A User s Guide to Contract Disputes Act Claim Preparation: Tips and Tactics

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1 A User s Guide to Contract Disputes Act Claim Preparation: Tips and Tactics By Matthew H. Solomson and Justin Snyder The Contract Disputes Act (CDA) is a virtual minefield for a would-be plaintiff seeking additional compensation or other non-monetary relief from the federal government related to a government contract. Not only do jurisdictional prerequisites create a number of hurdles that contractors must surmount in order to pursue litigation against the federal government before the U.S. Court of Federal Claims (COFC) or a board of contract appeals (BCA), but satisfying those prerequisites in a strategic manner is essential not only to repelling the government s virtually inevitable motion to dismiss, but also to avoiding, at least in the COFC, a government counterclaim. In that regard, this article explores the CDA claims process and suggests valuable tactics for CDA claim preparation. First, we address the basic coverage of the CDA and its claim submission requirement. Next, we address the particular requirements of a proper CDA claim, including how some contractors have opened themselves up unnecessarily to jurisdictional litigation and how to avoid such traps. Lastly, we discuss the problem of government counterclaims and how to minimize their risk. What is the Contract Disputes Act? Often during the course of performing a government contract, the government expressly adds work to, implicitly changes the scope of work of, or otherwise alters conditions impacting the performance of, a contract. Indeed, contractors often will submit multiple requests to be paid for additional expenses incurred as the result of such extra work or changed conditions, and disputes may arise if and when the contracting officer (CO) either delays in responding to or rejects a contractor s request for additional compensation. Rather than an endless back-and-forth with a contracting officer, the Contract Disputes Act (41 U.S.C et seq.) provides contractors with a formal process for asserting claims against the government. The CDA is designed to enable the administrative resolution of government contract disputes and covers express or implied contracts made by an executive agency for the procurement of goods and services, the procurement of construction, alteration, repair, or maintenance of real property, or the disposal of personal property. 1 Procurement is the acquisition by purchase, lease or barter, of property or services for the direct benefit or use of the Federal Government. 2 The definition is generally construed broadly but does not include contracts for research and development, 3 barter agreements, 4 grants, or cooperative agreements. 5 Disputes related to the procurement process are not governed by the CDA, but rather are bid protests governed by 28 U.S.C. 1491(b) (in the COFC) or the Competition in Contracting Act, 41 U.S.C. 253 (in the GAO). 6 A contractor must be a party to a federal government contract in order to have standing to bring a CDA claim; thus, subcontractors not in privity of contract with the government are not afforded CDA relief. 7 However, a prime contractor may sue the government under the CDA on behalf of a subcontractor by sponsoring its claim. 8 In addition to setting forth the procedure for pursuing contract claims, the CDA provides the statutory basis for the jurisdiction of the Boards of Contract Appeals, 9 grants the contractor a right of further review of any CO decision 10 arising under or related to a contract and requires the government to pay interest on claims due to contractors. 11 Finally, the CDA establishes a civil penalty for fraudulent claims. 12 Bringing a Claim under the CDA Once a contractor has made the decision to pursue a CDA claim, the contractor must ensure that it follows the correct procedure or risk unnecessary obstacles and perhaps even lose the claim entirely. The first step in the process is to prepare a written claim to the contracting officer for a final decision. 13 A claim is defined as 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. 14 The claim need not be submitted in any particular form or use any particular language, but it must at least provide the CO with sufficient notice of the basis and amount of the claim. 15 Contractors must submit claims within six years after the accrual of the claim. 