In order to bring an appeal of a claim before the Court of Federal Claims or a Board of Contract Appeals, that claim must be presented to the contracting officer for decision.  The claim must be specific enough to give the officer notice of the basis of the claim and allow him/her to make an informed judgment about it. Typically the contracting officer will issue a final decision on a claim, but even if he or she does not, the claim will be “deemed denied” by law, and the contractor may appeal to a Board or the Court.  The Contract Disputes Act requires that a claim that is appealed be the same as the claim presented to the contracting officer.  In Affiliated Const. Group, Inc. v. United States, No. 10-444C (Fed. Cl. April 16, 2014), the court found that the claim before it had been changed since the submission to the contracting officer, and dismissed it for lack of jurisdiction.  It’s important to understand why this happened.

Claims are the same if they “arise from the same operative facts, [and] claim essentially the same relief,” even if they “assert differing legal theories for that recovery.” Scott Timber Co. v. United States, 333 F.3d 1358, 1365 (Fed. Cir. 2003).  In Scott Timber, even though plaintiff “posed slightly different legal theories” in support of its claim than had been offered in the submission to the contracting officer, the Federal Circuit nevertheless determined that the Court had jurisdiction over a claim which arose from the same set of operative facts as the claim presented below.  The assertion of additional facts or new legal theories of recovery, when based upon the same operative facts as included in the original claim, does not constitute a new claim. The appealed claim need not adhere to the exact language or structure of the original claim as long as the claims “arise from the same operative facts, claim essentially the same relief, and merely assert differing legal theories for that recovery.” Id. 

The question is, when is a changed claim a “new claim” that arises from different operative facts? Affiliated Construction furnishes an answer.  Allied received a contract to renovate a power distribution room.  This involved renovations of power distribution, air conditioners, piping, new power systems, alarms systems and sprinklers.  Affiliated’s claim was for the cost of additional fire-mitigation items (smoke dampers, access doors, registers, grills and diffusers) beyond what it had estimated when pricing its bid.  As submitted to the contracting officer, Allied linked the increase in these items to the changes it found in the Uninterrupted Power System. The original claim did not say that the room was unexpectedly found to violate code requirements.  Instead it stated that Allied had made a reasonable estimate in its bid of what would be needed—compared to what was actually required, and in effect, that Allied had underestimated fire mitigation devices.  However, in its appeal, Allied stated that the room was unexpectedly found to violate code requirements, and that the increased amount of fire protection equipment was due to the existing duct work not meeting code standards.

The Court put it this way:  “the key operative facts relating to this claim—other than whether Allied was on notice that the existing area was not code compliant—are whether the existing duct work contained an inadequate number of dampers and related equipment to meet the applicable code, and whether the increased numbers of these items that Allied installed were due to these pre-existing deficiencies.”

The court concluded that the claim to the contracting officer (concerning Allied’s estimate in its bid of items needed) and the claim presented to the Court (concerning the insufficiency of the ducts and equipment to comply with the code) were two different claims.  The second claim, most important to the appeal, had never been submitted to the contracting officer, and the court therefore had no jurisdiction to consider it.

So the takeaways are:

(1) You can increase the dollar amount of your claim, as long as the operating facts upon which the number is based remain the same (you might have later information on costs).

(2) You can even add legal theories or provide additional facts, as long as the basic operative facts are still the same.

(3) You may not establish or claim new “operative facts” in your claim to the Board or the Court.  Operative facts are the material facts upon which your claim is based.

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