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Minimizing Risks and Maximizing Success in Government Contracting
1.
Minimizing Risks and
Maximizing Success in Government Contracting Leonard R. Ruzicka, Jr. Stinson Morrison Hecker LLP © Stinson Morrison Hecker LLP, 2010
2.
Introduction
Your Company's long and profitable record in private construction does not translate into success in the government sector even for the same type of work There are already too many stories about successful contractors jumping from the private into the government sector to keep their staff intact and their employees busy with disastrous financial consequences © Stinson Morrison Hecker LLP, 2010
3.
This presentation will
focus on what you need to do to minimize your risks/maximize your success in performing government work © Stinson Morrison Hecker LLP, 2010
4.
I. Golden Rules
of Government Contracting Rule Number One: The contract is your client. A governmental representative should not/cannot give you anything that is not provided for in the contract. Stated simply horse trading is not allowed. © Stinson Morrison Hecker LLP, 2010
5.
Rule Number Two.
Know your contract. The natural follow on to Rule Number One is to understand your contract. A project manager who is not familiar with all the commercial and technical requirements of his contract is headed for trouble. © Stinson Morrison Hecker LLP, 2010
6.
Rule Number Three.
Provide timely and complete notices. Failure to provide timely and complete notices in government contracting is fatal to otherwise valid claims. Submit your notices, follow the requirements of the Contract Disputes Act, and do not expect anything other than treatment consistent with the contract. © Stinson Morrison Hecker LLP, 2010
7.
Rule Number Four.
Provide Complete, Open and Truthful information. If you intend to deviate in any manner from the plans and specifications, such deviation must be documented and approved by an authorized representative of the government agency. © Stinson Morrison Hecker LLP, 2010
8.
II. Laws and
Regulations Applicable to Government Contracting Federal Most federal contracts for construction are awarded as a result of a competitive bid process. In the Request for Proposals (“RFP”), the Federal Acquisition Regulations (FAR) Provisions that govern the performance of the work are either included or referenced in the contract that the bidder is expected to execute if the contract is awarded to that bidder. © Stinson Morrison Hecker LLP, 2010
9.
The relevant provisions
applying to a contract for construction are found in Section 52 of the FAR. Every contract with a federal agency for construction contains a number of FAR provisions. © Stinson Morrison Hecker LLP, 2010
10.
The following are
some of the key provisions in fixed price construction contracts: – Variation in Estimated Quantities (52.212-11) – Suspension of Work (52.212-12) – Differing Site Conditions (52.236-2) – Site Investigation (52.236-3) – Changes (52.243-1) – Default (52.249-10) – Liquidated Damages (52.212-5) – Disputes (52.233-1) © Stinson Morrison Hecker LLP, 2010
11.
There is a
substantial body of federal case law interpreting the FAR provisions as well as cases that are instructive as to the mutual obligations of the parties during the construction process, i.e. implied obligations which include: – Plans and specs are complete and accurate (Spearin Doctrine) – Cooperation/coordination of government in contractor’s efforts – Reasonable Access © Stinson Morrison Hecker LLP, 2010
12.
The following FAR
provisions are also important to the contracting process: – Contracting Officer’s Authority (33.210) – Contracting Officer’s Decision (33.211) – Truth in Negotiations 10 U.S.C. 2304 Civil liability for knowingly submitting false data in conjunction with a submission of certified cost or pricing data for a contract change or modification or a non-fixed price contract solicitation. © Stinson Morrison Hecker LLP, 2010
13.
– False Claims
Act 31 U.S.C. Section 3729 et seq. Civil liability for knowingly presenting a false claim to the U.S. Government ($10,000 plus treble the damages sustained by Government) – Prompt Payment Act U.S.C. Section 3901 et seq. – Miller Act 40 U.S.C. Section 270 © Stinson Morrison Hecker LLP, 2010
14.
When do the
FARS apply / some general rules: • FARS apply if you enter into a direct contract with a federal agency. • FARS apply to subcontractors/vendors at any level if there is some performance on the project site that is covered by a contract with a federal agency. © Stinson Morrison Hecker LLP, 2010
15.
• FARS apply
even if there is no performance on the project site if the contract with the government agency is incorporated by reference in your contract except for the Davis-Bacon requirements. There are some exceptions if working on a contiguous site/certain transportation activities. • When in doubt assume the FARS apply. © Stinson Morrison Hecker LLP, 2010
16.
STATE Most States agencies
that regularly do construction, e.g., state transportation departments, have standard specifications governing the performance of construction within that state for that agency. These State-standard specifications typically mirror the federal FAR provisions with some minor variations. However, there are a number of States that have deviated substantially from the FAR and have very harsh and risk shifting provisions. Some States have very little case law to interpret these provisions and therefore interpretations under federal or other state case law is necessary. © Stinson Morrison Hecker LLP, 2010
17.
• In addition
to these standard specifications, most States have enacted statutes that govern the construction process: • Prompt Pay 34.057 RSMo./Little Miller Acts 107.170 RSMo. • Prohibition on “no damage for delay” clauses 34.058 RSMo. • False Claims. See Cal. Govt. Code Section 12650 et seq. (similar to Federal FCA) © Stinson Morrison Hecker LLP, 2010