Insights

On February 6, 2025, Crowell & Moring presented a webinar, "The New Normal: What U.S. Government Contractors and Grant Recipients Need to Know About Terminations, Stop Work Orders, Tariffs, and the Path Forward in 2025."  In this webinar (available here), Crowell & Moring lawyers specializing in U.S. government contracts and grants addressed:

On October 31, 2024, the Armed Services Board of Contract Appeals (ASBCA or Board) published its FY 2024 Report of Transactions and Proceedings, which provides statistics regarding the “adjudication of appeals, petitions for contracting officer final decisions, applications for fees and costs under the Equal Access to Justice Act, and other matters” of the Army, Navy, Air Force, Corps of Engineers, Defense Logistics Agency, Defense Contract Management Agency, Central Intelligence Agency, National Aeronautics and Space Administration, or the Washington Metropolitan Area Transit Authority. 

The Civilian Board of Contract Appeals (CBCA or Board) recently published its Annual Report for FY 2024, providing statistics regarding the adjudication of appeals between contractors and civilian agencies. This year, the civilian agencies with the highest number of docketed claims at the Board were the Department of Veterans Affairs, the General Services Administration, the Department of State, the Department of Homeland Security, and the Department of Agriculture. These agencies accounted for 126, or 76%, of the 165 Contract Disputes Act (CDA) appeals docketed at the Board. 

On December 17, 2024, the Civilian Board of Contract Appeals (Board) announced its plan to launch a new Electronic Docketing System (EDS).  Once implemented, the Board will require use of the new EDS for most submissions. 

In Fortis Industries, Inc., CBCA 7967 (Sept. 18, 2024), the Civilian Board of Contract Appeals (CBCA) denied in part the government’s motion for partial summary judgment on the issue of whether the contractor released its claims by signing a modification terminating the contract for convenience. During contract performance, the General Services Administration (GSA) imposed monthly deductions to contract payments as a response to certain performance issues. GSA later proposed to terminate the contract for convenience and sent a contract modification stating that all obligations under the contract were concluded except payment for work performed in June 2022. The contractor signed the modification but stated in its transmittal email that it was owed payment for services in May 2022 as well. 

In MLU Services, Inc. v. Department of Homeland Security, CBCA No. 8002, the Civilian Board of Contract Appeals (Board) denied a Federal Emergency Management Agency (FEMA) motion to dismiss for failure to prosecute, which the agency filed just four days after MLU failed to timely submit one of its initial pleadings.

The U.S. Court of Appeals for the Federal Circuit held in Avue Technologies Corp. v. Department of Health and Human Services that an appellant’s non-frivolous allegation of a contract with the government via an end-user license agreement (EULA) incorporated into another contractor’s Federal Supply Schedule (FSS) agreement was sufficient to establish jurisdiction under the Contract Disputes Act (CDA).

In Aviation Training Consulting, LLC, ASBCA No. 63634 (Jan. 11, 2024), the Armed Services Board of Contract Appeals (ASBCA) confirmed that a contractor’s properly asserted claim for relief under Section 3610 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act is a claim under the Contract Disputes Act (CDA) and denied the Air Force’s motion to dismiss for lack of jurisdiction.

On December 19, 2023, the United States District Court for the District of Utah denied summary judgment in part to Vanderlande Industries (Vanderlande), holding that a reasonable jury could find that Vanderlande negligently misrepresented the viability of subcontractor Ludvik Electric Co.’s (Ludvik) pass-through claims during the parties’ settlement negotiations over the claims. 

