Disputes frequently arise because the government refuses to agree that a contractor is entitled to additional money or time resulting from constructive changes, differing site conditions, government-caused delays, or countless other reasons. These disagreements typically are dealt with through the submission of Requests for Equitable Adjustment (REAs) or certified claims and are ultimately resolved through the disputes process. They focus on the rights of the parties under the specific terms of the contract. The problem, however, is that contractors also incur costs because of government indecisiveness that has not yet generated an REA or claim under a particular contract clause. This places the contractor in a state of limbo, not knowing whether there will be a significant impact to the project.

The failure to promptly review and determine the acceptability of a submittal, respond to a Request for Information (RFI), or to review a shop drawing can have a significant impact on the cost and time of performance. As esteemed Professor Ralph Nash once observed, “indecision by the government can be very costly” and the “ball is in the government’s court” when a contractor puts the government on notice of a problem, submits a document for approval, or requests additional information. Nash & Cibinic Report, February 1988, Vol. 2, No. 2. Particularly frustrating are those situations where the government is guilty of lethargy or fails to act because necessary funding is not yet available. This causes the contractor to finance project performance to an extent that it could not have reasonably anticipated at the time of bidding.

To increase the chance of getting paid in a timely manner, contractors should diligently document the time lost and cost incurred as the result of government indecision. The government’s contracting and field personnel must be provided with prompt notice of the impact of the government’s failure to act with specific reference to the possibility that a claim might result. Above all, government representatives must be reminded that contractors are not bankers and they are not in the business of providing financing for the additional costs that arise because of government inaction or indecision.

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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.