Government Contractor Defense

Government contractor defenses are commonplace during the performance of your contract. When the government makes an adverse decision against you, the next thing that a defense lawyer should do is to assess the facts, see if you have any legal defenses to the allegations, then attempt to negotiate the issues before the agency.

Only when the contracting officer fails to amicably resolve the issue should you have to defend the matter in court.

Terminations for Default: A government contractor defense often arises in the case where the government alleges that you did not comply with the terms and conditions of the contract. The result is a termination for default.

As compared to commercial contracting, there are specific court decisions that address your potential defenses. For example, the agency may have created a situation where it would have become difficult for you to perform. As such, any cure notice given would be meaningless.

When you face a threat of termination for default, you may want to consider contacting a defense lawyer immediately. This can prevent further facts that could develop but not in your favor. You also want to advise him or her about the facts leading up to the adverse action. The government simply cannot create a situation that puts the contractor at risk of non-performance.

Available Government Contractor Defenses

Some of the common defenses available to you as a contractor could include:

  • There is a mistake. 
  • Estoppel. 
  • Impossibility of Performance
  • The government’s  action substantially contributed  the situation  

Another common trap faced with government contractor defense is when it is brought up for the first time in the appeals court.  For example, if you assert a set-off of damages sought by a federal agency, you should have brought the issue at the agency level.  This is but one hurdle that a defense lawyer could face. See M. Maropakis Carpentry, Inc. v. United States, _____ F.3d _____, No. 2009-5024, (Fed. Cir. June 17, 2010).

False Claims Act Government Contract Defenses: Yet another situation where government contractors may have to get in to a defensive posture is when the agency alleges a false claim violation.

A person does not violate the False Claims Act by submitting a false claim to the government; to violate the FCA a person must have submitted, or caused the submission of, the false claim (or made a false statement or record) with knowledge of the falsity. In § 3729(b)(1), knowledge of false information is defined as being (1) actual knowledge, (2) deliberate ignorance of the truth or falsity of the information, or (3) reckless disregard of the truth or falsity of the information.

As you can see, government contract defenses to these types of allegations are very fact-specific. As attorneys, we always suggest that you keep sound documentation as you perform your project because as time accrues, you may not always remember the fine details that help you to develop a viable defense.

Can The Government use Its Sovereign Immunity Defense Against Contractors?

The Tucker Act, initially enacted in 1887, added to the jurisdiction of the Court of Claims by formally waiving the government’s sovereign immunity for claims “founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States.”

The Supreme Court has explicitly confirmed that “by giving the Court of Claims jurisdiction over specified types of claims against the United States,” the Tucker Act “constitutes a waiver of sovereign immunity with respect to those claims.” This is a hurdle that government contract defense lawyers must watch out for.

The Tucker Act does not explicitly identify the substantive law that governs a contracts-based claim. While claims founded upon a particular “money-mandating” statute refer to the statute itself as providing the governing substantive law, when a claim is founded simply upon contract, the source of substantive law is the federal common law of contracts.

If you are a federal government contractor facing a potential, or actual, adverse action from the agency, be aware that you do have legal rights that includes defenses. Consider getting help from a government contractor defense lawyer. Call 1-866-601-5518.

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