United States Court of Appeals 

for the Federal Circuit 

__________________________ 

LUMBERMENS MUTUAL CASUALTY COMPANY, 

Plaintiff-Cross Appellant, 

v. 

UNITED STATES, 

Defendant-Appellant. 

__________________________ 

2010-5086, -5087 

__________________________ 

Appeal from the United States Court of Federal 

Claims in case no. 04-CV-1255, Senior Judge Robert H. 

Hodges, Jr. 

___________________________ 

Decided: August 3, 2011 

___________________________ 

MARK G. JACKSON, Ball Janik, LLP, of Seattle, Washington, argued for plaintiff-cross appellant. With him on 

the brief was MATTHEW C. HOYER, of Washington, DC. 

DONALD E. KINNER, Assistant Director, Attorney, 

Commercial Litigation Branch, Civil Division, United 

States Department of Justice, of Washington, DC, argued 

for defendant-appellant. With him on the brief were 

TONY WEST, Assistant Attorney General, JEANNE E.

DAVIDSON, Director and CHRISTOPHER L. KRAFCHEK, Trial 

Attorney. Of counsel was LESLIE CAYER OHTA. 
LUMBERMENS MUTUAL CASUALTY CO v. US 2

EDWARD G. GALLAGHER, The Surety & Fidelity Association of America, of Washington, DC, for amicus curiae 

The Surety & Fidelity Association of America. 

__________________________ 

Before BRYSON, MAYER and DYK, Circuit Judges. 

DYK, Circuit Judge. 

This case requires us to decide three issues concerning the jurisdiction of the United States Court of Federal 

Claims (“Claims Court”) in actions brought by Miller Act 

sureties against the United States. See 40 U.S.C. 

§ 3131(b) (2006) (formerly 40 U.S.C. § 270a). 

In Insurance Company of the West v. United States, 

243 F.3d 1367, 1375 (Fed. Cir. 2001) [hereinafter ICW], 

we held that the Claims Court has jurisdiction under the 

Tucker Act, 28 U.S.C. § 1491, over sureties’ claims against 

the government that are based upon the theory of equitable subrogation. The first issue presented in this appeal 

is whether the surety’s claim against the United States 

seeking to recover allegedly improper progress payments 

made to the contractor is an equitable subrogation claim 

and is therefore within Tucker Act jurisdiction under 

ICW. We conclude that the surety’s claim is not an equitable subrogation claim because the United States made 

the payments in question before it received notice of the 

contractor’s default. 

The second issue is whether the Claims Court has 

Tucker Act jurisdiction over impairment of suretyship 

claims against the government apart from the theory of 

equitable subrogation. We hold that the United States’ 

waiver of sovereign immunity under the Tucker Act does 

not extend to such claims. 
3 LUMBERMENS MUTUAL CASUALTY CO v. US

The final question is whether the administrative requirements of the Contract Disputes Act (“CDA”), 41 

U.S.C. § 601 et seq., apply to a surety’s claim against the 

United States arising from a takeover agreement which 

the government and surety have entered into for the 

completion of a bonded contract following the principal 

obligor’s default. We hold that such claims fall within the 

scope of the CDA and that, as such, the Claims Court 

lacks jurisdiction over a surety’s takeover agreement 

claim where the surety has failed to satisfy the CDA’s 

jurisdictional prerequisites. 

BACKGROUND

I 

On April 11, 2000, Landmark Construction Company 

(“Landmark”) and the United States Navy (“Navy”) entered into a contract under which Landmark agreed to 

repair and renovate 160 military family housing units for 

the price of $9,878,026. The contract required construction to be completed by October 23, 2002, and it provided 

for liquidated damages of $75 per unit, per day past that 

date. In accordance with the Miller Act, 40 U.S.C. 

§ 3131(b) (2006) (formerly 40 U.S.C. § 270a), the contract 

required Landmark to furnish performance and payment 

bonds.

To fulfill the construction contract’s bond requirement, Landmark entered into two suretyship agreements 

with Lumbermens Mutual Casualty Company (“Lumbermens”) on April 20, 2000, under which Lumbermens 

issued a payment bond (for $2.5 million) and a performance bond (for the $9,878,026 contract price). The United 

States was not a party to either suretyship agreement, 

but both contracts expressly identified the United States 

as the intended third-party beneficiary of the bond in the 

event Landmark breached its obligations.
LUMBERMENS MUTUAL CASUALTY CO v. US 4

On February 27, 2001, Landmark and the Navy 

agreed to add 21 housing units to the construction contract (for a total of 181 units) in exchange for increasing 

the contract price by $1,884,174. The modification did not 

extend the contract’s completion date, which remained 

October 23, 2002. Lumbermens did not provide payment 

or performance bonds for the additional units.

On July 20, 2001, Landmark informed the Navy that 

it was unable to complete the construction contract due to 

financial problems, and it abandoned the construction site 

soon thereafter. The Navy terminated Landmark for 

default on August 2, 2001. At that time, Landmark had 

completed only 22 (about 12%) of the 181 housing units, 

but the Navy had already given Landmark payments 

equal to $4,793,633—approximately 40% of the modified 

contract price. In making these payments, the government allegedly ignored multiple Federal Acquisition 

Regulation (“FAR”) provisions incorporated into the 

contract that were purportedly aimed at ensuring progress payments would correspond to the amount of work 

actually completed. For example, under the FAR payment provisions, progress payments were not to be issued 

until Landmark provided a Schedule of Prices (an itemization of the contract price detailing how all funds would 

be spent), a Network Analysis Schedule (a chart breaking 

down the contractor’s work schedule into a series of tasks 

and dates), and, for each invoice, a Certification of Completion (a document certifying that the invoice submitted 

by the contractor only requests payment for services 

within the contract). Lumbermens contends that the 

government did not enforce these FAR provisions; that 

the provisions were intended to benefit the surety as well 

as the government; and that Lumbermens was injured as 

a result of the government’s lax enforcement.
5 LUMBERMENS MUTUAL CASUALTY CO v. US

Following Landmark’s default, the United States exercised its rights as an intended third-party beneficiary of 

the performance bond and demanded that Lumbermens 

complete the construction contract. Lumbermens accepted its obligation and hired Atherton Construction 

(“Atherton”) to complete the job. The three parties—

Lumbermens, Atherton, and the United States—entered 

into a “takeover agreement” on November 20, 2001, under 

which Lumbermens agreed that, “in accordance with [its] 

obligations under [the] Performance Bond,” “it [would] 

undertake the completion of the work and [would] contract with [Atherton] for completing the work remaining 

under the contract.” J.A. 314. Atherton agreed to complete the entire modified contract, including the 21 additional units that were not part of the original contract 

bonded by Lumbermens, and it contracted with another 

surety to bond the additional units. Lumbermens and 

Atherton also entered into a separate “completion” contract under which they agreed that Lumbermens would 

be responsible for all liquidated damages assessed by the 

government between October 23, 2002, and June 22, 2003, 

and Atherton would be liable for assessments thereafter.

