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Justin’s session, “Legal and DoJ Matters,” will take place Wednesday, November 9, from 8:30 to 10:00 a.m., and the panel will cover settlement and judgments from recent civil fraud and false claims, penalty assessments, and emerging issues.
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The ability for a Government contractor to secure fair resolution of a contract dispute is essential for maintaining a vibrant competitive marketplace for federal contracts. The perceived fairness of the contract dispute resolution process is influential on contractor participation. S. Rep. No. 95-1118, at 4 (1978) (“The way potential contractors view the disputes-resolving system influences how, whether, and at what prices they compete for Government contract business.”). Yet even after passage of the Contract Disputes Act of 1978, it is often difficult for a contractor to secure a review of a claim on the merits due to a barrage of procedural and jurisdictional hurdles. The U.S. Court of Appeals for the Federal Circuit has cleared some of the thicket in recent years by reiterating its commonsense approach to evaluating the sufficiency of claims, finding that if a submission meets the requirements of a claim, it may be heard on the merits, even if it was not originally styled as a claim.
This Feature Comment discusses this recent guidance, including the Federal Circuit’s treatment of the difficult question of which contractor submissions may be treated as valid claims under the CDA, even if not styled as such in the first instance. We then offer practical guidance for contractors navigating these issues.
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Welcome back to our “Lifecycle of a Claim” series. This series explores the Contract Disputes Act (“CDA”) claims process, with practical guidance stemming from recent case law every step of the way. Click the subscribe button on the right to get timely updates right in your inbox!
Click here to read our first post and here to read our second post. This post focuses on Step 5 of this process: submitting a claim.
Seven Elements for Submitting a Claim
Once a contractor has made the decision to pursue a CDA claim, the contractor must ensure that it follows the Contract Disputes Act or risk jeopardizing its ability to obtain meaningful judicial review. While the Federal Circuit has made clear that a claim need not take “any particular form or use any particular wording,” below are seven fundamental elements that should be included:
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Welcome back to our “Lifecycle of a Claim” series. This series explores the Contract Disputes Act claims process, with practical guidance stemming from recent case law every step of the way. Click the subscribe button on the right to get timely updates right in your inbox!
Click here to read our first post (covering Steps 1 and 2 of the infographic). This post focuses on Steps 3 and 4 of this process: submitting a request for equitable adjustment (“REA”) and negotiating the REA with the contracting officer.
Terminology Defined: What Is the Difference between an REA and a Claim?
There are two primary methods for pursuing a contract adjustment following a change: submitting an REA or filing a claim.
REA: A request (rather than a demand) to negotiate with the contracting officer to adjust the contract for price, time, or other terms. There is no FAR definition of an REA but generally an REA does not expressly or implicitly request a contracting officer’s final decision (“COFD”) or contain the FAR 33.207(a) certification.
Claim: 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, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract.” FAR 2.101; FAR 52.233-1(c).
In an important decision for preserving contractor data rights, the Court of Federal Claims recently confirmed that “technical data” has a limited scope and, per the DFARS, includes only information “of a scientific or technical nature.” Raytheon Co. v. United States, No. 19-883C, 2022 WL 2353085 (Fed. Cl. June 15, 2022).
Pursuant to DFARS 252.227-7013, if any data is identified as “technical data” the Government may be able to assert licensing rights in a contractor’s noncommercial technical data. See DFARS 252.227-7013(b). In contrast, for any data identified as proprietary non-technical data, the Government cannot assert any licensing rights in the proprietary non-technical data.
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Welcome to our new “Lifecycle of a Claim” series. This series will explore the Contract Disputes Act claims process, with practical guidance stemming from recent case law every step of the way. Click the subscribe button on the right to get timely updates right in your inbox!
The claims landscape for government contractors can be a minefield of both procedural and substantive issues. Through this series, we are providing a guide to one common type of claim: those arising out of a “change” to the contract.
