Adding Value to the Company: Moving to Dismiss Claims Under the Contract Disputes Act for Statute of Limitation Violations

To say that there is a crisis surrounding the closing of government contracts, especially large cost-type contracts held by large government contractors, would certainly not be an understatement. [i]  Closing a contract essentially requires verification that the goods or services have been provided and that final payment has been made to the contractor. Audits are the tools the government uses to support contract closeouts.  However, the government is seemingly taking forever to perform various audits of government contracts.  To illustrate, the Defense Contract Audit Agency, the audit arm of the Department of Defense, had a backlog of 25,000 incurred cost audits at the end of Fiscal Year 2011, some dating as far back as 1996. GAO, Defense Contracting:  DOD Initiative to Address Audit Backlog Shows … Continue reading

Government Claims Are Subject to the Statute of Limitations Just Like Contractor Claims

Under the Contract Disputes Act, the Government is subject to the same six year statute of limitations in filing its (a government) claim that contractors are. As is the case with contractors, the date cannot be manipulated by either party, as shown in Raytheon Missile Systems, ASBCA No. 58011, Jan. 28, 2013. (Government claims include refunds for defective pricing, overpayments made, money owed because of a change in Cost Accounting Standards (“CAS”), etc.) If a claim is not submitted within 6 years after accrual of the claim, the Boards of Contract Appeals and the Court of Federal Claim lack jurisdiction, and the Government’s (or contractor’s claim) will never get its day in court, and that is what happened in the Raytheon case. Raytheon submitted a … Continue reading

Will the Government Pay for Your Lawyer, Accountant or Consultant Costs

Recently, in Tip Top Const., Inc. v. Donahoe, Postmaster Gen., (Fed. Cir. No. 2011-1509, Sept. 19, 2012), the Federal Circuit reiterated its earlier position that although professional fees incurred in connection with prosecution of a Contract Disputes Act (“CDA”) claim are not recoverable, the costs of such professional fees incurred in connection with the administration of a contract are recoverable.  What’s the difference? The Federal Circuit has previously held that there are “three distinct categories” of legal and consultant costs in the cost principles of the FAR: “(1) costs incurred in connection with the work performance of a contract; (2) costs incurred in connection with the administration of a contract; and (3) costs incurred in connection with prosecution of a CDA claim.” Bill Strong Enterprises, … Continue reading