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The 6-year period shall not apply to contracts awarded prior to October 1, 1995, or to a Government claim based on a contractor claim involving fraud. Generally, only the parties to the contract—the government and the prime contractor—can bring a claim under the CDA. The decision in Cummins-Wagner demonstrates one of many different ways in which a court can treat notice issues. On the other hand, contractors should avoid falling into endless letter writing and negotiations. When Can a CDA Claim Be Asserted?
Such extensions can avoid government claims for liquidated damages. At the end of the day there can be no debate that when the contracting officer denies a contract claim, government contractors must follow certain statutory requirements before appealing to the Board of Contract Appeals. If the demand letter states that it constitutes the contracting officer's final decision and notifies the contractor of its appeal rights to the Court of Federal Claims (COFC) or a board of contract appeals (BCA), it qualifies as a final decision under the Contract Disputes Act (CDA). The contract provided for payment to be made to the account at Bank of America, which was identified in Aspen's CCR file. Failing to meet this deadline can also have a grave impact to thousands or even millions of dollars of contractual claims. Thus, any statement or request for monetary damages in the contractor's claim must be scrutinized carefully to ensure there is nothing in the claim that would give rise to an FCA counterclaim. If you are like most contractors, you simply cannot afford to file a contract claim against the government and then lose out for what most would call a 'technicality. Filing a government contract claim. Depending on the nature of the warranty provision contained in the contract, an agency can pursue certain remedies for defective services or products. Most liquidating agreements limit the prime contractor's liability to the amount the government agrees to pay or is required to pay. Liquidated damages are a fixed amount set forth in a contract to compensate the agency for unexcused delays in the contractor's performance of the contract.
Within that 90-day period, the sub-subcontractor sent an email response identifying the total amount owed, as well a copies of the outstanding invoices. Under Federal Crop Ins. The contract provided for payments to be made by electronic funds transfer to an Aspen company account at Bank of America. The question of whether to submit a Request for an Equitable Adjustment, commonly referred to as an "REA, " or a claim, is one that clients ask on a frequent basis. Claims by the government, such as claims for liquidated damages or claims for default termination, are subject to the CDA and may be brought by the government against a contractor after a contracting officer has issued a final decision on each claim. Aspen's Bank of America account was listed in its CCR file. But it sure makes doing so more difficult.
Aspen's owners soon advised the contracting officer that its vice-president was not authorized to make a change in the payment instructions. Given the regularity by which parties now communicate by email, it is certainly a subject worth revisiting. Potential remedies of the government could include: - requiring the contractor to either repair, replace, correct, or re-perform the work at the contractor's expense; - the agency curing the defect itself or hiring a third party to do so and then charging the original contractor the costs of the additional work; - accepting the performance, but seeking a reduction in the price; or. A "Claim" must be certified pursuant to FAR § 33. Or an agency might have paid an invoice before learning that a contractor had not, in its view, satisfied a contract requirement (such as staffing a specific number of positions for a specific number of hours per week), even when this was not the fault of the contractor, but caused by the agency. For reasons that do not appear in the opinion, an Aspen vice-president and operations manager sent the contracting officer an email requesting that the government make future payments to another company-owned account at Commerzbank. In a February 2022 opinion, the Federal Circuit reversed. Aspen filed a claim for breach of contract to recover the two progress payments, asserting that the government had breached the contract by failing to send progress payments to the Bank of America account. But what about the apparent authority of contractor representatives? Demanding a refund of the contract price from the contractor.
Below, we discuss 5 key ways a government contractor can be subject to a government claim and best practices to reduce your risks. Government contractors should consider using a more formal method of notifying the agency. A mere notification by a contractor notifying a contracting officer of an issue or an amount the contractor believes it is entitled to does constitute a claim under the CDA. The Equal Access to Justice Act allows some individuals and small businesses to recover attorneys' fees up to $125 per hour if it is determined that the claimant is the prevailing party and the government's position was not substantially justified. For instance, a prevailing wage claim arising under the Davis Bacon Act is not subject to the CDA because claims or disputes which another federal agency is specifically authorized to handle are not subject to the disputes process under the CDA. Frequently, deemed denial appeals result in an order directing the contracting officer to issue a final decision. The CBCA hears disputes from all other executive agencies except the United States Postal Service (USPS), the Postal Rate Commission, and the Tennessee Valley Authority.
A common type of government claim is based upon what the government considers to be an overpayment on its part. Initiation of the Claim. The CDA provides a framework for asserting and handling claims by either the government or a contractor. A formal complaint is not required to file an appeal of a contracting officer's final decision to a BCA. A termination for default is treated as a final decision, and a contracting agency may follow it with a final decision that the contractor reimburse the agency for its reprocurement costs. Companies should not take this process lightly. In this case, the prime contractor contacted the sub-subcontractor to ask how much it was owed on the project. Second, the contractor's written demand or assertion must seek the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to a contract between the government and the contractor. The payment bond claimant was a sub-subcontractor who filed a claim because the subcontractor failed to make timely payment. In a lawsuit on the payment bond, the surety argued that the email sent by the sub-subcontractor was not sufficient notice of the claim. It should be noted, however, that in cases where there is doubt, there is no harm in starting out with an REA. This includes showing the differences in the original contract and the claim submitted. Ultimately, the COFC or BCA will decide whether the agency's claim has merit.
Within what may seem to be small percentages, companies lose millions is denied contract claims against the government for one or more of the above reasons. The contractor's claim must be sum certain or capable of determination by a simple mathematical formula. In United States ex rel. However, a contractor's claim must strictly satisfy the criteria set forth below to constitute a claim under the CDA. Companies sometimes find themselves in situations when calculating the statute of limitations for filing a contract claim against the government. 207(c) when the claim amount exceeds $100, 000, and it must be submitted to the Contracting Officer in a manner that clearly provides the factual, technical, and legal basis for an equitable adjustment to the contract.