Judges: Woodrow
Filed: Jun. 07, 2017
Latest Update: Mar. 03, 2020
Summary: This appeal arises out of a contract between the United States Army (Army), and Melwood Horticultural Training Center, Inc. (Melwood or appellant) for base, operations facility maintenance services at Fort George G. Meade (Fort Meade or, FGGM) in Maryland.
ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
Melwood Horticultural Training Center, Inc.) ASBCA No. 60666
)
Under Contract No. W911S0-11-F-0040 )
APPEARANCES FOR THE APPELLANT: Larysa Kautz, Esq.
General Counsel
Christie Roberts, Esq.
Assistant General Counsel
APPEARANCES FOR THE GOVERNMENT: Raymond M. Saunders, Esq.
Army Chief Trial Attorney
MAJ David H. Stem, JA
Trial Attorney
OPINION BY ADMINISTRATIVE JUDGE WOODROW
ON THE GOVERNMENT'S MOTION TO DISMISS FOR LACK OF JURISDICTION
This appeal arises out of a contract between the United States Army (Army)
and Melwood Horticultural Training Center, Inc. (Melwood or appellant) for base
operations facility maintenance services at Fort George G. Meade (Fort Meade or
FGGM) in Maryland.
Appellant's request for additional funds in ASBCA No. 60666 seeks to recover
costs for three separate matters: (1) reimbursement for retention bonuses; (2)
reimbursement for subcontractor payments associated with alleged breaches of the
contract; and (3) an amount "TBD" (to be determined) for lost profits associated with
services procured from vendors other than appellant, allegedly in violation of the terms of
the contract. The Board consolidated this appeal with ASBCA No. 60323* and appellant
subsequently filed a consolidated complaint.
The Army moves to dismiss ASBCA No. 60666 for lack of jurisdiction. The
government challenges the Board's jurisdiction on three grounds: (1) that the
contracting officer (CO) never issued a final decision as to appellant's claim; (2) that
appellant's claim fails to state a sum certain; and (3) that appellant's claim fails to state a
claim on which relief may be granted. Although appellant's request for additional relief
*While ASBCA No. 60666 is consolidated with ASBCA No. 60323, this decision
pertains only to the government's motion to dismiss in ASBCA No. 60666.
However, the Rule 4 and supplemental Rule 4 references in this decision pertain
to the submittal filed under ASBCA No. 60323.
contains specific dollar amounts for some elements, the total amount of the request is an
unspecified amount "to be determined" and a total amount cannot readily be calculated
by simple arithmetic. Accordingly, we hold that we lack jurisdiction to entertain
appellant's request in ASBCA No. 60666, because it fails to state a sum certain.
STATEMENT OF FACTS CSOF) FOR PURPOSES OF THE MOTION
1. On 1 July 2011, the Mission & Installation Contracting Command, Fort Eustis,
Virginia (MICC or Army) awarded Contract No. W911S0-11-F-0040 to Melwood for
facilities maintenance and repair, sustainment, restoration, and modernization at
Fort Meade (supp. R4, tab 5 at 1).
2. The contract incorporated by reference FAR 52.212-4, CONTRACT TERMS AND
CONDITIONS - COMMERCIAL ITEMS (JUN 2010), which reads in pertinent part:
(d) Disputes. This contract is subject to 41 U.S.C.
chapter 71, Contract Disputes. Failure of the parties to this
contract to reach agreement on any request for equitable
adjustment, claim, appeal or action arising under or relating to
this contract shall be a dispute to be resolved in accordance
with the clause at FAR 52.233-1, Disputes, which is
incorporated herein by reference. The Contractor shall
proceed diligently with performance of this contract, pending
final resolution of any dispute arising under the contract.
(Supp. R4, tab 5 at 46)
3. The contract also incorporated by reference FAR 52.233-1, DISPUTES (MAY
2014 ), which reads in pertinent part:
(c) Claim, as used in this clause, means a written
demand or written assertion by one of the contracting parties
seeking, as a matter of right, the payment of money in a sum
certain, the adjustment or interpretation of contract terms, or
other relief arising under or relating to this contract.
However, a written demand or written assertion by the
Contractor seeking the payment of money exceeding
$100,000 is not a claim under 41 U.S.C. chapter 71 until
certified. A voucher, invoice, or other routine request for
payment that is not in dispute when submitted is not a claim
under 41 U.S.C. chapter 71. The submission may be
converted to a claim under 41 U.S.C. chapter 71, by
complying with the submission and certification requirements
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of this clause, if it is disputed either as to liability or amount
or is not acted upon in a reasonable time.
(Supp. R4, tab 5 at 46) (Emphasis added)
4. By letter dated 11April2016, appellant mailed (via FedEx) a package with a
completed version of its "Claim: Request for Contracting Officer's Final Decision" to
the CO on 14 April 2016 (supp. R4, tab 54). Also included in the letter was a signed
certification in accordance with FAR 33.207 (id. at 9).
5. In its submittal to the CO, appellant sought the following relief:
[R]eimbursement for $114,000.00 for Retention Bonuses paid
to Melwood's key project personnel and $130,985.00 for
Melwood's GFEBS subcontractor, Thompson Gray, and
Melwood's IT subcontractor, Corsica. Additionally,
Melwood seeks the anticipatory margin and profit associated
with Fort Meade and MICC subcontracting and purchasing
made outside of the designated BASOPS Procurement List
provider, Melwood.
(Supp. R4, tab 54 at 1)
6. Specifically, appellant sought to recover costs for three items. First, appellant
sought reimbursement for retention bonuses paid to Melwood's key project personnel in
the amount of$114,000.00 plus a markup of20.87%. Second, appellant sought
reimbursement for two ofMelwood's subcontractors, Thompson Gray and Corsica, in the
amount of $130,985.00 plus a markup of20.87%. The total amount for these two elements
not including mark-up is $244,985.00. Third, appellant sought "anticipatory lost profits"
for alleged breaches of the contract associated with subcontracting and purchasing made
outside of the designated BASOPS Procurement List provider, Melwood, in an amount
"TBD." (See supp. R4, tab 54 at 1, 354)
7. Melwood subcontracted with Thompson Gray for General Fund Enterprise
Business System support (supp. R4, tab 54 at 6). Contract section C.1.9. l explains that the
General Fund Enterprise Business System (GFEBS) is the Army's automated financial
management system, which replaced the Integrated Facilities System-Maintenance (IFS-M)
real property management recordkeeping system in fiscal year 2011 (supp. R4, tab 5 at 130).
8. Melwood subcontracted with Corsica to provide additional Information
Technology (IT) support (supp. R4, tab 54 at 6).
9. "BASOPS" stands for Base Operations Support Plan (supp. R4, tab 5). The
BASOPS Procurement List, in turn, refers to the AbilityOne Procurement List (PL), a list
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maintained by United States AbilityOne Commission of products and services designed
to create work opportunities for people who are blind or who have significant disabilities.
See FAR Subpart 8.703, Procurement List.
10. Attachment 60 to appellant's 11 April 2016 letter states that it seeks total
reimbursement in the amount: "$295,892.88 + TBD" (supp. R4, tab 54 at 354):
Retention Bonuses $114,000
IT Subcontractors (Thompson Gray & Corsica) $130,985
PL Violations $TBD
Subtotal $244,985 + TBD
Markup at 20.78% $50,907 .88 + TBD
Total $295,892.88 + TBD
11. Appellant mentions seven contracts, discussed in the chronology set forth in
Attachment 1 to the letter, as among the contracts that the Army awarded outside the
designated BASOPS procurement list, allegedly in violation of FAR 8. 704, Purchase Priorities
and FAR 8.706, Purchase Exceptions (PL Violations) (supp. R4, tab 54 at 8, 13, 71-72).
Appellant does not set forth the dollar amount of any of these contracts (id. at 71-72).
12. Appellant also states that the Army awarded an additional eight contracts
during 2011through2014 which were worth "over $28,431,350." Accordingly, it "seeks
the anticipatory profit from these 15 procurement actions described above as well as any
other similar inappropriate actions not fully disclosed by FGGM MICC at this time."
(Supp. R4, tab 54 at 8)
13. In a letter dated 13 June 2016, the CO responded to appellant's submittal,
stating that:
Based on a review of the claim, as well as the accompanying
supporting documentation, the Government cannot make a
Determination regarding Melwood's claim at this time, and
the purpose of this correspondence is to request specific
information in order for the Government to properly address
Melwood's concerns.
This is not a final decision of the contracting officer, but
rather a request for more information which, hopefully, will
allow me to render an informed decision on your claim.