16 The claim must set out a specific dollar amount that the contractor is willing to accept in satisfaction of its claim not a range or amount plus some amount to be determined and language such as not to exceed, approximately, or at least will not satisfy this sum certain requirement. 17 Claims based on estimates are acceptable, so long as the contractor identifies what part of the claim relies on estimates and explains how the contractor arrived at those estimates using actual cost data. 18 As discussed further below, contractors should exercise caution when using estimates to avoid a government counterclaim for fraud or misrepresentation. Claims exceeding $100,000 must be certified by an individual authorized to bind the contractor to ensure that the claim is made in good faith and that amount requested and supporting data are accurate and complete to the best of the contractor s knowledge and belief. 19 An authorized individual is generally a senior official or general partner of the organization, or the organization s attorney. 20 The certification is a prerequisite to the claim being considered by the COFC or boards under the CDA and the government cannot waive the certification requirement. 21 While an exact recitation of the statute is not required, we recommend closely mirroring the statutory language: October/November 2012 The Federal Lawyer 29

2 I hereby certify that this claim is made in good faith; that the supporting data are accurate and complete to the best of the Contractor s knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the Contractor believes the Government is liable; and that I, as, am duly authorized to certify the claim on behalf of the Contractor. Technical defects in the certification, such as missing certifications when two or more claims not requiring certification are deemed by a tribunal to be a larger claim requiring certification or when a certification is made by the wrong representative of the contractor, are correctable. 22 However, if the certification is made with intentional, reckless, or negligent disregard for the applicable certification requirements, it is not correctable and will result in dismissal of the claim for lack of jurisdiction. 23 For example, in a recent case, URS Energy & Construction, Inc. v. Department of Energy, the certification stated as follows: I certify that this invoice is correct and in accordance with the terms of the contract and that the costs incurred herein have been incurred, represent the payments made by the Contractor except as otherwise authorized in the payments provision of the contract, and properly reflect the work performed. 24 The Civilian Board of Contract Appeals dismissed the contractor s claim, noting that the statement said nothing about good faith and did not indicate that the certification was made by a contractor official duly authorized to certify the claim. Furthermore, the contractor was well aware of the language necessary to certify a CDA claim properly and, in fact, had used the correct language in a prior claim. 25 Rather than risk having to restart the process and re-file a proper claim with the CO, contractors should ensure they comply with the CDA s various claim requirements from the outset. While nonmonetary relief under the CDA may be available to a contractor, such relief also must be sought in a CDA claim submitted to a contracting officer, just as with a monetary claim. 26 For example, the contractor in Kemron Environmental Services, Inc. v. United States sought a declaration that its performance evaluation was unreasonable and an order directing the Army Corps of Engineers to rescind or modify the evaluation. 27 Before ruling on the validity of Kemron s claim, the COFC first had to determine whether Kemron had satisfied the jurisdictional prerequisites to asserting a CDA claim for nonmonetary relief. 28 The court found, however, that Kemron s communications through letters and s to the contracting officer and other agency contacts did not constitute a claim under the CDA, as Kemron simply stated that it would be willing to submit a claim at the agency level, rather than actually asserting a demand for a determination as a matter of right. 29 Without a valid written claim to the contracting officer, the COFC had no jurisdiction over Kemron s complaint. 30 The CDA requires that [a]ll claims by a contractor against the government related to a contract shall... be submitted to the contracting officer for a decision 31 claims submitted to other government officials do not qualify as claims. 32 It does not, however, require that the claims be sent only to the contracting officer, or necessarily directly to that officer. 