Don't Be Left Holding the Bag - Why It's More Important Than Ever To Thoroughly Review Your Government Contract Before Signing

Boeing just challenged a recent ruling by the Court of Federal Claims which has wide-reaching implications for government contractors. In a May decision, the Court held that, by executing a contract with the government, Boeing had waived its right to challenge the government’s inclusion in the contract of certain mandatory FAR provisions. If the decision were to stand, it would seemingly mean that a contractor’s only recourse in such a situation would be to file a pre-award protest.

Boeing has appealed this decision to the Federal Circuit on the grounds that it violates “clear, binding precedent.” Its argument appears to be well founded. In a 2008 decision, the Federal Circuit determined that when a contractor agrees to abide by mandatory regulations these terms are “non-negotiable” and therefore not “consented to.” In other words, government contractors cannot be deemed to have waived contractual rights if they had no choice in the first place to accept them.

Boeing’s appeal notes the policy implications of upholding the lower court’s decision, i.e. that contractors would have to make pre-award protests to all laws and regulations that “might ever conceivably be applied by the government” – a tall task considering the thousands of regulations in the FAR alone – and something that would “drastically and needlessly increase the number of pre-award bid protests” and further burden “an already overtaxed acquisition system.”

Nevertheless, while Boeing’s challenge is pending, contractors would be prudent to exercise more vigilance before executing a contract with the government or potentially risk being left holding the bag.

Should you have any concerns about your execution of a contract with the government, be sure to contact us at https://centrelawg.wpengine.com/contact/.