January 2021
At Pannier Law, P.C., we are proud to announce a significant win for our client, General Dynamics – National Steel and Shipbuilding Company (GD-NASSCO), in an appeal before the Armed Services Board of Contract Appeals (ASBCA). This victory, decided on January 25, 2021, highlights our proficiency in handling complex government contract disputes and advocating for contractors facing unilateral changes.
Case Background
On January 24, 2017, the U.S. Department of the Navy issued Solicitation No. N00024-17-R-4426 for repair and alterations during the Dry-Docking Phased Maintenance Availability (DPMA) onboard USS MAKIN ISLAND (LHD 08). The contract, awarded to GD-NASSCO on June 6, 2017, in the fixed-price amount of $121,598,483, originally designated thousands of line items as Government Furnished Material (GFM), with no responsibility on the contractor for pre-fabrication. Post-award, the Navy issued Requests for Contract Change (RCCs) 10G through 27G, converting over 11,000 line items from GFM to Contractor Furnished Material (CFM). The Navy then directed GD-NASSCO to perform pre-fabrication efforts, leading to a dispute over additional costs.
Our Strategy
Pannier Law filed a motion for summary judgment, arguing that the Navy’s directives constituted a unilateral change under the Contract Disputes Act (CDA). We contended that the original contract and solicitation did not impose pre-fabrication responsibilities on GD-NASSCO. Key arguments included:
- Detailed Contract Analysis: We emphasized that the contract’s work items listed GFM in prefabricated form, with installation requirements invoked under paragraph 3, and no mention of contractor fabrication. The RCCs were marked “For Pricing Only” and described GD-NASSCO’s role as “Procure Material,” not fabricate.
- JFMM Alignment: We demonstrated that the Navy’s Joint Fleet Maintenance Manual (JFMM) places the burden on the Government to provide GFM suitable for its intended use, reinforcing that pre-fabrication was the Navy’s obligation. The JFMM identifies GFM as material with a unique government relationship, such as long lead time items.
- Cost Impact Breakdown: GD-NASSCO estimated additional efforts totaling $1,933,018.30 for pre-fabrication of the converted items, including 2,336 man-hours for procurement and requisitioning, plus fabrication labor for 359 specific items.
Our motion was supported by a voluminous record, including the solicitation, contract documents, RCCs, and correspondence showing the Navy’s belated imposition of new requirements.
The Outcome
On January 25, 2021, the ASBCA granted GD-NASSCO’s motion in ASBCA.No.61854, Appeal of General Dynamics – National Steel and Shipbuilding Company. The ASBCA ruled that the contract did not place the burden of pre-fabrication on GD-NASSCO, sustaining the appeal and denying the Navy’s cross-motion. The case was remanded to the parties for determination of quantum, ensuring compensation for the equitable adjustment.
Why This Matters
This victory not only secured recovery for GD-NASSCO but also reinforces contractors’ rights to equitable adjustments when the government imposes changes post-award. It sets a precedent for disputes involving GFM-to-CFM conversions and highlights the importance of clear contract language in federal procurements.
Trust Pannier Law for Your Legal Needs
This successful outcome reflects Pannier Law’s commitment to delivering strategic, results-driven representation. Whether you’re a contractor navigating government disputes or facing other legal hurdles, our team is here to protect your interests with skill and dedication.
Contact Pannier Law, P.C. today at (310) 971-5093 or visit www.pannierlaw.com to learn how we can help you achieve your legal goals.
Disclaimer: This article is for informational purposes only and does not constitute legal advice or create an attorney-client relationship. Consult a qualified attorney for advice specific to your situation.
About the Author: William Pannier, founder of Pannier Law, brings over 20 years of experience as a Government Contracts attorney.
Court: Armed Services Board of Contract Appeals