Board of Contract Appeals
                 General Services Administration
                      Washington, D.C. 20405

                   ___________________________

                    MOTION TO DISMISS DENIED: 
                          April 11, 2006
                   ____________________________


                           GSBCA 15160

             MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY
                   and THE CITY OF MINNEAPOLIS,
                                 
                                         Appellants,
                                 
                                v.

                 GENERAL SERVICES ADMINISTRATION,

                                         Respondent.

    Lawrence A. Moloney of Gray, Plant, Mooty, Mooty & Bennett, P.A., Minneapolis,
MN, counsel for Appellants.

    Robert C. Smith and Mark R. LaFeir, Office of General Counsel, General Services
Administration, Washington, DC; and Paul J. Maxse, Office of Regional Counsel, General
Services Administration, Chicago, IL, counsel for Respondent.

Before Board Judges NEILL, DeGRAFF, and GOODMAN. 

NEILL, Board Judge.

    The General Services Administration  (GSA) has moved that we dismiss this case for
lack of jurisdiction.  For the reasons set out below, we deny the motion to dismiss.  In
bringing this motion to dismiss, GSA has also questioned whether this appeal was timely
filed.  To explore this issue, we authorized limited discovery.  Having reviewed appellants'
response to the Government's discovery requests and the Board's own files, we dismiss the
allegation as unproven. 

                            Background

    On March 19, 1993, GSA, acting on behalf of the Federal Government, entered into
a Development Agreement (the Development Agreement) with the Minneapolis Community
Development Agency (the MCDA) and the City of Minneapolis (the City).  Under the
recitals of the Agreement, it is stated that GSA has been authorized to construct a courthouse
of 300,000 occupiable square feet, plus 225 enclosed parking spaces, in the City of
Minneapolis and that the project will house the United States District and Bankruptcy Courts
and various executive agencies.  GSA is to develop the project, including public plaza
improvements, as a federal construction project through a design/build solicitation under
GSA's competitive source selection procedures.  Appeal File, Exhibit 22 at 1-2.  

    The Development Agreement's recitals further provide that the MCDA will assemble
a development site and the property will be conveyed to GSA by the MCDA for development
of the project.  In addition, the MCDA and the City, by themselves and also in cooperation
with GSA, are to carry out certain additional development activities in conjunction with the
project.  This includes structured parking facilities as well as tunnel and skyway connections
on and around the project site.  Id.  

    The recitals to the Development Agreement also envision the issuance of bonds by
the City, pursuant to its port authority powers, to cover the costs of land acquisition, parking
facilities, tunnel and skyway construction, and a direct financial contribution to GSA to
defray a portion of the cost of the project related to the structured parking and public plaza.
Id. at 2.

    Finally, prior to GSA's award of the design/build contract, but after "remediation of
environmental conditions and completion of MCDA's other site preparation responsibilities,"
the MCDA is to convey fee simple title to the property to GSA.  Id. at 3.

    Section 4.03 of the Development Agreement provides additional information
regarding the above-cited "remediation of environmental conditions."  It reads: 

    The MCDA acknowledges the existence on the Property[,] as of the date of
    this Agreement[,] of an adverse environmental condition consisting of
    petroleum hydrocarbons discovered in the course of initial soil testing.  Prior
    to conveyance of the Property to GSA[,] the MCDA shall assure remediation
    of all adverse environmental conditions theretofore identified by MCDA, the
    City or GSA.  At closing[,] the MCDA will deliver an undertaking to hold
    harmless and defend GSA from liability in connection with the existence or
    remediation of adverse environmental conditions theretofore identified by
    MCDA, the City or GSA.         

Appeal File, Exhibit 22 at 25.  

    On January 14, 1994, the parties amended the original Development Agreement.  By
then, it was clear that the completion of remediation of the contaminants had become a
serious problem and posed a threat to the timely conveyance of the project site to GSA and
to the commencement of construction.  Appeal File, Exhibit 46.     

    Under the amended Development Agreement, the MCDA agreed to remain
responsible for: (1) remediation of the soil contamination already known to exist at the
project site; (2) remediation of the soil contamination identified, after amendment of the
agreement, as a result of excavation of the property by GSA's design/build contractor;  and
(3) remediation of the soil contamination identified as a result of the implementation of
remediation.  GSA, for its part, agreed to advise its design/build contractor of the
environmental condition of the property and promptly, upon award of the construction
contract, to request the contractor to develop a remediation plan.  Appeal File, Exhibit 46
at 3.

