ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of--
Parsons Government Services, Inc. 
Under Contract No. M67854-09-D-8000 
APPEARANCES FOR THE APPELLANT: 
) 
) 
) 
) 
) 
APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 60663 
Michael R. Rizzo, Esq. 
Mary E. Buxton, Esq. 
Pillsbury Winthrop Shaw Pittman LLP 
Los Angeles, CA 
Ronald J. Borro, Esq. 
Navy Chief Trial Attorney 
Anthony K. Hicks, Esq. 
David B. Stinson, Esq. 
Trial Attorneys 
OPINION BY ADMINISTRATIVE JUDGE O'SULLIVAN 
ON THE GOVERNMENT'S MOTION TO DISMISS 
FOR FAILURE TO STATE A CLAIM 
Parsons Government Services, Inc. (Parsons) appeals from a deemed denial of a 
$20,899,704 claim asserting that the government incorrectly expended operation and 
maintenance (O&M) funds instead of military construction (MILCON) funds and thus 
the contract should be considered void ab initio, allowing Parsons to recover in 
quantum meruit. The government moves to dismiss for failure to state a claim upon 
which relief can be granted. We grant the motion and dismiss the appeal. 1 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
1. On 18 March 2009, the government awarded Contract No. M67854-09-D-8000 
(contract) 
to Parsons Infrastructure & Technology Group2 for Military Operations in 
Urban Terrain (MOUT) training systems for the United States Marine Corps (R4, tab 1). 
1 ASBCA No. 60663 is consolidated with ASBCA No. 60662. The motion pertains to 
ASBCA No. 60663 only. 
2 By contract Modification No. P00006 dated 10 June 2009, the contractor name was 
changed from "Parsons Infrastructure & Technology Group" to "Parsons 
Government Services, Inc." (R4, tab 7). 

The contract was a requirements contract and included a five-year ordering period 
(id. at 1043, 1126-27). 
2. By letter dated 16 October 2015, Parsons 
submitted a certified claim 
of $20,899,704 to the contracting officer alleging that the government should have 
awarded the contract as a construction contract appropriating MILCON funds instead 
ofa supply and services contract using O&M funds (app. supp. R4, tab 2 at 39, 41). 
Parsons alleges that because of this, "the contract should be rescinded as a matter 
of law and Parsons is entitled to quantum meruit on its fixed-price work - i.e., the 
actual cost of the work Parsons performed on firm-fixed price tasks plus a reasonable 
profit on that actual cost" (id.). 
3. By letter dated 19 October 2015, Parsons submitted a second certified claim 
for $16,478,454 to the contracting officer alleging that the government materially 
breached the requirements provisions of the contract by awarding work to other 
companies, constructively changing the contract by awarding out of scope work, 
refusing to pay for concrete, and delaying and interfering with Parsons' performance 
(app. supp. R4, tab 3). 
4. On 6 July 2016, Parsons filed its appeals from deemed denials of its claims 
dated 16 and 19 October 2015. The appeal from the deemed denial of the claim dated 
19 October 2015 was docketed as ASBCA No. 60662. The appeal of the deemed 
denial of the claim dated 16 October 2015 was docketed as ASBCA No. 60663. 
ASBCA Nos. 60662 and 60663 were subsequently consolidated. The government's 
motion to dismiss for failure to state a claim upon which relief can be granted only 
encompasses ASBCA No. 60663. 
DISCUSSION 
The government moves to dismiss this appeal for failure to state a claim upon 
which relief can be granted. The government argues that Parsons failed to put forth 
facts and allegations which would entitle it to a legal remedy, that the federal statute 
which was allegedly violated provides no private cause of action, and that judicial 
invalidation of a fully performed contract is generally disfavored. Parsons disputes the 
government's arguments and states that both of its causes of action, that the contract 
was illegal and is void ab initio and that the government breached the duty of good 
faith and fair dealing, state a claim upon which relief can be granted. Parsons requests 
an opportunity to amend its complaint should we agree with the government that 
Parsons fails in its claim to state a ground upon which relief can be granted. 
Parsons' claim states that the predecessor to the contract at issue in this appeal 
was funded with MILCON funds (app. supp. R4, tab 2 at 44). Parsons alleges that 
since its contract was not funded with MILCON funds it "eliminated Congress' ability 
2 

