Picture this scenario: the government hires your company to do a job; you assign one of your best employees to lead the effort. He or she does such a good job that the government hires your employee away. The government then drags its feet on approving your proposed replacement and refuses to pay you for the time when the position was not staffed–even though the contract was fixed-price.
The scenario is exactly what happened to a company called Financial & Realty Services (FRS), and according to the Civilian Board of Contract Appeals, FRS wasn’t entitled to its entire fixed-price contract amount.
A request for equitable adjustment is not a “claim” under the FAR. Although a REA and a claim can look very similar, there are important legal distinctions.
And as one contractor recently learned, the distinction between a REA and a claim can make all the difference when it comes to a potential appeal.
A Contracting Officer’s death did not waive the requirement that a contractor file a claim with the agency before bringing its claim to federal court.
In a recent decision, the Court of Federal Claims held that a contractor was not entitled to forego the claim requirement because of the Contracting Officer’s death–even though the agency did not appoint a replacement.
A contractor’s failure to follow the requirements of DFARS 252.232-7007 (Limitation of Government’s Obligation), also known as the “LOGO” clause, resulted in the contractor performing more than $288,000 in free work for the government.
The contractor’s dilemma is an important reminder to be aware of–and scrupulously comply with–the LOGO clause and similar FAR clauses.