Client Alerts & Newsletters

Stop in the Name of Fraud?: After-the-Fact Fraud Allegation Does Not Divest ASBCA of Jurisdiction

Aug.21.2020

In Mountain Movers/Ainsworth-Benning, LLC, the Armed Services Board of Contract Appeals addressed whether the Board retains jurisdiction over an appeal of a contractor’s claim when a contracting officer (CO) rescinds a final decision based upon a contractor’s alleged fraud. During the appeal, the CO rescinded the final decision, asserting that the contractor had previously made misrepresentations related to the contract. The CO issued a new final decision stating that the contractor’s alleged misrepresentation divested the CO of authority to decide the claim, and cited to FAR 33.210(b), which states that COs do not have the authority to settle, compromise, pay, or adjust any claim involving fraud. The Government then moved to dismiss the appeal for lack of jurisdiction, arguing that there was no longer an appealable final decision. The Board rejected the Government’s argument, and held that it possessed jurisdiction over the prior final decision, which had decided the claim on the merits and was appealed before the CO’s rescission. The Board also noted that the Contract Disputes Act may divest a CO of authority to resolve claims when the alleged fraud relates to the claim, but not when there is just a belief of possible fraud during contract performance. This decision is consistent with recent Board case law finding jurisdiction over appeals when there is an allegation that the contractor committed fraud during contract performance, and makes clear that the Government cannot divest the Board of jurisdiction simply by making allegations of performance fraud either post hoc or unrelated to the “claim.” 

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Stephen J. McBrady
Partner – Washington, D.C.
Phone: +1 202.624.2547
Email: smcbrady@crowell.com

Nicole Owren-Wiest
Partner – Washington, D.C.
Phone: +1 202.624.2863
Email: nowrenwiest@crowell.com

Michelle D. Coleman
Counsel – Washington, D.C.
Phone: +1 202.654.6708
Email: mcoleman@crowell.com

Skye Mathieson
Counsel – Washington, D.C.
Phone: +1 202.624.2606
Email: smathieson@crowell.com

John Nakoneczny
Associate – Washington, D.C.
Phone: +1 202.624.2814
Email: jnakoneczny@crowell.com

Crowell & Moring LLP is an international law firm with approximately 550 lawyers representing clients in litigation and arbitration, regulatory and policy, and transactional matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation, as well as its ongoing commitment to pro bono service and diversity, equity and inclusion. The firm has offices in Brussels, Doha, London, Los Angeles, New York, Orange County, San Francisco, Shanghai, and Washington, D.C.

View Desktop Site | Mobile Sitemap |

Contact | Subscribe | Terms of Use | Privacy Statement | Alumni

© Crowell & Moring LLP 2021
Attorney advertising - prior results do not guarantee a similar outcome.