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Maximizing Termination For Convenience Settlements/Edition II - Part I - Seidman & Associates, P.C.
All too often, contractors do not know what costs they are entitled to recover following a convenience termination. Contractors may even resort to asking Government personnel for advice. Government personnel, however, are not always knowledgeable, and, more importantly, a contractor request for advice places them in an obvious conflict-of-interest position. Their job is to dispose of termination for convenience claims for as little money as possible rather than to maximize contractor recovery. As a result, contractors often do not claim all their allowable costs in termination settlement proposals and may accept improper disallowances of their claimed costs by Contracting Officers and Government auditors. In addition, contractors may accept less than what they are entitled to receive because of a desire not to offend the customer or a need for immediate cash.
This Edition II Briefing Paper is the first of two Papers that update and expand Briefing Papers No. 95-5, Maximizing Termination Settlements, which focused on fixed-priced contracts. 3 These Briefing Papers provide new strategies and cover new topics such as cost-type contracts, indefinite-delivery/indefinite-quantity contracts, FAR Part 12 commercial item contracts, and avoiding the “Termination for Convenience” clause prohibition on the recovery of anticipatory profits.
Specifically, this Part I provides a background discussion of the purpose and effect of the “Termination for Convenience” clause and a review of the standard “Termination for Convenience” clauses for various types of contracts, compares the cost-based formula used for traditional Government contracts with the modified price-based formula used in FAR Part 12 commercial item contracts, summarizes pertinent cost principles, and presents general strategies for maximizing recovery. Part II, to be published later, addresses how to recover specific costs following a termination for convenience and provides strategies for specific contract types such as indefinite-delivery/indefinite-quantity, cost-type, and FAR Part 12 commercial item contracts.
A “Termination for Convenience” clause is incorporated in every Government prime contract even if it is not physically incorporated. Under the Christian doctrine, as set forth in G.L. Christian & Assocs. v. United States, a “Termination for Convenience” clause is read into Government prime contracts because it must be included by regulation. 11 The Christian doctrine does not apply to subcontracts issued under Government prime contracts. 12 Accordingly, without a proper “Termination for Convenience” clause in a subcontract, a prime contractor could be obligated to pay for anticipatory profits.
Traditional Government contracts use a cost-based formula to calculate termination costs. FAR Part 12 commercial item contracts use a modified price-based formula.
A contractor’s recovery for the termination for convenience of a FAR Part 12 contract for commercial items is composed of two elements: (1) the percentage of the contract price reflecting the percentage of the work performed prior to the notice of the termination, and (2) any charges the contractor can demonstrate resulted directly from the termination. 25 This is a modified price-based formula since the first element is price based and the second element is cost based.
The cost of “common items” are not allowable unless the contractor submits evidence that the items could not be retained at cost without sustaining a loss. “Common items” are those reasonably usable on the contractor’s other work.
“Costs continuing after termination” despite all reasonable efforts by the contractor to eliminate the costs are generally allowable. “Idle facilities and idle capacity” are an example of costs continuing after termination.
“Initial costs” not fully absorbed because of a termination are allowable. One example is “starting load costs” such as learning curve costs and training. Another is “preparatory costs” such as initial plant rearrangement and production planning.
“Loss of useful value” of special tooling and special machinery and equipment is generally allowable to the extent it resulted from the termination.
“Rental costs under unexpired leases” are allowable for a reasonable period, to the extent they cannot be avoided, if necessary for the performance of the terminated contract.
The costs of “alterations of leased property” are allowable when the alterations were necessary for performing the contract.
“Subcontractor claims” are generally allowable. An appropriate share of the contractor’s indirect expense may be allocated to the amount of settlements with subcontractors.
“Settlement expenses” for preparation and presentation of a termination claim and termination and settlement of subcontracts are generally allowable. These expenses include the cost of inhouse personnel and outside experts such as attorneys and accountants.
A settlement should compensate the contractor fairly for the work done and the preparations made for the terminated portions of the contract, including a reasonable allowance for profit. Fair compensation is a matter of judgment and cannot be measured exactly. In a given case, various methods may be equally appropriate for arriving at fair compensation. The use of business judgment, as distinguished from strict accounting principles, is the heart of a settlement.
