Claims and Contract Disputes

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.

Continue Reading CBCA Issues Rare Decision Addressing Government Claim Accrual

On August 17, 2018, the Civilian Board of Contract Appeals (“Board” or “CBCA”) published in the Federal Register its amended Rules of Procedure governing appeals under the Contract Disputes Act (“CDA”).  These amended rules: simplify and modernize access to the Board, clarify obligations under certain prior rules, and increase conformity between its rules and the Federal Rules of Civil Procedure (“Federal Rules”).  Furthermore, as reflected in the proposed changes issued in the Federal Register in March 2018, the amended rules are intended to “allow the Board to adopt and apply case law applying the relevant Federal Rules, as well as any future amendments to those Federal Rules, without revising the Board’s rules again.”

Our key takeaways are provided below, and a comparison of the Board’s prior and current rules can be found here.

Continue Reading CBCA Rules Overhaul Finalized: Effective September 17, 2018

In a case of first impression, a Court of Appeals has held that a government subcontractor’s claim for reimbursement of its actual indirect costs was time-barred. Fluor Fed’l Solns. LLC v. PAE Applied Techs, LLC, No. 17-1468, 2018 WL 1768233 (4th Cir. Apr. 12, 2018) (per curiam) (unpublished). It is the first case to directly address the interplay between the Allowable Cost and Payment Clause of the Federal Acquisition Regulation (“FAR”), 48 C.F.R. § 52.216-7, and a statute of limitations. It highlights the risks government subcontractors face when they choose to wait for a Government audit rather than litigate promptly after a payment dispute arises.

Continue Reading Waiting For the Final Government Audit May Be Too Late

On April 24, 2018, the Department of Defense (DoD) issued a Notice and Request for Comment on draft guidance that DoD proposes for assessing contractors’ System Security Plans (SSPs) and their implementation of the security controls in NIST Special Publication (SP) 800-171. This includes assessments as part of source selection decisions and during contract performance. DFARS 252.204-7012 requires defense contractors to provide “adequate security” for networks where covered defense information (CDI) is processed, stored, or transmitted. Adequate security means, “at a minimum,” implementing NIST SP 800-171. To demonstrate implementation or planned implementation of the security controls in NIST SP 800-171, contractors must describe in a SSP how the security requirements have been implemented and develop plans of action and milestones (POA&M) that describe how any unimplemented security requirements will be met.
Continue Reading Draft DoD Guidance on SSPs and NIST SP 800-171 – Impact on Bid Protests and Ongoing Contract Performance

[Update: The CBCA’s amended rules will become effective on September 17, 2018.  Click here for additional information and our analysis.]  

On March 28, 2018, the Federal Register published proposed changes to the Civilian Board of Contract Appeals’ (“Board”) Rules of Procedure regarding appeals under the Contract Disputes Act (“CDA”).  These proposed rules indicate that the Board wishes to: simplify and modernize access to the Board, clarify certain rules, and increase conformity between its rules and the Federal Rules of Civil Procedure (“Federal Rules”).  Our key takeaways are below, and a side-by-side comparison between the Board’s current and proposed rules can be found here.  Interested parties may submit comments by May 29, 2018.
Continue Reading CBCA Proposes Changes to its Rules

Earlier this Fall, the Armed Service Board of Contract Appeals dismissed an appeal for lack of jurisdiction because the certified claim lacked a proper signature. Appeal of NileCo General Contracting LLC, ASBCA No. 60912 (Sept. 22, 2017). This simple oversight proved decisive. Although this case does not chart a new course in Contract Disputes Act (CDA) jurisprudence, it serves as a helpful reminder that the Board’s jurisdiction hinges on compliance with basic requirements. Failing to meet any of those requirements could have significant consequences.
Continue Reading Government Contracts 101 Reminder: Certified Claims Must Include a “Signature”

Over the last year, we have reported extensively on various government contract decisions regarding contract releases. In Sylvan B. Orr v. Department of Agriculture, CBCA 5299 (Sep. 29, 2017), the Civilian Board of Contract Appeals (“CBCA” or “Board”) published yet another notable opinion on this topic. This decision demonstrates why it is critical to reserve your rights regarding potential claims sparked by conduct that occurs before a release of claims provision is signed—even when the additional costs at issue are not incurred until after the release is executed.

Continue Reading Left Holding the Bag: Release Provision Precludes Recovery for Costs Incurred Post-Release

Under Chevron U.S.A. v. NRDC and its progeny, courts show great deference to administrative agencies’ interpretations of statutes and regulations.  However, it does not necessarily follow that courts will provide that same deference to agencies’ interpretations of government contracts.  Last week, in a statement respecting the denial of certiorari in Scenic America, Inc. v. Dept. of Transportation, Supreme Court Justice Neil Gorsuch pointed out this distinction and raised an issue that merits further judicial attention.
Continue Reading Government Contracts and Chevron Deference: Justice Gorsuch Weighs In

In recognition of the decennial anniversary of the U.S. Civilian Board of Contract Appeals (“Civilian Board”), we set out to determine notable trends in Civilian Board practice. Among other things, we identified a recent marked increase in the number of published decisions containing substantial discussions of discovery issues – more than half of the 24 decisions we identified and reviewed were issued in or after 2014. Through the publication of these decisions, the Board has provided important guidance to practitioners who may face the same (or similar) discovery issues in the future. We believe that this trend toward publication should generally result in greater predictability of outcomes in discovery disputes, and therefore should facilitate the resolution of potential discovery disputes more efficiently.

Earlier this month we published an article about this very topic in the Board of Contract Appeals Bar Journal. In our article, we focused our analysis primarily on three interesting decisions that pit statutory requirements related to the disclosure/production of information – the Privacy Act, the Inspector General Act, and the Freedom of Information Act – against the bounds of permissible discovery at the Civilian Board. These three decisions should provide a relatively high degree of outcome predictability in similar cases because of the rigid statutory requirements at issue.

In addition to the link to a PDF of the article above, the full text of the article is available below.
Continue Reading Predictability of Outcomes in Discovery Disputes at CBCA Improves During its First Ten Years

Earlier this month, the Armed Services Board of Contract Appeals held that the U.S. Army breached its contractual obligation to provide physical security to its principal logistical support contractor, KBR, during the height of the Iraq War.  As a consequence, the Board found that KBR was entitled to be reimbursed for $44 million, plus interest, in costs that the Government had withheld from KBR relating to KBR’s and its subcontractors’ use of private security.  A copy of the opinion is available here.

Continue Reading ASBCA Issues Important Ruling in “Contractor-on-the-Battlefield” Dispute