Conflict Jostles Contracting Sector D.C. Law Firms, Clients Hurry To Alter Services, Insurance
By Carrie Johnson Washington Post Staff Writer Saturday, March 22, 2003; Page E01 William A. Roberts III, a longtime government contracts lawyer in Washington, said his phone started ringing Wednesday night. Clients that help the Defense Department and other federal agencies support troops overseas have called with questions about everything from insuring expensive machinery in the Middle East to computing hazard pay for contract workers near the line of fire. "We've gotten a rash of questions tied to what's going on in Iraq," said Roberts, a partner at Wiley, Rein & Fielding LLP and a former assistant to the Navy's general counsel. Just as New York's legal community can be roiled by upheavals on Wall Street, Washington's law firms often feel the shift of major government initiatives. Helping clients secure government work, protecting clients' interests when policies shift and protesting when things don't go their clients' way -- for instance, when a rival wins a lucrative contract -- has long been a mainstay of Washington's legal community. The Iraqi war has already changed the government contracting environment. For example, the Defense Department, citing the need to move supplies quickly, has waived many strict procurement rules. The waiver, which is permitted during national emergencies, enabled the government to bypass some competitive bidding requirements and other contracting rules. W. Stanfield Johnson, a senior partner at Crowell & Moring LLP, said this will make it difficult for clients to protest contract awards and will reduce the amount of "bid protest" work handled by Washington firms. In addition, the government has been asking contractors to quickly alter their contracts so they can provide war-related goods and services. Lawyers say they have been reviewing a flurry of these revisions, because clients want to make sure there will not be disputes when they try to get reimbursed. Contract workers who find themselves near harm's way can be entitled to hazard pay, which essentially means bigger paychecks from employers because of staffers' proximity to the war. The government reimburses contractors for the higher pay rate in some circumstances, depending on the contract, legal experts said. Some lawyers say they are fielding inquiries from clients about how to calculate the payments using complicated Defense and State department formulas. Contracts with the government generally spell out the kind of insurance that companies need to provide for employees who work near combat areas. But sometimes getting insurance coverage for machines used to repair and test costly equipment, such as tanks or electronic weapons systems, can't be done until a contractor knows just where the equipment will be stationed, said Roberts. That can lead to last-minute scrambling by contractors and lawyers as the "assets" move into position. Others say their clients are more focused on the next phase of the war. James J. McCullough, a partner at Fried Frank Harris Shriver & Jacobson in Washington, said his clients are calling with questions about how to get on the "short list" of contractors that will be considered to handle rebuilding efforts in Iraq. His short answer? Make sure they communicate what they can do with military decision makers "early and often." For the handful of U.S. law firms with offices in the Middle East, simple things such as conducting a client meeting became a challenge this week. David Pfeiffer, a partner at Bryan Cave LLP who is working out of Kuwait City, said a session with the National Bank of Kuwait was interrupted several times Thursday by the sounds of incoming missiles from Iraq. "The citywide sirens were blaring," Pfeiffer, a graduate of Georgetown University, said in a telephone interview yesterday. "It's a very shocking sound that completely dominates every room." Bryan Cave has offices in Saudi Arabia and the United Arab Emirates, as well as in Washington. Pfeiffer said some clients want to know how they can alter their operations in the region now that access to seaports, among other things, are hard to come by. But for the most part, he said, the issues he's dealing with this week are the same that occur with any business disruption, "albeit a more dramatic one." Researcher Richard S. Drezen contributed to this report.
