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CBCA Case Foreshadows Wave of COVID-19 Constructive Change Claims

by Stephen L. Bacon

In Valerie Lewis Janitorial v. Department of Veterans Affairs, the Civilian Board of Contract Appeals (CBCA) held that a contractor was entitled to the cost of extra cleaning it was directed to perform in response to an infectious disease outbreak. This case foreshadows a wave of similar constructive change claims that will likely arise from the coronavirus pandemic.

In 2010, the Veterans Administration (VA) awarded Valerie Lewis Janitorial (VLJ) a contract to provide janitorial services and hospital aseptic maintenance services at a VA facility in Northern California. After roughly a year of performance, the VA identified an outbreak of clostridium difficile (C. diff) among patients.

To control the outbreak, the VA directed VLJ to use a new product (bleach) and a new two-step aseptic process (clean, wait ten minutes, then disinfect) to kill C. diff.  VLJ requested compensation for additional costs associated with the new cleaning process. The VA’s Contracting Officer Representative agreed that VLJ was entitled to additional compensation. The parties eventually modified the contract to implement the two-step process, but could not agree on the amount owed to VLJ.

During the CBCA litigation, the VA did an about-face and took the position that VLJ was not entitled to any compensation at all. The CBCA rejected the VA’s argument and adopted the Contracting Officer Representative’s estimate as the proper measure of recovery for VLJ’s constructive change claim.

As government facilities begin to reopen, agencies will likely demand extra cleaning and other protective measures to prevent the spread of COVID-19. The VLJ case illustrates that you are entitled to an equitable adjustment under the Changes clause if those measures exceed your contract requirements.

 

Key Considerations in Constructive Change Claims

Contractors should be aware, however, that not all actions taken in response to the pandemic will be compensable. For instance, in Pernix Serka Joint Venture v. Department of State, the CBCA recently rejected a contractor’s constructive change claim after it evacuated a job site to flee the Ebola outbreak. The contractor was entitled to more time under the Default clause’s force majeure provision, which identifies “epidemics” and “quarantine restrictions” as unforeseeable events that excuse delay. But, the CBCA held that the contractor was not entitled to more money under the Changes clause because the government did not direct the contractor to evacuate the job site.

As the coronavirus pandemic unfolds, these two decisions underscore the importance of obtaining clear direction when the government requests additional work or demands a change to your method of performance.  As always, documentation is key to preserving your rights under the Changes clause, as a lack of clear direction from the government can be fatal to your equitable adjustment claim.  The rule will be no different during a pandemic.

The team of attorneys at Rogers Joseph O’Donnell is here to assist you with any contract issues that may arise in connection with the pandemic.  We have formed a taskforce dedicated to helping businesses navigate the ever-changing legal and regulatory landscape during this unprecedented time.  You may call 202-777-8956 if you have any questions regarding this article.

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