ASBCA Holds That Claim for Payment Accrues When Work Is Completed
By: Lori Lange
Published Date: December 18, 2020
Under the Contract Disputes Act (CDA), contractors have to submit claims against the Government relating to a contract within six years after the accrual of the claim. Under FAR 33.201, a claim accrues when all events that fix the alleged liability and permit assertion of the claim were known or should have been known. Case law generally holds that the events fixing liability should have been known when they occurred unless they were either concealed or inherently unknowable at the time.
Contractor’s Claim for Payment
Recently, the Armed Services Board of Contract Appeals (ASBCA) held that a contractor’s claim for payment accrued when the contract work was completed in Anis Avasta Construction Co., ASBCA No. 61926 (Nov. 18, 2020). In that case, in 2011, the contractor was awarded and completed a contract to construct a 200 meter water well in Afghanistan. The contractor notified the Contracting Officer that the work was completed. In response, the Contracting Officer’s Representative (COR) indicated that the paperwork was being processed. After about a year, the contractor reached out to the Combined Joint Special Operations Task Force – Afghanistan (CJSOTF-A) to check on the status of payment. The CJSOTF-A ultimately responded that the contractor was clear to submit an invoice for payment.
The contractor subsequently submitted its invoice and was told that the invoice would be submitted for payment. Over a month later the contractor emailed the CJSOFT-A payments email address requesting a status update. The contractor was told that CJSOFT-A had to find the COR to sign the invoice and that the contractor had to submit a DD250, the Material Inspection and Receiving Report. Apparently, the contractor never submitted the DD250, the invoice was never processed, and the contractor was not paid.
Almost six years later, the contractor filed a claim for payment with the Director of Contracting at Special Operations Joint Task Force – Afghanistan (SOJTF-A). The contract specialist advised the contractor that the contractor could not file a claim against the Government after six years had passed. The contractor then filed a notice of appeal with the ASBCA. Thereafter, the Government issued a Contracting Officer’s final decision denying the claim. The Government asserted that it did not have any official evidence to support completion of the contract.
The Government moved for summary judgment, arguing that the contractor’s claim was barred by the statute of limitations as well the doctrine of laches. The Government contended that the claim was barred because the contractor waited over seven years after the claim accrued to enforce its right to payment. The ASBCA granted the motion.
The ASBCA concluded that the claim arose on the date that the contractor contacted the Government and stated that the work was finished. The ASBCA rejected the contractor’s arguments that the claim accrued on the date the contractor was directed to submit a DD250 – some two years later. It stated that the contractor had not provided any additional facts to support its allegations that it was the Government’s responsibility to still issue payment without the contractor submitting the requested documents.
This case is a reminder that contractors cannot sit on their rights to submit claims to the Government. Contractors must be diligent in ensuring that any claim is submitted before the CDA’s six year statute of limitations runs.