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Commencing an Appeal Due to the Deemed Denial of a CDA Claim

The Contract Disputes Act (CDA) requires contracting officers (COs) to issue a final decision on claims of $100,000 or less within 60 days. For claims greater than $100,000, COs must render a final decision within a reasonable period and notify the contractor within 60 days of the claim, a specific time within which the decision will be issued. If the CO fails to notify the contractor within 60 days of a specified time within which he would issue the decision, the contractor may file an appeal based on a deemed denial of its claim. Adjudicative forums have consistently held that the CDA requires COs to pinpoint a particular date for the issuance of the decision, with a general timeframe found insufficient to meet statutory requirements. Additionally, the time specified by the CO to render his final decision may not be contingent upon the occurrence of a future event. In situations where the CO specifies a time for the issuance of the final decision, but the calculation of the particular date is dependent upon some future event, the contractor is within its rights to file its appeal on a deemed denial basis.

In Armed Services Board of Contract Appeals (ASBCA) No. 56097, the Space and Naval Warfare Systems Command (SPAWAR) awarded a contract for the manufacturing and supply of communications data links to enable U.S. Navy ships to exchange intelligence information with military aircraft. During performance, the contractor identified six entitlement issues and submitted a request for equitable adjustment (REA). The contractor later converted the REA into a CDA claim and submitted it for the CO’s final decision on May 8, 2007. Before the expiration of the 60 days following the receipt of the certified claim, the CO sent a letter notifying the contractor that SPAWAR intended to respond to the claim by approximately December 14, 2007. On July 3, 2007, the contractor filed its notice of appeal with the Board based on a deemed denial. In response, the Navy filed a motion to dismiss the contractor’s appeal as premature. In its decision on the motion, the Board noted that the CO’s notification had failed to comply with CDA requirements because it did not establish a fixed date by which the CO would issue his final decision. Specifically, the CO informed the contractor of SPAWAR’s intent to respond by approximately December 14, 2007. The Board found such an “intent” to respond by an “approximate” date insufficient under the CDA. Consequently, the Board denied the government’s motion to dismiss, directed the CO to issue a final decision by December 14, 2007, and exercised its discretion to stay proceedings until the CO issued his final decision.

In ASBCA No. 52263, the contractor filed a similar appeal on a deemed denial basis on a claim relating to Air Force contracts for the Joint Surveillance Target Attack Radar System aircraft. The consolidated claim, which otherwise met the requirements of the CDA, was submitted to the CO for a final decision. The CO did not issue a decision on the claim within 60 days but provided the contractor with a timeframe to expect the final decision contingent upon the results of a separate alternative dispute resolution (ADR) proceeding between the parties. Specifically, the CO informed the contractor that in consideration of the parties’ initiation of ADR procedures, the CO intended to issue his final decision no later than 90 days after the termination of the ADR, provided the ADR process did not resolve the dispute. Subsequently, the contractor filed its appeal based on a deemed denial of the claim, and the parties sought the Board’s decision regarding its jurisdiction over the appeal. In the resulting opinion, the ASBCA determined that the CO’s notice did not meet the requirements of the CDA because the time provided for the issuance of the final decision depended upon future events, namely the conclusion and results of the parties’ ADR proceedings. Thus, when the contractor filed an appeal on a deemed denial basis, the Board had jurisdiction because the CO failed to state with certainty a time within which he would issue the final decision.

In ASBCA No. 48163, the contractor filed a certified claim of approximately $41 million against the Air Force on August 8, 1994. The CO did not issue a decision within 60 days of the claim but notified the contractor via a letter sent within that period that he did not anticipate issuing a final decision until early March 1995 timeframe. The CO also stated in the letter that his representation concerning the final decision date was contingent upon the contractor’s cooperation in providing the cost and pricing data that the CO had previously requested. The contractor filed its notice of appeal following the CO’s notice on a deemed denial basis, and the Air Force subsequently filed a motion to dismiss. The ASBCA determined that in its notice informing the contractor to expect a final decision in the early March timeframe, the CO had failed to specify a definite time within which he would issue the final decision. Additionally, even the approximate timeframe that the CO provided was contingent upon a future event, that is, the government’s timely receipt of the cost and pricing information from the contractor. Thus, the CO had effectively retained the discretion to potentially withhold a final decision indefinitely by couching the notice in subjective and conditional terms. Consequently, the Board denied the government’s motion to dismiss, finding that the contractor was entitled to file its appeal based upon a deemed denial of its claim.

The CDA requires the CO to either issue a final decision or notify the contractor of a reasonable time within which he would render his final decision within sixty days of receiving a claim. Thus, when the CO cannot issue a decision on a claim over the amount of $100,000 within sixty days of receiving it, he must notify the contractor of a reasonable definitive date by which he would issue the final decision. Contractors should be mindful that the CO’s notice in such situations must pinpoint a particular date for the final decision with specificity. It is insufficient for the CO to provide an approximate timeframe within which he would issue the final decision. It is also improper for the CO to condition the date of the final decision upon the occurrence of some future event. Consequenlty, when the CO conditions the issuance of the final decision upon the receipt of additional information from the contractor or provides a date of issuance that is contingent upon the occurrence of some other future event, the contractor may commence its appeal under the CDA on a deemed denial basis. Ultimately, if the CO’s notice fails to pinpoint a specific date for the issuance of the final decision or if the CO fails to issue a notice altogether within sixty days of the receipt of the claim, the contractor may file an appeal based on a deemed denial of the claim.

