CHARLES F. LETTOW, Judge.
This case arises from a contract dispute between Mansoor International Development Services, Inc. ("Mansoor" or "plaintiff") and the United States ("the government"), acting through the United States Army, Bagram Regional Contracting Center ("the Army"). In August 2011, Mansoor entered into an indefinite delivery/indefinite quantity ("IDIQ") contract with the Army to provide trucking services in Afghanistan, which was terminated for default in March 2012. Compl. ¶¶ 4-5, 7. Thereafter, Mansoor submitted a claim to the contracting officer in the amount of 81,473,654 Afghani ("AFN") seeking payment for various invoices. Compl. ¶ 8.
Mansoor brings this action pursuant to the Contract Disputes Act ("CDA"),
Mansoor is an Afghan corporation based in Kabul, Afghanistan. Compl. ¶ 2. On or about August 11, 2011, the Army awarded to Mansoor contract number W91B4N-11-D-7011 ("the contract") for approximately 48,307,159,600 AFN. Compl. ¶ 4. The award was a multi-award IDIQ contract to provide trucking services in Afghanistan on an initial 12-month term pursuant to the National Afghan Trucking ("NAT") program. Compl. ¶¶ 5, 7. The contract divided the transportation missions into three "Suites"— Suite I (Bulk Fuels), Suite II (Dry Cargo), and Suite III (Heavy Cargo) — based upon the type of cargo being transported and the equipment needed for such transportation. Compl. ¶ 6. For services under each Suite, the contract specified a series of fixed unit prices attributed to completed mission units, assets used, and responsibility for security of the mission. Compl. ¶ 6.
Under the terms of the contract, the Army issued task orders consisting of Transportation Movement Requests ("TMRs") for transportation missions. Compl. ¶ 5. The TMRs were awarded on a competitive basis based upon NAT contractors' rankings. Compl. ¶ 5. Payment of the TMRs was determined by fixed-unit prices for services, distances, and delays, in addition to other factors. Compl. ¶ 5. Payment was subject to reduction or back-charge due to quality assurance and control factors, such as "unexcused delays, failures to comply with performance objectives, failures to complete the mission[,] and/or pilferage or loss of the cargo." Compl. ¶ 5. Further, under paragraph 5.4 of the contractual Performance Work Statement ("PWS"), a mission completed more than seven days past the required delivery date was considered "failed" and no compensation would be awarded. Compl. Attach. B ¶ 4a.
On March 31, 2012 the Army terminated its contract with Mansoor for default. Compl. ¶ 7.
Facing a stalemate in settlement negotiations, the contracting officer issued a final decision on June 11, 2013 in accord with the Federal Acquisition Regulations, 48 C.F.R. ("FAR") § 33.210. See Compl. Attach. B.
Compl. Attach. B. ¶ 3. This approach indicated that several TMRs reflected failed missions where Mansoor did not ensure timely delivery pursuant to the PWS or comply with a Required Spot Date. Compl. Attach. B. ¶¶ 4a-c; see also Compl. ¶ 9. Additionally, a large percentage of TMRs submitted by Mansoor lacked military grid reference system coordinates and other data "which would identify performance measurement standards necessary to validate basic transportation services." Compl. Attach. B. ¶ 4d. Based on the ACA method, the contracting officer determined that Mansoor was only entitled to 30,000,000 AFN of its total claim. Compl. Attach. B ¶ 9.
Just short of one year after the final decision, on June 9, 2014, Mansoor filed a complaint in this court. Count I of the complaint alleges that the Army breached the contract by refusing to pay, in full or in part, for the 519 TMRs included in Mansoor's certified claim. Compl. ¶ 17. In Count II, Mansoor contends that the Army breached the implied covenant of good faith and fair dealing because the contracting officer failed to "fairly and independently consider the merits of the contractor's claim." Compl. ¶ 24. Mansoor alleges that the contracting officer "applied undisclosed statistical analyses, involving data from other contracts, to the gross amount of [Mansoor's] claim, [and] refus[ed] to consider or negotiate with [Mansoor] the merits of individual claim elements." Id.
Before proceeding to the merits, "a court must satisfy itself that it has jurisdiction to hear and decide a case." Hardie v. United States, 367 F.3d 1288, 1290 (Fed. Cir. 2004) (quoting PIN/NIP, Inc. v. Platte Chem. Co., 304 F.3d 1235, 1241 (Fed. Cir. 2002)) (internal quotation marks omitted). When deciding whether to dismiss a motion under Rule 12(b)(1) for lack of subject matter jurisdiction, the court will "normally consider the facts alleged in the complaint to be true and correct." Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 747 (Fed. Cir. 1988) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). The plaintiff bears the burden of "alleg[ing] in his pleading the facts essential to show [subject matter] jurisdiction" by a preponderance of the evidence. McNutt v. General Motors Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936); see also Reynolds, 846 F.2d at 748.
