NASA Procedural Requirements

NPR 9640.1A Effective Date: October 28, 2019 Expiration Date: October 28, 2024

Subject: Financial Management of Contractor Claims Against NASA

Responsible Office: Office of the Chief Financial Officer

Chapter 1. Claims Against NASA

1.1 Overview

1.1.1 This chapter sets forth requirements relating to claims by contractors against NASA under 41 U.S.C. §§ 7101-7109.

1.1.2 Regulations impose prerequisites for certain written demands or assertions (e.g., those exceeding $100,000) to become claims. A voucher, invoice, or other routine request for payment that is not in dispute is not a claim.

1.1.3 The United States cannot be sued without its consent. The United States consents to be sued (i.e., waives its sovereign immunity) only by clear and explicit legislative acts. Similarly, the Federal Government's funds, property, or rights cannot be given away without its consent. The Constitution places the power to release or otherwise dispose of the rights and property of the United States with the Congress. Therefore, a party needs legal authority to bring a claim against the United States, and the Federal Government needs legal authority to make funds, property, or rights of the Federal Government available to others. Absent statutory authority, the officers and agents of the Government may not waive the United States' contractual rights or pay a claim.

1.2 Contractor Claims Against NASA under the Contract Disputes Act

1.2.1 Assistance to Claimants. Pursuant to 18 U.S.C. § 205, a Government employee shall neither assist nor act on behalf of a claimant in prosecuting any claim against the United States other than in the proper discharge of official duties.

1.2.2 Government employees shall not receive any gratuity, nor any share of or interest in any such claim, in consideration of assistance in the prosecution of such claim.

1.2.3 Per 41 U.S.C. § 7101-7109, a contractor's claim against NASA is to be submitted to the NASA Contracting Officer in writing and in accordance with statutory requirements.

1.2.4 The Contracting Officer shall notify and consult with the Center Office of the Chief Counsel, the Center Procurement Officer, and the Center Office of the Chief Financial Officer (OCFO) (or Office of General Counsel and Agency OCFO, Financial Management Division) regarding claims of $10,000 or greater.

1.2.5 The Contracting Officer shall review each claim in consultation with the Center Office of the Chief Counsel (or Office of General Counsel) in accordance with legal authorities and issue a final decision in writing within the statutorily prescribed time limits unless advised by legal counsel that grounds exist to decline to issue a final decision, i.e., defective certification. If the Contracting Officer denies a claim, the claimant may appeal the decision to the Court of Federal Claims or the Armed Services Board of Contract Appeals (ASBCA). Decisions of the Court of Federal Claims and ASBCA are appealable to the Court of Appeals for the Federal Circuit, decisions of which may be appealed to the United States Supreme Court.

Figure 1-1. Contracting Disputes Act Process

1.2.6 Generally, only Contracting Officers, or those to whom the authority is delegated, may settle contract claims at the Agency level or at the ASBCA. Only the Department of Justice is authorized to settle claims before the Court of Federal Claims.

1.2.7 With certain exceptions and subject to the limitations of their warrants, Contracting Officers are authorized to decide or resolve any claims arising under a contract subject to 41 U.S.C. §§ 7101-7109.

1.2.8 The Contracting Officer shall work closely in coordination with the Center OCFO (or Agency OCFO, Financial Management Division), relevant Resource Management Officer (RMO), and Center Office of the Chief Counsel Office (or Office of General Counsel) to ensure that there are adequate funds legally available for obligation before agreeing to the payment of additional funds or the adjustment of contract terms that would result in the payment of additional funds under the contract. The Contracting Officer and Center OCFO should seek advice from their NASA legal counsel as to entitlement and quantum on claims. It is foreseeable that the Contracting Officer, upon review of the claim, facts, circumstances, and contract file, and in consultation with NASA legal counsel, may determine that the claimant is not entitled to any compensation. Additionally, it is foreseeable that the Contracting Officer may determine that although the claimant is entitled to additional compensation, such amount is less than the amount claimed.

1.3 Payment of Claims

1.3.1 Determining which funding source (e.g., appropriations) to use when paying contract claims can involve detailed and nuanced analysis. Executing a written agreement or final decision may constitute an obligation of funds. Contracting Officers shall work with their respective Center Office of the Chief Counsel (or Office of General Counsel), Center OCFO, and RMO to ensure that adequate funds are legally available for obligation from the correct sources before agreeing to pay a claim.

1.3.2 Claims for the Payment of Money Granted by the Contracting Officer.

1.3.2.1 If the Contracting Officer authorizes payment of a claim that is authorized by and enforceable under the provisions of the original contract, the claim amount will be paid out of appropriations that were available for obligation when the contract was executed.

1.3.2.2 If the Contracting Officer authorizes payment of a claim for a contract change that exceeds the scope of the contract (an out-of-scope change), the payment is a new obligation and will be paid out of appropriations current at the time the change is made.

1.3.3 Final Court Judgments, ASBCA Awards, Department of Justice Compromise Settlements, and Interest and Costs.

1.3.3.1 The Judgment Fund pays final monetary judgments by the Court of Federal Claims and Court of Appeals for the Federal Circuit, awards by the ASBCA, compromise settlements by the Department of Justice, and interest and certain costs specified in the judgments where payment is not otherwise provided for under another appropriation. The Judgment Fund is not available to pay settlements made by the Contracting Officer.

