REAs, Claims, and CDA Claims Litigation: A Primer

I guess, Maria, I should get started. Yeah. I think probably, generally, I think a minute gives Zoom a lot enough time to let it filter in. Perfect. So, good afternoon, everyone, and welcome to GovSpan's educational webinar series. AI name is Artisha Meehan, and I am the head of federal public sector at GovSpan. GovSpan, as you all know, is a trusted source of data analytics and insight for organizations buying and selling into the public sector. Maria, maybe the next slide. And today's agenda is really gonna be a quick introduction. We're gonna get into the presentation. And, I'm gonna request everyone to please ask use the q and a feature to ask questions, so that way we can go ahead and answer all the questions. Typically, we do that, Maria, at the end of the webinar. Do we just wanna stick to that? Yeah. I I like to try to take them as they come in if I can, but I AI to leave a little bit of time at the end. But, obviously, how many we get and how many people are attending today. Okay. Perfect. And then, next slide. And, for everyone, today's webinar is on aria REA's claims and CDA claims litigation with Maria Panicelli, a partner in MacArthur and English LLP's government contracts group and a good good friend. So just AI you know, quickly, for those who don't know, the federal solution for GovSpan is AI, which is really focused on providing accurate federal intelligence by integrating more than eighteen datasets into a world, in and give you that intelligence and into the world of, government contracting. A SLED solution provides relevant intelligence using the spending contract, contact, and the data directly from thousands of state, local, and educational agencies. And, also, for those who might know or are interested, we have recently launched a new module, meeting intelligence, which actually uses a lot of cool, AI functionality to transcribe countless agency meetings to provide, really interesting insights into your inbox. Next slide. Just quickly about AI and all our datasets that we basically are putting, you know, integrating data from. And, you know, the FedMiner organization was really formed in two thousand four, and we are now part of GovSpan. So, really, the idea is to have one data source for all our clients for FedSled and now meeting intelligence. Next slide, please. And I think so. AI, I'm gonna, answer this question, which is really will the slides be distributed at the end to the participants? Yes. Within twenty four hours of, of, of the webinar today. So, hopefully, by tomorrow, please stay tuned for an email with a link to the webinar and the presentation. And just, so today, I am really happy to have Maria Panicelli. I was just telling her that every time I sit through a presentation that she does, I always come out learning something. For those who don't know Maria, she is a partner in MacArthur and English LLP's government contracts group and a good friend. Her clients include primes and subs working with a variety of agencies across a wide breadth of industries all over the nation and abroad, and she basically helps these clients navigate every stage of the procurement process. Maria understands the unique challenges involved in government contracting and small business procurement and is proficient in interpreting and applying the FARS, DFARS, WAR, GSARs, etcetera, as well as the small business regulations in furtherance of her AI' goals. Her practice includes bid protests, contract interpretation, and performance counseling, the preparation and negotiation of REAs and CDA claims, gonna do a primer on that today as well as related litigation before the boards of contract appeals, the court of federal claims, and the federal circuit, statutory and regulatory compliance counseling, federal subcontracting, liquidate liquidation of pass through claims, Miller Act claims, subprime disputes, contract terminations, and suspensions and debarments. She's also has a lot substantial experience with the government small business programs and provides effective assistance to eight a, HUBZones, BOSB, SDVOSBs, and WOSB, EDWOSB clients seeking to obtain or maintain small business eligibility. Maria's clients enjoy practical and shrewd advice as well as z list advocacy and bid protest litigation, claims prosecution, and false claims act, defense. So and in addition to all of this, I am always impressed by how active Maria is through you know, with a number of, industry related professional associations. She's a frequent lecturer. She is a thought leader and is an author on government contracting and small business procurement topics. So I'm really, really looking forward to today's session and learning more about REAs and claims. And, Maria, thank you so much for being here, and, the floor is yours. Thank you so much for that lovely introduction and, for calling me a friend. I'm I'm quite honored by that. And thanks obviously to, you know, you guys to hosting and last but not least for everyone joining us out there today. As, you just heard, I'm a partner at the firm of McCarter in English, which is a full service law firm. But my group, the government contracts group, is kind of a a core group of individuals that focus exclusively on federal procurement. So unlike some other lawyers out there who kinda dabble in government contracts because it's part of what their clients are involved in, our practice is all day, everyday government contracts. And a a big part of my practice in particular is what we're gonna be talking about today, which is request for equitable adjustment, aka REAs, claims, and then CDA, which stands for contract disputes act claims litigation. My aim today is gonna be a lot of information contained in here because this is a kind of a a big sprawling topic. So your goal today should not be to memorize everything you hear, but rather and I say this when I I present on bid protests as well. But rather, my goal is always to kind of give you an overview and a lay of the land so that you can kinda spot where the the issues can pop up and kinda get a sense if, you know, hopefully, of of what you do when they pop up. But at a minimum, just remember, hey. This is one of those issues that Maria talked about. This is what I need to seek guidance from, you know, people in my company, from our legal department, or from outside counsel, you know, whatever the case may be. I won't build belabor the point on who I am. I think I've already covered it and, also was covered in my lovely introduction. Thanks again for that. But you will also get my contact information at the end. So if we've got questions that you, you know, we we don't get to today, there's a lot of you joining us, today, Or if you just don't like asking questions in a public forum or if the question doesn't occur to you until after we wrap up, in any of those cases or any other case, feel free to reach out to me. You've got my phone number, my email, and my social media information. Again, you will see the slide at the end of the presentation, and you will be caught getting a copy of the slides. So our agenda for today, we're gonna start with, you know, what are REAs and claims? You know, what what do they allow you to do? We're then gonna move into, you know, how are they the same as each other and how are they different. And based on those differences, when might it be appropriate to use which strategy? We're gonna talk a little bit about pass through claims, and then we're gonna AI give an introduction to, you know, once you get past the claim itself stage, what happens if you've got to proceed to claims litigation. And I'm gonna give you kind of a a smattering or a little taste of some common government defenses in the hopes that that will help you kind of prepare in advance and, you know, a stitch in time saves nine type of approach, where if you kinda know what defenses might be brought up against you, you can kinda prepare in advance and make sure that you don't give the government those defenses, you know, how to avoid those things upfront. So with that, first things first, what are REAs and claims? And, again, REA stands for request for equitable adjustment. Both of these are are tools that contractors can use, basically asking the government based on various things that could have happened during performance of a contract for an adjustment to that contract, usually in the form of either additional time or additional money or both. There are some other cases where you're gonna be asking for something different. You know, for example, if you're trying to challenge an unjustified CPARS evaluation, you might be asking for some sort of declaratory relief. But the vast majority of REAs and claims are going to be, hey. You know, for this reason, I need the contract price adjusted upwards to, you know, whatever. Or, hey. For this reason, I need the contract duration or the the period of performance adjusted to, you know, whatever. I need an extra month. I need an extra million dollars. And and that's what you're going to be doing. You can do that through an REA or you can do that through a claim, and we're gonna talk about, you know, the differences and the similarities and why you use, you know, each or or where it's appropriate to use each. One thing to be aware of, especially for for those of you out there who might be newer to government contracting or maybe are not newer to government contracting but are newer to dealing with issues that pop up during the contract that might necessitate an REA or a claim, Especially if you're used to dealing with, you know, contracts in other contexts, state or local, type contracts or AI or commercial contracts, you might be used to a system where usually, you know, if something goes wrong, you file a breach of contract complaint in either your local u United States federal district court, that's the trial level for the the federal system, or in your local state trial level court. And it's usually, like I said, a a breach of contract claim. That's not the way it works when you're going against the federal government. There's a very specific set of procedures you need to use. You need to go through kind of a process before you even get to that complaint stage. You know, in in other contexts, usually, that complaint that's being filed with the court is is step one. Maybe there was a strongly worded letter or a threatening phone call before that saying, hey. If you don't get your act together, we're gonna sue you. Or if you don't pay us, we're gonna sue you. Or if you don't, you know, stop encroaching on my land or or whatever the case may be, I'm gonna sue you. In the federal government context, there is a whole lot of back and forth and a whole administrative process that you go through with the agency itself before you go to a judicial body. And then when you go to a judicial body, you have to go to certain ones, and you have to kind of structure your complaint in a certain way. It's not usually a breach of contract action. So you've gotta keep in mind that there's this unusual process that you have to go through, and REAs and and to an even greater extent, claims are part of that process. And we're gonna talk about all of that in more detail as we move forward. But both of these, REAs and claims, are basically dispute resolution mechanisms. You are in both cases even though only REA has, you know, the the word equitable adjustment in the name. Remember, that's what the EA stands for. But they are both ways of requesting an adjustment to the contract. You know, an REA has it in its name, but the is that first administrative remedy step that we talked about in terms of exhaustion of administrative remedies. So they are both tools that kinda get you to the same place. It's just a question of figuring out which tool might work better for you in your specific contract. So remember AI just said, you know, when you gotta exhaust certain administrative remedies when you're going against the government and you also have to go to specific courts and then you've got to kind of structure your complaint in a specific way. A lot of that has to do with the fact that the legal basis for your REA or your claim you know, in other words, what gives you entitlement to say, hey. I deserve more money, or, hey. I deserve more time. So, hey. You know, mister or missus contracting officer, please adjust this contract to increase the price or to increase the period of duration. Those are going to be based on far clauses that are in your contract. So, you know, it's going to be specific to your contract and the clauses that are in your contract. When you are talking about the FAR, FAR parts one through fifty one are generally in instructions to, you know, contracting officers, to the the contractors about how to go about, you know, competing for, performing, administering contracts. But all of those parts have references to FAR part fifty two, which is all of the clauses that are, when appropriate, inserted into federal contracts. So if you look at FAR part fifty two, you'll often see, you know, a little line up top that says as per, and then it cites another section of the FAR somewhere in one through fifty one, you know, the the following clause reads, and then you've got the whole clause. Well, if you you go to the the citation where it says as per, you know, whatever, that's the the instruction section that's gonna say, hey. This clause should be inserted into contract when. And it might be, you know, when it's a firm fixed price contract above whatever level or when it's a cost reimbursable contract for this agency or, you know, of this nature, whatever the the case may be. But the clauses that are in contracts are specific to those contracts. There is, you know, a very rigid system in terms of when, what clauses go into what contract. So you're always gonna need to look at your contract, what clauses you have, how they govern the issues that are at play. And we're gonna talk about those types of issues and and where you look in just a minute. But you're gonna be looking at the the FAR specific or the the specific FAR clauses in your contract for your entitlement for the the legal basis for you to ask for more time or more money. And then the process by which you submit your REA or your claim, the process by which you ask for that money that you're entitled to is laid out both in the FAR, specifically in subpart thirty three point two, and in the contract Disputes Act, that CBA that I mentioned before, the CBA claims litigation, Contract Disputes Act. One of the big important clauses in the FAR, and you can see it's a a fifty two number, like I said, part fifty two is where all the clauses live, is the disputes clause itself. That's going to be kind of your starting point or your gateway to, you know, how are you going to to, you know, establish a claim or or go about filing a claim. But it's going to be used in conjunction with all the other sections of the FAR that entitle you to the money and FAR subpart thirty three as well as the contract disputes act. Alright. I've got a question