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2017 Procurement Review--Contract Disputes



 

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

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

In Sparton DeLeon Springs, LLC, the ASBCA held that the Contracting Officer's decision demanding reimbursement of direct costs was a government claim and was time-barred because it was issued more than six years after the Government knew or should have known of the claim. Subsequently, the Board denied the Government's motion for reconsideration. In Thorington Electrical and Construction Co., the ASBCA held that a claim submitted more than six years after it accrued was time-barred, and there was no provision in the CDA to cure this problem by allowing the claim to "relate back" to an earlier claim concerning which the Contracting Officer already had issued a decision and which already had been disposed of on appeal. 

In Ahtna Environmental, Inc., the CBCA used its discretion to stay an appeal to permit the Contracting Officer to issue a decision on the merits of the contractor's claim after a prior Board decision had rejected the basis for the Contracting Officer's original decision, which had addressed only the issue of whether a release barred the claim. 

In H.C. Beck, Ltd., the CBCA denied the Government's motion to dismiss the appeal for failure to state a claim and held that the contractor's references to the "Differing Site Conditions" and "Request for Equitable Adjustments" clauses were sufficient to proceed with an appeal involving a claim for removing significantly more asbestos-containing materials than the contract originally contemplated.

In Shippers Stevedoring Co., the ASBCA dismissed an appeal because neither the appellant nor its representative responded to numerous board communications inquiring whether the representative met the requirements of Board rule 15(a).

In USAC Aerospace Group dba USAC Aerospace Group Ordnance Division, the ASBCA dismissed an appeal because the alleged corporate appellant failed to provide evidence of (i) its legal capacity to bring its appeal or (ii) the authority of its alleged representative under Board Rule 15.

In DCX-CHOL Enterprises, Inc., the ASBCA dismissed an appeal as moot because the Contracting Officer had rescinded the underlying demand for payment that was being appealed.

In TKC International LLC, the ASBCA dismissed the appeal because the individual filing the appeal failed to present any evidence that he was currently an "officer" of the company entitled to represent it in accordance with Board Rule 15.

In Parsons Government Services, Inc., a dispute stemming from the contractor's contention that the Government had violated statutory requirements for the source of contract funding (thereby allegedly rendering the contract void ab initio, entitling the contractor to recover in quantum meruit), the ASBCA dismissed the appeal for failure to state a claim upon which relief could be granted because the statutes at issue provided no private cause of action.

In Andrews Contracting Services, LLC, the ASBCA dismissed an appeal for lack of jurisdiction because the contractor's Request for Equitable Adjustment  did not request a Contracting Officer's decision and, therefore, was not a CDA claim.

In ABS Development Corp., the ASBCA denied the Government's motion to dismiss consolidated appeals as having originally been filed prematurely because, despite a subsequent stay by the Board to permit the Contracting Officer to issue a decision, he failed to do so within a reasonable time or within the time the Government had indicated a decision would be issued.

In Hanboo Construction Co., Ltd. , the ASBCA dismissed an appeal after the company advised the Board that it knew nothing about the original appeal letter and that the individual who had signed it no longer worked for the company.

In K2 Solutions, Inc., the ASBCA: (i) dismissed the contractor's claims that an alleged option exercise improperly reduced the contract's scope of work (because the Board found that the attempted option exercise was ineffective because it differed from the terms of the contract); but (ii) declined to dismiss the contractor's claim that the Government had breached its duty of good faith and fair dealing with regard to the modification that was not effective as an option exercise because that modification could plausibly be viewed as a new offer that the contractor accepted by beginning performance.

In BES Design/Build, LLC, the CBCA denied the contractor's request for the immediate release of the funds found due to it in the Contracting Officer's decision because, once appealed by the contractor, that decision is not binding, and the Board reviews the dispute de novo.

        Jurisdiction

      In Kirk Ringgold, to reach the merits, the Board found that a lessor had submitted a CDA claim when, after the Contracting Officer had disputed the contractor's right to holdover rent, the contractor's wife  "emailed the contracting officer a final invoice with the note, 'An add’l 15 days rent, $6,000, is owed through 10/09/15 when USFS contractors were gone and rock removed. Please process this invoice for prompt payment of this agreed on amount for . . . helibase use.'"

In BES Design/Build LLC, the CBCA dismissed (for lack of jurisdiction and as premature) an appeal filed before the date the Contracting Officer had timely set for issuance of a decision on the contractor's claim.

In EnergX, LLC, the CBCA dismissed an appeal (from an agency's decision to reject a VECP) for lack of jurisdiction because there was no certified claim underlying the original appeal, even though the prior judge had granted the parties extensions of time to allow the Contracting Officer to issue a decision on a certified claim.

In [Redacted], ASBCA No. 60652, the Board dismissed an appeal for lack of jurisdiction absent evidence the contractor had submitted a claim to the Contracting Officer. The ASBCA reached the same result in American Green Land Construction Co.

In Carter Safety Consultants, Inc., the ASBCA held it lacked jurisdiction over an appeal filed more than 90 days after receipt of the Contracting Officer's decision, noting that a possible attempt to file the appeal within 90 days at the wrong forum (in this case, the GAO) was unavailing. In Anaconda Construction Co., the ASBCA dismissed another appeal for failure to file within 90 days of receipt of the Contracting Officer's decision.

In Military Aircraft Parts, the ASBCA held that the contractor's failure to appeal a default termination decision within 90 days was not excused by the fact that the contract did not include a "Default" clause. In another Military Aircraft Parts  decision, the Board: (i) rejected the contractor's argument that the CAFC's holding in Sikorsky Aircraft (i.e., that the six-year limit for submitting claims is not a jurisdictional statute of limitations) should be extended to apply to the CDA's 90-day limit for appealing Contracting Officer's decisions; and (ii) held that, absent evidence of when the contractor had received a government email transmitting another Contracting Officer's decision, there was no basis to dismiss an appeal from that decision as untimely.

In Agility Services Logistics Co., on remand from the CAFC, which had ordered the Board to determine the identity of the real party in interest in the appeal, the ASBCA held that such a determination was irrelevant to its original decision that it lacked jurisdiction over contracts with the Coalition Provisional Authority of Iraq, regardless of the identity of the real party in interest, and that, in any event, the parties had not provided the Board with the information necessary to determine the real party in interest, and the Board lacked the expertise to answer question under Iraqi law on its own.

In CompuCraft, Inc., the CBCA held: (i) it lacked jurisdiction over the portion of the contractor's appeal requesting the Board to order the Government to change a performance evaluation; and (ii) the Board's review was not limited by any findings of fact in the Contracting Officer's underlying decision.

In Public Warehousing Co., K.S.C., the ASBCA held it lacked jurisdiction to certify its prior decisions (staying an appeal the during pendency of a related district court fraud case and allowing the Government to amend its answer to assert affirmative defenses) for interlocutory review by the CAFC.

In Foxy Construction, LLC, the CBCA held it lacked jurisdiction over an appeal because, for various reasons (lack of certification, no request for Contracting Officer's decision), none of the contractor's three letters to the Contracting Officer satisfied the requirements for a CDA claim.

In Rover Construction Co., the ASBCA denied the Government's motion to dismiss an appeal for lack of jurisdiction because, viewed as a whole, numerous emails between the contractor and the Government sufficed to convert a routine invoice into a claim.

In [Redacted], ASBCA No. 60597 (Mar. 3, 2017), the ASBCA held that, despite several questionable government actions that might otherwise have converted a settlement proposal into a disputed claim, there was no jurisdiction because the proposal exceeded $100,000, but was uncertified.

The CBCA dismissed an appeal by Consultis of San Antonio, Inc., for lack of jurisdiction because the issue on appeal (which involved the interpretation of the terms of the underlying GSA Schedule contract) should have been decided by the GSA Schedule contract Contracting Officer rather than by the VA's task order Contracting Officer.

In [Redacted], ASBCA No. 60841 (Apr. 3, 2017), the ASBCA dismissed another appeal because the underlying claim was in excess of $100,000 and, therefore, required a signed certification, but included only a typed signature block without an actual signature.

In Islands Mechanical Contractor, Inc., the ASBCA dismissed an appeal for lack of jurisdiction because a significant portion of the contractor's "claim" was actually just a proposal for additional work, and, therefore, did not satisfy the CDA requirement that it demand a sum certain as a matter of right.

