ESA South, Inc.
Docket: ASBCA 62242, ASBCA 62243
Decision date: 2020-06-09

ARMED SERVICES BOARD OF CONTRACT APPEALS 
 
Appeals of -- ) 
 ) 
ESA South, Inc. ) ASBCA Nos. 62242, 62243 
 ) 
Under Contract Nos.  W9128F-14-D-0014 ) 
W912EP-17-F-0098 ) 
  
APPEARANCE FOR THE APPELLANT: James E. Krause, Esq. 
    James E. Krause, P.A. 
   Jacksonville, FL 
 
APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq. 
  Engineer Chief Trial Attorney 
Susan E. Symanski, Esq. 
 Jorge R. Martinez, Esq. 
    Engineer Trial Attorneys 
   U.S. Army Engineer District, Jacksonville 
 
OPINION BY ADMINISTRATIVE JUDGE MCILMAIL  
ON THE GOVERNMENT’S MOTION TO DISMISS  
FOR LACK OF JURISDICTION 
 
  The government moves to dismiss these appeals for lack of jurisdiction 
because, it says, the appeals involve fraud (that is, the alleged overbilling of the 
government on two contracts for emergency, temporary roofing in the aftermath of a 
2017 hurricane in Florida).  The government points to 41 U.S.C. § 7103(c)(1), which 
states “[t]his section does not authorize an agency head to settle, compromise, pay, or 
otherwise adjust any claim involving fraud” (gov’t mot. at 5).  The government also 
cites an opinion of the United States Court of Federal Claims and another of the 
Civilian Board of Contract Appeals, for its contention that “a contracting officer’s 
final decision is not valid if it is based upon a suspicion of fraud, and, therefore, there 
can be no jurisdiction based upon the CDA [Contract Disputes Act] when a 
contracting officer has a suspicion that a claim involves fraud” (gov’t mot. at 6).  We 
need not decide whether we agree with that contention to decide the government’s 
motion.  The document that the government relies upon and attaches to its January 23, 
2020 motion is a letter—also dated January  23, 2020—from the contracting officer to 
appellant stating: 
 
I will not be issuing contracting officer’s final decisions as 
requested in your Metal Roof Best Practices claim, dated 
September 7, 2018, and your ROE Shortfall claim dated 

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September 25, 2018.  The reason for this is that I have a 
reasonable suspicion that [appellant] made fraudulent 
misrepresentations as to the amount of blue plastic 
sheeting that it installed during the Hurricane Irma blue 
roof mission. 
 
 (Gov’t mot. at 5 ¶ 13) 
 
  These appeals, however, were filed in October 2019, based upon the deemed 
denial of the 2018 claims that the contracting officer references in his letter; the 
government admits that “[t]he contracting officer has not rendered a final decision on 
either of Appellant’s claims” (gov’t mot. at 5 ¶ 11).  We do not agree that the 
contracting officer’s 2020 letter divests us of jurisdiction to entertain these 2019 
appeals.  If it did, the government presumably could defeat any appeal before this 
Board simply by presenting to the Board a letter from the contracting officer written 
after the filing of the appeal articulating the contracting officer’s suspicion that the 
claim underlying the appeal was fraudulent.  We do not agree that section 7103(c)(1) 
goes that far.  Indeed, discussing that section we have said that “[we] have jurisdiction 
under the CDA to decide the contract rights of the parties even when fraud has been 
alleged,” “we possess jurisdiction over an appeal if we do not have to make factual 
determinations of fraud,” and “[t]hat fraud allegedly may have been practiced in the 
drafting or submission of . . . [a] claim does not deprive this Board of jurisdiction 
under the CDA.”  Sand Point Servs., LLC, ASBCA No. 61819, 19-1 BCA ¶ 37,412 at 
181,859 (quoting cases).  The government quotes Case, Inc. v. United States, 88 F.3d 
1004, 1009 (Fed. Cir. 1996), for the rule that “when a contracting officer lacks 
authority to issue a final decision on a claim, there can be no valid deemed denial of 
the claim so as to confer CDA jurisdiction” (gov’t mot. at 7), but that case does not 
involve section 7103(c)(1) (or its predecessor, 41 U.S.C. § 605(a)), much less a 
contracting officer’s post-appeal articulation that a contractor’s claim is suspected to 
be fraudulent.  We do not find that Case controls the outcome here. 
 
  Nor do we find the answer in PROTEC GmbH, ASBCA No. 61161 et al., 18-1 
BCA ¶ 37,010 at 180,244, which the government does not cite but which addresses the 
operation of the phrase “any claim involving fraud.”  There, the government moved to 
dismiss appeals for lack of jurisdiction, arguing that the contracting officer’s final 
decisions were invalid—and thus that we lacked jurisdiction —because the basis for 
denying the claims purportedly was a suspicion of fraud.  Id.  We found that “the 
[contracting officer’s final decisions] were not even based upon a suspicion of fraud,” 
and denied the motions.  Id.  Moreover, here appellant’s claims were not denied; 
rather, the contracting officer never rendered decisions on those claims. 
 
  Finally, the government says that “there is still an ongoing fraud investigation, 
which divests the Board of jurisdiction to consider these appeals” (gov’t reply br. at 2) 

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(footnote omitted), but that is contrary to what we said in Todd Shipyards Corp., 
ASBCA No. 31092, 88-1 BCA ¶ 20,509 at 103,682, in which the government was 
investigating allegations that a contractor had fraudulently charged Navy contracts: 
 
[T]he mere fact that there is an ongoing criminal 
investigation which involves the same contract or contracts 
and claims pending before the Board is not enough to 
divest the Board of jurisdiction if those matters are 
otherwise properly before the Board. 
 
 We said much the same in PROTEC: 
 
[T]he mere fact that there is an ongoing criminal 
investigation which encompasses events which were the 
basis for the contracting officer’s decision being appealed 
is not enough to divest us of jurisdiction. 
 
18-1 BCA ¶ 37,010 at 180,245. 
 
CONCLUSION 
 
The motion is denied. 
 
 Dated:  June 9, 2020 
 
 
 
TIMOTHY P. MCILMAIL 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
 
I concur 
 
 
 
 
 I concur 
 
 
 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
 OWEN C. WILSON 
Administrative Judge 
Vice Chairman 
Armed Services Board 
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 Nos. 62242, 62243, Appeals of 
ESA South, Inc., rendered in conformance with the Board’s Charter. 
 
Dated:  June 10, 2020 
 
 
      
  
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals