Determining the Appropriate Respondent Agency in Appealing Blanket Purchase Agreement Claims

December 8, 2024 Sareesh Rawat, Esq.

The government establishes a Blanket Purchase Agreement (BPA) with qualified sources when it anticipates having repetitive needs for supplies or services. Federal Courts and Contract Appeals Boards have repeatedly held that a BPA is not a contract because it lacks mutuality of consideration between the government and its contractor, which is an essential element for the formation of a contract. Instead, a BPA is an overarching framework of terms and conditions for future contracts. These future contracts incorporate the terms of the BPA and come into existence when an order is placed and accepted under the BPA. Since BPAs are not considered contracts on their own, courts and contract appeals boards lack the necessary Contract Disputes Act (CDA) jurisdiction to adjudicate claims arising out of them until the contractor receives an order under the BPA. However, once an order is placed and accepted under the BPA, a contract is formed and CDA jurisdiction attaches. Thus, when the underlying BPA is issued by one federal agency, but the terms of that BPA permit other federal agencies to place orders under it, contractors may find it challenging to identify the appropriate agency to file their claims. In such situations, contractors should typically file their claims against the agency that placed the BPA order that most closely corresponds to the dispute instead of the agency that issued the overarching BPA.

In Civilian Board of Contract Appeals (CBCA) 7323, 7918, a decision issued on September 11, 2024, the CBCA dismissed the contractor’s monetary claim for destroyed equipment against the BPA issuing agency for lack of jurisdiction, instead finding that the agency that placed the BPA order was the proper respondent. The U.S. Department of Agriculture (USDA) issued the relevant BPA in June 2021 for the ongoing acquisition of heavy equipment and machinery to protect government lands and minimize loss of life or damage to property and natural resources from fire and other hazardous incidents. The terms of the BPA permitted several other federal agencies besides the USDA to place “resource orders” for goods or services from pre-approved vendors. Soon after the issuance of the BPA, the contractor accepted a resource order for a masticator machine. The resource order for the masticator was placed by the Department of the Interior (DOI) to assist in clearing areas impacted by the Summit Trail Fire. The resource order duly identified DOI as the ordering agency.

The masticator was later destroyed in a fire, and the contractor submitted a claim to the USDA for $451,782 to replace it. In its claim the contractor alleged that the government was liable for the loss of the masticator due to its grossly negligent and reckless acts. In her final decision denying the claim, the USDA contracting officer (CO) indicated that she possessed the requisite authority to settle the dispute. After the USDA CO denied its claim, the contractor submitted a claim to the DOI CO that placed the purchase order and requested $632,010 for damages related to the destruction of the masticator in the fire. However, the DOI CO also denied the contractor’s claim. The contractor challenged both final decisions at the CBCA, where the two appeals were docketed and then consolidated. During the appeal, the USDA took the position that it was not the appropriate respondent as it was not the agency that issued the resource order for the masticator. In response, the contractor pointed to the USDA CO’s final decision, in which the CO had claimed that she possessed the requisite authority to deny the claim. The contractor also attempted to rely upon CBCA 6358, where the Board had decided it had jurisdiction to decide an appeal against a BPA issuing agency that was not the ordering agency because the contractor had alleged that a contract existed between it and the BPA issuing agency.

However, the CBCA agreed with the USDA and dismissed the contractor’s appeal against it. The CBCA explained that since the BPA is merely a framework of terms for future contracts, it lacks the mutuality of obligation necessary to form a contract. Therefore, the Board lacks jurisdiction under the CDA to decide claims arising out of a BPA unless an order is issued under it because BPAs are not considered contracts. The CBCA did not find the contractor’s reliance on its decision in CBCA 6358 appropriate, noting that the Board’s decision in that case did not reference the Federal Circuit’s binding precedent that a BPA is not a contract. The Board was similarly unpersuaded by the argument that the USDA CO’s determination that she could resolve the claim meant that the USDA was a proper respondent in the appeal. Consequently, the CBCA dismissed the portion of the claim against the USDA after finding that the contractor only had a contract with the DOI as the agency that placed the order against the BPA and not the USDA, which was merely the agency that issued the BPA.

To be enforceable, a federal contract must be sufficiently defined to provide a basis for determining the existence of a breach and for providing an appropriate remedy. Since BPAs are not contracts on their own, courts and contract appeals boards lack the necessary CDA jurisdiction to adjudicate appeals on claims arising out of them – unless an order has been placed by the government and accepted by the contractor bringing the claim. Nevertheless, contractors should be mindful that while a BPA is not a contract in and of itself, its terms are still relevant for the purposes of a claim since the terms and conditions of the BPA are incorporated in each order. However, in cases where the BPA issuing agency is different from the agency that placed the order, contractors should typically file their claims against the agency that placed the order most relevant to the claim instead of the agency that issued the BPA. Any subsequent appeals should be similarly filed against the agency that issued the relevant order as the appropriate respondent agency.

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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Establishing Date of Receipt of CO’s Final Decision for Triggering CDA Appeals Limitations Period

July 5, 2024 Sareesh Rawat, Esq.

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.

Implications of a Lack of Notice Detailing Contractor Appeal Rights in a CO’s Final Decision

July 17, 2024 Sareesh Rawat, Esq.

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.

Jurisdictional Implications of CDA’s Presentment Requirement

September 15, 2024 Sareesh Rawat, Esq.

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.

Determining Date of Accrual of Government Claims

October 9, 2024 Sareesh Rawat, Esq.

The Contract Disputes Act (CDA) requires the federal government and its contractors to assert claims against the other party within six years of claim accrual, after which the claim is barred. However, the CDA does not define when the claim begins to accrue, which may sometimes complicate the statute of limitation calculation for contractors, especially when defending government’s claims. To determine when government claims begin to accrue, contractors must look to the Federal Acquisition Regulation (FAR), the terms of the underlying contract, and the facts and circumstances surrounding the particular contract. Since multiple factors are implicated in determining the accrual date, it may not always be evident whether the government’s claim is timely. Such lack of clarity may be particularly applicable in government claims concerning allowability of contractor costs in cost-reimbursable settings. Specifically, it may be challenging to determine the date of accrual of government’s cost claims in situations where payments are made in advance based on provisional billing rates and the contractor later fails to adequately demonstrate the allowability of billed costs in its final cost rate proposals.

Determining the Appropriate Respondent Agency in Appealing Blanket Purchase Agreement Claims

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