On April 26, the Federal Circuit issued a decision in Crawford v. United States (a C&M case), holding that a U.S. Army combat veteran is entitled to recover his attorneys’ fees arising from a dispute related to obtaining medical retirement benefits earned during his service.  In the underlying dispute on remand to the Army Board for Correction of Military Records from the Court of Federal Claims (COFC), Mr. Crawford obtained full relief, including nearly a decade of retirement benefits that he was unlawfully deprived of due to his erroneous administrative discharge, but Mr. Crawford was initially denied recovery of his attorneys’ fees under the Equal Access to Justice Act (EAJA).  Mr. Crawford appealed, and the Court of Appeals for the Federal Circuit unanimously reversed the COFC, holding that (1) even though the COFC’s remand order stated that it was based on judicial economy, the substance of the Government’s admissions in the case amounted to an “implicit” concession of error, and (2) the Government’s legal position was not “substantially justified” under the relevant EAJA standards.  The Federal Circuit then remanded the case to the COFC to determine the quantum of legal fees to be awarded to Mr. Crawford. 

In Tolliver Group, Inc. v. United States (Aug. 17, 2022), the Court of Federal Claims (“COFC”) granted the contractor’s request for summary judgment, awarding $195,890 in legal fees the contractor incurred to successfully defend against a False Claims Act suit brought by a whistleblower.  The court held that the cost principles in Federal Acquisition Regulation (“FAR”) Subpart 31.2 applied to the contractor’s fixed-price task order, and the contractor’s legal fees were allowable and payable under the contract.  This is the second time that the COFC addressed the contractor’s entitlement to legal fees, having previously held that the contractor could recover a portion of them under the Spearin doctrine (which we reported on here).  The Federal Circuit later vacated that award on jurisdictional grounds (reported on here) and remanded the case to the COFC.

The Federal Circuit recently affirmed the Civilian Board of Contract Appeals’ (CBCA) decision denying a pandemic-related claim in Pernix Serka Joint Venture v. Secretary of State, CBCA No. 5683, 20-1 BCA ¶ 37,589.  Pernix involved a firm-fixed-price construction contract in Sierra Leone that was impacted by an Ebola outbreak several months into the project.  The Department of State (DOS) declined to provide direction or to issue a suspension of work order, and instead advised Pernix to make its own business decisions regarding performance and employee safety.  Pernix chose to demobilize its workforce and, later, to remobilize with the addition of its own on-site medical facility and services.  Pernix then submitted a claim for the increased medical, safety, and demobilization and remobilization costs.  DOS granted an adjustment to the schedule for the Ebola-related delays under the contract’s excusable delay clause, but denied Pernix’s monetary claim.

In URS Federal Services, Inc., ASBCA No. 62475 (March 23, 2021), the Board dismissed a contractor’s three-count complaint for lack of jurisdiction on one count and for failure to state a claim on the other two.  The Board first addressed Count III, which alleged that the Government had breached the implied duty of good faith and fair dealing by failing to pay the invoiced amounts, because the Government had never disputed entitlement to the amounts or taken issue with the contractor’s performance.  The Government moved to dismiss for lack of jurisdiction because the operative facts of the count had not been presented to the contracting officer (CO) in the underlying claim.  The Board agreed, finding that an operative fact of Count III (that the CO had denied the claim) had not been included in the original claim (which the Board noted made sense because the claim’s submission predated its denial).

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 American Rescue Plan Act of 2021 (the Act), signed into law by President Biden on March 11, 2021, extends Section 3610 of the CARES Act (previously discussed here, here, and here) through September 30, 2021. The extension allows federal agencies to reimburse contractors for six additional months of paid-leave costs if employees are unable to access worksites to perform their duties and unable to telework during the pandemic. Without this latest extension, Section 3610 relief would have ended on March 31, 2021. Consistent with the original enactment and previous extensions, the Act does not provide funding specifically for this relief, but agencies are authorized to use any available funds. 

