Lamson, Dugan and Murray, LLP, Attorneys at Law

What To Do When the Government is Slow to Decide a Claim?

Posted in Government Contracting

iStock_000017987518XSmallYou may know this situation all too well.  You’ve submitted your certified claim to the contracting officer and there it sits.  You ask for a decision and they say soon, but it’s not soon.  And pretty soon, several months have gone by.  Since the Court of Federal Claims’ decision in Rudolph and Sletten, Inc. v. U.S., the government may have to decide in 60 days or your claim will be deemed denied which would allow you to file your claim in the Court of Federal Claims.

 

Background

Rudolph and Sletten (R&S) were awarded a contract to construct the La Jolla Laboratory.  On August 20, 2013, R&S submitted a certified claim seeking $26,809,003 as compensation for costs due to alleged government-caused delays and disruption, additional consultant costs and extra work.

In October, 2013 the contracting officer informed R&S that a decision would be made in 9 months.  R&S wrote the contracting officer stating that the 9 month extension was excessive and unreasonable and demanded a detailed explanation for the delay or a work plan.  The contracting officer explained the reason for the delay and said the claim would be decided by July 15, 2014.

R&S filed suit in January, 2014.  Even though the lawsuit had been filed, the contracting officer sought to extend the deadline for its decision to March, 2015.  The government then filed a motion seeking to dismiss the claim, arguing that R&S failed to obtain a final decision from the contracting officer before filing its complaint.  The government alternatively asked the court to stay the case and remand it to the contracting officer for a final decision.

The Court’s Decision

The court made two interesting rulings in this case.  First, the court decided that the contracting officer was deemed to have denied the claim when it failed to decide the claim within its initial estimate.  Second, the court remanded the claim back to the contracting officer, but provided a deadline by which to decide the claim.

On the first issue, the court cited to the Contract Dispute Act and the language that required the contracting officer to issue a decision within 60 days or notify the contractor when the decision would be issued.  The court found that the contracting officer was within its rights to extend the deadline by which to decide the claim to July 15, 2015. But, the contracting officer had no authority to extend the deadline to March, 2015.  Because the contracting officer did not decide the claim by July 15, 2015, it was deemed a denial.

On the second issue, the court remanded the case back to the contracting officer for a decision, but with strict instructions that the decision must be made within 30 days of the court’s order.  The court also sent a parting shot over the contracting officer’s bow:

While the Court believes a decision from the contracting officer will be beneficial to this case, the contracting officer’s findings of facts are not binding upon the parties and are not entitled to any deference.

Take Away: A contracting officer may extend the time by which a decision may be made beyond the 60 days allowed by the Contract Dispute Act, but the deadline may not be extended again.  If the decision is not made during the first extension, it will be deemed denied, allowing a contractor to file suit.

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