MOTION TO DISMISS FOR LACK OF JURISDICTION DENIED:
 March 27, 2013
CBCA 3084
SELRICO SERVICES, INC.,
Appellant,
v.
DEPARTMENT OF JUSTICE,
Respondent.
Theodore M. Bailey of Bailey & Bailey, P.C., San Antonio, TX, counsel for
Appellant.
Joshua A. Mandlebaum, Commercial Litigation Branch, Civil Division, Department
of Justice, Washington, DC, counsel for Respondent.
Before Board Judges DANIELS (Chairman), SOMERS, and KULLBERG.
DANIELS, Board Judge.
The contractor alleges that money owed it under a contract with the United States
Marshals Service was improperly offset to pay a debt owed by a different company which
previously held a contract with the Department of the Army.  We have jurisdiction to hear
this case.  We consequently deny a motion by the respondent, the Department of Justice, to
dismiss the case for lack of jurisdiction.


CBCA 3084 2
Background
In the spring of 2004, the Department of the Army sought to have a Sprung structure
installed at Tallil Air Base, Iraq, to serve as a gymnasium.  Sprung structures are made by
Sprung Instant Structures, Inc.  They feature an aluminum substructure covered with highly
tensioned fabric panels.
Sprung Instant Structures, Inc. told the Army that although it sold these structures, it
did not install them.  It suggested that the Army deal with its “Strategic Alliance Partner,
Selrico Services,” to supply and install the product.  Subsequently, Selrico Services, Inc.,
through Buddy Aleman, presented the Army with its “quote for a total ‘turnkey’ setup of the
Sprung Structure.”  Mr. Aleman later wrote, “Our company name operating in IRAQ is as
follows: Selrico International.”  He also provided the contractor and government entity
(CAGE) code1 which is associated with Selrico Services, Inc.  He signed his letter, “Buddy
Aleman, Vice President, Selrico Services, Inc., Selrico International.”
Selrico Services, Inc. and Selrico International, Inc. are separate, though affiliated,
corporations.  They have the same address and the same president (John R. “Rick” Aleman). 
According to the appellant, the two companies have different but overlapping ownership. 
Each has its own CAGE code.  Each has its own taxpayer identification number, and each
files its own tax return.  Selrico International, Inc. sometimes did business as Selrico Services
International.
On May 13, 2004, the Department of the Army entered into a contract with “Selrico
International” for the supply and installation of a Sprung structure at Tallil Air Base.  The
contract includes, however, the CAGE code for Selrico Services, Inc.  The initial amount of
the contract was $348,986.34.  This amount was later increased to $365,386.34.
The contract required the Army to pay the contractor a mobilization fee of 30% of the
contract price.  The Government issued a check dated May 25, 2004, to Selrico International
Inc. in the amount of $104,695.91 (30% of $348,986.34).
1 As explained by the Comptroller General, “CAGE codes . . . are assigned to
discrete business entities for purposes of executing payments under government contracts
. . . ; CAGE codes are used to dispositively establish the identity of a legal entity for
contractual purposes.”  Perini/Jones, Joint Venture, B-285906 (Nov. 1, 2000); see also Gear
Wizzard, Inc., B-298993 (Jan. 11, 2007).

