Suh'dutsing Technologies, LLC
Docket: ASBCA 58760
Decision date: 2010-03-26

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of--
Suh'dutsing Technologies, LLC 
Under Contract No. HC1028-10-D-2003 
APPEARANCES FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 58760 
Thomas 0. Mason, Esq. 
Francis E. Purcell, Jr., Esq. 
Christopher J. Kimball, Esq. 
Cooley LLP 
Washington, DC 
William E. Brazis, Jr., Esq. 
DISA General Counsel 
Mark B. Grebel, Esq. 
Colleen M. Eagan, Esq. 
Trial Attorneys 
Defense Information Systems Agency 
Scott Air Force Base, IL 
OPINION BY ADMINISTRATIVE JUDGE O'SULLIVAN 
ON RESPONDENT'S MOTION TO DISMISS WITHOUT PREJUDICE OR 
STAY PROCEEDINGS 
Respondent has filed a motion to dismiss without prejudice or to stay 
proceedings in this appeal. Respondent requests that the Board either dismiss the 
appeal without prejudice pursuant to Board Rule 18, or in the alternative stay the 
appeal for at least six months pending the outcome of a Department of Justice 
investigation into whether false representations of intent to comply with the FAR 
limitation on subcontracting were made in connection with the award of the 
section 8(a) set-aside contract involved in the appeal. Appellant opposes the motion. 
For the reasons stated below, we deny the motion. 
STATEMENT OF FACTS FOR PURPOSES OF THE MOTION 
Contract No. HC1028-10-D-2003 was awarded to Suh'dutsing Technologies, 
LLC (Suh'dutsing), on 26 March 2010 (R4, tab 1). Suh'dutsing is owned by the Cedar 
Band of the Paiute Tribe and participates as a small disadvantaged business in the 
Small Business Administration's (SBA's) 8(a) program (app. supp. R4, tab 24 at 1). 
The claims at issue in this appeal are those of Suh'dutsing's subcontractor, ESCgov, 

Inc. (ESCgov), and ESCgov's subcontractor, SMS Data Products Group, Inc. (SMS) 
(app. supp. R4, tab A). 
DISA awarded the contract 
for implementation and sustainment services in 
furtherance of its requirement to upgrade DISA Computing Services from its existing 
IBM Tivoli Enterprise Console solution to IBM's published upgrade path, which 
included IBM Netcool software (R4, tab 1 at 13). DISA actively worked with IBM 
to 
identify an Alaskan native or tribal 8(a) firm to act as prime contractor so that the 
award would not have to be competed, and Suh'dutsing was identified to DISA by 
IBM (app. stmt. of add'l facts -ii 3).1 
As originally envisioned by DISA in a November 2009 solicitation, the contract 
would have had a one-year base period (implementation phase) with four one-year 
options for sustainment services (app. supp. R4, tab Bl at 1-4). DISA made it clear in 
this 2009 solicitation that it expected the implementation phase to include both the 
acquisition and the installation of the IBM Netcool software (id. at 37-39). The parties 
ultimately negotiated a three-year base period with two option years (app. supp. R4, 
tabs B 17, B 18, B24 at 2; comp I. -ii 26). 
On 27 June 2011, DISA notified Suh'dutsing that it elected not to proceed with 
the sustainment phase of the contract (R4, tab 4). Subsequently, Suh'dutsing 
sponsored a claim on behalf of its subcontractor ESCgov to recover $4,254,430.61 in 
costs occasioned by DISA's alleged constructive termination 
for convenience of the 
contract (including upfront IBM software costs that were to have been recovered over 
the negotiated three-year base period of the contract) and DISA's alleged constructive 
changes to the contract causing both ESCgov and its subcontractor, SMS, to incur 
additional labor costs. This certified claim was submitted to the contracting officer on 
21December2012. (App. supp. R4, tabs A, B, C) On 28 June 2013, appellant filed 
an appeal to this Board from the contracting officer's deemed denial of its claim (R4, 
tab 39) which we docketed as ASBCA No. 58760. 
Following the Board's denial on 28 April 2014 of the government's motion to 
dismiss the appeal for lack of jurisdiction (14-1BCA-ii35,596), the parties engaged in 
written discovery and the government sought and received leave, twice, to amend its 
answer to add additional affirmative defenses. Of note, the most recent amendment, 
1 Previously in this appeal, respondent filed a motion for summary judgment 
accompanied by a memorandum of law, a statement of undisputed material 
facts, and supporting exhibits. In response, appellant filed its opposition and its 
statement of genuine issues of material fact, which included its statement of 
additional facts, and supporting exhibits. On 8 May 2015 respondent filed its 
reply to appellant's opposition, along with a reply to appellant's statement of 
genuine issues of fact, and supporting exhibits. 
2 

