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

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.

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

TILLIT LAW Federal Contract Claims Insights