William J. Spriggs bill@spriggslawgroup.com (434) 993-2802
http://spriggslawgroup.com
http://spriggslawgroup.blogspot.com
From 2011 to the present, 23 ASBCA and CBCA
appeals. Over the past several
years, Mr. Spriggs has successfully handled 23 appeals on behalf of clients
before the Armed Services Board of Contract Appeals (ASBCA) and the Civilian
Board of Contract Appeals (CBCA). Most of
those cases were settled by agreement of the parties, and four were litigated
to a final decision. Mr. Spriggs also
has advised clients on many contract management and dispute resolution matters
and served as an expert witness. He
frequently assists clients in preparing requests for equitable adjustment and
claims and has experience with ADR at the ASBCA and the CBCA.
During his career, Mr. Spriggs has served as founder and CEO of his own professional
services firm, which, under his guidance, he took from $2M in revenues and 15
people to $80M in revenues and 245
people. He has over 40 years of experience managing his
business while serving as a federal procurement lawyer in cases for major
corporations and small to medium-sized companies. As a government
contracts attorney, he has handled cases involving claims, protests, disputes, and appeals related to constructive changes,
default terminations, convenience terminations, cost allowability and
allocability, contract interpretation, data rights protection, and defective pricing. His services have enabled his clients to
recover nearly $1,000,000,000 in profits
on government contracts. The firm he
founded and led saved its clients billions
in losses.
While growing his firm’s
business, Mr. Spriggs maintained a profit rate of over 30 percent. He applied
horizontal management techniques with project teams and administrative
functions. The firm had zero claims against it. Mr. Spriggs resisted mergers and diversified
the firm with critical acquisitions. He maintained a merit-based compensation system and an entrepreneurial approach to
marketing and complete client satisfaction.
He found a niche for small to
medium-sized firms offering superior performance at a reasonable cost. His approach was to grow only as the needs of
his clients dictated. He stuck to
his core values of quality excellence
and successful results. His motto was growth, one step at a time.
Although he is known for his
litigation skills, his emphasis has always been on government contract dispute avoidance and resolution by
settlement. He is a counselor,
lecturer, and author. He is a recognized
expert on the Federal Acquisition Regulation (FAR) and its various federal, state, and local agency
counterparts.
His representative clients
include: Lockheed Martin, The Boeing
Company, General Dynamics, Beech Aircraft, Cessna Aircraft, Koch
Industries, General Time Corporation, AshBritt, Inc., Bourns, Inc., Recon Optical,
Inc., Target Corporation, Homes by Bell-Hi, Inc., Pettibone Corporation, Pikesville Electric Corporation, Arvol D.
Hays Construction Co., Inc., Goodfellow Brothers Construction Co., Inc.,
Eagle-Picher Industries, Inc., Cubic Corporation, Magnavox Electronic Systems Co., Inc., UNR Industries, Inc., Research,
Analysis & Development, Inc., 3M, Inc., Gulf & Western Industries, Inc., and Spacesaver Systems, Inc.
His cases have involved
·
weapons systems for the Army,
·
disaster recovery services for FEMA and the Army
Corps of Engineers,
·
GOCO facility services for DOE,
·
aircraft stress sensing systems for the Air
Force,
·
bomb fuses for the Navy,
·
water supply to the Army in Iraq,
·
rough terrain trucks for the Army,
·
forklift trucks for the Army,
·
conveyor systems and forklifts for the Postal
Service,
·
weapons instrumentation for the Navy,
·
road reconstruction for the Department of
Interior,
·
submarines for the Navy,
·
missiles for the Air Force,
·
storage and distribution systems for DCMA,
·
repair and home construction for HUD,
·
aircraft engine parts for DCMA,
·
information systems for the Navy,
·
security systems for the FBI,
·
tug boats for the Coast Guard and
·
office furniture and filing systems for GSA.
Mr. Spriggs has a proven track
record of enhancing client profitability, avoiding client losses from cost
disallowances and default terminations, and resolving disputes on contract and
regulation interpretation issues.
Enhancing Client
Profitability
He investigates contract performance against contractual
requirements and analyzes whether customer acts or omissions give rise to constructive changes to contract
requirements or breaches of implied
contract obligations. As he investigates the facts, he examines
various theories to submit requests for equitable adjustment under the changes
clause. He then prepares, offers, and negotiates
settlement of the recommendations.
