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2012 Procurement Review--Contract Disputes



 

Boards of Contract Appeals (ASBCA, CBCA, PSBCA, and GAOCAB)

Jurisdiction/Standing/Timeliness/Contract Disputes Act (CDA) Issues    

In Quimba Software , the ASBCA dismissed an appeal as untimely after determining that receipt of a Contracting Officer's decision by email does not extend the 90-day period for filing an appeal.

In USCS Chemical Chartering, the CBCA held that the successor-in-interest of a bankrupt firm lacked standing to prosecute a claim because the bankrupt firm failed to list the claim in its schedule of assets.

In Dr. Lewis J. Goldfine , the CBCA dismissed (for lack of CDA jurisdiction) a claim for money damages that had not first been submitted to the Contracting Officer for a decision and a claim for cancellation of a BPA (because a BPA is not a contract) even though the BPA repeatedly referred to itself as a contract: "The fact that the BPA which SSA issued to Dr. Goldfine calls itself a contract brings to mind a quotation attributed to President Lincoln: 'If you call a tail a leg, how many legs does a dog have? Four. Calling a tail a leg doesn’t make it a leg.' "

In The Boeing Co., the ASBCA dismissed a government claim against the contractor (for increased costs allegedly incurred by the Government as a result of a voluntary change in the contractor's accounting system) because the Contracting Officer's decision asserting the government claim was not issued within the CDA's six-year statute of limitations (41 U.S.C. § 7103(a)(4)(A), formerly 605(a)). The ASBCA (i) examined whether any of several recent appeals court (including Supreme Court) decisions had changed the conclusion that the CDA's is a jurisdictional statute of limitations and (ii) concluded they had not.

In Whiteriver Construction, Inc. , the CBCA held that a letter submitted to Contracting Officer labeled as "final certified claim" and including a CDA certification (submitted to correct a prior letter that did not include a certification) constituted a CDA claim.

In ACR Machine, Inc. , the ASBCA held that a contractor's email to the Contracting Officer requesting an extension of 120 days to a purchase order was a " request for an adjustment in contract terms" under the definition of a "claim" in the "Disputes" clause  (FAR 52-233.1) and, thus, was a claim under the CDA.

In General Dynamics Ordnance and Tactical Systems, Inc. (a dispute involving unanticipated costs associated with the Government's allegedly inadequate estimates concerning ammunition quantities required by the contract), the ASBCA held that the Government's willful failure to comply with the Board's orders to turn over documents to the contractor during discovery merited the sanction of an adverse inference that the documents, i f disclosed, would have shown that there was relevant information available to the Government that it failed to consider when developing the estimates in question, thereby causing the estimates to be inadequately or negligently prepared. 

In Side Bar and Assocs., the CBCA held that the Contracting Officer's belated issuance of a decision on a a claim that already had been properly appealed to the Board from a deemed denial could not affect the Board's jurisdiction over the entire appeal.

In Muhtesem Co., the ASBCA granted the Government's motion to dismiss (for lack of jurisdiction) the following elements of damages claimed to result from Government's late final payment under a contract: interest on borrowing; loss of reputation; and loss of anticipatory profits on other business opportunities.

In JRS Management, the CBCA dismissed an appeal for lack of jurisdiction (no contract) because the contractor had responded to a government order for services by announcing it was substituting a different individual from the one specified in the order, thus making a counteroffer the Government then rejected.

In Bannum, Inc., the CBCA dismissed an appeal involving a claim barred by the CDA's six-year statute of limitations because it was filed more than six years after it originally accrued. Subsequently, however, the Board granted in part a motion for reconsideration because the contractor had complained of many acts by the Government that occurred more recently than six years in the past.

In SWR, Inc., the ASBCA denied the Government's motion to dismiss a claim for lack of jurisdiction and held that the contractor took sufficient steps under 11 U.S.C. 1123 to preserve its claim in bankruptcy by adequately disclosing the claim in its reorganization plan and disclosure statement.

In APS Denver, LLC, the Board denied the Government's motion to dismiss for lack of CDA jurisdiction because the fact that the real estate tax assessment in dispute was under appeal to the taxing authority (and, therefore, ultimately might be reduced) did not change fact that the contractor had claimed a definite amount as a sum certain in its claim.

In A-1 Horton's Moving Service, Inc., the ASBCA denied the Government's motion to dismiss for lack of CDA jurisdiction and held that a claim for breach of a transportation services contract when no services have been provided (as opposed to a claim for monies due once services under such an agreement have been provided) is governed by the CDA rather than section 3726 of the Transportation Act. 

In Ironhorse Ltd., the ASBCA held that a reminder letter sent by the contractor three months after its submission of the original REAs to the Contracting Officer converted those REAs into claims filed within the CDA's six-year statute of limitations. 

In Triad Mechanical, Inc., the ASBCA dismissed an appeal for lack of CDA jurisdiction because (i) the contractor's termination for convenience settlement proposal was not a claim despite the fact that contractor had labeled it as such,  and (ii) a government request for additional documentation before completing its audit of the proposal did not signify an impasse over it.

In CPR Restoration, LLC, the CBCA dismissed an appeal for lack of jurisdiction because the appellant did not have a contract with the agency and appeared to have been only a subcontractor, with no right of direct appeal.

In CACI, International, Inc., the ASBCA held it had jurisdiction over the contractor's appeal from a government finding of noncompliance with CAS 403 even though there was no allegation of a monetary impact due to the alleged noncompliance.

In Waterstone Environmental Hydrology and Engineering, Inc., the ASBCA dismissed an appeal not filed at the Board within 90 days of receipt of the Contracting Officer's decision (the contractor, without the assistance of counsel, had initially appealed to the wrong forum).

The CBCA dismissed an appeal by URS Energy & Construction., Inc., for lack of jurisdiction because its attempt at the required CDA claim certification was defective in so many respects that it could not be cured.

In Caddell Construction Co., the Board held it had CDA jurisdiction over a contractor's claim for a mistake in bid allegedly induced by the contracting agency's' "confusion" in failing to designate clearly the applicable Davis-Bacon Ac t wage determination rate for structural ironworkers on a building construction task order.

In NOVA Technology Corp., the ASBCA Board held it lacked CDA jurisdiction over a dispute involving a cooperative agreement that did not meet the FAR definition of a contract.

