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Motion to Stay Appeals Did Not Satisfy Criteria

The government's motion to stay proceedings to conduct a criminal investigation was denied by the Armed Services Board of Contract Appeals because the facts in the appeal and prior criminal proceedings were dissimilar and the investigation would not be compromised. The appeals arose from a blanket purchase agreement to provide black and gray water removal and dumpster services at a foreign military base. Two contractors formed a joint venture to perform the contracts but the government subsequently discovered a scheme by one of the contractors to inflate the amount of black and gray water removed from the base. This contractor was debarred as a result. The other contractor was not debarred because it persuaded the government it was unaware of the deception and acted responsibly after the scheme was uncovered. The government, however, refused to pay this contractor's invoices, and the contractor appealed the contracting officer's deemed denials.
Test Not Met

After discovery began, the government moved to stay the board proceedings for six months, arguing it needed the time to investigate whether the contractor had also engaged in criminal conduct. However, the government failed to satisfy the requirements for a stay, which address whether the facts and issues in the board and criminal proceedings are substantially similar, whether the government's investigation would be compromised, whether the stay would harm the non-moving party, and whether the duration of the requested stay is reasonable. Here, the facts, issues, and witnesses in the appeals were different from those in the prior criminal proceedings cited by the government, because the BPAs in the criminal proceedings were unrelated to the BPAs at issue in the appeals. Also, the contractor seeking payment was found to have acted in a responsible manner when the other contractor's wrongdoings came to light. In addition, nothing in the record suggested that discovery requests in the appeals would impact the government's fraud investigation. Moreover, the possibility of harm to the contractor and the reasonableness of the stay's duration weighed in favor of the contractor. (Palm Springs General Training and Contracting Establishment, ASBCA, 92,441)



(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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