THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND
IS BEING RELEASED TO THE PUBLIC IN ITS ENTIRETY ON 
FEBRUARY 13, 2017
MOTION TO DISMISS DENIED:  January 24, 2017
CBCA 3760, 4822, 5281
SMITH MANAGEMENT CONSTRUCTION, INC.,
and
BRC LEASE COMPANY, L.L.C.,
                                                                              Appellants,
v.
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
                                                                               Respondent.  
Richard A. DeTar of McAllister, DeTar, Showalter & Walker, Easton, MD, counsel
for Appellants.
Brian C. Caney, Office of the General Counsel, Department of Health and Human
Services, Washington, DC, counsel for Respondent. 
Before Board Judges DRUMMOND, ZISCHKAU, and BEARDSLEY.
BEARDSLEY, Board Judge.


CBCA 3760, 4822, 5281 2
Respondent, the Department of Health and Human Services, National Institutes of
Health (NIH or Lessee), has moved to dismiss these appeals for lack of subject matter
jurisdiction.  For the reasons set forth below, the motion is denied.  
Statement of Facts for Purposes of the Motion
On June 15, 2001, NIH and FSK Land Corporation (FSK or lessor) entered into lease
no. NIH-LRP-060197 (lease), pursuant to which lessor agreed to construct a research facility
(Bayview Research Center) at the Johns Hopkins Bayview Medical Campus in Baltimore,
Maryland.  These appeals arise from the construction of the Bayview Research Center.
As required by the lease and supplemental lease agreement (SLA) no. 1, FSK entered
into a development management services agreement (DMSA) with Smith Management
Construction, Inc. (SMCI) in December 2001.  The DMSA required SMCI, as development
manager, to perform pre-construction, development, and construction services for the
Bayview Research Center.  By its terms, the DMSA was a subcontract under the lease, and
NIH was not a party to the agreement. 
The lease stated:
Notwithstanding any degree of participation by the Government in the
development of the Plans . . . and the review of the construction documents or
the utilization of Construction Inspection Services . . . or the acceptance of any
services, the Government shall have no liability for the design and construction
of the Premises, nor shall such participation by the Government relieve any
other party or person of their legal or contractual responsibility for such
design, construction, or services. . . .
Lessor acknowledges . . . and regardless of Government review, approval, or
concurrence of any type, that the Lessor (or as shall be more particularly set
forth in the Development Management Services Agreement, Lessor’s
subcontractors, including Development Manager) shall be responsible for all
errors and omissions, including any additional cost and/or delay.
Appeal File, Vol. 2, Exhibit 31 at 39-41.  The lease also required FSK to furnish payment
bonds. 

CBCA 3760, 4822, 5281 3
The DMSA stated: 
NIH is an intended third-party beneficiary of this Agreement and may enforce
all duties and obligations hereunder against Development Manager. 
Notwithstanding NIH’s approval rights, NIH’s status as a third party
beneficiary, or any other provision of this Agreement, nothing in this
Agreement shall waive any privileges or immunities of NIH.  Neither the
status of NIH as a third party beneficiary, nor any other condition or term of
this Agreement, shall make NIH responsible for any obligations under this
Agreement or liable to the Development Manager or Lessor under this
Agreement.  The foregoing sentence shall not preclude Development Manager
from exercising Lessor’s rights through Lessor against NIH pursuant to
Section 10.2(a) below.
Appeal File, Vol. 2, Exhibit 32 at 43-44.  Section 10.2(a) stated, “In the event Lessor fails
to cooperate with the Development Manager in presenting a claim to the Government, then
Development Manager shall have the right to proceed with such claim against the
Government in the name of the Lessor to the extent permitted by law.”  Id. at 47.  
On May 20, 2004, BRC Lease Company, L.L.C. (BRC) became the successor-in-
interest to FSK and the effective lessor pursuant to an assignment and novation agreement. 
Also on May 20, 2004, BRC and NIH executed SLA no. 14, and FSK and SMCI executed
an amendment to the DMSA.  Neither SLA no. 14 nor the amendment to the DMSA
modified SMCI’s status as a subcontractor or section 10.2(a) of the DMSA.  The May 2004
amendment to the DMSA stated:
In any instance where the [DMSA] refers to a consent, approval or other action
by [BRC], such consent, approval or other action shall instead be provided or
taken, as the case may be, by NIH and Ambac.  Accordingly, [SMCI]
acknowledges and agrees that it will not be relying in any manner upon any
advice, expertise or direction from [BRC] or any [BRC] Entity . . . in
connection with the Facility. 
[T]he Lessor, BRC Lease Company, LLC, . . . shall not be entitled to and shall
not possess the authority to approve, deny, or condition any requests for
payment, changes to the design and construction work, or time for
performance in connection with the construction of the Facility.  
Appeal File, Vol. 2, Exhibit 36 at 2.  In SLA no. 14, NIH approved the modifications to the
DMSA. 