In Intermark Managed Services, Inc., the ASBCA denied the Government's motions to dismiss and held that the Board had jurisdiction where a joint venture became the prime contractor under a modified contract and the joint venture member who filed the appeal was authorized by the relevant joint venture documents to do so on behalf of the joint venture. The Board also held that a claim was properly certified where the contractor submitted an affidavit to the Board stating that the original claim was certified and, prior to the appeal, the Contracting Officer had repeatedly referred to it (in writing) as the "certified claim." (Thus, the Contracting Officer's subsequent statements on appeal (to the effect that those prior references were a matter of form and that she first noticed after the appeal was filed that the claim package in the Government's Rule 4 file did not include a certification) were unavailing.)

In Parsons Evergreene L.L.C., the ASBCA dismissed an appeal for lack of jurisdiction because the Government's letter merely notifying the contractor that the Government intended to assess liquidated damages (absent (i) an actual assessment of damages, (ii) a notice of the contractor's appeal rights, (iii) a statement that the letter was a final decision) was not an appealable final decision.

In TMS Envirocon, Inc., the ASBCA dismissed most of the contractor's claims for failure to comply with the CDA's six-year statute of limitations and denied a claim for REA preparation costs because the costs were incurred in anticipation of litigation, not negotiations, and were unreasonably high compared to the claimed amounts. Subsequently, the Board affirmed the decision on reconsideration.

In Eastern New Mexico University -- Roswell, the ASBCA held that a contract for providing training classes was neither an ID/IQ nor a requirements contract and, therefore, dismissed the contractor's claim for an alleged shortfall in expected students, but held that there was a possibility the contractor could recover for claims involving extra work, even if the Board was not quite sure what to call the contract.

In Hedgecock Electric, Inc., the ASBCA held, inter alia, that seemingly broad release language in bilateral modifications did not operate as an accord and satisfaction of the contractor's delay claims where the Contracting Officer had indicated such claims would not be considered until the end of the contract.

In a couple of similar cases involving the same contractor, e.g., DODS, Inc., the ASBCA held that, because a firm had not undertaken any substantial performance of a unilateral purchase order (which is an offer) before the delivery date passed, the offer lapsed before a contract was ever formed.

In ePlus Technology, Inc. the CBCA denied the Government's motion to dismiss an appeal for lack of jurisdiction and held that a submission labeled both as a termination for convenience settlement proposal and a claim, which had been properly certified and which included a request for a Contracting Officer's decision, was a CDA claim that could be appealed as deemed denied after the Contracting Officer failed to respond to it for six months.

In Daniel S. Sinclair, et al., the ASBCA held (i) it lacked CDA jurisdiction over claims for "a minimum of" a stated amount because there was no sum certain being claimed.

In Omni Pinnacle, L.L.C., the CBCA denied the Government's motion to dismiss an appeal involving a cooperative agreement for lack of CDA jurisdiction because the contractor's allegation that Government's actions under the agreement created an implied-in-fact procurement contract were sufficient to give the contractor an opportunity to conduct discovery to try to prove that allegation.

In ERKA Construction Co., the ASBCA dismissed one count of the complaint for lack of CDA jurisdiction because the prior letter to the Contracting Officer on which it was based did not request a decision and was not certified.

In GTSI Corp., the CBCA held it lacked jurisdiction over the portion of an appeal involving the GSA under a GSA FSS contract where only the actions of the ordering agency (and not the terms of FSS contract) were involved in the underlying claim.

In Jacob Construction LLC, the CBCA dismissed an appeal as untimely filed where there was no evidence the Contracting Officer had extended the period for appeal by reconsidering her original decision, even though the Contracting Officer was considering other claims related to the same contract.

In Eagle Peak Rock & Paving, Inc., the CBCA dismissed a direct subcontractor appeal (brought under a third party beneficiary theory) for lack of CDA jurisdiction because the subcontractor had no privity of contract with the Government and the third party beneficiary arguments would apply only to appeals in the Court of Federal Claims pursuant to Tucker Act.

In Green Dream Group, the ASBCA (i) denied the Government's motion to dismiss appeals for lack of jurisdiction, and (ii) held that even though the contractor had changed its name and then changed its address in a Baghdad war zone because of an explosion, it was the same entity that had been awarded the original contract.

In Cecelia Sutton, the CBCA dismissed an appeal for failure to prosecute after the appellant failed to respond to and comply with the Board's initial scheduling order and several subsequent orders.

In EJB Facilities Services, the ASBCA denied the Government's motion to dismiss the appeal for lack of CDA jurisdiction based on the Government's allegation that the person who submitted the claim was a former government employee who, prior to his retirement, had participated personally and substantially in the solicitation leading to the award of the contract at issue and, therefore, had allegedly violated 18 U.S.C. 207(a)(1) in communicating the claim to the Government.

In KK&L Administration, Inc., the CBCA dismissed an appeal for lack of jurisdiction because it was the subcontractor, purporting to be prime's representative, that filed the notice of appeal. It did not help matters that a letter purportedly authorizing the sub to file the appeal included the docket number of the appeal but was dated three months before the appeal was actually filed. 

In Jane Mobley Assocs., the CBCA held that a claim that the Government had breached the covenant of good faith and fair dealing by issuing a modification that unilaterally changed the contract's payment practices did not not require an allegation of bad faith on the part of the Government. The CBCA applied the same principle in Sigma Services, Inc.

In Tri-County Contractors, Inc., the ASBCA held that, especially in the context of earlier communications on the same subject, a request for equitable adjustment addressed to the Contracting Officer and seeking a "written response" (which was accompanied by a CDA certification) satisfied the requirements for a CDA claim.

Changes/Constructive Changes/Contract Interpretation/Breach/Authority

In Singleton Enterprises, the CBCA denied a post-award unilateral mistake-in-bid claim due to a lack of evidence in two areas:  (i) what the bid would have been absent the alleged mistake; and (ii) that government knew, or should have known, of the mistake prior to award.

In Rafael Portillo, the CBCA held that the Government complied with an unambiguous lease provision that permitted it to terminate a lease with 60-days advance notice.

In Distributed Solutions, the ASBCA initially granted partial summary judgment to the Government (because its interpretation of disputed language in a contract modification was the only reasonable one and was not in conflict with any other contractual language) but subsequently vacated its earlier decision in order to allow further discovery on issues of contract interpretation.

In Sharp Electronics Corp. , the CBCA held that a purchase order provision establishing a cancellation charge if the Government did not extend a 48-month, lease-to-own term beyond the first 12-month period was valid and enforceable against the Government.

In Hillcrest Aircraft Co., the CBCA denied the contractor's claim for reimbursement of federal excise taxes in a contract containing the unique commercial item tax clause at FAR 52.212-4(k)).

In TKC Aerospace, Inc., the CBCA interprted the contract as making the contractor responsible for the costs of repairing corrosion in an aircraft it was leasing to the Government and for the costs of "downtime" during such repairs.

