CLIENT ALERT: Contract Claims Against the Government
May 2008

Last year, in Roxco, Ltd. v. United States, 77 Fed. Cl. 138 (2007), the U.S. Court of Federal Claims issued an instructive decision concerning the procedure by which a contractor pursues a claim against the Government. The dispute at issue in Roxco was whether a claim before the Court of Federal Claims (CFC) was properly appealable. However, the broader significance of this case is the useful primer it offers on the claims process.

The CFC began its outline of this procedure by discussing the legal basis of claims against the Government. Under the Tucker Act, judgment may be rendered upon any claim against the United States founded either upon the Constitution or any Act of Congress or any regulation of an executive department or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort. 28 USC Section 1491(a)(1). The Tucker Act, however, is only a jurisdictional statute and does not create any rights enforceable against the United States for money damages. Therefore, to come within the jurisdictional reach of the Tucker Act, a claimant must identify an independent contractual relationship, constitutional provision, federal statute and/or executive agency regulation that provides the claimant with a right to money damages.

Pursuant to the Tucker Act, claims must be filed within six years after the claim first accrues. 28 USC Section 2501. A claim accrues when all the events have occurred which fix the liability of the Government and entitle the claimant to institute an action. In general, this six year limitation period applies to contract claims both by and against the Government. FAR 33.206 (1995).

Under the doctrine of sovereign immunity, the Government is immune from suit except as it consents to be sued. Any waiver of sovereign immunity must be unequivocally expressed and may not be implied. The Contract Disputes Act (CDA) constitutes such a waiver.

The CDA grants jurisdiction to the CFC and the agency boards of contract appeals over claims between contractors and the Government involving any express or implied contract for the procurement of property, other than real property in being. 41 USC Section 602(a)(1). The term “claim” is defined in the FAR as “a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain.” FAR 2.101 (2006). A claim not requesting a sum certain must ask for another form of relief. The CDA mandates that all claims by a contractor against the Government shall be in writing and shall be submitted to the contracting officer for a decision. Section 605(a). A claim does not have to be submitted in any particular form or use any particular wording. All that is required is that the contractor submit in writing to the contracting officer a clear and unequivocal statement that gives the contracting officer adequate notice of the basis and amount of the claim.

A claim greater than $100,000 must be certified by the contractor. Section 605(c)(1). The certification is required to state 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 contract adjustment for which the contractor believes the Government is liable; and the person making the certification is duly authorized to certify the claim on behalf of the contractor. A defect in the certification shall not deprive the CFC or board of contract appeals of jurisdiction over that claim. Prior to the entry of final judgment, however, the CFC or board shall require that a defective certification be corrected. Section 605(c)(b). While a defective certification may be cured, the CDA does not provide for curing a lack of certification. The CFC and boards cannot exercise jurisdiction over an uncertified claim in excess of $100,000.

Within 60 days of receiving a certified claim in excess of $100,000, the contracting officer must either issue a decision or notify the contractor of the time within which a decision will be issued. 41 USC Section 605(c)(2). Although 60 days is the outside limit, the contracting officer’s decision is to be issued within a reasonable time, accounting for such factors as the size and complexity of the claim and the adequacy of the information in support of the claim provided by the contractor. Section 605(c)(3). The contracting officer shall issue his decision in writing, shall state the reasons for the decision and inform the contractor of its rights as provided in the CDA. Section 605 (a). If the contracting officer does not issue a decision within the required 60 days, the claim will be deemed denied and this will authorize commencement of an appeal of the claim. Section 605(c)(5).

Certification is important. The fundamental purposes of this requirement are to provide an accurate appraisal of the contractor’s damages and thus encourage settlements and to discourage improper submissions by holding contractors liable for fraudulent claims.

A CDA claim must be submitted to the contracting officer for a final decision before it can be appealed. After the contracting officer issues a final decision on a claim, the contractor may appeal either to the appropriate board of contract appeals or to the CFC. 41 USC Sections 607(d) and 609(a)(1). The CFC has jurisdiction over the claim if the appeal is made within twelve months of the contracting officer’s final decision. Section 609(a). Appeals to the boards of contract appeals must be brought within 90 days of the contracting officer’s decision. Section 606.

Contractors who understand the claims process are better prepared to protect their contractual rights. This results in stronger claims prosecuted at less cost.

This Client Alert has been prepared by Lewis and Roca LLP for informational purposes only and is not legal advice. Readers should seek professional legal advice on matters involving these issues.

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