In Kellogg Brown & Root Services, Inc. v. Murphy, Kellogg Brown & Root Services (KBR) filed a claim with the Army to recover costs associated with a subcontractor’s work on a dining facility in Iraq. The Army denied the claim and KBR appealed to the Armed Services Board of Contract Appeals (the Board). On the Army’s motion, the Board dismissed the claim, finding the six-year statute of limitations under the Contracts Dispute Act (CDA) had expired. KBR appealed to the Federal Circuit, which reversed the Board’s decision, finding the claim did not accrue, and thus the limitations period did not begin to run, until KBR had a basis for a “sum certain” to “fix” its liability.
Under a cost-plus-award-fee contract with the Army, KBR subcontracted work to the joint venture of KCPC/Morris. KBR later terminated the subcontract for delay and KCPC/Morris stopped work on September 12, 2003. On January 24, 2005, after KCPC/Morris had filed suit against KBR, the parties entered into a settlement agreement that liquidated a portion of KCPC/Morris’ claim. On the remainder of the claim, the parties agreed to cooperate to submit an invoice to the government.Continue Reading Federal Circuit Clarifies “Accrual” of Claims under Contract Disputes Act