Everyone has New Year traditions. Some do resolutions, some take vacations, some simply buy a fun new calendar. Here at SmallGovCon we like reading the different federal contracting annual reports. These annual reports function as almost yearbooks or like a friend’s yearly holiday card that discusses all the highlights of the past year. These annual reports are a great resource for contractors to catch up on what a specific agency or tribunal has been up to, and plan for the year ahead. In this quick review of the CBCA and ASBCA’s annual reports, we will cover some of those takeaways. Who knows, maybe in reading this post, you can find something that gives you your own federal contracting new year’s resolution.
The Civilian Board of Contract Appeals (CBCA) functions as a tribunal at which contractors and civilian agencies can “resolve contract disputes between government contractors and agencies under the Contract Disputes Act.” As such, when reading about the CBCA you will typically hear about contract claims, and different contract administration and performance issues. While it doesn’t seem to get as much traction on publications about federal contracting as say the GAO or Court of Federal Claims, it is still a tribunal which many contractors may someday need to go to in order to resolve issues. Similarly, the Armed Services Board of Contract Appeals (“ASBCA”) is a tribunal that generally hears contract disputes between Department of Defense agencies and contractors . As the CBCA annual report has more information this year than ASBCA, we will start with some nuggets of info from that.
CBCA Annual Report
CBCA’s 2023 annual report covers a good amount of ground. You will find some significant case summaries, information on new staff (including a new Judge), acknowledgment of staff achievements, and fiscal year statistics. Of most interest to federal contractors will likely be the cases and statistics, although it is good to put faces to names that you may encounter as well as recognize the great work CBCA’s employees may be completing.
CBCA Cases of Note:
In its annual report, CBCA lists summaries of nine cases that it deems “Decisions of Note.” All are worth a quick read (each is about half a page). The cases noted by CBCA in the annual report provide some great examples and pitfalls for contractors to consider prior to filing with CBCA. Some good takeaways are below:
- Alan E. Fricke Memorials, Inc. v. Department of Veterans Affairs, CBCA 7352, et al. (Jan. 12, 2023)
- VA issued cure notices for performance of a contract for inscription services at a VA cemetery. The contractor did not respond directly to the cure notices, but eventually completed all backlogged work on the contract. VA, however, terminated the contract for default. Upon review, CBCA converted the termination for default to a termination for convenience. CBCA found that the cure language didn’t properly put the contractor on notice that the CO sought a plan for how the contractor would “receive and process orders in the future and that, by the date of the cure notices, [contractor] had no delinquent orders to support a default termination.”
- With this case, CBCA seems to be issuing an alert to agencies that cure notices must be clear, and that contractors should strive to catch up on any work that may be subject to them. If it’s not clear, a contractor may be able to challenge a default termination. Contractors should also read any cure notices closely, and correct any problems.
- Cobra Acquisitions, LLC v. Department of Homeland Security, CBCA 7724 (Sept. 21, 2023)
- The contractor here had a contract with the Puerto Rico Electric Power Authority (“PERPA”) to provide power restoration services. This contract stemmed from the Federal Emergency Management Agency (“FEMA”) entering into a “cooperative agreement with Puerto Rico” to allow FEMA to provide disaster assistance. PERPA failed to pay the contractor “more than $174 million” that the contractor claimed was due. The contractor submitted a claim to FEMA for this. The CBCA however states that under the Contract Disputes Act (“CDA”), its jurisdiction is limited to contracts with an executive agency, and FEMA (the executive agency here) was not a party to the contract between PERPA and the contractor. CBCA continued, clarifying that a “suretyship arrangement is not a contract for the procurement of good or services” and would not be seen as a procurement contract under CDA. The CBCA “lacks jurisdiction to entertain third-party beneficiary contract claims.”
- CBCA’s jurisdiction is limited to direct contracts with executive agencies; and even if an executive agency may have been the cause behind an action, if the contract itself is not with that agency, then CBCA cannot hear the claim. Contractors need to be sure to nail down who their contract and claim is with, before diving into the CBCA process.
- SBA Archway Helena, LLC v. General Services Administration, CBCA 5997, et al. (Mar. 6, 2023)
- In a design/build lease with GSA, the contractor alleged that GSA was “at fault for 234 days of delay in issuing a notice to proceed (NTP) after the contract was awarded.” This caused occupancy and the start of rent payments to be pushed back. CBCA found that the costs at issue (pre-occupancy costs) would not have occurred under the lease without the agency’s delay. That being said, the CBCA did not agree that GSA was liable for the entirety of the delay, adjusting the percentage of costs accordingly.
- This confirms that an agency’s delay in starting a contract could lead to a viable claim for contractors, but that CBCA will not take a contractor’s length of delay in such claim at face value. CBCA will make its own determination on how much a contractor can recoup in any such claim.
CBCA Statistics:
CBCA notes that there were 409 new cases filed at CBCA in 2023, but this includes cases that are not claim appeals, such as FEMA cases, of which there were quite a few. There were 246 claim appeals docketed in the past year. For the 47 claim appeal cases that went to a decision on the merits, the Board granted the appeal 10 times (contractor fully wins), granted in part the appeal 11 times (contractor won some of its grounds), and denied the appeal 26 times. The report mentions CBCA dismissed 138 CDA cases (125 were voluntarily dismissed, often meaning a settlement was reached). The CBCA also produced a graph of which agencies had the most appeals filed. It would appear that the agency with by far the most appeals filed was the Department of State, followed by the VA, and then the GSA.
Taking the statistics into account, a great many CBCA appeals end in settlement. And of those not ending in settlement or dismissal, close to half of appeals (about 45%) at least result in some victory for the contractor.
ASBCA Annual Report
The ASBCA’s annual report focuses on the statistics for ASBCA during 2023. The ASBCA docketed 342 cases in 2023, representing a decrease of 58 cases from 2022. This also marks a 5-year low for the amount of cases docketed at ASBCA. Among the DoD agencies that had cases docketed, the one with the most was the Corps of Engineers at 105, with the Army, Navy and Air Force with 40 to a little over 50 cases each.
The ASBCA resolved (or as they say “disposed”) 375 cases in 2023, 22 less than 2022. Of those, 88 were sustained, 44 were denied, and 243 were dismissed. The 88 sustains are lower than 2022, but still represent a higher amount of sustains than in 2019, 2020, and 2021. Of those not dismissed, that represents quite a high sustain rate of 67%–but we have few details on what a sustain resulted in for the contractor. Very few ASBCA cases are appealed up to the U.S. Court of Appeals for the Federal Circuit, as there were 14 appeals filed based on 13 ASBCA decisions in 2023. ASBCA also highlighted that 83 cases were voluntarily diverted to Alternative Dispute Resolution.
In comparison to CBCA, the ASBCA rules in favor of the contractor more often on the merits. But it does look like ASBCA’s usage was less common than the CBCA this past year, which is interesting because DoD spends many more contract dollars than civilian agencies. Whether that was due to less contracting issues in DoD contracts, or due to some form of wariness in using ASBCA, is unclear.
While ASBCA and CBCA may not be the most talked about federal contracting tribunals, they are still widely used. As you can see, there is some helpful information in these annual reports. Given the percentage of sustains and settlements reached for claim appeals, it is crucial to fully assess your options with a federal contracting attorney to see if you have a viable case before going to the CBCA or ASBCA.
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