Agility Defense & Government Services, Inc. v. United States provides hope to contractors that incur higher than anticipated costs on a requirements contract or, alternatively, on construction contracts where line item prices are based on estimated quantities. 

In Agility, the Federal Circuit examined whether the provision of historical workload data satisfied the Government’s responsibility to provide a realistic estimated quantity in a procurement for a requirements contract. The dispute arose out of a fixed-price requirements contract for the disposal of surplus military property. The Government provided historical data and estimated workloads prior to the submission of proposals.

The contractor submitted claims seeking payment based on a theory of negligent workload estimates. After the Government denied those claims, the contractor appealed to the Court of Federal Claims. While the Court of Federal Claims acknowledged that the contractor had experienced higher workloads than in previous years, it ultimately denied the contractor’s claims, reasoning that the Government’s estimates were acceptable because it had provided offerors with historical data.

The Federal Circuit reversed that decision and ruled in favor of the contractor. The Court held that the contractor had satisfied its burden to show that the Government’s estimates were negligent because the historical data provided was not the most current information available. Here, the contractor presented evidence that the Government was aware that there would likely be a surge in workload after contract award, but failed to disclose that information to offerors. In such a case, while the historical data was accurate, the Government’s estimate was negligent because it possessed information that was more current and more accurate than the historical data.

Although the burden of proof is high in these disputes, Agility demonstrates that contractors may prevail where the Government fails to provide the most current information in its possession.

Michael H. Payne is Chair of the Firm’s Federal Contracting Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution.

Casey J. McKinnon is an Associate in the Federal Contracting Group and focuses his practice on government contracts and litigation

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Photo of Michael H. Payne Michael H. Payne

As Chair of the firm’s growing Government Contracting Group, Michael H. Payne represents contractors, subcontractors, and suppliers on a wide range of federal contracting issues, including the interpretation of solicitation and contract provisions, the filing of bid protests, resolution of disputes, and the…

As Chair of the firm’s growing Government Contracting Group, Michael H. Payne represents contractors, subcontractors, and suppliers on a wide range of federal contracting issues, including the interpretation of solicitation and contract provisions, the filing of bid protests, resolution of disputes, and the preparation of contract claims and the litigation of appeals. Michael has vast experience in federal government contracting, stemming from his time as Chief Trial Attorney for the North Atlantic Division of the Army Corps of Engineers, and is recognized in the federal construction contracting industry as an attorney who enjoys a good working relationship with government agencies.

Michael’s high success rate in settling cases prior to litigation has earned him clients that rely on his advice in the long term. As a trusted advisor to his clients, he is known for his responsiveness and is not afraid to be straightforward about the realities of pursuing a case.

Michael is aggressive when called for and approaches each case analytically and develops strategies for his clients’ best long-term results. He thinks outside the box and frequently develops arguments in approaches that facilitate the resolution of disputes without litigation.

With in-depth knowledge of military and civil works construction, Michael represents clients before the Armed Services Board of Contract Appeals (ASBCA), the Government Accountability Office (GAO), the United States Court of Federal Claims, and a number of Federal District and Appellate Courts, including the United States Court of Appeals for the Federal Circuit. Throughout his career, he has enjoyed a strong relationship with the dredging industry, representing many dredging contractors nationwide.

Known in the legal community as a techie, Michael always uses the latest technology to practice law more efficiently. He regularly teaches other attorneys at the firm and local bar associations how they can use devices such as iPads to enhance their practices. Michael started the Federal Construction Contracting Blog, the first blog focused on federal construction contracting,  which is still a go-to resource for the industry.

Photo of Casey J. McKinnon Casey J. McKinnon

Casey J. McKinnon focuses his practice on government contracts and litigation, representing clients in all stages of litigation related to federal contracting, including case strategy, discovery, trials, and appeals. He counsels clients throughout the procurement process including solicitation review, proposal preparation, and pre…

Casey J. McKinnon focuses his practice on government contracts and litigation, representing clients in all stages of litigation related to federal contracting, including case strategy, discovery, trials, and appeals. He counsels clients throughout the procurement process including solicitation review, proposal preparation, and pre and post-award bid protests. Casey also assists with day-to-day contracting issues including drafting, reviewing, and negotiating contracts and other matters of contract administration.

Casey is also a member of the firm’s Commercial Litigation Group. His experience spans all aspects of commercial litigation, including discovery, motions practice, oral arguments, and trials. He has litigated cases in Virginia, Maryland, and the District of Columbia on a range of issues, with a focus on contract disputes.  Casey also has appellate experience and has presented arguments before the Virginia Supreme Court.