Legal Authority - Get it in Writing

Published November 8, 2014, by Tom Petruska
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There is a well-established rule in government procurement law that the only person who can bind and commit the government is the warranted Contracting Officer (“CO”) acting within the limits of their authority. Only the Contracting Officer can modify the terms of the contract. And the modifications must be in writing. Regardless of how long this firm rule has been in existence – and firmly and rigidly enforced by the courts – contractors continue to perform work based on verbal “changes” to the terms of their prime contract “authorized” by the Contracting Officer’s Representative (“COR”) or another official.

The failure of a contractor to recognize this principle was discussed by the Armed Service Board of Contract Appeals (the “ASBCA” or the “Board”) in the Appeal of Creek Services, LLC, (“Creek”) ASBCA No. 59127, dated 1 July 2014.

On 14 May 2009, Creek was awarded a Multiple Award Task Order Contract (“MATOC”) by the Army Corp of Engineers for “Greater New Orleans Hurricane and Storm Damage Risk Reduction System.” Task Order 0003 was awarded to Creek on 25 September 2009 for flood protection. On 3 January 2012 Creek submitted a Request for Equitable Adjustment (“REA”) for reseeding due to unusually severe weather. On 28 June 2013, Creek requested a final decision from the Contracting Officer.

On 18 July and on 15 August 2013 Creek requested a meeting with the CO and informed the CO that they were preparing several additional claims but were willing to reach a global solution with the CO in an amount of $725,000. On 27 August 2013 the CO issued a final decision regarding the reseeding claim. On 5 September 2013 Creek asked the CO if she had reviewed its global offer and requested an answer.

On 2 October 2013, Creek met with the CO but no decisions were made and on 11 December 2013 the CO issued a final decision rejecting the claim. Creek filed an appeal on 10 January 2014.

The ASBCA dismissed the appeal as it was filed 135 days after the CO issued the final decision on the reseeding claim which was received by Creek on 28 August 2013 – 45 days after the law required a Notice of Appeal to be filed. Creek argued it was part of a global settlement that was submitted on 15 August 2013 and rejected on 11 December 2013. Creek could not show any evidence of discussions or “reconsideration” of its earlier final decision.

The appellant seemed to believe that exchanges of communications constituted a change to the law or the regulation. But only the CO can issue or reconsider a final decision. No verbal exchanges can change or be a substitute for the written order. So it is critical that a contractor must get a final decision from the CO in writing. Under the CDA, the CO is required to issue a decision in 60 days. An appeal must be filed within 90 days of a denial, or deemed denial, of a claim. This means that each claim included in a CO’s final decision must be appealed to a Board of Contract Appeals within 90 calendar days. This 90 day period may not be waived unless the CO “reconsiders” the final decision – in writing. Meetings, conference calls, and other verbal exchanges do not change a decision or the time to file an appeal. Do not be misled by any conversation with the CO. The CDA time limits cannot be changed, and only the CO can issue written final decisions or reconsideration. Track the time carefully and file appeals timely.

[1] FAR 1.602-1
[2] CDA 41 USC 7104(a)