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Lee v. United States, 15-1555 (2016)

Court: United States Court of Federal Claims Number: 15-1555 Visitors: 7
Judges: Charles F. Lettow
Filed: Aug. 24, 2016
Latest Update: Mar. 03, 2020
Summary: In the United States Court of Federal Claims No. 15-1555C (Filed: August 24, 2016) ) SEH AHN LEE, et al., ) Claims for civilian pay and breach of ) contract; Back Pay Act, 5 U.S.C. § 5596; Plaintiffs, ) absence of appointment to the civil service; ) implied contract precluded by an express v. ) contract dealing with the same subject; ) dismissal pursuant to RCFC 12(b)(1) and UNITED STATES, ) (6) ) Defendant. ) ) John P. Pierce, Themis PLLC, Washington, D.C., for plaintiffs. With Mr. Pierce at th
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             In the United States Court of Federal Claims
                                          No. 15-1555C

                                     (Filed: August 24, 2016)

                                              )
 SEH AHN LEE, et al.,                         )      Claims for civilian pay and breach of
                                              )      contract; Back Pay Act, 5 U.S.C. § 5596;
                       Plaintiffs,            )      absence of appointment to the civil service;
                                              )      implied contract precluded by an express
        v.                                    )      contract dealing with the same subject;
                                              )      dismissal pursuant to RCFC 12(b)(1) and
 UNITED STATES,                               )      (6)
                                              )
                       Defendant.             )
                                              )

       John P. Pierce, Themis PLLC, Washington, D.C., for plaintiffs. With Mr. Pierce at the
hearing and on the briefs were David L. Engelhardt and Michael Cone, Themis PLLC,
Washington, D.C.

        Hillary A. Stern, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
United States Department of Justice, Washington, D.C., for defendant. With her at the hearing
was Elizabeth Parish, Interim General Counsel, Broadcasting Board of Governors, Washington,
D.C. With Ms. Stern on the briefs were Benjamin C. Mizer, Principal Deputy Assistant Attorney
General, Civil Division, and Robert E. Kirschman, Jr., Director, and Steven J. Gillingham,
Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of
Justice, Washington, D.C.

                                     OPINION AND ORDER

LETTOW, Judge.

        Plaintiffs Seh Ahn Lee, Irina Ryan, Ahmad Nariman, and Mark Peach claim they are
entitled to civilian pay and damages for breach of contract, alleging that the Broadcasting Board
of Governors (“Broadcasting Board” or the “Board”), an independent agency of the United
States (the “government”), denied plaintiffs full compensation and benefits for their work as
contractors for the agency. Plaintiffs assert that although they were hired by the Broadcasting
Board as purchase order vendors (or nonpersonal service contractors), they were in reality acting
in the capacity of personal service contractors. Plaintiffs assert that they should be awarded
monetary relief under the Back Pay Act, 5 U.S.C. § 5596, for certain wages, benefits, and tax
payments to which they would have been entitled if their contracts had been properly classified
as personal service contracts. Alternatively, plaintiffs claim they should receive monetary
damages as a result of the government’s breach of an implied contract for compensation
commensurate with their services in the capacity of personal service contractors. Plaintiffs have
included class allegations in their complaint and amended complaint, contending that
“approximately 660 persons [at the Board] have been providing personal services by means other
than by federal appointment at any given time, including at present.” Am. Compl. ¶ 102, ECF
No. 7. In that connection, plaintiffs have filed a motion to certify a class of persons who are said
to have worked in the capacity of personal service contractors. Pls.’ Mot. to Certify Class, ECF
No. 17.

        Pending before the court is the government’s motion to dismiss plaintiffs’ complaint
pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the United States Court of Federal
Claims (“RCFC”). Regarding plaintiffs’ civilian pay claim, the government asserts that plaintiffs
have failed to state a valid claim for relief because the Back Pay Act only applies to government
“employees” as defined by 5 U.S.C. § 2105(a), and plaintiffs have not alleged they fall within
this defined group. Def.’s Mot. to Dismiss (“Def.’s Mot.”) at 7-8, ECF No. 12. Regarding
plaintiffs’ breach of contract claim, the government argues that this court lacks subject matter
jurisdiction because, under the Contract Disputes Act (“CDA”) of 1978, recodified at 41 U.S.C.
§§ 7101-7109, plaintiffs must first submit a claim to the appropriate contracting officer, and they
have not done so. Def.’s Mot. at 5-7.

        The motions have been briefed and were addressed at a hearing on August 16, 2016. For
the reasons discussed, the government’s motion to dismiss plaintiffs’ complaint is GRANTED,
and plaintiffs’ motion to certify a class is DENIED as moot.

                                        BACKGROUND

        The Broadcasting Board was established in 1994 to streamline management of the
government’s international broadcasting activities through organizations such as Voice of
America, Radio Free Europe, and Radio Martí. See United States International Broadcasting Act
of 1994, Pub. L. No. 103-236, §§ 301-15, 108 Stat. 382 (1994) (codified at 22 U.S.C. §§ 6201-
16); see also Am. Compl. ¶ 21; 5 U.S.C. § 104(1). The Board initially operated as part of the
United States Information Agency, but it became an independent government agency in 1999
under the general oversight of the Secretary of State, who serves as one of the nine voting
members of the Board. See Omnibus Consolidated and Emergency Supplemental
Appropriations Act of 1999, Pub. L. No. 105-277, § 1323, 112 Stat. 2681 (1998).

        Plaintiffs are four individuals who provided services to various elements of Voice of
America – an organization within the Broadcasting Board – either directly through individual
purchase order vendor contracts or as independent subcontractors to staffing agencies under
prime contracts with the Board. Am. Compl. ¶¶ 22-25. Mr. Lee is a naturalized U.S. citizen
from South Korea who has worked as a contractor for nearly 13 years, including under a
subcontract with Technologist, Inc. Am. Compl. ¶ 22. Ms. Ryan is a naturalized U.S. citizen
from Russia who has worked as a contractor for approximately nine years, including through a
subcontract with Computer Technology Services, Inc. Am. Compl. ¶ 23. Mr. Nariman is a
naturalized U.S. citizen from Iran who formerly worked as a contractor for approximately six
years from 2007 to 2013. Am. Compl. ¶ 24. Mr. Peach is a U.S. citizen who has worked as a
contractor for approximately eight years. Am. Compl. ¶ 25. As noted earlier, plaintiffs allege
that approximately 660 potential class members served under similar contracts with the Board.
Am. Compl. ¶ 9.

                                                 2
        In 2013, the Department of State’s Office of Inspector General (“OIG”) conducted an
audit of the Board’s Office of Contracts “to evaluate whether [the Board] had adequate
acquisition policies and procedures and to assess the efficacy of those policies and procedures.”
Pls.’ Opp’n to Def.’s Mot. to Dismiss (“Pls.’ Opp’n”) Ex. A, at 1 (Audit of the Broadcasting
Board of Governors Administration and Oversight of Acquisition Functions (June 2014) (“OIG
Report”)), ECF No. 15-2. As a result of its audit, OIG concluded that, among other things, the
“[Board] awarded contracts that were personal in nature, resulting in [the Board] exceeding its
statutory authority to award personal service[] contracts.” 
Id. In its
analysis, OIG used the
definition of a personal service contract in 48 C.F.R. (Federal Acquisition Regulations, or
“FAR”) § 37.104(a), which states that such a contract “is characterized by the employer-
employee relationship it creates between the [g]overnment and the contractor’s personnel.” 
Id. at 10.
OIG looked to the following six factors outlined in FAR § 37.104(d) to assess whether
certain Broadcasting Board contracts were personal service contracts:

       (1) Performance on site.
       (2) Principal tools and equipment furnished by the [g]overnment.
       (3) Services are applied directly to the integral effort of agencies or an
           organizational subpart in furtherance of assigned function or mission.
       (4) Comparable services, meeting comparable needs, are performed in the same
           or similar agencies using civil service personnel.
       (5) The need for the type of service provided can reasonably be expected to last
           beyond one year.
       (6) The inherent nature of the service, or the manner in which it is provided
           reasonably requires directly or indirectly, [g]overnment direction or
           supervision of contractor employees in order to –
               (i) Adequately protect the [g]overnment’s interest;
               (ii) Retain control of the function involved; or
               (iii) Retain full personal responsibility for the function supported in a
                     duly authorized [f]ederal officer or employee.

Id. at 10-11
(quoting FAR § 37.104(d)) (correcting typographical errors in the quotations as
stated in the OIG report).

        OIG noted that the FAR generally prohibits personal service contracts “without explicit
statutory authority.” OIG Report at 10 (citing FAR § 37.104(b)).1 In terms of the Broadcasting
Board’s contracting efforts, the Foreign Relations Authorization Act, Fiscal Year 2003, Pub. L.
No. 107-228, § 504, 116 Stat. 1350 (2002) (codified at 22 U.S.C. § 6206 note) established a pilot
program in which the Director of the International Broadcasting Bureau (an office within the
Broadcasting Board) is authorized to hire up to 60 “United States citizens or aliens” under

       1
         The pertinent regulation states: “The [g]overnment is normally required to obtain its
employees by direct hire under competitive appointment or other procedures required by the civil
service laws. Obtaining personal services by contract, rather than by direct hire, circumvents
those laws unless Congress has specifically authorized acquisition of the services by contract.”
FAR § 37.104(a).

                                                3
personal service contracts not to exceed two years in duration. 
Id. at 10
& n.13.2 OIG found
that, “[b]ased on an estimate provided by an agency official,” during the pertinent time (fiscal
years 2011 and 2012), the Broadcasting Board “awarded approximately 660 services contracts
that may have been personal in nature, 44 of which, according to [Board] officials, were
appropriately classified as [personal service contracts].” 
Id. at 10
; see also 
id. at 75
(defining the
scope of OIG’s analysis of the Board’s domestic contracts). OIG also performed its own
analysis in which it “selected and reviewed 23 service[] contracts and found that 13 were labeled
as nonpersonal service[] contracts, 5 were identified as [personal service contracts], 2 were
identified both as a [personal service contract] and a nonpersonal service[] contract, and 3 had no
indication of whether they were personal or nonpersonal service[] contracts.” 
Id. at 11-12
(footnotes omitted). Of the 16 contracts that were either identified as nonpersonal service
contracts or not classified, OIG determined that at least 14 should have been classified as
personal service contracts under the criteria in FAR § 37.104(d). 
Id. at 12-14.
By extrapolating
from this sample of contracts, OIG “concluded that [the Board] likely exceeded the statute’s
limit on the number of [personal service contracts] employed by awarding an overwhelming
majority of all services contracts as nonpersonal service[] contracts, though they were personal in
nature.” 
Id. at 15.3
        The Broadcasting Board disagreed with OIG’s determination that it had exceeded its
statutory authority, asserting that the contracts in question were not personal service contracts but
rather “purchase order vendor” contracts, which are not subject to the same limitations. OIG
Report at 16-17; see also 
id. at 94-96
(Letter from Richard M. Lobo, Director, International
Broadcasting Bureau, to Steve A. Linick, Inspector General, Department of State (Nov. 22,
2013)). Nevertheless, the Board indicated that it would move away from entering into purchase
order vendor contracts and instead use staffing agencies that would subcontract for the requisite
services to alleviate the concerns raised in the OIG report. OIG Report at 17. The Board also
stated that it would “reissue clear guidance to each manager about the distinction between
independent contractors and personal service[] contractors.” 
Id. 2 Under
the terms of the statute, this pilot program was to “terminate on December 31,
2005,” and all contracts under the program were to remain in effect no longer than six months
beyond this date. 22 U.S.C. § 6206 note, subsection (c). According to the OIG report, “[t]his
provision [of the authorization act] was extended each year via appropriations bills or continuing
resolutions, keeping the authority in effect through September 30, 2014.” OIG Report at 11. At
the hearing held on August 16, 2016, the court was advised that this authorization remains in
effect. Hr’g Tr. 7:5-14 (Aug. 16, 2016) (The date will be omitted from further citations to the
transcript of the hearing.).
       3
        OIG also concluded that the Broadcasting Board did not comply with certain procedural
requirements of the personal service contract pilot program, observing that some of the contracts
exceeded two years in duration, and, in certain cases, the Director of the International
Broadcasting Bureau did not directly approve the contract, nor did he or she make the required
“determination that personnel resources were insufficient or that the need was not permanent.”
OIG Report at 14-15 (citing 22 U.S.C. § 6206 note, subsection (b)).


                                                  4
        Plaintiffs filed their original complaint on December 21, 2015, followed by an amended
complaint on March 7, 2016. Specifically, they allege that their contracts with the Broadcasting
Board, as well as those of other potential class members, fall within the type of contracts that,
according to the OIG’s analysis, should have been classified as personal service contracts. Am.
Compl. ¶¶ 73-78. Accordingly, plaintiffs allege that they are entitled to additional compensation
and benefits – including rates of pay commensurate with the General Schedule rates applicable to
federal employees, paid leave and holidays, retirement and insurance benefits, and certain tax-
related benefits – that are provided to personal service contractors under internal Department of
State rules and the rules of similar agencies. Am. Compl. ¶¶ 85-93. Plaintiffs advance two
alternative claims that they are entitled to monetary relief: (1) that they are entitled to back pay
and other monetary relief under the Back Pay Act and related statutes and regulations, Am.
Compl. ¶¶ 94-98, 108-15; and (2) that they are entitled to monetary damages because the
government has breached implied contracts with plaintiffs to compensate them in the same
manner as contractors performing under actual personal service contracts, Am. Compl. ¶¶ 116-
26.

