Claim Preclusion in Claims Litigation: If You Have Multiple Claims Against the Government, You Best Submit them All at Once

The contractor in this case unsuccessfully attempted some procedural jujitsu with its claims. The contractor submitted one set of claims to the contracting officer which were denied. The contractor appealed to the ASBCA and on appeal raised some new claims. The ASBCA dismissed the new claims because they had not been submitted to the contracting officer. So the contractor submitted the new claims to the contracting officer. When those claims were denied, the contractor filed suit with the COFC. The court found that the claims were now barred by the doctrine of claim preclusion. The record showed that the contractor knew of its claims when it first submitted its initial set of claims to the contracting officer. The contractor should have submitted all known claims at that time. The court would not permit the contractor to litigate claims piecemeal.

Avant Assessment, LLC v. United States, COFC No. 20-1185

Background

Avant Assessment had contracts with the Army to provide language testing materials. The Army terminated the contracts for cause, stating that Avant had not delivered acceptable items or had delivered them late. 

Avant appealed the termination to the ASBCA. The board granted the appeal and ordered the Army to convert the termination for cause into terminations for convenience.

Following the ASBCA decision, Avant submitted a termination settlement proposal to the Army. The Army did not respond to the proposal. Avant appealed again to the ASBCA, alleging that the government had constructively accepted some of the purportedly rejected test materials the company provided while performing. The ASBCA found that it lacked jurisdiction over some claims raised in the second appeal because Avant had not submitted  its them to the contracting officer.

So Avant submitted new claims to the contracting officers, which included claims that had been part of the second ASBCA appeal. The Army denied those claims, and Avant filed suit in the Court of Federal Claims. The government moved to dismiss Avant’s complaint for failure to state a claim. The government argued that Avant’s claims were now barred by the doctrine of claim preclusion.

Legal Analysis

• Element of Claim Preclusion – Under the doctrine of claim preclusion, a final judgment in one proceeding precludes a party from raising a matter in a second proceeding that should have been raised in the first. A party has one, and only one opportunity to litigate a matter. Claim preclusion applies when (1) the parties in two proceedings are the same, (2) a final judgment was entered in the first proceeding, and (3) the claim raised in the second proceeding is based on the same transactional facts as claim in the first proceeding.
• Avant Did Not Submit All Its Claims to the Contracting Officer – Generally, claims arising out of the same contract constitute the same claim for purposes of claim preclusion. Here, the record showed that Avant was fully aware of its claims before it submitted its initial settlement proposal, but failed to raise those claims in the proposal submitted to the contracting officer. In light of the ASBCA’s ruling in the second appeal, those unasserted claims were now barred.
• Dismissal of the Second ASBCA Appeal Did Not Foreclose Application of Claim Preclusion – Generally, a dismissal for lack of subject matter jurisdiction in one action does not support claim preclusion in subsequent actions. Here, the ASBCA dismissed Avant’s second appeal for lack of subject matter jurisdiction. But that jurisdictional defect was due solely to Avant’s failure to submit all its claims to the contracting officer at once. The Contract Disputes Act does not abrogate the doctrine of claim preclusion. A party may not submit some, but not all of its claims, to the contracting officer and then proceed to piecemeal litigation of its claims through selectively limiting the ASBCA’s jurisdiction. Avant should have presented all its claims to the contracting officer at the same time.
• Avant’s UCC Claims Were Not Precluded – The court did, however, find that new claims Avant asserted under the Uniform Commercial Code were not barred by claim preclusion. Avant alleged that under the UCC, it was entitled to recover the value of test materials the government rejected because the government ended up using those materials and thus accepted them. The court found that Avant had not known of these UCC claims when it submitted its termination proposal. These claims were based on the government’s post-rejection actions, and Avant did not learn of them until after it conducted discovery in the ASBCA case.

Avant is represented by Dirk D. Haire and Kristen W. Broz of Fox Rothschild LLP. The government is represented by Daniel B. Volk, Brian M. Boynton Robert E. Kirschman, Jr., and  Patricia M. McCarthy of the Department of Justice as well as by Major Sherod L. Davis, Sr., of the Army.