Superior Knowledge Doctrine: Government Breach of Contract Claim

Contractors often have questions on the types of claims available to them.  One claim contractors can assert when trying to recover government breach of contract damages is a superior knowledge claim.  The superior knowledge doctrine is based on the idea that where the government had knowledge of information that would affect a contractor’s performance, the government is obligated to share that information.

Superior Knowledge Doctrine – Government has Duty to Disclose

A contracting agency has an implied duty to disclose to a contractor information, that is otherwise unavailable to the contractor, regarding some matter affecting the contract that is vital to contract performance.  If the information is not disclosed, then under the superior knowledge doctrine the contractor is entitled to recover the increased costs that resulted from the lack of information.

Elements needed to prove a Superior Knowledge Claim:

At the crux of a superior knowledge claim lies the idea that the government had the information and intentionally kept it from the contractor.

The four elements needed to prove a government breach of contract damages based on superior knowledge are:

• Contractor undertakes to perform a contract without vital knowledge of a fact that affects performance cost or duration
• Government was aware the contractor had no knowledge and had no reason to obtain the information
• The contract specifications either misled the contractor or did not put it on notice to inquire, and
• The government failed to provide the relevant information

All four elements must be proven in order to have a successful superior knowledge claim upon which you can recover damages.  The elements must be proven by evidence of specific, relevant information or vital knowledge that was unavailable to the contractor but that the government possessed.  The superior knowledge doctrine refers only to knowledge the government had (and consequently, the contractor did not have) at the time when the contract was awarded and made.

You cannot create a successful superior knowledge claim against the government based on what a contracting agency “should have known.”  While this concept can be used towards claims of unilateral or mutual mistake, bid verification, and unconscionability, there have been no cases where a superior knowledge claim was successful based on knowledge the government should have known.

What Damages are Recoverable?

In a 2010 case, the contractor American Ordinance was able to recover for the delays and associated additional costs that were due to the government’s wrongful withholding of superior knowledge.  The government had superior knowledge regarding problems it anticipated and accurately predicted as relating to the contract, yet repeatedly refused to share this information with the contractor, as a result. the contractor had a valid superior knowledge claim. 

Your Duty as a Contractor

Under the superior knowledge doctrine, even if the government did not disclose the information, the contractor can be found in a position where it should have sought out the information. 

For example, in an ASBCA hearing for its government breach of contract claim, the contractor argued that the government erroneously stated there was no historical information available regarding electrical consumption.  The board noted that the contractor actually knew historical information was available and its personnel even collected the information for their proposal team.  Even if the government made an erroneous statement or withheld the information, the contractor was aware of the information and thereby failed to meet all elements necessary for successful claims against the government.

When the superior knowledge doctrine is applied and met, a contractor can recover government breach of contract damages under a breach of contract theory.

If you think you may have a superior knowledge claim, call a government contract claims attorney at 1-866-601-5518.