The Armed Services Board of Contract Appeals (ASBCA) ruled in favor of The Haskell Company and its subcontractor, ENFRA MCC LLC, regarding a dispute over a pass-through claim. The decision, issued on May 5, 2026, allows ENFRA to continue its appeal against the Navy after the government sought to dismiss the case for lack of jurisdiction. This ruling is significant for contractors and subcontractors involved in federal contracts, as it clarifies the requirements for submitting claims and the role of prime contractors in supporting subcontractor claims.
The case, identified as ASBCA Nos. 64380 and 64381, arose from a contract awarded to Haskell by the Department of the Navy in 2017. The dispute centers on a claim submitted by ENFRA, which alleged costs due to project delays. The Navy argued that ENFRA lacked the necessary privity of contract and that Haskell's certification of the claim was insufficient under the Contract Disputes Act (CDA). The court's decision to deny the Navy's motion to dismiss is crucial for ENFRA, allowing it to pursue its claims against the Navy.
Background
The parties involved in this case are The Haskell Company, a prime contractor, and ENFRA MCC LLC, a subcontractor. Haskell was awarded Contract No. N40085-17-C-8327 by the Navy on June 29, 2017, for the design and construction of mechanical systems. ENFRA was subcontracted by Haskell shortly after the contract was awarded.
In early 2024, ENFRA expressed its intent to submit a pass-through claim to the Navy, which would allow it to seek reimbursement for costs incurred during the project. The claim was officially submitted on February 3, 2025, and included certifications from both Haskell and ENFRA. However, the Navy denied the claim, stating that ENFRA had no direct contract with the government and that Haskell's certification was not compliant with CDA requirements.
The Ruling
The ASBCA, led by Administrative Judge Laura J. Arnett, ruled against the Navy's motion to dismiss the appeals. The court found that Haskell had indeed sponsored ENFRA's claim, which allowed ENFRA to appeal the Navy's denial. The court stated, "We have found Haskell’s June 4, 2025 letter to the CO requesting that she 'review and consider' ENFRA’s claim as a 'properly submitted pass through claim sponsored by Haskell' expressly demonstrated Haskell’s sponsorship of the claim."
Additionally, the court concluded that the certifications provided by both Haskell and ENFRA were sufficient to establish jurisdiction. The court noted, "Taken together, these documents are sufficient to constitute a defective certification pursuant to 41 U.S.C. § 7103(b)(3)." This ruling indicates that while there were issues with the certification, they did not prevent the court from having jurisdiction over the case.
Impact
This ruling has significant implications for subcontractors working under federal contracts. It clarifies that a prime contractor can sponsor a subcontractor's claim, even if there are issues with the certification, as long as there is evidence of intent to support the claim. The decision reinforces the idea that the relationship and communication between prime contractors and subcontractors are crucial in navigating contract disputes.
Furthermore, the ruling sets a precedent for future cases involving pass-through claims, emphasizing that a prime contractor's support can be inferred from consistent cooperation and communication throughout the claim process. This could encourage subcontractors to pursue claims more vigorously, knowing that they may have a pathway to appeal even when faced with jurisdictional challenges.
What's Next
Following this ruling, the case will proceed, allowing ENFRA to continue its appeal against the Navy. The Navy may have options to further contest the ruling, but details regarding any potential appeals were not provided in the court filing. The outcome of this case could influence how similar disputes are handled in the future.