TRIBUTE TO WILLIAM J. SPRIGGS

 

A GUIDE TO PROFITABILITY OF CHANGED WORK

Many, if not most, contractors have been smart enough to build the effects of inflation into their initial pricing on government contracts. Some of them, however, did not get it exactly right. And then some did not price the risk of extraordinary inflation for one reason or another. We are here to sympathize with those of you who are being killed by inflation, which you did not reasonably expect to help you recover from the impact of inflation, and show you how you can be made whole on your contract. Our approach to making the contractor whole is based on the words used by the appellate court in 1963 to describe the objective regarding remuneration on a contract that has been changed.  In describing the process by which contractors are compensated when there are changes, the court, referring to the mechanism of an equitable adjustment, stated:

“Equitable adjustments in this context are simply corrective measures utilized to keep a contractor whole when the Government modifies a contract. Since the purpose underlying such adjustments is to safeguard the contractor against increased costs engendered by the modification, it appears patent that the measure of damages cannot be the value received by the Government but must be more closely related to and contingent upon the altered position in which the contractor finds himself by reason of the modification.”  Bruce Construction Corporation v. United States, 324 F.2d 516 (Ct. Cl. 1963).

This is not your definitive treatise on recovery of damages for breaches of construction contracts in the private sector. Here, we address those contractors who also deal in the public sector and are concerned about sufficient recovery in the event of changes and how to make contracts attractively profitable. Stated another way, some contractors are wary of or even leaving the public sector based on their perception of stringent restrictions on recovering damages if things go wrong. They may primarily be concerned about the effects of inflation and what to do about it because much has been written about how there are no clauses in public contracts that protect contractors from inflation. And that is correct except for limited assistance by the DOD.

In private contracting, damages fall roughly into three categories: direct, incidental, and consequential.

In public contracting, damage calculations are made in the context of the changes clause, which provides an equitable adjustment. That concept was articulated in Bruce to mean that the contractor should be made whole. The idea of making the contractor whole has been the basis for the development of the law on the meaning of equitable adjustment. Traditionally, equitable adjustment includes the direct cost of performing change, the indirect associated costs, and the profit on those costs. It is important to note that actual costs are required, although estimates are permitted. In addition, the direct and incidental costs associated with the change are included in an equitable adjustment. However, the changes clause itself contemplates the recognition of consequential damages. The requirement to make the contractor whole is embodied in the notion that the change may affect the original work.

Early in the development of the law of federal government contracts, it became evident that the concept of equitable adjustment could well include the impact of the change on the unchanged work. Therefore, the changes clause was amended to include “whether or not changed”, meaning that increased cost could be recovered on the original work.  So-called delay and disruption costs traditionally have been included in the equitable adjustment calculation because of this language in the changes clause permitting the impact on unchanged work.

But when the Court of Appeals for the Federal Circuit decided an equitable judgment was to make the contractor whole, what did that concept include? How far does it go? Making a contractor whole is more than just remuneration. For one thing, it's been well recognized that the concept includes reevaluating profit on the costs. Profit, arguably, is correctly increased in the calculation to account for the fact that changed work is uncertain and requires greater risk and, presumably, the prospect of greater rewards. Not enough attention has been paid to the calculation of profit. The Armed Services Board of Contract Appeals has permitted 13% profit on changed work on a shipbuilding claim. The 10% profit often used as a benchmark should be increased to at least 13%.

It is not far-fetched to suggest that the concept of equitable adjustment, as interpreted by the Court of Appeals for the Federal Circuit, should include elements that would make the contractor whole, such as non-remunerative. The delay permits the calculation of costs but also implicates the design and performance aspects of the contract. The effect of the change on the unchanged or original work could well include a need to redesign the structure or item of equipment. Likewise, the original work may well be affected by the change to the extent that the means and methods of performance of the contract need to be changed, making them entirely different than originally planned. Manpower may be necessary to be replaced with workers with different expertise. Certain aspects of the project may have to be demobilized, and others mobilized. So, it's not just the costs of the impact on the unchanged work that are recoverable. The concept of making the contractor whole could include restructuring the project and its management.

In public contracting, it's the government's job to scrutinize the contractors’ claims to be sure that the contractor is not carrying the concept of making itself whole to the extreme. The same applies to the private sector, where the owner must scrutinize the contractor’s damage claim. Contractors articulate their entitlement and then throw in the kitchen on damages. Folks often misinterpret the entitlement side to justify throwing every damaged item they can think of against the wall to see what sticks. They hold to the concept that if you do not ask for it, you will never have a chance to get it.

