## Facts

- Franklin Pavkov Construction Company (FPC) entered into a fixed-price Air Force contract to install four sets of three-story stairs on two dormitory buildings at Shaw Air Force Base.
- The contract required the government to provide specified stair components as government-furnished property (GFP), but did not specify when, how, or where GFP must be delivered.
- The government delivered GFP to a fenced area near the work site and conducted a joint review and inventory with FPC representatives.
- During the inventory, FPC’s representative left before completion and FPC did not later finish the inventory.
- About six months into the one-year performance period, FPC notified the government that certain GFP components were missing.
- FPC completed the work by purchasing or fabricating the allegedly missing components.
- After substantial completion, FPC submitted a certified claim seeking an equitable adjustment for additional costs, asserting the GFP delivery was incomplete and that the government failed to complete a joint inventory.
- The contracting officer denied the claim; the Armed Services Board of Contract Appeals (ASBCA) denied FPC’s appeal.

## Issues

1. Whether a contractor under a fixed-price contract has an implied duty to inspect GFP for completeness and suitability within a reasonable time after delivery and to give prompt notice of defects or shortages.
2. Whether failure to timely inspect and notify the government bars a contractor’s claim for an equitable adjustment based on alleged GFP shortages.

## Decision

- The Federal Circuit affirmed the ASBCA’s denial of FPC’s claim.
- The court agreed that FPC had an implied duty to inspect the delivered GFP and to provide timely notice of any shortages.
- The court upheld the ASBCA’s finding that FPC’s approximately six-month delay in reporting alleged shortages was untimely and precluded an equitable adjustment.
- The court found no reversible error in the ASBCA’s fact-finding or application of law.

## Legal Principles

- A contractor receiving government-furnished property has an implied obligation to inspect it for completeness and suitability within a reasonable time after delivery.
- The contractor must promptly notify the government of alleged GFP defects or shortages; unreasonable delay can bar recovery.
- Untimely notice may prevent an equitable adjustment because it deprives the government of a fair opportunity to investigate and remedy the alleged deficiency.
- In a fixed-price contract, absent a compensable government change or breach timely raised, the contractor bears the risk of added costs tied to its own failure to satisfy inspection and notice duties.

## Conclusion

The Federal Circuit held that a contractor cannot shift added performance costs to the government for alleged deficiencies in government-furnished property when the contractor fails to timely inspect the delivery and promptly notify the government of claimed shortages.


Franklin Pavkov Constr. Co. v. Roche, 279 F.3d 989 (Fed. Cir. 2002)