The Construction Industry offers tremendous opportunities and challenges for any business owner. However, when your customer is the federal government, there is an extra layer of requirements that can either make or break your business. Just putting together a bid or proposal is a test of skill and attention to detail, but what comes next?
One of the byproducts of the recent use of negotiated procurements under FAR, Part 15, has been the concern, on the part of contractors, that the submission of claims will be a negative factor during the evaluation process on a Request for Proposals. While we can certainly understand that a contractor who has a history of filing frivolous claims might deserve to be downgraded, we see no valid reason for the government to assign a lower rating to a contractor who has filed meritorious, or good faith, claims in the past.
On February 12, 2006, a provision was added to the Defense Federal Acquisition Regulation Supplement (DFARS) dealing with the review of claims that we find very disturbing. Under DFARS Subpart 233.2, Disputes and Appeals, Paragraph 233.10, “Contracting Officer’s Authority,” there is a reference to a new “PGI” (Procedures. Guidance and Information). The new guidance states that “When it would be helpful in reviewing the current claim, the contracting officer should get information on claims previously filed by the contractor. Such information may provide a historical perspective of the nature and accuracy of the claims submitted by the contractor and how they were settled. Potential sources for the information include the contracting activity’s office of legal counsel, other contracting activities, and the Defense Contract Audit Agency.”
We believe that each claim should stand on its own merits. Each claim is different and is the result of a different contract, a different set of facts, and is ultimately decided by a different set of legal principles. In addition, the Contract Disputes Act of 1978 gives contractors the right to file claims. It seems to us that “guidance” that could potentially penalize contractors for filing claims is most inappropriate.Continue Reading New DFARS Provision Has a "Chilling Effect" on Claims