United States: Federal Circuit Nullifies Sum Certain Contract Disputes Act Jurisdictional Defense

In ECC Int'l Constructors, LLC v. Sec'y of Army, No. 2021-2323, 2023 WL 5355302 (Fed. Cir. Aug. 22, 2023), the U.S. Court of Appeals for the Federal Circuit considered whether the Federal Acquisition Regulation ("FAR") requirement that contract claims submitted to the contracting officer under the Contract Disputes Act ("CDA") state a "sum certain"—i.e., specify the precise dollar amount sought as relief—is jurisdictional. In a resounding victory for contractors, the Federal Circuit held that, although the FAR requirement to state a sum certain remains mandatory for a valid CDA claim, such a requirement is not a prerequisite to a court taking jurisdiction, i.e., considering the merits, and is no longer subject to a Government jurisdictional motion. Moreover, the Government's failure to timely raise lack of sum certain as a defense potentially forfeits its right to challenge this element of a contractor's claim. Importantly, this ruling could mark the first falling domino in what may be the beginning of the end for jurisdictional challenges to CDA claim requirements.

The Claim and Board Proceedings

This claim appeal arose out of a contract awarded by the U.S. Army Corps of Engineers to ECCI in 2010 to design and build a military compound in Afghanistan. After ECCI experienced government-caused delays, it submitted a Request for Equitable Adjustment followed by a claim, which ECCI subsequently appealed to the Armed Services Board of Contract Appeals ("Board") on a deemed denial basis. Six years later, after a series of unsuccessful settlement negotiations, the parties engaged in discovery and held a nine-day hearing on the merits. Three months after the hearing and during post-trial briefing, the Government moved to dismiss ECCI's claim for lack of jurisdiction on the basis that distinct portions of the claim were based on different operative facts, and therefore were actually separate claims, each requiring its own sum certain. In granting the Government's motion to dismiss, the Board found that "ECCI's claim submission to the contracting officer sets forth a bottom line sum certain, but does not set forth sums certain for any of the discrete sub-claims that comprise that submission."¹ ECCI filed a motion for reconsideration, which the Board rejected on July 15, 2021. ECCI appealed to the Federal Circuit.

The Federal Circuit Concluded that the Sum Certain Requirement is Nonjurisdictional

The Federal Circuit provided a framework for examining whether a court or board should consider a rule "jurisdictional" or "non-jurisdictional." The Court, turning to recent decisions by the U.S. Supreme Court,² noted that the word "jurisdictional" concerns the classes of cases a court may hear (i.e., subject-matter jurisdiction) and the persons over whom the court may exercise authority (i.e., personal jurisdiction), while "nonjurisdictional" concerns the requirements for parties to take certain procedural steps at certain specified times (e.g., claim-processing rules). The Court followed the Supreme Court's approach of treating a procedural requirement as jurisdictional only if Congress "clearly states that it is."³

The Court used this framework to consider whether the requirement to state a sum certain in a claim under the CDA is jurisdictional.⁴ The sum certain requirement is not in the CDA text. In fact, the CDA does not define the elements of a claim at all; instead, courts have looked to the Federal Acquisition Regulation ("FAR") for guidance.⁵ The FAR defines a claim as:

Since the FAR, not the CDA, contains the rule, the Federal Circuit held that the sum certain is a nonjurisdictional procedural requirement, because rules outside of the statutory text are not jurisdictional. Nevertheless, the Court maintained that the sum certain requirement remains an important, mandatory requirement for a claim. However, unlike a jurisdictional challenge, which the Government can raise at any time, a nonjurisdictional procedural defect can be forfeited if the Government fails to timely raise it. The Federal Circuit remanded the case to the Board to consider whether the Government forfeited its right to raise a substantive challenge based on the sum certain requirement, and if it did, to consider the merits of ECCI's claim.

Key Takeaways

A Critical Decision: Notwithstanding the Court's advisement that this decision will not impact "the vast majority of cases," it nullified a powerful Government defense to a CDA claim. In light of this and another recent decision, the Federal Circuit appears open to reconsidering longstanding jurisdictional rules.⁷ The Court's reasoning in this decision could extend beyond the sum certain to other claim requirements not expressly stated in the CDA text.

Claims Still Must Demand Payment in a Sum Certain: A contracting officer may still deny a claim for failing to state a sum certain and, if timely challenged by the Government, a board or the Court of Federal Claims may still grant a motion to dismiss an appeal for failure to state a claim. If the Government challenges a deficient sum certain after litigation has progressed, however, a board or the Court of Federal Claims may find that defense forfeited. But even if forfeited, contractors must still substantiate the claimed amount to obtain relief.

Footnotes

1. ECC Int'l Constructors, LLC, ASBCA No. 59586, 21-1 BCA ¶ 37,862 (May 17, 2021).

2. See, e.g., Wilkins v. United States, 143 S. Ct. 870 (2023); Fort Bend Cnty., Tex. v. Davis, 139 S. Ct. 1843 (2019); MOAC Mall Holdings LLC v. Transform Holdco LLC, 143 S. Ct. 927 (2023); Boechler, P.C. v. Comm'r, 142 S. Ct. 1493 (2022).

3. See Boechler, P.C. v. Comm'r, 142 S. Ct. 1493, 1497 (2022) (quoting Arbaugh v. Y & H Corp., 546 U.S. 500, 546 (2006)).

4. See 41 U.S.C. §§ 7101–7109.

5. Securiforce Int'l Am., LLC v. United States, 879 F.3d 1354, 1359 (Fed. Cir. 2018) ("Because the CDA does not define 'claim,' we look to the [FAR] . . . ."); Northrop Grumman Computing Sys., Inc. v. United States, 709 F.3d 1107, 1112 (Fed. Cir. 2013) (explaining that "[t]he CDA establishes some prerequisites for a valid claim," such as that it be in writing, but the court assesses "whether a claim is valid based on the [FAR], the language of the contract in dispute, and the facts of the case"); Reflectone, Inc. v. Dalton, 60 F.3d 1572, 1575 (Fed. Cir. 1995) (en banc) ("[T]he CDA itself does not define the term 'claim.'").

6. FAR 2.101 (emphasis added).

7. See, e.g., M.R. Pittman Grp. LLC v. United States, 68 F.4th 1275 (Fed. Cir. 2023) (determining that the Blue & Gold waiver rule regarding solicitation challenges is not jurisdictional).

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