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Costs of Reducing Maintenance Backlog Awarded

The Court of Federal Claims awarded a vehicle maintenance contractor and its subcontractor direct labor and material costs incurred in performing additional work on a government fleet because they sufficiently established the size of the maintenance backlog they assumed and the costs associated with reducing the backlog. In a prior decision on a claim brought on behalf of the subcontractor (49 CCF 78,427), the court concluded the contractor was entitled to special compensation for the government's breach of contract. The contract provided for recovery if the contractor inherited more than 355 labor hours' worth of repairs. However, the contractor was required to expend labor hours far in excess of that number to reduce the maintenance backlog, and the government compensated the contractor for only a portion of the additional work. Also, the government constructively changed the contract by ordering work that was beyond the contract requirements.

Good Documentation

Following a trial on damages, the contractor and its subcontractor were awarded direct costs attributable to the work that was "over and above" the 355 hours budgeted to reducing the maintenance backlog. Notwithstanding the difficulties caused by the size of the backlog, the shortcomings of the government's management system, and the government's restrictions on system use, the contractor identified the direct costs associated with reducing the backlog "with more than sufficient precision." The primary direct costs, consisting of labor, parts, and contracted-out work, were carefully documented in a binder, using thousands of lines of information. "Other direct costs, such as repair materials, shop and office supplies, and uniforms, were reasonably estimated based on the percentage of related work," and communications, travel, and supervision costs were reasonably apportioned to "O&A "work. Government audits confirmed the accuracy of the contractor's figures. The subcontractor was also awarded the costs it incurred in developing a database for tracking and measuring the maintenance backlog. (Tecom, Inc. v. U.S., FedCl, 53 CCF 79,089)

(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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