The rate of profit the contractor would have earned had the contract been completed.
The rate of profit contemplated by the contractor at the time of award.
The “Termination for Convenience” clause in FAR Part 12 contracts for commercial items–paragraph (l) of the FAR 52.212-4, “Contract Terms and Conditions–Commercial Items” clause–states that the contractor will not be required to comply with contract cost principles or the Cost Accounting Standards. 35 COs may apply the FAR Part 49 principles for contract termination as guidance when terminating commercial item contracts if not inconsistent with the commercial item termination rules. 36 The FAR 49.201 “fair compensation” principle quoted above would appear to apply since it does not appear to be inconsistent with the commercial item termination rules.
The first step in maximizing recovery is to determine whether a cancellation is a breach of contract. If there is a breach of contract, recovery is not subject to the limitations set forth in the “Termination for Convenience” clause and the FAR cost principles. As previously noted, the “Termination for Convenience” clause allows the Government to cancel without paying anticipatory profits. 37 In addition, where there is a breach of contract by the Government, the limitations on recovery in the FAR cost principles are inapplicable. 38 As a result, a contractor is entitled to recover more if a Government cancellation is a breach of contract not subject to the recovery limitations of the “Termination for Convenience” clause.
(a) A breach of contract occurs when a prime contractor or upper-tier subcontractor purports to terminate for convenience a subcontract without a “Termination for Convenience” clause. A termination for convenience of a prime contract not containing the clause by the Government is not a breach. As previously noted, the “Termination for Convenience” clause is a required provision that is read into the Government prime contract even if it is not physically included. 39 However, because the Christiandoctrine does not apply to subcontracts issued under Government prime contracts, without a proper “Termination for Convenience” clause in a subcontract, a prime contractor that cancels a subcontract could be obligated to pay for anticipatory profits.
A breach of contract based on (a), (b), or (c) is a common occurrence. A breach of contract based on (d) or (e) is unusual. The level of proof required to show bad faith is extremely difficult to meet. The Government rarely enters a contract where it does not intend to meet its obligations.
If disallowance of a cost would be unfair, you should claim the cost in your termination settlement proposal even if the cost is not allowable under the cost principles. As one board of contract appeals explained in holding that bid and proposal costs were allowable in a termination settlement to provide a contractor fair compensation despite a conflicting cost principle: “A contractor is not supposed to suffer as the result of a termination for convenience of the Government, nor to underwrite the Government’s decision to terminate.” 48 You should always include a narrative with your Standard Form 1435, “Settlement Proposal (Inventory Basis),” SF 1436, “Settlement Proposal (Total Cost Basis),” or SF 1437, “Settlement Proposal for Cost-Reimbursement Type Contracts,” 49 that explains each cost element and why allowance of any cost that may be unallowable under the cost principles is necessary to provide fair compensation.
Government auditors and COs sometimes disallow costs because they would have allegedly performed the work in a different manner. For example, they may question a contractor’s subcontracting decisions, lease arrangements, or personnel decisions.
The Government, however, may not substitute its judgment for that of the contractor to disallow costs. As stated by one commentator, “contractors are permitted great discretion in choosing the manner of performance, and unless there has been a clear abuse of discretion, the contractor’s choice, along with the costs resulting from it, will be regarded as reasonable.” 50 Thus, the question is whether a cost is reasonable–not whether the CO would have incurred it. The FAR provides that a cost is “reasonable” if “it does not exceed that which would be incurred by a prudent person in the conduct of competitive business.” 51 You should not allow the Government to second-guess your performance and disallow your “reasonable” costs.
A fixed-price contractor is not required to document its costs of performance. Nevertheless, the Government often attempts to avoid paying termination costs because a fixed-price contractor does not have the documentation that would be required for a cost-reimbursement contract.
You should not allow the Government to impose impractical proof requirements after it terminates a contract for convenience. As long as you incurred the costs and provide a reasonable factual basis to substantiate the amount, disallowance for lack of proof is improper.
You should therefore claim all your incurred costs in a termination settlement proposal irrespective of whether the Government or you are responsible for the costs.58 As discussed in Part II of this Briefing Paper, in some circumstances, you may even recover the costs of contractor-caused delays and defective or nonconforming work.
