D'Ambra Construction, a subcontractor on a Navy project, sued the general contractor and surety for unpaid work after the government terminated the contract for convenience. The court ruled that the subcontractor could only recover amounts the federal government actually approved and paid—not the full value of work performed. This means government approval limits your recovery, even if you did more work than paid.
Your recovery is capped at what the government approves in writing, regardless of actual work completed or contract price
Termination for convenience clauses in federal contracts give the government broad power to end work and limit your payment claims
Flow-down clauses from prime to subcontract mean government contract terms bind you directly—review these before signing