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ASBCA Applies Affirmative Misconduct Standard In Denying Contractor's Estoppel Defense

May.23.2006

Despite the Government's earlier approvals of CAS Disclosure Statements found to have disclosed the contractor's accounting practice, the ASBCA in United Technologies Corp., Pratt & Whitney found no affirmative misconduct by the government estopping it from asserting a retrospective claim based on non-compliance with CAS. In following guidance from the Federal Circuit that to prevail on estoppel the Company was required to prove affirmative misconduct by the government, the Board found no inherent conflict between the Supreme Court's rulings in Winstar and other cases that, "when the United States enters into contract relations, its rights and duties therein are governed generally by the law applicable to contracts between private individuals" and Federal Circuit law applicable "in the context of the government's performance of contractual duties in conjunction with CAS rules and regulations . . . not applicable to contracts between private litigants."

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