What constitutes changes. A constructive change to a contract occurs when requirements are charged without a formal "order" to do so (either an informal order, direction or by the fault of the government). The Appeals Court in Taratoros v. General Svcs. Admin. GSBCA 15083 ruled that a directive by the government to install sprinklers in the attic of a building was a constructive change, finding the contract did not require it. Sometimes a contract may be accelerated by certain directives or constructive orders. A maintenance service contractor claimed it was entitled to extra cost because the government constructively accelerated performance by directing it to complete all work to clear brush from a stream channel by the end of the fiscal year. The board rejected its claim stating it was able to complete the contracted work before the end of the year citing the fact it was seeking more work during the period (SAWADI Corp. ASBCA 53073).

Unabsorbed overhead. In Charles G. Williams Constr., Inc. v. White the appeals court vacated a board decision where the board relied exclusively on a DCAA finding to reject a contractor’s claim for unabsorbed overhead, holding the board must independently determine entitlement to Eichleay damages (the established method of computing unabsorbed overhead especially when a contractor has been on "standby" status due to a government caused delay and unable to take on other work during the period to "absorb" the overhead). Though the Board agreed in another case the government unreasonably suspended work of renovating 24 housing units by failing to release the last 12 units, it denied the contractor’s claim for unabsorbed overhead on the grounds the contractor was never on standby because it performed half the work on the last 12 units during the suspension period (Carousel Dev. Inc., ASBCA 50719). The Board agreed the contractor was entitled to Eichleay overhead even though the delay had not caused the contractor to wholly suspend all work since the Eichleay formula criteria was met because the contractor’s work was significantly interrupted (Roy McGinnis & Co. ASBCA 49867).

Delay in meeting schedules. In evaluating a contractor’s claim that government action prevented it from a planned early completion, the board asserted the contractor could not demonstrate the admitted government problems caused the delay because it never submitted a revised schedule for early completion that could be compared to actual work (Kaco Contracting Co. ASBCA 44937). The Court determined a total time approach attributing all the difference between the original and actual completion dates to the government caused delays was "of virtually no value" in meeting the contractor’s burden of proof because it mistakenly assumes the government is responsible for all delays (Morganit Nat’l, Inc. v. US).

Equitable Adjustments. The contractor, not the government, has the burden of proving the amount by which the change increased its cost of performing the contract (Sauer Inc. ASBCA 39605). The risk of increased costs from differing site conditions usually falls on the government while bad weather does not. When the contractor claimed "rolling waves" constituted a differing site condition entitling it to an equitable adjustment under the "Differing Site Conditions" clause the board found the waves were caused by bad weather not unknown physical conditions entitling it not to an equitable adjustment but to a time extension for delays caused by unusual severe weather (Luke Bros. Inc. ASBCA 52887). A significant change in inspection procedures can lead to increased costs where a subcontractor was entitled to an equitable adjustment where systematic changes in inspection procedures unreasonably disrupted its performance (Grumman Aerospace Corp. ASBCA 50090). Also, the board held a contractor who paid out unused sick leave in its first year option period under a new collective bargaining agreement (CBA) for accrued costs in its base year was entitled to an equitable adjustment because the base year contract was covered by a different CBA (Penn Enters., Inc. ASBCA 52234).

Termination for convenience (T for C). The Board held the government’s failure to order the minimum estimated quantity under an ID/IQ contract should not be considered a T for C and should not be limited to lost profit on the unordered quantity. Rather, the contractor was entitled to be paid the difference between contract revenues and minimum guaranteed payment where the contractor was required to maintain capability up to the maximum level of service (Mid Eastern Indus. Inc. ASBCA 53016). The equitable adjustment arising out of a partial termination is for the increased cost of continued work due to the partial termination, not for claimed increased costs that would have been increased in the absence of the termination (Aeronica Inc. ASBCA 51927).

Termination settlement costs. In determining whether a termination settlement proposal is a claim (which disallows preparation costs) or contract administration (which allows such costs), the Board stated it is now well established that a contractor’s settlement proposal does not "ripen" into a claim until the parties have reached an "impasse", creasing a dispute (Voices R Us, Inc. ASBCA 51565). In General Dynamics (ASBCA 52283), a subcontractor purchased special tooling and test equipment (STE) for its subcontract and when it was terminated the price and subcontract settled the $2.5 million of unamortized costs for $500,000. The government refused to reimburse the prime contractor but the Board ruled its was entitled to it because (1) the parties have the discretion under a T for C to reconcile basic fairness with strict application of accounting principles (Codex Corp. v. US) (2) recovery for loss of useful value of STE is not limited to the amount included in the price (American Elec. ASBCA 16635) and (3) the settlement was less than the amount the subcontractor would be entitled to under litigation. A contractor has no reasonable expectation to recover continuing home office overhead expenses under a termination but it may recover standby or idle equipment costs following a termination (Walsky Constr. Co. ASBCA 52772).

Claim Requirements. Though the requirement to submit a claim to the CO is strict (Sprint Communications GSBCA 15139) submittal of a claim elsewhere – e.g users of a GSA scheduled prices – with copies to the GSA contracting officer and attempts to engage in dialog with him is sufficient for a valid claim (CACI Inc. v. Gen Svcs. Admin.). Though contractor expressed the intention to submit an invoice at a later date for unabsorbed overhead, it submitted several invoices when work was complete and the government rejected them asserting the invoices did not meet the requirement for a claim to request a "sum certain" amount. The board ruled the fact a contractor has not completed all work under a contract mod or change does not mean it is prohibited from submitting one or more claims for portions of work that have been completed (MDP Constr. Inc. ASBCA 52769). The Board ruled a claim stating damages were "in excess of $5,000,000" is not a valid claim because claims for "in excess of" a specified amount does not satisfy the requirement for a "sum certain" (Goodwin Equip. Inc. ASBCA 53462). Proper certification is required only for claims exceeding $100,000. The board ruled that individual claims under $100,000 where the total of all claims exceeded $100,000 do not meet the threshold requirement and hence do not require certification (Velia Flying House v. US).

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