Volume 1 - Number 5 | December 29, 2003 - Construction Claims Advisor

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You are here: Home » Volume 1 - Number 5 | December 29, 2003

Volume 1 - Number 5 | December 29, 2003

Editor's Notes | Volume 1 - Number 5: 2003 Ends on False Claims and a Wrong Assumption
This is our last issue for 2003. Appelate opinions have been light over the holidays, and we look at false claims, an insurance reminder and the importance of being specific in task orders (don't include meaningless assumptions).
False Claims Act
Use of false claims legislation to attack contractor claims is supposedly on the rise. In this issue, we cover a False Claims decision where the contractor was fined $195,000 for a false statement that arguably had no effect of removing funds from the government by fraudulent means.
The Daily Report
In our Tips and Techniques section, we cover the importance of content in the Contractor’s and Owner’s Daily Report, why daily reports are critical to claims resolution, and typical shortcomings.

False Claims Act-Westinghouse Pays Penalty for Each Progress Payment Based on False Conflict of Interest Statement: This case involves a government training program contract and a number of side issues regarding what fees the Qui Tam “relator” could recover regarding a false statement Westinghouse made about an organizational conflict of interest (OCI) relationship. Although not a construction contract, two important issues are worth contractor attention.

Ward General Insurance Services, Inc. v. The Employers Fire insurance Company et al.: Despite policy endorsements such as “Valuable Papers and Records Coverage”: “Electronic Equipment and Software Coverage”; “Electronic Data Processing Coverage”; “and “Business Income Coverage”; a commercial insurance policy did not cover expenses to restore data, loss of business income and loss of productivity when no direct physical loss was incurred. Either operator error or a program error caused the loss of data.

Contractor Assumption on USDA Task Order Costs $90,000: A contractor submitted four claims totaling $97,000 to recover “out-of-scope work” at the Beltsville Human Nutrition Research Center in Beltsville, MD. This included: 1) $20,938 for processing RFIs in excess of the quantity agreed, 2) $58,797 for reviewing and processing of submittals in excess of the quantity agreed, 3) $10,671 for preparing and providing electronic drawings for a general contractor in a useable format, and 4) $6,375.97 (costs plus profit) in revising the project interior finish schedule. In an accelerated ADR processing with a binding, non-appealable determination, the judge awarded Jacobs $6,202.08. Since the opinion did not include an explanation, we contacted the USDA to learn more.