OOPS 2015 - Contract Disputes - Crowell & Moring
OOPS 2015Contract DisputesChris HaileDavid BodenheimerAgustin Orozco47WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Overview Contract Terminations Asserting Defenses to Government Claims:Maropakis and its Progeny Government Claims and Abusing Defective PricingLaw48WWW.CROWELL.COM
OOPS 2015Contract Terminations49WWW.CROWELL.COM
OOPS 2015Terminations: Changed Environment Budget pressures Active and critical oversight Threats of termination for default and early noticesto cure More rapid resort to termination / de-scopeoptions50WWW.CROWELL.COM
OOPS 2015Termination for Convenience Broad but not unlimited discretion for theGovernment– Tigerswan, Inc. v. United States, 118 Fed. Cl. 447 (2014) Alleged abuse of discretion in T4C followed by sole-sourceprocurement from another contractor– Applied Business Mgmt. Solutions v. United States, 117Fed. Cl. 589 (2014) Termination and sole-source reprocurement51WWW.CROWELL.COM
OOPS 2015Termination for Convenience ASBCA reverses course for recoveries undercommercial-item procurements– SWR, Inc. (Dec 2014) FAR 52.212-4(l) “reasonable charges [that] . . . have resultedfrom the termination” read broadly to provide faircompensation. Abandons prior position that only costs in the nature of“settlement expenses” were recoverable52WWW.CROWELL.COM
OOPS 2015Termination for Default Increased and earlier use of the threat of termination– New Iraq Ahd Co., ASBCA 58768 (Oct. 2014) (threat of terminationwithin government rights and not improperly coercive) Response challenges––––Rapid responses on complex issuesThe record to dateThe path forwardManaging the relationship High stakes– DODS, Inc., ASBCA 57746, 58252 (Jul. 2014) (Contractor terminatedafter proposing delayed schedule in response to cure notice)53WWW.CROWELL.COM
OOPS 2015Termination for Default Identifying affirmative claims and defenses––––Government delays and failures to cooperateConstructive and directed changesWaiver of requirements or schedulesWaiver / Estoppel by failure to terminate promptly Protecting claims and defenses, even before youneed them– Comply with notice requirements / alert the CO– Watch out for inappropriate / overbroad releases54WWW.CROWELL.COM
OOPS 2015Asserting Defenses to Government Claims:Maropakis and its Progeny55WWW.CROWELL.COM
OOPS 2015Maropakis M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323 (Fed. Cir.2010)– Contract completed 467 days late– Maropakis requested 447 day extension Letter not certified Did not request final decision by CO– CO issues final decision on government’s claim for liquidated damages– Federal Circuit Reject Maropakis’ argument that the underlying facts of its time extensionrequest could be presented as a defense to the government’s liquidateddamages assessment “[A] contractor seeking an adjustment of contract terms must meet thejurisdictional requirements and procedural prerequisites of the CDA, whetherasserting the claim against the government as an affirmative claim or as adefense to a government action.”56WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Developments Sikorsky Aircraft Corp. v. United States, 102 Fed. Cl. 38 (2011)– Maropakis involved a defense seeking contract modification and not a “traditionalcommon law defense that [is] independent of the means by which a party seeksequitable adjustment to a government contract.”TPL, Inc. v. United States, 118 Fed. Cl. 434 (2014)– Court ignored “common law” labels Contractor applied to defenses in breach ofcontract case: impracticability, mutual mistake of fact, and unconscionability.Total Eng'g, Inc. v. United States, 120 Fed. Cl. 10 (2015)– Maropakis did not bar contractor's “defective specifications” defense to agovernment claim.Asfa Int’l., ASBCA No. 57880, 14-1 BCA ¶ 35,736 (Sep 2014)– Maropakis did not bar Contractor’s defense of waiver by forbearance againstGovernment claim for liquidated damages.57WWW.CROWELL.COM
OOPS 2015Developments Raytheon Co. v. United States, 747 F.3d 1341 (Fed. Cir. 2014)– The government’s failure to obtain a CO's final decision on its equitableadjustment defense prohibited the Court from considering the government'sdefense.K-Con Bldg. Sys., Inc. v. United States, 778 F.3d 1000 (Fed. Cir. 2015)– Contractor sought (1) remission of liquidated damages, asserting the LDclause was unenforceable; (2) remission of LDs, asserting entitlement to timeextensions; (3) additional compensation on account of other contractchanges.– Federal Circuit affirms COFC dismissal of the claim for remission based onentitlement to time extension.– Entitlement to an extension had not been properly submitted for the CO’sfinal decision, meaning the COFC had no jurisdiction.58WWW.CROWELL.COM
OOPS 2015Where Are We Now? “Seeking an adjustment ofcontract terms” “Traditional common lawdefenses” Does the label matter, if the effectis the same?59WWW.CROWELL.COM
OOPS 2015Practical Takeaways Be mindful of potential impacts Identify defenses to government claimsearly in the claims process Recognize this is a developing area oflaw Consider protective claims to thecontracting officer60WWW.CROWELL.COM
OOPS 2015Contractor Claims:Bad, Ugly & Never Good61WWW.CROWELL.COM
OOPS 2015Welcome to Government Claims62WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Government Claims: Good or Bad?What’s Bad? No AccountabilityNo RationalityNo LegalityNo FinalityWhat’s Good?“AbsolutelyNothing”- Edwin Starr63WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Defective Pricing’s Back!TINA’s Ups & Downs Boom Years – 1970s & 80s– Vietnam & Emergencies Lean Years – 2000s– FASA, IPTs, & De-emphasis TINA Redux – 2014-15– Old Awards (2006-2009)– Lots of Audit Buzz– Multiple ASBCA Appeals64WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Proving Defective PricingRemember the 5 “Points”Government bears burden ofproof for “five points” ofdefective pricingDCAA Audit Manual1. Cost or Pricing Data2. Data Reasonably Available3. Not Disclosed or Known toGovernment4. Government Reliance on Data5. Causation of Increased Price65WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Abusing JudgmentsFacts vs. Judgments DCAA/DOJ Allegations– Estimates & Escalation Pricing Realities– FAR § 2.101 (judgments)– Contract Pricing Ref. Guide “educated guesses”Judgments OkayASBCA Precedent“We find that the subject escalationfactor was not cost or pricing data.”UTC, 04-1 BCA 32,556.DCAM Guidance (14-104.7)66WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Demanding Use vs. DisclosureUse vs. Disclosure DCAA/DOJ Allegations– Failed to use cost data Audit Realities (DCAM)Disclosure OnlyASBCA Precedent“The plain language of the Act does notobligate a contractor to use any particularcost or pricing data to put together itsproposal. Indeed, TINA does not instruct acontractor in any manner regarding themanner or method of proposal preparation.”United Technologies Corp., 04-1 BCA 32,556Federal Precedent Martin-Baker (D.C. Cir. 2004) UTC (6th Cir. 2015)67WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Cherry-picking Volatile DataHigh-Volatility Pricing DCAA Allegations– Using snapshot of data Market RealitiesVolatile Data Not Reliable“As for the heavy scrap, we have found that scrapprices vary widely over a period of time and forthat reason appellant’s proposed credit was basedupon an average of .01 per pound realized inperforming previous contracts for sales of twogrades of heavy metal scrap and turnings. On thebasis of uncontradicted testimony by Mr. Gaw wehave found that no single selling price canreasonably be considered applicable for anyextended period of time. The evidence does notestablish whether the August 1965 selling price forheavy scrap cited in the DCAA post award auditreport was in effect the entire month of August,some lesser period, or a greater period, or whetherthat price was actually an average of various scrapselling prices in effect during part or all of August1965.” Norris Industries, Inc., ASBCA No. 15442, 741 BCA ¶ 10,48268WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Battling Forward Pricing RatesForward Pricing Rates DCAA Allegations– Must tell PCO Legal Realities– FAR § 15-407-3 (a) vs. (b)– DFARS § 215.407-3 (ACO)– Disclosure & Reliance FMC, 87-1 BCA 19,544 Litton, 93-2 BCA 25,707 Texas Inst., 89-1 BCA 21,489FAR § 15-407-3 Forward Pricing(a) When certified cost or pricing data are required,offerors are required to describe any forward pricing rateagreements (FPRAs) in each specific pricing proposal towhich the rates apply and to identify the latest cost orpricing data already submitted in accordance with theFPRA. All data submitted in connection with the FPRA,updated as necessary, form a part of the total data thatthe offeror certifies to be accurate, complete, and currentat the time of agreement on price for an initial contract orfor a contract modification. (See the Certificate of CurrentCost or Pricing Data at 15.406-2.)(b) Contracting officers will use FPRA rates as bases forpricing all contracts, modifications, and other contractualactions to be performed during the period covered by theagreement. Conditions that may affect the agreement’svalidity shall be reported promptly to the ACO. If the ACOdetermines that a changed condition invalidates theagreement, the ACO shall notify all interested parties ofthe extent of its effect and status of efforts to establish arevised FPRA.69WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Flipflopping after NegotiationsNegotiations vs. TINA Claims DCAA Allegations– Ignoring Negotiation Facts Negotiation Realities––––Contractor disclosed factsGov. engineers reportedParties negotiated risksPCO accepted risk impactNegotiation Context“Care must also be taken to try to tie theassessment to a consideration of theparties’ actions at the time and to avoidimposing an after-the-fact perspectiveon how the negotiations should havebeen conducted to produce improvedresults from a particular party’s point ofview.” Aerojet Ordnance Tenn., 95-2 BCA¶ 27,922– DCAA 2nd Guesses All70WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Missing DeadlinesTINA Claims 6 Years Later Agency Allegations– Final Decisions 6 Years Legal Realities– 41 U.S.C. § 7103(a)(1)(4(A) 6 Years after accrual– FAR § 33.201 (“accrual”) Knew or Should HaveKnownASBCA Precedent“[T]he Government had established thebasis for its defective pricing claim . . .more than six years before the COs’ June2008 decisions issued.” McDonnellDouglas Servs., 10-1 BCA ¶ 34,32571WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Sandwiching SubcontractorsTINA vs. Subcontractors DCAA Allegations– Asserting Prime Reliance Strategic Realities– No 2-Front Wars– 10 Points of ProofPrime Prime Negotiation Record“[Boeing] based its negotiation positionwith Resalab with respect to theestimated labor hours on its own inhouse technical evaluation of Resalab’sman-hour estimate which involved aphysical survey of Resalab and technicalinterface with Resalab.” The Boeing Co.,ASBCA No. 20875, 85-3 BCA ¶ 18,351Sub72WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Screaming Fraud TINATINA Fraud IG AllegationsDCAA Fraud Indicators– Alleging falsity Legal Realities–––––COPD (J.T. Construction)Judgments (Allison)Use (Martin-Baker)Fair Market Value (UTC)Presumptions (Singer)73WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Resolving TINA DisputesLitigation vs. ADR PCO Allegations– Rubberstamping DCAA Legal Realities– Contract Disputes Act Resolution vs. Litigation– FAR § 15.407-1(d) Due Process– Opportunity to Rebut Sooner Better3 Party Oversight ADR Policy (FAR § 33.204) “Agencies are encouraged to use ADRprocedures to the maximum extentpracticable.” ADR Procedure (FAR § 33.214) Objective: inexpensive & expeditious Agreement (e.g., ASBCA sample forms) Other Ideas Contracting Officer as Neutral Government Counsel as Gatekeeper74WWW.CROWELL.COMWWW.CROWELL.COM
OOPS 2015Questions?Chris Haile202-624-2898chaile@crowell.comDavid stin .COMWWW.CROWELL.COM
OOPS 2015 WWW.CROWELL.COM WWW.CROWELL.COM TINA Claims 6 Years Later Agency Allegations –Final Decisions 6 Years Legal Realities –41 U.S.C. § 7103(a)(1)(4(A) 6 Years after accrual –FAR § 33.201 (accrual) Knew or Should Have Known ASBCA Precedent [T]he Government had es
land (i.e. umunani), disputes involving informal and polygamous unions, disputes about land transactions, and boundary disputes. Disputes over inheritance and gifts of land seemed to be the most common. These disputes were typically between parents and siblings, and between siblings upon the death of their parents.
4.2. Disputes, amendments and contract termination 33 4.2.1. Settlement of disputes 33 4.3. Contract amendment 34 4.3.1. Contract termination 35 4.4. Contract closing stage 37 4.4.1. Contract closing 37 CHAPTER - III 38 5. WORK CONTRACT MANAGEMENT 38 5.1. General data 39 5.1.1. Project stages 39 TABLE OF CONTENTS
The Contract Disputes Act, 41 U.S.C. §§ 7101-7109, sets forth certain prerequisites for the exercise of jurisdiction over claims, including 6-year SOL Claims submitted more
The corporate disputes are different from the organisational internal disputes which are generally taken up by the management to resolve them. However, a corporate dispute makes company and/ or its promoters and/or its officials as one of the party in case of litigations. Such matter includes disputes over a contract, a
construction industry disputes, and the causes of those disputes, is essential. It can be concluded that construction disputes are a cause of concern in every construction project and the solution to this problem is to avoid and cautiously manage them for smooth running of construction process. Keywords: Claim, Dispute, Disagreement, contract 1.
Disputes have arisen mainly over land acquisition processes, use of common resources and impact of company operations on livelihoods and the environment. Disputes have also arisen between companies over concessions. Given the prevalence of land‐related disputes, the poor state of access to formal justice
Lazarev Vladislav Serghei Contract 15. Malinovschi Victor Gheorghe Contract 16. Nistor Haralambie Tudor Contract 17. Pereteatcă Andrei Leonid Contract . Redica Irina Boris Contract 15. Rotari Marin Constantin Contract 16. Solonari Teodor Victor Contract 17. Stan Egic Ghenadie Contract 18. Stratu Cristian Mihail Contract .
Although adventure tourism is rapidly growing South Africa, research on the subject in this region is relatively limited. A few studies have examined issues and challenges facing the adventure tourism industry as a whole. Rogerson (2007) noted some of the challenges facing the development of adventure tourism in South Africa. One was the lack of marketing, particularly marketing South Africa .
