Why Didn't I Think of that Before? Presenting New Grounds in Government Contract Appeals
Dooooohhhh!!
—Homer Simpson
There are many circumstances that can cause a federal contract to evolve or even to go awry. There are provisions in contracts that anticipate changes—“changes” clauses come to mind, as does the price adjustment clause that accounts for changes in the cost of complying with the Service Contract Act. However, there are times when a contractor and the Contracting Officer can’t reach an agreement over the resolution of a problem or an adjustment to the contract price to address a change that has arisen.
This is where the FAR disputes clause and the Contract Disputes Act kick in to establish the process by which disputes will be decided when the parties can’t agree on a solution. A contractor’s first step in pursuing a dispute is to submit a claim to the Contracting Officer in which the contractor asks for a Contracting Officer’s Final Decision (“COFD”). Absent an extension of time, the Contracting Officer is required to issue the final decision within 60 days. 41 U.S.C. § 7103(f).
If the Contracting Officer rejects all or part of a claim (or if he or she fails to issue a timely decision, aka a “deemed denial”), the contractor may appeal that decision to a Board of Contract Appeals or to the Court of Federal Claims (“COFC”) within, respectively, 90 days or one year. 41 U.S.C. § 7104. However, it’s important to account for the fact that neither the Boards nor the COFC have jurisdiction over an appeal unless the claim has been presented to and denied by the Contracting Officer. If a claim was not submitted to them, then the appeal usually must be dismissed.
But what happens when a contractor’s brilliant legal counsel (cough, cough) discovers another argument that wasn’t on the radar when the claim was submitted for a final decision. Can you add that argument to your appeal? Or, do you have to go back to the Contracting Officer to present the different theory for a new final decision?
Two recent decisions address that very question. In January of this year, the Armed Services Board of Contract Appeals issued a decision in Appeal of ECC Int’l, LLC, ASBCA No. 60167 (Jan. 25, 2022) in which it held that an alternate theory of recovery could be presented on appeal for the first time so long as the theory is based on the same “operative facts.” More recently, the Civilian Board of Contract Appeals reached essentially the same conclusion in Appeal of Zach Fuentes, LLC, CBCA No. 7090 (Apr. 6, 2022). There, the CBCA stated that the contractor’s alternative legal theory on appeal was within its jurisdiction because the operative facts upon which a proposed amended complaint was based were “sufficiently similar” to those proffered to the Contracting Officer even though the allegations were “a more fulsome explanation” of those facts.
I won’t delve into the procedural particulars of these cases; however, I draw your attention to them because they present a scenario that we frequently encounter—that scenario being where you find another approach to supporting your entitlement to relief from the Government. Sometimes you stumble across some new information that, if it had been considered, would lead to a different finding. Or, sometimes you don’t stumble across new information per se but you realize there’s a different way of looking at it—that maybe there’s another legal basis for entitlement based on the same information.
The distinctions between new information and new legal theories aren’t always clear. So, what to do when the clock is ticking on bringing an appeal based on the COFD that’s been issued? Do you assert the alternate legal theory on appeal without submitting it to the Contracting Officer based on your determination that it’s based on the same facts? Or do you hold off on your appeal when you know there are new operative facts, or when you’re unsure?
We subscribe to the notion that, in many circumstances, it makes sense to play things safe and do both. You don’t want to lose your right to appeal the decision in your hands but you also don’t want to run the risk of not being able to present the new theory. That’s why on a number of occasions, we’ve filed the appeal based on what we have and, at the same time, submit a new request for a Contracting Officer’s Final Decision to get the new angle in front of him or her as soon as possible. Often, we alert the Board that a new request for a final decision has been submitted that will be related to the newly filed appeal and request that the proceedings be stayed pending the issuance of the new decision.
Bottom line—make every effort to brainstorm what and how you present your claim to the Contracting Officer. However, when you ascertain that there’s another approach, make sure you insulate yourself as best as you can from procedural issues that could impair your rights or slow the process down.