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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 | 8 min read | 06.30.25

AI Companies Prevail in Path-Breaking Decisions on Fair Use

Last week, artificial intelligence companies won two significant copyright infringement lawsuits brought by copyright holders, marking an important milestone in the development of the law around AI. These decisions – Bartz v. Anthropic and Kadrey v. Meta (decided on June 23 and 25, 2025, respectively), along with a February 2025 decision in Thomson Reuters v. ROSS Intelligence – suggest that AI companies have plausible defenses to the intellectual property claims that have dogged them since generative AI technologies became widely available several years ago. Whether AI companies can, in all cases, successfully assert that their use of copyrighted content is “fair” will depend on their circumstances and further development of the law by the courts and Congress....