An appeal of a
government claim for alleged
overcharges was granted by
the Armed Services Board of
Contract Appeals because,
based on the contract as a
whole, the government's
interpretation of the
payments clause was without
merit. The dispute arose
from labor-hour task orders
issued under a contract to
provide interior design
support. As indicated in its
proposal, the contractor
charged for all employee
hours worked, including
uncompensated overtime. The
government contended the
contractor charged for
employees' "unexpensed
and uncompensated"
overtime. According to the
government, FAR
52.232-7, Payments under
Time-and-Materials and
Labor-Hour Contracts, "[made]
all employees hourly workers
for purposes of reimbursing
the contractor."
Therefore, the contractor
could charge only for hourly
costs and not for extra
hours worked by salaried
employees.
Not
Legally Defensible
However, the
contract provided for
firm-fixed-price rates, and
for labor-hour task orders
to be priced in the pricing
schedule. In addition, FAR
52.232-7 (a)(2) and (3)
provided for hourly rates
prescribed in the pricing
schedule to be multiplied by
the number of direct
labor-hours performed, and
for hourly rates to be paid
for all labor performed on
the contract that met the
contract's labor
qualifications. It was
undisputed the employees
worked the hours charged and
the contractor paid their
salaries, and it was "not
legally defensible"
for the government to "read
out" or ignore
portions of FAR
52.232-7 (a)(2) and (3).
In addition, the government
relied on references to
costs and ceiling price in FAR
52.232-7 (d) and (e)
that were not germane to the
issue and did not
specifically prohibit the
contractor from collecting
hourly rates for work
performed by salaried
employees. ( GaN
Corp., ASBCA, ¶93,537)
|