Have you ever thought that the Government's action or inaction caused your firm to lose out on opportunities? If so, you had better be prepared to show a strong nexus between the actions of the Government and the consequential damages.
In 2010, the Air Force at Eielson Air Force Base near Fairbanks Alaska contracted with Shaw Building Maintenance (Shaw) for janitorial services. The contract ended in 2013.
Nearly four years later, Shaw presented a certified claim to the contracting officer consisting of:
- $9,045 in equipment losses
- $2,010 in Prompt Payment Act interest
- $408,725 for punitive damages, and
- $1,882,002 for "missed opportunities" from contracts not obtained from third-parties, allegedly because of the Government administration of the janitorial service contract.
The Government denied the claim so Shaw appealed to the ASBCA (Armed Services Board of Contract Appeals).
The Government moved for dismissal of the punitive damages and missed opportunities claims.
Regarding the "missed opportunities" claim, the Board wrote:
... the attenuation of the connection between the government's administration of the contract and appellant's claim, essentially for monies allegedly lost under contracts that appellant did not enter with third parties, is one for a type of consequential damages that are too remote and speculative to be recovered against the government.Consequently, the $1.9 million "missed opportunities" claim was dismissed.
Concerning the punitive damages part of the claim, the Board wrote that it had no authority to award punitive damages. Awarding punitive damages was not part of its charter.
Consequently, the $409 thousand punitive damages claim was dismissed.
That left about $11 thousand remaining on the claim which hopefully the parties can settle on without spending too much time, effort, and money.
The Board decision can be downloaded here.
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