The government awarded a $44 million firm-fixed-price contract to ACME to build a large structure. Shortly after work began on the contract, Acme alleged it encountered differing site conditions and that the contract's specifications were defective. Ten months later, Acme alleged that these conditions caused changes and additional work and increased Acme's costs of performing the work. In addition, Acme alleged the government was responsible for causing more than a year's delay in contract performance. Over the course of contract performance, the government paid Acme $7 million for additional work performed. Acme filed claims totaling $56 million at the Armed Services Board of Contract Appeals. This dollar figure did not include attorney's fees, costs, and amounts relating to two separate subcontractor claims.

Relations between the parties deteriorated badly. The company is on the verge of bankruptcy and its officers have their backs against the wall. Because of the dollar amounts involved, this case is likely to get a lot of media and/or congressional attention.

Moreover, if Acme wins your agency will likely have to seek a supplemental appropriation to pay Acme. For purposes of this scenario assume Acme has asserted facts sufficient to satisfy all legal elements of the claims it has submitted. In addition, assume that the contractor is almost certain to prevail because the government has little or no credible defense to liability.