On occasion, he has taken these cases to the next level of the dispute
resolution process. He has over 70 published judicial decisions. Although he has taken dozens of cases to
trial, he has settled most of them by negotiating a settlement. His recovery
success rate exceeds 80%, with over
90% of the cases settled without expensive litigation. His fee in these cases is recoverable as part
of the settlements.
Avoiding Losses from
Disallowances and Defaults
In several cases, Mr. Spriggs has
assisted contractors and subcontractors in avoiding losses on government
contracts and subcontracts by successfully negotiating cost disallowance issues
with DCAA and convincing contracting officers to convert terminations from
default to convenience. Based on his
knowledge of FAR Part 31 and the DCAA Contract Audit Manual, he has convinced
auditors and contracting officers of the allowability of costs, often based on
the proper application of allocability principles. He frequently teams up with the forensic
accounting firm McGovern & Greene to add expert accounting reports to his
presentation. He always presents a
comprehensive written argument followed by finely tuned negotiation
techniques. His success rate in cost disallowance cases is nearly 100%.
In cases of terminations for default, he presents a comprehensive
statement of the facts and all the excuses for failure to perform. Since every compensable change is an excusable
cause of failure to perform, his presentations include requests for an equitable adjustment under the
contract's changes clause. He consists
of a pro forma termination for convenience settlement proposal to bolster his
argument. He also negotiates termination
for convenience settlement proposals.
Based on his knowledge of FAR
Part 31, he has successfully negotiated the allowability of costs,
including his fee.
Resolving Disputes on
Contract and Regulation Interpretation
Relevant
Representative Experience
·
Reversing
a termination for default. The Army terminated a weapons systems manufacturer for default based on alleged failure
to pass tests and make progress. The
contractor had made a valiant effort to pass the requisite tests, which had
been changed without the contractor’s knowledge or consent. Mr. Spriggs analyzed the situation and found
that the cure notice was based on one type of test, and the show cause and
default statements were based on a different test. Since a default for test failure or to make
progress must be preceded by a proper cure notice, he argued the default was
improper. He also assisted the client in
preparing a termination for a convenience settlement proposal, and he augmented
that proposal with detailed requests for equitable adjustment based on improper
testing and impossibility of performance.
He invited his colleagues at McGovern & Greene to assist in cost
presentations and with DCAA audits.
Throughout the audit process, he provided answers to questions from the
auditors and prepared position papers on the allowability and allocability
of costs, including his consultancy costs.
He put together a comprehensive presentation of the facts and legal
principles in preparation for negotiating a settlement of the entire case. He first argued the impropriety of the
default based on failure to issue a proper cure notice and excusable causes of
failure to perform based on constructive changes. He also pointed out that the constructive
changes based on impossibility would survive even if the default were
upheld. The DCAA auditors had disallowed costs based on the adjustment for loss
formula. Mr. Spriggs pointed out that
the procedure does not apply when the government substantially contributes to
the loss. Following the written presentation,
he led the negotiation team, which successfully settled the matter with the
government, converting the default to convenience and paying a substantial
portion of the contractor’s costs
(which included his consulting attorney fees) plus profit.
·
Careful
contract administration yields nearly a billion dollars. The Corps of Engineers attempted to
terminate improperly a Katrina disaster
recovery contractor. Mr. Spriggs
devised a plan that successfully thwarted the removal attempts, resulting in
the contractor’s recovery of $750,000,000 in revenues. Then, seeing various constructive changes based on daily questions about contract
interpretation, he prepared and submitted requests for equitable adjustment and
claims for an additional sum of over
$100,000,000. Most of the demands and claims were based on
contract interpretation issues. Still, the allowability of certain costs also
came into play, requiring him to work with DCAA to resolve cost allowability
and allocability issues. One of the claims involved the unique theory
that the contractor is entitled to relief under the Changes clause, where the
government and the contractor were equally ignorant of the underlying facts. Through that theory, a variation on the superior knowledge doctrine, Mr.
Spriggs convinced the Corps of the efficacy of equal ignorance. He settled the
claim for 100 cents on the dollar.
