THIS DECISION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER
AND IS BEING RELEASED TO THE PUBLIC IN ITS ENTIRETY ON
JUNE 7, 2023
MOTION FOR PARTIAL DISMISSAL DENIED:  May 19, 2023
CBCA 7565, 7566, 7567
ACUITY ENGINEERING & TECHNICAL SERVICES, LLC
fka MICHAEL BAKER GLOBAL SERVICES, LLC
Appellant,
v.
DEPARTMENT OF STATE,
Respondent.
Kara L. Daniels and Sonia Tabriz of Arnold & Porter Kaye Scholer LLP,
Washington, DC, counsel for Appellant.
Jeffrey A. Regner, Office of the Legal Adviser, Buildings and Acquisitions,
Department of State, Washington, DC, counsel for Respondent.
Before Board Judges RUSSELL, GOODMAN, and KULLBERG.
GOODMAN, Board Judge.
Appellant, Acuity Engineering & Technical Services, LLC fka Michael Baker Global
Services, LLC, has filed these three appeals which have been consolidated for decision. 
Respondent, the Department of State (DOS or respondent), has filed a motion to dismiss
count V of the consolidated complaint for failure to state a claim for which relief can be
granted.  We deny the motion.


CBCA 7565, 7566, 7567 2
Background
Count V of the consolidated complaint reads in its entirety:
Count V:  Breach of Contract - 
Application of Unenforceable Liquidated Damages Rate
199. Acuity hereby incorporates the preceding paragraphs of this Complaint.
200. FAR 11.501 and applicable precedent require that the liquidated
damages rate listed in the Contract be a “reasonable forecast of just
compensation for the harm that is caused by late delivery or untimely
performance” under the Contract and that the government evidence the
reasonableness.  See George W. Marshall [and] Gordon L. Blackwell, ENG
BCA No. 6066, 00-1 BCA ¶ 30,730 (explaining that liquidated damages in
construction contracts should reflect estimated daily costs of inspection,
supervision, engineering and associated overhead expenses resulting from
contractor-caused delay and therefore striking as an unenforceable penalty “an
improper, erroneous rate that bore no relationship to the actual damages that
the Government would suffer if the contract completion date was not met”).
201. FAR 11.501(a) makes clear that “[l]iquidated damages are not punitive”
and may only be used to “compensate the Government for probable damages.”
Furthermore, as set out in FAR 11.501(c):  “The contracting officer must take
all reasonable steps to mitigate liquidated damages.”
202. The liquidated damages assessed by DOS against Acuity do not
approximate any damage suffered by DOS or bear any relationship to any
alleged damages that DOS has suffered, and are furthermore disproportionate,
unreasonable and excessive.
203. The liquidated damages are punitive.
204. DOS has taken no steps to mitigate liquidate [sic] damages.  To the
contrary, DOS caused critical path delays to the Project schedule and
unreasonably refused to extend the substantial completion date to account for
those and all other excusable delays entitling Acuity to a time extension.
205. Despite the tens of millions of dollars of increased performance costs
and losses that Acuity incurred to overcome the design and other issues faced,

CBCA 7565, 7566, 7567 3
Acuity’s commitment to DOS and the successful completion of the Project did
not waiver.
206. Acuity substantially completed the Project in early May 2022, at
significant financial cost to the Company.
207. To date, the financial burden of the flawed design as well as the
numerous other government-caused impacts resulting in delay and lost
productivity have been borne by Acuity alone.
208. In addition to an extension of substantial completion date and an
increase in the price of the Contract, Acuity is entitled to recover $3,198,312
in liquidated damages improperly assessed by DOS, plus applicable interest
and any other relief the Board deems appropriate.
Appellant’s Complaint at 37-38.
Respondent states in its motion to dismiss count V:
Acuity alleges that the contract liquidated damages rate is unenforceable
because the rate is not comparable to the actual damages suffered by the
Department.  Acuity applies the wrong standard.  Instead, the reasonableness
of a liquidated damages rate is measured at the time of contract, not in
retrospect.  Acuity fails to allege any facts challenging the reasonableness of
the contract liquidated damages rate under the correct forward-looking
standard.  Accordingly, Count V of the complaint should be dismissed for
failure to state a claim upon which relief may be granted.
. . . . .
Acuity fails to allege anywhere in its complaint that the liquidated damages
rate was not a reasonable forecast of damages at the time of contracting.
Instead, Acuity alleges only that the liquidated damages rate is not related to
the damages that the Department suffered in retrospect.  Complaint, [¶] 202.
 
. . . Even if this allegation were true, it would not be sufficient to establish that
the liquidated damages amount was an unreasonable forecast at the time of
contracting.  The remainder of the allegations in count V of the complaint are
either legal conclusions or allegations not relevant to the issue of
enforceability.

CBCA 7565, 7566, 7567 4
Respondent’s Motion to Dismiss at 1-2, 7.
Discussion
A motion to dismiss for failure to state a claim will be granted only when the facts
asserted by the appellant do not entitle it to a legal remedy.  We must assume that all well-
pled factual allegations plausible on their face are true and indulge in all reasonable
inferences in favor of the non-movant.  Océ North America, Inc. v. Department of Health and
Human Services, CBCA 2115, 11-1 BCA ¶ 34,677, at 170,819.  Dismissal for failure to state
a claim should not be granted unless it appears beyond doubt that the appellant cannot prove
any set of facts in support of its claim that would entitle it to relief.  GC Columbia, LLC v.
General Services Administration, CBCA 7374, 22-1 BCA ¶ 38,197, at 185,502 (citing
Conley v. Gibson, 355 U.S. 41, 45-46 (1957), and Icenogle Construction Management, Inc.,
VABCA 7534, 06-2 BCA ¶ 33,325, at 165,271).  
In response to respondent’s motion, appellant asserts that it has pled sufficiently with
regard to the unreasonableness of the liquidated damages assessed, which ultimately may be
proved by facts found during discovery in which the parties have yet to engage.  See, e.g.,
George F. Marshall, ENG BCA 6066, 00-1 BCA ¶ 30,730, at 151,825-26; see also ALK
Services, Inc. v. Department of Veterans Affairs, CBCA 1789, 10-2 BCA ¶ 34,518, at
170,246 (allowing a non-moving party in a summary judgment proceeding to engage in
discovery to establish support for its claim).
Respondent states in its motion to dismiss that “the remainder of the allegations [other
than ¶ 202] in Count V of the complaint are either legal conclusions or allegations not
relevant to the issue of enforceability.”  We do not read count V as narrowly as respondent,
as it contains additional allegations that the liquidated damages are punitive and that
respondent caused delays, failed to issue time extensions, and failed to mitigate damages. 
Indulging in every reasonable inference in favor of the appellant, as we must, we cannot say
at this stage of the proceedings, before discovery has commenced, that appellant cannot
prove any set of facts in support of its allegations in count V of the consolidated complaint
that would entitle it to relief.  Blackstone Consulting, Inc. v. General Services
Administration, CBCA 718, 08-1 BCA ¶ 33,770, at 167,161.

CBCA 7565, 7566, 7567 5
Decision
The motion to dismiss count V of the consolidated complaint for failure to state a
claim for which relief can be granted is DENIED.
    Allan H. Goodman        
ALLAN H. GOODMAN
Board Judge
We concur:
   Beverly M. Russell             H. Chuck Kullberg         
BEVERLY M. RUSSELL H. CHUCK KULLBERG
Board Judge Board Judge