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Guest Vern Edwards

If the contractor submits an REA that's a claim, it must make both certifications, because they are different. I know of no regulation, policy, or ruling to the contrary.

If he submits an REA that is not a claim he must make the REA certification. If he decides to convert the non-claim REA to a claim, then he must make the claim certification. He doesn't "recertify".

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You're right Vern, I mis-spoke when I stated "It does not, therefore it is not a claim. It is a request for equitable adjustment, based on what authority for such an adjustment, I have no idea because that is not stated." I will now back-pedal, but not much.

This is a very interesting case. I'm actually glad to have it.

When it comes down to it I acted as I did previously, in part, because of "The Claim Problem Decision Table" that's a part of The FAR Bootcamp curriculum. Step 19 states that if the Contractor has not requested a decision by the Contracting Officer then the submission is not a claim. The basis stated for this discriminator is that "Case law requires that in order for a demand or assertion to be a claim the contractor must request a decision by the contracting officer. See Cibinic, et al., Administration of Government Contracts, 4th ed., pp. 1267-1269. The request may be explicit or implied." While I had conducted a great deal of research which led to treating the submission as a claim, this decision table really caused me issue because it led me to believe that the implied request was not patently obvious and you really had to reach to determine that the letter implied a decision when in fact I knew that the Contractor did not want a written decision based upon previous discussions with the Contractor. Probably a stronger caviat in the decision table should be placed on that decisional discriminator. My interpretation at that time was that the definition of "implied" is different than is stated in this recent case:

“All that is required is that the contractor submit 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.” Contract Cleaning Maint., Inc., 811 F.2d at 592. Thus, the contractor’s request for a decision from the contracting officer need not be explicit; it may be implied. James M. Ellett Constr. Co. v. United States, 93 F.3d 1537, 1543 (Fed. Cir. 1996); see also Transam. Ins. Corp., 973 F.2d at 1576 (“The statute’s broad language demonstrates that as long as what the contractor desires by its submissions is a final decision, that prong of the CDA claim test is met.”).

Knowing now what I did not know then, I would have still sided with caution and considered the submission to be a claim and allow the Contractor to come back and tell me in writing that he is not seeking a written decision, instead, he is seeking to negotiate.

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Guest Vern Edwards

Dingoes:

Here is the letter that Don quoted:

This letter serves as our request for cost modification in the amount of $50,325.00 for extended overhead due to delays outlined in our request for time extension letters dated 25 February 2005.

The writer says he's requesting something and says what he wants. In order for him to get what he wants, the CO will have to make a decision. Right? Doesn't that imply (indicate by suggestion rather than explicit reference) that he wants the CO to make a decision? Wouldn't it be reasonable to think so?

Now, a CO who is familiar with the case law should know that implication is enough to satisfy the requirement for a request for a decision. Since the request is for less than $100,000, it need not be certified, so there is room for doubt about the contractor's intentions. It seems to me that a knowledgeable CO would think: I wonder if this guy really wants a final decision. I suspect that he does not understand my problem, which is that while I'm legally compelled to treat it as a claim, I'd rather not be up against a deadline and have to pay interest. I mean, how much can claim prep costs be for a $50,000 claim. I think I'll call the guy and ask him what his intentions are. I may have to explain the consequences of making a claim instead of an REA that's not a claim.

I think you did the right thing in making the inquiry. That's what I think any good CO would have done.

P.S. The Bootcamp decision table does not tell you everything, because we want you to read the references that we provide.

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From the limited information that Don initially provided, I'm not sure that "any reasonable contracting officer" would have recognized it in this instance as a request for a CO Decision regarding entitlement to extended overhead. The context of that statement in the quoted Court Decision suggested to me that it meant "all reasonable CO's" should have recognized the "request for a cost modification" as a request for a CO decision.