1.3.3.2 In accordance with 41 U.S.C. § 7108 and 31 U.S.C. § 1304, NASA is required to reimburse the Judgment Fund out of appropriations available for the activity that gave rise to the claim and are current at the time of the award or judgment. Reimbursements to the Judgment Fund are treated as new obligations. See paragraph 1.4, below, for additional information regarding the Judgment Fund.

1.3.4 In consultation with the relevant Contracting Officer, Center Office of the Chief Counsel (or Office of General Counsel), and RMO, the Center OCFO shall review requests for payments related to claims to determine how payment may be made. This determination is dependent upon authorization, approval, and funding available to settle the claim. Claims will not be processed for payment unless funds have been appropriated and are legally available for obligation (considering purpose, time, and amount).

1.4 The Judgment Fund

1.4.1 In accordance with 31 U.S.C. § 1304, a permanent indefinite appropriation managed by the Department of the Treasury is used to pay final monetary court judgments, ASBCA monetary awards, Department of Justice compromise settlements, and interest and costs specified in the judgments where payment is not otherwise provided for under appropriation. Payment is certified by the Secretary of the Treasury. NASA is required to reimburse the Judgment Fund for these payments.

1.4.2 Reimbursing the Judgment Fund. Regulations and requirements specific to the Judgment Fund may be found at 31 CFR pt. 256 and I TFM 6-3100. Guidance on the Judgment Fund reimbursement process may be found on Treasury's Web page for the Judgment Fund (https://www.fiscal.treasury.gov/judgment-Fund/) and the Web page for Treasury Managed Accounts (https://www.treasurydirect.gov/govt/apps/tma/tma.htm).

1.4.3 Setoff Against Judgment. Office of Management and Budget (OMB) delegated Judgment Fund payments and setoffs against such payments to the Judgment Fund Branch of Treasury's Financial Management Service. In accordance with 31 U.S.C. § 3728, Treasury will withhold paying any part of a judgment owed by NASA that may offset a debt that is owed to NASA by the claimant. That portion of the debt and the judgment will be discharged if agreed to by the claimant. If the claimant disputes the setoff, the Government will bring a civil action to recover the debt. Treasury will withhold payment of an additional amount to cover the cost of bringing the civil action.

1.4.4 Interest on Claims and Judgments.

1.4.4.1 Generally, interest may not be recovered on a claim against the United States unless expressly provided by statute or contract. Courts are not authorized to award interest against the United States on the basis of equity or because payment has been delayed, even if the delay can be termed unreasonable.

1.4.4.2 If payment is owed on a contract claim under 41 U.S.C. § 7109, the Government is required to pay interest on the claim from the date the Contracting Officer receives the claim to the date of payment, in accordance with 48 CFR subpt. 33.2. This requirement applies whether the claim is allowed by the Contracting Officer, a board of contract appeals, or a court.

1.5 Assignment of Claims

1.5.1 Assignments of claims will be made in accordance with 31 U.S.C. § 3727. A claim may only be assigned after the claim has been allowed, the amount is decided, and a warrant for payment has been issued. The assignment is to be acknowledged before an official who will certify the assignment. 31 U.S.C. § 3727(b) is applicable to contracts when it is expressly provided for in the contract.

1.5.2 As stated in 31 U.S.C. § 3727(c), the requirements of paragraph 1.5.1 above do not apply to assignments of money under a contract providing for payments of at least $1,000 when the contract does not forbid an assignment or a written notice of the assignment is filed with the contracting official, the head of the agency, the surety on a bond on the contract, and any disbursing official for the contract.

1.6 False Claims

1.6.1 When there are suspicions of fraud or irregularities regarding a claim (either prior to payment or subsequent to payment), the Center Office of the Chief Counsel (or Office of General Counsel) shall be informed to determine appropriate action.

1.6.2 Upon discovery of fraud, the Agency OCFO, Director of the Financial Management Division, shall be immediately notified by telephone and submission of a written notice and the matter shall be referred to the Office of Inspector General in accordance with NPD 9800.1.

1.7 Roles and Responsibilities

1.7.1 The Agency Chief Financial Officer (CFO) shall issue and maintain policy guidance related to the financial management responsibilities regarding claims.

1.7.2 Center CFOs shall:

a. Refer contractor claims related to 41 U.S.C. §§ 7101-7109 (FAR subpt. 33.2, Disputes and Appeals) to the procurement officer.

b. Contact the Center Office of the Chief Counsel (or Office of General Counsel) upon receipt of a claim.

c. Issue and maintain guidance related to the Center's financial management responsibilities regarding claims settled administratively at the Center.

d. Support the settlement or disposition of claims in coordination with the Center organization out of which activity the claims arose.

e. Include an explanation of the doubtful aspects if any aspect of the claim appears to be in doubt.

1.7.3 The NASA Shared Services Center (NSSC) staff shall process the payment of claims that are approved by the Center CFO with the applicable concurrences from the Center Chief Counsel and Contracting Officer.

1.7.4 The Center Office of the Chief Counsel shall:

a. Notify and coordinate with the Office of the General Counsel upon receipt of the claim.

b. Provide advice and counsel to assure the propriety of claims prior to action by the Center CFO and the decision of the Contracting Officer to settle applicable claims.

c. Notify and coordinate with the Control Account Manager (CAM) for the Appropriation that is expected to provide funds for settlement, upon receipt of the claim.

1.7.5 The Center OCFO shall review claims filed with the Center to determine how payment may be made.

1.7.6 The Center Procurement Office shall review claims filed with the Center in conjunction with the Center OCFO and Chief Counsel.

1.7.7 The Agency Office of Procurement shall review claims of $100,000 or greater.

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NODIS

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