Often times, contractors to the United States Government find themselves in a situation requiring them to file a claim to assert their rights. A contractor contracted to the United States is held to the provisions of the Contract Disputes Act (41 U.S.C. 7101-7109) and the Federal Acquisition Regulation (“FAR”).
The claim process under the CDA contains specific timeliness and submission requirements. These are strict deadlines which, if not satisfied, could bar a contractor’s claim. The good news for contractors, as reaffirmed by a February 2016 decision by the Armed Services Board of Contract Appeals, is that the Government is also required to meet timeliness requirements.
For contactor claims over $100,000 that are properly certified pursuant to the CDA, the general rule is that the Government’s contracting officer must within 60 days either issue a final decision or notify the contractor of an exact date by which a final decision will be made. 41 U.S.C. 7103(f)(2); FAR 33.211(c)(2). A proper final decision starts the contractor’s 90-day clock within which it may appeal to the proper board of contract appeals, or within the one-year clock for appealing to the U.S. Court of Federal Claims. If the contracting officer fails to issue a final decision within the required 60 days and fails to announce an exact date by which the final decision will be made, the contractor may treat its claim as “deemed denied” under the CDA and proceed with an appeal.
In a February 2016 decision, the Armed Services Board of Contract Appeals (“ASBCA”) dealt with a related, but different issue. What if the contracting officer does not issue a final decision within 60 days and does not pinpoint a date by which a final decision will be made, but instead asks the contractor to provide more information or documentation about its claim. The proverbial “kicking the can down the road.” The facts in Aetna Government Health Plans, ASBCA No. 60207 (Feb. 10, 2016), were straightforward. Aetna submitted a claim pursuant to the CDA for damages it suffered when the Government terminated its contract for the Government’s convenience. Instead of issuing a final decision on the claim, the contracting officer responded that the Government needed Aetna to provide additional documentation in order to analyze it. In addition, rather than pinpointing a particular date, the contracting officer stated he would issue a final decision within 90 days after receipt of that documentation.
Aetna elected not to provide the documentation requested by the contracting officer. Instead, Aetna followed the CDA rule and appealed its deemed denial to the ASBCA. The issue before the ASBCA was whether Aetna properly appealed the Government’s deemed denial. The Government sought dismissal of the appeal, arguing the board did not have jurisdiction because the contracting officer never issued a final decision.
The board in Aetna held that the Government violated the CDA by failing to issue a final decision within 60 days or, alternatively, to “pinpoint” a particular date by which the contracting officer would issue a final decision. This failure, the board held, constituted a “deemed denial” under the CDA, authorizing commencement of an appeal to the proper board of contract appeals or the U.S. Court of Federal Claims.
Responding to the Government’s argument that Aetna could not pursue an appeal because the contracting officer had not yet issued a final decision, the ASBCA ruled: “It is not enough to state that a final decision will be issued within a specified number of days after the occurrence of some future event.” Thus, the contracting officer in the Aetna case failed to comply with CDA and Aetna properly appealed the decision as a deemed denial.
The Aetna decision reaffirms the rule that the Government must comply strictly with the timeliness requirements of the CDA. If a contractor does not receive a final decision on its CDA claim within 60 calendar days or, alternatively, does not receive a specific date by when the contracting officer will make a final decision on the claim, the contractor is permitted to treat its claim as “deemed denial.” It can then appeal the denial to the proper board or U.S. Court of Federal Claims.
In a situation where a contracting officer asks a contractor to provide more information, the contractor may or may not want to comply with the request. If there is an indication the contracting officer is viewing the claim favorably, or if the contractor realizes it may not have previously provided a complete set of supporting documentation, the contractor may want to comply and provide the additional information. However, if the pertinent information has been provided and the contractor suspects the request is a delay tactic, it would be wise for the contractor to understand it has the right to appeal a non-decision after 60 days have passed if the contracting officer has not specified an exact date by which the decision will be made.