Under a cost-reimbursement, plus incentive fee contract with the Department of Energy, the Contractor agreed to build a Mixed Oxide FuelFabrication Facility near Aiken, South Carolina. The purpose of the project was to convert weapons-grade plutonium into fuel rods for use in commercial nuclear powerplants.
In denying one of the Contractor’s certified claims, the Government summarily clawed back $21.6 million of incentive fees previously paid to the Contractor. The Contractor argued that the Government could not do this before the contract performance was complete. The Court agreed with the Contractor and ordered return of the entire sum by the Government to the Contractor.
The Court saw the Government’s claw-back attempt as “baseless retaliation” and implied failure by the contracting officer to review the claim in good faith. “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,” like prematurely demanding the immediate refund of incentive fees.
Roads & Bridges | Written Notice
WRITTEN NOTICE | Beware that strict compliance of the contract might be required.
When an owner replaced a contractor for significant safety violations, […]
Roads & Bridges | Mommie Dearest
MOMMY DEAREST | The story of an ESA without a MOM
Nobody enters this world, or a contract, without a mother: There can […]
IIJA | Does Closing a “Giant Loophole” Cost Contractors?
A recent article published by Roads and Bridges magazine reports that the Office of Management and Budget is working to broaden the scope […]
Roads & Bridges | Buy American Plan Gets an Update
BUY AMERICAN PLAN GETS AN UPDATE
The Office of Management and Budget is developing standards to replace the current Buy […]
Roads & Bridges
Where Does the Buck Stop?
WHERE DOES THE BUCK STOP? | A shallow concrete pour leads to an interesting lawsuit
On the desk of President Harry S. Truman […]
Roads & Bridges | Reshaping Agreements
RESHAPING AGREEMENTS | Oral Agreements Must Be Written in Stone
Reuse, reshaping, and/or reapplication of existing materials was the goal in this roadway […]
Pay-If-Paid Unenforceable in Virginia Starting Jan. 1, 2023
As of Jan. 1, 2023, pay-if-paid clauses are unenforceable, regardless of whether a surety/payment bond claim is involved. This is only for […]
How Short is Too Short
A limitations period is too short when it’s unreasonably short.
Construction Contracting Without Relief Clauses During COVID-19
What to do if your contract lacks the parts to handle COVID-19? Considerations for creating new contracts during COVID-19.
Jonathan J. Straw
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