                                            ANALYSIS

          A. Count One: Plaintiffs’ Claim for Monetary Relief Under the Back Pay Act

         In its motion to dismiss, the government argues that Count One of plaintiffs’ complaint
should be dismissed for failure to state a claim upon which relief can be granted under RCFC
12(b)(6) because they have not alleged that they are or were “employees” of the federal
government within the meaning of the Back Pay Act, 5 U.S.C. § 5596. Def.’s Mot. at 7-8. The
Back Pay Act authorizes the payment of previously earned wages to “[a]n employee of an
agency who, on the basis of a timely appeal or an administrative determination . . . is found by an
appropriate authority under applicable law, rule, regulation, or collective bargaining agreement,
to have been affected by an unjustified or unwarranted personnel action which has resulted in the
withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee.” 5
U.S.C. § 5596(b)(1). For the purposes of Title 5 of the United States Code, an “employee” is
defined as “an individual who is . . . appointed in the civil service” by a federal employee acting
in an official capacity. 5 U.S.C. § 2105(a)(1). The government argues that although plaintiffs
claim they were providing “personal services” to the government “in the manner of federal
employees,” e.g., Am. Compl. ¶ 4, they do not allege they were ever actually appointed to the
civil service, Def.’s Mot. at 7-8. Therefore, the government asserts that plaintiffs have failed to
state a cognizable claim under the provisions of the Back Pay Act. 
Id. The court
agrees that Count One of plaintiffs’ amended complaint must be dismissed,
but for a more fundamental reason. Before the court can consider whether plaintiffs have stated
a claim upon which relief can be granted under RCFC 12(b)(6), the court “must first consider
whether jurisdiction is proper.” Herrmann v. United States, 
124 Fed. Cl. 56
, 67 n.18 (2015)
(citing Greenlee Cnty. v. United States, 
487 F.3d 871
, 876 (Fed. Cir. 2007); Reynolds v. Army &
Air Force Exch. Serv., 
846 F.2d 746
, 747 (Fed. Cir. 1988)); see also Mendoza v. United States,
87 Fed. Cl. 331
, 335 (2009) (“Only after completing this initial jurisdictional inquiry will the
court address the specific question of whether the facts in the plaintiffs’ case [state a claim upon



                                                 5
which relief can be granted].”).4 In this instance, plaintiffs invoke this court’s jurisdiction under
the Tucker Act, which grants the court “jurisdiction to render judgment upon any claim against
the United States founded . . . upon the Constitution, or any Act of Congress or any regulation of
an executive department.” 28 U.S.C. § 1491(a)(1); see also Am. Compl. ¶ 17 (invoking this
court’s jurisdiction under the Tucker Act). However, the Tucker Act alone cannot serve as a
basis for this court’s jurisdiction; a plaintiff also “must identify a separate source of substantive
law that creates the right to money damages.” Fisher v. United States, 
402 F.3d 1167
, 1172
(Fed. Cir. 2005) (en banc in relevant part). The Back Pay Act can serve as such a “money
mandating” statute when it is invoked as a basis for monetary relief for “violations of [other]
statutes or regulations covered by the Tucker Act.” 
Mendoza, 87 Fed. Cl. at 335
(quoting
Worthington v. United States, 
168 F.3d 24
, 26 (Fed. Cir. 1999)); see also United States v.
Connolly, 
716 F.2d 882
, 887 (Fed. Cir. 1983) (en banc) (the Back Pay Act “is merely derivative
in application,” and therefore must be coupled with allegations of other violations of statutes or
regulations within the purview of the Tucker Act). Nonetheless, the Court of Federal Claims has
jurisdiction under the Back Pay Act only for claims of “presently due money damages.” Todd v.
United States, 
386 F.3d 1091
, 1095 (Fed. Cir. 2004). “[T]he long-standing rule [is] that ‘one is
not entitled to the benefit of a position until he has been duly appointed to it.’” 
Id. at 10
95
(quoting United States v. Testan, 
424 U.S. 392
, 402 (1976)). That rule applies “even though he
may have performed the duties of another position or claims that he should have been placed in a
higher grade.” 
Testan, 424 U.S. at 406
. Without first obtaining the appointment, such a plaintiff
has no claim for “presently due” money, and the court must dismiss the case for lack of
jurisdiction. Caraway v. United States, 
123 Fed. Cl. 527
, 533 (2015) (citing 
Todd, 386 F.3d at 1095
) (dismissing a case for lack of jurisdiction when plaintiffs alleged that they should have
been promoted), appeal pending, No. 16-1322 (Fed. Cir.).

        In connection with their Back Pay Act claim, plaintiffs allege that the Broadcasting Board
violated numerous statutes, regulations, and internal agency rules pertaining to compensation for
federal employees and contractors. Am. Compl. ¶¶ 85-93, 115 (citing various sections of Titles
5, 21, and 29 of the United States Code, which pertain to employee compensation and tax
contributions, as well as sections of Titles 5 and 48 of the Code of Federal Regulations, which
apply to federal employees and contractors, respectively). In this connection, plaintiffs must
make “a nonfrivolous assertion that [they are] within the class of plaintiffs entitled to recover
under the money-mandating source.” 
Mendoza, 87 Fed. Cl. at 335
(quoting Jan’s Helicopter
Servs., Inc. v. Federal Aviation Admin., 
525 F.3d 1299
, 1307 (Fed. Cir. 2008)). Because
plaintiffs have invoked the Back Pay Act as the money-mandating statute, they must accordingly
make a non-frivolous assertion that they fall within the class of individuals covered by the statute
– in other words, “employees” defined under 5 U.S.C. § 2105(a) as individuals “appointed in the
civil service.” See Greenlee 
Cnty., 487 F.3d at 877
(finding the Court of Federal Claims had


       4
         In its motion to dismiss, the government did not challenge the court’s subject matter
jurisdiction over Count One of plaintiffs’ complaint. See Def.’s Mot. at 5-6 (focusing its
jurisdictional challenge under RCFC 12(b)(1) on Count Two of the complaint). Nevertheless,
“[s]ubject-matter jurisdiction may be challenged at any time by the parties or by the court sua
sponte.” Folden v. United States, 
379 F.3d 1344
, 1354 (Fed. Cir. 2004) (citing Fanning,
Phillips, Molnar v. West, 
160 F.3d 717
, 720 (Fed. Cir. 1998) (“[The court] therefore ha[s] a
special obligation to satisfy [itself] of [its] own jurisdiction.”)).
                                                  6
subject matter jurisdiction because the plaintiff had established it was a “unit of local
government” within the meaning of the money-mandating statute pertinent in that case, i.e., the
Payment in Lieu of Taxes Act). Here, the plaintiffs allege that they were “never” appointed, Am.
Compl. ¶¶ 10, 102, but that they “should have been,” Am. Comp. ¶ 14. Because the plaintiffs
acknowledge that they were not appointed to the civil service, they cannot invoke jurisdiction
under the Back Pay Act. See 
Todd, 386 F.3d at 1095
.

