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Complaint Was Properly Filed After Denial of Breach Claim

A breach of contract claim filed more than twelve months after the government's default termination decision was not barred by the statute of limitations, according to the Court of Federal Claims, because the claim was not an appeal of the termination decision, but of the contracting officer's denial of the contractor's breach claim. The government, which engaged the contractor to provide prosthetic and orthotic services to military veterans, moved to dismiss the contractor's complaint for lack of subject matter jurisdiction, arguing the contractor's claims, which were filed more than twelve months after the default termination, were time barred. The contractor had appealed the termination decision, but the court had dismissed the contractor's breach of contract claim without prejudice to allow the contractor an opportunity to certify the claim and submit it to the CO for a final decision (52 CCF 78,984).

Unavailing Argument

The contractor subsequently submitted a certified claim for breach of contract and breach of the implied duty of good faith and fair dealing. After seeking additional time to decide the claim, the CO denied it, stating the relief sought by the contractor was based on the same circumstances that formed the basis of the default termination decision. According to the government, the contractor's breach of contract claim required reconsideration of the CO's final decision terminating the contract, and was therefore barred by the Contract Disputes Act twelve-month statute of limitations. The government's argument was unavailing, however. The contractor's monetary claim for breach of contract was separate and distinct from the government claim terminating the contract for default and therefore required certification and submission to the CO. Consequently, the contractor could not bring suit for damages until it had properly submitted the claims to the CO for a final decision. (Kenney Orthopedic, LLC v. U.S., FedCl, 53 CCF 79,162)




(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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