Cost Accounting and Pricing Archives - Government Contracts Navigator

The Bottom Line: Cost and Pricing Updates | Sum Certain

Stephanie M. Harden and Shane M. Hannon ●

Appeal of Samho Enterprise, ASBCA No. 63587 (Aug. 13, 2025)

The Bottom Line: The Contract Disputes Act (“CDA”) requires that if a contractor submits a claim for payment to the Government, the claim must include a “sum certain”—with the emphasis on “certain.” Here, the contractor submitted a claim for damages after the Government declined to exercise the contract’s first option year. The contractor submitted a claim for “no less than” $326,276. The claim’s qualifying language—“no less than”—meant the claim did not state a sum certain. The Armed Services Board of Contract Appeals (the “Board”) therefore dismissed the contractor’s appeal.

Key points of interest:

A sum certain is a mandatory element of a CDA claim. If a contractor’s claim fails to state a sum certain, the contracting officer may deny the claim on that basis, and the Board may dismiss any subsequent appeals for failing to state a claim.
Using qualifying language to describe the requested amount does not constitute a sum certain. If a claim characterizes its requested amount with qualifying language, like “approximately,” “to be determined,” or “in excess of,” the claim does not state a sum certain under the CDA.
Pursuant to the Federal Circuit’s 2023 decision in ECC International Constructors, the “sum certain” requirement is not a jurisdictional requirement. Accordingly, the Board dismissed the appeal without prejudice.
The contractor’s appeal also asked the Board to order the agency to exercise the contract’s option year. The Board reiterated it does not have jurisdiction over requests for specific performance.

Contractors submitting claims for monetary relief must include a “sum certain,” not a “sum approximate.” Failure to state a sum certain is fatal to a claim.

The Bottom Line: Cost and Pricing Updates | Act of God or Compensable Delay?

Stephanie M. Harden ●

Welcome to The Bottom Line: Cost and Pricing Updates, a new series covering what contractors should know about recent cost and pricing disputes—without the long read!

For our inaugural post, we present:

Appeal of Gideon Contracting, LLC, ASBCA No. 63561 (May 12, 2025)

The Bottom Line: When the Government orders a suspension of work due to an “act of God,” it may still be on the hook for the resulting increased costs under the Suspension of Work clause if it proximately causes an unreasonable delay. Here, the Government proximately caused the delay at issue through its management of water drainage through a lake and dam, including through controlled releases of water, and the Armed Services Board of Contract Appeals (“ASBCA” or “the Board”) found a portion of the delay to be unreasonable.

Key points of interest:

Generally, “acts of God” entitle contractors to additional time, but not additional compensation. However, the distinguishing feature entitling Gideon to additional compensation here was that the Government controlled the release of floodwaters via a drainage management system. Thus, the flooding was not caused solely by rainfall, as the Government argued, but rather, by the Government’s release of floodwater.
Gideon was not entitled to damages for the entire suspension period, however, because the contract specified when and how water releases would occur. Therefore, Gideon was only entitled to compensation for portions of the suspension that were found to be “unreasonable” (or as described by the Board, inexplicable).

Contractors facing suspensions of work should carefully evaluate whether their contracts may entitle them to relief where at least a portion of such suspensions are “unreasonable.”

What Contractors Facing Terminations, Stop-Work Orders, and Suspension of Work Orders Directed by the Trump Administration Need to Know

Stephanie M. Harden, Jennifer A. Short, Justin A. Chiarodo, Shane M. Hannon, and Amanda C. DeLaPerriere ●

The Trump administration’s directives to “pause” grant funding and to terminate certain grants and contracts sent shock waves through the government contracts and non-profit sectors. Although the “pause” in grant funding has been temporarily halted by a federal court (as of January 28), other terminations and suspensions have not been blocked. We summarize below the steps entities can take to preserve their rights as they navigate these emerging directives.

But First: What Happened?

Immediately after his inauguration on January 20, President Trump began ordering federal agencies to pause funding for certain projects or initiatives. A January 20 Executive Order (“EO”) titled “Unleashing American Energy” encouraged energy exploration and production and eliminated electric vehicle mandates. It directed agencies to “immediately pause” all disbursements under the Inflation Reduction Act of 2022 and the Infrastructure Investment and Jobs Act.

Another EO titled “Ending Radical and Wasteful Government DEI Programs and Preferencing” directed the Office of Management and Budget to terminate DEI programs (see our prior analysis of this EO here). Consequently, the new Department of Government Efficiency announced on January 24 that approximately $420 million in current or impending contracts, most of which related to DEI programs, were cancelled.

Consistent with these orders, the Office of Management and Budget (“OMB”) on January 27 directed federal agencies to pause, as of January 28 at 5:00 PM ET, all payments and obligations to disburse any federal financial assistance, including financial assistance for nongovernmental organizations. The two-page OMB policy memo stated that the paused programs will be assessed to determine whether they are consistent with the administration’s new policy objectives. This directive has led to widespread chaos, prompting the administration to issue additional guidance on January 28 regarding the scope and purpose of the January 27 funding freeze. The freeze on grant funding was then temporarily halted by a federal district court later in the day.