In January 2002, after beginning construction, Atherton discovered safety code violations in the electrical work 

completed by Landmark. The Navy had previously been 

notified of the faulty wiring issue by Landmark during a 

design review meeting on August 24, 2000. Though the 

electrical issue delayed Atherton’s work by 46 days, the 

Navy denied Atherton’s requests for an extension.

Atherton completed the construction project on June 

6, 2003. Because this was after the contract’s October 23, 

2002, completion date, the Navy assessed Atherton liquidated damages of $1,015,125—including $713,475 for its 

delay in finishing the base units from the original construction contract and $301,650 for its delay in complet-
LUMBERMENS MUTUAL CASUALTY CO v. US 6

ing additional units under the modified contract. Because 

these liquidated damages were all assessed for the period 

between October 23, 2002, and June 22, 2003, Lumbermens was required to reimburse Atherton pursuant to the 

parties’ completion contract. 

II 

Following completion of the construction project, 

Lumbermens brought suit against the government in the 

Claims Court under the Tucker Act, 28 U.S.C. § 1491, 

seeking to recover damages under three theories, which 

we now discuss.

A. Equitable Subrogation 

Lumbermens’ first claim sought to recover damages 

under the theory of “equitable subrogation.” J.A. 43. 

Lumbermens contended the government improperly 

increased Lumbermens’ suretyship costs by making 

overpayments to Landmark in violation of FAR payment 

provisions in the bonded contract that were aimed at 

ensuring progress payments corresponded to work actually completed. Lumbermens argued that these provisions were included in the construction contract in part 

for Lumbermens’ protection as a surety. As such, Lumbermens argued, the government owed it a duty to administer the contract according to these provisions so that it 

did not materially increase Lumbermens’ risk under its 

bond obligations. By making payments to Landmark 

before the corresponding work was completed, Lumbermens argued, the government prematurely depleted the 

contract fund that Lumbermens relied on to support its 

bond, thereby increasing the amount Lumbermens ultimately was required to pay out to complete the contract 

following Landmark’s default. 
7 LUMBERMENS MUTUAL CASUALTY CO v. US

The government moved to dismiss Lumbermens’ equitable subrogation claim for lack of jurisdiction, contending 

that the United States has not waived sovereign immunity for claims by a surety based on alleged overpayments 

on a bonded contract made prior to receiving notice from 

the surety of the contractor’s default. In considering the 

government’s motion to dismiss, the court noted that we 

recognized in ICW that the Claims Court has Tucker Act 

jurisdiction over sureties’ equitable subrogation claims 

against the government. See Lumbermens Mut. Cas. Co. 

v. United States, 67 Fed. Cl. 253, 255 (2005) (citing ICW, 

243 F.3d at 1375) [hereinafter Lumbermens I]. The court 

described “[t]he doctrine of equitable subrogation [as] 

entitl[ing] a surety taking over [a] contract[’s] performance . . . to rights that the defaulting contractor would 

have had against the government.” Id. at 255. However, 

the court further noted that “[t]he Government’s equitable 

duty to retain contract funds for the surety is triggered 

upon notice from the surety that the contractor is in 

default or that payment should be made to the surety.” 

Id. Thus, the court dismissed Lumbermens’ “equitable 

subrogation” claim because it “did not notify the Government that Landmark was approaching default or that the 

Navy should withhold or divert progress payments” before 

the payments were made. Id. 

B. Impairment of Suretyship / Pro Tanto Discharge 

For its second claim, Lumbermens asserted identical 

counts to that of its “equitable subrogation” claim on an 

alternative theory of impairment of suretyship (a.k.a. pro 

tanto discharge), J.A. 31, pointing out that state contract 

law recognizes such claims. The government moved to 

dismiss Lumbermens’ impairment of suretyship / pro 

tanto discharge claim for lack of jurisdiction, contending 

that the United States has not waived sovereign immunity for such claims. After a trial, the Claims Court 
LUMBERMENS MUTUAL CASUALTY CO v. US 8

determined it had jurisdiction over Lumbermens’ impairment of suretyship claim without addressing the sovereign immunity issue. See Lumbermens Mut. Cas. Co. v. 

United States, 90 Fed. Cl. 558, 560 (2009) [hereinafter 

Lumbermens II]. 

The court found that the FAR provisions were included for the benefit of the surety as well as the government. Id. at 562. The court concluded that, by making 

overpayments to Landmark, the government had improperly “impaired collateral that Lumbermens relied on to 

support its bond.” Id. at 569. The court accordingly 

awarded Lumbermens $1,375,420.11 in damages. Id. 

The court rejected Lumbermens request for additional 

damages based on the government’s alleged overpayment 

of Landmark’s personnel costs, finding that these costs 

were properly paid as “fixed overhead” costs that were 

“allocated across the length of [the] contract.” Id. at 567. 

C. Takeover Agreement 

Lumbermens’ final claim alleged that the United 

States breached the parties’ takeover agreement by 

withholding an improper amount of Atherton’s contract 

payments as liquidated damages for the contract’s late 

completion. Lumbermens contended the government’s 

liquidated damages assessment against Atherton (ultimately paid by Lumbermens)1 was excessive because (1) 

the government was at fault for the 46 day delay caused 

by its faulty electrical wiring, and (2) the government had 

no right to assess liquidated damages against Lumber-

 1 The parties agree that, by obligating itself under 

the completion contract to reimburse Atherton for the 

liquidated damages, Lumbermens was equitably subrogated to Atherton’s rights and could assert any claim 

Atherton had against the government, including Atherton’s claim for remission of improperly assessed liquidated damages. 
9 LUMBERMENS MUTUAL CASUALTY CO v. US

mens based on the late completion of the 21 housing units 

added to the contract which Lumbermens did not bond. 

The government moved to dismiss Lumbermens’ takeover 

agreement claim on the grounds that Lumbermens failed 

to satisfy the jurisdictional prerequisites of the CDA, such 

as the requirement under 41 U.S.C. § 605(a) and (c)(1) 

that it first submit a certified claim to the contracting 

officer. 

