September 01, 2020 Procurement Lawyer

"Defective Certifications” Under the CDA: The Federal Circuit Provides Some Clarity

by Armani Vadiee, Todd M. Garland & Zachary D. Prince

Armani Vadiee is a partner and Todd M. Garland and Zachary D. Prince are senior associates in Smith Pachter McWhorter, PLC, in Tysons Corner, Virginia.

As originally promulgated, the Contract Disputes Act (CDA) contained several ambiguities that became apparent as litigation unfolded over the subsequent decade. Among other issues, the CDA as interpreted by the Federal Circuit created a potential unfair scenario where a contractor could litigate a case through trial, expending years of effort and cost, only to discover that a technical infirmity in the original claim certification meant that the Board or court lacked jurisdiction from the outset, forcing the contractor to recommence the entire process from the beginning.

In 1992, Congress revised the CDA to address this problem, providing that a “defective” certification “does not deprive a court or an agency board of jurisdiction over the claim.” Unfortunately, Congress did not define “defective,” thus in part perpetuating the jurisdictional quagmire that the 1992 amendment was intended to resolve. Over the past several decades, the Boards of Contract Appeals, and to a lesser extent the U.S. Court of Federal Claims (COFC), have developed a body of decisional law defining “defective” certifications by reference to language from the legislative history of the 1992 amendment. However, that legislative history was taken from a version of the 1992 amendment that Congress expressly rejected.

In late 2019, the Federal Circuit addressed the issue for the first time in DAI Global LLC v. Administrator of the United States Agency for International Development.1 The appellant, DAI Global LLC, f/k/a Development Alternatives, Inc. (DAI), appealed from the Civilian Board of Contract Appeals’ dismissal of appeals DAI had filed on behalf of its subcontractor, ERSM (Afghanistan) Limited, d/b/a Edinburgh International (EI). The Board had determined that it lacked jurisdiction over the appeals based on its finding that DAI had failed to submit with EI’s claims any certifications that were not correctable under the CDA. The Federal Circuit reversed, holding the certifications were “defective” and thus correctable and, further, rejecting the Board’s erroneous standard based on flawed statutory interpretation.

The Federal Circuit’s decision in DAI provides some clarity as to what constitutes a “defective” certification, correcting the multidecade application of a flawed standard. Nonetheless, the decision leaves open the longstanding concerns of the contracting community regarding sponsored claims. Further, the decision does not address whether the CDA certification requirement is still a jurisdictional matter in light of recent decisions by the Supreme Court and the Federal Circuit, nor does the decision resolve what precisely “defective” means. These open issues will likely continue to be litigated over the coming years.

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