It is difficult to fault the contractor for being aggressive.  The concept of being made whole seems to support their position.  It is possible to reprice all original work affected by the change and, in the process, lessen the effects of inflation.

 

LEADERSHIP

You arrive 10 minutes late to the 4 o'clock meeting and sit at the head of the table or stand at the podium. You launch into an expression of your views on the agenda subjects. You refer to policies and practices you exhort everyone to follow. 

You purposely avoid any indication things are going well because that only encourages people to expect bonuses. You thank everyone tersely, ask if they have any questions, and then leave the room. You worked hard to get to your leadership position, and are proud of how smoothly the meeting went. 

Leadership? That is not leadership.

Why have a meeting? There are only two reasons: 1) congratulate or compliment others, or 2) listen to others. Either announce public praise or learn from all those people you hired to do their best. You speak last about what you've learned and not about you.

In my advice to CEOs based on my 37 years as a CEO and a Marine Corps officer before that, they, not you, come first. And you mean it; demonstrate it. You do not wait, half listen, then take the stage and announce your conclusions and directions. 

Be vigilant. You agree with the universal truth of praise in public and criticize in private. But there are other truths. Listen. You are supposed to be the smartest one in the room. But you are not. You are the lucky leader. 

Get to the meeting early. Do not sit at the head of the table or stand at the podium. Encourage candor. Find ways to express your empathy. You need them more than they need you. Yes. Let that sink in. In attitude, you work for them.      

HOW TO WRITE A MONETARY CLAIM

 

1.      Send a letter to the contracting officer which claims relief in simple, concise terms. Follow instructions on how to write a request for equitable adjustment but call it a claim. State fats and legal theories of recovery.

2.      The letter says it is a claim pursuant to the Contract Disputes Act of 1978 and FAR Parts 2.101 and 33.201 through 214.

3.      In the letter, state that you request a final decision of the contracting officer as required by the Contract Disputes Act of 1978 and FAR 33.211.

4.      Certify the claim (if it exceeds $100,000.00) as follows:  I certify that the claim is made in good faith, that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the contractor believes the government is liable; and that I am duly authorized to certify the claim on behalf of the contractor.  Do not deviate from this language found in FAR 33.207(c).

5.      Be sure to state a sum certain as the claim amount.

6.      Point out that interest runs on the claim from the time of its receipt.  FAR 33.208.

7.      Be sure to request a final decision as required by FAR 33.211.

8.      Appeal the decision (or the failure to render one) to the appropriate Board.

PROMPT JUDICIAL INTERVENTION

Why declaratory relief? It can break up an impasse preventing performance. What is it? A judgment from the court or board that resolves a dispute that may be a severe impediment to continued performance.

Suppose you are managing your federal government contract as we have suggested. In that case, you will have a relationship with the contracting officer that promotes transparent, well-documented negotiation of solutions to performance problems. (One of my clients once told me he was unsure who his contracting officer was.)

The fastest, most effective way to resolve disputes is one-on-one, perhaps even while washing up in the restroom (remind me to tell you that story). Know, be very friendly with, and respect your warranted contracting officer. Communicate daily.

If you have an unresolvable disagreement, get her agreement to ask for an ADR judge to mediate. Both Boards will dispatch a real judge to aid as a neutral at any stage of your problem, even early claim and incipient dispute. And why not? The judges have been trained to unite the parties; they are highly motivated, and it does not cost anything. One day should do it. It's not a trial.

Then, there is the point of this piece. The Civilian Board just issued a decision denying the contractor's request for declaratory relief on a nonmonetary claim. The attorney involved is an old salt who should have known better. One longstanding test for such relief is whether there is an adequate legal remedy. Clearly, a monetary claim was adequate relief. Declaratory relief is an extraordinary equitable remedy where there is a dispute that the declaration will resolve and legal remedies are unavailable.

Let me repeat for emphasis. To obtain declaratory relief on a timely basis, there must be a genuine dispute, an action by the court or board can resolve it, and no remedy at law is available to resolve the dispute. The best example is a disagreement over the interpretation of language in the contract. 

The best example is a contract interpretation issue, a legal matter solely within the province of the court or board. The parties are at an impasse, and performance cannot reasonably continue without judicial intervention.

In our experience, 90% of serious disputes involve contract interpretation issues, and the situation cries out for prompt determination by a judge. File your nonmonetary claim. No certification. No 60-day wait for a final decision.