about tools being used by the subcontractor where the prime is not paying the sub. So for right now, we're talking about the the prime contractor. We're gonna get to what are called pass through claims and how subcontractors deal with things in just a little bit. But the AI of a a preview or spoiler alert, in terms of when we get there, subcontractors cannot go directly after the the I'm sorry, after the government. They can cooperate with the prime government or I'm sorry. I can't talk today. Cooperate with the prime contractor to go after the government, or they can sue the the prime contractor in a subcontractor AI contractor dispute. But REAs and claims are the tools that primes use to go after the government for additional time or additional money on their behalf and or on the behalf of their subcontractors. Alright. So some of the common bases for claims or REAs, things that have arisen, things that have gone wrong, you know, unanticipated events that have occurred while performing contract changes is gonna be the biggest one. You've got several different versions of the changes clause in the FAR. Again, which version is in your contract is going to depend on what type of contract you have. So you're always gonna wanna check your specific contract to see what's in there. There can be express changes where the government, you know, issues a modification and tells you to do something or says that they're thinking of of making a change and asks you to put together a proposal. But there can also be constructive or implied in in some cases, in some version of the changes clause where the government basically says, you know, they don't call it a change, but they direct you to change the work in such a way that's gonna take take more time or more money. And in that case, you can file an REA. Defective specifications, different site conditions, delays, and other time related issues AI disruption, inefficiency, suspension, acceleration, which are all themselves separate things. A lot of times, contractors kind of use the term delay to encompass all of that, but they are, in fact, different conceptual things. Again, CPARS, I mentioned this before, if you get an unjustified CPARS and you're trying to get declaratory relief, terminations, if you were improperly terminated for default and you're trying to convert that to a t for c, termination for convenience instead so that you can get, some more money, get the the black mark removed, and and not be on the hook for procurement costs if they reprocure. These are all some of the the common bases for claims. This is not an exhaustive list. There are any number of things that can go wrong or, you know, issues that can arise or unanticipated events that can occur. You know, obviously, COVID several years ago is a big one that, you know, AI of falls into the delay category but could have had other repercussions that aren't in one of these categories per se. So it's always going to be about trying to identify what has happened that has cost you more time you know, cost you more money or, you know, caused you to experience a delay. Realizing or or trying to tie it back to which far clauses relate to that issue. Is it the the changes clause? Is it the, you know, differing AI conditions clause? And some of the time, you need to be careful and you need to talk to someone who's familiar with these types of claims because, for example, defective specs is usually under the changes clause. Delays could be under the changes clause, could be under the different site condition clause, could be under another clause. Usually, it's gonna be you're gonna have to trace it all the way back to what the source of the delay is. Was it because of a defective specification? Was it because of a change? Was it because of a termination? Was it because of COVID? You know, was it because of another act of God? Was it because of the weather? You're going to have to understand kind of where the the source is and be able to associate that with a specific far clause to figure out where your entitlement lies. Because, again, remember, your entitlement to the additional time or the additional money is far clause specific. So let's talk about the differences between REAs and claims and, you know, when you might wanna use each. Generally speaking, as a a general overview summary, REAs are a lot less formal than a claim. They are still considered a creature of contract administration. In other words, the FAR kind of contemplates that things are gonna happen that might not have been anticipated during performance, and it kind of anticipates and contemplates this process by which the the government and the contractor go back and forth and say, hey. You know, this happened, so I I need some additional time or I need some additional money. Here's how much I need. And the government goes, alright. Yeah. That makes sense. And I see your point here, but maybe not here. Let's negotiate on that point. And, ultimately, you end up with a a modification where, you know, you get the additional time or additional money or a portion thereof, whatever you've negotiated. When you get to the claim stage, you're you're kind of past the point of contract administration. You you might not have been able to reach a resolution at the negotiation stage. The party's positions might be a little bit more fixed. And the biggest thing here is that it's now a formal request for relief that is that first step in the exhaustion of administrative remedies. Remember I said you can't just start at a court. You can't just file a breach of contract claim at your local state or or United States district court if you're dealing with the federal government. You have to exhaust your administrative remedies first, which specifically in this context means you need to file a claim. So if you file an REA, it's not gonna trigger that. It's not gonna be an exhaustion of administrative remedy. And we're gonna get to kind of what that means in terms of strategy in just a little bit. Certification is another big difference. Certification is required for all claims over a hundred thousand dollars. You do not need to AI, an REA unless it's to a Department of Defense agency and it's over the simplified acquisition threshold. Be careful that you are looking in the right place for your certification language. The language for an REA certification is not the same as a language for claim certification, and contractors make that mistake often. In terms of when to submit, your statute of limitations on a claim is six years from claim accrual. You're gonna wanna provide notice before that. REAs are a little bit more squishy. You you know, you need to get them in before closeout, but you need to, you know, subject to the FAR provisions that you are dealing with, you know, the FAR provisions that provide you with your entitlement. You need to be looking at those to figure out if there are advanced notice requirements, you know, when you might need to get notice in. But, obviously, the the sooner you're going to be able to let the government know that something's coming, the safer you're going to be. Remember I said that claims are more formal? It's the first step in the exhaustion of the administrative remedies. Well, the kind of the corollary of that is that because they're more formal, they also trigger a more formal requirement for the government to respond. An REA does not trigger anything for the government. The government could technically ignore an REA forever if they wanted to. If they get a claim, if an agency gets a