33 Thus, where a contractor sends a proper claim to its primary contact with a request for a final decision of the CO and the primary contact timely delivers the claim to the CO, the contractor has submitted a claim to the CO under the CDA. 34 However, these exceptions should not be relied upon and contractors should ensure that the person to whom the contractor has submitted the claim either is the CO or may be expected to transmit the claim to the CO. 35 After the applicant has submitted a proper claim to the contracting officer, the CO has 60 days to issue a written decision on any claim of $100,000 or less. For claims of more than $100,000, the CO has 60 days either: (1) to issue a decision; or (2) to notify the contractor of the (reasonable) time it will take for the CO to issue a decision. 36 The CO ultimately must state the reasons for the decision and inform the contractor of its rights. Specific findings of fact are not required and, if made, are not binding on the COFC or the boards in a subsequent case or appeal. 37 Failure of the CO to issue a decision on a claim within the required time period is deemed to be a denial of the claim. 38 However, the COFC or board has the option to stay the proceedings and obtain a final decision from the CO. 39 If a contracting officer issues a favorable decision on a contractor s claim, then the matter is ended as the contractor has received what it claimed. 40 On the other hand, if the CO expressly denies the claim or fails to render a decision within the specified time frame, that decision is final. The contractor then has two mutually exclusive options file an appeal with the appropriate board of contract appeals within 90 days of receiving the CO s final decision or bring an action in the COFC within 12 months of receiving the CO s decision. 41 The boards have the authority to grant any relief that would be available to a contractor in the COFC, including non-monetary relief arising under or related to the contract. 42 Whether a contractor decides to bring an action in the COFC or file an appeal with the appropriate board of contract appeals, the action or appeal must be based on the same operative facts, the same factual and legal bases, as the claim subject to final decision of the CO. 43 A claim to the COFC or board may assert differing legal theories from those contained in the CDA claim as long as they claim essentially the same relief; 44 a contractor may even request more money or have the amount adjusted at trial so long as the relief claimed is based on the same operative facts in the CDA claim. 45 The key practice point, therefore, is that while a contactor may always seek more damages before the court of board for the same predicate claim submitted to the CO, decreasing the amount sought at least before the court carries some potential risks. On the other hand, if the amount sought from the CO in the CDA claim is too low, there is a chance the CO simply decides to grant the claim, 30 The Federal Lawyer October/November 2012

3 as to collectability or... doubt as to the facts or law, 50 and the Department of Justice (DOJ) appears increasingly willing to pursue them. 51 The government may pursue any type of claim, even tort claims over which the COFC would not have jurisdiction if brought by a contractor. 52 Generally, however, government counterclaims are either fraud-based counterclaims or counterclaims for liquidated damages and/or reprocurement costs. Counterclaims must satisfy Rule 12(b) of the Rules of the U.S. Court of Federal Claims (RCFC) and, in the case of fraud counterclaims, RCFC 9(b) requires that the government s pleading must identify the specific who, what, when, where, and how of the alleged fraud; contractors should be sure that the government complies with the rule and move to dismiss the counterclaims where the government has not so complied. 53 Fraud counterclaims all involve some allegation of misrepresentation of fact in the pursuance of a claim and some degree of knowledge of a falsity. 54 Most commonly, a contractor will face a charge of a false or fraudulent claim when a claim seeks reimbursement for services or goods not provided (or different than those actually rendered), when a claim for payment could be considered false under the contract or other relevant law, or where a contractor has obtained a contract fraudulently. In that regard, a contractor s CDA claims are subject to liability, not only under the False Claims Act, 31 U.S.C.A. 3729, but also are subject to forfeiture pursuant to the Special Plea in Fraud, 28 U.S.C.A and to the CDA s own unique fraud provision, which provides as follows: thereby precluding the contactor from seeking additional relief for the same issues (again, based on the doctrine of accord and satisfaction). 