The court found that the CDA’s jurisdictional requirements were inapplicable to Lumbermens’ claim 

because the CDA applies to “contractor[s]” that enter 

“contract[s] for the procurement of materials or services,” 

whereas Lumbermens signed the takeover agreement “in 

its capacity as a surety.” Lumbermens II, 90 Fed. Cl. at 

561. With respect to the merits, the court accepted Lumbermens’ first argument, rejected its second argument, 

and awarded Lumbermens $326,700 in remitted liquidated damages. Id. at 568–69. 

The United States appealed the Claims Court’s judgment in favor of Lumbermens to this Court. Lumbermens 

cross-appealed seeking additional damages with respect 

to both its impairment of suretyship and takeover agreement claims. We have jurisdiction pursuant to 28 U.S.C. 

§ 1295(a)(3). 

DISCUSSION

I 

We first consider the government’s contention that 

the United States has not waived its sovereign immunity 

with respect to Lumbermens’ claims for damages based on 

the allegedly premature progress payments made by the 

government to Landmark. 

The United States is immune from suit absent “a 

clear statement . . . waiving sovereign immunity . . . 
LUMBERMENS MUTUAL CASUALTY CO v. US 10

together with a claim falling within the terms of the 

waiver.” Dolan v. U.S. Postal Serv., 546 U.S. 481, 498 

(2006) (quoting United States v. White Mountain Apache 

Tribe, 537 U.S. 465, 472 (2003)). The government’s 

waiver of sovereign immunity “‘must be unequivocally 

expressed in statutory text’ and ‘will be strictly construed, 

in terms of its scope, in favor of the sovereign.’” GomezPerez v. Potter, 553 U.S. 474, 491 (2008) (quoting Lane v. 

Peña, 518 U.S. 187, 192 (1996)). Whether the United 

States has waived sovereign immunity with respect to a 

particular claim is a question of law, which we review de 

novo. ICW, 243 F.3d at 1370. 

The sole basis alleged for the Claims Court’s jurisdiction over Lumbermens’ claim is the Tucker Act, 28 U.S.C. 

§ 1491(a)(1), which provides in relevant part: 

 The United States Court of Federal Claims 

shall have jurisdiction to render judgment upon 

any claim against the United States founded . . . 

upon any express or implied contract with the 

United States . . . . 

It is clear that Lumbermens was not in privity of contract with the United States prior to executing the takeover agreement. The United States was not a party to 

either suretyship agreement, although the government 

was named as the intended third-party beneficiary in 

both. See J.A. 327, 329.2 Lumbermens nevertheless 

 2 It is well settled that, in this type of suretyship 

arrangement, the obligee and the surety are not in privity 

of contract. See ICW, 243 F.3d at 1370 (noting that we 

have “held that there is no [privity of contract]” between 

the surety and obligee in such cases); Admiralty Constr., 

Inc. v. Dalton, 156 F.3d 1217, 1220–21 (Fed. Cir. 1998) 

(finding that “the Navy was not a party to the surety 

agreement,” so the surety could not file a Contract Disputes Act claim with the contracting officer); Fireman’s 
11 LUMBERMENS MUTUAL CASUALTY CO v. US

contends that “express or implied contracts” jurisdiction 

exists under the Tucker Act. 

A. Equitable Subrogation 

Lumbermens first contends that it can recover damages based on the government’s alleged overpayments to 

Landmark under an “equitable subrogation” theory, J.A. 

43, relying on our decision in ICW, 243 F.3d at 1374–75. 

In ICW, a surety provided performance and payment 

bonds for a government contract, and the United States 

was not a party to the suretyship agreements. Id. at 

1369–70. Upon incurring financial difficulties, the contractor notified the United States that it would be unable 

to continue performing, and the surety notified the government that it was to receive all further payments on the 

contract. Id. at 1369. Nonetheless, the government 

thereafter continued making payments to the contractor. 

Id. The surety brought suit against the United States 

seeking to recover the wrongfully disbursed funds under 

the theory of equitable subrogation. Id. We held that the 

Claims Court had jurisdiction because, under the doctrine 

of equitable subrogation, the surety “step[s] into the shoes 

of [the] government contractor” and may bring suit under 

the Tucker Act based on the contractor’s privity with the 

United States under the construction contract. Id. at 

1369, 1374–75; see also Nat’l Am. Ins. Co. v. United 

States, 498 F.3d 1301, 1304 (Fed. Cir. 2007) (reaffirming 

that a surety may “invoke the doctrine of equitable subrogation to step into the shoes of the contractor for the 

 

Fund Ins. v. United States, 909 F.2d 495, 499 (Fed. Cir. 

1990) (finding no privity between the surety and the 

obligee because, “while the [obligee was] identified as the 

intended third-party beneficiary of the performance bond, 

it did not sign the bond or undertake any obligation to 

Fireman’s Fund in it”); Ransom v. United States, 900 F.2d 

242, 244–45 (Fed. Cir. 1990) (same). 
LUMBERMENS MUTUAL CASUALTY CO v. US 12

purpose of satisfying the jurisdictional requirements of 

the Tucker Act”). 

The Claims Court dismissed Lumbermens’ “equitable 

subrogation” claim here because, before the payments 

were made, Lumbermens “did not notify the Government 

that Landmark was approaching default or that the Navy 

should withhold or divert progress payments.” Lumbermens I, 67 Fed. Cl. at 255. We agree. The theory of 

equitable subrogation is based on the view that the triggering of a surety’s bond obligation gives rise to an implied assignment of rights by operation of law whereby 

the surety “is subrogated to the [principal obligor’s] 

property rights in the contract balance.” Balboa Ins. Co. 

v. United States, 775 F.2d 1158, 1161 (Fed. Cir. 1985) 

(emphasis omitted). That is, the surety “step[s] into the 

shoes” of the principal obligor and is entitled to all of its 

rights relating to the construction contract. ICW, 243 

F.3d at 1374; see also Nat’l Am. Ins. Co., 498 F.3d at 1304, 

1307. Here, equitable subrogation is not implicated. 

Equitable subrogation can be used to recover improper 

payments to a principal obligor only if made after the 

obligee received notice of the principal obligor’s default 

(i.e., notice that the bond obligation has been triggered 

and an implied assignment of the contract rights to the 

surety has occurred).3 The alleged overpayments in this 

 3 See ICW, 243 F.3d at 1371 (explaining that 

“[n]otice from the surety to the [obligee is] essential” for a 

surety to recover under the theory of equitable subrogation); Fireman’s Fund, 909 F.2d at 498 (same); Balboa, 775 F.2d at 1162–64 (same); U.S. Fid. & Guar. Co. v. 

United States, 475 F.2d 1377, 1384 (Ct. Cl. 1973) (same); 

see also Restatement (Second) of Contracts § 338(1) 

(“[N]otwithstanding an assignment, the assignor retains 

his power to discharge or modify the duty of the obligor to 

the extent that the obligor performs or otherwise gives 

value until but not after the obligor receives notification 
13 LUMBERMENS MUTUAL CASUALTY CO v. US

case were all made before the obligee received notice of 

Landmark’s default. Thus, stepping into the shoes of 

Landmark at the time of the default notice would not 

enable Lumbermens to assert a claim for damages based 

on the government’s alleged overpayments to Landmark. 

This is so because Landmark itself would have no claim 

against the government for funds the government had 

already paid it under the contract (as opposed to a right to 

recover future payments). As we stated in Fireman’s 

Fund, “[o]nly when the surety may be called upon to 

perform, that is, only when it may become a party to the 

bonded contract, should the government owe it any duty.” 

909 F.2d at 499. 

Contrary to Lumbermens’ assertions, this court did 

not hold to the contrary in National Surety Corp. v. 

United States, 118 F.3d 1542 (Fed. Cir. 1997). The court 

in National Surety merely found that the notice requirement for an equitable subrogation claim was satisfied 

where “the government had knowledge of the default . . . 

and so informed the surety.” Id. at 1547. While the 

National Surety court may have arguably misapprehended the particular facts of that case when applying the 

prevailing rule, the court did not purport to eliminate the 

longstanding rule that equitable subrogation permits a 

surety to recover improper payments only if made after 

the obligee was on notice of the principal obligor’s default. 

Indeed, a panel of this court would lack the authority to 

eliminate this rule in view of our prior precedents explicitly holding that equitable subrogation only applies to 

 

that the right has been assigned and that the performance is to be rendered to the assignee.” (emphasis added)); 

id. cmt. e, illus. 4; id. § 336(2) (“The right of an assignee is 

subject to any defense or claim of the obligor which accrues before the obligor receives notification of the assignment . . . .”). 
LUMBERMENS MUTUAL CASUALTY CO v. US 14

payments made after the obligee receives notice of the 

default. See Fireman’s Fund, 909 F.2d at 498; Balboa, 

775 F.2d at 1162–64; U.S. Fid. & Guar., 475 F.2d at 

1384.4

Here, Lumbermens does not allege that any improper 

payments were made to Landmark after July 2001, when 

Landmark first informed the government of its default. 

Lumbermens I, 67 Fed. Cl. at 254. Because the government did not make progress payments to Landmark after 

notice of its default, the Claims Court correctly held that 

Lumbermens cannot recover the alleged overpayments 

under the theory of equitable subrogation. 

B. Impairment of Suretyship / Pro Tanto Discharge 

Alternatively, Lumbermens asserts it was entitled to 

bring its claim based on the theory of impairment of 

suretyship / pro tanto discharge. We find that the United 

States has not waived sovereign immunity as to such 

claims. 

Essential to an understanding of this issue is a discussion regarding the origins of, and theoretical basis for, 

an impairment of suretyship / pro tanto discharge claim. 

The theory of discharge began as a state law defense that 

a surety could assert to avoid enforcement of its bond 

obligation on the grounds that the obligee (the beneficiary 

of the bond) had taken improper actions which prejudiced 

the surety by increasing its financial risk. For example, 

one ground for discharge is when material modifications 

that increase the surety’s risk are made to the bonded 

 4 This court applies the rule that earlier decisions 

prevail unless overruled by the court en banc, or by other 

controlling authority such as intervening statutory 

change or Supreme Court decision.” Tex. Am. Oil Corp. v. 

Dep’t of Energy, 44 F.3d 1557, 1561 (Fed. Cir. 1995) (en 

banc). 
15 LUMBERMENS MUTUAL CASUALTY CO v. US

contract without the surety’s consent. See Restatement 

(First) of Security § 128 (1941); see also Restatement 

(Third) of Suretyship and Guaranty §§ 37(2), 41. If such a 

modification substantially increases the surety’s risk by a 

factor “which cannot fairly be measured,” then “the surety 

is discharged [of its bond obligations] entirely”; otherwise, 

the surety’s bond obligation “is discharged only to the 

extent of [its] loss”—i.e., a pro tanto discharge. Restatement (First) of Security § 128, cmt. (f); see also Reliance 

Ins. Co. v. Colbert, 365 F.2d 530, 535 (D.C. Cir. 1966). 

Another ground for pro tanto discharge—which corresponds to Lumbermens theory in this case—is that the 

obligee has prejudiced the surety by improperly making 

early contract payments or overpayments to the principal 

obligor in a manner inconsistent with specific payment 

schedules, conditions, or retainage provisions in the 

bonded contract. Early payments or overpayments to the 

principal obligor prematurely deplete the bonded contract 

fund to which the surety expects a right of equitable 

subrogation in the event that the principal defaults and 

the surety is required to perform. See Restatement 

(Third) of Suretyship and Guaranty §§ 37(3)(f), 44 (discussing impairment of right of subrogation); see also id.

§§ 37(3)(d), 42 (discussing impairment of collateral—i.e., 

the contract balance). That is, by wasting the contract 

funds in contravention of the contract’s terms, the obligee 

may impair the surety’s future right of equitable subrogation and increase its risk of loss, thereby discharging it 

from its bond obligation pro tanto.5 

 5 See, e.g., United States v. Cont’l Cas. Co., 512 F.2d 

475, 478 (5th Cir. 1975) (“[A] surety is entitled to be 

subrogated to the benefit of all securities and means of 

payment under the [obligee’s] control, and any act by the 

[obligee] depriving the surety of this right discharges it 

pro tanto . . . . [The obligee] . . . must act in good faith 
LUMBERMENS MUTUAL CASUALTY CO v. US 16

While pro tanto discharge, as the government admits, 

may be asserted as a defense to a government claim 

asserted under a bond, the problem here is that Lumbermens is asserting the theory of impairment of suretyship 

not as a defense, but as an affirmative cause of action. 

Lumbermens correctly points out that, over time, the 

state law theory of impairment of suretyship / pro tanto

discharge evolved to encompass not only a defense, but 

also an affirmative cause of action that allows a surety to 

seek damages from an obligee after fully performing its 

bond obligation despite having an impairment of suretyship defense. See Restatement (Third) of Suretyship and 

Guaranty § 37(4) (“If the obligee impairs the [surety’s] 

suretyship status . . . the [surety] has a claim against the 

obligee with respect to such performance to the extent 

that such impairment would have discharged the [surety] 

with respect to that performance.”); id. cmt. a (noting that 

“this section and §§ 39–44 provide rules discharging the 

[surety] from liability . . . and providing for recovery from 

the obligee if the loss has already occurred because the 

[bond] obligation has been performed”). When a surety 

fully performs even though it would have had a right to 

withhold some amount of performance had it asserted a 

pro tanto discharge defense, the surety has effectively 

overpaid on its bond obligation. In such cases, “the 

[surety] is harmed and, but for [a cause of action to recover the excess amount paid], the obligee would receive a 

 

and not unreasonably prejudice the surety’s right to 

subrogation.”); Fort Worth Indep. Sch. Dist. v. Aetna Cas. 

