Maritime government contracting is a major business in Alaska involving the Navy, Army, Coast Guard and other agencies. Most Alaska government contractors are familiar with the Federal Acquisition Regulation (FAR) 33.211 provision at the end of each contracting officer’s (“CO’s”) decision on a Contract Disputes Act (“CDA”) claim. It states: “Instead of appealing to the agency board of contract appeals, you may bring an action directly in the U.S. Court of Federal Claims (except as provided in 41 U.S.C. 7102(d), regarding Maritime Contracts) within 12 months of the date you receive this decision.” However, as a result of this language specifically referencing the U.S. Court of Federal Claims (“COFC”), some maritime contractors incorrectly appeal CO final decisions on maritime claims to the COFC.
Unfortunately these contractors do not always understand that this language limits court appeals of a CO’s decision on a maritime contract claim to U.S. District Courts, such as the District of Alaska. The question for the COFC then becomes whether to transfer to a U.S. District Court or dismiss the case. Certainly, no contractor wants to find itself in this situation because its claim was appealed to the wrong court.
The CDA’s language establishes an alternative procedure for claims arising under maritime contracts, such as contracts for the repair of vessels, marine construction, towing, ship management, stevedoring, port facilities and dredging. The effect of § 7102(d) is that contractors who are a party to a maritime contract may, after receiving a decision from the CO, (1) file an appeal at the board of contract appeals (“BCAs”) within 90 days of receipt of the decision, or (2) file an “action” appealing the decision directly in U.S. District Court within 12 months.
While all other government con-tractors must fight their appeals of CO’s decisions at the COFC or the BCA in Washington, D.C., Alaska maritime contractors can stay in Alaska and file in U.S. District Court for the District of Alaska under the CDA.
The U.S. District Court jurisdiction for CDA maritime claims provides important considerations for contractors, such as a decision may be issued in a shorter period of time. Appeals at the BCAs in D.C. can take well over two years to be decided. In comparison, a decision from District of Alaska will be much faster. Time, after all, is money.
The local assistant U.S. attorney will generally be responsible for representing the government, rather than agency counsel. The contracting officer will also no longer have authority to settle the claim, as would be the case at the BCAs in D.C. Rather, the U.S. Attorney’s Office has sole settlement authority. Sometimes it is helpful for contractors to have a fresh set of eyes, someone who is not the contracting officer, review the claim for possible settlement.
However, U.S. District Court judges do not have the same background in government contracts that the CDA requires for administrative judges at the BCAs. BCA judges are required to have many years of government contract law experience, and the BCA decisions come from three judge panels. District Court judges therefore may approach government contract law in a much different manner than the board judges, which can be helpful (or harmful) to a contractor. This why it is important for a contractor’s counsel to provide legal advice regarding the potential consequences of each of these approaches for the contractor’s specific claim.
Also, unlike the BCAs, which generally decide entitlement but not quantum (the amount of money a contractor should receive), district courts decide both entitlement and quantum. This is a major consideration for a contractor because it leads to faster payment of the claim amount. If the BCA finds that the contractor is “entitled” to payment, then the contractor still has to go back to the contracting officer to negotiate payment. Whereas a U.S. District Court such as the District of Alaska issues a decision that states exactly how much money the contractor is to be paid by the government.
Since a CO’s decision on a maritime government contract CDA claim cannot be brought at the COFC, an appeal of the District of Alaska decision on a maritime contract does not go to the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) in Washington, D.C., where COFC cases are appealed. Instead it stays on the West Coast and is decided by the U.S. Court of Appeals for the 9th Circuit.
Now some contractors, after consulting with their counsel, may decide to appeal to the BCAs anyway. But if they disagree with the BCA’s decision, they have a special right to appeal BCA decisions on maritime CDA claims. In a traditional non-maritime contractor claim, if the CO’s decision is appealed to the agency BCA, then appeal of the agency’s BCA decision would go straight to the Federal Circuit in D.C. However, for maritime CDA claims, appeals of the decisions of the BCAs must be filed with the appropriate U.S. district court. Appeals of these district court decisions are also to the relevant U.S. Court of Appeals for that district.
Essentially, a contractor who appeals a BCA decision concerning a maritime claim is afforded two opportunities to appeal from the trial forum: to the U.S. District Court, and then to the U.S. Court of Appeals that has jurisdiction over that district court. Non-maritime contractors only get one such appeal.
Accordingly, U.S. District Court maritime claim jurisdiction affords Alaska maritime contractors a unique choice of forum under the CDA — U.S. District Court rather than the Court of Federal Claims. This CDA choice of forum may provide contractors with certain advantages, such as comparatively quicker decisions and diverse interpretations of government contract law. It also provides for striking differences with the other choice for maritime contractors, the BCAs.