James M. Ellett Construction Company, Inc. v. United States

James M. Ellett Construction Company, Inc. (Ellett) (plaintiff) entered into a contract with the Forest Service of the United States Department of Agriculture (government) (defendant) to construct a logging road in Oregon. The contract contained the standard Federal Acquisition Regulation (FAR) clause allowing the government to terminate the contract for its convenience and a standard FAR disputes clause allowing Ellett to appeal the government contracting officer’s (CO) final decision on a termination settlement proposal. The government issued a partial authorization for Ellett to proceed with construction. Approximately two months later, because of unexpected legislative changes, the government terminated Ellett’s contract for convenience. Ellett sent a formal, certified letter to the government on November 17, 1988, containing Ellett’s formal notice of claims under the Contract Disputes Act (CDA) to recover approximately $545,000 for equitable adjustments, unforeseen costs, and lost profits. Ellett then submitted a formal termination settlement proposal in compliance with FAR procedural requirements requesting a net payment of approximately $495,000; some of the claims in the settlement proposal were duplicative of claims in the November claim letter. After more than one year of unsuccessful negotiations, the government, at Ellett’s request, issued a final decision on Ellett’s termination settlement proposal, awarding Ellett approximately $23,000. Ellett appealed the government’s decision to the Court of Federal Claims. The government moved to dismiss, arguing that Ellett never submitted a valid CDA claim to the CO. The Court of Federal Claims dismissed Ellett’s claim for lack of jurisdiction, holding that neither Ellett’s November letter nor the final settlement proposal constituted a valid CDA claim.