The Civilian Board of Contract Appeals (“CBCA” or “Board”) recently published a decision on accrual of government claims for overpayment under the Contract Disputes Act (“CDA”). In the case, United Liquid Gas Co. d/b/a United Pacific Energy v. Gen. Servs. Admin., CBCA 5846, United Pacific Energy (“UPE”) appeals a General Services Administration (“GSA”) final decision seeking overpayments arising under four task orders that were issued under UPE’s GSA schedule contract to provide propane gas.

In its motion for partial summary relief, UPE argued that GSA’s claims for some of those overpayments were time-barred by the CDA’s six-year statute of limitations. The Board sided with UPE, finding that the discrete overpayment claims at issue in the motion accrued when the Government overpaid each corresponding invoice — each of which occurred more than six years before GSA issued its final decision. In doing so, the Board rejected GSA’s argument that the claims did not accrue until the Government issued an audit report discussing the overpayment issue, which occurred less than six years before GSA issued its final decision.

This decision is important because it adds to the limited number of opinions that the Board has published on claim accrual and reinforces established precedent. Our takeaways are below.

UPE Performed, Billed, and Was Paid under Task Orders

In 2002, UPE entered into a schedule contract with GSA to provide propane gas at prices established in the schedule. A GSA administrative contracting officer (“ACO”) was responsible for issuing, administering, and monitoring the schedule contract, while a purchasing contracting officer (“PCO”) assigned at the ordering agency was responsible for issuing task orders. In this case, the ordering agency was Fort Irwin Contracting Command (“Ft. Irwin”). Ft. Irwin issued four task orders during fiscal years 2011, 2012, 2013, and 2014, which UPE fulfilled, billed for, and was paid for.

As pertinent to UPE’s motion, in November 2010, the Ft. Irwin PCO issued task order 1 to purchase gas during fiscal year 2011. UPE provided gas under that order until March 2011, submitting approximately 144 invoices for payment. Ft. Irwin began paying those invoices on January 5, 2011.

GSA Audits and Final Decision

GSA conducted several contractor assisted visits (“CAV”) to review UPE’s performance under the schedule contract and issued several reports:

  • May 2010 CAV Report – GSA learned that UPE was not charging Ft. Irwin the schedule contract price between August 2008 and September 2009 and recommended corrective action by the ACO.
  • October 2011 CAV Report – GSA noted a discrepancy between the approved unit price and the invoiced unit price from October 2010 through December 2010. This time period included deliveries under task order 1.
  • December 2015 CAV Report – GSA reviewed all activities under the schedule contract, and found that UPE did not comply with contract pricing when it invoiced under task order 4. Based on this report, GSA issued a demand letter in March 2016, which UPE refuted.

The GSA Office of the Inspector General (“OIG”) then reviewed the Ft. Irwin orders. The OIG concluded that the Government made overpayments to UPE based on discrepancies between the unit prices identified in UPE’s invoices and GSA’s approved unit prices. Thus, on June 13, 2017, a GSA ACO issued a final decision adopting the OIG’s findings and demanding a total of $3,321,946 in overpayments made to UPE on the four task orders.

UPE’s Motion and GSA’s Response

The CDA’s statute of limitations provides that “each claim by the Federal Government against a contractor relating to a contract shall be submitted within 6 years after the accrual of a claim.” 41 U.S.C. § 7103(a)(4)(A). Accordingly, in its motion for partial summary relief, UPE argued that GSA’s claims under task order 1 were untimely because the Government knew that UPE’s pricing may not have been compliant as early as the May 2010 CAV Report. Alternatively, UPE asserted that any claim related to task order 1 began to accrue on the date that UPE submitted its first invoice, October 18, 2010, or when Ft. Irwin began paying the invoices, January 5, 2011. Thus, the Government should have issued its final decision by January 2017, at the very latest.