After a termination, the contractor is often left in a position where its normal treatment of indirect costs will not result in fair compensation. Under such circumstances, indirect costs may be charged as direct costs under the “fair compensation” principle.
The agency boards of contract appeals have routinely permitted costs normally charged as indirect costs to be charged directly for purposes of computing termination costs. 59 If terminated contractors were required to treat their indirect costs as under a normal contract, only a portion of incurred costs would be recovered. After a termination, the boards have permitted contractors to charge as direct costs the following normally indirect costs: supervisory personnel, freight charges, factory supplies, equipment repairs, small tools, travel, telephone, and other office expenses;60 engineering labor; 61 quality assurance, manufacturing management, production control, material control, and purchasing; 62 and office labor of the company president. 63 In charging what would otherwise be indirect costs as direct costs, contractors must avoid “double counting” by removing the costs from indirect cost pools.
If a fixed-price contract was being performed at a loss, the contractor is not entitled to profit and the termination recovery is subject to a loss adjustment. Under a loss adjustment, the contractor’s termination costs, not including settlement expenses, are reduced by the percentage of the loss the contractor would have incurred had the contract been completed. 66 Contractors can often recover profit and avoid loss adjustments by (a) submitting equitable adjustment claims that increase the contract price and (b) holding the Government to its burden of proof.
A contract is a loss contract if it would have been completed at an amount in excess of the contract price. The contract price includes the nominal price plus any equitable adjustments to which a contractor is entitled. 67 Thus, a contractor can use equitable adjustment claims to increase the total contract price and avoid application of the loss formula. The “contract price” set forth by a contractor on standard forms for termination settlement proposals should include any equitable adjustments to which the contractor is entitled.
The burden of proving entitlement to a loss adjustment is on the Government. 68 To prevail, the Government must prove (1) the contractor operated at a loss and (2) the amount of the loss. 69 A contractor can often avoid application of the loss formula by holding the Government to this burden. If left to its own devices, the Government often fails to meet its burden of proof.
The easiest way for the Government to meet its burden is to obtain an admission from the contractor. The Defense Contract Audit Agency Contract Audit Manual advises DCAA auditors (who perform audits of termination settlements for many agencies in addition to the Department of Defense) to request the contractor to provide an estimate to complete the terminated portion of the contract. 70 However, as recognized by the Manual, there is “no contractual requirement for the contractor to furnish an estimate to complete.” 71 Nevertheless, many contractors, without knowledge of their rights or the consequences of their actions, voluntarily provide an estimate. Instead, contractors should carefully consider whether it is to their advantage to comply with a Government request for an estimate to complete.
Alternatively, a contractor may want to provide an estimate to complete in support of its claimed profit. As previously noted, one of the factors in determining profit is “[t]he rate of profit the contractor would have earned had the contract been completed. 77 Estimated profit is calculated by subtracting costs incurred at the time of termination from an “estimate at completion.” The estimate at completion is the sum of costs incurred at the time of termination and the estimate to complete.
The FAR does not state whether all costs (direct and indirect costs) or just direct costs should be considered in determining whether a contract is a loss contract. You may be able to avoid a loss adjustment by pointing out there is no loss (and therefore no loss contract) if revenues would have exceeded direct costs at completion.
An accounting textbook defines “[l]osses” as “decreases in owner’s equity that do not result from expenses or distributions to owners.” 78 There is no decrease in equity as long as fixed costs are met. Any revenue above fixed costs increases an owner’s equity. Therefore, under this definition, the Government is not entitled to a loss adjustment if revenues at completion would have exceeded direct costs.
100% of the contract price adjusted for items completed before the termination date or to be completed after the termination date with the CO’s approval.
100% of subcontractor settlements the contractor has paid that were approved by the CO.
90% of the direct costs of termination inventory including materials, purchased parts, supplies, and direct labor.
90% of other allowable costs not included above that are allocable to the terminated requirements including settlement expenses.
100% of partial payments made to subcontractors.
