Court Of Federal Claims Takes A Fresh Look At The CDA Statute Of Limitations

The authors of this article discuss a recent Court of Federal Claims decision addressing a critical U.S. Court of Appeals for the Federal Circuit decision interpreting the statute of limitations under the Contract Disputes Act that impacts the time by which contractors must file claims.

The Court of Federal Claims ("COFC") recently issued a decision in Kansas City Power & Light Co. v. United States,1 addressing a critical U.S. Court of Appeals for the Federal Circuit decision interpreting the statute of limitations under the Contract Disputes Act ("CDA") that impacts the time by which contractors must file claims. Simultaneously, the COFC blurred the lines of the continuing claims doctrine, a partial defense to application of the statute of limitations.

THE CONTRACT DISPUTES ACT

The CDA requires any party seeking relief under a government contract to file a claim within six years of claim accrual.2 A claim accrues on "the date when all events, that 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, money damages need not have been incurred."3 On the question of injury, the case law had developed that "it is enough that the [party] knows, or has reason to know, that some costs have been incurred, even if the amount is not finalized or a fuller analysis will follow."4 In 2016, the Federal Circuit layered the FAR 2.101 definition of a claim, with its requirement of a "sum certain" into the accrual analysis.5 This presented the prospect of a conflict between the concepts of a "sum certain" and "some injury" in the competing definitions.

KANSAS CITY POWER & LIGHT CO.

In Kansas City Power & Light Co., the COFC confronted this disconnect, clarifying that the requirement for a "sum certain" does not mean the injury must consist of a fixed and complete dollar amount in order to trigger the CDA's state of limitations.

Kansas City Power & Light Co. ("KCP&L") entered into a contract with the General Services Administration ("GSA") to provide electrical service. Under this contract, GSA agreed to indemnify and defend KCP&L with respect to legal claims related to the provision of electrical service. While KCP&L was providing this electrical service, a GSA employee sustained fatal injuries. The following dates are relevant to the ultimate statute of limitations issue at COFC:

March 27, 2007...