Decision 4. Bring an FSS Dispute to the One Contracting Officer Who Can Resolve It

Berenzweig Leonard is beginning the New Year with a summary of four important government contract legal decisions handed down in 2013. We began by describing in two blog articles the problems a government contractor can get into as a result of “apparent authority”, a one-sided legal concept that does not apply to the government but that does apply to a  government contractor and can be costly if not closely monitored. Later, we dealt with the two most fundamental, and most-ignored, rules in government contracting: an enforceable government contract decision can only come from the contracting officer and only if that decision is in writing.

We have saved THE most important decisions for last: decisions that dealt with disputes involving purchases under the GSA Federal Supply Schedule (FSS). Because a previous blog article on October 17, 2013 discussed these decisions in detail, we will only summarize their important conclusions here.

Decision 4. Bring an FSS Dispute to the One Contracting Officer Who Can Resolve It

In the GSA FSS process, two contracting officers are involved: the GSA contracting officer and the ordering agency contracting officer. Each has a different contract vehicle to deal with: the GSA contracting officer is responsible for the FSS contract with a vendor and the ordering agency contracting officer is responsible for the delivery or task order the agency uses to buy something off that vendor’s GSA FSS contract. When a schedule vendor has a dispute with the government over a delivery or task order, only one contracting officer is the correct one for a contractor to file a claim under the Contract Disputes Act. Which one is it?

According to the new rules developed by the U.S. Court of Appeals for the Federal Circuit (CAFC) and the Armed Services Board of Contract Appeals (ASBCA) in the decisions described in the earlier blog:

Contract interpretation issues: the GSA contracting officer is the only contracting officer to handle a dispute involves interpretation of the terms and conditions of the FSS schedule contract. However, when the dispute is over the terms and conditions of the FSS order, the ordering contracting officer must resolve the dispute.

Performance issues: the ordering agency contracting officer is the only contracting officer that can decide performance issues not involving interpretation of the FSS contract such as whether the contractor’s default was excusable.

Terry O'Connor is the Director of Government Contracts with Berenzweig Leonard, LLP, a DC regional business law firm. He can be reached at toconnor@BerenzweigLaw.com.

The Government Shutdown’s Impact on Payment to Contractors

All companies contracting with the Federal Government should ensure that they are doing everything they can to protect themselves and maximize their chances of payment once the government shutdown ends. Congress has approved back pay for federal workers once the shutdown is over, and President Obama recently signed a bill requiring the DoD to continue paying civilian Federal Government employees and contractors that provide support to the armed services.  Government contractors, however, have been put in limbo, and need to make careful decisions while navigating the shutdown.

Contractors who do not serve the armed services must typically operate on a case-by-case basis, and should stay in contact with their Contracting Officers (COs) and Contracting Officer Representatives (CORs), if they are working, to understand what the procuring agency is doing and how it is operating during the shutdown. The worst thing to do is to drop off the CO’s communication radar and give the CO proof by way of an email track record that your company did not contact him or her during the shutdown to confirm understandings on contract performance. Assumptions cannot be made during this uncertain time, so it will be beneficial to contractors to send regular written communications to agency representatives to ensure everyone is on the same page.

Each contract will have varying factors affecting its appropriation, but generally speaking, a contractor should not expect to get paid for work it does not perform – the Federal Government cannot accept payment for voluntary services under the Anti-Deficiency Act. However, contractors covering work that is fully funded, or incrementally funded and not yet reaching the funding limit, should still be funded by the Government, although each case can differ. Time and materials contracts are more problematic, and contractors should proceed with caution. FAR § 52.242-15 gives the Government discretion to terminate or suspend work independent of whether a contract is funded, and so if contractors have not already initiated creative cost-cutting mechanisms, now is the time to think outside the box and be protective.

Hopefully Congress can lead the way to a solution so that the current standoff can end, and hard working contractors can go back to work and slowly resume a normal and uninterrupted routine to help federal customers achieve their missions.

Katie Lipp is an attorney the Washington, DC regional business law firm Berenzweig Leonard, LLP. She can be reached at KLipp@BerenzweigLaw.com.