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Claims·Protests & Claims Brief

Government Said Demand Letter Wasn’t a Final Decision—ASBCA Didn’t Buy It

Craig LaChanceSeptember 7, 2023 · 1 min read

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The government moved to dismiss the appeal of a government claim. The government contended it had a sent a demand letter to the contractor, not a claim. The ASBCA denied the government’s motion. The letter had all the hallmarks of a claim.

Appeal of PAE Applied Technologies, LLC, ASBCA No. 63233

The Letter – The agency sent a letter to the contractor. The letter stated the contractor overbilled the government for unallowable COVID-19 costs. The agency demanded reimbursement of $4.3 million.
Appeal – The contractor appealed. The agency moved to dismiss for lack of subject matter jurisdiction. The agency argued its demand letter had not been a claim. Rather, the agency had merely invited the contractor to comment on COVID-related costs.
Letter Was a Claim – The board rejected the agency’s argument. The letter was a claim. The letter demanded payment of alleged unallowable costs, contained a sum certain, and provided adequate notice of the claim’s basis.
Appeal Language – The government argued the letter wasn’t a claim because it didn’t include appeal rights.. The board noted it has long held that omission of appeal language only impacts jurisdiction if the contractor was prejudiced by the omission. Here, the contractor had filed a timely appeal and thus wasn’t prejudiced.
Government Intent – The government argued the letter was not a claim because the government hadn’t intended it to be a claim. The board said the government’s intent was not controlling. The board looks to the totally of the circumstance to determine if a claim was submitted. Here, the circumstance indicated the parties had reached an impasse, and that the government asserted a claim.

The contractor is represented by Nicole J. Owren-Wiest, Erin N. Rankin and Catherine O. Shames of Crowell & Moring LLP. The government is represented by Craig D. Jensen and Philip Hadji of the Navy.

–Case summary by Craig LaChance, Senior Editor

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