In Southern Defense Systems, Inc., the ASBCA held that the contractor was not entitled to receive the same (higher) pass-through mark-up on a particular delivery order as stated in the basic contract (rather than the lower rate negotiated for the delivery order) because the contractor did not demonstrate there was a patent or latent ambiguity, a violation of the FAR, a mistake, or bad faith, coercion, or misrepresentation by the Government.

In Hartman Walsh Painting Co., the Board denied the contractor's claim for extra work on a painting contract and held that the Government's approval of one of the contractor's submittals did not preclude the Government from later enforcing compliance with specification.

In M.E.S., Inc., the ASBCA decided several claims by a construction contractor for alleged changes and compensable delays (including claims for extended field and home office overheads) opposed by various government defenses, including the sovereign acts doctrine, concurrent delays, and lack of proof of quantum.

In denying Veleta Corp.'s claim under the "Changes" clause, the CBCA held that the contractor failed to present any evidence of  either (i) work beyond that required by the specifications specs or (ii) increased costs caused by this allegedly extra work.

In Walsh/Davis Joint Venture, the CBCA held that an unambiguous sentence in various contract modifications barred the contractor from passing through its construction subcontractor's subsequent claims for cumulative labor inefficiencies.

In Weigel Hochdrucktechnik GmbH & Co. KG, which involved a contract performed in Spain, the ASBCA (i) held that the Government had failed to prove that the water testing it required the contractor to perform was required by either the contract or Spanish law and (ii) denied the contractor's claim for waterproofing certain containers because the Government merely acquiesced in contractor's (ultimately unsuccessful) suggested method for doing so, without waiving the contract requirement that they be waterproof. 

In Valley Apparel, LLC, the ASBCA denied an appeal because one statement in a footnote to a solicitation for an indefinite quantity contract to supply parkas regarding the percentage of each size parka the Government "anticipated" ordering was not a guarantee that the Government would order those percentages, especially when read in connection with numerous other solicitation provisions indicating the amounts to be ordered were uncertain.

In Top Painting Co., the ASBCA granted the Government's motion for summary judgment and rejected the contractor's claim for Differing Site Conditions because (i) the contractor had failed to conduct a pre-award site visit; (ii) the conditions encountered by the contractor were visible (neither subsurface nor latent); and (iii) the contract required the contractor to deal with conditions of that type.

The ASBCA denied an appeal by Hartman Walsh Painting Co. because, in connection with its misrepresentation claim, the contractor failed to prove that the Government made an erroneous representation of material fact.

In Sharon Roedel, the PSBCA, in a rare result, held that (i) an enforceable oral agreement for a six-month contract without the right of termination had come into existence (despite denials from the Postal Service), and (ii) the Postal Service had breached the contract by terminating it within a week of its inception, entitling the contractor to the wages and profit she would have earned in the full term. 

In UniTech Services Group, Inc., the Board denied the contractor's claim for decommissioning costs, sometimes referred to as unamortized and stranded costs, arising from the closing of the contractor's longstanding nuclear laundry facility in Hawaii, finding there was no evidence of an implied-in-fact contract, especially where there was an express contract covering the same subject area, and concluding there  was no basis under that express contract for recovery on theories of failure to disclose superior knowledge, breach of the covenant of good faith and fair dealing, or equitable estoppel.

In Cubic Transportation Systems, Inc., the ASBCA held that both the "Pricing of Adjustments" and "No Waiver of Sovereign Immunity" clauses in a contract between a private firm and the Washington Metropolitan Area Transit Authority precluded the recovery of interest on late payments.

In International Oil Trading Co., the ASBCA held, inter alia, that the Government's inspection method did not substantially comply with requirement of the "Quantity Determination" clause of a fuel delivery contract, and the Government could not present extrinsic evidence to interpret that unambiguous requirement.

In Strand Hunt Construction, Inc., the ASBCA held that (i) high temperatures encountered by a contractor in a building were contemplated by the specifications and, therefore, were neither a constructive change nor a Type I Differing Site Condition, and (ii) an interpretation never advanced by the contractor before appeal (and then not raised until the very last opportunity during the appeal) was not entitled to any weight.

The CBCA granted the contractor's appeal in Red Gold, Inc., because the contractor successfully established all the elements for a unilateral mistake-in-bid claim.

In GaN Corp., the ASBCA held that, under the "Payments" clause of a contract that provided the contractor would be paid at pre-established, fixed hourly rates for the hours actually worked by its employees, the fact that the contractor's salaried employees were not paid extra for working extra hours was irrelevant.

In Daniel S. Sinclair, et al., the ASBCA held (i) it lacked CDA jurisdiction over claims for "a minimum of" a stated amount because there was no sum certain being claimed, and (ii) the Government's termination of a lease did not extinguish its contractual obligation to make specified improvements, which was the main reason for the lessor to enter the lease in the first place.

In  MCC Construction Corp., the ASBCA held that the phrase "subsequent contracting opportunities" in section 713(b) of the Small Business Competitiveness Demonstration Program Act of 1988 means solicitations for a contract rather than requests for task order proposals.

In Lear Siegler Services, Inc., the ASBCA sustained the contractor's appeal and held that a unilateral modification to a task order under an Air Force ID/IQ contract for aircraft and depot maintenance at National Guard aviation facilities was a compensable change because it increased the agreed maintenance workload beyond that required by the performance work statement.

In IAP World Services, Inc., the CBCA held that, under a fixed-price contract, the contractor was not entitled to recover its costs of snow removal in a winter when three times the normal amount of snow fell. Historical snowfall data in the solicitation was not a guarantee, and the fact that a different contracting officer had once paid for such removal did not establish a course of dealing.

In Teresa A. McVicker, P.C., the ASBCA held that the Government's purported partial convenience termination merely ratified the Government's prior breach of the covenant of good faith and fair dealing when it induced the contractor to enter into the contract and hire specific employees without disclosing that the Government intended to bring those employees (and the associated work) in house as soon as possible. Therefore, the contractor was entitled to breach damages in the form of lost profits for the base contract year.

In Primetech, the CBCA granted the Government's motion to dismiss an appeal with prejudice because (i) the Government had fulfilled the requirement in a bilateral settlement agreement (to make a specified payment to the contractor), and (ii) extrinsic evidence would not be admitted to vary the terms of the agreement to require (as the contractor contended) that the Government should also expunge references to the contractor's default termination from government records.

In NDG Constructors, the ASBCA held that a construction contractor failed to prove it encountered Type I Differing Site Conditions in the form of (i) a different soil profile, (ii) soil with different characteristics, or (iii) increased soil moisture conditions.