In Savannah River Nuclear Solutions, LLC, the CBCA denied the contractor's "petition" requesting the Board either to direct the Contracting Officer to issue a decision within 30 days or to treat his failure to have issued a decision prior to the submission of the petition as a deemed denial. The Board found that the contractor's various submissions (claim, petition, and briefs) were inconsistent and confused the procedural requirements applicable to claims for less than $100,000 with those for claims in excess of $100,000. More than 35 years after the deceptively simple appearing CDA became law, litigants still are getting bogged down in its procedural quagmires.

In a related Savannah River Nuclear Solutions, LLC, decision issued the same day as the one above, the CBCA dismissed an appeal for lack of jurisdiction because the Contracting Officer lacked authority to issue a decision on a claim where the matter had been referred to the DOJ due to suspected fraud, and, therefore, his failure to issue a decision could not be treated as a deemed denial.

In [Redacted], ASBCA Nos. 60814, 60864 (June 1, 2017), the ASBCA dismissed an appeal for lack of jurisdiction because the contractor had failed to submit a signed certification to the Contracting Officer on a claim in excess of $100,000 prior to filing its appeal.

In Melwood Horticultural Training Center, Inc., the ASBCA dismissed an appeal for lack of jurisdiction because the contractor's claim as a whole did not state a sum certain, although portions of it did include definite sums.

In M.I.T. International Commercial Lending, LLC, the CBCA held that it lacked jurisdiction over an appeal involving buyer's alleged default in an auction of real property and that, in any event, the appeal should also be dismissed for failure to prosecute after the appellant failed to respond to any one of numerous communications from the Board, which had been sent to it by a variety of alternate methods.

In Crooked River Logistics, LLC, the PSBCA dismissed appeals for lack of jurisdiction because: (i) the contractor had failed to file claims with the Contracting Officer; and (ii) the contractor complained of the Postal Service's decision to award two contracts to another firm.

In YRT Enterprises LLC dba Tompkins Investigative Services, the CBCA dismissed an appeal for lack of jurisdiction because: (i) the Contracting Officer's letter asking that the contractor's security credentials be returned to the Government on the last day of the contract was not a termination decision that could be appealed; and (ii) the Board had no authority over claims for injunctive relief, punitive damages, or the allegedly improper withdrawal of security clearances. 

In Safeco Insurance Co. of America, the ASBCA dismissed an appeal for lack of jurisdiction because: (i) the Board lacks CDA jurisdiction over equitable subrogation claims; and (ii) the appellant failed to present non-frivolous allegations of the required elements for an implied-in-fact contract.

In Benjamin Medina, the ASBCA held: (i) it lacked jurisdiction over the lessor's quantum meruit claim because it had not been previously presented to the Contracting Officer; (ii) the lease's restoration clause (a) clearly stated the Government would not be responsible for the costs of repainting if it occupied the premises for more than three years and (b) was not in conflict with the indemnification clause; and (iii) other property conditions at lease termination were due to non-compensable normal wear and tear.

In KEO & Assocs., the CBCA held it lacked jurisdiction over an appeal--not even to entertain the contractor's request to dismiss the appeal without prejudice (after the Contracting Officer withdrew a decision on an REA)--because there was no underlying certified claim requesting a Contracting Officer's decision.

In Hellenic Air Force, the ASBCA dismissed an appeal because the Board lacked jurisdiction to provide the requested relief, i.e., ordering the Government to re-open or reinstate an FMS agreement (due to allegedly defective sale items), which the Board interpreted as a request for injunctive relief.

In Eagle Mechanical, Inc., the CBCA held it lacked jurisdiction over a direct appeal by a subcontractor that was not sponsored by the prime. 

In E.C. London & Assocs., the ASBCA held it lacked jurisdiction over the contractor's request for Prompt Payment Act interest on the portions of its claim that were allowed because the contractor had not first submitted a Prompt Payment Act interest claim to the Contracting Officer.

In Elizabeth Construction Co., the ASBCA dismissed an appeal for lack of jurisdiction because the appellant did not allege the existence of any contract between it and United States.

In Lulus Ostrich Ranch, the ASBCA held: (i) it lacked jurisdiction over a bid-protest type claim that the Government allegedly violated procurement rules by awarding contracts to other contractors; however, (ii) it had jurisdiction over a claim that the Government had extended appellant's contract only as a pretext to permit its subcontractor time to become eligible to perform the contract in appellant's stead.

In Triumph Donnelly Studios LLC, the PSBCA held it lacked jurisdiction to hear a claim for damages for the Postal Service's failure to deliver an item of Priority Mail.

The ASBCA dismissed an appeal for lack of jurisdiction in NileCo General Contracting LLC, because the contractor included only a typewritten signature block on the original claim, but no actual signature (not even a digital or electronic one).

In Elham Ahmadi Construction Co., the ASBCA held it lacked jurisdiction over an untimely appeal submitted by a foreign firm appearing pro se more than six years after the default termination on which it was based.

In L-3 Communications Integrated Systems, L.P., the ASBCA denied the contractor's motion to dismiss for lack of jurisdiction because the Board found that the Contracting Officer's written decisions asserting the Government's claims against the contractor demanded a sum certain and provided the contractor with sufficient notice of the basis and the amount of the claims.

Changes/Constructive Changes/Contract Interpretation/Breach/Authority

In Astro Systems, Inc., the ASBCA held that the contract did not require the Government to pay the lessor profit on the cost to repair damage to leased vehicles caused by government personnel.

The ASBCA dismissed two government claims out of hand in Lockheed Martin Integrated Systems, Inc., reasoning that: (i) the Government's attempt to disallow certain subcontract costs was based only on vague, conclusory assist audit reports on subcontractors and did not establish any logical liability on the part of the prime; and (ii) the Government's claim that the prime contractor breached some duty to the Government by failing to monitor its subcontractors adequately to avoid billing the Government for certain subcontractor costs questioned in various assist audits did not even allege several of the elements required to establish a breach.

In Kirk Ringgold, the CBCA held that, under a lease, the Government was liable for holdover rent for the period the agency took to restore the property after vacating it. To reach the merits, the Board found that the lessor had submitted a CDA claim when, after the Contracting Officer had disputed the contractor's right to holdover rent, the contractor's wife  "emailed the contracting officer a final invoice with the note, 'An add’l 15 days rent, $6,000, is owed through 10/09/15 when USFS contractors were gone and rock removed. Please process this invoice for prompt payment of this agreed on amount for . . . helibase use.'"

In A.T.I TACOSE S.C.a.R.L., the ASBCA granted the Government's motion for summary judgment and held that: (i) the contractor's reliance on a single drawing that did not depict speakers in sleeping rooms was unreasonable because the specifications clearly stated that requirement and took precedence over the drawings pursuant to the Order of Precedence clause; and (ii) the firm, fixed-price design-build contract required the contractor to comply with European and Italian building code requirements and, therefore, the contractor was not entitled to extra compensation for complying with elements of those requirements it discovered only after award.

In Military Aircraft Parts, the ASBCA granted the Government's motion for summary judgment because a bilateral modification was clear and unambiguous and constituted a release and an accord and satisfaction of the contractor's claims.

In an interesting case about the limits of the implied duty of good faith and fair dealing, the CBCA held, in TranBen, Ltd., that, where the Government had ordered the minimum required quantity in an IDIQ contract to supply travel vouchers and where the contractor alleged the Government had misled the IRS into approving the use of debit cards as a substitute for vouchers by inaccurately apprising the IRS that vouchers were not readily available, which in turn, allegedly breached the duty of good faith and fair dealing and resulted in fewer orders for vouchers under the contract, the contractor had failed to state a claim upon which relief could be granted in the form of monetary damages because the alleged breach by the Government was not sufficiently related to its duty to the contractor under this particular contract to be actionable.

In South Bay Boiler Repair, Inc., the ASBCA held that the plain language of a ship repair contract satisfied the requirements of 10 U.S.C. 7311 to notify the contractor of "the types and amounts of hazardous wastes that are required to be removed by the contractor from the vessel, or that are expected to be generated, during the performance of work under the contract" so that the contractor was not entitled to extra compensation for removing what it claimed were unanticipated quantities of hazardous materials.