(Supp. R4, tab 55 at 1, 4)
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14. The CO's 13 June 2016 response did not notify Melwood of the time within
which the CO would issue a final decision (supp. R4, tab 55).
15. Melwood did not respond to the CO's request for information (gov't mot. to
dismiss at 3).
16. On 16 June 2016, appellant filed a notice of appeal with the Board.
Appellant's notice of appeal stated that the "inability of the Contracting Officer to issue a
decision, in accordance with FAR 33.21, Contracting officer's decision, (g) is deemed to
be a denial of the claim thereby authorizing Melwood to file this appeal."
17. On 13 July 2016, the Board notified the parties that appellant's 16 June 2016 notice
of appeal was docketed as ASBCA No. 60666 and consolidated with ASBCA No. 60323.
18. On 28 July 2016, the government filed a motion to dismiss ASBCA No. 60666.
19. On 12 August 2016, appellant filed an amended complaint. In its amended
complaint, appellant stated that it "is entitled to the anticipatory margin and profit
associated with the aggregate amount of contracts and purchases made outside of the
designated PL [Procurement List], which amount is $28,431,350." (Am. compl. iii! 65-67)
20. On 29 August 2016, appellant filed its response to the government's motion to
dismiss.
21. On 21 October 2016, the government filed its reply brief in support of its
motion to dismiss.
DISCUSSION
The government challenges the Board's jurisdiction to entertain ASBCA No. 60666
on three grounds: (1) that the CO never issued a final decision as to appellant's claim;
(2) that appellant's claim fails to state a sum certain; and (3) that appellant's claim fails to
state a claim on which relief may be granted. Because the threshold issue regarding our
jurisdiction begins with the filing of a claim with the CO, we will first address whether
appellant's 11April2016 submittal constituted a claim as defined by the contract,
applicable regulations, and case law.
Appellant's Claim Fails to State a Sum Certain
Our jurisdiction under the CDA is predicated upon the filing of a claim by one of
the contracting parties, 41 U.S.C. ยง 7103(a). The CDA does not define "claim," but the
Federal Acquisition Regulation (FAR) does so. FAR 2.101 states in pertinent part as
follows:
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Claim means a written demand or written assertion by
one of the contracting parties seeking, as a matter of right, the
payment of money in a sum certain, the adjustment or
interpretation of contract terms, or other relief arising under
or relating to the contract. However, a written demand or
written assertion by the contractor seeking the payment of
money exceeding $100,000 is not a claim under the Contract
Disputes Act of 1978 until certified as required by the Act.
[Emphasis added]
This definition of "claim" also is incorporated into appellant's contract as a part of the
Disputes clause, set forth at FAR 52.233-1, Disputes (SOF ~ 3). The specific issue before
us is whether appellant's letter to the CO, dated 11 April 2016, asserts a claim in a "sum
certain" in accordance with this definition. If it does not, appellant has not asserted a
proper claim, and we do not possess jurisdiction.
Attachment 60 to appellant's submittal states that appellant seeks total
reimbursement in the amount of $295,892.88 plus an amount "TBD" (SOF ~ 10). The
specific dollar figure of $295,892.88 is the sum of the amounts for retention bonuses for
Melwood employees ($114,000), IT subcontracts with Thompson Gray & Corsica
($130,985), plus a markup of20.78 percent on both of those amounts ($50,907.88) (id.).
In contrast, the component of appellant's request for lost profits associated with services
procured from vendors other than appellant does not set forth a specific dollar amount.
Instead, it states that the amount is TBD. Appellant admits as much in its response brief:
"[t]he only request that does not specify the precise final monetary amount due to
Appellant is for the lost profits" (app. resp. at 5).
While it is true that portions of appellant's submittal contain specific dollar
amounts, the overall claim fails to state a sum certain. We decline to sever portions of
the claim in order to maintain jurisdiction over the portions containing specific dollar
amounts. Specifically, in Islands Mechanical Contractor, Inc., ASBCA No. 59655, 17-1
BCA ~ 36,721 at 178,809 (citing Eaton Contract Services, Inc., ASBCA No. 52888 et al.,
02-2 BCA ~ 32,023, aff'd on recon., 03-1 BCA ~ 32,239), we held:
The failure to meet jurisdictional requirements remains even
if, as here, the "claims" contain one component...which were
stated in a sum certain but the overall "claim" is not. We will
not entertain that portion of a claim stated in a fixed amount
and discard the remainder, as an "entire claim is in a sum
certain, or it is not."
