Negligent Estimate Response and Reply Briefs (AGT v. U.S. Army)

The blog’s attorney authors wrote here about a contractor, AGT, which we represent before the Armed Services Board of Contract Appeals for a negligent estimate claim (and summary judgment motion) against the U.S. Army.  Here are links to the summary judgment response and reply briefs submitted thus far:

Negligent Estimate Summary Judgment Motion, AGT v. US Army

The blog’s attorney-authors represent a contractor in a case against the U.S. Army. The case is in litigation before the Armed Services Board of Contract Appeals (ASBCA), ASBCA No. 56758, Under Contract No. DABM06-03-C-0009.

The contractor we represent, American General Trading & Contracting (AGT), provided laundry services for U.S. Army soldiers in Iraq.  In the legal case, AGT alleges, among other issues, that the Army included negligent estimates in the parties’ contract that severely overestimated the amount of clothing items to be laundered.  Once the contract was performed, AGT had laundered substantially fewer laundry items than the average-item number estimated in the contract.

We recently filed a motion for summary judgment with ASBCA, trying to win the negligent estimate claim and other issues for AGT.  The summary judgment brief is below.

Non-U.S. Contractor Dealing With a U.S.-Based Bully? There Are Rules (Laws) for the International Playground

English: A Bully Free Zone sign - School in Be...

If you are reading this blog, chances are that you may be part of a small- or mid-sized company that is not based in the U.S., and that you have contractual dealings with a large party– perhaps the United States Government (USG) or a large contractor– that is based in the United States.

If you run into a dispute with that large party, you may feel a bit, well… bullied, like the days of being a young child in the school play yard. Even if the U.S.-based bully does not insult you or your family, or take your lunch money (or your soccer ball), you still may feel the bully is pushing you around. For example, the USG or U.S.- based contractor may seem to be taking advantage of you based on its larger size and financial strength, its knowledge of U.S. laws and protocols, and so on.

However, much of a bully’s behavior is based on what you believe, as compared to the reality of the situation. In reality, you are stronger than you may think. There are several factors that can give you leverage against a U.S.-based bully, and equality on the international playground.

These leveraging factors can include:

  • Laws and legal rights that are available based on the language in your contract, and/or based on laws of the U.S. Federal Government or States.
  • A lawyer you hire to show the bully you are in a position of knowledge of your legal rights and the ability to pursue them.
  • The value of your goods, services and work, and the fact that treating you fairly (once you stand up for your legal rights) is in the best long-term interest of the USG or U.S.-based contractor interacting with you.

If you are dealing with a U.S.-based bully, its unfair conduct and even corruption can often be effectively addressed, even if this may not have been your experience with other companies or governments outside the United States.

If you want to know more about your contractor’s rights relating to a USG project, please feel free to contact us.

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Contract Dispute Brewing? Keep Documentation

If you are a contractor or subcontractor for a project relating to the U.S. Government (USG), and you encounter a dispute or think you may pursue a legal action, please know that the documentation you keep is critical.  Specifically, you should (1) save documents and electronic information related to the dispute; and (2) keep a journal of important events relating to the dispute.

Do not assume that other parties will keep important documents and produce them to you later, or will agree with your undocumented recollections of events, so you want to be sure you have your own documents to support your claim.

More about keeping documentation…

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Rely on Bad Numbers Estimated For a Contract? Consider Filing a “Negligent Estimate” Claim or Similar Legal Claim


Numbers (Photo credit: Jon Matthies)

Some contractors and subcontractors working on U.S. Government (USG) projects discover too late that numbers quoted in the solicitation or contract were bad estimates.  Worse, a contractor in that situation may have relied on those numbers being accurate, with this reliance turning out to cause the contractor to lose money.

For example, a contractor relying on contract numbers that are overestimated may over-order supplies, and overspend on personnel and facility costs, only to learn later that such extra expenses were wasted because the scope or volume of the contract turned out to be far less than the estimates originally given. Worst of all, a contractor or subcontractor in this position may learn that the other party (USG or prime contractor) had known, or had good reason to know, that the numbers were inaccurate from the first day.

If you find yourself in a bad-estimate situation like this, and you are a contractor on a USG project, you should know there are potential legal options, including a potential legal claim for having made a “negligent estimate” on your contract scope of work.

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Navigating the U.S. Legal System, If You are a USG Contractor (or Sub) Outside the U.S.

Compass Rose

Compass Rose (Photo credit: mwcarruthers)

Many companies that are located outside the United States, and that are contractors and subcontractors on United States Government (USG) projects, are unaware of the legal systems and rights that can apply to their contracts and interactions.  Working on project for the U.S. government does not necessarily mean, if problems come up, you can sue the U.S. government. Your complaint may instead be against the prime contractor company with whom you have a contract. There are a variety of factors that determine who you can sue, where and how, when your work is connected to the U.S. government or a U.S. company working overseas. This article gives a high-level overview of law and areas of the U.S. legal system that could apply to your matters.

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Is Your Prime Contractor Killing You? Courts in U.S. Considering Rights Of Those Harmed by Exposures to Toxic Pollution Overseas


GB.AFG.10.0283 (Photo credit: balazsgardi)

Civilian contractors and U.S. military personnel who worked in Iraq and Afghanistan have filed dozens of lawsuits in courts around the United States alleging prime contractor KBR negligently polluted their environment and subsequently caused them to suffer serious chronic and even deadly illnesses.

