This is the second of an eight-part blog series addressing cutting-edge strategies for Certified Claims under the Contract Disputes Act. Certified Claims are the primary avenue available to government contractors to recover damages due to changes, delays, inefficiencies, and other government-caused issues – a particularly important issue as contractors seek to maintain positive cashflow while facing the prospect of an economic slowdown or recession.
You can check out on the first post in the series here.
Federal contractors that experience government-caused increases to the cost/time of performance have a direct route for seeking an adjustment to their contract – the Contract Disputes Act (CDA).
The CDA provides contractors with a framework for asserting, pursuing, and resolving Claims for time and/or money damages. Through the Act, the government waives the sovereign immunity defense that usually prevents direct actions against federal agencies. In exchange, the CDA limits contractors’ jurisdiction to the various Boards of contract appeals and the Court of Federal Claims.
The foundation of every Claim is entitlement under a remedy-granting clause included in your contract. Contractors must demonstrate the government-caused impact and document how it increased the time and/or cost of performance. Once the contractor’s proverbial ducks are in a row, the submission process starts with a formal written Claim directed to the Contracting Officer.
While the Claim does not have to be in any particular form or format, there are certain essential elements that must be included in every Claim.
Failure to include any of these elements can result in a denial by the Contracting Officer or, worse, dismissal at the Boards or Court for lack of jurisdiction.
Let’s examine a few of the key elements of a Claim, and recent developments in the law for each:
The Sum Certain
Every Claim must include a request for a “sum certain” – i.e., the amount of relief sought in the Claim. The sum certain must be made with sufficient specificity – that is, the contractor must avoid wishy-washy language (like “approximately”) when describing the amount asserted in the Claim.
Recently, we’ve seen increased focus by the government on so-called “sub-claims.” A sub-claim exists where the contractor seeks relief on multiple claims arising out of different operative facts within the same Claim document. A good test as to whether your Claim presents multiple sub-claims is to ask whether the Contracting Officer will need to focus on unrelated evidence to resolve different aspects of the Claim.
In that event, the contractor is submitting multiple sub-claims within its overall Claim and must state a sum certain for each distinct sub-claim.
If the amount of Claim is more than $100,000, the contractor must certify that:
- The Claim is made in good faith
- The supporting data are accurate and complete to the best of contractor’s knowledge and belief
- The amount requested accurately reflects the adjustment for which contractor believes the government is liable; and
- The person asserting the Claim is duly authorized (such as a CEO or general partner of the contractor having overall responsibility for conduct of contractor’s affairs) to certify the Claim.
One of the purposes behind this added step is to reduce frivolous or unwarranted Claims. The presence of a signed certification is often a key element in the Government’s pursuit of contractors under the False Claims Act when fraud is suspected.
Contractors need to be thorough in understanding the certification requirements for each Claim. Failure to properly certify a Claim can result in a lack of jurisdiction before the Boards or Court.
Request for Final Decision
Once a contractor submits a Claim that satisfies all regulations/requirements, the Contracting Officer reviews it and issues a Contracting Officer’s Final Decision (COFD).
For Claims of $100,000 or less, the Contracting Officer must issue a COFD within 60 days after receipt. For Claims of greater value, a Contracting Officer may issue a COFD within 60 days or provide the contractor with notice of the time by which she will issue the COFD.
If the Contracting Officer does not issue a timely decision, the contractor may ask the Board or Court to order the Contracting Officer to do so. In the alternative, the contractor may consider the silence a “deemed denial” and start the appeal process.
As this blog hopefully makes clear, the key to successful Claims management is preparation.
In addition to considering the core issues of entitlement, notice, and damages, contractors need to think through the procedural elements of a Claim in advance. Being squared away up front is the best first step towards early resolution and recovery.
Come back next Tuesday (November 15) when we’ll walk through what happens if the government denies your Claim, including examining the appeal process at the Boards and Court.
Nick Solosky is a Partner in Fox Rothschild’s Government Contracts Practice Group. You can reach Nick directly at email@example.com or 202-696-1460.