& Sur. Co., 48 F.2d 1, 4 (5th Cir. 1931) (“It is well settled 

that a stipulation in a building contract that a percentage 

of the price shall be retained until the final completion 

and acceptance of the work, is as much for the benefit of 

the surety as for the protection of the [obligee], and a 

failure to comply therewith releases the former in so far 

as the rights of the latter are concerned.”). 
17 LUMBERMENS MUTUAL CASUALTY CO v. US

windfall.” Id. at § 37(4) cmt. d. Thus, the surety’s affirmative cause of action for impairment of suretyship 

stems not from an equitable assignment of rights (like 

equitable subrogation), but rather is based on an impliedin-law contract theory—i.e., a recovery in the nature of 

quantum meruit or quantum valebant. 

Here, Lumbermens alleged it was prejudiced by the 

government’s overpayments to Landmark that were 

inconsistent with progress payment provisions in the 

construction contract and that it was discharged of its 

bond obligation to the extent of the allegedly improper 

payments.6 Lumbermens therefore sought reimbursement from the government under the theory that, by fully 

performing its bond obligation, Lumbermens conferred 

more benefit on the government than was legally required 

and the government was unjustly enriched. While this 

may be a sound legal theory for recovery against an 

obligee as a matter of state law, we conclude that the 

United States has not waived sovereign immunity as to 

such claims. 

In Department of the Army v. Blue Fox, 525 U.S. 255 

(1999), the Supreme Court directly addressed the issue of 

sovereign immunity with respect to non-contractual rights 

created by state law. In Blue Fox, an insolvent prime 

contractor working on a government contract failed to pay 

a subcontractor for its work. Id. at 256. The subcontractor sued the government in federal district court under 

§ 10(a) of the Administrative Procedure Act (“APA”) 

seeking to enforce an equitable lien on any contract funds 

 6 The government disputes whether the FAR payment provisions at issue were included in the contract for 

Lumbermens’ benefit and, if they were, whether those 

provisions were violated. We need not reach this question 

because we find that the Claims Court lacked jurisdiction 

over Lumbermens’ claim. 
LUMBERMENS MUTUAL CASUALTY CO v. US 18

remaining in the government’s possession. Id. at 256–57, 

260. Section 10(a) of the APA waives sovereign immunity 

for claims “seeking relief other than money damages.” 5 

U.S.C. § 702. The Supreme Court noted that “a waiver of 

sovereign immunity is to be strictly construed, in terms of 

its scope, in favor of the sovereign.” Blue Fox, 525 U.S. at 

261. The Court concluded that the plaintiff’s claim for an 

equitable lien was a claim for money damages and thus 

outside the APA’s waiver of sovereign immunity. Id. at 

262–63. 

But the Court also made clear that state law equitable 

theories could not be asserted as monetary claims against 

the government by subcontractors and suppliers. The 

Court noted that “sovereign immunity left subcontractors 

and suppliers without a remedy against the Government 

when the general contractor became insolvent,” and that 

the Miller Act bond requirement was designed to cure 

that problem. Id. at 264.7 “But the Miller Act by its 

terms only gives subcontractors the right to sue on the 

surety bond posted by the prime contractor, not the right 

to recover their losses directly from the Government.” Id. 

The Court explicitly rejected the theory “that subcontractors and suppliers can seek compensation directly against 

the Government.” Id. The Court also expressly rejected 

the plaintiff’s contention that its claim was supported by 

the Court’s prior opinions in Pearlman v. Reliance Insurance Co., 371 U.S. 132 (1962), Henningsen v. United 

States Fidelity & Guaranty Co., 208 U.S. 404 (1908), and 

Prairie State Bank v. United States, 164 U.S. 227 (1896)—

three Supreme Court cases involving the rights of sureties 

who stepped into the shoes of the defaulting contractor. 

Blue Fox, 525 U.S. at 264. The Court stated: 

 7 In Blue Fox, no bond had been provided. Id. at 

257–58. 
19 LUMBERMENS MUTUAL CASUALTY CO v. US

None of the cases relied upon by [Blue Fox] involved a question of sovereign immunity, and, in 

fact, none involved a subcontractor directly asserting a claim against the government. Instead, 

these cases dealt with disputes between private 

parties over priority to funds which had been 

transferred out of the Treasury and as to which 

the Government had disclaimed any ownership. 

They do not in any way disturb the established 

rule that, unless waived by Congress, sovereign 

immunity bars subcontractors and other creditors 

from enforcing liens on Government property or 

funds to recoup their losses. 

Id. at 265 (emphases added). Like the claim seeking to 

enforce a lien in Blue Fox, Lumbermens’ impairment of 

suretyship / pro tanto discharge claim is a non-contractual 

cause of action based on state law. As in Blue Fox, we see 

no waiver of sovereign immunity that unambiguously 

consents for the government to be sued based on noncontractual rights arising under state equitable principles. 

At most, Lumbermens’ impairment of suretyship / pro 

tanto discharge claim can be viewed as being based on an 

implied-in-law contract theory (i.e., a quasi-contract or 

unjust enrichment theory). While the Tucker Act does 

cover “implied contract[s],” the Supreme Court has long 

held that the scope of the Tucker Act’s waiver of sovereign 

immunity “extends only to contracts either express or 

implied in fact, and not to claims on contracts implied in 

law.” Hercules Inc. v. United States, 516 U.S. 417, 423 

(1996).8 Generally speaking, implied-in-law contracts 

 8 See also United States v. Mitchell, 463 U.S. 206, 

218 (1983); Army & Air Force Exch. Serv. v. Sheehan, 456 

U.S. 728, 738 n.10 (1982); Hatzlachh Supply Co. v. United
LUMBERMENS MUTUAL CASUALTY CO v. US 20

“impose duties that are deemed to arise by operation of 

law” in order to prevent an injustice, whereas implied-infact contracts are “founded upon a meeting of the minds, 

which, although not embodied in an express contract, is 

inferred, as a fact, from conduct of the parties showing, in 

light of the surrounding circumstances, their tacit understanding.” City of Cincinnati v. United States, 153 F.3d 

1375, 1377 (Fed. Cir. 1998) (quoting Baltimore & Ohio 

R.R. v. United States, 261 U.S. 592, 597 (1923)). 

