On September 29, 2023, a ruling by the Civilian Board of Contract Appeals (CBCA) made headlines within the legal profession, particularly amongst those specialising in contract law for federal contractors and government entities.
The CBCA ruled that Inter-Con Security Systems, a federal contractor, could not collect damages from the U.S. Marshals Service (USMS). This decision was made in response to the contractor’s claim that it was being unfairly sued by former employees as a direct result of actions undertaken by the government.
To the disappointment of Inter-Con, the CBCA, in the case of Inter-Con Security Systems, Inc. v. U.S. Dept. of Justice, CBCA No. 6995, sided with the government. The appeal board asserted that any such action by the contractor was justified under the terms of the relevant contract language. This interpretation suggests that when government action is valid as per contractual agreement, a lawsuit filed by a former employee against the contractor cannot be shifted onto the government entity.
More details surrounding the implications of this ruling and its likely impact on future similar disputes can be found in the article “Inter-Con Security Systems: Significance of CBCA’s Decision on Government Contractors“, as discussed in JD Supra by PilieroMazza PLLC.
Notably, while this ruling seems to reinforce the power and influence of contract language in shaping the outcomes of disputes between government entities and contractors, it also implies a possible increase in the responsibilities and potential liabilities that contractors may have to reckon with going forward.
This latest CBCA decision could thus have a significant impact on the strategies employed by both contractors and law firms operating in the government contractor sector, prompting moves to ensure that their contractual language is robust and provides sufficient protection against actions arising from government decisions.