Open Burn Pit Toxic Pollution

Civilian contractors and U.S. military personnel who worked overseas are suing KBR for its alleged negligence burning trash in open air pits that spewed toxic substances into the air. These lawsuits claim the toxic fumes and ash coming from these pits later caused chronic or even deadly illnesses in those who lived and worked near these pits.

KBR had contracted with the U.S. government to handle the tons of waste generated at military bases in Iraq and Afghanistan. Burn pits were the popular method for managing waste especially in the early years of the two wars. According to reports, materials known to create toxic pollutants when burned were tossed into these pits, including batteries, plastics and jet fuel used as an accelerant. Dead animals, human body parts and medical waste were also part of the mix.

As the lawsuits wind their way through the judicial system, KBR in turn is seeking dismissal, arguing its status as a government contractor should enable it to enjoy the same immunity from lawsuits as the government.

Water Plant Toxic Substance Exposure

Meanwhile, KBR recently was found guilty of negligence in its reconstruction work at an oil field water plant, called Qarmat Ali, in 2003 and ordered to pay $85 million to 12 Oregon National Guard soldiers who were exposed to a toxic substance while guarding the site.

KBR was accused of allowing bags of sodium dichromate, a corrosive substance used to keep pipes at the water plant free of rust, to spread across the plant an into the air rather than be cleaned up. The soldiers said they have suffered chronic respiratory ailments dues to being exposed to the substance. They fear the exposure could cause cancer later.

KBR is expected to appeal the verdict. In addition, it has filed a lawsuit seeking to force the U.S. government to pay the soldiers’ damages and attorney fees. KBR argues an indemnification clause in its contract requires the government to pay for any third-party lawsuits.

Similar suits are pending in Texas and West Virginia.

Contractors’ Rights to Pursue Prime Contractor and Government Misconduct

Contractors should not be deterred in pursuing their rights and fighting against what they believe to be wrongful conduct.

If you are a subcontractor who has observed your prime contractor or the government putting your safety and health at risk, you may have rights and should seek competent legal advice.

For more information about the services we provide to government contractors, see our page here.

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USG Asking You Do More Work Per the Contract Than Originally Contemplated? Know Your Rights

Piles of work
Image by skuds via Flickr

When the government asks you to do more work than called for under your contract, do you know your options and rights?

Your options, it may seem, are: (1) to complain or refuse and risk angering your customer; or (2) to do the extra work.

Neither option is appealing.

Many USG contractors choose #2, and just do the extra work on the assumption they will earn favor with the USG for future contracts and/or they will recoup their losses later.

These assumptions could leave you broke, with no recourse to pursue the government for additional payment.

Before you do the work, you should insist on a change order and compensation for the extra cost and/or extension of time to fulfill the government’s request.

If you have already agreed to do the work with no change order, you may still have legal options under the Federal Acquisition Regulation (FAR) to pursue compensation for the extra work.

An attorney can assist with the change order process to ensure you receive appropriate compensation up front for any extra work.  Or if you have already done the work, an attorney can help identify ways you may be able to still obtain compensation.

Whether you try to handle these matters on your own or with an attorney, keep in mind that when the government asks you to do extra work, you should not passively agree and hope to get payment later.  You should consider taking action immediately, to preserve your right to seek additional compensation.

Often, contractors are afraid of acting, feeling they don’t want to rock the boat with the USG.  But the USG can be reasonable if you approach disputes in an appropriate manner.  (How you do approach disputes appropriately, you may ask?  We’ll post an article soon about that).

Going to Buy Local? Plan Ahead, Check if On Spec

Buy Fresh, Buy Local (lomo)
Image by stevegarfield via Flickr

A common problem for USG contractors is running into delays due to local suppliers’ goods being worse than anticipated, or even non-existent.

This post describes (1) planning to avoid such delays due to local problems; or (2) if it’s too late, effectively dealing with such delays.

Bidding Stage, and Failure to Research the Local Supply Market

At the bidding stage, a USG contractor obviously has a lot to think about. Among the issues, you of course will consider include what types of supplies you’d need to do the contractual work, how much such supplies typically cost, etc.

One issue, while simple however, may go unexamined by USG contractors during bidding: whether the local market can actually supply the goods you assume it can.

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Questions for Your New Attorney, Starting With #1: How Will I Get a Return on My Investment of Legal Fees?

question mark
Image via Wikipedia

Has your business avoided contacting an attorney because you’re concerned it could be a “waste” of money?

That’s an understandable concern. Sometimes, attorneys fees are not in fact a good investment.  Perhaps you’ve had a prior experience where you paid an attorney by the hour, and he spun his or her wheels without getting you anywhere.  That is, you did not get a favorable result: your main result was paying out legal fee money.

It’s true that in such instances, your money is poorly invested.  After all, you don’t pay an attorney just to do legal work.  You don’t pay an attorney for fancy briefs or documents.  You pay an attorney to improve your situation: to get a better financial result than you started with.

There are attorneys out there who understand this, and who strive to provide value to clients.

So how do you find an attorney who provides value?  It starts with the questions you ask.

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