There is a lot of fiction about how to negotiate settlements of government contract claims. In reality, there are a few principles which are immutable, unassailable and nearly universal in application. Here are my favorite few.
Bargaining position. Know your bargaining position and enhance it. Don't enhance it by bluffing (see below). Know the opposing party's strengths and weaknesses and be equally circumspect about your own. Get outside help. Listen to others about the relative positions. Set a realistic goal based on your position. Don't negotiate if your position is demonstrably weaker than that of the other side.
Preparation. Prepare, prepare, prepare. Hire experts to help. You can significantly increase your bargaining position by intensive preparation. Exhaust this one. The side that is the best prepared will always come out with a good result. To win the battle of the experts, document, document, document. Rehearse, do mock negotiations and hire a mediator to critique your approach.
Bluffing. Don't. Two problems. You probably are lying and the other side most likely will think so. And, the other side may well call your bluff or completely ignore it as if you have not made it. Taking an extreme position is nonsense. A reasonable person on the other side will just ignore you. You must have integrity and nothing kills that like bluffing.
Splitting the difference. This is time honored. But there is a time and a place for it. Always split the difference when the positions are close. Never even think about it when the positions are far apart. This is always the last resort. Offering to split the difference must be made when the negotiations have been exhausted.
Honesty and sincerity. At the foundation of the real art of the deal is a negotiator who has a reputation for honesty and sincerity. You have to be believable. The other side must know that you tell the truth and that you are candid and forthcoming. This also means you are not given to game playing and tricks commonly associated with used car salesmen.
In the end, success may well include other factors. But you are unlikely to succeed without following these five fundamental principles.
bill@spriggsconsultingservices.com bill@spriggslawgroup.com
Sunday, April 30, 2017
Monday, April 24, 2017
RULES OF CONTRACT INTERPRETATION
The first rule of contract interpretation is to examine the
plain meaning of contract language giving reasonable meaning to all parts of
the contract. LAI Services, Inc. v. Gates, 573 F.3d 1306, 1314 (Fed. Cir.
2009). See also, Coast Fed. Bank, FSB v. United States, 323 F.3d 1035 (Fed. Cir.
2003); Philadelphia Authority for
Industrial Development v. United States, 114 Fed. Cl. 519 (2014).
A contract must be construed in its entirety “so as to
harmonize and give meaning to all its provisions.” Thanet
Corp. v. United States, 219 Ct. Cl. 75, 82, 591 F.2d 629, 633 (1979). The entire contract clause, not just a
portion of it, must be analyzed to ascertain the clear meaning of the
clause. See, e.g., Tri-O, Inc. v. United States, 28 Fed. Cl. 463 (1993).
When construing a contract, the rule is to read the contract
as a whole so as to give meaning to each of its provisions. Hol-Gar
Mfg. Corp v. United States, 351 F.2d 972 (Ct. Cl. 1965). Proper contract interpretation gives meaning
to all provisions and makes sense. McAbee Constr. Inc. v. United States, 97
F.3d 1431, 1435 (Fed. Cir. 1996). Proper
contract interpretation requires a review of all relevant language in a
contract schedule to resolve the meaning of language in the specification. Boyajian
v. United States, 423 F.2d 1231 (Ct. Cl. 1970). The rules on contract interpretation seek to
avoid ambiguity. C. Sanchez and Son, Inc. v. United States, 6 F.3d 1539, 1543 (Fed
Cir. 1993); Beta Systems, Inc. v. United
States, 838 F.2d 1179, 1185 (Fed. Cir. 1988).
If the words are ambiguous, the second step in contract
interpretation is to examine the conduct of the parties at the time to
determine if that conduct resolves the ambiguity. If so, the ambiguity is resolved in favor of
the party arguing for that meaning. KDI Development, Inc. v. Johnson, 495
Fed. Appx. 84 (Fed. Cir. 2012). The
intended interpretation of the parties often can be gleaned from their actions
prior to the time the dispute arose.
Evidence of this behavior has been given controlling weight. Macke
Co. v. United States, 467 F.2d 1323 (Ct. Cl. 1972).