        The court is not persuaded by plaintiffs’ citation to FAR § 37.104(a), which states that a
“personal service[] contract is characterized by the employer-employee relationship it creates
between the [g]overnment and the contractor’s personnel,” Am. Compl. ¶ 33, nor by their related
assertion that they “were providing personal services in the manner of federal employees,” Am.
Compl. ¶ 25.5 This is not the same as alleging that plaintiffs were in fact appointed to the civil
service during the relevant time period. In responding to the government’s motion to dismiss,
plaintiffs concede that they were not appointed to the civil service, but they assert that the
government’s “argument ignores the most important fact of the case: the [Broadcasting Board]
used illegal contracts fraught with material misrepresentations to lure [p]laintiffs and [m]embers
of the proposed [c]lass into providing personal services without the appointments to federal
service to which they were entitled.” Pls.’ Opp’n at 10.6 Plaintiffs further assert that “[n]o


       5
           In full, subsections (a) and (b) of FAR § 37.104 state:

       (a) A personal services contract is characterized by the employer-employee
           relationship it creates between the Government and the contractor’s personnel.
           The Government is normally required to obtain its employees by direct hire
           under competitive appointment or other procedures required by the civil
           service laws. Obtaining personal services by contract, rather than by direct
           hire, circumvents those laws unless Congress has specifically authorized
           acquisition of the services by contract.
       (b) Agencies shall not award personal services contracts unless specifically
           authorized by statute (e.g., 5 U.S.C. 3109) to do so.

FAR § 37.104(a), (b).
       6
         Plaintiffs also assert that OIG determined that the Broadcasting Board engaged in
“fraud,” and that the Board has conceded this fraud. See, e.g., Am. Compl. ¶ 62 (“The [Board]
admitted that it deliberately mis-labeled contracts as if providing non-personal services in
knowing violation of law to avoid paying the compensation that was due to [p]laintiffs and
[c]lass [m]embers as providers of personal services.”); Pls.’ Opp’n at 1 (“The Inspector General
uncovered the agency-wide frauds in 2014 . . . . The [Board’s] leadership ultimately admitted
the essential facts of this case.”); 
id. at 4
(“Since at least 2010, the [Board’s] leadership has
known that its contracting officers were fraudulently labeling contracts for ‘non-personal
services’ . . . . Internally, the [Board] admitted that these findings were not only correct, but
were applicable to almost its entire roster of 660 contractors.”). The record is not so categorical,
however. The OIG report does not state that the Board engaged in fraud; it postulates that the
Board’s contracting officials “did not know the difference between personal and nonpersonal
service[] contracts,” or “may not have been fully aware of or properly trained on the proper
                                                   7
[c]ourt has issued a published decision that denies applicability of the [Back Pay] Act when the
lack of federal appointment is due solely to the agency’s fraud against its workers.” 
Id. at 11.
        Even if these allegations of intentional error on the government’s part are taken as true,
plaintiffs have cited no authority to establish that “fraud” in a contract, or in the inducement to a
contract, would serve to convert a contract employee to a civil service appointee for the purposes
of claiming entitlement to monetary relief under the Back Pay Act. See Costner v. United States,
665 F.2d 1016
, 1020 (Ct. Cl. 1981) (finding that even when a particular type of contract with the
government was “not legally authorized,” “there is no implication that the proper remedy is
retroactively to make [the contractors] employees” for the purposes of a claim under the Back
Pay Act); see also 
id. at 1021
(declining to apply common law to determine whether an
employer-employee relationship existed, observing that the requirements of the Back Pay Act are
more stringent).7 The situation might be different if plaintiffs were alleging that when they


implementation and specific limitations of applicable statutes.” OIG Report at 15. And,
plaintiffs have not provided any evidence that the Board has conceded it committed fraud against
its contractors. In its fifth and final response to the OIG report, the Board acknowledged that “it
cannot employ personal services contractors in excess of those authorized,” but stated that “the
Agency continues to assert, as a legal matter, that its use of independent contractors is consistent
with the FAR.” OIG Report at 102.
       7
         Plaintiffs assert that “on the same facts, the IRS and a U.S. district court entered three
separate rulings that ignored the [Broadcasting Board’s] fraudulent labeling of contracts and
granted contractors certain statutory rights of appointed employment.” Pls.’ Opp’n at 10. As the
“three separate rulings,” plaintiffs cite (1) Almutairi v. International Broad. Bureau, 928 F.
Supp. 2d 219 (D.D.C. 2013), (2) the internal Board memorandum from December 2013 in
response to the OIG report, and (3) their own amended complaint at paragraph 72, which
describes the Almutairi case. 
Id. Accordingly, plaintiffs
only cite one “ruling[],” and they
mischaracterize that decision, which, in any event, is inapplicable to the present case.

         The Almutairi case does not address the question of whether alleged “fraudulent labeling
of contracts” gives plaintiffs “statutory rights” to recovery under the Back Pay Act. That case
involved a factual dispute over whether an individual (Mr. Almutairi) had applied for a civil
service position or a purchase order vendor contract. 
Almutairi, 928 F. Supp. 2d at 226
. After
addressing this dispute, the district court examined whether Mr. Almutairi could still sue the
government for discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”),
codified at 42 U.S.C. § 2000e et seq., and the Rehabilitation Act of 1973, codified at 29 U.S.C. §
701 et seq., even if he had only applied for a purchase order vendor contract. 
Id. at 229.
The
district court noted that both Title VII and the Rehabilitation Act allow discrimination suits by
“employees or applicants for employment.” 
Id. (citing 42
U.S.C. § 2000e-16 and 29 U.S.C. §
794a(a)(1)). Unlike the Back Pay Act, however, the remedies provided under Title VII and the
Rehabilitation Act are not limited to civil service appointees; they apply to all employees and
applicants for employment. See, e.g., 42 U.S.C. § 2000e(f) (Title VII definition of an
“employee” as “an individual employed by an employer”). Therefore, the district court’s
discussion of whether Mr. Almutairi qualified as an “employee” (or, more precisely, an
“applicant for employment”) for the purposes of his discrimination claim has no bearing on this
                                                 8
signed a contract with the government, they thought they were actually being appointed to the
civil service because of misrepresentations by the government. But that is not the circumstance
alleged in the complaint. Plaintiffs in essence assert that to procure the type of work they were
performing, the Broadcasting Board should have entered into personal service contracts with
them, or if that contract option was unavailable (for example, because the Board had already
reached the statutory limit for such contracts), the Board should have appointed them to the civil
service. Am. Compl. ¶¶ 4, 10; see also Am. Compl. ¶ 27 (noting that Broadcasting Board had
the option of issuing up to 60 personal service contracts or appointing staff to the civil service).
What the Board should have done is irrelevant to the question of whether plaintiffs can establish
jurisdiction in this court under the Back Pay Act. See 
Testan, 424 U.S. at 407
(holding that
appointment is a prerequisite even if the plaintiff claims he “should have been placed in a higher
grade”) (emphasis added)). The operative circumstance is that plaintiffs have not alleged, nor
does it appear that they could non-frivolously allege, that they were in fact appointed to the civil
service by the Board. Accordingly, Count One of plaintiffs’ complaint must be dismissed for
lack of subject matter jurisdiction.

