The ASBCA recently issued a decision that provides contractors with relief and a viable option for progressing their claim when a contracting officer unreasonably delays issuance of a final decision. The critical triggering event, the Contracting Officer’s Final Decision (“COFD”), which allows a contractor to commence a lawsuit against the Government before the ASBCA and Court of Federal Claims, can—not infrequently—be unreasonably delayed by the Government. One strategy that contractors have used to circumvent a CO’s delay in issuing a COFD is to characterize the CO’s failure to issue a COFD in 60 days without notification of when the COFD will be issued, as a “deemed denial.” What happens, however, if the CO advises the contractor that the COFD will be issued in 12 months? 14 months? Two years? This situation recently arose before the ASBCA and the ABSCA’s succinct ruling benefits contractors who are faced with lengthy waiting periods for a COFD.
Rizzani de Eccher, a construction contractor for the US Army Corps of Engineers in Qatar, submitted a certified claim to the CO seeking a time extension, compensable delays, and remission of approximately $10,000,000 in liquidated damages. Upon receipt of the claim in December 2017, the CO advised the contractor that the COFD would be issued in February 2019, fourteen months after submission of the certified claim.
In April, the Contractor asked the ASBCA under Rule 1(a)(5) to order the CO to render a decision by August 2, 2018. In response, the Government stated that the COFD would be provided by mid-November. After considering the parties’ arguments, the ASBCA determined that the Government’s timeline remained unreasonable and ordered that the COFD be issued by September 12, 2018. While still approximately 9 months after submission of the initial claim, the Contractor’s strategy resulted in an order accelerating the COFD by five months—a substantial amount of time and corresponding value to the contractor who is, understandably, eager to have the $10 million in liquidated damages resolved, as well as the delay and related issues raised in the claim.
The take-away for Contractors: if the CO proposes an “unreasonable” time to respond to the COFD—bearing in mind that reasonableness is determined on a case-by-case basis—Rule 1(a)(5) of the ASBCA Rules may offer relief and expedite the issuance of the COFD.