The contractor sued for breach alleging a constructive change. The government moved for summary judgment arguing that many of the contractor’s claims accrued more than six years before they were submitted and thus were barred by the statute of limitations. The contractor attempted to argue that its claims had been inchoate and had not accrued more than six years before they were submitted. The court rejected the contractor’s argument. A constructive change claim accrues when a contractor receives instruction to perform work outside the scope of the contract. Here, the contractor had been directed to perform work more than six year before it submitted its claims. The claims were time-barred.
Square One Armoring Services Company v. United States, COFC Nos. 16-cv-0124, 16–cv-0263, and 21-cv-2002
Background
Square One Armoring Services Company entered a contract with the State Department in 2007. The contract was for the supply of armored vehicles. Between 2007 and 2014, the State Department asked Square One to perform additional work beyond the contract specifications to increase the capabilities of the armored vehicles. Square One performed the requested work.
On October 9, 2014, Square One submitted 18 claims to the contracting officer seeking over $17 million for the additional work.The contracting officer denied the claims. Square One then filed suit with the Court of Federal Claims alleging that the additional work on the vehicles was a constructive change.
Analysis
The government moved for summary judgment on eight of Square One;s claims alleging they were barred by the CDA’s six-year statute of limitations. The government alleged the claims had accrued when the agency directed Square One to perform the additional work. For eight of these claims, the government contended, the agency had directed the work before October 8, 2008, which was more than six years before Square One submitted its claims.
Square One reasoned that under the FAR, a claim does not accrue until the events fixing liability are known or should have been known. Square One contended that it didn’t really know about its claims until it received final invoices form the government containing a sum certain.
But the court reasoned there is no “sum certain” requirement for claim accrual. FAR 33.201, the claim accrual provision, says nothing about a sum certain. Rather, the sum certain requirement appears in a different FAR provision governing the requirements for a claim submitted to the contracting officer. Indeed, the court reasoned, if a sum certain was required for claim accrual, then a claimant would have to file a new claim each time its costs changed.
Citing language in FAR 33.201, Square One argued that its claim did not accrue until it had knowledge of all the events fixing liability. Square One alleged it did not have knowledge of all the events until after it had examined results from government testing on the armored vehicles.
The court found this argument didn’t account for all the language in FAR 33.201. While the provision uses the term “all events,” it also states that “some injury”—not all injury—must have occurred. This indicates that a plaintiff need not know the full extent of its injuries when a claim accrues.
The court concluded that a constructive change accrues when a contractor receives instructions to perform work outside of the contract. At that point, the contractor is on notice of a potential claim. Applying this standard, the court found that six of Square One’s constructive change claims were barred by the statute of limitations.
Square One is represented by David J. Habib, Jr. of the Law Office of David J. Habib. The government is represented by James W. Poirier, Brian M. Boynton, Patricia M. McCarthy, Franklin E. White, Jr., and Daniel A. Hoffman of the Department of Justice.
–Case summary by Craig LaChance, Senior Editor
