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Non-breaching Party Wins Damages Despite Claims That Payment Is Excessive

Monday, February 04, 2008 02:17 pm

Non-breaching Party Wins Damages Despite Claims That Payment Is Excessive

The U.S. Civilian Board of Contract Appeals ruled that a contractor's negligent performance, which constituted a contract breach, deprived it of a right to dictate the cost it must pay to rectify that breach.

In 2004, CAL, INC. (CAL) was contracted to perform a sewer and storm drain upgrade under an agreement with the Federal Bureau of Prisons (FBOP). When much of the work was not yet completed by early 2007, the parties agreed to a modified contract to close out CAL's obligations. CAL agreed to perform by a specific date specific tasks -- which included restoring the job site to its original conditions and furnishing the Government with as-built drawings and closed circuit television (CCTV) videotapes showing site work completed -- and to accept $647, 656 as full payment for the work. FBOP paid $500,000 immediately and held the balance until work completion.

When CAL inquired after the balance payment, the Government's contracting officer indicated that the Government found CAL's performance deficient, especially with regard to the drawings which were inaccurate, lacked critical information an [...]

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