Do contractors need to wait for a project to be complete to file a delay claim? The answer is a resounding NO! There is no reason for a contractor to finance a government-caused delay for any longer than absolutely necessary.
The Civilian Board of Contract Appeals (CBCA) recently drove this point home in CTA I, LLC v. Department of Veterans Affairs, CBCA 5826 (2018). In that case, CTA filed an Appeal in August 2017 seeking approximately $2 million in delay, inefficiency, and other costs for impacts occurring between notice to proceed and September 30, 2016. To date, the project is still not complete and the contractor is showing a contract completion date of November 2018, which is over three years late.
Near the close of discovery, the VA moved to stay the Appeal until contract completion on the grounds that until the contract is complete, the full delay impact is unknown.
The CBCA rejected the VA’s motion to stay, noting:
CTA is entitled to try to prove at this juncture that the VA caused compensable delay to activities on the critical path up to and including September 30, 2016, thereby delaying the future completion date. CTA need not wait until contract completion to litigate its delay claim for that completed, discrete period. Indeed, the very thing that defines work on the critical path is that the work has no leeway and must be performed on schedule; otherwise, the entire project will be delayed.
The CBCA further noted that the Suspension of Work clause requires contractors to submit delay claims “as soon as practicable.” Nothing in the FAR requires contractors to wait until contract completion to file a delay claim.
Takeaway:
If a contractor encounters a delay impact, it need not wait until contract completion to submit a delay claim. The process of litigating a delay claim to judgment is surprisingly lengthy and it is often in the contractor’s best interested to get the process started. An added benefit of filing your claim during contract performance is the early accrual of Contract Disputes Act (CDA) interest, which begins to accrue the date your claim is filed. Although the current CDA interest rate of 2.625% is relatively low, given the size of the claim and the length of the dispute, CDA interest can grow to be quite substantial.