In K-Con, Inc., the ASBCA denied the contractor's claim for the Government's delays in issuing notices to proceed, holding that, in contracts for the construction of public buildings, the bonding requirements of FAR 52.228-15 are mandatory and represent a significant component of public procurement policy and, therefore, are deemed to be incorporated in those contracts by operation of law under the Christian doctrine, even when mistakenly omitted from the contract documents. Subsequently, the contractor's motion for reconsideration was denied.

In 1441 L Assocs., LLC, the CBCA held that the plain language of the extension agreement in a lease resolved the question of the quantum of the cumulative operating costs to be paid by the agency. 

In ServiTodo, LLC, the CBCA held that the clear release language of a bilateral settlement agreement barred the current claim. 

In Supply & Service Team GmbH, the ASBCA held that the (perhaps broader-than-necessary) waiver language in a valid bilateral modification, which was supported by consideration, precluded the Government from subsequently challenging the costs of a Technical Order previously paid to the contractor.

In ASW Assocs., a case involving contract interpretation, the CBCA held that, because the contract lacked a guaranteed minimum quantity or any clause requiring the Government to order all its requirements from the contractor, the contract was neither an ID/IQ nor a requirements contract, and, thus, the contractor was entitled to be paid only for the actual work it performed.

In CB&I AREVA MOX Services, LLC, the CBCA held that the clear language of a bilateral contract modification precluded the contractor's claim for an increase in its fee percentage based on an option that was never exercised. Subsequently, the Board denied the contractor's request for reconsideration.

In MBD Maintenance, LLC, the PSBCA held that a release signed by the contractor after the contractor was aware of the facts giving rise to a mistake in bid claim barred that claim.

In Dream Management, Inc., a decision under the small claims procedure that the CBCA, therefore, labeled as nonprecedential, the Board held that: (i) the plain language of a task order under an FSS contract established it was a time-and-materials, rather than an IDIQ, order; (ii) a significant government error in estimating the quantity of work involved was not a breach because there is no basis for a negligent estimate claim in a T&M contract; (iii) a bilateral modification purporting to end the order was not a valid method of terminating it and, therefore, the cancellation should be treated as a termination for convenience; and (iv) as part of its T for C claim, the contractor was entitled to some of the subcontract costs it incurred as a result of the agency's erroneous estimate for the work. It's a shame the decision is nonprecedential because these were all significant legal issues that were addressed.

In SecTek, Inc., the CBCA held that the Government was not liable for the successor contractor's underestimation of the costs for vacation time of the predecessor contractor's employees the successor had retained in a contract covered by the Service Contract Act because the Government was not required to furnish the successor with a seniority list (which would have helped it estimate such costs) until after award, and the successor did not effectively object to the terms of the solicitation (or reserve its rights) regarding this issue in submitting its offer.

The ASBCA shut out MULE Engineering, Inc. on all of its construction contract claims, finding, inter alia, that:  (i) the contractor's inability to perform certain contract work with its own personnel and its delays in employing a subcontractor for that effort constituted concurrent delays that barred one of its claims under the "Suspension of Work" clause;  (ii) the Army's alleged delays were not the cause of the allegedly higher-than-anticipated cost of the contractor's subcontract with its metal building and concrete subcontractor; (iii) the contract required installation of a disputed building column, and the Board was not bound by Contracting Officer's decision granting the contractor certain of its claimed costs for installing the column; (iv) the contractor not entitled to its costs  of replacing a unit it ordered with a duct on the wrong side because the contract drawings contained a patent ambiguity about which the contractor had failed to inquire prior to bidding; (v) any government-caused delay in delivery of a dehumidifier was not on the critical path and, therefore, did not entitle the contractor to extra compensation; and (vi) the Board not bound by part of the Contracting Officer's decision erroneously granting part of the contractor's claim for allegedly excess curb pours, because the contract contained a patent ambiguity on this issue about which the contractor, again, had failed to inquire. 

In Jonathan Noeldner, the CBCA denied the contractor's claim on a timber sales contract because the Government did not require the contractor to cut smaller diameter trees than he was contractually responsible for harvesting, and statements by the Government's sale administrator erroneously interpreting the contract were irrelevant.

In T. K. Hughes Auto Sales, Inc., the CBCA denied the contractor's claims for rust on the undercarriages of two automobiles  bought at a government auction because the vehicles were not misdescribed, there was no warranty against such rust, and the buyer had an opportunity to inspect the vehicles prior to bidding.

In Turner Construction Co., an unusual, non-CDA case decided by the CBCA under the construction contract's Disputes clause, the Board summarized its holding as follows:

The Board’s role in this matter is to find a reasonable price for the construction services that Turner provided in the renovation of the American History Museum. We are tasked with this assignment because, despite Smithsonian’s promises both in the original contract and during contract performance, Smithsonian never negotiated a firm fixed price for much of the work Turner performed. Smithsonian has a renovated museum, and the Board is deciding herein what additional sums are owed to Turner for that building. The difficulty in this case was principally of Smithsonian’s own making. If Smithsonian had agreed to a firm fixed price for the construction, Turner would have been bound to that price, subject to adjustment for changes and other increases. Having failed to execute the bargain prior to the provision of services, Smithsonian cannot reap the benefits of a bargain it wishes it had struck.

The Board finds that Turner and its subcontractors incurred costs to address problems for which Smithsonian is responsible—hazardous waste abatement, mechanical, electrical and plumbing (MEP) interferences, and continuing design changes. On this record, Turner may recover based upon a quantum meruit theory. Turner’s subcontractors used more conventional methods to attempt to prove their disruption claims arising from these same issues, and some succeeded. However, none of Turner’s subcontractors proved their claims for extended overhead flowing from contract delays.

Regarding Smithsonian’s claim for overpayment based upon its audit of Turner’s project costs, the Board finds that Smithsonian has not met its burden. While the audit exposed areas that merited further investigation, Smithsonian did not undertake those necessary steps. Instead, it simply demanded repayment and has failed to establish a proper basis for that demand.

In Swinerton Builders Northwest, a decision that includes 230 pages of factual findings alone in a complex construction contract dispute, the ASBCA held, inter alia, that: (i) although there were many disagreements and inopportune comments by both sides during the project, neither side's positions rose to the level of a bad faith desire to harm the other; (ii) the contractor's proposal did not clearly apprise the Government that it included an alternative or deviation from the solicitation's HVAC/mechanical requirements, and the contractor failed to prove the Government approved any such deviation or otherwise waived the contract requirements in this area at the time of award; (iii) the Government's later approval of an alternative design was only done to avoid further delays to the project caused by the contractor's stubborn insistence on the use of an alternative design and was not a basis for a constructive change or delay claim by contractor (the Government not being required "to exercise the patience of Job"); (iv) the contractor released certain aspects of a Differing Site Conditions claim in a bilateral modification, but was entitled to 14 days of compensable delay damages; and (v) although the Government breached the contract by denying access to the worksite to a Project Manager, the contractor failed to prove damages from the breach.

In IAP Worldwide Services, Inc., the ASBCA held that the Government had constructively (and compensably) accelerated the contractor's task order performance requirements by failing to timely grant the contractor's requests for time extensions due to Pakistan's closure of a border on the contractor's route, but the border closing was not a breach of a warranty of availability because the  Government had not made, agreed to, or, by its conduct, created any such warranty.

In Zafer Construction Co., the ASBCA held that a contractor that had failed to take advantage of prebid opportunities (i) to inspect the site, (ii) to review detailed drawings, and (iii) to ask questions, could not establish the elements for recovery of unanticipated costs under any of its theories of of unilateral mistake, unconscionability, or differing site conditions.

In JHCH Properties #2, LLP, the PSBCA held that the contractor was liable for certain back charges (but not others) after it failed to comply with the Postal Service's requests to repair premises leased by the contractor to the Postal Service, forcing the Postal Service to have the repairs performed by a third party.

In Kellogg Brown & Root Services, Inc., a case that included appeals on remand from the Court of Appeals for the Federal Circuit, the ASBCA decided several motions to dismiss and held, in the main, that the Government's prior material breach of a contract (i.e., the Government's failure to provide the contractor and its subcontractors with the contractually promised level of force protection) excused the contractor's subsequent noncompliance with the contract's prohibition against the use of private security companies (PSCs), the reasonable costs of which the contractor was, therefore, entitled to recover.

