CDA Claims Appeal Litigation: Key Questions and Common Government Defenses

September 17, 2021

By: Maria L Panichelli, Esq.

A contractor’s right to seek equitable adjustment of the contract duration or price is one of the most important tools in Federal contracting.  For those of you who attended my previous webinar, REAs and CDA Claims: Getting Paid for Unanticipated Costs on Federal Projects, you will remember that Federal contractors cannot simply initiate a breach of contract lawsuit in a state or U.S. District Court, as they could in a private commercial dispute.  A contractor must instead file a claim, under the Contract Disputes Act (“CDA”), with the government agency that issued the contract from which the claim arose.  Some contractors may choose to file a Request for Equitable Adjustment (aka a “REA”) first, before filing a claim.  (If you have questions about REAs, Claims, and when to use which, check out my previous Deltek webinar, and then consult a legal professional who can advise you on your individual situation).  But it is the claim that must be filed before a contractor can proceed to litigation.

In an ideal world, after you file your claim, the Agency takes it under advisement, and agrees with you; the Agency agrees to increase the contract price to compensate you for the unanticipated costs you have incurred as a result of an issue arising during performance, and/or agrees to extend the contract duration to account for such issues.  But what happens when the Agency disagrees with you, and denies your claim?  Or agrees that you are entitled to payment or an extension of time, but for far less money or time than you sought?  What if the Agency fails to answer your claim all together?  What remedies do you have?  Well, you can finally “take them to court” – by initiating CDA Claims Appeal Litigation. 

In anticipation of my upcoming CDA Claim Litigation and Common Defenses webinar let’s take a look at some fundamental Q&A about this type of litigation.

  • What Can You Appeal?
    As outlined above, before initiating a lawsuit, a contractor must first seek an adjustment of its contract –in terms of contract price or duration – by filing a claim pursuant to the CDA and FAR Subpart 33.2.  Pursuant to these laws, the Agency is obligated to review and respond to such a claim by issuing a decision, which is called a Contracting Officer’s Final Decision, or “COFD”.  If, in the COFD, the Agency denies your claim in whole or in part you may appeal that denial of your claim.  Alternatively, if the Agency fails to answer your claim within a “reasonable time,” that is considered a “deemed denial” of your claim, and you can appeal such a deemed denial just as you could appeal an express denial of your claim. 
  • What is the Legal Basis of Your Appeal?
    CDA Claim Appeals are usually premised on the fact that the contractor has a statutory right to demand judicial review of the Agency’s decision.  The underlying claims are usually based on contract provisions themselves – such as the Changes Clause, or the Differing Site Conditions Clause, etc.  Breach claims may come into play, but not always.
  • To What Forum(s) Can/Should You Appeal?
    Claim denials (and deemed denials) can be appealed to one of two places.  The first is the applicable Board of Contract Appeals, most likely either: (1) the Armed Services Board of Contract Appeals (“ASBCA”) if the contract from which your claim arises is with a Defense agency, for example, the United States Army Corps of Engineers, or the Air Force; or (2) the Civilian Board of Contract Appeals (“CBCA”), if the contract from which your claim arises is with a civilian agency, such as the Department of Veterans Affairs or General Services Administration.  The second place you can appeal is to the United States Court of Federal Claims (“COFC”).  The COFC is a trial-level federal court, similar to a U.S. District Court, though the COFC is an Article I tribunal (not an Article III court), meaning its jurisdiction is subject-matter based, and narrow in scope.  The appropriate forum that is best for you depends on a number of factors, which we will discuss during our upcoming webinar.
  • When Must You Appeal?
    The appeal deadline depends on the forum to which you are appealing.  If you elect to appeal to the applicable Board of Contract appeals, your appeal must be filed with the Board within 90 days of receiving the COFD.  If you elect to appeal to the COFC, you have one year from the date of the COFC.  
  • What Defenses Will the Government Raise?
    Every case is different, and the government’s defenses to your claim will vary, depending on the claim itself.  That said, there are some defenses that are far more common than others.  Indeed, some defenses seem to arise in almost every claim.  A thorough understanding of these defenses can help you avoid falling into pitfalls that may nullify your claim(s) – like failing to give notice, signing a modification with release language, or taking direction from someone without authority – during performance.

If you wish to learn more about these defenses, and CDA litigation in general, please join us Tuesday, September 28 at 11:00am ET for CDA Claim Litigation and Common Defenses.