We've been successful with this. The contractor and the contracting officer were at an impasse over language in the contract. The contractor thought its obligation was over when the warranty period expired. The government took the position the warranty began to run once the total construction phase was tested and accepted. The contractor wanted to refuse to perform. Instead, we filed a declaratory relief action to force the contract interpretation issue and whether the order to perform was a cardinal change. We settled the case with the help of the board judge.

 

SUBCONTRACT DISPUTES CLAUSE

(a) Any dispute that arises under or is related to this Agreement and which relates to a matter that gives the Prime Contractor recourse against the U.S. Government under the Prime Contract or applicable law shall be resolved in accordance with the Disputes clause of the prime contract as follows:

(1) Subcontractor will give Prime Contractor a fully supported written claim concerning any such dispute within five (5) years after the claim accrues, but in no event later than final payment under this Agreement, or Subcontractor shall be barred from any remedy for such claim.

 

(2) Subcontractor will cooperate fully with Prime Contractor in prosecuting any such dispute and will be bound by the outcome unless: (i) Prime Contractor does not afford Subcontractor a reasonable opportunity to participate in the resolution of the dispute, (ii) without Subcontractor's written consent, Prime Contractor settles or takes other action to prejudice Subcontractor's rights concerning the dispute, or (iii) Prime Contractor, having determined to discontinue its own prosecution of the dispute, does not afford Subcontractor an opportunity to continue to prosecute the dispute in Prime Contractor's name;

 

(3) If Prime Contractor and Subcontractor agree to prosecute Subcontractor's claim under this subparagraph (a), for any such claim for more than $100,000, Subcontractor shall submit with the claim a certification to Prime Contractor and to the contracting officer for the prime contract, signed by an authorized representative of the Subcontractor that: (i) the claim is made in good faith; (ii) the supporting data are accurate and complete to the best of the signatory's knowledge and belief; (iii) the amount requested accurately reflects the contract adjustment for which Subcontractor believes the U.S. Government is liable; and (iv) the signatory is duly authorized to certify the claim on behalf of Subcontractor. Furthermore, Subcontractor shall indemnify and hold Prime Contractor harmless from damages, judgments, (including reasonable attorney's fees), and other liabilities arising from any breach of such certification or any violation of Section 5 of the Contracts Disputes Act of 1978 (4I U.S.C. 604) or any violation of costs common law or statutory prohibitions against misrepresentations, fraud or false statements;

 

(4) Prime Contractor and Subcontractor will each bear their own costs of prosecuting any such dispute;

 

(5) If the parties do not agree to proceed in accordance with this paragraph (a), the dispute will be decided in accordance with subparagraph (b) hereof;

 

(6) Nothing in this Agreement Grants Subcontractor a direct right of action against the United States under the Disputes clause of the prime contract, except insofar as certain intellectual property clauses flowed down from the prime contract may so state or be construed to so provide.

 

(b) Any other dispute that arises under or is related to this Agreement, as well as any dispute that the parties to do agree to resolve according to the procedures set forth in the foregoing subparagraph (a), may be decided by a court of competent agree that jurisdiction and venue lies exclusively in the courts of the Commonwealth of Virginia.

 

(c) The Subcontractor shall proceed diligently with the performance of this Agreement, pending final resolution of any request for relief, claim, appeal, or action arising under or relating to the Agreement.

 

  

HOW TO PRICE A REQUEST FOR EQUITABLE ADJUSTMENT

 

1.      DIRECT MATERIAL

2.      DIRECT LABOR

3.      INDIRECT FACTORY OR FIELD OVERHEAD EXPENSE, IF APPLICABLE

4.      SUBCONTRACTOR REA COSTS AND SUBCONTRACTOR'S PROFIT ON THOSE COSTS

5.      COSTS OF CONTRACT ADMINISTRATION IN DEALING WITH CHANGE, INCLUDING REA PREPARATION AND NEGOTIATION COSTS (BE SURE TO REMOVE FROM G & A POOL WHEN CHARGING DIRECT)

6.      DELAY AND DISRUPTION COSTS, INCLUDING LABOR INEFFICIENCY, MATERIAL AND LABOR COST/RATE INCREASES, AND UNABSORBED HOME OFFICE OVERHEAD

7.      ANY ADDITIONAL COSTS OF THE EFFECT OF THE CHANGE ON THE UNCHANGED ORIGINAL WORK, INCLUDING EFFECTS OF INFLATION, CHANGES TO MEANS AND METHODS OF PERFORMANCE, CHANGES TO DESIGN, CHANGES TO SCOPE OF WORK.