The FAR suggests COs consider the inclusion of a provision in a settlement of a “complete termination” preserving the Government’s rights “concerning defects, guarantees, or warranties” and imposing other contractor obligations concerning terminated work. 92 A contractor should not agree to any continuing obligations in a complete termination other than those in the “Termination for Convenience” clause without adequate compensation.
To avoid any misunderstanding concerning the scope of a termination for convenience, in any settlement agreement, the contractor should obtain a release from all post-termination performance obligations other than those specified in the “Termination for Convenience” clause.
Instead of requesting the full cost of performing work that was not terminated, the contractor in International Data Products should have claimed its additional cost of performing the nonterminated work. The additional cost of providing warranty services or software upgrades may have been substantial since the contractor may not had the personnel on staff to do this work after the termination for convenience.
The period allowed for submitting a proposal can be extended by the Termination CO, prime contractor, or higher-tier subcontractor. A prime contractor or subcontractor must request a time extension in writing before the deadline. 102 Deadlines must be met at any cost even if the proposal needs to be revised at a later date. If a deadline is not met, a contractor forfeits its right to judicial review of the amount the CO determines is owed. In other words, if you fail to submit a timely “final” settlement proposal, the CO can pay whatever the CO decides, and you are without a remedy. 103A similar forfeiture rule is incorporated in most subcontracts.
If only part of the contract or subcontract is terminated, a contractor is entitled to an equitable adjustment of the price of the continued portion of the contract or subcontract to reflect the fact that there is less work over which to spread fixed costs. 104 The “Termination for Convenience” clause requires that a prime contractor submit any request for an equitable adjustment following a partial termination within 90 days unless this period is extended in writing by the CO. 105 A subcontractor should look to its subcontract to determine the deadline for submission of a request for an equitable adjustment.
As previously noted, tribunals have given contractors some flexibility in claiming costs either as a request for equitable adjustment on the nonterminated work or as a cost of the terminated portion of the contract in its termination settlement proposal.106 The “Termination for Convenience” clause allows more time for the latter type of filing. Nevertheless, the best practice is to request an extension of time to submit costs that can be included in a request for equitable adjustment on the nonterminated portion of the contract as part of your termination settlement proposal.
The “Termination for Convenience” clause for commercial item contracts (paragraph (l) of the FAR 52.212-4 clause) does not set a time limit on the submission of a termination settlement proposal after a termination for convenience.
A contractor whose contract has been terminated for convenience should obtain professional help from qualified Government contract attorneys and accountants. Terminations for convenience present arcane legal and accounting problems. The use of qualified professionals can greatly increase recovery.
Cost should not be a barrier. Reasonable professional fees related to a termination for convenience are generally recoverable as settlement expenses under the FAR “Termination costs” cost principle. 107 The costs of professional help have been held to be recoverable even if it is ultimately determined that the contractor has no termination costs it can claim other than the fees for the professional advice. 108 You should therefore not hesitate to seek help from qualified professionals upon receipt of a notice of termination.
These Guidelines are intended to assist a contractor in maximizing its recovery after a contract has been terminated for convenience. They are not, however, a substitute for professional representation in any given situation.
1. Determine if cancellation is a breach of contract rather than a termination for convenience. Examples of breach of contract are the termination for convenience of a subcontract without at termination clause, failure to order the guaranteed minimum under an IDIQ contract, failure to purchase all requirements under a requirements contract, a bad faith termination, and the termination of a contract where the Government never intended to meet its obligations. A contractor is entitled to anticipatory profits for a breach of contract but not for a termination for convenience.
2. If disallowance by the Government of an incurred cost would be “unfair,” claim the cost in your termination settlement proposal even if it is unallowable under FAR cost principles. Explain in the accompanying narrative why the cost is allowable under the overriding principle that a contractor is entitled to “fair compensation” in a convenience termination.
3. Do not let the Government second-guess your costs. If you exercised reasonable judgment in incurring the costs, allegations by Government officials that they would have acted differently are not grounds for disallowance.
4. Do not let the Government escape liability by imposing impractical proof requirements for costs incurred under a fixed-price contract. Provide the best available information and explain in the accompanying narrative or audit rebuttal why better documentation is unavailable.
