Photo of Thomas Humphrey

Last month, the Federal Circuit decided a case over 70 years in the making.  Following the bombing of Pearl Harbor in 1941 and full-scale U.S. entrance into World War II, the government entered into a series of contracts with oil companies to ramp up production of aviation gasoline (“avgas”) desperately needed for the war effort.  But along with increased production came increased waste and toxic byproducts, notably spent alkylation acid and “acid sludge.”  Safe waste disposal could not keep up with production, and much of the waste was eventually dumped at a site in Fullerton, California. 

Until last week, the oil companies were on the hook for the cleanup costs.  Thanks to the Federal Circuit’s recent ruling, though, the government must now reimburse the contractors for their remediation costs.  The discussion below traces the course of the litigation, outlines the Federal Circuit’s legal analysis, and discusses how the decision represents but one potential avenue for U.S. government contractors to recover environmental remediation costs. Continue Reading Federal Circuit Requires Government to Indemnify Contractors for CERCLA Remediation Costs Based on “Taxes” Provision in WWII Contracts

On Thursday, May 20, from 2:00 pm – 3:00 pm ET, please join Tom Humphrey, John McCarthy, and Peter Eyre from Crowell & Moring’s Government Contracts Group for an in-depth discussion of the proposed rules, how these rules might impact strategic business decisions, and the implications for bid protests at GAO and the Court of Federal Claims.

The Department of Defense has issued proposed rules (.pdf) regarding organizational conflicts of interest (“OCI”), which would apply to all DoD procurements. Even for non-DoD contractors, these proposed rules merit careful attention because it is likely that the revisions to the FAR OCI provisions (which are currently underway) will closely resemble the proposed DoD rules. The proposed rules generally track decades of GAO and Court of Federal Claims decisions interpreting FAR 9.5. But there are some new elements as well. For instance, if implemented, these new rules would require many contractors to submit extensive disclosures – e.g., "any other work performed on contracts, subcontracts, grants, cooperative agreements, or other transactions within the past five years that is associated with the offer it plans to submit" – to allow agencies to analyze actual and potential OCIs. In addition, the proposed rules, implementing a specific mandate from the Weapons System Acquisition Reform Act of 2009, would prohibit (subject to a few limited exceptions) a contractor performing systems engineering and technical assistance functions for a major acquisition program from participating as a contractor or major subcontractor in the development or construction of a weapon system under such program.