In L.C. Gaskins Construction Co., the ASBCA: (i) rejected the Government's affirmative defense of fraud in the inducement based on language in the contractor's proposal because the solicitation's specifications were ambiguous and problems caused by miscommunications between the contractor and one of its subcontractors did not rise to the level of an affirmative misrepresentation; and (ii) analyzed the contractor's claim that the discovery of hazardous material in spent blast debris resulting from the removal of existing paint constituted a Type I Differing Site Condition.

In Presentation Products, Inc. dba Spinitar, the ASBCA held that a contract clause (FAR 52.212-4) stating that the contract price included all applicable federal, state, and local taxes precluded the contractor's claim for reimbursement of Hawaii's state excise tax even though the contractor's bid had stated it did not include that tax.

The ASBCA sustained an appeal by Hallmark-Phoenix 3, LLC because: (i) the Government had failed to reimburse the contractor for the increased wages and fringe benefits it was required to pay as a result of DOL wage determinations applicable during an extension period of the contract; and (ii) the Government's affirmative defenses to the contractor's claim were untimely raised.

In BAE Systems Southeast Shipyards Mayport LLC, a case involving contract interpretation and plenty of basic mathematical reasoning, the ASBCA held that: (i) a contract's formula for calculating the small business utilization percentage was unambiguous; (ii) the Government's answer to a question formally published in an amendment to the solicitation was incorporated into the final contract as a matter of law; (iii) that answer and the contract's small business utilization formula must be read together; and (iv) the contractor's proposed method of calculating small business utilization was unreasonable because it would result in a utilization figure of more than 200% in one case.

In Innoventor, Inc., the ASBCA issued a summary judgment in favor of the Government on the contractor's constructive change claim because there was no evidence that any authorized individual  required the contractor to perform work not required by the contract's terms.

In Commerce Plaza Office Partners, LLC, the CBCA held that, even absent a restoration clause in the lease, the Government, as the tenant of leased space in an office building, was liable for damage to the property that exceeded reasonable wear and tear.

In Sonoran Technology and Professional Services, LLC, a dispute involving contract interpretation, the ASBCA held that, under the principle of  expressio unius est exclusio alterius (i.e., where one or more objects in a class are specifically named, objects of that class that are not named are excluded), FAR 52.222-43 (the Service Contract Act Price Adjustment clause) does not entitle a contractor to an equitable adjustment for an increase in a state's gross receipts tax. The Board also held that the Changes clause did not authorize such an adjustment in this situation either.

In Benjamin Medina, the ASBCA held: (i) it lacked jurisdiction over the lessor's quantum meruit claim because it had not been previously presented to the Contracting Officer; (ii) the lease's restoration clause (a) clearly stated the Government would not be responsible for the costs of repainting if it occupied the premises for more than three years and (b) was not in conflict with the indemnification clause; and (iii) other property conditions at lease termination were due to non-compensable normal wear and tear.

In Godwin Anagu, the CBCA denied a misdescription claim regarding a vehicle purchased at auction because the warranty of description when a vehicle is sold "as is" is satisfied when the advertisement provides an accurate year, make, model, and VIN number.

In Coast to Coast Computer Products, the CBCA denied various claims related to the agency's blanket purchase agreement (BPA) mainly because the claims were based upon a misapprehension of the nature of a BPA, i.e., upon various alleged obligations on the part of the Government that a BPA simply does not establish.

In Engineering Solutions & Products, LLC, the ASBCA denied a claim based on an alleged implied-in-fact agreement and held that the contractor had made a business decision to risk leasing warehouse facilities for an extended period in the hopes it could sublease to the Government for seven years, but without any binding commitment from the Contracting Officer (or anyone else with actual or implied authority) to stay that long, and, therefore, could not recover (even under a quantum meruit theory) when the Government vacated the premises after only five years. However, in Honeywell International, Inc., the ASBCA determined the amount the contractor could recover under quantum valebant or quantum meruit remedies for the fair market value of the goods and services it had delivered to the Government pursuant to an invalid contract.

In E.C. London & Assocs., the ASBCA: (i) denied the contractor's claim for cleaning windows added by changes because (a) the evidence presented by the Government established the added windows were offset by others taken offline, such that the contractor was paid for the square footage indicated in the task orders at issue, and (b) the record contained no explanation of the methodology used to come up with contrary square footage measurements once made by one government employee (and no way to replicate those figures); and (ii) held it lacked jurisdiction over the contractor's request for Prompt Payment Act interest on other portions of its claim that were allowed because the contractor had not first submitted a Prompt Payment Act interest claim to the Contracting Officer.

In Industrial Maintenance Services, Inc., a decision involving contract interpretation issues and limited to the issue of entitlement, the CBCA held, inter alia, that the contractor was entitled to certain costs associated with the effect of a change on unchanged work because the bilateral modification implementing the change did not include an agreement as to the time and cost impacts of the added and altered work and, therefore, did not preclude recovery for those impacts, as the Government had contended.

In Central Texas Express Metalwork LLC d/b/a Express Contracting, in dismissing the contractor's appeal, the ASBCA held that the contractor could not avoid the final release of claims that it and the Government had signed (thereby making the release a binding contract)  by refusing to accept the final payment called for in the release.

In Arab Shah Construction Co., the ASBCA denied a claim because it: (i) was precluded by a contract modification,  (ii) was not submitted until after final payment had been made, and (iii) was "supported" by two pieces of "evidence" the Board determined were likely forgeries by the contractor.

In Access Personnel Services, Inc., a decision limited to entitlement, the ASBCA rejected both the Government's and the contractor's interpretations of FAR 52.232-7 (Payments Under  Time-and-Materials and Labor-Hour Contracts) and held that the "Payments" clause required that the contractor be reimbursed for its "costs of subcontracts" rather than for (i) the hourly rates billed to it by its subcontractor (as the Government contended) or (ii) the hours billed to it by its subcontractor at the same hourly rates stated in the contract's Schedule for the prime's work (as the contractor contended).

In CH2M♦WG Idaho, LLC, the CBCA held, inter alia, that neither the "Changes" clause nor the "Incentive Fee" clause in a cost reimbursable contract gave the Government the right to unilaterally change the contract to adjust payments between target and non-target work as a means of correcting a G&A allocation issue.

In Avalon Plaza LLC, a decision involving the rules of contract interpretation, the CBCA held that a lease agreement, interpreted as a whole, did not entitle the lessor/appellant to extra compensation for air conditioning a data communications room to maintain a specific temperature range.

In Sylvan B. Orr, the CBCA held that a general release executed by the contractor precluded its subsequent claim for disposal of non-hazardous solid waste and, even if the claim had not been covered by the release, the contractor's actions in attempting to find a location for disposal of the waste were unreasonable and failed to mitigate any damages it might otherwise have suffered.

Terminations/Liquidated Damages/Government Claims

In Truckla Services, Inc., the ASBCA upheld a  default termination because: (i) the contractor had completed only 13% of the work within the contractual performance period, and the Contracting Officer's conclusion that the contractor's plan to complete the work was not reasonably certain nor finalized was supported by the evidence and not an abuse of discretion; and (ii) the BP oil spill, while complicating the contractor's efforts to find barges, did not excuse its failure to perform because the contractor had located two subcontractors capable of performing the work.

In Paradise Pillow, Inc., the CBCA held that a contractor who had fully performed the required work under a bilateral contract modification, which required it to retrieve blankets it had previously delivered to Government, was entitled to the compensation stated in that modification after the Board found the Government's subsequent attempt to terminate the contract for cause was invalid and should be converted to a T for C.

In Industrial Consultants, Inc. dba W. Fortune & Co., the ASBCA upheld a default termination because the contractor's failure to perform was due to its disagreement with the Government's project design rather than any excusable causes.

In Pyrotechnic Specialties, Inc., the ASBCA upheld a default termination (and denied related claims), holding, inter alia, that: (i) discussions concerning extending the contract schedule did not result in an agreement to do so; (ii) the contractor failed to present sufficient evidence that production defects were caused by the Government's allegedly defective specification rather than by the contractor's own production problems; (iii) the Government was not required to approve the contractor's requests for deviations; (iv) even if the Government had tightened the test acceptance requirements in one area, the contractor's failures on another test would still have justified the rejection of its units; (v) a government email suggesting a default termination but not addressed to the Contracting Officer and not directing Contracting Officer to terminate was not evidence the Contracting Officer had failed to exercise independent judgment in terminating the contract; and (vi) there was no evidence of a bad faith termination.