If the language is latently ambiguous, and the contractor’s
interpretation is reasonable, the contractor’s interpretation will prevail over
the one advanced by the government. Input/Output Tech, Inc. v. United States,
Fed. Cl. 65, 72-73 (Ct. Cl. 1999). A
latent ambiguity usually becomes evident when two conflicting interpretations
appear reasonable. Id. The contractor is not
required to prove the ambiguity. If the contractor’s interpretation is
reasonable, the government’s reasonable alternative interpretation demonstrates
the ambiguity which results in interpretation against the government. United
States v. Turner Constr. Co., 819 F.2d 283 (Fed. Cir. 1987).bill@spriggsconsultingservices.com
Monday, April 17, 2017
HOW TO WRITE A REQUEST FOR EQUITABLE ADJUSTMENT REVISITED
Since we wrote How to Write a Request for Equitable adjustment, June 24, 2012, the note has received 7,427 page views. There is no regulatory guidance on what needs to go into this document. There is, however, a 6 page outline of what can be called the anatomy of a request for equitable adjustment.
I have offered to send this outline to anyone who asks. Sadly, I must apologize to those of you who have asked and I have not responded. The best way to contact me is to send an email to bill@spriggsconsultingservices.com and I will send you the outline.
Do not make your presentation a long discussion of legal theories in search of the facts. Also, do not tell a long story in search of a theory. Keep the legal theories in mind, but concentrate on a logical, detailed statement of facts with supporting documentation.
And I again say I am sorry for those who missed getting the outline. Send me an email and I will respond with the anatomy of a request for equitable adjustment.
bill@spriggsconsultingservices.com bill@spriggslawgroup.com
I have offered to send this outline to anyone who asks. Sadly, I must apologize to those of you who have asked and I have not responded. The best way to contact me is to send an email to bill@spriggsconsultingservices.com and I will send you the outline.
Do not make your presentation a long discussion of legal theories in search of the facts. Also, do not tell a long story in search of a theory. Keep the legal theories in mind, but concentrate on a logical, detailed statement of facts with supporting documentation.
And I again say I am sorry for those who missed getting the outline. Send me an email and I will respond with the anatomy of a request for equitable adjustment.
bill@spriggsconsultingservices.com bill@spriggslawgroup.com
LPTA AND PAST PERFORMANCE EVALUATIONS
Past performance need not be evaluated in lowest price, technically acceptable (LPTA) procurements if the contracting officer documents the reason past performance is not an appropriate evaluation factor. If the contracting officer decides to use past performance as an evaluation factor in LPTA selection, a comparative assessment does not apply. FAR 15.101-2(b)(1).
If the contracting officer determines that a small business' past performance is not acceptable the issue must be referred to the Small Business Administration for a Certificate of Competency in accordance with FAR subpart 19.6.
In our experience, technical acceptability in LPTA procurements have been pass/fail determinations. A comparative analysis means the proposals will be rated on some type of scale, relative to each other. However, LPTA most often is used to determine whether the proposal is acceptable or not and part of the technical evaluation includes past performance acceptability.
Past performance has been considered by GAO to be a responsibility factor. GAO views past performance as the ability of the contractor to perform the contract. Responsibility factors may be used as technical evaluation factors only when comparative evaluation is used. GAO has cautioned an agency that it cannot disqualify a small business under the guise of using relative assessment of responsibility technical factors.
If there is no real comparative evaluation, and the assessment is based on pass/fail, the decision really is one of nonresponsibility. An "unacceptable" rating on a technical criterion involving past performance really is a determination of nonresponsibility. If a small business' past performance is not acceptable, then under FAR 15.101-2(b)(1), the matter must be referred to the Small Business Administration for a Certificate of Competency. GAO consistently views past performance as a responsibility criterion where it is used as pass/fail.
bill@spriggsconsultingservices.com bill@spriggslawgroup.com
If the contracting officer determines that a small business' past performance is not acceptable the issue must be referred to the Small Business Administration for a Certificate of Competency in accordance with FAR subpart 19.6.
In our experience, technical acceptability in LPTA procurements have been pass/fail determinations. A comparative analysis means the proposals will be rated on some type of scale, relative to each other. However, LPTA most often is used to determine whether the proposal is acceptable or not and part of the technical evaluation includes past performance acceptability.
Past performance has been considered by GAO to be a responsibility factor. GAO views past performance as the ability of the contractor to perform the contract. Responsibility factors may be used as technical evaluation factors only when comparative evaluation is used. GAO has cautioned an agency that it cannot disqualify a small business under the guise of using relative assessment of responsibility technical factors.
If there is no real comparative evaluation, and the assessment is based on pass/fail, the decision really is one of nonresponsibility. An "unacceptable" rating on a technical criterion involving past performance really is a determination of nonresponsibility. If a small business' past performance is not acceptable, then under FAR 15.101-2(b)(1), the matter must be referred to the Small Business Administration for a Certificate of Competency. GAO consistently views past performance as a responsibility criterion where it is used as pass/fail.
bill@spriggsconsultingservices.com bill@spriggslawgroup.com
Sunday, April 9, 2017
T FOR D DEFENSE: ABUSE OF DISCRETION
There are, of course, many defenses to a termination for default. Acts or omissions of the government in its contractual capacity are among them.
One of the more esoteric defenses is known as abuse of discretion and involves failure to respond to requests for equitable adjustment (REA's).
In a case known as Ryste & Ricas, Inc., the Armed Services Board of Contract Appeals (ASBCA) reiterated the rule that a termination for default could not be based on materially erroneous information as to the contractor's responsibility for delay or materially erroneous information as to the effort and time required to finish the work. The government owes the contractor an assessment of all of the relevant circumstances when it exercises its discretion to terminate for default.
In Ryste, the contracting officer did not adequately consider whether time extensions were appropriate. The contractor had requested time extensions as part of REA's. These requests were not adequately addressed by the contracting officer. The contracting officer did not analyze the contractor's problems and did not consider whether the contract could have been substantially completed if the time extensions had been granted. In the end, the ASBCA determined the contracting officer abused his discretion by terminating the contract for default.
The ASBCA concluded the government had not met its burden of proof.
The lesson to be learned is that REA's must be fully considered. FAR 49.402-3(f) requires contracting officers to consider, among other things, the terms of the contract and applicable law and regulations in determining whether to terminate for default. The terms of the contract usually include the changes clause. The changes clause permits the contractor to submit an REA for equitable adjustment in price and schedule. FAR 43.204(b) states that contracting officers shall negotiate equitable adjustments resulting from change orders in the shortest practicable time.
If a contractor believes the contract has been changed, constructively or otherwise, and submits its REA, the contracting officer is obliged to consider it. It would seem, from a fair reading of Ryste, and the regulations, that the contracting officer also is obliged to adequately respond to the contractors REA before terminating for default. The contracting officer owes the contractor an assessment of the REA. Failure to respond altogether could well be argued as a breach of contract.
The defense to a termination for default which can be characterized as an abuse of discretion is hardly in the mainstream of defenses. However, one of the main defenses to a termination for default is acts of the government in its contractual capacity (constructive changes, breaches, etc.). Therefore, many of the defenses involve an abuse of discretion to one degree or another.
bill@spriggsconsultingservices.com
One of the more esoteric defenses is known as abuse of discretion and involves failure to respond to requests for equitable adjustment (REA's).
In a case known as Ryste & Ricas, Inc., the Armed Services Board of Contract Appeals (ASBCA) reiterated the rule that a termination for default could not be based on materially erroneous information as to the contractor's responsibility for delay or materially erroneous information as to the effort and time required to finish the work. The government owes the contractor an assessment of all of the relevant circumstances when it exercises its discretion to terminate for default.
In Ryste, the contracting officer did not adequately consider whether time extensions were appropriate. The contractor had requested time extensions as part of REA's. These requests were not adequately addressed by the contracting officer. The contracting officer did not analyze the contractor's problems and did not consider whether the contract could have been substantially completed if the time extensions had been granted. In the end, the ASBCA determined the contracting officer abused his discretion by terminating the contract for default.
The ASBCA concluded the government had not met its burden of proof.
The lesson to be learned is that REA's must be fully considered. FAR 49.402-3(f) requires contracting officers to consider, among other things, the terms of the contract and applicable law and regulations in determining whether to terminate for default. The terms of the contract usually include the changes clause. The changes clause permits the contractor to submit an REA for equitable adjustment in price and schedule. FAR 43.204(b) states that contracting officers shall negotiate equitable adjustments resulting from change orders in the shortest practicable time.
If a contractor believes the contract has been changed, constructively or otherwise, and submits its REA, the contracting officer is obliged to consider it. It would seem, from a fair reading of Ryste, and the regulations, that the contracting officer also is obliged to adequately respond to the contractors REA before terminating for default. The contracting officer owes the contractor an assessment of the REA. Failure to respond altogether could well be argued as a breach of contract.
The defense to a termination for default which can be characterized as an abuse of discretion is hardly in the mainstream of defenses. However, one of the main defenses to a termination for default is acts of the government in its contractual capacity (constructive changes, breaches, etc.). Therefore, many of the defenses involve an abuse of discretion to one degree or another.
bill@spriggsconsultingservices.com
Saturday, April 8, 2017
THE JUDICIAL ROLE OF THE CONTRACTING OFFICER
It's time we reminded ourselves of the judicial role of the contracting officer in government contracts. Contracting officers are required by law to act impartially and function in a judicial role when resolving disputes. The history is clear but very often overlooked.
Abraham Lincoln once said: "It is as much the duty of the government to render prompt justice against itself, in favor of citizens, as it is to administer the same between private individuals." In 1912, the United States Supreme Court, in addressing the duties of the contracting officer, said: "But the very extent of the power and the conclusive character of his decision raised a corresponding duty that the agent's judgment should be exercised not capriciously or fraudulently, but reasonably, and with due regard to the rights of both contracting parties."
The most resounding pronouncement, however, was made by the Court of Claims in a 1950 opinion when, after referring to the 1912 Supreme Court opinion, the Court of Claims said the contracting officer must not represent either side but must "act as an impartial, unbiased judge." The Court of Claims went on to say the contracting officer's function was "to act impartially, weighing with an even hand the rights of the parties on the one hand and on the other." The court recognized the obligation of the contracting officer to represent the government's interests in procurement matters, but it went on to state clearly that "in settling disputes this is not his function."
This is pretty clear. So why are there so many complaints about contracting officers failing to act judicially when disputes arise?
It's time to get back to basics and take heed of judicial precedent. And just to bring all this up to date, read FAR 1.602-2(b) again. "Contracting officers shall ensure that contractors receive impartial, fair and equitable treatment." It's mandatory. Impartial, fair and equitable treatment. Sounds like something Abraham Lincoln might say.
bill@spriggslawgroup.com
Abraham Lincoln once said: "It is as much the duty of the government to render prompt justice against itself, in favor of citizens, as it is to administer the same between private individuals." In 1912, the United States Supreme Court, in addressing the duties of the contracting officer, said: "But the very extent of the power and the conclusive character of his decision raised a corresponding duty that the agent's judgment should be exercised not capriciously or fraudulently, but reasonably, and with due regard to the rights of both contracting parties."
The most resounding pronouncement, however, was made by the Court of Claims in a 1950 opinion when, after referring to the 1912 Supreme Court opinion, the Court of Claims said the contracting officer must not represent either side but must "act as an impartial, unbiased judge." The Court of Claims went on to say the contracting officer's function was "to act impartially, weighing with an even hand the rights of the parties on the one hand and on the other." The court recognized the obligation of the contracting officer to represent the government's interests in procurement matters, but it went on to state clearly that "in settling disputes this is not his function."
This is pretty clear. So why are there so many complaints about contracting officers failing to act judicially when disputes arise?
It's time to get back to basics and take heed of judicial precedent. And just to bring all this up to date, read FAR 1.602-2(b) again. "Contracting officers shall ensure that contractors receive impartial, fair and equitable treatment." It's mandatory. Impartial, fair and equitable treatment. Sounds like something Abraham Lincoln might say.
bill@spriggslawgroup.com
Thursday, September 26, 2013
GOVERNMENT'S DUTY TO INQUIRE
We've written often about the contractor's duty to inquire and seek clarification of solicitation ambiguities before submitting its bid. The rule is clear. If the solicitation is obviously unclear, the contractor has a duty to inquire and seek clarification of the ambiguous language or assume the risk of error. A protest later will fail as untimely. But what about the government? Does the government have a duty to seek clarification of apparent mistakes in the contractor's offer in a negotiated procurement under FAR Part 15? Yes, says the Court of Federal Claims in a recent opinion by Judge Charles Lettow.
Procurement officials have authority to act regarding clerical errors in sealed bidding and negotiated procurements. Where sealed bidding is concerned, the rules regarding clerical and other mistakes in bids "are cast in mandatory terms," says Judge Lettow. In contrast, the regulatory provisions regarding mistakes discovered before award in offers for negotiated procurements are "largely discretionary". Judge Lettow cites the discretionary language in FAR 15.306(a)(2) permitting the contracting officer to provide the offeror an opportunity to "clarify certain aspects of proposals . . . or to resolve minor or clerical errors." He does not mention FAR 15.306(b)(3)(i) which permits clarification and refers specifically to FAR 14.407 which recites the mandatory requirements.
Judge Lettow sees a fairly sharp dividing line between the rules in negotiated and sealed bidding procurements. However, he says, "the permissive language of the clarification provisions in Part 15 does not mean that those provisions are not susceptible to judicial enforcement."
The protesting contractor mistakenly submitted the wrong information regarding the experience of one of its subcontractors. The subcontractor was proposed by a competitor with the correct project experience information. The government took the position it had no duty in inquire about the possible error by the protester. The government rejected the protester's proposal as incomplete.
Interestingly, the court focused on whether competitive negotiation is so far removed from sealed bidding that a contracting officer's reaction to a clerical mistake can be "diametrically different" in the two types of procurement despite factually compelling reasons to seek clarification.
The court decides the government had the duty to inquire and grants relief to the contractor. The contracting officer abused her discretion. She "improperly refused to seek clarification . . . ."
The lesson here? In negotiated procurements, contractors should attempt to correct mistakes or make clarifications in their proposals even where negotiations are not going to be conducted. Clarifications are not negotiations. Moreover, contractors should argue, in appropriate cases, that it would be an abuse of discretion not to allow the correction. Their proposals should not be rejected.
bill@spriggsconsultingservices.com
Procurement officials have authority to act regarding clerical errors in sealed bidding and negotiated procurements. Where sealed bidding is concerned, the rules regarding clerical and other mistakes in bids "are cast in mandatory terms," says Judge Lettow. In contrast, the regulatory provisions regarding mistakes discovered before award in offers for negotiated procurements are "largely discretionary". Judge Lettow cites the discretionary language in FAR 15.306(a)(2) permitting the contracting officer to provide the offeror an opportunity to "clarify certain aspects of proposals . . . or to resolve minor or clerical errors." He does not mention FAR 15.306(b)(3)(i) which permits clarification and refers specifically to FAR 14.407 which recites the mandatory requirements.
Judge Lettow sees a fairly sharp dividing line between the rules in negotiated and sealed bidding procurements. However, he says, "the permissive language of the clarification provisions in Part 15 does not mean that those provisions are not susceptible to judicial enforcement."
The protesting contractor mistakenly submitted the wrong information regarding the experience of one of its subcontractors. The subcontractor was proposed by a competitor with the correct project experience information. The government took the position it had no duty in inquire about the possible error by the protester. The government rejected the protester's proposal as incomplete.
Interestingly, the court focused on whether competitive negotiation is so far removed from sealed bidding that a contracting officer's reaction to a clerical mistake can be "diametrically different" in the two types of procurement despite factually compelling reasons to seek clarification.
The court decides the government had the duty to inquire and grants relief to the contractor. The contracting officer abused her discretion. She "improperly refused to seek clarification . . . ."
The lesson here? In negotiated procurements, contractors should attempt to correct mistakes or make clarifications in their proposals even where negotiations are not going to be conducted. Clarifications are not negotiations. Moreover, contractors should argue, in appropriate cases, that it would be an abuse of discretion not to allow the correction. Their proposals should not be rejected.
bill@spriggsconsultingservices.com
Thursday, June 13, 2013
SSA MUST ADEQUATELY EXPLAIN DECISION
The Government Accountability Office (GAO) has just sustained a protest because the source selection authority (SSA) failed to substantively consider differences between proposals, and also failed to adequately explain and properly document the source selection decision. B-408046; B-408046.2.
This is a case where the award was made to the lower priced, lower-rated offeror. The differences on the technical scores were not great but the protester's were better than the successful awardee's. As we've noted over and over again, in these days of budget constrains, agencies tend to award to the lower priced offeror even in a best value procurement where the technical/management and past performance factors are significantly more important than cost or price. Here, GAO signals again that it is watching the store to see if the agency is following the rules.
While an agency has broad discretion in making a tradeoff between price and non-price factors, says GAO, "an award decision in favor of a lower-rated, lower-priced proposal must acknowledge and document any significant advantages of the higher-price, higher-rated proposal and explain why they are not worth the price premium." Put this rule in the book: An award decision in favor of a lower-priced proposal must acknowledge, explain and document any significant advantages of the higher-price, higher-rated proposal and explain why they are not worth the price premium.
In this very recent case, GAO said the solicitation stated that technical/management approach was more important than the past performance factor, and when combined the non-cost factors were significantly more important than the cost factor. The SSA's decision acknowledged that the protester's proposal was higher rated on past performance but the SSA found that the "slightly better" past performance ratings were not significant enough to warrant paying the higher evaluated price. The record did not explain why the SSA concluded that the protester's past performance as only "slightly better" and the record did not support the decision that this difference was not worth the price premium for the protester's proposal.
As we've reported before, conclusory statements are not enough to justify the source selection decision. The rule is that the SSA must explain the rationale for the decision and specifically justify awarding to a lower-priced offeror, in a best value procurement, by going on to explain (and document) the reasons why the higher-rated (for the non-price factors) offeror's higher price is not worth the premium.
Would that we all would finally get this message.
bill@spriggsconsultingservices.com
This is a case where the award was made to the lower priced, lower-rated offeror. The differences on the technical scores were not great but the protester's were better than the successful awardee's. As we've noted over and over again, in these days of budget constrains, agencies tend to award to the lower priced offeror even in a best value procurement where the technical/management and past performance factors are significantly more important than cost or price. Here, GAO signals again that it is watching the store to see if the agency is following the rules.
While an agency has broad discretion in making a tradeoff between price and non-price factors, says GAO, "an award decision in favor of a lower-rated, lower-priced proposal must acknowledge and document any significant advantages of the higher-price, higher-rated proposal and explain why they are not worth the price premium." Put this rule in the book: An award decision in favor of a lower-priced proposal must acknowledge, explain and document any significant advantages of the higher-price, higher-rated proposal and explain why they are not worth the price premium.
In this very recent case, GAO said the solicitation stated that technical/management approach was more important than the past performance factor, and when combined the non-cost factors were significantly more important than the cost factor. The SSA's decision acknowledged that the protester's proposal was higher rated on past performance but the SSA found that the "slightly better" past performance ratings were not significant enough to warrant paying the higher evaluated price. The record did not explain why the SSA concluded that the protester's past performance as only "slightly better" and the record did not support the decision that this difference was not worth the price premium for the protester's proposal.
As we've reported before, conclusory statements are not enough to justify the source selection decision. The rule is that the SSA must explain the rationale for the decision and specifically justify awarding to a lower-priced offeror, in a best value procurement, by going on to explain (and document) the reasons why the higher-rated (for the non-price factors) offeror's higher price is not worth the premium.
Would that we all would finally get this message.
bill@spriggsconsultingservices.com
Saturday, June 1, 2013
TIPS ON CLAIM RESOLUTION
Contractors hate to litigate claims. They have better things to do. It takes too long and diverts important resources into a speculative, risky enterprise with no hope of a new product or service line. But some contractors are either forced or choose to treat losses written off as possible profit enhancers in tough times. There are other reasons to pursue claims particularly when they involve contract interpretation issues which may apply to ongoing contract performance, or defending a termination for default by arguing affirmative relief claims.
So we thought we would provide a list of tips for contractors preparing for the possibility of claim litigation.
So we thought we would provide a list of tips for contractors preparing for the possibility of claim litigation.
- Prepare a professional request for equitable adjustment (REA) and convert it to a claim only after negotiations with the contracting officer fail. See www.spriggsconsultingservices.com for a list of 14 tips on how to negotiate a settlement of the REA. Submit the claim with the proper certification (do not change a word) and ask for a prompt final decision as required by the regulation. Remind the contracting officer interest is running on the claim.
- Appeal the failure to issue a decision if it is not rendered either within 60 days or a reasonable time (usually 90 days), whichever is appropriate under the regulation.
- Make your choice of forum based on sound professional advice. This usually means going to the Board of Contract Appeals (Board).
- Always file your complaint with your notice of appeal. Always. There is no need to wait the 30 days.
- Always ask opposing counsel to agree to mediation right away. Always. The first step in the litigation should be an attempt to set up a mediation meeting presided over by a Board judge. In fact, it is possible to engage the services of a Board judge even before commencing the litigation.
- Consider forgoing discovery and arguing that opposing counsel's discovery should be limited. If you have prepared your case properly, you may be able to proceed to trial without discovery or after limited discovery. Control of the other side is difficult and depends on the judge.
- Consider carefully dispositive motions. Legal issues can be disposed of on motion. Try to narrow or completely eliminate the factual issues so that the only issues that remain are legal issues susceptible to disposition on motion.
- If mediation has not worked early on, forget alternative dispute resolution (ADR). Go ahead and go to trial as fast as you can or file your dispositive motions.
- There is a reason for the hackneyed "settlement on the court steps." It happens. But it most likely happens before the parties have invested too much time in witness preparation and before they come close to the courthouse steps.
- The Boards like to adjudicate entitlement and leave quantum (damages) to the negotiation of the parties. Even the slightest headway on entitlement can lead to settlement.
bill@spriggslawgroup.com http://www.spriggslawgroup.com/
DOD REA CERTIFICATION REQUIREMENT
On December 7, 2011, DOD introduced a new clause for contracts estimated to exceed the simplified acquisition threshold. DOD now requires contractors to certify that any request for equitable adjustment (REA) exceeding that threshold in amount is "made in good faith, and that the supporting data are accurate and complete to the best of [the contractor's] knowledge and belief."
Just to review the bidding, contractors may seek REA's for upward adjustments in price and schedule extensions on any government contract containing the standard Changes clause. For commercial item contracts awarded under FAR Part 12, it's a difference story. There, the changes clause says changes may only be made by mutual agreement of the parties. However, REA's can be submitted under breach of contract theories on commercial item contracts. In any event, if you have the new clause in DFARS 252.243-7002, you must certify your REA.
This is not the same certification required under FAR Subpart 33.2. If you desire to convert your REA to a claim, you must use the certification language at FAR 33.207. That certification adds another clause to the certification asserting the contractor's belief the amount accurately reflects what it believes the government must pay and attests to the certifier's eligibility to make the certification. If you want to request the contracting officer's final decision thereby affording yourself the opportunity to appeal that decision and you want to recover interest on your REA, you must certify it with the exact language from FAR 33.207. Although minor informalities in the language can be corrected later, you should use the exact language in the regulation.
REA's are an integral part of the public contracting scheme. One of the major differences between public and private commercial contracts is the use by the government of the Changes clause. Because the government dictates the mandatory use of this clause and thereby maintains total control over the contractor's performance, the law has developed various remedies for the contractor to recover additional costs (and profit on those costs) under various theories called constructive changes. (These constructive changes are actually breaches of the contract given a different name.)
We've written several blogs about breaches of government obligations under every contract. The government's specifications must be free of errors, conflicts and omissions and must permit commercially practicable performance. The government is obligated to cooperate with the contractor, not interfere in the contractor's performance and communicate with the contractor. The govenment is obliged to provide information vital to the contractor's performance. There are other types of constructive changes such as constructive acceleration of performance (where the government unjustifiably denies the contractor's request for a schedule extension). Differing interpretations of contract language give rise to constructive changes.
The take away points are these: (1) you have a right to seek redress for constructive changes; (2) if you submit an REA on a DOD contract, you must certify it under DFARS 252.243-7002; (3) if you want to convert your REA to a claim, you then must recertify it in accordance with FAR 33.207; and (4) call us as we are experts at preparing REA's and claims.
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