8.      GENERAL AND ADMINISTRATIVE EXPENSES ON ALL REA COSTS

9.      PROFIT ON ALL COSTS (USUALLY AT 12% FOR CHANGED WORK)

A WALK THROUGH FAR (BUT NOT TOO FAR)

You all are familiar with the Federal Acquisition Regulation (FAR).  However, you may need a handy reference guide to the various Parts and Subparts.  I’ve put together a summary of the Parts with comments based on my experience over more than 40 years of using FAR.  My comments obviously are based on my experiences and my notes reflect my opinions on the relative importance of the various Parts.  I think you will find, however, that my suggestions on which Parts merit close attention and careful reading are universally true.

 

Each numbered paragraph corresponds to a FAR Part.  (H) means highly important, (M) means only sometimes important, and (L) means seldom important.

 

1.      (M)  States guiding principles, how regulations are arranged, circumstances under which regulations, clauses, policies, and procedures may deviate from the FAR rules, and generally how to prepare a D & F (Determination and Finding).

2.      (H)  Definitions.  Always check to see if the word you are focused on is defined in Part 2.

3.      (H)  Improper Business Practices and Personal Conflicts of Interest section.  Whistleblower protection for contractor employees and contractor code of business ethics and conduct.  Procurement integrity prohibitions, restrictions, and requirements.

4.      (M)  Various administrative matters such as contract execution, distribution, contract reporting, contractor records retention, CCR, Reps, and Certs, and reporting contractor compensation and first-tier awards.

5.      (M)  Publicizing contract actions.  Methods of dissemination of information and how and when to synopsize contract actions.

6.      (H)  Full and open competition is required except in certain stated circumstances.  Exceptions must be fully justified.

7.      (H)  Acquisition Planning including policy on contractor versus government performance.  Rules on the content of written acquisition plans.  Detailed discussion of “inherently governmental functions”.

8.      (H)  Required sources of supplies and services.  Subpart 8.4 is the only FAR discussion of Federal Supply Schedules.

9.      (H)  Contractor qualifications, including rules on contractor responsibility, qualifications, debarment, suspension, and ineligibility, and an important section on organizational and consultant conflicts of interest (subpart 9.5).

10.   (M)  Market research requirements.

11.   (L)  Seldom an issue.  Describes agency needs including liquidated damages, priorities and allocations, and variation in quantity.

12.   (H)  Acquisition of commercial items.  This is being used a lot.  Different rules for changes and terminations.  Reduced number of clauses.  Streamlined procedures.  This is a good time to check the definition of commercial items in Part 2.

13.   (M)  Simplified acquisition procedures.  See the definition of simplified acquisition threshold in Part 2.

14.   (M)  Sealed bidding rules.  Seldom used.  Hardly ever used for services.

15.   (H)  Extremely important.  All the rules on negotiated acquisitions.  Read carefully.  Contains rules on how solicitations are to be put together, what they should include, how the evaluation factors are to be written, how to conduct discussions and source selection, make awards, notify winners and losers, and how to conduct debriefings.  Subpart 15.4 contains all the rules on contract pricing.  The section ends with a discussion of unsolicited proposals which is very important but often overlooked.  In these days in which the government is crying for innovation, 15.6 becomes very important.

16.   (H)  Discussion of all the various types of contracts.  Must-read.  A complete discussion of fixed prices, IDIQ, and T & M.

17.   (M)  Multi-year contracting, options, and interagency acquisitions.

18.   (L)  Emergency acquisitions.

19.   (H)  Extremely important.  All the rules on small business programs including policies, set-asides, certificates of competency and determinations of responsibility, contracting with SBA (8a), and HUBZone rules.

20.   Reserved.  No content.

21.   Reserved.  No content.

22.   (M)  All about labor laws including Walsh-Healey, Service Contract Act, and disabled veterans.

23.   (M)  Rules in the environment, energy and water efficiency, renewable energy technologies, occupational safety, and drug-free workplace.

24.   (M)  Protection of privacy and freedom of information.

25.   (M)  Foreign acquisition.  Buy American Act, trade agreements, and prohibited sources.

26.   (M)  Other socioeconomic programs including preferences for disaster or emergency assistance, and Indian-owned and historically black institutions.

27.   (H)  Patents, Data, and Copyrights.  An extremely important section on Rights in Data.

28.   (L)  Bonds and insurance.

29.   (L)  Taxes.

30.   (M)  Cost Accounting Standards.  No worry for small businesses.

31.   (H)  An extremely important section on allowable costs.  The five tests of allowable costs.  Worth reading.

32.   (H)  Contract financing including progress payments, contract debts, contract funding, prompt payment, and electronic funds transfer.

33.   (H)  All the rules on protests, disputes, and appeals.  A must-read for protests and disputes.

34.   (L)  Major System Acquisition.

35.   (M)  Research and development contracting.

36.   (M)  Construction and architect-engineer contracts.

37.   (M)  Service contracting.  Not really much meat here.

38.   (M)  Federal Supply Schedule contracting.  Basically refers back to 8.4. 

39.   (M) Acquisition of information technology.  Not really much meat here either.

40.   Reserved.  No content.

41.   (L)  Acquisition of utility services.

42.   (H)  Contract administration and audit.  Rules for contracting officers.  Important section on novations and change of name agreements.  Extremely important in light of the anti-assignment statutes.

43.   (M)  Contract modifications.  Change orders.

44.   (M)  Subcontracting policies and procedures.  Not much meat.

45.   (M)  Government property use, title, reporting, and disposal.

46.   (M)  Quality assurance.  Contract clauses, government, and contractor responsibilities.

47.   (L)  Transportation.

48.   (L)  Value engineering.  Hardly used.

49.   (H)  Termination of contracts.  Extremely important to read thoroughly.  Covers both terminations for default and for convenience.  49.201 is a thing of beauty.  Cure notice and show cause notice discussed.  Adjustment for loss. 

50.   (L)  Extraordinary contractual actions and the Safety Act.  Hardship relief.  Support anti-terrorism by Fostering Effective Technologies Act of 2002.

51.   (L)  Use of government sources by contractors.

52.   (H)  All the solicitation provisions and contract clauses.  52.3 contains a matrix that tells you which clauses for which type contracts are required or optional.  But there is nothing in FAR telling you which clauses are mandatory subcontract flow down clauses.

53.   (H)  All the prescribed forms with illustrations.

 

 

  

HOW TO WRITE A REQUEST FOR EQUITABLE ADJUSTMENT

1.         The change proposal narrative containing:

(a)       Summary statement of the change.

(b)       Statement of the contract requirement.

(c)       Statement of the Government direction or actions or inactions that caused the contractor to exceed the contract requirements.

(d)       Detailed statements of the added work or work performed exceeding contract requirements.

(e)       Computation of the costs of work exceeding contract requirements.

(f)        (A Legal brief may be included in each claim package or group of packages as the circumstances indicate.)

2.         An indexed and tabbed appendix containing, as applicable.

(a)       Excerpts from pertinent contract documents.

(b)       Pertinent contract drawings.

(c)       Pertinent correspondence and performance documents.

(d)       Charts and tables containing or analyzing data.

(e)       Photographs.

(f)        Technical write-ups.

(g)       Excerpts from technical treatises.

(h)       Expert opinions.

(i)        Cost computation.

(j)        Any other pertinent documents or data.

(k)       (Additional extremely detailed supporting material of a bulky nature should be readily retrievable but not necessarily appended to the change proposal.)

Each of the foregoing items of documentation for the change proposal is described briefly below.

1(a).    Summary.  As the name implies, the summary statement is a brief statement of the claim.  It should be complete including the amount claimed. However, it should never consist of more than several short paragraphs.  Its purpose is to inform the reader of what he will learn if he reads the rest of the change package.  It is important that the summary be accurate.  The summary should normally be prepared after all other writings, as set out below, is completed.

1(b).    Contract Requirements.  Since costs are being claimed for exceeding contract requirements, it is essential that the original contract requirements be clearly established at the beginning of the change proposal.  This is accomplished by stating the contractor's interpretation of the contract requirement and then proving it to be reasonable by reference to each and all of the specification paragraphs, drawings or other contract documents upon which reliance is placed for that particular interpretation.  This is the baseline that must be established. To avoid excess length in the narrative, it frequently is desirable to include reproductions of contract articles in the appendix, to which reference may be made. See Paragraphs 2(a), and (b) below.

