WHEN TO APPEAL A DEFAULT TERMINATION

The Armed Services Board of Contract Appeals (ASBCA) enforces the 90 day statutory appeal requirement of terminations for default (or cancellation).  The 90 days runs from the time of the default termination or cancellation.  Or does it?  Look at what the ASBCA has said.

But first, look at the statute and the regulation.  FAR 33.211(a)(4)(v) requires a complete notification of appeal rights.  Requires.  A complete notification includes the right to appeal to the ASBCA within 90 days of the notification provided by the regulation (derived from the statute).

In 2017, the Board dismissed an appeal for lack of jurisdiction in which the contractor failed to file within 90 days of the notice of termination.  However, the Board did not examine whether the notification complied with FAR 33.211.  See Military Aircraft Parts, ASBCA No. 60139, February 21, 2017.  The only case cited by the Board to support its decision was the Board's prior decision in another Military Aircraft Parts case in which the notification complied with FAR 33.211.  Scratch your head.  The notification was defective in that it in no way complied with FAR 33.211.  Based on the Board's own precedent, the Board should have examined whether the contractor was prejudiced by the government's failure to comply with FAR 33.211.  The Board's inquiry would address what caused the failure to appeal within 90 days.

Importantly, in 2014, the Board denied the government's motion to dismiss an appeal filed after the 90 day deadline from the termination notice because the contractor was able to show it was prejudiced by a default notification which did not provide the contractor details about its rights to appeal to the ASBCA within 90 days (as required by FAR 33.211).  Mansoor International Development, ASBCA No. 58423, September 4, 2014.

In Mansoor, the Board based its decision on a 1996 Federal Circuit opinion.  The default notification merely said "Your company has the right to appeal under the disputes clause."  The Board found this was deficient, and, under the Federal Circuit authority, the contractor proved it was prejudiced by saying "[w]e did not understand our appeal rights and obligations and MiDs was prejudiced by the failure of the Contracting Officer in March to explicitly recite them."

In 2016, the Board decided a case in which the default notification informed the contractor of its right to appeal the determination under the disputes clause cited in FAR 33.211.  The Board found this notification was insufficient to start the running of the 90 days if the contractor could show it was prejudiced by the failure to be fully informed of its appeal rights.  The contractor made no attempt to show prejudice and the appeal was dismissed for lack of jurisdiction.  Bushra Company, ASBCA No. 59918, April 22, 2016,

The lesson is loud and clear.  Contractors, insist that any final decision include the appeal notification requirements in FAR 33.211.  Contracting officers, follow the requirements of FAR 33.211.  Finally, contractors, when in doubt, appeal within 90 days of any default termination.

Other precedent at the Board interprets contractor's communications liberally in deciding whether notice of appeal is effective.  A letter to the contracting officer may be enough if it adequately informs that the contractor intends to appeal or uses language indicating a dispute and request for relief.

Postscript:  If the T for D notice is defective because it does not comply with FAR 33.211, is the T for D not also defective and therefore a nullity which would result in conversion to a T for C?  Where a cure notice is required, the failure to provide one nullifies the T for D and results in conversion to a T for C.  Why not the same result for failure to comply with FAR 33.211?

bill@spriggsconsultingservices.com