Jottings By An Employer's Lawyer

Monday, December 29, 2003

Hitting a Nerve, Or Just a Slow News Day - Reimbursement of Government Contractors Legal Bills

Although by now government contractors are used to being perennially raked over the coals, today's AP article on reimbursement of Department of Energy contractors' legal bills, clearly seems newsworthy to a large cross section of publications. In fact the story with this specific headline, Feds Pick Up Legal Bills for Contractors has appeared in 31 publications in the last 2 hours according to a quick google search. Since a large part of it appears to be for the fees of lawyers representing the contractors in employment law claims, it caught my attention.

As with most government contracting stories, it is easy for some to hit a rhetorical high note. This article's example is from a University of Baltimore Law Professor Charles Tieffer:
While you'd expect all corporate managements to spend lavishly on their legal self-defense, only a few have the privilege of using a key to the Treasury, namely generous 100 percent cost-reimbursement contracts, to make the taxpayer foot the bill.
A little more rational is the point made by Steve Schooner, the co-head of the government procurement program at George Washington University Law School:
There's a certain zero-sum game aspect to all of this. If one of these contractors performs only government work and we refuse to reimburse them for a legitimate cost of doing business - which many legal costs are - then we've put them in an untenable position where they're operating at a loss.
And of course if operating at a loss, they are not likely to be a long term provider of services or jobs.

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