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
ASBCA Addresses Claim Accrual on Prompt Payment Act Interest Penalties
The Prompt Payment Act requires the government to pay an interest penalty when it fails to make a payment by the required payment date. But, for CDA statute of limitations purposes, when does that penalty claim accrue? This issue was addressed in the recent Public Warehousing Co. (May 2, 2016) decision, where the Board …
Applicable Statute of Limitations for CAS Violations Comes into Focus
The Contract Disputes Act, 41 U.S.C. §§ 7101-7109, sets forth certain prerequisites for the exercise of jurisdiction over claims. Among these prerequisites is a six-year statute of limitations, which is applicable to Government and contractor claims alike. With few exceptions, claims submitted more than six years after “accrual” are not valid and cognizable under the CDA.
The obvious question is, when does the clock start – i.e., when does a claim “accrue”? Although the CDA does not define the term accrual, the ASBCA and Court of Federal Claims rely on the FAR 33.201 definition, which describes accrual as “the date when all events, which fix the alleged liability of either the Government or the contractor and permit the assertion of the claim, were known or should have been known.” As you may have guessed by the phrase “known or should have known,” determining when a claim accrues can raise a number of subjective and factual questions (for example, who must know? And when “should” that person have known?). Over the past several years, there have been a number of SOL decisions attempting to clarify this standard in the context of contractor and Government claims (see previous discussions here, here, here, here, here, and here).
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