    Under the amended Development Agreement, it was further agreed that a contract
modification for the design of a remediation plan would be issued and, upon approval of the
plan by the state pollution control agency, GSA would issue a contract modification to the
contractor to effect the remediation efforts in conjunction with the excavation and foundation
phase of construction.  The MCDA agreed to pay the cost of this modification.  Appeal File,
Exhibit 46 at 5.

    To expedite the remediation effort, the amended Development Agreement also
provided that GSA could issue the contract modification on a "Price-To-Be-Determined"
basis with a ceiling price to be set by GSA and paid by the MCDA.  It was agreed that GSA
would be liable to the MCDA for any remaining funds advanced by the MCDA but not paid
to the design/build contractor for carrying out the modification.  Any disagreement among
the parties regarding the final contract modification price was to be subject to negotiations
among the parties or subject to resolution pursuant to Article XI, Remedies, of the
Development Agreement.  Appeal File, Exhibit 46 at 5.

    On January 19, 1994, following execution of the amended Development Agreement,
the project site was conveyed to GSA.  Appeal File, Exhibit 50.  Appellants contend that, on
September 19, 1994, after transfer of the property to GSA and GSA's award of the
construction contract, they deposited with GSA $2,420,295.  Complaint   1.  The contracting
officer accepted the money as funding for the cost of the contract modification to be
negotiated with the construction contractor for the remediation effort.  Appeal File, Exhibit
196 at 1.  

    On April 9, 1999, appellants submitted a certified claim for $2,693,055.50.  The claim
is based upon an alleged breach of the Development Agreement, as amended, relative to the
environmental remediation of the project site.  The claim has been denied in its entirety by
the contracting officer.  It is her position that all costs incurred with the corrective
remediation of the project site were reasonable and the sole responsibility of the City and the
MCDA.  Appeal File, Exhibit 258.  

                            Discussion

Jurisdiction

    Two questions present themselves with regard to the fundamental issue here of
whether or not we have jurisdiction to decide this appeal.  The first question stems from a
provision in Article XI of the original Development Agreement.  This article deals with
remedies under the Development Agreement.  Section 11.02 of Article XI addresses "Judicial
Remedies."  This section provides in part: 

         Nothing in Article XI will diminish GSA's right to pursue and resolve
    disputes with its contractors, including, without limitation, the Design/Build
    Contractor, under the Contract Disputes Act of 1978 (Title 41 U.S. Code 
    Sections 601-613) and regulations promulgated thereunder (the "Contract
    Disputes Act").  However, neither the MCDA nor the City shall be deemed a
    "contractor" for purposes of the Contract Disputes Act, and the parties agree
    that neither this Agreement nor any other Project Agreement to which the City
    or the MCDA is a party shall be deemed subject to the Contract Disputes Act. 
    
Appeal File, Exhibit 22 at 46-47. 

    Apparently in recognition of this provision, upon submitting their certified claim to
the contracting officer on April 9, 1999, appellants promptly initiated suit in the United
States Court of Federal Claims claiming that the Court had jurisdiction over the case
pursuant to the Tucker Act, 28 U.S.C.    1346, 1491(a) (1994 & Supp. V 1999).  In reply, the
Government moved for the dismissal of the suit on the ground that the case fell squarely
under the jurisdictional prerequisites of the Contract Disputes Act of 1978 (CDA), 41 U.S.C. 
  601-613 (1994 & Supp. V 1999), which required that there be a contracting officer's final
decision on the claim or that there be a deemed denial of the claim before the claimant could
even file suit.  

    While the Government's motion to dismiss was pending before the Court of Federal
Claims, the contracting officer accorded to the claim filed on April 9, 1999, treatment
normally given to a claim brought under the CDA.  On May 20, she advised claimants that
a final decision would not be issued immediately but would be rendered no later than August
9, 1999.  On that date, the contracting officer issued her decision denying the claim in its
entirety.  The decision advised appellants of their right to appeal under the CDA and
expressly stated that, notwithstanding section 11.02 of Article XI of the Development
Agreement, the Agreement was deemed to be subject to the CDA.  Appeal File, Exhibit 258. 

