In the Lockheed Martin ASCBA Case 62209 Lockheed Martin Aeronautics Company April 13, 2022 Decision, the Board found that when there is a Congressionally established statute of limitation the “theory of laches” does not apply.
So, what is the Theory of Laches?
The “Theory of Laches” comes from the basic concept that the Courts will not assist a party in litigation that has not made a timely effort to assert their rights and assists only those parties that are aware of and vigilant about their rights. A party is said to be guilty of laches when they come to the Court to assert their rights after a considerable delay (i.e., passage of time). The underlying concept is the Courts should not examine stale cases, because the Court is there to assist a party that is vigilant and not indolent. The reasons for the delay if valid and reasonable may be accepted by the Court.
In layman’s terms, you cannot sit on your claim against another party and place that party at a disadvantage in defending itself. This is often the case with the Government making a demand (i.e., Contracting Officer’s Final Determination) against a contractor after significant time has passed resulting in the contractor not having the personnel and documentation that was available to it when the issue occurred.
Yes, we know in this case the Government tried to press the theory of laches against the contractor. It is amazing how motivated the Government can get when faced with a claim for $143M. The case involved a $143M claim by Lockheed Martin against the Air Force for work outside the original scope (i.e., over and above) of upgrades to C-5 Galaxy aircraft.
As a contractor even if you have an extended period thanks to a statute of limitation, you should take action on any claims, request for equitable, or disagreement with a Contracting Officer final decision as soon as possible. While under FAR 52.233-1 the contractor has 6 years from the Government’s action to submit a written and certified claim, waiting is never a good idea. Additionally, once you receive a Contracting Officer final decision you have 90 days to appeal to ASBCA and 12 months to appeal to the Court of Federal Claims.
Remember under the Changes Clauses at FAR 52.243, for the most part, the contractor must assert its right to an adjustment under the clause within 30 days from the date the contractor receives the Government’s written change order. Once the Government affects a change through its actions, written or not, the contractor needs to be as timely as possible in putting the Government on written notice that the contractor plans to submit a request for equitable adjustment. Do not wait for everything to support the issue. Additionally, if the Government did not put its action/change in writing submit your written request to the Government for such written direction. If you believe the Government took an action that created a material increase in cost to the contract, put the Government on notice in writing and update as more facts and circumstances become available.
Many small businesses encounter the Government making technical package changes to fixed priced contracts that the Government professes are minor in nature. While we are not saying this is a common practice, it does happen. The risk to the contractor is that the date of the technical change starts the FAR 52.243-1(c) 30-day clock for the contractor to assert its right to an adjustment under the clause. We suggest that, unless you are sure the cost impact of any change is immaterial, the contractor send a written notice to the contracting officer asserting its right to an adjustment for any change and then start the process of determining the impact. It stops any legal battle over the 30-day limitation and if you later inform the Government the cost impact was not material – no harm no foul.
Redstone GCI assists contractors throughout the U.S. and internationally with understanding the Government’s expectations and supporting contractors from contract award to contract closeout. We would be happy to be part of your team
 Paraphrased from BYJU’S Exam Prep website (Doctrine of Laches - Meaning, Importance, Case Examples for UPSC. (byjus.com))