A recent Armed Services Board of Contract Appeals case has highlighted the importance of understanding the legal theories, judicial procedures, and evidentiary requirements unique to government contracting, if a contractor wants to get paid on its claim. In Appeal of BES Construction, LLC the ASBCA actually reduced the amount that the contractor had already been awarded by the contracting officer because the contractor and its counsel were unaware of what was necessary to effectively prosecute its claim.

In BES, the contractor filed a claim against the Air Force, seeking $608,568.67 in delay damages.  The contracting officer (CO) issued a contracting officer’s final decision (COFD), acknowledging merit in the claim, but concluding that the contractor was entitled to only $134,886.29 in damages.  BES appealed to the ASBCA, presumably hoping to increase the amount of damages it could recover.  Unfortunately for BES, because of missteps and omissions during litigation, it ended up with even less.

The first such omission was the failure to produce necessary expert testimony to support BES’ claims regarding delays and related delay damages.  At the hearing, the government called an expert in delay and construction costs, who opined that the contractor was only entitled to $69,483.88 in delay damages.  BES did not call a delay expert to rebut the government expert’s testimony, and instead relied on factual testimony from the owner of the company itself.  The second misstep was BES’ failure to provide the ASBCA with well-reasoned legal argument concerning BES’ entitlement.  The ASBCA judge hearing the case was extremely critical of BES’ post-hearing brief, explaining that it failed to include the requisite level of legal analysis concerning the basis of the contractor’s claims. 

In making his ruling, the judge stated that the ASBCA would be justified in denying the appeal all together, on the basis of the “undeveloped” brief alone. Luckily for BES, the judge nonetheless chose to rule on the claim.  Unluckily for BES, the judge found that, because the contractor had not presented expert testimony on the extent of the delay and its impact on the critical path, it had not carried its burden to prove its delay damages.  Despite the fact that the contracting officer had determined that the contractor was entitled to $134,886.29, the Board judge held that the only proof of damages in the record was the government’s expert testimony, in which that expert opined that the contractor was entitled to $69,483.88.  The judge therefore reduced the claim award to $69,483.88.

So, what can you learn from this?  On the most basic level, the take-aways are that: (1) Contractors must learn what expert testimony is required to prove a claim against a federal agency, and make sure they provide that testimony at trial; and (2) Contractors need to provide judges with well-reasoned, legally supported arguments, demonstrating entitlement under the law, and a supported damage calculation.  But, there are bigger, more wide-reaching lessons to be learned here, as well.

This case provides a vivid reminder that the law can be a harsh and exacting mistress.   Lack of familiarity with legal theories or requirements can result in a forfeiture of certain rights or remedies – it can cost a contractor hundreds of thousands of dollars, if not more.  BES lost out on over a half a million dollars in damages, and it could have had its entire claim dismissed, all because it failed to satisfy certain requirements relating to the prosecution of a delay damages claim.  It is quite easy for contractors – and attorneys who are not experienced in government contracting, in particular – to make mistakes that might nullify a contractor’s claim rights, reduce damages, or even result in expensive counterclaims, liquidated damages, or reprocurement costs.  We meet contractors all the time who tell us that they don’t need a government contracts attorney to represent them, because they are happy with their local counsel.  While most of these contractors are represented by excellent local attorneys, who have extensive knowledge of, and substantial experience litigating, state law issues, a lack of experience or familiarity with government contracts law in particular can have major repercussions.  Successful recovery of damages against a federal agency requires a contractor, and its attorney(s), to understand the specific legal theories, FAR provisions, processes and procedures, and evidentiary requirements of effective CDA claim prosecution – many of which may be unique to government contract law, and/or the courts and boards that hear government contracting cases.  Accordingly, if you need help with a claim or other government contracting matters, make sure that your attorney is well-versed in government contracting law.