With the rise in COVID-19 cases due to the Delta variant, government contractors and the government agencies they work with may also see a rise in COVID-related claims and requests for equitable adjustment (REAs) linked to their contracts. In this blog, PilieroMazza reviews a key government defense tactic, the Sovereign Acts Doctrine (the Doctrine), that contractors should be aware of to help them better prepare before filing a claim or REA.
What is the Sovereign Acts Doctrine?
The Doctrine provides that the federal government, when acting as a contracting party, cannot be held liable for an obstruction to the performance of a contract resulting from its public and general acts as a sovereign. In its capacity as the sovereign, the government can impact a contractor’s performance of a contract, and, in such instances, the government is released from liability for damages resulting from its sovereign acts, as long as those acts are “public and general” and not taken purely to avert contractual obligations.
The Doctrine as a Government Defense Tactic
In terms of COVID-related claims and REAs, the government may invoke the Doctrine as an affirmative defense to payment for compensable delays caused by a constructive suspension of work tied to COVID-19. As it relates to site access restrictions, the Federal Circuit held that any governmental act that obstructs a government contract is more likely to be regarded as incidental, and thus, subject to the Doctrine, when the governmental act is broad enough to affect parties having no connection to the contract, i.e., the public. Agencies may attempt to rely on the Doctrine to avoid liability for costs stemming from COVID-19 that resulted from government directives, i.e., stop work orders.
For instance, if the government mandates a site suspension that impacts your contract and there are costs tied to that suspension, the government may be required to grant time extensions related to COVID-19 but may plausibly try to skirt liability for the associated costs, claiming the Doctrine as a defense and that the action was taken to protect the public in general and not taken to avoid contractual obligations. Contractors need to be wary of this defense and make sure that they employ sufficient protocols in response to COVID-related government directives so that they are prepared to present a viable claim or REA to challenge such a defense.
If you need assistance filing a COVID-related claim or REA, please contact the author of this blog, Lauren Brier (firstname.lastname@example.org) or a member of PilieroMazza’s Government Contracts Claims & Appeals Group.