46 The government will move to dismiss if the COFC action or BCA appeal seeks relief not in the original CDA claim submitted to the CO or is based on facts different than or in addition to those in the original claim; the tribunal then must decide whether to dismiss the new parts of the claim not subject to a final decision of the CO or dismiss the claim entirely. Beware the Government Counterclaim An important factor for contractors to consider when choosing to initiate a CDA action in the Court of Federal Claims is the government s ability to file counterclaims against the contractor. 47 Pursuant to 28 U.S.C. 1503, the Court of Federal Claims has jurisdiction over any set-off or demand by the United States against any plaintiff in such court. 48 By bringing a claim in the COFC, a contractor impliedly consent[s], as a condition to such right to sue the United States, that any counterclaim interposed by the United States should be heard and determined by this court without the intervention of a jury. 49 Government attorneys are to file fraud-based claims unless there is some doubt If a contractor is unable to support any part of the contractor s claim and it is determined that the inability is attributable to a misrepresentation of fact or fraud by the contractor, then the contractor is liable to the Federal Government for an amount equal to the unsupported part of the claim plus all of the Federal Government s costs attributable to reviewing the unsupported part of the claim. Liability under this paragraph shall be determined within 6 years of the commission of the misrepresentation of fact or fraud. 55 Remember that CDA claims over $100,000 must be certified as truthful representations of contractors costs. The primary purpose of the certification is to deter the submission of fraudulent or inflated claims by making contractors expressly liable for fraudulent misrepresentations. 56 Perhaps the best example of a government counterclaim case under the CDA fraud provision is Daewoo Engineering & Construction Co. v. United States. 57 Contractor Daewoo submitted a request for equitable adjustment in the form of a certified claim to the Corps of Engineers. In Daewoo s claim, the company alleged that the government breached its duties to cooperate and to disclose superior knowledge, and sought approximately $64 million in additional costs. 58 The CO denied Daewoo s claim, and Daewoo subsequently filed a complaint at the COFC. The government counterclaimed for damages, seeking $64 million October/November 2012 The Federal Lawyer 31

4 under the CDA, $10,000 under the False Claims Act, and entered a special plea in fraud under the Forfeiture of Fraudulent Claims Act. 59 The COFC concluded that the government demonstrated by clear and convincing evidence that the contractor knowingly presented a false claim with the intention of being paid for it and awarded the government roughly $50.6 million under the CDA, $10,000 under the FCA, and forfeited Daewoo s claims. 60 The Federal Circuit affirmed the COFC s decision, agreeing that the CDA was false and not in good faith. Specifically, the Federal Circuit emphasized that Daewoo apparently used no outside experts to make its certified claim calculation, and at trial made no real effort to justify the accuracy of the claim for future costs or even explain how it was prepared. 61 Further, Daewoo s damages experts at trial treated the certified claim computation as essentially worthless, did not utilize it, and did not even bother to understand it. 62 Contractors should take at least two lessons from the Federal Circuit s Daewoo opinion. First, the unsupported part of Daewoo s claim rendered the entire $64 million claim subject to forfeiture. Second, and more importantly, the court rejected Daewoo s argument that a fraudulent claim must rest on false facts rather than simply upon a baseless calculation. 63 Instead, the court held that by certifying the claim, Daewoo represented that the claim was made in good faith and, therefore, a baseless certified claim is a fraudulent claim. 64 In another recent case, Railway Logistics International v. United States, the COFC again ruled in favor of the government on its counterclaim under the CDA fraud provision. 65 The plaintiff encountered difficulty performing a $1 million supply contract for the delivery of locomotive parts and the CO eventually terminated the contract for convenience. 