The White House has directed Agency heads to “terminate or modify . . . covered contracts.” With some exceptions, there are numerous potential contracts on the chopping block. What should contractors do?
Upon receipt of a unilateral modification, assess whether the cost or time will increase in unchanged areas. For example, deductive changes for certain work could increase costs for other work that must still be performed. If costs were increased because of deductive changes, then carefully consider submitting a request for equitable adjustment.
Upon receipt of a notice of complete termination for convenience, promptly stop incurring further costs and, within one year of the termination, present a reasonable and well-supported termination settlement proposal to the Government under FAR 52.249-2(e). Recoverable costs include:
1. Costs actually incurred;
2. Profit on the work actually done; and
3. Costs of preparing a termination settlement proposal.
Upon receipt of a notice of partial termination for convenience, promptly stop incurring costs related to the terminated portion of the work and present a request for equitable adjustment within 90 days of the notice under FAR 52.249-2(l).
HEADER PHOTO: Termination by Nick Youngson CC BY-SA 3.0 Alpha Stock Images
Trick or Treat in Government Contract Claims
Without a request for a contracting officer’s final decision, claimants may seek treats, but get tricked instead.
Owner Nonpayment is No Defense to Miller Act Claim
As if you needed confirmation that the Federal Miller Act is a powerful tool for unpaid subcontractors, this is it. Even when a Prime ordered and accepted the Sub’s work, but didn’t have to pay under the Subcontract, the Subcontractor still. . . .
Trust, but Verify
Rely at your own risk upon a Contracting Officer’s statements when statutes or contract provisions may conflict.
Payment for Verbal Changes When a Writing was “Required”
Even if your agreement can only be modified by a writing, you may still have a good argument to be paid for extra work.
Pirates and Arbitration
How does a pirate solve a dispute (besides walking the plank)?
Bases Covered?
Contractors, will your current insurance policy cover “your work” as a joint venture partner? The typical answer is NO.
Two Paths at the Same Time to the Same Place
“Two roads diverged in a wood, and . . .” the Prime Contractor had to take both roads at the same time to the same place.
Rules, Which Rules?
Good Idea: Include a choice of law clause in your contract to promote consistency and predictability (while reducing potential costs and risk).
Government Liability for Third-Party Delays
Generally, the Government is not responsible for delays caused by third parties, even other contractors at its own project site, unless the Government affirmatively indicates the site will be ready and available.
