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.
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.
Termination for Convenience was OK to Get a Lower Price
When Massachusetts’ highest State court rejected Federal law on termination for convenience (T4C) a public entity’s “sole discretion . . . for […]
Pirates (Parties) Should Arbitrate Arbitrability
Yes, the word “pirates” is an anagram for “parties.” Participants in a lawsuit, arbitration, or mediation are collectively referred to as parties. Are they pirates too?
Very Bad Behavior Without Bad Faith is Not a Breach of Contract
Despite “abhorrent” behavior by the Army Corps of Engineers, a majority of the Armed Services Board of Contract Appeals held there was […]
Government Construction Contracts Require Bonds, Even When Contract Doesn’t Say So
Yesterday (Nov. 5, 2018), the Fed. Cir. Ct. of Appeals again endorsed the Christian doctrine, which can make unstated requirements part of a government contract.
Government’s Negligent Estimate a Trick?
The Government’s negligent estimate failed to provide the “most current information available.”