In Amin Farnam, the CBCA summarily denied an appeal involving a claim for the cost of repairs to a vehicle bought at an "as is" auction. Subsequently, the Board affirmed its decision, despite conceding it initially had gotten the facts wrong.

In Airclaims, Inc., the CBCA held that a contract was plain and unambiguous and did not require the Government to compensate the contractor for its employees' time spent in airplane travel.

In APAC Southeast, Inc., the ASBCA granted the Government's motion for summary judgment because FAR 52.217-8 ("Option to Extend Services") permits the Government to extend  a contract up to six months beyond its normal term, including options, under to FAR 52.217-9 ("Option to Extend the Term of the Contract").

In MJL Enterprises, Inc., the CBCA denied the Government's motion for summary judgment in part because disputed issues of fact remained as to whether the general release language in various bilateral amendments covered the claims at issue before the Board.

In R.L. McDonnell Construction, the ASBCA denied a construction contractor's claim for extra costs because (i) the SOW was not ambiguous; (ii) there was no Differing Site Condition; (iii) the drawings were not defective; and (iv) the Government did not fail to cooperate; (v) but, rather, the contractor had made an unreasonable assumption in bidding the job without checking with the Government.

In Sigma Services, Inc., the CBCA held that a claim that the Government breached the implied covenant of good faith and fair dealing does not require a showing of bad faith by the Government.

In Donald P. Wood, the CBCA denied a claim for partial refund of the purchase price paid for goods in an online auction because the claimant failed to prove the items he received had been misdescribed and failed to comply with the contract requirements for making such claims.

In BAE Systems San Francisco Ship Repair, the ASBCA held that the Government did not breach its duty to cooperate with the contractor by taking too long to approve a request made by the contractor because the contractor did not inform the Government of the significance or urgency of the request.

In Lacey Newday Consulting LLC, the CBCA denied the contractor's claim that a mistake in bid justified a higher price for ground beef because, under the RFQ, the contractor accepted the Government's "offer" (purchase order) by delivering in accordance with the terms of the purchase order.

Terminations/Liquidated Damages  

In Lan-Cay, Inc., the ASBCA upheld a termination for default, rejecting the contractor's contentions that the Government had (i) wrongfully withheld progress payments and (ii) audited and inspected the contractor's work excessively.

In Delta Industries, Inc., the ASBCA held that a purchase order was an offer that lapsed when Delta failed to deliver within the required time.

In Singleton Enterprises, the Board upheld a default termination after  a contract had been reinstated following an earlier default because there was no reasonable prospect the contractor could meet newly agreed upon completion date and because the contractor had not shown performance was impossible due to an allegedly defective spec. 

The CBCA upheld the default termination of a roadway vegetation maintenance contract held by D&M Grading, Inc., because the conditions encountered by contractor (which it claimed excused its failure to complete the work) did not amount to either a Type I or Type II Differing Site Condition.

In Laura K. McNew, the PSBCA held that although a mail deliverer's act of taking, and using, a discount coupon from undeliverable mail addressed to a former resident only as "Occupant" breached the contract and was an event of default, the default was excused by the fact that this was a common practice of employees of the post office in question. (When I was a kid, the "everybody else is doing it" excuse never worked with my parents.)

In Harold N. Colerick, the PSBCA held that the Postal Service had properly terminated contract under its "notice termination" clause (which contemplated no-cost terminations) and that the contractor was not entitled to convenience termination costs because the contract did not contain a termination for convenience clause, even though the Postal Service had muddied the water by repeatedly referring to such a clause in its communications with the contractor.

In Singleton Enterprises, the CBCA upheld the Contracting Officer's decision to deny various elements of a convenience termination claim for lack of proof, tardiness in providing notice to the Government, and performance in spite of the lack of a notice to proceed with the contract work.

In Charles Mullens, the ASBCA held there was no basis for the contractor's challenge to its termination where the contract included a "no fault" termination clause.

In Steelform, Inc., the ASBCA granted the Government's motion for summary judgment as to the propriety of a default termination because bilateral mods acted as an accord and satisfaction, preventing the contractor from relying on delays occurring prior to the mods as excuses for its nonperformance.

In Jerome T. Dunbar, the CBCA upheld the default termination of a sales contracts resulting from an online auction (as well as an assessment of liquidated damages) after the buyer failed to pick up the items he had won at auction by the extended deadline for doing so.

In Hanley Industries, Inc., the ASBCA denied the Government's motion for summary judgment upholding a default termination based on the contractor's alleged failure to comply with a contract provision requiring timely notice of a vendor change because "contractual notice provisions will not be mechanically applied."

In BYA International, LLC, the ASBCA denied the contractor's motion for summary judgment to overturn a default termination based on an alleged government waiver because the question whether the forbearance period preceding the termination was reasonable was a fact issue still to be resolved.

Delay

In Versar, Inc., the ASBCA denied both parties' delay claims against the other because neither party presented evidence (i) concerning concurrent delay or (ii) segregating its own and its opponent's delays.

In Paradigm II, LLC, d/b/a JB Carpet & Upholstery Care, the ASBCA denied a contractor's claims for anticipated profits and unabsorbed overhead after the Government failed to order as much work as the contractor had anticipated, noting that, during the alleged period of delay (i) the contractor could not prove it was ready, willing, and able to perform because it had declined several delivery orders; and (ii) the contractor had only one permanent employee (its managing member) and, therefore, did not pay employees to stand by. 

In ECC, International, the ASBCA denied all delay claims by a construction contractor for various constructive changes, including defective government-furnished property, interference with performance, and acceleration, most of which boiled down to the contractor's belief that the Government's representatives had been too strict in enforcing the contract's requirements.

Costs and Cost Accounting Standards (CAS)

In J.F. Taylor, Inc., the ASBCA determined that the executive compensation paid by a contractor was reasonable because the DCAA's method for challenging that compensation suffered from unrebutted statistical flaws.

In Space Gateway Support, LLC, the ASBCA held that (i) the costs of accrued sick leave hours paid to employees in cash at the termination of their employment in accordance with the terms of applicable collective bargaining agreements were allowable fringe benefits under FAR 31.205-6, and (ii) the Government's contrary interpretation of the contract would have required a deviation from the FAR that the agency had not obtained.

In Metron, Inc., after an extensive, fact-based analysis, the ASBCA held that a contractor's executive compensation costs were reasonable and allowable.

