The Small Business Administration is proposing to use a 24-month average to calculate a business concern’s number of employees for eligibility purposes in all of SBA’s programs.
The Armed Services Board of Contract Appeals (“the Board”) recently issued its fiscal year (FY) 2021 annual report, covering the period from October 1, 2020, through September 30, 2021. Of note, contractors docketed only 400 new appeals during FY 2021, which marks the fewest number of new docketed appeals at the Board in more than 20 years. This decrease follows the downward trend in docketed appeals the Board has experienced during the last four fiscal years, with the exception of a slight increase during FY 2020. For comparison, the Board docketed 497 new appeals last year; 708 in FY 2014 and 624 during FY 2007, when the Board’s docket achieved all-time high levels on the basis of Iraq and Afghanistan reconstruction claims.
With respect to the new FY 2021 appeals, the U.S. Army Corps of Engineers continues to be the most frequent opponent of contractors. Private contractors noticed new appeals adverse to the U.S. Army Corps of Engineers in 166 of the 400 new cases. Contractors initiated matters adverse to the Army (62/400), the Navy (49/400), the Defense Logistics Agency/Defense Contract Management Agency (43/400), and the Air Force (37/400) as well during FY 2021. At the conclusion of FY 2021, the Board’s total docket included 954 cases, a number which has increased slightly (up from 947) since the beginning of FY 2021.
The Board also reported on its disposition of motions filed by contractors and government agencies. While the number of motions pending decreased from FY 2019 to FY 2020 (1,030 to 853), that number ballooned to 2,109 as of October 1, 2021. Of the pending motions, 233 are Motions to Dismiss, 270 are Motions for Summary Judgment, and 1,505 are categorized as “Other,” which are non-substantive motions for extensions, deferrals and additional types of relief that would not result in case disposition if granted.
The Board resolved 129 appeals on the merits during FY 2021. In contrast, the Board decided 123 cases during FY 2020 and 154 during FY 2019. The Board sustained 52.7 percent in whole or in part—which represents essentially the same sustain rate claimants achieved during FY 2020. The Board also dismissed 262 cases during FY 2021, with mutual settlement being the primary reason for these dismissals.
With respect to alternative dispute resolution (ADR), the Board handled 36 cases during FY 2021. Five of those cases settled prior to formal mediation sessions. Of the 31 remaining cases, 27 were successfully resolved, three did not resolve, and one remained pending at the conclusion of FY 2021. In his closing remarks, Chairman Thrasher noted that “many litigants have continued to push [hearings and ADRs] forward into the future, presumably in the hope the proceedings could soon be conducted in person. However, since the pandemic has persisted, we are continuing to receive requests for the continued use of remote hearings and ADRs.” Judge Thrasher expects a “significant upward trend in [the Board’s] hearings and ADR workload during this next fiscal year.”
The statistics and Chairman Thrasher’s comments offer some insight for contractors seeking to resolve their Contract Disputes Act claims. First, prudent contractors should look for opportunities to resolve matters before they become ASBCA cases. The falling number of new appeals suggests that the Department of Defense agencies may be more open now than ever to achieving such early resolutions. Second, notwithstanding the shrinking docket of new appeals, contractors should expect that the duration of their pending matters will lengthen. With so many matters deferred and the large number of motions pending, the Board’s 25 judges are quite busy. Third, ADR remains a very attractive option to resolving cases, as 27 of the 31 matters (87%) that went through ASBCA ADR last year did settle. Finally, contractors with strong cases should be encouraged that the Board’s sustain rate exceeded 50% again last year, so appellants may want to dig in and remain resolute when circumstances do warrant.
If you have any questions, please reach out to Pillsbury’s Claims and Terminations team. Also, please keep your eyes open for our client alert that addresses the Civilian Board’s annual report, which we expect will be released in the coming weeks.