Contract Disputes Act - Statue of Limitations

Introduction

The statutes of limitation, and in extreme circumstances the due process clauses, U.S. Const. Amends. V and XIV, protect the accused from unreasonable delays.

A statute of limitations dictates the time period within which a legal proceeding must begin. The purpose of a statute of limitations is to ensure the prompt prosecution of criminal or civil assertions (charges) and thereby spare the accused of the burden of having to defend against stale charges after memories may have faded or evidence is lost. The statue is designed to protect individuals from having to defend themselves against charges when the basic facts may have become obscured by the passage of time and to minimize the danger of official punishment because of acts in the far-distant past. A time limit may also have the salutary effect of encouraging law enforcement officials promptly to investigate suspected criminal activity. Therefore, in most instances, prosecutions are barred if the defendant points out that there was no indictment or other formal charge within the time period dictated by the statute of limitations.

Federal Acquisition Streamling Act (FASA) of 1994

The Federal Acquisition Streamlining Act (FASA) of 1994 provides for a six (6) year statute of limitation. The clock starts ticking when a claim accrues. Determination of when a claim “accrues” can be found in FAR Part 33, at 33.201. The court found the definition it had been looking for, which read — Accrual of a claim occurs on the date when all events, which fix the alleged liability of either the Government or the contractor and permit assertion of the claim, were known or should have been known. For liability to be fixed, some injury must have occurred. However, monetary damages need not have been incurred.

Federal Acquisition Regulation

33.206 Initiation of a claim. (a) Contractor claims shall be submitted, in writing, to the contracting officer for a decision within 6 years after accrual of a claim, unless the contracting parties agreed to a shorter time period. This 6-year time period does not apply to contracts awarded prior to October 1, 1995. The contracting officer shall document the contract file with evidence of the date of receipt of any submission from the contractor deemed to be a claim by the contracting officer.

(b) The contracting officer shall issue a written decision on any Government claim initiated against a contractor within 6 years after accrual of the claim, unless the contracting parties agreed to a shorter time period. The 6-year period shall not apply to contracts awarded prior to October 1, 1995, or to a Government claim based on a contractor claim involving fraud.

ASBCA Cases

• Raytheon Corp. (April 22, 2013), the ASBCA dismissed the government's CAS-based claims relating to 3 out of the 4 accounting practice changes at issue. The Board allowed one claim to proceed where Raytheon only reported the fact of a change, not the cost impact from which the Government could have concluded it had a claim. In the other 3 claims Raytheon had provided cost impact information more than 6 years prior to the final decision asserting a Government claim. Of note is that the clock starting running when Raytheon Corp notified the Government of the cost impact.

To look at other cases, go to: http://www.asbca.mil/

References

• Federal Acquisition Streamlining Act
• Defense Contract Management Agency (DCMA) Guidebook; http://guidebook.dcma.mil/48/index.cfm
• Federal Acquisition Regulation, Part 33.2 - Disputes and Appeals