5. Keep in mind that a termination for convenience in essence converts a fixed-price contract to a cost-reimbursement contract. Claim all your incurred costs up to the total contract price regardless of which party is responsible for the costs, including costs for contractor-caused and concurrent delays and costs for defective or nonconforming work.
6. Make sure to charge indirect costs as direct costs to obtain “fair compensation.” Avoid double counting by removing costs charged directly from overhead cost pools.
7. Remember that the total contract price is the original contract price plus any equitable adjustments to which a contractor is entitled. Avoid loss adjustments by submitting equitable adjustment claims to increase the total contract price.
8. Keep in mind that it is difficult for the Government to prove it is entitled to a loss adjustment absent a contractor admission. Consider avoiding loss adjustments by not providing an estimate to complete and thereby holding the Government to its burden of proof.
9. Remember that the FAR does not define a loss. Avoid loss adjustments by pointing out that from an accounting standpoint there is no loss if revenues at completion would have exceeded direct costs.
10. Keep in mind that most profit is earned at the beginning of a contract because of increased difficulty and risk. A contractor should therefore frontload profit to maximize recovery.
11. Remember to request a partial payment on your termination settlement to facilitate cash flow.
12. Be sure to schedule all inventory allocable to the contract. If the Plant Clearance Officer accepts it, the Government bought it and cannot later claim it is not allocable to the contract.
13. Be aware that the FAR suggests that a CO consider including a provision in a settlement agreement for a complete termination that would require contractors to correct defects, provide warranty work on delivered items, and perform other terminated work. You should not agree to such a provision without adequate compensation.
14. To avoid disputes concerning the scope of a termination, you should obtain a release of any continuing obligations other than those specified in the termination notice or clause in any settlement agreement.
15. Where a termination for convenience is partial, submit a request for equitable adjustment for the increased cost of performing the nonterminated work.
16. Be sure to submit a timely termination settlement proposal or, if the termination is partial, a request for equitable adjustment for the increased cost of performing the continuing work. If a contractor fails to submit a timely proposal, it forfeits its right to judicial review. A CO can pay whatever he wants, which may be nothing.
17. Remember that if a contract is partially terminated for convenience, the “Termination for Convenience” clause allows less time for submitting a request for equitable adjustment on the nonterminated portion than for submitting a settlement proposal for the terminated portion.
18. After a partial termination for convenience, some tribunals have allowed a contractor to claim costs recoverable as an equitable adjustment on the continuing portion in its termination settlement proposal as a cost of the terminated effort. Nevertheless, the best practice is to obtain permission from the CO to do this before your request for equitable adjustment on the nonterminated portion is due.
19. Obtain professional help to prepare and negotiate the settlement proposal. Knowledge and experience result in better recoveries. Also, a contractor is entitled to recover its reasonable legal and accounting fees incurred in preparing and negotiating its settlement proposal as settlement expense.
1 See, e.g., FAR 52.249-2.
2 See FAR 52.212-4, para. (l).
3 Seidman & Banfield, “Maximizing Termination for Convenience Settlements,” Briefing Papers No. 95-5 (Apr. 1995).
4 Seidman & Banfield, “Preparing Termination for Convenience Settlement Proposals for Fixed-Price Contracts,” Briefing Papers No. 97-11 (Oct. 1997).
8 E.g., FAR 52.249-2, para. (f); see G. L. Christian & Assocs. v. United States, 160 Ct. Cl. 1, 312 F.2d 418, reh’g denied, 160 Ct. Cl. 58, 320 F.2d 345, cert. denied, 375 U.S. 954 (1963); Dairy Sales Corp. v. United States, 219 Ct. Cl. 431, 593 F.2d 1002 (1979).
10 See 71 Fed. Reg. 74,667 (Dec. 12, 2006) (adding FAR 52.212-4, alt.1).
11 G.L. Christian & Assocs. v. United States, 160 Ct. Cl. 1.
12 See generally Darst, “Subcontract Incorporation-By-Reference & Flowdown Clauses Under Federal Government Construction Projects,” Briefing Papers No. 05-7 (June 2005).
13 See, e.g., FAR 52.249-2, paras. (f), (g), (i); see also FAR 49.113, 49.201, 49.202, 31.205-42.
15 E.g., FAR 52.249-2, para. (f); see FAR 49.207.
16 See FAR 52.243-1 (“Changes–Fixed-Price” clause), 52.243-2 (“Changes–Cost-Reimbursement” clause); see also Agrinautics, ASBCA 21512 et al., 79-2 BCA ¶ 14149, 22 GC ¶ 200.
17 FAR 49.203(a); see, e.g., FAR 52.249-2, para. (f).
23 41 U.S.C.A. § 422(f)(2)(B); see FAR 12.214.
24 See Seidman, Banfield, Chvotkin & Charles, “Service Contracting in the New Millennium–Part I,” Briefing Papers No. 02-11 (Oct. 2002).
25 FAR 12.403(d); FAR 52.212-4, para. (l).
26 FAR 49.113. See generally Arnavas, “Gov-ernment Contract Cost Recovery,” Briefing Papers No. 01-6 (May 2001).
27 See, e.g., Durette, GmbH, ASBCA 34072, 91-2 BCA ¶ 23756.
28 FAR 31.205-42. See generally Manos, Government Contract Costs & Pricing ch. 49 (Thomson West 2004 & Supp. 2007).
32 Jacobs Eng’g Group v. United States, 434 F.3d 1378 (Fed. Cir. 2006), 48 GC ¶ 49; see also Edwards, “Termination of Cost-Reimbursement Contracts: A Novel Interpretation of the Termination Clause,” 20 Nash & Cibinic Rep. ¶ 17 (Apr. 2006).
35 FAR 52.212-4, para. (l).
37 See FAR 49.202(a); G. L. Christian & Assocs. v. United States, 160 Ct. Cl 1, 312 F.2d 418, reh’g denied, 160 Ct. Cl. 58, 320 F.2d 345, cert. denied, 375 U.S. 954 (1963); Dairy Sales Corp. v. United States, 219 Ct. Cl. 431, 593 F.2d 1002 (1979).
38 Contel Advanced Sys., Inc. ASBCA 50648 et al., 03-2 BCA ¶ 32277, at 159,699, rev’d on other grounds, 384 F.3d 1372 (Fed. Cir. 2004), 46 GC ¶ 422; Manos, Government Contract Costs & Pricing § 87:E (Thomson West 2004 & Supp. 2007).
39 G.L. Christian & Assocs. v. United States, 160 Ct. Cl. 1.
40 Maxima Corp. v. United States, 847 F.2d 1549 (Fed. Cir. 1988).
42 Rumsfeld v. Applied Cos., 325 F.3d 1328, 1339 (Fed. Cir. 2003), 45 GC ¶ 190.
43 Kalvar v. United States, 211 Ct. Cl. 192, 543 F.2d 1298 (1976), cert. denied, 434 U.S. 830 (1977).
44 Am-Pro Protective Agency, Inc. v. United States, 281 F.3d 1234 (Fed. Cir. 2002), 44 GC ¶ 94.
45 Krygoski Constr. Co. v. United States, 94 F.3d 1537 (Fed. Cir. 1996), 38 GC ¶¶ 522, 547, cert. denied, 520 U.S. 1210 (1997).
46 See DAR 8-301; FPR 1-8.301; ASPR 8.301.
47 See generally Arnavas, Gildea & Duquette, “DCAA Audits,” Briefing Papers No. 94-9, at 8 (Aug. 1994).
48 Kasler Elec. Co., DOTCAB 1425, 84-2 BCA ¶ 17374, at 86,566, 26 GC ¶ 326; see also Codex Corp. v. United States, 226 Ct. Cl. 693 (1981), 23 GC ¶ 239 (precontract costs).
49 FAR 53.301-1435, -1436, -1437.
50 Rishe, Government Contract Costs 10-20 (Federal Publications Inc. 1984); see Aeronca Mfg. Corp., ASBCA 3844, 58-1 BCA ¶ 1724.
52 See FAR 49.201(a), (c); see also Algonac Mfg. Co., ASBCA 10534, 66-2 BCA ¶ 5731, aff’d, 192 Ct. Cl. 649, 428 F.2d 1241 (1970), 12 GC ¶ 297.
