Contractor wins key pandemic-related claims against government in landmark ruling
On December 20, 2023, the Armed Services Board of Contract Appeals (ASBCA) ruled in favor of a prime contractor's pandemic-related claims, rejecting the government's motion to dismiss. The American Bar Association challenged the government's stance on COVID-19-related damages on behalf of the contractor's subcontractors.
The ASBCA denied the government's arguments that the claims lacked merit, were barred by the sovereign acts doctrine, and failed to provide separate sums certain for each sub-claim. The Board declined to dismiss the claims based solely on the sovereign acts defense, indicating further examination is needed.
The contractor alleged that the government acted in bad faith by instructing them to proceed with the project as if the pandemic had no impact, instead of collaborating to address the issues. The Board held that the contractor raised sufficient allegations of constructive change, constructive suspension of work, and breach of the implied duties of good faith and fair dealing. However, it also noted that it was too early to resolve whether certain claims were sub-claims requiring a separate sum certain.
This decision serves as a reminder for contractors of the elements required to establish entitlement to relief for constructive changes, constructive suspension of work, and breach of the implied duties of good faith and fair dealing. While the sum certain requirement is no longer jurisdictional, a lack of a sum certain can still be grounds for dismissing claims for failure to state a claim.
