The Contracting Officer Denied My Claim: Is It Time to Appeal?

The Contract Disputes Act (“CDA”) was intended to provide a straightforward process for contractors to resolve disputes that occur under a government contract. In short, a contractor may initiate a dispute by submitting a claim to the contracting officer. The contracting officer then issues a final decision, and if the contractor disagrees, it may appeal to a board of contract appeals within 90 days or to the U.S. Court of Federal Claims (“COFC”) within one year. Although this path seems clear, questions arise when the process is put into practice. One common question is whether the contracting officer’s decision is sufficient to trigger the deadline for the contractor to appeal if the decision is lacking some of the usual formalities. The Civilian Board of Contract Appeals (“CBCA”) recently issued a decision that answered that question.

In Hof Construction, Inc. v. General Services Administration, CBCA No. 6306 (Dec. 12, 2018), the contractor was appealing a termination for default and the assessment of liquidated damages. When the agency terminated the contract in December 2017, it sent the contractor a letter that concluded: “This notice constitutes the final decision of the Contracting Officer. You may have the right to appeal under the Disputes clause.” The letter also stated that the agency would be assessing liquidated damages. Several months later, the agency issued a unilateral modification assessing liquidated damages.

The contractor did not file an appeal with the CBCA or the COFC at this time. Instead, in August 2018, the contractor submitted a claim to the contracting officer, seeking to convert the termination to a termination for convenience and a withdrawal of the unilateral modification. When the contracting officer did not respond to the claim, the contractor filed an appeal with the CBCA in November 2018. The CBCA then asked the contractor to show why its appeal was not untimely given that it was filed almost a year after the contracting officer had sent the letter terminating the contract.

The contractor argued that the letter terminating the contract was not a final decision, triggering the right to appeal, because it did not contain the type of language contemplated by the FAR, such as:

 

This is the final decision of the Contracting Officer. You may appeal this decision to the agency board of contract appeals. If you decide to appeal, you must, within 90 days from the date you receive this decision, mail or otherwise furnish written notice to the agency board of contract appeals and provide a copy to the Contracting Officer from whose decision this appeal is taken. The notice shall indicate that an appeal is intended, reference this decision, and identify the contract by number.

The CBCA recognized that the agency’s letter terminating the contract was imperfect, but it concluded that the imperfections did not make the letter unclear or misleading. The CBCA held that an agency is not required to use all of the language in FAR 33.211. Instead, the analysis turns on whether the contractor was prejudiced by the omissions or imperfections. Put another way, the contracting officer’s final decision will trigger the obligation to appeal unless the contractor can show that it suffered some harm because of the flawed notice.

Where does the CBCA’s decision leave a contractor that recently received a final decision from a contracting officer? If the decision advises the contractor of its right to appeal, the deadline to appeal has likely begun. If the adequacy of the notice is unclear, it would be prudent to seek advice from counsel. If you need assistance with CDA claims or appeals, please contact PilieroMazza’s government contracts group.