claim, they are required to review the the claim, review the facts and the claim, secure assistance from the legal department or any other departments that are necessary. Basically, they're supposed to coordinate across departments and then prepare what's called the COFD, a contracting officer's final decision. They are supposed to do that within if the claim is under a hundred thousand dollars, sixty days. If the claim is over a hundred thousand dollars, they're still supposed to do it within sixty days, but the caveat is they can just ask for more time within sixty days. Where the real teeth come in is that the agency is supposed to answer within a reasonable time. So they have to answer really even though they're supposed to answer within sixty days, there's, you know, kind of an exception that swallows the rule. The real idea is that they are required to answer within a reasonable time. Reasonable is going to be different depending on how complex the claim is, how big, you know, the the the claim in in terms of dollar amount is, and other things like that. In terms of the format, there's not really a a magic format for for either of these, an REA or a claim. They're generally gonna take the form of a letter with supporting exhibits. Whether you are doing an REA or a claim, really, the key to success is to provide the best and most thorough explanation of facts you can that shows why you are, under the clause in your contract, entitled to compensation either in the AI you know, in the the compensation you want, extra time, extra money, declaratory relief, you know, a conversion of your termination, whatever the case may be. You are going to want to make sure, especially in a claim, that you are doing a lot of that tying it back to the clause in your contract and having more of the legal argument in there. REAs look. Ideally, you've got the legal argument in there. But oftentimes, REAs, especially if contractors choose to do them themselves before kind of bringing in, especially outside counsel, they might be a little bit more fact based. And we'll talk about some strategies for, you know, when you should bring in counsel depending on your preferences in in just a little bit. When you are doing a claim, though, remember that I said the government's got sixty days? Well, technically speaking, they've got sixty days if you ask for a decision within sixty days. So some best practice stuff is always just to throw language in there saying that this is a claim to which you expect a response within sixty days, in which you respectfully request a response within sixty days, and that you do want a contracting officer's final decision. That's just gonna make it, you know, very solid belts and suspenders that you are are asking for a response within the the sixty days. One other thing to keep in mind, and this is kind of goes to the strategy of when you want to bring an attorney in and how early. When you prepare an REA, those costs are recoverable because this is still considered a contract administration matter. So if you hire someone like me to help you prepare an REA, you can add the costs that you pay me, you know, the reasonable costs that you pay me, in addition to an accountant or some other sort of consultant that's necessary or internal costs if it's taking some of your people away from other work they could be doing. That can all get wrapped up and included in the REA you submit as some of the money you are asking for. If you hire someone like me to prepare a claim, the costs are not recoverable. You're now kind of advancing towards litigation. Government's not gonna pay for your litigation costs. So what a lot of people do is they hire an attorney, you know, to to help prepare the REA. And then later, if the REA is not successful, they convert it to a claim. So that AI leads us to our next point. You know? Given the the differences in these two strategies, what do you choose? The claim, remember, is the only way to exhaust administrative remedies. So, ultimately, if you are not able to get the government to agree to give you time or money and you're gonna have to go to court, you're gonna have to file a claim first. And you can start with a claim. You can just say, hey. I I wanna streamline this process. I'm filing a claim. You have no obligation to do an REA first, but a lot of people do do an REA first, a, because it doesn't preclude the later filing of a claim. It's not either or. It can later be converted to a claim. If you do it that way, you know, and if you you kind of incur the bulk of the legal costs at the REA stage, you can seek those costs as part of your recovery. And oftentimes, it's nice to kinda start off with a less aggressive stance. At least that's the way contractors view it oftentimes. So you're gonna wanna talk with your attorney about, you know, strategy and select. Do we wanna start with an REA? Do we wanna start with a claim? Obviously, if you're running up against that statute of limitations, the six years for a claim, you might not wanna dilly dally with an REA first. Filing an REA does not toll the statute of limitations. But, you know, based on the recovery of cost issue that we just talked about where you can recover REA costs but not claim costs, that might be a consideration. But, also, don't don't think that once you're at the claim stage, you can't settle. It's not as though even though the REA is is more considered, okay. Now we're negotiating. We're trying to reach an agreement. You can still do that after a claim. So, you know, it's not like settlement or or resolution is off the table once you file a claim. But, again, just just talk to your attorney, go through these strategies, figure out what makes sense for you. I have plenty of clients that AI starting with REAs. I have other clients that, you know, say, look. The government's not gonna answer an REA. I need to take a stronger stance than that. I don't wanna waste time. We're starting with a claim right away. Either is a perfectly valid business decision. Obviously, the real thing you need to keep your eye on is statute of limitations and, obviously, keep in keep in mind the cost issue. But other than that, you've got a lot of leeway. This is going back to the the one question I got in terms of subcontractors, and I kind of alluded to this before, but just to hit it in in full detail. There is something called sovereign immunity, which is a general bar of lawsuits against the United States. So the general rule is you cannot sue the United States government. Now there are obviously exceptions to that. You know, in addition to, like, civil rights violations and things like that, there's a big exception for people who have a contract or companies that have a contract with the government because, obviously, what person in their right mind would ever enter into a contract with a party that they can't sue if something goes wrong. So there is a waiver of sovereign immunity under that lovely contract disputes act that we've been talking about and also something called the Tucker Act, which says that, you know, if you've got a contract with the government, sure, then, you know, that's an exception to the rule. You can sue them. But, obviously, that only applies to the prime contractor. Right? That's only the the party that actually has a direct contract with the government. So if you are a subcontractor, you do not have a contract with the government. You have a contract with the prime who in turn has their contract with the government. You cannot take advantage of the Contract Disputes