Insights

In MVL USA, Inc. et al. v. United States, the United States Court of Federal Claims (“COFC”) held that the provisions of FAR 22.505, 52.222-33 and 52.222-34 (collectively, the “PLA mandate”), which required the use of project labor agreements (“PLAs”) on large-scale federal construction projects valued above or at a certain threshold, violated the Competition in Contracting Act (“CICA”). As we previously reported here, former-President Biden issued Executive Order 14063 in February 2022, instructing federal agencies to require construction contractors and subcontractors on projects valued at $35 million or more to “agree, for that project, to negotiate or become a party to” a PLA. A few months later, the FAR Council promulgated a final rule implementing the executive order in FAR 22.505, 52.222-33 and 52.222-34. 

In Fortis Industries, Inc., CBCA 7967 (Sept. 18, 2024), the Civilian Board of Contract Appeals (CBCA) denied in part the government’s motion for partial summary judgment on the issue of whether the contractor released its claims by signing a modification terminating the contract for convenience. During contract performance, the General Services Administration (GSA) imposed monthly deductions to contract payments as a response to certain performance issues. GSA later proposed to terminate the contract for convenience and sent a contract modification stating that all obligations under the contract were concluded except payment for work performed in June 2022. The contractor signed the modification but stated in its transmittal email that it was owed payment for services in May 2022 as well. 

In Konecranes Nuclear Equip. Servs. LLC, ASBCA, Nos. 62797, 62827 (May 7, 2024), the Armed Services Board of Contract Appeals (Board) awarded approximately $4.9 million in delay-related breach damages to Konecranes Nuclear Equipment Services (Konecranes) due to the Navy’s breach of its implied duty to not interfere on a commercial-item contract for the provision of 25-ton general purpose portal cranes.

On May 3, 2024, in Geospatial Technology Associates, LLC v. United States, COFC No. 16-346C, the U.S. Court of Federal Claims denied the government’s motion to dismiss for lack of jurisdiction and, alternatively, for summary judgment due to alleged inaccuracies in a copyright registration, holding that plaintiff Geospatial Technology Associates, LLC’s (“plaintiff” or “GTA”) patent and copyright infringement claims pursuant to 28 U.S.C. § 1498 raise issues that “must be addressed at trial.” This newest development follows GTA’s original March 2016 lawsuit against several government agencies—including the Department of the Army, the Department of the Air Force, and the National Geospatial-Intelligence Agency (“NGA”)—alleging patent and copyright infringement of the underlying software code of its product, “NINJA.pro.” 

AI remains a critical focus of both the federal government and industry, with multiple efforts in recent weeks to address governance of the development and use of AI in the United States.  On February 26, 2024, a U.S. Department of State-commissioned report, titled “Defense in Depth: An Action Plan to Increase the Safety and Security of Advanced AI” (Action Plan), proposed multiple U.S. Government and partner nation lines of effort to address growing national security risks posed by rapidly expanding AI capabilities, including the expectation of achieving artificial general intelligence (AGI).  Just days later, on March 5, 2024, House Chairman Comer and Ranking Member Raskin introduced the Federal AI Governance and Transparency Act.  This bipartisan bill would focus government resources on increasing transparency, oversight, and responsible use of federal AI systems and centrally codifying federal governance of agency AI systems.  Additionally, on March 28, 2024 the Office of Management and Budget released the final guidance on Memorandum M-24-10, Advancing Governance, Innovation, and Risk Management for Agency Use of AI as we address here.

In Aviation Training Consulting, LLC, ASBCA No. 63634 (Jan. 11, 2024), the Armed Services Board of Contract Appeals (ASBCA) confirmed that a contractor’s properly asserted claim for relief under Section 3610 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act is a claim under the Contract Disputes Act (CDA) and denied the Air Force’s motion to dismiss for lack of jurisdiction.

On December 19, 2023, the United States District Court for the District of Utah denied summary judgment in part to Vanderlande Industries (Vanderlande), holding that a reasonable jury could find that Vanderlande negligently misrepresented the viability of subcontractor Ludvik Electric Co.’s (Ludvik) pass-through claims during the parties’ settlement negotiations over the claims. 

On December 20, 2023, the Armed Services Board of Contract Appeals (Board) denied the government’s motion to dismiss a prime contractor’s pandemic-related claims filed on behalf of its subcontractors.  The Board rejected the government’s arguments that the claims failed to state any claims for relief that could be granted, were barred by the affirmative defense of sovereign acts, and failed to provide separate sums certain for purported sub-claims.   

On November 2, 2023, the Department of Defense (DoD) released its 2023 DoD Data, Analytics, and Artificial Intelligence Adoption Strategy (2023 Strategy), and an accompanying Fact Sheet, to accelerate the adoption of analytics, data, and artificial intelligence (AI) technologies that will enable better and faster decision-making at all levels and across the DoD.  The 2023 Strategy builds upon and supersedes the DoD’s first AI Strategy published in 2019, reported on here, and the revised Data Strategy published in 2020 to continue the DoD’s digital transformation, unifying previous guidance and enabling stronger alignment and synchronization to scale advanced capabilities for use across the DoD. 

On August 25, 2023, in ECC CENTCOM Constructors, LLC v. United States, COFC No. 21-1169, the U.S. Court of Federal Claims (“the Court” or “COFC”) barred ECC CENTCOM Constructors, LLC (“ECC”) from asserting claims that should have been asserted before the Armed Services Board of Contract Appeals (“ASBCA”) citing the doctrine of claim preclusion. 

On June 29, 2023, the Government Accountability Office (GAO) released its second report[1] on Department of Defense (DoD) artificial intelligence (AI) acquisition efforts.  This latest report examines the DoD’s lack of formal AI acquisition guidance and identifies key principles from the private sector that can be applied to the DoD’s AI acquisition efforts. 

On April 6, 2023, the Civilian Board of Contract Appeals (CBCA), in BES Design/Build, LLC, CBCA 7585, dismissed a contractor’s appeal for lack of jurisdiction, finding the appeal untimely, and underscoring that a contractor cannot reset the 90-day appeal window by resubmitting its original claim.

On March 22, 2023, the Department of Defense (DoD) issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to allow a procuring contracting officer (PCO) to delegate the authority to the contract administration office (CAO) to negotiate and settle direct costs questioned in an indirect cost rate proposal audit.  After the delegation, the PCO must provide the CAO access to all supporting documentation related to questioned direct costs within 30 days.  After settling the questioned direct costs, the CAO shares the settlement results with the procuring contracting office, which then makes any necessary adjustments to affected contracts.  The delegation authority does not apply to classified contracts.

In General Atomics Aeronautical Systems, Inc., ASBCA Nos. 61633, 61731 (Feb. 8, 2023), released March 14, 2023, the Armed Services Board of Contract Appeals (ASBCA) considered, but declined to answer, the existential question of whether intracompany lease payments are “costs.”  The ASBCA denied the Government’s motion for summary judgment, finding that material facts about the contractor’s intracompany lease payments remained in dispute.  Further, the ASBCA held that because the Government failed to respond to the contractor’s affirmative defense that the Government’s claim was barred by the statute of limitations, the Government was not entitled to summary judgment.