Fluor Federal Solutions, LLC ( 2018 )


Menu:
  •               ARMED SERVICES BOARD OF CONTRACT APPEALS
    Appeal of--                                   )
    )
    Fluor Federal Solutions, LLC                  )       
    ASBCA No. 61353
    )
    Under Contract No. N69450-12-D-7582           )
    APPEARANCES FOR THE APPELLANT:                        John S. Pachter, Esq.
    Jennifer A. Mahar, Esq.
    Kathryn T. Muldoon Griffin, Esq.
    Smith Pachter Mc Whorter PLC
    Tysons Comer, VA
    APPEARANCES FOR THE GOVERNMENT:                       Craig D. Jensen, Esq.
    Navy Chief Trial Attorney
    Russell A. Shultis, Esq.
    Todd J. Wagnon, Esq.
    Trial Attorneys
    OPINION BY ADMINISTRATIVE JUDGE CLARKE
    ON JURISDICTION
    We consider if we have jurisdiction over this appeal based on the prerequisite of a
    claim stating a sum certain. Fluor Federal Solutions, LLC (Fluor) submitted a claim having
    a claimed dollar amount derived from an estimate. We conclude that we have jurisdiction
    pursuant to the Contract Disputes Act of 1978 (CDA), 
    41 U.S.C. §§ 7101-7109
    .
    FINDINGS OF FACT
    1. On 13 December 2011 the Navy awarded Contract No. N69450-12-D-7582
    for base operation services at four Navy installations in the Jacksonville, Florida, area
    (R4, tab 1.3). The contract included a base year, four option years and three award
    option years (id. at 3-10). Each year of the contract included a firm-fixed-price (FFP)
    and indefinite-delivery, indefinite-quantity (IDIQ) line item. Of importance to this
    decision is Award Option Year 3 that had an FFP line item priced at $31,374,431.00
    and an IDIQ line item priced at $9,207,208.00 for a total of $40,581,639 (id. at 10).
    2. The contract included an Award-Option Plan, paragraph 6, which read as follows:
    6.0 AWARD-OPTION DETERMINATION
    The primary intent of the award-option incentive is to
    motivate the Contractor to perform the required services in
    such a manner as to warrant the highest possible rating
    during each performance period. All unearned award
    options will be deleted by unilateral modification to the
    contract. Once all award-option periods have been earned
    or deleted by modification, evaluations for the remaining
    performance periods will be conducted in accordance with
    CPARS/ACASS/CCASS, as applicable. A Contractor
    must receive at least a "Satisfactory" rating on each
    individual assessment criteria and a "Very Good" or
    "Exceptional" end-of-period performance rating to be
    eligible for an award-option for the associated performance
    period. "Exceptional" ratings earn twelve (12) months and
    "Very Good" ratings earn six (6) months.
    (App. supp. R4, tab 201 at 5) The Award-Option Assessment Criteria were listed in
    paragraph 10.0 (id. at 7-8).
    3. Award-Option Plan, paragraph 8, reads:
    8.0 A WARD-OPTION PLAN CHANGES
    The ODO [Award-Option Determining Official] may
    unilaterally change the assessment criteria covered in this
    plan, provided the Contractor receives notice of any
    changes at least fifteen (15) calendar days prior to the
    performance period to which the changes apply. Changes
    to this plan that are applicable to a current performance
    period will be incorporated by a bilateral modification
    under the appropriate contract clause.
    (App. supp. R4, tab 201 at 5)
    4. Unilateral Modification No. P00187, dated 4 April 2017, changed
    Award-Option Plan, paragraph 6, as follows:
    The purpose of this modification is to incorporate the
    revised Award Option Plan for available Award Option 3,
    a future performance period. Paragraph 6.0 is revised to
    state "The ODO may make a final assessment to issue a
    unilateral modification awarding a future performance
    period award-option ofup to twelve (12) months for the
    convenience of the Agency, when the contractor has
    2
    obtained a rating of 'Satisfactory."' The revised Award
    Option Plan is hereby incorporated into this modification.
    (R4, tab 2.187 at 2) Modification No. POO 187 listed "FAR 52.243-1 ALT 1 Changes
    Fixed-Price" as the authority for the modification (id. at 1).
    5. By Modification No. P00193, dated 28 June 2017, the Navy exercised
    Award Option 3 with a 12-month period of performance from 1 July 2017 through
    30 June 2018 (R4, tab 2.193 at 1). The modification includes the following:
    1. In accordance with NAVFAC Clause 5252.217-9301
    award option three for the period O1 July 2017 through
    30 June 2018 is exercised.
    Total firm-fixed price (CLIN 0011)        $38,998,932.58
    Total indefinite quantity (CLIN 0012)     $ 9,144,271.00
    Total estimated award option 3 price      $48,143,203.58
    (R4, tab 2.193 at 2) 1
    6. Fluor objected to Modification Nos. P00187 and P00193 and on 25 July 2017
    submitted a certified claim to contracting officer Eric Binderim in the amount of
    $14,814,503 (R4, tab 3). The claim included the following:
    This is a certified claim and request for Contracting
    Officer's Final Decision under the Contract Disputes Act
    (41 USC§§ 7101-09) and the contract's Disputes clause
    (FAR 52.233-1 Disputes (July 2002)). Fluor asserts
    entitlement to its allowable costs of performing Award
    Option 3, plus a reasonable profit. Appendix A provides an
    estimate of the costs to be incurred for the period July 1,
    2017 through June 30, 2018, plus a reasonable profit. The
    total estimated costs, plus profit, for recurring (firm-fixed
    price Contract Exhibit Line Items (ELINs)) and
    non-recurring (Indefinite Delivery/Indefinite Quantity
    (IDIQ) ELINs) work is $62,957,707. This represents an
    estimated increase over the Mod 193 values of$1 l,480,750
    for recurring work and $3,333,753 for non-recurring
    work-a total estimated increase of $14,814,503.
    1
    We do not know why CLINs 0011 and 0012 were listed rather than 0015 and 0016
    and we do not know why CLIN prices were also changed. However, we need
    not sort this out for the purposes of this decision.
    3
    (R4, tab 3 at 1336-37) The $14,814,503 was calculated by subtracting the $48,143,203.58
    for Award Option Year 3 (R4, tab 2.193 at 2) from the estimated cost for performance of
    Award Option Year 3 of$62,957,707. Claim Appendix A presents the calculation of the
    $62,957,707 estimate and is based on Fluor's costs during Option Year 4, 4 July 2016 to
    2 July 2017 (R4, tab 3 at 1381). Fluor contends that the Navy had no authority to issue
    unilateral Modification No. P00187 changing Award-Option Plan paragraph 6 and unilateral
    Modification No. P00193 exercising Award Option Year 3 and consequently Fluor is
    entitled to the allowable costs of performing during that year.
    7. By letter dated 10 August 2017 the Navy asserted that the claim "will require
    an audit from the Defense Contract Audit Agency along with other independent analysis"
    (R4, tab 4).
    8. By letter dated 17 August 2017 Fluor responded to the Navy's 10 August 2017
    letter stating that its claim was "complete as submitted," that the claim's quantum was
    based on an estimate and a DCAA audit was not necessary for the Navy to issue a final
    decision within the statutory 60 days (app. supp. R4, tab 211 ). On 14 September 2017
    the Navy sent Fluor another letter again stating that the claim required DCAA audit and
    that a final decision was expected to be issued by 29 December 2017 (app. supp. R4,
    tab 212). Fluor responded by letter dated 15 September 2017 again objecting to the
    delay in issuing the final decision and indicated it would treat the claim as deemed
    denied (app. supp. R4, tab 213).
    9. On 28 September 2017 Fluor appealed to the Board based on a deemed denial of
    its claim. On 2 October 2017 the Board docketed Fluor's appeal as 
    ASBCA No. 61353
    .
    10. On 8 December 2017 the Board requested the parties' positions on whether the
    claim amount of$14,814,503 qualifies as a sum certain under FAR 2.101. The Board
    inquired on what effect, if any, Fluor' s 17 August 2017 and 15 September 2017 letters had
    on the sum certain question. Both parties agreed that Fluor' s claim satisfied the sum certain
    requirement. The Navy argued, however, that the Board lacked jurisdiction because Fluor's
    claim was complex and required a DCAA audit, therefore, the claim was premature.
    DECISION
    Fluor submitted its certified claim on 25 July 2017 during the first month of
    Award Option Year 3. Fluor calculates its claim value of $14,814,503 by estimating
    how much its costs plus profit would be for performance during A ward Option Year 3
    and subtracting the contract price for Award Option Year 3. A detailed explanation of
    how the estimate was calculated was included with the claim. (Finding 6) The
    $14,814,503 is an unequivocal sum certain and the only question is if the fact that it is
    based on an estimate of costs and profit for Award Option Year 3 poses a jurisdictional
    problem. In Ball Aerospace & Technologies Corp., 
    ASBCA No. 57558
    , 11-2 BCA
    ,r 34,804, we listed qualifications to a numeral amount that defeat its consideration to
    4
    be a sum certain such as: "approximately," "at least," "no less than," "well over," and
    "in excess of." 
    Id. at 171,275
     (citations omitted). "Estimated" is not among the fatal
    qualifications. Indeed, we have frequently accepted estimates in support of a sum
    certain. Government Services Corp., 
    ASBCA No. 60367
    , 16-1 BCA ,i 36,411 at
    177,538, ("The Board has repeatedly held that use of estimated or approximate costs in
    determining the value of a claim is permissible so long as the total overall demand is
    for a sum certain."). We agree with the parties that Fluor's claim states a sum certain
    and merely and appropriately (and permissibly) informs the government that it is based
    upon estimates. We reviewed the 17 August 2017 and 15 September 2017 letters and
    find no reason to change our determination that the claim presents a sum certain.
    Next we consider the Navy's contention that the appeal was premature because the
    Navy desired a DCAA audit before issuing a final decision. Fluor's appeal is based on a
    deemed denial (finding 9). We agree with Fluor's argument that an audit goes to
    quantum and is not needed to assess entitlement (app. surreply hr. at 7). We have held
    that a contracting officer's desire to conduct an audit does not change the status of a
    contractor's claim. Eaton Contract Services, Inc., ASBCA Nos. 54054, 54055, 03-2
    BCA ,i 32,273 at 159,664. We deny the Navy's contention that the appeal is premature.
    CONCLUSION
    Fluor's claim states a sum certain and is not premature. We have jurisdiction.
    Dated: 30 May 2018
    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
    5
    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. 61353
    , Appeal of Fluor
    Federal Solutions, LLC, rendered in conformance with the Board's Charter.
    Dated:
    JEFFREY D. GARDIN
    Recorder, Armed Services
    Board of Contract Appeals
    6
    

Document Info

Docket Number: ASBCA No. 61353

Judges: Clarke

Filed Date: 5/30/2018

Precedential Status: Precedential

Modified Date: 6/11/2018