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  • Question

    Can the contractor come back and claim for subcontractor costs based on the settlement and acceptance and accord statements above?


    Answer

    I recommend you consult with your organization's counsel.  This REA could turn into a claim and subsequent litigation if left unresolved.  The contract should be looked to in determining the rights of the parties involved as should the language used in the bilateral modification that it sufficiently satisfies accord and satisfaction (proper subject matter, competent parties, a meeting of the minds and consideration).  In the language you provide it indicates in part "disruptions arising out of, or incidental to, the work as herein revised, except as noted above"  Not clear what the "except as noted above"  covers. 
     
    Typically, the subcontractor's claims are with the prime contractor, not the government unless the government agreed to have the sub as a joint payee.  If this is the case the sub could be considered a third party beneficiary and could bring an action to  recover directly against the government.  Otherwise, the prime may still bring a pass-though claim against the government (on behalf of the subcontractor) so long as the prime contractor is liable to the sub on the same claim (called the Severin Doctrine).  Some pass-through claims do end up being sustained in litigation despite an accord and satisfaction with the Prime.  See Bell BCI Company v. The U.S. (COFC 03-1613C) and subsequent appeal (Fed.Cir., 570 F.3d 1337).
     

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