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CDA Inapplicable to Claim Alleging Agreement to Facilitate Payment

A claim seeking payment for military support services was not dismissed by the Court of Federal Claims, because the Contract Disputes Act requirement for obtaining a contracting officer's final decision did not apply to the alleged implied-in-fact agreement to facilitate payment from a third-party government. The contractor sought to recover payments due on a military base camp project in Iraq. The contractor alleged that, at the government's urging, it entered into an express written contract with the Iraqi government so that Iraqi Ministry of Defense funds could be used to pay for contract performance. According to the contractor, it was reluctant to submit a proposal but the United States government promised to assist it if any problems were to arise in obtaining payment from the Iraqi government. Specifically, the contractor alleged the government breached an implied-in-fact contract to facilitate payment from the Iraqi government for the contractor's performance of the express contract. The government moved to dismiss, arguing the contractor could not sue in the CFC under the CDA unless it first obtained a final decision from a contracting officer.

Claim Mischaracterized

However, the allegation fell under the court's Tucker Act jurisdiction and not the CDA. The Tucker Act grants the CFC broad jurisdiction over "express or implied contract(s) with the United States" (28 USC 1491(a)(1)). The CDA, in contrast, applies only to express or implied contracts for: the procurement of property, other than real property in being; the procurement of services; the procurement of construction, alteration, repair or maintenance of real property; or the disposal of personal property (41 USC 602(a)(1)-(4)). The government mischaracterized the nature of the contractor's claim, which sought relief based on an implied-in-fact contract theory that the government agreed to facilitate and obtain payment from the Iraqi government in exchange for the contractor's performance of the express contract. Under the alleged arrangement, the CDA did not apply because the implied contract called for services provided by the government but from which the government would not directly benefit. Moreover, the contractor alleged the breach of an agreement to facilitate and obtain payment from a third party rather than asking for the government to make payment itself. The CDA grants jurisdiction over contracts for the procurement of services but not for the provision of services. The contractor, therefore, was not required to obtain a contracting officer's final decision before seeking redress in court. (Laudes Corp., FedCl, 53 CCF 79,083)

(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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