Later, Mr. Spriggs successfully prosecuted a protest of the advanced
contracting initiative for disaster recovery services.
·
Proving
DCAA auditors were wrong. DCAA
auditors disallowed certain overhead costs as not allocable to a
government-owned contractor-operated (GOCO)
nuclear facility. The allocability issue centered around how
much off-site overhead would be allowed on the contractor’s employees at the
GOCO facility. Mr. Spriggs analyzed the
situation, and based on his experience in the Arctic submarine tanker case (discussed below), he wrote a position
paper explaining to the auditors that the allocability regulation was written
in the disjunctive and that if the cost is necessary to the operation of the
business in support of the statement of work, it is allocable to the government
contract. Moreover, only potential
direct benefits must be demonstrated.
There is a benefit, general in scope, derived from costs necessary to
the overall operation of the business.
In meetings with DCAA, the auditors finally concluded that the offsite
overhead was allocable to the GOCO contract.
·
Government
misuse of proprietary, confidential data.
The Air Force received a contractor’s unsolicited proposal for aircraft frame stress sensing systems
and wrote the contractor saying it would treat the submission as proprietary
and confidential. After that, the
government published a synopsis of the concept and asked for expressions of
interest from contractors. Mr. Spriggs
argued that the contractor’s offer and the government’s acceptance formed an
implied contract not to disclose the data.
Alternatively, he claimed the implied warranty resulted directly from
his client’s response to the government’s offer to consider unsolicited
proposals. Detailed written
presentations and extensive negotiations followed to no avail. Mr. Spriggs tried the case and won a motion
for summary judgment.
·
Stopping
a sole source acquisition. The
government intended to award an exclusive source acquisition of bomb fuses. Mr. Spriggs parsed the language of FAR Part 6 and the relevant precedents
and determined adequate justification for the sole source award, which had not
been adequately analyzed and documented.
The facts did not justify the prize, and an exception to the competition
requirement did not exist. After trying
to convince the government of its error to no avail, he again sought relief in
court, and the court agreed, issuing
a permanent injunction prohibiting the sole source award and granting the
client the opportunity to compete.
·
Creating
a new theory of recovery. The Army contracted for water to be supplied to troops in Iraq. The contract required the government to
assist the contractor by providing adequate facilities, space, and
accommodations necessary for contractor personnel to perform the contract. It then terminated the contractor for default
and failure to meet the delivery schedule.
The agreement was awarded under FAR Part 12, which deals with commercial item contracting with
special terms and conditions for such acquisitions. Mr. Spriggs, an expert on commercial item
contracting, prepared the contractor’s response to the termination for default
based on claims that the government breached the express and implied terms of
the contract, requiring the government to cooperate and provide the contractor
with facilities and accommodations necessary for contract performance. He pointed out that the principles of common
law and the Uniform Commercial Code (UCC) govern the parties' relationship
under commercial contracting. He thus
prepared a presentation based on the principles of traditional contract
damages, including incidental and consequential damages, reaching far beyond
the constructive change equitable adjustment principles involving the FAR Part 31 cost principles. The new theory arises almost of necessity,
given that Mr. Spriggs argued that FAR Part 12 essentially removes the changes
clause. The case is pending.
·
Defective
government-furnished drawings and specifications. According to detailed drawings and
specifications, the Army contracted for rough terrain forklift trucks. The contract required significant engineering
effort and completion of the first article testing. The contractor encountered errors in the
government-furnished data package and submitted dozens of requests for waivers
(RFW) and engineering change proposals (ECP).
The government granted them in part and denied them in detail. During and after the first article testing,
the DCMA product inspectors descended on the contractor’s plant and frequently
interfered with the contractor’s performance.
They also delayed and disrupted the contractor’s performance. After completion of the work, but before
final payment on the contract, the contractor sought the advice of Mr. Spriggs,
who put together a constructive changes
presentation with voluminous attachments and enclosures. He then followed his time-honored pattern of
describing each contract requirement, exactly how the government constructively
changed the condition, and how the changes affected the nature and cost of the
work. He then put together a detailed
presentation of all the associated costs, including his fee, plus profit. Each RFW and ECP was discussed in detail,
showing the technical engineering cause and the effect on production. In addition to the detailed factual
description, he followed his usual procedure of making sure each constructive
change and request for equitable adjustment was supported by legal theory. The legal principles used were defective government-furnished data,
commercial impracticability, and overzealous inspection. Each RFW and ECP, he argued, was an admission
of government liability. Extensive DCMA and DCAA technical and audit reviews followed. Mr. Spriggs insisted on receiving all the
technical evaluations and the audit report.