CBCA 3760, 4822, 5281 4
On October 15, 2013, SMCI submitted to NIH a certified claim in the amount of
$953,595.64.  This claim requested “unpaid balances under specific contracts issued directly
from the NIH beginning in May of 2008 for work completed, and for the recovery of specific
reimbursable amounts due under the DMSA, as previously approved and authorized for
reimbursement.”  Appeal File, Vol. 1, Exhibit 1 at 1.  Specifically, SMCI claimed
$565,049.37 as detailed in requisition no. 58 (A-1) and $388,546.27 for unpaid legal fees
incurred by SMCI defending the project against claims filed by the general contractor,
Skanska USA Building, Inc. (Skanska), for which SMCI claimed NIH agreed to reimburse
it.  SMCI appealed an adverse final decision in SMCI’s name.  The appeal was docketed as
CBCA 3760.  
On September 29, 2014, SMCI submitted a second claim as both a direct claim against
NIH and also on behalf of BRC pursuant to section 10.2(a) of the DMSA.  This second claim
was for the same unpaid balances and legal fees claimed in the first claim.  SMCI
supplemented its second claim by submitting a corrected certification dated October 16,
2014.  The corrected certification indicated that SMCI was “duly authorized to certify the
claim on behalf of BRC Lease Co., LLC and Smith Management Construction, Inc.” 
Appellant’s Supplemental Appeal File, Exhibit 23.  On October 23, 2014, SMCI submitted
an amended certified claim that did not add new facts to the September 29, 2014, claim but
“merely explains in more specific detail” that the contractual relationship between NIH and
BRC pursuant to the lease created privity.  Id., Exhibit 25.  BRC did not respond to requests
by SMCI to sponsor this claim.  SMCI directly and “in the name of and through BRC”
appealed a deemed denial of this claim.  This appeal was docketed as CBCA 4822. 
SMCI lastly appealed the denial of its claim sponsored and certified by BRC.  The
claim consisted of SMCI’s October 23, 2014, amended claim with an October 12, 2015,
sponsorship letter and certification from BRC.  In its sponsorship letter, BRC stated that to
the extent that SMCI’s claims were based on supplemental agreements and understandings
between SMCI and NIH, those agreements could be for work not originally called for under
the DMSA, and BRC was not a party to or aware of the supplemental agreements between
NIH and SMCI.1  More specifically, BRC only agreed to sponsor SMCI’s claims that were
for work under the DMSA.  BRC clarified its position by letter dated December 18, 2015,
stating that BRC was willing to sponsor and pass through SMCI’s entire claim for
$953,595.64.  This appeal was docketed as CBCA 5281.  All three appeals were
consolidated.  
1 On May 2, 2008, NIH entered into contract HHSN2922007001115L (the 115L
contract) with SMCI, pursuant to which SMCI performed work in support of the Bayview
Research Center construction project.  Appellant has indicated that none of its claims arise
out of this contract.  

CBCA 3760, 4822, 5281 5
BRC assigned its leasehold interest to NIH Bayview Acquisition, LLC (NIH Bayview)
by substitute trustee’s deed of assignment dated September 8, 2015, as the result of a court-
ordered foreclosure sale.  The substitute trustees conveyed to NIH Bayview “all right, title
and interest of the said Substitute Trustees in and to the leasehold estate in land and premises
. . . together with all of the leasehold interest in the buildings, structure, fixtures and
improvements located thereon.”  Respondent’s Second Motion to Dismiss, Exhibit 4.  The
September 8, 2015, novation agreement among the substitute trustees, NIH Bayview, and
NIH stated that “[t]he Government . . . has entered into certain contracts with the Transferor
[substitute trustees], as successor in interest to BRC Lease Company, LLC, namely: a U.S.
Government Lease for Real Property formerly known as lease number LRP-060197.” 
Respondent’s Second Motion to Dismiss, Exhibit 6.  The term “the contracts” referred to:
the above lease [lease no. LRP-060197], and all supplemental lease
agreements pertaining thereto made between the Government and the
Transferor [substitute trustees] or its predecessor [BRC] before the effective
date of this Agreement (whether or not performance and payment have been
completed and whether or not releases have been executed if the Government
or the Transferor [substitute trustees] has any remaining rights, duties, or
obligations under such contracts).  Included in the term “the contracts” are also
all modifications made under the terms and conditions of these contracts and
purchase orders between the Government and the Transferee, on or after the
effective date of this Agreement. 
. . . .
The Transferor [substitute trustees] confirms the transfer to the Transferee
[NIH Bayview], and waives any claims and rights against the Government that
it now has or may have in the future in connection with the contracts.
Id. 
 
The construction project was completed before NIH Bayview acquired the leasehold
interest.  Prior to the assignment and the novation agreement, NIH confirmed and represented
to NIH Bayview in a statement of lease dated September 4, 2015, that supplemental lease
agreements 1 through 25, including SLA no. 1 dated March 13, 2002, which established the
DMSA, and SLA no. 14, had been canceled prior to the 2015 novation agreement.  In this
same statement of lease, NIH assigned a new contract number to the lease, changed the lessor
from BRC to NIH Bayview, and restated the lease, lease rider, rent schedule, general clauses,
ground lease, and exhibits.  