Dismissal is warranted under Rule 12(b)(6) if the "facts asserted by the claimant do not under the law entitle him [or her] to a remedy." Perez v. United States, 156 F.3d 1366, 1370 (Fed. Cir. 1998). To survive a motion to dismiss for failure to state a claim, the plaintiff's complaint must "contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). Additionally, the facts alleged must "`plausibly suggest[] (not merely [be] consistent with)' a showing of entitlement to relief." Cary v. United States, 552 F.3d 1373, 1376 (Fed. Cir. 2009) (quoting Twombly, 550 U.S. at 557). Although the complaint "does not need detailed factual allegations," Twombly, 550 U.S. at 545, it must present more than "`naked assertion[s] devoid of `further factual enhancement,'" Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 557) (alteration in original), or "the-defendant-unlawfully-harmed-me-accusation[s]," id. (citing Twombly, 550 U.S. at 555). The court must "draw on its judicial experience and common sense" in determining whether the plaintiff has pled adequate facts to allow the court to infer that his or her entitlement to relief is plausible—not merely possible, id. at 679, and "must accept as true the complaint's undisputed factual allegations and should construe them in a light most favorable to the plaintiff," Cambridge v. United States, 558 F.3d 1331, 1335 (Fed. Cir. 2009) (citing Papasan v. Allain, 478 U.S. 265, 283 (1986); Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991)).
The government's motion to dismiss Count II of the compliant pursuant to RCFC 12(b)(1) initially propounds the well-established premise that a contracting officer's final decision is only a jurisdictional prerequisite for a CDA suit in this court and the merits of the dispute are addressed de novo without deference accorded to the contracting officer's final decision. See Def.'s Mot. at 8-9; see also Hernandez, Kroone & Associates, Inc. v. United States, 110 Fed. Cl. 496, 519 (2013), reconsid. denied, 2013 WL 3199299 (Fed. Cl. June 25, 2013) ("Under the Contract Disputes Act, submission of a claim to the contracting officer is a necessary prerequisite to bringing a direct action suit upon denial of the claim, but the proceeding on the matter in this court is de novo, not an appeal of the contracting officer's denial.") (citing 41 U.S.C. §§ 7103(e), 7104(b)(4)). The government then builds on this principle by reclassifying and redefining Mansoor's claim, averring that "the crux of Mansoor's claim for breach of the covenant of good faith and fair dealing appears to be that the contracting officer did not analyze the TMRs in the manner that Mansoor requested." Def.'s Mot. at 8. The government argues that this premise for Mansoor's claim is "irrelevant to the proceedings in this [c]ourt because Mansoor must `prove the fundamental facts of liability and damages de novo.'" Id.; see also Def.'s Reply in Support of its Mot. to Dismiss Count II of Pl.'s Compl. for Lack of Subject Matter Jurisdiction and Failure to State a Claim ("Def.'s Reply") at 3, ECF No. 19 (quoting Wilner v. United States, 24 F.3d 1397, 1401 (Fed. Cir. 1994)). From this constructed postulate, the government leaps to the conclusion that the court lacks the juridical power "to entertain Mansoor's request that the [c]ourt review the contracting officer's final decision." Def.'s Mot. at 9.
Mansoor's response also begins with a well-recognized axiom involving the implied covenant of good faith and fair dealing, i.e., that "[t]he implied covenant of good faith and fair dealing requires that the [g]overnment, including the [c]ontracting [o]fficer[,] `not . . . act so as to destroy the reasonable expectations of the other party regarding the fruits of the contract.'" Pl.'s Opp'n to Defendant's Mot. to Dismiss Count II of Pl.'s Compl. for Lack of Subject Matter Jurisdiction and Failure to State a Claim ("Pl.'s Opp'n") at 3, ECF No. 18 (quoting Metcalf Const. Co. v. United States, 742 F.3d 984, 991 (Fed. Cir. 2014) (in turn quoting Centex Corp. v. United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005))). Mansoor maintains that the Army breached the implied covenant of good faith and fair dealing by applying the ACA methodology, which allegedly constituted an approach to enforcement that was neither contemplated by the parties nor consistent with the express terms of the contract. See Pl.'s Opp'n at 4. A claim based upon these allegations, according to Mansoor, falls within the jurisdictional purview of this court.
The government disputes that the claims in Count II of the complaint pertain to a breach of an obligation in the contract. See Def.'s Reply at 2 ("Mansoor's response attempts to change the focus of its complaint from taking issue with the method by which the contracting officer's final decision analyzed its claim to now suggesting that it has alleged a breach of an unidentified express contract provision."). Rather, it urges that "Mansoor's allegations reflect a disagreement with the contracting officer's approach to Mansoor's claim" and are insufficient to invoke this court's jurisdiction because a contracting officer's final decision is irrelevant to this court's de novo review. See id. at 2-4.
