Tag Archives: good faith certification

CERTIFYING CLAIM UNDER CONTRACT DISPUTES ACT

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Under the Contract Disputes Act (41 USC 7101 en seq.), when a contractor submits a claim to the government in excess of $100,000, the claim MUST contain a certification of good faith, as follows:

For claims of more than $100,000 made by a contractor, the contractor shall certify that–

(A) the claim is made in good faith;

(B) the supporting data are accurate and complete to the best of the contractor’s knowledge and belief;

(C) the amount requested accurately reflects the contract adjustment for which the contractor believes the Federal Government is liable; and

(D) the certifier is authorized to certify the claim on behalf of the contractor.

41 U.S.C. 7103(b)(1).  See also 48 C.F.R. s. 33.207(c) as to the wording of the certification.

The contracting officer is not required to render a final decision on the claim within 60 days if, during this time period, he/she notifies the contractor of the reasons why the certification is defective. 41 U.S.C. 7103(b)(3).   Importantly, the contracting officer’s failure to render a decision within 60 days is deemed an appealable denial.

However, “[a] defect in the certification of a claim does not deprive a court or an agency board of jurisdiction over the claim. Prior to the entry of a final judgment by a court or a decision by an agency board, the court or agency board shall require a defective certification to be corrected.”  Id.

This is important.  In a recent decision out of the Federal Circuit, DAI Global, LLC v. Administrator of the United States Agency for International Development, 945 F.3d 1196 (Fed. Cir. 2019), a government contractor submitted a claim to the government with a defective certification.   The contracting officer waited 70 days (not the required 60 days) before notifying the contractor that the claims did not contain the required certification.   The contractor (smartly interpreting the contracting officer’s untimely notification as a denial of the claim) appealed to the Civilian Board of Contract Appeals.   The Board dismissed the contractor’s claims for lack of jurisdiction claiming the contractor failed to certify the claims and the contractor’s errors in preparing the certification were not correctible.  The contractor appealed to the United States Court of Appeals, Federal Circuit.

First, the appellate court held that the Contract Disputes Act states that a defect in the certification does NOT deprive a board over jurisdiction.  Whether the defect is technical in nature or not is of no moment since a board is not deprived of jurisdiction if there is any defect in the certification.

Second, the appellate court held that that the contracting officer failed to timely notify the contractor of the defective certification.  It was required to either issue a final decision on the claim or notify the contractor of the defective certification within 60 days.  “Because the contracting officer failed to issue a decision within the statutory period [60 days], [the contractor’s] claim was deemed denied and became appealable to the Board.” DAI Global, LLC, supra.

It is always good practice to work with counsel when preparing or submitting a claim.  Here, the contractor had good counsel as counsel treated the contracting officer’s untimely notification to the contractor of a defective certification as an appealable denial of the claim.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

SUBMITTING A “CLAIM” UNDER THE CONTRACT DISPUTES ACT

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The case of Delaware Cornerstone Builders, Inc. v. U.S., 117 Fed.Cl. 539 (Fed.Cl. 2014) exemplifies what happens if a federal government contractor fails to properly submit a claim in accordance with the Contract Disputes Act (41 U.S.C. s. 7101 en seq.).  As reflected below, the failure of the contractor to comply with the Contract Disputes Act will strip the United States Court of Federal Claims of jurisdiction to resolve the contractor’s claim with the federal government.

 

In this case, the contractor disputed the scope of the government’s punchlist.  The contractor sent a letter to the contracting officer that included a good faith certification requesting payment in the amount of $143,390.39 pursuant to its resubmitted payment application #14.  The contracting officer denied the payment request stating that the amount exceeded the value of punchlist work. Due to the delay in the contractor completing the punchlist items, the government advised that it would hire another contractor to complete the items and deduct the costs from the contractor’s contract balance.  However, the government did not hire the replacement contractor.  Years later the contract was still not closed out. The contractor was still trying to get paid its contract balance and was communicating with the government’s legal counsel.   The government’s counsel advised the contractor to submit a formal claim (per the Contract Disputes Act), but the contractor failed to do so.  Instead, the contractor filed a lawsuit in the Court of Federal Claims for $200,760.39.  The government moved to dismiss the complaint based on the contractor’s failure to comply with the Contract Disputes Act prior to filing the lawsuit.  The Court of Federal Claims agreed:

 

The CDA [Contract Disputes Act] permits a contractor to appeal the final decision of a contracting officer to this Court within 12 months of receiving the decision on a claim. A contractor may also seek review in this Court if the contracting officer fails to respond to a contractor’s claim within 60 days, as provided in the CDA. As such, the predicate for jurisdiction under the CDA is an appeal of either a contracting officer’s final decision on a claim or a deemed denial of a claim.

***

The CDA does not define the term “claim,” but the Federal Acquisition Regulation (“FAR”) [in F.A.R. 2.101] defines a claim 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 from or relating to the contract. Thus, the elements of a claim are: (i) a written demand, (ii) seeking, as a matter of right, (iii) the payment of money in a sum certain. Additionally, all claims requesting relief greater than $100,000 must be certified by the contractor.

***

An action brought before the Court of Federal Claims under the CDA must be based on the same claim previously presented to and denied by the contracting officer.

Delaware Cornerstone Builders, supra, at 545-47 (internal quotations and citations omitted).

 

While the contractor arguably submitted a certified claim for the $143,390.39 per its resubmitted payment application #14, this amount was different than the $200,760.39 it was seeking in its Complaint.  Thus, the amount it was seeking was not based on the same potential claim denied by the contracting officer which was a condition precedent to the contractor filing a lawsuit against the government in the Court of Federal Claims.

 

If a prime contractor wants to pursue a claim against the federal government, it needs to properly prepare and submit that claim pursuant to the Contract Disputes Act.  Notably, this is also memorialized in the disputes clause in F.A.R. 52.233-1 that is likely incorporated into the prime contract.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.