Wednesday, May 30, 2018


The Court of Federal Claims (COFC) recently has overruled a Competition in Contracting Act (CICA) override of the mandatory stay in a bid protest case.  The stay may be overridden by a contracting agency if it demonstrates urgent and compelling reasons or if performance of the contract is in the best interests of the government.

Obviously, the court pointed out, performance of most contracts would be in the best interests of the government or the contract would not have been awarded in the first place.  So, something more must be shown by the agency to justify the override.  The exception to the automatic say rule which permits an override to the stay based on best interests should not be permitted to cancel the rule that the stay be automatic.

The COFC has addressed the best interests exception in only a few cases.  If meeting a performance deadline is critical to the entire purpose of the contract, the court has permitted the override to stand.

The problem is the agency must show that the timing is so crucial that a continuation of the existing contract pending the outcome of the protest or a bridge contract to accomplish the same thing would not suffice.  The government's argument that lapse in services is an unacceptable risk is insufficient.

In this recent case, Intelligent Waves, LLC v. United States, COFC No. 18-465 C, May 9, 2018, the court pointed out that the agency had ample time to consider how to take appropriate measures to avoid any lapse in services pending the conclusion of the protest.  No claim was made by the government that the timing of the new contract performance, as opposed to continuation of the old contract or an interim bridge contract, would be crucial, in this case, to the health or safety of veterans.

The agency had waited to award the new contract until 6 days before the old contract expired.  The court said the government essentially argued that the stay must be overridden to avoid a lapse in services because it waited too late to extent the existing contract or enter into a bridge contract.

The court concluded that it was in the best interest of the United States that the integrity of the competitive nature of the procurement process be upheld.  In this case, the agency would not be allowed to manipulate the congressional mandate. 

The court overruled the agency's override and reinstated the automatic stay.

Wednesday, May 23, 2018


We've written often on how to convert the request for equitable adjustment (REA) to a claim for purposes of appeal of the contracting officer's decision.  Recently, the Armed Services Board of Contract Appeals (ASBCA) reminds us that the request for a contracting officer's decision is a prerequisite to an appeal in order for the ASBCA to have jurisdiction.  Hejran Hejrat Co. LTD, ASBCA No. 61234, April 23, 2018.

The REA may be submitted in any form but the preferred form is set forth in our posts on how to write the REA.  You must tell the story of what the contract required, what was changed, how the changes impacted performance, the theory of recovery upon which the REA is based and a calculation of the cost impact resulting directly from the changes enumerated in the REA.

The ASBCA reminds us that the claim, read REA if you wish, need not take any particular form or use any particular wording.  "All that is required is that the contractor submit in writing to the contracting officer a clear and unequivocal statement that gives the contracting officer adequate notice of the basis and amount of the claim."  An REA can become a claim.  But more is involved.  "In addition to explaining the reason for the claim and the amount requested, a claim must also include a request for a final decision from the contracting officer and a certification if the amount sought is greater than $100,000."

Hejran Hejrat disavowed the notion that it was seeking a contracting officer's final decision.  Perhaps the company was trying to be diplomatic in its approach.

Too bad.  The ASBCA said that even the characterization of a submission by a contractor saying he would send a final decision cannot establish that a claim has been submitted.

"There can be no contracting officer's final decision on a claim if the contractor has not requested that the decision from the contracting officer."  (Emphasis added.)  

Thursday, April 26, 2018


A recent GAO decision addresses two important issues.  Will GAO review terminations where an agency terminates a contract in response to a successful agency protest by another contractor?  And, will GAO review a protest alleging an agency failed to give the contractor the required debriefing?  The answer to the first question is yes and the answer to the second is no.  AutoFlex, Inc., B-415926, April 19, 2018.

AutoFlex argued the agency unreasonably terminated the contract it had been awarded and in turn awarded the contract to another contractor.  The agency took corrective action as a result of an agency level protest.  GAO denied the protest on the merits, but GAO reiterated the rule that such actions may be challenged in a protest.

GAO stated that it generally will decline to review termination of contracts because such actions are a matter of contract administration.  However, GAO will review terminations if they result from a defect in the award process.  In such cases, GAO will review the protest to see if the initial award was improper.  If so, GAO will scrutinize whether the corrective action taken was appropriate to "protect the integrity of the competitive procurement system."  GAO most likely will defer to the agency if there were in fact flaws in the initial award.  However, the corrective action must be an appropriate remedy for the improper award.

The decision is a reminder that if a contractor receives an award but finds its contract terminated, the contractor may seek relief at GAO by challenging the propriety of the corrective action.

The same decision reminds us that there just is no remedy if the agency fails to provide a required debriefing.  GAO considers debriefings "procedural" matters that do not involve the validity of an award and therefore beyond GAO's jurisdiction.  Not good.  There needs to be some teeth in the debriefing requirement.


The Armed Services Board of Contract Appeals (ASBCA) recently reaffirmed the doctrine of "unclean hands" as it applies to contractor's claims.  The doctrine, which has long been a staple of the common law in equity, is described by the Board as "one who seeks equity must do equity."  The doctrine prevents the contractor tainted with inequity or bad faith from obtaining the relief sought.

The recent case arose on the issue of whether the government could amend its Answer to the contractor's Complaint to include the affirmative defense of unclean hands.  We expect we may see more of this approach from government attorneys.  The Board concluded, however, that there was insufficient evidence for the Board to decide whether the government had a reasonable basis for its allegation.  Appeal of Raytheon Company, ASBCA Nos. 60448, 60785, April 9, 2018.

