This blog post was authored by Tyson Bareis.
In November, the Civilian Board of Contract Appeals issued two decisions reiterating that contractor allegations of a government breach of the covenant of good faith and fair dealing, which is inherent in every contract, differ from allegations of bad faith. See Jane Mobley Associates, Inc., CBCA 2878 (Nov. 14, 2012); Sigma Services, Inc., CBCA 2704 (Nov. 5, 2012). These decisions are important because contractor allegations of government breach of the covenant of good faith and fair dealing (i.e., lack of diligence, negligence, or failure to cooperate) are relatively common when litigating contract claims. Frequently, when contractors make such allegations against government personnel, contracting officers and government attorneys rely on the higher “well-nigh irrefragable proof” standard for demonstrating bad faith on the part of government personnel, despite the fact that case law has distinguished between these allegations for several years. The latest CBCA cases are explicit in distinguishing these types of allegations and, therefore, may be of great use to contractors bringing claims against the government. The cases also serve as an excellent reminder that the presumption that government employees act in good faith when discharging their employment duties, which underlies the high standard required to show bad faith on the part of government personnel, is narrow and will not protect the government from all allegations of misconduct.