Contract Performance Issues

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On July 14, 2022, the Department of Labor (DOL) issued a proposed rule that would require contractors and subcontractors performing covered service contracts to offer, in good faith, service employees employed under the predecessor contract the right of first refusal of employment under the successor contract. The proposed rule implements President Biden’s November 18, 2021 Executive Order 14055, Nondisplacement of Qualified Workers Under Service Contracts (the order). In sum, the order establishes a general policy for the federal government that “service contracts which succeed contracts for the same or similar services, and solicitations for such contracts, shall include a non-displacement clause.” …
Continue Reading Don’t You Forget About Me: DOL’s Proposed Rule on the Right of First Refusal in Service Contracts

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Oftentimes, contractors find it difficult to differentiate between the government’s acts taken in its sovereign capacity as opposed to those taken in its contractual capacity. The government acts in its sovereign capacity when it takes actions that are general and public in nature and do not target any particular contractor; rather the impact of the government’s action on its contracts is merely incidental to the purpose of a broader governmental objective. As two recent Armed Services Board of Contract Appeals (the Board) decisions involving contractor claims for COVID-19-related costs illustrate, the distinction between these two roles can make or break a contractor’s claim. …
Continue Reading The Sovereign Acts Doctrine Strikes Back: COVID Costs Are Its Latest Victim

Contract and Gavel Illustration

In a recent opinion issued by the United States Court of Federal Claims, Meridian Engineering Company vs. The United States, a case argued by our firm, the Court ruled that a contract modification containing a release did not prevent the contractor from recovering further damages. The dispute involved a contract between Meridian and the U.S. Army Corps of Engineers for a flood-control project in Nogales, AZ. After entering into the contract, the Contracting Officer issued two contract modifications that compensated Meridian for government-caused delays related to an access ramp and surveys. As a result of the underlying delays, Meridian’s work was pushed into the yearly rainy season in southern Arizona, referred to as the “monsoon” season, and completion of the critical channel invert work was impacted by numerous flood events. Had it not been for the earlier access ramp and survey delays, the work would have been completed before the onset of the “monsoon” season.
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Continue Reading When a Final Release is Not “Final”

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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.
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Continue Reading The Impact of Government Indecision on Government Contractors

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The Judgment Fund was established by Congress in 1956 to alleviate the need for specific legislation following every successful claim against the United States. The purpose behind the Judgment Fund was to eliminate the procedural burdens involved in getting an individual appropriation from Congress, allowing for the prompt payment of judgments and reducing the amount of interest accrued between the time the judgment was awarded and payment was made. Although the Judgment Fund successfully eliminated the need for legislative action in almost every case, and in most cases resulted in prompter payments to successful claimants, it also had the unintended consequence of incentivizing procuring agencies to avoid settling meritorious claims in favor of prolonged litigation. Specifically, an agency could avoid making payment from its own appropriated funds if it refused to settle a case and instead sought a decision from a court, subsequently providing it access to the Judgment Fund which draws money straight from the Treasury. Congress eliminated this problem when it passed the Contracts Disputes Act (CDA) of 1978, which requires agencies to reimburse the Judgment Fund with appropriated funds that are current at the time of the judgment against the agency. Although contracting officers are no longer incentivized to avoid settlement, the source and availability of funds can still impact whether or not they decide to settle a claim because there are differences between how a judgment is funded and how a settlement can be funded. …
Continue Reading How the Judgment Fund’s Availability Impacts a Contracting Officer’s Decision to Settle a Claim

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Government contractors know that an unfavorable performance review posted to the Contractor Performance Assessment Reporting System (“CPARS”) can be extremely costly. Many negotiated solicitations include past performance as an important or even primary evaluation factor for contract award. An unfavorable review on a past contract can impose significant costs on the contractor to address the unfavorable review with contracting officers on future solicitations. However, the contractor saddled with an unfair and inaccurate CPARS review may now have a means to challenge the review and recover some of these costs. …
Continue Reading A New Way to Claim Damages Resulting from an Unfavorable CPARS Rating

WelOnviaLegalLandscapecome to the second edition of Legal Landscape, a series we have developed with Onvia’s blog to provide government contractors with a quick, but thorough, summary of important legal developments and regulations in government contracting, as well as a plain-English explanation of how those developments may affect contractors at all levels of government. In this issue, we discuss recent compliance and enforcement trends in federal as well as state and local government contracting. State and local contractors should keep in mind that state and local agencies often look to changes in federal regulations as a guideline; changes recently made in the federal arena are likely to trickle down to state and local governments soon.
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Continue Reading Legal Landscape: Big Changes to Prevent Discrimination, Fraud and Non-Compliance

Several months ago, we told you about Ambuild Company v. LLC v. U.S., a very important case pending before the Court of Federal Claims (“COFC”).  The AmBuild case was of particular interest to our firm because it concerned the interpretation of a Department of Veterans’ Affairs (“VA”) regulation, which the VA revised following an…