Lumbermens’ theory of recovery is based on the view 

that it has paid more than it owed and the government 

was unjustly enriched. Such a claim which “relies on 

equitable principles” is “presumably based on an impliedin-law contract theory.” Barrett Refining Corp. v. United 

States, 242 F.3d 1055, 1062 (2001); see also Royal Indem. 

Co. v. United States, 313 U.S. 289, 296 (1941) (stating 

that equitable principles relate to “recovery on quasi 

contractual obligations arising from payment of money by 

mistake”). We have held in other contexts that the mere 

provision of goods or services to the government in excess 

of a party’s legal obligation does “not create an implied-infact contract [for the government] to pay for them,” and 

that such cases constitute “implied-in-law contract scenarios [that] are beyond the purview of the Tucker Act.” 

Trauma Serv. Grp. v. United States, 104 F.3d 1321, 1327 

(Fed. Cir. 1997) (finding claim barred by sovereign immunity where medical contractor sought payment for x-ray 

 

States, 444 U.S. 460, 465 n.5 (1980); Ala. v. United States, 282 U.S. 502, 507 (1931); Goodyear Tire & Rubber Co. v. 

United States, 276 U.S. 287, 292–93 (1928); United States 

v. Minn. Mut. Inv. Co., 271 U.S. 212, 217 (1926); Merritt v. 

United States, 267 U.S. 338, 341 (1925); Hill v. United 

States, 149 U.S. 593, 598 (1893). 
21 LUMBERMENS MUTUAL CASUALTY CO v. US

services which the government accepted but was not 

contractually obligated to pay for).9 

Thus, because Lumbermens’ impairment of suretyship / pro tanto discharge claim is based on a noncontractual state law cause of action, or at most an implied-in-law contract theory, we hold that the Claims 

Court lacked jurisdiction to consider Lumbermens’ claim. 

Contrary to Lumbermens’ assertions, this court’s 

opinion in National Surety does not support its theory 

that the government has waived its sovereign immunity 

as to impairment of suretyship / pro tanto discharge 

 9 See also Int’l Data Prods. Corp. v. United States, 492 F.3d 1317, 1325 (Fed. Cir. 2007) (“A recovery in 

quantum meruit is based on an implied-in-law contract. 

That is, a contract in which there is no actual agreement 

between the parties, but the law imposes a duty in order 

to prevent injustice. The [Claims Court], however, lacks 

jurisdiction over contracts implied in law.”); Perri v. 

United States, 340 F.3d 1337, 1343–44 (Fed. Cir. 2003) 

(“The Court of Federal Claims’ jurisdiction over claims 

founded on an express or ‘implied contract with the 

United States’ ‘extends only to contracts either express or 

implied in fact, and not to claims on contracts implied in 

law.’ Recovery in quantum meruit, however, is based 

upon a contract implied in law.” (citations omitted)); 

Fincke v. United States, 675 F.2d 289, 296 (Ct. Cl. 1982) 

(“Plaintiff’s difficulty with this claim is that a suit to 

recover compensation on a quantum meruit basis is an 

action on a contract implied in law . . . . It is well settled 

that this court does not have jurisdiction of claims based 

on an alleged contract implied in law.”); but see Union 

Pac. Ins. Co. v. United States, 464 F.3d 1325, 1329–30 

(Fed. Cir. 2006) (recognizing an exception whereby an 

implied-in-fact contract to pay the fair value of goods or 

services exists when they are rendered to the government 

pursuant to an express contract that turns out to be 

illegal and therefore void); United States v. Amdahl Corp., 786 F.2d 387, 393 (Fed. Cir. 1986) (same). 
LUMBERMENS MUTUAL CASUALTY CO v. US 22

claims. As discussed above, National Surety was decided 

based on the theory of equitable subrogation. 118 F.3d at 

1545–48. The National Surety court expressly stated that 

it viewed the “doctrine of [equitable] subrogation” as “the 

appropriate theory of liability” in that case. Id. at 1545. 

National Surety therefore has no bearing on the issue of 

whether the government has waived sovereign immunity 

with respect to claims based on the unapplied theory of 

impairment of suretyship / pro tanto discharge.10

In its amicus brief, the Surety & Fidelity Association 

of America contends that finding no waiver of sovereign 

immunity with respect to impairment of suretyship / pro 

tanto discharge claims would leave sureties without a 

remedy when the government impairs the surety’s collateral. This is incorrect. If a surety concludes that the 

government has improperly impaired its collateral, the 

surety has the right to withhold payment on the bond, to 

the extent the surety has been prejudiced, based on the 

defense of impairment of suretyship / pro tanto discharge. 

We simply hold that, once a surety makes overpayments 

on its bond obligation, it has no right to affirmatively 

recover against the United States. 

Thus, we find that the Claims Court lacked jurisdiction over Lumbermens’ affirmative claim against the 

government on the theory of impairment of suretyship / 

pro tanto discharge. 

 10 We have consistently held that panel authority 

that does not address an issue is not binding as to the 

unaddressed issue.” Ark. Game & Fish Comm’n, 637 F.3d 

1366, 1378 n.7 (Fed. Cir. 2011); see also Sacco v. United 

States, 452 F.3d 1305, 1308 (Fed. Cir. 2006); Boeing N. 

Am., Inc. v. Roche, 298 F.3d 1274, 1282 (Fed. Cir. 2002); 

Nat’l Cable Television Ass’n, Inc. v. Am. Cinema Editors, 

Inc., 937 F.2d 1572, 1581 (Fed. Cir. 1991). 
23 LUMBERMENS MUTUAL CASUALTY CO v. US

II 

We next turn to the Government’s contention that the 

Claims Court lacked jurisdiction over Lumbermens’ 

breach of contract claim based on the takeover agreement 

because Lumbermens failed to satisfy the jurisdictional 

prerequisites imposed by the CDA. “The determination of 

jurisdiction under the CDA is a question of law” and “is 

therefore subject to de novo review.” Winter v. FloorPro, 

Inc., 570 F.3d 1367, 1369 (Fed. Cir. 2009) (quoting England v. Swanson Grp., Inc., 353 F.3d 1375, 1379 (Fed. Cir. 

2004)). 

Pursuant to § 602(a), the CDA 

applies to any express or implied contract . . . entered into by an executive agency for—(1) the procurement of property, other than real property in 

being; (2) the procurement of services; (3) the procurement of construction, alteration, repair or 

maintenance of real property; or (4) the disposal of 

personal property. 

41 U.S.C. § 602(a). The Act requires that “[a]ll claims by 

a contractor against the government relating to a contract 

shall be in writing and shall be submitted to the contracting officer for a decision.” Id. § 605(a). For claims of more 

than $100,000, the contractor is further required to 

“certify that [its] claim is made in good faith.” Id.

