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bill@spriggsconsultingservices.com bill@spriggslawgroup.com
Tuesday, May 28, 2019
Thursday, May 23, 2019
MISUSE OF DEFAULT TERMINATIONS REVISITED
On July 25, 2012, we warned of the misuse of terminations for default in connection with the government sequestration issue. Lately, we've been concerned that the government may be misusing terminations for default in order to place the burden on the contractor to collect what it is owed when the government just wishes to abandon the contract for reasons other than a bona fide default by the contractor. The government just wants to take the money off the contract for another use.
Termination for default allows the government to move the funding off the contract. Conversely, funding must be left on the contract pending resolution of the termination for convenience settlement proposal. Thus, the contracting officer has a funding motivation for turning the cancellation into a termination for default.
Termination for default is a drastic action which severely inhibits the contractor's ability to get new work with the government. The law requires that it not be misused or abused.
Termination for default shifts the burden of contract administration and all the contract risks to the contractor. No termination contracting officer needs to be appointed and there is no administrative burden on the government. There may be no reprocurement since the requirement is going away. The contractor must defend the termination for default action.
In defending the termination for default, it may take the contractor up to four (4) years of litigation to obtain a conversion of the termination to one for convenience which finally entitles the contractor to payment under the convenience termination clause. We have seen many termination for default cases where the government has delayed the litigation for up to and sometimes longer than 4 years.
This is to say nothing of the expense of converting the default to a convenience termination and then going through the lengthy and expense process of collecting the convenience termination money. We can think of no greater adverse action against increasing competition in government contracting than the misuse of terminations for default.
At the very least, the government should explore with the contractor, whether it may be possible to agree on a no cost termination for convenience settlement. We suspect at least some of the drastic termination for default actions could be avoided by exploring this possibility.
bill@spriggsconsultingservices.com
Termination for default allows the government to move the funding off the contract. Conversely, funding must be left on the contract pending resolution of the termination for convenience settlement proposal. Thus, the contracting officer has a funding motivation for turning the cancellation into a termination for default.
Termination for default is a drastic action which severely inhibits the contractor's ability to get new work with the government. The law requires that it not be misused or abused.
Termination for default shifts the burden of contract administration and all the contract risks to the contractor. No termination contracting officer needs to be appointed and there is no administrative burden on the government. There may be no reprocurement since the requirement is going away. The contractor must defend the termination for default action.
In defending the termination for default, it may take the contractor up to four (4) years of litigation to obtain a conversion of the termination to one for convenience which finally entitles the contractor to payment under the convenience termination clause. We have seen many termination for default cases where the government has delayed the litigation for up to and sometimes longer than 4 years.
This is to say nothing of the expense of converting the default to a convenience termination and then going through the lengthy and expense process of collecting the convenience termination money. We can think of no greater adverse action against increasing competition in government contracting than the misuse of terminations for default.
At the very least, the government should explore with the contractor, whether it may be possible to agree on a no cost termination for convenience settlement. We suspect at least some of the drastic termination for default actions could be avoided by exploring this possibility.
bill@spriggsconsultingservices.com
Wednesday, May 15, 2019
CORRECTION OF CPARS RATINGS
The Armed Services Board of Contract Appeals (ASBCA) and Civilian Board of Contract Appeals (CBCA) have jurisdiction to decide whether the contracting officer acted reasonably in determining that performance was unsatisfactory or if such a CPARS rating was arbitrary and an abuse of discretion. The Boards may decide whether the government acted arbitrarily and capriciously in making an inaccurate and unfair performance evaluation. Cameron Bell Corporation d/b/a Gov Solutions Group (GovSG), ASBCA No. 61856, May 1, 2019.
The Boards also have jurisdiction to decide whether the government breached is implied by law duty of good faith and fair dealing when it assigned the CPARS rating.
The Boards do not have jurisdiction to grant specific performance (direct the contracting officer to change the CPARS rating) or grant injunctive relief. The Boards cannot direct that the CPARS rating be changed. However, the Boards may remand the matter to the contracting officer and require the contracting officer to follow applicable regulations and provide the contractor a fair and accurate performance evaluation.
So, it is possible to challenge a CPARS rating at the ASBCA. The complaint must allege the contracting officer did not act reasonably and made an arbitrary determination which was an abuse of discretion. The complaint also could allege breach of the obligation of good faith and fair dealing. But the relief sought must be limited to requesting the Board to remand the matter to the contracting officer for a redo of the CPARS rating consistent with applicable regulations, fairness and accuracy.
bill@spriggslawgroup.com
The Boards also have jurisdiction to decide whether the government breached is implied by law duty of good faith and fair dealing when it assigned the CPARS rating.
The Boards do not have jurisdiction to grant specific performance (direct the contracting officer to change the CPARS rating) or grant injunctive relief. The Boards cannot direct that the CPARS rating be changed. However, the Boards may remand the matter to the contracting officer and require the contracting officer to follow applicable regulations and provide the contractor a fair and accurate performance evaluation.
So, it is possible to challenge a CPARS rating at the ASBCA. The complaint must allege the contracting officer did not act reasonably and made an arbitrary determination which was an abuse of discretion. The complaint also could allege breach of the obligation of good faith and fair dealing. But the relief sought must be limited to requesting the Board to remand the matter to the contracting officer for a redo of the CPARS rating consistent with applicable regulations, fairness and accuracy.
bill@spriggslawgroup.com
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