Show Me the Money? When a Sum Approximate Counts as a Sum Certain

In Creative Management Services, LLC, dba MC-2 v. U.S. (Feb. 26, 2021), the Federal Circuit affirmed a Court of Federal Claims decision dismissing a contractor’s appeal of the government’s Contract Disputes Act (CDA) claim as untimely, holding that the contractor appealed more than 12 months after receiving a contracting officer’s (CO) final decision. On appeal, the contractor alleged that the final decision was not a valid claim because it did not state a “sum certain” as required by the CDA, and this deficiency meant that the 12-month appeal period had not started to run.

The contractor was awarded a General Services Administration (GSA) task order to provide marketing and logistical support for an annual GSA conference, and was required to keep the revenue it collected for the conference in a trust account. When GSA canceled the conference in the fourth year and asked the contractor to return all remaining money in the trust account, the contractor refused and submitted a termination for convenience proposal to GSA. GSA subsequently issued two letters to the contractor demanding an accounting of the trust account and all money that remained in it. The CO then issued a final decision on the contractor’s termination proposal and on GSA’s claim to the remaining funds in the trust account, without providing a dollar amount. The contractor filed suit three years after the final decision was issued, challenging the government’s claim to the trust account funds. 

The Federal Circuit agreed with the Court of Federal Claims that the CO’s final decision was valid and provided the contractor with adequate notice of the government’s claim, thus starting the statute of limitations clock. Notably, the Court held that a CDA claim need not identify a “precise” monetary amount, and that there is no “rule” that qualifying terms such as “nearly” or “approximately” cannot be a sum certain as long as the amount is readily ascertainable. Here, despite GSA’s use of the term “approximately” to describe its claimed amount from the trust account, the contractor knew (or could easily ascertain) the balance of the trust account and knew the value of its termination settlement costs, and could therefore calculate the amount owed to the government. This decision is a good reminder regarding the importance of timely appealing final decisions.