Submitting a certified claim to a government agency or appealing a contracting officer’s final decision (COFD) can be a risky business decision for federal contractors.

On one hand, there is the risk of straining the relationship with its valued client and potentially risking the contractor’s ability to get future work.

On the other hand, claims sometimes are inevitable because you are entitled to compensation, but have not been able to come to agreement.

A Contractor’s first line of defense is to protect itself by following the requirements in the remedy-granting Federal Acquisition Regulation (FAR) clauses contained in the contract.  If that is unsuccessful, the contractor must then decide whether to submit a certified claim. If the claim is denied, you then reach a decision point on options to appeal the COFD.

Whether to head to a board of contract appeals or the Court of Federal Claims and then whether to engage in Alternative Dispute Resolution are tough questions.

Remedy-Granting FAR Contract Clauses

As an initial matter, federal contractors must understand that the FAR remedy-granting clauses do not provide automatic relief without action on their part. The contractor must take affirmative and diligent steps to protect its rights to additional time and costs.

Contractors may look to the FAR’s Changes clause (52.243-1) to recover excess performance costs caused by changes made by the agency (under either a directed or constructive theory).  Contractors must assert claims for extra time and costs within thirty (30) days of the change.  It is therefore imperative to stay on top of project correspondence, communicate with the government, and provide prompt notice as required.  Communication and documentation are key.

The FAR’s Excusable Delay clause (52.249-14) appears in many types of federal contracts, including cost-reimbursement, time-and-material, and labor-hour contracts.  Contractors that provide supplies, services (including construction services), and research & development to the government should check their contracts to see if this clause is incorporated.  FAR 52.249-14 provides that – for causes outside the contractor’s control, the government will not hold the contractor “in default because of any failure to perform.”  This clause covers excusable delays (i.e., time, but not money associated with a delay beyond the control of the contractor).  The remedy amounts to extending contract completion deadlines and is a helpful tool to avoid default termination.

The Stop Work Orders clause (FAR 52.242-15) and Suspensions of Work clause (FAR 52.242-14) permit the Contracting Officer to temporarily stop or suspend performance in the best interests of the government.  Once a contractor receives a stop/suspend work order, it must take prompt and reasonable steps to mitigate any additional costs incurred on the project.  When a contractor incurs extra performance costs (despite these efforts), it is prudent to submit the costs to the government through a request for equitable adjustment or claim.

Appealing a Contracting Officer’s Final Decision

Contractors have 90 days from receipt of a COFD to appeal to one of the various agency boards of contract appeals.  The boards include the Armed Services Board of Contract Appeals (ASBCA) for appeals from Department of Defense agencies such as the U.S. Army Corps of Engineers (USACE), the Civilian Board of Contract Appeals (CBCA) for appeals involving the General Services Administration (GSA), the Department of Veterans Affairs (VA), the Department of Energy (DOE), Housing and Urban Development (HUD), and the Department of Transportation (DOT), and others, the Postal Service Board of Contract Appeals, or the GAO’s Contract Appeals Board for legislative branch agencies such as the Architect of the Capitol, the Congressional Budget Office, and others).

Alternatively, contractors have one year from receipt of the COFD to appeal to the Court of Federal Claims.

Many contractors are not aware that the various boards of contract appeals and the Court of Federal Claims also offer alternative dispute resolution (ADR).

For example, the CBCA website lists facilitative mediation, evaluative mediation, mini-trial, non-binding advisory opinion, and summary binding decision.  Addendum II to the Rules of the ASBCA Rules is  a bit more generic and only identifies binding and non-binding.  Appendix H to Court of Federal Claims Rules similarly lists private third-party neutrals, mediation, early neutral evaluation, mini-trials, outcome prediction assistance, and non-binding arbitration.  Each of these options requires both parties to agree and specifically make the request.

While mediation is likely the most widely used employed method of ADR (where a judge acting as the mediator shuttles between the two parties to help them facilitate a resolution), outcome prediction, if even on only specific legal or factual issues, can be helpful.

Also, most contractors are not aware that the boards offer pre-Dispute mediation – meaning that the boards will mediate at the parties’ express request before a contractor has submitted a certified claim or received a contracting officer’s final decision.