In response, GSA asserted that it first became aware of the overcharges under task order 1 when it issued the October 2011 CAV Report. In making this argument, GSA explained that the May 2010 CAV Report was not relevant because it did not relate to task order 1 billings. GSA also noted that the task order 1 invoices were submitted to and paid by the Defense Finance and Accounting Service (“DFAS”), not GSA’s finance office. Thus, if the claims accrued in October 2011, then they would not be time-barred because GSA issued its final decision in June 2017.

GSA’s Claim for Certain Overpayments is Time-Barred

The Board concluded that GSA’s claim for certain overpayments are time-barred, albeit for slightly different reasons than proposed by UPE. The Board recognized that the Court of Appeals for the Federal Circuit recently addressed claim accrual in Kellogg Brown & Root Servs., Inc. v. Murphy, 823 F.3d 622, 626 (Fed. Cir. 2016). Summarizing that case, the Board pointed out that Federal Acquisition Regulation (“FAR”) 33.201 defines claim accrual as “the date when all events, that fix the alleged liability on either the Government or contractor and permit assertion of the claim, were known or should have been known,” and FAR 2.101 requires a claim for the payment of money to be stated in “a sum certain.” Citing to precedent from the CBCA and the Armed Services Board of Contract Appeals (“ASBCA”), the Board then reiterated that a claim can begin to accrue before the claimant experiences the full extent of the injury.

The Board therefore held that GSA’s claims for overpayment began to accrue on January 5, 2011, when the Government overpaid the first invoice under task order 1, and continued to accrue as each subsequent invoice was paid. The Board reasoned:

At that point in time, the terms of the [schedule] contract clearly put both Ft. Irwin and GSA on notice that UPE was overbilling the Government and all events that fixed the alleged liability, specifically, in this case, overpayments in a ‘sum certain,’ were known or should have been known. Government claims continued accruing each time Ft. Irwin overpaid a task order 1 invoice under the [schedule] contract, because every time a payment was made on an invoice, the Government knew or should have known of the overpayment and the ‘sum certain’ it was overpaying.

Therefore, as the final decision was issued on June 13, 2017, any claims for overpayments of invoices predating June 13, 2011, i.e., six years earlier, were time-barred.


  • Government Claims for Overpayment Can Accrue Upon Each Payment

In its decision, the Board reinforces that overpayment claims can accrue under the CDA’s statute of limitations at the time the Government makes each overpayment, and regardless of when the Government may issue an audit report formally recognizing the overpayment.

Relying on Fluor Corp., ASBCA 57852, 14-1 BCA ¶ 35,472 (2013), the Board explained that the “terms” of the schedule contract and “the overpayment of each invoice establishes accrual because it was at that time that the work was ‘performed, billed and paid,’ and the Government knew or should have known of its overpayment claim.” Under this scenario, the Government’s CAV reports simply were not relevant to establish the date that the claims accrued. The ASBCA in Fluor Corp. reasoned that the statute of limitations in that case did not begin to run upon payment of the final invoice because the claim was a “continuing claim inherently susceptible to being broken down into a series of independent distinct events each having its own associated damages.”

Therefore, in the event a dispute arises regarding a potential overpayment, contractors should ensure that they have accurate payment records and, if applicable, assert the CDA’s statute of limitations as a defense.

  • Potential Impact for Contractor Claims

Because the CDA’s statute of limitations applies to government and contractor claims, the Board’s rationale in this decision could apply when a contractor submits a claim arising from the Government’s underpayment of an invoice. Thus, contractors would be well-served to scrutinize and reconcile payments soon after receipt to avoid falling victim to a potential statute of limitations defense years later.

  • Payment by Ordering Agency Instead of GSA is Irrelevant for Claim Accrual

The Board’s decision indicates that, under a schedule contract, GSA will be held to know contemporaneously upon payment that an overpayment has occurred, even though an ordering agency actually makes the claimed overpayment. Indeed, to reject GSA’s argument that it did not know about the overpayments at issue until later because they were paid by DFAS, not GSA’s finance office, the Board reasoned that GSA should have known of the overpayments upon payment because “GSA was obligated to monitor those payments in its role as the administrator of the [schedule] program.”