Request for Equitable Adjustment Did Not Qualify as CDA Claim for Purposes of Statute of Limitations; Zafer Construction Company v. United States, COFC No. 19-673C

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Government’s motion to dismiss claims appeal as barred by the statute of limitations is granted. The contractor asserted various claims seeking damages for delays and constructive changes. The court found that claims all had their basis in a single triggering event. This event occurred more than six year before the contractor submitted a claim, so the claims were untimely. The contractor argued that requests for equitable adjustment (REA) it filed before its certified claims should be considered claims themselves. But the court found that the REAs did not qualify as claims because they did not indicate that the contractor had expected a final decision. Instead, the contractor had stated it submitted the REAs to further the parties’ negotiations.

Zafer Construction Company had a contract with the Army Corps of Engineers to design and build public works utilities at Bagram Air Base in Afghanistan. In 2013, after completing the project, Zafer submitted a request for equitable adjustment seeking additional payments under the contract. Zafer submitted an amended REA in 2014. Over the next four years, Zafer and the government engaged in negotiations over the amount Zafer claimed to be owed.

The negotiations apparently failed because in 2018 Zafer submitted a certified claim. In its claim, Zafer sought to recover delay and constructive change costs. The Corps denied the claim as untimely. Zafer filed suit with the Court of Federal Claims. The government moved to dismiss, contending that the claim was barred by the Contract Disputes Act’s six-year statute of limitations.

To determine whether Zafer’s claims were barred by the statute of limitations, the court first had to determine when the claims accrued. A claim accrues when all the events that fix the government’s liability are known or should have been known by the contractor.

The court noted that Zafer had claims for delay damages and constructive change damages. The complaint separated the delay damages into four periods of time. But the court found that each period relied on the same initial triggering event, namely, the government’s failure to provide Zafer flight line access and failure to remove obstacles from the water system route of construction. This triggering even occurred in 2009, which was more than six-years before Zafer filed its claim.

Zafer, however, argued that the continuing claim doctrine applied to its delay claims. That doctrine saves parties that have pled a series of distinct events—each of which would give rise to a separate cause of action—as a single continuing event. But, the court noted, that doctrine does not apply to a claim based on a single distinct event that has effects that continue to accumulate over time. The doctrine only applies if the claim is susceptible to being broken down into a series of independent and distinct events each having their own associated damages. Here, even if the doctrine applied, the events triggering all the alleged delays occurred in 2009, which was still more than six years before Zafer filed its claim.

With respect to the Zafer’s constructive change claims, the court noted that the 2014 REA shows that all of the alleged constructive changes were ordered prior to 2012, which meant they also occurred more than six years before Zafer submitted claim.

Zafer argued that the REA’s it filed in 2013 and 2014 should qualify as claims. To qualify as a claim under the CDA, there must be a written demand seeking payment of money in a sum certain or the interpretation of contract terms. Although a contractor is not required to explicitly request a final decision, the claim must show that the contractor desires a final decision.

Here, Zafer’s REAs included written demand for a sum certain, but there was not any indication that Zafer was expecting a final decision. Instead, the REAs asked the government to continue negotiating and was void of any indication that Zafer was asserting a claim. Indeed, Zafer stated in the REAs that it was submitting them so the parties could engage in negotiations to resolve the issue. Because the REAs did not qualify as claims, they could not save Zafer’s suit.

Zafer is represented by Sam Z. Gdanski. The government is represented by Robert R. Kiepura, Ethan P. Davis, Robert E. Kirschman, Jr., and Steven J. Gillingham of the Department of Justice as well as James D. Stephens of the Army Corps of Engineers.

COFC - Zafer Construction Company