Construction Contracting

Unlike private parties in a contract, the government has several unique rights that allows it to avoid its contractual obligations in certain circumstances. We have written about the government’s right to terminate contracts for convenience. But the government may also avoid contract liability by invoking the sovereign act doctrine as a defense. This defense is available where government’s obstruction to the contract is considered a public and general act as a sovereign.

Continue Reading ASBCA Finds COVID Mitigation is a Sovereign Act

Contractors and contracting officers are often asked to make tough decisions about issues that arise in the course of a complex government contract. Decisions that change the scope of work, the schedule, or the cost of the work must be documented so that the work can proceed. In a perfect world, the parties would execute a bilateral contract modification that addresses and resolves any potential future disputes.

Continue Reading How a reservation of rights can affect the outcome of a dispute on a government contract

Now that we are two years into the COVID-19 pandemic in the United States, it should come as no surprise that several cases discussing whether COVID-19 is an excusable delay have made their way through the ASBCA and CBCA dockets. These cases show that although COVID-19 may be treated as an “epidemic” under the right circumstances according to the enumerated excusable delays in the FAR, the boards have no intention of treating the pandemic as a cure-all for contractors facing potential terminations for default.

Continue Reading Recent Board Decisions Explain Why COVID-19 Won’t be a “Get-Out-of-Jail-Free Card” for Contractors Facing Terminations for Default

The ASBCA’s November 2021 decision in Harry Pepper and Associates, Inc., No. 62038 et al. (Nov. 3, 2021) offers important guidance on the role of live witness testimony in one of the most challenging aspects of differing site conditions claims: proving that the actual site conditions were actually different from those that were expected.

The claims at issue in the case arose from a $36 million task order for the restoration of NASA’s B-2 rocket test stand, which was built in the 1960s as part of the Apollo program and used to test the Saturn V rockets. The restoration was needed so that the B-2 stand can be used to test rocket vehicles for use in NASA’s new moon-launch program, Artemis.

Continue Reading The Role of Live Witness Testimony in Proving Differing Site Conditions Claims

On February 4, 2022, President Biden issued Executive Order 14063, requiring certain federal construction contractors and subcontractors “to negotiate or become party to a project labor agreement with one or more appropriate labor organizations.”

The EO’s Project Labor Agreement (PLA) requirement applies to “large-scale construction projects,” defined to include domestic federal construction projects “for which the total estimated cost of the construction contract to the Federal Government is $35 million or more,” subject to adjustment based on inflation.

Continue Reading Biden Executive Order Requires Project Labor Agreements on “Large-Scale Construction Projects”

Federal agencies and contractors are working hard to address the realities of the COVID-19 pandemic. In some cases, work must stop. In others, the work will increase or change dramatically. While contractors should look to contracting officers for guidance with respect to specific contracts, agency-wide guidance documents are beginning to shed light on the government’s expectations. We will be using this blog entry to collect and share agency guidance on performance of government contracts during the Coronavirus pandemic.

Department of Defense—

Department of the Army—

  • Planning for Potential Novel Coronavirus Impacts (Mar. 12, 2020). Encourages increased communication, notes that contracting officers do not bear the responsibility to determine whether the excuse of COVID—19 applies, outlines causes for performance delays that are excusable and FAR provisions that excuse performance delays, and clarifies situations in which compensation is an option.


Continue Reading Federal agency guidance on the COVID-19 pandemic

The spread of COVID-19 (Coronavirus) remains unclear, but its impacts are already being felt. Supply chains are being disrupted and companies are implementing preventative measures to protect their employees. Many businesses have already suspended non-essential travel, encouraged remote working arrangements, and advised employees to follow the Centers for Disease Control risk-reduction strategies. Given these delays and disruptions, it’s logical to wonder:  Are delays or impacts related to the Coronavirus an excusable delay?

The answer is yes, if you can prove it. Below we outline the standard contract clauses dealing with delays from epidemics and discuss how courts have interpreted those clauses in the past when contractors claimed their delays should be excused due to an epidemic.
Continue Reading Is Coronavirus an excusable delay?

The Military Housing Privatization Initiative was intended to address the availability and adequacy of housing for military service members and their families. As a result of the MHPI, approximately 99 percent of military family housing in the United States is now operated and maintained by private developers. MHPI developers have recently been the target of litigation seeking to hold them responsible for mold and other environmental contamination. Plaintiffs are not only seeking damages for personal injury. They are seeking class certification. In one case they are seeking injunctive relief that would require changes to how the MHPI project is managed.

In this post, we provide some background on the MHPI program, the environmental contamination litigation filed so far, and some perspective on the legal issues presented in these cases. We explain why MHPI developers have a basis to assert derivative sovereign immunity and why the federal enclave doctrine presents an obstacle to some state law claims. We also point out why plaintiffs may face insurmountable hurdles in achieving certification to proceed in a class action.
Continue Reading How MHPI developers can defend against class actions for environmental contamination

Under the Christian Doctrine, prime contractors face the risk of having a court or a board of contract appeals read a clause into their contracts, even if it was omitted from the contract that they signed. In this entry we discuss whether the Christian Doctrine applies to subcontractors.

The Christian Doctrine is almost certainly inapplicable to subcontractors. For the reasons why, consider the decision in Energy Labs, Inc. v. Edwards Engineering, Inc., (N.D. Ill. June 2, 2015). A subcontractor contracted to manufacture and deliver HVAC systems for the Chicago Transit Authority. In its own contract, the prime contractor certified that the HVAC system would comply with the Buy America Act. But the prime contractor failed to flow the requirement down to the HVAC manufacturer, which planned to manufacture the units in Mexico. After learning that the plan to manufacture the units in Mexico would not meet the Buy America requirement, the prime contractor canceled the order and purchased the units from another manufacturer.

The original manufacturer sued for breach of contract. In its motion to dismiss, the prime contractor made two arguments. The subcontract was “illegal” because it omitted the Buy America requirement. Or it was legal only because the Christian Doctrine meant that the Buy America requirement was read into the subcontract by operation of law. The court rejected both arguments. There was nothing “illegal” about the prime’s failure to include a Buy America requirement in the subcontract. And there was no basis to read the requirement into the subcontract through the Christian Doctrine. “The Christian doctrine . . . was intended to apply to contracts between the federal government and government contractors, not to subcontracts.”

This result is consistent with our experience.
Continue Reading Does the Christian Doctrine apply to subcontractors?

Arbitration is often seen as a way of getting a more predictable result in complex construction disputes. The subject matter expertise available with experienced arbitrators and the finality of the arbitration process itself are certainly important considerations. But resolving disputes in arbitration can sometimes lead to surprising results, even ones that might be inconsistent with the underlying contract or with applicable state law.

The Eighth Circuit’s recent decision in Beumer Corp. v. ProEnergy Services, LLC, No. 17-2862 (8th Cir. Aug. 9, 2018), is an example of such a case. The arbitrator in this case awarded attorney’s fee of nearly a million dollars more than the liability cap in the contract. Despite the possibility that this result was inconsistent with state law, the Eighth Circuit let the award stand.

Continue Reading Why getting the wrong result in arbitration may be what you bought