Contracting work at the federal level is a multi-billion dollar industry. Whether starting from scratch or dipping into a deeper market, subcontractors aiming for federal contracts need to understand what they are getting into.
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By Dick Lieberman, Consultant and Retired Attorney
A final decision on a claim by a contracting officer is a jurisdictional requirement for the Court of Federal Claims or a Board of Contract Appeals to consider an appeal of a contractor’s claim. Absent such a decision, neither the Court nor a Board will have jurisdiction to consider an appeal. However, the Contract Disputes Act of 1978 (the “CDA”) contains provisions for failure of a contracting officer to issue a final decision on a claim. This is the “deemed denied” provision of the CDA, which generally requires that a contracting officer make a final decision within 60 days of receipt of a proper claim. Prior to the CDA, the timing of issuance of a final decision was within the discretion of the contracting officer, subject only to a broad requirement that the decision be issued within a “reasonable time” after submission of a claim. But, there was no limit, and contracting officers often took years to render a decision. The CDA remedied this problem by including the following requirements for the issuance of the contracting officer’s decision on any any proper claim:
(f) Time for Issuance of Decision.
(1) Claim of $100,000 or less. A contracting officer shall issue a decision on any submitted claim of $100,000 or less within 60 days from the contracting officer’s receipt of a written request from the contractor that a decision be rendered within that period.
(2) Claim of more than $100,000. A contracting officer shall, within 60 days of receipt of a submitted certified claim over $100,000:
(A) issue a decision; or (B) notify the contractor of the time within which a decision will be issued.
(3) General requirement of reasonableness. The decision of a contracting officer on submitted claims shall be issued within a reasonable time, in accordance with regulations prescribed by the agency, taking into account such factors as the size and complexity of the claim and the adequacy of information in support of the claim provided by the contractor.
(4) Requesting tribunal to direct issuance within specified time period. A contractor may request the tribunal concerned to direct a contracting officer to issue a decision in a specified period of time, as determined by the tribunal concerned, in the event of undue delay on the part of the contracting officer.
(5) Failure to issue decision within required time period. Failure by a contracting officer to issue a decision on a claim within the required time period is deemed to be a decision by the contracting officer denying the claim and authorizes an appeal or action on the claim as otherwise provided in this chapter. However, the tribunal concerned may, at its option, stay the proceedings of the appeal or action to obtain a decision by the contracting officer.
41 U.S.C. § 7103(f). Pursuant to the Contract Disputes Act of 1978, a Contracting Officer must issue a final decision on any proper claim within 60 days of its submission. For claims over $100,000, the contracting officer may defer the decision, but must “notify the contractor of the time within which a decision will be issued.” Any failure to issue the decision within the required period is deemed to be a denial of the claim, and authorizes an immediate appeal to a Board of Contract Appeals or to the Court of Federal Claims.
In a recent decision, the Court of Federal Claims held that subsection (f)(2) of the above section of the CDA gives the government the right to extend the deadline for issuing a final decision only once and that the deadline must be set during the initial 60-day period. Rudolph and Sletten, Inc. v. United States, No. 14-647C (Fed. Claims, Feb. 23, 2015). There are several other rules that the government must comply with, if it wants to extend the 60 day period, and these are:
FOR CLAIMS OF $100,000 or LESS:
(1) The contracting officer is not permitted to extend the time for the final decision on any claim less than $100,000. The final decision must be made within 60 days or the claim under $100,000 is deemed denied.
FOR CLAIMS OVER $100,000:
(2) The contracting officer may extend the sixty day time limit, but must do so within the 60
day period, and must pinpoint the exact date for a decision. That is, the contracting officer may extend the decision for a specific number of days, or until a date certain. The contracting officer may not use indefinite or uncertain time frames like “in approximately 45 days” or “some time after June 1, 2015”. Failure to provide a date certain results in deemed denial of the claim at the 60 day mark. (Cubic Defense Applications, Inc., ASBCA No. 56097, 07-2 BCA ¶ 33,695, contracting officer’s letter advising that the government intends to respond to the contractor's claim “approximately December 14, 2007” held insufficient as a “fixed or specific date” for issuing a decision).
(3) The contracting officer may extend the sixty day time limit only once. Any attempt to extend the time limit a second time results in deemed denial at the end of the first time extension beyond 60 days. Rudolph and Sletten,supra.
(4) The contracting officer must pinpoint the date, and may not make the decision contingent upon some future event, such as like “after the audit has been completed.” The use of an indefinite time period will result in deemed denial of the claim at the 60 day mark. (Northrop Grumman Corp., ASBCA No. 52263, 00-1 BCA ¶ 30,676, appeal authorized on a deemed denial basis where contracting officer letter stated a decision will be issued no later than 90 days if alternative dispute resolution did not result in resolution of all issues); (Inter-Con Security Systems, Inc., ASBCA No. 45749, 93-3 BCA ¶ 26,062, appeal on a deemed denied basis allowed when CO advised that she would render a decision “within 60 days of receipt of the audit report” that she intends to request.)
