Contract Appeal Data Offers Insights for Industry

NATIONAL DEFENSE MAGAZINE By Jen Bentley, Dan Russell and Elizabeth Witwer 

“The Armed Services Board of Contract Appeals in October released its annual report for fiscal year 2025. ABCA REPORT YEAR ENDING SEPTEMBER 30, 2025

It reveals several key findings and, most importantly, what they might mean for defense contractors navigating claims and disputes in fiscal year 2026.“

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“The document provides a useful snapshot of case volumes, outcomes, agency trends and procedural developments. 

First, the board experienced an increase in the number of appeals docketed in fiscal year 2025 as compared to fiscal year 2024. It docketed 371 new or reinstated appeals, a 34 percent increase from the prior year’s 276 appeals.

The Army Corps of Engineers remained the greatest source of new appeals, with 104 filings, while the Defense Logistics Agency saw a threefold increase — from 11 to 33 — and Air Force filings rose sharply from 37 to 62.

The reasons for the increase are hard to pinpoint given the variety of cases and types of disputes. However, this uptick in cases is likely unrelated to the change in administration given the time required for appeals to reach the board. Any increase in disputes related to the new administration’s actions — as many predict — is more likely to be seen in next year’s case load.

Second, appeals continued to be sustained at high rates, which means that the board continues to be a favorable forum for contractors. In whole or in part, it sustained 67 percent of appeals that reached the merits, consistent with high success rates in recent years. The predominance of sustained and partially sustained outcomes continues to signal that well-supported claims fare well at the board.

Third, the number of pending cases dropped again relative to the prior year as the board continued to chip away at its backlog of appeals in fiscal year 2025.

After reporting more than 900 pending appeals per year in fiscal years 2020-2023, the board reduced its docket to 784 in fiscal year 2024 and further to 748 cases in fiscal year 2025.

Notably, despite an increase in new filings, the board appears to have resolved appeals at a faster rate than they were filed — evidence of effective docket management despite a busier year.

However, the Defense Contract Management Agency showed a higher ratio of pending appeals to new appeals, suggesting that cost accounting matters may take longer to resolve because of their complexity.

Of the 748 cases pending before the board, more than 200 were in “suspended” status, generally at the parties’ request while they pursue settlement, while only 68 were “ready to write,” the category reflecting cases awaiting a decision by the board.

Fourth, alternative dispute resolution continues to deliver strong results for defense contractors.

Eighty appeals at the board moved to alternative dispute resolution in fiscal year 2025, and the board reported that all matters diverted to the process were either resolved, withdrawn or remained actively engaged at year’s end, with none deemed unsuccessful, underscoring it as a valuable process for litigants seeking efficient, negotiated outcomes.

Additionally, the board highlighted the continued availability of “off-docket” alternative dispute resolution, which allows parties to seek assistance from the board without filing a notice of appeal.

Off-docket alternative dispute resolution is often an attractive choice for contractors who wish to preserve a positive working relationship with the agency. The board handled five such matters in fiscal year 2025. The board’s alternative dispute resolution data demonstrates the continued effectiveness of mediation and other alternative processes in resolving disputes efficiently.

Fifth, and finally, the board highlighted notable qualitative updates this year in the areas of modernization, accessibility and technology. It continued to offer flexible hearing formats, allowing proceedings to be held in person or virtually.

While not reflected in its annual report, the board is preparing to move offices soon and will have upgraded technology in its courtrooms. It also published guidelines for the use of artificial intelligence in the last year.

Overall, the fiscal year 2025 report shows that the Armed Services Board of Contract Appeals remains an active, effective forum for resolving government contract disputes, even amid rising filings and increasingly complex cases. With strong alternative dispute resolution programs, steady case management and ongoing modernization, contractors can expect the board to remain a reliable venue in fiscal year 2026.”

Contract Appeal Data Offers Insights for Industry

ABOUT THE AUTHORS:

Jen Bentley is an associate, and Dan Russell and Elizabeth Witwer are of counsel in the Washington, D.C., office of Covington & Burling LLP.