§ 605(c)(1). We have held that “submission of a certified 

claim to the contracting officer in the first instance is a 

jurisdictional prerequisite to filing a suit in the Claims 

Court.” Thoen v. United States, 765 F.2d 1110, 1116 (Fed. 

Cir. 1985); see also 41 U.S.C. § 609(a)(3) (“Any action 

[filed in the Claims Court] shall be filed within twelve 

months from the date of the receipt by the contractor of 

the decision of the contracting officer concerning the claim 

. . . .”). Lumbermens did not submit a certified claim to 
LUMBERMENS MUTUAL CASUALTY CO v. US 24

the contracting officer as required by the Act. However, 

the Claims Court found that the CDA did not apply to 

Lumbermens’ claim because (a) the “takeover agreement 

[was] not a contract for the procurement of materials or 

services,” and (b) “Lumbermens signed the takeover 

agreement as a surety fulfilling its performance bond 

obligation, not as a contractor completing a construction 

project.” Lumbermens II, 90 Fed. Cl. at 560–61. We 

disagree on both points. 

First, we find that the takeover agreement is clearly a 

contract for “the procurement of construction, alteration, 

repair or maintenance of real property.” 41 U.S.C. 

§ 602(a)(3). The agreement expressly states that “[t]his 

Takeover Agreement is for completion of defaulted Contract N44255-97-C-5515,” which it describes as a contract 

“for Whole Site Repair/Revitalization [of the] Maylor 

Capehart Housing Area, Naval Air Station, Whidbey 

Island, Oak Harbor, WA.” J.A. 314. 

Lumbermens argues that the takeover agreement 

“does not itself procure construction services” but “instead 

arranges for and leads to a contract for the procurement 

of construction.” Appellee’s Br. 44. Lumbermens contends this case is analogous to Coastal Corp. v. United 

States, 713 F.2d 728 (Fed. Cir. 1983), in which we held 

that an implied contract requiring the government “to 

treat a bid [on a government contract] honestly and fairly” 

was not a procurement contract because it was “preliminary and ancillary to any contract . . . for goods or services.” Id. at 730. That is not the situation here. Unlike 

the implied contract in Coastal, the takeover agreement 

in this case directly procured “the performance of all work 

and other obligations of the defaulted contract not presently completed or fulfilled.” J.A. 314. The contract itself 

contained all material terms of the agreement, including 

provisions covering the payment terms, the required date 
25 LUMBERMENS MUTUAL CASUALTY CO v. US

of completion for the construction work, and liquidated 

damages. J.A. 315. As such, the takeover agreement 

itself created a binding contract between the parties for 

the procurement of construction services. 

We are similarly unpersuaded by Lumbermens’ argument that the takeover agreement is “analogous . . . to 

a settlement agreement” and that “a claim alleging a 

breach by the government of a settlement agreement is 

not covered by the CDA.” Appellee’s Br. 45–46. We need 

not decide the issue of whether a settlement agreement 

can ever be covered by the CDA, because the takeover 

agreement here was not analogous to a settlement agreement. The agreement contains no language regarding a 

settlement of any dispute between the parties, and it 

contains no release of liability by either party—a feature 

common to settlement agreements. To the contrary, the 

takeover agreement expressly states that it “shall [not] be 

construed . . . as modifying, limiting or releasing [Lumbermens] from its obligations to the United States under 

its Performance and Payment Bonds” and that it “does 

not waive, prejudice, or in any way adversely affect or 

limit any claim that [Lumbermens] might have against 

the Government.” J.A. 315–16. In short, no legal dispute 

was settled by the takeover agreement; rather, a binding 

contract was formed for the performance of all construction work left uncompleted under the defaulted contract. 

Second, we find that the Claims Court erred in concluding that Lumbermens did not enter the takeover 

agreement as a “contractor” within the meaning of the 

CDA. The Act defines “contractor” as “a party to a Government contract other than the Government.” 41 U.S.C. 

§ 601(4). Lumbermens argues that the takeover agreement in this case is somehow outside the scope of the 

CDA because it is a three-party agreement between 

Atherton (referred to as the “Completing Contractor”), 
LUMBERMENS MUTUAL CASUALTY CO v. US 26

Lumbermens (referred to as the “Surety”), and the United 

States, rather than a two-party agreement between a 

surety and the government. See J.A. 314. Lumbermens 

contends this takeover agreement “merely memorialized 

and reaffirmed [its] pre-existing obligations as [a] performance bond surety” and that “Atherton—and not 

Lumbermens—is clearly and expressly considered the 

‘contractor’” under the agreement. Appellee’s Br. 47–48. 

Lumbermens cites the following language of the takeover 

agreement for support: 

It is understood and agreed that the Surety, by 

entering into this Agreement, is not acting as a 

contractor but is instead acting in its capacity as a 

performance bond surety. The Surety, who will 

have no employees on the project site, shall have 

no obligation to furnish any insurance under the 

contract, and any insurance required under the 

contract shall be provided by the Completing Contractor. 

J.A. 316 (emphasis added). Lumbermens contends that 

the agreement’s express designation of it as a “surety” 

rather than a “contractor” exempts it from the jurisdictional requirements of the CDA. Appellee’s Br. 50. We 

disagree.11 

 11 Lumbermens cites this court’s opinion in Admiralty Construction for the proposition that “Congress 

simply had an entirely different set of problems in mind 

when it passed the CDA, and we see no reason to judicially transform sureties into ‘contractors’ where 

[C]ongress has not done so.” 156 F.3d at 1221 (quoting 

United States v. Seaboard Sur. Co., 817 F.2d 956, 962 (2d 

Cir. 1987)). However, both Admiralty and Seaboard

involved situations where the surety “did not execute a 

takeover agreement with the [government] to complete 

the defaulted contract” and therefore “[could not] show 
27 LUMBERMENS MUTUAL CASUALTY CO v. US

Despite the takeover agreement’s reference to Lumbermens as “the Surety,” the agreement makes clear that 

Lumbermens became bound to complete the defaulted 

construction contract by assuming the role of a prime 

contractor and hiring Atherton as its subcontractor. The 

takeover agreement expressly incorporated “[t]he provisions and clauses of the defaulted contract,” J.A. 314, and 

it further provided that: 

 [T]he Government has made demand upon the 

Surety for completion of the work in accordance 

with the Surety’s obligations under its Performance Bond. 

 [T]he Surety has advised the Government that 

it will undertake the completion of the work and 

will contract with the Completing Contractor for 

completing the work remaining under the contract 

in accordance with its terms and conditions of the 

terminated contract . . . . 

