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Wording That Releases Litigant's 'further Liability' Doesn't Nix Pass-through Claim

Friday, January 04, 2008 02:12 pm

Wording That Releases Litigant's 'further Liability' Doesn't Nix Pass-through Claim

The U.S. Civilian Board of Contract Appeals ruled that language releasing the prime contract holder's "further liability"for claims it's pursuing on behalf of a subcontractor doesn't prevent it from pursuing those claims with the government.

In 2001, the General Services Administration (GSA) awarded a contract to Acquest Government Holdings, OPP (Acquest) for the construction and lease of an outdoor facility housing animals at the National Wildlife Research Center (NWRC). Acquest subcontracted the facility's construction to Colorado Jaynes Construction Company (CJCC). Due to some alleged problems with design changes and delays on the GSA's part, Acquest decided to pursue claims against the government on behalf of CJCC.

Agreements spoke of pursuing claims but also of releasing liability

In 2003, Acquest and CJCC entered into a series of written agreements that all contained similar language referring to the claims against the GSA and holding Acquest harmless from these claims following their resolution. For example, there was a "Final Contract Change Order"that made reference to "issues claimed against the GSA/NWRC and the Government [...]

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