WASHINGTON, D.C. – The Civilian Board of Contract Appeals (CBCA) has upheld the Department of Veterans Affairs’ decision to terminate a roofing contract with All Phase Services, Inc. after the contractor failed to report a significant bid mistake for nearly four years.
The dispute centers on a $257,500 underbid error in All Phase Services’ proposal for roofing work at the Buffalo VA Medical Center, originally submitted in September 2020. According to case documents, a subcontractor discovered the mistake in spring 2021, but All Phase Services did not inform the VA until April 2025, after the company had already been terminated for default and filed an appeal.
The CBCA ruled that the delay violated the contractor’s duty of good faith and prevented All Phase Services from seeking rescission of the contract based on the error.
In its decision, the Board stated that All Phase Services’ extended silence regarding the six-figure bid discrepancy was incompatible with federal contracting requirements, which call for prompt disclosure of known mistakes.
All Phase Services argued that the VA’s contracting officer should have identified the error during bid verification. However, the Board found that the VA had already taken appropriate steps, including requesting a bid confirmation early in the procurement due to concerns about pricing similarity with a previous solicitation.
Because All Phase Services chose not to disclose the subcontractor’s error until years later, the CBCA ruled that the company lost the ability to withdraw or correct the bid under Federal Acquisition Regulation (FAR) mistake principles.
Beyond the mistake issue, earlier CBCA findings noted that All Phase Services had struggled with project progress and failed to meet required performance milestones. Those issues independently supported the VA’s termination for default, the Board said.
The November 2025 ruling granted the VA’s motion for summary judgment on the mistake claim and denied All Phase Services’ request for contract relief. The termination stands in full.
Key Timeline
-
Sept. 2020: All Phase Services submits bid for VA roofing project.
-
Spring 2021: Subcontractor identifies $257,500 pricing error.
-
2021–2024: All Phase Services continues work amid performance concerns; no disclosure made.
-
Early 2025: VA terminates All Phase Services for default.
-
April 2025: All Phase Services reports the bid error for the first time, after filing an appeal.
-
Nov. 2025: CBCA rules the delay unreasonable and upholds termination.
The ruling reinforces the federal requirement that contractors must inform contracting officers of any known bid errors as soon as they are discovered, even if the mistake originates with a subcontractor. Delays in reporting can invalidate claims for relief and jeopardize contract performance.
The decision also highlights the scrutiny specialty contractors face on government projects, where documentation, schedule adherence, and transparency are closely monitored.
