ConstructionPro Week, Volume: 3 - Issue: 51 - 12/19/2014

Are Federal Agencies Abusing the Discovery Process?

By Bruce Jervis

 

Most contractors on federal construction projects are at a significant disadvantage in disputes with the agencies with which they do business. The federal government has such a vast array of personnel and resources that only the largest private companies can hold their own.

 

Statutes such as the Contract Disputes Act and the Equal Access to Justice Act level the field to a certain extent. However, one area where the disparity of power remains evident is the “discovery process” – the pre-hearing disclosure of information and documents.

 

In a recent case, the U.S. Department of Veterans Affairs ignored contractor document requests for months, ignored deadlines established by the Civilian Board of Contract Appeals, and otherwise engaged in what the board characterized as an “egregious abuse” of the discovery process. But, unlike the federal courts, the board lacked authority to impose financial penalties. It could only order access to the documents by an appointed third party.

 

The U.S. Court of Federal Claims, another forum for appealing a contracting officer’s denial of a claim, does have authority to impose financial penalties. However, this is a more costly forum than the federal administrative boards, which hear the large majority of contract appeals. What has been your experience? Are federal agencies abusing the discovery process with impunity? I welcome your comments.

 

COMMENTS

As a small, SBA 8(a) graduate, general contractor, I was forced to engage in two separate contract payment dispute claims against the U.S. Army Corps of Engineers (Ft. Worth & Albuquerque Districts). Both contract claim processes were appealed to the ASBCA; both appeal processes were settled in a formal mediation with an ASBCA judge presiding.

The irony of both settlements is the Corps of Engineers ended up paying 100% of the disputed remaining contract balance, albeit three (3) years after the fact, with no assessed liquidated damages, but I was unable to collect any of my claim expenses due the natural of the settlement and I simply could not afford to continue the battle for another two (2) years.

The point being, the Corps of Engineers knows they have unlimited time and funding to out last any small business. The contract claim appeals process is, in effect, nothing more than another "window dressing", self-serving layer of federal administration, that could care less about equity, merit or the rule of law in contractor claims. What motivation is there to do so? There is no downside to the government, win or lose. Without individual accountability or real downside jeopardy, why try or even make an effort?
Posted by: Phil Howry - Friday, December 19, 2014 11:43 AM


 









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