to authorize and appropriate the work and perform its oversight and resulted in a 
contract that did not include the proper terms, such as those requiring Davis Bacon Act 
wage determinations 3 and FAR clauses applicable to apprentices and disputes in labor 
standards" (id. at 45). Parsons then states that since the contract required construction 
work and was not 
funded with MILCON funds, that the contract was tainted by the 
illegality and is thus void ab initio and Parsons should be able to recover in quantum 
meruit (id. at 50). In Parsons' complaint, it alleges 
that the government breached the 
contract by using O&M funds instead of MILCON and as a result "it was not fully 
compensated for construction work it performed" (comp I. ~ 50). Parsons fails to 
explain in its complaint how the use of O&M versus MILCON funds led to its not 
being "fully compensated" for its work. 
Parsons' response to the government's motion to dismiss further elaborates on 
Parsons' claim. Parsons argues in its response that by using O&M funds instead of 
MILCON, the government "induced Parsons to perform a different type of contract 
than that solicited and prevented Parsons from realizing its reasonable expectations" 
(app. resp. at 4). Parsons also states that it suffered "direct and actual harm" by 
performing the work under a contract funded by O&M funds since the "Marine Corps 
materially changed Parsons' design requirements, accelerated its responsibilities, 
and delayed and interfered with work execution during 
delivery order performance" 
(id. at 5-6). Of note, Parsons states that this direct and actual harm is the subject of its 
claim arising under the same contract, currently appealed and docketed as ASBCA 
No. 60662 (id. at 6). Parsons also asserts, for the first time in its response, that the 
government breached the contract and violated the implied duty of good faith and fair 
dealing by depriving Parsons of its reasonable expectations that the contract would 
have the necessary Congressional oversight and more stringent terms consistent with a 
MILCON-funded contract (id. at 7-8). 
Dismissal for failure to state a claim upon which relief can be granted is 
appropriate where the facts asserted in the complaint do notentitle the claimant to a 
legal remedy. Lindsay v. United States, 295 F.3d 1252, 1257 (Fed. Cir. 2002). The 
Board will grant a motion to dismiss for failure to state a claim when the complaint 
fails to allege facts plausibly suggesting (not merely consistent with) a showing of 
entitlement to relief. Cary v. United States, 552 F.3d 1373, 1376 (Fed. Cir. 2009) 
(citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 557 (2007)). 4 In deciding a 
motion to dismiss for failure to state a claim, "the court must accept well-pleaded 
3 By contract Modification No. P00005 dated 10 June 2009, the government modified 
the contract to add Davis-Bacon Act wage determinations (R4, tab 6). 
4 While the Federal Rules of Civil Procedure do not apply to proceedings before the 
Board, we may look to them for guidance, particularly in areas not addressed by 
our own rules. Dennis Anderson Constr. Corp., ASBCA Nos. 48780, 49261, 
96-1BCA~28,076 at 140,188. 
3 

factual allegations as true and must draw all reasonable inferences in favor of the 
claimant." Kellogg Brown & Root Services, Inc. v. United States, 728 F.3d 1348, 1365 
(Fed. Cir. 2013). In this review, "[w]e decide only whether the claimant is entitled to 
offer evidence in support of its claims, not whether the claimant will ultimately prevail." 
Matcon Diamond, Inc., ASBCA No. 59637, 15-1 BCA ii 36,144 at 176,407. The scope 
of our review is limited to considering the sufficiency of allegations set forth in the 
complaint, "matters incorporated by reference or integral to the claim, items subject to 
judicial notice, [and] matters of public record." A&D Auto Sales, Inc. v. United States, 
748 F.3d 1142, 1147 (Fed. Cir. 2014) (citing SB CHARLES ALAN WRIGHT & ARTHUR R. 
MILLER, FEDERAL PRACTICE AND PROCEDURE§ 1357 (3d ed. 2004)). For purposes of 
assessing whether an appeal before us states a claim upon which relief can be granted, 
the primary document setting forth the claim is not the complaint, per se, but the 
contractor's claim submitted to the contracting officer. Lockheed Martin Integrated 
Systems, Inc., ASBCA Nos. 59508, 59509, 17-1 BCA i\ 36,597 at 178,281. 
The government primarily relies on United Pacific Insurance Company v. 
United States, 464 F.3d 1325 (Fed. Cir. 2006), in support of its motion to dismiss. In 
United Pacific, the plaintiff-appellants were Miller Act sureties on a government 
construction project who argued that the contract entered into with the government 
was illegal and thus void due to fiscal law violations and sought recovery in quantum 
meruit. Id. at 1326. The Federal Circuit held that neither statute in issue (10 U.S.C. 
§§ 2805, 2811) provided for invalidation of contracts which violated its provisions. 
United Pacific, 464 F.3d at 1330. The Federal Circuit also held that its en bane 
opinion in American Telephone and Telegraph Co. v. United States, 177 F.3d 1368 
(Fed. Cir. 1999) (en bane) ("AT&T III") was dispositive ofUnited Pacific's appeal. 
United Pacific, 464 F .3d at 1331. 
In AT&T Ill, the government failed to comply with a statute's requirements 
before entering into a fixed-price contract for the development of a major system or 
subsystem exceeding $10 million. AT&T Ill, 177 F.3d at 1369. The Federal Circuit 
held that "(i]nvalidation of the contract is not a necessary consequence when a statute 
or regulation has been contravened, but must be considered in light of the statutory 
or regulatory purpose, with recognition of the strong policy of supporting the 
integrity of contracts made by and with the United States." AT&T Ill, 177 F.3d at 1374. 
The court further stated that "the policy underlying the enactment must be considered in 
determining the 
remedy for its violation, when the statute itself does not announce 
the sanction of contract invalidity." Id. Our cases also hold that "[i]llegal acts 
by a Government contracting agent do not alone taint a contract and invoke 
the 
void ab initio rule." United Technologies Corp., ASBCA No. 46880 et al., 95-1 BCA 
ii 27,538 at 137,230, recon. denied, 95-2 BCA ii 27,698 (citing Godley v. United States, 
5 F.3d 1473, 1476 (Fed. Cir. 1993)). 
4 