for which the Board granted leave on 23 March 2015, adds the affirmative defense that 
appellant misrepresented its intent to abide by the requirement that it perform at least 
50 percent of the cost of labor incurred to perform the contract with its own personnel, 
that the contract would not have been awarded but for the alleged misrepresentation, 
and that therefore the contract is void ab initio. (Second amended answer, affirm. def. 
,-r 22) On 12 March 2015 the government filed its motion for summary judgment, 
based in part on the same affirmative defense. Appellant filed its opposition to the 
motion for summary judgment on 13 April 2015, arguing in part that had the 
government not terminated the contract before the base period had run, Suh' dutsing 
would have been able to satisfy the 50 percent requirement. 
On 15 April 2015, the government filed the motion that is the subject of this 
decision. Appended to the motion was a letter from the office of the United States 
Attorney for the Southern District of Illinois, dated 14 April 2015, stating that the 
office is conducting an investigation under the False Claims Act, 31 U.S.C. 
§§ 3729-3733, regarding "allegations that false claims were submitted or caused to be 
submitted by Suh'dutsing Technologies, LLC to the United States through false 
representations that it would perform at least 50% of the contract cost for personnel." 
Also attached to the government's motion was a Civil Investigative Demand (CID) 
served on the appellant on 30 March 2015 by the Department of Justice (DOJ). The 
CID requests production of all documents produced by appellant in discovery in this 
appeal, and any other written communications regarding the work to be performed by 
appellant, ESCgov, or SMS under the contract at issue in this appeal. 
In order to allow time for the Board to issue a decision on the government's 
motion, the Board stayed the taking of depositions in this appeal until 22 June 2015, 
and rescheduled the hearing to commence 10 August 2015. 
DECISION 
The Board has inherent authority to stay its proceedings. In exercising this 
authority in connection with parallel proceedings, we "weigh competing interests and 
maintain an even balance." Palm Springs General Trading and Contracting 
Establishment, ASBCA No. 56290 et al., 10-1BCA,-i34,406 at 169,867 (citing Public 
Warehousing Company, K.S.C., ASBCA No. 56116, 08-1 BCA ,-i 33,787 at 167,226 
and Landis v. North American Company, 299 U.S. 248, 254-55 (1936)). In exercising 
our discretion, we recognize that, under the Contract Disputes Act, 41 U.S.C. 
§ § 7101-7109, "a contractor is entitled to have a properly asserted appeal litigated 
before, and decided by, the Board." Kellogg Brown & Root Services, Inc., ASBCA 
Nos. 56358, 57151, 11-1BCA,-r34,614 at 170,603 (citing TRW, Inc., ASBCA 
Nos. 51172, 51530, 99-2 BCA ,-r 30,407 at 150,332). 
3 

The factors normally considered by the Board in determining whether to stay 
proceedings in these circumstances include: ( 1) whether the facts, issues, and 
witnesses in both proceedings are substantially similar; (2) whether the ongoing 
investigation or litigation would be compromised by going forward with the case 
before us; (3) the extent to which the proposed stay would harm the nonmoving party; 
and (4) whether the duration of the requested stay is reasonable. Public Warehousing 
Company, 08-1BCA,-r33,787 at 167,227-29; Kellogg Brown & Root Services, 11-1 
BCA ,-r 34,614 at 170,603-05. We also consider whether the government has 
demonstrated a "clear case of hardship or inequity in being required to go forward," 
TRW, 99-2 BCA ,-r 30,407 at 150,332, and whether considerations of judicial efficiency 
counsel in favor of granting a stay. Kaman Precision Products, Inc. formerly dba 
Kaman Dayron, Inc., ASBCA No. 56305 et al., 10-2 BCA ,-r 34,499 at 170,153. 
Similarity 
The government contends that the investigation undertaken by DOJ "involves 
the same parties, Contract, witnesses, documents, and issues as in the appeal," and is 
concerned that if the appeal is not stayed pending the DOJ investigation, "Appellant 
will get free discovery in the False Claims Act litigation [sic]2 by deposing 
Government witnesses in the appeal" (gov't mot. at 2-3). Appellant responds that the 
only issue that appears to be the subject of the DOJ investigation is exactly defined by 
the respondent's recently asserted affirmative defense (i.e., whether Suh'dutsing 
intended to incur 50 percent or more of the labor cost of performing the contract), and 
that the remaining issues in this appeal concern many other facts, documents, and 
witnesses that do not overlap with the DOJ investigation (app. opp'n at 1-2). 
This appeal involves the sponsored claims of appellant's subcontractors for 
unrecovered costs occasioned by DISA's decision not to proceed with the sustainment 
phase of the contract, which appellant argues is a constructive termination for 
convenience of a contract that was supposed to run for at least three years, as well as 
unreimbursed expenses and increased costs resulting from alleged constructive 
changes to the contract by the government. The government decided not to proceed 
with the contract in June of 2011, and the companies involved in this appeal have been 
pursuing a resolution of their contract claims for nearly four years now. The 
investigation, which appears to be of recent origin, does not overlap any issues in this 
appeal except for the one issue introduced by the government's most recently asserted 
affirmative defense, which is only one of many affirmative defenses asserted by 
respondent (24 in all). 
2 The government's references to "litigation" appear mistaken, since at present there is 
only an investigation. 
4 

