Filed: May 26, 2020
Latest Update: May 26, 2020
Summary: In the United States Court of Federal Claims Nos. 06-387C & 13-988C CONSOLIDATED (Filed: May 26, 2020) ) INFORMATION SYSTEMS & ) Accord and Satisfaction; Release; NETWORKS CORPORATION, ) Apparent Authority; Ratification; Final ) Indirect Cost Rates Plaintiff, ) ) v. ) ) THE UNITED STATES, ) ) Defendant. ) ) Norman Singer, Bethesda, MD, for plaintiff. Sheryl Floyd, United States Department of Justice, Civil Division, Washington, DC, with whom were Joseph H. Hunt, Assistant Attorney General, Rober
Summary: In the United States Court of Federal Claims Nos. 06-387C & 13-988C CONSOLIDATED (Filed: May 26, 2020) ) INFORMATION SYSTEMS & ) Accord and Satisfaction; Release; NETWORKS CORPORATION, ) Apparent Authority; Ratification; Final ) Indirect Cost Rates Plaintiff, ) ) v. ) ) THE UNITED STATES, ) ) Defendant. ) ) Norman Singer, Bethesda, MD, for plaintiff. Sheryl Floyd, United States Department of Justice, Civil Division, Washington, DC, with whom were Joseph H. Hunt, Assistant Attorney General, Robert..
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In the United States Court of Federal Claims
Nos. 06-387C & 13-988C
CONSOLIDATED
(Filed: May 26, 2020)
)
INFORMATION SYSTEMS & ) Accord and Satisfaction; Release;
NETWORKS CORPORATION, ) Apparent Authority; Ratification; Final
) Indirect Cost Rates
Plaintiff, )
)
v. )
)
THE UNITED STATES, )
)
Defendant. )
)
Norman Singer, Bethesda, MD, for plaintiff.
Sheryl Floyd, United States Department of Justice, Civil Division, Washington, DC, with
whom were Joseph H. Hunt, Assistant Attorney General, Robert E. Kirschman, Jr.,
Director, and Kenneth M. Dintzer, Deputy Director, for defendant.
OPINION
FIRESTONE, Senior Judge.
Pending before the court in these consolidated breach of contract cases are the
parties’ cross motions for partial summary judgment and associated motions to strike.
Defendant the United States (government) moves for partial summary judgment
regarding certain issues arising under Counts I, II, and III of plaintiff Information
Systems & Networks Corporation’s (ISN) complaint in case No. 13-988C. These counts
involve the calculation of final indirect cost rates and allegedly unpaid costs and
improperly withheld amounts associated with the seventeen contracts between ISN and
the government that are at issue. ISN cross moves for partial summary judgment
regarding certain issues arising under Count I, involving the calculation of final indirect
cost rates, only.
For the reasons that follow, the government’s motion for partial summary
judgment is GRANTED IN PART and DEFERRED IN PART, and ISN’s cross motion
is DENIED. In addition, ISN’s motion to strike is DEFERRED, and the government’s
motion to strike or to file a surreply is DENIED AS MOOT.
In this opinion, the court holds that the unambiguous terms of an earlier settlement
agreement between the United States and ISN bar ISN’s claim for declaratory relief
regarding the correct final indirect cost rates for fiscal years (FY) 1987-1995. The court
also finds that, as ISN concedes, ISN’s claims regarding the correct final indirect cost
rates for FY 1982 are governed by an earlier indirect cost rate agreement. The court also
holds that final rate agreements between ISN and the Defense Contract Audit Agency
(DCAA) signed by ISN’s Chief Financial Officer in 2002 bar ISN’s claims regarding the
correct final general and administrative rates covered by those agreements.
The court defers ruling on the remainder of the government’s partial summary
judgment motion. This is because, based on the filings made thus far in these
consolidated cases, the court has concluded that determining the final indirect cost rates
for all of the years in question will significantly narrow the parties’ dispute regarding
Counts I, II, and III of the complaint and the government’s counterclaim. As ordered in
more detail at the conclusion of this opinion, the parties by June 9, 2020 are required to
2
file a joint status report regarding what, if any, indirect cost rate issues remain with a
proposal for resolving those indirect cost rate issues. After receiving the joint status
report, the court will schedule a status conference with the parties to address next steps in
this litigation.
I. BACKGROUND
These consolidated cases arise out of cost-reimbursement contracts entered in the
1980s between ISN and various federal agencies. On December 14, 2004, ISN filed a
Contract Disputes Act (CDA) claim with an administrative contracting officer (ACO) at
the Defense Contract Management Agency (DCMA). See Def.’s App. 11-17, ECF No.
282-2 through ECF No. 282-9 (CDA claim certified by Roma Malkani, President and
Chief Executive Officer of ISN). In the 2004 CDA claim, ISN raised seven claims
supporting its contention that it was owed money on the nineteen contracts then at issue.
See id. at 11.
As relevant here, one of ISN’s seven claims was for “final determination of all
outstanding contractual issues to establish final [indirect cost] rates.” Id. at 14. ISN
sought “the issuance of final rate approvals for FY 1985-1996.”
Id. Indirect costs (costs
not associated with a specific cost objective) are distributed to specific contracts
proportionally, using an indirect cost rate. Indirect cost rates are generally calculated as a
percentage that expresses the ratios of different types of indirect expenses (i.e., fringe,
overhead, or general and administrative costs) incurred by the contractor in a certain
period of time to direct labor costs or some other base. See
id. at 12-13 (ISN CDA claim
describing indirect cost rates); see also Data Comput. Corp. v. United States,
80 Fed. Cl.
3
606, 608 (2008) (describing indirect cost rates). These rates are then used to calculate
final contract payment to determine whether the government owes additional money to
the contractor. May 7, 2020 Tr. 15-18, ECF No. 301 (describing payment process). ISN
in its 2004 CDA claim sought resolution of how “cost of ownership, cost of bonuses, cost
of pension, cost of ownership-equipment rental, and corporate and [bid and proposal] cost
allocation” would be incorporated into the final indirect cost rates calculation for its
contracts for FY 1985-1996. Def.’s App. 14. As noted above, ISN characterized these
issues as “all outstanding contractual issues to establish final rates.”
Id.
On February 9, 2005, the ACO issued a final decision on ISN’s final indirect cost
rates claim, disallowing some costs and determining final fringe and overhead indirect
cost rates applicable to “all Government flexibly price[d] contracts and subcontracts” for
FY 1987-1995, as well as interim general and administrative (G&A) indirect cost rates
for FY 1987-1995.1
Id. at 18-24.
