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Another Salvo in the War for Control of Contractor "Systems" Approval

Client Alert | 1 min read | 08.20.10

In the "Report on Allegation of Unsatisfactory Conditions Regarding Actions by the Defense Contract Management Agency, Earned Value Management Center" (July 28, 2010 http://www.dodig.mil/Audit/reports/fy10/apo/D-2010-6-002.pdf), the DoD Inspector General recommended that the Defense Contract Management Agency "prohibit joint surveillance reviews or other joint activities with a contractor" in order to avoid compromising DCMA's "independence" and to take action to increase DCAA "participation" in Earned Value Management Systems audits. While DCMA did not concur in many of the recommendations in the IG report, if the IG recommendations were adopted they would inevitably be applicable to other contractor "systems" issues, make it more difficult for contracting officers to resolve systems issues raised by DCAA, and have a decidedly negative impact on compliance and contract administration activities in the procurement process.

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Client Alert | 4 min read | 08.13.26

Supreme Court Confirms Contractual Loss of Bargain Without Repudiatory Breach

English law has long treated the choice between terminating for repudiatory breach and exercising a contractual termination right as consequential. Under the Financings[1] causation principle, a party exercising a contractual right for a non-repudiatory breach could recover losses accrued to the date of termination — but nothing more. Loss of bargain was out of reach unless the breach went to the root of the contract. A practical workaround, confirmed in Lombard,[2] was to designate the relevant obligation as a condition, elevating any breach to repudiatory status, but that device carries significant strategic risk if the termination is later found to have been wrongful....

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