53 Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 767 (Fed. Cir. 1987), 29 GC ¶ 296 (quoting Willems Indus., Inc. v. United States, 155 Ct. Cl. 360, 295 F.2d 822 (1961), cert. denied, 370 U.S. 903 (1962), 3 GC ¶ 565).
54 Tagarelli Bros. Constr. Co., ASBCA 34793, 88-1 BCA ¶ 20363, 30 GC ¶ 342 (Note), aff’d. on recons., 88-2 BCA ¶ 20546.
55 Industrial Refrigeration Serv. Corp., VABCA 2532, 91-3 BCA ¶ 24093, 33 GC ¶ 251 (Note).
56 Seven Science Indus., ASBCA 23337, 80-2 BCA ¶ 14518.
57 Durette, GmbH, ASBCA 34072, 91-2 BCA ¶ 23756, at 118,972.
58 Worsham Constr. Co., ASBCA 25907, 85-2 BCA ¶ 18016, 28 GC ¶ 243 (Note).
59 Agrinautics, ASBCA 21512 et al., 79-2 BCA ¶ 14149, 22 GC ¶ 200; Amplitronics, Inc., ASBCA 20545, 76-1 BCA ¶ 11760, 18 GC ¶ 373; American Elec., Inc., ASBCA 16635, 76-2 BCA ¶ 12151, 31 GC ¶ 289 (Note), aff’d in part and modified in part on other grounds on recons., 77-2 BCA ¶ 12792.
60 Okaw Indus., Inc., ASBCA 17863, 77-2 BCA ¶ 12793.
61 Agrinautics, ASBCA 21512 et al., 79-2 BCA ¶ 14149, 22 GC ¶ 200.
62 Condec Corp., ASBCA 14234, 73-1 BCA ¶ 9808, 15 GC ¶ 295.
63 Amplitronics, Inc., ASBCA 20545, 76-1 BCA ¶ 11760, 18 GC ¶ 373.
64 48 C.F.R. § 9904.402-40. See generally Manos, Government Contract Costs & Pricing ch. 63 (Thomson West 2004 & Supp. 2007).
65 See generally AT&T Techs., Inc. v. United States, 18 Cl. Ct. 315 (1989), 31 GC ¶ 372.
67 See FAR 52.243-1 (“Changes–Fixed-Price” clause), 52.243-2 (“Changes–Cost-Reimbursement” clause); see also Agrinautics, ASBCA 21512 et al., 79-2 BCA ¶ 14149, 22 GC ¶ 200.
68 Systems & Computer Information, Inc., ASBCA 18458, 78-1 BCA ¶ 12946; R&B Bewachungs GmbH, ASBCA 42214, 92-3 BCA ¶ 25105.
69 Maitland Bros., ASBCA 43088, 93-3 BCA ¶ 26007, aff’d on recons., 94-1 BCA ¶ 26285.
70 DCAM ¶ 12-307a(2) (Nov. 16, 2007).
71 DCAM ¶ 12-307a(3) (Nov. 16, 2007).
72 Okaw Indus., Inc., ASBCA 17863, 77-2 BCA ¶ 12793; see also Systems & Computer Information, Inc., ASBCA 18458, 78-1 BCA ¶ 12946.
73 See Scope Elecs., Inc., ASBCA 20359, 77-1 BCA ¶ 12404, 19 GC ¶ 146, aff’d on recons., 77-2 BCA ¶ 12586; see also R&B Bewachungs GmbH, ASBCA 42214, 92-3 BCA ¶ 25105.
74 FAR 49.203(a); Okaw Indus., Inc., ASBCA 17863, 77-2 BCA ¶ 12793.
75 Okaw Indus., Inc., ASBCA 17863, 77-2 BCA ¶ 12793.
76 Astro Dynamics, Inc., ASBCA 41825, 91-2 BCA ¶ 23807; R.H.J. Corp., ASBCA 12404, 69-1 BCA ¶ 7587, 11 GC ¶ 195; see also Scope Elecs., Inc., ASBCA 20359, 77-1 BCA ¶ 12404, 19 GC ¶ 146, aff’d on recons., 77-2 BCA ¶ 12586; Douglas Corp., ASBCA 8566, 69-1 BCA ¶ 7578, 11 GC ¶ 239, aff’d on recons., 69-1 BCA ¶ 7699.
