UNTIMELY CLAIMS: EQUITABLE TOLLING OR EXCUSABLE NEGLECT?

A recent Armed Services Board Case gave some insight on the 6-year statute of limitations for filing claims under the Contract Disputes Act (“CDA”), explaining the circumstances under which equitable tolling could operate to extend the 6 years. Unfortunately, it did not apply to the appellant in this case. Khenj Logistics Group, ASBCA No. 61178, Feb. 15, 2018. Khenj was awarded a construction contract by the Army for barracks, bunkers and support buildings in Afghanistan in May 2009. When the facility location changed, the Army terminated the contract for convenience, and subsequently agreed to pay Khenj the cost of its Defense Base Act insurance and the cost of its materials. When Khenj soon thereafter (June 2009) attempted to contact the contracting officer by phone and … Continue reading

ONLY A CONTRACTOR, NOT AN IMPOSTOR, MAY SUBMIT A CLAIM

An Air Force contracting officer (“CO”) receives an email referencing Contract No. H92237-13-C-5002 (the “Contract”) for general labor services for a base in Afghanistan. The General Director of Tawhid Afzali Construction Company (“TACC”), Mr. Muhmmad Nazeer, states in the email that his company did not receive payment for the three year old Contract, enclosing a purported copy of the Contract which was dated three years prior and showed a face amount of $72,400. The information on the face of the Contract contradicted the original award determination in the contract file which stated that “it is determined that Najibullah Rahmal, in the amount of $94,240, is most advantageous to the government.” The CO has no copy of the Contract in the file, and no record of … Continue reading

CONTRACTOR CANNOT WAIVE ITS RIGHT TO BOARD REVIEW UNDER THE CONTRACT DISPUTES ACT

A recent Armed Services Board of Contract Appeals (“ASBCA”) case confirms the fact that a contractor may not assign claims to a surety that waives the contractor’s right to appeal a contracting officer’s decision to the Board. Ikhana, LLC, ASBCA Nos. 60462 et al., Oct. 18, 2017. The government awarded Ikhana a contract to construct access lanes and remote screening facilities at the Pentagon. In connection with the contract, Ikhana executed performance and payment bonds with a surety, the Guarantee Company of North America. Part of the consideration the contractor offered was an indemnity agreement which stated that if an “event of default” occurred by Ikhana (defined as: the government declaring Ikhana in default, or Ikhana breaching any terms of the indemnity agreement, or the … Continue reading

ARMED SERVICES BOARD SUSTAIN RATE INCREASES SLIGHTLY IN 2017

In Fiscal Year 2017, the number of appeals docketed at the Armed Services Board of Contract Appeals (“ASBCA”) declined slightly, however, there was a slight increase in the percentage of appealed sustained. Report of Transactions and Proceedings of the ASBCA for the Fiscal Year Ending 30 September 2017, Oct. 10, 2017. As shown on the table below, there were 571 appeals docketed and 678 appeals considered (sustained, denied or dismissed) in 2017. ASBCA Results in FY 2015-17 FY2015 FY2016 FY2017 Appeals Docketed 668 644 571 Appeals Disposed-total 647 654 678 Dismissed 526 521 539 Total “Merit” Cases 121 133 139 Sustained-number 64 76 80 (Sustained-percent) (52.9%) (57.1%) (57.6%) Denied 57 57 59 In 2017, there was a slight decline in cases docketed from 2016 (from … Continue reading

HOW TO SIGN YOUR CLAIM AND CERTIFICATION

The Contract Disputes Act of 1978 (“CDA”) contains a few simple requirements for claims over $100,000, including certification. Yet to this day contractors have consistently violated the certification requirements and, as a result, had their claims dismissed by the Boards and Courts. This happened most recently in NileCo Gen’l Contracting, LLC, ASBCA No. 60912, Sept. 22, 2017. It seems as if a technology-crazed world sometimes refuses to use the most low-tech machine of all—the pen—because the pen is just not electronically convenient. Hopefully, government contractors will read this blog. The CDA states that each claim for more than $100,000 must be certified to state that: The claim is made in good faith; The supporting data are accurate and complete to the best of the contractor’s … Continue reading

