Claims

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On June 27, 2018, in Appeal of CiyaSoft Corporation, the Armed Services Board of Contract Appeals held that the Government can be bound by terms of a commercial software license agreement that the contracting officer (CO) has neither negotiated nor seen.  CiyaSoft Corporation (CiyaSoft) submitted a claim asserting that the Army had breached its contract to purchase computer software by using more copies of the software than were permitted by the contract.  The Army denied the claim, in part, because the contract contained no terms specifying how the government would secure and protect the software.  Instead, CiyaSoft had included license terms limiting the software’s use (i) inside the box containing the CDs with the software, (ii) on a piece of paper inside the software’s shrinkwrap, and (iii) in clickwrap that was displayed during the software’s installation process.  On appeal, the Board found that although the contract included no license terms and the CO never saw or discussed with CiyaSoft the license terms that accompanied the software delivery, the CO had a duty to inquire about what use rights applied to the software and the failure to do so imputed knowledge of the licensing terms on the Army.  Pointing to the longstanding policy embodied in the FAR that that the government should accept commercial computer license terms that are customarily provided to other purchasers, the Board held that “the government can be bound by the terms of a commercial software license it has neither negotiated nor seen prior to the receipt of the software, so long as the terms are consistent with those customarily provided by the vendor to other purchasers and do not otherwise violate federal law.”

Continue Reading Commercial License Terms May Govern Even Without Contracting Officer Knowledge

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Crowell & Moring is hosting Government Contracts 101 in our Washington, D.C., office on Thursday, October 26, 2017.  This all-day event will last from 8:30 a.m. to 6:30 p.m. at 1001 Pennsylvania Ave, N.W., and provide an overview of the full scope of issues that government contractors face on a daily basis.  We will cover FAR, key statutes and regulations, the bid and proposal process, protests, disputes, cyber requirements, changes, claims, key compliance issues, suspension/debarment, and costs.  The course is designed for those attorneys and business personnel that may be new to government contracting and for those that may need a “refresher.” 

Training is foundational to our business, and it is a part of our Firm’s DNA.  Our founding partners regularly provided government contracts training not just for business development purposes, but also out of a sense of duty to the profession. 

Government contracting is hard.  The rules and regulations can be counter-intuitive.  And perfectly acceptable commercial business practices can be criminal violations in the government contracts setting.  Industry members deserve every opportunity to learn the rules of the road so they can thrive. 

Furthermore, in the current fiscal environment budget pressures can hit government contractors hard.  Training funds can be hard to find.  As a Chambers Band-One rated government contracts practice with more than 60 lawyers working day-in and day-out in the trenches of our industry, we feel an obligation to our profession to provide this foundational training, free of charge, to our clients and to any interested industry member who desires this knowledge.  Join us.  Come, learn, network with your peers, and enjoy a day with us. 

We hope you can join us.

Registration is available here for industry-members interested in attending.

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Contractors that use a fiscal year ending 12/31 submit their annual cost submissions in June of the following year.  For 2010 incurred cost submissions (ICS) submitted in June 2011, many contractors may receive affirmative claims from the Government seeking to disallow some or all of those incurred costs, because the Government has a 6-year statute of limitations to bring such claims (i.e., June 2017).  Due to DCAA’s audit backlog, COs may receive Audit Reports right around the SOL deadline, and issue Final Decisions in order to avoid missing that deadline.  Contractors that do receive Final Decisions disallowing costs should be aware of the 90 day limit to appeal the Final Decision, whether they intend to negotiate or litigate.

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On June 14, we presented a webinar titled “Frequently Asked Questions About Requests for Equitable Adjustment and Contract Disputes Act Claims.” The webinar featured some of the most common questions we encounter in the field regarding CDA claims and REAs, as well as a discussion of procedural, substantive, and business considerations that go into the decision to assert a claim or an REA.

The audience Q&A featured a remarkable 30 questions during the 1-hour webinar, so be on the lookout for a “sequel” Claims Recovery v2.0 webinar in the coming weeks, where we will address additional FAQs and new questions that attendees may submit in advance.

Finally, because part of the discussion focused on identifying and pursuing claims, attached here is a description of the Crowell & Moring Performance Review Offering, which describes available training and diagnostic reviews regarding recovery opportunities for clients in the government contracting industry.