In the consolidated appeals of Cook Mail Carriers, Inc. and Patricia J. Sasnett, the PSBCA, inter alia, upheld the termination of two contracts under the Termination with Notice clause because, even though the Contracting Officer was mistaken about why changes in mail routes were needed, he had a right to terminate on 60 days notice with or without cause,  and he would still have terminated the contracts and consolidated the routes if he had known the correct facts, so he did not act in bad faith.

In William Finley, although the PSBCA held it had jurisdiction over an appeal involving a monetary claim that the Postal Service declined to renew a contract due to racial discrimination, the Board granted summary judgment in favor of the Government because there was no evidence (beyond the contractor's speculations) that the Postal Service abused its discretion or acted in bad faith or from discriminatory motives in declining to renew a contract so that mail routes could be consolidated.

In [Redacted], ASBCA Nos. 60300, 600302 (Mar. 29, 2017), the ASBCA upheld default terminations after the contractor lost access to its work areas due to a vendor vetting process, which determined that it was a Force Protection Threat to United States and Coalition forces at Kandahar Airfield.

In Military Aircraft Parts, the ASBCA upheld the cancellation of a purchase order because the contractor failed to deliver conforming items in a timely manner.

In Dream Management, Inc., a decision under the small claims procedure that the CBCA, therefore, labeled as nonprecedential, the Board held that: (i) the plain language of a task order under an FSS contract established it was a time-and-materials, rather than an IDIQ, order; (ii) a significant government error in estimating the quantity of work involved was not a breach because there is no basis for a negligent estimate claim in a T&M contract; (iii) a bilateral modification purporting to end the order was not a valid method of terminating it and, therefore, the cancellation should be treated as a termination for convenience; and (iv) as part of its T for C claim, the contractor was entitled to some of the subcontract costs it incurred as a result of the agency's erroneous estimate for the work. It's a shame the decision is nonprecedential because these were all significant legal issues that were addressed.

In First Division Design, LLC, the ASBCA held that, after a convenience termination, the contractor was entitled to recover the portion of the contract price that the Government had withheld because the Government did not dispute the contractor's contention on appeal that it had completed the work; however, in this situation, the contractor was not entitled to recover home office overhead because it was not a cost "resulting from" the termination under FAR 52.212-4(l).

In JHCH Properties #2, LLP, the PSBCA held that the contractor was liable for certain back charges (but not others) after it failed to comply with the Postal Service's requests to repair premises leased by the contractor to the Postal Service, forcing the Postal Service to have the repairs performed by a third party.

In Esther Wurzberger and Char's Hallmark Cards & Gifts, Inc., the PSBCA denied wrongful termination claims by two contractors whose contract postal units had been terminated by the Postal Service as a result of a collective bargaining agreement with the postal workers' union. Each contract contained a Termination clause that permitted termination without cause by either party upon a specified number of days' advance notice, so the PSBCA rejected all the contractors' theories of recovery, including bad faith and breach of the implied duty of good faith and fair dealing.

In SYMVIONICS, Inc., the ASBCA upheld a default termination because the contractor anticipatorily repudiated the contract by notifying the Government that the contractor could not perform unless certain delivery order requirements were modified, especially where the contractor was aware of the Government's interpretation of those requirements prior to award and failed to object.

In Affiliated Western, Inc., the CBCA upheld the default termination of a contractor that fell behind the contract schedule and failed to respond adequately to cure notices, especially where the contractor failed to provide any critical path analysis to support its contention that it had experienced excusable delays on the project.

In Asheville Jet Charter and Management, Inc., the CBCA held that the resignations of three of the contractor's key, at-will employees did not constitute a strike and were not caused by the Government and, therefore, did not excuse the contractor's failure to perform.

In Thunderstruck Signs, the ASBCA denied an appeal from a termination for cause because, after the Government repeatedly had extended the delivery date, the final due date established by the Government (which the contractor failed to meet through no fault of the Government) was reasonable in the circumstances.

In Tristana R. Harvey Career Planning & Consulting Series LLC, the ASBCA held that a convenience termination was not in bad faith and did not violate the implied duty of good faith and fair dealing.

In American Boys Construction Co., the ASBCA held that, where a stop work order was issued nine days after award (and was followed by a termination for convenience): (i) the contractor's decision to  purchase materials prior to both a notice to proceed and material approval was unreasonable and, therefore, noncompensable; and (ii) the contractor's claim for standby labor costs had to be denied because the contractor failed to present any evidence to support it.

In Yates-Desbuild Joint Venture, the CBCA used critical path analysis to apportion responsibility for lengthy delays between the Government and the contractor under a contract for the construction of a Department of State compound in Mumbai, India.

Costs, Defective Pricing, and Cost Accounting Standards (CAS)

In Technology Systems, Inc., over a dissent, the ASBCA held, inter alia, that: (i) the doctrine of retroactive disallowance of costs (under which the Government is estopped from challenging the same type of costs it has allowed in the past) requires a showing of affirmative misconduct by the Government (which was not present in this case); (ii) DCAA's failure to object to costs in past audits, without more, is not sufficient to prevent the Government from questioning those same types of costs in subsequent audits under either a retroactive-disallowance or course- of-dealing theory; and (iii) FAR 31.205-33 (covering professional and consultant service costs) does not establish a blanket requirement for the generation and provision of "work product" in order to recover such costs. The Board also ruled on several other specific types of costs in dispute between the parties.

In A-T Solutions, Inc., the ASBCA rejected the Government's attempt to disallow certain charges for items that had been part of interdivisional transfers, (i) holding that such transfers were "at  price" and, thus, the contractor was entitled to charge the Government at price under FAR 31.205-26(e), and (ii) rejecting the DCAA's attempt to establish a requirement that such transfers must have "economic substance."

In Exelis Inc., the ASBCA held that: (i) the contractor's executive compensation costs were unallowable under FAR 31.205-6(i) because they were based on securities price changes and dividend payments rather than on the employee's individual performance;  and (ii) the Contracting Officer was justified in imposing a penalty on the disallowed costs because they were expressly unallowable.

In Raytheon Co., the ASBCA held, inter alia, that: (i) the burden on the Government to prove that challenged costs are expressly unallowable and subject to a penalty is to show that it would be unreasonable under all the circumstances for a person in the contractor's position to conclude that the costs were allowable; (ii) the burden on the contractor to prove that the Contracting Officer's decision not to waive the penalty for expressly unallowable costs is to show that the decision constitutes an arbitrary and capricious abuse of discretion; (iii) neither the contractor's aircraft fractional lease costs nor its Challenger 604 aircraft lease costs are expressly unallowable costs under a FAR cost principle or executive agency FAR supplement  and, therefore, are not subject to a penalty on expressly unallowable costs; (iv) the salary expenses of employees who engage in activities that generate unallowable lobbying costs are expressly unallowable costs, and the contractor did not meet its burden to prove that the Contracting Officer abused his discretion in declining to waive the penalty for such costs; and (v) the costs of the design and build of its M&A application, which was a proposed database intended to be used both for general planning and specific M&A purposes when ultimately configured, but which was terminated before it was completed and was never used in connection with any M&A target, were allowable economic and market planning costs and, thus, were not expressly unallowable and were not subject to penalty.

In 2Connect W.L.L., the ASBCA held that a 15-year irrevocable right-of-use lease for a segment of a telecommunications circuit that the contractor had procured in preparation to perform an order was an allowable cancellation cost under the definition of "actual nonrecoverable cost"  in DFARS 252.239.7007 (i.e., that the contractor could not otherwise have recovered the cost in its normal business operations) after the Government cancelled the order (as a result of a successful protest) prior to the time the contractor began performing actual services under the order.

In Pro-Built Construction Firm, the ASBCA determined the  recoverable portions of direct labor, subcontract costs, DBA insurance, G&A, and profit claimed by the contractor as a result of a termination for convenience prior to the notice to proceed on a contract for the construction of a police station.

Quantum 

In Astro Systems, Inc., the ASBCA held that the contractor not entitled to recover profit on the cost of repairing damages to a vehicle it had leased to the Government.

