The underlying principle of preparing and defending government contract claims starts with the Contract Disputes Act. Many government contractors – large and small – have repeatedly lost hundreds of thousands in contract claims simply because they did not follow the legal requirements for filing a federal contract claim.
When companies submit contract claims against the federal government, there should be a substantial effort to provide very detailed facts and to provide evidence to support the claim. If you are seeking additional labor costs, then be prepared to submit time sheets etc.
A different analysis should be used for firm-fixed-price contracts where there is a totally new requirement that is also bid on a fixed rate.
- Federal contractors should not underestimate the importance of providing supporting documentation when preparing claims under the Contract Disputes Act.
- You should also be prepared to explain why the claimed items were not already contemplated within the current contract.
- Companies should not take direction from the contracting officer representative or end user. Only the contracting officer can bind the federal government.
- If you receive directions to perform work that is a scope change, then you must still communicate with the contracting officer before starting the changed work.
41 USC 7103 Contract Disputes Act (CDA) Requirements
Pursuant to the Contract Disputes Act, “[e]ach claim by a contractor against the Federal Government relating to a contract shall be submitted to the contracting officer for a decision.” 41 USC 7103(a)(l). This is a critical legal requirement simply because if the contracting officer denies your claim and you have to appeal to the Boards of Contract Appeal or the U.S. Court of Federal Claims, there must be a valid legal claim submitted in order for the court to have jurisdiction to hear your appeals case. Without it, your appeal of the contracting officer’s decision will be dismissed.
As the appellant, you must prove by a preponderance of the evidence that you submitted a claim for payment to the contracting officer in order to establish the court’s jurisdiction. See Reynolds, 846 F.2d at 748; United Healthcare Partners, 13 BCA ii 35,277 at 173,156-57.
What are Contract Claims Against the Federal Government?
Definition: Although the Contract Disputes Act (CDA) does not term “claim,” the Federal Acquisition Regulation, FAR 2.101 suggests that a Claim means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract….”
Not considered: A payment voucher, invoice, or other routine requests for payment that is not in dispute when submitted is not a contract claim under the Contract Disputes Act. When defending government contract claims, the preparation and submission may be converted to a claim, by written notice to the contracting officer. However, there must be a dispute either as to liability or amount or is not acted upon in a reasonable time.
Legal content requirement: When preparing and defending government contract claims in court under the Contract Disputes Act, your claim must provide sufficient facts and evidence to support the request damages. There is not specific or required form. However, a legally sufficient contract claim must include “(1) adequate notice of the basis and amount of a claim and (2) a request for a final decision.” See M Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1328 (Fed. Cir. 2010) and other contract disputes cases.
Your request for a contracting officer’s decision can be implied from the context of the claim submission to the contracting agency. James M Ellett Construction Co. v. United States, 93 F.3d 1537, 1543 (Fed. Cir. 1996); Lael Al Sahab & Co., ASBCA No. 58346, 13 BCA ii 35,394 at 173,663.
By preparing and submitting legally sufficient claims, you can avoid unnecessary litigation about whether your claim was prepared correctly. You want to get to the merits and have the court decide the dispute.
Emails and Correspondence to the Government
Don’t rely on them! In determining whether a contractor has submitted a claim, the Boards of Contract Appeals and other appellate courts will apply a common sense analysis on a case-by-case basis, examining the totality of the correspondence between the parties. CCIE & Co., ASBCA Nos. 58355, 59008, 14-1 BCA ii 35,700 at 174,816.
- Contractors should always focus on drafting a legally sufficient claim.
- Including emails and correspondence should be part of the preparation and submission phase and not the litigation phase.
- Make sure that any correspondence you rely upon comes from the contracting officer and not just the contracting officer representative.
Contract Claims Statute of limitations
If you are wondering how much time you have a file a federal contract claim, the CDA requires the Submission of a Claim to the government within Six Years of its Accrual. If you miss it by one day, the court will not have any mercy on appeal. The statute of limitations rule has no room for flexibility. See 41 USC 7103(a)(4)(A). When the event
- When the event occurs tends to be the basis for the accrual of the claim.
- You should not wait until the last dollar is known to then start counting the statute of limitations for government contract claims.
Previous Release of Claims
Another problem when preparing and defending government contract claims is when the contractor has already signed a release of claims in a previous situation. This is the kiss of death for small businesses an large DOD contractors. The key question is whether the claim that the government now claims has been released is really under the current contract.
The Civilian Board of Contract Appeals, CBCA, has upheld the clear language of a settlement agreement, which stated that “[i]n a settlement ‘each party gives up something in order to terminate the dispute without further litigation.’” Primetech v. Department of Homeland Security, CBCA 2453, et al., 12-2 BCA ¶ 35,130 at 172,477-78 (quoting Asberry v. United States Postal Service, 692 F.2d 1378, 1381-82 (Fed. Cir. 1982))
At best, when you sign a release of claims letter, you or your contract disputes attorney should insert clear language that you are reserving your rights regarding identified claims.
The above points are but only a few of the legal issues raised in government contract claims and disputes. For assistance with preparing and defending government contract claims, please call the lawyers at Watson & Associates, LLC. 1-866-601-5518. FREE INITIAL CONSULTATION.