Weasel words: “Words or statements that are intentionally ambiguous or misleading.” Concise Oxford English Dictionary 1635 (11th ed. rev. 2008).
The Armed Services Board of Contract Appeals (ASBCA) recently dismissed in part Odyssey International, Inc.’s appeal of a government contracts claim for consequential damages because the contractor failed to seek a “sum certain.” Instead, the contractor claimed “at least $15,033,862” (Odyssey International, Inc., ASBCA No. 62062, Jan. 28, 2020 (emphasis added)). Those weasel words doomed that part of the claim.
What happened?
Odyssey contracted with the U.S. Army Corps of Engineers (the “agency”) to construct an Army depot building. Odyssey determined the building foundation design was unworkable and prepared a revised, more expensive design that was approved, but the agency withheld permission to proceed until a contract modification was executed. The contract modification never came, but two different contracting officer’s representatives gave instructions to proceed with the new foundation work. The agency then cancelled the proposed contract change and stated that it would only pay Odyssey for some of the extra costs incurred. Odyssey submitted a claim of $651,099 to the contracting officer for additional time, subcontract costs, and extended overhead. The contracting officer denied the claim, and Odyssey appealed to the ASBCA.
By way of background, as defined in the Federal Acquisition Regulation, a “[c]laim means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract” (FAR 2.101 (emphasis added)).
In its complaint at the ASBCA, among other arguments, Odyssey sought damages of “at least $15,033,862” under a consequential damages theory. The agency moved for dismissal of that aspect of the claim appeal, arguing that it was speculative, failed to state a sum certain, and had not been previously presented to the contracting officer for a decision.
The ASBCA granted the agency’s motion to dismiss in part, stating, “The [ASBCA] has long held that qualifications to a numerical amount, such as the use of the word ‘approximately,’ ‘no less than,’ or ‘well over’ prevent its consideration as a sum certain… In fact, [ASBCA] precedent has specifically held that a claim amount prefaced by the specific phrase ‘at least’ fails to state a sum certain.” Alternatively, the ASBCA held that the allegation was a new claim that had not previously been presented to the contracting officer, which also warranted dismissal.
What is the takeaway?
When submitting a claim and, if necessary, a subsequent appeal, the contractor must be specific as to the amount claimed or else risk having some or all of the claim dismissed for failing to state a sum certain.