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Loss Of Future Profits Claim Too Remote And Speculative

Tuesday, May 01, 2012 04:42 am



Muhtesem Co., 2012 ASBCA No. 57538 (Feb. 7, 2012)

A contractor took out loans so that it could (tardily) pay its subs, but the snowball consequences of that loan were not the government's fault--even though it too was late with its final payment.

Muhtesem Company (Muhtesem) sought $149,000 in damages in connection with a $700,000 federal government project to build a school in Iraq. The damages, allegedly attributable to the government's late final payment, consisted of loan interest, reputation loss, and loss of future profits.

First, Muhtesem claimed that the government's late payment forced it to take out loans to pay its subcontractors. However, the loans were obtained before Muhtesem submitted the invoice in question, and the loan amount was three times that of the invoice. Regardless, the Board agreed with the government that loan interest was not recoverable because of the "no inte [...]

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