(5) The contracting officer on submitted claims must establish a date that is within a
reasonable time, in accordance with regulations prescribed by the agency, taking into account such factors as the size and complexity of the claim and the adequacy of information in support of the claim provided by the contractor. Where a contracting officer specifies an unreasonable amount of time, the claim will be deemed denied at the 60 day mark (three-month delay for performance of an audit, where the Government had previously seen the claim, was held unreasonable. Eaton Contract Services, Inc., ASBCA 54054, et al., 03-2 BCA ¶ 32,273); (delays by the Government allegedly due to a shortage of attorneys in the agency held to be unreasonable. Fru-Con Construction Corp., ASBCA 53544, 02-1 BCA ¶ 31,729.)
TIPS:
If you want to move the appeals process along, and the contracting officer does not issue a final decision on your claim within 60 days, you should use the “deemed denied” provisions of the CDA to authorize an appeal. If the contracting officer attempts to extend the 60 day period, but fails to comply with the rules listed above, you may properly take your appeal to the Board or the Court of Federal Claims without a final contracting officer’s decision.
Copyright 2015 Dick Lieberman, Permission Granted to the Maryland PTAC. This article does not provide legal advice as to any particular transaction.
By Dick Lieberman, Consultant and Retired Attorney
Readers of this blog are aware that if a contractor desires to take an appeal to the Board of Contract Appeals of a contracting officer’s final decision on a claim or dispute, the contractor must do so within 90 days of its receipt of that final decision. 41 U.S.C. § 7104(a). If the contractor submits the notice of appeal 91 or more days after receipt, the Board will dismiss it for lack of jurisdiction. But when the contracting officer sends multiple copies of the final decision using different methods of transmission, when does the 90 days begin to run? The answer is that unless the contractor has requested a specific method of receiving correspondence (such as e- mail), the 90 days begins to run on the date of the receipt of the last correspondence, unless the contracting officer indicates which document is intended to begin the running of the appeal period. TTF, LLC, ASBCA Nos. 59511 et al., Feb. 5, 2015.
In TTF, the Defense Logistics Agency (“DLA”) Avation group awarded three contracts to TTF for aircraft parts (skin panels, access covers and access doors). DLA separately terminated all three for default for reasons not specified in the decision. TTF appealed all three terminations to the Board, but the Government moved to dismiss them because the appeals were dated more than 90 days after the initial emails were sent to TTF notifying them of the terminations and the reasons therefor.
Although done separately, for all three contracts the contracting officer sent TTF the following:
• An email with the complete termination decision contained in an attachment. The email stated that “confirming modifications will be posted on DIBBS [the DLA Internet Bid Board System, a web-based application that contains procurement information related to DLA procurements].”
• A unilateral modification terminating the contract, and the appellant was notified of that modification on DIBBS, which provided an automated email to TTF notifying him of the modification.
• A copy of the termination decision was sent to TTF by certified mail, received by TTF much later.
The Government’s position was that the 90 days for TTF’s appeal began to run on the date receipt of the initial emails (TTF admitted that it had received them on the date transmitted). The Board did not agree. The Board stated that the contractor had to appeal within 90 days from its date of receipt of the final decision, but that it “is the government’s burden to establish the date the final decision was received, but the burden of proof is on appellant to establish that its appeal was timely filed.” The Board noted that it had previously held that sending multiple copies of a final decision, without indicating which if them is intended to begin the running of the 90 day appeal period, confuses a contractor as to the date for appeal of the decision, and entitles the contractor to compute the date from receipt of the last copy. Frasson Lodovico, 14-1 BCA ¶35,525. If a contractor has previously requested to receive correspondence by means of particular method, an earlier copy of a decision received by that method may start the 90 day appeal period.
Finally, the Board pointed out that TTF was notified of the terminations in three different ways: (1) by email; (2) by automated DIBBS system, including links to the termination modifications; and (3) by certified mail. Nothing in any of these communications instructed TTF as to which of the decisions started the 90 day appeal period, which was referred to in all three communications. The Board concluded that the 90 day appeal period began with TTF’s receipt of the copies that were sent by certified mail, and that were received later than the electronic notices. However, one of these appeals was submitted more than 90 days after the receipt of the certified mail date, and the Board dismissed that single appeal as untimely filed, while maintaining jurisdiction over the other two appeals.
TIPS:
It is always a good idea to submit any notice of appeal within 90 days of your first receipt of the contracting officer’s final decision. A notice of appeal is a simple one page document at the Board. Unlike the Court of Federal Claims, where the detailed complaint must be submitted to initiate an appeal, the Board requires only the filing of a simple “Notice of Appeal” which must only:
• Include a statement that the contractor is taking an appeal
• Identify the contract by number
• Identify the Agency or Department
• Identify the decision being appealed (or include and reference a copy of that decision)
• Identify the amount in dispute, if any.
There is no reason to delay filing a notice of appeal. You can do it immediately upon receipt of the final contracting officer’s decision without writing anything more than a simple notice of appeal. However, if you are delayed, unless the contracting officer indicates otherwise or you have stated that email is your preferred method of receiving communications, the starting date for the 90 day period to appeal is most likely to be the date of receipt of the certified mail letter.
