Contract Disputes Act (CDA) claims offer Government Contractors the opportunity to recover costs incurred due to Government-caused changes or delays. While the initial focus often rests on proving liability, a recent Court of Federal Claims (COFC) decision highlights the danger of failing to prove entitlement to damages.
In other words, claims can present the danger of winning the battle . . . only to lose the war.
The Federal Protective Service (FPS) awarded a contract for administrative support services personnel. The contract included a Department of Labor Wage Determination setting forth the wage and vacation requirements for the solicited employees. Per the terms of the contract, each tendered employee was required to log 1,888 “productive hours” per year.
The issue at the heart of the contractor’s claim was FPS’ demand for more hours (2,000 per employee) and more personnel (FPS required the contractor to secure replacement personnel during employee absences).
The COFC granted the contractor’s motion for summary judgment, finding that the agency’s enhanced demands constituted a constructive change to the contract. But, despite prevailing on the issue of liability, the Court awarded no damages.
While the contractor almost certainly incurred additional costs associated with the contract change, it failed to offer proof of those costs to the Court’s satisfaction. Specifically, the COFC decision highlights the absence of evidence like payroll records that would detail the additional costs incurred as damages.
So, while still a victory, the contractor walked away with nothing to show for its “technically” successful claim.
The takeaway here is simple and should be applied in every instance. In the event of a claim – or even a suspected claim – the contractor should make a conscious effort to track and document all additional costs incurred in real time.
In addition to avoiding the very unfortunate outcome seen in this COFC decision, tracking costs from the outset has many additional benefits (and zero downside). For example, understanding these costs will help the contractor assess the merits of a claim prior to submission. A detailed understanding of actual damages could also be helpful in terms of early dispute resolution with the agency (thus avoiding the claims process entirely).
Nick Solosky is a Partner in Fox Rothschild’s Government Contracts & Construction Practice Group. You can reach Nick directly at NSolosky@FoxRothschild.com or 202-696-1460.