On May 12, 2005, the ACO addressed ISN’s remaining six claims, involving
allegedly unpaid contract amounts, costs over contract ceilings, lost profits and
unabsorbed overhead, interest, and attorneys’ fees. Pl.’s App. 68, ECF No. 283-1. In this
1
Final G&A rates could not be established because those rates were the subject of
pending litigation at the time. Def.’s App. 18. Specifically, ISN had challenged in this
court the exclusion of ISN’s claimed Subchapter S state income taxes from ISN’s
proposed G&A rates. On February 6, 2006, the Federal Circuit ruled in favor of the
government, effectively disallowing ISN’s inclusion of its owner’s personal state income
taxes in the G&A pool. See Info. Sys. & Networks Corp. v. United States, 437 F.3d 1173,
1177-78 (Fed. Cir. 2006).
4
decision, the ACO determined that for eleven contracts over which he had authority, the
government had overpaid ISN by a total of $280,241.2 Id. at 70.
ISN challenged the ACO’s February 9, 2005 decision regarding indirect cost rates
in this court in case No. 06-99C. ISN claimed that the disallowed costs and the rates
were “unjustified and unreasonable.” Def.’s App. 34 (No. 06-99C Am. Compl. ¶¶ 22-
23). On October 25, 2010, the parties in case No. 06-99C entered into a settlement
agreement. Def.’s App. 42. The settlement agreement recognized that ISN, in its 2004
CDA claim, had requested “the resolution of final indirect cost rates.” Id. at 38. ISN
agreed to settle its amended complaint so long as the government incorporated certain
allowances for office rent and equipment rent in ISN’s final indirect cost rates for FY
1987-1995.
Id. at 39-42.
The government agreed to incorporate those allowances “for
purposes of calculating final indirect cost rates, in addition to the allowances already
allowed pursuant to the contracting officer’s February 9, 2005 final decision.”
Id. at 39.
Under the terms of the settlement agreement, ISN also agreed to release:
all claims, known or unknown, including all claims for monetary and declaratory
relief, against the United States . . . arising out of, set forth, related to, or otherwise
involved in Case No. 06-99C, including but not limited to, any claims for costs,
expenses, attorney fees, and damages of any sort, with the exception of claims for
payment resulting from the Government’s calculation of final indirect cost rates
that ISN might present to the agencies with which it contracted.
2
Of the nineteen contracts asserted in ISN’s 2004 CDA claim, the ACO determined he
had authority or delegated authority over twelve. Pl.’s App. 68. It was later determined
that one of these twelve was listed incorrectly in Exhibit A to ISN’s claim and the ACO
did not have authority over the correct contract. The other eleven ISN contracts were
included in the ACO’s May 12, 2005 final decision. See No. 13-988C Compl., Ex. B at
48-51 (discussing the eleven contracts previously appropriately before the ACO in the
May 2005 decision).
5
Def.’s App. 40. Based on this agreement, case No. 06-99C was dismissed. The
government provided ISN the indirect rates calculated in accordance with the settlement
agreement in February 2011. No. 13-988C Compl. ¶ 29.
Meanwhile, on May 11, 2006, ISN filed a separate action in this court challenging
the ACO’s May 12, 2005 final decision, which held that ISN owed the government
$280,241 for the contracts over which the ACO had authority. This lawsuit was filed as
case No. 06-387C, one of the consolidated actions here. The government filed a
counterclaim, seeking the payment of the $280,241. See Answer & Counterclaim at 15,
ECF No. 10.
Case No. 06-387C was stayed pending the resolution of case No. 06-99C. See
Apr. 23, 2008 Minute Order. The stay was lifted when case No. 06-99C settled. As
noted above, in February 2011 (during discovery in case No. 06-387C) the government
provided ISN with the indirect cost rate calculations it prepared in accordance with the
settlement. No. 13-988C Compl. ¶ 29. According to ISN, these calculations contained
errors, and as a result, ISN conducted its own indirect cost rate calculations, adding and
reallocating costs, as part of its claim for damages in case No. 06-387C. Id. ¶¶ 43-44.
Case No. 06-387C was eventually scheduled to go to trial in November 2012.
However, in motions in limine, the government argued that ISN’s claims for revised
indirect cost rate calculations had not been presented to the contracting officer and
therefore the court lacked jurisdiction over the claims under the CDA. See Mot. to
Dismiss & Mot. in Limine, ECF No. 47. The parties then stipulated to the dismissal
6
without prejudice of ISN’s claims. See Stipulations, ECF Nos. 62, 66. The government’s
counterclaim, however, was not dismissed and remains pending. See July 30, 2015 Order
at 4, ECF No. 131.
Following the stipulated dismissal of ISN’s claims in case No. 06-387C, on
January 31, 2013, ISN filed a CDA claim before the DCMA raising twelve issues
regarding seventeen contracts, including claimed adjustments to the final indirect cost
rates that had been prepared by the government under the settlement agreement in case
No. 06-99C. The new DCMA ACO, after determining that she only had authority over
eleven of the seventeen contracts, issued a final decision denying the claims on May 20,
2013.3 See No. 13-988C Compl., Ex. B at 48-51. The new ACO determined that for the
claims already decided by the prior ACO, including the indirect cost rate claims, “it
would be inappropriate for me to issue any final decision concerning them, and I do not
do so.” Id. at 49.
On December 13, 2013, ISN challenged the ACO’s May 20, 2013 decision in this
court in case No. 13-988C, which was then consolidated with case No. 06-387C (the
government’s counterclaim). As relevant here, in Count I of the complaint in case No.
13-988C, ISN seeks a declaratory judgment that ISN properly calculated its final indirect
3
For the other six contracts, ISN delivered or attempted to deliver its claims to the
relevant contracting officers. Some claims were denied, some did not receive a response,
and others were returned to ISN. See No. 13-988C Compl. at 5-6. The government has
sought partial summary judgment regarding ISN’s claims under some of those contracts,
but the court does not address the government’s arguments regarding those contracts in
this decision.
7
cost rates for FY 1982-2000. Id. at 19. In addition to the costs agreed to in the No. 06-
99C settlement agreement, ISN seeks add into the indirect cost rate calculation “claimed
and incurred allowable costs per the FAR [(Federal Acquisition Regulations)] for ‘Other
Compensation.’” No. 13-988C Compl. at 19-20. ISN has also “utilized in its calculation
a reversal [(re-allocation)] of [the] corporate allocations” originally set forth in the
ACO’s February 9, 2005 decision.
