This is the fifth of an eight-part series addressing cutting-edge strategies for Certified Claims under the Contract Disputes Act (CDA). 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 point for contractors seeking to maintain positive cashflow while facing the prospect of an economic slowdown or recession.
You can check out previous posts here: Part 1, Part 2, Part 3, Part 4
The CDA has a reputation as a “catchall” for disputes between federal contractors and the government – and to a certain extent that reputation makes a lot of sense. As I’ve been covering in this series, contractors can assert CDA Claims for additional time and costs (or Requests for Equitable Adjustments) under a variety of remedy granting contract clauses.
But there are certain types of controversies between contractors and the government that are not subject to CDA jurisdiction. Today, we’ll examine a few key jurisdictional issues that contractors should be aware of when disputes with the government arise.
Independent Torts (or Non-Contract Claims)
CDA jurisdiction arises out of legislation called the Tucker Act and is limited to “any claim against the United States founded . . . upon any express or implied contract with the United States . . . in cases not sounding in tort.”
That means Court of Federal Claims (COFC) and Boards of Contract Appeals lack jurisdiction to adjudicate tort claims (such as misrepresentation and fraudulent inducement) that are not also breach of contract cases. In more practical terms, this situation most commonly arises where the contractor contends the government failed to take action to protect private property. The COFC routinely takes (or rejects) these types of claims based on whether (or not) the contractor alleges breach of a contractual duty.
The lesson for contractors is to think carefully about the damages sought from the government and how best to raise them. All roads must lead back to alleged contractual obligations breached by the government.
The CDA expressly provides that agency heads are not authorized to settle or otherwise pay claims where there is an allegation of fraud. Instead, fraud claims are assigned to the Department of Justice. When the government brings a fraud claim against a contractor, the Boards and COFC may stay CDA claims while the fraud allegations are resolved.
Fraud – or even an allegation of fraud – is something every contractor should strive to avoid. Penalties under the Civil False Claims Act (including treble damages) are notoriously harsh. All the more reason to circle back to Part 1 of this series for a discussion of proper notice and documentation in supporting CDA Claims.
Contract Award and Pre-Award Controversies
The CDA also does not apply to contractor challenges to contract procurement and agency award decisions. All CDA controversies must relate to actions occurring during or after contract award / performance – not before.
Instead of the CDA, contractors must look to the Competition in Contracting Act – procedures commonly referred to as bid protests. Certain federal agencies, the COFC, and the Government Accountability Office (GAO) all have unique procedures for litigating procurement challenges.
Come back next Tuesday (December 6) when I’ll cover about Subcontract Claims from the perspective of both prime contractors and subcontractors.
Nick Solosky is a Partner in Fox Rothschild’s Government Contracts Practice Group. You can reach Nick directly at NSolosky@FoxRothschild.com or 202-696-1460.