Our client had a commercial item contract with the Navy to provide, among other things, medical coding services at various Naval Hospitals across the United States.  The contract required our client to provide one-month units of such coding services for a fixed price each month.  For a variety of reasons during several months of performance, our client had fewer than the contract specified number of employees at several sites, though our client still met the coding requirements at each site.  Although the Navy never complained of our client’s performance, nor issued any contract discrepancy reports, several months later the Navy deducted amounts from our client’s invoices.  Our client filed an REA, which it later certified as a claim, attempting to recover the amounts deducted by the Navy.  After the Navy denied the claim, we filed suit at the Court of Federal Claims.

Our client’s theory of recovery was that the units of service were “months”, not “man-hours”, and that it had provided the services as required by the contract, all of which were accepted by the Navy.  Further, pursuant to FAR 52.214-4(a), the Navy was precluded from seeking an equitable price reduction because it had failed to act within a reasonable time.

The parties filed cross-motions for summary judgment, which the court denied.  The parties then engaged in settlement discussion, resulting in a payment to our client.