This Federal Contract Claims Insight is provided as a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more are encouraged to consult the TILLIT LAW PLLC Client Portal or Contact Us to determine how the law would apply in a specific situation.

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Once a contractor submits a claim to the government under the Contract Disputes Act (CDA), the government is required to provide it a copy of the contracting officer’s final decision (COFD). The receipt of the COFD by the contractor is a key event in the lifecycle of a CDA claim because it triggers the beginning of the statute of limitation period to appeal the COFD at a Board of Contract Appeals (BCA) or the Court of Federal Claims (COFC). Upon receipt of the COFD, the contractor has ninety (90) days to file an appeal at a BCA or twelve (12) months to file an appeal at the COFC. Since the statute of limitations is a condition on the waiver of the government’s sovereign immunity, adjudicative forums enforce it strictly as long as the government can establish, by evidence, the date on which the contractor received the COFD. The Federal Acquisition Regulation (FAR) § 33.211(b) obligates the contracting officer (CO) to furnish to the contractor a written copy of the COFD by certified mail, return receipt requested, or by any other method that generates evidence of receipt. Notably, the CO’s obligation to furnish a copy of the COFD to the contractor applies equally to all final decisions on claims, regardless of whether the contractor or the government initiates the claim.

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To file appeals under the Contract Disputes Act (CDA), contractors are required to first submit their claims to the contracting officer (CO) for a contracting officer’s final decision (COFD). The Federal Acquisition Regulation (FAR) § 33.211(a)(4)(v) requires COs to include in their final decisions a notice detailing the contractor’s rights to appeal the COFD at the Boards or the COFC. Such notice of contractor appeal rights should include language substantially similar to the following:

“This is the final decision of the Contracting Officer. You may appeal this decision to the agency board of contract appeals. If you decide to appeal, you must, within 90 days from the date you receive this decision, mail or otherwise furnish written notice to the agency board of contract appeals and provide a copy to the Contracting Officer from whose decision this appeal is taken.”

As detailed in the appeal rights notice, the contractor has ninety (90) days to appeal the COFD to an appropriate Board of Contract Appeals or up to twelve (12) months to appeal the decision at the Court of Federal Claims (COFC). The receipt of the COFD by the contractor triggers the beginning of the CDA appeals limitations period, within which the contractor must appeal the COFD at a Board of Contract Appeals (BCA) or the Court of Federal Claims (COFC). Notably, in cases where the government issues a decision terminating a contract for default, the receipt of notification of the CO’s decision to terminate the contract begins the CDA appeals limitation period. Such a default termination notice must typically contain the contractor appeal rights language detailed above. However, the omission of the appeals rights language in the termination notice does not, by itself, negate an otherwise final decision. Additionally, the lack of such an appeal rights notice also does not stop the receipt of the COFD from triggering the CDA appeals limitation period – unless the contractor can demonstrate detrimental reliance or prejudice stemming from the omission of such notice.

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The Contract Disputes Act (CDA) requires that a contractor present its claim to the contracting officer (CO) before an appeal or suit may be properly filed on that claim. This presentment requirement can be characterized as the linchpin of the contract appeals process under the CDA and is also the last clear chance for the government and the contractor to avoid appeals litigation. Once the contractor submits its claim to the CO, the CDA requires the CO to issue his final decision within 60 days of receiving the claim if the claimed amount is less than $100,000. For certified claims over $100,000, the CO must either issue his final decision within 60 days or notify the contractor within 60 days of the time within which a final decision will be issued. The CDA also requires that the CO issue the final decision within a reasonable time, accounting for factors such as the size and complexity of the claim and the adequacy of information provided by the contractor in support of its claim. In the event of an undue delay by the CO in issuing a final decision, the contractor may request the appeals adjudicative forum to exercise its discretion and direct the CO to issue a decision within a specified period. If the CO fails to issue a decision within that period, the contractor’s claim may be “deemed denied” and considered appealable under the CDA.

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Upon the issuance of a contracting officer's final decision (COFD), contractors have 90 days to file their notice of appeal before an appropriate Board of Contract Appeals (BCA). BCAs have consistently held the requirement to file an appeal within the 90-day appeal period as a non-waivable jurisdictional requirement. Thus, if the contractor fails to file their appeal within this 90-day appeal period, the BCA may not entertain the appeal as it lacks jurisdiction over it under the Contract Disputes Act (CDA). Contractors must strictly follow the 90-day appeal deadline, which is not tolled even when the contractor inadvertently files their appeal at the wrong BCA. In certain situations, contractors may file their appeal after 90 days have passed since the original COFD issuance, provided they can demonstrate that the contracting officer (CO) reconsidered the final decision as a result of the parties' discussions during the appeal period. If government actions during the appeal period indicate that the contractor reasonably believed that the CO reconsidered her decision, the finality of the CO's decision may be vitiated or invalidated. Under such circumstances, the CO's vitiated final decision may not be reinstated, and the CO is required to issue a new final decision, restarting the 90-day appeal period under the CDA. However, because the parties often continue settlement discussions after the issuance of the COFD, it may not always be clear whether the CO reconsidered her final decision or if the COFD remained final.

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Commencing an Appeal Due to the Deemed Denial of a CDA Claim

Contract Claims Insights | TILLIT LAW PLLC