The Armed Services Board of Contract Appeals has dismissed an appeal from Tanik Construction Company, Inc. The appeal sought extraordinary contractual relief related to a contract with the Army Corps of Engineers. The court ruled that it did not have jurisdiction to hear the case, which could affect how contractors pursue claims against government agencies in the future.
Tanik Construction, based in Alaska, previously entered into a contract with the Army Corps of Engineers for various government facility improvements. The dispute arose when the company sought additional damages after claiming that the Corps' actions led to the destruction of its business and emotional distress. The court's decision means that Tanik's claims for extraordinary relief will not be heard.
Background
Tanik Construction Company, Inc. (Tanik) is a construction firm that has been in operation since 2003. The company was awarded a contract by the Army Corps of Engineers on April 9, 2014, to perform restoration and modernization work on government facilities in Alaska. A task order for specific improvements at the Coast Guard Station in Kodiak was awarded shortly after, valued at over $5.7 million.
As the project progressed, Tanik encountered issues related to differing site conditions. Despite executing several change orders, the company submitted a certified claim seeking additional damages, which the contracting officer denied, citing previous releases of claims. Tanik then appealed this decision to the Board, which led to a settlement allowing the company to pursue a claim for extraordinary contractual relief.
The Ruling
In its latest ruling, the Armed Services Board of Contract Appeals, led by Administrative Judge J. Reid Prouty, determined that Tanik's claim for extraordinary contractual relief was not within the Board's jurisdiction. The court noted, "Without the submission of a valid CDA claim, we do not possess jurisdiction to consider Tanik’s appeal." The ruling emphasized that the claim was based on regulations that invoke Public Law 85-804, which grants discretionary relief to contractors but does not allow for judicial review.
The court highlighted that Tanik's claim for extraordinary relief did not reference the Contract Disputes Act (CDA) and instead sought relief under FAR Part 50 and DFARS Part 250, which are associated with extraordinary contractual actions. The ruling concluded that the Board cannot review such claims, stating, "We do not possess jurisdiction to consider this appeal."
Impact
The dismissal of Tanik's appeal sets a significant precedent for contractors seeking extraordinary relief from government contracts. The ruling clarifies that claims for extraordinary contractual relief under Public Law 85-804 are not subject to the same review processes as those under the CDA. This could discourage contractors from pursuing similar claims in the future, knowing that they may not be heard by the Board.
Moreover, the ruling reinforces the notion that contractors must clearly establish the basis for their claims and the appropriate legal framework under which they are pursuing relief. The decision may lead to greater scrutiny of claims submitted by contractors against government entities, as they must navigate the complexities of jurisdiction and the specific regulations governing their claims.
What's Next
Following this ruling, Tanik Construction has limited options for appeal, as the dismissal is based on jurisdictional grounds. There is no indication that a related case is pending, and it remains unclear whether Tanik will pursue further legal action in another forum.