## Facts

- The Forest Service awarded Ellett a July 1988 contract to build a 2.7-mile logging road in Oregon.
- The contract incorporated the FAR termination for convenience clause and a Disputes clause allowing appeal from certain contracting officer (CO) determinations.
- The government issued only a partial notice to proceed and, about two months later, terminated the contract for convenience due to legislative developments affecting timber sales.
- On November 17, 1988, Ellett sent the CO a certified written demand seeking about $545,000 in equitable adjustments and other relief, expressly invoking the Contract Disputes Act (CDA) and requesting a CO final decision.
- Ellett later submitted a termination settlement proposal under the termination clause seeking about $495,000, with some overlap with the November submission.
- After extended negotiations failed, and at Ellett’s request, the CO issued a final decision on the termination settlement proposal, awarding about $23,000.
- Ellett sued in the Court of Federal Claims challenging the CO decision and seeking more than $451,000 plus related relief.
- The Court of Federal Claims dismissed for lack of subject-matter jurisdiction, concluding neither the November letter nor the termination settlement proposal was a valid CDA claim when suit was filed.

## Issues

1. Whether Ellett’s November 17, 1988 certified letter constituted a CDA “claim” sufficient to support jurisdiction in the Court of Federal Claims.
2. Whether a termination settlement proposal can become a CDA claim once negotiations fail and the CO issues a written determination, making it appealable under the CDA and the Disputes clause.

## Decision

- The Federal Circuit reversed and remanded.
- The court held the November 17, 1988 letter was a valid CDA claim because it was a written, certified demand for a sum certain, submitted to the CO and requesting a final decision.
- The court held the termination settlement proposal, though initially a proposal, ripened into a CDA claim once the CO issued a written determination under the termination clause after lack of agreement.
- Because Ellett submitted at least one (and effectively two) CDA claims and received a CO final decision, the Court of Federal Claims had subject-matter jurisdiction.

## Legal Principles

- A CDA claim is a written demand or assertion seeking, as a matter of right, payment of money in a sum certain (or other contract relief), submitted to the CO, and certified when required by the CDA.
- A claim need not be preceded by a dispute, impasse, or failed negotiations to qualify as a CDA claim.
- A termination settlement proposal under a termination-for-convenience clause may later become a CDA claim when the contractor seeks a CO determination after failure to agree and the CO issues a written determination that is appealable under the Disputes clause.
- The Court of Federal Claims has CDA jurisdiction when there is a CO final decision (or equivalent determination authorized by contract and treated as final) on a contractor’s claim.

## Conclusion

The Federal Circuit held that Ellett’s certified November 1988 demand was a CDA claim and that its termination settlement proposal became a CDA claim upon the CO’s written determination, so the Court of Federal Claims erred in dismissing for lack of jurisdiction and the case was remanded for merits proceedings.


James M. Ellett Constr. Co. v. United States, 93 F.3d 1537 (Fed. Cir. 1996)