08/15/2022

Editor's Notes

The submission of a proper “claim” under a federal construction contract is not as straightforward as one might think. The Contract Disputes Act stipulates the basic components. These requirements have been fleshed out in federal regulations and numerous opinions of the federal courts. The submission of a complete, proper claim is essential. It starts the clock running on recovery of interest and forces the government to make a decision, overtly or through inaction, which can be appealed.

 

The Court of Appeals for the Federal Circuit recently issued an opinion that addressed several important aspects of claims administration. When does a mere “request for an equitable adjustment” ripen into a valid claim? Must a request for a final decision on the claim be stated explicitly or may it be inferred from the circumstances? Is a contractor’s expression of willingness to continue negotiations inconsistent with a demand for a final decision? The court’s conclusions are instructive.

 

The second case in this issue involves the enforceability of a one-year time limit on claims against a performance bond. The Virginia Supreme Court ruled that due to the wording of the bond, which included a “saving provision,” the limitation clause was enforceable regardless of whether the law of Virginia or the law of Maryland was applied.

 

The third case addresses the forfeiture of bid security on a public contract bid that is withdrawn after bid opening but before announcement of contract award. Under North Carolina law, is the bidder entitled to withdraw? Is the bidder permitted to withdraw but forced to forfeit its bid bond/security? What if the bidder was not in line for contract award in any event? May the bidder then withdraw without forfeiture?

 

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