Attorney Client Privilege

[Whynot]

Hypothetically, if during the performance of a cost reimbursable contract, a prime contractor utilizes attorneys and charges the customer for their time, assume it is within scope, allowable and not part of termination or legal proceeding with the customer, and the attorney provides some attorney-client-privilege material to the prime contractor, does the customer because they have paid for the attorney’s time have access to this material or does the attorney-client-privilege remain intact. It is hypothetical make any assumptions you want that may impact your response.

[Retreadfed]

The attorney-client privilege only applies to communications between an attorney and his/her client arising out of that relationship. Assuming that the contractor is the client of the attorney and that the government is not the client, the privilege would attach and the attorney could not provide the material to the government unless the contractor waived the privilege.

Two FAR provisions are relevant to this question: FAR 31.205-33, which arguably could be read as requiring the contractor to provide the material in order for the cost of the attorney to be allowable, and 52.203-13 which indicates that privileged materials do not have to be disclosed to the government.

As a practical matter, if you get into a dispute with the contractor over access to the materials, I doubt that an appeals board or court, where lawyers dominate, will agree that the government has access to privileged material.

[ji20874]

Is this a pre-award or post-award question?

If pre-award, and a Government agency is planning a cost-reimbursement contract, and assuming there is some rational need that the agency has identified before entering into the contract, the agency might reasonably include a clause in the solicitation and contract requiring delivery of all work products resulting from professional and consultant (including legal) services subcontracts arising under the contract or directly charged to the contract. If that clause is problematic for a contractor, it can be dealt with in negotiations before contract award.

If post-award, well, we really can't speak hypothetically, can we? One needs to read the contract, read the FAR, and read the case law, and then speak based on the readings. But if I did want to play hypothetically, I might start by asking whether the legal services were charged directly to the contract or indirectly to overhead or G&A pools. I'm not sure (I haven't read any case law), but that might be part of the equation for the answer. But FAR 52.205-33 needs to scrutinized very carefully. Were the legal services for the contractor's sole benefit, or were they necessary for accomplishing the contract work? [i'm not asking for an anwer from the original poster, just raising some questions hopefully for his or her benefit.]

[here_2_help]

Interesting question.

I think Retreadfed has answered the question asked, though I would add that the customer has not "paid for the attorney's time." Instead, the customer has reimbursed the prime contractor for costs incurred, in accordance with the terms of the prime contract. That distinction makes a world of difference.

I'm guessing there would be a number of situations where an attorney's efforts would be both in scope and allowable -- such as DOE M&O contracts or DOD BOS-type contracts. Would those efforts normally be direct-charged to the contract (and burdened with indirect costs and profit/fee)? Hard to say; it would depend on the contractor's disclosed or established cost accounting practices.

If the attorney's time was direct-charged to the prime contract, that fact very likely would not act to waive privilege and give the customer some special access rights. Clearly, there is no "title" to pass to the customer, as would be the case with cost-type contracts and purchased direct material. The attorney is providing a service, period. The customer does not obtain title to the attorney's work product, for the reason Retreadfed posted. (On the other hand, if IP rights are involved, what does the contract say?)

Good hypothetical ... got me thinking.

H2H

[Guest Vern Edwards]

Retread and ji20874:

You can get mad at me if you like, but I'm calling you two out.

The question is about attorney-client privilege. That's a very complex topic. Most attorneys are not experts. Are you qualified to answer questions about attorney-client privilege? On the basis of what credentials? I certainly am not qualified, but maybe you two have credentials that I don't know about and don't have myself.

Did you ask appropriate questions before venturing your answers? (The answer is no.) I note that you have not cited a single monograph or board or court decision as authority for your assertions. Are you familiar with Epstein's The Attorney-Client Privilege and Work Product Doctrine, 5th ed. (two volumes) (2007) or The Attorney-Client Privilege and Work Product Doctrine by the American Bar Association, 4th ed. (2003)?

Retread, you say: "The attorney-client privilege only applies to communications between an attorney and his/her client arising out of that relationship."

Great. Now, just what constitutes "that relationship"? Have you read Rovner, "The Unforeseen Ethical Ramifications of Classroom Faculty Participation in Law School Clinics" in University of Cincinnati Law Review (Spring, 2007), which quotes Maryland Court of Appeals as saying: "What constitutes an attorney-client relationship is a rather elusive concept"? What do you think about this, from a note in the Harvard Journal of Law & Technology (Spring, 2004): "It is hard to imagine an unsophisticated client actually understanding just what constitutes an attorney-client relationship...."

Are all communications between attorney and client protected. Hmmm?

Are either of you familiar with inadvertent waiver of the privilege? Have you studied the 52 page monograph by Thornburgh, Waiver of the Attorney-Client Privilege: A Balanced Approach, from the Washington Legal Foundation?

This was Whynot's question: [D]oes the customer because they have paid for the attorney’s time have access to this material or does the attorney-client-privilege remain intact[?]

The only proper answer to that question is: "I don't know. Ask your lawyer."

[Guest Vern Edwards]

I suspect that Whynot's question arouse out of FAR 31.205-33(f), which requires documentation to support a request for cost reimbursement. If so, then see Manos, Government Contract Costs & Pricing 2d, Section 40:6, which includes a lengthy discussion of the history of the cost principle, DCAA guidance, and litigation over demands for the production of privileged information in order to document costs. However, it does not discuss when the privilege applies or what information is covered by the privilege.

[here_2_help]

Vern,

No dispute with your posts; just wanted to add that recent DCAA audit guidance (issued after Manos' publication date) directs auditors into a collision course with contractors seeking to assert protections afforded by privilege. (See, e.g., MRD 12-PPS-018 dated July 25, 2012 and MRD 12-PPS-019 dated August 14, 2012).

H2H

[ji20874]

Vern,

You err in suggesting that I answered (or attempted to answer) the original poster's question -- I made no attempt to answer the question, either definitively or hypothetically, but just to offer some food for thought, so to speak. As for credentials, well, the original poster didn't ask for answers only from a credentialed expert -- he or she wanted to stimulate some discussion and some dialogue, and maybe even hear things he or she wouldn't hear from a credentialed expert who knew all the facts. That sort of exchange is what makes WIFCON a valuable resource to players in the government contracting field.

[Guest Vern Edwards]

Well, we can disagree about how valuable that specific sort of exchange is to players in the contracting field. A better response would have been to cite some informative source, like Manos, or just to say, "You'd better ask a lawyer about that." But I have said all I have to say about it.