Government Contractor May Proceed With Delay Claim Notwithstanding Incomplete Project

A recent decision by the Civilian Board of Contract Appeals rejected the Government’s attempt to stay an appeal seeking recovery for delay damages “until the project is complete.” In CTA I, LLC v. Department of Veterans Affairs (March 9, 2018), the Civilian Board of Contract Appeals denied the Government’s motion to stay the appeal.

The underlying claim arose out of a contract to rebuild a dialysis center at a VA facility in Richmond, Virginia. CTA alleges that it suffered approximately $2 million in delay, inefficiency and other costs incurred from the date of notice to proceed through September 30, 2016. The Government sought to stay the appeal until project completion on the basis that CTA will not be able to prove that the Government “delayed the project completion as a whole” until the total amount of project delay is known. The Board rejected this argument, stating that CTA is entitled to prove at this juncture that the Government caused compensable delay to activities on the project critical path up to and including September 30, 2016, thereby delaying the future completion date. The Board stated that “[d]elay claims covering discrete periods of contract performance are often consolidated for litigation after a project is complete, but that is by no means a substantive legal requirement as the [Government] implied.” The Board also rejected the Government’s alternative argument for a stay based on its belief that CTA would file a follow-on claim for subsequent delay and impact, noting that there was no evidence that a future appeal about a different period of contract performance would “duplicate” the litigation in the pending appeal.

The key takeaway from this decision is that a contractor may choose to bring several discrete claims over the life of a project rather than being forced to wait for project completion. The concern with such an approach is whether the efficiencies of a single claim outweigh the ability to present and, hopefully, expedite consideration and resolution of your claim or claims. If you have questions about whether your business may have such a claim against the Government, please do not hesitate to contact us for advice.