Many successful claimants under federal contracts are entitled to attorney fees and other litigation expenses under the Equal Access to Justice Act. However, the government will not be liable for fees and expenses if its original denial of the claim is “substantially justified.” Does this refer to the government’s overall response to a consolidated claim or just the portion of the claim upon which the contractor prevailed on appeal? The U.S. Court of Appeals for the Federal Circuit recently ruled on this issue.
The Federal Circuit said the statute, as amended, requires examination of the overall administrative record. However, it is appropriate—and standard practice—to focus on the successful portion of the contractor’s appeal. The government’s conduct and reasoning in denying that portion of the claim is crucial.
The second case in this issue involves a contractor’s adoption of a subcontractor proposal as a term of the subcontract agreement. Language in that proposal created an unexpected problem for the contractor regarding its Commercial General Liability insurance coverage.
The third case addresses the proper way to appeal denial of a claim on a federal contract. The appeal must allege facts and make arguments consistent with the claim initially submitted to the government contracting officer. Otherwise, the contractor has essentially skipped that step of the claim process, and the appellate board has no jurisdiction.
