Thursday, April 4, 2019

Government Must Specify a "Sum Certain" When Issuing Final Decisions

A "claim" according to FAR (Federal Acquisition Regulation) 2.101 is a written demand or written assertion by one of the contracting parties (could be the contractor or the Government) seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract. Further, a written demand or written assertion by the contractor seeking payment of money exceeding $100 thousand is not a claim unless certified.

Its easy to think that term "sum certain" applies only to contractors because disputes that are thrown out are thrown out because the contractor did not specify a "sum certain". But the Government must also specify a "sum certain" if it is seeking remuneration from a contractor.

A recently published ASBCA decision illustrates this point.

In June 2018, DCMA (Defense Contract Management Agency) issued a COFD (Contracting Officer Final Decision) and demanded payment from L-3 Communications. In January 2019, DCMA withdrew its COFD and in February 2019 requested the ASBCA to dismiss L-3's appeal.

The ASBCA noticed a problem with the COFD. The COFD presented three distinct amounts demanded by DCMA; $292,634, $297,677, and $572,318. The question became, was this a "sum certain" (the COFD must have been a real cobbled together mess) .

The Board found that there was no way to reconcile the three amounts stated in the COFD through simple mathematical analysis or any other analysis. Therefore the Board ruled that DCMA's COFD failed to state a sum certain and dismissed the case.

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