Government Contracts CBCA Resolves Conflicting Precedents from Predecessor Boards
Wednesday, February 6, 2019

CBCA Resolves Conflicting Precedents from Predecessor Boards

By Government Contracts Editorial Staff

The Civilian Board of Contract Appeals dismissed an appeal in part as untimely because the contractor failed to show that the notice of its appeal rights misled it into filing the appeal after the 90-day period for challenging government claims had expired. The contractor, engaged under a construction contract that the government terminated for default, filed its appeal 11 months after the termination and 6 months after the government assessed liquidated damages in closing out the contract. Generally, “[u]pon receiving a contracting officer’s decision asserting a government claim, a contractor has ninety days to appeal to the appropriate [board] … or else the decision becomes final and conclusive” (16-1 BCA ¶36,464, quoting 41 USC 7103(g)). The board found that neither the CO’s final decision terminating the contract nor the unilateral modification assessing liquidated damages were unclear or misleading.

Predecessor Boards. In reaching this decision, the board addressed conflicting precedents and disavowed a predecessor board’s decision. In Decker & Co. v. West (40 CCF ¶76,887), the Court of Appeals for the Federal Circuit held that misleading advice in a default termination regarding appeal rights did not excuse the contractor’s failure to file a timely board appeal, because the contractor did not show that it had relied on the incorrect advice. Following this precedent, the Department of Transportation Board of Contract Appeals ruled that “[d]efects in final decision statements of appeal rights only serve to preclude the ninety-day or one-year periods from commencing if the contractor is able to demonstrate that it suffered some harm as a result of that defect” (98-1 BCA ¶29,625). However, the Department of Veterans Affairs Board of Contract Appeals adopted a different approach and held that, where a CO’s termination decision cited the Contract Disputes Act and gave details on how to appeal to “the agency board of contract appeals,” without identifying the board, the defect was “critical” and rendered the decision “substantially deficient and unable to meet the minimum requirements necessary to trigger the running of the appeal period” (02-1 BCA ¶31,662).

Conflict Resolved. The board found these decisions to be unreconcilable and agreed with the DOT BCA that defective statements of appeal rights in a final decision only stop the appeal period from running if the contractor demonstrates that it suffered some harm as a result. Accordingly, the board concluded that the contractor did not show reasonable, detrimental reliance on a defect in the notice of appeal rights that could extend the appeal period by enough to make the appeal timely. The contractor’s challenges to the default termination and to unilateral modification assessing liquidated damages were therefore dismissed for lack of jurisdiction. (Hof Construction, Inc. v. GSA, CBCA, ¶95,653).

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