On April 6, 2012, we reported on Raytheon Company v. United States, COFC No. 09-306C (Apr. 2, 2012), where the Court of Federal Claims found that the government’s $25 million claim against the contractor was time-barred under the Contract Disputes Act’s (“CDA”) six-year statute of limitations. In our blog post and our client advisory about this decision, we reminded readers that this principle will also be enforced against contractors. There is also another statute of limitations that contactors must take into account – the six-year statute of limitations applicable to the Court of Federal Claims’ jurisdiction. Although this statute of limitations does not apply to CDA claims, contractors must still be cognizant of it.
On May 31, 2012, the Federal Circuit issued its decision in Floorpro, Inc. v. United States, Fed. Cir. No. 2011-5116, and found that a subcontractor was time-barred under the Court of Federal Claims’ six-year statute of limitations (28 U.S.C. § 2501). After reviewing the facts, the Federal Circuit determined that the subcontractor (which was not in privitiy with the Government) was aware that the government breached the contract in August 2002, and at that point, the subcontractor had a “complete and present cause of action.” However, the subcontractor waited until October 2009 – more than six years later – to file its complaint before the Court of Federal Claims. It was no excuse that the subcontractor originally filed a complaint in a timely fashion at the ASBCA in 2003, and lost on appeal at the Federal Circuit in June 2009 – on the grounds that ASCBA did not have jurisdiction over a subcontractor claim based upon a third-party beneficiary theory. Although the Federal Circuit commented that such a claim potentially existed under the Tucker Act in the Court of Federal Claims, this guidance came too late.
Contractors must take notice of this decision as this six-year statute of limitations is very powerful. Once a contractor becomes aware (or should have become aware) of a potential non-CDA claim against the government, it must track its claims to ensure that it does not become a victim to this statute of limitations. Similarly, contractors must also track their CDA claims to avoid falling victim to the CDA’s statute of limitations period.
Please contact us for more information about the application of the Court of Federal Claims’ jurisdictional statute of limitations, the CDA’s statute of limitations or any matter related to government contract claims. Waiting until the last second may cost you the claim.