Over the last few months, we’ve reported on various government contracts decisions that illustrate the impact a release of claims provision can have on contractors. For example, we recommended that contractors should: (1) be precise when drafting and negotiating a release provision and, whenever possible, avoid using sweeping language, and (2) maintain contemporaneous documentation of release negotiations, including of any communications with the government before, during and after the release is executed.  This guidance likely would have helped the contractor in MBD Maintenance, LLC v. United States Post Service, PSBCA Nos. 6625, 6642, the latest Board of Contract Appeals decision to bar a contractor’s claims based on a broad release of claims provision.

In MBD Maintenance, the contractor submitted a claim (and initiated an appeal) after signing a broad release of claims form associated with its request for final payment.  That release stated the contractor would “remise, release, and discharge the Postal Service . . . of and from all liabilities, obligations, claims, and demands whatsoever under or arising” from the contract.  This release also included a block that allowed the contractor to identify any excepted claims, but the contractor left that block blank.

The Postal Service moved for summary judgment, arguing that the general release provision barred the claim. The contractor asserted that the release should not apply because it “reasonably believed it could continue to pursue its claim based on conversations between the parties” about the claim and prior to executing the release.  In denying the appeal, the Postal Service Board of Contract Appeals rejected the contractor’s argument, in part, because of lack of evidence supporting its argument. In other words, the presentation of contemporaneous documentation may have helped the contractor overcome summary judgment and live to fight another day.

The bottom line: Contractors should never treat a release of claims provision as an afterthought or assume that the parties’ contemporaneous ─ but undocumented ─ discussions will provide a sufficient basis upon which to pursue claims moving forward. To the contrary, as demonstrated by this decision, and a broad release provision can result in a claim being dismissed outright – regardless of the substantive merits of the claim itself.