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Contractor's CDA Standing Was a Triable Issue


The Armed Services Board of Contract Appeals denied the government's motion to dismiss an appeal for lack of subject matter jurisdiction because there were triable issues of fact as to whether the contractor accepted the transfer of its contract without recourse against the government. The contractor appealed the deemed denial of its claim to recover payment for several task orders issued under an indefinite-delivery/indefinite-quantity contract for the repair and continuity of Iraq oil infrastructure. The contractor contended the government breached the contract when it purported to assign its payment obligations in a unilateral transfer of the contract to the Coalition Provisional Authority. The government moved to dismiss, arguing the CPA was not an "executive agency" within the meaning of the Contract Disputes Act; in accordance with the transfer of authority from the CPA to the Interim Iraqi Government, the transferred contract and TOs became agreements between the contractor and the sovereign government of Iraq, nullifying the contractor's standing under the CDA; and appropriated funds could not be used to pay a monetary award in connection with the task orders funded with Iraqi funds.

No Precedent


The board first found that the CPA, an entity created by the Coalition partners in Iraq, including the United States, did not fit within the CDA's definition of an "executive agency" (41 USC 601(2)). Next, after noting the absence of precedent under the CDA concerning contract transfers by the government, the board relied on the Restatement (Second) of Contracts (1981) and found, since there was no novation agreement between the parties, there were triable issues of fact as to whether the contractor accepted the transfer of its contract and thereby relieved the government of its contractual duty of payment. Finally, the fact that some of the task orders were funded with Iraqi monies did not mean appropriated funds could not be used to pay a monetary award, since the CDA provides for judgments against the government to be paid from the Judgment Fund, which is a permanent, indefinite appropriation (41 USC 612). (Kellogg, Brown & Root Services, Inc., ASBCA, 93,047.















































 






 

 

(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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