Claim Accrues Before an Impasse

In Sys. Dev. Corp v. McHugh (Fed. Cir., Sept. 26, 2011), the Federal Circuit rebuffed a contractor’s attempt to save its claim for equitable adjustment from the six-year statute of limitation by arguing that, because it was combined with a termination proposal, the claim did not accrue until they had reached an impasse on the termination.  This puts contractors at risk for losing claims that they might, for business or other reasons, initially decide not to pursue but might later want to advance, e.g., to combat a loss ratio application in a termination setting.