Photo of David C. Petrone

Dave is the former Counsel to the Naval Facilities Engineering Command, Northeast Region. During his over 25-year tenure with the Navy, he was responsible for leading a staff of attorneys in the defense of contractor bid protests, claims, and appeals. In addition, he was involved with the development, review, and administration of construction, facility support, environmental remediation, and public private venture contracts, to include providing legal counsel with respect to the negotiation, resolution and litigation of complex construction/design issues. In this role, he also provided his clients training related to federal contract law, contract/project management, the Federal Acquisition Regulation (FAR), and ethics.

In a recent Armed Services Board of Contract Appeals (ASBCA) decision, Pave-Tech, Inc., the ASBCA found that the decisions a construction contractor makes, even from the very beginning of a project, have consequences. In another recent article, we warned about signing contract modifications that contain release language which could thereafter preclude recovery of costs to which a contractor thought it was entitled later in a project. The decision in Pave-Tech reinforces the importance of considering all aspects of a contract from the onset of a project.

One such decision a government contractor might be tempted to make is to accept additional field office (jobsite) overhead (FOOH) expenses for a change on a percentage markup basis, especially for a change that may not even have required an extension to the contract completion date. However, what might appear to be a windfall recovery—the government allowing the recovery of FOOH expenses (even when a change order does not require an extension to the contract’s period of performance)—could result in a contractor not being able to recover its actual FOOH when the contract completion date is extended.
Continue Reading Recovering Field Overhead Expenses