Government Contracts Monitor

Heart of Stone: Board Says “No” To Imperfect Appeals

March 30, 2015

A recent Postal Service case reminds us how important it is to know how to proceed if your contract is terminated. Clifford B. Finkle, Inc. v. U.S. Postal Service, PSBCA No. 6540 (March 25, 2015). The Postal Service terminated with notice a contract with Clifford B. Finkle Inc. (CBF) who then (i) appealed the termination to the Postal Service Board of Contract Appeals (Board) and subsequently (ii) filed a monetary claim with the contracting officer (CO). When the CO denied its monetary claim, CBF failed to appeal the CO’s decision, despite the fact that the CO provided written notice of the appeal rights and counsel for the Postal Service sent CBF an email admonishing them to “keep in mind” that CBF has a “90 day deadline to appeal the recent final decision.” CBF didn’t listen. The Postal Service moved to dismiss the termination appeal arguing the Board lacks jurisdiction where, as here, the contractor (i) challenges a termination without a monetary claim and prior to receiving a decision from the CO and (ii) fails to file a notice of appeal within 90 days of receiving the CO’s final decision on its monetary claim.

As most of us know, the Contract Disputes Act (CDA) requires that contractor claims be in writing, certified (if over $100,000), and submitted to the contracting officer for a decision. The contracting officer must then issue a decision in writing, whereupon the contractor, if it wants to appeal this decision to the Board, must do so within 90 days from the date of receipt of the decision. The Board is then authorized to hear and decide the contractor’s appeal from the decision of the contracting officer.

The question is whether a contractor’s challenge of a termination with notice or for convenience, standing alone, confers jurisdiction on the Board. The answer is clear: “Unlike a termination for default … which can be challenged under the CDA without an additional monetary claim … a termination with notice or termination for convenience is a contract action … not a contracting officer’s decision. Without a monetary claim submitted to the contracting officer, the Board has no jurisdiction over a challenge to a termination for convenience or termination with notice action.”

CBF’s notice of appeal challenged only the Postal Service’s termination with notice and, thus, did not confer jurisdiction on the Board. True enough, CBF subsequently filed a monetary claim which the CO denied, but it then failed to appeal the denial within 90 days. The 90-day deadline to appeal the CO denial is “strictly construed and failure to appeal within 90 days precludes the Board from taking jurisdiction to consider the case on its merits.” A Board of Contract Appeals “may not waive this ninety-day statutory period.”

As it thrashed around to find a basis for Board jurisdiction, CBF argued that its notice of appeal challenging the termination should be construed to cover the subsequently issued CO decision on CBF’s monetary claim. No such luck. As the Board pointed out, it has “long [been] held that the jurisdictional standard must be applied to each claim, not an entire case; jurisdiction exists over those claims which satisfy the requirements . . . .”

CBF made a mess of its termination and, as a result, eliminated any possibility of obtaining relief. Don’t make the same mistake. Know the rules and follow them. If you don’t, you’ll see that Boards have hearts of stone.

Attorneys

Lindsay Simmons