Wiley Rein LLP


Government Contracts | GOVERNMENT CLAIMS AND TERMINATIONS

With recent budget constraints and the prospect of perpetual federal budget uncertainties, the government has become increasingly aggressive in asserting its legal rights against contractors in such areas as contract performance, award fee determinations, defective pricing, cost allowability, default terminations, and data rights.  For contractors, shrinking revenues, market forces, and business imperatives compel companies to push back in situations for which, in the past, easy accommodations would have been reached.  We regularly counsel and defend contractors in these areas, which can involve a host of goals and strategies, such as negotiated settlements, alternative dispute resolution, and litigation of claims under the Contract Disputes Act (CDA).

Representative experience includes:

  • Successfully challenged the Defense Contract Audit Agency (DCAA) to executive compensation review methodology.  See Appeals of J.F. Taylor, Inc., ASBCA 56105, January 18, 2012, 12-1 BCA ¶ 34920.
  • Mediated a dispute before a board judge involving the allowability of legal expenses in subcontractor litigation, resulting in a finding of allowability for the expenses and settlement of the dispute. 
  • Litigated a Contract Performance Evaluation Report dispute – taking the case to the board of contract appeals, winning the client a fresh evaluation and resulting in significantly improved results which have repaired damage to the client’s past performance record.
  • Defended termination for default, resulting in a settlement agreement converting the termination to a termination for convenience and the issuance of favorable past performance ratings. 
  • Assisted multiple clients in appeals from validations of restrictive markings involving both technical and software data rights.  
  • Defended a challenge to contractor’s costs, resulting in decision that established that contractor testimony can substitute for missing documentary evidence in proving the allowability of costs. 
  • Negotiated a no-cost termination for convenience for a contractor that was on the verge of defaulting on performance.
  • Successfully responded to a show-cause notice threatening to terminate a multi-billion-dollar program for default, leading to the favorable restructuring of the program. 
  • Prepared legal justification in response to a customer’s threat to terminate for default a program for the commercial variant of a U.S. Department of Defense (DOD) aircraft, resulting in payment to our client of nearly $40 million.
  • Worked with a major accounting firm in preparing an internal audit report resulting in the exoneration of our client despite a principal subcontractor having admitted to engaging in erroneous billing.
  • Negotiated no-cost termination for convenience with mutual releases on behalf of a contractor that could not obtain necessary funding to perform recently awarded contract as a result of downturn in financial markets.