1. Home
  2. |Insights
  3. |Contractor Recovers Increased Costs from a Collective Bargaining Agreement Executed After an Option Period is Exercised

Contractor Recovers Increased Costs from a Collective Bargaining Agreement Executed After an Option Period is Exercised

Client Alert | 1 min read | 03.04.20

In Alutiiq Commercial Enterprise, LLC (Jan. 9, 2020), the Armed Services Board of Contract Appeals held that a contractor is entitled to an equitable adjustment under the Service Contract Act Price Adjustment Clause, FAR 52.222-43, for increased labor costs associated with a new Collective Bargaining Agreement executed after an option period is exercised when the contracting officer failed to provide the 30-day notice required by FAR 22.1010(b), which requires the contracting officer to notify the contractor and the collective bargaining agent in writing of the forthcoming option exercise and the applicable acquisition dates. The Board reached this conclusion despite the fact that the parties exercised the option via a bilateral modification. The Board was unwilling to find that the bilateral modification waived FAR 22.1010(b)’s notice requirement when a clear and unequivocal intention to do so was not present. The dissent stated that the option referred to in “FAR 22.1010, FAR 52.222-43, and FAR 52.217-9 means an option exercised unilaterally” and thus the notice requirement in FAR 22.1010(b) did not apply to the parties’ bilateral modification. 

Contacts

Insights

Client Alert | 4 min read | 10.30.26

Two Wrongs Don’t Make a Right: GAO Sustains Protest Where Agency Tried to Fix PIA Violation with a Second PIA Violation

Recent sustain decisions by the U.S. Government Accountability Office (GAO) in Fluor Federal Solutions, LLC and Reliance Test & Technology send a clear message: when an agency tries to fix a Procurement Integrity Act (PIA) violation by committing a second one, the cure can be just as fatal as the disease. The cases involved the U.S. Air Force’s $1.8 billion procurement for O&M services at Elgin Air Force Base. During discussions, the Air Force inadvertently released a pricing overview slide with all offerors’ bottom-line evaluated costs to Reliance Test & Technology, which immediately notified the agency of the error. In response, the Air Force decided to level the playing field by providing the same information to all the other offerors in the procurement, stating, “[o]fferors may consider this disclosure in their [final proposal revision].”...