The late, great Yogi Berra once said that “Baseball is 90 percent mental. The other half is physical.”  Sometimes it seems as if Yogi’s logic is equally applicable to the claims process in the world of Government contracting, where 90 percent of the early battle is following the correct claim initiation procedures prescribed by the Contract Disputes Act (“CDA”), 41 U.S.C. §§ 7101-7109. 

The CDA is an indispensable statute that, inter alia, codifies a disputes process for companies wishing to assert claims based on Government acts and/or omissions in connection with a contract to which the CDA applies. Although the CDA is omnipresent in the world of Government contracting, an August 4, 2016, decision by the Armed Services Board of Contract Appeals (“Board”) highlights the danger faced by contractors who fail to comply with its most basic requirement – i.e., the written submission of a valid “claim” to the Contracting Officer in the first instance. The case is Arab Shah Constr. Co., ASBCA No. 60553, and the facts are straightforward:

• In March 2011, Arab Shah Construction Company (“Arab Shah”) was awarded a contract for $62,000 to construct a metal pole barn in the village of Mangwal, Afghanistan.

• On May 23, 2011, the Contracting Officer informed Arab Shah via e-mail that the pole barn was needed in Gardez, Afghanistan, instead of Mangwal, and that the contract would be modified to effect the change in location if Arab Shah could “keep the same price.” Later that day, Arab Shah agreed to the contract modification, but indicated that the change in location would cost “more money.”  In response, the Contracting Officer purportedly pledged to pay Arab Shah’s relocation costs. Although the modification was executed just hours later, it did not provide Arab Shah with any additional funding.

• On May 26, 2011, Arab Shah paid $19,000 to transport the materials to Gardez.

• On September 22, 2011, the Government paid Arab Shah $62,224.09 – constituting the $62,000 contract amount plus $224.09 in interest.

• Arab Shah filed an undated Notice of Appeal (“Appeal”) that was received by the Board on April 22, 2016. The Appeal stated that Arab Shah “never got the payment for the services” despite the fact that it delivered “all the equipment . . . to the site.” 

• The Government filed a Motion to Dismiss (“Motion”) the Appeal on May 17, 2016, for lack of jurisdiction. In so doing, the Government argued that Arab Shah “never submitted a claim in a sum certain” to the Contracting Officer.

The Board granted the Government’s Motion because Arab Shah failed to submit a “claim” to the Contracting Officer. The Board noted that, while the CDA does not define the term “claim,” it is defined by Federal Acquisition Regulation (“FAR”) 2.101 as follows:

Claim means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract. . . . A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a claim. The submission may be converted to a claim, by written notice to the contracting officer as provided in [FAR] 33.206(a), if it is disputed either as to liability or amount or is not acted upon in a reasonable time. (Emphasis in original.)

Although there are no specific requirements regarding the content and format of a claim, the Board made clear that a claim must be (1) submitted in writing, (2) provided to a Contracting Officer, (3) with “clear and unequivocal statement[s] that give the [CO] adequate notice of the basis and amount of the claim.” (Citations omitted.)  In this case, Arab Shah failed to submit a valid claim under the CDA because, although it provided an invoice indicating that it paid $19,000 for the relocation of materials, there was “no evidence” that it presented the invoice or any request for payment to the Contracting Officer. The Board ruled that Arab Shah’s failure in this respect was “fatal to [its] jurisdiction.” 

This case functions as an important reminder to every company performing under a CDA-covered Government contract. If your company holds such a contract and is contemplating the assertion of a claim against the Government, the following simple steps will help ensure a smooth procedural commencement to the dispute:

• Submit the Claim in Writing to the Contracting Officer:  The claim should (1) set forth the bases for entitlement – i.e., the Government act(s) and/or omission(s) that increased the cost of performance and/or delayed the contract schedule, (2) specify the relief sought with as much certainty as possible, and (3) request that the Contracting Officer issue a final decision on the claim. If you are submitting the claim via e-mail, send a contemporaneous copy of the documentation to the Contracting Officer’s physical address listed in the contract to which the claim relates.

• Request Confirmation of Receipt:  In the transmittal letter or cover e-mail accompanying the claim, it is important to request that the Contracting Officer provide written confirmation that she or he has received the claim. If you do not receive a response to this request, continue following up until you do.

• Remember the Certification Requirement:  If the claim is in excess of $100,000, it must be certified by an individual authorized to bind the contractor with respect to the claim. Pursuant to FAR 33.207(c), the certification must state as follows: 

I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the contractor believes the Government is liable; and that I am duly authorized to certify the claim on behalf of the contractor.

Although a defective certification will not deprive a court or agency board of contract appeals of jurisdiction over the claim, final judgment on the claim cannot be entered until the certification is corrected. 

Above all else, Arab Shah proves that contractors and their counsel need to pay careful attention to the CDA’s procedural road map when asserting a claim against the Government. Failure to do so will result in an increased, unnecessary expenditure of time and resources and will most assuredly prove that Yogi was right when he said: “You’ve got to be very careful if you don’t know where you are going, because you might not get there.”