United States: Ninth Commandment Of Government Contracting: Thou Shalt Be Prepared To Reciprocate

(This article is part of a 10-part series for the blog of Public Contracting Institute called, "A Government Contractor's Ten Commandments.")

It would be wonderful if everything in a Government contractor's life were black and white: Both parties could live by the language in the contract and there would be no need to stray from that language. But that does not happen. In fact, a Government contractor's life is filled with dealing with people, on both sides of the fence, who either don't like what the contract says or want to ignore it. One of the most difficult things to learn is when and where to be flexible in terms of performing or administering the contract. Many times the ability to make the right decision boils down to the relationship between the parties.

The two parties to a contract have a peculiar relationship. On the one hand, it is adversarial because they represent different interests and have different goals. On the other hand, any experienced contractor or contracting officer will be quick to admit that successful contract performance requires the cooperation of both parties from beginning to end. Without that cooperation, failure will always be a possibility.

Lawyers and judges often preach about the sanctity of contract and how important the language of the contract is, and they are correct. But it is also true that Murphy's Law plays as significant a role in Government contracting as it does in every other walk of life; if that is the case, the parties need to be prepared to deal with the twists and turns they will likely encounter during contract performance.

Let's look at a typical example: The contractor gets a call from  the contracting officer one day in June. The C.O. says that she knows that deliveries are not due until July, but she is wondering if the contractor might be able to ship five units right away — it would make the admiral very happy. Could the contractor argue that this would be an "acceleration" under the contract and demand consideration in exchange for doing it? Of course. But should he? That is a judgment call. Maybe the five units are sitting on the factory floor and sending them early is not a problem at all. As a general rule, contractors should leap at opportunities to do favors for their customers, because you never know when you might need one in return. In a situation like this, if management approves, a smart contractor is probably going to send the five units early without asking for anything in return.

Fast forward one month: The contract says that the delivery date is July 30, and the hardware is ready to go a few days before that. But the instruction manuals that are to accompany the hardware are not in the format the Government personnel had expected. The contractor assures the C.O. that the corrections can be readily made and asks for another week to get everything done. Faced with this situation, a C.O. has a number of options, including a default termination for failure to deliver acceptable products on time. But that is where the relationship between the parties can come into play. Without needing to be reminded of the favor the contractor did a month earlier, the C.O. is likely to accept the contractor's proposal without amending the contract.

This is the kind of give-and-take that goes on all the time between contracting parties, and it reminds me of advice I got from one of my bosses in my early days as a contracting officer: People live up to commitments made to other people better than institutions do.  If someone you trust tells you that you have a deal, you have a deal. But you don't get to that point in a relationship until you have built a bond of trust. Regardless of your position and on which side of the table you sit, you need the other side to cooperate with you, and they need you to do the same. Understanding when and where to ask for and grant favors is one of the unwritten rules of our business. Taking a different approach — demanding strict compliance with the terms of the contract on all matters large and small — is going to cause more problems than it solves.

The importance of a business relationship is not parceled out on a contract-by-contract basis. If you think about it, you will realize that our business relationships are on a continuum; they are comprised of many different contracts, deals and negotiations between the parties over a period of time. In some cases one party has the upper hand; in others, the reverse is true.  That should not affect the basic trust the parties have developed over time.

I learned this from a total stranger on an airplane more than 35 years ago. We were eating breakfast on a flight south, and we started to talk about what we had to do that day. He was going to Atlanta to meet with the executives of a major airline for the negotiation of a deal that he was under great pressure to close that same day. When he described the situation, I remarked that it didn't sound like he had much leverage because, in effect, the other company was a sole-source and could demand a huge price. He agreed, but he then told me that he had been doing favors for this company in the New York airports for years, and he intended to call in every I.O.U. he had that afternoon. That was a lesson I will never forget.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions