business contract being signed

Company Not Compensated for Work Outside Federal Contract

Baistar Mechanical, Inc., won a five-year snow removal and maintenance contract at the Armed Forces Retirement Home’s property in Washington, D.C. in 2011. The property provides a home for several hundred retired military members.

While performing the contract, the Contracting Officer’s Representative contacted the firm and asked for assistance in the design and construction of a boiler plant at the facility. Baistar Mechanical, Inc., offered some assistance. The company was not awarded the construction contract to build the plant and was never paid for any of the assistance it provided on the boiler plant and other projects at the facility. This was despite the fact that the work was requested by Contracting Officer’s Representative.

The government terminated the contract with Baistar Mechanical, Inc. The company filed a series of claims and sought payment for the work it performed. The government rejected the claims, and Baistar Mechanical, Inc. filed an appeal with the U.S. Court of Federal Claims.

The contract specifically states: any additional service performed by the company “will be done at the financial risk of the contractor.” That led the court to reject the claim.

The court wrote that the “contracting officer may have delegated management authority to its representatives, but that delegation was limited by the contract. The contract’s explicit terms gave the contracting officer exclusive authority to order out-of-scope work, and barred the representatives from implied authority to do the same. The fact that the representatives allegedly acted as if they had authority, or even believed they had authority, is insufficient.”

The ruling shows that government contractors must pay special attention to the terms of the contract and be careful not to perform work outside of the contract.

Source

KDuncan & Company is dedicated to providing knowledge and support for small government contractors about concerns regarding government contracting. For questions on areas such as as cost proposals, accounting systems, DCAA compliance, and incurred cost audits, reach out to KDuncan & Company.

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