The Contract Disputes Act (CDA) requires contracting officers (COs) to issue their final decision on contractor claims in writing and mail or otherwise furnish the decision to the contractor. To be legally valid, the CO’s final decision must adhere to specific content requirements. For instance, 41 U.S.C. § 7103(e) requires the CO’s final decision to state the reasons for the decision and inform the contractor of its appeal rights. The appeals rights notice should include language substantially similar to the notice provided in Federal Acquisition Regulation (FAR) § 33.211(a)(4)(v). The CO is not required to include specific findings of fact in the final decision, and if included, such facts are not binding in a subsequent appeal. Notably, the FAR further expands upon the content requirements for the final decision. FAR § 33.211(a)(4) requires the final decision to include a description of the claim along with references to the relevant contract terms. The CO must also explain the factual areas of agreement and disagreement, and provide a statement of the decision along with a supporting rationale. However, despite the requirements to provide a supporting rationale, the CO’s final decision need not necessarily be voluminous. On appeal, dispute adjudicative forums rarely find that the final decision is legally defective due to a lack of sufficient rationale.
In Armed Services Board of Contract Appeals (ASBCA) No. 52171, the contractor alleged that the CO’s final decision was legally defective after the contractor failed to submit its appeal to the Board within the statutory 90 days of receiving the final decision. The appeal involved an 8(a) contract for the demolition of various World War II-era buildings at Fort Huachuca in Arizona. The government later terminated the contract for convenience, and the resulting modification released the contractor of all present and future liabilities under the contract. The modification also released any rights of claims that the contractor may have had against the government with respect to the contract. Despite the release language included in the final modification, the contractor submitted a certified claim to the government more than a year after the termination. The CO acknowledged the receipt of the contractor’s claim and issued a one-page final decision letter denying the claim in its entirety. Following the CO’s final decision, the contractor filed a notice of appeal (NOA) with the Board. However, the NOA was filed 95 days after the contractor received the final decision. Consequently, the government filed a motion to dismiss, requesting the Board to dismiss the untimely appeal.
In response to the government’s motion to dismiss, the contractor did not argue that it had filed a timely appeal. Instead, the contractor maintained that the CO had not issued a valid final decision because the final decision lacked sufficient supporting rationale. At the outset of its decision, the Board recognized that if the CO’s final decision was determined to be legally invalid, then the contractor was not bound by the 90-day deadline to appeal that decision. Upon reviewing the contents and supporting rationale of the final decision, the Board noted that the CO’s letter identified the contractor’s claim and plainly stated that it was the CO’s final decision. Furthermore, even though she made no reference to specific contract terms, the CO’s analysis was ultimately sufficient to place the dispute in its appropriate contractual context. The final decision also included the CO’s determination that the contractor’s claim was barred by the release executed by the parties at the time of the termination for convenience. Finally, the CO unambiguously informed the contractor that its claim was denied in its entirety and notified it of its appeal rights. Therefore, the Board found no basis to conclude that the CO’s final decision was legally defective and granted the government’s motion to dismiss as more than 90 days had elapsed from the date the contractor received the final decision and filed its notice of appeal.
The CDA and the FAR provide the content requirements for the CO’s final decision on contractor claims. The final decision must notify the contractor of its appeal rights under the CDA. Furthermore, the final decision should describe the contractor’s claim and provide references to the pertinent contractual terms. If no contractual references are provided, the final decision should otherwise place the dispute in its appropriate contractual context. Furthermore, the CO must provide the factual areas of disagreement, along with a statement of the decision and a supporting rationale. If appropriate, the CO may refer to supporting documentation, such as audit reports or affidavits, and attach them to the final decision. However, the CO’s final decision need not be voluminous because adjudicative forums typically find that the final decision does not lack sufficient explanation if it meets the content requirements described here. In any event, when the adequacy of the content of the CO’s final decision is challenged, the Board will not require the CO to provide a more detailed final decision. Finally, contractors should be mindful that, although not required, the CO is free to issue a revised final decision at her discretion, either independently or in response to a challenge to the contents of the decision.
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.
