Posted on 7/23/2011 10:56 AM

THE BIG FIVE IMPLIED CONTRACTUAL OBLIGATIONS

The federal common law of contracts implies the government has 5 obligations in every contract.  (The obligations extend to subcontracts in many if not most cases.)  The government has the duty to:

  1. Write contractual documents which are clear;
  2. Write contractual documents which are free of errors, conflicts and omissions;
  3. Write contractual documents which are commercially practicable and not impossible to perform;
  4. Communicate and cooperate with the contractor and not interfere in the contractor's performance; and
  5. Disclose information vital to the contractor's performance.

Breach of these obligations gives rise to affirmative contractor claims and each breach is an excusable cause of contractor non performance under the default clause.

On the other hand, the government can assert an absolute defense:  that the contractor assumed the risk.  How does the contractor assume the risk?  With regard to numbers 1 through 3, the contractor loses if, upon review of the documents before bidding, a reasonable contractor would have seen the problem.

It gets a little more complicated with subcontracts.  If the subcontract contains a choice of law clause referring to the federal common law of contracts or FAR clauses are flowed down, it is likely these same obligations flow down as well. 

 

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