Law360 recently published an article authored by Culhane Meadows’ Washington, D.C. partner, David P. Hendel, which discusses a recent opinion from Weber Trucking LLC v. U.S. Postal Service having broad implications for government contractors and fixed-price service contracts.
Here are a few excerpts from the article:
Contractors who toil under a fixed-price service contract now have a new claim theory they can use to recover unexpectedly high performance costs.
A recent opinion by the Postal Service Board of Contract Appeals in Weber Trucking LLC v. U.S. Postal Service has breathed new life into the theory of defective specifications, holding that the doctrine applies to service contracts.[1] The case and its application could have broad implications for government contractors.
Weber Trucking
Weber Trucking held a fixed-price contract with the Postal Service to sort and “carry all mail tendered” along a designated route in Las Vegas, Nevada. The solicitation and resulting contract set out estimated hours and mileage but contained disclaimers as to their accuracy.
The contract stated that the estimated annual miles were given only as information, and instructed the supplier to determine the actual miles. Similarly, the solicitation stated that the estimated annual hours were approximately the hours needed, and that the contractor must determine the actual hours.
No estimate was provided for the amount of mail that would be tendered. The Postal Service tendered far more mail than could be delivered within the time allotted in the contract’s schedule.
To cope with the overflow of mail, the contractor hired an additional carrier and added a second vehicle. When the Postal Service provided only a slight increase based on the contract’s adjustment formula, Weber Trucking filed a claim seeking to recover all of its additional performance costs.
Weber’s claim was sustained, with the three-judge panel splitting on their rationale for the holding. The presiding judge, Peter F. Pontzer, upheld Weber Trucking’s claim based on the legal theories of defective specifications and superior knowledge.[2]
Download PDF of this article HERE
The foregoing content is for informational purposes only and should not be relied upon as legal advice. Federal, state, and local laws can change rapidly and, therefore, this content may become obsolete or outdated. Please consult with an attorney of your choice to ensure you obtain the most current and accurate counsel about your particular situation.
About Culhane Meadows – Big Law for the New Economy®
The largest woman-owned national full-service business law firm in the U.S., Culhane Meadows fields over 70 partners in eleven major markets across the country. Uniquely structured, the firm’s Disruptive Law® business model gives attorneys greater work-life flexibility while delivering outstanding, partner-level legal services to major corporations and emerging companies across industry sectors more efficiently and cost-effectively than conventional law firms. Clients enjoy exceptional and highly-efficient legal services provided exclusively by partner-level attorneys with significant experience and training from large law firms or in-house legal departments of respected corporations. U.S. News & World Report has named Culhane Meadows among the country’s “Best Law Firms” in its 2014 through 2022 rankings and many of the firm’s partners are regularly recognized in Chambers, Super Lawyers, Best Lawyers and Martindale-Hubbell Peer Reviews.
