Government Contracts Monitor

ASBCA Allows Tolling of Appeal Period Where Contracting Officer Fails to Advise Of Right to Appeal

July 18, 2016

Under the Contract Disputes Act (CDA), a contractor who receives a negative decision from a contracting officer may appeal the decision to the Armed Services Board of Contract Appeals (ASBCA). ASBCA’s jurisdiction over appeals is predicated upon the proper submission of a claim by a contractor to a contracting officer for decision, the issuance of an adverse decision on the claim by the contracting officer, and the filing of an appeal of the decision of the contracting officer within 90 days of receipt. Generally, these jurisdictional requirements are applied strictly by the ASBCA. Well settled law indicates that the appeal period will be tolled if a contractor can establish detrimental reliance on a defective decision made by a contracting officer. In such a situation, the action – or inaction – of contracting officers can have a significant impact on potential appeals.

The recent decision in Access Personnel Services, Inc., ASBCA No. 59900, June 15, 2015, provides an interesting illustration of this truism. In that case, the government’s motion to dismiss asserted that the ASBCA did not have jurisdiction over the appeal based on the fact that Access Personnel Services (APS) failed to file a timely appeal with the Board. APS did not deny that the appeal was filed more than 90 days after receipt of the adverse decision of the contracting officer. Instead, it argued that the appeal period should be tolled based on the fact that APS was unaware of the appeal deadline.

The CDA requires that contracting officers inform contractors of their rights under the CDA. 41 U.S.C. § 7103(e). To accomplish this, FAR 33.211(a)(4)(v) implements the statutory language and requires that contracting officers include language explaining the rights of contractors in their decision document. Here, the contracting officer failed to include this language. The ASBCA noted that “APS was unfamiliar with the contract dispute process in general and the ASBCA in particular.” APS was unaware of the existence of the ASBCA until after the appeal period ended. The ASBCA emphasized APS’s complete unawareness of its rights under the CDA.

The government argued that APS had the responsibility to take active steps to understand their rights after receiving the adverse decision of the contracting officer. The ASBCA rejected this contention, stating “We do not read [applicable case law] or the CDA to impose a ‘due diligence’ requirement on unknowledgeable contractors.” The government also argued that the contracting officer’s failure to include language explaining the right to appeal was absolved by the inclusion of the Disputes clause, FAR 52.233-1 (July 2002), in the contract. That clause mentions the right to appeal but does not explain the deadline to file the appeal or to whom the appeal should be made. According to the ASBCA, the Disputes clause’s lack of explicit instructions made it insufficient to inform APS of its appeal rights under the CDA. Finally, the government argued that tolling the appeal period for unknowledgeable contractors would provide an indefinite appeal period. The ASBCA rejected this contention out of hand, observing that “the government has the ability to obviate this concern by issuing CO decisions in accordance with the law.”

The ASBCA determined that APS’s failure to timely file its appeal was the result of detrimental reliance on the omission of statutorily required language by the contracting officer. Due to this finding of detrimental reliance, the ASBCA denied the government’s motion to dismiss and tolled the 90-day appeal period.

While it involves an odd set of facts, this case should serve as a reminder to contracting officers that they must adhere to the letter of the law, including the FAR. It is also a boon for first-time or inexperienced contractors who may not be fully informed of their rights under the CDA. Unfortunately, readers of the Jackson Kelly PLLC Government Contracts Monitor in general (and this article in particular) are too well informed to take advantage of this ruling.