In the latest issue of The Wright Toolbox:
It Ain’t Over Till It’s Over
by Jason Potter
Sometimes getting it right takes several tries. Manekin contracted with the Maryland Department of General Services (DGS) to build barracks and a garage for the Maryland State Police. Throughout the project, Manekin submitted various proposed change orders (PCOs) seeking additional time and compensation, including PCO 68 which sought both. PCO 68 was subsequently discussed at various project meetings, but recorded in the PCO Log as “void” (as opposed to “rejected” or “no charge” as listed for other PCOs).
At the conclusion of the project, Manekin submitted a Request for Equitable Adjustment (REA), again requesting additional time and compensation based on the same factors and conditions set forth in PCO 68. DGS rejected the REA, and Manekin filed a notice of claim with the procurement officer (PO). The PO ultimately denied the claim as untimely. The PO found that Manekin did not submit its claim within 30 days after it “[knew] or should have known of the basis for a claim”, as required by its contract and by COMAR 21.07.02.05-1D. Manekin appealed to the denial of the claim to the Maryland Board of Contract Appeals (BCA). During the evidentiary portion of the hearing, the BCA granted DGS’ then-pending motion for summary disposition, holding that Manekin knew or should have known of its claim when it submitted PCO 68, and, therefore the claim was untimely. On appeal from the BCA, the Circuit Court for Howard County affirmed the BCA summary disposition against Manekin, holding that substantial evidence existed to support the PO’s and BCA’s decision that Manekin’s claim was untimely.
Not giving up, Manekin appealed the Circuit Court ruling to the Maryland Court of Special Appeals. The Appellate Court reversed the lower court. It held that the 30 day window for submitting a claim began when DGS denied the REA, because that was the first time DGS disputed Manekin’s right to payment for PCO 68. The Court distinguished prior BCA cases in which a claimant had actual notice of the agency’s rejection of a PCO, which triggered the running of the 30 day window, which did not occur here. The Court also found that the BCA engaged in improper factfinding by determining that Manekin should have known of the basis of its claim when DGS designated the claim as “void” in the PCO Log, despite the fact that subsequent progress meeting minutes indicated that the parties had agreed to leave open the issue of additional time and compensation, and despite the fact that other PCO claims were designated as “rejected” and not “void.”
The Court of Special Appeals also found that the Circuit Court erred, because the grant of a summary disposition by the BCA, like the grant of summary judgment in Circuit Court, is a legal matter on which a reviewing court does not defer to the PO. Therefore, the “substantial evidence” test for factual determinations on which the court relied was inapplicable and the Circuit Court erred in its deference to the PO.
Manekin lost with the PO, lost at the BCS, lost at the Circuit Court, but continued to stick with its case and finally was vindicated at the Court of Special Appeals. Sometimes, it ain’t over until it’s over!
Department Of Labor Discretionary Suspensions And Debarments Just Became A Whole Lot Easier And Faster – That Is Probably Not A Good Thing!
The U.S. Department of Labor announced a new pilot program for discretionary suspensions and debarments, ostensibly to ensure accountability and protect the federal government from doing business with those who engage in “inappropriate or illegal conduct.” Discretionary suspensions and debarments make individuals or organizations ineligible for federal contracting and transactions with the federal government typically for up to 12 months for a suspension and up to three years for a debarment.
The DOL stated that the pilot program’s goal is to reduce the processing time on discretionary suspension and debarment actions from months to days through increased efficiency and sharing of information based on indictments or convictions. The pilot program involves the Department’s Office of Inspector General (OIG) including additional information in its referrals to the Office of the Assistant Secretary for Administration and Management (OASAM) that will allow decisions to be made quickly.
The U.S. Secretary of Labor, Alexander Acosta, stated “launching this pilot program will help to protect resources from fraud, waste, and abuse – faster than ever before. . . Taxpayer resources will be better protected by streamlining the process and improving the use of information from indictments and convictions that result from the work of the Office of Inspector General. . . . this pilot program is a clear reminder that the Department requires those conducting business with the federal government to be responsible and act with honesty and integrity.”
The pilot program will be in effect from April 2019 to April 2020. The program is a reminder to federal contractors that compliance and thorough reviews of labor and employment practices, including hiring, discrimination, harassment and wage payment procedures is critical. Suspensions and debarments go far beyond mere money damages and could make or break a company. Let WCS help you with your company’s compliance.
To browse past issues, visit The Wright Toolbox page.