The Court said, in part: "Thus, the contractor’s request for a decision from the contracting officer need not be explicit; it may be implied. James M. Ellett Constr. Co. v. United States, 93 F.3d 1537, 1543 (Fed. Cir. 1996); see also Transam. Ins. Corp., 973 F.2d at 1576 (“The statute’s broad language demonstrates that as long as what the contractor desires by its submissions is a final decision, that prong of the CDA claim test is met.”). Although plaintiff’s February 25, 2005 letter is terse, plaintiff clearly indicates that it is a “request” for extended overhead based on the delays it alleged in its other three February 25, 2005 letters. Not only is plaintiff’s “request” tantamount to a demand, but any reasonable contracting officer receiving plaintiff’s letter would have interpreted it as a request for a decision regarding plaintiff’s entitlement to extended overhead. In fact, it bears noting that Ms. Hundley rendered decisions in response to plaintiff’s other three February 25, 2005 letters, all of which contained language similar to the letter at issue (each of the three letters began, “[t]his letter serves as our request for time extension,” and each concluded, “[t]herefore [plaintiff is] requesting a non-compensable time extension” )."

1. There was no indication that the letter that Don originally referred to directly tied to THREE other letters dated the same as the request for a cost modification.

2. Please note that each of the thee other letters, per the Court Decision, "requested a non-compensable time extension". Is there some mistake in that quote? A non-compensable time extension does not usually entitle a contractor to recover extended overhead, as compensation.

3. I don't think, in reading the letter by itself, that it is clearly a "terse" letter. The Merriam-Webster on-line Dictionary uses the definition of terse as "brief and direct in a way that may seem rude or unfriendly".

4. The Court stated that the CO rendered decisiions on each of the other letters of the same date. That wasn't evident in the original question posed here.

5. Those are all facts that were revealed in the Court's Decision.

From my personal perspective, since the mid-1990's, I am used to dealing with many more construction contractors that deliberately avoid submitting claims for various reasons. One is the reason that Vern described in post #21 of not being able to recover claim preparation and legal costs.

Another reason is that since the mid-1990's, most of our contractors participate in formal "Partnering" with the government, wherein both sides make concerted efforts to resolve issues before they become claims or disputes.

Many of our contracts also began including Alternatative Dispute Resolution clauses, which provided for arbitration or other collaberative processes as alternatives to resorting to final decisions under the CDA.

Many of our contractors only elevate an issue to the status of a "claim" as a last effort or when the government refuses to timely resolve or respond to the issue because they want to avoid any impression of being considered a claim's artist, difficult to deal with. etc. Reputations and client relations are often extremely important with our construction contractors.

When the USACE transitioned from primarily using IFB's to best value RFP's, Partnering and Alternate Disputes, there was a large reduction in the numbers of "claims", each of which are tracked as recordable metrics by USACE.

I tend to agree that a CO should attempt to deterrmine the intent of the contractor. However, I do not think that any US Government employee should coach or otherwise advise a contractor on how they can maximize their monetary recovery by either making an issue a claim and requesting a CO decision or by just calling it a (non-claim) REA. I think that we were taught in our government ethics training that this is not legal.

Don has tried to provide good teaching points here. However, did the information initially presented in that post - on its own - demonstrate to a reasonable CO that the contractor implicitly desired or requested, by its submission of that letter, a final CO decision? We have more information to draw upon at this point. It might reasonably depend upon facts that were not evident until we read the quote from the Court Decision or it may also depend upon the CO's or the organization's experience and perspective. All we knew for sure was that the request for a monetary adjustment was not a routine request for payment. A routine request for payment would not be considered a claim on its own but could be converted to one.

EDIT: I posted this prior to seeing post number 28 above, so it is not in response to that post.

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Guest Vern Edwards

Joel:

Don's teaching point was: read the definition.

The definition of claim has not changed in 20 years. The case law about what is and what is not a claim has been known for quite a while now. It is inexcusable that people who are empowered to make final decisions on claims don't know that case law and can't recognize a claim.

One of the earliest responses to the question said it's not a claim because it's a request, not a demand or assertion. Demand or assertion are legal terms of art and a visit to Black's Law Dictionary would have shown that a demand is simply a request made as a matter of right. In any case, the ASBCA said BACK IN 1993:

[T]he threshold question is whether that submission constituted a “claim” under the CDA. To that end, it does not matter if the submission is styled as a “claim,” a “proposal,” a “request for equitable adjustment,” or something else. What matters is that the submission satisfies the definition of “claim” prescribed in applicable implementing regulations and contract clauses, as interpreted by the Federal Circuit.

