• R.D. Lieberman,Consultant

Wrongful Default, Lies by Contracting Officer's Representative

The Court of Federal claims recently found the default termination of an Army contract for repair of an Air Force runway to be “improvident” and converted the default to a termination for convenience of the Government. Alutiiq Manufacturing Contractors, LLC v. United States, Fed. Claim No. 15-881C (June 27, 2019). Aside from technical issues with the default, the case is notable for the Court’s calling out an Air Force Colonel, who was the construction manager and Contracting Officer’s Representative (“COR”), for a “history of dishonesty” and his testimony admitting “lying” during this project.


In making the default termination, the contracting officer outlined five acts or omissions that justified his decision:

(1) Alutiiq’s inability to secure an asphalt subcontractor;

(2) Personnel gaps in Alutiiq’s management team

(3) Failure to submit project records and as-built drawings

(4) Failure to submit routine documents and photos

(5) “A belief of the onsite government personnel that the project [was] at least 10% behind schedule.”


The Court found that the Government’s termination decision was improper because it could not pass the standard found in Lisbon Contractors, Inc. v. United States, 828 F. 2d 759 (Fed. Cir. 1997). Lisbon held that the government must demonstrate a reasonable belief on the part of the contracting officer that there was no reasonable likelihood that the contractor could perform the entire contract within the time remaining for contract performance. The government cannot satisfy this burden by merely showing that the contractor was behind schedule (which is all they did here).


The most interesting part of the case was the description of the COR’s (Col. Thomas Niichel) history of dishonesty and specific lies. The court quoted one section of the trial transcript with the COR:


Q. You told him-he asked you specifically if you had contacted that contractor to reaffirm that they had met the spec. right?

A. Yes sir.

Q. Your response to him was unequivocal yes, sir, right?

A. Yes sir.

Q. That was a lie.

A. Yes, it was.


The court concluded that the government did not possess adequate grounds to terminate Alutiiq, noting specifically that the Contracting Officer’s reliance on the assertions of the COR (Col. Nichols) was heavily undercut by his history of dishonesty and hostility towards the contractor.


Takaway. The government must satisfy the Lisbon standard, when terminating for default. Specifically, the government must demonstrate a reasonable belief on the part of the contracting officer that there was no reasonable likelihood that the contractor could perform the entire contract within the time remaining for contract performance. And of course, honesty on the part of contracting officials is required.


For other helpful suggestions on government contracting, visit:

Richard D. Lieberman’s FAR Consulting & Training at https://www.richarddlieberman.com/, and Mistakes in Government Contracting at https://richarddlieberman.wixsite.com/mistakes.

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The website of Richard Donald Lieberman, a government contracts consultant and retired attorney who is the author of both "The 100 Worst Mistakes in Government Contracting" (with Jason Morgan) and "The 100 Worst Government Mistakes in Government Contracting." Richard Lieberman concentrates on Federal Acquisition Regulation (FAR) consulting and training, including  commercial item contracting (FAR Part 12), compliance with proposal requirements (FAR Part 15 negotiated procurement), sealed bidding (FAR Part 14), compliance with solicitation requirements, contract administration (FAR Part 42), contract modifications and changes (FAR Part 43), subcontracting and flowdown requirements (FAR Part 44), government property (FAR Part 45), quality assurance (FAR Part 46), obtaining invoiced payments owed to contractors,  and other compliance with the FAR. Mr.Lieberman is also involved in numerous community service activities.  See LinkedIn profile at https://www.linkedin.com/in/richard-d-lieberman-3a25257a/.This website and blog are for educational and information purposes only.  Nothing posted on this website constitutes legal advice, which can only be obtained from a qualified attorney. Website Owner/Consultant does not engage in the practice of law and will not provide legal advice or legal services based on competence and standing in the law. Legal filings and other aspects of a legal practice must be performed by an appropriate attorney. Using this website does not establish an attorney-client relationship. Although the author strives to present accurate information, the information provided on this site is not guaranteed to be complete, correct or up-to-date.  The views expressed on this blog are solely those of the author. FAR Consulting & Training, Bethesda, Maryland, Tel. 202-520-5780, rliebermanconsultant@gmail.com

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