ASBCA Takes on Contract Dispute Without Jurisdiction Under the Contract Disputes Act

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Agency agreements with the ASBCA allow the Board to adjudicate contract disputes outside the purview of the Contract Disputes Act.

TAKEAWAYS

  • The ASBCA can take jurisdiction over contract disputes pursuant to agency agreements with the Board.
  • The Board applied a 60-day time frame for the agency to issue a final decision, even though the contract dispute at issue was not subject to the CDA.
  • The Board considered the agency’s failure to provide a final decision within 60 days to be a breach of the contract.

In a recent decision issued by the Armed Services Board of Contract Appeals (ASBCA or Board), the Board held that the Washington Metropolitan Area Transit Authority (WMATA) breached its contract with Transdev Services, Inc. (Transdev) when WMATA failed to issue a timely final decision in response to Transdev’s claims. Appeals of Transdev Services, Inc., ASBCA Nos. 62654, 62655. The Board handled this matter even though the Contract Disputes Act (CDA) did not apply to the dispute. The Board also applied a strict time frame to WMATA’s final decision responsibility.

After Transdev filed its Complaint, WMATA filed a motion to dismiss Transdev’s appeals, asserting that the Board lacked jurisdiction because the CDA does not apply to contract disputes between private contractors and non-federal agencies like WMATA. The Board agreed that the CDA was not applicable to the dispute, but nonetheless determined it had jurisdiction over Transdev’s claim. The Board relied on that fact that WMATA and the ASBCA are parties to a Memorandum of Understanding (MOU) which provides that the ASBCA would serve as the forum for resolution of all contractor appeals from WMATA contracting officer adverse final decisions.

The disputes clause in Transdev’s contract contained language obligating the contracting officer to issue final decisions. WMATA had not provided its written final decisions by the time Transdev filed its notices of appeal with the Board, which occurred, respectively, 126 and 122 days following Transdev’s claim submissions. The Board determined it had jurisdiction to decide the appeals on the basis of its MOU with WMATA. The Board then found the contracting officer’s failure to issue a written decision was a breach of the contract. The Board applied a 60-day time period to WMATA’s final decision obligation – even though WMATA’s contract with Transdev did not cite to the CDA or its relevant sixty-day time period. The Board stated “[t]his approach, set forth in the CDA, represents a reasonable period of time for purposes of assessing WMATA’s actions here.” We note that the Board did not regard the claims as “deemed denied,” as the Board determined that legal principle to apply uniquely to the CDA.

We find this case noteworthy for two reasons. First, this case underscores the fact that the Board’s jurisdiction is broader than that conferred by the CDA. The Board also can have jurisdiction over a contractor’s appeal if the agency in question has an agreement with the ASBCA. The Board’s webpage notes this (emphasis added):

[The Board’s] primary function is to hear and decide post-award contract disputes between government contractors and the Department of Defense; the National Aeronautics and Space Administration; the Central Intelligence Agency, as appropriate; and other entities with whom the ASBCA has entered into agreements to provide services.

Accordingly, if a government agency outside the executive branch has denied your claim and you do not know where to turn, it is worth investigating whether your contracting partner has an agreement similar to the one WMATA executed with the Board. Second, we note that the Board applied a 60-day obligation on WMATA to provide a final decision. We will watch closely whether this begins a trend that might extend to executive branch contracting officers.

[View source.]

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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