One Contractor Hurdle Defeated: Federal Circuit Holds That the “Sum Certain” Requirement for CDA Claims Is Not Jurisdictional

ECCI filed a claim in 2014 that sought compensation for construction delays allegedly caused by the U.S. Army Corps of Engineers (USACE) during a contract to design and build a military compound in Afghanistan. Six years later, following a trial on the merits, USACE moved to dismiss the matter on the grounds that the Board did not have jurisdiction to consider ECCI’s claim because it lacked a sum certain. USACE argued that while ECCI’s claim had a bottom-line sum certain, it did not set forth sums certain for any of the discrete sub-claims that comprised the submission to the contracting officer. The Board granted USACE’s motion and dismissed the claim. ECCI appealed the dismissal to the Federal Circuit.

In deciding whether or not the sum certain requirement was jurisdictional, the Federal Circuit started with the language of the underlying statute. The CDA—codified at 41 U.S.C. § 7101 et seq.—requires contractors first to submit claims to the contracting officer for her/his consideration. The CDA requires that contractors provide such claims in writing and states that contractors may appeal adverse contracting officer final decisions. The statute also requires contractors to submit claims within six years of their accrual. The statute does not have a “sum certain” requirement. In fact, the CDA does not even mention “sum certain” or provide a definition of what constitutes a “claim.”

The Federal Circuit noted that the Disputes Clause at Federal Acquisition Regulation (FAR) 52.233-1 provides additional regulatory guidance on claims, and that the definition of a claim in FAR 2.101 includes the requirement that a contractor present a sum certain. Accordingly, contractors are required to provide claims with a sum certain on the basis of this regulatory language. Such regulatory language, however, does not create a jurisdictional requirement. Rather, per the Federal Circuit, only statutes can create jurisdictional requirements. Where, as here, Congress has not expressed the sum certain requirement as jurisdictional, the requirement is not jurisdictional. Instead, in cases like this, where a regulation proffers a requirement that is absent from the statute, the requirement can be cured by the contractor early in the litigation process if the government presents a timely and persuasive showing that a claim lacked the sum certain. The Federal Circuit made clear that the government must challenge an alleged lack of sum certain at the outset of litigation and that it cannot wait until after trial to make such a challenge as it attempted here. The Federal Circuit admonished the government that, if it delays in making a challenge to the sum certain regulatory requirement, the challenge may be forfeited.

Based on ECCI, we offer the following practical going-forward guidance. Contractors still need to present a sum certain, so price your discrete claim elements separately, but also state early and often in your claim the total amount you seek. Do not equivocate. Do not offer alternative claim amounts. If a contractor does not present a sum certain, the agency will have a basis to challenge the lack of sum certain with a motion to dismiss for failure to state a claim. If the agency prevails in that challenge, then the contractor will have an obligation to amend the claim.

Agencies frequently challenge whether a contractor has presented a sum certain on what contractors may believe are hyper-technical grounds, e.g., failing to provide a table that adds together precisely articulated claim elements. Now that dismissal on jurisdictional grounds is no longer possible for sum certain flaws, agencies should turn to the merits more quickly. That said, there are other jurisdictional challenges that the government frequently presents that may work to delay consideration of the merits of a claim. For example, agencies frequently allege that a contractor did not timely appeal a letter that the government claims was a final decision even though the government did not title the letter a final decision or inform the contractor of its appeal rights when it sent the letter originally. Conversely, agencies sometime argue that a contractor prematurely appealed something that was not a final decision even though it was labeled as such or itemized appeal rights. To date, Board and Court guidance in this area has been unclear. We are hopeful that the Federal Circuit can clear up the “final decision” hurdle next.