If a contractor is working on a fixed-price contract, can it charge the government for attorney’s fees to defend a False Claim Act (“FCA”) case related to the contract?
In The Tolliver Group, Inc. v. United States (Fed. Cl. Jan. 22, 2020), the Court of Federal Claims (“COFC”) said the answer was “yes,” if the government was liable for an equitable adjustment under the circumstances. The decision was welcomed by contractors facing meritless FCA suits, which are often costly to defend even when the relator plainly does not have a case.
But the Federal Circuit has thrown cold water on Tolliver — at least for now. In a decision last week, the court of appeals vacated Tolliver on jurisdictional grounds, concluding that the legal theory of the COFC’s decision was never presented to the contracting officer for a final decision under the Contract Disputes Act of 1978 (“CDA”), and that the COFC therefore lacked jurisdiction over the contractor’s claim. The Tolliver Group, Inc. v. United States (Fed. Cir. Dec. 13, 2021).