Federal government construction contractors often lose a considerable amount of money due when the contracting officer denies a claim under the FAR Changes Clause. The first concern is to know whether your claim is actually a compensable claim or not. For example, under FAR construction regulations, all excusable delays will be compensated. Other concerns that many contractors tend to disregard is the promptness in which they notify the contracting officer. The general rule is that as soon as you know of the change then you should immediately notify the contracting officer.
By properly assessing your claim before submission, you can avoid unnecessary litigation cost and increase your chances of actually getting paid by the agency.
Available Remedies Under FAR Changes Clause
At times, equitable adjustments are available to the contractor under the Changes Clause. In government construction contracts, companies are entitled to equitable adjustments only for changes ordered or as directed by a contracting officer FAR 52.243(a)-(d). Companies always want to make sure that only the contracting officer gives formal directions.
- Submitting a claim that does not meet the Contract Disputes Act not only causes the CO’s denial of the claim but also may warrant the Appeals Court Dismissing your case.
- Construction delay claims preparation can be tricky. Having the best approach will be a benefit because claims accepted by the government include a reasonable explanation of why the claim should be paid and enough detail that can help the CO make the decision to pay.
Compensable vs Excusable Delays
When there is a delay on a government project, it is important to distinguish a compensable delay from an excusable delay under FAR construction regulations. If the government caused or imposed the delay, then the delay may be compensable and both a monetary and a time extension would be due. M.E.S., Inc. (2012); Edge Const. Co. v. United States, 95 Fed. Cl. 407 (2010).
However, if the delay was not caused by the government, a contractor is only entitled to an excusable delay, whereby only a time extension is due. M.E.S., Inc. See also equitable subrogation and Miller Act claims.
In addition to the government’s liability under the FAR Change Order Clause, causation, and resulting injury must also be shown to justify a request for equitable adjustment. Servidone Constr. Corp. v. United States, 931 F.2d 860 (Fed. Cir. 1991). Under the FAR Change Order Clause, the delay must also be unreasonable for it to be compensable. George Sollitt Constr. Co. v. United States, 64 Fed. Cl. 229 (2005). Courts look a the facts of each case to decide whether or not the agency’s actions were unreasonable.
Federal Delay Costs Construction Contracts
The Excusable Delay Clause on a federal construction project means that the event causing the delay is not the contractor’s fault. For example, a delay often occurs when there is the unusually severe weather.
Courts have made it clear that while delay costs in construction contracts may be available for unusually severe weather, equitable adjustments are not available for such delays under the FAR Changes Clause for government construction projects. Edge Const. Co.
- The contractor must still provide evidence of the unusually severe conditions before they can be entitled to a time extension.
- An excusable delay may turn into a compensable delay via a constructive acceleration contract claim if the time extension was requested and then denied.
If the government insisted on a completion within a time frame that did not allow for the extension, then contractors may find themselves incurring more costs. As a result, the agency may be liable for damages. Fraser Const. v. United States, 384 F.3d 1354 (Fed. Cir. 2005).
At times, a contractor is unable to complete the project within the originally specified period. To be considered an excusable delay, once the government proves late completion, the contractor then must show that the delay was excusable. PCL Constr. Servs., Inc. v. United States, 53 Fed. Cl. 479 (2002).
One example of such delay is when the government delayed the project and the contractor missed the performance deadline.
FAR Changes Statute and Concurrent Construction Contract Delays
Under the FAR Changes Clause, even if there are compensable construction delays, a contractor typically may not recover if it is concurrent with an additional delay not caused by the government, such as weather or contractor delay. Fireman’s Fund Ins. Co. v. United States, 92 Fed. Cl. 598 (2010).
However, a contractor can still attempt to prove under the FAR change order clauses that the government-caused delay was distinct from others and should thus still be compensable. Mega Const. Co. v. United States, 29 Fed. Cl. 396 (1993). See information about cost escalation damages.
Under the construction claims and changes clause, for all alleged government construction delays, the contractor bears the burden of proof. This means that you should provide detailed records and evidence to support your position in the event of litigation.
If you think you may have delay costs construction contracts claims against the federal government under the FAR Changes Clause, or if there might be a delay claim against you, please call Watson & Associates, LLC to speak with any of our Federal Government Construction Attorneys at 1-866-601-5518 for a free consultation.