Case: 19-1621     Document: 42    Page: 1   Filed: 05/19/2020




   United States Court of Appeals
       for the Federal Circuit
                   ______________________

          ELECTRIC BOAT CORPORATION,
                    Appellant

                             v.

                SECRETARY OF THE NAVY,
                          Appellee
                   ______________________

                         2019-1621
                   ______________________

     Appeal from the Armed Services Board of Contract Ap-
 peals in No. 58672, Administrative Judge David D’Alessan-
 dris, Administrative Judge J. Reid Prouty, Administrative
 Judge Richard Shackleford.
                  ______________________

                   Decided: May 19, 2020
                   ______________________

     IAN GERSHENGORN, Jenner & Block LLP, Washington,
 DC, argued for appellant. Also represented by MATTHEW
 S. HELLMAN, D. JOE SMITH.

     WILLIAM JAMES GRIMALDI, Commercial Litigation
 Branch, Civil Division, United States Department of Jus-
 tice, Washington, DC, argued for appellee. Also repre-
 sented by JOSEPH H. HUNT, MARTIN F. HOCKEY, JR.,
 ROBERT EDWARD KIRSCHMAN, JR.; ALANA M. SITTERLY,
 RUSSELL SHULTIS, Naval Litigation Office, United States
 Department of the Navy, Washington, DC.
Case: 19-1621    Document: 42      Page: 2    Filed: 05/19/2020




 2                       ELEC. BOAT CORP. v. SEC’Y OF THE NAVY




                  ______________________

     Before LOURIE, MOORE, and CHEN, Circuit Judges.
 MOORE, Circuit Judge.
     Electric Boat Corporation appeals from the Armed Ser-
 vices Board of Contract Appeals’ grant of partial summary
 judgment to the United States Department of the Navy,
 holding that Electric Boat’s Contract Dispute Act (CDA)
 claim is barred by the statute of limitations. Because the
 Board correctly held that Electric Boat’s claim is barred by
 the statute of limitations, we affirm.
                        BACKGROUND
     On August 14, 2003, Electric Boat and the Navy en-
 tered into a contract (the Contract) for the construction of
 up to six separate Virginia-class nuclear-powered subma-
 rines (SSNs), SSN 778 through SSN 783. 1 The Contract
 established a target price for each submarine, comprising
 the sum of the target cost and the target profit. See J.A. 84
 (SSN 783). Electric Boat was entitled to periodic progress
 payments proportional to Electric Boat’s overall construc-
 tion progress. J.A. 271–79 (Clause H-29). The Navy was
 required to fully compensate Electric Boat under the Con-
 tract until Electric Boat’s invoiced costs exceeded


     1    The Contract between Electric Boat and the Navy
 funded full construction of only the first submarine, SSN
 778. Pursuant to Clause H-17 of the Contract, the remain-
 ing five submarines were funded on an installment basis
 and the parties’ obligations under the Contract were en-
 tirely contingent on the future availability of funds. J.A.
 238–39. The Navy modified the Contract in January 2004,
 transitioning the contract to a multi-year procurement con-
 tract for the remaining five submarines. J.A. 396. Clause
 H-20 of the modified contract maintained the installment
 funding and contingency provisions of Clause H-17.
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 ELEC. BOAT CORP. v. SEC’Y OF THE NAVY                       3



 construction progress at the target price, less certain ad-
 justments.

incorporates by reference the standard
 Changes Clause under 48 C.F.R. §§ 52.243-1, -2. J.A. 335,
 344. The Changes Clause requires that the Navy’s Con-
 tracting Officer “make an equitable adjustment in the con-
 tract price, the delivery schedule, or both” in the event that
 the Contracting Officer makes a change to the contract that
 “causes an increase or decrease in the cost of, or the time
 required for, performance.” 48 C.F.R. § 52.243-1(b). The
 Contract also includes a “Change-of-Law Clause,” which
 provides for a price adjustment in the event that compli-
 ance with a new federal law, or a change to existing federal
 laws or regulations, directly increases or decreases Electric
 Boat’s costs of performance. J.A. 279–81 (Clause H-30).
 The Change-of-Law Clause specifies that no cost adjust-
 ments shall be made thereunder for the first two years af-
 ter the effective date of the Contract (i.e., until August 15,
 2005). J.A. 280. After two years, adjustments shall only
 be made if a qualifying change of law increases Electric
 Boat’s costs of performance “in excess of $125,000 per ship.”
 J.A. 281 (Clause H-30(c)).
     The Change-of-Law Clause requires that Electric Boat
 promptly notify the Navy’s Contracting Officer of a quali-
 fying enactment or change in federal law. J.A. 281 (Clause
 H-30(d)). Section (e) of the Change-of-Law Clause further
 provides that requests for price adjustments thereunder be
 made in accordance with the procedures set forth in Clause
 H-9, entitled “Documentations of Requests for Equitable
 Adjustment.” J.A. 281 (Clause H-30(e)). Clause H-9 sets
 forth uniform procedures for submitting requests for equi-
 table adjustments under all articles of the Contract, includ-
 ing the standard Changes Clause. J.A. 228.
     On September 15, 2004, OSHA issued a new federal
 regulation entitled Fire Protection in Shipyard Employ-
 ment (the OSHA Regulation). See 69 Fed. Reg. 55,668
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 4                      ELEC. BOAT CORP. v. SEC’Y OF THE NAVY




