Contractors working on federal projects continue to face losses caused by COVID. Recovering these losses is proving difficult and the Sovereign Acts Doctrine may make it even more difficult.
The Sovereign Acts Doctrine balances the government’s dual role in acting as a contractor and the sovereign. When the sovereign takes action which is in the public good, a breach of contract action will not stand against the sovereign. In order for the government to prove that its actions were covered by the Sovereign Acts Doctrine, the government must prove that its actions were public and general, and the action must render the performance of the contract impossible.
The Sovereign Acts Doctrine applies in situations where the government takes action that prevent a contractor from performing. For example, if the government closes an air force base to prevent the spread of COVID, a contractor may suffer losses due to its inability to access the worksite. One would expect the government to extend the completion date, but the government will also likely deny the compensation claim under the Sovereign Acts Doctrine. In closing the air force base, the government’s actions were public and general in nature, applying to all individuals, and only incidentally impacted the contract. As such, any claim for additional compensation will likely be denied.
Similarly, if the government implements COVID restrictions on the project, a contractor’s efficiency may be impacted. Again, a contractor may successfully request more time to complete the project, but a claim for additional compensation will likely be denied. ,So long as the government’s action applies to all contractors on the project and the COVID restrictions are for the public benefit, the Sovereign Acts Doctrine will prevent recovery.
Contractors working on federal project face tremendous challenges, not to mention the government implementing COVID restrictions. Knowing the impact of the Sovereign Acts Doctrine can help you assess your risk on the project. If you need help assessing the impact of the Sovereign Acts Doctrine on your federal projects, we recommend you contact an experienced construction attorney.