In Inframat Corp., the ASBCA held held that,  under FAR 42.709-5(c)(1), (2),  the contractor  was not entitled to a waiver of the penalties for unallowable costs included in its final indirect cost proposals because, inter alia, the contractor:

failed to exercise due care because its system support broke down for failure to make yearly maintenance payments, its [software accounting] system crashed, it lost cost information, its bookkeeper could not make timely cost entries, and its inexperienced controller included expressly unallowable costs in its 2004  final indirect cost rate proposal on the  misunderstanding that DCAA later would tell him what costs were not acceptable. . . . 

In URS Energy & Construction, Inc., the CBCA denied the Government's motion for reconsideration (based on sovereign immunity and Anti-Deficiency Act arguments) of the Board's prior decision finding the contractor entitled to recover the amount paid to a surety under a supersedeas bond.

In Shaw Areva Mox Services, LLC, the CBCA denied the Government's motion for summary relief because the Board was not bound by the Contracting Officer's prior determination that the costs at issue were not allowable.

In Thomas Associates, Inc., the ASBCA upheld the ACO's determination that five indirect cost items (membership in a hunting club, costs of a jazz ensemble, gifts of flowers to employees on various special occasions,  an expensive Christmas party that included significant costs for alcohol, and certain rental costs) were expressly unallowable under FAR 31.205 and that the contractor was not entitled to a waiver of the penalties for unallowable costs under FAR FAR 42.709-5.

Quantum 

The CBCA did not buy National Fruit Product Co.'s arguments that its late deliveries were excused by a stinkbug outbreak, but concluded the Government had vastly overstated the amount of liquidated damages that were due. The contractor and the Government each interpreted the liquidated damages provision in an equally preposterous manner: the contractor claimed only $33.53 were due, and the Government had assessed more than $500,000. The Board concluded that the proper interpretation of the clause resulted in an assessment of $9,650. 

Discovery/Evidence/Procedure

In Parsons-UXB, Joint Venture, the ASBCA granted the contractor's motion to exclude an export report and testimony based on that report because nothing in the proffered evidence required expert testimony: "[The proffered] opinion is not based upon any 'scientific, technical, or other specialized knowledge' and does not 'help the trier of fact.' None of the facts described by [the proffered expert] require any expertise to decide them. All of them are within our competence to determine as the trier of fact. Accordingly, his opinion about them is of no help. Additionally, [the proffered expert's] opinion of the meaning of the word 'foreseeable' relates to an issue of l aw, and in particular attempts to interpret specialized legal terminology." 

In General Dynamics Ordnance and Tactical Systems, Inc. (a  dispute involving unanticipated costs associated with the Government's allegedly inadequate estimates concerning ammunition quantities required by the contract), the ASBCA held that the Government's willful failure to comply with the Board's orders to turn over documents to the contractor during discovery merited the sanction of an adverse inference that the documents, i f disclosed, would have shown that there was relevant information available to the Government that it failed to consider when developing the estimates in question, thereby causing the estimates to be inadequately or negligently prepared. 

In Lawrence Jackson, the CBCA dismissed an appeal (with prejudice) for failure to prosecute after the appellant repeatedly ignored the Board's orders to file a Complaint or to designate its notice of appeal as its Complaint.

In Utility Construction Co., the ASBCA denied the Government's motion to dismiss an appeal for failure to prosecute based on the appellant's litigation delays. The Board noted that the appellant had not refused to proceed and that the appellant's attorney indicated it was not receiving payments from the contractor.

In Power Wire Constructors, the CBCA denied the contractor's motion for reconsideration in part because the contractor asserted as fact a position directly contradictory to the one it had taken in the original litigation).

In The Public Warehousing Co., the ASBCA ruled on several discovery motions in a board case where there were concurrent district court civil and criminal fraud proceedings involving the same contractor and the same contract, but distinct issues. One motion was the Government's (unsuccessful) motion to dismiss the appeal after it discovered the contractor was live-streaming the Contracting Officer's deposition to defense counsel in the criminal proceeding. 

Equal Access to Justice Act

In Maggie's Landscaping, Inc., the ASBCA denied an EAJA application, in part because the Government's litigation position, though incorrect, was substantially justified and also because it was the Board, on its own initiative, which had to search the record to come up with evidence to support one of the contractor's original claims.

        

Court of Federal Claims

Contract Disputes Act (CDA) / Tucker Act / Jurisdiction / Standing 

In SUFI Network Services, the court denied the Government's motion to dismiss a complaint in a direct appeal to the court from the Government's failure to issue a decision on the contractor's claim for attorneys' fees submitted after a prior successful ASBCA case on the merits (despite the fact that the 1979 version of the "Disputes" clause in this non-appropriated fund contract only provided for an appeal to the ASBCA) because the Government breached the "Disputes" clause by failing to issue a decision on the contractor's claim within a reasonable time--meaning the clause was no longer controlling on this issue. 

In Travelers Casualty & Security Co. of America, the court held that, given the Anti-Assignment Act, a general liability insurer (as opposed to a surety) does not have standing to sue Government for breach of contract to recover amounts it paid to its insured, even under a theory of equitable subrogation. 

In Simulation Technology, a CDA jurisdictional decision, the court dismissed an excusable delay claim that was not sufficiently similar to the claim that had been previously presented to the Contracting Officer to have put him on notice of it.

In Century Exploration New Orleans, Inc., And Champion Exploration, LLC, the court discussed (at length) the evolution of the case law on the subject before concluding that the contractor was not prohibited from asserting a Fifth Amendment "Takings" claim and a breach of contract claim as alternative theories in the same Complaint.

In L-3 Services, Inc., Aerospace Electronics Division, the court noted it lacked jurisdiction over claims under maritime contracts and that allegations of violations of the FAR and the Antideficiency Act were not sufficient to establish jurisdiction.

In Township of Saddle Brook, the court dismissed a claim based on an implied-in-fact contract (because the allegations in the complaint were not adequate to establish either the mutual intent to contract or an exchange of consideration) and held there is no jurisdiction in the court over claims for promissory estoppel.

In Raytheon Co., the court held that  the CDA's six-year statute of limitations barred a Contracting Officer's decision on a  government claim issued ten years after the advance agreement on allowable costs that the decision purported to challenge and  that (i) the continuing claims doctrine, (ii) equitable tolling under the FAR "Credits" clause, and (iii) the accrual suspension doctrine did not apply in this situation. The Government's claim had been based on an audit conducted after the expiration of the six-year period, apparently motivated by criticism of the original audit conducted within that period. Subsequently, the Government argued unsuccessfully that the court should reconsider its earlier decision because the statute of limitations on the Government's claim could not begin to run until it completed its audit. In this case, the court concluded the Government had enough information to know of its claim even before it began the audit.

In Bell Heery/A Joint Venture, the court dismissed the counts in the complaint requesting a "review" of the Contracting Officer's denial of the contractor's claims (because the CDA only authorizes suits directly on the underlying claims).