While no contractor wants to have a dispute, there are multiple paths to take to create the greatest likelihood of achieving a quick and cost-effective resolution.  Fox Rothschild’s Washington, DC-based Federal Government Contracts Practice can help your company navigate that process.

Those following our coverage of the federal COVID Vaccine Mandate need to know about the latest twist.  On the heels of the injunction against the OSHA Mandate for private employers, a Georgia Federal court judge issued a nationwide injunction blocking the COVID-19 Vaccine Mandate for federal contractors.

Based on the ruling, the Safer Federal Workforce webpage currently states that “[t]he Government will take no action to enforce the clause implementing requirements of Executive Order 14042, absent further written notice from the agency, where the place of performance identified in the contract is in a U.S. state or outlying area subject to a court order prohibiting the application of requirements pursuant to the Executive Order.”

The natural question for government contractors is – What on earth do we do now??  Here are five practical steps federal contractors can take to account for this latest development:

(1) Continue to Perform All Contractual Obligations.

Even amidst all of the on-going uncertainty, there is one thing we know for sure – the government will enforce all contracts as written.

If your current contracts include (or were modified to include) the Vaccine Mandate, you must comply (at least for the time-being).  Barring a future change, the Mandate is a contractual requirement and a contractor that fails to perform is at risk for a breach of contract claim.

Worse still, a contractor that fails to make good faith efforts towards compliance could find itself as the unfortunate test case for the Vaccine Mandate under the Civil False Claims Act.

(2) Approach Future Modifications with Caution and Keep Track of Time & Costs.

If there is a pending request from the government to modify your contracts to include the Mandate – think twice and be proactive.  Again, once you sign the modification it is part of the contract and you are on the hook to comply.

Prior to the injunction, we recommended that contractors include a reservation of rights language related to the time and costs associated with compliance before signing any modifications.  If the government issues the modification unilaterally, contractors should still track the time and costs to support a future claim.

(3) Maintain Flexibility and Be Nimble.

The Biden Administration already appealed the Georgia decision, which could result in the return of the mandate.  So, we may see even more back and forth on this issue before a final decision is made.   Flexibility and good faith will be key for contractors in terms of dealing with the government, subcontractors, suppliers, and employees.  Be consistent and focus on an approach that doesn’t paint you into a corner based on an outcome you can’t control.

(4) Communicate Up and Down the Chain

Continue to communicate with your government clients and your subcontractors or suppliers.  The landscape is changing quickly and you want to keep communication lines open.

(5) Stay informed.

Continue to check back with us for updates on the injunction, compliance issue, and the Vaccine Mandate in general.  You can also reach us directly:  Nick Solosky and Diana McGraw.

Nick Solosky is a Partner in Fox Rothschild’s Government Contracts Practice Group.  You can reach Nick directly at NSolosky@FoxRothschild.com or 202-696-1460.

President Biden recently issued Executive Order No. 14042 requiring covered federal contractors ensure that their employees are fully vaccinated against COVID‑19 unless an employee otherwise requests, and receives an accommodation for sincerely held religious beliefs or a medical condition that justify them not being vaccinated.

Substantive guidance has been issued by the federal government to implement the provisions of the Executive Order.  Specifically, on September 24, 2021, the federal Safer Federal Workforce Task Force issued guidance to implement the Executive Order and continues to update its guidance regularly on these processes.  On September 30, 2021, the FAR Council issued a memorandum allowing federal agencies to issue class deviations to implement the Executive Order and the pending FAR 52.223-99, Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors, to memorialize the vaccine mandate.  Further on September 30 and October 1, 2021, the General Services Administration (GSA) and the Department of Defense (DoD) issued class deviations formally implementing the vaccine mandate.

In general, there are two primary business risks associated with the new federal vaccine mandate:  (1) the increased cost or extended performance time associated with complying with the mandate; and (2) potential future civil False Claims Act liability in the event that contractors and subcontractors have not made good faith efforts to comply.  The first risk is currently affecting contractor implementation of the mandate as we speak, and the second risk under the False Claims Act will surely follow in the future.

