Despite “abhorrent” behavior by the Army Corps of Engineers, a majority of the Armed Services Board of Contract Appeals held there was no breach of the duty of good faith and fair dealing. Yet, the Contractor recovered almost all of its claimed damages because the Corps forced the Contractor to sign a modification under duress and ignored a significant constructive change.
In this story, two bids were submitted for maintenance dredging of the Scarborough River, Scarborough, Maine. The successful bidder was 40% lower than the Government’s initial estimate. Before contract award the Corps requested a change to the winning bidder’s plan at no additional cost to the Government and the Corps revised its Government estimate to be only 14% higher than the winning bid.
After award, the Corps unilaterally reduced the amounts it had agreed to pay for certain CLINs, which effectively cut off the contractor’s cash flow for the Project.
From these facts, a minority of the Board found the Corps breached its duty of good faith and fair dealing. However, a majority of the Board held there was no breach, despite the Corps’ “abhorrent” and unreasonable behavior. (A split of opinion on the Board is rare.)
The full opinion has more detail of how unfairly the Corps treated the Contractor.
Appeals of North American Landscaping, Construction, and Dredge, Co., Inc., Armed Services Board of Contract Appeals Nos. 60235, 60236, 60237, and 60238 (August 9, 2018).
Virginia General Contractors Not Protected from Pre-Work Claim Waivers
On March 2, 2018, the Governor approved an act of the Virginia General Assembly to make unenforceable pre-work waivers of lien rights […]
Adding Terms to a Government Contract without Saying So
Imagine an incredulous Contractor asking, “Show me in the Contract where it says I’m supposed to do X?” The Government Contracting Officer smugly answers, “even though the Contract doesn’t say so, you must do it anyway.” Is that even possible, when, how?
Differing Site Conditions: When the Part Does Not Equal the Whole
If all apples are fruit, then why are all fruit not apples?
Forum Selection Can Be a Home-Court Advantage
I promise that any disputes between us will be argued at your house. Time passes and a dispute begins to brew. Now, I want to argue at my house, not at yours. You pay costs to argue at my house that you wouldn’t have incurred had I done as agreed. Should I have to reimburse your costs?
No-Damage-for-Delay and Owner-Related Dispute Clauses are No Defense to Surety Liability Under Miller Act
Prime Government Contractors - you may need to update your interim payment waivers.
Contractual Fairness is Whatever the Parties’ Agreed
When you know a current action or inaction is wrong, but you do not object, should you be allowed to object later?
Which Comes First – Specifications or Drawings?
Sometimes it's not better to ask for forgiveness after-the-fact.
Government Contract Claims: When Appeal is Rejection of Settlement
Without a reservation of rights, appealing a Contracting Officer’s Final Decision is a rejection of any offer of payment or settlement included therein. So, the contractor had only three options.
Linking Obligations
If you want to bind the subcontractor to the prime in every way the same as the prime is bound to the owner, then the incorporation clause of the subcontract should be: . . .
