In a recent case, the Armed Services Board of Contract Appeals, dismissed a claim for lack of jurisdiction because it did not include a “sum certain.”
The case is a good reminder of the importance of demanding a specific sum of money for most claims.
The case, Sweet Star Logistic Service, ASBCA No. 62082 (September 30, 2020), involved a dispute over the quality of various items Sweet Star delivered to the government. In September 2018, the Army awarded a contract to Sweet Star for delivery of information technology equipment and cable supplies. The contract items were delivered and inspected, but from the government’s perspective, some of the items Sweet Star had sent were missing, damaged, or non-conforming to the contract specifications. So, on December 7, 2018, the contracting officer informed Sweet Star by email that the Army was not responsible for items that came up missing due to the fact that a government representative attested that all items were accounted for upon delivery.
Just three days later, the government issued a bilateral contract modification to “deobligate the funding that represent[ed] the total for the items that were returned to the customer.” The modification changed the unit price of one of the contract line items, decreasing it by $104,207.76. One month later, on January 11, 2019, the government informed Sweet Star by email it had until January 24, 2019 to collect all non-conforming contract items. The government would not deliver the items to Sweet Star, and noted that after January 24, 2019, any non-conforming items which had not been collected would be considered “abandoned,” leaving the government to dispose of the items in accordance with agency procedures.
January 24 came and went, but Sweet Star did not collect its non-conforming items. Instead, on March 25, 2019, Sweet Star sent a request for payment to the contracting officer, stating it had received 45% of its payment for the contract, but 55% of the materials had not been returned. Sweet Star requested that the Army detail when payment for the retained materials could be expected. The request ended with a final notice from Sweet Star letting the Army know it would appeal to the Armed Services Board of Appeals while the Army kept the materials. The request read as follows:
Hope you Doing well, [sic] I am Contacting you concerning the Contract Number W91B4N18P5056 Lifted Materials, as you know [sic] We have received about 45% Payment of the subject Contract but our 55% Materials are with your customer which they have not return [sic] the materials [sic] Please computerize with us when you will going to pay for the materials your customer keep it there [sic]
Please Finalize your decision concerning that materials if Gov [sic] will not pay for it why they keep those materials we are going to Apply for Appeal in Armed Service Board of Appeal (ASBCA)
[T]his is our Final Notice to going for Appeal after that we hope the [B]oard get the right Decision of this.
Considering Sweet Star’s request to be a claim for the $104,207.76 which the contract had purportedly been reduced by, the government emailed Sweet Star back instructing it to certify the claim, since it exceeded $100,000. A few days later, the Contracting Officer emailed Sweet Star accepting $432.60 of its claim and denying the remaining balance of $103,775.16. Sweet Star then filed its notice of appeal to the ASBCA.
At the ASBCA, Sweet Star was unable to get its foot in the door, because its request for payment did not include a sum certain.
Under the Contract Disputes Act, for the ASBCA to have jurisdiction, a contractor must first submit a “claim” to the contracting officer for decision. “Claim” is defined under the FAR 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 of interpretation of contract terms, or other relief arising under or relating to the contract.” The ASBCA focused in on the term “sum certain.”
In its decision, the ASBCA noted that Sweet Star did not mention a dollar amount requested anywhere in its claim; it only stated Sweet Star had received about 45% payment, but 55% of its materials remained with the government. This was a dispositive omission by Sweet Star, as the ASBCA pointed out, “in an appeal where the gravamen of the claim is money, a contractor cannot avoid the requirement for a sum certain.”
In order to satisfy the requirement of a sum certain for claims under the CDA, a contractor needs to clearly state the amount it is requesting, as the ASBCA noted, “[t]his Board views a claim as set forth in a sum certain whenever the contractor has submitted in writing to the Contracting Officer ‘a clear and unequivocal statement that gives the contracting officer adequate notice of the basis and amount of the claim.'”
Sweet Star’s purported “sum certain” did not meet this standard, as the ASBCA found it was ambiguous, unclear, and gave the CO inadequate notice of the basis and amount of the claim. Without a sum certain that is readily calculable by simple arithmetic, there was no valid claim. The ASBCA concluded that without a claim, it had no jurisdiction and dismissed the appeal.
The ASBCA’s decision was based upon established precedent as, “[i]t is well settled, for the purposes of the Board’s jurisdiction, a contractor’s monetary claim must be submitted to the CO in a sum certain.”. This case serves as a reminder that the world of government contracting requires contractors to be thorough and meticulous, for something as simple as demanding payment can be bungled if the proper steps are not taken.
Questions about this post? Email us or give us a call at 785-200-8919.