This post focuses on Steps 1 and 2 of this process: identifying when a change has occurred and providing timely notice to the Contracting Officer. We begin with a few foundational questions:
What is a change?
There are two primary types of changes:
Actual Changes: According to the Federal Acquisition Regulation (“FAR”), a change occurs when the Contracting Officer issues a written order to make changes within the general scope of the contract to matters such as drawings, designs, or specifications; the method of shipment or packing; or the place of delivery. See, e.g., FAR 52.243-1.
Constructive Changes: A constructive change arises when the contractor is required to perform work beyond the contract requirements, but the Government does not issue a formal change order. Constructive changes can arise from informal orders, defective specifications or other misrepresentations, interference from the Government, or constructive accelerations of performance.
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The General Services Administration (“GSA”) Office of Governmentwide Policy recently authorized contracting officers to provide relief to GSA contractors experiencing cost increases due to surging inflation. See Acquisition Letter. To assist struggling contractors, GSA issued a temporary moratorium on the enforcement of certain limitations contained in GSA economic price adjustment (“EPA”) clauses.
GSA issued the moratorium in response to an uptick in contractors’ requests for price increases and removal of items from their Federal Supply Schedule (“FSS”) contracts to avoid selling at a loss. In issuing the moratorium, GSA recognized that inflationary pressures and price volatility, caused by supply chain disruptions, strong demand, and labor shortages, are ongoing concerns unlikely to abate in the near term. GSA acknowledged that it must help contractors weather this “unusual time”—especially small businesses and new market entrants—to ensure a resilient and diverse federal industrial base and the government’s continued access to critical “products, services, and solutions.”
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Ambiguities in a solicitation or contract have long been one of the greatest traps for unwary contractors. At the solicitation phase, a failure to identify a “patent” (i.e., obvious) ambiguity often results in the contractor losing the competition with no viable bid protest challenge. This is because such ambiguities are construed in the agency’s favor. A contractor seeking to recover added costs based upon an ambiguous contract term will be unable to recover such costs if the ambiguity is “patent” and the Government disagrees with the contractor’s interpretation.
Traditional Test for Patent vs. Latent Ambiguities
So how does one distinguish between “patent” and “latent” ambiguities? Numerous Federal Circuit authorities tell us that a patent ambiguity arises where there is “an obvious omission, inconsistency or discrepancy of significance” that “could have been discovered by reasonable and customary care.” E.g., Per Aarsleff A/S v. United States, 829 F.3d 1303, 1312-13 (Fed. Cir. 2016) (internal quotations omitted). By contrast, a latent ambiguity is a “hidden or concealed defect which is not apparent on the face of the document, could not be discovered by reasonable and customary care, and is not so patent and glaring as to impose an affirmative duty on plaintiff to seek clarification.” Id. (internal quotations omitted).
Our Part 1 post addressed contract administration related to changes to or a termination of a contract arising from the government’s withdrawal from Afghanistan. This post focuses on the cost management, documentation, and government audit aspects that contractors should be focused on to prepare for and mitigate downstream and currently unknown risks.
Requesting Payment/Compensation
Responding to a change or termination will likely involve submitting a request for payment or compensation. The label placed on a contractor’s request for payment depends on whether its contract has been terminated or has experienced a “change.” The type of request for payment also can vary depending on the type of contract involved (i.e., cost reimbursement, fixed price, or labor hour).
It is hard to describe the manner in which the United States is withdrawing from Afghanistan. At this point, the safety and security of Americans and those who provided critical assistance to U.S. operations in Afghanistan are at the forefront of everyone’s thoughts. However, contractors in Afghanistan must confront the repercussions of shutting down operations in Afghanistan or dealing with significant changes in contract performance requirements. Translated—this means ensuring fair compensation for terminated or changed contracts.
This blog post focuses on the contract administration aspects that contractors should be thinking of now to prepare for and mitigate downstream and currently unknown risks. Below is a list of issues for contractors supporting operations in Afghanistan to consider.