In Campus Management Corp., the ASBCA:  (i) denied several of the contractor's claimed termination for convenience costs because they were not supported by evidence in the form of contractor's standard business records; and (ii) held that the contractor was entitled to CDA interest beginning from the time it submitted its CDA claim for invoices that Government had unreasonably delayed in paying (in addition to Prompt Payment Act interest accruing prior to the date of the claim).

In Northrop Grumman Corp., a decision limited to quantum calculations, the ASBCA sustained the contractor's appeal  of the Government's "disallowance" of more than $250 million of the contractor's post-retirement benefit costs because the contractor had underfunded those benefits using a method not sanctioned by FAR 31.205-6(o)  and, thus, did not incur the costs or charge the Government for them so that the Government did not suffer any damages.

In Honeywell International, Inc., the ASBCA determined the amount the contractor could recover under quantum valebant or quantum meruit remedies for the fair market value of the goods and services it had delivered to the Government pursuant to an invalid contract.

Discovery/Procedure/Motion Practice

In Niking Corp., noting that such motions are not favored, the ASBCA denied the contractor's motions to strike (as insufficiently vague) the Government's affirmative defenses or require more definite statements, holding that the Board's rules require only notice pleading and that there was already a detailed record in the claim and the Contracting Officer's decision, which established the Government's positions on the claims.

In Quality Control International, the CBCA granted the contractor's request to amend its complaint to add a constructive change theory of recovery to its original claim for relief under the Price Adjustment clause because both theories arose from same operative facts, even though the constructive change theory added overhead and profit as elements of claimed damages not previously submitted to the Contracting Officer for decision.

In Eastco Building Services, the CBCA refused to dismiss an appeal brought under a "dba" name because both the agency and relevant documents recognized that the assumed name entity and the real entity were one and the same.

In Public Warehousing Co. K.S.C., the ASBCA granted the Government's motion to amend its answer to include additional affirmative defenses, except laches, and stayed the appeal for one year to permit parallel criminal proceedings in district court to proceed. In another In Public Warehousing Co., K.S.C., decision, the ASBCA denied the contractor's motion: (i) to lift the Board's earlier order imposing a one-year stay of an appeal involving the contractor's affirmative claims; and (ii) to certify that earlier order for interlocutory appeal to the CAFC.

In Brittishan Enterprises Corp., the CBCA dismissed an appeal for failure to prosecute because, after the original corporate representative died, the contractor's counsel was unable to locate any corporate representative who was willing to prosecute the appeal.

In Suffolk Construction Co., the CBCA issued a public reprimand to the contractor's attorney because, without the agency's consent, he removed the agency's contract drawings from its counsel table in a courtroom during a break in hearing proceedings, had them scanned by a third party vendor before returning them, and gave contradictory explanations/justifications for his actions.

The CBCA dismissed an appeal by JDM, LLC for failure to prosecute because, after the company's original counsel withdrew from the representation in favor of its President, the President failed to respond to the next several orders and communications from the Board. However, in Government Services Corp., the ASBCA denied the Government's motion to dismiss for failure to prosecute because the contractor had not "repeatedly" missed filing deadlines, and there was no showing of prejudice to the Government from the deadline the contractor had missed.

In CTA I, LLC, the CBCA denied the contractor's petition to require the Contracting Officer to issue a decision by specified date that was only 17 days from the date of the filing of the petition because the contractor did not identify any circumstances that would require such a rushed decision. Subsequently, the CBCA held in another CTA I, LLC decision that, under the CDA, if a Contracting Officer, within 60 days of receiving a claim, provides the contractor with a definite date within which a decision will be issued and then misses that date, the contractor's only options are to wait for the decision or to treat the missed date as a deemed denial and appeal--according to the Board, the contractor cannot, at that point, petition the Board to direct the Contracting Officer to issue a decision by a specific date.

Often in government contract disputes, we are faced with the question whether a government official had the authority to  bind the Government, but in Horton Construction Co., the ASBCA denied the Government's motion for summary judgment based on a final payment and release document allegedly signed by the contractor because the contractor raised a genuine issue of material fact by maintaining that the individual that signed the documents on behalf of the contractor lacked the authority to do so.

In ABS Development Corp., the ASBCA granted the Government's requests to amend its answers to include contentions that (i) the contract was obtained, and tainted, by fraud, and hence was void ab initio, and (ii) the Government was not responsible for the sovereign acts of a foreign government.

EAJA/Prompt Payment Act

In Kirk Ringgold, the CBCA allowed more than $30,000 in legal fees under the EAJA after the Board sustained the contractor's prior appeal involving a claimed amount of $6000.

In Optimum Services, Inc., which involved the contractor's application for reimbursement under the EAJA, the ASBCA held, inter alia, it lacked authority: (i) to award attorneys' fees in excess of the statutory cap of $125 per hour absent an agency regulation authorizing such enhancement or (ii) to award expert fees at hourly rates higher than the Government paid its own experts.   

In E.C. London & Assocs., the ASBCA held it lacked jurisdiction over the contractor's request for Prompt Payment Act interest on the portions of its claim that were allowed because the contractor had not first submitted a Prompt Payment Act interest claim to the Contracting Officer.


Court of Federal Claims

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

In CanPro Investments, Ltd., the Court of Federal Claims:  (i) dismissed (for lack of jurisdiction) the counts of the complaint based on allegations of superior knowledge, impossibility of performance, and entitlement to rescission of the lease because they were not first presented to the Contracting Officer; (ii) dismissed other parts of the complaint because the plaintiff failed to allege plausible grounds for its claims of mutual mistake, misrepresentation and concealment, impracticability of performance, and frustration of purpose; and (iii) held that the plaintiff had sufficiently pled a plausible breach-of-contract claim based on the implied duty of good faith and fair dealing for conduct occurring after execution of the disputed lease. Subsequently, the court denied the Government's motion for reconsideration of the portion of the decision allowing the claim for breach to proceed.

In Seneca Sawmill Co., the court denied the Government's motion to dismiss a suit for failure to state a claim because the contractor's allegation (i.e., that the Government improperly reduced the acreage to be harvested under a timber sales contract in violation of the contract's termination provision and as a result of the Government's mishandling of issues concerning the protection of northern spotted owls in the area) was sufficient to state a claim for breach of contract.

In Kansas City Power & Light Co., the court denied the plaintiff/contractor's motion to strike the Government's affirmative defense of "offset" because that affirmative defense is not a CDA "claim" that requires a Contracting Officer's decision prior to being raised in court.

In L-3 Communications Integrated Systems L.P., the court dismissed a suit for lack of jurisdiction because the contractor had never submitted a certified claim to the Contracting Officer prior to filing suit.

In Claude Mayo Construction Co., the court denied the Government's motion to dismiss a breach-of-contract count of the contractor's amended Complaint because the pleading clearly alleged a contractual obligation (to pay the contractor) that the Government refused to meet.

In Michael Roth & Assocs., Architects & Planners, Inc., the court dismissed the suit because: (i)  the contractor failed to present a claim to Contracting Officer based the legal theory that it ultimately advanced at court, i.e., that the agency allegedly failed to comply with obligations imposed upon it by the contract's "Design Within Funding Limitations" clause (FAR 52.236-22); and (ii) nothing in the contract required the Government to increase the contractor's fee to 6% of the final construction cost estimate once that estimate had been adjusted upward.

In The Hanover Insurance Co., the court held that a surety's letter to the Government adequately notified it of the contractor's default of a bond agreement, triggering the surety's right of equitable subrogation.

In Vanquish Worldwide, LLC, the court held that the contractor's messages to the Government concerning a disputed performance evaluation did not constitute a CDA claim because they did not request a decision from the Contracting Officer and contemplated further dialogue.

 

Changes/Breach/Contract Interpretation/Defective Specs/Authority

In RQ Squared, LLC, after permitting limited discovery, the court granted the Government's renewed motion for summary judgment and dismissed the plaintiff's suit for breach of an alleged implied-in-fact contract (under which the Postal Service was allegedly to protect plaintiff's proprietary information from disclosure and use) because, inter alia: (i) the court could not discern from the plaintiff's pleadings and submissions exactly what proprietary information the Postal Service allegedly misappropriated; (ii) the Postal Service was using the disputed technology before the plaintiff disclosed it to the Postal Service; and (iii) UPS developed certain disputed technology independently without unauthorized disclosure from the Postal Service.

In First Crystal Park Associates Limited Partnership, the court held that: (i) where a lease option contemplated renewal of the entire leased space, the Government's alleged attempt to renew only a portion of the space was not an effective option exercise; (ii) the Government official who allegedly reached an oral agreement with the plaintiff to exercise an option for only a portion of the space lacked the authority to modify the  lease or create a new one; and (iii) an alleged verbal agreement concerning the partial option exercise was not binding because it was not reduced to writing as the parties apparently had contemplated it would be.

In Tidewater Contractors, Inc., the court issued a summary judgment dismissing the contractor's breach of contract claim because: (i) although an FHWA Manual established trade practice applicable to certain of the disputed issues, it could not be used to vary the contract's terms; and (ii) none of the contractor's multiple assertions of alleged improprieties in various aspects of the Government's selection and testing of the contractor's concrete density core samples established that it was improper for the Government to reject them.

In Senate Builders and Construction Managers, Inc., the court denied the construction contractor's claim for recovery of its costs of importing backfill material because all the contractor's theories of recovery relied on an unreasonable interpretation of the Government's answer to a pre-bid question, which was included in an amendment to the solicitation prior to bidding.

In Idaho Stage LLC, the court held that the plain meaning of a contract as a whole favored the contractor's interpretation, and, even if the contract were ambiguous, that ambiguity was latent and, therefore, should be construed against the Government as the drafter.

In Horn & Assocs., the court held that, viewing the work on a contract for the performance of recovery audits as a whole, the Government severely impeded and failed to cooperate with the contractor in its work, which prevented the contractor from completing the totality of the contract requirements and constituted a breach by the Government of its duty of good faith and fair dealing.

In Gazpromneft-Aero Kyrgystan LLC, the court denied the contractor's claim for reimbursement of back taxes assessed by the Kyrgyz Republic because the contractor failed to give timely notice of the assessment pursuant to the requirement of FAR 52.229-6(j), which prejudiced the DoD's ability to address the issue.

In its lengthy and detailed decision on the construction contract disputes in RDA Construction Corp., the court held that: (i) the contractor's superior knowledge argument failed because, even though the Government did not provide relevant information to the contractor concerning a wharf's severe load restrictions, the visible condition of the wharf at the time of prebid inspections should have prompted the contractor to seek additional information; (ii) the contractor was not entitled to recover for a Type 1 differing site condition because the solicitation did not affirmatively indicate that the wharf's condition would be different from what it turned out to be; (iii) the contractor was not entitled to recover for alleged misrepresentation of the wharf's load bearing capacity because there was no such affirmative misrepresentation in the solicitation; (iv) the contractor's cardinal change theory failed because the evidence showed that, before beginning work, the contractor knew of the condition of which it ultimately complained; (v) the Government did not violate its implied duty of good faith and fair dealing in any of the numerous situations complained of by the contractor; (vi) the termination for default was justified and, therefore, the Government was entitled to assess liquidated damages; (vii) the Government's counterclaim under the CDA’s anti-fraud provision, 41 U.S.C. § 7103(c)(2), failed because the contractor's claim was not baseless, indefensibly inflated, or premised on an affirmative misrepresentation of fact; and (viii) the Government's other counterclaims based on various fraud statutes failed for similar reasons.

In InterImage, Inc., the court held that, where both the basic CPFF contract and the delivery orders issued under it contained limitations of funding provisions, the limitations provision in each delivery order governed how much the contractor was entitled to recover of both costs and fees in its final invoice at contract closeout, even though the total costs (and claimed fees) that the contractor had incurred had not exceeded the overall funding limit in the base contract.

In DNC Parks & Resorts at Yosemite, Inc., which involved contract interpretation, the court held that the contract at issue unambiguously precluded the Government from asserting prior material breach as an affirmative defense to the plaintiff's claims for certain termination costs.

Magnus Pacific Corp. prevailed on the majority of its claims for extra work on a fixed-price contract for levee restoration work, in large part because the Government's design for the project contained flaws, and the solicitation documents misled bidders, for example, as to the amount of fill that would have to be imported for use on the project.

In Stromness MPO, LLC, which involved numerous issues of contract interpretation, the court found that both parties had made mistakes in the administration of leases between them and held, inter alia, that although the Postal Service had not breached the lease agreements by constructing a demising wall that prevented access to certain areas in the leased premises by those in other areas of the premises not leased to the Postal Service, the Postal Service was liable for having constructing the wall in the wrong location and for certain holdover costs.

In Baldi Bros., Inc., the court held that, under FAR 14.407-4(b)(2)(ii), the contractor was not entitled to recover on its claim to modify a contract to correct an alleged mistake in bid because the corrected bid would exceed the next lowest acceptable bid that the Government had received in the competition.

In James M. Fogg Farms, Inc., et al., the court held that a contract which incorporated certain federal regulations, but not the provision in the underlying statute upon which plaintiff was relying in its breach claim, did not create a contractual obligation that could be breached.

 

Terminations

In Securiforce International America, LLC, the court held that, although a partial termination for convenience was improper because the Contracting Officer testified she had not exercised her own independent judgment in issuing it, the contractor had not established that the termination for convenience or any other alleged government actions or breaches excused its subsequent failures to perform or invalidated the subsequent default termination of the contract.

In Boarhog LLC, the court held that the agency's convenience termination of the plaintiff's contract (as part of corrective action in response to an agency-level bid protest by another firm) did not constitute a breach, and, even if it had, the contractor could not show any compensable damages because the termination had occurred before it had performed any work or incurred any costs. All this was especially true because, as a result of the contractor's protest against the cancellation, the agency had subsequently taken additional corrective action and awarded it a second contract that was identical to the original award.

In its latest decision in K-Con Building Systems, Inc., which is interesting in part because the court previously held that the default termination underlying these disputes was invalid, the court: (i) denied the contractor's motion to amend its Complaint to include an appeal of a deemed denial of a claim for convenience termination costs because that claim, having been submitted to the Contracting Officer more than six years after it accrued, was untimely, and (ii) held that (a) the contractor had abandoned certain claims and had not established excusable delay because the Government's review of its drawings complied with the contractual requirements; (b) the contractor had failed to establish that any government-caused delays affected the critical path of performance; and (c) the Government had established its entitlement to liquidated damages in part because the contractor had failed to establish any affirmative defenses to the assessment of those damages.

In its lengthy and detailed decision on the construction contract disputes in RDA Construction Corp., the court held that: (i) the contractor's superior knowledge argument failed because, even though the Government did not provide relevant information to the contractor concerning a wharf's severe load restrictions, the visible condition of the wharf at the time of prebid inspections should have prompted the contractor to seek additional information; (ii) the contractor was not entitled to recover for a Type 1 differing site condition because the solicitation did not affirmatively indicate that the wharf's condition would be different from what it turned out to be; (iii) the contractor was not entitled to recover for alleged misrepresentation of the wharf's load bearing capacity because there was no such affirmative misrepresentation in the solicitation; (iv) the contractor's cardinal change theory failed because the evidence showed that, before beginning work, the contractor knew of the condition of which it ultimately complained; (v) the Government did not violate its implied duty of good faith and fair dealing in any of the numerous situations complained of by the contractor; (vi) the termination for default was justified and, therefore, the Government was entitled to assess liquidated damages; (vii) the Government's counterclaim under the CDA’s anti-fraud provision, 41 U.S.C. § 7103(c)(2), failed because the contractor's claim was not baseless, indefensibly inflated, or premised on an affirmative misrepresentation of fact; and (viii) the Government's other counterclaims based on various fraud statutes failed for similar reasons.

In Avant Assessment, LLC, which involved consolidated appeals under three contracts, the ASBCA: (i) overturned the default termination of one contract because the Government waived the original delivery dates by adopting a new schedule and failed to prove that the contractor had not met the new schedule (this part of the decision makes more sense if one also reads the Board's earlier decision in the related case of  ASBCA No. 58866); and (ii) held that the contractor had failed to provide specific proof of its claims that the Government had improperly rejected test items.

Costs; Cost Accounting Standards (CAS)

In Quimba Software, Inc., the court held that the contractor's deferred compensation costs were allowable under an exception to 26 C.F.R. § 1.404(b)-1T because the deferral was "unintended, unavoidable, and unanticipated."