Act and the Tucker Act exception to sovereign immunity. You are subject to the general rule, not the exception, and you cannot sue the federal government. You also cannot lien the the property in federal government. So you need to have a a relationship with your prime where they, quote, unquote, sponsor or more commonly pass through, that's why they're called pass through claims, your claim. Now this is a little outside the the, you know, pure topic today, but this is a big issue in subcontracting that you need to work out. You know, it's a common cause of subprime conflict and of tension between the parties. If there is an issue and it's you know, the government is responsible, you need to have something in your subcontract about how you are going to cooperate to get that money, how you're gonna cooperate to put together an REA or a claim. The sub's gonna be concerned about, well, you know, if the prime won't sponsor or pass through my claim, I'm kinda without remedy other than suing the prime. The prime's gonna be concerned about, alright. I need the sub's cooperation to be able to successfully prosecute an REA or a claim against the the government. But, also, I don't want the sub suing me and nipping at my heels while I'm already fighting an upstream battle. So this is things these are things, excuse me, that you need to address in a subcontract. And if you ultimately do put together a pass through claim, there's a separate agreement that is, you know, best practices to execute called a liquidating agreement that actually governs, you know, attorney's fees and apportionment and, you know, settlement power and appeal power and all of those things that the parties should execute. But for now, kind of leaving the the little tangent over to subcontract land, which, obviously, I also do a lot of, and going back to the the main topic today of REAs and claims, I bring this up because it's very important for subs and primes to be talking about this. From a subcontract point of view, you need to make sure you're letting your prime know if you've got a potential REA or claim and you need to do it ASAP. You don't wanna go to them sounding like a complainer or, you know, making it their problem. You wanna go in a solutions oriented mindset and with that type of approach, but you need to be transparent even about when things go wrong. Because a lot of AI, the prime needs to give the government notice in order for the entitlement to kick in. And if you do, what would be a very nice and responsible thing to do in terms of just general common sense, which is, AI, I don't wanna tell them about it until we've solved it and we've already fixed it. And then I'll tell them, hey. By the way, this problem came up, but it's been taken care of. But, unfortunately, this is one of those areas where common sense and law do not necessarily, overlap, and you're gonna want to go as a subcontractor to your prime and let them know when something is coming up ASAP, so that you can make sure they're providing appropriate notice, and then you are cooperating on an RA or a claim. From a prime contractor's point of view, if you know that there are issues on the job, you need to make sure before you submit an REA or a claim, you talk to your subs and you are including whatever money they might need. You know, if you are saying, hey. There was a big delay because of this differing site condition, and we're gonna put together a two million dollar claim that also asks for an additional six months, talk to your subs. See if you need to add to that number or that time because once you know, let's let's say things go great and the government turns around and goes, yep. No problem. We we completely agree. Here's a modification for the two million and the six, you know, months you asked for. You sign that, and then your sub comes and says, oh, I also had another half million dollars in damages for that. You you're you're gonna have to finance that. You know? You've you've gotten what you're gonna get from the government, at least if you signed a a modification that had a waiver, which we're gonna talk about a little bit So this is something to address, you know, amongst yourselves, amongst the primes and the subs when you are talking about REAs and claims. You know, REA or for subs, keep your primes in the loop about if they're gonna have to sponsor or pass through a claim. Tell them about problems ASAP. Primes, be asking your your subs if anything's going on. And if you already know you're gonna be preparing an REA claim, check with the subs to see if they need to add into it. The other thing to keep in mind, and this is a big one for small business contractors in particular, the disputes clause requires the prime to keep working even if there's a change or whatever the case may be. If there's a dispute about the work or about whether you should be getting paid more for the work or be given extra time, you have the right to pursue an REA or a claim. But in the meantime, unless you are told to stop, there is a suspension of work, you have to keep going. So do not make the mistake of, hey. You know, there was a change. I think I'm owed an additional two million dollars and additional six months. I filed an REA, but until they agree and issue a mod, I'm not doing anything. You will be terminated for default, and the government will be within its rights to do so. Unfortunately, when you work with the federal government, you kinda have to do things on spec when they tell you to. And if you think you're entitled to additional time or additional money, you need to, in a parallel proceeding, this REA or claims track that we're talking about, be seeking the money on the back end, but you need to perform in the meantime. So, again, hopping back over to our tangential subcontract area, that is something as a prime contractor you need to pass through to your subs. Subcontractors, that is something as a sub you need to realize if the prime is passing down to you. And if that is not something you can handle, if you can't self finance work while you're going through a long process to get money back from the government, you have to push back against that or you have to walk away. So be aware that this is a big thing too. Those are all things you need to keep in mind, you know, when you're doing an REA or a claim, coordination between primes and subs, and the continuation of the work in a parallel track in the meantime. Like I said, some pretty negative consequences if you don't do that, including termination for default, and, you know, really bad marks and inability to get jobs going forward. Alright. So with that, let's move into the CDA claims litigation piece. Now remember, I said you can't just go to court. You can't start at court or start after, you know, a strongly worded letter. You have to have filed a claim first. And then and only then can you, after waiting for a response from the government, proceed to actual claims litigation. Now, look. Ideally, you either issued an REA or submitted an REA and got paid, got what you wanted, or you submitted a claim. And when the government responded, you got what you wanted. But if you didn't, if you have to proceed to litigation, this is what we're gonna talk about now. So you've submitted your claim and, you know, you're waiting on the government response or you you get the government response. There are two things that you can appeal. If you get a COFD, a contracting officer's final decision, that is your response to your claim, that denies your claim in whole or in part. It