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Volume 6 - Number 01 | January 7, 2008
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EDITOR'S NOTES
According to a study released a little more than a year ago, the number of federal civil servants hovers near the 2 million mark (not including postal workers, military personnel, government contractors or grant recipients, which account for another 12.7 million people garnering a federal paycheck). To protect itself and its interests, the federal government established 18 U.S.C. section 207, which prohibits former employees from disclosing or using information obtained while an employee to advise and/or aid a non-government entity. For example, from a bidding standpoint, it means that a former employee who worked on a request for proposals should not turn around and bid on that contract once he or she enters the private sector. To do so could mean criminal offense charges.
Upon his retirement, a federal employee immediately began a contracting business and bid on two projects that had fallen within his job requirements only two weeks earlier. Because he was the low bidder on both projects, questions were raised about the propriety of accepting the bids. Both were ultimately rejected. A perusal of the section, which is provided on our website, provides a more defined look at the limitations placed upon former government employees.
Also this week, we see the pitfalls of using a joint check agreement and that a thorough accounting of a project’s expenses is perhaps the best way to protect a contractor from allegations of cost overruns.
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JOINT CHECK AGREEMENT COMPROMISED BY EXCLUSIVE PAYMENT BOND REMEDY
Filing too late to meet a claims deadline against a payment bond, a supplier submits an alternate legal argument to collect payment from a prime contractor after the subcontractor defaults on the project and allegedly runs off with supplies. The court determines the bond was its only legitimate remedy.
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