Government Contracts Monitor

It’s Dangerous to be Late: Understand Your Appeal Rights

October 28, 2014

Last month the Armed Services Board of Contract Appeals (ASBCA) affirmed that even a defective termination notice starts the 90-day appeals clock, unless the contractor can establish it was actually prejudiced by the defective notice. In Mansoor International Development, ASBCA No. 58423, September 04, 2014, the ASBCA denied the government’s motion to dismiss the appeal as untimely, but only because it found both that the termination notice in question lacked the notification of rights required by FAR 33.21 l(a)(4), and that the contractor was actually prejudiced by the defect in the notice.

Mansoor was an inexperienced Army contractor providing trucking services in Afghanistan. On March 31, 2012, the contracting officer (CO) sent Mansoor a letter stating that (i) Mansoor’s contract would be terminated at the completion of its current task order and (ii) Mansoor could appeal the termination under the Disputes Clause. Months later, on September 1, 2012, the CO issued a modification to the pending task order, again giving notice of contract termination as described in the March 31, 2012 letter, but this time setting out the full notice required by FAR 33.211(a)(4) which includes a clear statement that the contractor has a right (i) to appeal to the ASBCA by furnishing written notice of that intent within 90 days or, instead, (ii) to bring an action directly in the United States Court of Federal Claims within 12 months of the CO’s decision.

Mansoor filed its notice of appeal with the Board within 90 days of its receipt of the September notice. When the Board sought comments from the parties concerning the timeliness of the appeal, the government filed a motion to dismiss for lack of jurisdiction based on timeliness. The questions raised before the Board were whether or not the March 31, 2012 letter was a proper notice of termination and, if not, whether the notice’s lack of an explicit statement of appeal rights prejudiced Mansoor’s ability to prosecute a timely appeal.

The Board, relying on Decker & Co. v. West, 76 F.3d 1573 (Fed. Cir. 1996), held that a contractor cannot rely on a defective notice of termination to delay the due date of an appeal unless it can demonstrate it was prejudiced by the notice. Here, Mansoor presented evidence that it “understood and believed that any time limits flowed from the completion of the contract close out process, including the completing of outstanding missions and submission of final invoices and claims” and that it “did not understand [its] appeal rights and obligations and was prejudiced by the failure of the Contracting Officer in March to explicitly recite them." On the basis of the evidence presented, the Board found that Mansoor was prejudiced by the defective notice. But even a slightly different fact pattern might have triggered a different result.

The lesson? Because a contractor must be able to show prejudice before relying on a defective termination notice to excuse an otherwise untimely appeal, it is vitally important to clarify any notice suggesting termination, however faulty it may seem to be, and to assume the most conservative approach to the start date for counting down the days within which to file a timely appeal with a Board or the Court.