Id. at 20. ISN estimates that with these adjustments
to the indirect rates the government owes ISN at least $3.7 million.
Id. at 21.
In Count II of the complaint in case No. 13-988C, ISN seeks to recover money
allegedly owed for unpaid invoices for direct labor and indirect costs, in the amount of $7
million. In Count III, ISN seeks to recover offsets which ISN claims were mistakenly
taken by the government together with other withheld amounts, in the amount of
$475,000 plus interest. See No. 13-988C Compl. at 21-22. The calculations in Count II
and Count III of ISN’s complaint use ISN’s revised final indirect cost rates. See id. ¶ 58.
Now before the court are the parties’ cross motions for partial summary judgment
regarding certain issues arising under Counts I, II, and III of the No. 13-988C complaint.
In its motion for partial summary judgment, the government seeks summary judgment on
six issues.4 First, the government argues that ISN’s claims relating to the determination
4
The government acknowledges that even if its motion for partial summary judgment is
granted in full, certain issues still remain under Counts I, II, and III. See Def.’s Mot. at 2
n.1, ECF No. 282. In particular, the government contends that the court must still decide
(1) “what are the valid indirect rates based on the Government’s counterclaim,” (2) “the
indirect rates for fiscal years (FY) 1983 and 1999-2000,” (3) “the G&A rates for FYs
1985 and 1986,” and (4) “the overhead and fringe rates for FYs 1996-1998.” Id.
8
of indirect cost rates for FY 1987-1995, arising under Count I of ISN’s complaint, are
barred by the settlement agreement in case No. 06-99C. Def.’s Mot. at 9-21, ECF No.
282. Second, the government argues that ISN’s claims for costs and offsets arising under
Counts II and III of ISN’s complaint for two contracts – Contract No. DTFA01-85-Y-
01018 and Contract No. MDA908-83-G-1504 – are barred by releases ISN signed in
connection with those contracts.
Id. at 21-25. Third, the government contends that ISN’s
Count II and III claims for Contract No. N66604-87-D-0098 are barred because ISN
previously adjudicated those claims before the Armed Services Board of Contract
Appeals (ASBCA) and must return to the ASBCA to resolve any remaining claims under
that contract.
Id. at 25-30. Fourth, the government argues that this court lacks
jurisdiction over ISN’s Count II and III claims for Contract No. 50SBNB5C3513 because
ISN failed to establish that its claim was submitted to a contracting officer for a decision,
a prerequisite to bringing suit in this court.
Id. at 30-34. Fifth, the government asserts
that ISN’s Count II and III claims relating to NASA Contract Nos. NAS5-27486 and
NASW-4164 are barred by laches.
Id. at 34-43. Finally, the government argues that ISN
entered into G&A rate agreements for FY 1996 and FY 1997-1998 that bar ISN’s Count I
claims for those fiscal years.5
Id. at 43-50.
ISN has cross moved for partial summary judgment only on ISN’s argument that
its final indirect cost rate claims for FY 1987-1995 are not barred by the settlement
5
ISN concedes that its claims for FY 1982 rates are barred by an indirect cost rate
agreement. Pl.’s Cross-Mot. at 5, ECF No. 283 (“ISN does not dispute that the final
indirect rate agreement for 1982 is binding . . . .”).
9
agreement in case No. 06-99C. Pl.’s Cross-Mot. at 6-19, ECF No. 283. ISN opposes the
government’s partial summary judgment motion, contending that the government has not
met its burden to show that summary disposition is warranted. Id. at 19-50.
ISN has also filed a motion to strike five declarations submitted by the
government in support of its motion for partial summary judgment regarding service of
Contract No. 50SBNB5C3513 and the NASA contracts that the government argues are
barred by laches. Pl.’s Mot. to Strike at 1-2, ECF No. 284. ISN generally argues that the
declarations are improper because they contain opinions and conclusions not based on
personal knowledge. Id. The government opposes ISN’s motion to strike, arguing that
each declaration is admissible. Def.’s Resp. to Pl.’s Mot. to Strike at 1, ECF No. 289.
Lastly, the government has filed a motion to strike certain portions of ISN’s reply
in support of its cross motion for partial summary judgment on the issue of whether the
settlement agreement in case No. 06-99C bars ISN’s indirect cost rate claims for FY
1987-1995. Def.’s Mot. to Strike at 1, ECF No. 293. The government contends that ISN
makes new arguments based upon extrinsic evidence – including a declaration of ISN’s
counsel and other new documents – to which the government has not had a chance to
respond. Id. at 1-2. Alternatively, the government requests to file a surreply.
Id. at 1.
ISN opposes this motion, arguing that the documents were added in direct response to the
government’s arguments, and that the government has failed to demonstrate that it is
entitled to a surreply. Pl.’s Resp. to Def.’s Mot. to Strike at 4-10, ECF No. 294.
10
II. LEGAL STANDARD
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
RCFC 56(a); see, e.g., Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390
(Fed. Cir. 1987). The moving party bears the burden of demonstrating that “there is an
absence of evidence to support the nonmoving party’s case.” Sweats Fashions, Inc. v.
Pannill Knitting Co., Inc.,
833 F.2d 1560, 1563 (Fed. Cir. 1987) (quotation omitted). If
the moving party makes such a showing, the burden shifts to the nonmoving party to
demonstrate by presenting evidence that a genuine dispute regarding a material fact
exists. See, e.g., Wavetronix LLC v. EIS Elec. Integrated Sys.,
573 F.3d 1343, 1354 (Fed.
Cir. 2009). “[O]nce a moving party satisfies its initial burden, mere allegations of a
genuine issue of material fact without supporting evidence will not prevent entry of
summary judgment.” Republic Sav. Bank, F.S.B. v. United States,
584 F.3d 1369, 1374
(Fed. Cir. 2009). “Contract interpretation is a question of law generally amenable to
summary judgment.” Premier Office Complex of Parma, LLC v. United States,
916 F.3d
1006, 1011 (Fed. Cir. 2019) (quotation omitted).
III. DISCUSSION
A. ISN’s Claims Regarding its Indirect Cost Rates for FY 1987-1995 are
Barred by the Settlement Agreement in Case No. 06-99C.