Discovery, Evidence, Procedure

In Northrop Grumman Systems Corp., although (at least for the time being) the court denied the plaintiff's motion for sanctions for spoliation based on the Postal Service's tardy imposition of a litigation hold preserving documents for possible litigation after the contractor's submission of a comprehensive REA, the court did impose sanctions on the Postal Service (preclusion of the use of certain documents and reimbursement of a portion of the plaintiff's attorneys' fees) as a result of the Postal Service's unreasonable delays in the production of documents.

In Securiforce International America, LLC, the court denied the contractor's motions for sanctions as a result of the Government's alleged failures to provide adequate discovery responses.

In Tender Years Learning Corp., the court denied the Government's motion to dismiss (and overruled its objections) and allowed the contractor: (i) to amend its Complaint to eliminate bid protest allegations and allege only implied-in-fact contract damages; and (ii) to bifurcate the issues of entitlement and quantum.

In MWH Global, Inc., the court denied the Government's motion to take more depositions than provided for in RCFC 30(a)(2)(A)(1) because the Government's motion offered no explanation as to why additional depositions should be allowed under the standards in the discovery rule.

In The Hanover Insurance Co., et al., the court permitted the Government to amend its answers to include affirmative defenses and counterclaims in fraud as a result of the plaintiffs' amendments to their complaints, well into discovery, to remove certain claims.

EAJA

In its latest win in this decade-plus long case, SUFI Network Services, Inc. convinced the court that it was entitled to its attorneys fees at full law firm rates because its position was substantially justified and there were special circumstances entitling it to an upward adjustment of EAJA's statutory cap on hourly rate.

In The Meyer Group, Ltd., the court denied the contractor's EAJA application because: (i) the Government's position in the underlying litigation was substantially justified given the lack of precedent on an unusual issue and the contractor's overly aggressive interpretation of the underlying agreement; and (ii) special circumstances rendered an EAJA award unjust because the case did not involve any public policy issues or any violations by the Government of a law or regulation, but rather the consequences of unfortunate Government missteps in entering a disadvantageous contract drafted by the plaintiff.

In Cook Mail Carriers, Inc., the PSBCA reduced the sum claimed in an EAJA application by a significant amount in order to reflect the contractor's limited success on its original claims.

 

Court of Appeals for the Federal Circuit

Jurisdiction/Standing/Res Judicata 

 In Guardian Angels Medical Service Dogs, Inc., the CAFC (i) reversed the CoFC's prior decision that an appeal from a default termination was untimely and (ii) held that the Contracting Officer's request for additional information from the contractor after the contractor had requested reconsideration of the Contracting Officer's prior decision terminating a contract for default meant the original decision was not final and did not become so (and, therefore did not start the appeal clock running) until the Contracting Officer subsequently informed the contractor she would not reconsider her decision after all.

 In what was probably the final chapter in the SUFI Network Services, Inc., dispute, the CAFC held that the Government had no right to appeal an ASBCA decision that the contractor had accepted in a case (one  of the last) governed by the Wunderlich Act, rather than the CDA.

 In Kellogg Brown & Root Services, Inc., an important decision concerning the CDA's six-year limitations period for submission of a claim, the CAFC reversed the ASBCA and held that a contractor's claim sponsoring its subcontractor's termination claim  did not "accrue" until it had developed sufficiently to be presented in a sum certain and, therefore, was not barred by the limitations period, even though the claim was not submitted to the Government until long after the termination, following a lengthy set of disputes between the sub and the prime and a false start in which the contractor had forwarded one iteration of the claim to the Government without certifying it.

 In Sheridan Transportation Systems, Inc., a decision labeled as nonprecedential, the CAFC held it lacked jurisdiction over an appeal from a CBCA decision concerning a dispute arising under the Transportation Act (31 U.S.C. 3726) rather than the CDA.

In Pacific Gas and Electric Co., et al., the CAFC affirmed the CoFC's dismissal of a breach of contract suit because the plaintiffs did not have privity of contract with the Government and, therefore, lacked standing.

In Lee's Ford Dock, Inc., the CAFC held that: (i) a lease allowing a contractor to operate a marina on the leased premises was a contract "for the disposal of personal property" under 41 U.S.C. § 7102(a)(4) and, therefore, was covered by the CDA; (ii) there was no CDA jurisdiction over the contractor's reformation claim, which was based upon allegations of the Government's misrepresentation, because it was different from the claim presented to the Contracting Officer, which was based on mutual mistake; and (iii) the Board's rejection of the contractor's breach claim (which was based on changes in the water levels of the lake surrounding the marina) was appropriate because the contract clearly gave the Government the right to manipulate the lake's water level "in any manner whatsoever."

Changes/Breach/Contract Interpretation

In System Fuels, Inc., et al.,, the CAFC reversed the CoFC and held that the plaintiff-contractors were entitled to recover their costs of loading spent nuclear fuel into storage casks as one element of damages for the Government's partial breach of its spent nuclear fuel contracts.

In DG21, LLC, the CAFC affirmed the ASBCA's prior decision denying a contractor's claim because the contractor, in agreeing to pay the prevailing rate for fuel in a fixed-price contract, had assumed the risk of rising fuel prices, and those rising prices were not a change to the contract.

In Northrop Grumman Computing Systems, Inc., the CAFC affirmed the CoFC's decision that the contractor had failed to establish any damages as a result of the Government's alleged breach of a delivery order (i.e., allegedly failing to use its best efforts to secure funding for the option years) because, without notice to the Government, the contractor had assigned all its rights under the order to a third party in exchange for a payment that equaled the contractor's expected profit from the full term of the order, including options.

In Zafer Taahhut Insaat ve Ticaret A.S., the CAFC affirmed the prior CoFC decision and held that: (i) there was no evidence the Government had denied the contractor's request for a time extension, which was a required element of the contractor's constructive acceleration claim; and (ii) the contractor failed to establish that the Government's negotiations with Pakistan to re-open one contract route amounted to fault on the part of the Government establishing a constructive change.

In Agility Defense & Government Services, Inc., the CAFC reversed the CoFC and held that, contrary to the lower court's findings, the evidence supported the contractor's contentions that: (i) the Government had provided inadequate or negligent estimates of the anticipated workload, and (ii) the contractor had detrimentally relied on the faulty estimates.

In Northwest Title Agency, Inc., the CAFC affirmed the CoFC's prior decision that the contracts at issue unambiguously precluded the contractor (who was providing closing services) from charging closing fees to homebuyers and, therefore, extrinsic evidence of trade practice could not be used to vary the plain meaning of the contract.

Fraud

In Laguna Construction Co., the CAFC affirmed the ASBCA's prior decision, holding that the contractor's Chief Operating Officer's guilty plea for accepting kickbacks from subcontractors demonstrated a prior material breach of the "Allowable Cost and Payment" clause of the contract at issue and was a valid defense to the contractor's claim for costs disapproved by a DCAA audit.

Discovery, Evidence, Procedure

The CAFC's decision  in Western States Federal Contracting, LLC (albeit nonprecedential) raises may be problematic. At the time (April 29, 2013) the contractor originally appealed to the CBCA from a deemed denial of its claim, it was not in good standing in its state of incorporation (Delaware), which is a requirement for maintaining an appeal. Although the Board gave it numerous chances to correct the problem, it did not do so until sometime after the CBCA published a decision dismissing the case on February 11, 2014. The contractor appealed to the CAFC from the CBCA's dismissal, and then (at the Government's request) the court vacated the Board's original dismissal so that the Board could consider two specific issues (one having to do with whether the company should have been permitted to proceed as an unincorporated association). As instructed, the  CBCA reviewed those two issues and, once again, dismissed the contractor's case. The contractor again appealed the dismissal to the CAFC. Now, the CAFC reverses again because the company is finally in good standing with the state and the CBCA's second decision was not entitled to rely on the company's lack of good standing at the time of the original dismissal because the court previously had vacated the Board's original decision, rendering it a nullity.

In Agility Public Warehousing Co. KSCP, FKA Public Warehousing Co. K.S.C., the CAFC affirmed the part of the  ASBCA's prior decision concluding that the Government had not breached the express terms of a contract, but remanded the case to the ASBCA to consider two claims that the Board had simply stated, without explanation, that it need not consider: "We need not decide whether the government constructively changed contract performance or whether it breached its implied duty of cooperation. At its core, whether the government breached the contract comes down to contract interpretation."


Supreme Court


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