HOW TO WRITE THE REA REVISITED

We wrote a blog post in 2012 on this subject which has received a lot of attention and some requests for copies of our 6 page guide on how to write the REA.  Many people have used this guide successfully and we are grateful for their recognition of its propriety given the fact that such instructions are not found in the regulations.  However, we feel it is time to revisit the subject with emphasis on constructive changes and breaches of contract giving rise to the need for the REA.

Implied by law in every contract are certain duties, the breach of which gives rise to constructive changes.  (As we have pointed out in some of our writings, on commercial item contracts, breach of these duties gives rise to breach of contract claims which really are constructive changes also.)  These implied obligations include the duty to provide specifications free of error, conflict and omission (defective specifications), the duty to provide commercially practicable specifications (commercial impracticability), the duty to disclose information critical to performance (superior knowledge), and the duty to cooperate, assist in and not interfere with performance (duty of good faith and fair dealing).  Constructive changes also arise from differing contract language interpretations and implied orders to accelerate performance.

This is the universe of constructive change theories.  Your REA must be based on one or more of these time honored grounds for recovery.  However, as we have advised in the past, you cannot recover on an REA which is all theory in search of supporting facts.  So, what are the basic principles of writing the REA?

Tell a story.  What you anticipated based on your careful reading of the contract requirements.  What occurred to destroy your reasonable expectations regarding the fruits of the contract.  How this impacted performance and with what result in additional costs.  What theory of recovery are you using.  Telling an elaborate story without a theoretical foundation is fatal.  Likewise, building a solid theoretical foundation without factual support is also fatal.

One final note.  Don't forget our admonition that in nearly every default and convenience termination case we've seen, constructive changes often play an important part.

bill@spriggsconsultingservices.com