Imagine you’re a Government Contractor under a firm, fixed-price contract and you’ve done nothing wrong. Nevertheless, the Government has decided to unilaterally end its contract with you. Yes, the Government can do this (for almost any reason). No, you cannot get your anticipated profit for unperformed work. You can only recover:
- Costs you actually incurred;
- Profit on the work actually done; and
- Costs of preparing a termination settlement proposal.
Costs actually incurred include preparing to perform (e.g., costs incurred after award and before notice-to-proceed) because “a settlement should compensate the contractor fairly for the work done and preparations made for the terminated portions of the contract…”). FAR 49.201(a); Appeal of Pro-Built Construction Firm, ASBCA No. 59278 (June 1, 2017).
“Cost and accounting data may provide guides, but are not rigid measures, for ascertaining fair compensation.” FAR 49.201(c). But, contract line items (CLINs) regarding price have no meaning in a T4C settlement focused on costs. Appeal of Atlas Sahil Construction Co., ASBCA No. 58951 (November 9, 2017).
If you get a T4C notice, promptly stop incurring further costs and present a reasonable and well-supported termination settlement proposal to the Government.
Your Contract Can Handle COVID-19
Uncertainty and risk are not new or novel to contractors. Contracts reduce uncertainty and share the risk of doing or providing something. COVID-19 may have contributed to, but it has not single-handedly created, uncertainty and risk.
Contractors Can Use RFI to Notify the Government
The Board (and the government) should not elevate form over substance in evaluating the sufficiency of a contractor’s notice.
Taxes Due!
It’s tax season again, so it’s time to pay the piper.
Contractor Wins when Government Reconsiders Accord
Ever had buyer’s remorse or second-guessed a decision? When the U.S. Army Corps of Engineers did that, a Contractor won its claim […]
Claim Certified with Digital Signature Deemed OK
The law is not a trend-setter. It doesn’t readily change or adapt to tech. So, a commonplace practice in business became a dispute when a claimant digitally certified a claim under the Contract Disputes Act.
Acceptance and Intervening Cause Avoided Construction Warranty Claim
Like cars, computers, and appliances, construction projects include warranties too. Similarly, construction project warranties are limited to causes within the contractor’s control […]
Insurance Company Had No Duty to Defend Under Eight Corners Rule
To decide if an insurer has a duty to defend, a Virginia State or Federal Court may only look at the allegations in the complaint and the insurance policy to determine if a judgment against the insured will be covered by the policy.
Owner SOL When Mandatory Mediation Didn’t Toll Statute of Limitations
Contract interpretation strives to find the meaning of all parts together.
Government Must Review Claims in Good Faith, Not “Conjure Up” a “Baseless Retaliation”
A contracting officer’s review of certified claims submitted in good faith is not intended to be a negotiating game where the agency may deny meritorious claims to gain leverage over the contractor.
