Federal contractors are winning a safeguard against the government’s practice of moving to dismiss cases brought under the Contract Disputes Act (CDA) for lack of jurisdiction in the late stages of litigation.

Recent decisions have accelerated a trend started in 2014 by the U.S. Court of Appeals for the Federal Circuit. It kicked into high gear this year when the U.S. Supreme Court ruled in March that it would treat a procedural requirement as jurisdictional “only if Congress ‘clearly states’ that it is.” The high court’s decision in Wilkins v. United States warned of the “risk of disruption and waste that accompanies the jurisdictional label.”

The Federal Circuit expanded on this line of thought in August 2023 with its decision in ECC Int'l Constructors, LLC v. Sec'y of Army, holding that the “sum certain” requirement for CDA claims is not jurisdictional.

Taken together, these decisions mark a significant shift in the law and raise questions about whether other CDA procedural requirements that have been labeled as jurisdictional will face similar challenges.

Background

In the Contract Disputes Act of 1978, Congress aimed for “efficient and fair resolution of contract claims.” The law adopted recommendations of the Commission on Government Procurement to organize existing agency-specific administrative processes and ensure access to due process and judicial review. This helped to reduce delays on contractors’ claims.

While Congress intended the CDA to streamline the process for contractors, the law nonetheless posed procedural traps. Notably, the Federal Circuit (and its predecessor, the U.S. Court of Claims), labeled five of the law’s requirements as jurisdictional:

• claim submission
• claim certification
• issuance of a contracting officer’s final decision
• timely appeal
• the six-year statute of limitations

The Federal Circuit overturned its own precedent on the statute of limitations requirement in its 2014 decision in Sikorsky Aircraft Corp. v. United States, holding that it is non-jurisdictional in nature.

Problems with Labeling CDA Requirements as Jurisdictional

The CDA’s purpose is to ensure fair and efficient dispute resolution. Yet decades of various administrative and judicial interpretations – and the labeling of certain requirements as jurisdictional – have challenged this goal. The government has held an advantage over contractors in CDA disputes by abusing the use of motions to dismiss for lack of jurisdiction long after cases are underway.

By their nature, jurisdictional issues can be raised at any time and can result in dismissal of a case. By labeling CDA requirements as jurisdictional, the Federal Circuit gave the government the power to move for dismissal years after a claim is filed, even if a full hearing on the merits had already occurred.

If CDA provisions were labeled as non-jurisdictional, the government would be required to raise them as affirmative defenses in the early stages of litigation and would bear the burden of proof.

Jurisdictional vs. Non-Jurisdictional

In Wilkins, the Supreme Court reversed a lower court’s decision that interpreted a statute at issue as jurisdictional. The justices disagreed and held that the procedural requirement at issue was non-jurisdictional.

To determine whether Congress clearly labeled a statutory requirement as jurisdictional, the Supreme Court has instructed that courts should considers whether the requirement governs a court’s “adjudicatory capacity.” Claim-processing rules, such as filing deadlines or the types of threshold requirements that claimants must complete or exhaust before filing a lawsuit are non-jurisdictional.

Three decisions handed down in 2023 by the Federal Circuit show that the appellate court is rethinking its approach to deciding when a statutory requirement qualifies as jurisdictional.

First, in CACI, Inc.-Fed. v. United States, the Federal Circuit found that the term “interested party” under the Tucker Act implicated a “statutory standing” that should not be treated as jurisdictional. The panel noted that the Supreme Court has “clarified that so-called ‘statutory standing’ defects do not implicate a court’s subject-matter jurisdiction.” In finding that prior caselaw treating the “interested party” issue as a jurisdictional issue is “no longer good law” and that the Claims Court “erred in treating the issue of statutory standing as jurisdictional,” the Federal Circuit held that “the issue of prejudice is no longer jurisdictional unless it implicates Article III considerations.”

Second, in M.R. Pittman Group, LLC v. United States, the Federal Circuit held that “the Blue & Gold waiver rule – which seeks to reduce inefficiencies by requiring an objection to a solicitation be made prior to the close of bidding – is more akin to a nonjurisdictional claims-processing rule since it ‘seeks to promote the orderly progress of litigation by requiring that the parties take certain procedural steps at certain specified times.’”

Lastly, in ECC Int’l Constructors Inc. v. Army, the Federal Circuit overturned decades of its own precedent when it held that the CDA’s requirement that claims include requests for a “sum-certain” is not jurisdictional. Specifically, the Court noted that “the sum-certain requirement is a nonjurisdictional rule subject to forfeiture.”

In reaching this decision, the panel noted that Congress did not clearly provide for the sum-certain requirement to be jurisdictional because the relevant CDA statute does not mention the term “sum certain,” and the relevant statute does not define what a “claim” is.

The panel also cited the Supreme Court’s guidance on when rules should be considered jurisdictional, which has emphasized that the courts must “inquire whether Congress has clearly stated that a requirement bears on a court’s jurisdiction.”

The sum-certain requirement, the panel found, “is an element of a claim for relief – in other words, it is an element of a CDA claim that a claimant must satisfy in order to recover – rather than a jurisdictional rule that a party could challenge after a trial on the merits.”

What’s on the Horizon

With the Federal Circuit reversing its own precedent on the issues of the CDA statute of limitations in Sikorsky and the “sum certain” requirement in ECC International, other CDA jurisdictional requirements are expected to be revisited.

Contracting Officer’s Final Decision
The statutory provisions granting the Boards of Contract Appeals and the Court of Federal Claims jurisdiction over CDA claims are contingent on whether a CO issues a final decision. This requirement most likely satisfies the Supreme Court’s test that Congress must state clearly that a requirement “bears on a court’s jurisdiction.”

Claim Certification
The reasoning behind the Federal Circuit's 1981 decision in Paul E. Lehman, Inc. v. United States that certifications for claims over certain value is jurisdictional was based on the erroneous idea that the requirement’s justification was in response to concerns raised by a Navy admiral.

The appellate court found that the admiral “viewed the certification requirement as a necessary prerequisite to the consideration of any claim.” However, the CDA’s requirement for certification contains no jurisdictional terms, aside from one sentence in the 1992 amendment, stating that a defect in the certification of a claim “does not deprive a court or an agency board of jurisdiction over the claim.”

Given this language and legislative history, under the Supreme Court’s “clear statement” analysis, Congress did not intend that claim certification be jurisdictional, so it is likely that courts would move away from the traditional analysis and determine that the claim certification requirement is non-jurisdictional.

Timely Appeal
The Federal Circuit has already cast doubt on whether filing deadlines are jurisdictional, as the CDA deadlines for filing before the Boards of Contract Appeals or the Court of Federal Claims are mere claim processing rules with no jurisdictional language, much like the CDA’s statute of limitations.

Furthermore, the Supreme Court has said that filing deadlines are “quintessential claim processing requirements.”

Key Takeaways for Federal Contractors

Federal contractors should take note of the shift in judicial review of CDA requirements. The tradition of labeling these requirements as jurisdictional is not as certain as it once was, following the decision in ECC International.

When an agency attempts to dismiss a claim late in the stage of litigation for lack of jurisdiction, claimants should cite to Wilkins and ECC International to push back against the agency. Agencies rely on motions to dismiss for a lack of jurisdiction as a powerful tool. For example, the government filed motions to dismiss for lack of jurisdiction in more than 10% of cases pending before the Armed Services Board of Contract Appeals in Fiscal Years 2021 and 2022.

What is positive is that these recent decisions have leveled the playing field for contractors in CDA claims disputes. Courts are now less likely to rely on tradition and precedents given the new framework under the Wilkins analysis.

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