Vitiation of the Finality of the CO’s Final Decision During the Appeal Period

March 13, 2025 Sareesh Rawat, Esq.

Upon the issuance of a contracting officer's final decision (COFD), contractors have 90 days to file their notice of appeal before an appropriate Board of Contract Appeals (BCA). BCAs have consistently held the requirement to file an appeal within the 90-day appeal period as a non-waivable jurisdictional requirement. Thus, if the contractor fails to file their appeal within this 90-day appeal period, the BCA may not entertain the appeal as it lacks jurisdiction over it under the Contract Disputes Act (CDA). Contractors must strictly follow the 90-day appeal deadline, which is not tolled even when the contractor inadvertently files their appeal at the wrong BCA. In certain situations, contractors may file their appeal after 90 days have passed since the original COFD issuance, provided they can demonstrate that the contracting officer (CO) reconsidered the final decision as a result of the parties' discussions during the appeal period. If government actions during the appeal period indicate that the contractor reasonably believed that the CO reconsidered her decision, the finality of the CO's decision may be vitiated or invalidated. Under such circumstances, the CO's vitiated final decision may not be reinstated, and the CO is required to issue a new final decision, restarting the 90-day appeal period under the CDA. However, because the parties often continue settlement discussions after the issuance of the COFD, it may not always be clear whether the CO reconsidered her final decision or if the COFD remained final.

In ASBCA No. 61026, the Armed Services Board of Contract Appeals (ASBCA) found a contractor's appeal timely even though it was filed after 90 days had passed since the contractor received the COFD because government actions and statements during the appeal period caused the contractor to reasonably believe that the CO was reconsidering her final decision. The Army issued the relevant contract in 2012 to acquire helicopter paint-booth equipment, booth monitoring systems, personnel protection systems, and related services for an aircraft corrosion control facility. On August 4, 2016, the CO terminated the contract for default and notified the contractor of its rights to appeal the final decision. However, on August 11, 2016, the CO emailed the contractor and stated that the government was willing to accept the delivery of contract items. The CO also suggested that the contractor contact the contract office to discuss proposals or further questions relating to the default termination. Furthermore, on August 25, 2016, the government again contacted the contractor and expressed optimism that the parties' continued cooperation could lead to a mutually beneficial solution. The government also held three teleconferences with the contractor on August 25, August 29, and August 31, 2016, during which the merits of the termination were discussed, along with alternate delivery proposals. Consequently, the contractor argued that the CO's final termination decision was vitiated by government actions and statements following the termination because the contractor believed the termination could be rescinded.

Meanwhile, the government took the position that it was made clear to the contractor that the termination notice was the CO's final decision because the government never reconsidered the termination, and any communications following the termination were solely to mitigate the contractor's liability. However, after considering the evidence in the record, the ASBCA agreed with the contractor, finding that although the CO never used the word "reconsider" during post-termination communications with the contractor, government actions in totality nevertheless vitiated the final decision. Additionally, the government's repeated use of the term "mitigation" during communications was not sufficient to support the government's position that the communications were for mitigation purposes only because the government failed to provide clear notice that the termination remained in effect. The Board explained that if the CO wanted to avoid a determination that she had reconsidered the final decision, she should have refrained from conducting any discussions, negotiations, review of documents, or other actions that could be considered a de facto reconsideration. There was substantial evidence in this case that the government's post-termination actions either amounted to reconsideration or, at a minimum, led the contractor to reasonably believe that the government was reconsidering the final decision. Thus, the ASBCA found the contractor's notice of appeal timely even though it was filed outside the appeal period of the original default termination decision because government actions following the termination vitiated the finality of the termination decision.

On the other hand, in ASBCA No. 63515, a more recent decision issued in March 2024, the ASBCA found that the CO's final decision was not vitiated by a meeting held during the appeal period as the contractor could not have reasonably concluded from the meeting that the CO was reconsidering her final decision. The United States Army Corps of Engineers (USACE) contract at issue contemplated a design-bid-build project for a consolidated communications facility at Scott Air Force Base in St. Clair County, Illinois. The dispute revolved around a Contractor Performance Assessment Reporting System (CPARS) evaluation, which had rated the contractor's "Quality" of performance as "Marginal." The contractor sought a revision of the CPARS evaluation through the submission of a CDA claim, which the CO denied in its entirety. Following the denial, the contractor emailed the CO and requested a reconsideration of the COFD. The contractor also requested a meeting to discuss the final decision. During the virtual meeting, the CO expressly stated that various USACE officials had vetted the COFD, and that it was the government's final decision. The CO also indicated that she had only agreed to meet with the contractor as a courtesy, in consideration of the parties' long business relationship. Furthermore, when the contractor insisted that the CO reconsider her decision, the CO referred the contractor to the appeal rights notice in the COFD to pursue the matter further. Another USACE official on the call also confirmed the government's position that the decision was final and that the contractor's "Quality" rating would not be revisited.

