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.

The Armed Services Board of Contract Appeals (ASBCA) recently reiterated its position regarding these rules in refusing to exercise jurisdiction over an appeal challenging a CO’s decision to terminate a contract for default. In ASBCA 63743, a decision issued on May 13, 2024, the Board refused to exercise jurisdiction over an appeal challenging a default termination decision because the contractor had filed its notice of appeal (NOA) more than 90 days after the receipt of the default termination notice. During the appeal, the contractor implicitly alleged that it was prejudiced by a lack of notice of its appeal rights in the termination decision as it cited a lack of counsel as the primary reason for misinterpreting the Board’s appeals limitation period as 120 days. However, the Board deemed the appeal to be untimely for being filed outside the 90-day appeals limitation period and found that the CO’s omission of the contractor’s appeal rights in the termination letter was not prejudicial to the contractor under the circumstances.

The underlying Navy contract required the contractor to deliver three glacial pool coolers for use at the Naval Diving and Salvage Training Center in Panama City, Florida, on November 30, 2022. After a long series of missed deadlines and miscommunications spanning over seven months, the Navy finally terminated the contract for default, citing the contractor’s failure to deliver the pool coolers via an email dated July 14, 2023. Notably, the Navy had terminated the contract for default once previously on May 3, 2023, but later reinstated it on June 2, 2023, by extending the delivery date to July 7, 2023. Importantly, both termination decisions, when conveyed to the contractor, did not include a contractor appeal rights notice required under FAR § 33.211. However, the Navy CO did, at one point, advise the contractor of its right to appeal the COFD under the CDA in an email following the first termination decision.

Upon receiving the second default termination decision on July 14, 2023, the contractor filed its notice of appeal at the ASBCA on October 24, 2023 – over 100 days after receiving the termination decision. Since the appeal appeared to have been untimely filed, the ASBCA directed the contractor to demonstrate with evidence that its appeal was timely under 41 U.S.C. § 7104(a). However, instead of presenting suitable evidence, the contractor submitted a request for alternative dispute resolution (ADR) at the ASBCA, citing a lack of counsel as its reason for misinterpreting the appeal limitation period as 120 days. On December 4, 2023, the ASBCA issued an order directing Navy counsel to brief the question of whether the Board possessed jurisdiction to hear the appeal while advising the contractor that it had 30 days to file a response after the government’s brief was filed. In its brief, the Navy argued that the Board lacked jurisdiction over the contractor’s appeal because the appeal was untimely and that the contractor was not prejudiced by the omission of the language outlining its appeal rights in the termination decision. Meanwhile, the contractor failed to respond to the government’s brief despite multiple orders from the Board after the expiration of the allotted period directing the contractor to submit a response.

In its analysis, the ASBCA noted that while the Navy failed to include the FAR 33.2111(a)(4)(v) language notifying the contractor of its appeal rights, the Navy CO had, in email communications following the first termination, notified the contractor that it could appeal the COFD at the ASBCA under the CDA. Additionally, the contractor responded to the initial termination decision by stating, “we have now been notified that we are required to proceed with the appeals process. This situation not only creates an unnecessary burden on the appeal board's valuable time but also imposes significant financial implications on our group due to this termination.” The Board also noted that while the contractor had implicitly alleged that it was prejudiced by the omission of the appeals right notice as it misinterpreted the appeals limitation period due to a lack of counsel – the contractor had failed to expressly assert that it was prejudiced by the lack of notice of its appeal rights. Finally, the Board pointed out that the same contractor had recently appeared before the Board and had properly initiated a CDA appeal. Remarkably, in that previous appeal, the Board had found the contractor’s notice of appeal to be timely when it was filed within 90 days of a corrected COFD. The Board noted that the contractor had the same named representative in this prior litigation as in the present case. In agreeing with the Navy, the Board determined that given the contractor’s demonstrated ability to bring a timely appeal before the Board, along with the other facts and circumstances surrounding the termination decision on appeal, it was difficult to understand how the contractor could have misinterpreted the appeals limitation period as 120 days. Therefore, the Board ruled that even considering the lack of counsel, the contractor did not suffer prejudice due to the omission of its appeals rights in the termination decision and ultimately concluded that the ASBCA did not have jurisdiction to hear the contractor’s appeal as it was untimely filed.

When challenging a CO’s final decision, contractors should take care to file their appeals within the appeals limitation period. In case of a missed appeals deadline, contractors should again review the CO’s final decision to ensure it included language notifying the contractor of its appeal rights. In the absence of such appeal rights language, contractors should affirmatively claim that they were prejudiced by the government’s lack of inclusion of an appeal rights notice and argue that the appeals limitations period should have been stayed due to the lack of an appeal rights notice. In such situations, the appeal limitations period may be tolled if the contractor can successfully demonstrate detrimental reliance or prejudice caused by the CO’s omission of the appeals rights notice in the final decision. However, contractors should be cognizant that a lack of notice of appeal rights, by itself, may not be sufficient to prove prejudice – especially if the government presents evidence that tends to show that the contractor should have been aware of its right to appeal the CO’s final decision. Ultimately, as demonstrated in ASBCA 63743, adjudicative forums will determine on a case-by-case basis whether a contractor was sufficiently prejudiced by the omission of the appeal rights notice to toll the appeals limitation period.

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.