A recent decision out of the U.S. District Court for the District of Maryland is a good reminder for prime contractors and subcontractors to carefully consider the disputes clause of their subcontracts. The decision is also an example of the importance of taking care when incorporating FAR clauses into subcontracts.
As part of a motion to dismiss the prime contractor alleged the subcontractor did not exhaust its administrative remedies prior to filing suit. The crux of this position was that FAR 52.233-1 was incorporated by reference into the contract and the procedures outlined in the FAR clause should have been followed prior to the subcontractor taking legal action.
The Court disagreed, indicating the parties outlined the specific FAR clauses incorporated into the contract and FAR 52.233-1 was not included. Accordingly, the subcontractor was allowed to pursue its lawsuit against the prime for breach of contract. The case is Therapure Biopharma, Inc. v. Dynport Vaccine Company, LLC; 1:19-cv-02092.
Our government contracts posts are published by Attorney Kristi Morgan Aronica. She serves as counsel to prime contractors and subcontractors in the government contracts market throughout Texas and nationally.