Government Contracts Board Awarded CDA Interest in Appeal Involving an NAFI
Wednesday, October 17, 2018

Board Awarded CDA Interest in Appeal Involving an NAFI

By Government Contracts Editorial Staff

The Armed Services Board of Contract Appeals awarded a contractor interest in an appeal involving a non-appropriated funds instrumentality because the board concluded it had jurisdiction under the Contract Disputes Act. The dispute arose from a contract to design and construct a temporary lodging facility and visitor quarters at an air force base. Sustaining the contractor’s claims in part, the board addressed the source of its jurisdiction to consider the appeal since the government agency with which the contractor contracted was a NAFI. Board precedent held the source of the board’s jurisdiction was its charter, which allowed the board to consider appeals if the parties contractually agreed to the board’s authority to resolve disputes (see, e.g., 94-1 BCA ¶26,297). This was consistent with the “NAFI doctrine,” which held that the Tucker Act and CDA did not grant the Court of Federal Claims or the boards of contract appeals jurisdiction over matters involving NAFIs (see e.g., Furash & Co. v. U.S., CA-FC, 45 CCF ¶77,780). As a consequence, the board had no basis to award CDA interest in appeals involving NAFIs.

Doctrine’s Viability. However, a 2011 en banc Federal Circuit decision. which held the NAFI doctrine no longer applied to lawsuits brought in the Court of Federal Claims pursuant to the Tucker Act (Slattery v. U.S., 635 F3d 1298), called into question the viability of the NAFI doctrine with respect to CDA appeals. The Federal Circuit subsequently declined to decide the issue (Minesen Co. v. McHugh, 56 CCF ¶79,775). However, in Furash, the Federal Circuit explained that Congress intended the NAFI doctrine to apply “in the same fashion to the CDA as it does to the Tucker Act.” In Pacrim Pizza Co. v. Pirie (46 CCF ¶77,972), the Federal Circuit emphasized that Furash’s extension of the NAFI doctrine to the CDA rested largely on the CDA’s enumerating certain NAFIs to which the CDA applied, therefore implying that the CDA did not apply to non-enumerated NAFIs.

Greater Fidelity. The board reasoned that, because the application of the NAFI doctrine to the CDA piggybacked on the numerated/non-enumerated distinction shared by both the CDA and the Tucker Act, the Federal Circuit’s rejection of that distinction in Slattery eliminated the basis for continuing to apply the NAFI doctrine to CDA appeals. Accordingly, the board ruled that “eliminating the NAFI doctrine’s application to CDA appeals shows greater fidelity to the Federal Circuit’s direction in Slattery than allowing it to remain, and nothing in Minesen requires a different outcome or suggests otherwise.” (Parsons Evergreene, LLC, ASBCA, ¶95,571).

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