Follow the Rules or Get the Boot: A Lesson in Following the CDA Prerequisites

Dorsey & Whitney LLP
Contact

The Contract Disputes Act (“CDA”), which governs disputes between contractors and the federal government, sets forth the rules for appealing a Contracting Officer’s Final Decision (“COFD”) to the Boards of Contract Appeals and the United States Court of Federal Claims.  These rules state that the contractor must first submit a written claim to the contracting officer for a written decision  (41 USC § 7103), and, if the claim exceeds $100,000, must certify the claim in accordance with 41 U.S.C. § 7103(b)(1).  After receipt of the COFD, a contractor must then file its notice of appeal with the governing Board of Contract Appeals within ninety days (41 USC 7104(a)), or, if filing in the Court of Federal Claims, within twelve months.  41 USC 7104(b).  These jurisdictional prerequisites are strictly enforced because the authorization to appeal a COFD constitutes a waiver of the Government’s sovereign immunity. Thus, failure to adhere to these requirements shall preclude a Board or Court of Federal Claims from taking jurisdiction to consider the merits of a case.

A recent decision of the Civilian Board of Contract Appeals (“CBCA”) in EHR Doctors, Inc. v. SSA, CBCA 4117, Oct. 21, 2014, (which followed two earlier decisions in the same matter, collectively CBCA Nos. 3426, 3522, and 4117) highlights such rigid enforcement of these statutory prerequisites. In the first appeal, EHR Doctors (CBCA 3426), the contractor sought $250,000 as a result of a contract modification reducing the contract price by that amount, which it claimed was executed under duress.  The CBCA dismissed the appeal without reaching the merits because the contractor submitted its “claim” to the auditor of the contracting agency, rather than the contracting officer, and did not include the required certification of the claim.  Thus, the Board held that the contractor failed to meet the jurisdictional prerequisites of both certifying and submitting its claim to the contracting officer.

Following the dismissal, the contractor properly submitted a certified claim to the contracting officer (which was denied), and then filed its second appeal, which was docketed as CBCA 3522.  However, in its complaint, the contractor sought, for the first time, $246,208.32 for alleged changes to the scope of its contract.  The Government (not surprisingly) moved to dismiss the claim for lack of jurisdiction, while the contractor asserted that submission of this second claim to the contracting officer was not required because it arose from the same set of facts as the first claim that the contracting officer had previously denied.  The Board disagreed with the contractor, and dismissed the appeal for failure to properly submit its claim, and receive a COFD prior to filing the appeal.

Presumably aware that its appeal on the second claim for $246,208.32 would likely be dismissed in CBCA 3522, the contractor submitted the claim to the CO for a final decision while the Government’s motion to dismiss was pending.  The CO denied the claim on March 11, 2014, yet, for reasons that are not clear, the Contractor waited 180 days to file its third appeal with the Board (docketed as CBCA 4117), which was 90 days longer than the rules permit. Again, and not surprisingly, the Government moved to dismiss the appeal as untimely. Similar to its prior argument, the contractor contended that its $246,208.32 claim was part and parcel of the claim pending before the Board in CBCA 3522, despite the fact it had been dismissed in that proceeding prior to filing the present appeal.  The contractor further noted that this claim’s incorporation in the complaint of the appeal in CBCA 3522 constituted notification to the Board of its intent to file the appeal, and that a second notice of appeal on this same claim would have needlessly burdened the Board’s resources with a duplicative request involving facts and circumstances that were already under the Board’s consideration.

The Board again rejected the contractor’s argument, finding that it did not have jurisdiction to entertain the appeal because the notice of appeal was not timely submitted.  Specifically, the Board held that raising the claim in the prior complaint was not sufficient to fulfill the statutory requirements set forth in the CDA.

The EHR Doctors’ decisions provide a perfect illustration of the potential pitfalls of failing to follow the CDA requirements to the letter of the law.  Based on the March 11, 2014 denial of its certified claim, the Contractor was required to appeal the COFD no later than June 9, 2014. The fact that the Board’s decision dismissing the second claim was issued on June 11, 2014, or the 92nd day after the COFD, suggests that the Board was waiting for the Contractor’s timely appeal, which, if it had been filed, would have rendered the issue effectively moot. Thus, the misguided assumption that the claim had been properly submitted to the CO resulted in its first dismissal, and the untimely appeal of the Contracting Officer’s final decision to the Board led to its second dismissal.

Given such strict adherence to the statutory deadlines and submission requirements, contractors must be cognizant of all CDA deadlines and prerequisites to filing an appeal to avoid waiving the right to pursue an appeal.  There are also important procedural, as well as substantive, differences between pursuing an appeal with a Board of Contract Appeals as opposed to the Court of Federal Claims that should carefully considered well in advance of any appeal.

 

 

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.

© Dorsey & Whitney LLP | Attorney Advertising

Written by:

Dorsey & Whitney LLP
Contact
more
less

Dorsey & Whitney LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide