Contractor & Government Sanctions Imposed by ASBCA or CBCA Boards

A board of contract appeal has the authority to impose sanctions, including government sanctions, on parties for unacceptable behavior.  While boards do not have the authority to impose monetary sanctions, federal courts, such as the Court of Federal Claims, can.  When a board imposes either contractor or government sanctions, the sanction must be just and specifically related to the claim at issue.

CBCA Imposed Sanctions

General Rule:

Civil Board of Contract Appeals CBCA Rule 33(c), sanctions, provides: when a party, its representative, or attorney fails to comply with any direction or order issued by the board or engages in misconduct affecting the board, its process, or proceedings, the board may make just orders, including imposing appropriate sanctions.  These sanctions may take many forms, as long as it is appropriate.

Types of Contractor or Government Sanctions:

One sanction, the dismissal of a case or any part thereof, while available to the board, has been seen as harsh and severe.  This sanction will only be imposed in ‘egregious situations,’ such as where the party has repeatedly failed to comply with the board’s orders as well as willful disobedience or causing prejudice to the opposing party. 

However, if there is any indication that the disobedient party wishes to continue the case and move towards a resolution, this sanction likely will not be imposed.  See Medtek, Inc. v. VA.

Many instances where the CBCA, and other courts and boards, have imposed government sanctions involve discovery sanctions and failure to produce the requested documents.  By withholding documents or not complying with discovery requests, the board has the power to impose discovery government sanctions. 

In a recent case, the CBCA imposed a sanction on the Department of Veteran’s Affairs to allow the contractor appellant, or a third party, access to the VA’s computer system, at the VA’s expense, to collect information that the VA failed to disclose during discovery.  Brasfield & Gorrie, LLC v. VA (2014).

ASBCA Imposed Sanctions

General Rule:

The Armed Services Board of Contract Appeals (“ASBCA”) may impose sanctions, as it considers necessary to the just and quick conduct of an appeal, if a party fails or refuses to obey an order issued by the board.  Board Rule 35.

The ASBCA has wide discretion in evaluating a motion for government sanctions or against the contractor.  The board will consider the degree of willingness, prejudice to the parties, delay and burden and expense incurred, and evidence of compliance with other board orders in determining if it will impose a sanction.  Especially in terms of discovery, if the party is unable to comply with the order due to inability not of its own doing, sanctions will likely not be imposed.

Types of Contractor or Government Sanctions:

In a 2010 case, where government sanctions were sought, the ASBCA noted that because there was no evidence of either the government acting willfully to delay discovery, the contractor being materially prejudiced, or the contractor incurring any undue burden or expense, discovery sanctions on the government were not appropriate.  The board looks for willfulness, bad faith, or fault before imposing government sanctions.

The ASBCA, like the Civilian Board of Contract Appeals (CBCA), has imposed government sanctions when there was substantial non-compliance with an order.  Sanctions are not just for the government, however; the ASBCA imposed sanctions on contractors, such as Environmental Safety Consultants, for including non-responsive documents when the discovery ordered specifically said not to.

Most Severe Sanction: Default Judgment 

The severest sanction, entry of a default judgment in favor of appellant, is reserved for situations in which willful disobedience or contempt can be shown.  In a recent case, Thorpe Seeop Corporation, the contractor was seeking a default judgment against the government because the government’s answer to the complaint was untimely, inadequate, and failed to provide a defense. 

The ASBCA did not find the government’s conduct to be disobedience or contemptuous, thus the government sanction motion for default judgment was denied.  Even if bad faith and prejudice are present, the board will still look for additional evidence when considering a dispositive sanction.

If you want to make a motion for government sanctions, it is important to argue for an appropriate sanction, as related and proportional to the facts of your case.  Please call Watson & Associates, LLC to speak with a Federal Government Contracts Lawyer at 1-866-601-5518 for a free consultation.