The recently-opened military effort in the Mideast, particularly Syria, and ongoing commitments from legacy conflicts in Iraq and Afghanistan have created and will likely continue to create contracting opportunities for U.S. and foreign companies. But the tumultuous and austere environments there and elsewhere in the U.S. Central Command (CENTCOM) Area of Operations, especially Turkey, Kurdistan, Kuwait and Bahrain, also present substantial challenges to the successful completion and closeout of such contracts. Security issues and other obstacles, including the challenges of a dynamic customer relationship marked by frequent turnover in deployed government personnel, have made the reconstruction of those countries’ infrastructures, as well as the provision of maintenance, transportation, life support, and intelligence support services, difficult, and contractors routinely incur increased costs and schedule delays as a result.
Even with the winding down of active military operations in some theaters, reconstruction projects will continue and, even more importantly, expeditionary contractors’ exposure to audits, investigations and the risk of disputes related to contract close-out will persist and likely deepen in the years ahead. A unique aspect of such operations that heightens contractor risk in these matters is the personnel turbulence for Government program, contracting and legal officials. With such personnel shifting jobs and locations, often with little warning and over vast distances, there is enormous risk that contractors’ interests, contributions and positions on key issues will be lost in the shuffle. And this exposure is only further elevated by the fact that the austere working conditions and high operational tempo typical of these projects impede contractor efforts to fully document critical communications with the Government, and to archive records that may be important to pursuing requests for equitable adjustment, claims and appeals after the work is completed. Contractors must think and act differently in order to succeed with expeditionary projects over the long-term.
We know how to plan for these risks, and how to maximize recovery even when the “fortunes of war” may place contractors at greater risk than would be experienced for stateside, garrison-focused projects. Wiley Rein has a wealth of experience assisting government contractors performing or seeking contracts in this region. When needed, our attorneys have traveled to these countries to provide on-site guidance and assistance. We understand and have worked with the key government agencies that are essential in the reconstruction process, including the Joint Contracting Command Iraq-Afghanistan (JCC-I/A), the Special Inspector Generals for Iraq and Afghanistan Reconstruction (SIGIR and SIGAR), the U.S. Army Corps of Engineers (USACE) both abroad and in the continental U.S. (CONUS), the U.S. Army, the U.S. Air Force Center for Engineering and Environment (AFCEE), the Defense Contract Audit Agency (DCAA), the Defense Logistics Agency (DLA), the Defense Contract Management Agency (DCMA), the U.S. Department of State, and the U.S. Agency for International Development (USAID).
We assist operational support and reconstruction contractors and subcontractors with the myriad legal issues they encounter in the battlefield environment, such as contractual and regulatory questions (including allowances, particularly danger and post differential/hardship pay), host nation law compliance (including Afghanistan income taxation), terminations, audits and investigations, training requirements, armed contractor personnel rule compliance, subcontractor disputes, and, as appropriate, requests for equitable adjustment (REAs), alternative dispute resolution, and certified claims. These contract administration matters, especially DCAA audits and disallowances, will assume increasing importance as military operations wind down in Afghanistan, and the U.S. military presence dwindles.
Our experience in these regions is demonstrated by the following representative matters:
- Obtained a multi-million dollar settlement from JCC-I/A for two REAs related to construction projects in Iraq.
- Prosecuted 13 claims on behalf of a Kuwaiti corporation with the U.S. Marine Corps/JCC-I/A on contracts performed in Iraq; worked with Army contracting and legal personnel assigned to close-out these contracts years after the fact, obtaining payment for the client while avoiding protracted litigation.
- Prosecuted a sponsored claim at the Civilian Board of Contract Appeals (CBCA) related to a construction project in Kirkuk, Iraq; at alternative dispute resolution (ADR) with the board, obtained a favorable settlement with USAID and another contractor.
- Assisted in preparation and submission of REA to the USACE regarding reconstruction projects in Basra, Iraq.
- Pursued REA with the U.S. Army regarding contract to perform repairs arising from terrorist action in Iraq and obtained a favorable settlement.
- Persuaded the SIGIR to terminate an investigation and withdraw a subpoena regarding an oil pipeline repair contract in Iraq.
- Represented contractor in protests of awards of construction and renovation projects within Baghdad and Al Anbar province and counseled client concerning claims in ongoing construction projects in Baghdad.
- Represented an Iraqi company that provided products to the military coalition and defended a threatened default termination after one of the items allegedly failed.
- Prosecuted two appeals of claims against USAID for disallowed prime contract and subcontract costs in Iraq, resulting in a landmark decision permitting contractors to substantiate costs through testimony when key records were lost at the Baghdad airport.
- Represented Saudi firm in responding to U.S. Army Suspension/Debarment Official (SDO) Request for Information regarding alleged kickbacks relative to work in Iraq and Afghanistan; after responding to the Army, the SDO took no action and did not require a compliance agreement.
- Secured favorable result in appeal of disallowed labor and transportation costs on USAID reconstruction contract in Iraq.
- Assisted on a termination for default of a major maintenance service contract in Kuwait that was settled and converted to a termination for convenience.
- Represented client in bid protest that overturned U.S. Army’s non-responsibility determination and exclusion of contractor from competition for National Afghan Trucking procurement.
- Advise multiple U.S. contractors on Status of Forces Agreements, application of host nation law, and the unique requirements that apply to contractor employees accompanying the Armed Forces overseas.
- Provide advice to joint ventures operating in Iraq on a variety of legal matters, including executive compensation issues arising from DCAA audits, travel expense questions under the Federal Acquisition Regulation (FAR), and stop-work orders.
Given the likelihood that contractors will continue to perform in these areas and may even be called on more, considering the drawdown of troops, contractors will continue to encounter difficulties unique to operating in these challenging environments. Wiley Rein attorneys have an enormous body of experience, with proven results, to help contractors address and resolve these issues.
ISSUE: FALL 2014
IN THIS ISSUE
- New Labor Executive Orders and Rules to Impose New Compliance Obligations on Contractors
- The “No Federal Contracts for Corporate Deserters Act of 2014”—Congress’s Latest Attempt to Address Inverted Domestic Corporations
- COFC Decisions Reinforce Challenges, But Open the Door, for Subcontractors Pursuing Claims for Nonpayment Directly Against the Government
- The Court Trusts, But You Should Verify—D.C. Circuit Affirms Dismissal of Qui Tam Alleging Reseller Violated the TAA
- Speeches & Publications
President Obama Signs Fiscal Year 2014 National Defense Authorization Act
By Tracye Winfrey Howard and Michael P. Grogan
January 8, 2014
Improving Access To Government Contractor Integrity Information
By Kara M. Sacilotto
July 20, 2012 | Government Contracts Law360
Constitutionality of Military Extraterritorial Jurisdiction Act (MEJA) Upheld
By Kara M. Sacilotto
April 11, 2011