did not give you got a response from the government, but it was not the response you hoped for. It did not give you what you wanted. You can appeal that, and we're gonna talk about where in just a little bit. The other thing that you can appeal is something called a deemed denial. Now remember AI said if you submit a claim, the government has to respond. It actually triggers a response from them. Triggers the obligation to respond, I should say. Remember AI said sixty days, but that's not a real rule because there's a big exception that swallows the rule that if they ask for more time, they get it. But the teeth, the real rule is within a reasonable time. But if you have submitted your claim and you have waited a reasonable time and you have not gotten it, you can say, hey. Look. That's as good as a denial. Justice deferred is justice denied. Right? The idea is, okay. You've waited more than a reasonable time. The government hasn't answered. That's the same as a denial. You can appeal that as well. And, again, this is just going to the timing in terms of what a deep denial is. These are the regulations, you know, the actual FAR section that deals with when the government needs to respond. The real teeth come in d where it says a reasonable time. Now, again, reasonable time is squishy. It doesn't say it's six months or it's nine months or it's a year. It's going to depend based on how big your claim is, what you submitted in the first place, how much documentation there is. But the bottom line is talk to your lawyer. They're gonna be able to tell you, hey. Look. You're probably, you know, you're probably still within what the courts would say is a reasonable AI, or no. You're clearly outside of what, you know, a reasonable time would be. You can go ahead and and, you know, try to initiate litigation at this point. Worst case scenario, if you kinda jump the gun, you you look inexperienced. You you look a little foolish. You might be a little chagrined, but it's not like you lose your ability. Most of the time, it's just stayed, or basically put on pause to see if the government will respond. So, you know, the consequences of of jumping the gun and and filing a deemed denial too soon are are not that big. Real quick note on the causes of action. Like I said, you're usually you're probably used to, in other contexts, having, you know, the the complaints you file be breach of contract, that's not generally what you're gonna see here. You might sometimes see breach of contract. You might more often see breach of good faith and fair dealing. But the way that the law is set up here again, remember, it's unusual. They're unusual causes of action. What you are really doing is exercising your statutory and regulatory right under the contract disputes act and the FAR, respectively, to have a judicial review of the agency's opinion. So it's not that the contract was breached. It's that you have a AI, given the far clauses, to have, you know, the the government, the agency, give you more time or more money. And if they don't agree with that, you have a right to say, hey, judge. Can you come in and just, you know, double check this? Do you agree or do you not agree? So it's not a breach of contract action usually. Usually, in this in the government contracts context, it's only a breach of contract. You only see a breach of contract count in a complaint if there's some sort of egregious behavior on behalf of the government. But what you will see is just, you know, basically different site condition or change or delay, things that don't seem like causes of action, but they are because you're asking for a statutory or AI sorry. You're you're exercising your statutory and regulatory right to have a judge review the agency's decision or, you know, in the case of a deemed denial, lack thereof on your claim. For that reason, the vernacular, the terminology you use is also a little different. Most of you are probably using are, you know, used to hearing the word, quote, unquote, appeal. After you get a decision at the trial level, you then go to the appellate court. Right? You you file your complaint. It's a breach of contract action. You're at the state court, trial level or the district court, which is the federal court trial level. And then once you get the decision, either side can appeal. Here, even when you are first going to court, your complaint is itself a, quote, unquote, appeal from the claims decision. So you start hearing the word appeal a lot earlier. Don't let that confuse you. It's basically just you know, it's because you're appealing the administrative stuff. You know, your initial complaint involves an appeal. You're not all the way at the appellate level yet, which is, I know, confusing. In terms of where you can appeal, where you end up filing your first complaint, you know, after you've gone through the administrative process and you've actually gone through filing a claim with the agency and you've either gotten your COOFD denying your claim or they haven't answered and you're going after a deemed denial, you can go one of two places. You can go to the United States Court of Federal Claims, otherwise known as COFC or COFC. That is the equivalent of AI States district court. It's a trial level court, but it is subject matter based jurisdiction. They hear government contracts claims amongst other things. It's not, like, geographic AI the other district courts are. The other place that you can go are the boards of contract appeals. Those are specific administrative law courts set up for government contract appeals, basically. And generally speaking, you know, those of us who practice, if we're talking about everything, will kind of improperly refer to them as, like, a court to just say, like, you're appealing to the courts, but they're the equivalent of a of a court. And it's, again, the the trial level, and they're government contract specific. If you are appealing there and you actually got a COFD, you've got ninety days. You've got longer. You've got twelve months. You got a year to go to the court of federal claims. Obviously, again, if you actually got a COFD. If it's a deemed denial, it's kinda up to you when you file. Right? You gotta make sure it's within a you know, you you pass the reasonable time marker and you're within your statute of limitations marker. Those are basically the clocks you need to keep your eye on. But if it's a COFD, your clock is ticking. You have ninety days. You have twelve months depending on where you're gonna go. The only other exception I would draw your attention to is those of you who do business with the Navy. There are certain limited circumstances where your claim might actually be subject to maritime law, which means that you can still go to the boards of contract appeals, but you can't go to the court of federal claims. It'll get moved over to a district court, or you should file in the pro in the first place in a district court. That's a pretty complicated wrinkle, and it happens it's it's fairly uncommon. But if you do business with the navy, it is something to to look at right away when you get your COFD so that you can determine, you know, would we have to go to the court of federal claims, or would we have to go to the district court? And, you know, based on that, do we wanna just kind of make it easy and go to the boards of contract appeal? The things that you need to think about and talk about with your lawyer in deciding where you wanna go, which forum is best, the size of the dispute, cost of litigation. Generally