Jennifer Schaus & Associates SERVICES FOR US FEDERAL GOVERNMENT CONTRACTORS
WEBINAR WEDNESDAYS – 2018 WASHINGTON, DC OFFICE PHONE: 2 0 2 – 3 6 5 – 0 5 9 8
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Join Us for Our 2018 Series of Complimentary Webinars on various US Federal Government Contracting Topics. Presenters are industry experts sharing knowledge about the competitive government contracting sector. Find all of our Govt Contracting webinars (free download) at www.JenniferSchaus.com
Contact Us @ 2 0 2 – 3 6 5 – 0 5 9 8
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
REMINDERS: All webinars are complimentary. All webinars are recorded. They are found on our website and on YouTube. Please send your questions to the speaker directly. Thank you for participating.
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
ABOUT JENNIFER SCHAUS & ASSOCIATES: - Based in downtown Washington, DC; -
A la carte services for Federal Contractors;
Proposal Writing to GSA Schedules, 8a Cert and Contract Administration, etc.; Educational webinars; -
Networking events and seminars;
WEBSITE: http://www.JenniferSchaus.com
3 Annual Doing Business With DOD & The Intel Community rd
NOV 27 2018
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
ABOUT OUR SPEAKER: David Dempsey Amherst College (1972) University of South Carolina Law School (1977) Federal procurement lawyer – 40 years Partner: Dempsey Fontana, PLLC
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Contract Strategy: Claim or Request an Equitable Adjustment Wednesday, November 7, 2018
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Statutory and Regulatory Background • The Contract Disputes Act of 1978 as amended 41 USC §§ 7101-7109
• Contractor Claims and Disputes Supplies, services, construction contracts involving appropriated funds Excludes NAFIs such as DoD exchanges (AAFES, U.S. Mint, FPI) Excludes the FAA
Boards of Contract Appeals (ASBCA, CBA, TVA and USPS) Court of Federal Claims FAR 33.2; DFARS 233.2 and other agency FAR supplements Presenter Logo here
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Statutory and Regulatory Background • “Claim” is defined in FAR 2.101: Written demand to the contracting officer Seeking as a matter of right
Payment of money in a sum certain, or
Adjustment or interpretation of contract term, or Other relief arising under or relating to a contract
Submitted to the Contracting Officer for a final decision
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Statutory and Regulatory Background Procedural Issues • File claim(s) within 6 years of “accrual” (when contractor knew or “should have known” the basis of claim – FAR 33.201 – not actual knowledge that claim has occurred) • If monetary claim exceeds $100,000, must properly certify claim per FAR 33.207(a): “I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the contractor believes the Government is liable; and that I am duly authorized to certify the claim on behalf of the contractor.” FAR 22.207 (c) Sum certain (“approximately,” “to be determined” insufficient and is element of “accrual”) Signed by an authorized official of the contractor
• Procedural defect – start over Presenter Logo here
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Claim vs. REA Request for Equitable Adjustment -- Preliminaries What precipitates the Claim or REA? •
Government:
Design / performance specifications Rushed procurement process Poor communication with offerors / Contractors (e.g., Q&As, discussions or no discussions) Mission requirements v. contract requirements
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
Claim vs. REA Request for Equitable Adjustment -- Preliminaries What precipitates the Claim or REA? • Contractor:
Misunderstanding Q&As, discussion questions Unwillingness to Recognize Mission Needs Failure to Read and Understand the Contract Failure to Properly Schedule Work
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Claim vs. REA Request for Equitable Adjustment -- Preliminaries •
What helps to resolve the Claim or REA?
Better communication Better understanding by USG and contractors of each other’s perspectives Better understanding by USG and contractors of the contract Terms Willingness to recognize and resolve claims earlier and at lower levels
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Claim vs. REA Request for Equitable Adjustment • No Format or definition • FAR 33.204: “The Government’s policy is to try to resolve all contractual issues in controversy by mutual agreement at the contracting officer’s level. Reasonable efforts should be made to resolve controversies prior to the submission of a claim.” • Presumes money damages have occurred due to government action or inaction – a contract “change” Not addressing breach of contract Not addressing termination for convenience settlement proposal
• Claim or Request for Equitable Adjustment
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Claim vs. REA Request for Equitable Adjustment • Changes Clause Contracts generally contain a changes clause permitting CO to make unilateral changes within the scope of the contract
• Clauses:
52.243-1 Fixed Price 52.243-2 Cost-Reimbursement 52.243-3 Time and Materials or Labor-Hours 52.243-4, -5 Construction
• Commercial Items – 52.212-4(c) Unless contract contains above changes clause, only written Bilateral Modifications allowed
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Claim vs. REA Request for Equitable Adjustment • Government Delays Any
action or inaction by Govt that delays or impedes any part of the Contractor’s performance
May
be excusable or inexcusable/compensable or non-compensable Entitled to equitable adjustment, but without profit (FAR 52.242-17)
• Stop Work Orders Can
be issued for 90 days (or extended by mutual agreement).