        Even if plaintiffs’ Count One claim were to be interpreted as an implied assertion that
they were “employees” within the definition of the Back Pay Act, that claim would have to be
dismissed for failure to state a claim under RCFC 12(b)(6). Under the standards for a motion
under RCFC 12(b)(6), the court must examine whether the complaint “contain[s] 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)). As applicable here, “[t]he question of whether a government employee is serving by
contract or appointment depends upon the ‘relevant statutory language and regulations and the
language of the hiring documents.’” Calvin v. United States, 
63 Fed. Cl. 468
, 472 (2005)
(quoting American Fed’n of Gov’t Employees Local 1 v. Stone, 
342 F. Supp. 2d 619
, 625 (N.D.
Tex. 2004)). Plaintiffs have alleged that they were all serving under express contracts during the
relevant time period, either directly with the Broadcasting Board or as subcontractors to a
staffing agency holding a prime contract with the Board. Am. Compl. ¶¶ 22-25. As this court
previously stated in Calvin, “[w]hile the Supreme Court has not explicitly held that employment
by appointment and by contract are mutually exclusive, its reasoning implies such a principle,
and courts have interpreted [Army & Air Force Exchange Serv. v. Sheehan, 
456 U.S. 728

court’s determination of whether a similar type of contractor would qualify as a civil service
appointee under the Back Pay Act.

        The internal Board memorandum is similarly inapposite. The cited portion of the
memorandum discusses a 2010 IRS tax audit in which the IRS determined that the Board should
have treated purchase order vendor contractors “as employees for tax reporting purposes,
including by withholding income and Social Security taxes.” Board Memorandum at 9. The
Board cited the potential tax liability as a reason for using “external service provider[s],” i.e.,
staffing agencies, to obtain purchase order vendor contractors instead of contracting with them
directly. 
Id. at 9-10.
The IRS’s determination of whether purchase order vendor contractors
should be treated as employees for tax purposes has little bearing on whether plaintiffs can be
“employees” within the meaning of the Back Pay Act.


                                                   9
(1982),] and like precedents to require mutual 
exclusivity.” 63 Fed. Cl. at 472
(citing Collier v.
United States, 
56 Fed. Cl. 354
, 356-57 (2003)). Plaintiffs have provided no reason to disturb this
principle that individuals serving under contract with the government cannot simultaneously be
serving as appointees in the civil service.8 Accordingly, they have not plausibly alleged that they
were federal employees during the relevant time period. For the reasons stated, the
government’s motion to dismiss Count One of plaintiffs’ amended complaint is GRANTED.

  B. Count Two: Plaintiffs’ Claim for Monetary Damages for Breach of an Implied Contract

       1. Subject matter jurisdiction.

        The government has moved to dismiss Count Two of plaintiffs’ complaint for lack of
subject matter jurisdiction. Def.’s Mot. at 5-7. The government asserts that plaintiffs’ breach of
contract claim is barred under the provisions of the CDA, specifically 41 U.S.C. § 7103(a),
because it was not first submitted to and denied by a contracting officer. 
Id. The CDA
“applies
to any express or implied contract . . . made by an executive agency for . . . the procurement of
services.” 41 U.S.C. § 7102(a)(2). Under the Act’s provisions, “[e]ach claim by a contractor
against the [f]ederal [g]overnment relating to a contract shall be submitted to the contracting
officer for a decision.” 41 U.S.C. § 7103(a)(1). After such a claim has been made, “a contractor
may bring an action directly on the claim in the United States Court of Federal Claims.” 41
U.S.C. § 7104(b)(1). The government asserts that plaintiffs did not submit their breach of
contract claim to a contracting officer, and this court consequently lacks jurisdiction to entertain
the claim. Def.’s Mot. at 5-6 (citing Advanced Materials, Inc. v. United States, 
46 Fed. Cl. 697
,
701 (2000); Witherington Constr. Corp. v. United States, 
45 Fed. Cl. 208
, 211 (1999); Cincinnati
Elecs. Corp. v. United States, 
32 Fed. Cl. 496
, 505 (1994)).

        As with Count One, the court agrees that Count Two must be dismissed for lack of
subject matter jurisdiction, but for a different reason than that asserted by the government.9 The


       8
         If the court were to find that plaintiffs were serving as civil service appointees, this
finding likely would be fatal to plaintiffs’ breach of contract claim in Count Two. See 
Calvin, 63 Fed. Cl. at 473
(“In light of the evidence adduced by the parties, as well as the principle that
‘federal employees do not have contractual relationships with the government, barring an explicit
agreement to the contrary executed by a federal officer who has authority to contract,’ Darden v.
United States, 
18 Cl. Ct. 855
, 859 (1989), plaintiffs are appointees, and their claims of breach of
employment contract are precluded.”).
       9
         Although the court finds there is a separate basis upon which to dismiss plaintiffs’
allegations in Count Two, it notes that for at least two reasons, the provisions of the CDA
requiring submission of a “claim” to the contracting officer before bringing a case before this
court likely do not apply here. First, plaintiffs’ alleged contracts with the Broadcasting Board do
not appear to fall within the class of contracts intended to be covered under the CDA. As this
court recently noted, “[t]he Federal Circuit has observed for many years that the CDA ‘does not
cover all government contracts.’” Anchor Tank Lines, LLC v. United States, __ Fed. Cl. __, __,
2016 WL 3910852
, at *8 (2016) (quoting Bailey v. United States, 
46 Fed. Cl. 187
, 210 (2000) (in
turn quoting Coastal Corp. v. United States, 
713 F.2d 728
, 730 (Fed. Cir. 1983))). “In particular,
                                                10
. . . the CDA does not apply to contracts that do not comport with the ‘cost and competition’
policy considerations underlying the CDA’s enactment by Congress, and where applying the
CDA would not ‘do justice to the realities of the situation.’” 
Id. (quoting Institut
Pasteur v.
United States, 
814 F.2d 624
, 627 (Fed. Cir. 1987)). As discussed infra at 12 n.10, plaintiffs’
express contracts with the Broadcasting Board constituted contracts with the government for the
purposes of this court’s jurisdiction under the Tucker Act. These contracts may be of the type
intended to be covered by the CDA, although to a certain extent the Board’s contracting
procedures were largely “unencumbered by normal FAR clauses, constraints, and policies.”
Bailey, 46 Fed. Cl. at 211-12
; see also OIG Report at 6, 30-31 (noting that the Board primarily
awarded contracts pursuant to the simplified acquisition procedures in FAR §§ 13.000 to 13.501,
using “quarterly sources sought notices” generally announcing opportunities for freelance talent,
which resulted in “a solicitation process absent any competition”). Count Two, however, is not
based on these express contracts, but rather on implied contracts with the government that
purportedly included additional compensation terms. Although the government correctly notes
that the provisions of the CDA apply to implied contracts as well as express contracts, Def.’s
Mot. at 7, the implied contracts in question must still comport with the additional standards
described in Institut Pasteur and related precedents. Here, plaintiffs have specifically alleged
that these implied contracts were not the result of a normal government procurement efforts, but
rather arose because plaintiffs were providing services that would typically have been
compensated in a different manner. See Am. Compl. ¶ 121. Accordingly, and assuming
arguendo that the court found a basis for such implied contracts to exist, which it does not, these
contracts would not “comport with the cost and competition policy considerations underlying the
CDA’s enactment.” Anchor Tank, __ Fed. Cl. at __, 
2016 WL 3910852
, at *8 (internal quotation
marks omitted).

