Avoiding Mistakes In a Breach of Contract Defense based on Impossibility or Commercial ImpracticabilityTo get a government contract claim excused from performance due to defense to breach of contract of impossibility or commercial impracticability, you must inform the contracting officer early in the process.

You cannot wait until the case is at the appeals level to bring it up.  Failure to follow this simple rule will cause the Court to dismiss the case for lack of jurisdiction.

Contractor Impossibility Defense on Federal Projects

According to the Federal Circuit Court of Appeals, the Impossibility” of performance exists “when it is objectively determined that no contractor could perform the work.” Conner Bros. Const. Co., Inc. v. United States, 65 Fed. Cl. 657, 686 (2005) (citations omitted).

If on appeal, your lawyer asserts  “impossibility” as a breach of contract defense, a grave problem can occur because your inability to perform may not necessarily be impossible. Instead, it may constitute a claim of commercial impracticality, not impossibility. 

On the other hand, and as is often the case in a government contract claims disputes, construction specifications, and defects in plans prepared by the government will not make you responsible for the consequences of defects in those plans and specifications. The appropriate remedy would be to allow the impossibility defense of performance is impracticable because of excessive and unreasonable difficulty or expense.

Commercial Impracticability as  a Breach of Contract Defense

what is commercial impracticability? In government procurement,  the breach of contract defense of impracticability occurs if there is a type of constructive change to the contract; because a commercially impracticable contract imposes substantial unforeseen costs on the contractor. In that case,  a contractor is entitled to an equitable adjustment.

Watch for Impossibility of Performance Issues to Increased Expense

The U.S. Supreme Court has long ruled that one is not excused from performance merely because performance becomes more expensive than originally contemplated. Mere unforeseen difficulty or expense does not constitute impossibility of performance and is not ordinarily an excuse. (Transatlantic Financing Corp. v. U.S. 363 F.2d 312 (1966.)

As often the case in a federal construction contract, when your company agrees to perform a project at a firm fixed price, the government will deny claims because of additional compensation or because unforeseen difficulties are encountered. This is why submitting bidding prices in a lowest priced technically acceptable LPTA Contract can be risky.

Failure to Bring the Issue up at the Claims Submission Stage Strips Jurisdiction of a Court on Appeal

The Court of Appeals has ruled that a contractor could not assert a defense of excusable delay against the government’s claim for liquidated damages where the contractor failed to present that claim to the contracting officer.  See Appeal of Maropakis 609 F.3d at 1331.

The Court rejected the contractor’s argument for an exception to the Contract Disputes Act notice requirement when a contractor’s claim for contract modification is made in defense to a government claim.

The Court also held that “a contractor seeking an adjustment of contract terms must meet the jurisdictional requirements and procedural prerequisites of the Contract Disputes Act, whether asserting the claim against the government as a claim against the federal government or as a defense to an agency’s action. See also Raytheon Co. v. United States, 747 F.3d at 1354.

Failure to follow the above rule will alert the Agency to file a summary judgment motion that will ultimately get your appeal dismissed.

Provide Evidence To Support Your Defense

As a practical matter, each claim you submit to the Agency should be supported with documentation, facts, and sometimes affidavits.  When submitting a claim to the federal government, most contractors simply focus on providing documentation for financial claims. This is not enough.

  • Providing detailed facts such as dates and times are always helpful;
  • If you are trying to show impossibility of performance or commercial law impracticality as a contract defense, you must also make you position clean and unavailable to challenge
  • You cannot raise these issues and breach of contract defenses at the appeal stage for the first time.

Speak to an Attorney & Get a Free Initial Consultation

For additional information or immediate help with the government contract impossibility defense or impracticability as a breach of contract defense, contact our government contracts attorneys. Call 1-866-601-5518.

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