A Badly Structured Contract Does Not Give a Contractor the Right to Walk Away: Lessons from Wild Hare Haulers
A poorly drafted government contract can impose substantial and unintended economic risk on a contractor. But a contractor facing those problems must still be extremely cautious before deciding that the Government’s mistakes justify stopping performance.
Wild Hare Haulers, LLC, ASBCA Nos. 64442 and 64443, illustrates both sides of that proposition.
The Army solicited a five-year laundry and dry-cleaning requirement at Fort Gordon, Georgia. The Performance Work Statement described a firm-fixed-price, per-piece IDIQ arrangement. Wild Hare also had to operate and maintain the Government’s laundry distribution and collection facility.
That structure created a significant pricing problem.
In a September 2026 Nash & Cibinic Report analysis, Vernon J. Edwards identifies a fundamental weakness in the procurement: there was no separate contract line item for operating and maintaining the distribution facility. Those largely fixed costs therefore had to be recovered through per-piece laundry and dry-cleaning prices. If actual quantities were substantially below estimates, the contractor could fail to recover the costs of maintaining the facility.
That is essentially what happened.
The award documentation added further confusion. The Government issued different documents using “not to exceed,” “estimated,” monthly, and per-piece concepts. The subsequent task order funded only two months of an eleven-month requirement. Almost immediately after performance began, the parties disagreed about whether Wild Hare was entitled to monthly payment or payment based upon actual pieces processed.
Wild Hare eventually stopped performing and returned the facility keys.
The Board held that the February 26 document signed by Wild Hare created the contract even though the contracting officer had not signed that version. It construed the agreement as requiring payment according to actual pieces processed and awarded Wild Hare $3,767.71 plus interest rather than the $54,879.48 sought.
More consequentially, the Board upheld the termination for cause. Wild Hare’s concern that available funding was running out did not justify permanently abandoning the work.
An important qualification is necessary: Wild Hare elected the ASBCA’s Small Claims (Expedited) procedure, so the decision expressly has no precedential value. Yet the facts offer valuable contract-management lessons.
Edwards persuasively identifies serious acquisition-design problems, including the missing fixed-cost CLIN, inadequate treatment of quantity risk, poor pre-award communication, and failure to recognize the vulnerability of an inexperienced small business.
Contractors nevertheless need disciplined remedies when those problems emerge. They should document ambiguities, seek written contracting-officer direction, quantify financial impacts, preserve requests for equitable adjustment or claims, and carefully evaluate contractual performance obligations before stopping work.
A defective contract can create a valid dispute. It does not necessarily create a valid right to walk away.
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Disclaimer:
This article is provided for general informational and educational purposes only and does not constitute legal advice. The Wild Hare Haulers decision was issued under the ASBCA Small Claims (Expedited) procedure and has no precedential value. Contract interpretation, funding, stop-work rights, default, and claim remedies depend on the particular contract and facts.