MOTION TO STRIKE DENIED;
MOTION FOR SUMMARY JUDGMENT DENIED: October 1, 2020
CBCA 6449
REGIMENT CONSTRUCTION CORP.,
Appellant,
v.
DEPARTMENT OF VETERANS AFFAIRS,
Respondent.
Timothy A. Furin of Ward & Berry PLLC, Washington, DC, counsel for Appellant.
Harold W. Askins, III, Office of General Counsel, Department of Veterans Affairs,
Charleston, SC; and David G. Fagan, Office of General Counsel, Department of Veterans
Affairs, Portland, OR, counsel for Respondent.
Before Board Judges BEARDSLEY, GOODMAN, and O’ROURKE.
GOODMAN, Board Judge.
Respondent, the Department of Veterans Affairs (VA), has filed a motion for
summary judgment, and appellant, Regiment Construction Corp., has filed a motion to strike
respondent’s motion.  We deny both motions.
Background 
On March 28, 2011, respondent awarded appellant a service-disabled veteran-owned
small business (SDVOSB) set-aside contract (the contract).  The contract was for condensate


CBCA 6449 2
piping replacement at a VA healthcare facility in New York state.  In November 2014,
appellant substantially completed the contract.  In February 2019, appellant submitted to
respondent a certified claim and request for equitable adjustment.  When respondent’s
contracting officer did not issue a decision on the claim, appellant considered its claim
deemed denied and filed this appeal on April 23, 2019.  Respondent filed an answer in this
appeal on June 21, 2019.  The parties then requested a suspension of proceedings to engage
in settlement discussions.
The suspension of proceedings was extended several times at the parties’ requests.
During a status conference with the Board on July 16, 2019, counsel requested a continued
stay, informing the Board that a settlement was near.  However, on November 4, 2019,
during a status conference with the Board, the parties requested that the Board continue to
stay all further proceedings until the resolution of a dispositive motion to be filed by
respondent.
On November 29, 2019, respondent filed a motion for summary judgment, asking the
Board to find as a matter of law that appellant committed fraud, and therefore the contract
was void ab initio.  The motion was supported by a settlement agreement between appellant,
an individual, and the Department of Justice (DOJ) executed on July 30, 2019, as well as a
VA Office of Inspector General (OIG) referral of appellant for suspension and debarment
dated November 21, 2019, which refers to the DOJ settlement agreement.
Concurrently with the filing of its response to the motion for summary judgment,
appellant filed a motion to strike respondent’s motion for summary judgment, asserting that
respondent cannot now raise the issue of fraud, since it did not raise fraud as an affirmative
defense in its answer, or otherwise assert the contract was void ab initio, and further asserts
that allowing the defense now would be unduly prejudicial.
Discussion
Appellant’s Motion to Strike Respondent’s Motion for Summary Judgment
In its motion to strike respondent’s motion for summary judgment, appellant asserts
that in 2009 the Government began an investigation into allegations that appellant had
committed SDVOSB fraud against the VA, at which time appellant had not applied to be a
SDVOSB nor to bid on contracts set-aside for SDVOSB contractors.  Appellant further
describes the settlement negotiations that were conducted between counsel for appellant and
respondent during the stay of proceedings in this appeal, and the July 16, 2019, conference
with the Board advising that the settlement was near.  Appellant states that at no point during
that call did respondent’s counsel raise the affirmative defense of fraud, or otherwise indicate
that the VA considered the contract void ab initio.  Appellant alleges further that on or about