The parties each move for summary judgment regarding the effect of the No. 06-
99C settlement agreement on ISN’s indirect cost rate claims under Count I of the No. 13-
988C complaint. The government argues that ISN’s indirect cost rate claims for FY
11
1987-1995 are barred under the doctrine of accord and satisfaction because, in the
settlement agreement, ISN unambiguously released all claims for the calculation of
indirect cost rates, known and unknown, for those years. Def.’s Mot. at 17-21. ISN
contends that the unambiguous language of the settlement agreement and extrinsic
evidence demonstrate that the settlement agreement left open the calculation of indirect
cost rates and did not foreclose additional costs and reallocations not expressly addressed
in case No. 06-99C. Pl.’s Cross-Mot. at 9-19; May 7, 2020 Tr. 25-26.
The court first discusses the legal standards governing the interpretation of
settlement agreements and the accord and satisfaction doctrine. Applying these
standards, the court concludes that ISN’s claims are barred under the plain terms of the
No. 06-99C settlement agreement.
i. Legal standards governing accord and satisfaction.
Accord and satisfaction refers to the “discharge [of a claim] by the rendering of
some performance different from that which was claimed as due and the acceptance of
such substituted performance by the claimant as full satisfaction of his claim.” Brock &
Blevins Co. v. United States, 343 F.2d 951, 955 (Ct. Cl. 1965) (quoting 6 Corbin,
Contracts § 1276 (1962)); see also Meridian Eng’g Co. v. United States,
144 Fed. Cl.
667, 671 (2019). To establish the affirmative defense of accord and satisfaction, four
elements must be present: “(1) proper subject matter; (2) competent parties; (3) a meeting
of the minds of the parties; and (4) consideration.” Holland v. United States,
621 F.3d
1366, 1382 (Fed. Cir. 2010) (quoting O’Connor v. United States,
308 F.3d 1233, 1240
(Fed. Cir. 2002)). A meeting of the minds occurs where there are “accompanying
12
expressions sufficient to make the [claimant] understand, or to make it unreasonable for
him not to understand, that the performance is offered to him as full satisfaction of his
claim and not otherwise.” Holland, 621 F.3d at 1382 (quoting Chesapeake & Potomac
Tel. Co. of Va. v. United States,
654 F.2d 711, 716 (1981)); see also Tamerlane, Ltd. v.
United States,
81 Fed. Cl. 752, 764 (2008).
With regard to the No. 06-99C settlement agreement, no dispute exists that the
parties to the settlement agreement were competent to enter into the agreement and that
there was valid consideration exchanged between the parties.6 Rather, the parties’
dispute centers on whether the subject matter in Count I of the No. 13-988C complaint is
the same as that addressed by the No. 06-99C settlement agreement and, relatedly,
whether there was a meeting of the minds regarding the scope of the settlement
agreement, including the release. Determining whether an accord and satisfaction has
occurred therefore requires the court to interpret the terms of the No. 06-99C settlement
agreement to establish what was resolved and released by ISN.
6
The court finds that the settlement agreement satisfies the “competent parties” and
“consideration” elements of the accord and satisfaction doctrine. As the government
states, plaintiff’s counsel signed the settlement agreement on behalf of ISN, and the
government’s counsel of record at the time signed the settlement agreement on behalf of
the United States, as authorized by appropriate Department of Justice officials. Def.’s
Mot. at 18. There was also valid consideration between the parties. As the government
states, ISN compromised its position by forgoing its claims in exchange for the additional
allowances listed in the settlement agreement. Id. at 18-19.
13
ii. The legal standards governing contract interpretation.
Contract interpretation begins with the plain language of the agreement.
Langkamp v. United States, 943 F.3d 1346, 1349 (Fed. Cir. 2019). The court “must
interpret a contract as a whole and in a manner which gives reasonable meaning to all its
parts and avoids conflict or surplusage of its provisions.” Gardiner, Kamya & Assocs.,
P.C. v. Jackson,
467 F.3d 1348, 1353 (Fed. Cir. 2006) (internal corrections, quotation
marks, and citation omitted). An “interpretation that gives meaning to all parts of the
contract is to be preferred over one that leaves a portion of the contract useless,
inexplicable, void, or superfluous.” NVT Techs., Inc. v. United States,
370 F.3d 1153,
1159 (Fed. Cir. 2004). When the provisions of the contract are clear and unambiguous,
“the court may not resort to extrinsic evidence to interpret it.” Premier
Office, 916 F.3d
at 1011. “When the contractual language is unambiguous on its face, [the court’s]
inquiry ends and the plain language of the [a]greement controls.”
Id. (quotation omitted).
The court will consider extrinsic evidence if a contract is ambiguous, however, the
parties’ “differing interpretations of a contract provision does not, standing alone, create
an ambiguity.” Mata v. United States, 114 Fed. Cl. 736, 745 (2014). Rather, both
interpretations must fall within a “zone of reasonableness.” Metric Constructors, Inc. v.
NASA,
169 F.3d 747, 751 (Fed. Cir. 1999); see also Premier
Office, 916 F.3d at 1011.
Moreover, “[t]o the extent that the contract terms are ambiguous, requiring weighing of
external evidence, the matter is not amenable to summary resolution.” Beta Sys., Inc. v.
United States,
838 F.2d 1179, 1183 (Fed. Cir. 1988).
14
The court’s interpretation of the settlement agreement at issue here involves a
release. “In interpreting the release, [the court must] first ascertain whether its language
clearly bars the asserted claim.” Dureiko v. United States, 209 F.3d 1345, 1356 (Fed. Cir.
2000). “[A]ny rights that the parties intended to reserve when executing a release must
be expressly stated.” MW Builders, Inc. v. United States,
134 Fed. Cl. 469, 512 (2017)
(citing Augustine Med., Inc. v. Progressive Dynamics, Inc.,
194 F.3d 1367, 1373 (Fed.
Cir. 1999)). Where release language is “unambiguous and susceptible only to one
reasonable meaning, the court’s review is limited to the plain meaning without
considering extrinsic evidence.” MW
Builders, 134 Fed. Cl. at 512. “Exceptions to
releases of claims are strictly construed against government contractors.” Gresham,
Smith & Partners v. United States,
24 Cl. Ct. 796, 801 (1991); see also
Dureiko, 209 F.3d
at 1356 (noting exceptions to releases are strictly construed against contractors).
iii. The terms of the No. 06-99C settlement agreement and ISN’s
current final indirect cost rate claims.
As discussed above, the parties’ dispute regarding the No. 06-99C settlement
agreement requires the court to determine, under the terms of the agreement, what claims
were resolved and released by ISN. The court must then determine whether any of ISN’s
indirect cost rate claims now before the court were resolved and released under the
settlement agreement.