The government's contention is sophistic and untenable. Although it is true that "once an action is brought following a contracting officer's decision, the parties start in [this] court . . . with a clean slate," Wilner, 24 F.3d at 1402, de novo consideration of a claim does not wholly ignore what the contracting officer actually did. For this court to possess subject matter jurisdiction under the CDA, "the contractor must submit a proper claim—a written demand that includes (1) adequate notice of the basis and amount of a claim and (2) a request for a final decision. In addition, the contractor must have received the contracting officer's final decision on that claim." M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1328 (Fed. Cir. 2010). Here, there is not a want of subject matter jurisdiction because the foregoing requirements have been satisfied. As plaintiff contends, the court has jurisdiction to determine whether "the [Army] breached its duty of good faith and fair dealing by not (1) reviewing [Mansoor's] TMRs, (2) processing its invoices, and (3) determining its [c]laim in accordance with the express terms of the [c]ontract." Pl.'s Opp'n at 4.
The government's contention that Mansoor has failed to state a claim upon which relief can be granted reprises its jurisdictional arguments, converting them to a charge that Count II of the complaint lacks the requisite factual allegations to support a claim for breach of the implied covenant of good faith and fair dealing. See Def.'s Mot. at 9; see also Def.'s Reply at 3. In the government's view, the implied duty of good faith and fair dealing "is limited to ensuring compliance with the express terms of the contract and, thus, does not create obligations not contemplated in the contract itself." Def.'s Mot. at 9 (citing Bradley v. Chiron Corp., 136 F.3d 1317, 1326 (Fed. Cir. 1998); United States v. Basin Elec. Power Co-op., 248 F.3d 781, 796 (8th Cir. 2001)). This argument focusing solely on express terms of a contract would eliminate any possibility that the implied duty of good faith and fair dealing could itself provide the basis for a claim that a contract was breached. That is wrong. The implied duty stems from the consensual terms reflected in an express contract, but it addresses the parties' reasonable expectations that may not have been embodied in explicit contractual language.
A claim that a party to a contract breached the duty of good faith and fair dealing implicates common law and is generally addressed by Restatement (Second) of Contracts § 205 (1981). That Section provides that "[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement." Restatement (Second) of Contracts § 205; see also Metcalf Const., 742 F.3d at 990. The Restatement observes that "[g]ood faith performance or enforcement of a contract emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party." Restatement (Second) of Contracts § 205 cmt. a. And, "the implied duty exists because it is rarely possible to anticipate in contract language every possible action or omission by a party that undermines the bargain." Metcalf Const., 742 F.3d at 991. Rather, "the nature of that bargain is central to keeping the duty focused on `honoring the reasonable expectations created by the autonomous expressions of the contracting parties.'" Id. (citing Tymshare, Inc. v. Covell, 727 F.2d 1145, 1152 (D.C. Cir. 1984) (per Scalia, J.)). In short, the duty "prevents a party's acts or omissions that, though not proscribed by the contract expressly, are inconsistent with the contract's purpose and deprive the other party of the contemplated value." Id. (citing First Nationwide Bank v. United States, 431 F.3d 1342, 1350 (Fed. Cir. 2005)).
The duty of good faith and fair dealing most often is raised respecting the parties' performance obligations, but it also explicitly pertains to enforcement. See Restatement (Second) of Contracts § 205 cmt. e ("The obligation of good faith and fair dealing extends to the assertion, settlement and litigation of contract claims and defenses."). "Bad faith" is not a necessary element of the duty in this regard. Importantly, the duty "also extends to dealing which is candid but unfair." Id. That essentially is the tenor of the allegations Mansoor presents in Count II. Plaintiff is asserting that the contracting officer breached the duty of good faith and fair dealing by addressing its claims using a statistical or quasi-statistical means, i.e., the "ACA method," that incorporated data derived from performance of unrelated contracts and did not focus on the individual circumstances of each of the TMRs at issue. Whether that approach to enforcement was reasonable in the setting of this contract is a question for another day, the answer to which will turn in substantial part on the parties' expectations under the contract. Nonetheless, Mansoor has manifestly stated a potentially viable claim for relief based on an alleged breach of the implied duty of good faith and fair dealing in the enforcement of the contract at issue.
For the reasons stated, the government's motion to dismiss pursuant to RCFC 12(b)(1), or, alternatively, RCFC 12(b)(6) is DENIED. The parties shall proceed with discovery and other pretrial preparatory steps in accord with the scheduling order issued on April 6, 2015.
It is so
FAR § 33.210.
Id.
