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Executive Order 14042, issued on September 9, 2021, requires that certain federal contractors and subcontractors mandate vaccinations against COVID-19 for covered employees in addition to requiring compliance by covered employees and visitors with other COVID-19 safety protocols.

However, E.O. 14042 leaves several questions unanswered, including how agencies should implement the order and, in some cases,

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.


Continue Reading Potential Federal Government Shutdown: Crowell & Moring Identifies and Answers Common Questions

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

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 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

The American Rescue Plan Act of 2021 (the Act), signed into law by President Biden on March 11, 2021, extends Section 3610 of the CARES Act (previously discussed here, here, and here) through September 30, 2021. The extension allows federal agencies to reimburse contractors for six additional months of paid-leave costs if

In BAE Systems Ordnance Systems, Inc., ASBCA No. 62416 (February 10, 2021), the Armed Services Board of Contract Appeals addressed whether an request for equitable adjustment (REA) constituted a Contract Disputes Act (CDA) claim. BAE submitted a series of REAs that it consistently labeled and characterized as such and certified in accordance with