Government Sues A/E Firm for Cost Escalation Caused By Late Delivery Of Design Package

摘要

Most architecture and engineering (A/E) firms conducting business with the federal government are familiar with the limitation on funding (LOF) contract clause in the Federal Acquisition Regulation entitled Design within Funding Limitations. Under this clause, the A/E firm agrees to design a structure that can be built within a certain price limit. Although the LOF clause is not frequently litigated, the A/E firm ostensibly has liability to the government if its design yields bids from third parties that exceed the construction funding limit.