CBCA 3760, 4822, 5281 6
In March 2016, NIH Bayview refused to sponsor SMCI’s claim for the reason that it
had acquired only BRC’s leasehold interest in the property as a result of the foreclosure sale,
and NIH Bayview did not become a party to or assume obligations or liabilities under the
DMSA. 
Discussion
The appellant bears the burden of establishing subject matter jurisdiction by a
preponderance of the evidence.  Alder Terrace, Inc. v. United States, 161 F.3d 1372, 1377
(Fed. Cir. 1998) (citing McNutt v. General Motors, 298 U.S. 178, 189 (1936)).  When the
Board considers a motion to dismiss for lack of subject matter jurisdiction, the allegations
of the complaint should be construed favorably to the appellant.  Academy Partners, Inc. v.
Department of Labor, CBCA 4947, 16-1 BCA ¶ 36,463, at 177,683 (quoting 801 Market
Street Holdings, L.P. v. General Services Administration, CBCA 425, 08-1 BCA ¶ 33,853,
at 167,566).  However, the Board may also look beyond the pleadings and “inquire into
jurisdictional facts” to determine whether jurisdiction exists.  Lewinger v. Department of
Veterans Affairs, CBCA 4794, 16-1 BCA ¶ 36,413, at 177,545 (citing Rockies Express
Pipeline LLC v. Department of the Interior, CBCA 1821, 10-2 BCA ¶ 34,542, at 170,355);
Rocovich v. United States, 933 F.2d 991, 993 (Fed. Cir. 1991).
CBCA 5281
NIH asserts that the October 12, 2015, certification and sponsorship by BRC of
SMCI’s claim and appeal was ineffective and defective due to the fact that on or about
September 8, 2015, BRC was replaced by NIH Bayview as the prime contractor under the
lease.  We disagree.  BRC remains in privity of contract with NIH for any claims arising out
of the DMSA.  
An assignor cannot be held to have transferred claims “unless he expressly so stated.” 
Summit Commerce Pointe, LLC v. General Services Administration, CBCA 2652, et al., 13
BCA ¶ 35,370, at 173,570 (quoting Ginsberg v. Austin, 968 F.2d 1198, 1201 (Fed. Cir.
1992)).  Even if the assignment is valid, “accrued causes of action do not automatically pass
to an assignee.”Id.  In order for NIH Bayview to have standing to sponsor SMCI’s claims,
SMCI’s claims under the DMSA must have been validly assigned to NIH Bayview and NIH
must have accepted the assignment, constructively or expressly by agreement.  Id.  
There was no assignment of the DMSA or the DMSA claims.  The deed of assignment
did not even mention the DMSA or the DMSA claims.  Instead, the deed of assignment
expressly transferred only “a very specific and limited interest in the property as a result of

CBCA 3760, 4822, 5281 7
the foreclosure sale, namely, BRC’s Leasehold Interest,” to NIH Bayview.2  Appellant’s
Opposition to Respondent’s Second Motion to Dismiss, Exhibit 19.  For this reason, NIH
Bayview refused to sponsor SMCI’s claim.  
NIH points to the 2015 novation agreement to support its position that the DMSA and
accrued claims under the DMSA were assigned to NIH Bayview.  The novation agreement,
however, confirmed only the transfer of certain “contracts,” not the DMSA or the DMSA
claims, to NIH Bayview.  The “contracts” expressly identified included the lease and SLAs
under which the transferor or NIH had to have “remaining rights, duties or obligations.” 
Neither NIH nor NIH Bayview had any remaining rights, duties, or obligations under the
SLAs because NIH represented that the SLAs had been canceled prior to the assignment. 
The cancellation of SLA no. 1 or no. 14, however, did not cancel the DMSA because these
SLAs were only vehicles by which NIH approved the DMSA or amendments to the DMSA. 
Similarly, the assignment of the lease did not assign the DMSA because the lease only
contemplated the execution of the DMSA.  The DMSA was a separate subcontract between
BRC and SMCI, and it had to be expressly mentioned to be assigned.  Thus, BRC remains
in privity of contract with NIH and SMCI for the purpose of certifying and sponsoring
claims arising out of the DMSA.  Consistently, the release in the 2015 novation agreement
does not release claims accrued under the DMSA.  It only waives claims in connection with
the “contracts,” which we have established consisted of the lease but not the DMSA.
We possess subject matter jurisdiction over this appeal.
CBCA 3760 and CBCA 4822
NIH asserts that the Board does not have jurisdiction to hear CBCA 3760 or CBCA
4822.  Given that the claims appealed in CBCA 3760 and CBCA 4822 are the same claims
appealed in CBCA 5281, and in the interest of judicial economy, the Board declines to decide
whether the Board has jurisdiction over these two appeals at this time.  
2 The substitute trustees acquired only BRC’s leasehold interest in the property as a
result of the foreclosure.  Therefore, NIH Bayview could only acquire the leasehold interest
from the substitute trustees.  

CBCA 3760, 4822, 5281 8
Decision
For the foregoing reasons, respondent’s motion is DENIED.
_____________________________
ERICA S. BEARDSLEY
Board Judge
We concur:
____________________________ _____________________________
JEROME M. DRUMMOND JONATHAN D. ZISCHKAU
Board Judge Board Judge