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.
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
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.
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.
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,
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 completing 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.
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.
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.
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
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 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.
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)
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).
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 ... together with a claim falling within the terms of the waiver." Dolan v. U.S. Postal Serv., 546 U.S. 481, 498, 126 S.Ct. 1252, 163 L.Ed.2d 1079 (2006) (quoting United States v. White Mountain Apache Tribe, 537 U.S. 465, 472, 123 S.Ct. 1126, 155 L.Ed.2d 40 (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.'" Gomez-Perez v. Potter, 553 U.S. 474, 491, 128 S.Ct. 1931, 170 L.Ed.2d 887 (2008) (quoting Lane v. Peña, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (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:
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.
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 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).
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 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.
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.
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 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
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.
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 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),
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.
In Department of the Army v. Blue Fox, 525 U.S. 255, 119 S.Ct. 687, 142 L.Ed.2d 718 (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, 119 S.Ct. 687. 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 remaining in the government's possession. Id. at 256-57, 119 S.Ct. 687, 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, 119 S.Ct. 687. 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, 119 S.Ct. 687.
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, 119 S.Ct. 687.
Id. at 265, 119 S.Ct. 687 (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, 116 S.Ct. 981, 134 L.Ed.2d 47 (1996).
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 implied-in-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, 61 S.Ct. 995, 85 L.Ed. 1361 (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-in-fact 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.
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 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.
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.
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
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 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 of completion for the construction work, and liquidated damages. J.A.
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 (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:
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.
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 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
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 claims by "contractors," the legislative history of the CDA states:
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.
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.
Because we find that the Claims Court lacked jurisdiction over Lumbermens' claims, we reverse the court's decision and
