May 22, 2022

Volume XII, Number 142

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May 19, 2022

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Key Takeaways From Recent Decisions Discussing Release Of Claims Provisions

Over the last few months, we’ve reported on various government contracts decisions that illustrate the impact a release of claims provision can have on contractors. For example, we recommended that contractors should: (1) be precise when drafting and negotiating a release provision and, whenever possible, avoid using sweeping language, and (2) maintain contemporaneous documentation of release negotiations, including of any communications with the government before, during and after the release is executed.  This guidance likely would have helped the contractor in MBD Maintenance, LLC v. United States Post Service, PSBCA Nos. 6625, 6642, the latest Board of Contract Appeals decision to bar a contractor’s claims based on a broad release of claims provision.

In MBD Maintenance, the contractor submitted a claim (and initiated an appeal) after signing a broad release of claims form associated with its request for final payment.  That release stated the contractor would “remise, release, and discharge the Postal Service . . . of and from all liabilities, obligations, claims, and demands whatsoever under or arising” from the contract.  This release also included a block that allowed the contractor to identify any excepted claims, but the contractor left that block blank.

The Postal Service moved for summary judgment, arguing that the general release provision barred the claim. The contractor asserted that the release should not apply because it “reasonably believed it could continue to pursue its claim based on conversations between the parties” about the claim and prior to executing the release.  In denying the appeal, the Postal Service Board of Contract Appeals rejected the contractor’s argument, in part, because of lack of evidence supporting its argument. In other words, the presentation of contemporaneous documentation may have helped the contractor overcome summary judgment and live to fight another day.

The bottom line: Contractors should never treat a release of claims provision as an afterthought or assume that the parties’ contemporaneous ─ but undocumented ─ discussions will provide a sufficient basis upon which to pursue claims moving forward. To the contrary, as demonstrated by this decision, and a broad release provision can result in a claim being dismissed outright – regardless of the substantive merits of the claim itself.

© 2022 Covington & Burling LLPNational Law Review, Volume VII, Number 87
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About this Author

Justin Ganderson, government contracts lawyer, Covington
Special Counsel

Justin Ganderson is Special Counsel in the firm’s Washington, DC office and a member of the Government Contracts Practice Group. Mr. Ganderson focuses his practice in the areas of claims and disputes resolution, internal investigations, public and private partnerships, utility privatizations, and general federal government contract counseling.

Mr. Ganderson has extensive experience in preparing and crafting requests for equitable adjustments and Contract Disputes Act (CDA) claims, and resolving disputes with government agencies prior to the commencement of...

202.662.5422
Alejandro L. Sarria, Covington Burling, litigation lawyer
Special Counsel

Alejandro L. Sarria is an experienced government contracts litigator and counselor. He represents civilian and defense contractors in litigation involving the federal government, including in contract disputes before the Boards of Contract Appeals (BCA) and U.S. Court of Federal Claims (COFC). Mr. Sarria also defends private contractors in high-profile tort cases arising out of military operations, national security programs, and environmental remediation projects.

In his counseling practice, Mr. Sarria advises government contractors on a range of federal...

202 662 5426
Ian Brekke, Covington Burling Law Firm, Government Contracting Litigation Attorney
Associate

Ian Brekke advises clients across a broad range of issues arising from their participation or connection to government contracting, including advising on particular regulatory requirements in contracts, grants, and other government agreements, advising clients in transactional matters involving government contractors, and providing guidance on intellectual property rights.

Mr. Brekke’s government contracts experience also includes representing clients involved in contract disputes, government investigations, civil litigation, and bid protests.

202-662-5016
Chase Johnson, Covington, trial lawyer
Associate

As a trial lawyer, Chase Johnson represents clients in high-stakes cases. Mr. Johnson has extensive courtroom and advocacy experience: in the past year alone, he has first-chaired over eight weeks of jury trials in federal and state court. His cross-disciplinary practice includes commercial litigation, the False Claims Act, government contracts, and products liability matters.

Mr. Johnson maintains a robust pro bono practice, focusing on indigent criminal defense and military veterans. Most recently, Mr. Johnson successfully achieved a not-guilty verdict for a...

202-662-5316
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