45 F.4th 1
D.C. Cir.2022Background
- The FAA contracted Archer Western to build air‑traffic facilities at McCarran (Las Vegas); the FAA issued multiple design changes that caused delays and extra costs.
- Archer submitted a request for an equitable adjustment; the FAA unilaterally adjusted the contract and formally denied Archer’s requested equitable adjustment in December 2013.
- Archer filed a notice of contract dispute with the FAA’s Office of Dispute Resolution for Acquisition (ODRA) in April 2015 asserting (among other things) a “Failure to Provide Equitable Adjustment for Significant Design Modification.”
- Archer also installed round and rectangular HVAC ducts; the antimicrobial coating flaked on round ducts and tests showed adhesion problems (including 17 zero scores) and oil contamination in rectangular ducts; FAA rejected all ducts and ordered replacement.
- Archer submitted a separate cumulative‑impact claim in 2019 alleging that successive modifications produced compensable costs across unchanged work. ODRA dismissed the equitable‑adjustment claim (as untimely), dismissed the cumulative‑impact claim (untimely), and upheld rejection of the rectangular ducts; FAA adopted ODRA’s order.
- Archer petitioned the D.C. Circuit; the court reviews FAA orders under the arbitrary‑or‑capricious / substantial‑evidence standard.
Issues
| Issue | Archer's Argument | FAA's Argument | Held |
|---|---|---|---|
| Timeliness of failure‑to‑provide‑equitable‑adjustment claim | Claim accrued when FAA denied the equitable‑adjustment in Dec. 2013; filing Apr. 2015 was within two‑year contractual window | Claim accrued earlier (when FAA proposed changes / when events fixing liability occurred), so claim was untimely | Court: Archer’s failure‑to‑provide‑equitable‑adjustment claim accrued on FAA’s Dec. 2013 denial and was timely; vacated dismissal |
| Timeliness of cumulative‑impact claim | Cumulative‑impact arises from the aggregate facts of other claims and was effectively pled | Claim had to be alleged separately and ‘‘broken down by individual claim item’’ within two years; Archer did not do so until 2019 | Court: Claim untimely; ODRA correctly dismissed it |
| Rejection of rectangular ducts | FAA’s rejection was unsupported; only round ducts had clear flaking, rectangulars did not require full replacement | Tests, oil contamination, and flaking on turning vanes supported rejection; reasonable to require replacement | Court: Substantial evidence supports FAA’s rejection of the rectangular ducts; affirmed |
Key Cases Cited
- Multimax, Inc. v. FAA, 231 F.3d 882 (D.C. Cir. 2000) (scope of review of FAA orders; arbitrary or capricious standard)
- City of Santa Monica v. FAA, 631 F.3d 550 (D.C. Cir. 2011) (application of substantial‑evidence standard to agency factual findings)
- Town of Barnstable v. FAA, 740 F.3d 681 (D.C. Cir. 2014) (substantial evidence means more than a scintilla)
- Pham v. National Transportation Safety Board, 33 F.4th 576 (D.C. Cir. 2022) (agency may rely on such relevant evidence as a reasonable mind might accept as adequate)
- Western Air Lines, Inc. v. Civil Aeronautics Board, 495 F.2d 145 (D.C. Cir. 1974) (a plausible alternative interpretation of evidence does not defeat substantial evidence review)