In Atkins North America, Inc., the court (i) rejected the plaintiff's contention that the Contracting Officer's decision (which had been drafted by others) did not reflect her independent judgment on a government claim and (ii) held that it was sufficient that the Contracting Officer  familiarized herself with the facts and conclusions contained in the draft decision and adopted them as her own.

In Uniglobe General Trading & Contracting Co, W.L.L., the court held it lacked CDA jurisdiction over a contractor's suit filed more than four years after the contractor received the Contracting Officer's decision and more than two years after the the Government had terminated post-decision discussions concerning the claim.

In Extreme Coatings, Inc., the court  stayed the proceedings to permit Contracting Officer time to decide claims submitted by the contractor to the Contracting Officer after the contractor had filed this suit based on the Contracting Officer's denials of other, related claims. The court reasoned that the two sets of claims were not so closely tied that the suit on the earlier claims had divested the Contracting Officer of the power to decide the second set of claims.

In Union Pacific Railroad Co., the court dismissed a case pursuant to the Tucker Act's statute of limitations because it was filed more than six years after the date it accrued.

In Kenney Orthopedic, LLC, the court held that, although it had Tucker Act jurisdiction over the plaintiff's claim for misrepresentation  in the inducement to enter a settlement agreement with the VA, the claim must be dismissed for failure to state with sufficient particularity the alleged facts of the what, when, where, and how of the misrepresentation under Rule 9(b).

In Hartford Fire Insurance Co., the court denied the Government's Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief may be granted where the plaintiff had alleged that it was entitled to funds due a contractor on one contract as damages for a sum the Government had wrongfully paid to the contractor on another where the plaintiff, as equitable subrogee, was the performance bond surety on both contracts (under the "two contract" theory recognized in Transamerica Insurance Co. v. United States, 989 F.2d 1188 (1993).

In Kenney Orthopedic, LLC, the court held that, although it had Tucker Act jurisdiction over the plaintiff's claim for misrepresentation  in the inducement to enter a settlement agreement with the VA, the claim must be dismissed for failure to state with sufficient particularity the alleged facts of the what, when, where, and how of the misrepresentation under Rule 9(b).

In K-Con Building Systems, Inc., the court held that: (i) even though a contractor's letter to the Contracting Officer requesting remission of previously-assessed liquidated damages for allegedly late performance contained almost no specifics concerning the basis of the request, it was, nevertheless, a valid CDA claim when read in the context of the contractor's earlier letters to the Contracting Officer requesting time extensions for excusable delays; (ii) the current suit divested the Contracting Officer of authority to issue a decision on a portion of a subsequent claim that was already encompassed by this suit; (iii) the liquidated damages rate used in contract was unobjectionable;  (iv) releases in various contract modifications precluded the  contractor from seeking further excusable delays based on inclement weather (hurricanes); and (v) the contractor was not entitled to recover on a claim for excusable delay because the contractor had not gone through the proper steps to obtain the Contracting Officer's approval for a change in its construction sequence.

In Ground Improvement Techniques, Inc., the court held it lacked jurisdiction because there was no privity of contract between the plaintiff/subcontractor and United States.

In Tidewater Contractors, Inc., the court held it lacked CDA jurisdiction because (i) no final decision had been issued at time the Complaint had been filed; (ii) no final decision could be implied because nothing the Government had done had determined liability or damages related to the contractor's claim; and (iii) no constructive termination for default had occurred.

Changes/Breach/Contract Interpretation/Defective Specs/Authority

In Pew Forest Products, the plaintiff argued (unsuccessfully, in both cases) that (i) its timber logging contracts came into existence at the time bids were opened and its bid was declared to be the best bid (as opposed to when the Government later signed the contracts), and (ii) its logging operations were compensably delayed by contingencies that the solicitation and contract documents clearly stated might occur. 

In System Planning Corp., the court denied a contractor's claim because the option clause containing the language on which the claim was based was never exercised.

In Bell Heery/A Joint Venture, after dismissing the counts in the complaint requesting a "review" of the Contracting Officer's denial of the contractor's claims (because the CDA only authorizes suits directly on the underlying claims), the court held that the actions of state officials hindering the performance of a federal construction contract could not be attributed to actual or implied breaches, changes, or cardinal changes of the contract by the Federal Government because the contract allocated the risk of such actions to the contractor through the "Permits and Responsibilities" clause.

In Overseas Lease Group, Inc., the court held that the Government breached a contract for leased vehicles by failing to compensate the lessor for damage to returned vehicles and by forcing the lessor to accept short term leases that did not comply with minimum contract term.

In BPLW Architects & Engineers. Inc., although the court found that the architect breached the contract by negligently failing to provide underfloor piping and civil site grading designs that complied with the contract's requirements and the applicable standard of care, the Government failed to prove that the negligent designs caused the vast majority of the costs claimed by the Government for its alleged damages.

In Lublin Corp., the court denied a subcontractor's claim that its prime contractor had terminated it because the Government allegedly had leaked information to the prime that the subcontractor had disclosed to the Government in confidence:

Plaintiff attempts to pile a Pelion of conjecture upon an Ossa of speculation in relying on a single, lonesome fact - the timing of its termination - to prove that HUD officials breached an alleged confidentiality agreement. But like the Greeks of old, whose stone pile atop Mt. Olympus failed to reach the heavens, plaintiff’s efforts fall far short of its goal, dashed, inter alia, by evidence proving that [the prime's] decision to terminate Lublin predated Lublin’s meeting with HUD.

In SUFI Network Services, Inc., the court, performing a Wunderlich Act review of a prior ASBCA decision in a non-CDA case involving a nonappropriated fund activity and a contract to provide telephone services in guest lodging rooms on U. S. Air Force bases in Germany increased the award to the contractor for various breaches and extra work from the approximately $4.6 million previously awarded to it by the ASBCA to more than $118.7 million.

In P&K Contracting, Inc., the court held that a contractor was not entitled to the extra costs of providing a contractually compliant HVAC system and rejected the contractor's allegations of (among others) mistake, defective specifications, equitable estoppel, superior knowledge as excuses for its original proposal of a non-compliant system.

In denying a motion for summary judgment in Alpena Marc, LLC, a case involving a dispute over the proper interpretation of the term "base year" in a real property lease for purposes of determining the responsibility for future tax adjustments, the court noted that the issue did not fit neatly within doctrine of patent ambiguity and that "the parties’ cribbed formulation of these doctrines [ambiguity and mistake] hamstrings not only resolution on summary judgment, but also an appropriate resolution of a bizarre contractual impasse that the rules of contract interpretation may not resolve satisfactorily to either party."  

