Not bad power, but the ability of a decision-maker (e.g., court) to decide which side is right (or which is more correct). A judge’s power is not automatic. Every court must first decide if it has the power to decide the parties’ dispute – whether it has jurisdiction over the subject matter and the parties involved. Without such power, no further decisions can be made.
Based upon recent guidance from the U.S. Supreme Court (Wilkins v. U.S., No. 21-1164, March 28, 2023), the U.S. Court of Appeals for the Federal Circuit held that the requirement to state a sum certain under the Contract Disputes Act of 1978 is NOT a jurisdictional requirement. Failure to state a sum certain does NOT deprive the decision-maker of power. Arguments regarding sum certain are subject to “disagreement on the merits” not dismissal for lack of jurisdiction because the claimant “organiz[ed] its sub-claims in a manner different from how the [Armed Services Board of Contract Appeals] would sub-divide claims” or how the Government would have preferred the claimant have sub-divided its claims. Although “a deficient sum certain may in some circumstances be a reason to reject all or part of a claim, it does not mean the Board lacks jurisdiction entirely.” The Federal Circuit did not describe or exemplify “some circumstances,” so stay tuned for what that means.
Claimants should still state a sum (or sums) certain or specific in their claims, no estimates or place-holders (see another post on this point). But now, if claimants are not specific, it can be cured without depriving the decision-maker of power to resolve the disputes.
Keep a Pass-Thru Claim Burning, Don’t Extinguish Liability
Prime contractors, have you ever submitted a subcontractor’s claim to a public owner? Subcontractors, have you ever wanted to submit a claim against the government, but you had no contract with government?
When You Can’t Recover from a Third-Party (The Economic Loss Doctrine)
Suppose that you (the Contractor) had extra costs and want payment for those extra costs from the designer.
Barbecue and Construction Contracts
While barbecue recipes can be short and simple, contracts can be long and complicated. Fundamentally, though, recipes are very much like contracts: what’s required, how much of each part/ingredient, in what order should they be assembled/added, when, and for how long?
Show Your Work
A mentor of mine once said that process and procedures can be more important than substance and results. Like solving a math problem, how you solve it is often more important than the answer itself. The same is true in resolving construction contract disputes with public owners.
Substandard is Not Defective
The government need not follow the industry standard. It can do less or more.
Hide, Seek, & Seek
Have you ever played hide and seek? If you are the seeker, do you win the game when you find the hidden person? Yes, of course! Unless, you’re a government contractor.
Contractor Schooled School
Have you ever done exactly what you were supposed to do, but it didn’t work and you were blamed anyway? Nevertheless, if contractors follow the owner’s plans and it still doesn’t work, the contractor may be without fault – this is as it should be.
Walk It Off, Keep Going
During a recent soccer game, my seven-year-old son took the ball squarely in the face. But, he walked it off and continued playing. Contractors must do the same with changes.
Are We There Yet?
Next time you close a deal, get the essential terms on paper and signed by all parties before it’s Miller Time.