In BAE Systems Ordnance Systems, Inc., ASBCA No. 62416 (February 10, 2021), the Armed Services Board of Contract Appeals addressed whether an request for equitable adjustment (REA) constituted a Contract Disputes Act (CDA) claim. BAE submitted a series of REAs that it consistently labeled and characterized as such and certified in accordance with DFARS 252.243-7002, Requests for Equitable Adjustment. Additionally, none of the REAs requested a contracting officer’s (CO) final decision pursuant to the CDA. In response, the CO disagreed with BAE’s request, but did not issue a final decision. BAE responded with further explanations of its position and provided additional information, which it again certified in accordance with DFARS 252.243-7002 (the same REA certification it provided in its initial REAs). BAE, again, did not include the certification required under the CDA or request a final decision. Ultimately, upon their denial, BAE expressly converted the REAs into a claim under the CDA, which it certified in accordance with CDA requirements. BAE subsequently filed an appeal on a deemed denial basis, which the Army moved to dismiss for lack of jurisdiction. The Army argued that BAE’s challenge to the CO’s decision was untimely because BAE’s REAs were actually valid CDA claims. The Board disagreed. The Board traced the history and substance of the parties’ communications and held that the REAs were not CDA claims, because BAE was careful not to expressly or implicitly request a final decision. The Board distinguished the facts from those in Hejran Hejrat Co. Ltd v. United States Army Corps of Engineers, 930 F.3d 1354 (Fed. Cir. 2019), which we reported on here. In Hejran Hejrat,the Federal Circuit was “loath to believe” that the contractor’s year-long exchange had not culminated in an implicit request for a final decision on a claim that had purported to be an REA. Here, on the other hand, BAE intentionally sought to avoid converting its REAs into claims, by “scrupulously refraining from requesting a CO’s final decision.” This decision amplifies the distinctions between an REA and a CDA claim. Contractors who intend to pursue relief through an REA, versus a CDA claim, should diligently avoid requesting a CO’s final decision, or otherwise engage in communications or conduct that could be interpreted as such a request.

On December 11, 2020, Congress presented to President Trump H.R. 6395, National Defense Authorization Act for Fiscal Year 2021. On December 23, 2020, President Trump vetoed the bill. Subsequently, the House voted on December 28, 2020 and the Senate voted on January 1, 2021 to override the veto. 

In BGT Holdings, Inv. v. United States, No. 1:18-cv-00178-PEC (Fed. Cir. Dec. 23, 2020), the Federal Circuit held that FAR 52.245-1 requires the Government to consider an equitable adjustment when it fails to provide Government-furnished equipment (GFE) required by the contract.  The contract in question required the Government to furnish equipment for the construction and delivery of a gas turbine generator.  After award, the Government stated that it would not provide the contractually-required equipment, unless BGT reduced the contract price.  In response, the contractor purchased the equipment itself, and sought reimbursement under FAR 52.245-1.  FAR 52.245-1 grants the Government the right to change the amount of GFE it provides, but also states that the CO “shall consider” an equitable adjustment under the contract.  The Government did not grant an equitable adjustment, and BGT asserted several theories related to FAR 52.245-1.  The Court of Federal Claims agreed with the Government that BGT’s breach count was insufficiently pled because, under FAR 52.245-1, the contracting officer must only “consider” the equitable adjustment––with any adjustment allowance being discretionary––and thus a decision to deny an adjustment is not a breach. 

On Sunday, President Trump signed a combined COVID-Relief and Omnibus Spending Bill, The Consolidated Appropriations Act of 2021, which funds the Federal Government for FY 2021 and includes a variety of COVID-19-related relief measures.  Among those measures, Section 1002 of the Act extends the reimbursement period for Section 3610 of the CARES Act, which allows federal agencies to use their funds to reimburse contractors for paid leave made to employees who are unable to access the worksites and unable to telework during the pandemic. The initial reimbursement cutoff of September 30, 2020 was previously extended until December 11, 2020, and the Act further extends the period until March 31, 2021, allowing agencies the discretion to continue to provide contractors with relief under Section 3610 of the CARES Act in 2021.

On December 9, 2020, the Department of Defense Office of Inspector General (DoD OIG) released its Audit of Department of Defense Implementation of Section 3610 of the Coronavirus Aid, Relief, and Economic Security Act. The audit report assesses several aspects of how the DoD has issued relief under Section 3610, including how well contracting officers have complied with guidance, issues with contractor disclosures, and common reasons for denying relief. For an in-depth summary of the report, read the full article here.