On March 31, 2017, the United States Civilian Board of Contract Appeals (CBCA) dismissed a contractor’s claims against the Department of Veterans Affairs (VA) for a lack of jurisdiction, stating that the contractor should have secured a final decision from the General Services Administration (GSA) prior to filing its claim. According to the CBCA, since the dispute was over the terms of a GSA Schedule contract and not over contract performance, proper procedures call for a decision from the GSA Schedule contracting officer before the CBCA can weigh in on the dispute.

The dispute arises out of a VA task order issued to appellant Consultis of San Antonio, Inc. (Consultis), on October 1, 2013, under a Federal Supply Schedule (FSS) contract with the GSA. Under the task order, Consultis agreed to perform information technology services, supplying personnel, management, administrative support, and technical services in accordance with the statement of work.

During performance, the Department of Labor (DOL) conducted an investigation into the applicability of the Service Contract Labor Standards (SCLS) to the contract, following an employee’s inquiry into the wage rates paid to contractor personnel. DOL uncovered that, while the Service Contract Act (SCA) was incorporated into the original GSA contract, wage determinations were not. After completing the investigation, DOL requested that the VA and GSA incorporate the wage determinations into the task order but both refused, stripping DOL of enforcement authority against the contract.

It wasn’t until March 10, 2016, that the VA issued a unilateral modification to the task order, incorporating the wage determinations suggested by DOL and giving Consultis 30 days to request a wage adjustment based on the modification. In response to Consultis’ request for supplemental payment for the increased wages, on June 7, 2016, the VA contracting officer issued a final decision denying the request, arguing that compliance with the SCLS was the contractor’s sole responsibility.

On September 1, 2016, Consultis filed a timely appeal of the VA’s denial with the CBCA, requesting declaratory relief relating to the application of the SCLS to the task order. Under the Contract Disputes Act, the CBCA has jurisdiction over contract disputes following a final decision from the contracting officer or a deemed denial. While the VA contracting officer’s denial is a final decision from the contracting officer, the CBCA dismissed the appeal, stating that the dispute was meant for the review of the GSA contracting officer rather than the VA contracting officer.

In reaching its decision, the CBCA separated the contract into two separate categories – contract performance and interpretation of the terms and conditions of the contract. According to the CBCA, the VA is in charge of the ordering activity; therefore, any issues relating to performance should be decided by the VA contracting officer. Conversely, any disputes relating to the terms and conditions of the contract require a decision from the GSA contracting officer.

Relying on the Federal Circuit decision in Sharp Electronics Corp. v. McHugh, the CBCA highlighted that resolving disputes relating to the terms and conditions of a schedule contract is within the jurisdiction of the schedule contracting officer – in this case the GSA. Though the wage determinations were applicable to the task order, the CBCA reasoned that the issue was still within GSA’s jurisdiction because resolving the disagreement required examining the terms of the schedule contract. The CBCA held that the dispute revolves around whether the parties waived SCLS compliance, and whether the VA modification was a new contract term or whether it expressly codified existing contract terms. As such, the CBCA found that the dispute is, at the very least, both an issue of contract performance and contract interpretation – which would require decisions from both the VA contracting officer and the GSA contracting officer.

Ultimately, the decision demonstrates how the CBCA distinguishes contract performance disputes from contract interpretation disputes. Prior to filing a claim with the CBCA, contractors should confirm that they have received a final decision from the appropriate contracting officer. As illustrated in this case, where the line between performance and interpretation is blurred, the contractor is better off securing decisions from both the activity contracting officer and the scheduling contracting officer.