Scot Cardillo dba Engineers Tooling Support ( 2022 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of - )
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Scot Cardillo dba Engineers Tooling ) ASBCA No. 62051Support )
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Under Contract No. N00174-11-D-0004 )
APPEARANCE FOR THE APPELLANT: Matthew J. McGrath, Esq.
The McGrath Law Group, LLC
Washington, DC
APPEARANCES FOR THE GOVERNMENT: Craig D. Jensen, Esq.
Navy Chief Trial Attorney
Sharon G. Hutchins, Esq.
Trial Attorney
OPINION BY ADMINISTRATIVE JUDGE WITWER
ON THE GOVERNMENT’S MOTION TO DISMISS
This appeal involves a government claim for the return of government-
furnished property (GFP). The contracting officer’s final decision from which the
appeal was taken has been rescinded. Accordingly, respondent, the Naval Surface
Warfare Center (Navy or government), moves to dismiss the appeal as moot.
Appellant, Scot Cardillo dba Engineers Tooling Support (ETS), objects to dismissal on
several grounds, none of which provide a basis for the Board to retain jurisdiction over
the appeal. The government’s motion is granted, and we dismiss the appeal for lack of
jurisdiction as moot.
STATEMENT OF FACTS FOR PURPOSES OF THE MOTION
In November 2010, the Indian Head Division of the Naval Surface Warfare
Center awarded Contract No. N00174-11-D-0004 to ETS for the fabrication, inspection,
and delivery of primer cups and anvils (R4, tab 1.1 at 96, 127). The contract specified
that the Navy would provide the production equipment and raw material required for
fabrication (id. at 127), and included a list of government-furnished equipment and
material, including the tool and die sets at issue here (id. at 130-31, 156-57).
After approximately five years of performance, the Navy terminated the contract
for the convenience of the government with an effective date of November 3, 2015
(R4, tab 1.3 at 262). The Navy instructed ETS to return all GFP, including the tool and
die sets (id. at 262-64). In February 2016, ETS returned some equipment to the Navy
(R4, tab 2 at 401). After inspecting the equipment, however, the Navy determined that
ETS failed to return all GFP provided under the contract (id. at 401-08). In particular,
the Navy alleged that ETS failed to return numerous components of the tooling and die
sets (id.). Accordingly, in letters dated March 9 and November 4, 2016, the Navy
demanded that ETS return the GFP (id.).
On April 10, 2019, the contracting officer issued a final decision (COFD)
asserting a government claim against ETS in the amount of $21,347 for GFP the Navy
asserts ETS failed to return (R4, tab 2 at 400). ETS timely appealed the decision to the
Board and requested that the COFD “be set aside, with no monies owed” (compl. at 5). 1
On January 23, 2021, three days prior to the hearing scheduled in this appeal,
ETS returned additional equipment to the Navy. (See gov’t mot. at 3; app. notice to
Bd. dtd. Jan. 25, 2021 at 1) The parties subsequently requested to postpone the
hearing so that the Navy could insect the equipment (gov’t corr. dtd. Jan. 25, 2021).
After inspecting the equipment, the contracting officer rescinded the April 2019 final
decision.
More precisely, in a November 2021 letter to ETS, the contracting officer
stated that, because ETS returned the GFP identified in the two demand letters and
the final decision, the contracting officer had rescinded the final decision (gov’t mot.
ex. 1). Later, in a declaration dated January 11, 2022, the contracting officer stated,
in pertinent part:
14. On 23 January 2021, ETS returned the missing GFP to
[Naval Surface Warfare Center] Indian Head.
15. On 3 November 2021, I issued a letter to ETS
rescinding the COFD because the Government had
completed its examination of the items returned and
determined that ETS had returned the GFP identified in the
references attached to the COFD.
16. I unequivocally withdrew the 10 April 2019 COFD
and demand for payment of $21,347.00 since the missing
GFP had been returned. The Government has no intention
of issuing another COFD seeking payment for, or the
return of, GFP that was the subject of the 10 April 2019
COFD.
(Gov’t reply, attach. 1, Demetrius R. Green decl. dtd. Jan. 11, 2022, at ¶¶ 14-16)
1
Citations to page numbers in the complaint are to the pdf page numbers.
2
As a result of the rescission of the final decision, the Navy moved to dismiss
the appeal as moot on November 12, 2021. On December 12, 2021, ETS opposed
dismissal and, on January 12, 2022, Navy filed a reply in support of its motion.
DECISION
I. The Navy’s Unequivocal Rescission of its Claim Renders the Appeal Moot.
It is well established that when a contracting officer unequivocally rescinds a
government claim, the government’s action moots the appeal, leaving the Board
without jurisdiction to entertain the appeal further. Combat Support Assocs.,
ASBCA Nos. 58945, 58946, 16-1 BCA ¶ 36,288 at 176,974. See also, e.g., Satterfield
& Pontikes Constr., Inc., ASBCA Nos. 59980, 62301, 21-1 BCA ¶ 37,873 at 183,908;
L3 Techs., Inc., ASBCA No. 61811 et al., 21-1 BCA ¶ 37,808 at 183,601-02;
Advanced Powder Solutions, ASBCA No. 61818, 19-1 BCA ¶ 37,425 at 181,897,
aff’d, 831 F.App’x. 501 (Fed. Cir. 2020); Quimba Software, Inc., 19-1 BCA ¶ 37,350at 181,613; FlightSafety Int’l Inc., ASBCA No. 60415, 2018 WL 7200012; URS Fed.
Support Servs., Inc., ASBCA No. 60364, 17-1 BCA ¶ 36,587 at 178,204;
AeroVironment, Inc., ASBCA Nos. 58598, 58599, 16-1 BCA ¶ 36,337 at 177,180-81.
The basis for such a dismissal is the constitutional requirement for “a case or
controversy.” L3 Techs., Inc., 21-1 BCA ¶ 37,808 at 183,602. “Simply stated, a case
is moot when the issues presented are no longer ‘live’ or the parties lack a legally
cognizable interest in the outcome.” Id. (quoting Powell v. McCormack, 395 U.S. 486,
496 (1969)). As the Court of Appeals for the Federal Circuit explained in Ferring B.V.
v. Watson Labs., Inc.-Fla., 764 F.3d 1382 (Fed. Cir. 2014), “[a] case becomes moot
when interim relief or events have eradicated the effects of a defendant’s act or
omission, and there is no reasonable expectation that the alleged violation will recur.”
764 F.3d at 1391 (citing County of Los Angeles v. Davis, 440 U.S. 625, 631 (1979)).
See also Chapman Law Firm Co. v. Greenleaf Constr. Co., 490 F.3d 934, 939 (Fed.
Cir. 2007) (“When, during the course of litigation, it develops that the relief sought has
been granted or that the questions originally in controversy between the parties are no
longer at issue, the case should generally be dismissed.”).
Here, the relief sought by ETS in its complaint, i.e., that the final decision
“be set aside, with no monies owed” (compl. at 5), has been granted by the Navy.
Moreover, there is no reasonable expectation that the Navy will reassert its claim.
In this regard, where the government takes action to rescind or withdraw its claim,
the “threshold inquiry” before the Board is whether the government’s action is
unequivocal. See Satterfield & Pontikes Constr., Inc., 21-1 BCA ¶ 37,873 at 183,908.
We find the Navy’s actions in this matter to be unequivocal.
3
In the November 2021 letter to ETS, the contracting officer rescinded the final
decision and expressly acknowledged that ETS returned the equipment that formed the
basis for the claim (gov’t mot. ex. 1). Thus, the letter reflects the rescission of the
final decision and the elimination of the dispute between the parties that was embodied
within that decision. Relying on the good faith presumption attributable to
government officials, Croman Corp. v. United States, 724 F.3d 1357, 1364 (Fed. Cir.
2013), we find the concession by the Navy, i.e., that ETS returned the GFP, leaves no
reasonable expectation that the dispute will recur in its present form.
The January 2022 declaration executed by the contracting officer provides the
same assurances. In the declaration, the contracting officer, once again, acknowledged
that ETS returned the missing equipment (gov’t reply, attach. 1, Green decl. at ¶¶ 14,
15). Additionally, the contracting officer stated that he “unequivocally withdrew”
the government’s claim and that “[t]he Government has no intention of issuing another
COFD seeking payment for, or the return of, GFP that was the subject of the
10 April 2019 COFD” (id. at ¶ 16). Such language demonstrates a clear and
unambiguous intent not to reassert the claim in the future. We have consistently
dismissed appeals as moot based upon similar representations by the government.
See e.g., L3 Techs., Inc., 21-1 BCA ¶ 37,808 at 183,601; Combat Support Assocs.,
16-1 BCA ¶ 36,288 at 176,973; Lasmer Indus., Inc., ASBCA No. 56411, 09-1 BCA
¶ 34,115 at 168,687-88, aff’d, 360 F.App’x 118 (Fed. Cir. 2010).
In sum, the above-captioned appeal is dismissed as moot because the Navy has
granted the relief requested by ETS and has unequivocally rescinded the government’s
claim. In the remainder of our decision, we address the objections raised by ETS,
none of which we find to have merit.
II. ETS’s Objections Provide No Basis to Retain Jurisdiction Over the Appeal.
ETS raises four objections, which fall within two general categories. In the first
category, ETS questions whether the Navy’s rescission of its claim is sufficiently
unequivocal to render the appeal moot. In the second category, ETS argues that,
even assuming that the rescission of the claim is sufficiently unequivocal, the Navy’s
“action only partially moots the case” (app. opp’n at 1). We address the objections by
category below.
A. ETS Fails to Demonstrate That the Navy’s Actions Are Insufficiently
Unequivocal.
First, ETS argues that the November 2021 letter is insufficient to support
dismissal because “the Government has not unequivocally stated an intent not to
revive its claim against ETS in some form” (app. opp’n at 6, 8 n.10). We need not
address whether such a statement is required to render the appeal moot because,
4
as established above, the contracting officer included such a statement in his
January 2022 declaration. Thus, ETS’s argument is contradicted by the evidence.
ETS’s second argument alleging that the rescission is not sufficiently
unequivocal is difficult to make out. ETS block quotes from a decision of our sister
board, the Civilian Board of Contract Appeals (CBCA), Avue Technologies
Corporation v. Agency for Global Media, CBCA No. 6752 et al., 20-1 BCA ¶ 37,639,
in which the CBCA dismissed as moot three consolidated appeals after the contracting
officer withdrew the final decisions giving rise to the appeals. In its opposition, ETS
does not adequately explain how this decision supports its position (see app. opp’n
at 8-9). 2 Our review of the CBCA’s decision leads us to conclude that the holding
supports the Navy’s position.
Specifically, in Avue Technologies Corporation, the CBCA dismissed as moot
three consolidated appeals. After the filing of the appeals, the government withdrew
all three final decisions and represented that the government no longer wished to
pursue the matter. Like ETS, the appellant objected to dismissal, arguing that the
withdrawals were not sufficiently unequivocal to preclude the parties’ disputes from
being resurrected. Relevant here, in dismissing the appeals over the objection of the
appellant, the CBCA recognized that Boards have routinely dismissed appeals as moot
based upon representations from the government that the government has no intention
of reasserting a demand for payment. Avue Techs. Corp., 20-1 BCA ¶ 37,639at 182,756 (citations omitted). Hence, although the CBCA’s decision is not binding
on us, our dismissal of the instant appeal appears consistent with the CBCA’s holding.
For the above reasons, we conclude that neither argument advanced by ETS
regarding the sufficiency of the Navy’s rescission provides a valid basis to deny the
Navy’s motion to dismiss.
B. ETS Fails to Demonstrate That There Remain Issues for The Board’s
Review.
In the second category of objections, ETS argues that the appeal is not
“entirely” moot for two reasons (app. opp’n at 8). First, ETS argues the appeal is not
entirely moot because its complaint contains “a counterclaim for breach of contract
and lack of due diligence by the contracting officer” (id. at 4). Second, ETS argues
that the appeal is not entirely moot because there are numerous “live” issues that could
2
Parties are reminded that “it is the duty of counsel, not the Board, to advocate for
their respective clients.” Lebolo-Watts Constructors 01 JV, LLC, ASBCA
No. 59740 et al., 21-2 BCA ¶ 37,789 at 183,426. It is not incumbent upon the
Board to become a party’s advocate, to make a case for it, or to divine how a
particular authority may support the party’s position.
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become relevant at some point in the future (id. at 8). As a result, ETS requests that
we find the Navy’s “action only partially moots the case” (id. at 1, 9-10), and that we
consolidate the counterclaim and remaining “live” issues with ASBCA No. 61612,
another appeal involving this contract (id. at 1, 10). 3
With respect to the former argument, although ETS references a “counterclaim”
multiple times in its opposition, ETS never expressly identifies the counterclaim in its
complaint (see id. at 1, 4, 10). After reviewing the complaint, the Board concludes
that the alleged counterclaim is comprised of a single sentence: “Furthermore, the
Government has breached the duty of good faith and fair dealing which extends to the
settlement of claims” (compl. at 5). 4 Even assuming for the sake of argument that
ETS’s counterclaim is well-pled—a questionable proposition at best—the instant
appeal is derived from the government’s claim, embodied in the April 2019 final
decision, for the return of $21,347 worth of GFP. ETS’s affirmative claim against the
Navy is not before us in this matter. 5 Indeed, we lack jurisdiction over claims raised
during our adjudication of an appeal, whether in a complaint or otherwise, that were
not first submitted to the contracting officer for decision in the form of a qualifying
claim under the Contract Disputes Act. ACC Constr. Co., ASBCA No. 56451,
09-1 BCA ¶ 34,037 at 168,351 (citing KAMP Sys., Inc., ASBCA No. 54253,
08-2 BCA ¶ 33,980 at 168,073); Phoenix Petroleum Co., ASBCA No. 42763 et al.,
94-1 BCA ¶ 26,461 at 131,668. Consequently, ETS’s first argument provides no basis
for us to deny the Navy’s motion to dismiss.
ETS’s second argument suffers the same fate. In its opposition, ETS argues
that the appeal is not entirely moot because there are numerous “live” issues that
“could arise in a re-formatted monetary claim against ETS or could otherwise cause
legal prejudice to ETS (such as administrative determinations relating to ETS’s
3
ASBCA No. 61612 stems from a final decision denying a monetary claim submitted
by ETS. ETS refers to ASBCA No. 61612 as the “CDA claim appeal” or the
“CDA case” (app. opp’n at 2, 9).
4
When taken in context, the complaint language reasonably cannot be construed as an
affirmative defense of prior material breach. Nor does ETS contend that it has
asserted such a defense. Even if the complaint language could be construed in
this manner, a request that we rule on the merits of this affirmative defense
would be a request for an advisory opinion, which we decline to provide.
See Combat Support Assocs., 16-1 BCA ¶ 36,288 at 176,974.
5
ETS acknowledges the limited scope of this appeal, stating that “[t]his appeal was
taken from an April 10, 2019, COFD based upon two demand letters issued on
March 9, 2016, and November 4, 2016” (app. opp’n at 3). Nowhere in its
opposition does ETS contend that the appeal is derived from a qualifying claim,
submitted by ETS to the contracting officer, for breach of the duty of good faith
and fair dealing.
6
standing as a responsible contractor for the upcoming re-procurement of the cups and
anvils)” (app. opp’n at 8). 6
As an initial matter, despite ETS’s obvious and continuing interest in these
issues, the issues are no longer “live” because any decision by the Board regarding
these issues cannot affect the rights of the litigants in this appeal. See DeFunis v.
Odegaard, 416 U.S. 312, 316 (1974) (holding that “courts are without power to
decide questions that cannot affect the rights of litigants in the case before them”).
Put another way, a determination by this Board on the issues raised by ETS is no
longer necessary to compel the relief requested by ETS in this appeal, i.e., that the
final decision “be set aside, with no monies owed” (compl. at 5). 7 L3 Techs., Inc.,
21-1 BCA ¶ 37,808 at 183,616 n.12 (citing Massachusetts v. E.P.A., 549 U.S. 497,
547 (2007) (Roberts, CJ, dissenting) (holding that “if ‘case or controversy’ has any
meaning at all, merely symbolic wins, with no formal legal consequence, no matter
how helpful to a party, are not what courts are for”)).
Putting aside the nomenclature ETS uses when referring to these issues,
the more fundamental problem with ETS’s argument is that it deals with hypothetical,
future situations. ETS requests that we issue a ruling on these issues because they
6
ETS identifies the following as “live” issues: (1) “whether the anvil tooling was
defective;” (2) “whether the spent and broken tooling ‘spares’ allegedly given
to ETS were, in fact, abandoned items, per FAR 25.245-1(k);” (3) “whether
ETS was liable for any lost, missing tooling items under FAR 52.245-1(h);”
(4) “whether ETS had an obligation under the contract to replace spent tooling
(which were consumed wear items) at the termination of the contract;”
(5) “whether ETS would be liable for [a] shortfall” between “the residual
tooling items on hand and those allegedly provided to ETS;” (6) “whether ETS
satisfactorily fulfilled its stewardship obligations under the GFP clause;”
(7) “whether ETS can claim title and trade secret rights to certain pieces of the
tooling items” (see app. opp’n at 4-5, 6 n.4, 7-8).
7
Although ETS contends that it requested declaratory relief regarding four of the
alleged “live” issues (app. opp’n at 4-5), its complaint contains no such request.
As we have recently stated, “[i]f a party wants [declaratory relief] it must
explicitly seek it, rather than hoping to obtain it as an incidental consequence
of” other requested relief. L3 Techs., Inc., 21-1 BCA ¶ 37,808 at 183,616 n.11.
Even assuming for the sake of argument that ETS asked for such relief in its
complaint, we are not certain that its appeal of the government’s claim for the
return of GFP would have entitled it to seek such relief. For instance, ETS
contends that it requested a declaratory judgment regarding whether the tooling
was defective (app. opp’n at 4). Such relief, however, would most likely need
to be the subject of an affirmative claim. We need not reach a conclusion on
this matter in any event, as it remains hypothetical.
7
“could arise” in a future claim and “could cause” harm to ETS. The jurisdiction of the
Board, however, is predicated on the existence of a valid claim. Arctic Slope Native
Ass’n. v. Sebelius, 583 F.3d 785, 793 (Fed. Cir. 2009); Weststar Eng’g, Inc., ASBCA
No. 52484, 02-1 BCA ¶ 31,759 at 156,851. ETS identifies no such claim. Thus,
ETS’s request is, in essence, a request for an advisory opinion. Sun Eagle Corp.,
ASBCA Nos. 45985, 45986, 94-2 BCA ¶ 26,700 at 132,790 (where a party requests
adjudication of issues “deal[ing] with hypothetical future situations, there is no case in
controversy, and there is no adversarial litigant [], and [the party] asks for an advisory
opinion”). We are not inclined to provide an advisory opinion on what we might do in
the future if certain events transpire.
III. Procedural Matters
ETS’s opposition also raises a few procedural matters. First, as noted above,
ETS requests that we consolidate its counterclaim and the remaining “live” issues with
ASBCA No. 61612. Because we lack jurisdiction over ETS’s counterclaim and
because there are no remaining live issues to adjudicate, ETS’s request to consolidate
this appeal with ASBCA No. 61612 is denied.
ETS also requests that we order the Navy to supplement the record with “the
factual underpinnings (e.g., the configuration and condition of the tooling when they
were acquired by the Government and also when they were provided to ETS in 2011)”
(app. opp’n at 5 & n.3) and “to disclose the results of [the Navy’s] review [of the
returned equipment] to ETS” (id. at 9 n.12). Because the Navy’s action moots the
appeal and obviates the need for further discovery in this matter, ETS’s request, which
we construe to be a motion to compel, is denied. 8
Lastly, ETS requests that, if the Board dismisses the appeal, we do so “by a
Board Order specifically identifying the non-preclusive impact of the dismissal” (app.
opp’n at 1) (emphasis added). Elsewhere, however, ETS requests that we dismiss the
Navy’s monetary claim with prejudice and indicate that the “preclusive effect is that
the Government may not refile the same $21,347 claim against ETS” (id. at 9-10)
(emphasis added). Although we are at a loss to understand ETS’s precise position
with respect to the nature of the dismissal here, we note that a dismissal of an appeal as
8
To the extent ETS is concerned that dismissal of this appeal will adversely impact its
ability to obtain discovery in ASBCA No. 61612 (see app. opp’n at 9
(contending that dismissal of the appeal will “depriv[e] ETS of the facts that
would support its legal contentions in the CDA case”)), the Board’s dismissal
of this appeal as moot does not impact one way or another discovery that would
be otherwise permissible and appropriate in ASBCA No. 61612. To that end,
any discovery ETS believes necessary to support its direct or rebuttal case in
ASBCA No. 61612 should be pursued in that appeal.
8
moot is without prejudice to its merits. URS Fed. Support Servs., 17-1 BCA ¶ 36,587at 178,204 (citing Combat Support Assocs., 16-1 BCA ¶ 36,288 at 176,974).
CONCLUSION
For the foregoing reasons, this appeal is dismissed as moot.
Dated: June 13, 2022
ELIZABETH WITWER
Administrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
RICHARD SHACKLEFORD J. REID PROUTY
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
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I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 62051, Appeal of Scot
Cardillo dba Engineers Tooling Support, rendered in conformance with the Board’s
Charter.
Dated: June 14, 2022
PAULLA K. GATES-LEWIS
Recorder, Armed Services
Board of Contract Appeals
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