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 |Let the Contract Lead
LET THE CONTRACT LEAD
Documents offer guidance needed to manage risk without derailing projects
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All court decisions are opinions. Appellate court decisions are typically made by a panel of three […]
Roads & Bridges | Clarifying Punitive Damages
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In June 2021, the South Dakota Department of Transportation contracted for the demolition and construction of a bridge on State […]
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A New York Court Shows How Performance Specifications Can Leave Contractors Holding the Bag
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FROM ROMAN ARCHES TO AI
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Roads & Bridges | Caught in the Middle
CAUGHT IN THE MIDDLE
New Mexico bridge case highlights the importance of written agreements for changes and delay compensation
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Roads & Bridges | Wait and It’s Waived
WAIT AND IT’S WAIVED
Roads & Bridges | Supreme Court Ruling on Arbitration Delay
Don’t wait to arbitrate! Progressing too far down the litigation […]
Roads & Bridges | Court Defines When Contractors Can Withdraw Due to Mistakes
BIDDING BLUNDER
Roads & Bridges | Court Defines When Contractors Can Withdraw Due to Mistakes
For over 125 years, the vast majority of jurisdictions […]
FEDERAL CONTRACT TERMINATION OR MODIFICATION
The White House has directed Agency heads to “terminate or modify . . . covered contracts.” With some exceptions, there are […]