1(c)     The Change.  This is the paragraph that will present some or the greatest difficulties in preparing, i.e., tying performance exceeding contract requirements to the Government's action or inaction (including issuance of defective or impossible drawings and specifications).  Where there is a written document directing the contractor to do or not to do certain work (even though not a formal change order), the problem is made easy.  Where there was a document prepared rejecting work considered to fulfill contract requirements, the problem is made relatively easy.  Likewise, where there was a defect or incompatibility in the contract's drawings or specifications, identification of the “constructive change” is relatively easy.  However, it is not at all unusual for the major portion of changes to arise from circumstances where the Government gently nudged a contractor into a particular course of action.  Some or all of the “nudges” may have been oral, instead of written.  The direction in such areas is not direct but is more subtle.  For claim purposes it is necessary only that the government has participated in the decision or the event that resulted in the contractor proceeding in a certain manner.

It is particularly in this area of investigation that the perception of the claim writers and investigators must be exercised.  For example, if difficulties are encountered with the item to be manufactured, it may be because the government changed the item's configuration (perhaps by work rejection) sometime earlier. Similarly, for example, the claim investigators may not readily see how a certain construction method or sequence was directed by the Government.  However, the reason for the construction technique may have been the lack of trained personnel to do it in another manner.  The lack of trained personnel in turn may have resulted from some direction that absorbed the available skills in this area.  In other words, changes must be traced to their ultimate origin and at times one must look behind the obvious and proximate causes for the real cause.

1(d).    The Added Work.  The Government cannot pay for work exceeding the contract requirements unless it knows precisely and in detail what that excess work is.  Accordingly, it is necessary to describe by size, weight, length, increased performance, etc., whatever it is that is being asserted as extra work.  Such description cannot be vague or general, it must be specific.  Where the change is based upon a defect or incompatibility in the drawings and specifications, a delay, a change of sequence, a redesign of work or over-inspection, etc., the resulting extra work must be described with particularity.  It is not sufficient to simply say that certain work was "delayed" or there was "impact."

The method by which the changes are quantified, i.e., the number of times an item was reworked, the number of drawing revisions, the number of man hours and materials lost through a change or defect in drawings, the increased quantities of materials used, etc., must be stated.  This statement ties in with the cost computation (1(e). below and it is not necessary to duplicate the quantities in both sections.  The purpose of the present section is to make it clear that the change is for a certain quantity of material, and/or labor, and/or delay, etc., and is not a change for something else or something which cannot be quantified.

1(e).    Cost Computation. The computation of costs for the additional work is principally the job of the accountants, change order estimators and cost analysts.  However, the claim writers and investigators will contribute a major input in identifying quantities as discussed in 1(d) above.  In addition, much of the pricing will be based upon engineering estimates which must be made by the original investigating group.

1(f).     Legal Brief.  A legal brief, if appropriate, will be prepared by the attorneys who also will review and revise, if necessary, the other sections of the change proposal narrative to coordinate legal theory with provable fact.

            Appendices

2(a).    Contract.  The use of contract excerpts is discussed in Paragraph 1(b) above.  Such excerpts should be complete for this particular change proposal so that the parties reviewing the claim need not go back to the contract itself.

2(b).    Drawings.  Same as 2(a) above.

2(c).    Correspondence.  These are documents generated during performance and usually are included in the appendix to support the statements in Paragraphs 1(c) and (d)., the work performed, and the Government's direction to perform such work.  Typically they may include correspondence, minutes of meetings, test reports, but may consist of any type of document.  If they support the claim and are not too bulky, include them in the appendix.

2(d).    Chart and Tables.  Frequently raw data is too voluminous to include in an appendix.  It should be charted, scheduled, tabulated, made into overlays, etc., in such a manner as to support the claim.  It is extremely important that any such chart specifically reference the source of the raw data and its retrievable location.  Use of this type of material should be maximized.

2(e).    Photographs.  "A picture is worth a thousand words" is a saying that has particular applicability to proving facts.  Typically it not only proves the fact of the change, but also is descriptive of what the change is.  On the other hand photographs are dangerous because they may show something inconsistent with a position asserted in some other change proposal.  They are valuable, but use with caution.

2(g).    Technical Write-ups.  Changes (and defective specifications) frequently are based upon highly technical considerations.  Frequently because of the length of the necessary technical discussion, it is undesirable to include them in the change proposal narrative and thus break the continuity and persuasiveness of the narrative.  Accordingly, it may be desirable to summarize the technical discussion in the narrative and to present it in complete detail in the appendix.

2(g).    Technical Treatises.  Where technical consideration are involved, it may be desirable to reproduce a few pages or a chapter of an accepted technical treatise that supports the positions advanced.

2(h).    Expert Opinions. An expert opinion may be attached under the same consideration discussed in 2(g) above.

