Oftentimes, a government contracts construction claims appeal is dismissed on appeal for lack of jurisdiction by the court. This can cost you a substantial amount of litigation fees only to find out that your case is dismissed on a technicality. To avoid such a peril, your must understand the basics when it comes to the appeal process.
When you file construction contract claims against the Federal Government, you want to first ensure that you meet the requirements of the Contract Disputes Act. Whether you are trying to recoup termination for convenience costs, delays, differing site conditions or other construction claims, you should always certify your claim before submission.
In addition you should make sure that:
- Your claim is very well documented;
- Your claim adequately explains why the amount request is not included in the original scope of work;
- Provide adequate support such as receipts, break down of labor hours and other additional costs.
- When appeal the CO’s decision, you do not try to introduce new evidence to the court.
Courts Must Have Claims Jurisdiction on Appeal
When you file a government contracts construction contract claims appeal at the Board of Contract Appeals or U.S. Court of Federal Claims, the courts have to establish jurisdiction to hear your case. Under the Contract Disputes Act, for you to pursue construction claims on appeal, you must first submit a written claim to the Contracting Offer for a final decision or deemed denial after 60 days.
To the extent construction contract claims exceed $100,000, they must be accompanied by a certification that it is made in good faith, the supporting data are accurate and complete to the best of your knowledge and belief, the amount requested accurately reflects the contract adjustment for which you believe the government is liable, and the certifier is authorized.
Though a defective certification does not deprive a court of jurisdiction (it must be corrected), the complete absence of one when it was required does and dictates dismissal. 41 U.S.C. §§ 7103-7105.
Construction Contract Claims for Termination for Convenience
When looking at the court’s jurisdiction for government construction contract claims appeal seeking termination for convenience costs, under the contract’s Termination for Convenience clause, within one year after a contract is terminated you are required to submit to the CO a final termination settlement proposal for the purpose of negotiation. See FAR 52.249-2(e).
Construction claims submitted under this termination for convenience clause, upon initial submission, the proposal is not a Contract Disputes Act claims. Only if the negotiation reaches an impasse, the proposal can then ripen into a claim. At that point, the CO must issue a unilateral determination, under terms dictated by the FAR, which constitutes a CO’s final decision.
You can then appeal the decision to the Board or Court of Federal Claims. This mistake is often made by a contractors’ corporate attorney that may not be familiar with the nuances of government contract claims. The termination for convenience clause does not refer to whether a termination settlement proposal exceeding $100,000 for construction claims must be certified to ripen into a claim. However, courts have decided this very issue in various cases. See Ellett, 93 F .3d at 1545 (“We agree that the termination settlement proposal must be certified in accordance with the CDA”); Consolidated Defense Corp., ASBCA No. 52315, 03-1 BCA ~ 32,112 at 158,780.
- When submitting a termination for convenience settlement proposal always certify it.
- When you know that your construction claims exceed the Contract Disputes Act certification threshold, you cannot avoid the certification prerequisite to the Court’s jurisdiction.
Government Construction Contract Claims Appeal and Liquidated Damages
A question that commonly arises is whether the liquidated damages in construction claims should be analyzed as a government claim against a contractor or as a contractor’s claim against the government. As a general rule, the government’s assessment in a construction contract for liquidated damages is a government claim against a contractor and can be directly appealed to the Court of Federal Claims.
The point here is that if the government in its decision for a construction contract claims states that it has a setoff charge against you, and you don’t agree, you should consult a government construction lawyer to appeal the decision. The key here is whether your initial claims were certified. They must be!
- If you disagree with the government’s assessment, you should file a direct appeal.
- If you start negotiation you may run the risk of missing the deadline for claims appeal.
If you instead subsequently submit a construction contract claims letter to the government demanding remission of the retained liquidated damages, arguing that the government was responsible for the delay in completing the contract, you can run into problems when appealing construction claims. Whether you are a large DOD construction contractor or a small business, you should be very careful when submitting construction claims against the federal government.
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