We conclude respondent has not satisfied this factor. 
Judicial Efficiency 
Respondent argues that proceeding with the appeal would be an inefficient use 
of judicial resources since, if the contract is voided on the basis that it was obtained 
through fraudulent misrepresentations, appellant cannot recover because there will be 
no contract (gov't mot. at 3). Respondent also argues that even if appellant prevails in 
this appeal, the contracting officer cannot pay any amount on the claim "as long as the 
False Claims Act litigation [sic] is pending" (id.). 
The Board has in numerous instances decided whether a contract was awarded 
in reliance on misrepresentations of fact, or due to illegal or fraudulent activity 
established by conviction or unrebutted evidence. If so, the contract is rendered void 
ab initio and the Board will deny recovery. Atlas International Trading Corporation, 
ASBCA No. 59091, 15-1BCA~35,830 at 175,198; Vertex Construction & 
Engineering, ASBCA No. 58988, 14-1 BCA ~ 35,804 at 175,110; Servicios y Obras 
Isetan S.L., ASBCA No. 57584, 13 BCA ~ 35,279 at 173,162-63; C&D Construction, 
Inc., ASBCA No. 38661, 90-3 BCA ~ 23,256 at 116,683-84; National Roofing and 
Painting Corp., ASBCA Nos. 36551, 37714, 90-2 BCA ~ 22,936 at 115,133-34. 
In this case, judicial efficiency counsels that the Board should decide whether 
respondent has established its affirmative defense, because respondent's ability to do 
so depends on the resolution of contract interpretation issues that are within the 
Board's subject matter expertise. Indeed, the essence of respondent's argument is that 
Suh'dutsing did not, and knew it would not, perform 50 percent of the cost of 
personnel on the contract during the implementation phase (first year of the contract), 
which the respondent refers to as "the Contract." (Resp. memo. of law in support of 
mot. for summ. judgment at 11-12) Thus, the government's affirmative defense 
depends in great part on the Board agreeing with the government that its contractual 
commitment was met, and "the Contract" was concluded, at the end of the 
implementation phase. Appellant, however, bases its claims for recovery on its 
position that the parties specifically negotiated a three-year base contract so that the 
upfront cost of the IBM software could be recovered over a greater period of time, thus 
reducing total cost to the government. Appellant's position is that the government 
committed to a three-year contract and was well aware that subcontractor involvement 
would be greater in the first year (implementation phase) due to the requirement that 
the work be done by personnel with expertise in the IBM Netcool software. Once the 
project moved into the two-year sustainment phase, appellant states it would have been 
5 

