A federal contract interpretation claim may involve requests for the meaning of contractual words, determination of the manner in which the contractor must undertake performance or supply of missing terms. Since the Contract Disputes Act (CDA) does not define a claim, adjudicative forums look to the definition of a claim provided in the Federal Acquisition Regulation (FAR). The FAR § 2.101 defines a claim as a written demand or assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract. Thus, the FAR definition of a claim includes non-monetary claims such as for the adjustment and interpretation of contract terms and claims for other relief. However, even claims for contract interpretation may have significant monetary consequences. Since the CDA requires certification of contractor claims over $100,000, contractors may consider certifying such contract interpretation claims to avoid potential dismissals for lack of certification in subsequent appeals. Including certifications can be particularly beneficial when a contractor has already incurred costs related to the claim at the time of submission, as such claims are often monetary claims disguised as interpretation claims.

In ASBCA 62736, a dismissal decision issued on December 5, 2024, the Armed Services Board of Contract Appeals (ASBCA) ruled that contractors must certify their contract interpretation claims the Board’s decision on which would have monetary consequences greater than the statutory threshold of $100,000, especially when the contractor has begun incurring costs in connection with those claims at the time of their submission. Prior to the appeal, the contractor submitted its initial contract interpretation claim on July 8, 2020, arguing that the United States Army Corps of Engineers (USACE) embedded design specifications as opposed to performance specifications in its contract for construction at the Brussels American School. That claim was denied and later became the subject of the present appeal. In its complaint filed at the ASBCA, the contractor stated that when submitting its contract interpretation claim, it had anticipated submitting a future request for equitable adjustment (REA) for a substantial price adjustment and schedule extension. Subsequently, on April 20, 2021, having already incurred costs relating to the interpretation claim, the contractor submitted its REA to the CO seeking over 5.1 million euros in damages and 910 days of schedule relief concerning a mechanical system at the school building.

Meanwhile, in the contract interpretation appeal before the ASBCA, the parties filed a joint motion to dismiss all but one count of the contractor’s complaint. The joint motion provided additional details about the contractor’s REA and informed the Board that the contractor planned on submitting a supplemental REA on the mechanical system issue. The joint motion also provided that the contractor intended to convert the mechanical system REA and its supplements into one or more CDA claims before presenting it to the CO. Once the ASBCA granted the parties’ joint motion, USACE filed a motion to dismiss the remaining count of the appeal for lack of jurisdiction. In its motion to dismiss, the agency argued that the contractor had failed to present the pertinent portion of its complaint to the CO for a final decision. Alternatively, the government took the position that the contractor’s contract interpretation appeal should be dismissed in full as the interpretation request was now a monetary claim, which had not yet been presented to the CO for a final decision. In response, the contractor requested that the Board allow the remaining count of the complaint to proceed as a contract interpretation claim and, in no event, dismiss the appeal with prejudice as the resolution of the specifications issue would be required to adjudicate the contractor’s future monetary claims.

The ASBCA granted the agency’s motion to dismiss, noting that the CDA requires claims over the statutory $100,000 threshold to be certified by the contractor. Importantly, the Board noted that at the time of submitting its contract interpretation claim, the contractor had already begun incurring costs related to the design specifications issue, which were later reflected in the April 2021 REA. Therefore, when the contractor first submitted its contract interpretation claim, it had the ability to quantify and submit a monetary claim to the CO but chose not to do so. It follows that the contractor’s claim was, in fact, a demand for monetary damages disguised as a contract interpretation claim. At a minimum, the Board’s decision on the contractor’s contract interpretation claim could impact a future claim with significant monetary consequences. Additionally, because the amount of money in dispute in this case was well over the $100,000 statutory threshold, the contractor was required to certify its claim, which it failed to do. Consequently, the ASBCA dismissed the contractor’s appeal for contract interpretation without prejudice.

Contractors should consider attaching a certification to their contract interpretation claims when they anticipate that the underlying interpretation issues may have monetary consequences over the $100,000 statutory threshold. By including a certification, contractors may avoid having to resubmit their interpretation claim as a separate monetary claim to the CO. It is worth noting that claims containing defective certifications may be corrected during appeals litigation. However, claims over the statutory threshold lacking certification must be dismissed. Including a certification may also be beneficial when the contractor incurs costs related to the interpretation issue between the initial submission of the claim and the appeal of that interpretation claim. Finally, as a practical consideration, many, if not most, contract interpretation claims have some monetary consequences, even if such claims are only being used to entitle the contractor to damages in a separate future proceeding. Therefore, when submitting contract interpretation claims on large or technically complex contracts, contractors should consider attaching a certification since a decision on their claim may not merely avoid costs but also come with significant monetary consequences.

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.