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