Include A Clear and Unequivocal Statement in Your CDA Claim

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As most contractors are aware, the Contract Disputes Act requires that a contractor must present the Contracting Officer with a certified claim prior to proceeding with a formal claim before the Board of Contract Appeals or Court of Federal Claims. A recent case out of the Court of Federal Claims highlights the importance of consistency when proceeding through the claims process. Though the contractor in Affiliated Construction Group v. United States presented a certified claim to the contracting officer prior to filing its Complaint with the Court of Federal Claims, the Government successfully moved to dismiss the lawsuit on the grounds that the contractor’s argument at court differed from its certified claim.

Affiliated Construction Group (“ACG”) entered into a FFP contract to provide a fire mitigation system to the Government. During performance, ACG learned that it would need to increase the number of devices from what it estimated in its bid in order to ensure that the system was code-compliant. ACG’s certified claim and Complaint alleged that ACG was entitled to receive the increased costs related to this work because “the final quantities were based on code requirements and as such were not the design team’s requirements.” The Government moved to dismiss, arguing that ACG’s claim was based on its own underestimating and, as this was a firm-fixed-price contract, ACG bore this risk. In response, ACG argued that the increase in devices was due to changes required by the Government and issued in the submittal process. However, ACG subsequently argued that the increase in devices was not due to an increase in the area or square footage of the project, but due to the fact that the existing system was not code-compliance, as ACG had assumed. In reply, the Government argued that ACG was changing its claim and the claim should be considered new for purposes of the CDA. Disputing this, ACG argued that both its certified claim and Complaint stated that the increase in cost was due to code requirements.

Though the court acknowledged that this case presented a close call, it held that neither the certified claim nor the Complaint was consistent with the argument that the increased costs were due to the site’s non-compliance with code requirements. While ACG had referenced the “code requirements” as the cause of the increased costs, the Court dismissed this reference, finding that it could have related to ACG’s underestimation of the devices necessary to meet code-requirements for the renovation work. Arguably, this is an overly nuanced distinction. Indeed, the Court wrote:

"One may, of course, infer from the language of the claim that ACG was really contending that the conditions of the site differed from those assumed in the contract. Perhaps the strongest motivation for drawing such an inference is that the claim, as written, does not seem to have anything to do with changes in the work ordered by the government, and would otherwise make no sense.

Notwithstanding the Court’s apparent acknowledgement that when reasonably read ACG’s claim did provide notice that the conditions on site differed from those assumed, the Court held that the Contracting Officer is not required “to interpret claims in such manner.”

To protect against a similar outcome, contractors should take care to develop a complete and thorough certified claim. This claim should include “a clear unequivocal statement” as to the basis of the claim to ensure that the Contracting Officer has the opportunity to review the claim and satisfy the CDA requirements. While the legal theories supporting a contractor’s claim may shift during the contractor’s prosecution of the claim, it is essential that the operative facts – those necessary to assess and rule on the claim – are provided to the contracting officer in a clear and unambiguous manner so that there is no room for the Government to later argue that it was not presented with the true basis of the contractor’s claim at the certified claim stage.

 

Topics:  Contract Disputes, Contract Disputes Act

Published In: Civil Procedure Updates, Construction Updates, Government Contracting Updates, Zoning, Planning & Land Use Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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