Termination for Convenience Case at Court of Federal Claims May Have Far-reaching Effect

The Court of Federal Claims issued a potentially very important decision in a Termination for Convenience case on April 2, 2013. In Tigerswan v. U.S., COFC 12-62C, Judge Firestone made a decision which could affect breach claims when the government acts in an illegal manner. With a number of potential terminations coming in the wake of sequestration, the nuances of this case may have a major impact. The Contractor alleged two bases for its breach of contract claim: 1. The government had breached the implied duty of good faith and fair dealing in its T for C decision; and 2. The government abused its discretion in the T for C decision, or it never intended to honor its contract. This is important because, generally, a … Continue reading

Preparing for Sequestration – Driven Contract Terminations and Restructures

Guest Author: Elizabeth A. Ferrell, McKenna Long & Aldridge. Originally posted at http://www.mckennalong.com/publications-advisories-3160.html   With the looming threat of sequestration, there is significant uncertainty regarding the budgetary resources that will be available for the reminder of the fiscal year. Unless Congress acts to prevent sequestration, beginning March 1, 2013, approximately $85 billion in budgetary resources across the Federal Government will be cancelled. On January 10, DoD issued initial planning guidance on sequestration. See “The Department of Defense Issues Initial Planning Guidance on Sequestration”. This week, on January 14, 2013, OMB issued a Memorandum for the Heads of Executive Departments and Agencies providing guidance on planning for the impact of a sequestration order. While the OMB guidance is fairly limited, OMB has tasked agencies with indentifying means to reduce … Continue reading

Afterthoughts: Contract Implications of Sequestration

Following each Nash & Schooner Hot Topics Webinar event, we interview Professor Ralph Nash to get his thoughts on the topic following the panel discussion.  On October 25th, Professors Ralph Nash and Steven Schooner discussed the contract implications of potential sequestration.   Do you think sequestration will happen? I don’t think anybody knows whether it will happen or, if does happen, how long it will last.  My belief is whether it happens or not there are going to be significant cuts in procurement spending.  So people ought to be planning for sequestration without regard to whether it does or does not occur.   If you were a contractor looking at your company’s portfolio of government contracts, would there be particular contracts that you would be … Continue reading

If Budget Sequestration Trims Your Contract: What Contractors Need to Know About Partial Terminations and Deductive Changes

Guest Authors: Neil H. O’Donnell and Dennis J. Callahan, Rogers Jospeh O’Donnell, PC, writes: By definition, budget sequestration is a ham-handed approach to cutting federal spending.  Even if sequestration is somehow averted, however, there can be little doubt that FY 2013 will see a particularly severe round of belt tightening in federal contracting.  In addition to delaying procurements and forgoing the exercise of contract options, federal agencies likely will become more aggressive in pruning the amount of goods and services called for under existing contracts.  How such deletions of work are characterized often falls into a large grey area, and, indeed, the BCAs and courts have not even settled upon a firm standard for distinguishing between partial terminations and deductive changes. The different recovery rules governing … Continue reading