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Not So Fast: An REA that Does Not Seek a Final Decision Is Not a CDA Claim

By Steve McBrady, Nicole Owren-Wiest, Charles Baek, Michelle Coleman & John Nakoneczny on March 8, 2021
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In BAE Systems Ordnance Systems, Inc., ASBCA No. 62416 (February 10, 2021), the Armed Services Board of Contract Appeals addressed whether an request for equitable adjustment (REA) constituted a Contract Disputes Act (CDA) claim. BAE submitted a series of REAs that it consistently labeled and characterized as such and certified in accordance with DFARS 252.243-7002, Requests for Equitable Adjustment. Additionally, none of the REAs requested a contracting officer’s (CO) final decision pursuant to the CDA. In response, the CO disagreed with BAE’s request, but did not issue a final decision. BAE responded with further explanations of its position and provided additional information, which it again certified in accordance with DFARS 252.243-7002 (the same REA certification it provided in its initial REAs). BAE, again, did not include the certification required under the CDA or request a final decision. Ultimately, upon their denial, BAE expressly converted the REAs into a claim under the CDA, which it certified in accordance with CDA requirements. BAE subsequently filed an appeal on a deemed denial basis, which the Army moved to dismiss for lack of jurisdiction. The Army argued that BAE’s challenge to the CO’s decision was untimely because BAE’s REAs were actually valid CDA claims. The Board disagreed. The Board traced the history and substance of the parties’ communications and held that the REAs were not CDA claims, because BAE was careful not to expressly or implicitly request a final decision. The Board distinguished the facts from those in Hejran Hejrat Co. Ltd v. United States Army Corps of Engineers, 930 F.3d 1354 (Fed. Cir. 2019), which we reported on here. In Hejran Hejrat,the Federal Circuit was “loath to believe” that the contractor’s year-long exchange had not culminated in an implicit request for a final decision on a claim that had purported to be an REA. Here, on the other hand, BAE intentionally sought to avoid converting its REAs into claims, by “scrupulously refraining from requesting a CO’s final decision.” This decision amplifies the distinctions between an REA and a CDA claim. Contractors who intend to pursue relief through an REA, versus a CDA claim, should diligently avoid requesting a CO’s final decision, or otherwise engage in communications or conduct that could be interpreted as such a request.

Photo of Steve McBrady Steve McBrady

Steve McBrady is a partner and co-chair of Crowell & Moring’s Government Contracts Group. He also serves as a member of the firm’s Finance and Strategic Growth Committees, where he has played a leading role in expanding client service offerings throughout the U.S.…

Steve McBrady is a partner and co-chair of Crowell & Moring’s Government Contracts Group. He also serves as a member of the firm’s Finance and Strategic Growth Committees, where he has played a leading role in expanding client service offerings throughout the U.S., Europe, Asia, and the Middle East.

In recent years, Steve has received the National Law Journal’s “Winning Litigator” award as a lawyer who has “tackled some of the most widely watched cases of the year,” as well as the “D.C. Trailblazer” award, recognizing lawyers who have “made significant marks on the practice.” In 2018, he was named “Government Contracts MVP” by Law360.

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Photo of Nicole Owren-Wiest Nicole Owren-Wiest

Nicole Owren-Wiest is a partner and member of the Steering Committee of Crowell & Moring’s Government Contracts Group in the firm’s Washington, D.C. office. Nicole is nationally ranked by Chambers USA in Government Contracts and a recognized leader in two of the most…

Nicole Owren-Wiest is a partner and member of the Steering Committee of Crowell & Moring’s Government Contracts Group in the firm’s Washington, D.C. office. Nicole is nationally ranked by Chambers USA in Government Contracts and a recognized leader in two of the most complex areas in government contracting: accounting, cost, and pricing, and intellectual property/data rights. With over 20 years’ experience, Nicole has a broad counseling and dispute-resolution practice and leads the Group’s cost accounting practice, which focuses on helping clients navigate the government’s complex cost and pricing rules, including the FAR Part 31 cost principles, the Cost Accounting Standards (CAS), and Truth in Negotiations Act/Truthful Cost or Pricing Data (defective pricing).

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Photo of Charles Baek Charles Baek
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Photo of Michelle Coleman Michelle Coleman

Michelle D. Coleman is a counsel in the Government Contracts Group in Crowell & Moring’s Washington, D.C. office. Michelle advises clients from diverse industries in connection with contract disputes and other government contract matters, including Contract Disputes Act (CDA) claims and requests for…

Michelle D. Coleman is a counsel in the Government Contracts Group in Crowell & Moring’s Washington, D.C. office. Michelle advises clients from diverse industries in connection with contract disputes and other government contract matters, including Contract Disputes Act (CDA) claims and requests for equitable adjustments, fiscal law questions, prime-sub disputes, and bid protests.

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Photo of John Nakoneczny John Nakoneczny

John Nakoneczny is an associate in the Government Contracts Group in Crowell & Moring’s Washington, D.C. office.

John represents and counsels contractors from diverse industries on contract disputes and other government contract matters. Prior to joining Crowell & Moring, he clerked at the…

John Nakoneczny is an associate in the Government Contracts Group in Crowell & Moring’s Washington, D.C. office.

John represents and counsels contractors from diverse industries on contract disputes and other government contract matters. Prior to joining Crowell & Moring, he clerked at the Civilian Board of Contract Appeals, where he supported its judges in resolving and mediating appeals under the Contract Disputes Act. John earned his J.D. from The George Washington University Law School, where he was the president of the Government Contracts Student Association and on the Federal Circuit Bar Journal. While in law school, John served as a legal intern at the U.S. General Services Administration and the Fraud Section of the U.S. Department of Justice, Criminal Division. Upon graduation, John was awarded the President’s Volunteer Service Award.

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  • Posted in:
    Administrative, Corporate Compliance
  • Blog:
    Government Contracts Legal Forum
  • Organization:
    Crowell & Moring LLP
  • Article: View Original Source

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