A recent Court of Federal Claims decision serves as a reminder to contractors of the perils of firm-fixed-price contracts in unpredictable environments.The case, Agility Defense & Government Services, Inc. v. United States, involved an “unusually high-risk” firm-fixed-price requirements contract between Agility Defense & Government Services (“Agility”) and the Defense Reutilization Management Services (“DRMS”). Under that contract, Agility agreed to dispose of all surplus military property at six locations in Afghanistan, Kuwait, and Iraq, regardless of quantity. In exchange, Agility received $45.2 million and the right to the proceeds of sales of scrap material from the surplus property. In the solicitation process, DRMS provided offerors historical workload information for each of the six locations, but declined to provide workload projections or estimates. From the start, the actual workload at almost every location was much greater than the historical baseline. Agility sought to recover $6.9 million in additional labor costs through an equitable adjustment on three different theories: (1) that a constructive change occurred; (2) that the historical information provided to offerors constituted a “negligent estimate;” and (3) that DRMS breached the warranty of reasonable accuracy in the solicitation phase.The court rejected all three arguments. Agility’s constructive change, negligent estimate, and breach of… Read full this story
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COFC: Contractor Stuck With Bill For Substantially Higher Than Expected Costs Under Firm-Fixed Price Requirements Contract have 334 words, post on www.natlawreview.com at August 20, 2015. This is cached page on Law Breaking News. If you want remove this page, please contact us.