2(i).     Cost Computation.  Normally the narrative (See 1(e). above) will contain only a summary of the cost computation.  Detail should be included in the appendix.  There will be another layer of detail and raw data, work papers, etc., which will be available but will not be included in the appendix and should be clearly referenced therein.

2(j).     Other Data.  The above listing of supporting documentation is not intended to be all inclusive and any other material which may be considered persuasive should be included in the appendix.  The nature of appropriate material is limited only by the nature of the material available and the imagination and ingenuity of the people preparing the change proposal.  Remember that after claim identification and investigation, the major job becomes salesmanship.  The first element of salesmanship is clear statement of the change.

2(k).    Bulky Data.  It is both impossible and undesirable to include all supporting data in the appendix because of bulk and also because much of it is of a lower tier evidentiary value.  However, it should be identified, catalogued, and available for presentation to the government should it request it or should the circumstances later indicate the desirability of it being submitted.  Much of the lower tier material would be presented at a contract appeal hearing before the Armed Services Board of Contract Appeals.

 

 

 

 

 

 

 

 

 

HOW TO WRITE A SPONSORSHIP AGREEMENT

Subcontractor will give Contractor a fully supported written REA within five (5) years after the REA accrues but in no event later than final payment under this Agreement or Subcontractor shall be barred from any remedy for such REA.

 

Subcontractor will cooperate fully with the Contractor in prosecuting the REA against the Owner and will be bound by the outcome unless the Contractor does not afford the Subcontractor a reasonable opportunity to participate in the resolution of the REA or Contractor, having determined to discontinue its own prosecution of the REA, does not afford Subcontractor a chance to continue to prosecute the REA in Contractor’s name.

 

The contractor shall cooperate with the Subcontractor in prosecuting the REA against the Owner. Still, the Contractor shall have the sole right to make final decisions on prosecution and settlement of the REA.   The subcontractor will take the lead in prosecuting the REA against the Owner, and the Contractor will assist the Subcontractor by allowing the Subcontractor to pursue the REA in the Contractor’s name.

 

Subcontractor shall submit with the REA a certification to Contractor, signed by an authorized representative of the Subcontractor, that the claim is made in good faith, the supporting dates are accurate and complete to the best of the signatory’s knowledge and belief, the amount requested accurately reflects the contract adjustment for which Subcontractor believes the U.S. Government is liable. The signatory is authorized to certify the REA on behalf of the Subcontractor.  Subcontractor indemnifies and holds the Contractor harmless from damages, costs (including attorney fees), and other liabilities arising from any breach of such certification or any violation of the law against misrepresentation, fraud, or false statements.

 

Contractor and Subcontractor will each bear its own costs of prosecuting the REA.

 

The subcontractor shall proceed diligently with performance of this Agreement pending the final resolution of any REA arising under this agreement.

 

This clause applies to any REA, claim, or appeal arising under or related to this subcontract agreement.

 

 

HOW TO WRITE A CLAIM

 

1.      Send a letter to the contracting officer which claims relief in simple, concise terms.

2.      In the letter say, it is a claim under the Contract Disputes Act of 1978 and FAR Parts 2.101 and 33.201 through 214.

3.      In the letter, state that you request a final decision of the contracting officer as required by the Contract Disputes Act of 1978 and FAR 33.211.

4.      Certify the claim (if it exceeds $100,000.00) as follows:  I certify that the claim is made in good faith, that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the contractor believes the government is liable; and that I am duly authorized to certify the claim on behalf of the contractor.  Do not deviate from this language found in FAR 33.207(c).

5.      Be sure to state a sum certain as the claim amount.

6.      Point out that interest runs on the claim from the time of its receipt.  FAR 33.208.

7.      Be sure to request a final decision as required by FAR 33.211.

8.      Appeal the decision (or the failure to render one) to the appropriate Board.

 

 

AN OPEN LETTER TO GENERAL MARK MILLEY

You are our Dwight David Eisenhower man of the hour. We have seen your speech upon leaving office. We have observed your testimony before Congress. We have watched your distinguished military career. You are intelligent and strong and speak for us as you are profoundly empathetic.

You have spent your life in service for us. We are deeply grateful. But we desperately need you to continue that service to support democracy and against minority rule and would-be dictators.

We entreat you to lead your colleagues in the military-industrial establishment to speak out orally and in writing in support of democracy and against the uprising of fascism. Write an open letter to the American people. Repeat what you already have said. Repeat the oath and what it says and means.

