The recent decision by the Armed Services Board of Contract Appeals (ASBCA or Board) in Appeal of StructSure Projects, Inc. has unveiled a potential new avenue for federal contractors to recover additional costs related to the COVID-19 pandemic. This comes as relief for many federal contractors who have been grappling with increased expenses in the wake of the global health crisis, with limited recourse for recouping these additional costs.
In their appeal, StructSure Projects, Inc. was granted additional costs incurred due to COVID-19 under a fixed-price task order, as outlined in the case ASBCA No. 62927 (Aug. 8, 2023). Traditionally, federal contractors performing tasks under this type of order have faced significant challenges in recovering additional costs.
Key takeaways from the case include:
- The ASBCA recognizes the reality of additional costs due to unforeseen circumstances such as a global pandemic, providing a precedent for contractors facing similar issues.
- Increased costs arising from performance-related adjustments due to COVID-19 could be compensable under the specific provisions of existing contracts. Contractors should review their contracts for such provisions.
Although this decision is a positive development for federal contractors, it does not guarantee a straightforward recovery process for all COVID-19 related costs. Legal challenges may still persist, and navigating these hurdles will require an intricate understanding of the law and individual contract terms.
The ASBCA’s decision reinforces the need for legal professionals to stay abreast of any significant developments and nuanced interpretations of the law. It also emphasizes that, in unprecedented times, contract law remains a dynamic and evolving field that may hold yet untapped avenues for recouping costs due to unforeseen circumstances such as the COVID-19 pandemic.