CBCA 3084 3
The Army accepted the Sprung structure on October 8, 2004.  The next day, Selrico
Services, Inc. sent to the Army an invoice in the amount of $365,386.34 for erection of this
structure.  The invoice includes the taxpayer identification number and CAGE code of
Selrico Services, Inc., and specifically states, “Remit Payment to: Selrico Services, Inc.”
The Army paid this amount by electronic funds transfer on or about October 30, 2004. 
The Army’s records state that the payee was “Selrico International,” but show the CAGE
code and taxpayer identification number of the payee as those of Selrico Services, Inc. 
According to a declaration of a Defense Finance and Accounting Service (DFAS) accounts
receivable technician, which the appellant asks us to exclude from the record, “It would have
been normal practice for the invoiced payment to have been made to the bank account
associated with the CAGE Code on the Invoice and on the Contract.”
In April 2010, the Army discovered that it had paid more than the agreed-upon
amount on this contract.  In August 2010, DFAS wrote to Selrico International, Inc., asking
it to remit the amount of the overpayment (the mobilization fee of $104,695.91) or, if it
believed that the debt was invalid or the amount incorrect, to request a review of the agency’s
determination.  After Rick Aleman, on behalf of Selrico International, Inc., told DFAS that
the company would research the matter, Selrico International, Inc. did not respond further.
In November 2010, DFAS began preparations to refer the debt to the Department of
the Treasury for collection from Selrico Services, Inc.  The debt was so referred.
Department of the Treasury records appear to reflect that on or before March 30,
2011, Selrico Services, Inc. disputed the debt.  In August 2011, and again in April 2012, the
department asked collection companies to collect the debt from Selrico Services, Inc.  In June
2012, Selrico Services, Inc.’s attorney wrote to one of the collection companies, disputing
the debt.  He asserted, “This debt is improperly being demanded of the wrong company,
Selrico Services, Inc. . . .  The correct company is Selrico International, Inc.”
In February 2012, the United States Marshals Service (USMS) contracted with Selrico
Services, Inc. to provide food services at the Service’s facility in Pineville, Louisiana, at
specified times during that year.  The USMS acknowledges that this contract was performed
without incident.  During 2012, Selrico Services, Inc. sent to the USMS invoices in the total
amount of $106,539.20 (March 12, $22,510.68; April 20, $22,510.68; June 5, $54,617.84;
August 6, $6900).  The USMS did not remit payment in response to all of these invoices.
Also during 2012, the Department of the Treasury transferred $84,040.12 from the USMS
to DFAS (May 11, $22,492.68; July 5, $54,599.84; August 16, $65.60; August 24, $6882).

CBCA 3084 4
On August 9, 2012, Selrico Services, Inc. submitted to the contracting officer on the
Marshals Service contract a claim in the amount of $99,639.20.  The claim letter asserted that
the USMS owed Selrico Services, Inc. that amount for its services under that contract, and
that the Government had improperly set off the money against a debt owed by a different
company, Selrico International, Inc.  By letter dated October 18, 2012, the amount of the
claim was increased to $106,535.20 and the claim was certified.
The Marshals Service contracting officer denied the claim on November 20, 2012. 
The contracting officer stated in her decision:
[T]he USMS does not have, and never has had, a dispute with Selrico about
payment for the work performed under the contract. . . .  There were no
contract issues between Selrico and the USMS during the course of the
contract, and the USMS accepted the services performed by Selrico.  With the
exception of one invoice which you sent with Selrico’s claim, and which is
being processed for payment, all the invoices submitted by Selrico were paid
in full.  The USMS did not withhold any money from the contract payments
made to Selrico.
Selrico Services, Inc. now states that the first invoice was paid and maintains that
“only $84,028.52 was erroneously withheld on the USMS Contract.”
Discussion
We set out in Ron Anderson Construction, Inc. v. Department of Veterans Affairs,
CBCA 1884, et al., 10-2 BCA ¶ 34,485, the standards under which a motion to dismiss a case
for lack of jurisdiction is to be considered:
Appellant bears the burden of establishing subject matter jurisdiction by a
preponderance of the evidence.  In assessing whether the Board has subject
matter jurisdiction, the allegations of the complaint should be construed
favorably to the pleader.  When a motion to dismiss for lack of subject matter
jurisdiction challenges the truth of alleged jurisdictional facts, the Board may
consider relevant evidence beyond the pleadings to resolve disputed facts.
10-2 BCA at 170,070 (citations omitted).
The Contract Disputes Act provides:

CBCA 3084 5
The Civilian Board [of Contract Appeals] has jurisdiction to decide any appeal
from a decision of a contracting officer of any executive agency (other than the
Department of Defense, the Department of the Army, the Department of the
Navy, the Department of the Air Force, the National Aeronautics and Space
Administration, the United States Postal Service, the Postal Regulatory
Commission, or the Tennessee Valley Authority) relative to a contract made
by that agency.
41 U.S.C. § 7105(e)(1)(B) (Supp. IV 2011).  This case involves an appeal from a decision
of a contracting officer of the United States Marshals Service, an executive agency which is
not excluded from our jurisdiction.  The question posed by the USMS’s motion is whether
the decision is relative to a contract made by that agency.
The common law right of the Government to set off against moneys due a contractor
as a means of recovering previous erroneous payments has long been recognized.  United
States v. Munsey Trust Co., 332 U.S. 234, 239 (1947); East Coast Security Services, Inc. v.
Department of Homeland Security, DOT BCA 4469R, et al., 06-1 BCA ¶ 33,290, at 165,062-
63 (citing cases).  “This right extends to offsets between separate contracts which the debtor
may have with the Government.”  Cecile Industries, Inc. v. Cheney, 995 F.2d 1052, 1054
(Fed. Cir. 1993).  The Government may use offsets to recover erroneous payments “without
recourse to the procedures of the Contract Disputes Act [which is now at 41 U.S.C. §§ 7101-
7109].”  Applied Companies v. United States, 144 F.3d 1470, 1478 (Fed. Cir. 1998).  As
provided in the regulations governing offsets:
When an offset occurs, the debtor has received payment in full for the
underlying obligation represented by the payment. . . .  [I]f an agency certifies
a payment to a Federal contractor for work completed or services provided,
and that payment is offset to collect a delinquent debt that the contractor owes
to another Federal agency, the contractor has been paid in full for its services.
31 CFR 285.5(e)(9) (2010).
The Government believes that is precisely what has happened here – it has offset,
from payments due to Selrico Services, Inc. under the USMS contract, to recover money it
mistakenly paid to that firm under the Army contract.  The dispute does not concern an action
taken by the USMS contracting officer relative to the contract made by the USMS.  Under
the rule established in Applied Companies, Contract Disputes Act procedures are not
available to challenge the Government’s action; the Board has no jurisdiction under that Act
to hear the case.

CBCA 3084 6
Selrico Services, Inc. maintains, to the contrary, that the Government has taken money
rightfully due to it under the USMS contract for the purpose of recouping funds mistakenly
paid under the Army contract to a different company, Selrico International, Inc.  To rectify
the error, Selrico Services, Inc. has filed a claim with the USMS contracting officer to
recover money which the contracting officer has wrongfully withheld, since Selrico Services,
Inc. performed the USMS contract without incident.  The appellant contends that the Board
has jurisdiction over the claim for the withheld money.
We conclude that Selrico Services, Inc. has the better of the argument regarding
jurisdiction.  If payments under the Army contract were actually made to Selrico
International, Inc. –  a different company from Selrico Services, Inc. – the Government could
not properly recoup its overpayment to that company by offsetting money otherwise due to
Selrico Services, Inc.  Construing the allegations of the complaint favorably to the pleader,
as we must at the moment, we recognize that Selrico Services, Inc. could have a valid claim
for that money relative to the USMS contract.  See J.G.B. Enterprises, Inc. v. United States,
497 F.3d 1259 (Fed. Cir. 2007).  Selrico Services, Inc. may challenge the offset
determination, as it did, by filing a Contract Disputes Act claim with the USMS contracting
officer.  Kearfott Guidance & Navigation Corp., ASBCA 49263, 99-2 BCA ¶ 30,518, at
150,696.  This case is different from those cited by the respondent – Applied Companies and
AMEC Construction Management, Inc. v. General Services Administration, CBCA 389, et
al., 07-1 BCA ¶ 33,505 – for there, the contractor from which a payment was offset was the
same company as the one which had been overpaid under another contract.
We hasten to add that based on the information presented thus far, it appears that
Selrico Services, Inc. will have a difficult task ahead in attempting to persuade us that the
second payment made under the Army contract went to Selrico International, Inc., and not
Selrico Services, Inc.  The payment was made in response to an invoice from Selrico
Services, Inc. which featured the CAGE code and taxpayer identification number of Selrico
Services, Inc.  Even if we are to give no credence to the declaration of the DFAS accounts
receivable technician, we would find it hard to believe that an electronic funds payment
would have gone to a company other than one with the CAGE code and taxpayer
identification number on the invoice.  It is the identity of the payee on the Army contract, not
the identity of the contractor, that matters here.  Nevertheless, we will afford Selrico
Services, Inc. an opportunity to prove its case.

CBCA 3084 7
Decision
The respondent’s MOTION TO DISMISS FOR LACK OF JURISDICTION is
DENIED.
_________________________
STEPHEN M. DANIELS
Board Judge
We concur:
_________________________ _________________________
JERI KAYLENE SOMERS HAROLD C. “CHUCK” KULLBERG
Board Judge Board Judge