         Second, the “claim” at issue in Count Two of plaintiffs’ complaint does not appear to be
the type of claim contemplated by the CDA in terms of its requirements for submission to a
contracting officer. The CDA does not separately define a “claim,” but the FAR defines a claim
as 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.” 48 C.F.R. § 2.101. Again, plaintiffs are
not seeking monetary relief arising from their express contracts with the Broadcasting Board, nor
are they asking for “adjustment or interpretation” of those contracts’ terms. Rather, they are
alleging that the government has breached a different set of compensation terms derived from
implied contracts. As evidenced by plaintiffs’ complaint, these are not claims for a “sum
certain,” but rather a yet-to-be-determined amount roughly equivalent to the compensation that
would have been given to a federal employee doing the same type of work during the same time
period. See Am. Compl. ¶¶ 122-23. Plaintiffs further complicate the issue by alleging that the
implied contracts arose as a result of the government’s “fraud” or misrepresentation in
mislabeling the express contracts as ones for “nonpersonal services.” Pls.’ Opp’n at 11-17.
Without addressing whether the type of fraud alleged by plaintiffs constitutes an exception to the
CDA under 41 U.S.C. § 7103(c)(1), the court finds that it would likely not “do justice to the
realities of the situation” to require plaintiffs to submit the type of claim alleged in Count Two to
a contracting officer before bringing a suit in this court. Institut 
Pasteur, 814 F.2d at 627
.

                                                 11
court recently noted that “[t]he general rule is that so long as the plaintiffs have made a non-
frivolous claim that they are ‘entitled to money from the United States’ . . . because they have a
contract right, this court has jurisdiction to settle the dispute.” Anchor Tank, __ Fed. Cl. at __,
2016 WL 3910852
, at *7 (quoting Adarbe v. United States, 
58 Fed. Cl. 707
, 714 (2003) (in turn
quoting Ralston Steel Corp. v. United States, 
340 F.2d 663
, 667 (Ct. Cl. 1965))); see also City of
Cincinnati v. United States, 
153 F.3d 1375
, 1377 (Fed. Cir. 1998) (holding that a “non-frivolous
assertion of an implied contract with the United States” is sufficient to establish subject matter
jurisdiction in this court). The four named plaintiffs allege that they worked for the Broadcasting
Board under “independent contracts,” including “purchase orders” or orders under “blanket
purchase agreements,” and that approximately one year ago, two of the four plaintiffs (Mr. Lee
and Ms. Ryan) began providing services through subcontracts with staffing agencies retained by
the Board. Am. Compl. ¶¶ 22-25.10 Plaintiffs’ claim in Count Two, however, is not based on an
entitlement to money damages under these express contracts. Instead, plaintiffs allege they also
had implied-in-fact contracts with the government that entitled them to additional “benefits, tax
payments, wages or salaries, and other consideration.” Am. Compl. ¶ 121.

        Plaintiffs have failed to make a non-frivolous claim of an implied-in-fact contract with
the government above and beyond the provisions of their express contracts. “The existence of an
express contract precludes the existence of an implied contract dealing with the same subject,
unless the implied contract is entirely unrelated to the express contract.” Atlas Corp. v. United
States, 
895 F.2d 745
, 754-56 (Fed. Cir. 1990) (finding that plaintiffs were not entitled to
additional payments to cover the costs of tailings stabilization because those costs were not
“‘entirely unrelated’ to the costs included in the contract prices,” and affirming dismissal for lack
of jurisdiction); see also Algonac Mfg. Co. v. United States, 
428 F.2d 1241
, 1255 (Ct. Cl. 1970)
(“[A]s a general rule there can be no implied contract where there is an express contract between
the parties covering the same subject.”); Cummings v. United States, 
17 Cl. Ct. 475
, 480 n.8
(1989) (quoting Algonac Mfg. and disposing of plaintiff’s claim of an implied contract without
further comment because plaintiff had already alleged a written contract on the same subject);
Trauma Serv. Grp., Ltd. v. United States, 
33 Fed. Cl. 426
, 432 (1995) (also citing Algonac Mfg.),
aff’d, 
104 F.3d 1321
(Fed. Cir. 1997). Here, plaintiffs do not allege that their entitlement to
additional compensation is based on work done outside the scope of their express contracts.
Rather, they argue that their express contracts should have been styled as personal service
contracts, in which case plaintiffs would have been entitled to compensation in the same manner


       10
          The court does not doubt that the plaintiffs, as direct contractors and not subcontractors,
worked under express contracts with the government for the purposes of the court’s jurisdiction
under the Tucker Act. See DaVita, Inc. v. United States, 
110 Fed. Cl. 71
, 81 (2013) (“A
purchase order ‘is an offer by the government to the supplier to buy certain supplies or services
upon specific conditions. A contract is established when the supplier accepts the order, by
furnishing the supplies or services ordered or by . . . substantial performance prior to the due
date.’” (quoting Canal 66 P’ship v. United States, 
87 Fed. Cl. 722
, 726 (2009) (in turn quoting
Zhengxing v. United States, 
71 Fed. Cl. 732
, 738 n.21 (2006)), aff’d, 204 Fed. Appx. 885 (Fed.
Cir. 2006) (alteration in Canal 66 P’ship)). The pertinent question, however, is whether
plaintiffs have made a non-frivolous claim of entitlement to money damages under an implied
contract with the government beyond the terms of their express contracts.


                                                 12
as federal employees. Am. Compl. ¶¶ 118-24. Plaintiffs do not allege that the government
actually offered to provide them additional compensation, or that they were pressed into
providing services beyond what was contemplated in their express contracts, thus entitling them
to additional compensation. Such allegations might form the basis for an implied contract
“entirely unrelated” to the terms of the express contracts already held by the plaintiffs. Atlas
Corp., 895 F.2d at 754
. Absent these or similar allegations, however, the court lacks jurisdiction
to consider a claim that an implied contract has been breached when there is no basis on which
such an implied contract could be established.

        Alternatively, plaintiffs argue that under the theory of quantum meruit (“as much as he
merited”), the government received the benefit of “personal services” performed by the plaintiffs
without providing the compensation that would typically be provided to personal services
contractors. Am. Compl. ¶ 126; see also United States v. Amdahl Corp., 
786 F.2d 387
, 393 n.6
(Fed. Cir. 1986) (defining “quantum meruit”). This contention is premised on accepting the
postulate that plaintiffs’ individual contracts were void because the Broadcasting Board entered
the contracts in contravention of FAR § 37.104. The court also lacks jurisdiction to consider this
argument. “A recovery in quantum meruit is based on an implied in-law contract. That is, a
contract in which there is no actual agreement between the parties, but the law imposes a duty in
order to prevent injustice.” International Data Prods. Corp. v. United States, 
492 F.3d 1317
,
1325 (Fed. Cir. 2007). The Court of Federal Claims generally does not have jurisdiction over
quantum meruit or implied-in-law contract claims. Id.; see also Trauma Serv. 
Grp., 33 Fed. Cl. at 432
(“Claims for unjust enrichment on quantum meruit damages state claims for breaches of
contracts implied in law, over which the court has no jurisdiction.” (citing United States v.
Mitchell, 
463 U.S. 206
, 218 (1983); United States v. Minnesota Mutual Co. Inc., 
271 U.S. 212
,
217 (1926); Atlas 
Corp., 895 F.2d at 755
)).11 The Federal Circuit has found an exception to this
general jurisdictional rule and allowed recovery under a quantum meruit or quantum valebant
(“as much as it was worth”) theory when a contractor provided goods or services to the
government in good faith under an express contract, but that contract was later rescinded for
invalidity. See 
Amdahl, 786 F.2d at 393
; see also International Data 
Prods., 492 F.3d at 1325
-
26 (acknowledging the exception in Amdahl but finding it was inapplicable because the contract
in question was “neither invalid nor unenforceable”); United Pac. Ins. Co. v. United States, 
464 F.3d 1325
, 1329-34 (Fed. Cir. 2006) (concluding that the exception in Amdahl was inapplicable
because the plaintiffs were paid “the full amount required by the contract”). In this instance, the
exception in Amdahl is not applicable to plaintiffs’ claim because the express contracts with
plaintiffs have not been found to be invalid, and plaintiffs have not alleged that they were not
paid in full under the express terms of those contracts.12 Accordingly, this court does not have
jurisdiction over plaintiffs’ quantum meruit claim.


       11
          This jurisdictional bar is based in part on the principle that no contract with the
government can arise without affirmative action by a contracting officer with the authority to
bind the government. See Trauma Serv. 
Grp., 33 Fed. Cl. at 431-32
(citing Merritt v. United
States, 
267 U.S. 338
, 341 (1925)).
       12
         At the hearing, plaintiffs raised for the first time the argument that their express
contracts with the Broadcasting Board might have been void ab initio due to fraud,
misrepresentation, or other defects, and that this could be an additional basis for their quantum
                                                13
       2. Failure to state a claim upon which relief can be granted.

         Even if this court had jurisdiction over plaintiffs’ breach of contract claim in Count Two,
this claim would have to be dismissed under Rule 12(b)(6) for failure to state a claim upon which
relief can be granted. As 
discussed supra
, a motion under RCFC 12(b)(6) requires the court to
examine whether there is sufficient factual matter in the complaint to establish a “claim to relief
that is plausible on its face.” 
Iqbal, 556 U.S. at 678
; 
Twombly, 550 U.S. at 570
. The
government’s motion to dismiss plaintiffs’ complaint cites both RCFC 12(b)(1) and 12(b)(6).
Def.’s Mot. at 1. Although the government focused its breach of contract arguments on
jurisdictional issues, the court may nonetheless also consider whether, under the standards
applicable to RCFC 12(b)(6), plaintiffs’ complaint states a plausible claim to relief.13 In Trauma
Serv. 
Grp., 104 F.3d at 1324-27
, the court of appeals concluded that plaintiff’s allegations of an
express or implied contract with the government were sufficient to establish jurisdiction in the
Court of Federal Claims, but it nevertheless affirmed the trial court’s decision to dismiss the
complaint under RCFC 12(b)(6) because neither an express nor an implied contract could have
existed as a matter of law.

       Although plaintiffs frame their claim in Count Two as a breach of an implied contract, it
could alternatively be viewed as an allegation that certain terms involving compensation were
omitted from their express contracts with the government. In that case, plaintiffs would be

meruit claim. Hr’g Tr. 26:23-25, 33:8-15. The government responded preliminarily at the
hearing, and, in a notice filed after the hearing at the court’s request, the government noted that
under the rationale in American Tel. & Tel. Co. v. United States, 
177 F.3d 1368
, 1373-74 (Fed.
Cir. 1999), plaintiffs’ contracts would not necessarily be void because of fraud or other
contravention of statute or regulation, and that the court must look instead to the purpose of the
pertinent statute or regulation that was allegedly violated. Def.’s Notice of Authority at 2, ECF
No. 22; see also American Tel. & 
Tel., 177 F.3d at 1374
(recognizing “the strong policy of
supporting the integrity of contracts made by and with the United States”). It is not necessary for
the court to address plaintiffs’ further merits-based argument, however, because it does not fit
within the jurisdictional exception contained in Amdahl. As was the case in United Pacific
Insurance, 464 F.3d at 1329-34
, plaintiffs here have already been paid in full for contracts
spanning as far back as 2003, Hr’g Tr. 23:8-13; Am. Compl. ¶¶ 22-25. Accordingly, and even if
plaintiffs now wish to contend that these contracts are void, the court has no basis on which to
take jurisdiction over plaintiffs’ quantum meruit claim.
       13
          Plaintiffs advanced detailed arguments at the hearing as to why their breach of contract
count states a claim, see Hr’g Tr. 23:14 to 28:7, 32:23 to 35:4, 48:19 to 50:17, and 55:9 to 56:1,
and the government responded to those arguments, see Hr’g Tr. 42:10 to 44:7. Plaintiffs
elaborated on this oral submission with a supplemental brief addressing the government’s
arguments that no viable claims had been stated in Count Two. See Pls.’ Resp. to Def.’s Notice
of Authority, ECF No. 24. In these circumstances, the court may consider whether the pertinent
count of the complaint states a claim. See Anaheim Gardens v. United States, 
444 F.3d 1309
,
1315 (Fed. Cir. 2006) (“The trial court may dismiss sua sponte under Rule 12(b)(6), provided
that the pleadings sufficiently evince a basis for that action.”); see also Shockley v. Jones, 
823 F.2d 1068
, 1072-73 & n.3 (7th Cir. 1987) (stating that a sua sponte dismissal under Rule
12(b)(6) can be appropriate when plaintiff had notice and an opportunity to be heard).
                                                14
asking the court to insert implied terms to fill the gap left by this omission. Even under this
lenient reading of the complaint, plaintiffs have not plausibly alleged their express contracts with
the government omitted any essential terms. “It is not the habit of courts to resolve disputes over
omission concerning [contract] matters by resorting to implied terms.” E. Allan Farnsworth,
Disputes Over Omission in Contracts, 68 Colum. L. Rev. 860, 862 (1968) (advocating resolution
of omissions through inferences from the actual contract terms, or “basic principles of fairness or
justice,” 
id. at 877,
rather than by inserting implied terms based on the parties’ presumed
intentions). An omission, or a “casus omissus” (“case which is not provided for”), generally
occurs where there is an event not accounted for in the express language of the contract and not
anticipated by the parties. 
Id. at 862
n.11, 873-76 (quoting 1 J. Bouvier, Law Dictionary 431
(8th ed. 1914)); see also Restatement (Second) Contracts § 204 cmt. b (1981) (“How omission
occurs. The parties to an agreement may entirely fail to foresee the situation which later arises
and gives rise to a dispute; they then have no expectations with respect to that situation.”). If an
omitted term is “essential,” i.e., it is necessary to the determination of the parties’ rights under
the contract, a court may fill this gap with “a term [that] is reasonable in the circumstances.”
Restatement (Second) Contracts § 204; see also Pacific Gas & Elec. Co. v. United States, 
536 F.3d 1282
, 1289 (Fed. Cir. 2008) (stating that the court can supply a minimum acceptance rate in
a contract for storage of spent nuclear fuel because without that term, “the contract would be
meaningless and nonsensical”); Howell v. United States, 
51 Fed. Cl. 516
, 520-21 (2002) (court
may supply a minimum quantity term to an indefinite-quantity contract when the parties failed to
include that term).

