SUM CERTAIN

By now, all contractors are aware that in order for a board of contract appeals or the Court of Federal Claims to have jurisdiction (or for the contracting officer to render a decision on a claim), the contractor must submit the claim in an amount with is definite.  The Armed Services Board of Contract Appeals (ASBCA) recently decided it had jurisdiction in a case involving a claim where the contractor had presented sums certain for two claim options.  The government argued there was no sum certain.  Constellation NewEnergy, Inc., ASBCA No. 62518, December 9, 2020.

The contractor submitted an REA to the contracting officer offering two options for two statements of work.  It then converted the REA to a claim without changing the substance of the REA.  In the meantime, the government decided it did not want to pay the extra price for one of the options.  When the contracting officer wrote the final decision, she noted that the government had rejected the more expensive option and she went on to reject the claim.  On appeal, the board questioned jurisdiction, the government moved to dismiss and the parties briefed the issue.

Judge O'Connell held the board had jurisdiction.  He noted that the Court of Appeals for the Federal Circuit (CAFC) has held that a claim must be submitted in writing and contain a "clear and unequivocal statement that gives the contracting officer adequate notice of the basis and amount of the claim."  Contract Cleaning Maintenance, Inc. v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987).

The sum certain requirement will result in rapid dismissal of an appeal if the amount is approximate.  However, the ASBCA has held that it is enough for jurisdiction that the amount can be calculated.

Keep in mind that a contractor can amend the claim by increasing or decreasing the amount while it is before the contracting officer or when the case is at the board where the claim is decided de novo. Also, the contractor can present alternative amounts based on separate theories of recovery.  Judge O'Connell decided Constellation NewEnergy, Inc.'s two option approach was just such a case although the facts were slightly different in that Constellation was pricing two separate statements of work.

One factor in the decision on jurisdiction is whether the contracting officer understood what had been submitted.  In this case, Judge O'Connell noted that the contracting officer had eliminated one of the options and only one option was open for consideration.

Finally, Judge O'Connell rejected the government's arguments based on distinguishable cases where the contractor estimated the amount of the claim.  (As we have written, estimates to come up with a price are permitted but the price submitted in a claim cannot be an estimated price.)  Beware.  Pick a number violates the sum certain rule.  Offering the government the option to pick a price violates the rule.

bill@spriggslawgroup.com