 (Sept. 15, 2004) (codified at 29 C.F.R. § 1915.501 et seq.).
 The OSHA Regulation, which became effective on Decem-
 ber 14, 2004, required companies to post a fire watch if cer-
 tain conditions are present during “hot work” in shipyard
 employment. See id.; 29 C.F.R. § 1915.504(b). On Febru-
 ary 24, 2005, Electric Boat submitted a Notification of
 Change to the Navy. J.A. 453–57. The Notification stated
 that “Electric Boat anticipates that compliance with [the
 OSHA Regulation] will result in an increase in the cost of
 performance [under the Contract] in excess of $125,000 per
 ship.” J.A. 453.
     On June 27, 2007, Electric Boat submitted a cost pro-
 posal to the Navy, seeking price adjustments across all six
 submarines. J.A. 459–69. In October 2008, the Navy coun-
 tered, challenging Electric Boat’s calculations of certain
 costs. J.A. 554–57. In April 2009, Electric Boat submitted
 a revised cost proposal to the Navy. J.A. 559–67. On May
 2, 2011, the Contracting Officer of the Navy issued a mem-
 orandum decision formally denying Electric Boat “entitle-
 ment to an adjustment of the contract price.” J.A. 705–10.
 The memorandum stated that Electric Boat’s cost pro-
 posals had “inadequate support” and that there were “dis-
 crepancies between [Electric Boat’s] proposal and the
 Government’s review of various documents related to the
 OSHA change.” J.A. 708. The memorandum further stated
 that if Electric Boat decided to further pursue an adjust-
 ment related to the OSHA Regulation, “it should seek ad-
 justment pursuant to [regulations governing] ‘Requests for
 Equitable Adjustment’” by June 3, 2011.

19, 2012, Electric Boat filed a certified
 claim with the Navy, seeking a price adjustment for in-
 creased costs it allegedly incurred in complying with the
 OSHA Regulation. J.A. 711–12. On February 27, 2013, the
 government issued a Contracting Officer’s Final Decision
 denying Electric Boat’s claim. J.A. 713–30. Electric Boat
 appealed the Contracting Officer’s Final Decision to the
 Board. The Navy moved for summary judgment that
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 ELEC. BOAT CORP. v. SEC’Y OF THE NAVY                     5



 Electric Boat’s claim was barred by the statute of limita-
 tions. Electric Boat filed a cross-motion for summary judg-
 ment that its claim was timely filed.
      On December 10, 2018, the Board granted-in-part the
 Navy’s motion for summary judgment and dismissed Elec-
 tric Boat’s complaint. 2 J.A. 17. The Board determined that
 Electric Boat knew of its claim no later than February
 2005, when Electric Boat submitted its Notification of
 Change to the Navy. J.A. 10. The Board further held that
 Electric Boat “suffered some injury not later than August
 15, 2005, the date two years after the effective date of the
 [C]ontract when [the Change-of-Law Clause] would first
 provide the right to a price adjustment.” J.A. 10. Because
 Electric Boat’s Claim was not filed until December 2012,
 more than six years after the August 2005 accrual date, the
 Board held that Electric Boat’s claim was untimely. J.A.
 17. Electric Boat appeals. We have jurisdiction pursuant
 to 28 U.S.C. § 1295(a)(10).
                         DISCUSSION
      We review the Board’s grant of summary judgment de
 novo. Gates v. Raytheon Co., 

, 1067 (Fed. Cir.
 2009). Interpretation of a government contract is question
 of law, which we also review de novo. See Forman v. United
 States, 

, 841 (Fed. Cir. 2003). Though not
 binding on the Court, we give the Board’s legal conclusions
 careful consideration in view of the Board’s considerable
 experience in construing government contracts. See 

.




     2   The Board denied the Navy’s motion for summary
 judgment as it pertained to Electric Boat’s claim for costs
 incurred by Electric Boat’s subcontractor, Huntington
 Ingalls, Inc. J.A. 17–18. The Navy has not challenged this
 aspect of the Board’s decision on appeal.
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 6                      ELEC. BOAT CORP. v. SEC’Y OF THE NAVY




                             I.
      A CDA claim “shall be submitted within 6 years after
 the accrual of the claim.” 41 U.S.C. § 7103(a)(4)(A).
 Whether and when a claim has accrued is determined ac-
 cording to the Federal Acquisition Regulation (FAR), the
 language of the contract, and the facts of the particular
 case. Kellogg Brown & Root Servs., Inc. v. Murphy, 

, 626 (Fed. Cir. 2016). The FAR defines claim ac-
 crual as “the date when all events, that fix the alleged lia-
 bility of either the Government or the contractor and
 permit assertion of the claim, were known or should have
 been known.” See 48 CFR § 33.201. Although “monetary
 damages need not have been incurred,” “[f]or liability to be
 fixed, some injury must have occurred.”

 the Board correctly determined that Electric Boat’s claim
 accrued more than six years before Electric Boat submitted
 its claim and that Electric Boat’s claim is therefore barred
 by the statute of limitations.
     The plain language of the Contract compels our conclu-
 sion. It provides that:
     (b) If, at any time after the effective date of this
     contract, a New Federal Law is enacted or a change
     is made to a Currently Applicable Federal Law or
     a New Federal Law or regulations thereunder
     promulgated by Federal authorities, and compli-
     ance with such new law or change directly results
     in an increase or decrease in the Contractor’s cost
     of performance of this contract, the contract
     price(s) shall be adjusted . . . . No such adjustment
     shall be made for contract costs incurred or pro-
     jected to be incurred during the two (2) year period
     after the effective date of this contract.
 J.A. 280 (Clause H-30(b)). Electric Boat’s injury under the
 Contract was the enactment of the OSHA Regulation, the
 compliance with which Electric Boat contends directly in-
 creased its costs of performance by more than $125,000 per
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 ELEC. BOAT CORP. v. SEC’Y OF THE NAVY                      7



 submarine. See J.A. 453. Because the OSHA Regulation
 became effective in December 2004, the Navy’s liability for
 a price adjustment became fixed under the Contract on Au-
 gust 15, 2005, when Clause H-30 first provides a right to a
 price adjustment. See J.A. 280. The Board correctly deter-
 mined that the Navy’s liability was fixed, and therefore
 Electric Boat’s claim accrued, on August 15, 2005, more
 than six years before Electric Boat filed its claim. See 48
 C.F.R. § 33.201.
     Electric Boat contends that its claim for costs did not
 accrue until May 2, 2011 when the Navy’s Contracting Of-
 ficer denied its request for a price adjustment. It argues
 that it was not injured under the Contract until it received
 notice of the Navy’s intent to not adjust the contract price.
 Citing our decision in Kellogg Brown, Electric Boat argues
 that the Board therefore erroneously determined that the
 procedures required by the Change-of-Law Clause did not
 delay accrual of Electric Boat’s claims. We do not agree.
      Although “the limitations period does not begin to run
 if a claim cannot be filed because mandatory pre-claim pro-
 cedures have not been completed,” the contract here did not
 require that Electric Boat undertake any such procedures.
 See Kellogg 

. In Kellogg Brown, the
 Army required that the contractor resolve disputed costs
 with the subcontractor before filing a claim for reimburse-
 ment.

that the contractor’s claim therefore did
 not accrue until the contractor resolved cost disputes with
 the subcontractor as required by the contract.

 29. The Contract here, however, expressly states that re-
 quests for price adjustments under the Change-of-Law
 Clause “shall be made in accordance with the procedures of
 the requirement entitled ‘DOCUMENTATION OF
 REQUESTS FOR EQUITABLE ADJUSTMENT.’” J.A.
 281 (Clause H-30(e)). The Contract therefore required that
 Electric Boat follow the standard equitable adjustment
 procedures set forth in Clause H-9 of the Contract. See J.A.
 228, J.A. 334.      Although the Change-of-Law Clause
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 8                       ELEC. BOAT CORP. v. SEC’Y OF THE NAVY




 required Electric Boat to “promptly notify” the Navy of a
 qualifying change in law, Electric Boat was not required to
 await a unilateral Navy price adjustment prior to filing a
 claim. See J.A. 281. Indeed, Electric Boat’s injury under
 Clause H-30 of the contract was the enactment of the
 OSHA Regulation, not the Navy’s refusal to adjust the
 price. 3 That the Navy did not formally refuse to adjust the
 price until May 2, 2011 therefore does not excuse Electric
 Boat’s failure to timely file a claim in compliance with the
 CDA and the plain language of the Contract. See J.A. 228;
 see also J.A. 334 (incorporating by reference the FAR’s
 standard Disputes Clause).
                             II.
     Electric Boat argues two alternative theories of partial
 timeliness. First, Electric Boat contends that its claim is
 timely as to five of the six submarines, SSN 779 through
 SSN 783, because Electric Boat’s costs for these subma-
 rines did not exceed the target price until after December
 19, 2006 (the Critical Date). Because its claims did not ex-
 ceed the target price, Electric Boat argues that it was being
 fully compensated and therefore had no claim for equitable
 adjustment for these submarines until after the Critical
 Date. Electric Boat’s contention is unavailing.




     3    Electric Boat’s complaint alleged two counts of re-
 lief: one count for an entitlement to a price adjustment and
 the other count for breach of contract arising from the
 Navy’s May 2, 2011 denial of Electric Boat’s request for ad-
 justment. J.A. 75. Electric Boat waived any argument of
 timeliness under common law breach of contract principles
 by failing to argue before the Board that its injury arose
 from the Navy’s alleged breach of contract on May 2, 2011.
 See J.A. 14 (identifying Electric Boat’s alleged first date of
 actual injury as December 15, 2006).
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 ELEC. BOAT CORP. v. SEC’Y OF THE NAVY                      9



      Electric Boat was not required to incur actual costs for
 each submarine before filing a claim for equitable adjust-
 ment under the Contract. Instead, when Electric Boat’s
 claim accrued in August 2005, Electric Boat had six years
 to file a claim for an equitable adjustment to the contrac-
 tual price terms, including the target cost for each subma-
 rine. See J.A. 280. That the Navy made progress payments
 to Electric Boat as required by Clause H-29 of the Contract
 does not excuse Electric Boat’s untimeliness as to any of
 the six submarines. See J.A. 271–79 (Clause H-29). The
 Navy’s payment of scheduled progress payments does not
 amount to agreement that Electric Boat is entitled to in-
 creased actual costs. There was an express provision under
 the contract for seeking such increased costs—equitable
 adjustment.
     Second, Electric Boat contends that its claims are
 timely as to the last two submarines, SSN 782 and SSN
 783, because the Navy did not authorize funds for Electric
 Boat to begin construction on the final two ships until De-
 cember 28, 2006 and January 10, 2008, respectively. Be-
 cause Clause H-20 of the Contract made Electric Boat’s
 performance contingent upon funding, Electric Boat argues
 it could not have known the “sum certain” of additional
 costs that it would incur for these submarines until after
 the Critical Date. This contention is also unavailing.
      Clause H-20 of the Contract merely provides that Elec-
 tric Boat’s expenditure for each fiscal year is contingent on
 the appropriation of funds. J.A. 245. It establishes that
 Electric Boat was not authorized to make expenditures or
 incur obligations in excess of the amounts that the Con-
 tracting Officer had specified as available for performance.
 J.A. 245. Clause H-20 does not, however, make Congres-
 sional appropriation a condition precedent for seeking a
 price adjustment for each submarine. Thus, while Electric
 Boat was precluded from incurring actual costs in the hull
 construction of the final two submarines until funding had
 been approved, it was not precluded from filing a claim for
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 10                     ELEC. BOAT CORP. v. SEC’Y OF THE NAVY




 adjusted target costs for these two submarines under
 Clause H-30. 4 We therefore reject Electric Boat’s second
 theory of partial timeliness, which runs counter to the
 plain language of the Contract and would needlessly delay
 the filing of claims for equitable price adjustments.
                        CONCLUSION
     We have considered Electric Boat’s remaining argu-
 ments and find them unpersuasive. For the foregoing rea-
 sons, we conclude that the Board correctly determined that
 the statute of limitations barred Electric Boat’s claim and
 therefore affirm the Board’s decision.
                        AFFIRMED
      No Costs.




      4   The Board rejected Electric Boat’s argument that
 its claim did not accrue until June 2007, when it allegedly
 had the information necessary to assert its claim. J.A. 13.
 The Board determined that the accrual of Electric Boat’s
 claim was not suspended between August 2005 and June
 2007, while Electric Boat gathered the information it
 deemed necessary to calculate its projected costs. J.A. 13.
 Because Electric Boat does not challenge this determina-
 tion on appeal, it has waived any argument that its claim
 did not accrue until it could calculate the “sum certain” of
 its incurred costs.