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Appeals Stayed Pending Criminal Investigation

The government's motion to stay proceedings was granted by the Armed Services Board of Contract Appeals because the consolidated appeals involved issues directly related to a criminal investigation and continuing with the case would interfere with the investigation. The contractor, engaged to provide technical and engineering support under two contracts, sought payment for services it allegedly performed. The contracting officer denied the claims, stating the contractor may have billed for work it did not perform. The CO based her decision on an ongoing fraud investigation examining the contractor's billing practices. The government moved to stay the appeals for six months to allow law enforcement agencies to investigate allegations the contractor engaged in criminal conduct. In response, the contractor argued it would suffer financial harm if the board were to stay the appeals. When the government moves to suspend civil actions on the basis of interference with criminal proceedings, the civil tribunal must consider and balance several factors, including whether: the facts, issues, and witnesses in both the civil and criminal proceedings are substantially similar; the government's ongoing investigation would be compromised by going forward with the civil case; the proposed stay could harm the contractor; and the duration of the requested stay is reasonable.
Akin to a Roadmap

Here, the criminal investigation and the appeals both concerned the extent to which the contractor performed the services for which it sought payment under the contracts. Also, the witnesses with knowledge of this issue would presumably be the same in both proceedings. In addition, continuing with the appeals and discovery against the government would be "akin to giving [the contractor] a roadmap of the [g]overnment's investigation. "Although the government seized the contractor's records, the investigation allegedly extended beyond the contractor to its employees and various government project personnel who were part of an alleged conspiracy. Under these circumstances, the government would suffer hardship if it were required to respond to civil discovery relating to the performance of services under the contracts before it could complete its criminal investigation. Although the proposed stay could harm the contractor if the invoices are found to be valid, a six-month stay was reasonable to complete the government's investigation. (Unconventional Concepts, Inc., ASBCA, 92,368)


(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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