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Better to Ask Permission than Forgiveness: ASBCA Denies Subcontract Payments

Client Alert | 1 min read | 01.18.19

On November 19, 2018, the ASBCA denied KBR’s claim for reimbursement of REA payments made to KBR’s subcontractor supplying trailers to the Army in Iraq. The cost-reimbursement task order permitted payment of “reasonable” allowable costs. KBR alleged that the government failed to perform the prime contract or, alternatively, was obligated to change the period of performance, and, thus, was responsible for the subcontractor’s delays and additional costs sought by the subcontractor’s REA and paid by KBR. The Board held that KBR was not entitled to reimbursement because the terms of the fixed-price subcontract did not obligate it to reimburse the additional costs, the decision to pay the subcontractor was a business decision KBR made, and the government did not object to any performance period extensions KBR granted to the subcontractor. The Board also found that the subcontractor’s REA costs were not substantiated, because they were not based on actual costs (although the subcontractor had this information), but on market estimates and delay models (which the Board found to be unreasonable). The Board rejected KBR’s argument that actual costs were not required because the subcontract was for commercial items, finding that the subcontract did not state it was for commercial items or contain commercial item clauses.


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Client Alert | 5 min read | 12.12.25

Eleventh Circuit Hears Argument on False Claims Act Qui Tam Constitutionality

On the morning of December 12, 2025, the Eleventh Circuit heard argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., No. 24-13581 (11th Cir. 2025). This case concerns the constitutionality of the False Claims Act (FCA) qui tam provisions and a groundbreaking September 2024 opinion in which the United States District Court for the Middle District of Florida held that the FCA’s qui tam provisions were unconstitutional under Article II. See United States ex rel. Zafirov v. Fla. Med. Assocs., LLC, 751 F. Supp. 3d 1293 (M.D. Fla. 2024). That decision, penned by District Judge Kathryn Kimball Mizelle, was the first success story for a legal theory that has been gaining steam ever since Justices Thomas, Barrett, and Kavanaugh indicated they would be willing to consider arguments about the constitutionality of the qui tam provisions in U.S. ex rel. Polansky v. Exec. Health Res., 599 U.S. 419 (2023). In her opinion, Judge Mizelle held (1) qui tam relators are officers of the U.S. who must be appointed under the Appointments Clause; and (2) historical practice treating qui tam and similar relators as less than “officers” for constitutional purposes was not enough to save the qui tam provisions from the fundamental Article II infirmity the court identified. That ruling was appealed and, after full briefing, including by the government and a bevy of amici, the litigants stepped up to the plate this morning for oral argument....

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