. . . . 

The Government and Surety agree that 

$7,392,381.24 is the unpaid contract balance, including retainages. The Completing Contractor 

will be paid by the Government in accordance 

with and in the manner provided by the defaulted 

contract and this Agreement. In addition, the 

Completing Contractor shall be paid by the Surety 

in accordance with its Completion Agreement with 

the Surety. 

 

that it ‘entered into’ a contract with ‘an executive agency’” 

as required by the CDA. Admiralty, 156 F.3d at 1221; see 

also Seaboard, 817 F.2d at 961 (noting that the suretyship agreement at issue was “not a contract to which the 

government [was] a party”). 
LUMBERMENS MUTUAL CASUALTY CO v. US 28

J.A. 314–15 (emphases added). As required by the takeover agreement, Lumbermens thereafter entered into a 

completion contract with Atherton, which stated that 

“[t]he Parties expressly acknowledge and understand that 

Completing Contractor [Atherton] is a subcontractor to 

Surety [Lumbermens].” J.A. 324 (emphasis added). The 

completion contract further specified that Atherton had 

“no authority to negotiate . . . any Change Order with 

respect to any issues” arising with the government, and it 

required that any claims Atherton had against the government “be submitted . . . to [Lumbermens] for processing . . . . in [Lumbermen’s] name.” J.A. 324–25. 

We have previously recognized that where, as here, a 

surety enters a takeover agreement with the government 

under which the surety agrees to complete the performance of a defaulted contract, the surety assumes the role 

of a prime contractor and becomes “a party to a Government contract” in direct privity with the United States. 

41 U.S.C. § 601(4). 

For example, in Fireman’s Fund, a surety and the 

government entered into a takeover agreement following 

the contractor’s default. 313 F.3d at 1346. In the inverse 

of the present situation, the surety followed CDA procedures and filed claims with the contracting officer (rather 

than the Claims Court) seeking remission of assessed 

liquidated damages based on delays allegedly caused by 

the government both before and after the takeover 

agreement was executed. Id. at 1347. On appeal to the 

Board of Contract Appeals (“Board”), the Board dismissed 

the surety’s claims that arose before the takeover agreement on the ground that the surety was not a “contractor” 

under the CDA at the time those claims arose. Id. We 

affirmed, finding that the surety was not “a ‘contractor’ 

with the United States . . . with respect to its pre-takeover 

claims,” id. at 1352, because “[i]t was not a party to any 
29 LUMBERMENS MUTUAL CASUALTY CO v. US

contract with the government prior to the takeover agreement it had with the government, and its pre-takeover 

claims did not arise under such a contract,” id. at 1351 

(emphasis added). We subsequently affirmed our Fireman’s Fund decision on nearly identical facts in United 

Pacific Insurance Co. v. Roche, 380 F.3d 1352 (Fed. Cir. 

2004), holding that “the Board had no jurisdiction over 

[the surety’s] claims that were based upon events that 

occurred prior to the takeover agreement.” Id. at 1356 

(emphasis added). These cases reflect a clear understanding that a surety does become a “contractor” within the 

meaning of the CDA when it enters into a takeover 

agreement, and the CDA applies to any post-takeover 

claims arising out of that agreement. The Claims Court 

has reached this same conclusion in earlier cases.12

We finally reject Lumbermens’ contention that the 

applicability of the CDA to its takeover agreement claim 

would violate the so-called “single point of contact” principle due to the fact that Atherton is also a party to the 

takeover agreement in privity of contract with the United 

States. In discussing the reasons for limiting the CDA to 

 12 See, e.g., Westech Corp. v. United States, 20 Cl. Ct. 

745, 749 (1990) (noting that, while a surety “may not 

bring a claim directly under the CDA,” it can do so if it 

“execute[s] a takeover contract with [the government] to 

complete the contract”); Travelers Indem. Co. v. United 

States, 16 Cl. Ct. 142, 153 (1988) (“[W]here a surety has 

executed a takeover agreement, as here, upon the default 

of the prime contractor in order to complete the work 

under the construction contract, it becomes a ‘party to a 

Government contract’ and thus, logically, a ‘contractor’ 

within the meaning of § 601(4) of the CDA.”); Universal 

Sur. Co. v. United States, 10 Cl. Ct. 794, 800 (1986) 

(“[Where a] separate takeover agreement[ ] [is entered] 

between the government and the surety after default by 

the contractor. . . . the surety in effect becomes the contractor, subject to the terms of the new agreement.”). 
LUMBERMENS MUTUAL CASUALTY CO v. US 30

claims by “contractors,” the legislative history of the CDA 

states: 

The recommendations of the Procurement Commission specifically exclude bringing subcontractors under the provisions of [the Act]. . . . By 

administering its procurement through a single 

point of contact, the Government’s job is made 

both simpler and cheaper. The single point of contact approach also helps suppress frivolous claims. 

. . . By forcing the prime contractor to administer 

its subcontractor network, the Government permits prime contractors and subcontractors at all 

tiers to use to some extent their familiar commercial procedures in contract award and administration. . . . Finally, by denying the subcontractors 

direct access to administrative remedies, the Government is forcing the prime contractor and the 

subcontractor to negotiate their disputes. 

S. Rep. No. 95-1118, at 16–17, reprinted in 1978 

U.S.C.C.A.N. at 5250 (emphases added). This legislative 

history suggests that claims by third parties who are not 

in privity of contract with the government are not covered 

by the CDA. See Winter, 570 F.3d at 1371 (stating that a 

subcontractor not in contractual privity with the United 

States was not a “contractor” within the meaning of the 

CDA); Admiralty Constr. Inc., 156 F.3d at 1220–21 (stating that a surety not in privity with the United States 

was not a “contractor”). In the present case, however, 

both Lumbermens and Atherton are parties to the takeover agreement in direct privity of contract with the 

United States. We see nothing in the CDA, its legislative 

history, or our prior cases that would prohibit multiple 

obligors on a contract with the government from being 

considered “contractors” within the meaning of the Act. 
31 LUMBERMENS MUTUAL CASUALTY CO v. US

Accordingly, because Lumbermens failed to submit a 

certified claim to the contracting officer as required by 

§ 605(a) and (c)(1), the Claims Court lacked jurisdiction 

over the claim. 

CONCLUSION

Because we find that the Claims Court lacked jurisdiction over Lumbermens’ claims, we reverse the court’s 

decision and remand with instructions to dismiss the 

complaint. Due to the Claims Court’s lack of jurisdiction, 

we hold that Lumbermens’ cross-appeal seeking additional damages is moot. 

REVERSED and REMANDED