Durrett Corporation (Durrett) is a DoD contractor that is currently performing two contracts to produce different types of widgets for the Air Force.In March 2012, Durrett competed for and won Contract A, which is a negotiated fixed-price contract awarded on the basis of adequate price competition.In April 2012, Durrett was awarded Contract B, also a fixed-price contract, on a sole source basis and was required to submit certified cost or pricing data.The Government furnished specialized equipment to Durrett under both contracts, which Durrett kept stored in one of its warehouses.

One particularly slow day, Mahoney, Spohn, and Elsesser (Durrett's warehouse employees) decided that it would be fun to find out which of the company's three forklifts were the fastest.As such, they each climbed aboard a forklift and began racing.During the commotion, Mahoney caused Spohn to crash into and damage the Government-furnished equipment.When the warehouse supervisor discovered what was going on, he disciplined all three employees and re-educated them on company's policy pertaining to the proper use of company equipment (the employees had already been informed of this policy when they were hired).Further, he warned of extreme consequences if the employees misbehaved in the future.

Assuming that Durrett did not have insurance for any of the Government-furnished property, who bears the cost for repairing the damage to the equipment under Contract A?What about Contract B?