Terminations 

In Philip Emiabata d/b/a/ NOVA EXPRESS, the court held that the Government properly terminated a Postal Services contract for default after the contractor failed to provide the Contracting Officer with proof that it had obtained the contractually-required liability insurance that would enable it to begin performance.

In 5860 Chicago Ridge, LLC, the court (i) upheld the Government's default termination of a building lease due to numerous, longstanding water leak problems even though the Government failed to strictly comply with lease's cure period requirements because the contractor indicated it could not have fixed all the leaks within the full cure period, but (ii) denied the Government's claims for relocation costs (because the Government failed to meet its burden of proof to show which of those costs were necessary) and excess reprocurement costs of substitute rental space (because the Government's witness failed to compare the relocated space with the original space to establish they were similar). 

In M.E.S., Inc., the court held it lacked subject matter and ancillary jurisdiction over a bonding company's claims in intervention that: (a) the plaintiff/defaulted contractor should be required (i) to pay the bonding company any recovery by plaintiff to the extent of the bonding company's bond  losses and (ii) to pay into court any remaining balance on plaintiff's affirmative recovery to be held for the benefit of the bonding company as a set-off against any potential award in a separate federal district court lawsuit between the bonding company and the Government (over the bonding company's refusal to be responsible for the excess reprocurement costs during the contractor's challenge to the underlying default termination at the PSBCA); and (b) the court should issue a declaratory judgment that the claims alleged against the bonding company by the Government in the district court suit with respect to the alleged excess reprocurement costs are subject to setoff to the extent of any affirmative recovery by the contractor in the Court of Federal Claims action. Secondly, the court held that the CDA's  statute of limitations with regard for claims for excess reprocurement costs begins to run when the Government pays the reprocurement contractor, not when the original default termination is issued. Third, the court held that, in this case, the Government, nevertheless, lost its right to claim excess reprocurement costs under the CDA because it unreasonably delayed the reprocurement for four years as part of a litigation strategy, when the delay increased the costs of reprocurement. 

Costs; Quantum; Cost Accounting Standards (CAS)

In Kellogg Brown & Root Services, Inc., the court analyzed the contractor's burden of proving the reasonableness of its claimed costs in connection with a contract to provide dining facility services to troops in Iraq, in a situation that was further complicated by the fact that two of the contractor's managerial employees accepted kickbacks from a subcontractor, which, in turn, resulted in government counterclaims for (i) violations of Anti-Kickback Act and (ii) common law fraud (with the court ultimately deciding that the contractor was liable only for the return of the amount of the kickbacks accepted by those employees).

In Sugar Hill, LLC V. United States, the court held that the lessor had not proved it was damaged by the Government's alleged failure to properly restore a trailer park at the conclusion of a post-Katrina lease for mobile home trailer pads because the contractor did not present credible evidence that the park had diminished in value.

In SUFI Network Services, Inc., the court held that a contractor on a NAFI contract could recover its attorneys' contingent fees incurred before the appeal of its claim to  the ASBCA. 

In its opinion on the merits (following trial) in the Raytheon post-1995 CAS 413 segment-closing adjustment case, the court  held that: (i) the parties did not intend the waiver language (which was taken from FAR 42.1204(i)) in the novation agreement relating to individual segment closings to bar Raytheon's CAS 413 claim because the waiver language was contract-specific whereas the CAS 413 claims were not; (ii) Raytheon’s reliance on the "last place worked" methodology to determine the share of pension assets attributable to the AIS segment was compliant with CAS 413-50(c)(12); (iii) linear interpolation was a reasonable method for Raytheon to utilize in estimating pension plan assets, and it complied with CAS 413-50(c)(12)(iii)’s requirement to utilize the market value of the assets as of the date of the segment closing; (iv) Raytheon's use of a one-hundred percent retirement assumption with regard to the retirement of retirement-eligible plan participants in preparing its segment closing calculations for all of the plans in dispute in the AIS segment was also reasonable and CAS-compliant; (v) Raytheon reasonably followed the illustration in CAS 413-60(c)(9) and utilized sales data as a proxy for pension cost data when performing its CAS 413 government share calculations, where a reasonable search for historical data was performed, and actual pension cost data could not be located; (vi) the court lacked jurisdiction over the Government's equitable adjustment claim, as well as a set-off claim it first raised during the trial; (vii) Raytheon’s Optical segment closing adjustment calculation did not comply with the CAS requirements (found in CAS 413-50(c)(12)(ii) and CAS 413-50(c)(5)) for allocating assets from a single composite pension plan to the Optical segment; and (viii) PWF was not a "segment" within the meaning of CAS 413-30(a)(19), and, therefore, its sale did not trigger the need for a segment closing adjustment. 

In Nycal Offshore Development Corp., following an earlier decision establishing that the Government had breached an oil and gas lease, the court held that the contractor was not entitled to lost profit expectancy damages because of an intervening cause--the contractor would not have been able to obtain the necessary air pollution permits to proceed with drilling.

In Kellogg Brown & Root Services, Inc., the court addressed the reasonableness of subcontractor costs related to a cost reimbursable prime contract for the provision of dining facility services in wartime in Iraq and discussed the standards the contractor had to meet to establish the reasonableness of its methods for pricing changes to those subcontracts during times of rapid troop buildups beyond the levels contemplated by the original subcontracts.

Discovery, Evidence, Procedure

In Structural Concepts, the court denied cross motions for partial summary judgment as to the propriety of government counterclaims for liquidated damages because such damages cannot not be quantified until after resolution of delay claims that have been reserved by the parties for trial on the merits.

In K-Con Building Systems, Inc., the court imposed both monetary and evidentiary sanctions on the Government because (i) it failed to produce a set of relevant documents during discovery, and (ii) one of its witnesses destroyed the documents after their existence became known but before the plaintiff could examine them.

In Sikorsky Aircraft Corp., the court denied the Government's motion to strike a set of emails from the record because the Government had waited too long after it had produced the documents during discovery to assert the deliberative process privilege.