speaking, COFC is gonna be more expensive than the board of contract appeals for a variety of reasons. The complexity of issues, how GovCon specific they are, you cannot be a judge in a federal court without being brilliant. But you can be a judge, at the the court of federal claims without having contract experience. The judges there can be drawn from government contracting, can be drawn from kind of patent stuff or or tax stuff because those are the other things that that court does. So you do sometimes have brilliant judges that nonetheless do not have experience in government contracting, and so you spend a lot of time and some of your page limits, explaining government contracts stuff, which a lot of them understand, but it's a it it's a little bit of an inconvenience. Actually, all of them understand. Eventually, they're, like I said, brilliant. They're they're judges. But, when you go to the boards of contract appeal, they are people who, when they practiced and before they were judges, they were government contract attorneys. A lot of times on the government side, so you have to deal with the fact that they're more inclined to see things the government way sometimes, but they do have that base knowledge. So those are things that are are worth thinking about. You also wanna think about who's going to be on the other side. If you are going to the board of contract appeals, the lawyer that's going to be representing the government is the agency counsel, so the core of engineers counsel or the VA counsel or the GSA counsel. If you go to the court of federal claims, they are going to be working under a department of justice attorney. It's gonna be the DOJ that is on the other side of the table. So sometimes that's a good thing. Sometimes that's a bad thing. You need to talk about that with your attorney. There is a difference in terms of the level of formality, especially when it comes to discovery. Again, maybe the the the boards are going to be less formal. That's going to result in, you know, a a lower cost and especially with regard to discovery, a lower cost. You're also just gonna wanna talk to your attorney about, you know, okay. What are the the current litigation times running? Sometimes there's a bigger log jam in the court of federal claims and things taking a really long time to to litigate there. Sometimes that's moving quicker or at least appears to be moving quicker than the the boards of contract appeals because they've gotten jammed up. So talk to your attorney about, you know, hey. How long is litigation expected to last if we go to each of these jurisdictions? Obviously, you're gonna wanna think about the the deadlines. You know, have you already blown the ninety days because you didn't talk to a lawyer until the ninety first day after you got your COFD? Well, then you don't have a choice. You're going to the court of federal claims. You obviously wanna jump on stuff earlier so you do have a choice and that you can consider all of these bullet points. But, unfortunately, sometimes the reality is you you don't. Most of the time, the case law is going to be consistent. It's not going to be you know, if we go to the boards of contract appeals, the case law is really bad for us. If we go to the court of federal claims, it's really good for us. So, obviously, we're going to the court of federal claims. Usually, they're pretty similar. They use each other's cases as being persuasive, but I have seen individual cases where that's not the case, and that there is a clear advantage in going one place or the other. That is something that you wanna talk about with your attorney, see if you want to to, you know, incur the cost to research that upfront, you know, see if there is a difference, and then talk about where you want to go. In terms of, you know, where litigation goes from there, this is kind of zooming out and looking at the whole thing. Again, maybe you filed an REA before you AI a claim, and you maybe you didn't. If you did and it led to the negotiations in an ideal world, you already got your money and your time. Or maybe you didn't you filed a claim that went to negotiations. Maybe it didn't maybe the government didn't answer. But either way, you know, in an ideal world, after the first two bullet points or or one of the first two bullet points, you would have gotten what you wanted. But if you didn't and you had to to pursue it further, you wait for the COFD that denies your claim or you wait for the government to pass that reasonable time. Now they're, you know, unreasonably delayed, and you appeal the COFD or you appeal the deemed denial. You file that complaint with the board, you know, the applicable board. And I should have mentioned before. I'm sorry. I'm I'm realizing now that I didn't. What board is, you know, appropriate depends on what agency you're dealing with. So there's the Armed Services Board of Contract Appeals, and there's the Civilian Board of Contract Appeals. They're kind of the the two most common. And as the names would indicate, if you're dealing with a, you know, a DOD agency, you're gonna go to the ASPCA. That's the Armed Services. If you're dealing with a, like, you know, non DOD civilian agency, it's gonna be the CBCA, the Civilian Board of Contract Appeals. But then you file your complaint. And, again, notice that the appeal comes earlier. That's the same stage as the complaint because, technically, your complaint is an appeal, your statutory and AI to have judicial review. You then go through discovery. And this is where it does start looking like litigation in in other contexts, you know, regular litigation in front of your state or your district court. You're gonna have, AI of a simplified discovery process in board cases where you've got something called the rule four file, but there's still gonna be a ton of documents going back and forth, document review, depositions, fact gathering. There AI, after that, be motions. There might not. Depends on if kinda you you get set up for a motion for summary judgment or not. And then you're gonna go through trial. There might, depending on the judge, be post trial briefing. Sometimes judges want that to AI sum up everything that was done at trial. Sometimes they don't. They just make a decision on what happened at trial, and then they're gonna issue a decision. Whether it's a board of contract appeals or the court of federal claim, either of those can be appealed to a federal circuit or should I say the federal circuit court, which is the appellate federal court that deals with these types of matters. Again, it's subject matter based, not jurisdiction based. So, you know, for those of you who are used to hearing things like the third circuit or the fifth circuit or the ninth circuit, this is the federal circuit. It's not tied to a geographic area. It's tied to subject matter, including all government contract stuff that's that's coming through the boards or the court of federal claims. Finally, I just wanna give a brief overview. And I did, just kind of, for your edification, include more detailed slides because I knew you guys would be getting a copy of the AI. But I also knew that we only had an hour. So I wanna briefly talk about, each of these common government defenses, and then you guys can can go through the more detailed slides that I included, you know, on your own AI, and and feel free to reach out to me. But here is a summary of the most common government defenses that you will see. Many, many, many of those clauses that, you know, entitle you to additional time or