Then, with those in hand, he responded point by point to each position
taken by the government. He then set up
negotiation sessions. In the first
session, he presented the contractor’s entire case, from beginning to end,
including all costs associated with equitable adjustment. He insisted on giving a chance without
interruption and used several key contractor employees in the
presentation. He then offered the
government the opportunity to present its case. At the end of the government’s presentation,
he gave the client a rebuttal and asked for a reasonable settlement offer. After an intermission, settlement offers were
exchanged, and the matter was favorably settled (Mr.
Spriggs has written monographs
on How to Write a Winning Request for
Equitable Adjustment and How to
Settle Disputes Effectively, Efficiently and Amicably.)
·
Conflicts
in performance specifications. The Army purchases air transportable, heavy-duty forklift trucks with performance, form,
fit, and function specifications.
The contractor encountered huge losses on the contract trying to design
the car to meet the weight restriction and still be powerful enough to meet the
performance requirements. Mr. Spriggs
was brought in. He analyzed a basic and
straightforward conflict or error in the performance specification’s weight and
power train requirements. The design
could not meet the weight restriction to meet the power requirements. So, he prepared a constructive change request
based on a primary defect in the government-furnished data. The presentation and negotiation of the
request followed the time-honored pattern.
He began his review with a request for all the government
documents. He used the Freedom of
Information Act and face-to-face persuasion.
Mr. Spriggs found internal government documents agreeing with his
position and successfully settled the matter using these documents as trump
cards.
·
Saving a
small business from bankruptcy. The Navy bought weapons guidance systems from a small business. It then terminated the contract for default,
and the Armed Services Board of Contract Appeals (ASBCA) converted the default
to a termination for convenience. The
company asked Mr. Spriggs to prepare its termination settlement proposal. He included requests for equitable adjustment in the proposal because the proposal exceeded
the original contract price. This
brought into play the termination contracting officer (TCO) and the procurement
contracting officer (PCO) with whom Mr. Spriggs had to deal. The company then went into Chapter 11 of the
Bankruptcy Act. The bankruptcy judge
wanted to hear testimony from Mr. Spriggs on the nature of the contractor’s
claims and the probability of recovery. Hence, Mr. Spriggs testified at length
in New York before a bankruptcy judge as an expert on government
contracts. The issue was whether the Navy
claims would settle for enough to fund the Plan of Arrangement to get the
client out of bankruptcy. Mr. Spriggs set
about paying the claims and meeting weekly to discuss settlement. The parties remained far apart. The Navy refused to recognize any of the constructive changes. Then Mr. Spriggs violated the rule that the
contractor never bid against itself. He
got the Navy counsel aside and told him what number it would take to settle the
case. He said the number required to
fund the Plan of Arrangement in bankruptcy was non-negotiable. Shortly after, the Navy agreed to the number,
the plan was funded, and the small business contractor emerged from Chapter 11,
a viable company once again. But not for
long. The company got back into
financial trouble and sought Mr. Spriggs's advice again. This time, Mr. Spriggs petitioned the
Contract Adjustment Board 5 times for relief under Public Law 85-804, eventually getting the client the relief it
needed.
·
The
government pays the consultant’s fees. The
Department of Interior (DOI)
specified road surface material for road
reconstruction in Maui, Hawaii, which was unsuitable for the climate. Doing right by mistake, the DOI terminated
the contractor’s contract for the government's convenience. Having received a note from Mr. Spriggs
reminding him that consultant’s fees are recoverable from the government, the
contractor’s president called Mr. Spriggs.
After that, Mr. Spriggs put together the termination for a convenience settlement
proposal, including all of the subcontractors’ claims and, of course, his fees
and expenses. A most pleasant
negotiation followed with the contracting officer in Denver, after which Mr.
Spriggs settled the settlement proposal for 97 cents on the dollar.
·
The
government pays for the contractor’s futile efforts to get commercial
work. A shipbuilding contractor devoted 100% to government work faced a
decline in its backlog and sought to diversify.
