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"Routine" Payment Request Was Not a CDA Claim

A decision dismissing an appeal for lack of jurisdiction for failure to submit a claim was affirmed by the Court of Appeals for the Federal Circuit because the contractor's request for payment on behalf of a subcontractor was routine and not in dispute. The contractor, engaged under an indefinite-delivery/indefinite-quantity contract for design-build work, entered into a basic ordering agreement with a subcontractor for the construction of healthcare facilities and delivery of medical equipment. After the government terminated task orders, the subcontractor submitted invoices to the prime contractor claiming additional indirect labor costs. The contractor did not pay the invoiced amounts and did not submit the invoices to the government for payment, but instead included the amounts in its termination settlement proposal. The government replied that it would not settle the subcontractor's claims, so the contractor included the amounts in a "Certified Claim for Payment," which the contracting officer denied. On appeal, the government moved for dismissal for failure to submit a valid Contract Disputes Act claim. The Armed Services Board of Appeals agreed, ruling the request was routine and the costs were not in dispute and therefore there was no valid sponsored claim under the CDA ( 11-1 BCA 34,632).

Routine or Non-routine

On appeal, the court looked to the definition of a claim in FAR 2.101 and agreed with the ASBCA that an invoice or other routine request for payment that is not in dispute when submitted does not constitute a claim for purposes of CDA jurisdiction. Whether a request for payment is routine or non-routine depends on the circumstances in which the requested costs arose. Generally, a payment request is non-routine if the facts show some unexpected or unforeseen government action that ties it to the demanded costs. Here, the costs originated from scheduled contract work and none of the work was additional or unforeseen work at the government's behest. In addition, the prime contract explicitly covered these costs. Therefore, because the contractor's request should have been submitted under the prime contract and in accordance with the expected progression of contract performance, it was routine. The contractor could not classify its request as non-routine without first pursuing the proper payment mechanisms under the prime contract.


In a strongly worded dissent, Circuit Judge Newman challenged the majority's "negation of the procurement system and the [CDA]." According to the dissent, the contractor complied with the protocols of claim submission, as set forth in the FAR and the CDA, after the COs denied the claim. Yet the ASBCA held there was no appealable action, leaving the contractor without recourse. Such a result, the dissent concluded, was contrary to the guiding principle that the "[f]ederal [a]cquisition [s]ystem will [c]onduct business with integrity, fairness, and openness." ( Parsons Global Services, Inc. v. McHugh, CA-FC, 56 CCF 79,797)




(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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