Fraud 

In Railway Logistics International, the court denied the contractor's $6 million in breach claims (on a contract worth less than $2.5 million) and granted the Government's counterclaims for forfeiture under a special plea in fraud based on a contractor spreadsheet concerning the claim quantum revealed during discovery. The court left little doubt how it felt about the spreadsheet and the contractor's claim in general:

    Railway Logistics could not support its claim because of fraud and misrepresentation of fact. Every item on the spreadsheet that served as plaintiff’s support for its claim was overstated or imaginary. Contents of the spreadsheet alone provide clear and convincing evidence that RLI practiced fraud "against the United States in the proof, statement, establishment, or allowance" of its claim. 28 U.S.C. § 2514. 
          Trial of this case revealed that defendant’s business relationship with RLI had no redeeming aspect; it caused a grievous waste of limited resources and hindered the Government’s rebuilding efforts in Iraq. RLI was in obvious breach of both contracts, yet defendant terminated them for convenience of the Government. This would have allowed plaintiff to walk away with little or no cost to itself, yet it sued the Government for millions of dollars on a specious claim, thereby creating still more waste of valuable time and resources.
          The Government limited its counterclaims to the most obvious and outrageously inflated fraudulent claims. Given that restraint, the category of claims that RLI could not support because of "misrepresentation of fact or fraud by the contractor" totaled $1,175,160. See 41 U.S.C. § 7103(c)(2). . . .
          Any amount of RLI’s claim that might have been valid, or could have remained after applying statutory penalties would be forfeited pursuant to the special plea in fraud. 28 U.S.C. § 2514. Statements contained in the spreadsheet alone support a finding, by clear and convincing evidence, that plaintiff attempted to practice a fraud "against the United States in the proof, statement, establishment, or allowance" of its claims.

In Grand Acadian, Inc., the court denied all of the contractor's various claims for government damage to leased property, but also held that the Government had not established that the contractor had the required mental state to support the Government's counterclaims for fraud under the FCA, the FFCA or the antifraud provision of the CDA , i.e., "knowing" submission of fraudulent claims.

The court's decision in Veridyne Corp. is a fascinating story of a joint scheme by the contractor and the procuring agency to avoid competition requirements on an 8(a) contract extension (by vastly understating its anticipated cost), which eventually collapsed due to the accounting constraints of funding limitations. The court refused to declare the extension mod void ab initio because the agency was in on the deception, but the contractor was, nevertheless, liable on the Government's counterclaims for forfeiture, fraud, and CDA antifraud provisions because the contractor manipulated certain invoices in order to get around the ever-increasing problem of funding limitations. In a later decision in the Veridyne case, the court granted a portion of the Government's claim for its costs of reviewing the unsupported portions of the contractor's CDA claim pursuant to the anti-fraud provisions of the CDA ( 41 U.S.C. 7103(c)(2)). 

EAJA

In Watterson Construction Co., the court denied the plaintiff's EAJA application because it found that the Government's litigation position was substantially justified.

Court of Appeals for the Federal Circuit

Jurisdiction/Standing/Res Judicata 

In The Minesen Co. v. McHugh, the CAFC enforced a provision in the "Disputes" clause of a NAFI contract that stated the ASBCA's decision on any appeal would be final and unreviewable.

In Parsons Global Services, Inc., the CAFC affirmed an ASBCA decision dismissing an appeal for lack of CDA jurisdiction because a prime contractor's request for payment of its subcontractor's overhead and G&A costs (at a rate specified in the subcontract) submitted by the prime two years after a termination for convenience was "routine" and, therefore, not a claim within the meaning of the CDA.

FloorPro, Inc., was a small subcontractor on a government contract, and it completed its modest work scope satisfactorily. The prime and the Government then entered a bilateral modification providing that the payment for FloorPro's work would be made out in a hard copy check jointly to the prime and sub to ensure FloorPro received the funds. The Government's paying office promptly ignored the mod and sent the funds electronically to the prime, which did not pay the sub. FloorPro sought relief from the Government's Contracting Officer and when that was denied, appealed at the ASBCA, which eventually (four years later) found in FloorPro's favor on a third party beneficiary theory. The Government appealed, and (two years later) the CAFC reversed on the grounds that the CDA did not provide the boards with such jurisdiction, but noted in dicta that the Tucker Act's grant of jurisdiction to the Court of Federal Claims was broader, so FloorPro promptly filed suit in that court, which eventually also held in its favor. Now, the CAFC reverses that decision, too, on the grounds that FloorPro did not file suit at the CoFC until more than six years after the Government had made the erroneous payment.  

In Bowers Investment Co., LLC, the CAFC affirmed the CoFC's dismissal of a contractor's claims for unpaid rent because they were based on the same transactional facts as, and therefore were precluded by, claims involved in a prior, unappealed, decision by the CBCA.

In Peter C. Nwogu, dba Environmental Safety Consultants, Inc., a decision labeled as nonprecedential, the CAFC  held, among other things, that the CDA gives the Court of Federal Claims Tucker Act jurisdiction to enforce a monetary judgment rendered by the ASBCA.  

Contract Interpretation/Changes/Authority/Breach

In Englewood Terrace Limited Partnership, a nonprecedential decision, the CAFC remanded the case to the CoFC for a recalculation of a lost profit award following a breach because the lower court had not subtracted the costs saved by reason of the breach.

In Scott Timber Co., the CAFC reversed the prior decisions by CoFC in favor of a timber sales contractor (see prior decisions on liability and quantum) and held that (i) the Government could not have breached the covenant of good faith and fair dealing by failing to disclose information to the contractor prior to award because the covenant does not exist until the contract is signed; and (ii) the Government did not unreasonably lengthen contract suspensions by unduly delaying its actions during the suspensions because the suspensions were not "specifically targeted" at delaying Scott's contracts and did not reappropriate any benefit guaranteed by the contracts, since the contracts contained no guarantee that performance would not be interrupted.

In a decision it labeled as nonprecedential, the CAFC reversed the prior decision by the CBCA  and held that the lessor, KD1 Development, Inc.,  rather than the lessee (GSA), was entitled to recover on its monetary claims because an ambiguity in a lease agreement as to whether operating costs were included in the base rental rate was a latent ambiguity that could not be resolved one way or the other by resort to extrinsic evidence (which pointed in both directions) and, therefore, must be construed against the Government.

Costs/CAS

In The DIRECTV Group, the CAFC affirmed the Court of Federal Claims' decision concerning the appropriate segment closing adjustments under CAS 413 when the sale of two segments involved the transfer of defined benefit pension plans.

In Tip Top Construction, Inc. v. Donahoe, the CAFC reversed the PSBCA's prior decision and held that consultant and attorney costs were recoverable because they were reasonable contract administration costs incurred in connection with negotiating the quantum of a change rather than for the prosecution of a CDA claim.

In Chu v. The Boeing Co., a decision it labels as nonprecedential, the CAFC affirmed (for the most part) a prior set  of CBCA decisions (including this most recent one) regarding the allowability of defense costs. The court held that,  although the Board incorrectly determined that it did not have the power to apportion the costs of litigation in cases with mixed results, there was no need to remand the case because apportionment would not have been appropriate in this case.

 


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