No Longer Appealing: Why Are Contractors Filing Fewer Appeals at the ASBCA?

We have surmised in previous years that this decline may be attributable, at least in part, to the passage of time since the conclusion of the most significant overseas contingency contracting (related to conflicts in Afghanistan and Iraq) for the Department of Defense. We have also suspected that Department of Defense contractors may be pursuing fewer appeals year over year because they have achieved success in resolving disputes informally with contracting officers before having to resort to a Board appeal. Although both of those reasons may be true, statistics from the Civilian Board of Contract Appeals (CBCA) and the Court of Federal Claims show that the trend of declining Contract Disputes Act (CDA) cases may be unique to the ASBCA. Indeed, the CBCA’s statistics indicate that in FY 2023, that Board docketed its highest number of new CDA appeals since 2017. Further, rather than declining, the Court of Federal Claims saw an equal number of CDA appeals filed in FY 2014 as it did in FY 2021.

The FY 2024 ASBCA annual report reveals the Army Corps of Engineers as last year’s most active agency: 71 of the 276 new appeals (or roughly 25%) were challenges of final decisions issued by U.S. Army Corps of Engineers contracting officers. Challenges to Navy final decisions comprise 21% of new FY 2024 appeals, and challenges to Army final decisions make up 17% of such new appeals. The Board reports that as of October 2024, the Board had 784 active matters. This represents a decline in pending cases—by 143—from the 927 appeals that remained pending at the conclusion of FY 2023. The number of pending cases at the Board had hovered between 900 to 1,000 at the conclusion of every fiscal year between FY 2014 and 2023.

The Board’s 23 active judges resolved 126 cases on the merits during FY 2024. The 23 judges collectively held 15 hearings in FY 2024, comprising 83 total hearing days. The Board reported a sustain rate, “in whole or in part,” of 46%. That represents a decline from the 67% sustain rate reported in FY 2023 and the 71% sustain rate reported for FY 2022. The sustain rate does not reveal the dollar value that contractors recovered versus the amount of money that contractors had originally sought. Accordingly, the reported sustain rates may not provide information on how successful contractors really were during FY 2024—or any reported year.

The Board reported that it dismissed 293 cases during FY 2024. Bilateral settlement prompted such dismissals in the “majority of cases.” At the conclusion of FY 2024, the Board had 299 motions for summary judgment pending, down from the record 554 pending at the conclusion of FY 2023. While this suggests that the Board worked diligently to decide dispositive motions in FY 2024, the statistics do not reveal whether the decrease from 554 pending motions to 299 pending motions resulted from decisions the Board issued or settlements. The Board also does not report on the length of time it takes to resolve cases or dispositive motions, which is an important consideration for contractors who must decide whether to take their appeals to the Board or the Court of Federal Claims.

Finally, with respect to alternative dispute resolution (ADR), the Board initiated 97 ADR proceedings during FY 2024. Ten of the 97 cases settled prior to the commencement of ADR and five were withdrawn. Of the 82 remaining ADR cases, 67 settled and the other 15 remained pending. Year after year, the Board’s high success rate suggests that ADR may be the best option to resolve cases at the Board successfully, swiftly and cost effectively. That said, as they say, it does take two to tango.

We will provide an alert that addresses the Civilian Board of Contract Appeals’ 2024 annual report, which we expect to be released soon. If you have any questions, please reach out to Pillsbury’s Claims and Terminations team.