Federal contractors performing contracts or projects subject to these EOs or OMB instructions have or likely will soon receive stop work orders or, in some cases, notices that the government is terminating for convenience. A “suspension of work” or “stop-work” order pauses performance for a period of time, after which the government may decide either to resume performance or terminate the contract. A notice of termination for convenience, as its name suggests, is the mechanism by which the government unilaterally terminates the contract as of right.

More Cases and Expanded Data Analytics: A Closer Look at DOJ’s FY 2023 False Claims Act Statistics

Dominique L. Casimir, Luke W. Meier, and Oliver E. Jury ●

The United States Department of Justice (“DOJ”) recently announced its statistics for False Claims Act (“FCA”) FY 2023 settlements and judgments. DOJ recovered $2.68 billion in FY 2023; as usual, the majority of these recoveries (nearly 70 percent, or $1.8B) came from the healthcare industry. DOJ continues to make use of data analytics to inform its enforcement activity.

Background

Comparing year-to-year variance in the volume of DOJ’s FCA recoveries provides only marginal utility. More telling is the rapid expansion of the non-qui tam matters opened during the past two years. In FY 2022, DOJ opened 305 non-qui tam matters, representing approximately 186 percent of its prior ten-year average (164). In FY 2023, this increase continued, with DOJ opening 500 non-qui tam matters—305 percent of the ten-year average over FY 12–21.

Two Sides to Every Story: When Is Extrinsic Evidence Relevant to Interpreting the Scope of a Contractor Release?

Stephanie M. Harden and David L. Bodner ●

When is it appropriate to consider “extrinsic evidence” of the parties’ intent when interpreting a contractor’s release of claims? A new decision out of the Armed Services Board of Contract Appeals (“ASBCA”), Sonabend Company (ASBCA No. 63359), sheds new light on this important question, denying the government’s motion for summary judgment because the release language it relied on was ambiguous and thus raised an issue of fact.

Signing Releases—An Area Fraught with Risk

Releases are typically presented to the contractor as routine. Simply sign the modification and new work scope or new funding will be added to your contract! But when a contractor signs a modification, it might waive its ability to later pursue a cost claim, even for prior changes not impacted by the modification itself. Thus, it is important to identify modification language that may bar a future claim.

The government typically seeks to bar recovery based on at least one of two legal theories: (1) a release and (2) accord and satisfaction.

Release—a unilateral act by which one party disclaims a contract right or obligation.
Accord and Satisfaction—a bilateral agreement or an accord, where the parties agree to altered performance and the acceptance of such altered performance is satisfaction of the accord, which discharges the claim.

In practice, these theories may apply even though a modification does not announce itself as a release or an accord and satisfaction or a bar to a future claim.

Lifecycle of a Claim, Part IV: Contracting Officer’s Final Decision

Stephanie M. Harden and David L. Bodner ●

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 this page to get timely updates right in your inbox!

This series walks through this infographic (click here or the image below to expand), which illustrates the lifecycle of a typical claim:

Our previous posts are available at the following hyperlinks: Part I, Part II, and Part III. This post focuses on Steps 6 through 8 of this process: reviewing the Contracting Officer’s Final Decision (“COFD”), accepting or the appealing the COFD, and resolving or litigating the matter.

We begin with these essential questions: What is a COFD? What can a contractor do if it does not like the COFD? And what is the timeline to appeal a COFD?

What Is a COFD?

A COFD is a Contracting Officer’s (“CO”) decision on the merits, which provides the reasons for the decision and notifies the contractor of its appeal rights. 41 U.S.C. § 7103(d)-(e). The FAR describes a COFD as a written decision that:

i. Describes the claim or dispute

ii. References pertinent contract terms

iii. States the factual areas of disagreement

iv. States the CO’s decision, with supporting rationale

v. includes notice of contractor’s appeal rights “substantially as follows:”

November 9, 2022: “Legal and DoJ Matters”

Blank Rome partner Justin A. Chiarodo will serve as a panelist at Federal Publications Seminars and Capital Edge Consulting’s 2022 Government Contract Accounting and Regulatory Update, being held November 9 and 10, 2022, in Arlington, Virginia.

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.

For more details, visit our website.

Lifecycle of a Claim, Part III: Submitting a Claim

Stephanie M. Harden and David L. Bodner ●

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!

This series walks through this infographic (click here or the image below to expand), which illustrates the lifecycle of a typical claim:

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:

Lifecycle of a Claim, Part II: Submitting a Request for Equitable Adjustment and Negotiation

Stephanie M. Harden and David L. Bodner ●

This series walks through this infographic (click here or the image below to expand), which illustrates the lifecycle of a typical claim:

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).

Lifecycle of a Claim, Part I: Identifying the Change and Providing Notice

Stephanie M. Harden and David L. Bodner ●

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.

We are pleased to introduce this infographic (click here or the image below to expand), which illustrates the lifecycle of a typical claim:

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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