The government alleged Raytheon tried to sell more missiles to the government than otherwise would be paid for by the fund amount available for the contract when signed, in violation of the Anti-Deficiency Act.  Raytheon contended the government had not submitted its position in the form of a claim.  The Board rejected the argument saying the government was not seeking money or an adjustment of the contract terms.

To us, the articulation of the unclean hands doctrine in this case is just another way of alleging bad faith by the contractor. 

You might think the unclean hands doctrine might work the other way when the government takes unreasonable positions on contractors' claims.  However, keep in mind that it is hard wired in government contract law that there is a presumption that government officials act in good faith and that presumption may be overcome only by clear and convincing evidence.

Wednesday, April 18, 2018


It's time to revisit the commercial item changes clause.  That clause says changes only can be made by written agreement of the parties.  The government cannot make unilateral changes.  A unilateral change is a breach of contract, just as it is in the commercial world.  The clause does not mention the contracting officer and certainly does not give the contracting officer the authority to order unilateral changes.  In fact, the concept of constructive changes does not apply to commercial item contracts.

Prior to the Contract Disputes Act (CDA), the Boards did not have jurisdiction to hear breach of contract claims.  So, the Boards developed the theory that breaches of contract could be characterized as constructive changes under the standard Changes clause.  They took breach of the duty to provide a specification free of errors, conflicts and omissions and made it the constructive change called defective specifications.  They took other breaches such as the duties to cooperate and not interfere and made them constructive changes.   Thus, the Boards have had a long history of recognizing breaches of contract as constructive changes.

The CDA gave the Boards jurisdiction to hear breach of contract claims.  Commercial item contracting eliminated the unilateral right of the government to make changes by introducing the requirement that changes be made only by written agreement of the parties.  In breach cases such as defective specifications and the duty to cooperate and not interfere (based on the obligation of good faith and fair dealing), the Boards have recognized that a government employee writing a defective specification or an inspector interfering in the contractor’s performance can cause a breach of contract giving rise to a breach of contract claim.
The commercial item changes clause requires a written agreement of the parties to effect a change.  Thus, if the government wants a change, it must negotiate the change and enter into a bilateral agreement with the contractor.  Constructive changes, which are unilateral changes, are breaches of the contract entitling the contractor to damages which will be measured in the traditional way of actual costs plus profit on those costs.

Thursday, April 5, 2018


Indulge me in a personal note.  The purpose is to leave you with a word of advice based on 50 years of experience in government contracting.

I began at Boeing as a contract administrator reviewing contract actions.  Then to Itek Corporation as a contract manager with daily contact with the contracting officer.  From there, I moved to the Martin Marietta (now Lockheed Martin) legal office where I was trial counsel in ASBCA appeals.  I moved to Washington, D.C. in 1972 to join the Gil Cuneo firm where I engaged in government contract litigation for 10 years before forming my own firm, Spriggs & Hollingsworth, where I practiced government contract law for 27 years.  For the last 8 years, I have continued in government contract counseling and litigation as Spriggs Consulting Services and Spriggs Law Group.

My ambition always has been to be a contract manager.  Hence, a consulting firm.  Alas, however, I have continued to engage in litigation.  Although I enthusiastically enjoy litigation, I am sorry that I have not been called upon often enough to engage in day to day contract management.

Now to the word of advice.  The salient thing I have learned over the years is that my clients have failed to see a contract problem early enough and failed to engage the contracting officer immediately upon recognizing the problem.  Too often, clients have not imaginatively created procedures to prevent problems.  But the bigger point is that they have not acted promptly by contacting the contracting officer when problems arise.  Too many of the litigation matters I have handled involve a client's failure to promptly contact the contracting officer and pursue an appropriate response in a timely manner.

So, read my post entitled "Good Contract Management" and undertake to resolve issues with the contracting officer promptly.  


Good contract management starts with knowing what is in the contract.  "When all else fails, read the contract."  Then, know the regulations and contract common law.  You cannot function effectively without daily building your knowledge of the law applicable to government contracts.  Every day, you must add to your understanding of the contract terms and the law applicable to your government contract.  You must also be aware of all of the recent developments in case law.  You should read recent decisions from GAO and the boards and courts.

Next, what ever happened to management by walking around?  You must know what is going on with performance on your contracts.  You must communicate with the people performing the work.  Fortunately, email helps.  It can help you reach out when physically getting around is difficult.

Stay in close touch with the contracting officer.  You must keep track of the contracting officer who has the authority to change the contract.  Hopefully, you can visit the contracting officer often in person.  Email also is effective.  When there is a problem requiring direction from the contracting officer, send a letter attached to an email.  When you think a change has occurred, immediately notify the contracting officer in writing (letter attached to an email).  Make the contracting officer your friend.

Prepare a daily report on your activities, like a diary.  After the day is done, when you have advanced your education, informed yourself on the performance of the contract, maintained contact with the contracting officer and sent out any necessary emails and letters, hit your computer and write up the events of the day.  We used to call these "memos to file."  Periodically index these daily reports by subject matter. 

When all is said and done, contract management is the most challenging job in government contracting.  Government contracts are the most highly regulated instruments in the world.  Becoming an expert on all of the legal implications is a constant challenge.  Making sure your employer is protected and earns a profit requires your constant vigilance, attention to detail and communication with the contracting officer.