Michael Payne, Dale Holmes, and Ryan Boonstra of the firm’s government contracting team secured a successful outcome for a military contractor in a $13.1 million claim against the U.S. Army Corps of Engineers over a design build project. The Federal Circuit’s three-judge panel ruled that a failure to state a “sum certain” (a precise claim amount required by the FAR) for a claim is not a jurisdictional error. The Federal Circuit based its decision on the lack of Congressional intent for the sum certain requirement to carry jurisdictional weight and the government’s severe delay in raising its argument that no sum certain was present.
In this case, our client appealed a ruling by the Armed Services Board of Contract Appeals (ASBCA) that granted a government motion to dismiss the case for lack of jurisdiction. The government argued that the underlying claim failed to state a sum certain and that the ASBCA lacked jurisdiction to consider the case. The problem was that the government did not file its motion to dismiss until six years had passed and the parties had engaged in negotiations, an alternative dispute resolution session, a nine-day trial, and were filing post-trial briefs. Not once in any of the earlier proceedings did the government contend that the original claim failed to state a sum certain. Nevertheless, the ASBCA granted the government’s motion to dismiss, and our team appealed to the Court of Appeals for the Federal Circuit.
The Court of Appeals reversed the dismissal by the ASBCA and ruled that the sum certain requirement was non-jurisdictional and its application could be forfeited by the government’s failure to raise the sum certain challenge in a timely manner. The court stated that our case represented a “draconian consequence” of the rule’s old application because the government’s severe delay in raising the issue left the contractor with no avenue to have its case ruled upon or resubmitted in proper form. As the court noted, if the government believes that a claim fails to state a sum certain, the issue is usually raised early and well before the six-year statute of limitations on filing claims expires. Since the government waited well after six years to raise the issue, the court remanded the case to the ASBCA to decide whether the government had waived its right to argue that the ASBCA lacked jurisdiction. Given the wording of the court’s decision and the clear guidance it provides, there is little doubt that the ASBCA will “see the handwriting on the wall” and acknowledge that it was improper to dismiss the case and turn to deciding the case on the merits. This is good news for federal contractors who have faced the application of the sum certain rule by the government at the eleventh hour. If the contractor’s claim truly fails to state a sum certain, that is easily correctable and should not be a reason to deny a contractor a decision on the merits.
If you have any questions about this case or the ruling, please contact Michael Payne at mhp@cohenseglias.com or 267.238.4756.