In the previous posting, I discussed a contractor that lost its constructive acceleration claim. In the same case, the contractor argued that the government / owner breached the implied covenant of good faith and fair dealing that exists in every contract. The contractor argued that the government denied its requests to work beyond regular work hours so that it could recover the project delays. The regular work hours were between 7am to 3:30pm Monday through Friday. Work outside of these hours required approval from the contracting officer. The contractor wanted to work every Saturday which the government denied although the contracting officer did extend the work hours from 6:30am to 6:30pm on Monday to Friday, and permitted the contractor to work on three Saturdays.
As it pertains to extending the contractor’s work hours, the prime contract used discretionary language, i.e., the contracting officer may approve such requests based on justification provided by the contractor. The contractor contended that by the contracting officer arbitrarily and unreasonably denying its request to work every Saturday to recover the schedule breached the government’s implied covenant of good faith and fair dealing. The Court of Appeals for the Federal Circuit disagreed:
The justification that [the contractor] needed to work outside of regular hours because it was behind on project completion is simply insufficient, as agreeing with [the contractor] would essentially mean that a [contracting officer] could never exercise discretion with respect to work hours requests as long as the contractor says, ‘we’re behind.’ And the fact that the [contracting officer] did extend hours during business days and allowed the contractor] to work on three Saturdays further underscores that the [contracting officer’s] denials were not arbitrary.
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