78 Horngren & Harrison, Accounting 477 (1989).
79 FAR 49.202(b)(1). See generally LeeVan & Willard, “A Beginner’s Guide to Program Metrics,” Briefing Papers No. 06-7 (June 2006).
80 Quality Seeding, Inc., IBCA 2297, 88-3 BCA ¶ 21020, at 106,181.
82 FAR 49.112-1(a); see, e.g., FAR 52.249-2, para. (m)(1).
86 See FAR 49.602-4, 53.301-1440.
87 See FAR 2.101, 49.206-3, 49.303-2.
89 Marvin Eng’g Co., ASBCA 18356, 74-1 BCA ¶ 10587; Thiokol Chem. Corp., ASBCA 17544, 76-1 BCA ¶ 11731.
90 31 U.S.C.A. § 3729. See generally Wimberly, Plunkett & LaSalle, “The Presentment Requirement Under the False Claims Act,” Briefing Papers No. 07-12 (Nov. 2007); Brackney & Solomson, “Current Issues in False Claims Litigation,” Briefing Papers No. 06-10 (Sept. 2006); Silberman, “False Claims Issues in Subcontracting,” Briefing Papers No. 06-8 (July 2006); Huffman, Madsen & Hamrick, “The Civil False Claims Act,” Briefing Papers No. 01-10 (Sept. 2001); Goddard, “Business Ethics in Government Contracting–Part II,” Briefing Papers No. 03-7 (June 2003).
91 18 U.S.C.A. § 287.
93 FAR 52.249-2 , para. (l).
95 International Data Prods. Corp. v. United States, 492 F.3d 1317 (Fed. Cir. 2007), 49 GC ¶ 279; see also Nash, “Fixed-Price IDIQ Contracts: High-Risk Ventures,” 21 Nash & Cibinic Rep. ¶ 43 (Sept. 2007).
97 Precision Specialty Corp. v. United States, 15 Cl. Ct. 1 (1988); Aero Components Co., ASBCA 42620, 92-1 BCA ¶ 24565 (1991).
98 FAR 49.206-1(a), 49.303-1; e.g., FAR 52. 249-2, para. (e).
99 FAR 2.101; see FAR 49.102.
100 Ryste & Ricas, Inc. v, Harvey, 477 F.3d 1337 (Fed. Cir. 2007), 49 GC ¶ 86; England v. Swanson Group, 353 F.3d 1375 (Fed. Cir. 2004), 46 GC ¶ 45; see also Nash, “Postscript II: Late Convenience Termination Settlement Proposals,” 21 Nash & Cibinic Rep. ¶ 13 (Apr. 2007).
101 See generally Meagher & Bingham, “Administering Subcontracts After a Termination for Convenience,” Briefing Papers No. 04-4 (Mar. 2004).
102 E.g., FAR 52.249-2, para. (e).
103 E.g., FAR 52.249-2, paras. (e), (j); Do-Well Machine Shop, Inc. v. United States, 870 F.2d 637 (Fed. Cir. 1989), 31 GC ¶ 116.
104 See FAR 49.104(d), 49.208, 52.249-2, para. (l).
105 FAR 52.249-2, para. (l).
106 Precision Specialty Corp. v. United States, 15 Cl. Ct. 1 (1988); Aero Components Co., ASBCA 42620, 92-1 BCA ¶ 24565 (1991), 34 GC ¶ 10.
107 FAR 31.205-42(g). See generally Manos, Government Contract Costs & Pricing ch. 49 (Thomson West 2004 & Supp. 2007); Vacketta, Yesner & Snyder, “Recovery of Legal Costs,” Briefing Papers No. 93-12 (Nov. 1993).
108 Engineered Sys., Inc., ASBCA 18241, 74-1 BCA ¶ 10492, 16 GC ¶ 160; Freedom Elevator Corp., GSBCA 7259, 85-2 BCA ¶ 17964; Contract Maintenance, Inc., ASBCA 20689, 77-1 BCA ¶ 12446.

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