Court of Appeals for the Federal Circuit: Boards Have Jurisdiction to Hear Appeals Notwithstanding Nontechnical Defect in Certification

In DAI Global LLC v. Administrator of the US Agency for International Development, the Court of Appeals for the Federal Circuit reversed a prior CBCA decision dismissing DAI’s appeals for lack of jurisdiction due to an allegedly defective CDA claim certification. In so doing, the Court upended a line of decisions holding that Boards lack jurisdiction if a contractor’s certification defect is nontechnical or “fraudulent, in bad faith, or with reckless or grossly negligent disregard of the requirements of the relevant statutes or regulations.”

From 2006-2010, DAI Global contracted with USAID to provide development services in Afghanistan. DAI subcontracted with a private security company to provide DAI with security services. In 2011, Afghanistan imposed on DAI’s subcontractor a $2m fine based on the size and composition of its workforce. The subcontractor allocated a portion of this fine to each of DAI’s contracts. In 2017, DAI submitted a cover letter and its subcontractors’ five claims to USAID, seeking reimbursement for the fine.  41 U.S.C. § 7103(b)(1) requires that, when submitting a claim for more than $100,000, the contractor must certify:

(A) the claim is made in good faith;
(B) the supporting data are accurate and complete to the best of the contractor’s knowledge and belief;
(C) the amount requested accurately reflects the contract adjustment for which the contractor believes the Federal Government is liable; and
(D) the certifier is authorized to certify the claim on behalf of the contractor.

• 7103(b)(1)(A-D).

The particular language required to certify a claim is prescribed by regulation:

I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the contractor believes the Government is liable; and that I am duly authorized to certify the claim on behalf of the contractor.
48 C.F.R. § 33.207(c).

While DAI’s subcontractor used this exact language in its certification, DAI did not. 70 days after submitting its claims, the contracting officer informed DAI that its claim did not contain a certification. DAI filed notice of appeal, but the Board denied DAI’s appeal, asserting that, since DAI’s claim lacked a certification, the Board lacked jurisdiction. The Board also stated that only technical errors are correctable, and that DAI made its certification with reckless disregard for the certification requirements. In the Board’s reading, a nontechnical mistake is fatal to a certification.

The Court of Appeals disagreed, noting that the Board had based its decision on an unenacted law that, in essence, forbade the correction of a nontechnical certification. The law, as enacted, relieves a contracting officer of the obligation to render a final decision on a claim with a defective certification only if the contracting officer, within 60 days, notifies the contractor of the reasons why any attempted certification was found to be defective. § 7103(b)(3). If the contracting officer does not notify the contractor or issue a decision within that time, the contractor’s claim is deemed denied and becomes appealable to the Board. § 7103(f)(5).

There is no textual distinction between technical and nontechnical defects in the certification. In the instant case, the contracting officer mistakenly believed the agency was relieved of its obligation to notify DAI of the defect in its certification, since that defect was nontechnical. Since the contracting officer failed to issue a decision within the 60 days, DAI’s claim was deemed denied and became appealable to the Board. The Board thus had jurisdiction over DAI’s appeal, notwithstanding the nontechnical defect in its certification. §§ 7103(f)(5), 7105(e)(1)(B).

While this case stands for the proposition that future courts may be willing to relax the CDA’s jurisdictional requirements, contractors would still be wise to track the language of § 33.207(c) in their certifications. Despite the jurisdictional hurdle cleared from their paths, contractors are still precluded from recovery absent a certification. See § 7103(b)(3).