The FAR generally favors the Government clients’ entitlement to data and software rights in federal procurements. This has commonly—and understandably—led to disgruntled contractors who didn’t realize what they were truly giving up when they opted to use their own software in performance of contracts without including regulation-compliant markings and protections.
But recently—thanks to a first-of-its-kind decision by the ASBCA—it seems the tide may have turned in favor of protecting these contractor-inventors from the standard Government windfall in its data rights acquisitions. Let’s take a closer look.
Shuttering of the government (or parts of the government) following appropriations lapses has become an increasingly common phenomenon in recent years. Funding lapses interrupt the usual predictability of government operations, which is often to the detriment of both agencies and federal contractors that are left in proverbial limbo with stop work orders.
Unfortunately, unlike many other topics, the FAR does not substantively address procedures for contractors during or following a government shutdown. As such, recovering expenses incurred as a consequence of government shutdowns can be challenging.
Here are some pointers.
The Government improperly threatened to terminate a contractor for default, because there was no good reason to believe the contractor had actually defaulted.
In a fascinating new decision by the Armed Services Board of Contract Appeals, the Government’s threat–made to a contractor with cash-flow issues–amounted to coercion, and invalidated a settlement agreement that awarded the contractor much less than it probably should have received.
Here’s a situation my colleagues and I see with some frequency: a contractor, in the course of working on a government contract, submits a request of some sort to the agency. Then waits for a response. And waits some more. Meanwhile, the government’s delay in responding prevents the contractor from moving forward with some aspect of the project, causing the contractor to incur costs.
For contractors faced with this type of government inaction, a recent decision by the Armed Services Board of Contract Appeals is welcome news. In that case, the ASBCA held that the government breached its implied duty of good faith and fair dealing by waiting more than three months to respond to the contractor’s request to amend the Statement of Work–allowing the contractor to “twist in the wind” during that period.
Here at SmallGovCon, we often write about nuanced, complex government contracting legal issues. This isn’t one of them.
The moral of today’s story comes straight from the personal superhero files of Captain Obvious: not reading the performance work statement in your own contract is a pretty bad idea.
The period of performance under a government contract, measured in “days,” meant calendar days–not business days, as the contractor contended.
In a recent decision, the Armed Services Board of Contract Appeals applied the FAR’s general definition of “days” in holding that a contractor had not met the contract’s performance schedule.
I recall sitting in a mediation one day when the mediator, a judge, told me and my client that we all have lightning in our fingers. He went on to explain that this means, once you sign a contract, it’s like magic in the sense that you can’t get out of the contract and are bound by it, absent certain exceptional circumstances.
I was reminded of this concept while reading a recent opinion from the Armed Services Board of Contract Appeals that dealt with the effect of a contractor signing a release with the government and then trying to back out of that release by refusing payment from the government.