You are our statesman. Our only one. Please continue to serve us. The only coalition powerful enough to stop the Trump cult is the military-industrial voice of reason, reminder, and redemption. 

Your time in history is upon us, and you have prepared yourself well. Muster the troops. Be there for us. 

ALERT: THE WANNABE DICTATOR . . .A CLARION CALL FOR ACTION

General Milley chose his words wisely. In a strong commander's voice, he warned of the election of the wannabe dictator. We all heard him. Yet there is no sign of a plan to heed the warning. The 14th Amendment won't stop him (the Supreme Catholic Court). Losing the popular vote won't stop him. Barrels of money and bombardments of ads won't stop him. Congress can't, and the elitist (Mark Warner) Democrats are bereft of fresh ideas. 

I have proposed the military-industrial complex leaders sign an open letter to all Americans supporting democracy and the Constitution and condemning wannabe dictators. 

The subtleties will pass by half the electorate unrecognized but will influence them to consider whether to continue the insurrection. The most potent force in the world has spoken against the existing minority rule and the incipient rise of autocracy/theocracy.

I can't believe I must write this and that my friends and fellow Americans give me no support. I predict the wannabe dictator will win. Who are you, you say. Why should we heed your call? So you don't know or like me. That does not mean I should be ignored. I just study the evidence.

All I'm asking is that you join me in contacting leaders of the military-industrial establishment and entreat them to sign the open letter that supports democracy, echos General Milley's speech, supports the Constitution and opposes minority rule, insurrectionists, and demagogues/dictators.

SOME HIGHLIGHTS OF OUR WORK

 Here are some highlights of our work.

We had considerable success at trial in the Marine Corps immediately after law school. We spent all our time either in court or getting ready to go to court. We did litigation work for Martin Marietta, winning two significant cases in roughly two years. We won a big case for General Dynamics and one for Vogue Instruments. We obtained injunctions in the U.S. District Court on bid protests in Oklahoma for Eagle Picher and the Court of Federal Claims for Magnavox.

We had a lot of settlements along the way, including a $0.96 on-the-dollar settlement for a construction company named Goodfellow Brothers, a fascinating story.

We won a significant precedent-setting data rights case in the Court of Federal Claims, where the government misappropriated the contractor's proprietary data. We won a major victory for AshBritt, which made it a significant player in the disaster cleanup business. Congress had to change the law due to the interpretation we argued.

We were retained on behalf of several clients to defend major asbestos claims in district courts nationwide, conceiving and initiating the government contractor defense. We were trial counsel in jury cases defending manufacturers of equipment containing asbestos. We also designed and prosecuted the case against the US government, forcing the government’s duty to indemnify the contractors for their losses.

(We grew our law firm from $2M in revenue to $80M.)

In the last decade, we handled 23 ASBCA and CBCA litigation matters, successfully resolving all but two, which we lost due to our client's admission against interest before our involvement.

As an example of the advantage of our experience, we pursued precedent for a constructive change claim theory that no other attorney has prosecuted based on our knowledge of case law we were taught in the 1960s, which is still a good precedent. We also developed some trial tactics and techniques to speed up claim resolution.

Last year, we settled two litigation matters for a large energy client on its energy savings contracts with the federal government. The more significant case involved contract language disputes that caused extended performance delays to the point that the client just wanted out of the contract. We devised and articulated the winning contract interpretation arguments and filed declaratory relief actions to get a judgment in the client's favor that could also avoid further performance on the contract. On the eve of the trial, the government agreed to make the client whole monetarily and relieved it of further obligation on the contract. A total victory was brought about by our articulation of contract language interpretation and the strategy of using declaratory relief as the vehicle for prompt judicial resolution.

IF YOU NEED TO GO TO TRIAL . . .

One subject we have avoided, as well we should, is trial work, strategy. and tactics. Does the commander announce his troop movements and share his plans with the enemy?

So, this will be brief.

As F. Lee Bailey did, we started in the Marine Corps in court every week. We learned direct and cross-examination, introduction of evidence, and how to argue to a jury or judge. Then in civilian life, we have been doing litigation work since Hector was a pup.

The point is whether the case goes to judgment or settles, we have had extraordinary success. We win.

But we also have some ideas on how to move the case faster, truncate discovery, avoid or hasten the trial date, sneak up on witnesses during an examination, and write short, pleasant-to-read, and compelling briefs.

Details are to be disclosed under the cloak of privilege.

https://spriggslawgroup.blogspot.com/2023/10/some-highlights-of-our-work.html

bill@spriggslawgroup.com