Reserving Contractor Rights to Additional Cost and/or Time to Implement the Mandate

The stated objective of the federal vaccine mandate is to “promote economy and efficiency in federal contracting” through decreased worker absences and hence reduced labor costs, among Federal contractors and subcontractors.  However, the mandate will surely cause additional cost and time impacts on many federal contracts as the mandate will adversely affect the ability of contractors to perform as planned before the mandate was implemented due contractor (or subcontractor) employees failing to comply with the mandate, employees quitting as a result of the mandate, employees seeking accommodations that make them less effective at performing their duties, and/or contractors and subcontractors being unable to hire employees in an ever tighter job market.  All of these outcomes will increase administrative and overhead costs for contractors as it is yet one more federal requirement for contractors and subcontractors to have to deal with to ensure compliance with applicable regulations.  In sum, the mere existence of the mandate will increase costs and the likelihood of performance delay for contractors, subcontractors, and suppliers on federal projects across the board.

The class deviations issued by GSA and DoD require that the respective agencies issue bilateral modifications (requiring the consent of both the prime contractor and the agency) to incorporate the vaccine mandate (through the incorporation of FAR 52.223-99 or DFARS 252.223-7999 into the prime contract).  Therefore, contractors must be wary of signing any modification issued by the government that does not address the contractor’s ability to recover additional costs or time as a result of the implementation of the mandate.  Contractors that do sign modifications run the risk of waiving their potential rights to increased costs or time, if any, and must either price the modification as a change to the contract or reserve their right to submit for increased costs and time in the future before signing any modification.

 

Future False Claims Act Liability for Failing to Comply with the Mandate

While neither the Executive Order nor the Taskforce Guidance contain any direct penalty for failing to comply with the federal vaccine mandate, experience has taught us that federal contractors are required to certify compliance with all contract requirements, including the vaccine mandate, every time they submit an application for payment.  Therefore, it is simply a matter of time before qui tam (False Claims Act) whistleblowers, the various Offices of Inspector General, or the U.S. Department of Justice begin alleging that contractors have violated the False Claims Act by submitting and certifying to payment applications when they clearly knew they were not compliant with the vaccine mandate and failed to make good faith efforts to comply.  While the Taskforce’s response to Frequently Asked Questions makes clear that prime contractors may reasonably assume that their subcontractors are in compliance, prime contractors are obligated to exercise due diligence with their subcontractors to ensure compliance and cannot do so if they have credible evidence to the contrary.  “Credible evidence” is a term pulled straight out of the FAR’s ethics and compliance contract clause, FAR 52.203-13 Contractor Code of Business Ethics and Conduct and requires a contractor to make a mandatory disclosure of a violation of, among other things, the civil False Claims Act.

Therefore, federal contractors subject to the federal vaccine mandate must take the mandate seriously, exercise good faith efforts to comply, and think carefully before signing any modification related to the mandate to avoid giving away their rights to additional cost and time resulting from the implementation of the mandate.

A final friendly reminder to register for Fox’s 2021 Federal Contracts Symposium on October 25 and 26 (next week!)

After careful consideration, we’ve made the decision to switch to a fully virtual format on an interactive platform.  While we hoped to see everyone in person, the Remo Tables platform offers plenty of opportunities for questions and even networking.

Please use this link to register

This year, I’ll be teaching a session with Diana McGraw addressing how to navigate terminations on federal projects.  We’ll cover key considerations for contractors dealing with the threat of termination for default under the FAR.  We’ll also tackle subcontract drafting and subcontractor management in the context of a termination scenario.

The session will feature a virtual lunch Judges’ Panel moderated by Federal Government Contracts Practice Chair Reggie Jones and featuring Judge Patricia E. Campbell-Smith (United States Court of Federal Claims), Judge Jeri Somers (former Chair of the Civilian Board of Contract Appeals), and Judge Carol Park-Conroy (JAMS Mediator, Arbitrator and Neutral Case Evaluator).

Based on popular demand, we’ve also added a session addressing what contractors need to know about the new Federal Vaccine Mandate.

Additional topics will include

  • Bid Protests
  • Effective Allocation of Damages for Federal Contract Claims
  • False Claims Act Internal Investigations
  • Expanding Your Business Through Mergers and Acquisitions
  • Suspension and Debarment; and
  • The Government’s Rights to Your Intellectual Property

You can view the full agenda here.

We hope to see you virtually on the 25th (and in person next year).  Please feel free to contact me directly with any questions about the event.

Nick Solosky is a Partner in Fox Rothschild’s Government Contracts Practice Group.  You can reach Nick directly at NSolosky@FoxRothschild.com or 202-696-1460.

