Take it To the Limit: CBCA Limits Application of Maropakis Requirement to Initially Submit Certain Defenses to Government Actions as CDA Claims
Ever since the Federal Circuit held in M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1331 (Fed. Cir. 2010) that “a contractor seeking an adjustment of contract terms must meet the jurisdictional requirements and procedural prerequisites of the [Contract Disputes Act], whether asserting the claim against the government as an affirmative claim or as a defense to a government action[,]” contractors appealing a government claim or counterclaim have agonized over whether to incur the administrative burden and expense of submitting their potential defenses as a claim under the CDA or risk losing the ability to assert those defenses on appeal. The Civilian Board of Contract Appeals’ (the “Board” or “CBCA”) recent decision in Jane Mobley Assocs., Inc. v. General Servs. Admin., offers some much needed clarity as to what types of defenses must first be raised as claims. CBCA 2878, 2016 WL 73878 (Jan. 5, 2016).
In Jane Mobley, the General Services Administration (“GSA”) asserted a claim against the contractor, Jane Mobley Associates, Inc. (“JMA”), alleging that JMA had been overpaid approximately $37,000 on a firm fixed-price contract. JMA raised a number of defenses that GSA moved to dismiss on jurisdictional grounds, alleging that the defenses presented CDA claims that had not properly been submitted to the contracting officer for final decision. The CBCA rejected this argument, holding that “the rule of Maropakis is inapplicable where the contractor’s defense does not seek an adjustment of contract terms.” The Board explained that where the contractor is appealing or defending a government claim but not asserting its own claim for relief, or is asserting ordinary common law affirmative defenses, the contractor is not seeking adjustment of contract terms and therefore is not asserting a CDA claim.
Noting that the CDA was promulgated to accord contracting parties full due process and facilitate efficient adjudication of contract disputes, the Board opined that this purpose is frustrated when “meaningless” and “duplicative” administrative requirements not required by the CDA are imposed. The CBCA added that “if we were to apply the rule of Maropakis to any defense raised by a contractor in response to a government claim that is not in the nature of an adjustment of contract terms or not seeking separate monetary relief, the ‘drastic consequence’ could well be that the contractor’s appeal is never able to be heard on the merits.”
The decision in Jane Mobley is consistent with the Court of Federal Claims’ recent decisions in Total Engineering, Inc. v. United States and Palafox Street Associates, L.P. v. United States, and continues a reassuring trend of limiting the application of Maropakis. It remains to be seen, however, whether the Federal Circuit believes that its decision in Maropakis was so limited.