66 The plaintiff then certified a claim for $6,438,000 in damages, $2.4 million of which were costs that were based on invoices from subcontractors and vendors and [the plaintiff s] internal accounting system. 67 The other $4.05 million in damages resulted from alleged delays and changes. The only support for the plaintiff s cost claim was a simple spreadsheet that the plaintiff called a rough estimate. 68 The court found that each item on the spreadsheet was significantly overstated in relation to actual costs. 69 Finding that the contents of the spreadsheet provide clear and convincing evidence that [the contractor] practiced fraud against the United States in the proof, statement, establishment, or allowance of its claim, the court awarded the government $1,175,160 under the CDA fraud provision and $11,000 pursuant to the False Claims Act. 70 As in Daewoo, the court also declared any remaining portion of the plaintiff s claim forfeited under the Forfeiture of Fraudulent Claims Act. 71 These cases together teach that contractors should be prepared to defend not only factual assertions in their CDA claims, but also the basis for any claimed sums or calculations. Not only will a successful government fraud counterclaim make a contractor liable for sometimes millions of dollars in fraudulent damages, but the contractor also may forfeit any non-fraudulent portion of the otherwise valid CDA claim. As demonstrated above, a contractor may encounter many obstacles and potential pitfalls in bringing a successful CDA claim. Here are some tips and suggestions to help keep contractors on the right track: Give the agency a reasonable opportunity to address your concerns before bringing a claim. As demonstrated above, filing and pursuing a CDA claim may be a lengthy and costly process. Jurisdictional hurdles, government counterclaims, and any defects in the claims process send you back to square one. Before making a claim, see if you can avoid the hassle altogether by settling the matter with the CO. You have 6 years to file a CDA claim, so there is no rush however, if you sense that the CO is dragging his feet or if the CO hasn t taken action on your invoices or payment requests in a timely manner, it may be time to consider filing a claim. Ensure your claim meets all the necessary requirements. Your claim must be in writing and sent to the contracting officer; if you intend possibly to pursue relief before the COFC or a BCA, we recommend explicitly calling the request for CO s decision a claim to be safe. Lay out all of the facts necessary to support your allegations. Be sure to request an exact amount and be able to support it. Your claim may use estimates, but if it does, be sure to explain what part of the claim uses estimates and how you arrived at them. In that regard, you should strongly consider hiring a damages expert or consultant to perform the necessary calculations for your claim. If an estimate cannot be supported, leave it out of your claim as you can always adjust the claim upwards in a subsequent action. While a tribunal 32 The Federal Lawyer October/November 2012

5 will not fault you for a simple math error or innocent mistake, intentional ignorance or recklessness for the accuracy of facts and data may lead to charges of fraud. Accordingly, even if you hire an expert or consultant, you should disclose all relevant information to him or her. If the amount of your claim exceeds $100,000, file a certification using the proper language. Along with your claim, ask the CO for a final decision within 60 days. Fully describe all of the operative facts, types of relief requested, and legal bases for your claim in a written demand to the CO. An effective CDA claim will carefully and persuasively lay out all the necessary information in a detailed and organized manner so that the CO can make an informed decision regarding whether to pay the claim or deny it. A sound claim also helps protect contractors from scrutiny and fraud allegations. At the very least, your claim should include an outline of the government acts or omissions that caused increased costs, additional work, or delay in completing the work as originally scheduled, and an explanation of how those government acts or omissions caused the additions costs or delay. It should also include an accurate computation of the extra costs and delay along with a discussion of the legal bases supporting your claim. Be careful not to base your claim on an unreasonable or inconsistent legal position or interpretation of the contract. Finally, your claim should include all the relevant contract documents, specifications, correspondence, modifications, and expert opinions, where applicable. The more thorough, detailed, and precise the better. In that regard, documentation is the key: be sure to have your project managers and contracts administrators retain, preferably in a separate, readily accessible file, all correspondence regarding any matters where you were requested to perform extra work. Claim an amount reasonable under the circumstances and be able to support any amount claimed with detailed cost and factual data. Contractors are often faced with difficult decisions when calculating and selecting a sum certain in a CDA claim. Too high of a claim risks being challenged by the government as unsupportable and exposes you to potential counterclaims; too low of an amount risks the government accepting your good deal and paying you an unsatisfactory amount. Given the increase of government counterclaims and the severe consequences if a contractor is found liable for a false or fraudulent claim, it s always safer to err on the side of caution. As long as the operative facts are the same, you can always claim more at the COFC or the boards why chance being unable to support your claim? Consider the likelihood of a government counterclaim and be prepared to defend against it. Before filing suit in the COFC, assess the risk of the government filing counterclaims. Too often, contractors appear to be caught unprepared when the DOJ asserts a counterclaim. Attempt to understand how and why the DOJ might pursue a counterclaim and how it might affect your settlement posture. Contractors should attempt to limit the government s ability to pursue counterclaims by asking the court to set a deadline by which the government must file counterclaims or forego them. Where the government seeks to amend its answer to include a counterclaim, determine when the government first learned of the grounds to pursue its counterclaim and emphasize the government s delay, if possible. Whenever the government does file a counterclaim, consider responding with a motion to dismiss for failure to state a claim adequately. Finally, be familiar with Daewoo and other decisions describing the types of behavior for which contractors may be held liable for fraud. Be careful about using the claims process as a vehicle for advantageous negotiations. Filing a claim as a negotiation tactic or to get the government s attention is a dangerous game. While parties in private sector litigation may bring huge damages claims to bargain for a favorable settlement, inflating a CDA claim based on speculative estimates of future costs or profits (like in Daewoo and Railway Logistics) is not permitted and potentially makes you liable under the CDA fraud provision. Understanding your rights pursuant to the CDA and the procedures necessary to bring a successful claim is essential when attempting to obtain additional compensation or non-monetary relief under a government contract. Contractors must use their best efforts to ensure accurate factual data, proper cost and damages calculations, and an adequate legal basis for recovery. Failure to do so could subject you to a fraud allegation and quickly turn a CDA claim into a government obligation. Similarly, a failure to comply with jurisdictional prerequisites could render your CDA claim dead-on-arrival before the COFC or a BCA. In sum, and as in every highly-regulated industry, obtaining experienced, competent counsel is a necessity when submitting a CDA claim to a CO or in pursuing such a claim before the court or BCAs. TFL Matthew H. Solomson is counsel in the Government Contracts practice of Sidley Austin LLP in Washington, D.C. He currently serves as chair-elect of the FBA s Government Contracts Section and co-chair of its Disputes Committee. Solomson also is an adjunct professor at the University of Maryland Francis King Carey School of Law, where he teaches government contracts law. He may be reached at msolomson@sidley.com. Justin Snyder is a summer associate at a government contracts firm in Virginia. He is also a student at American University Washington College of Law in Washington, D.C. He can be reached at jsnyder1027@ gmail.com. Endnotes 1 41 U.S.C New Era Constr. v. United States, 890 F.2d 1152, 1157 (Fed. Cir. 1988) (emphasis in original). Note that in the bid protest context, procurement is defined by 41 U.S.C. 111 the term procurement includes all stages of the October/November 2012 The Federal Lawyer 33

