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Government Contracts Monitor

Claims and Disputes

Prompt Payment Act & Contract Disputes Act Interest Rate Decreased to 2.125%, Effective 1/1/20

The Treasury Department has announced that the Prompt Payment Act (“PPA”) and Contract Disputes Act (“CDA”) interest rate is decreasing to 2.125% per annum for the first half of 2020 – i.e., January 1, 2020 through June 30, 2020.  This interest rate is used to calculate the interest penalty paid by the Government when it fails to timely pay contractors for goods and services, as well as interest…

Prompt Payment Act & Contract Disputes Act interest rate decreased to 2.625%, effective 7/1/19

The Treasury Department has announced that the Prompt Payment Act (“PPA”) interest rate decreased to 2.625% per annum for the last half of 2019 – i.e., July 1, 2019, through December 31, 2019.  This interest rate is used to calculate the interest penalty paid by the Government when it fails to timely pay contractors for goods and services, as well as interest due under the Contract Disputes Act…

Exemption 4: Protection of Confidential Information - The Ground May be Shifting

The Supreme Court recently granted a petition for writ of certiorari over (that is, agreed to review) an Eight Circuit decision involving Exemption 4 of the Freedom of Information Act (“FOIA”).  What is Exemption 4?  It is the exemption that protects from public disclosure “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” Why is this…

ASBCA Determines Contract Obtained Through Material Misrepresentation Void <em>Ab Initio</em>, Negating Both Contractor and Government Claims Under the Voided Contract

In a no-longer so infrequent scenario, the Armed Services Board of Contract Appeals (ASBCA or Board) recently held a contract void ab initio where the contract was obtained through material misrepresentation.  Specifically, the erstwhile contractor had told the Government that the contractor intended to use its own personnel on-site in Israel, without which representation the Government would not…

Prompt Payment Act & Contract Disputes Act Interest Rate Increased to 3.625%, Effective 1/1/19

The Treasury Department has announced that the Prompt Payment Act (“PPA”) interest rate increased to 3.625% per annum for the first half of 2019 – i.e., January 1, 2019 through June 30, 2019.  This interest rate is used to calculate the interest penalty payable by the Government when it fails to timely pay contractors for goods and services, as well as interest due under the Contract Disputes Act…

See-Saw: The Number Of Appeals May Be Down, But Contractor Success Is On The Rise

The Armed Services Board of Contract Appeals (ASBCA) released its annual report last month, describing its case activity for FY 2018. Interestingly, of the 139 cases decided on the merits, the Board agreed with the contractor/appellant 69 percent of the time.  And that’s not all.  In most of the 420 cases dismissed by the Board the case was disposed of because the parties had reached a settlement,…

The Cardinal Change - A Dramatic But Important Remedy

All experienced government contractors know that it is often impossible to predict (and therefore to price), the wide range of risks involved in performing federal government contracts. When a dramatic change occurs, it can sometimes be compensable as a cardinal change - a change that occurs when a contractor is directed to perform additional work beyond the scope of the contract. Case in point: …

When it Comes to the 90-Day Window to Appeal a Final Decision, Don't Play With Fire or You Might Get Burned

The Contract Disputes Act provides 90 days to appeal a Contracting Officer decision to the appropriate authority. While that might seem like a long window, it is one that must be given the utmost attention because missing it robs the Board of its jurisdiction over the matter. The decision in Aerospace Facilities Group, Inc., ASBCA No. 61026 (“Aerospace Facilities”) provides a good reminder of…

A Contractor with a Novated Contract Is Still a Contractor

When an awardee novates it contract to another contractor, can the new contractor assert any claim that the original awardee could have pursued? That was the question in the recent Armed Services Board of Contract Appeals (ASBCA) decision in Cooper/Ports America, LLC, ASBCA No. 61461. According to the ASBCA, the answer depends on the terms of the novation agreement. In this case, the answer was…

The Government May Have the Right to Remain Silent, But Anything It Says In the Solicitation May Be Used Against It To Find a Latent Ambiguity

If the Government chooses to remain silent regarding site conditions, then it has to be consistent throughout the Solicitation.  As the recent Armed Services Board of Contract Appeals (ASBCA) decision in R.L. Persons Construction, Inc., ASBCA 60121 (March 15, 2018), makes clear, where the government makes representations about site conditions in one place but is curiously silent in others, the…

If You’re Terminated for Convenience, Don’t Put Off Submission of Your Termination Settlement Claim

Busy contractors focused on day-to-day issues and future opportunities sometimes put other matters off to the extent they miss contractual deadlines. The recent decision of the Armed Services Board of Contract Appeals (ASBCA) in Black Bear Construction Company, ASBCA No. 61181 (November 14, 2017) serves as a reminder of the potentially high cost of excessive procrastination.

The matter involved an…

Short Take: It’s All in a Day’s Work, but Remember the “Day” Is a “Calendar” Day Unless Otherwise Specified

When interpreting and performing contracts, it’s important to remember that unless the contract language specifies otherwise, the FAR provides a default definition of the word “day” to mean a “calendar day.” The contractor in Family Entertainment Services, Inc., ASBCA No. 61157, learned this lesson when the Government deducted $81,692.34 from the Contract amount in a firm-fixed price contract to…

 

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