Opinion ID: 1057954
Heading Depth: 2
Heading Rank: 1

Heading: Procurement Act

Text: The Procurement Act establishes the public policies pertaining to governmental procurement from nongovernmental sources. Code § 2.2-4300. It requires that [a]ll public contracts with nongovernmental contractors . . . for the purchase of services . . . shall be awarded in accordance with its provisions, unless otherwise authorized by law. Code § 2.2-4303. There is no dispute in this case that the contract between HCC and Jean Moreau is a public contract under the Procurement Act. The General Assembly has imposed certain procedures and limitations on the processing and enforcement of contract claims which are subject to the Procurement Act. Flory Small Business Dev. Ctr. v. Commonwealth, 261 Va. 230, 238, 541 6 S.E.2d 915, 919 (2001). Among the procedures it has prescribed is that [c]ontractual claims, whether for money or other relief, shall be submitted in writing no later than 60 days after receipt of final payment; however, written notice of the contractor's intention to file a claim shall be given at the time of the occurrence or at the beginning of the work upon which the claim is based. Code § 2.2-4363(C)(1). These are mandatory, procedural requirements which must be met in order for a court to reach the merits of a case. Flory, 261 Va. at 238, 541 S.E.2d at 919. The circuit court concluded that Jean Moreau failed to submit a claim within 60 days after final payment, because its October 24 letter to HCC was not a claim, [but rather] an invitation to settle. And, even if [that letter] were a claim, the circuit court alternatively held, it was more than 60 days since final payment was made on July 31st, 2006, [and was] therefore barred by the [Procurement Act]. Jean Moreau contends that the circuit court was wrong because HCC never provided notice of final payment, and thus the 60-day limitations period in which to submit a claim never began to run. Jean Moreau further argues that, even assuming the Court could treat the July 31, 2006 payment as 'final payment' for the purposes of § 2.2-4363, its June 9 letter to HCC assert[ed] a claim for the additional development fees on 7 the Springdale project, and therefore satisfied the Procurement Act. We disagree. Nothing in Code § 2.2-4363 requires a public body to give notice that a payment is final before the 60-day limitations period begins to run, and Jean Moreau cites no other section of the Procurement Act that sets forth such a requirement. Nonetheless, HCC's May 8 and June 19 letters to Ms. Moreau notified Jean Moreau that, after the invoices from the 2005-2006 fiscal year were satisfied, the Commission would make no more payments under the parties' contract. In the May 8 letter, HCC said that it had voted not to continue and fund its contract with Jean Moreau . . . beyond the current fiscal year ending June 30, 2006. And in the June 19 letter, HCC said that, [u]pon legal review, the Commission believes that you have been fully and fairly compensated, and the Commission has honored every term of its contract with you. Moreover, Jean Moreau's June 9 letter to HCC was not a claim in writing no later than 60 days after receipt of final payment. Code § 2.2-4363(C)(1). In that letter, Ms. Moreau said that she wanted to give HCC a 'heads up' that [she] intend[ed] to seek legal remedy regarding [the deferred] fees under the parties' contract. This statement, to be sure, gave HCC notice of Jean Moreau's intention to file a claim, thereby satisfying the requirement imposed by Code § 2.2-4363(C)(1) 8 that written notice of the intent to file a claim be given at the time of the occurrence. But it was not itself a claim. While Code § 2.2-4363 does not prescribe exactly what a writing must contain to be considered a claim, our prior cases suggest that it requires more than what Ms. Moreau included in the June 9 letter. For instance, in Flory, 261 Va. at 234, 541 S.E.2d at 917, the contractor's claim consisted of invoices for reimbursement of approximately $89,000 for services rendered and expenses incurred. And in Welding, Inc. v. Bland County Service Authority, 261 Va. 218, 227, 541 S.E.2d 909, 914 (2001), the contractor alleged that, within 60 days of final payment, it made a claim by letter for $100,000 for additional work. Although the notice of intent need not  'be separate and distinct from the claim itself,'  Commonwealth v. AMEC Civil LLC, 280 Va. 396, 409, 699 S.E.2d 499, 506 (2010) (quoting Flory, 261 Va. at 238, 541 S.E.2d at 919), a claim is not necessarily submitted when a notice of intent is given. That is the case here. Jean Moreau's June 9 letter gave notice of its intent to file a claim for the deferred development fees, but did not make a claim for those fees. The earliest Jean Moreau arguably submitted such a claim was in its October 4 letter – more than three weeks after the 60-day limitations period had expired. 9 In sum, Jean Moreau did not comply with the mandatory, procedural requirements of the Procurement Act in bringing its breach-of-contract claim against HCC. Flory, 261 Va. at 238, 541 S.E.2d at 919. Specifically, it did not submit the claim to HCC within 60 days after final payment as required under Code § 2.2-4363(C)(1). For this reason, we hold that the circuit court did not err in concluding that the claim was barred.