Nor does the word “request” preclude a document's status as a claim. See Zafer, stating:

The government objects [the contractor's] 1 August 2007 REA as the basis for our jurisdiction, alleging that the document is a preliminary request for equitable adjustment, and does not adhere to CDA certification requirements because “request” is twice substituted for “claim” and the authority of the certifier is not stated. We find that the REA is a cognizable claim, as it adequately informs the government of the basis and precise amount of the claim and that the use of the word “request” in lieu of “claim” is inconsequential.

See Saco Defense, Inc., ASBCA 44792, 93-3 BCA ¶ 26029. That decision is still "good law".

The rest of the "no" responses were wrong either because they applied criteria that were not in the definition or because the author did not know the case law.

There is no excuse for a CO or contract specialist who cannot recognize a claim when he or she sees it. Study, dammit. Read books. Read cases. Or give back the certificate of appointment.

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I read the Case. The significance of the fourth letter as a claim was primarily related in this Decision to whether or not the Coast Guard had the authority to terminate an order under a FSS contract of the GSA. The Court was not determining the merits of the claim itself. The Court didn't dwell on the apparent discrepancy between three letters seeking non-compensable time extensions and a fourth letter seeking monetary adjustment for the reasons set forth in the other letters.

EDIT: This post is a followup to my post #29. The Court Decision, when put in context of what all happened - the contractor had been terminated for cause for gosh sakes - would certainly indicate that the CO should have considered it a claim.

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In response to post 30, I still feel that my points raised in my post 29 are also valid. Inasmuch as only 15 minutes transpired between my post and the lengthy, rather passionate response, I wonder if you really read my post from my perspective.

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Guest Vern Edwards

I read it. It doesn't take me long to read stuff like that and to write a response.

My only interest is the responses to Don's question. I have no interest in revisiting the case in question. It was a simple decision, based on well-established legal principles, and we did not need it in order to answer correctly that the letter was a claim. It did not make new law. I knew my answer before I knew there had been a decision. I guessed that there had been one and found it within about 30 minutes.

We only needed the decision in order to be able to convince those who thought it was not a claim because REAs and claims are different things, or because it was a request, not a demand or assertion, or because it was not submitted within six years of its accrual, or because it did not request a CO decision. The only person who raised a legitimate issue was Carl Culham, who questioned whether it had been submitted by a party to the contract. Don had neglected to make it clear in his opening post that the letter was from the prime contractor. None of the facts you cited had any bearing on the answer to Don's question.

I am bothered by one part of your long post:

I do not think that any US Government employee should coach or otherwise advise a contractor on how they can maximize their monetary recovery by either making an issue a claim and requesting a CO decision or by just calling it a (non-claim) REA. I think that we were taught in our government ethics training that this is not legal.

I don't think it is wrong for a CO to explain to a contractor the alternative consequences of two possible courses of action, which is what I suggested. The clauses in government contracts and the procurement regulations are written by the government. As the only government representative empowered to interpret the contract, the contracting officer owes a contractor that kind of explanation. I don't think the CO should urge one course or the other, which I did not suggest, but there is nothing illegal about explaining the consequences of a choice. If there were more COs like that, there would be less litigation and less litigation cost.

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I don't think there is a clear teaching point.

If I read the damned definition, to use Vern's words, and a letter meets the definition of a claim, then I must process it as a claim...

But wait, wait, maybe I should ask the contractor first to make sure the letter was intended as a claim? If the above sentence is true, why should I bother asking the contractor? Well, for the good reasons Vern provides.

We ask the question because we know from experience that every request of the sort we're talking about is not intended to be a claim. Some are, some aren't. In cases like this, the proof seems to be in the contractor's intent rather than the form of the request letter.

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Guest Vern Edwards

Actually, if you read the cases, the contractor's intent is very important.

The only time you really have to ask is with respect to requests of $100,000 or less and non-monetary requests, which don't have to be certified. The criteria for a claim are not very demanding -- a short email might be a claim. The contractor might intend it to be a claim and he might not. It's reasonable to ask the contractor its intentions, because it (like so many COs) it might not know a claim when it sees one, and might not know the consequences of the difference. If you're the CO, you might be happy to learn that you don't have to issue a decision within a deadline -- 60 days or a reasonable time.

If a request exceeds $100,000, then it must be certified, and if it isn't it need not be treated as a claim. That should be clear even to ignorant and inexperienced contractors and COs.

