Claims and Disputes

Improving agency assessments of contractor past performance has been a priority since the Government Accountability Office published its 2009 report criticizing the system. A number of new FAR rules can be linked to GAO’s recommendations. For example, GAO pointed to the lack of reporting on default terminations and defective pricing. The FAR has now been amended to require default terminations and defective pricing be reported as part of a contractor’s past performance. See 75 Fed. Reg. 60258 (Sept. 29, 2010) [pdf]. The latest proposed revision to the FAR responds to GAO’s recommendation that there be greater uniformity in past performance reporting. See 76 Fed. Reg. 37704 (June 28, 2011). The proposed rule would revise FAR 42.1503 to include five minimum evaluation factors for which contractors are to be evaluated:  (i) Technical or Quality; (ii) Cost Control (as applicable); (iii) Schedule/Timeliness; (iv) Management or Business Relations; and (v) Small Business Subcontracting (as applicable).  The proposed rule would also impose a uniform ratings scale for use by past performance evaluators. As defined in the CPARS Policy Guide, past performance would have to be described as exceptional, very good, satisfactory, marginal, or unsatisfactory.

Title 41 of the U.S. Code holds many of the key laws governing contracts with the federal government. A four-year effort to organize this collection of public contract laws and remove “ambiguities, contradictions, and other imperfections” was completed on January 4, 2011. The President’s signature on Public Law No. 111-350, 124 Stat. 367 (Jan. 4, 2011) [pdf] has the effect of renumbering the entirety of Title 41 and giving new section numbers to many of the most important government contract laws.

The standard for proving damages in spent nuclear fuel cases is becoming clearer.  As a result of delays in construction of the Yucca Mountain nuclear waste repository, nuclear utilities across the country have been forced to incur extensive costs storing spent nuclear fuel that would otherwise have been transferred to Yucca Mountain, leading to a series of decisions at the Court of Federal Claims and the Federal Circuit.  The Federal Circuit’s March 11, 2011 decision in Southern Nuclear Operating Co. v. United States, No. 2008-5020 (Fed. Cir. Mar. 11, 2011) [PDF] clarifies the parties’ roles in proving damages.

Unless Congress takes action by March 4, 2011, most federal agencies will be required to cease operations, presenting significant challenges for contractors. Whether you’re optimistic or pessimistic about the prospects of a political solution that would avoid the looming government shutdown, preparing for it is a necessity. News reports on the issue are interesting, but they don’t do much in the way of developing a strategy for handling a shutdown. Here is a look at some of the key questions presented, with answers based on decisions that came out of the now infamous 1995 government shutdown.

It’s a worst-case scenario for many government contractors. Despite using strict confidentiality agreements and bold restrictive legends, the government releases a valuable trade secret to the public. The Trade Secrets Act may result in criminal consequences for the offending individuals, but the more pressing question for the contractor is how to recoup the loss of a valuable asset. The recent decision in Spectrum Sciences and Software, Inc. v. United States, No. 04-1366C (Fed. Cl. Feb. 14, 2011) [pdf], offers some guidance.

Even a dog knows the difference between being accidentally stepped on and intentionally kicked.  Having your contract terminated by the government is similar. If it happens because circumstances have changed, it’s like being accidentally stepped on. You don’t like it, but you know it wasn’t intentionally done to harm you. But if your contract is terminated solely because the agency seeks a better price—that is an intentional kick to the gut. Does the law recognize the difference between these two scenarios? Read on.