United States: Who CARES? The ASBCA Might.

In Aviation Training Consulting, LLC, ASBCA No. 63634 (Jan. 11, 2024), the Armed Services Board of Contract Appeals (ASBCA) confirmed that a contractor's properly asserted claim for relief under Section 3610 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act is a claim under the Contract Disputes Act (CDA) and denied the Air Force's motion to dismiss for lack of jurisdiction.

Aviation Training Consulting submitted a claim seeking an equitable adjustment under the authority of Section 3610 of the CARES Act for costs associated with maintaining its workforce "in [a] ready state" during the COVID-19 pandemic. The claim asserted that the government's withholding of relief under Section 3610 was "deliberate and motivated by arbitrary and abusive considerations." The Contracting Officer (CO) denied the contractor's claim, and the contractor appealed to the ASBCA. The government moved to dismiss the appeal, arguing that the ASBCA lacks subject matter jurisdiction over Section 3610 claims.

The ASBCA denied the government's motion to dismiss, holding that the contractor's claim was within the scope of its jurisdiction because it "related to a contract" with the government—a procedural requirement for a claim under the CDA. The ASBCA reiterated that Section 3610 provides agencies with discretion to modify government contracts to reimburse contractors for costs of paid leave provided to employees and subcontractors during the COVID-19 pandemic, subject to the availability of appropriated funds. Thus, a claim presented to the CO for relief under the authority of Section 3610 is a claim related to the contract. The ASBCA also was not persuaded by the government's comparison of Section 3610 to Public Law 85-804, which also provides agencies discretion to modify contracts to allow for extraordinary relief. The Board stated that Public Law 85-804's legislative history clearly demonstrates that Congress intended to exclude requests under that law from the operation of the CDA, but the government failed to present any similar legislative history for Section 3610.

This decision clarifies that the ASBCA has CDA jurisdiction over properly asserted claims for relief pursuant to the authority of Section 3610, an important development for contractors who have experienced additional costs resulting from the COVID-19 pandemic.

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