able to perform more of the contract with its own personnel and thus achieve overall 
compliance with the 50 percent rule.3 
On balance, while we note the government's points, (1) the great disparity 
between the stage this appeal has reached and that of the DOJ investigation, which is 
apparently of recent origin, and (2) the relevance of contract interpretation issues to the 
ultimate success or failure of the government's fraud allegations, cause us to conclude 
that judicial efficiency is best served by proceeding with this appeal. 
Whether the Ongoing Investigation Would Be Compromised 
The government states that, because of the asserted commonality of witnesses, 
documents, and issues, "there is significant risk that the development of the record and 
ultimately the accuracy, efficacy, and finality of future fact findings and rulings by the 
Board will impact the False Claims Act litigation [sic]" (gov't mot. at 2). The 
government is also concerned that if the appeal is not stayed pending the DOJ 
investigation, "Appellant will get free discovery in the False Claims Act litigation [sic] 
by deposing Government witnesses in the appeal" (id. at 3). 
As noted previously, there is no False Claims Act litigation, only an 
investigation. This appeal was docketed on 5 July 2013, and the contractor has been 
seeking a resolution of its contractual claims from the government for nearly four 
years. In addition, we agree with appellant that the overlap between the civil 
investigation and this appeal is relatively circumscribed and limited to whether 
appellant misrepresented its intent to incur 50 percent of the cost of labor to perform 
the contract, whereas numerous other contractual issues are presented for resolution in 
this appeal. 
Significantly, this appeal presents issues of contract interpretation that are 
foundational to the government's affirmative defense and should be decided first, lest 
the cart go before the horse. In that respect, this case is similar to TRW, where we 
found the underlying issues regarding the correctness of TRW' s accounting for 
indirect costs to be within our statutory mandate to determine. TRW, 99-2 BCA 
'ti 30,407 at 150,332. We said that if TR W's treatment of costs was found to be 
incorrect, the district court had jurisdiction to decide whether TRW' s actions were 
fraudulent. Id. 
3 There are additional matters on which the parties disagree that may affect the 
outcome on this issue, including interpretation of the applicable SBA 
regulations and which version of those regulations applies to the appellant's 
contract performance. 
6 

Appellant argues that the government has failed to articulate any harm to the 
investigation from proceeding with the appeal, other than appellant's getting "free 
discovery." Appellant notes that there has been no explanation of how deposing 
government witnesses in this appeal would be detrimental to DOJ' s investigation. We 
agree. If there were a concurrent criminal proceeding, there could be a legitimate 
concern that depositions in this proceeding might be used to circumvent the more 
restrictive rules governing discovery in criminal proceedings. See, e.g., Public 
Warehousing Company KS.C., ASBCA No. 58078, 14-1BCA~35,574 at 174,340. 
That is not a concern here, however. 
We also understand the government to suggest that there could be a danger of 
inconsistent rulings, but we do not see this as a current issue, given the absence of an 
active False Claims Act case involving overlapping issues being litigated concurrently 
in a federal district court. If a forum other than this Board subsequently has litigation 
before it related to the issues in this appeal, it will determine to what extent collateral 
estoppel will apply. 
In summary, we conclude that respondent has failed to "demonstrate a clear 
case of hardship or inequity in being required to go forward." TRW, 99-2 BCA 
~ 30,407 at 150,332. 
Harm to the Nonmoving Party 
Appellant is a small disadvantaged tribal business. The claims in this appeal 
are for a significant sum of money, over $4.25 million dollars. Appellant argues 
against dismissal or stay on the ground that Suh'dutsing and its subcontractors, both 
small businesses, have already spent a great deal of time and money in defending 
against the government's motion to dismiss for lack of jurisdiction and substantially 
completing discovery. If the appeal is dismissed or subjected to a lengthy stay, 
appellant asserts, not only will it further delay resolution on the merits, but there will 
likely be duplication of effort and cost involved in re-starting the appeal, and the 
availability of evidence or witnesses may become an issue. The government, on the 
other hand, asserts that no harm will accrue from "general delay" since interest on the 
claim will continue to accrue. 
We are not convinced that eventual recovery of CDA interest will prevent harm 
to the appellant and its subcontractors. In addition, a hiatus of any length risks the loss 
of witnesses and evidence. No representation has been made by the government that 
the investigation will be concluded within a time certain. If this Board dismisses the 
appeal without prejudice or stays it for a period of time pending completion of the 
DOJ investigation, which is in a very early stage, there is no telling how much longer 
appellant and its subcontractors may be forced to wait for their claim to be 
adjudicated. 
7 

Reasonableness of the Duration of the Stay 
Respondent requests that the appeal be dismissed without prejudice until 
conclusion of the DOJ investigation and any resulting litigation. "[A] stay of 
indefinite duration in the absence of a pressing need [is an abuse of discretion]." 
Landis, 299 U.S. at 255. In the context of the likely harm to appellant and the other 
factors discussed above, we find the requested duration to be unreasonable. 
CONCLUSION 
The respondent's motion to dismiss without prejudice or to stay is denied. 
Dated: 18June2015 
I concur 
/!!f!/d~gt;;t-
MARK N. STEMPL R 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
8 
L~T.01 utIVAN 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I concur 
fer 
RICHARD SHACKLEFORD 
Administrative Judge 
Vice Chairman 
Armed Services Board 
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. 58760, Appeal of 
Suh'dutsing Technologies, LLC, rendered in conformance with the Board's Charter. 
Dated: 
9 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals