Air Services, Inc. ( 2015 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
Air Services, Inc. ) ASBCA No. 59843
)
Under Contract No. W91QV1-12-C-0059 )
APPEARANCES FOR THE APPELLANT: Donald H. Spence, Jr., Esq.
Cynthia A. Becker, Esq.
Spence & Becker, LLC
Gaithersburg, MD
APPEARANCES FOR THE GOVERNMENT: Raymond M. Saunders, Esq.
Army Chief Trial Attorney
Frank A. March, Esq.
Trial Attorney
OPINION BY ADMINISTRATIVE JUDGE MELNICK
ON THE GOVERNMENT'S MOTION TO DISMISS FOR LACK OF JURISDICTION
Appellant, Air Services, Inc., appeals the contracting officer's 13 February 2015
decision denying its revised Request for Equitable Adjustment (REA) seeking $105,888
in extended general conditions costs. The government moves to dismiss for lack of
jurisdiction, arguing that appellant failed to submit a proper claim pursuant to the
Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109. We deny the motion.
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION
1. On 26 September 2012, the United States Army Mission & Installation
Contracting Command awarded Contract No. W91QV1-12-C-0059 to appellant for the
renovation of Building 324 at Fort Belvoir, Virginia (R4, tab 1 at 1-2). The contract was
awarded as a direct award under the Small Business Administration's Section 8(a)
Program (id. at 29). The contract incorporated numerous standard Federal Acquisition
Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DF ARS)
clauses, including FAR 52.233-1, DISPUTES (JUL2002); FAR 52.242-14, SUSPENSION OF
WORK (APR 1984); and FAR 52.243-4, CHANGES (JUN 2007) (id. at 9, 27-28).
2. By email dated 7 March 2014 to contracting officer (CO) David P. Wallace and
another government official, appellant submitted its change order proposal #8, dated
24 February 2014, seeking a 36-week time extension and an equitable adjustment of
$247,900 for extended general conditions costs (R4, tab 49 at 4-19).
3. On 7 May 2014, CO Wallace emailed appellant's senior project manager,
Mr. Donald Iak, with the subject line "RE: Building 324- Fire Alarm RFl#17- Response,"
stating:
If you are submitting a claim under FAR Clause 52.233-1,
please follow procedures in FAR Clause 52[.]233-1,
Sub-paragraph (c ), ( d)( 1), ( d)(2)(i), ( d)(2)(iii), sub-paragraph
(3 ), (e). If you are claiming Request for Equitable
Adjustment (REA) please follow procedure under DF ARS
252.243-7002. In addition, please submit certified payroll
information for contract W91QV1-12-C-0059.
(R4, tab 49 at 2)
4. The paragraphs of the contract's Disputes clause, FAR 52.233-1, cited by
CO Wallace's 7 May 2014 email define the term "claim," require that a claim be
submitted to the CO for a written decision within six years of accrual, and require that a
claim exceeding $100,000 be certified by the contractor. FAR 52.233-l(d)(2)(iii)
provides:
The certification shall state as follows: "I certify that the
claim is made in good faith; that the supporting data are
accurate and complete to the best of my knowledge and
belief; that the amount requested accurately reflects the
contract adjustment for which the Contractor believes the
Government is liable; and that I am duly authorized to certify
the claim on behalf of the Contractor."
DFARS 252.243-7002, REQUESTS FOR EQUITABLE ADJUSTMENT (DEC 2012), provides in
pertinent part:
(a) The amount of any request for equitable adjustment
to contract terms shall accurately reflect the contract
adjustment for which the Contractor believes the Government
is liable. The request shall include only costs for performing
the change, and shall not include any costs that already have
been reimbursed or that have been separately claimed. All
indirect costs included in the request shall be properly
allocable to the change in accordance with applicable
acquisition regulations.
(b) In accordance with 10 U.S.C. 2410(a), any request
for equitable adjustment to contract terms that exceeds the
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simplified acquisition threshold shall bear, at the time of
submission, the following certificate executed by an
individual authorized to certify the request on behalf of the
Contractor:
I certify that the request is made in good faith, and that
the supporting data are accurate and complete to the best of
my knowledge and belief.
(Official's Name)
(Title)
DFARS 252.243-7002, although cited by CO Wallace, was not incorporated into the
contract.
5. Mr. Iak responded to CO Wallace on 7 May 2014, stating in pertinent part:
I am a little confused by your response below. Are you
telling me that you have rejected the REA that we sent to
your attention on February 24, 2014? ...
Have you reviewed the REA we submitted on 2/24/14? Are
you requesting we revise and resubmit the REA or is it the
government's decision to reject it in whole and advise us to
file a claim? Please advise.
(R4, tab 49 at 1-2) CO Wallace replied on 8 May 2014, stating that he was only seeking
clarification as to whether appellant was submitting a claim or an REA, and noting that
appellant's change order proposal did not comply with either FAR 52.233-1 or
DFARS 252.243-7002 (id. at 1).
6. CO Maria Belino-Coffeen's 8 May 2014 email to Mr. Iak and others stated:
Mr. Iak: Good morning. I am reviewing the complete file for
this REA/Claim; if am [sic] not mistaken you were informed
by Mr. Wallace on how to submit it properly IAW FAR
(52.243-1)/DFARs (DFARS 252-243-7001) [sic] whether you
are submitting a claim or REA.
As far as documents submitted there were no other supporting
documents received from your firm to support claim/REA
other than the letter you have submitted.
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You need to provide all supporting documentations with
reference to your claim/REA and this has to be certified.
Please see below excerpts from DFAR[S], paragraph (b).
(R4, tab 50 at 1) CO Belino-Coffeen proceeded to provide appellant the text of
DFARS 252.243-7002 in its entirety (id.).
7. By letter dated 22 May 2014, appellant submitted an REA alleging 26 weeks of
government-caused delay and seeking an equitable adjustment in the amount of $155,733
in extended general conditions costs (R4, tab 51at1-4). The REA was certified in
accordance with DFARS 252.243-7002(b) and signed by Mr. lak (id. at 4).
8. On 13 October 2014, appellant's president, Mr. Wilson Mancilla, inquired of
CO Belino-Coffeen as to the status of its REA (R4, tab 54 at 1). Appellant's 13 October
2014 letter stated:
As you are aware, we have been trying to resolve the
final issue on this project regarding our general conditions.
We were informed by Mr. David Wallace on August 18, 2014
that a determination and recommendation had been made by
yourself regarding this matter. He did not state what that
recommendation was ....
It has now been seven weeks since you made your
recommendation, and more than four months since we
initially submitted on this issue. At this time we respectfully
request that we be informed of the status of this inquiry. Air
Services, Inc[.] is very concerned that this matter has been
possibly overlooked or is not a priority by the government to
be resolved. This is a very important matter that we need to
conclude in the near future. Any information or
communication from you on this matter will be greatly
appreciated.
(R4, tab 54 at 2) A 28 October 2014 email from Mr. Mancilla to CO Belino-Coffeen
suggests that the government had not responded to appellant's 13 October 2014 letter as
of that date (id. at 1).
9. Mr. Mancilla again attempted to contact CO Belino-Coffeen regarding
appellant's REA on 11 November, 14 November, and 19 November 2014 (R4, tab 56).
On 19 November 2014, CO Belino-Coffeen responded by email:
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Mr. Mancilla: Good afternoon, my apologies for being
dilatory in responding to your e-mail. ...
I have reviewed REA submitted by your firm, the supporting
docs provide[ d] have no specifics other than dollar figures.
We could discuss this REA or I could reply declining
submitted REA due to insufficient supporting documents for
contracting office rot [sic] make a decision. I rather discuss it
with you.
(Id. at 1) On 25 November 2014, appellant provided the government with additional
documentation (R4, tab 57).
10. By letter dated 13 January 2015, appellant's counsel wrote to
CO Belina-Coffeen, stating that appellant had submitted an REA for a contracting
officer's final decision (COFD) on 22 May 2014. Appellant's counsel stated that
CO Belina-Coffeen, in a 3 December 2014 email, had promised to issue a decision within
four weeks, but that no decision had been received by appellant. Appellant's counsel
advised the CO that if she failed to issue a final decision by 19 January 2015, appellant
would "deem the claim denied" and appeal either to this Board or to the United States
Court of Federal Claims. (R4, tab 58 at 2) The 3 December 2014 email referenced in the
13 January 2015 letter is not in the record.
11. CO Belina-Coffeen responded to appellant's counsel by email on 13 January
2015, acknowledging receipt and requesting an additional two weeks to "render my final
decision" on the 22 May 2014 REA. Appellant's counsel responded the following day:
"We will look for your final decision on or before February 2, 2015. Thereafter, we will
deem the decision denied and file the appeal." (R4, tab 60)
12. By letter to appellant dated 2 February 2015, CO Belino-Coffeen stated that
upon her review the documents provided by appellant did not support its REA. The CO
advised appellant that, absent additional supporting documentation, she was inclined to
deny the REA. (R4, tab 62 at 4-5)
13. By email to CO Belina-Coffeen dated 5 February 2015, appellant submitted a
revised REA (R4, tab 64). The revised REA reduced the amount sought to $105,888 (id.
at 6). As with the original REA, the revised REA contained a DFARS 252.243-7002
certification, signed by Mr. Iak, which stated: "I certify that the request is made in good
faith, and that the supporting data are accurate and complete to the best of my knowledge
and belief' (id. at 9).
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14. CO Belino-Coffeen issued a 13 February 2015 "Contracting Officer's Final
Decision to Request for Equitable Adjustment (REA) under W91QV1-12-C-0059"
denying appellant's revised REA (R4, tab 66 at 8-20). Although titled a final decision,
CO Belino-Coffeen's decision did not provide appeal rights and stated: "REA is denied
without prejudice to the contractor. Government is open to have Air Services document
submitted for audit by Army Audit Agency to help Air Services better understand
Government's position as to why REA is being denied." (Id. at 20)
15. Appellant appealed CO Belino-Coffeen's decision on 19 February 2015. The
Board docketed the appeal as ASBCA No. 59843.
16. On 22 April 2015, Mr. Mancilla executed a corrected CDA certification on
behalf of appellant (app. opp'n, attach.).
DECISION
The CDA provides that each "claim by a contractor against the Federal
Government relating to a contract shall be submitted to the contracting officer for a
decision." 41 U.S.C. § 7103(a)(l). The linchpin of the Board's jurisdiction over a
contractor claim is the contractor's submission of a proper claim to the CO for a decision.
Puget Sound Environmental Corp., ASBCA Nos. 58827, 58828, 14-1BCA~35,585
at 174,371; MACH II, ASBCA No. 56630, 10-1BCA~34,357 at 169,673. Although the
CDA does not define the term "claim," 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." FAR 2.101. A claim exceeding
$100,000 must be certified in accordance with 41 U.S.C. § 7103(b). We determine
whether a contractor's submission is a CDA claim on a case-by-case basis, applying a
common sense analysis. CCIE & Co., ASBCA Nos. 58355, 59008, 14-1BCA~35,700
at 174,816; Precision Standard, Inc., ASBCA No. 55865, 11-1BCA~34,669 at 170,787.
We may examine the totality of the correspondence between the parties in determining
the sufficiency of a claim. Lael Al Sahab & Co., ASBCA Nos. 58344, 59009, 15-1 BCA
~ 35,809 at 175,129; Vibration & Sound Solutions Ltd., ASBCA No. 56240, 09-2 BCA
~ 34,257 at 169,270.
There is no bright-line distinction between an REA and a CDA claim. A claim
need not be submitted in any particular format or use any particular wording; the
contractor need only submit "a clear and unequivocal statement that gives the contracting
officer adequate notice of the basis and amount of the claim." Contract Cleaning
Maintenance, Inc. v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987). The government
correctly notes that "an REA submitted to a contracting officer may satisfy the
requirements for a claim" (gov't mot. at 4 ). In Reflectone, Inc. v. Dalton, the court
determined that "an REA provides an example of a written demand for payment as a
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matter of right which is not 'a routine request for payment' and, therefore, it satisfies the
FAR definition of 'claim."' 60 F.3d 1572, 1577 (Fed. Cir. 1995) (en bane); see also id.
at 1578 ("Reflectone's REA is clearly '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."'); Zafer Taahhut lnsaat ve Ticaret A.S., ASBCA No. 56770, 11-2 BCA ii 34,841
at 171,3 92 ("The Reflectone decision determined that an 'REA' can serve as a competent
claim."). In this appeal, the government does not contend that appellant's revised REA
fails to meet the FAR definition of a "claim" (see gov't mot. at 4-5; gov't supp. br.
passim), and we are satisfied that the revised REA meets the requirements of a claim in
FAR2.101.
In addition to meeting the FAR definition of a "claim," however, a claim must be
submitted to the CO for a decision. James M Ellett Construction Co. v. United States, 93
F.3d 1537, 1543 (Fed. Cir. 1996). This requires that a claim include a request for a
COFD. M Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1327 (Fed. Cir.
2010). We have held that a contractor's REA rose to the level of a CDA claim where we
have found such a request for a final decision. See, e.g., Zafer, 11-2 BCA ii 34,841
at 171,391-92; Environmental Safety Consultants, Inc., ASBCA No. 54995, 06-1 BCA
ii 33,230 at 164,666; Southern Automotive Wholesalers, Inc., ASBCA No. 53671, 03-1
BCA ii 32,158 at 158,998.
The government argues appellant's revised REA is not a claim because it fails to
request a final decision (gov't mot. at 4-5). Relying on this Board's decision in Certified
Construction Company ofKentucky, LLC, ASBCA No. 58782, 14-1BCAii35,662, the
government contends the DFARS 252.243-7002 REA certification and the lack of an
express request for a COFD render appellant's revised REA deficient as a CDA claim
(gov't mot. at 5-6). Although the government acknowledges appellant's counsel's
communications with the CO, the government maintains that the references to a final
decision in those communications relate to the original REA, not the revised REA (gov't
mot. at 5).
Reviewing the totality of the parties' correspondence, we find that appellant
sought a final decision on its revised REA. The government is correct that appellant's
revised REA does not itself explicitly request a COFD. A request for a final decision
need not be explicit, however, but may be implied from the context of the submission.
Rex Systems, Inc. v. Cohen, 224 F.3d 1367, 1372 (Fed. Cir. 2000); Ellett, 93 F.3d at 1543;
Transamerica Insurance Corp. ex rel. Stroup Sheet Metal Works v. United States, 973
F.2d 1572, 1576-77 (Fed. Cir. 1992). To the extent that appellant's original 22 May 2014
REA did not indicate, either expressly or implicitly, that appellant was seeking a final
decision, appellant subsequently corrected that defect. Appellant's counsel's 13 January
2015 letter to CO Belino-Coffeen unmistakably indicated that appellant was seeking a
final decision on its REA (SOF ii 10). CO Belino-Coffeen's response acknowledged that
appellant was seeking a final decision and requested an extension of time in which to
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render a final decision. Appellant's counsel's reply stated that it expected a final decision
by 2 February 2015. (SOF ,-r 11) Rather than issue a final decision by that date,
CO Belino-Coffeen issued a 2 February 2015 letter indicating that she was inclined to
deny appellant's REA absent additional information (SOF ,-r 12). Appellant submitted its
revised REA in response to that letter (SOF ,-r 13). Contrary to the government's position,
in light of the earlier request for a final decision, we find nothing in this series of
communications to suggest that appellant was no longer seeking a final decision when it
submitted its revised REA. See Transamerica, 973 F .2d at 1578 {"This court is loathe to
believe that in this case a reasonable contractor would submit to the contracting officer a
letter containing a payment request after a dispute had arisen solely for the contracting
officer's information and without at the very least an implied request that the contracting
officer make a decision as to entitlement.").
The government places undue weight on the fact that appellant's revised REA
contained a DFARS REA certification rather than a CDA certification. In Certified
Construction, upon which the government relies, we first found that the contractor did
not explicitly or implicitly request a final decision in the letter at issue. Certified
Construction, 14-1BCA,-r35,662 at 174,572. We then noted that the letter referred to
itself as an REA, and contained a DFARS REA certification. Id. Reviewing the totality
of the record, we found that at all points after the submission of the REA the contractor
did not treat the letter as a claim until the government raised a statute of limitations
defense on appeal. Id. Accordingly, we held that the contractor had not submitted a
claim until the contractor's subsequent letter that explicitly requested a final decision and
included a proper CDA certification. Id. In reaching that conclusion, the certification
provided by the contractor was one piece of evidence in determining whether a proper
CDA claim had been submitted. Although the certification provided was relevant to our
decision, we did not hold that the presence of a DFARS REA certification is outcome
determinative and precludes a finding that a contractor submitted a CDA claim or
implicitly requested a final decision.
The record in this appeal does not support the inference that by submitting its
revised REA with a DF ARS REA certification appellant intended its revised REA to not
be a CDA claim. In arguing that appellant's revised REA was not a CDA claim, the
government asserts that "[o]ne of the contracting officers e-mailed appellant with
instructions for submitting a claim and an REA and asked appellant to clarify whether it
was submitting an REA or a claim" (gov't mot. at 5). While CO Wallace's 7 May 2014
email stated that a claim should be submitted under FAR 52.233-1 and an REA under
DFARS 252.243-7002 (SOF ,-r 3), appellant's response indicates that it did not understand
CO Wallace's instruction (SOF ,-r 5). CO Belino-Coffeen's 8 May 2014 email then
directed appellant to certify its "claim/REA" pursuant to DFARS 252.243-7002(b) (SOF
,-r 6). Accordingly, appellant's certifying its revised REA in accordance with
DFARS 252.243-7002(b), per CO Belino-Coffeen's instruction, does not suggest that
appellant did not intend its revised REA to be a CDA claim.
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This does not end our jurisdictional analysis. Appellant's revised REA exceeded
$100,000 and was therefore required to be certified in accordance with 41 U.S.C.
§ 7103(b). Section 7103(b)(l) requires a contractor to certify that:
(A) the claim is made in good faith;
(B) the supporting data are accurate and complete to
the best of the contractor's knowledge and belief;
(C) the amount requested accurately reflects the
contract adjustment for which the contractor believes the
Federal Government is liable; and
(D) the certifier is authorized to certify the claim on
behalf of the contractor.
The contract's Disputes clause, FAR 52.233-1, implements the CDA certification
requirement and prescribes specific certification language. Certification in accordance
with the CDA, where required, is a precondition to this Board's jurisdiction. HEB
International Logistics, ASBCA No. 59448, 15-1BCAif35,917 at 175,579. Absent such
certification, the Board lacks jurisdiction to entertain an appeal. GSC Construction, Inc.,
ASBCA No. 59401, 15-1BCAif35,887 at 175,445. A defective certification, however,
does not deprive the Board of jurisdiction, although it must be corrected prior to a final
judgment. 41 U.S.C. § 7103(b)(3); Bizhan Niazi Logistic Services Co., ASBCA
No. 59205, 14-1 BCA if 35,703 at 174,827.
In Advanced Engineering & Planning Corp., ASBCA Nos. 53366, 54044, 03-1
BCA if 32, 157, we reserved the question of whether a DFARS REA certification is
correctable under the CDA. 1 03-1BCAif32,157 at 158,994. In this appeal, the
government does not challenge the curability of appellant's DFARS REA certification,
stating that appellant's "certification does appear to meet the standard for a defective
certification that may be corrected" (gov't mot. at 4). However, we have a duty to assure
ourselves that we have jurisdiction to entertain an appeal, even where the parties have not
raised an issue. Macro-Z Technology, ASBCA No. 56711, 14-1BCAif35,712
at 174,859, aff'd, Macro-Z Technology v. Mabus, 793 F.3d 1375 (Fed. Cir. 2015).
Accordingly, we address whether a DFARS REA certification, submitted with an
otherwise proper claim, may be corrected under the CDA.
1
In Advanced Engineering, we held that the contractor's REA, which contained a
DFARS 252.243-7002 certification, was not certified in accordance with the CDA.
03-1BCAif32,157 at 158,994. However, the contractor there had disavowed that
its REA was a CDA claim and did not seek to correct its certification. Id.
at 158,992-94. We therefore did not consider whether a DFARS certification
could ever be considered a defective but correctable claim certification under the
CDA. Id. at 158,994.
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In determining whether a certification is defective but correctable under the CDA,
we consider whether the flaws in the attempted certification "are so significant that,
rather than treat the certification as 'defective' ... we must effectively conclude that no
certification was submitted." Western Plains Disposal, ASBCA No. 56986, 11-1 BCA
~ 34,617 at 170,613 (quoting SAE!Americon-Mid-Atlantic, Inc. v. General Services
Administration, GSBCA No. 12294, 94-2 BCA ~ 26,890 at 133,852). In Western Plains
Disposal, we considered whether a Certificate of Current Cost or Pricing Data pursuant to
FAR 15.406-2(a) was correctable under the CDA. 11-1 BCA ~ 34,617 at 170,613. The
certification at issue in Western Plains Disposal stated, in pertinent part: "This is to
certify that, to the best of my knowledge and belief, the cost or pricing
data ... submitted .. .in support of Equitable Reimbursement and Cost Adjustment are
accurate, complete, and current as of August 23rd, 2009." Id. at 170,612 (explanatory
notes omitted). Relying on the GSA Board's decision in SAE/Americon-Mid-Atlantic,
which determined that a Certificate of Current Cost or Pricing Data made the second
assertion required by the CDA and was therefore not tantamount to the absence of a
certification, 94-2 BCA ~ 26,890 at 133,852, this Board held that the Certificate of
Current Cost or Pricing Data "was a defective but correctable CDA certification."
Western Plains Disposal, 11-1BCA~34,617 at 170,613. Our holding in Western Plains
Disposal compels the same result in this appeal. The DF ARS REA certification provided
by appellant in this appeal (SOF ~ 13) makes both the first and second attestations
required by 41 U.S.C. § 7103(b)(l). It would be anomalous to hold that a Certificate of
Current Cost or Pricing Data is correctable under the CDA, but find appellant's
certification uncorrectable where it meets one more prong of a proper CDA certification
than the Certificate of Current Cost or Pricing Data. Accordingly, we hold that
appellant's DFARS 252.243-7002 REA certification is correctable under 41 U.S.C.
§ 7103(b)(3). 2
CONCLUSION
The government's motion to dismiss for lack of jurisdiction is denied.
Dated: 22 October 2015
MARK A. MELNICK
Administrative Judge
Armed Services Board
of Contract Appeals
(Signatures continued)
2
We note that appellant has corrected its defective certification (SOF ~ 16).
10
I concur . /. I con~
~,,/f #~ -- [b<\--.L-+--
~N~LE~ RICHARD SHACKLEFORD
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 59843, Appeal of Air
Services, Inc., rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
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