    By letter dated November 8, 1999, counsel appealed the contracting officer's final
decision to this Board.  Appeal File, Exhibit 259.  In view of this and related events, the
MCDA, the City, and the Government eventually, on December 3, 1999, filed with the Court
of Federal Claims a Stipulation of Dismissal without Prejudice.  The stipulation provided in
part:

    The City, MCDA, and the United States agree that the Tucker Act lawsuit
    should be voluntarily dismissed without prejudice in light of the Government's
    motion to dismiss, the final decision of the GSA contracting officer, and the
    November 11, 1999 appeal.   

Letter from Appellants to the Board (Nov. 10, 2005), Exhibit 3 at 2. 

    The second question that arises with regard to our jurisdiction over this case concerns 
the subject matter of this dispute.  In moving to dismiss this case, GSA relies not only on
language of the Development Agreement, which would place a dispute among the parties
outside the CDA, but also on language in the CDA itself which allegedly places the subject
matter of this dispute beyond coverage of the Act.  

    Given the position taken by the Government in the earlier suit before the Court of
Federal Claims, we find it perplexing that  GSA now argues that the CDA is not applicable
to the claim now before us.  

    The language of the CDA upon which GSA relies concerns the applicability of the Act
to executive agency contracts.  It reads: 

         Unless otherwise specifically provided herein, this chapter applies to
    any express or implied contract (including those of the nonappropriated fund
    activities described in section 1346 and 1491 of Title 28) entered into by an
    executive agency for --

         (1) the procurement of property, other than real property in
         being; 
         (2) the procurement of services;
         (3) the procurement of construction, alteration, repair or
         maintenance of real property; or, 
         (4) the disposal of personal property.  

41 U.S.C.   602(a).

    GSA writes: 

    [T]he agreement was a conveyance of a pre-existing property interest held by
    Appellants to the government that also required Appellants to provide a sum
    of money and remediation of all adverse environmental conditions on the
    property, not to an existing structure.  It did not involve the "procurement of
    construction . . . of real property" as contemplated by the CDA.  41 U.S.C. 
     60[2](a)(3).  As such, the dispute is over the conveyance of a pre-existing real
    property interest and not subject to the CDA and the Board's jurisdiction.   
GSA's Comments Regarding Jurisdiction at 2-3.  

    We find GSA's reading of the Development Agreement unduly narrow.  It is, of
course, true that the agreement provides for the conveyance of a pre-existing real property
interest.  The agreement, however, is multipurpose.  It also provides for tunnel and skyway
construction by the MCDA and the City.  Even more significantly, it calls for the
remediation of the adverse environmental conditions of the property.  In our view, this
commitment on the part of the MCDA and the City can be viewed either as a service to be
provided or an alteration, repair, or maintenance of the real property to be conveyed.  In
either case, this aspect of the agreement, just as the commitment of the MCDA and the City
to provide construction, in our opinion, renders the Development Agreement subject to the
CDA.  See RMI Titanium Co. v. Westinghouse Electric Corp., 78 F.3d 1125, 1129, 1142 (6th
Cir. 1996) (contractual claim related to environmental remediation of premises was "within
exclusive jurisdiction of the CDA").  

    Admittedly, an agreement such as the one before us, which clearly has been entered
into for, among other reasons, the purpose of conveying a real property interest, does pose
a problem with regard to CDA jurisdiction.  In this regard, the Court of Appeals for the
Federal Circuit has provided useful guidance for situations such as this where a contract has
been entered for some purpose in addition to the mere conveyance of a real property interest. 
The Court writes:  

    In view of the conflict posed by this dual-purpose contract, it is necessary to
    examine the nature of the dispute between the parties to resolve the
    jurisdictional issue.

Bonneville Associates v. United States, 43 F.3d 649, 654 (Fed. Cir. 1994).  If the dispute in
question does not relate to the conveyance of the real property interest but to some other
aspect of the contract, then it should be resolved pursuant to the CDA.  Following the
Court's advice in Bonneville, we have examined the nature of the dispute now before us.  

    GSA contends that the dispute is one over the conveyance of a pre-existing real
property interest.  GSA's Comments Regarding Jurisdiction at 3.   We disagree.  The dispute
in this case is not over the conveyance of the real property interest in question.  The
conveyance already took place several years ago.  Rather, the present dispute concerns
provisions in the Development Agreement, as amended, which deal with the liability of the
MCDA and the City for costs associated with their continuing obligation, after conveyance,
to provide remediation of adverse soil conditions known to exist in the property.  Given the
nature of the dispute in this case, therefore, we are persuaded that we have the jurisdiction
either under section 602(a)(2) or (3) of the CDA to resolve it, notwithstanding the mixed
subject matter of the Development Agreement. [Foot # 1 ]  

****************** Footnote Begin **********
[Foot # 1 ]         GSA distinguishes the facts in the Court's ruling in Bonneville from those
in this case on the ground that the dispute in Bonneville involved repairs to a structure on the
premises and not alteration of the terrain itself.  We find the distinction irrelevant, for we can
find no justification for restricting application of section 602(a)(3) of the CDA to structures
permanently attached to real property but excluding application of the same section to the
very terrain from which the structure derives its identity as real property.      
****************** Footnote End ************


    Having concluded that the subject matter of the dispute before us does fall under the
CDA, we turn next to the question of whether the parties may, through mutual agreement to
a provision within their Development Agreement, remove such a dispute from CDA coverage
or applicability.  This they cannot do.  The provision is contrary to law to the extent that it
attempts to limit the reach of the CDA.  It is well settled that a contract provision "cannot
stand" to the extent that it attempts to defeat jurisdiction of the CDA.  Burnside-Ott Aviation
Training Center v. Dalton, 107 F.3d 854, 858 (Fed. Cir. 1997).         


Timeliness

    GSA's concern regarding the timeliness of this appeal rests on the fact that the notice
of appeal was stamped as received by the Board on November 15, 1999.  The elapsed time
between the contracting officer's decision of August 9, 1999, and the date of the Board's
receipt of the notice of appeal, therefore, is said to be ninety-eight days -- eight days more
than the ninety-day period provided under the CDA for appeal of a contracting officer's final
decision.  See 41 U.S.C.   606.  For this reason the Government sought and received from
the Board permission to engage in limited discovery to determine, if possible, the exact date
that appellants received the contracting officer's final decision. 

    In reply to the authorized discovery request, counsel for appellants states that, from
a review of appellants' files, it would appear that the decision was received on August 25,
1999.  The decision was addressed to three individuals, (1) Lawrence Moloney, counsel for
appellants; (2) Keith Ford, Interim Executive Director of the MCDA; and (3) Jay M. Heffern, 
City Attorney.  

    Mr. Moloney's copy of the decision is not date-stamped.  A facsimile cover sheet,
however, found in the files of his law firm, indicates that, on August 25, a copy of the final
decision was sent to the City Attorney's deputy, Mr. Michael Norton.  Mr. Ford's copy of
the decision does have a date stamp showing receipt on August 25.  A handwritten note on
the first page of the letter and personally signed by Mr. Ford indicates that he passed the
letter on to an employee of the MCDA, Nikki Newman, for filing.  

    The explanation and documentation furnished by counsel for appellants in response
to GSA's discovery request presents a persuasive case for August 25, 1999, as the date of
receipt of the contracting officer's decision.  Assuming this to be the date of actual receipt,
even the date on which the Board received appellants' notice of appeal falls within the
ninety-day period for filing an appeal.  However, under the Board's Rules, notice of appeal
is considered filed upon the earlier of (A) its receipt by the Office of the Clerk of the Board
or (B) if mailed, the date on which it is mailed.  A United States Postal Service postmark is
prima facie evidence that the document with which it is associated was mailed on the date
thereof.  Rule 101(b)(5)(i) (48 CFR 6101.1(b)(5)(i) (2005)).  The envelope in the Board's
files, which contained appellants' notice of appeal, bears the postmark: "NOV 08 '99." 
GSA's concerns with the timeliness of this appeal, therefore, remain unsupported.  We find
this appeal to have been submitted well within the ninety days allotted under the CDA for
filing. 





                             Decision

    The Government's motion to dismiss this case for lack of jurisdiction is DENIED. 

                                  
                                             ________________________
                                         EDWIN B. NEILL
                                         Board Judge

We concur: 

_______________________                     _________________________
MARTHA H. DeGRAFF                           ALLAN H. GOODMAN 
Board Judge                                   Board Judge