Defense to Government Position is Not a Claim Subject to Contract Disputes Act
January 29th, 2015
The government claims a contractor’s work is defective. The contractor says in defense that problems are due to design deficiencies and not construction errors. Is the contractor’s position a “claim” subject to the Contract Disputes Act (CDA)? The U.S. Federal Court of Claims says no. The work included installation of a new steam line. During testing, there was movement of the line and cracking of associated concrete piers. The government claimed the contractor’s (Total Engineering) work was faulty, and the Contracting Officer after investigation eventually issued a final decision that Total owed about $2.3 million to the government. Total filed a complaint to challenge the CO’s final decision and to seek payment of its contract balance of $737,838, claiming the problems arose from design and not from construction. The government moved to dismiss the complaint, arguing that the court had no jurisdiction as Total had failed to submit its “claim” to the CO and thus had failed to comply with the CDA. The court noted: In construing Total’s defense to the Government claim as an independent contractor claim, the Government seeks to impose a meaningless duplicative administrative exhaustion requirement not contemplated by the CDA. The Government argues that Total was required to submit its defense to the Government’s claim for a deductive credit to the Contracting Officer as a “claim” and obtain a final decision on its so-called “claim” as a prerequisite to bringing suit in this Court. The CDA does not require the contractor to jump through such an extra hoop and refile its defense to a Government claim as a so-called contractor’s “claim” where it is not seeking any separate monetary relief or contract adjustment. In sum, “Total does not request any monetary relief due to performing work under the Government’s design specifications, but only asserts defective design specifications to rebut the Government’s claim that Total’s work caused the steam line failure and attendant costs.” Thus, the contractor has not made a “claim” under the CDA, and the court will proceed with the case. The case is Total Engineering, Inc. v. United States, 2015 U.S. Claims LEXIS 30 (Jan. 26, 2015).