On October 28, 2022, the Department of Defense (DoD) amended the Defense Federal Acquisition Regulation Supplement (DFARS) by issuing two final rules related to contract cost and pricing. Specifically:
In Doubleshot, Inc., ASBCA No. 61691 (July 19, 2022), the Armed Services Board of Contract Appeals (“ASBCA”) granted the contractor’s motion for partial summary judgment, denying the Government’s claim for unallowable costs to the extent that it was based on missing or unsigned employee time cards. The ASBCA held that the contractor was not required to maintain time card records to support the allowability of labor charges beyond the retention period specified in the contractor’s cost-plus-fixed-fee contracts (including applicable time extensions).
The contracts incorporated both the Audit and Records – Negotiation clause (FAR 52.215-2) and the Allowable Cost and Payment clause (FAR 52.216-7), which grant the Government the right to examine the contractor’s records reflecting all claimed costs and reduce payments for amounts that are unallowable. Following the contractor’s delayed submission of two final indirect cost rate proposals, the Defense Contract Audit Agency (“DCAA”) did not begin auditing the proposals until eight months after the contractual obligation to maintain records had expired. DCAA then questioned the contractor’s labor costs for which there was no time card support, even though the contractor was able to demonstrate that it paid its employees. The Government’s claim and the contractor’s appeal followed.
In Tolliver Group, Inc. v. United States (Aug. 17, 2022), the Court of Federal Claims (“COFC”) granted the contractor’s request for summary judgment, awarding $195,890 in legal fees the contractor incurred to successfully defend against a False Claims Act suit brought by a whistleblower. The court held that the cost principles in Federal Acquisition Regulation (“FAR”) Subpart 31.2 applied to the contractor’s fixed-price task order, and the contractor’s legal fees were allowable and payable under the contract. This is the second time that the COFC addressed the contractor’s entitlement to legal fees, having previously held that the contractor could recover a portion of them under the Spearin doctrine (which we reported on here). The Federal Circuit later vacated that award on jurisdictional grounds (reported on here) and remanded the case to the COFC.
Continue Reading When is the Price of a Fixed-Price Contract Not Fixed?
In ECC Int’l, LLC, ASBCA No. 60167 (Jan. 25, 2022), the Armed Services Board of Contract Appeals (“Board”) held that it had jurisdiction to hear a contractor’s alternate theories of recovery that arose from the same operative facts and sought the same relief requested in its claim. The contractor initially filed a certified claim for
The Federal Circuit recently affirmed the Civilian Board of Contract Appeals’ (CBCA) decision denying a pandemic-related claim in Pernix Serka Joint Venture v. Secretary of State, CBCA No. 5683, 20-1 BCA ¶ 37,589. Pernix involved a firm-fixed-price construction contract in Sierra Leone that was impacted by an Ebola outbreak several months into the project. The Department of State (DOS) declined to provide direction or to issue a suspension of work order, and instead advised Pernix to make its own business decisions regarding performance and employee safety. Pernix chose to demobilize its workforce and, later, to remobilize with the addition of its own on-site medical facility and services. Pernix then submitted a claim for the increased medical, safety, and demobilization and remobilization costs. DOS granted an adjustment to the schedule for the Ebola-related delays under the contract’s excusable delay clause, but denied Pernix’s monetary claim.
Continue Reading Federal Circuit Affirms Board Decision on Pandemic-Related Claim
In Ology Bioservices, Inc., ASBCA No. 62633 (May 20, 2021), the Armed Services Board of Contract Appeals (the Board) held that the Government could not assess a penalty on the contractor’s fiscal year (FY) 2013 compensation costs for being expressly unallowable when the Government delayed publishing the compensation cap for FY 2013 by more
In URS Federal Services, Inc., ASBCA No. 62475 (March 23, 2021), the Board dismissed a contractor’s three-count complaint for lack of jurisdiction on one count and for failure to state a claim on the other two. The Board first addressed Count III, which alleged that the Government had breached the implied duty of
In GSC Constr., Inc., ASBCA No. 62530 (Mar. 1, 2021), the Armed Services Board of Contract Appeals (the Board) denied the Government’s motion to dismiss for lack of jurisdiction. The contractor submitted a certified claim to the contracting officer (CO) that included costs associated with a change order, and then subsequently filed an appeal
In L3 Technologies, Inc., ASBCA Nos. 61811, et al. (Mar. 1, 2021), the Armed Services Board of Contract Appeals (Board) granted the Government’s motion to dismiss the appeal, over the contractor’s objection, following the Contracting Officer’s (CO) unequivocal withdrawal of its cost disallowance claims. The contractor argued that its case was not moot despite
In Creative Management Services, LLC, dba MC-2 v. U.S. (Feb. 26, 2021), the Federal Circuit affirmed a Court of Federal Claims decision dismissing a contractor’s appeal of the government’s Contract Disputes Act (CDA) claim as untimely, holding that the contractor appealed more than 12 months after receiving a contracting officer’s (CO) final decision. On appeal, the contractor alleged that the final decision was not a valid claim because it did not state a “sum certain” as required by the CDA, and this deficiency meant that the 12-month appeal period had not started to run.
The contractor was awarded a General Services Administration (GSA) task order to provide marketing and logistical support for an annual GSA conference, and was required to keep the revenue it collected for the conference in a trust account. When GSA canceled the conference in the fourth year and asked the contractor to return all remaining money in the trust account, the contractor refused and submitted a termination for convenience proposal to GSA. GSA subsequently issued two letters to the contractor demanding an accounting of the trust account and all money that remained in it. The CO then issued a final decision on the contractor’s termination proposal and on GSA’s claim to the remaining funds in the trust account, without providing a dollar amount. The contractor filed suit three years after the final decision was issued, challenging the government’s claim to the trust account funds.
Continue Reading Show Me the Money? When a Sum Approximate Counts as a Sum Certain