ARMED SERVICES BOARD MERITORIOUS DISPOSITIONS INCREASE IN 2018

In its annual report for fiscal year 2018, the Armed Services Board of Contract Appeals (“ASBCA” or “Board”) noted an increase in the number of sustained (meritorious) contract appeals, and a decline in the total number of contract appeals. The two year comparison is shown below: FY 2017 FY 2018 Percent Increase or Decrease Appeals sustained on merits 80 96 20% increase Appeals denied on merits 59 43 27% decrease Dismissed 539 420 22% decrease Appeals pending, end of period 770 901 7.7% decrease The news was actually good for contractors. The number of appeals sustained on the merits rose by 20 percent. There was a 27 percent decrease in appeals denied on the merits, a 7.7 percent decrease in the number of appeals pending, … Continue reading

FINAL DECISION MUST SOLELY ASSERT FRAUD TO DEFEAT BOARD JURISDICTION

The Armed Services Board of Contract Appeals refused to dismiss appeals for lack of jurisdiction where the government had argued that the final decisions of the contracting officer were invalid because the decision’s basis for denying the claims purportedly was a suspicion of fraud. PROTEC, GmbH, ASBCA Nos. 61161 et al., March 20, 2018. The Board found that a suspicion of fraud was not the basis of the final decisions, that there were other bases for denying the claims, and therefore the Board had jurisdiction to consider the appeals. PROTEC submitted a certified claim regarding its Contractor Performance Assessment Reporting System (“CPARS”) evaluation, which rated its performance as unsatisfactory. The government also refused to pay certain PROTEC invoices, and PROTEC submitted a second and third … Continue reading

WHEN SHOULD THE GOVERNMENT BE REQUIRED TO FILE A COMPLAINT AT THE BOARDS OF CONTRACT APPEALS?

The rules of the Armed Services Board of Contract Appeals (“ASBCA”) and the Civilian Board of Contract Appeals (“CBCA”) require that within 30 days after the docketing of an appeal, the appellant [contractor] must file a complaint setting forth its claims in simple, concise and direct terms. ASBCA Rule 6(a); CBCA Rule 6(b). A recent case discussed the situation when the Board reversed the rule, and required the Government to file the complaint. Transworld Systems, Inc. v. Dep’t of Education, CBCA 6049, March 1, 2018. Transworld concerned a government claim made by the Department of Education (“ED”) demanding that Transworld repay $1.3 million in alleged overpayments that ED had made. The Board explained that Transworld was appealing ED’s claim, not its own, and it is … Continue reading

WHEN WILL BOARDS HAVE JURISDICTION TO ADJUDICATE MATTERS THAT RELATE TO SERVICE CONTRACT ACT ISSUES?

There is an interesting question of whether or not the Boards of Contract Appeals (as opposed to the Department of Labor, or DOL) have jurisdiction over certain matters involving the Service Contract Act, 41 U.S.C. Chapter 67. A recent case, Alcazar Trades, Inc., CBCA 5837, Feb. 27, 2018, is a case where the Civilian Board found that the dispute was solely within DOL’s jurisdiction, and dismissed an appeal involving a wage determination. There are other cases which are distinguishable, as explained below, where the BCA’s will accept jurisdiction under certain circumstances. Alcazar negotiated a new collective bargaining agreement (“CBA”) under a GSA schedule contract, and submitted the new CBA to the agency (Nuclear Regulatory Commission) contracting officer, requesting upward wage adjustments in the contract option … Continue reading

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