6 process of acquiring property or services, beginning with the process for determining a need for property or services and ending with contract completion and closeout. See Distributed Solution Inc. v. United States, 539 F.3d 1340, 1345 (Fed. Cir. 2008) (adopting the Office of Federal Procurement Policy definition in determining whether a procurement has occurred for purposes of the COFC s bid protest jurisdiction, 28 U.S.C. 1491(b)(1)). 3 See, e.g., Institut Pasteur v. United States, 814 F.2d 624 (Fed. Cir. 1987) (delivery of research samples not a procurement of property or services under the CDA). 4 See, e.g., Intern. Indus. Park Inc. v. United States, 95 Fed. Cl. 63 (2010) (granting of easement in exchange for paving and improving access roads not covered by CDA). 5 Nova Technology Corp., ASBCA No , 2012 WL (May 30, 2012) ( contracts do not include grants and cooperative agreements ); see also Lucas v. United States, 25 Cl. Ct. 298 (1992). 6 See, e.g., Coastal Corp. v. United States, 713 F.2d 728 (Fed. Cir. 1983) (holding that the implied contract to give procurement bids fair and honest consideration not covered by the CDA); Inter-Continental Equip. Inc., ACBCA No , 90-1 BCA 22,501 at 112,956 ( Board lacks authority to order or review actions which do not affect a contract that has already come into existence between the Government and a contractor ). 7 Erickson Air Crane Co. v. United States, 731 F.2d 810, 813 (Fed. Cir. 1984); Harper/Nielsen-Dillingham, Builders Inc. v. United States, 81 Fed. Cl. 667, 674 (2008); but see Wallace O Conner Intern. Ltd. v. United States, 23 Cl. Ct. 754 (1991) (finding subcontractor standing where government undertook obligation to pay subcontractor directly for all work performed under the general contract). 8 Erickson, 731 F.2d at U.S.C.A U.S.C.A U.S.C.A U.S.C.A. 7103(c); see supra notes and accompanying text U.S.C.A. 7103(a)(1); Paragon Energy Corp. v. United States, 645 F.2d 996, 971 (Ct. Cl. 1981) ( Absent this claim, no decision is possible and, hence, no jurisdiction for this court. ) C.F.R Sarang Corp. v. United States, 76 Fed. Cl. 560, 565 (2007) U.S.C.A (a)(4)(a). 17 See Red Gold, Inc. v. Department of Agriculture, CBCA 2259, 12-1 BCA 34,921 ( not to exceed amount is indefinite and does not qualify as a sum certain ); Sandoval Plumbing Repair, Inc., ASBCA 54640, 05-2 BCA 33,072 (modifying phrase no less than will not satisfy sum certain requirement). 18 Rough estimates or estimates based entirely on future costs will be heavily scrutinized and may open the contractor up to fraud counterclaims; see Railway Logistics Intern. v. United States, 103 Fed. Cl. 252 (2012) (overstated estimates in relation to actual costs resulted in over $1 million fraud award for government); Daewoo Engineering & Constr. Co. v. United States, 557 F.3d 1332 (Fed. Cir. 2009) (claim based solely on future cost estimates held fraudulent when not supported by factual evidence and damages experts made no use of the calculation). On the other hand, reasonable, good faith estimates will not present a fraud problem; see Matthew Solomson, Good Enough For Government Work Court of Federal Claims Rejects Government s FCA Challenge To Contractor s Estimates, available at fcablog.sidley.com/blog.aspx?entry=78 (discussing Grand Acadian v. United States, No C, 2012 WL (May 23, 2012)) U.S.C.A. 7103(b). 20 See Flying Horse v. United States, 49 Fed. Cl. 419 (2001) (contractor s attorney could certify CDA claim); T.L. Roof & Assocs. Const. Co. v. United States, 28 Fed. Cl. 572 (1993) (senior official or general partner authorized to bind contractor to CDA claim). 21 SITCO General Trading and Contracting Co. v. United States, 87 Fed. Cl. 506 (2009). 22 H.R. Rep. No at 28 (1992); see Walashek Indus. & Marine Inc., ASBCA No , 00-1 BCA 30, See, e.g., Keydata Sys. Inc. v. Dept. of Treasury, GSBCA No TD, 97-2 BCA 29,330 (certification only addressing one prong of the requirements; blatant disregard and not correctable); Sam Grey Enterprises Inc. v. United States, 32 Fed. Cl. 526, 529 (1995) (statement I acted in good faith did not remotely resemble CDA certification and was not correctable). 24 URS Energy & Constr. Inc. v. Dept. of Energy, CBCA No. 2589, 2012 WL (May 30, 2012) See Kemron Environmental Servs. Inc. v. United States, 93 Fed. Cl. 74, 86 (2010) (citing GPA-I, LP v. United States, 46 Fed. Cl. 762 (2000)) (noting that a contractor must submit a request to the CO for a final decision to set forth a proper nonmonetary CDA claim). 27 at at at U.S.C.A (emphasis added). 32 See White Sands Corp., ASBCA No , 01-1 BCA 31,348 (denying claim where submitted to government lawyer); D.L. Braughler Co. Inc. v. West, 127 F.3d 1476 (Fed. Cir. 1997) (submitting letter to resident engineer without seeking CO decision held not a claim). 33 Neal & Co. Inc. v. United States, 945 F.2d 385, 389 (Fed. Cir. 1991); see Kemron Environmental Servs. Inc. v. United States, 93 Fed. Cl. 74, 87 (2010); Robin Indus. Inv., Tadcol Gov t Servs. Div. v. United States, 22 Cl. Ct. 448, 455 (1991) (holding that contractor who sent claim to DISC attorney who forwarded letter to CO properly submitted its claim to CO under the CDA). But see West Coast General Corp. v. United States, 19 Cl. Ct. 98, 102 (1989) (rejecting a claim sent to the contractor s Resident Officer in Charge of Construction for failing to submit to the CO because [s]trict compliance with the Act is important so that the contracting officer will know what he is dealing with, and what he 34 The Federal Lawyer October/November 2012

7 is expected to do ). 34 Neal & Co. Inc., 945 F.2d at Gardner Zemke Co., ASBCA No , 98-2 BCA 29, U.S.C.A. 7103(f) U.S.C.A. 7103(e) U.S.C.A. 7103(f)(5) The essential elements of an effective accord and satisfaction are (1) proper subject matter, (2) competent parties, (3) meeting of the minds of the parties and (4) consideration. The most common pattern for accord and satisfaction is a mutual agreement between the parties in which one pays or performs and the other accepts payment or performance in satisfaction of a claim or demand which is a bona fide dispute. Brock & Blevins Co. v. United States, 343 F.2d 951, 955 (Ct. Cl. 1965). We note, however, that both the government and a contractor would be well advised to execute a clear bilateral modification with a carefully defined scope of release U.S.C.A. 7104; see Renda Marine Inc. v. United States, 71 Fed. Cl. 782 (2006), aff d, 509 F.3d 1372 (Fed. Cir. 2007) (barring a contractor s CDA claim where appeal was not taken within 90 days nor action in the COFC within 12 months); United States v. Kasler Elec. Co., 123 F.3d 341, 346 (6th Cir. 1997) (noting that the CDA limits review of the merits of government contract disputes to certain forums ) U.S.C.A. 7105(e)(2). 43 See ATK Thiokol Inc. v. United States, 76 Fed. Cl. 654 (2007); Wilson v. General Servs. Admin., GSBCA No , 96-1 BCA 28, See M.A. DeAtley Const. Inc. v. United States, 75 Fed. Cl. 575 (2007). 45 SMS Data Products Group Inc. v. United States, 19 Ct. Cl. 612 (1990) ( The excess quantum must, however, spring from the same certified claim. ). 46 Supra note For an in depth discussion of the issues encountered with government counterclaims, see Matthew Solomson, When the Government s Best Defense is a Good Offense: Litigating Fraud and Other Counterclaim Cases Before the U.S. Court of Federal Claims, Briefing Papers 1 (Nov. 2011), available at aspx?pub= U.S.C Joseph Morton Co. v. United States, 3 Cl. Ct. 780, 785 n.2 (1983). 50 U.S. Attorneys Manual , available at title9/42mcrm.htm# See, e.g., Veridyne Corp. v. United States, No C, 2012 WL (Fed. Cl. July 6, 2012) (asserting common law defense of fraud against government contractor); Grand Arcadian Inc. v. United States, No C, 2012 WL (Fed. Cl. May 23, 2012) (bringing counterclaim alleging contractor s certified claim is false and fraudulent); Alcatec LLC v. United States, 100 Fed. Cl. 502 (2011) (counterclaiming under the Forfeiture of Fraudulent Claims Act); Daewoo Eng g & Constr. Co. v. United States, 557 F.3d 1332 (Fed. Cir. 2009). 52 Continental Mgmt. Inc. v. United States, 527 F.2d 613, 616 (Ct. Cl. 1975); Frantz Equip. Co. v. United States, 105 F. Supp. 490, , 122 Ct. Cl. 622, (1952). 53 RCOFC 9(b); see Exergen Corp. v. Wal-Mart Stores Inc., 575 F.3d 1312, 1327 (Fed. Cir. 2009). 54 Crane Helicopter Servs. Inc. v. United States, 45 Fed. Cl. 410, 435 (1999) U.S.C.A. 7103(c)(2). 56 Fischbach & Moore Int l Corp. v. Christopher, 987 F.2d 759, 763 (Fed. Cir. 1993) ( [certification] trigger[s] a contractor s potential liability for a fraudulent claim under section 604 [now section 7103 of the CDA]). 57 Daewoo Eng g & Constr. Co. v. United States, 557 F.3d 1332 (Fed. Cir. 2009) F.2d at ; see 28 U.S.C at at 1338 (citing Daewoo, 73 Fed. Cl. 547, 582 (2006)) at (citing Itek Corp. v. First Nat l Bank of Boston, 730 F.2d 19, 25 (1st Cir. 1984); Ward Petroleum Corp. v. Fed. Deposit Ins. Corp., 903 F.2d 1297, 1301 (10th Cir. 1990)). 65 Railway Logistics Inter. v. United States, 103 Fed. Cl. 252 (2012). 66 at at at October/November 2012 The Federal Lawyer 35