       Here, plaintiffs have not demonstrated that additional compensation terms were
“essential” to their contracts.14 Again, nothing in plaintiffs’ complaint suggests that anything


       14
           In their amended complaint, plaintiffs assert that their express contracts with the
Broadcasting Board were required to contain the clause set out in FAR § 52.232-3, which
pertains to personal service contracts and states:

       The Government shall pay the Contractor for the services performed by the
       Contractor, as set forth in the Schedule of this contract, at the rates prescribed,
       upon the submission by the Contractor of proper invoices or time statements to
       the office or officer designated and at the time provided for in this contract. The
       Government shall also pay the Contractor (a) a per diem rate in lieu of subsistence
       for each day the Contractor is in a travel status away from home or regular place
       of employment in accordance with Federal Travel Regulations (41 CFR [§] 101-
       7) as authorized in appropriate Travel Orders; and (b) any other transportation
       expenses if provided for in the Schedule.

Am. Compl. ¶ 86 (quoting FAR § 52-232-3 in part). Plaintiffs argue that the reference to “rates
prescribed” in this clause refers to rates prescribed for federal employees under Title 5 of the
Code of Federal Regulations, as well as by internal agency rules. Am. Compl. ¶¶ 87-91; see also
Hr’g Tr. 35:16 to 37:11. Plaintiffs concede that the Broadcasting Board has no such rules
prescribing certain rates of pay or benefits for personal service contracts, Am. Compl. ¶ 87-88,
but nevertheless assert that the wages and benefits prescribed in the rules of the Board’s “sister
and parent agencies,” namely, the United States Agency for International Development and the
                                                 15
changed with regard to the nature of their work under the contracts or the government’s
representations about how plaintiffs would be compensated. The only difference appears to be
the OIG’s report finding that the Broadcasting Board issued certain “nonpersonal service[]”
contracts that should have been identified and structured as “personal service[]” contracts. The
court cannot, however, use those findings as a basis to substitute or supplement compensation
terms in plaintiffs’ prior contracts with the Board with “implied” terms entitling plaintiffs to the
type of compensation they would have preferred to receive. Count Two of plaintiffs’ amended
complaint is unavailing.

Department of State, should be substituted in the absence of such rules for the Board, Am.
Compl. ¶¶ 89-91.

         The contract clause contained in FAR § 52.232-3 falls within a group of sections (FAR
§§ 52.232-1 to -10) that pertain to “invoice payments” made under fixed-price contracts. See 2
Karen L. Manos, Government Contract Costs & Pricing § 85:8 (June 2016 ed.). Similar
provisions for payments under fixed-price contracts generally (FAR § 52.232-1) and payments
under fixed-price research and development contracts (FAR § 52-232-2) substitute the phrase
“rates prescribed” for “the prices stipulated in [the] contract.” The use of “rates prescribed” in
FAR § 52.232-3 is preceded by the phrase “as set forth in the Schedule of this contract,” which
indicates that the clause refers to the rates prescribed in the contract’s schedule, as well as to the
“services performed” under that schedule. Accordingly, addition of this clause to plaintiffs’
express contracts with the Broadcasting Board would not entitle plaintiffs to any wages or
benefits beyond those already specified in the contract. In this same vein, FAR § 52.232-3 refers
to entitlement to “per diem” rates related to travel, but plaintiffs have not alleged that their
express contracts omitted such entitlements. Plaintiffs list a total of 22 types of pay and benefits
they believe they were denied under their express contracts, but none of them involves
reimbursement for travel-related expenses. Am. Compl. ¶¶ 85, 115, 122.

        At the hearing, plaintiffs also elaborated the argument that certain statutes and regulations
other than the FAR compelled the inclusion of additional terms related to compensation and
benefits in plaintiffs’ express contracts with the Broadcasting Board. Hr’g Tr. 35:13 to 37:11.
Although plaintiffs did not enumerate these provisions at the hearing, they referred to a list in
their amended complaint, Am. Compl. ¶¶ 85, 115, which included certain statutes and
regulations to be used as “proxies for determining reasonable compensation” allegedly owed to
plaintiffs. Am. Compl. ¶ 85. The court finds that the cited authorities are inapplicable to
plaintiffs even if, as they allege, they should have been compensated as personal service
contractors. For example, plaintiffs cite various provisions of Title 5 of the United States Code
related to basic rates of pay, premium pay, paid leave and holidays, compensation for work-
related injuries, and various retirement, health, and insurance benefits. Am. Compl. ¶ 85.
However, the same definition for “employee” that applies to the Back Pay Act applies to all
other provisions of Title 5, i.e., the provisions only apply to individuals “appointed in the civil
service.” 5 U.S.C. § 2105. The same is true for the regulations plaintiffs cite within Title 5 of
the Code of Federal Regulations (e.g., 5 C.F.R. Parts 304 and 511), which tellingly all fall within
Subchapter B entitled “Civil Service Regulations.” Am. Compl. ¶ 85. Accordingly, the cited
statutes and regulations do not require that any additional terms be included in plaintiffs’ express
contracts with the Broadcasting Board.

                                                 16
                                          CONCLUSION

        For the reasons stated, the government’s motion to dismiss plaintiffs’ complaint under
RCFC 12(b)(1) and 12(b)(6) is GRANTED.15 The clerk will enter judgment in accord with this
disposition.

       No costs.

       It is so ORDERED.

                                                    s/ Charles F. Lettow
                                                    Charles F. Lettow
                                                    Judge




       15
          Plaintiffs’ motion to certify a class of similarly situated contractors is DENIED as moot,
as is plaintiffs’ motion for an extension of time to file a reply in support of their motion to certify
a class.
                                                  17

Source:  CourtListener

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