The court starts with the plain language of the agreement. Langkamp, 943 F.3d at
1349. In the No. 06-99C settlement agreement, the parties stipulated that, on December
14, 2004, ISN presented to the DCMA ACO “a claim requesting the resolution of final
15
indirect cost rates.” Def.’s App. 38. The agreement further states that the ACO issued a
decision “disallowing certain claimed costs and setting forth his determination of indirect
cost rates.” Id. The parties stated that to settle the case, the government would include
additional allowances in its final indirect rate calculation.
Id. at 39.
The settlement
agreement states that “[t]he United States agrees that the allowances described in
paragraph 6 will be allocated to the appropriate indirect cost pools for purposes of
calculating final indirect cost rates, in addition to the allowances already allowed
pursuant to the contracting officer’s February 9, 2005 final decision.”
Id.
ISN then agreed to stipulate to the dismissal of its complaint.
Id. at 40. In the
release clause of the settlement agreement, ISN agrees to:
release[], waive[], and abandon[] all claims, known or unknown, including all
claims for monetary and declaratory relief, against the United States . . . arising
out of, set forth, related to, or otherwise involved in Case No. 06-99C, including
but not limited to, any claims for costs, expenses, attorney fees, and damages of
any sort, with the exception of claims for payment resulting from the
Government’s calculation of final indirect cost rates that ISN might present to the
agencies with which it contracted.
Id. Further, in paragraph 14 of the settlement agreement, ISN:
warrants and represents that no other action or suit with respect to the claims set
forth in case No. 06-99C is pending or will be filed in or submitted to any other
court, administrative agency, or legislative body, with the exception of claims for
payment resulting from the Government’s calculation of final indirect rates that
ISN might present to the agencies with which in contracted.
Id. at 41. The parties signed the settlement agreement on October 25, 2010,
id. at 42-43,
and on November 1, 2010, the court dismissed ISN’s complaint.
On January 31, 2013, however, ISN submitted a claim to the DCMA ACO stating
that, “[i]n addition to the additional allowable costs stipulated and agreed to in the [No.
16
06-99C] Settlement Agreement, ISN has added to the relevant cost pools additional
claimed costs adjusted per the FAR for ‘Other Compensation.’” No. 13-988C Compl.,
Ex. A at 42. ISN further stated that “[i]n addition, ISN utilized in its calculations a
reversal of the corporate allocations originally set forth in the ACO’s Final Decision of
February [9], [2005] for years 198[7]-1995.” Id. ISN sought the ACO’s agreement that
its final indirect rates were “accurate and properly reflect the Final Rates that should be
utilized on ISN’s final completion vouchers.”
Id. On May 20, 2013, the ACO denied
this claim for FY 1987-1995 because the former ACO had previously decided the claim.
Id., Ex. B at 49.
On December 13, 2013, ISN filed in case No. 13-988C its eleven-count complaint,
seeking, in Count I, declaratory judgment that its revised calculation of final indirect rates
for FY 1982-2000 is just and proper. Specifically, in Count I, ISN claims that it is
entitled to add “Other Compensation” to the relevant cost pools and to reverse (re-
allocate) corporate allocations “originally set forth in the ACO’s Final Decision of
February 9, 2005.”7 No. 13-988C Compl. at 19-20. In other words, ISN seeks to add
costs to its indirect rate pools, re-allocate the costs among the indirect rates pools, and
recalculate its final indirect cost rates for FY 1982-2000, including for the years
previously addressed by the ACO’s February 9, 2005 decision, which was challenged in
case No. 06-99C.
7
The government also contends that ISN added back other unallowable costs. Def.’s
Mot. at 17 (citing No. 13-988C Compl. ¶ 52).
17
iv. ISN released all claims relating to the determination of ISN’s FY
1987-1995 final indirect cost rates under the plain terms of the
No. 06-99C settlement agreement.
Upon consideration of the terms of the No. 06-99C settlement and the nature of
ISN’s claims here, the court agrees with the government that the claims in Count I –
regarding what costs and allocations should be used to calculate final indirect cost rates
for FY 1987-1995 – were resolved and released by ISN in case No. 06-99C. The plain
terms of the settlement agreement preclude ISN from making any claims for additional
costs and re-allocations for purposes of calculating the final indirect cost rates for those
years. By signing the No. 06-99C settlement agreement, ISN broadly released all claims
“known or unknown . . . arising out of, set forth, related to, or otherwise involved in Case
No. 06-99C.” Def.’s App. 40. The additional costs ISN now seeks, and the reversal of
the corporate allocations, are certainly “related to” the claims involved in case No. 06-
99C, which challenged the ACO’s February 9, 2005 determination of ISN’s indirect rates
for FY 1987-1995. ISN’s claims regarding indirect cost rates for those years are thus
unambiguously barred under the terms of the release. See Holland, 621 F.3d at 1382-84;
Info. Sys. & Networks Corp. v. United States,
68 Fed. Cl. 336, 346 (2005) (holding that
claims were released under prior settlement agreement).
ISN’s reading of the settlement agreement to the contrary is unreasonable. ISN
first argues that case No. 06-99C involved only the “specific cost disallowances” made
by the ACO, that ISN made “no claim for final indirect rates,” and that final rates were
not resolved in the settlement agreement itself. Pl.’s Cross-Mot. at 15-16. It is true that
the No. 06-99C settlement agreement did not expressly establish the final indirect rates
18
for FY 1987-1995. However, the court agrees with the government that in case No. 06-
99C, ISN challenged the ACO’s disallowances of various costs and allocations in order to
calculate ISN’s final indirect rates, and the settlement agreement resolved what would be
included in that calculation. Def.’s Resp. at 6, 11.
This is evident from the plain terms of the agreement. The parties agreed and
stipulated that ISN’s underlying CDA claim “request[ed] the resolution of final indirect
cost rates,” and that the ACO issued “final indirect cost rates.” Def.’s App. 38. The
United States agreed to include the costs outlined in the settlement agreement “for
purposes of calculating final indirect cost rates” in addition to the costs already allowed
under the ACO’s final decision. Id. at 39.
Giving meaning to all parts of the settlement
agreement, the parties plainly resolved how the FY 1987-1995 final indirect cost rates
would be calculated. ISN’s contention that the settlement agreement left open ISN’s
ability to later add new costs or to reallocate costs is unreasonable.
ISN also argued at oral argument that the exception to the settlement agreement’s
release clause, which mentions the “calculation” of final indirect cost rates, encompasses
its indirect cost rate claims. May 7, 2020 Tr. 26. However, the plain language of the
exception does not give ISN the right to challenge, once again, the costs and allocations
agreed to by the parties in the settlement agreement. Rather, the release exception states
that ISN may make a claim for “payment” “resulting from the Government’s calculation
of final indirect cost rates.” Def.’s App. 40. The court agrees with the government that
this language permits ISN to submit “claims for payment” under ISN’s contracts after the
government calculates the final indirect rates in accordance with the settlement
19
agreement. Def.’s Mot. at 20; Def.’s Resp. at 10. This exception does not permit ISN to
add or reallocate costs for purposes of calculating the final indirect rates.
The court also agrees with the government that ISN’s two other arguments
challenging the scope of the settlement agreement are without merit. First, ISN argues
that the February 9, 2005 ACO decision regarding final indirect rates was not explicitly
incorporated into the agreement. Pl.’s Cross-Mot. at 17-19; Pl.’s Reply at 19-22.
However, as the government argues, Def.’s Resp. at 13-15, the February 2005 ACO
decision did not need to be expressly incorporated to explain the scope of the costs and
allocations that were included in the settlement. Paragraph 8 of the settlement agreement
specifically identifies the February 2005 decision and explains that the government
would calculate the final indirect cost rate using the allowances described in paragraph 6
of the settlement agreement and those “already allowed pursuant to the contracting
officer’s February 9, 2005 final decision.” Def.’s App. 39. The settlement agreement’s
failure to use the term “incorporation” when referring to the ACO’s February 2005
decision does not undermine the government’s contention that the settlement agreement
resolves all of the claims ISN brought or could have brought pertaining to the calculation
of final indirect cost rates for FY 1987-1995.
Second, ISN’s argument that the settlement agreement only covers “costs” and not
the “allocation” of costs to indirect cost pools also lacks merit. Pl.’s Cross-Mot. at 16-17.
This contention, as the government argues, Def.’s Resp. at 11-13, is undermined by ISN’s
amended complaint in No. 06-99C and the plain terms of the settlement agreement. ISN
expressly challenged the ACO’s decision with respect to “Corporate and B&P
20
Allocations,” which were used to determine its final indirect rates, in its No. 06-99C
amended complaint. Def.’s App. 32 (emphasis added). Moreover, the settlement
agreement expressly states that “[t]he United States agrees that the allowances described
in paragraph 6 will be allocated to the appropriate indirect cost pools for purposes of
calculating final indirect cost rates.” Id. at 39 (emphasis added). The corporate
allocations were directly addressed in case No. 06-99C and allocations were referenced in
the settlement agreement. Under the agreement’s plain language, any challenges to
allocations were also released.
For all of these reasons, the court holds that ISN’s Count I claims for FY 1987-
1995 are unambiguously barred pursuant to the plain terms of the No. 06-99C settlement
agreement.
v. The court does not consider the extrinsic evidence offered by
ISN to interpret the settlement agreement and no subsequent
government conduct precludes the accord and satisfaction
defense.
Because the court concludes that the plain language of the settlement agreement
unambiguously bars ISN’s Count I claims for FY 1987-1995, it is not necessary for the
court to consider the extrinsic evidence presented by ISN in support of its interpretation
of the settlement agreement. Jaynes v. United States, 75 Fed. Cl. 218, 234 (2007)
(holding that in the context of the accord and satisfaction defense, the court will not
consider extrinsic evidence if the language of the agreement at issue is plain); see also
Holland, 621 F.3d at 1382-83 (finding that the plain language of a settlement agreement
was sufficient to show a meeting of the minds for accord and satisfaction); Premier
21
Office, 916 F.3d at 1011 (holding that where the terms of a contract are plain, the court
will not look to extrinsic evidence to interpret the contract).
However, the court notes that courts may “refuse to bar a claim based upon the
defense of accord and satisfaction where the parties continue to consider [a] claim after
execution of a release” because this conduct is evidence that there was no meeting of the
minds between the parties regarding the release. England v. Sherman R. Smoot Corp.,
388 F.3d 844, 849 (Fed. Cir. 2004) (quoting Cmty. Heating & Plumbing Co., Inc. v.
Kelso,
987 F.2d 1575, 1581 (Fed. Cir. 1993)). ISN argues in its filings that the
government in this litigation has never before asserted that the settlement agreement
prohibited ISN from making any claim about final indirect rates, suggesting that the
parties did not intend to bar ISN’s indirect cost rate claims. Pl.’s Cross-Mot. at 10-11
(contending that the government’s argument “contradicts the representations of defendant
previously made to the Court”); Pl.’s Reply at 8-14 (arguing that throughout the “entire
period of litigation leading up to the various pretrial proceedings,[] there was no mention
by defendant that ISN had released its right to calculate and present final indirect rates”).
ISN’s reference to the government’s litigation conduct, however, does not
demonstrate that the government conceded that ISN could assert its indirect cost rate
claims. At most, the government acknowledged that ISN might have been able to
challenge the indirect cost rates on the grounds that the rates were erroneously calculated
under the terms of the settlement agreement, not that ISN could later add or reallocate
indirect costs for purposes of establishing new final indirect cost rates. See Pl.’s Reply at
13-14; Def.’s Reply to Mots. in Limine at 5, ECF No. 61.
22
Moreover, as ISN itself describes, the government consistently sought to bar ISN’s
revised indirect cost rate claims based on res judicata under case No. 06-99C and on
other jurisdictional grounds. See Pl.’s Reply at 8-14. Indeed, some of the litigation
documents ISN relies on demonstrate that the government did, in fact, consider ISN’s
indirect cost rate claims to be barred by the No. 06-99C settlement agreement. See Aug.
13, 2012 Tr. 9, ECF No. 104 (government counsel stating that cost allowance issues were
settled in Case No. 06-99C). In short, ISN has not identified any evidence to establish
that the government agreed that ISN was free to add and reallocate costs after ISN signed
the settlement agreement, or that the government accepted those changes as valid.8
Based on the foregoing, the court grants the government’s motion for summary
judgment with regard to the indirect cost rates for FY 1987-1995, which were resolved by
the settlement agreement in case No. 06-99C. The court denies ISN’s cross motion for
summary judgment on this issue.
B. The Indirect Cost Rate Agreements for FY 1996-1998 Bar ISN’s
Claims Regarding G&A Rates for Those Years.
The government has also moved for partial summary judgment regarding ISN’s
indirect cost rate claims for FY 1996-1998. According to the government, ISN, through
8
Likewise, under the defense of release, there are “special and limited circumstances”
under which a claim may be prosecuted, despite the execution of a release. Mingus
Constructors, 812 F.2d at 1395. These circumstances include mutual mistake, conduct of
the parties acknowledging claims after a release, obvious mistake or oversight, and fraud
or duress.
Id. ISN does not present any evidence of mistake, fraud, or duress. And as
discussed above, the government did not acknowledge the validity of ISN’s claims after
the release. As such, ISN is bound by the terms of the release.
23
its Chief Financial Officer Charles Bonuccelli, signed in 2002 binding G&A rate
agreements for those years, and, therefore, ISN may not modify the G&A rates covered
by those agreements. Def.’s Mot. at 45-50. ISN argues that Mr. Bonuccelli did not have
authority to bind ISN to the rate agreements. Pl.’s Cross-Mot. at 46-50. The government
responds that Mr. Bonuccelli had “apparent authority” to bind ISN, and that ISN’s failure
to timely disavow the rate agreements demonstrates that Mr. Bonuccelli had apparent
authority to sign them and that ISN ratified the agreements. Def.’s Mot. at 47-49.
Apparent authority is “the power held by an agent or other actor to affect a
principal’s legal relations with third parties when a third party reasonably believes the
actor has authority to act on behalf of the principal and that belief is traceable to the
principal’s manifestations.” United States v. Great Am. Ins. Co., 738 F.3d 1320, 1334
(Fed. Cir. 2013) (quoting Restatement (Third) Of Agency § 1.03 (2006)). “[S]ilence may
constitute a manifestation when, in light of all the circumstances, a reasonable person
would express dissent to the inference that other persons will draw from silence. Failure
then to express dissent will be taken as a manifestation of affirmance.”
Id. (quoting
Restatement (Third) Of Agency § 1.03 cmt. b). “[S]ummary judgment on this issue is
appropriate if, viewed in the light most favorable to the non-moving party, the facts
establish that the principal acted in a manner that gave its agent the appearance of
authority.”
Id. at 1335.
The only dispute before the court regarding the validity of the FY 1996-1998 rate
agreements is whether Mr. Bonuccelli had the authority to bind ISN. The court
concludes that the undisputed facts establish that Mr. Bonuccelli had apparent authority
24
to do so. Mr. Bonuccelli was ISN’s Chief Financial Officer and was responsible for the
accounting and taxes for the company. Def.’s App. 913-14. In this role, Mr. Bonuccelli
interfaced with DCAA to enter into auditor-determined rate agreements for FY 1996-
1998. See id. Specifically, Mr. Bonuccelli submitted to the DCAA incurred cost
submissions, which were certified by Ms. Malkani, president of ISN, proposing final
G&A rates for FY 1996-1998.
Id. at 920, 996, 1041, 1064, 1091, 1131; see 48 C.F.R. §
42.705-2 (governing auditor-determined rates). DCAA then sent the rate agreements
accepting the proposed certified rates to Ms. Malkani. The rate agreements were returned
to DCAA signed by Mr. Bonuccelli.
Id. at 1039, 1177. Mr. Bonuccelli had also signed
other documents on behalf of ISN. Def.’s Reply App. 1292.
Based on Mr. Bonuccelli’s position at ISN and the fact that the agreed-upon rates
were already certified by Ms. Malkani, it was reasonable for the government to assume
that Mr. Bonuccelli had the authority to sign the rate agreements and bind ISN. See Am.
Anchor & Chain Corp. v. United States, 331 F.2d 860, 861 (Ct. Cl. 1964) (holding work
manager had apparent authority to bind company to contracts without prior authorization
from company’s vice president by virtue of management position and failure of company
to repudiate contracts); Restatement (Third) of Agency, § 1.03 cmt. b (“If the principal
places a person in a position or office with specific functions or responsibilities, from
which third parties will infer that the principal assents to acts by the person requisite to
fulfilling the specific functions or responsibilities, the principal has manifested such
assent to third parties.”). Mr. Bonuccelli’s pattern of signing other documents on behalf
of ISN further supports the government’s reasonable belief that Mr. Bonuccelli was
25
authorized to sign the FY 1996-1998 rate agreements. See Great Am., 738 F.3d at 1335
(holding that “the pattern of agents exceeding their authority with no objection from [the
company] would lead a reasonable person in the government’s position to believe that
such acts were authorized”).
ISN’s seventeen years of silence after the agreements were signed also affirms Mr.
Bonuccelli’s apparent authority to sign them. See Great Am., 738 F.3d at 1334 (noting
that a principal’s inaction creates apparent authority). It was not until 2019 that ISN
expressly contended that Mr. Bonuccelli did not have binding contract authority for ISN,
in the context of this litigation. Def.’s App. 849-50 (ISN’s response to the defendant’s
first request for admissions). In fact, ISN in other related cases – case No. 98-663C
(regarding the inclusion of state income tax costs in indirect rates) and case No. 06-99C –
represented that its rates for FYs 1996-1998 had been settled under the 2002 agreements.
Def.’s App. 1213 (ISN’s post-trial brief in case No. 98-663C stating “[ISN] settled its
indirect rates with the defendant for . . . 1996, 1997 and 1998”); Def.’s App. 31 (No. 06-
99C amended complaint stating “final indirect rates have been agreed to for FY 1996,
1997, and 1998 pursuant to agreements dated September 3, 2002”). Moreover, in its
now-dismissed amended complaint in case No. 06-387 – one of the consolidated actions
here – ISN stated that its 1996 and 1997 rates had been settled. No. 06-387C Am.
Compl. ¶ 4, ECF No. 21. Taken together, ISN’s undisputed admissions and its failure to
repudiate the 2002 rate agreements for nearly two decades demonstrate that the
26
government reasonably believed that Mr. Bonuccelli had the apparent authority to bind
ISN to the rate agreements.9
ISN points to only two specific pieces of evidence to demonstrate that Mr.
Bonuccelli did not have apparent authority to bind ISN. However, neither creates a
disputed issue sufficient to overcome summary judgment in the government’s favor.
First, ISN quotes a passage from the 2008 deposition of the DCMA ACO who issued the
2005 decisions challenged by ISN in case Nos. 06-99C and 06-387C. In that deposition
testimony, the ACO stated that he believed indirect rates negotiated between the ACO
and Mr. Bonuccelli would have to be “ratified by [ISN’s] president,” Ms. Malkani.
Def.’s Reply App. 1286. ISN contends that this deposition testimony demonstrates that
the government knew Mr. Bonuccelli did not have contracting authority for ISN. Pl.’s
Cross-Mot. at 46.
9
Although the court has concluded that Mr. Bonuccelli had the apparent authority to bind
ISN, the court also agrees with the government, Def.’s Resp. at 40, that it appears that
ISN also ratified the rate agreements through its undisputed admissions and more than a
decade of silence regarding the validity of the agreements. See id. (citing cases); see also
Am.
Anchor, 331 F.2d at 864 (holding that contractor ratified agreements by not objecting
for several months); Restatement (Third) of Agency § 4.01 cmt. f (2006) (“Delay in
expressing an objection to an unauthorized act may result in ratification, depending on
the length of time that elapses between the time the principal learns of the unauthorized
act and the time the principal manifests an objection.”). ISN does not expressly argue
that the elements of ratification have not been met. See Pl.’s Cross-Mot. at 45-50. ISN
also does not dispute that at least a decade had passed before it challenged the FY 1996-
1998 G&A rates or that it previously stated these rates had been settled by the prior
agreements. See
id. Rather, ISN makes the conclusory argument that it had no “duty to
disavow” the agreements.
Id. at 48. This statement is insufficient to overcome summary
judgment on this issue. See Republic Sav.
Bank, 584 F.3d at 1374 (holding that mere
allegations of a genuine issue of material fact without evidence is insufficient).
27
However, the government in response presents the ACO’s 2019 deposition
testimony, which demonstrates that the ACO in 2008 was referring to indirect rate
negotiations, not the FY 1996-1998 indirect cost rate agreements, which were not
negotiated. Def.’s Resp. at 38; Def.’s Reply App. 1290-95 (ACO’s 2019 deposition
testimony noting that he expected Ms. Malkani to approve negotiated rates, but that he
assumed Mr. Bonuccelli “had the ability to bind the company”). This is confirmed by a
closer reading of the ACO’s 2008 deposition testimony, which states, in response to a
line of questioning regarding “negotiating . . . various indirect rate issues,” that the ACO
understood that any agreements would have to be “ratified by the president.” Def.’s
Reply App. 1286 (emphasis added). In fact, the ACO specifically testified in 2008 that
the 1996 rate agreement never “reached [his] level” because both parties agreed on the
rates certified by Ms. Malkani. Id. In short, the 2008 ACO deposition testimony does
not go to the question of whether Mr. Bonuccelli had the authority to sign the 2002
auditor-determined rate agreements, where ISN and the government agreed on ISN’s
rates. The 2008 deposition testimony provided by ISN thus does not create a disputed
issue of material fact regarding the government’s understanding of Mr. Bonuccelli’s
authority to sign those agreements.
Second, ISN argues that it disclaimed the 2002 final indirect rate agreements in
2012, when ISN submitted completion invoices for payment on its various contracts that
used ISN’s revised indirect rates. Pl.’s Cross-Mot. at 46-47. However, as the
government discussed at oral argument, May 7, 2020 Tr. 32-33, the completion invoices
did not expressly disavow Mr. Bonuccelli’s authority.
28
Finally, ISN makes the argument that because the regulations governing the 2002
rate agreements state that “the agreement shall be signed by the contractor and the
auditor,” 48 C.F.R. § 42-705-2(b)(iii) (emphasis added), the government should have
known that Mr. Bonuccelli had no authority to sign the rate agreements. Pl.’s Cross-Mot.
at 47. However, ISN does not appear to dispute that the agreement could be signed by
“anyone authorized by the contractor.” Id. at 48. In addition, even if this regulation
limited Mr. Bonuccelli’s authority to sign the rate agreements, the Federal Circuit has
held that the authority granted by a regulation is not dispositive on summary judgment of
whether the government could reasonably believe that an agent, like Mr. Bonuccelli, had
the authority to sign the agreement. Rather, “[t]he central premise of apparent authority
is that legally effective authority can in fact go beyond an expressly stated grant of actual
authority.” Great
Am., 738 F.3d at 1334; see also Am.
Anchor, 331 F.2d at 863-64
(holding that a manager had apparent authority to sign contracts even though the
government’s invitation for bids required evidence of an agent’s authority). The
provisions of the FAR cited by ISN thus do not demonstrate that the government
unreasonably relied on Mr. Bonuccelli’s apparent authority to sign the rate agreements.
For these reasons, the court grants the government’s motion for summary
judgment with regard to the G&A rates for FY 1996-1998 covered by the 2002 rate
agreements.
29
C. ISN’s Motion to Strike is Deferred and the Government’s Motion to
Strike is Denied as Moot.
In light of the foregoing, the court defers ISN’s motion to strike declarations relied
on by the government in its motion for partial summary judgment for issues not
addressed in this decision. The government’s motion to strike declarations addressing
extrinsic evidence of the parties’ intent regarding the No. 06-99C settlement agreement,
or, in the alternative, to file a surreply is denied as moot.
IV. CONCLUSION
For the foregoing reasons, the government’s motion for partial summary judgment
is GRANTED IN PART and DEFERRED IN PART. ISN’s cross motion for partial
summary judgment is DENIED. ISN’s motion to strike is DEFERRED, and the
government’s motion to strike is DENIED AS MOOT.
In addition, the parties are directed to file a joint status report regarding what
indirect cost rate issues for FY 1982-2000 under Count I or the government’s
counterclaim remain for trial and a proposal for further proceedings on the indirect cost
rate issues only by June 9, 2020. The parties should discuss the issues identified by the
government in its motion for partial summary judgment, see Def.’s Mot. at 2 n.1; infra
n.4, and any other issues that remain regarding indirect cost rates.
The court intends to turn to ISN’s remaining claims and the government’s
counterclaim and defenses once all final indirect cost rates are determined. However, in
the June 9, 2020 joint status report, the parties should also explain the effect of this
opinion on the relief sought in Counts II and III of ISN’s complaint and the government’s
30
counterclaim, including each party’s position regarding whether or not the government
owes ISN any money for each contract at issue. See Def.’s Mot. at 2 n.1. Thereafter, the
court will schedule a status conference to discuss next steps.
IT IS SO ORDERED.
s/Nancy B. Firestone
NANCY B. FIRESTONE
Senior Judge
31
