In Lockheed Martin Aeronautics Company, ASBCA No. 62209 (a C&M case), the Armed Services Board of Contract Appeals (Board) awarded $131,888,860 in damages plus applicable interest in connection with Lockheed Martin’s claim for the cumulative disruptive impacts it experienced in performing over and above work on the C-5 Reliability Enhancement and Re-Engining Program. The
OMB Final Rule Rewrites the Uniform Guidance for Grants, Cooperative Agreements, and Other Federal Financial Assistance
On April 22, 2024, the Office of Management and Budget (OMB) issued a Final Rule significantly revising the Uniform Guidance for grants, cooperative agreements, and other federal financial assistance. The Final Rule (titled “OMB Guidance for Federal Financial Assistance”), and OMB’s accompanying memorandum to agencies and reference guide, state that the revisions aim to streamline and clarify the grant rules and improve management, transparency, and oversight of federal financial assistance. Agencies must implement the Final Rule by October 1, 2024; however, agencies may apply it to federal awards as early as June 21, 2024.Continue Reading OMB Final Rule Rewrites the Uniform Guidance for Grants, Cooperative Agreements, and Other Federal Financial Assistance
Use It or Lose It: ASBCA Finds That the Government Forfeited its Sum-Certain Defense
In JE Dunn Construction Company, ASBCA No. 63183, the Armed Services Board of Contract Appeals (“ASBCA”) issued its first published decision applying the Federal Circuit’s recent holding that the FAR sum-certain requirement for Contract Disputes Act claims is not jurisdictional. The Board held that, because the government did not raise the issue until after a hearing on the merits, the government forfeited its right to challenge the contractor’s satisfaction of the sum-certain requirement.Continue Reading Use It or Lose It: ASBCA Finds That the Government Forfeited its Sum-Certain Defense
Common Questions—and Answers—About A Potential Government Shutdown
Congress has not passed crucial funding bills for the start of the fiscal year 2024. If Congress does not act by September 30, the government may be forced to shut down for lack of funding. While Congress may yet act, agencies across the government are preparing for a shutdown, and contractors should do so as well.
The issues that contractors would face under a government shutdown may vary with the circumstances of individual contracts, but there are a number of common considerations. Continue Reading Common Questions—and Answers—About A Potential Government Shutdown
Money Talks, But So Do Other Impacts: ASBCA Underscores that a Claim with Possible Financial Impacts Is Not Fundamentally a Monetary Claim Unless It Has No Other Significant Consequences
On May 15, 2023, the Armed Services Board of Contract Appeals (“ASBCA” or “the Board”) in J&J Maintenance, Inc., d/b/a J&J Worldwide Services, ASBCA No. 63013 issued an instructive analysis of its jurisdiction to hear monetary and nonmonetary claims. Partially granting a government motion to dismiss, the ASBCA explained that, if a contractor does not seek monetary relief in its claim to the contracting officer (“CO”), then the contractor cannot seek monetary relief on appeal to the Board. Addressing the contractor’s claim for contract interpretation, however, the Board denied the government’s motion to dismiss and held that, where a contractor can reasonably articulate “significant consequences” of its claim other than the recovery of money, the fact that the claim may also have a financial impact on the parties does not strip the Board of jurisdiction. Continue Reading Money Talks, But So Do Other Impacts: ASBCA Underscores that a Claim with Possible Financial Impacts Is Not Fundamentally a Monetary Claim Unless It Has No Other Significant Consequences
Debt Limit Default
Concerns about the federal debt limit have simmered since the Government reached the limit in January, but things are coming to a boil with the Treasury Department’s confirming that, as early as June 1, “extraordinary measures” may be insufficient to prevent the U.S. from defaulting on its obligations. A default would be unprecedented, creating uncertainty about how the Administration will proceed. It is important, therefore, that contractors understand the circumstances and be prepared to respond effectively to a range of scenarios.
What is the Federal Debt Limit?
The federal debt limit is the maximum amount of money that Congress, by statute, permits the Treasury to borrow. When Treasury reached this borrowing limit in January 2023, it began taking “extraordinary measures” to keep paying the federal government’s bills, but those extraordinary measures can only temporarily stave off default. Once the federal government’s cash on hand is no longer sufficient to pay its bills despite those extraordinary measures, the U.S. could begin defaulting on its payment obligations. Continue Reading Debt Limit Default
Board Upholds Measured-Mile Methodology to Calculate Disruption
In Lockheed Martin Aeronautics Company, ASBCA No. 62209, the Armed Services Board of Contract Appeals (“Board”) denied the Air Force’s motion for summary judgment, which had argued that the “measured mile” approach to calculating disruption was legally untenable. In its decision, the Board noted that it has “accepted the measured mile approach as an
Goodbye Commercial “Items”: FAR Council Replaces Definition with Commercial Products and Services
On November 4, 2021, the FAR Council issued a final rule replacing the FAR definition of “commercial item” with bifurcated definitions for “commercial product’’ and “commercial service.” The rule implements Section 836 of the National Defense Authorization Act for fiscal year 2019, and is also consistent with recommendations from the Section 809 Panel to implement
Potential Federal Government Shutdown: Crowell & Moring Identifies and Answers Common Questions
Congress has not passed crucial funding bills for the start of FY 2022 and, on September 28, 2021, Treasury Secretary Yellen informed Congress that Treasury now estimates that the Federal government will reach the debt ceiling by October 18. As a result, we again face the prospect of a government shutdown for lack of funding. While Congress may yet take action, agencies across the government are likely to begin taking steps to prepare for a shutdown, and contractors should do so as well.
Although the issues that contractors would face under a government shutdown may vary with the circumstances of individual contracts, there are a number of common considerations. Based on our experience under prior Federal government shutdowns, these include:
- Where Is the Money? For incrementally funded contracts, a “shutdown” situation is likely similar to those experienced at the end of any fiscal year when there is a “gap” between appropriations. Contractors will need to consider the implications of the various standard clauses (Limitation of Costs, Limitation of Funds, Limitation of Government Obligations) that may affect the government’s obligation to pay costs in excess of the amounts already obligated to their contracts. Of particular concern will be the standard provisions in those clauses that may limit the government’s liability for termination costs in the event that the contracts are eventually terminated without new funding. Contractors will need to decide whether to continue to perform or to take the actions authorized when funding is insufficient to pay for anticipated costs. But for contracts that are fully funded or that have incremental funding sufficient to cover all anticipated costs, including termination costs, a shutdown would not normally create new funding risks.
Laches Defense No Longer Available in ASBCA Appeals
In Lockheed Martin Aeronautics Company, ASBCA No. 62209 (a C&M case), the Board granted Lockheed Martin’s motion for summary judgment on the issue of whether the Government can assert laches as an affirmative defense to a Contract Disputes Act claim. In a case of first impression, Lockheed Martin argued that the affirmative defense of