Disputes related to Requests for Equitable Adjustment (REA) for constructive contract changes, or termination settlement proposals for contracts terminated for convenience and FAR regulatory compliance matters asserted in agency audit reports happen in a wide variety of situations for federal government contractors.
REAs for constructive contract changes could be the result of numerous events like a differing site condition, a defective specification, deliquent government furnished property or information, the unsuitability of whatever government property or information was delivered or any number of other events.
Termination settlement proposals could be required whenever the government terminates a contract for any reason. There are often competing interests when settling a terminated contract, since the government wants to minimize its obligation regardless of what it has promised in the termination clause. By contrast, the termination settlement proposal is the contractor's last opportunity to make the most on the contract and receive the benefit of what the government promised to pay the contractor should it terminate the contract.
Allegations of FAR non-compliance could be related to cost allowability under the FAR 31 cost principles, cost allocability under the Cost Accounting Standards (CAS), failure to disclosue cost or pricing data under FAR 15, or any number of other agency supplement requirements related to accounting, manufacturing, estimating or purchasing sytems.
Regardless of the cause, there are numerous procedures described throughout the contract and the regulations for handling these issues. Many of them even entitle the contractor to additional compensation, like cost and profit, when resolving them.
Resolving the issues and reaching a settlement in the field of government contracts can be difficult, however. The technical nature of procurement rules and regulations ensures that the parties must go great distances before they can meet in the middle. The government's zeal in getting the best possible deal, which does not always mean the best balanced deal, usually means that the contractor must shoulder a greater burden at demonstrating their compliance or proving their entitlement to additional compensation, if the matter is to be resolved without wasteful litigation.
The process is often further thwarted because the primary resource of the opposition's negotiator (whether government or upper tier contractor) is typically a government auditor whose agenda and motivations can run counter to the actual contract and regulatory requirements.
Celestial Defense helps clients resolve issues without years of litigation. We provide highly expert advisory services and exceptional performance that is focused on what really matters to our clients so that they can manage their business and deliver the same exceptionalism that made them a success. Review the description of Exemplary Projects.
Learn more about contract changes and claims with Pricing Changes and Claims.
Learn more about complete or partial terminations with Terminations for Convenience of Government Contracts
Learn more about Cost Accounting Standards
Learn More about Cost or Pricing Data
Celestial Defense of Atlanta, Georgia has over 30 years experience serving the needs of government contractors and provides the full spectrum of federal government contract consultanting services designed to reach resolution of frequent and common disputes issues without years of litigation for issues such as: