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2013 Procurement Review--Contract Disputes



 

Boards of Contract Appeals (ASBCA, CBCA, PSBCA, and GAOCAB)

Jurisdiction/Standing/Timeliness/Contract Disputes Act (CDA) Issues    

In Tobias Schunck, the CBCA held that a notice of appeal sent by Federal Express, which did not arrive at the Board until 91 days after the contractor had received the Contracting Officer's decision, was untimely.

In Lockheed Martin Services, Inc., the ASBCA denied (for lack of jurisdiction) the Government motion for partial summary judgment seeking return of license costs previously paid to the contractor because there was no underlying decision by the Contracting Officer asserting the claim.

In Kellogg Brown & Root Services, Inc., the ASBCA exercised its discretion and dismissed two appeals without prejudice under ASBCA Rule 30 because False Claims Act litigation had been instituted in federal district court covering the same claims. 

In Servicios y Obras Isetan S.L., the ASBCA dismissed an appeal because the underlying contract had been obtained through fraud in the inducement (the submission of fictitious documents) and, therefore, was void ab initio.

In Executive Personnel Services, Inc., the CBCA dismissed an appeal filed 92 days after receipt of the Contracting Officer's decision, as untimely. However, in Premier Group, the ASBCA denied the Government's motion to dismiss an appeal as untimely due to the lack of a postmark on an appeal that was received by the Board more than 90 days after the contractor received the Contracting Officer's decision. The Board accepted as sufficient a declaration from the appellant's attorney that he placed the notice appeal in a U.S. Postal Service mail receptacle on the 90th day.

In CB of Bozeman, Inc., dba Maintenance Patrol, the ASBCA held that the Government's failure to notify the contractor of its appeal rights in a Contracting Officer's "memorandum" denying a claim, coupled with subsequent actions that led contractor to believe the Government was reconsidering its decision, excused the contractor's failure to appeal the original "decision" within 90 days. On the merits, however, the Board held that yearly releases executed by the contractor precluded its subsequent claims for additional SCA wage increases.

In Fluor Corp., the ASBCA held that (for purposes of determining whether certain government claims were barred by the CDA's six-year statute of limitations) (i) the Government's CAS noncompliance claim first accrued as of date the Government completed its CAS noncompliance audit for all payments made to contractor prior to that date; and (ii) thereafter, the Government's claims were in the nature of a continuing claim that accrued for each subsequent payment to the contractor as it was made.

        Jurisdiction

In Tele-Consultants, Inc., the ASBCA held (i) that the appellant need only allege a contract existed in order to establish the Board's jurisdiction and (ii) that whether such a contract actually was formed goes to the merits of the appeal.

In JRS Management, the CBCA held it lacked jurisdiction over a claim that relied on the same operative facts (the Government's allegedly improper performance evaluations) as a prior claim that had not been timely appealed to the Board.

In Temescal Plaza, LLC, the PSBCA held it lacked jurisdiction over (i) a contractor's claims for specific performance and equitable relief, (ii) monetary claims not previously presented to the Contracting Officer for a decision, and (iii) an indemnification claim prematurely brought before the contractor had been found liable. The Board, however, retained jurisdiction over the contractor's claim for interpretation of a contractual provision.

In Taj Al Safa Co., the ASBCA dismissed (without prejudice) an appeal for lack of CDA jurisdiction because it was questionable whether the contractor's emails constituted a demand for a Contracting Officer's decision on a claim for a sum certain, but, in any event, there was no certification of an amount sought in excess of $100,000.

In United Healthcare Partners, Inc., the ASBCA dismissed the monetary portion of an appeal from a termination for cause because the contractor had not previously submitted that part of the claim to the Contracting Officer for a decision.

In Selrico Services, Inc., the CBCA held it had jurisdiction over a claim that the Government had improperly offset against appellant's contract funds that Government had mistakenly paid to another contractor (even though the Government contended the two entities were one and the same).

In Impact Associates, Inc., the ASBCA held it lacked jurisdiction over a claim under a Corps of Engineers FSS task order because the dispute involved the interpretation of provisions in the FSS contract, itself, which must be decided by the GSA schedule Contracting Officer, rather than by the Corps' KO.

In R&G Food Services, Inc. d/b/a Port-A-Pit Catering, the CBCA held it lacked CDA jurisdiction over claim for "not less than" a specified amount because the claim was not for a sum certain.

In MOQA - AQYOL JV, LTD , the ASBCA denied  the Government's motion to disqualify an individual from representing the contractor before the Board because the motion was based on an alleged violation of a criminal statute, and the Board lacks jurisdiction to make such determinations.

In Soto Construction Co. the CBCA dismissed an untimely appeal for lack of jurisdiction, reasoning that the reference in the Contracting Officer's decision to the right to appeal to "the agency board of contract appeals" was sufficient and rejecting the contractor's allegation that the generic reference misled it into believing it would be appealing to some department of the procuring agency.

In MAC International FZE, the ASBCA held it lacked jurisdiction over claims for PPA interest because the contract was not with the Government (see prior decision) and no PPA claim had been submitted to the Contracting Officer for a decision.

In Environmental Safety Consultants, Inc., the ASBCA granted the Government's motion to dismiss the contractor's appeal because the underlying invoice, which had resubmitted an earlier routine progress payment request, included neither a request for a Contracting Officer's decision nor the the required CDA certification. However, in Tricon Timber, LLC, the CBCA held that in the circumstances of the case, the contractor's submission satisfied the requirements for a CDA claim even though it was labeled an "invoice," and the fact that the Contracting Officer's subsequent decision did not advise the contractor of its appeal rights did not deprive the contractor of the right to appeal.

In Hart Ventures, Inc., d/b/a A-1 Fire Services, the CBCA held it lacked jurisdiction over an appeal from the termination of a blanket purchase agreement because such agreements are not contracts.

In Corporate Systems Resources, Inc., the ASBCA held it lacked jurisdiction over a claim by a subcontractor under a Washington Metropolitan Transit Authority prime contract.

In Hewlett-Packard Co., the ASBCA held it had jurisdiction over a dispute involving Army delivery orders because the resolution of the appeal required the interpretation of only those delivery orders, not the underlying GSA schedule contract or BPA.

In Summit Commerce Pointe, LLC , the CBCA dismissed an appeal by the assignee of lease for lack of jurisdiction because the  Government had not accepted the assignment.

In EHR Doctors, Inc., the CBCA dismissed another appeal for lack of jurisdiction because it involved an uncertified claim in excess of $100,000. The ASBCA dismissed two more appeals for the same reason: Baghdadi Swords Co. and Lael Al Sahab & Co.

In Amina Enterprise Group, LTD, the ASBCA held that gratuitous statements in a pro se appellant's notice of appeal from a default termination regarding remedies the Board does not have the power to grant and a possible future contractor claim did not deprive the Board of jurisdiction over this appeal.

In Allen Jerry Oliver, the PSBCA dismissed an appeal filed absent an underlying claim and a Contracting Officer's decision.

In Redmond City Center, L.L.C., the PSBCA denied the Postal Service's motion to dismiss for lack of jurisdiction and held that an employee of one firm was specifically authorized to submit the claim and then the notice of appeal as the representative of the actual party in interest.

In Postal Group, LLC, the PSBCA denied the Postal Service's motion to dismiss a claim under a theory of laches because the Postal Service had not shown it was prejudiced by any delay in the claim submission.

In International Oil Trading Co., the ASBCA held that it has CDA jurisdiction over the Government's affirmative defense that contracts were obtained by bribery and were void ab initio.

In Protecting the Homeland Innovations, LLC, a non-CDA appeal involving the Washington Metropolitan Area Transit Authority (WMATA), the ASBCA held it lacked jurisdiction over a contractor's claim of promissory estoppel because it involved the assertion of a contract implied-in-law, and the WMATA had not waived sovereign immunity with respect to such claims. 

In Xerox Corp., the ASBCA dismissed (for lack of jurisdiction) an appeal involving an Army National Guard Bureau delivery order because resolving the dispute would require interpretation of the underlying FSS contract, which is a matter for the GSA's Contracting Officer and the CBCA.

In Kellogg Brown & Root Services, Inc., the ASBCA exercised its discretion and denied the Government's motion to dismiss a nonmonetary appeal regarding the proper interpretation of a contract clause even though the Government had not taken any action (in years) to enforce its interpretation by denying any costs involved in the dispute.

In Henry Stranahan, the ASBCA held it lacked jurisdiction over an appeal from a decision to debar a contractor. In Alalamiah Technology Group Co. (K.S.C.C.), the ASBCA held it lacked jurisdiction over an appeal by disappointed bidder.

In Mawaraa AlBihar Co., the ASBCA held it lacked jurisdiction over an uncertified claim in excess of $100,000.

In EJB Facilities Services, the ASBCA denied both (i) the contractor's motion to dismiss a government claim for fire damages because the Board found it is was just different theory of recovery for the same claim previously decided by the Contracting Officer, and (ii) the Government's motion to dismiss the contractor's complaint as a request for declaratory relief not previously decided by Contracting Officer because the Complaint was just a response to the Government's claim that included a suggestion as to why the Board should deny that claim.

In Ft. McCoy Shipping & Services, the ASBCA held that it had CDA jurisdiction over an appeal commenced by a letter submitted directly to the Contracting Officer within 90 days of the his decision on a claim because the letter (i) referenced the Contracting Officer's decision, (ii) included the contract number, (iii) expressed dissatisfaction with the decision, (iv) made it clear that the contractor was seeking resolution by a higher authority, and (v) stated: "This letter serves as my notice of intent to appeal."

In CB of Bozeman, Inc., dba Maintenance Patrol, the ASBCA held that the Government's failure to notify the contractor of its appeal rights in a Contracting Officer's "memorandum" denying a claim, coupled with subsequent actions that led contractor to believe the Government was reconsidering its decision, excused the contractor's failure to appeal the original "decision" within 90 days. On the merits, however, the Board held that yearly releases executed by the contractor precluded its subsequent claims for additional SCA wage increases.

In Development & Evolution Construction Co., the ASBCA held it lacked CDA jurisdiction over an appeal demanding a convenience termination settlement amount in excess of $100,000 because none of the prior termination settlement proposals submitted to the C.O. had been certified, even though the most recent of those proposals had been for less than $100,000.

In Metag Insaat Ticaret A.S., the ASBCA held that, under the concept of a "deemed denial," the Board had jurisdiction over an appeal which had been filed with the Board (i) before the C.O. had issued a decision on the underlying claim and (ii) less than 60 days after that original claim had been filed with the C.O., because, at the time the Government had moved to dismiss the claim for lack of jurisdiction, and indeed even as of the date of the Board's decision on that motion, the C.O. still had not issued a decision on claim (and many more than 60 days had, by then, elapsed).

In Public Warehousing Co. K.S.C., the ASBCA held that the Contracting Officer's repeated delays (totaling more than four years) in issuing a decision on the contractor's claim (in order to wait for judicial outcomes in separate fraud cases) gave rise to an appealable deemed denial.

In Linc Government Services, LLC , the ASBCA held that (i) given all the surrounding circumstances, the contractor's letters to the Government implicitly requested Contracting Officer's decisions concerning the interpretation of the contract's terms and, therefore, were valid CDA claims; and (ii) the contractor complied with the CDA's requirements by sending its claim letter to the Contracting Officer identified in the contract, and the fact that a new Contracting Officer (with a different address) had been assigned without notice to the contractor did not invalidate the claim submission.

In Duncan Aviation, Inc., the ASBCA  held that (i) a claim certification submitted subsequent to, but clearly referencing, a prior REA essentially converted the REA into a CDA claim; and (ii) a request for a Contracting Officer's decision was implicit in the correspondence read as a whole.

In The Boeing Co., the ASBCA (i) refused the contractor's request to dismiss claims related to several contracts simply because the Government had misidentified one contract number and (ii) allowed the Government to correct the number in the record.

In WorleyParsons International, Inc., the ASBCA held it lacked CDA jurisdiction over a government claim against only one member of a JV, when the JV was the contracting entity.

Changes/Constructive Changes/Contract Interpretation/Breach/Authority

 In Drennon Construction & Consulting, Inc., which involved a contract to widen a road, the work was delayed and truncated after a hill the contractor was required to excavate collapsed, and the  CBCA held that the collapse was due to defective specifications and a differing site condition, making the resulting period of suspension of the work unreasonable per se and entitling the contractor to compensation.

In Lacey Newday Consulting LLC, the CBCA denied the contractor's claim that a mistake in bid justified a higher price for ground beef because, under the RFQ, the contractor accepted the Government's "offer" (purchase order) by delivering in accordance with the terms of the purchase order.

In ECC, International, the ASBCA denied all delay claims by a construction contractor for various constructive changes, including defective government-furnished property, interference with performance, and acceleration, most of which boiled down to the contractor's belief that the Government's representatives had been too strict in enforcing the contract's requirements.

In ThinkQ, Inc., the ASBCA held that the Government's was the only reasonable interpretation of term "utilized" in the "Placing Orders" clause.

In New Iraq Company 2003, the CBCA held it lacked jurisdiction over an appeal from a decision by an Army Contracting Officer.

In Jaynes Corp., the ASBCA relied on the rule of contract interpretation that contracts must be read as a whole in finding for the contractor because the Government's interpretation would have rendered several portions of the contract "inoperative, meaningless, and useless."

In Colorado River Materials, Inc., d/b/a NAC Construction, the ASBCA held (i) that a written, bilateral settlement agreement, which applied to "all claims and all potential claims" related to a contract, acted as an accord and satisfaction and (ii) that there was no evidence in the record to support the contractor's contention that the Government had misled contractor into believing its claim was excepted from the agreement and was still being considered by Government.

In ALK Services, Inc., although the CBCA agreed with the contractor that contracts for grounds maintenance services at various national cemeteries were requirements contracts and recognized that the contractor had presented some anecdotal evidence that the Government had diverted some work that should have been performed by the contractor to the Government's own employees, the Board nevertheless held that the contractor had failed to present sufficient evidence to establish either bad faith by the Government in failing to exercise an annual option or to quantify the damages allegedly flowing from the diversion of work.

The ASBCA, in Troy Eagle Group, granted the Government's motion for summary judgment that delays in performance of a contract in Iraq caused by gate and border closures, road blockages, and requirements that shipments be made in military convoys, whether ordered by the United States (in its sovereign capacity) or the Iraqi government, were not compensable.

In TigerSwan, Inc., the Government (i) initially awarded a contract to the plaintiff for security services in Iraq, (ii) then (in the midst of protests filed by competing offerors, including the incumbent) terminated the contract for convenience after it concluded it no longer needed many of the services; (iii) awarded a second contract for a reduced scope of work to the plaintiff after a quick turnaround solicitation limited to the original competitors; (iv) but then terminated that contract for convenience as well (and awarded a sole source contract to the incumbent, which was already operating under a bridge contract due to the prior protests) on the basis that the protests and the resulting stop work order and delays had made it impossible for the plaintiff to mobilize and complete the work in a timely manner. The court denied the Government's motion to dismiss the plaintiff's claims for breach of contract based on its objections to the terminations for convenience, but granted the motion to dismiss its bid protest claims for bid preparation costs, because it had not bid on the sole source contract, which had been completed by the time of the decision.    

In Lakeshore Engineering Services, Inc., the court granted the Government's motion for summary judgment and held the contractor was not entitled to recover under any of its theories (including, inter alia, breach of the warranty of specifications, mutual mistake, and unilateral mistake) for price increases based on alleged discrepancies between local prices and those contained in a pricing book incorporated in the solicitation because the book contained explicit warnings that those prices might not be accurate and that the contractor should verify pricing for itself and should adjust its bidding coefficient accordingly.

In Raytheon Missile Systems Co., the ASBCA first imputed DESC JP-10 fuel price increases to the contracting party (NAVAIR) and then held that NAVAIR breached its implied duty not to hinder or interfere with the contractor's performance by subjecting the contractor to fuel price increases caused by conditions outside the set of risks the contractor assumed in its fixed-price contract. 

In Tiger Enterprises, Inc., the ASBCA denied the contractor's appeal, finding that the Government had properly paid the contract amounts directly to a bank under valid assignment, despite all sorts of procedural objections raised by the contractor. 

In Turner Construction Co., the CBCA held that, where a contract required the parties to attempt to negotiate a final, fixed contract price after performance had reached a certain point but the parties had failed to reach agreement, nothing precluded the contractor from subsequently submitting a claim for an equitable adjustment for its reasonable costs of performance.

In Glasgow Investigative Solutions, Inc., the ASBCA granted the Government's motion for summary judgment that options were properly exercised and, in doing so, rejected the contractor's contention that FAR 52.217-8 (Option to Extend Services) can only be used to extend the contract term after all other options have been fully exercised and is intended only for situations at the end of a contract when the Government needs extra time to transition to a new contractor.

In Jaynes Corporation, the ASBCA held that the Government's improper interpretation of the contract led to its rejection of the contractor's submittal of Schedule 40 pipe that complied with ASTM A135.

In CAE USA, Inc., the ASBCA granted the Government partial summary judgment on a contractor's equitable adjustment claims that it was entitled (on a theory of unilateral mistake, failure to disclose superior knowledge, or breach of the implied covenant of good faith and fair dealing) to recover  fringe benefit costs it had been required to pay under a collective bargaining agreement as the successor contractor pursuant to the Service Contract Act.

In The Ducke Group LLC, dba Haven House Veterans Resource, the CBCA denied a contractor's claim for alleged expenses not recouped due to the Government's alleged underutilization of contract to provide room and board for homeless veterans at a fixed per diem rate because the contract was neither a cost-reimbursable nor a requirements contract, and because it did not contain a guaranteed minimum quantity.

In IAP World Services, Inc., the CBCA granted an appeal from the denial of a claim for excess costs under an FFP contract because the contractor originally had followed the Government's directions to base its bid on certain costs related to service calls published in the solicitation that turned out to be inaccurate in practice. 

In Atlantic Dry Dock Corp., the ASBCA denied a claim for the costs of painting the allegedly unexpected vertical square footage area on a ship because there was no proof the Government had superior knowledge as to the actual vertical square footage and no clear proof of a trade practice to include a contingency of only 20% for such painting in a bid.

In James A. Cummings, Inc., the CBCA held that the Government's rejection of a type of piping permitted by the contract (and its requirement that the contractor use steel piping instead) was a compensable change.

In response to the Government's motion for summary judgment in The Ravens Group, Inc., the court held that a contractor (i) was not entitled to recover allegedly excess costs for servicing three units not identified in the original contract because the total number of units it serviced did not exceed total number contemplated by contract, and (ii) could not use the jury verdict method to calculate its alleged damages because the contract required it to track labor hours to determine any excess costs, which it had failed to do, and sufficient records existed for it to reconstruct such hours.  The court left questions regarding the Government's allegedly negligent estimates for determination at the trial on the merits.

In Bluebird Communications, Inc., the ASBCA granted the Government's motion for summary judgment and denied the contractor's claim for allegedly unamortized capital improvement costs based on a theory of mutual mistake because the contract had been fully performed, and the contractor simply had not priced it adequately to recover such costs within the performance period. 

In 600 Second Street Holdings LLC the CBCA held that the fact that a lessor had, in the past, charged less than the maximum amount allowed by a lease for additional parking spaces did not preclude it from raising the charge to the maximum amount. 

In Baghdad Fallujah Co., the ASBCA dismissed an appeal for failure to certify a claim in excess of $100,000.

In Dongbuk R&U Engineering Co., the ASBCA dismissed another appeal because a contract obtained through fraudulent misrepresentations was void ab initio. Similarly, in Honeywell International, Inc., the ASBCA held that portions of a delivery order were illegal or invalid terms that the Board lacked jurisdiction to enforce.

In Dragados USA, Inc., the ASBCA disagreed with the specific contract interpretation arguments of both parties and used the rules of contract interpretation to arrive at the plain meaning of a disputed specification paragraph. 

In Optimum Services, Inc., the ASBCA held that the contractor had failed to prove the elements of a Type I Differing Site Condition and was the party who was primarily responsible for project delays involving submittal reviews.

In Mylene Will Co., L.L.C., the ASBCA denied a Type I Differing Site Condition claim because the contractor did not prove it was damaged by the differing conditions.

In B.A.E. Systems Technology Services, the ASBCA used principles of contract interpretation to conclude that, although the contract was not a "model of clarity," it established that the repair of a generator damaged during a fire was covered by the cost reimbursable depot maintenance/repair CLIN rather than the fixed-price organizational and intermediate maintenance/repair CLIN.

In Systems Integration & Management, Inc., the CBCA held that the contractor was entitled to payment (plus Prompt Payment Act interest) for invoices it submitted on various delivery orders for completed work, with adequate supporting documentation, which the agency had refused to pay without any adequate justification. 

In BYA International, LLC, the ASBCA granted the Government's motion for summary judgment because the contractor had not followed the contract's requirements for obtaining approval to use a different method than specified for constructing exterior walls.

In Tiger Enterprises, Inc., the ASBCA held that the Government properly made lease payments directly to the bank/assignee (rather than to the contractor/assignor) under a bridge contract because the Government was merely continuing the proper procedure it had followed under the basic contract, the proceeds of which had been assigned to the bank.

In Project Solutions Group, a decision it noted was nonprecedential, the CBCA held that excessively high relative humidity levels encountered by a contractor at the installation site for new flooring were not the result of a compensable, latent differing site condition but likely were caused by fact that the contractor repeatedly watered the area to keep down the dust.

In Jane Mobley Assocs., the CBCA held that the overwhelming weight of the evidence established that an extension to a fixed-price contract was, itself, fixed-price (rather than T&M) so that the actual hours worked by the contractor were irrelevant to the amount it was entitled to bill. 

Kap-Sum Properties, LLC, involved the unusual situation where a lessor claimed the Government/lessee had anticipatorily repudiated its building lease. The lessor, therefore, terminated the lease and made a claim for breach damages associated with its attempts to release the space. The CBCA held that the Government had not repudiated the lease and that the lessor should have simply made a claim for delay damages as a result of the Government's delays in providing build-out drawings.

In PAW & Assocs., LLC, the ASBCA held that the Government did not breach an ID/IQ contract by failing to award a specific task order to the contractor during an option period because the Government already had met its obligation to order the minimum quantity. Denying the Government's motions to dismiss, the Board retained jurisdiction over the contractor's claims that the Government had breached both (i) the implied-in-fact contractual duty to provide the contractor a fair opportunity to be considered for the issuance of a task order and (ii) the underlying ID/IQ contract (by failing to protect the proprietary information in the contractor's task order proposal).

In Reliable Contracting Group, LLC, the CBCA denied the contractor's claim of improper rejection because the generators it had  offered had been in storage for the previous four years and, therefore, did not meet the contract's requirements that they be new and available for testing at their manufacturing facility.

In CMEC ARC Electric JV, LLC, the CBCA denied the contractor's claim for extra compensation to deliver an item clearly required by the contract specifications.

In VSE Corp., the CBCA held that the contractor was liable for damage caused by Hurricane Irene to government vehicles stored by, and in the care and possession of, the contractor.

In Walterboro Motor Sales Co., the CBCA denied the purchaser's claim for the cost of repairs to a vehicle purchased at a government auction because the vehicle had not been misdescribed in the auction materials.

Terminations/Liquidated Damages/Government Claims  

In American AquaSource, Inc., the ASBCA upheld a termination for cause of a contract to supply purified water because the contractor's performance during the 49 day period between the missed delivery date and the termination (conducting a site survey, being notified by its construction contractor that it might be liable for liquidated damages, and using minimal efforts to find an alternate source of water) was not sufficiently substantial to constitute reliance on the alleged waiver of the delivery date.

In Red Sea Engineers & Constructors, Inc., the ASBCA upheld a default termination because (i) the construction contractor's delay was not excused by the Government's withholding of progress payments and its refusal to process related documents in a situation where the Government had expressed reasonable concerns that, due to the contractor's lack of progress, earlier  payments had overpaid the contractor; and (ii) a four-month forbearance period after the Government's warning that it was reserving its rights did not waive the completion date, especially because the contractor had continued to submit optimistic (though inaccurate) reports of its progress during that period.

In Expediters Worldwide USA, Inc., the CBCA sustained an appeal of the default termination of an auction sales contract for a barge because (i) the bid description omitted mention of the large amount of water in the barge's ballast tanks, which would have to be disposed of, and (ii) the Contracting Officer failed to inform the buyer of an agency's availability to undertake that disposal, which failure breached the Government's duty to cooperate with the contractor in the performance of the contract.

 In Payne Enterprises, the CBCA held that declining prices for the timber, an overall economic decline, and a precipitous drop in housing starts and housing remodeling resulting in a steep decline in the demand for hardwood lumber did not excuse the contractor's failure to complete a timber sales contract.

In Strand Hunt Construction, Inc., the ASBCA held (in a 23-page opinion by the majority) that (i) the contract completion date was the date originally proposed by the contractor and accepted by the Government, despite the fact that, in bilateral modifications, both parties erroneously continued to refer to the completion date in the solicitation until the dispute arose; and (ii) the contractor was entitled to the remission of liquidated damages to the extent of, the unreasonable portion of a stop work order and the Contracting Officer's failure (a) to act within reasonable period of time to resolve punch list items and (b) to concede beneficial occupancy occurred at same time as substantial completion. Two dissents (one of which ran to 130 pages) disagreed with the majority's position concerning the completion date. 

In ADT Construction Group, Inc., the ASBCA upheld a default termination based on (i) the contractor's failure to meet the original completion date and an interim construction date on a revised schedule; (ii) the contractor's lack of progress, indicating it was unlikely to meet any new completion date; and (iii) the contractor's failure to provide adequate assurances that it would or could complete the contract absent additional financial support to which it was not entitled under the contract. The Board rejected a plethora of excuses offered by the contractor, including what the Board viewed as a tardy spoliation claim.

Previously, in Environmental Safety Consultants, Inc., the ASBCA sustained a contractor's appeal from a default termination because the Government delayed 11 months beyond the stated completion date before terminating, thus waiving the original date without establishing a new one. The Government appealed the decision to the Court of Appeals for the Federal Circuit, but then agreed to a dismissal of that appeal. Most recently, the Government returned to the Board and filed a motion for relief from the original judgment. The Board denied the Government's motion because it was based on a slew of arguments that had already been rejected or were too late to raise at this late date.

In Gargoyles, Inc., the ASBCA upheld the termination for cause of a commercial items contract for light armored vehicles because, without a valid excuse, the contractor failed to deliver within the required delivery schedule. The Board noted that a warning letter issued by the Government after the delivery date had passed was actually a "show cause" notice even through it referred to itself as a cure notice and both parties had consistently referred to it as such.

In Commissioning Solutions Global, LLC, the ASBCA upheld the termination for cause of a fixed-price contract because the contractor refused to perform absent a price increase. The Board) rejected the contractor's argument that a drawing was illegible because its condition was patent before award, and the contractor did not rely on it in order to perform.

In Bruce E. Zoeller, the ASBCA granted the Government's motion for summary judgment as to the contractor's claims of superior knowledge and bad faith in a lease cancellation and also rejected the contractor's claim that the Board, itself, had been unfair to it.

In Free&Ben, the CBCA upheld the agency's assessment of liquidated damages for a buyer's failure to make timely payment for an item bought at an online auction.

In Donaldson Enterprises, Inc., the ASBCA upheld a government deduction against the contractor's delivery order invoice for the value of government property converted (taken) by a subcontractor.

In GMS Hawaii Corp., the ASBCA denied a claim for termination costs because the contract permitted termination without liability in the circumstances of this case.

In Platinum Logistics Services Co., the ASBCA upheld a termination for default because the contractor had repeatedly failed to provide conforming items and, in response to a cure notice, had failed to give the Government assurances it would comply with contract in the future.

In TTF, L.L.C., the ASBCA held that a purchase order had lapsed as a matter of law because the firm had failed to timely deliver supplies that met the specification requirements, and the items it did attempt to deliver were nonconforming because they did not fulfill the requirement that they be manufactured by a HUBZone business.

In Selrico Services, Inc., the CBCA held that the Government had satisfied the requirements of 31 U.S.C. 3716(a) before offsetting money otherwise owed to the contractor under a USMS contract against money improperly paid to the same payee under a separate Army contract.

In Dace Enterprises, LLC, the ASBCA held that the Government properly terminated a contract for cause because the contractor was not authorized by the manufacturer to provide (resell) required support for specified systems and, thus, could not fulfill terms of contract.

In Russell Sand & Gravel Co., over the Government's strenuous objections, the CBCA determined that most of costs claimed in the contractor's convenience termination settlement proposal were recoverable.

In Earthstar Construction and Logistics Co., the ASBCA upheld a termination for cause due to the contractor's failure to deliver "new" items, as required by the contract.

Costs, Defective Pricing, and Cost Accounting Standards (CAS)

In the Lockheed Martin Aeronautics Co. defective pricing case, the ASBCA held that the Government had utterly failed to prove that the alleged nondisclosure of cost or pricing data had resulted in any increase in the negotiated price.

In Dynamics Research Corp., the ASBCA held that a contractor which had failed to comply with the notice requirement of the "Limitation of Government Obligation" clause (i.e., that it notify the Government at least 90 days before its incurred costs were expected to equal 85% of the then-allotted funds) could not recover for costs in excess of the allotted funding.

In PHI Applied Physical Sciences, Inc., the ASBCA held that FAR 52.232-20 (the "Limitation of Cost" clause) barred the contractor's claim for increased costs under a CPFF contract because the contractor failed to provide the notice of cost overruns required by that clause, and the Contracting Officer never issued a notice that the estimated cost of the contract had been increased.

In PHI Applied Physical Sciences, Inc., the ASBCA denied a claim for a cost overrun because the contractor failed to give the required notice under FAR 52.232-20 (Limitation of Cost) and the Contracting Officer did not authorize incurrence of the costs.

In Parsons-UXB Joint Venture, the ASBCA addressed several issues arising under a Navy contract concerning the allowability of various costs incurred by individual members of a joint venture in a dispute with Hawaii over amounts owed for Hawaii's general excise tax. 

In The Boeing Co., the ASBCA held that the "Limitation of Funds" clause limited the amount the prime contractor could recover for subcontract settlement costs after a convenience termination.

Quantum 

In South Carolina Public Service Authority, a decision limited to quantum after a prior finding of entitlement, the ASBCA held that the contractor was entitled to indemnification from the Government for the full amount a jury awarded to third party landowners for flooding damages in a separate action against the contractor, plus CDA interest from the time the contractor submitted its indemnification claim to the Government.

In Joe Phillips, the ASBCA used the jury verdict method to reduce the 79% profit rate sought by the contractor for the Government's improper diversion of work under a requirements contract to approximately 30%. [Subsequently, the Board denied the Government's request for reconsideration]

In EJB Facilities Services, the ASBCA agreed with the contractor that the pricing of a deductive change order should be based on the contractor's estimated costs to perform the deleted work (which relied on the actual historical costs of performance) rather than the contractor's original proposal, as the Government had argued.

Discovery/Procedure

In Kurtis Parker, an appeal from a government claim for liquidated damages, the CBCA dismissed for failure to prosecute because the appellant failed to respond to the Government's reasonable request for documentation supporting the appellant's contentions.

In Sammy's Delivery Service, the PSBCA denied the Government's motion in limine to preclude the contractor from contesting the existence or amount of a debt on a government claim based, inter alia, on the contractor's prior acknowledgment of the debt. The Board noted, however, that the Government could present evidence of the prior admissions to counter the contractor's current contentions. 

In Tri-County Contractors, Inc., the ASBCA denied the Government's motion for summary judgment because of material issues of fact concerning whether the Contracting Officer should have known that the contractor's signature on a general release in connection with a final invoice was not intended to release two previously-submitted claims.

In Proteus, Inc. , the CBCA denied the Government's motion to dismiss the contractor's appeal for failure to prosecute because the Board found that both parties had engaged in "a pattern of non-egregious, albeit frustrating, delay."

In Laguna Construction Co., the ASBCA granted the Government's motion to stay the proceedings pending related criminal proceedings against three principal officers of the contractor (and four officers of its subcontractor).

The CBCA dismissed an appeal by Ryll International, LLC for failure to prosecute after the contractor essentially disappeared, did not answer her phone, and failed to respond to several messages regarding a scheduled video conference hearing.

In Ensign-Bickford Aerospace & Defense Co., the ASBCA denied the Government's motion for the dispositive sanction of an adverse inference against the contractor for discarding evidence (tested items) primarily because the Government had not demonstrated it was prejudiced since other evidence was still available on the issue in question.

In Government Technical Services, LLC, the ASBCA partially granted a pro se appellant's motion to dismiss without prejudice  under Rule 30 due to a pending criminal matter in another forum, but noted that the dismissal would be deemed to be with prejudice unless either party moved to reinstate the appeal within one year.

In Laguna Construction Co., the ASBCA granted the Government's motion to amend its answer to include the affirmative defense of fraud after the contractor's vice president pleaded guilty to soliciting and receiving kickbacks from subcontractors on a number of contracts, including the one involved in the current appeal.

In Bruce E. Zoeller , the ASBCA held that a motion for reconsideration filed 32 minutes past the expiration of the 30-day  deadline would not be considered.

Equal Access to Justice Act

In J. F. Taylor, Inc., the ASBCA denied the contractor's EAJA application in a dispute over executive compensation costs because the Government's litigation position, though it did not prevail, was substantially justified in that (i) it was supported by legal precedent; (ii) the method for which Government argued was the longstanding method used in the DCAA audit manual; (iii) the statistical evidence presented by the contractor at the hearing was a new approach; and (iv) the Government prevailed on some individual aspects of dispute.

In Environmental Safety Consultants, Inc., the ASBCA denied the contractor's EAJA application because, although it did not prevail, the Government's litigation position (no waiver of delivery prior to default termination) was substantially justified.

Court of Federal Claims

Contract Disputes Act (CDA) / Tucker Act / Jurisdiction / Standing 

In Estes Express Lines, the court held it lacked Tucker Act jurisdiction over an action brought by a motor carrier/subcontractor that had no privity of contract with the Government.

In Westlands Water District, the court dismissed claims based on various breach-of-contract theories because they all assumed a contractual obligation by the Government to provide drainage to the plaintiff, which the court held did not exist, and because many of the claims were time-barred by the statute of limitations.

In Red Hawk Construction, Inc., the court dismissed a subcontractor's claim (i.e., that the Government's Contracting Officer had fraudulently dispersed funds in violation of the Anti-Assignment Act) because the subcontractor had no privity of contractor with the Government and was not (and could not have been) an assignee under the facts of this case.

In Kellogg Brown & Root Services, Inc., because the contract award fee provisions at issue were ambiguous on the issue of whether the Contracting Officer had discretion to ignore the contract's mathematical system for calculating the award fee, the court denied the Government's preliminary motion to dismiss contractor's claims that the Contracting Officer's  decision awarding no fee to the contractor despite its high numerical scores (i) breached the contract and (ii) was arbitrary and ambiguous, but did dismiss the claims that the decision (i) breached the implied covenant of good faith and fair dealing and (ii) violated FAR 16.401.

In DaVita, Inc., the court denied the Government's motion to dismiss and held it had jurisdiction over a plaintiff's (i) non-CDA claim for a declaratory judgment that the VA had improperly failed to pay the plaintiff for authorizations for dialysis treatments issued pursuant to 38 C.F.R. 17.36; and (ii) its CDA claim requesting an interpretation of a 2009 contract as authorizing certain of the treatments for which Government also  failed to pay the plaintiff. The court held that the latter claim was a nonmonetary claim in the way the plaintiff had presented it to the Contracting Officer and, therefore, was not subject to the CDA's requirement that monetary claims be stated as a sum certain. 

In Diversified Maintenance Systems, Inc., the court dismissed a complaint for lack of jurisdiction because the contractor failed to establish it had submitted a claim to the Contracting Officer for a decision. The interesting thing is that this was the contractor's second try at this suit, the first one meeting the same fate. 

In Crewzers Fire Crew Transport, Inc., the court  held it lacked jurisdiction over a firm's claims related to the Government's termination for cause of a BPA because a BPA is not a contract and, under it, the plaintiff had made no binding commitments to the Government. In a companion case, the court reached the same result where the Government had issued a convenience termination of another BPA involving the same firm. In both cases, the terminations were based on the firm's alleged "breaches" of the BPA. 

In Aeroplate Corp., the court denied (for lack of jurisdiction) two subcontractors' motions to intervene in a contract case to enforce an equitable lien on funds the agency had set aside for the project or owed to the prime contractor/plaintiff.

In Sperient Corp., the court (i) held that the plaintiff's Phase II Small Business Innovation Research (SBIR) R&D contracts were procurement contracts covered by the CDA and, therefore, (ii) dismissed the suit for lack of jurisdiction because the plaintiff had not obtained a Contracting Officer's decision on its claims.

In Coffee Connections, Inc., the court that CDA language requiring, inter alia, a claim in a sum certain, which had been improperly inserted in the Disputes clause of a non-CDA AAFES concessions contract, was unenforceable.

Changes/Breach/Contract Interpretation/Defective Specs/Authority

In Shell Oil Co., et al., the court held that the "Taxes" clause included in the contracts in dispute did not contemplate indemnification claims by contractors for later-imposed CERCLA clean-up costs after the contracts ended.

In Sundowner 102, LLC, the court held that the use of the phrase "long term" in an ID/IQ contract to lease aircraft to the Government for a base term of one year with seven one-year options did not obligate the Government to exercise the options.

In 1200 Sixth Street, LLC, the court dismissed the contractor's breach of contract claim because the Government's actions did not strictly comply with requirements of option provision, and, therefore, the Government had not exercised the option the contractor claimed had been breached.

In Hernandez, Kroone and Assocs., the court held that (i) the actions of the parties before the dispute arose demonstrated that the plaintiff's proposal formed a part of the resulting contract, and, therefore, a subsequent modification merely making that fact clear was not a change to the contract; but (ii) the unorthodox way the contract was negotiated had given rise to legitimate issues concerning its scope, and, therefore, the Government's counterclaims in fraud could not be sustained.

In Bay County, Florida, the court held that, under the Christian doctrine, the Government could not rely on the provisions of a clause it had improperly included in a contract, but, instead, was bound by the terms of the clause it should have included.

In Thomas F. Neenan, the court  held that a draft lease agreement did not amount to a binding contract because it was not signed by the Contracting Officer and the government employee who assured the plaintiff that "it's a deal" did not have the authority to bind the Government.

In Bay County, Florida, the court held that, under the Christian doctrine, the Government could not rely on the provisions of a clause it had improperly included in a contract, but, instead, was bound by the terms of the clause it should have included.

In Sigma Construction, Inc., a/k/a Sigma Services, Inc., the court dismissed the suit, holding that an oral agreement by the Contracting Officer and the contractor to settle a convenience termination claim was not enforceable against the Government because (i) it was not in writing as required by FAR Part 49,  and (ii) the Contracting Officer lacked the authority to enter into an oral contract.

In Englewood Terrace Limited Partnership, on remand from the CAFC, the court reduced its original award of more than $3 million in damages for lost profits resulting from a breach of contract to zero because it said the plaintiff had failed to prove the amount of damages resulting from the breach. Subsequently, in 2015, the CAFC affirmed the CoFC's decision. 

In Chapman Law Firm, LPA, the court held that (i) the plaintiff's affirmative claims were forfeited under the Special Plea in Fraud statute because the plaintiff had submitted falsified routine inspection reports under its contract, and (ii) the plaintiff was liable for monetary penalties for four such falsified submissions under the Civil False Claims Act.

In Kenneth Earman, the court rejected the plaintiff's claims on various jurisdictional and contract interpretation grounds, including the following: (i) the plaintiff presented no evidence of its own mistake to support its mutual mistake claim; (ii) a statute relied on by the plaintiff had not been incorporated into the contract (despite the Government's concession during the litigation that it had been!); and (iii) another provision had not been incorporated by the Christian doctrine because the contract at issue was not a procurement contract, and the clause in question was not a "mandatory contract clause[] which express[es] a significant or deeply ingrained strand of public procurement policy."

In Jemal’s Lazriv Water, LLC (for purposes of applying a building lease's tax adjustment clause), the court interpreted a provision stating that the base year taxes included "the real estate taxes for the first 12-month period of the lease term coincident with full assessment."  

Terminations 

In Ulysses, Inc., the court held that, although the Government was justified in canceling one purchase order because the contractor was supplying its own part rather than the one specified in the RFQ and the order, the Government's cancellation of a second order was unreasonable (and should be converted to a T for C) because neither the second RFQ nor plaintiff's quotation specified a particular part, and plaintiff reasonably believed that the reference in the purchase order was just historical. (A significant factor in the court's decision that a contract had been formed from the second RFQ was that the plaintiff had almost finished manufacturing the full quantity of items before the disconnect was discovered.) The court denied the  Government's counterclaims in fraud in large part because plaintiff's claims were based on its clearly stated disagreement with Government's view of the legal issues involved in the dispute.

In Zip-O-Log Mills, Inc., d/b/a Zip-O Timber Co., the court held that a timber sales contract was effectively terminated for convenience when the Government ceased actions that would permit it to fulfill its obligations, not the years-later date when the Government finally acknowledged the obvious by sending a termination letter.

In Coffee Connections, Inc., the court held that (i) CDA language requiring, inter alia, a claim in a sum certain, which had been improperly inserted in the Disputes clause of a non-CDA AAFES concessions contract, was unenforceable; and (ii) AAFES properly terminated the contract for unsanitary conditions under a Default clause that permitted immediate termination by either party for a breach by the other.

Costs; Cost Accounting Standards (CAS)

In a 236-page opinion (the majority of which is devoted to tracing the history of government procurement generally and limits on recovery of profit in government contracts in particular from the Constitution and the Revolutionary War through the Civil War, WWI and WWII (and most of the wars between) and on up to the present), the ASBCA, in Space Gateway Support, LLC, held that former FAR 45.302.3(c) (now revised and relocated to 15.404-4(c)(3)) prohibited the contractor from recovering profit on the cost of equipment purchased pursuant to directions from the Government.

In Sikorsky Aircraft Corp., the court denied the Government's claim that a contractor had violated CAS 418-50 in allocating its material overhead costs. Specifically, the court determined that (i) because the management and supervision costs contained within the materiel overhead pool were insignificant relative to the entire pool, CAS 418-50(e) rather than CAS 418–50(d) applied; and (ii) because the first two allocation bases permitted by that subsection (e) were impractical to use in this case, the contractor had properly reverted to the third alternative base--in the contractor's situation, direct labor--which complied with that subsection because that allocation base varied in proportion to materiel overhead costs during the relevant periods and, thus, was an acceptable means of measuring the resources consumed in connection with pool activities.

In Unisys Corp., the court held that, after making the appropriate CAS 413 segment closing adjustments, the  contractor did not owe the Government any additional amounts claimed by the Government.

In General Electric Co., the court granted partial summary judgments to each side and reserved the remaining issues for trial in a dispute over the appropriate segment closing adjustment under CAS 413.50(c)(12).

In General Motors Corp., the court (i) held that, under original CAS 413.50(e)(12), the contractor was entitled to include pension benefit improvements adopted in the regular course of business just prior to a segment closing in the contractor's segment closing adjustment calculation and, in the process, (ii) denied the Government's contentions (a) that such inclusion would result in an "inequitable calculation" and (b) that an alternate segment closing adjustment date should be used in order to  exclude those benefits.

Discovery, Evidence, Procedure

In Larrye Cheaves, the court excluded an expert's report offered by the plaintiff as evidence of trade usage of an allegedly ambiguous contract term  because the court concluded that the contract was not ambiguous and that it already incorporated the trade usage in question.

In Sikorsky Aircraft Corp., the court denied the Government's post-decision motion to effectively dissolve a protective order while an appeal of the case was still pending at the Federal Circuit.

Fraud

In Hernandez, Kroone and Assocs., the court held that (i) the actions of the parties before the dispute arose demonstrated that the plaintiff's proposal formed a part of the resulting contract, and, therefore, a subsequent modification merely making that fact clear was not a change to the contract; but (ii) the unorthodox way the contract was negotiated had given rise to legitimate issues concerning its scope, and, therefore, the Government's counterclaims in fraud could not be sustained.

In Gulf Group General Enterprises Co., W.L.L., the court analyzed the propriety of three terminations and a claim for delay and extra work in light of (i) government counterclaims alleging violations of the False Claims Act and (ii) (with regard to the delay claim) the affirmative defense of the Sovereign Acts doctrine.

EAJA/Attorneys Fees 

In SUFI Network Services, Inc., the court held that the contractor was entitled to recover ~$697,000 in attorneys fees as a result of its successful suit for government breach of a NAFI contract not covered by the CDA or FAR because its attorneys' recorded hours and hourly rates were reasonable.

Court of Appeals for the Federal Circuit

Jurisdiction/Standing/Res Judicata 

In Northrop Grumman Computing Systems, the court reversed the Court of Federal Claims and held that, despite omitting  information concerning third-party financing arrangements related to Anti-Assignment Act issues, the contractor's original claim letter gave the Contracting Officer adequate notice of the amount and basis of its breach of contract claim and, therefore, was sufficient under the CDA. 

In Sharp Electronics Corp. , the court affirmed the ASBCA's prior decision dismissing an appeal for lack of jurisdiction and held that, under FAR 8.406-6, only the GSA's Contracting Officer has the authority to decide disputes involving, even in part, the interpretation of FSS contract provisions and that an ordering agency Contracting Officer lacks such authority, even when the dispute also involves purchase order provisions.

Costs/CAS

In General Dynamics Corp., the court affirmed the ASBCA's prior decision that the contractor's use of a partial-year asset valuation in computing its retirement plan forward pricing rates was noncompliant with CAS 412.

In Rockies Express Pipeline LLC, the court held that, although the CBCA had correctly concluded that the Government had breached a contract, the Board had improperly limited the contractor's damages based on a flawed assumption as to the Government's rights after the breach when, in fact, the contractor was entitled to damages through the end of the contract term.

Fraud/Anti-Kickback

In Kellogg Brown & Root Services, Inc., the court upheld much of the CoFC's prior decision but held it erred in (i) failing to impute the contractor's employees' actions to the contractor for purposes of the Government's counterclaim under the Anti-Kickback Act and (ii) calculating the base fee due the contractor.

EAJA

In White Buffalo Construction, Inc., a nonprecedential decision, the Court of Appeals for the Federal Circuit agreed with the CoFC that the Government's decision shortly before trial to convert a default termination to a termination for convenience mooted the plaintiff's claim for attorneys' fees under the EAJA.

 

      

Supreme Court


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