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Join us for a webinar titled “Government Contracts Recovery: ‘Frequently Asked Questions’ About Requests for Equitable Adjustments and CDA Claims.”  During the 60-minute webinar, a team of claims professionals from C&M’s Government Contractor Recovery Practice will address some FAQs that arise in the context of contractor claims / REAs, and solicit audience questions, as we delve into some of the procedural, substantive, legal, and business considerations that factor into whether to assert a claim or an REA.

We hope you can join us on Tuesday, June 14th, 2017 at 1 PM Eastern.  To register for this event, please click here.

 

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In a recent decision, the Court of Federal Claims rejected the Government’s motion to dismiss a lawsuit filed under the Tucker Act seeking to recover “risk corridors” payments pursuant to §1342 of the Affordable Care Act. In Health Republic Insurance Co. v. U.S. (Jan. 10, 2017), the Court held that “HHS is required to make annual risk corridors payments to eligible qualified health plans” under the ACA, and that the “plaintiff’s claim for unpaid risk corridors payments is ripe for adjudication.” The Court – which based its decision on several factors, including the risk corridors program’s purpose of stabilizing insurance premiums in the health insurance marketplace – also held that even if the ACA were ambiguous and the court were to apply a Chevron deference analysis, HHS has interpreted the program to require annual payments, and the agency’s own actions (i.e., making partial annual payments) indicate it believes the program is annual in nature.

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ABS Development Corp. (ASBCA Nov. 17, 2016) highlights the importance of providing a fully-compliant certification for CDA claims over $100,000—which includes, according to the Board, the requirement for contractors to provide an identifiable and verifiable handwritten signature or digital e-signature. As the contractor in ABS discovered, the Board considers “typewritten” signatures, regardless of font, to be insufficient.

In ABS, the Board dismissed for lack of jurisdiction certain contractor claims that had been “certified” by means of typewritten names (in signature-font) because a typewritten name “cannot be authenticated, and, therefore, is not a signature.” The Board made clear that the CDA’s purpose is to bind contractors by means of a signed certificate that “cannot be easily disavowed by the purported author.” The Board explained that a signature “is a discrete, verifiable symbol that is sufficiently distinguishable to authenticate that the certification was issued with the purported author’s knowledge and consent or to establish his intent to certify.” Because anyone could type another person’s name on a signature block, the purported author could
disavow the certification and the signature would be nearly impossible to authenticate.

Continue Reading The Pen is Mightier: Typewritten Signature Invalidates CDA Claim

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In AeroVironment, Inc. (Mar. 30, 2016), following an apparent settlement of the government’s cost disallowance claim, the ASBCA denied the government’s request to amend its answer (in order to “clarify” entitlement to additional quantum) because the proposed amendments constituted new “claims” that required new final decisions.  Acknowledging that parties may ordinarily revise quantum without running afoul of jurisdictional concerns, in this case the Board found that the proposed amendments (which were premised on a new interpretation of FAR Parts 3l and 42, a different calculation methodology, and greatly increased the monetary stakes), involved different “operative facts” and “would alter the ‘essential nature’ and fundamental basis of the claim asserted in the final decisions,” over which the Board lacked jurisdiction.

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On Thursday, November 19, Crowell & Moring attorneys will discuss using contractor claims as a recovery mechanism under U.S. Government contracts on WFED radio. Listen in at 12:30 pm EST as these practitioners discuss how contractors can use claims as part of an overall strategy to ensure that both parties comply with contract terms and conditions when issues like government-directed changes and delays come up during the course of a project.

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On October 20, the Armed Services Board of Contract Appeals published its FY 2015 Report of Transactions and Proceedings.  The report provides statistics regarding the adjudication of appeals between contractors and the Army, Navy, Air Force, Corps of Engineers, DLA, DCMA, other Defense agencies, CIA, NASA, and the Washington Metropolitan Area Transit Authority.  This year’s report reflects that the Appellant prevailed in just over half of the appeals decided in the merits (53%).  It also indicates that, as usual, the Board had a high success rate in resolving matters via ADR. Of the cases that went through non-binding ADR, 93% were resolved successfully.