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Found 1 result

  1. What happens when the Government accepts articles containing synthetic fabric or coated synthetic fabric, only to realize later that the item is noncompliant? As a general matter, under the standard “Inspection” clause once final acceptance has occurred, the Government has no remedy under the contract itself. Acceptance is only inconclusive if there are latent defects in the items, fraud, or gross mistakes amounting to fraud. In March of 2013 a defense contractor self-reported to me, the contracting officer, that it delivered components which were not compliant with DFAR 252.225-7012 Preference for Certain Domestic Commodities clause in 14 of its contracts from 2005 to 2010. They also submitted a proposal to compensate the Government for the contractual non-conformance. I found that the National Aeronautics and Space Administration Board of Contract Appeals has examined whether a failure to follow a domestic preference requirement could constitute a “gross mistake amounting to fraud.” In that case, three years after it accepted and paid for steel tubing, the Government realized that the tubing violated the Buy American Act provisions in the contract and sought either an equitable adjustment in the contract price or replacement tubing from the contractor. The board found that neither remedy was available, reasoning that the “Inspection” clause was not meant to cover mistakes on a “collateral matter” such as a Buy American Act violation. Thus, the Government’s acceptance was final, and the Government could not invoke its pre-acceptance remedies. The board further found that the Buy American Act clause itself provided no express remedy for a violation of its terms. I believe the same reasoning logically should apply with equal force to the Berry Amendments synthetic fabric restrictions. The same kind of domestic preference policies are involved, and the “Preference for Certain Domestic Commodities “clause is equally silent on the subject of post acceptance remedies. My legal advisor’s opinion is, “if the contractor self-reported than it must be a Berry violation” and we should accept the compensation.
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