CBCA 6449 3
July 17, 2019, counsel for respondent and appellant conducted further settlement discussions
and verbally agreed in principle to settle the appeal.  Respondent’s counsel indicated that he
did not have final settlement authority but would schedule a meeting with the appropriate
approval authority within the VA.
On July 30, 2019, appellant and an individual entered into the DOJ settlement
agreement, pursuant to which the United States was to be paid a sum of money as
“restitution.”  On August 1, 2019, respondent’s counsel sent an email to appellant’s counsel
requesting a call to discuss the DOJ settlement agreement, stating, “This may have an impact
on my ability to settle this case.”  Appellant states that this was the first time that the
Government had raised the issue of fraud despite knowing about the investigation for a
period of over ten years.
Appellant asks the Board to strike the motion for summary judgment, as it has been
injured and prejudiced by respondent’s failure to raise the affirmative defenses of fraud and
contract voidness until after extended settlement negotiations and appellant’s incurrence of
substantial legal fees, as appellant would have employed a different legal strategy had the
defenses been raised earlier.  Respondent replies that respondent only became aware of the
DOJ settlement agreement and the VA OIG “finding of fraud” from a DOJ press release
dated July 30, 2019.1
Failing to state an affirmative defense in an initial answer is not a complete bar to ever
asserting that defense.  This Board has allowed initial pleading of an affirmative defense in
a motion for summary judgment absent prejudice to the opposing party.  In A-Sons
Construction, Inc. v. Department of Housing & Urban Development, CBCA 3491, et al.,
15-1 BCA ¶ 36,089, the Board stated:
The purpose of putting the affirmative defenses in the answer “is to give the
opposing party notice of the affirmative defense and a chance to respond.” . . .
Failure to plead an affirmative defense in a timely manner can result in the
defense’s waiver. . . . Nonetheless, even though the Government acts “at its
own peril” in failing to plead its affirmative defenses in its answer, “tribunals
generally are liberal . . . in allowing the late assertion of [affirmative] defenses,
absent prejudice to the opposing party.”  Ball, Ball & Brosamer, Inc., IBCA
2841, 97-1 BCA ¶ 28,897, at 144,084; see First Annapolis Bancorp, Inc. v.
United States, 75 Fed. Cl. 280, 288 (2007) (“An affirmative defense may be
1  A link to the press release was included in respondent’s response to the motion.
While the press release refers to a VA OIG investigation, the VA OIG fraud referral was
dated November 21, 2019.

CBCA 6449 4
waived if not pled as prescribed, but the waiver is not effective absent unfair
surprise or prejudice.”) . . . While we encourage timely pleading of affirmative
defenses, we, like other tribunals, will not typically reject an affirmative
defense raised for the first time in a motion for summary relief, absent
articulable prejudice to the opposing party, particularly where the motion, as
here, is filed well before any trial or hearing has been scheduled.  See, e.g.,
Ultra-Precision [Manufacturing, Ltd. v. Ford Motor Co.], 411 F.3d [1369,] at
1376 [(Fed. Cir. 2005)] (affirming trial court's consideration of affirmative
defense first raised in second set of summary judgment motions); National
Gypsum Co., ASBCA 53259, et al., 03-1 BCA ¶ 32,054, at 158,454-55 (2002)
(affirmative defense considered although first raised in brief); Holland v.
United States, 74 Fed. Cl. 225, 256 (2006) (same), rev’d on other grounds,
621 F.3d 1366 (Fed. Cir. 2010).
While we realize that appellant expended resources for settlement negotiations which
resulted in an expectation that a settlement had been reached, before respondent asserted its
affirmative defense, appellant has had the opportunity to respond fully to the affirmative
defense in its opposition to the motion for summary judgment.  We cannot find that appellant
has been prejudiced.
Appellant’s motion to strike respondent’s motion for summary judgment is denied. 
Respondent’s Motion for Summary Judgment
Summary judgment is appropriate when there are no genuine disputes of material fact
and the movant demonstrates it is entitled to judgment as a matter of law.  See Carmazzi
Global Solutions, Inc. v. Social Security Administration, CBCA 6264, 19-1 BCA ¶ 37,439
(citing Walker Development & Trading Group Inc. v. Department of Veterans Affairs, CBCA
5907, 19-1 BCA ¶ 37,376).  Genuine disputes of material fact exist when a rational finder
of fact could resolve an issue in favor of either party and the resolution of that issue would
impact the outcome of the case under governing law.  See Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986).  We must view all inferences in a light most favorable to the non-
movant.  See Walker Development & Trading (citing Matsushita Electric Industrial Co. v.
Zenith Radio Corp., 475 U.S. 574, 599 (1986)).
Respondent contends that appellant has committed fraud and therefore the contract
is void ab initio.  Respondent’s motion presents an extensive recitation of alleged undisputed
facts, many of which are disputed with supporting documentation in appellant’s response to
the motion, leaving issues of material fact in dispute.  We will not burden this decision with
a recitation of these issues.  However, the basis of the motion for summary relief is stated
by respondent as follows:

