Shutterstock_2438192851.jpg

Demonstrating Relationship of Claims to an Underlying Government Contract

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.

Related Insights

TLF-Contract-Claims-Insight-57.jpg

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.

more
Shutterstock_530695792.jpg

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.

more
TLF-Contract-Claims-Insight-75.jpg

A Contract Disputes Act (CDA) claim meets the mandatory “sum certain” requirement when the contractor has submitted to the contracting officer (CO) a clear and unequivocal statement that gives the CO adequate notice of the basis and amount of the claim. While the CDA provides no definition of a claim, the Federal Acquisition Regulation (FAR) § 2.101 defines a government contract “claim” as a written demand or assertion by a contracting party seeking, as a matter of right, the payment of money in a “sum certain.” This “sum certain” requirement contained within the FAR definition of a claim was considered jurisdictional until the Federal Circuit’s relatively recent decision in ECC International, LLC v. Secretary of the Army, 79 F.4th 1364 (2023). In the much publicized ECC decision, the Federal Circuit held that the “sum certain” requirement was not a jurisdictional prerequisite for a CDA claim but a mandatory claim-processing rule that claimants must follow. Since parties may raise jurisdictional issues at any time during appeals litigation, the ECC decision has practically limited the government’s “sum certain” challenges to motions for dismissal for failure to state a claim upon which relief may be granted, brought at the outset of the appeals litigation.

more
Shutterstock_1059713198.jpg

A claim under the Contract Disputes Act (CDA) must first be presented to and denied by the contracting officer (CO) before it can be appealed to a Board of Contract Appeals (BCA) or the Court of Federal Claims (COFC). Adjudicative forums have consistently held the CDA’s presentment requirement to be jurisdictional. That is, for a BCA or the COFC to exercise jurisdiction over a CDA appeal, the underlying claim must first have been presented to the CO for a final decision. Contractors may satisfy the presentment requirement by submitting the claim to the CO in accordance with the requirements of the CDA. While the CDA does not require the claim to be submitted in a particular form, it must typically provide a clear and unequivocal statement that gives the CO adequate notice of the basis and amount of the claim. The CO must then issue a final decision on the claim. The contractor may appeal the CO’s final decision at a BCA or the COFC within 90 days or 12 months, respectively.

In Avant Assessment v. U.S., No. 20-1185C, a decision issued on May 7, 2024, the COFC dismissed an appeal from a CDA claim for a lack of subject matter jurisdiction because the contractor failed to first present its claim to the CO. The appeal was part of a long-running litigation relating to contracts first issued by the U.S. Army in 2011 for foreign language testing materials to assess the proficiency of military linguists. The Army terminated the contracts for default in 2013, but following a successful appeal at the Armed Services Board of Contract Appeals (ASBCA), the default termination was converted into a termination for the government’s convenience. Following the successful convenience conversions, the contractor submitted termination settlement proposals to the CO, which were denied. After the CO’s denial, the contractor again appealed the CO’s final decision to the ASBCA. Notably, during the discovery phase in the second round of ASBCA litigation, the contractor learned that the government had not only retained the rejected testing materials but also “used” them by transferring them to a third party. Therefore, the contractor demanded payment for the rejected test materials. The contractor alleged that the Army had constructively accepted the rejected testing materials by retaining and using them after rejection. Alternatively, the contractor argued that the Army improperly rejected the testing materials. The ASBCA dismissed a large portion of the contractor’s claim for lack of jurisdiction since the contractor’s constructive acceptance claims had not first been first presented to the CO.

more

Demonstrating Relationship of Claims to an Underlying Government Contract

TILLIT LAW Federal Contract Claims Insights