Thus, if a portion of a claim does not contain a sum certain, the submittal to the CO does
not meet the definition of a claim as set forth in the contract (SOF ~ 3) and in FAR 2.101.
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Appellant's argument that the amount of lost profits readily is calculable is
unavailing. While a claim may be sufficient if the amount in dispute can be determined
by simple mathematical calculation, this is not such a case. See, e.g., PHI Applied
Physical Sciences, Inc., ASBCA Nos. 56581, 58038, 13 BCA ~ 35,308 at 173,337
("Although the amount sought was not expressly totaled by appellant, a sum certain total
is readily calculable by simple arithmetic.").
According to appellant, the amount of appellant's lost profits can be calculated
with "pertinent contractual details, including cost" from the contracts the government
entered into with other vendors allegedly in violation of appellant's contract (app. resp.
at 5). Although appellant filed a Freedom of Information Act (FOIA) request for these
contracts, it states that it "has not been successful in obtaining them" (id. at 6). Instead,
appellant contends that the government has information in its possession and, therefore,
has adequate notice of the monetary amount of appellant's "claim for anticipatory lost
profits."
Appellant's argument that its anticipated lost profits can be calculated from
information in the government's possession is flawed for several reasons. First, appellant
has not explained - in its 11 April 2016 submittal to the CO or its brief - how the
government would make such a calculation. Appellant asserts in its brief that the
government is "familiar with Appellant's pricing model, including the agreed-upon mark-up
for Appellant's services." (App. resp. at 7) According to appellant's argument, the
government should infer that it could multiply appellant's mark-up percentage by the
aggregate value of the contracts that allegedly were diverted from appellant in order to
calculate appellant's anticipated lost profits. Not only must this calculation be inferred, the
inputs to the calculation also must be inferred.
Second, appellant's request does not identify the specific contracts that it alleges
were diverted from appellant, nor does the request set forth specific dollar amounts for
the allegedly diverted contracts. In its submittal, appellant mentions seven contracts,
discussed in the chronology set forth in Attachment 1 and also mentions an additional
eight contracts revealed from FOIA requests. (SOF ~ 11) Appellant states that FGGM
MICC awarded these eight contracts during 2011 through 2014 and were worth "over
$28,431,350.00" (SOF ~ 12). Appellant then states that it "seeks the anticipatory profit
from these 15 procurement actions described above as well as any other similar
inappropriate actions not fully disclosed by FGGM MICC at this time" (id.). These
statements demonstrate that the amount of anticipatory lost profits is a moving target and
is based on appellant's allegations of what constitutes "inappropriate" procurement
actions. It would be impossible for the government to speculate as to what contracts
appellant considers to be "inappropriate."
Moreover, appellant's statements in its brief acknowledge the ambiguity in the
calculation of its lost profits. Specifically, appellant states that its request is based on the
amount of diverted contracts "in excess of $28,431,350.00," leaving open the possibility
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that there is some other undisclosed amount that would serve as the basis of appellant's
lost profits claim. (App. resp. at 6) Indeed, if the calculation were as straightforward as
appellant claims, it could have made the calculation in its request to the CO.
Finally, appellant cannot rehabilitate its submittal to the CO by relying on
information obtained during discovery (app. resp. at 5-6). While a contractor may
properly amend its claim upon learning additional facts pertaining to a valid claim,
Tecom, Inc. v. United States, 732 F.2d 935, 938 (Fed. Cir. 1984), it cannot later furnish a
sum certain to "rehabilitate" an invalid claim or portion thereof. Northrop "Grumman,
10-2 BCA ii 34,517 at 170,233 (citing Eaton, 02-2 BCA ii 32,023 at 158,266-67). The
sufficiency of a claim is determined at the time it is submitted to the CO; if it was
improperly made, the Board lacks jurisdiction.
Id.
In summary, because Melwood's submittal to the CO in ASBCA No. 60666 is not
stated as a sum certain, it does not meet the definition of a claim and, as such, we lack
jurisdiction to entertain the appeal.
CONCLUSION
For these reasons, we grant the government's motion to dismiss.
Dated: 7 June 2017
I concur I concur
RICHARD SHACKLEFORD OWEN C. WILSON
Administrative Judge Administrative Judge
Acting Chairman Acting Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
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I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 60666, Appeal ofMelwood
Horticultural Training Center, Inc., rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
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