Shapiro, Lifschitz & Schram

“Their preparation on a case is like no other – they are often done preparing two weeks before the trial is scheduled.”

Robert J. Lockhart – Executive Vice President, Capital Construction Consultants, Inc.

WHAT TO EXPECT: AN OVERVIEW OF THE DISPUTES PROCESS FOR GOVERNMENT CONSTRUCTION CONTRACTS

Companies who contract with the Federal Government (“Government”) must follow specific statutory processes if they have disputes on those projects.  Similarly, companies who contract with state or local public agencies should always consult the governing local law or regulation because public agencies frequently have their own disputes processes.

Contracts with the Government include a Disputes Clause from the Federal Acquisition Regulations ("FAR").  In turn, the Contract Disputes Act of 1978 ("CDA"), governs disputes that arise under construction contracts with the Government.  More specifically, the CDA applies to all disputes arising under or relating to a Government contract (express or implied) that an executive agency enters into for property, services, construction, alteration, repair or maintenance of real property, and the disposal of personal property.  In summary, contractors must comply with the Disputes Clause in their contract and pursue claims under the CDA.

Courts and the administrative boards (“Board”) that decide claims under the CDA interpret it narrowly.  This means that contractors must strictly comply with the CDA’s mandated procedures or risk waiving their claims against the Government.  Contractors must also continue performing their contracts even if they have a dispute with the Government.

The following summarizes the CDA’s basic requirements and procedures.

1.  Presentation of a Claim

Typically, a dispute begins when a contractor submits a claim to the Government’s Contracting Officer.   The CDA broadly defines a claim as a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to [the] contract.” 

Contractors must certify (in writing) all claims seeking more than $100,000.  More specifically, contractors must certify that: (a) the claim is made in good faith; (b) the underlying supporting information and data are accurate and complete to the best of the contractor's knowledge and belief; (c) the amount requested accurately reflects the contract adjustment for which the contractor believes the Government is liable; and (d) that the person making the certification is duly authorized to certify the claim on behalf of the contractor. 

2.  Contracting Officer's Final Decision

If a contractor and the Government cannot satisfy or settle a claim, the Contracting Officer must then issue a Final Decision.  The Final Decision must (a) describe the claim or dispute, (b) refer to the pertinent contract terms, (c) state the factual areas of agreement and disagreement, and (d) set forth the Contracting Officer's decision and supporting rationale.  A contractor cannot pursue its claim further until the Contracting Officer issues the Final Decision.  If the Contracting Officer doesn’t issue a Final Decision within 30 days of a request by the contractor to do so, the contractor may appeal on a "deemed denial" basis to an appropriate Board or the U.S. Court of Federal Claims (“Court”).

3.  Appeal to a Board of Contract Appeals

A contractor appeals by filing a Notice of Appeal at an appropriate Board within 90 days of receiving the Contracting Officer's Final Decision.  If not, a contractor waives its appellate rights before the Board. 

If the contractor timely files its appeal, the clerk at the Board will then notify the Government and the contractor (in writing) that it has docketed the case.  Agency counsel will represent the Government in the Board proceeding.

Board proceedings are less formal than those in Court.  The parties can take discovery and Board Judges do not need to follow the Federal Rules of Civil Procedure or Evidence.

After the Complaint and Answer have been filed and discovery has finished, a Board Judge conducts a hearing.  The parties then file post-hearing briefs.  Although only one judge presides at the hearing, a panel of three Board Judges issues the decision.  A contractor can appeal an adverse decision to an appellate court (the U.S. Court of Appeals for the Federal Circuit).

4.  Appeal to the U.S. Court of Federal Claims

A contractor may also appeal a Contracting Officer's Final Decision to the Court by filing a Complaint within 12 months of receipt of the Contracting Officer's Final Decision.  If it fails to do so, it waives its appellate rights.

The Court uses a more formal process than the Board.  Those judges must follow procedural rules modeled after the Federal Rules of Civil Procedure.  A single judge renders decisions in Court that the parties may appeal to the same appellate court that hears appeals from the Board. 

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The foregoing merely provides a basic overview of the disputes process that contractors must follow if they have disputes with the Government.  Contractors must know their specific rights and duties for each project and should have an experienced construction attorney assist and advise them in all aspects of the project from contract drafting to close-out.

Did You Know . . .

Members of the SLS trial group have tried in excess of 50 jury trials and 75 bench trials?

The SLS construction group has worked on sports stadiums across the country including Orioles Park in Baltimore and Paul Brown Stadium in Cincinnati?

The SLS construction group has worked on power plant projects across the country?

In 2007 SLS was selected for an Honorable Mention as one of the Best Places To Work in Washington DC?

Ron Shapiro, Steve Schram and Judd Lifschitz have all been selected as SuperLawyers by Law and Politics?

The SLS office building is an historic townhouse constructed in the late 1800s?

SLS has been selected by Martindale-Hubbell as a Preeminent Law Firm?

SLS trial lawyers have argued appeals in the U.S. Circuit Courts of Appeal for the 4th, 5th, 9th, D.C. and Federal Circuit?

SLS trial lawyers have been lead trial counsel in cases in Arizona, California, District of Columbia, Florida, Louisiana, Maryland, New Jersey, New York, North Carolina, Oregon, Texas, and Virginia, - to name just a few?

Virtually all the cases that SLS trial lawyers mediated have been favorably settled at mediation?

The transactional group at SLS was lead counsel on one of the largest, most complex mixed-use projects in downtown Washington, DC involving 4 lenders and 6 property owners?

In appreciation for the outstanding efforts of each of its employees during 2007, SLS gave everyone (attorneys, paralegals, and staff) a 4 day/3 night expense paid trip to Key West, Florida?

The transactional group at SLS has represented tenants in more than 200 retail leases in the Mid-Atlantic region?

Every attorney in the transactional group at SLS has at least 15 years experience?

The transactional group at SLS has represented developers in the purchase, construction, financing and/or sale of more than 75 multi-family apartment projects?

The transactional group at SLS has represented real estate investors and developers with respect to property in Pennsylvania, West Virginia, Delaware, Maryland, the District of Columbia, Virginia, North Carolina, South Carolina, Georgia, Florida, Texas, Tennessee, Michigan and the U.S. Virginia Islands?

Attorneys in the transactional group at SLS have represented eight national banks in commercial real estate loans?

Attorneys in the transactional group at SLS have represented the FDIC, the Resolution Trust Corporation and several banking institutions in loan workout transactions throughout the Mid-Atlantic region?

The transactional group at SLS has represented homebuilders and commercial real estate developers in work-outs of individual loans and also for work-outs of large portfolios involving dozens of properties in several states?

The trial lawyers of SLS have numerous reported decisions to their credit?