The Armed Services Board of Contract Appeals (“ASBCA”) recently explained that a settlement of a termination for convenience must be based on the costs incurred by the contractor, not on either contract line item number (“CLIN”) prices or some type of jury verdict (because of the contractor’s inability to documents its costs). Atlas Sahil Const. Co., ASBCA No. 58951, Nov. 9, 2017. The Army awarded Atlas a design-build, firm-fixed-price construction contract for expansion of a forward base in Afghanistan that supported U.S. forces. Eighteen months later, the contract was terminated for convenience pursuant to FAR 52.249-2 Alt I, because the base was going to be closed and there was no longer a need to expand it. Atlas submitted a termination settlement proposal of $4.0 million, … Continue reading
This episode of The PCI Network focuses on Suspension and Debarment. David Drabkin, Director and Faculty at PCI discusses, how to maintain compliance and avoid suspension and debarment. Mr. Drabkin is currently the Director of Acquisition Policy with Northrop Grumman Corporation. There he works with Congress, Executive Agencies and Industry Associations to evaluate and promulgate acquisition policy for Federal programs ensuring the interests of the Northrop Grumman are represented in the process.
The fixed price default clause at Federal Acquisition Regulation (“FAR”) 52.249-8(c) as well as the “excusable delays” clause in commercial item contracts at FAR 52.212-4(f) provide that a contractor shall not be liable for default in the event of “strikes.” The Civilian Board of Contract Appeals (“CBCA”) recently considered how a “strike” should be defined, and whether a default should be excused in the event of a strike. Asheville Jet Charter and Mgt., Inc., v. Dept of the Interior, CBCA 4079, May 19, 2016. Here is what the two default clauses say about strikes. (Excerpts)(emphasis added):—– FAR 52.249-8 (Default (Fixed Price Supply and Service). [T]he Contractor shall not be liable for any excess costs if the failure to perform the contract arises from causes beyond … Continue reading
The Federal Circuit recently clarified that a contractor’s claim does not accrue until the exact amount (“sum certain”) of the claim is known to the contractor. Kellogg Brown & Root Serv., Inc. v. Murphy, No. 2015-1148 (Fed. Cir. May 18, 2016), 2016 WL 2893218. This case is important because any dollar claim that fails to include a “sum certain” should be dismissed by the contracting officer and the courts. First, a brief discussion of accrual of claims, and definition of a claim. The Contract Disputes Act provides that a claim “shall be submitted within 6 years after the accrual of the claim.” 41 USC § 7103(a)(4)(A). The FAR defines accrual of a claim as follows: “the date when all events, that fix the alleged liability … Continue reading
Default terminations can be a nightmare for government contractors. To begin with, a profitable contract may end. Then the government is likely to bill the contractor for “excess cost of reprocurement,” which is the additional cost for obtaining a substitute contractor for the same product or work at what most likely is a much higher price. The default will be included in the contractor’s past performance record, which may hurt in obtaining new contracts. And finally, the company could be suspended or debarred based on its “willful failure to perform in accordance with the terms of one or more contracts” (FAR 9.406-2) or where the government deems the default “so serious or compelling…that it affects the present responsibility [of the] contractor.” (FAR 9.406-2; FAR 9.407-2). … Continue reading
By PCI Consultant A cure notice identifies a deficiency in a contractor’s performance that the Government considers to endanger performance of the contract, and warns the contractor that the contract may be terminated for default if the problem is not “cured” or addressed, within a specified time period. See generally FAR 49.607(a). Decker & Co. v. W., 76 F.3d 1573, 1576 n.2. (Fed. Cir. 1996). While it is abundantly clear that cure notices are required for non-commercial contracts, the Civilian Board of Contract Appeals recently reaffirmed that they are required in commercial item contracts, which use a slightly different clause known as the “termination for cause.” Brent Packer and Myrna Palasi v. Social Security Admin., CBCA 5038, 5039, Feb. 22, 2016. The termination for default … Continue reading