With contract terminations for convenience coming at an unprecedented rate, it is essential for contractors to remember that a termination for convenience itself is not a claim that can be immediately appealed. While your instant reaction may be to march into court or before a board of contract appeals as soon as you receive the termination for convenience notification from your contracting officer (CO), a premature appeal will be short-lived. Two contractors recently learned that the hard way at the Civilian Board of Contract Appeals (CBCA). Boards and courts have consistently held that, unlike terminations for default, terminations for convenience are not sufficient claims to confer jurisdiction for them to review a CO's decision to terminate. This is also true for claims for costs underlying a termination for convenience. To challenge a termination for convenience or seek associated termination costs, you must first submit a claim to the CO and receive a CO's Final Decision (COFD). This is true even if the termination notice itself is labeled as a final decision. 

A Look at the Law

Under the Contract Disputes Act (CDA), "[e]ach claim by a contractor against the Federal Government relating to a contract shall be submitted to the contracting officer for a decision." 41 U.S.C. § 7103(a)(1). A contractor normally has the right to appeal a COFD, or if the CO does not issue a timely decision, to appeal the deemed denial of the claim. § 7103(f)(5)-(g). The Federal Acquisition Regulation (FAR) defines a claim as a written demand or assertion by either a contractor or the government "seeking, as a matter, of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract…" FAR 2.101. An invoice or other routine request for payment is not a claim unless it becomes disputed or "is not acted upon in a reasonable time."

Upon submission of a contractor's claim, a CO typically has 60 days to issue a COFD. FAR 32.211(c). If the CO fails to timely issue a COFD, or if the contracting officer denies the claim, a contractor normally may appeal the denial or deemed denial. § 7103(f)(5)-(g). Conversely, a contractor may not appeal until there has been a final decision or a deemed denial of a claim. However, terminations for convenience – even when styled as a final decision – are not final decisions under the CDA. Put another way, a contracting officer's decision to terminate a contract for convenience is not a government claim. This is compared to a contracting officer's final decision to terminate a government contract for default or cause which is instantly appealable as a government claim. See e.g., Malone v. United States, 849 F.2d 1441, 1443-44 (Fed. Cir. 1988) This distinction is important to understanding your rights under the CDA and the timeline requirements for filing an appeal. 

Two Recent CBCA Dismissals

In January 2025, the CBCA dismissed two appeals because those contractors attempted to challenge a termination for convenience before first filing a claim with the CO. In the first appeal, the appellant sought relief after its U.S. Agency for International Development (USAID) contract was terminated for convenience. John Blankson, CBCA 8256, 25-1 BCA ¶38,726 (Jan. 2, 2025). The CO's termination letter stated, "I have reached the conclusion that continuing your contract with USAID/West Africa is not in the Government's interest." The letter also said it was "the final decision of the Contracting Officer," and explained appellant's right to file an appeal, including with the agency board of contract appeals with the option of using small claims procedure. Id. at 2. 

The appellant immediately filed an appeal with the CBCA challenging the termination for convenience and seeking $50,000 without first submitting a claim to the CO. The CBCA granted the government's motion to dismiss for lack of jurisdiction finding that the Board could not hear the appeal because there was no claim in dispute. The CBCA explained, "[a]lthough USAID's letter represented that it was a 'final decision,' that letter was not a COFD, but rather, it was only a notice of the termination of appellant's contract for convenience." Id. at 3. The Board found that a CO "…cannot bestow subject jurisdiction on the board" by using a misleading label on a termination for convenience notice. Id. at 4. 

Two weeks after dismissing the John Blankson appeal, the CBCA issued a similar decision dismissing another contractor's appeal of a termination for convenience by USAID in the appeal of Tesla Liliana Reyes Ramirez. Tesla Liliana Reyes Ramirez, CBCA 8210, 25-1 BCA ¶38,728 (Jan. 15, 2025). Here, the appellant requested relief from another termination for convenience of a USAID contract and sought $100,000 directly from the CBCA without first filing a claim with the CO. The CO's decision terminating appellant's personal services contract stated, "[t]his is the final decision of the Contracting Officer. You may appeal this decision to the agency board of contract appeals." Id. at 2. Appellant took those words at face value and appealed to the CBCA without first submitting any claim to the CO. Citing its decision in John Blankson and other precedent, the CBCA found that the termination was not an appealable COFD and dismissed the appeal for lack of jurisdiction. 

Termination for Convenience Takeaways

The two recent dismissals at the CBCA serve as a reminder to contractors that, regardless of the language used, a termination for convenience does not create an instant right under the CDA to challenge a termination or seek a monetary remedy directly from a court or a board of contract appeals. The necessary first step to seeking a monetary remedy or challenging a termination for convenience is to file a claim with the CO. While this may seem like an unnecessary administrative burden, it is a jurisdictional requirement under the CDA that the CBCA has made clear they intend to enforce. This procedural step also allows the CO to address a claim before resorting to litigation. In the cases discussed above, the appellants skipped this formality thereby creating jurisdictional defects that could have been avoided and adding to the time and expense required to resolve these terminations. 

For more information, please contact:

Scott N. Flesch, sflesch@milchev.com, 202-626-1584

Elissa B. Harwood, eharwood@milchev.com, 202-626-5890

Jason N. Workmaster, jworkmaster@milchev.com, 202-626-5893

Alex L. Sarria, asarria@milchev.com, 202-626-5822 

Ashley Powers, apowers@milchev.com, 202-626-5564

Connor W. Farrell, cfarrell@milchev.com, 202-626-5925

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