Despite this clear messaging, the contractor's in-house counsel continued to insist that the CO reconsider her final decision and requested a written answer to the contractor's request for reconsideration. The following week, the CO sent a letter in response to the meeting stating that the government remained satisfied with the CPARS ratings and that the previously issued COFD remained the government's final decision. Upon receiving the letter, the contractor filed its notice of appeal with the ASBCA. However, the appeal was filed 91 days after the contractor’s receipt of the initial COFD. Since the contractor had filed its appeal outside of the CDA appeal limitations period, the Board sua sponte directed the parties to brief the issue of jurisdiction. During briefing, the contractor argued that its appeal was timely because the parties had met during the appeal period, and the CO's letter in response to the meeting had vitiated the finality of the COFD. However, this time, the Board disagreed with the contractor, noting that the meeting held during the appeal period was a mere act of courtesy and did not constitute a reconsideration of the merits of the COFD. The Board reviewed the recording of the virtual meeting and concluded that USACE did not discuss the merits of the claim or the COFD during the meeting. Additionally, government officials made it abundantly clear to the contractor that the CO's decision was final. Thus, the Board dismissed the contractor's appeal as untimely, noting that the contractor failed to demonstrate that it was reasonable for it to conclude that the CO was reconsidering her final decision.

When determining whether the finality of a COFD has been vitiated, the focus is on government actions during the appeal period. Specifically, the BCA's inquiry focuses on whether government actions led the contractor to reasonably believe that the subject matter of the COFD was not yet final, thus, making an appeal unnecessary. While vitiation of the finality of the COFD will depend on the specific facts of each case, government requests for meetings, additional documentation, or communications indicating the continuance of a contractual relationship, when seen in conjunction with the contractor's request for reconsideration are good indicators of vitiation. Notably, once a final decision has been vitiated, it may not be reinstated, and it is then the CO's responsibility to reissue a final decision following CDA requirements. However, contractors should be mindful that a mere request to the CO to reconsider the final decision, without more, will not be sufficient to vitiate the finality of the COFD. Additionally, if the CO can demonstrate that she clearly communicated to the contractor that the COFD remained final, it is likely that the BCA will not find vitiation. Ultimately, it is the contractor's burden to prove that it could have reasonably or objectively concluded that the COFD was being reconsidered based on government actions during the appeal period. Thus, depending on the circumstances, contractors seeking reconsideration of the COFD during the appeal period may benefit from seeking clarification from the CO regarding the finality of the decision to adequately preserve their appeal rights.

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

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.

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.

Requesting the CO’s Final Decision on a Claim within a Specified Period

January 30, 2025 Sareesh Rawat, Esq.

The Contract Disputes Act (CDA) requires that a contractor present its claim to the contracting officer (CO) before an appeal or suit may be properly filed on that claim. This presentment requirement can be characterized as the linchpin of the contract appeals process under the CDA and is also the last clear chance for the government and the contractor to avoid appeals litigation. Once the contractor submits its claim to the CO, the CDA requires the CO to issue his final decision within 60 days of receiving the claim if the claimed amount is less than $100,000. For certified claims over $100,000, the CO must either issue his final decision within 60 days or notify the contractor within 60 days of the time within which a final decision will be issued. The CDA also requires that the CO issue the final decision within a reasonable time, accounting for factors such as the size and complexity of the claim and the adequacy of information provided by the contractor in support of its claim. In the event of an undue delay by the CO in issuing a final decision, the contractor may request the appeals adjudicative forum to exercise its discretion and direct the CO to issue a decision within a specified period. If the CO fails to issue a decision within that period, the contractor’s claim may be “deemed denied” and considered appealable under the CDA.

Vitiation of the Finality of the CO’s Final Decision During the Appeal Period

TILLIT LAW Federal Contract Claims Insights