CBCA 6449 5
[R]espondent is not asking the Board to making [sic] a factual finding of fraud
because the DVA OIG has already determined that the fraud was committed.
There are no facts in the record which rebut this determination.  Since the
question of fraud is resolved and not currently before the Board, the issue is
whether the established fraud renders this contract void ab initio which is
within the Board’s jurisdiction.
In denying the motion for summary judgment, we find that respondent’s motion and
three specific documents upon which it relies – the DOJ settlement, the VA OIG fraud
referral, and the DOJ press release – do not, as respondent alleges, evidence a previous
determination that appellant committed fraud.
Respondent states in its motion:
Respondent’s Statement of Uncontested Facts demonstrates that [appellant],
through its representatives, knowingly misrepresented its status as an eligible
SDVOSB in order to receive awards under VA’s SDVOSB set-aside program,
and that the Government relied on that misrepresentation in making its award
decision.  This fact is evidenced by the July 30, 2019 settlement agreement
with the Government as well as the substantiated VA OIG findings and referral
to the Suspension and Debarment Committee.  These findings reflect the lack
of control by the service-disabled veteran as required for award of an
SDVOSB set aside contract.  These facts alone are sufficient for the Board to
make a ruling in this case.
Respondent’s argument is devoid of merit.  The DOJ settlement agreement does not
contain findings or admissions of fraud, and reads in relevant part:
The United States contends that it has certain civil claims against Regiment
and Hernandez arising from false claims made in conjunction with contracts
awarded to Regiment by the United States. . . . [The] United States asserts that
between the years 2008 and 2015, Regiment and [an individual] procured
government contracts set aside for SDVOSBs by improperly representing that
Regiment was an SDVOSB.  That conduct is referred to below as the Covered
Conduct.
This Settlement Agreement is neither to be construed as an admission of
liability by Regiment or [the individual], who dispute the merits of the
allegations, nor a concession by the United States that its claims are not well
founded.
 

CBCA 6449 6
The United States releases Regiment and [an individual] from any civil or
administrative monetary claim the United States has for the Covered Conduct
under . . . the common law theories of breach of contract, payment by mistake,
unjust enrichment and fraud.
Nothing in this Paragraph . . . shall be construed as releasing Regiment and/or
[an individual]’s claims against any federal agency in connection with the
work performed by Regiment.
When we read the document as a whole, and the statements quoted above, we cannot
interpret the document as a “finding of fraud,” as alleged by respondent.  Likewise, the VA
OIG referral of appellant for suspension and debarment cannot be so construed, as it merely
references the DOJ settlement as a basis.  While the VA OIG referral states: “investigation
substantiated allegations of SDVOSB providing grounds for debarment under 38 U.S.C.
8127(c),” no grounds for debarment were stated, nor does this statement support a finding
of fraud.
Finally, the DOJ press release from which respondent states it learned of the VA OIG
“finding of fraud” states only that it “credited [a] Special Agent . . . of the United States
Department of Veteran’s Affair’s Office of Inspector General, and [a] Special Agent . . . of
the U.S. Small Business Administration’s Office of Inspector General, with the
investigation.”  The press release does not state that there was a finding of fraud by the VA
OIG, but only implies that the VA OIG’s investigation aided the DOJ in reaching the
settlement.
Respondent’s motion for summary judgment lacks factual support.  While it contains
a plethora of allegations, there is no evidence of a previous finding of fraud, nor can we
make such a finding based upon the record.  Issues of material fact remain in dispute, and
respondent does not prevail in its motion for summary judgment.

CBCA 6449 7
Decision 
Appellant’s motion to strike respondent’s motion for summary judgment is DENIED.
Respondent’s motion for summary judgment is DENIED.
    Allan H. Goodman        
ALLAN H. GOODMAN
Board Judge
We concur:
    Erica S. Beardsley             Kathleen J. O’Rourke     
ERICA S. BEARDSLEY KATHLEEN J. O’ROURKE
Board Judge Board Judge