A consortium of private companies asked the contractor to design a submarine tanker to transport oil. The contractor created the vessel and
prepared its proposal to the consortium.
It spent a considerable sum in the process and charged its costs to its
overhead pool, which was then allocated to all its existing work, which was
government work only. The government
objected, and the DCAA auditors
disallowed all the costs. The consortium
never accepted the tanker proposal. The
contractor appealed and sought Mr. Spriggs's counsel. The case turned on the allocability section of FAR
Part 31. Mr. Spriggs argued that the
criteria for allocability were stated in the disjunctive and that the costs
were beneficial and, therefore, allocable to the government since they were
necessary to the overall operation of the contractor’s business. Necessity was demonstrated in the need to
acquire additional work, ultimately bringing the government’s costs down and
preserving the contractor’s pool of talented engineers for the future and
potential government benefit. The
government continued to object. After
cross-examination of the DCAA auditor at trial, during which Mr. Spriggs
demonstrated the auditor had not been reading the regulation correctly, The
ASBCA agreed with Mr. Spriggs and held that the costs were, in fact, allocable
to the government in that they potentially could have benefitted the
government. The decision became a
landmark and has formed the basis for many successful arguments that costs are
allocable based on potential benefits.
·
Creating
the government contractor defense in product liability cases. When the asbestos litigation crisis peaked, a group of current and former
manufacturers of asbestos-containing products sought Mr. Spriggs's advice on
involving the government, which had approved the use of asbestos, in resolving
the problems its use had created. Over
lunch one day, Mr. Spriggs outlined an approach most of the companies then
followed to defend the underlying product liability cases and to seek the
government’s contribution and indemnity for losses the companies had
incurred. The idea was a variation of
the time-honored defective specification theory. Mr. Spriggs became known as the father of the
government contractor defense theory in product liability cases. Although the idea took off slowly, the
Supreme Court eventually articulated it, and courts have since applied it to
all types of government contracts, including services. The defense is an absolute bar to personal injury
or property damage cases brought by third parties against government
contractors following specific directions from the government. Mr. Spriggs was instrumental in asserting
this defense in a third-party suit against a government contractor in the
aftermath of Hurricane Katrina. He also
believes the theory correctly applies to subcontractors following the direction
of prime contractors, who follow the government’s approach.
·
Recovering
profit on top of consultancy fees. A
contractor encountered delay and changing requirements on a U.S. Postal Service
(USPS) contract for mail storage and distribution systems,
including pallet racks and conveyor systems. After losing money on the agreement, the
contractor sought Mr. Spriggs' advice.
He went to work on a request for equitable
adjustment, which included delay and disruption costs, constructive
acceleration of performance, and contract administration costs, including
his fees. After negotiations languished,
he took the matter to the Postal Service Board of Contract Appeals (PSBCA),
where he won a complete victory, including the recovery of his fees plus the
contractor’s average profit applied on top of those fees.
·
Using the
battle of experts to the contractor’s advantage. The Air
Force contracted for missiles
under an incentive compensation
clause, which provided the contractor an incentive fee if the missile launch
proved successful or if the cause of the failure could not be determined. The launch failed. Mr. Spriggs recovered the incentive fee for
the contractor by showing it was impossible to determine the cause of the
failure. By extending the battle of the
experts, he proved his point that no one knew what had happened.
·
Advice on
countless cost-allowability questions. Cost
allowability questions abound. The cost
principles in FAR Part 31 come into
play in all requests for equitable adjustment and terminations for convenience,
to say nothing of cost-reimbursement contracts that are still alive and
well. Mr. Spriggs has advised several
contractors on various cost allowability issues, including the allowability of bonding costs, compensation for personal
services, cost of money, entertainment costs, idle facilities costs,
independent research and development, bid and proposal costs, lobbying,
professional and consultant benefits costs, selling costs, taxes, termination,
and travel costs. He also has
successfully argued the applicability of the rule against retroactive
disallowances to defeat all types of cost disallowances.
·
The
premium placed on proper contract administration. The Department of Housing and Urban
Development (HUD) is contracted to repair damaged and construct new homes. The contractor encountered delay, disruption,
and feeble government contract administration.
