Limitation on Mark-Up of Subcontractor Costs
Client Alert | less than 1 min read | 04.30.07
In an interim rule effective immediately, the Defense Department amended DFARS on April 26, 2007 to permit the Government to "disallow" (including on firm-fixed price contracts) "excessive pass through charges" on subcontracts where the total subcontract costs exceeds 70 percent of the contract value. "Excessive" charges are defined to include costs and profit that the contractor cannot demonstrate to the contracting officer add something other than "no or negligible" substantive value to performance, so any contractor with an accounting practice that allocates G&A to subcontract costs could run afoul of these rules.
Insights
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.
Client Alert | 7 min read | 08.12.26
Developments in Canadian Investment Treaty Practice: New FIPA Between Canada and UAE in Force
Client Alert | 6 min read | 08.11.26
Client Alert | 1 min read | 08.10.26
