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.

Importantly, for the remainder of the termination for convenience claim, the ASBCA entered judgment, which became final. The contractor then submitted the dismissed portion of its constructive acceptance claims to the CO for a final decision, which the CO again denied. At this stage, the contractor switched forums and brought its appeal before the COFC. In Avant Assessment, LLC v. United States, 159 Fed. Cl. 632, 641 (2022), the government filed its first motion to dismiss, alleging that the contractor’s claims were barred by the doctrine of claim preclusion since ASBCA had previously entered final judgment. In that decision, the COFC partially denied the government’s motion to dismiss, determining that the contractor’s UCC claims were not barred by claim preclusion because they were based on different operative facts that only became known during the ASBCA litigation. There, the COFC ruled that the contractor could not have included its unknowable UCC claims in its termination for convenience settlement proposals because the UCC claims were based on facts uncovered in the ASBCA appeal. However, the remaining counts in the contractor’s complaint relating to termination for convenience were dismissed due to claim preclusion.

Following that 2022 COFC decision, the government filed a second motion to dismiss, this time requesting that the Court dismiss the contractor’s UCC claims for not meeting the presentment requirement. Specifically, the government alleged that the contractor’s assertions regarding the government’s use of the rejected test items, which the Court had determined were based on different operative facts that became known during the ASBCA litigation, were never presented to the CO per the requirements of the CDA. The government argued that if the operative facts underlying the contractor’s UCC claims were sufficiently different from what was before the ASBCA to avoid the claim preclusion bar, then the contractor was required to present those facts (and the underlying claims) to the CO before filing the appeal at the COFC. Thus, the government argued that the COFC lacked jurisdiction over the contractor’s surviving UCC claims because the CO had never been put on notice regarding these claims. Therefore, in successfully avoiding the bar of claim preclusion in the previous motion to dismiss, the contractor had inadvertently argued itself out of the COFC’s jurisdiction.

Meanwhile, the contractor argued that its UCC claims were included in the plain language of the certified claim letters submitted to the CO. Specifically, the contractor took the position that its claim presented to the CO mentioned “use rights” in the context of the government’s enjoyment of exclusive ownership and retention of the rejected items to the contractor’s detriment. Therefore, according to the contractor, its UCC claims asserting that the government constructively accepted the rejected items by retaining them, also put the CO on notice regarding its UCC claims. However, the Court rejected this argument. In dismissing the contractor’s UCC claims for lack of jurisdiction, the COFC explained that it was the government’s post-rejection “use” of the items (in addition to the retention) through the transfer of items to a third party, which first became known to the contractor during the discovery phase of the prior ASBCA litigation. Therefore, any claims relating to the government’s post-rejection “retention” conduct alone did not survive the claim preclusion bar. Only the contractor’s UCC claims based on the government’s post-rejection “use” of the items were not precluded because the government’s post-rejection “use” by third-party transfer was discovered during the ASBCA litigation. However, since the contractor had not presented this specific factual premise to the CO, the contractor’s UCC claims had failed to satisfy CDA’s presentment requirement and, therefore, had to be dismissed.

CDA requires contractors to first present their claims to the CO and obtain a final decision before bringing appeals before a BCA or the COFC. While recent Federal Circuit decisions have held various claim processing requirements, such as the sum certain requirement, as non-jurisdictional but mandatory, contractors should still be mindful that adjudicative forums have consistently held the CDA’s presentment requirement to be jurisdictional. As demonstrated in this case, multiple appeals involving the same set of underlying operative facts may present added complications due to res judicata, if litigated separately. Therefore, where possible, contractors should seek to bring such appeals together and strive to present their related claims to the CO as soon as practical. Notably, the outcome here would have been the same even if the presentment requirement were only considered mandatory and not jurisdictional since the CO was never actually put on notice regarding the facts relating to the contractor’s post-retention use of the items underlying its UCC claims. Contractors should be cognizant that when new facts giving rise to additional claims are uncovered during the discovery phase of appeals litigation, contractors may need to put the CO on notice regarding such facts and present such additional claims to the CO. If the particular facts necessitate it, contractors should request a stay in proceedings during appeals litigation to present their additional claims promptly. Presenting the additional claims to the CO for a final decision on time may help avoid potential jurisdictional complications further down the road during appeals litigation.

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.