Then, the government terminated for default. Since a proper cure notice was not provided,
Mr. Spriggs persuaded the agency to rescind the termination for default and
instead consider requests for equitable adjustment based on the government’s
failure to administer the contract properly.
The government had failed to keep proper contemporary records of the
work performed. The government also
moved far too slowly under the emergency circumstances. Counseled to do so by Mr. Spriggs, the
contractor practiced timely, accurate, and complete record-keeping, thereby
prevailing in recovering additional money.
Mr. Spriggs also established the ability to recover differing site
condition costs when a limited site inspection is afforded. He also found the government responsible for
delay and disruption costs based on the theory the government implied warranted
homeowners would not interfere with the work.
·
Sometimes,
fundamental fairness prevails. In a
unique contracting situation, the government, acting through the Navy, refused to pay for aircraft engine parts and services
because a subcontractor declined to provide cost or pricing data. Mr. Spriggs argued that the subcontractor’s
failure was irrelevant to the contractor’s claim to be paid. The ASBCA agreed and held that the contractor
was entitled to a reasonable value of the work performed. The subcontractor's
failure to submit the cost or pricing data did not defeat the contractor’s
claim. It ordered that fair value had to
be paid.
·
Hidden
ambiguities are construed against the government. The Army
argued that the economic price
adjustment clause did not apply to a first-article test report. Particular
contract language addressed the circumstances under which the clause would be
used. However, the language in the
specific clause was unclear. Mr. Spriggs
argued that government contracts are contracts of adhesion whereby the
government dictates and writes the terms and conditions. If language is not ambiguous, the lack of
clarity must be construed against the government. The Board agreed that the contractor could
not reasonably have noticed the ambiguity while reviewing the solicitation to
prepare its bid.
·
Cost
disallowances and default terminations are government claims. Cost allowability and default termination
disputes involve claims by the government on which it bears the burden of
proof. In a Trident submarine contract for information systems, Mr. Spriggs
demonstrated that a cost disallowance is a government claim, and the contractor
does not need to certify its reimbursement claim. Failure to pay routine vouchers also is not a
certification claim.
·
No
novation is needed for transfers by operation of law. Mr. Spriggs has also
handled the recovery of unamortized labor learning costs in terminating a bomb
fuse contract. He has established that requiring a novation of a contract
agreement is unnecessary if the contract transfer is by operation of law. A merger
is a transfer; therefore, it does not violate the Anti-Assignment statutes. Mr.
Spriggs has, on numerous occasions, dissuaded the government from requiring a
novation agreement when the transfer has taken place by operation of law.
·
Enforcement
of the Freedom of Information Act time limits. Mr. Spriggs has been involved
extensively in controversies involving the Freedom of Information Act (FOIA).
He has used FOIA as a shield to prevent the release of proprietary and
confidential business information (reverse FOIA actions) and as a sword to
obtain timely information release. In one notable appellate case, he
established the precedent that the government must promptly release abstracts
of negotiated acquisition results for a client selling acquisition information.
Education:
B.A. in English Literature from Abilene Christian University,
President Sigma Tau Delta, Honorary English Society; J.D. from Washburn University School of Law, where he served as an
editor of the Washburn Law Journal.
Military: Mr. Spriggs served as a
commissioned officer in the U.S. Marine Corps, serving eight years in the
reserves and three years on active duty.
Employment history:
·
2011-present,
Spriggs Law Group
·
2009-2010,
Buchanan Ingersoll & Rooney PC, Washington, D.C.
·
1982-2009,
Spriggs & Hollingsworth, Washington, D.C.
·
1972-1982,
Sellers, Conner & Cuneo, Washington, D.C.
·
1969-1972,
Martin Marietta Corp. (now Lockheed Martin), Denver, Colorado
·
1968-1969,
The Boeing Company, Wichita, Kansas
Admissions:
District of Columbia Bar; Court of Federal Claims and Court of
Appeals for the Federal Circuit; United States District Court for the District
of Columbia; United States Supreme Court.
Memberships: DC Bar Association; American Bar
Association; National Contract
Management Association; Professional Services Council; National Defense
Industrial Association; Fredericksburg Regional Chamber of Commerce; Prince
William Chamber of Commerce.
Publications: http://spriggslawgroup.BlogSpot.com
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