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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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