Virginia Supreme Court Clarifies When a Claim is Deemed Submitted Under the Virginia Public Procurement Act

In early 2012, the Virginia Supreme Court clarified that a notice of intent to file a claim and the submission of a claim may not always be inclusive of each other, and the failure to actually submit the claim after notifying the government of an intent to file a claim can forever bar a breach of contract action. In Jean Moreau & Associates, Inc. v. Health Center Commissions for the County of Chesterfield, 720 S.E.2d 105 (January 13, 2012), the Health Center Commission for Chesterfield County awarded the contractor a five year contract to plan and develop an independent-living facility.  The contract was to be continued yearly, subject to approval and ratification by the Commission, and provided the contractor with a monthly fee, development fee, and marketing fee.  Two years after the contract was awarded, the Commission voted to discontinue the contract, and sent the contractor a letter conveying that decision.  Roughly one month after the receipt of the Commission’s letter, the contractor responded, claiming that it was owed development fees and “wanted to give [the Commission] a ‘heads up’ that [the contractor] intended to seek legal remedy regarding these fees.”  While the Court found that the response clearly did give notice of the contractor’s intent to file a claim within the requirements of the Virginia Public Procurement Act, the letter was not itself actually a claim.  Since the contractor did not send anything else to the Commission, the Court found that the contractor failed to comply with the Virginia Public Procurement Act’s requirement that a claim be submitted within 60 days after final payment, thereby forever barring a breach of contract action.  The Court further explained that the Virginia Public Procurement Act does not require a public body to give notice that a payment is final before the 60-day limitations period begins to run against the private entity doing business with the government or municipal corporation.

Categories: Legal Updates