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Government Engineer Did Not Have Authority to Modify Contract

Posted on July 18th, 2015 by

In the title=”Appeal of Circle, LLC. ASBCA No. 58575 (July 1, 2015) (July 1, 2015)” href=”http://manfredonialaw.com/wp-content/uploads/2015/07/authoritycase.pdf”>Appeal of Circle, LLC. ASBCA No. 58575 (July 1, 2015), the Armed Services Board of Contract Appeals (“ASBCA”) denied a contractor’s claim for additional work on a canal improvement project in Southeast Louisiana. The contractor claimed that a Government Engineer imposed structural review criteria exceeding the specification requirements, which resulted in higher material and labor costs.

The Government did not issued a written change order changing the specification requirements. The contractor therefore argued that the contract was constructively changed.  To prove a constructive change, the ASBCA noted that the contractor must meet the following burden of proof:

To meet its burden to prove that it was subject to a constructive contract change on the basis it alleges, Circle must establish that:  (1) It was compelled by the government to perform work that was not required by the terms of the contract; (2) the person directing the change had contractual authority unilaterally to alter the contractor’s duties under the contract; (3) the contractor’s performance requirements were enlarged; and ( 4) the additional work was not volunteered. but was directed by a government of1icer. 25 Mountain Chief Management Services, Inc., ASBCA No. 58725, 15-1 BCA ¶35,831 at 175,201 (quoting Northrop Grumman Systems Corp. Space Systems Division, ASBCA No. 54774, 10-2 BCA i! 34,517 at 170,242-43

The ASBCA found that the Government Engineer who allegedly directed the use of a different specification standard did not have the authority to do so.  Of particular significance, was that the Engineer did not have authority to approve or reject submittals. Only the ACO could do so.  The ASBCA therefore denied the contractor’s claim for additional compensation.

This case is warning to contractors when dealing with Government Engineers.  Keep the Contracting Officer in the loop with all communications with Government engineers.  This way the Contracting Officer cannot claim surprise or ignorance of any directive that could result in additional work.  Additionally, Second, get approval from the Contracting Officer to perform change order work, even if it is simple as an email.  The theory of constructive change is still a well accepted government contract principle preventing the Government from directing additional work, but refusing to pay due to the lack of a written change order.

 

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