Takeaways

The ASBCA continues to reduce its backlog of appeals. FY 2019 ended with 813 pending appeals, which is the fewest since the conclusion of FY 2012.
Contractors who had their matters resolved on the merits in FY 2019 experienced a sustain rate of 47 percent, the Board’s lowest in 20 years.
The ASBCA’s ADR resolution rate increased slightly during FY 2019.

The ASBCA issued its FY 2019 report on October 29, 2019, covering the period October 1, 2018 through September 30, 2019. The statistics offer some insight for contractors seeking to resolve their appeals. Contractors docketed 418 new appeals in FY 2019. FY 2019 was the fifth consecutive year that docketed appeals decreased, from a recent high of 708 new appeals docketed in FY 2014. We attribute the reduction in docketed appeals, in part, to the passage of time since the most significant overseas contingency contracting (related to conflicts in Afghanistan and Iraq) was completed. Further, on the positive side, we have seen a renewed effort toward partnering among the parties to government contracts that has resulted in early resolution of possible disputes.

The Board reduced its docket from 901 active appeals on October 1, 2018 (the conclusion of FY 2018) to 813 active appeals at the conclusion of FY 2019. The statistics suggest that most of this reduction can be attributed to fewer new cases being docketed rather than quicker disposition of pending cases. We say this because the number of new docketed appeals has gone down each of the previous five fiscal years. At the same time, the number of appeals disposed of in FY 2019 dropped from 559 dispositions in FY 2018 to 506 in FY 2019.

With respect to the new appeals docketed in FY 2019, contractors adverse to the US Army Corps of Engineers and Navy each accounted for 90 of the 418 docketed appeals. Contractors docketed 50 appeals adverse to the Defense Contract Management Agency, 65 adverse to the Army, and 43 adverse to the Air Force.

The ASBCA decided 154 appeals on the merits in FY 2019, an increase from the 139 merits decisions reached in FY 2018. The Board sustained 47.7 percent of those FY 2019 appeals in whole or in part. The sustain rate for FY 2019 is the lowest since 1997, when the rate was 45 percent. By contrast, in FY 2018, the sustain rate for contractors was 69.1 percent, which was the highest since 2007 (71 percent).

The parties requested ADR in 76 cases during FY 2019. Sixty-eight of those matters successfully resolved, which is an 89 percent success rate. This is a modest increase from FY 2018’s success rate of 85 percent. Year after year, ADR remains a very attractive option for contractors at the Board.

A contractor’s best opportunity to resolve contract disputes, typically, is reaching a fair settlement with the Contracting Officer before any litigation begins. When that is not possible, the Boards of Contract Appeals and Court of Federal Claims are the two options available to seek resolution of unresolved final decisions under the Contract Disputes Act. While both have advantages and disadvantages, recent data suggests that the ASBCA remains a forum where contractors can obtain a fair—and increasingly faster—outcome in resolving their disputes via negotiation, ADR, or hearing, last year’s low sustain rate notwithstanding. If you have unresolved disputes, consult with experienced counsel to ensure your claims are substantiated, properly filed, and aggressively prosecuted. Also, ask whether and when ADR might be appropriate.