additional money, changes clause, different site condition clause, etcetera, require you to have provided notice. So a lot of times what the government's gonna say is you didn't provide notice. That is something that you want to be talking about with a lawyer, you know, how to provide appropriate notice and cover your basis and preserve your claim rights as soon as issues start coming up, because lack of notice is a huge one. I would say that or this next one are the biggest ones that I see. If you sign a modification and for this one, I will pull up the the more detailed slides, and it has something like this in it, and they very often have something like this, and it's most often in the closing statement area of the mod. See that second sentence where it says, it is further understood, agree, and agreed that this adjustment constitutes compensation in full, yada yada yada. You have just said that for whatever the scope of the modification is, it's all good. You've gotten paid, and you've gotten every adjustment you're entitled to. So if you get a modification and it only partially compensates you for the the change or the different site condition or the delay, do not sign it if it's got language like this. Ask the government to issue it unilaterally instead of bilaterally where you have to sign. If they won't do that, ask them to remove this language. If they won't do that, ask them to edit it and, you know, to to basically say, hey. Look. I've been compensated in full for this piece, but I'm still awaiting payment on this piece. Do not, especially if the government does what it often does. And I'm not implying that this is malicious. I think sometimes it's one hand not knowing what the other does, or sometimes it's people not realizing the the legal effect of things that they're cutting and pasting. But if a contracting officer says, hey, bud. We completely understand. We agree. We're gonna give you more time, and we're gonna give you more money. We just don't have the funding right now. We need to wait till October first. Here's the mod for the additional time so that, you know, you're not past your period of performance, and we'll get you the money in the new year. Totally acceptable. But if they put a mod in front of you that only gives you time and has language like this, you just signed away your rights to get the money later. They might still give it to you, but they might not because their lawyer's gonna say they don't have legally have to. So be very, very careful. Sometimes this is called a waiver, defense. Sometimes it's called release. Sometimes it's called dissatisfaction. It all means the same thing. It means that the government's pointing to a modification you signed earlier that had some sort of release language in it that said you didn't want any more time or any more money, so be very, very careful about that. Two big defenses that they come up with with regard to defective specifications. The first is, yeah, they were defective, but you should have known that on the face of them when you first saw it. In other words, it's not a latent defect that was hidden that you couldn't possibly know about until you started performance. There's such a glaring error on the face of the specifications when you were bidding the project, you should have known about it. So lesson here is be really, really careful upfront if you see a problem with specifications. As part of the bidding process, raise a question about it. Again, something you have to do. Stitch in time saves nine early. The AI specifications verse versus performance specifications, you know, only design specifications kinda get you there to the the fact that the government has a warranty and that they breached it. So you need to talk to your lawyer upfront. Not a lot you can do about whether a spec is a design or a performance specification, but you're gonna wanna talk to your lawyer when you're putting together your REA or your claim to have a realistic view about whether something can be characterized as a design specification such that you will get additional time or additional money, or if it is perhaps a performance spec where the government's gonna put you through, you know, a lot of hoops and and ultimately try not to pay you, and you might not be as successful. With regard to delay, critical path, you you have to go through the critical path. You actually have to be delayed, not just disrupted or, you know, inefficiencies for there to be a delay claim and any concurrent delay. In other words, if there's another delay that wasn't the government's fault that overlapped, that's gonna cut into what you can recover for. That's a big thing that the government is going to to be doing. Finally, last but not least, lack of authority. This one comes up most often in the context of the changes clause. But the idea is, you know, if you're talking about the government having made a change, has to have been the contracting officer that made that change. If it's someone else, you are not going to have a, you're not going to it it's going to be seen that, like, you should have known they didn't have the authority to tell you to do something outside the scope of the contract. Any additional costs are are on you. A lot of times, that's, you know, taken care of again at a very early stage, kind of concurrently, wrapping it all up full circle with that first bullet point, where you when you give notice, if you've only been hearing from the COR and the CO has been very, very absent, or if you're dealing with the AI VA, the COTR because the the CO has been absent, you're gonna wanna give that notice to the CO and say, this is the person who told me, and I'm going to assume that you agree and that you concur and that you are, you know, echoing or ratifying this instruction unless I hear differently from you. That that, along with notice, can be very hard to rectify or or work around at a later stage. It's absolutely something you have to plan for upfront. So with that, again, the rest of the slides I included so that you could review them. There's some case sites and and some explanations regarding each of those defenses, which itself could be each of them in our presentation on themselves. I knew we weren't gonna be able to get to them in detail, but I wanted to provide you the material. If you've got any questions now, I'll stick around for a couple extra minutes. Otherwise, you know, feel free to reach out to me directly. You've got my information on the screen. And, again, you will be getting a copy of the AI. So, feel free to to shoot if you got any questions now. But if not, you know, feel free to send them to me later, and I I hope you found the the perform oh, the performance the presentation in for that. Yeah. I don't see any quest oh, I do. Thank a lot of thank yous and, you know, a lot of great information, Maria, that you've presented as always. Just so that everyone knows, Maria, I think if you can go one slide. We have a couple of other really good, webinars coming up with AI, so please feel free to register for those. The links will be when you get the AI. It'll it's hyperlinked. Otherwise, I think I think we are good. Well, thank you again for my lovely introduction and, obviously, for for being my friend. And AI. And I'm honored to to be called yours. And thanks to everyone for joining us today. Please do feel free to reach out to me, and, I hope to see you at my upcoming webinars on, subcontracting and small business changes. Yes. Looking forward to that. Thank you, everyone. Thank you. Bye bye. Bye bye.