When
the period ends, CO must either terminate (full or partial) or allow the contractor to resume performance
Contractor
entitled to equitable adjustment for costs of standby (e.g., idle labor, mitigation, etc. (FAR 52.242-15)
• Requirement to NOTIFY the Contracting Officer Typically
within 20 – 30 days of the actual or perceived “change,” depending on the clause
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Claim vs. REA Request for Equitable Adjustment •
•
Changes Clause is normally used to remedy “constructive” changes and usually identified after it has occurred
Constructive change is considered within the scope of the contract
Generated by an oral or written communication, act or failure to act1717 by the contracting officer or other authorized government official that is construed as having the same effect as a written change order
Constructive change is developed from case law
No fault of contractor and contractor did not “volunteer” (contractor engineers, administrators and other “nice guys”)
A change in time or cost or both
Constructive change is not a “cardinal” change because cardinal changes are deemed to be outside the scope of the contract
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Claim vs. REA Request for Equitable Adjustment – Go/No Go
• Reasons for:
Perceived as less confrontational May facilitate timely resolution Can recover REA preparation costs under many circumstances
• Reasons Against:
Cannot recover interest No time requirements to issue a decision No review of agency position per litigation documents No availability of “Judgment Funds” (31 USC §1304 (c)) Contractor can devote considerable time seeking to resolve the REA only to have the Government deny the REA and then “start over” with a CDA claim
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Claim vs. REA Request for Equitable Adjustment – Go • Contractor puts Government on notice of the constructive change and intent to submit the REA because: Contract Interpretation during performance Interference & failure to cooperate Defective specifications Failure to disclose important Information which Government knew about or should have known about (e.g., differing site condition, incorrect labor hour estimates Acceleration Presenter Logo here
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC www.JenniferSchaus.com
Claim vs. REA
Request for Equitable Adjustment – Go • Submission of REA: Summary
of Gov’t act(s) or omission(s) giving rise to REA Identify contract requirements Detailed
statement of Government acts or omissions Authority of government official Statements from contractor personnel
Statement
of cause and effect Detailed computation of damages accounting records
Legal explanation
of theory of recovery
• DFARS 243.204-71 certification for REAs exceeding the SAT: “I certify that the request is made in good faith, and that the supporting data are accurate and complete to the best of my knowledge and belief.” DFARS 252.243.7002 Different from FAR CDA certification SAT is now $250,000 per 2018 NDAA (P.L. 115-91), §805
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Claim vs. REA Request for Equitable Adjustment – Go
• REA submission should not be viewed as an "opening offer" or negotiation tactic (certification and False Claims Act)
Frivolous or improper purpose Speculative future costs
• Facts must be accurately represented
No reckless factual assertions Statements and exhibits must be properly substantiated
• Legal and other positions cannot be unreasonable
Contract interpretation Technical arguments Calculation of damages
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
Claim vs. REA Request for Equitable Adjustment • Possible recovery of REA preparation costs FAR cost principle analogy: 31.205-33 -- Professional and Consultant Service Costs • Legal, accounting, actuary, outside expert services • Reasonable and allocable to REA preparation • Nature and scope of services • Adequacy of engagement agreement (i.e., retainer agreement)
• Demonstrable effort to negotiate settlement by REA Correspondence Meetings Presenter Logo here
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THANK YOU FOR ATTENDING!!
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QUESTIONS? CONTACT OUR SPEAKER: David Dempsey (703) 880-9171 or ddempsey@deftlaw.com
SERVICES FOR US FEDERAL CONTRACTORS
OFFICE: 2 0 2 – 3 6 5 – 0 5 9 8