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Government Contracts

Government Contract

A government contract is when the government seeks out a contractor who will fulfill a certain task for them. In many cases, the contractor is some sort of construction or building entity that will perform construction work on behalf of the government. However, contracting is also done in many other sectors of the government. Government contracts are usually obtained through a formal process of bidding. Agreements between the federal government and private individuals or businesses generally take one of three forms:

  • Procurement Contracts
  • Federal Grants
  • Cooperative Agreements

Government Contractors

Government contractors are individuals or companies contracted by the United States government to design, develop and produce various products. Military contractors are the most common type of government contractors.

Procurement Contract

A procurement contract is an instrument used when the United States government and a private party establish an agreement for the government to acquire property or services for the direct benefit or use of the United States. The vast majority of the agreements entered into by the United States government constitute procurement contracts. Since they are generally for the government's direct benefit, the government typically demands far more extensive involvement or participation during the performance of such a contract that most private parties would insist on.

Grant Or Cooperative Agreement

The government uses either a grant or cooperative agreement (instead of a procurement contract) when the principal purpose of the relationship is to transfer something of value to a state or local government or a non-profit entity to carry out a public purpose. A “grant” is used when substantial involvement is not expected between the government and the recipient when carrying out the activity contemplated in the agreement. A “cooperative agreement” is used when there is expected to be substantial involvement between the government and recipient.

Types of Government Contract Disputes

Government contract disputes can often arise in connection with a government project. Some common types of contract disputes include:

  • Abandonment of the project, or failure to complete the project
  • Disclosing confidential government information related to the project
  • Disputes over rates, pricing, materials, and other technical details
  • Conflicts with third parties or outside companies
  • Issues with assigning contract terms to other parties

Contract conflicts may often be resolved through a lawsuit or through an agency investigation. Some contract disputes involve remedies like damages, especially if third parties were injured or suffered losses due to a violation.

Contract Awards

Contract awards refer to situations in which a company or the government seeks a party to hire to fulfill a certain project. Each of the competing parties submits a bid to the hiring organization. If they are selected for the project, they may be “awarded” a contract to complete the work. A common example of this is where the government needs to find a contractor to build a building or to repair certain structures. Only one business or contractor will be awarded the contract.

The term “contract award” can sometimes also refer to a damages award that is issued in relation to a breach of contract claim. Contract awards are often associated with large government projects, though they can also be involved with smaller, private business endeavors as well.

Common Disputes over Contract Awards

Contract awards are typically straight-forward agreements in which the most competitive bidder is chosen to complete the work. However, this can often lead to some legal conflicts, such as:

  • Incomplete or unsatisfactory work product
  • Unauthorized assignment or delegation of contract duties
  • Breach of contract claims
  • Violations of environmental or zoning statutes
  • Violations of local business ordinances and regulations

Like any contract situation, contract awards can sometimes involve third parties. This can further complicate matters if multiple parties are involved. 

Filing A Lawsuit over a Contract Award

Remedies for a contract award lawsuit will often depend on the type of legal issue, as well as the type of contract involved. Also, the process for handling such lawsuits may differ in each case. For instance, for federal government contracts, you may need to file a complaint with a government agency, depending on the type of claim or violation involved. For private contract awards, it may not be necessary to work with a government agency.

Legal remedies may include a damages award for losses, or an equitable remedy such as specific performance of contract duties.

Government Contractor Immunity

In some cases, a contractor hired by the government may be immune to legal action. This depends on many factors, and is subject to limitation. Generally, in order to be immune to a lawsuit, the contractor needs to be working within the specific scope of authority granted by the government project. Contractors can often forfeit their immunity if they step outside the bounds of what they are supposed to be doing. Contractors acting within the scope of their contracts with the government generally have what is called limited government immunity. The rationale for this immunity status is that if contractors were liable for all injuries they incurred in designing and developing products for the government prices would be too high for the government to afford hiring outside contractors.

Limitations on Immunity

Government contractor's immunity is not infinite and there are some important limitations. These limitations include the following:

  • Contractors are not immune if they failed to warn of defects that it knew about and didn't inform the federal government of.
  • Contractors must comply with the specifications of the federal government. If the contractor didn't follow the specifications of the government it should be held liable.
  • If a product was purchased from a contractor that was not specifically making the product for the federal government then immunity would not apply.

How Do I Obtain Government Immunity?

Government contractors that are afraid of not getting immunity should check their contracts. In addition, these parties should check all documentation to make sure the government's instructions were followed explicitly. If the government's instructions were not followed exactly then these parties should make sure that the government gave clearance to make these alterations.

Private Contractor Taking Over State Functions

There are occasions in which a private contractor takes over state functions. Some examples include security of airports and prisons. These situations may render private contractors liable to individuals who are injured by their own negligence. Private contractors, therefore, should be very careful when taking over government contracts.

How Can A Lawyer Help Me With A Public Contract With The Federal Government?

As all three types of public contract agreements with the government are governed by federal rules, an attorney's assistance is absolutely necessary. Attorneys experienced in contract or government law can make sure that any public contract between you and the government meets the requirements of federal law. Contract awards are a major aspect of many business endeavors. Retaining a contract attorney will be invaluable in making sure that the government does not take advantage of you through the terms of the contract.