Please join Nick Solosky and Diana McGraw for a free webinar focused on successful partnering for federal contracting opportunities.  We are excited to be working with the Washington Building Congress on this presentation.

The webinar will be held on Thursday, June 10 at 11:00 Eastern.  Please click here to Register.

The webinar will focus on helping contractors adapt to market shifts experienced in 2020 and focus on opportunities available in the federal marketplace — for 2021 and beyond.

A major point of discussion will be the Small Business Administration’s October 2020 Final Rule, which provides much needed clarity for government contractors (both large and small) on issues including:

  • Multiple Award Contracts and Requirements for Certification and Recertification
  • Affiliation Rules and Size Determinations
  • Joint Venture Requirements
  •  SBA’s All Small Mentor-Protégé Program

If you are interested in exploring federal work — or if the government is already one of your clients — understanding this Rule is the key to unlocking new opportunities.  Even in  uncertain times like these, the government continues to spend money..  For example, President Biden’s American Jobs Plan alone includes a proposed multi-billion dollar investment in transportation infrastructure over the next 10 years. Opportunities abound for those ready to take action.

We hope that you are able to join us for the webinar.  If not, please feel free to contact us directly for a copy of the presentation materials, or to discuss specific questions.

Nick Solosky is a Partner in Fox Rothschild’s Government Contracts Practice Group.  You can reach Nick directly at NSolosky@FoxRothschild.com or 202-696-1460.

Join us tomorrow, December 8 at 12:00 Eastern for Part III of our Web Series covering the Small Business Administration’s Final Rule: Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments.

To Register, please Click Here.

In this session, we’ll cover changes to the SBA’s rules and regulations governing Affiliation.

It should go without saying that every small business needs to stay current regarding the rules of affiliation.  Affiliation with a large business renders small businesses ineligible for critical set-aside contracts.  Simple mistakes, misunderstandings, or even ignorance of the law are no excuse – it is up to each small business to stay informed.

To help keep your business ahead of the curve, we’ll examine updates regarding economic dependence, the newly organized concern rule, and the ostensible subcontractor doctrine.  As always, we’ll also break down the real world application of the changes.

In addition to affiliation, this session will examine other rule changes that small businesses need to understand.  Most notably, the Final Rule adds a requirement that procuring agencies must consider the “capabilities, past performance, and experience” of the first-tier subcontractors if the small business prime contractor cannot independently demonstrate its own capabilities and past performance needed for contract award.  We’ll discuss what small businesses must do to best take advantage of this change.

If you missed out on Parts I and II of the Web Series – Good News!  The materials are now available online.

You can check out Part I on covering Multiple Award Contracts here.

Part II on Joint Ventures and the All Small Mentor-Protégé Program is available here.

We designed this Web Series to provide Federal contractors and industry professionals a meaningful and practical crash course in what the Final Rule means and how it will impact business operations.  Each one hour and fifteen minute session will take place through the interactive Remo webhosting platform and consist of learning and networking opportunities, broken down in the following schedule:

15 minute Networking Session

30 minute SBA Final Rule Topic Presentation

30 minute Follow-Up Networking

We look forward to seeing you there.

Nick Solosky is a Partner in Fox Rothschild’s Government Contracts Practice Group.  You can reach Nick directly at NSolosky@FoxRothschild.com or 202-696-1460.

Fox is excited to announce a new four-part Web Series covering the Small Business Administration’s Final Rule: Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments.  The Final Rule is more than 50 pages – all packed with significant new rules and changes that will affect how both large and small businesses do work for the Federal Government.

Join Nick Solosky and Diana McGraw next Tuesday November 17, 2020 at Noon EasternClick here to Register today (the first 100 to register get lunch on us).

The first session will cover the Final Rule’s impact on Multiple Award Contracts and Requirements for Certification and RecertificationShawn Ralston (Small Business Liaison Officer, AECOM) will join us for this session and offer his insights on the practical application of the Final Rule.

In future weekly sessions we will also cover:

  • Changes to the 8(a) Program;
  • Updates to the Small Business Regulations and Affiliation Rules Generally; and
  • Joint Ventures and the All Small Mentor-Protégé Program Limitations and Requirements

We designed this Web Series to provide Federal contractors and industry professionals a meaningful and practical crash course in what the Final Rule means and how it will impact business operations.  Each week, we will also invite industry guest speakers to offer valuable advice and insights.

