In Nauset Construction Corporation,1 the Armed Service Board of
Contract Appeals once again addressed how Government allegations of
fraud impact the Board's ability to hear a claim.
In Nauset, the contractor submitted a claim for additional
time and money arising out of a construction project. The
Contracting Officer subsequently extended the date for issuing her
final decision, noting that due to ongoing investigations by
multiple government agencies, she could not issue a decision.
Ultimately, the Contracting Officer informed the contractor that
the Government suspected the contractor's claimed costs were
fraudulent or false and that she had no authority to take action on
the contractor's claims, citing Federal Acquisition Regulation
(FAR) 33.210.
The contractor filed an appeal with the Board, and the Government
moved to dismiss on the grounds that the Board lacked jurisdiction
because the claims involved fraud. In ruling on the motion, the
Board looked to the language of the Contract Disputes Act and the
FAR, which the Board characterized as unambiguous.
The Board noted that while the Contracting Officer had properly
referred the suspected fraud to the investigative
agencies, she erred by concluding that because she, herself,
suspected fraud, the claims did in fact
involve fraud and that she had no authority to
resolve them. As the Board explained, a Contracting Officer's
articulation of a suspicion of fraud is insufficient to deprive the
Board of jurisdiction.
Furthermore, the Board held that the fact that there is an ongoing
investigation does not divest the Board of jurisdiction in a matter
otherwise properly before it. The Board further noted that the
record did not support that a finding of fraud in the
contractor's claims had been made by an authority competent to
make such a finding, and the Board declined to make such a
finding.
The Board further noted that because the Contracting Officer had
declined to issue a decision on the claims, the Board had
jurisdiction on the basis of a deemed denial. Therefore, the Board
had jurisdiction over the matter and the Contracting Officer could
not divest the Board of jurisdiction by his or her unilateral
action.
Footnote
1 ASBCA Nos. 61673 and 61675 (May 5, 2021)
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