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If Don's teaching point is only to read the definition, then determine if a one line letter requesting a cost modification is a claim, I don't agree with the teaching point. It isn't enough. The Decision itself required more than simply reading the definition and applying it to the one line letter that had little or no context. The Court stated that the "claim test" also included this: “The statute’s broad language demonstrates that as long as what the contractor desires by its submissions is a final decision, that prong of the CDA claim test is met.” Then the Court explained the clear relationship of the letter to the other contemporaneous letters that did request entitlement, which were treated as claims and which did result in CO decisions. Thus, the letter was directly related to other claims and now requested money in addition to no cost time extensions separately requested.

It was not clear to me from the letter that Don quoted in post #1 that the contractor was requesting a CO decision concerning entitlement to a time extension. We did not know wheher or not the Government had already agreed to entitlement to time extension(s) from the "request for time extension letters dated 25 February 2005", nor did we have any knowledge of the time between the requests for time extension(s) and the letter which contained the quantification. We didn't know if the contractor was just providing the amount in response to a request by the government after deciding entitlement. The other letters may have been in response to a government request to resolve schedule issues. Thus, we had no way of knowing if those other letters constituted a claim(s).

The only thing that I was pretty sure of. without further information, was that this was not "a voucher, invoice, or other routine request for payment that is not in dispute when submitted. Thus, it could have been a claim per the definition.

I suggested asking the contractor to clarify if it was a claim or not, in part for the same reason Vern used in post #28 when he said "Since the request is for less than $100,000, it need not be certified, so there is room for doubt about the contractor's intentions." Vern also said "I think (Dingoes) did the right thing in making the inquiry. That's what I think any good CO would have done."

I described some additional considerations for obtaining clarification from a contractor, assuming that the parties are on speaking terms. Asking a contractor to clarify its intent is simply a matter of proper communications and good judgement. Once a CO determines that the matter is a claim that implicitly or explicitly constitutes a request for a CO Decision, he/she proceeds to initiate a CO decision. I believe that he/she may alternatively simply agree with the contractor, document that agreement and proceed to settle the claim.

Don asked if the matter is a claim. From various posts here, apparently the teaching point described here is 1 ) read the definition of a claim, 2 ) compare it to the letter, then 3 ) determine that it is a claim. If you don't agree, then you are wrong.

To jump off into the CO decision process based upon that one line letter without any other understanding or knowledge of the circumstanmces or to discern the clear intent of the contractor would not generally be something that any "good contracting officer" should do, in my opinion. There could be tens or more "claims" on any individual construction contract if the CO treated every letter that included a request for a modification as a claim.

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The teaching point point is very good that just because a Contractor doesn't explicitly request a CO decision doesnt mean that the issue is not a "claim" However, I think that teaching contracting officers about claims should also extend beyond knowing the simple legal definition iof a claim. The lesson should include the practical aspects of being a good CO. One must determine the contractor's intent - especially when the Contract Disputes Act is involved. It is more than the mechanics of reading definitions. The time and efforts of a CO and its contract admin and legal staffs would soon be totally consumed by the contract claims process if it simply considered virtually every request for monetary adjustment, time extension, change in the specifications, etc. as an implicit request for a contracting officer's decision without asking the contractor to clarify its intent. Can you imagine what a CO with a hundred or more active construction type or similar contracts would do under such circumstances?

To be fair to Don, he was aware of the facts that would lead one to conclude that the contractor was implicitly requesting a CO decision because he read the Decision. I think that he was able to interpret the simple letter from the context of the situation I teach my students in the Design-Build class that when we and our fellow project delivery teammates know the intent, context and facts concerning what we are trying to say in an RFP, we should have someone not familar with all the intent and facts review the draft document. Sometimes what we write doesn't fully express what the full intent is or all of the facts necessary for another, reasonable reader to discern the full intention.

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This teaching point was valuable and timely. I have a case before a Board where the Government attorney questioned jurisdiction under exactly the conditions of this thread. Though I argued exactly the logic in the decision of K-Con Building Systems vs Government, it is helpful to have case reference.

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Guest Vern Edwards

To be fair to Don, he was aware of the facts that would lead one to conclude that the contractor was implicitly requesting a CO decision because he read the Decision.

The request was implicit based on the plain language of the request itself, not because of facts that went before it. That is a crucially important point. The judge pointed out the earlier transactions to show why it should have been even more obvious to the CO.

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