Each one hour and fifteen minute session will take place through the interactive Remo webhosting platform and consist of learning and networking opportunities, broken down in the following schedule:

  • 15 minute Networking Session
  • 30 minute SBA Final Rule Topic Presentation
  • 30 minute Follow-Up Networking

We look forward to getting your business ahead of the curve.

Be sure to check back here for detailed discussions of the Final Rule changes that will accompany each weekly Web Session.

Nick Solosky is a Partner in Fox Rothschild’s Government Contracts Practice Group.  You can reach Nick directly at NSolosky@FoxRothschild.com or 202-696-1460.

Government contractors may face performance evaluations by federal agencies that erroneously or capriciously capture the  efficacy of their work,  at times by seemingly arbitrary standards. These evaluations can hobble key abilities to gain new projects — the lifeblood of federal contractors.

In his article for Modern Contractor Solutions, Federal Government Contracts and Procurement Partner Nicholas Solosky details how the Contract Disputes Act (CDA) creates the framework for handling “claims” against the government on Federal contracts and discusses key evaluation issues, including: 

  • Past Performance
  • Ratings and Narratives
  • CPARS Procedure/Timeline
  • Practical Resolution Strategies

Read the full article.

A quick reminder that Fox Rothschild (Virtual) Federal Contract Symposium starts this Monday (October 5).

Please Click Here to Register for the Symposium.

After careful consideration, we elected hold the event virtually.  However, using the innovative Remo platform, you can still expect an interactive and engaging two days of remote targeted sessions on the most important legal topics facing the industry.

I’ll be presenting on Recent Trends in GAO & COFC Bid Protests.  In addition, my colleagues will present on topics including:

• Federal Affirmative Action Plans & Equal Employment Opportunity Requirements
• Federal Contract Ethics & Compliance Program Requirements
• Agency Counsel’s Perspective: How to Communicate Effectively & Resolve Disputes With Government Customers
• Effective Management, Litigation & Resolution of Complex Claims
• Internal Investigations & How to Avoid False Claims Act Violations; and
• Navigating the DFARS & CMMC Cybersecurity Requirements

We’re also pleased to present the Keynote Presentation by Patrick J. Fitzgerald (Director at Baker Tilly and former Director of the Defense Contract Audit Agency at the Department of Defense).  The Full Symposium Agenda is available  here.

CLE credit is available for certain jurisdictions and the first 100 registrants will enjoy  complimentary lunch on both days via delivery service.

If you have questions or want to receive additional information and updates, please contact Stacy Flynn at sflynn@foxrothschild.com or 215.299.2035.

Nick Solosky is a Partner in Fox Rothschild’s Government Contracts Practice Group.  You can reach Nick directly at NSolosky@FoxRothschild.com or 202-696-1460.

I am excited to host this upcoming Webinar on Protecting the Reputation of Government Contractors by Challenging Erroneous CPARS Evaluations.

The Webinar goes Live on Wednesday, August 19 at Noon Eastern.  If you are unable to attend, please contact me directly :  nsolosky@foxrothschild.com or 202-696-1460.

Click Here To Register Now

Webinar Preview

A negative performance evaluation from a Federal agency, or worse a recommendation against future performance, can make it very difficult for a government contractor to win new work.

But all is not lost.

Contractors that have been unjustly injured by an erroneous Contractor Performance Assessment Reporting System (CPARS) evaluation have options.  Venues such as the U.S. Court of Federal Claims and Boards of Contract Appeals are increasingly entertaining claims filed by contractors over inaccurate CPARS evaluations – including claims for monetary damages.

In this webinar, we will cover:

• Practical strategies for contractors to deal with unfair and harmful CPARS performance evaluations before they become final.

• A review of the claim and litigation process in the event that early intervention is unsuccessful.

• New and innovative strategies emerging for performance evaluation disputes – including how contractors can seek to recover monetary damages associated with negative performance evaluations.

Register for the Webinar Here

Nick Solosky is a Partner in Fox Rothschild’s Government Contracts Practice Group.  You can reach Nick directly at NSolosky@FoxRothschild.com or 202-696-1460.