New Military Practice Attempts to Circumvent CDA Requirement of CO’s Final Decision

By Kelline R. Linton,
Junior Associate.


Federal contractors should be aware of a new practice that attempts to circumvent the Contract Disputes Act (“CDA”) requirement of a Contracting Officer’s (“CO”) final decision.  In a recent case before the Armed Service Board of Contract Appeals, the Army had entered into a memorandum of authority with the Defense Finance and Accounting Service (“DFAS”) that set up a process in which DFAS could directly bill the contractor for liabilities under the contract, but without a CO’s final decision.  When the contractor disputed the bills and filed an appeal with the Board, the Army moved to dismiss the case on the argument that the bills did not represent a claim because there was no CO’s final decision.  The Board denied the Army’s motion and found that it had the authority to hear the appeal on the basis that the contractor had a valid non-monetary CDA claim because the contractor had requested a CO’s final decision on the disputed bills.  The Board also emphasized that, absent a CO’s final decision, “there was no authority for the DFAS letter writers to assert liability against [the contractor].”


Remember, if you face a similar situation in which you are billed for contract liabilities without a CO’s final decision, you do have the ability to challenge the bills before the Board by creating a non-monetary CDA claim.  For example, you may request a CO’s final decision on whether the bills are a government claim, which may then include the CO’s interpretation of contract clauses and the CO’s actions on that interpretation.  We also are available to assist you if this problem arises.