Thursday, July 12, 2018

Government Caused Delay - Contractor Inflates its Equitable Adjustment Proposal

A contractor for the Department of Veterans Affairs filed an appeal with the Civilian Board of Contract Appeals (CBCA) for additional costs incurred as a result of extending the contract by five days because of altered and added work.

The amount of the claim was only $5,633 and included indirect costs that the contractor tried to claim as direct and some other items that were largely unsupported. The Government calculated that the contractor was only due $603, an amount the CBCA ultimately awarded the contractor.

 The contract stated that overhead and fee percentages include field and office supervisors and assistants. The contractor claimed costs for such individuals as direct costs. The contractor also claimed cost for a portable toilet that it could not support and cost for a forklift and fuel which it was unable to demonstrate a direct relationship to the work required by the contract.

The CBCA was rather critical of the contractor's approach.
The contractor's broad-brush approach, and failure to point to specific tasks or related dollars, results in an unsupported position. Impacted work may, not must, result in a change in value. Not all remaining work is necessarily impacted by a change order because non-change order work perhaps is performed as originally scheduled, or is performed earlier or later with no change in value or cost to the contractor
Contract auditors are guided to ensure that costs included in equitable adjustment claims have a strong nexus to the event giving rise to the equitable adjustment proposal or claim. It is the auditors concern that some contractors use the equitable adjustment process to "get healthy" by including costs that bear no relationship to the delay or disruption. This particular claim fell well short of the threshold for an audit so it had to have been some woke person in the contract administration department that figured out what was going on.

You can read the entire CBCA decision here.

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