Rocky Road

September 21, 2015

In 2004, the U.S. Army Corps of Engineers awarded Weston/Bean Joint Venture a contract to dredge the Miami River channel. That channel was originally created between 1931 and 1933, and has not been dredged since. Under the contract, Weston agreed to remove and dispose of contaminated sediment, and to be paid based on a price per cubic yard of dredged material. Once the work began, Weston discovered that the materials to be dredged included significant quantities of rock. Weston claimed that although the contract was for “maintenance dredging” and disposal of “sediments,” it was entirely outside the contract to require Weston to dredge and dispose of rock.

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There’s a Rule for That

September 18, 2015

In June 2013, Plaintiff, Anham Fzco, d/b/a/ ANHAM LLC (Dubai), filed a breach of contract lawsuit in the U.S. Court of Federal Claims, alleging that the United States had breached a term of a settlement agreement. The agreement was reached following Anham’s bid protest challenging its exclusion from a procurement for services in Afghanistan. Under the agreement, the Government was to notify Anham within 60 days whether it would award a contract to Anham. The Government failed to do so.

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Cold Case Files

September 15, 2015

The Sikorsky Aircraft Corporation, manufacturer of the Black Hawk helicopter, holds several contracts with the U.S. government to furnish aircraft and spare parts. Over the years, Sikorsky has been involved in several disputes with the government over Sikorsky’s method for allocating its material overhead costs. Prior to 1999, the company allocated materiel overhead costs using a hybrid allocation base of direct costs less the costs of commercial aircraft engines and used helicopters. But Sikorsky concluded that its allocation method only partially mitigated the distortion of costs associated with government furnished material. So after January 1, 1999, Sikorsky allocated the indirect material costs by using a direct labor cost base.
The Government claimed that Sikorsky’s overhead cost accounting between 1999 and 2005 did not comply with the Government’s cost accounting standards, and the parties brought that dispute to the U.S. Court of Federal Claims.In response to that dispute, Sikorsky changed its accounting methods in 2006, giving the Government an alternative argument that Sikorsky’s change in accounting practices constituted an unlawful voluntary change in violation of the Cost Accounting Standards. The Government claimed that it was entitled to recover almost $80 million in increased costs under its alternative theory.
Sikorsky succeeded in the initial case, and the CFC held that the 1999 to 2005 accounting methods were lawful. But when the Government continued to press its alternative claim, Sikorsky filed a new lawsuit in the CFC, arguing that the Government’s claim was barred under the doctrine of claim preclusion. The Government responded that it could not have brought the counterclaim in the first round of litigation because the contracting officer had yet to assert the alternative claim. The CFC rejected that argument, explaining:

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About that Roof

September 14, 2015

In 2007, Vanguard Construction, Inc. entered into an indefinite delivery/quantity contract with the U.S. Air Force to construct roof replacement and repairs on certain buildings at the Edwards Air Force Base. In performing this work, Vanguard demolished and removed an existing gravel roof, which required also removing a portion of a metal storage structure sitting on top. After completing the demolition Vanguard discovered that a 60-foot section of the roof stem wall was missing, and contacted the Air Force asking for instructions on how to proceed. The Air Force advised Vanguard that the condition of the stem wall was visible prior to the demolition and instructed Vanguard to complete the repairs. The Air Force also advised Vanguard that it should have priced its construction project to account for the missing stem wall.

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All I Want for Christmas

September 1, 2015

Antonio Johnson joined the U.S. Army in 1980. Before his discharge, he had achieved the rank of sergeant. While he was still enlisted and with three years left on his enlistment contract, disciplinary actions were taken against him, resulting in two reductions in rank. Ultimately he was honorably discharged in December 1988, but with a notation on his discharge papers of “Misconduct—Commission of a Serious Offense.”

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Less Than Special

August 28, 2015

Matthew T. Crumley began serving as a commissioned officer on active duty in the Air Force in 2000, eventually achieving the rank of Major in 2008. In November 2010, he was injured while serving as an Honor Guard Ceremonial Guardsman during a funeral ceremony. He sent an email to senior Air Force officials detailing the incident and asking the Air Force to address the situation. The Air Force sent him a formal letter of admonishment for sending this email, advising him that he had bypassed his normal chain of command and stating that had acted unprofessionally. Based on this email, Crumley later received an evaluation that included this negative email.

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