The Contract Disputes Act, codified at 41 U.S.C. §§ 7101-7109, requires that a contract claim filed under the Act relate to a contract with the government. Adjudicative forums that resolve appeals challenging the contracting officer’s (CO) final decision in such claims, including Boards of Contract Appeals and Federal Courts, have consistently ruled that the phrase “relating to a contract” should be read broadly. Therefore, for a claim to be related to a contract for the purposes of CDA jurisdiction, the claim must have some relationship to the terms or performance of an underlying government contract. Despite this broad categorization, it may not always be apparent whether a claim sufficiently relates to a particular government contract to fall under CDA jurisdiction. In such situations, contractors should be aware that if they can demonstrate that their claim bears some relation to the contract, they stand a good chance of properly bringing their claim under the CDA.

On January 11, 2024, the Armed Services Board of Contract Appeals (ASBCA) issued an opinion in ASBCA No. 63634, denying the Air Force’s motion to dismiss, and exercising jurisdiction over an appeal arising from a claim pursuant to § 3610 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The contractor was performing on a government contract to operate, maintain, support, and upgrade the training systems for the Air Force’s B-52 bomber aircraft. Among the relief sought in the claim, the contractor requested compensation in the form of equitable adjustment for increased costs to keep its workforce in a ready state during the COVID-19 pandemic. However, the CO denied that portion of the contractor’s claim. During the subsequent ASBCA appeal, the government again moved to dismiss the contractor’s § 3610 claims, asserting that the ASBCA did not have subject matter jurisdiction to resolve claims under the CARES Act. The government analogized § 3610 of the CARES Act to Public Law 85-804, which provides government agencies broad discretionary authority to modify government contracts but does not give the Board authority to entertain appeals from the government’s adverse decisions.

In denying the Air Force’s motion to dismiss for lack of jurisdiction, the ASBCA emphasized that § 3610 of the CARES Act permitted the government to utilize the funds made available under the Act to modify the terms and conditions of a government contract. Additionally, this authority to modify federal contracts to reimburse contractors at the minimum applicable contract billing rates did not require any consideration from the contractor. The ASBCA determined that this connection was sufficient to conclude that a claim presented to a CO by a contractor for § 3610 relief is a claim that relates to a government contract within the meaning of the CDA. To support its determination, the ASBCA cited a decision by the Federal Circuit where the Board was found to have jurisdiction in the context of negative contract performance evaluations.

The ASBCA also distinguished § 3610 of the CARES Act from Public Law 85-804, noting that while Public Law 85-804 also provided agencies broad discretionary authority to modify government contracts – the legislative history of that law demonstrated that Congress intended to exclude it from the operation of the CDA. The Board noted that the Air Force failed to show any legislative history indicating that Congress intended to exclude § 3610 of the CARES Act from the operation of the CDA. Consequently, the ASBCA denied the government’s motion to dismiss, finding that it could exercise jurisdiction over the contractor’s appeal, specifically in the context of the contractor’s contentions that the Air Force’s withholding of § 3610 funds from the contractor was deliberate, arbitrary, and abusive.

Contractors performing on federal contracts may typically present their claims to the CO under the CDA as long as they relate to an underlying federal contract. Similarly, the CO’s adverse decision on those claims may be subsequently appealed to an appropriate board of contract appeals or the Court of Federal Claims (COFC). However, whether a claim sufficiently relates to the underlying federal government contract may not always be obvious. When presenting such claims to the CO, contractors should present facts that sufficiently establish their claims as arising under or relating to the federal contract. To demonstrate this connection, contractors must show that some relationship exists between their claims and the government contract’s terms, conditions, or performance. In doing so, contractors can help ensure that adjudicative forums will exercise CDA jurisdiction to hear and decide upon the merits of their claims.

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.