AFTER THE AFTERTHOUGHTS: REAs VERSUS CLAIMS

On November 14, 2017, a PCI Consultant posted a blog article about Requests for Equitable Adjustments (“REA”) versus claims. It seems to me that the original discussion and the blog overlooked an important problem in contract administration today—the failure of contracting officers (“CO”) to do their duty to review and engage in negotiations on both REAs and claims. The blog said: On September 28, 2017, Professor Ralph Nash and Tim Sullivan hosted a virtual classroom on the topic of Requests for Equitable Adjustments and Claims. Following the virtual classroom, I interviewed Professor Nash to ask questions related to the discussion during the training. Question: I would assert that if examined just from the perspective of reading case law on the issue, the difference between an … Continue reading

ONE TRUTH ABOUT THE TRUTH IN NEGOTIATIONS ACT

The Truth in Negotiations Act (“TINA”) requires that contractors furnish cost or pricing data before an agreement on price for most negotiated procurements of more than $750,000. Cost or pricing data mean all facts that a prudent buyer or seller would reasonably expect to significantly affect price negotiations, and that were available at the time the contract price was agreed to. This data (which is factual and verifiable, such as vendor quotes, nonrecurring costs, unit cost trends—but not estimates or projections) must be certified by the contractor as “accurate, current and complete.” The government uses the data to determine price reasonableness, and you can easily see how a contract price that relied on a subcontractor quote could be significantly reduced, based on the contractor’s furnishing … Continue reading

CONSTRUCTIVE ACCELERATION

Constructive acceleration occurs when the government demands the contractor’s compliance with an original contract deadline even though there is excusable delay. This is precisely what happened in IAP Worldwide Svcs, ASBCA no. 59397 et al, May 17, 2017. A contractor is entitled to compensation for additional costs that result from the constructive acceleration. In IAP, the Army Corps of Engineers issued three delivery orders to provider power plants at forward military bases in Pakistan. The delivery orders incorporated IAP’s proposal which made it clear that IAP would ship the power plants via surface transportation, using what was called the “Pakistan route.” Before the shipments were due, in response to U.S. combat operations, Pakistan closed the Port of Karachi and the land routes from that city … Continue reading

CONTRACTOR CAN SEEK PAYMENT FOR WORK THAT WAS INVOICED AND ACCEPTED PRIOR TO DEFAULT TERMINATION

Claude Mayo Construction Company, Inc. (“Mayo”) had a contract with the General Services Administration (“GSA”) to renovate a U.S. Attorney’s Office in Syracuse, NY. Before Mayo completed the project, GSA terminated the contract for default. Mayo sought to overturn the default, which is not the subject of this appeal. However, Mayo also sought damages for a breach of contract because GSA, without basis, failed and refused to pay Mayo for work completed and accepted by GSA prior to the default termination. Claude Mayo Const. Co., Inc., No. 15-1263C (Fed. Cl. June 23, 2017). GSA sought to dismiss the breach of contract, asserting failure to state a claim. The government alleged that Mayo failed to identify a duty arising from the contract or a breach of … Continue reading

MUST YOUR CLAIM BE CERTIFIED BY THE PERSON WHO SIGNED YOUR CONTRACT?

The Civilian Board of Contract Appeals (“CBCA”) recently set forth the requirements for a person who signs a contractor’s certification of its claim. AMX Veterans Spec. Servs., LLC v. Dept of Veterans Affairs, CBCA 5180, August 9, 2016. As readers of this blog know, any claim over $100,000 must be certified stating that: • the claim is made in good faith, • the supporting data are accurate and complete to the best of the contractor’s knowledge and belief • the amount requested accurately reflects the amount the government owes • the certifier in authorized to certify the claim on behalf of the contractor. 41 U.S.C. §7103(b). The Federal Acquisition Regulation (“FAR”) states that for requests over $100,000, whatever the contractor submits “is not a claim…until … Continue reading