The Federal Circuit has held that "[t]he primary intent of a statute or regulation 
must be to protect or benefit a class of persons in order for that class to be able 
to bring suit against the government for violating the statute or regulation." 
Cessna Aircraft Co. v. Dalton, 126 F.3d 1442, 1451 (Fed. Cir. 1997). Furthermore, 
"if the primary intended beneficiary of a statue or regulation is the government, then 
a private party cannot complain about the government's failure to comply with 
that statute or regulation, even if that party derives some incidental benefit from 
compliance with it." Id. at 1451-52. The Federal Circuit in United Pacific found 
that the purposes behind 10 U.S.C. §§ 2805 and 2811 was "agency flexibility 
through decentralization, as well as the limitation of spending and waste through 
Congressional oversight," not to enable contractors to assert a private cause of action. 
United Pacific, 464 F .3d at 1331. The court rejected United Pacific's attempts to 
distinguish the holding in AT&T III, and affirmed the dismissal for failure to state a 
claim. 
Parsons in this appeal cites generally to 10 U.S.C. §§ 2801 et. seq. as requiring 
major construction to be funded by MILCON funds and 10 U.S.C. §§ 2801, 2802, and 
2805 as requiring notice to Congress and approval for all military construction projects in 
excess of$3 million (compl. ~~ 17, 36). Parsons' claim also makes the same arguments 
(see app. supp. R4, tab 2 at 48-50). Section 2805 was held in United Pacific not to 
contemplate a private cause of action, and Parsons has not drawn our attention to any 
language in the other two statutes it cites that might dictate a different result. 
Both of Parsons' causes of action in this appeal are rooted in the alleged fiscal 
law violations 5• We find United Pacific to be controlling here. We do not think that 
Parsons can "prove any set of facts in support of its claim that would entitle it to relief." 
Great Lakes Dredge and Dock Company, ASBCA Nos. 53929, 54266, 04-1 BCA 
~ 32,518 at 160,862 (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). For that 
reason, we deny Parsons' request to be allowed to amend its complaint. 
5 Parsons' claim did not set forth the argument that the government breached the 
contract by violating the implied duty of good faith and fair dealing (SOF ~ 2). 
Under the Contract Disputes Act, the Board has jurisdiction over disputes based 
upon claims that a contractor has first submitted to the contracting 
officer for 
decision and lacks jurisdiction over claims raised for the first time on appeal, in 
a complaint or otherwise. 41 U.S.C. §§ 7103-7105. Because we find Parsons' 
breach claim is rooted in the alleged fiscal law violation, we need not consider 
this jurisdictional issue. 
5 

CONCLUSION 
The government's motion is granted and the appeal is dismissed with prejudice 
for failure to state a claim upon which relief can be granted. 
Dated: 3 May 201 7 
I concur 
/ MARK N. STEMPLER 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
LYND~Lt/tfo 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I concur 
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. 60663, Appeal of Parsons 
Government Services, Inc., rendered in conformance with the Board's Charter. 
Dated: 
6 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals