ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of--

Sauer Incorporated 

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ASBCA No. 60366 

Under Contract No. N69450-09-D-1274 

APPEARANCE FOR THE APPELLANT: 

APPEARANCES FOR THE GOVERNMENT: 

Kevin J. Kelly, Esq. 

General Counsel 

Ronald J. Borro, Esq. 

Navy Chief Trial Attorney 

Richard A. Gallivan, Esq. 

Trial Attorney 

OPINION BY ADMINISTRATIVE JUDGE CLARKE 

ON THE GOVERNMENT'S MOTION TO DISMISS 

The United States Navy (government) moves to partially dismiss this appeal 

alleging that Sauer Incorporated (Sauer) raised a new claim for the first time in its 

complaint. We treat this as a motion to strike part of the complaint and grant the 

motion. 

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 

1. The government and Sauer entered into IDIQ Contract No. N69450-09-D-1274 

(contract) on 3 June 2009 (R4, tab 1). Task Order 4 was awarded to Sauer on 

18 November 2009 for design and repairs to Hangar 1552 at Naval Station Mayport, 

Florida (R4, tab 3). The contract incorporates by reference FAR 52.233-1, DISPUTES 

(JUL 2002), ALTERNATE I (DEC 1991) (R4, tab 1at9). 

2. By letter1 dated 18 June 2013, Sauer stated to the contracting officer (CO) 

that during earlier negotiations regarding compensation for a government suspension 

of work, Sauer's home office overhead at 6.22% was "inadvertently left out of the 

settlement" and requested an additional $57,535 be added onto the settlement. The 

contractor further stated: 

Sauer's position is that there is entitlement to the standard 

home office overhead and feels the best way to proceed is 

to include the [$57,535] overhead into the pending mod. 

1 The Board expresses no opinion as to whether this letter is a claim. 
(R4, tab 8) 

By doing so, the Eichleay total [for unabsorbed overhead] 

will be reduced accordingly and Eichleay negotiations can 

still proceed at a later time. 

3. By letter2 dated 20 June 2013, the CO rejected Sauer's request to add home 

office overhead to the settlement stating among other things, that "because a fair and 

reasonable bottom line price was negotiated ... there is no merit to Sauer's request for 

'standard overhead rate"' (R4, tab 10 at 1001 ). 

4. The government and Sauer entered into Modification No. 17 (Mod 17) of 

Task Order 4 on 26 September 2013. The stated purpose of the modification was to 

adjust the task order for time and money due to the government's suspension of work 

for over a year as referenced in Sauer' s 18 June 2013 letter. The settlement in Mod 17 

was for a lump sum of $925,000 and a time extension of 437 days. The modification 

provides, in relevant part: 

The negotiated amount incorporates extention [sic] of 

warranties and escalation of price for labor and material. 

All changes associated with the susupension [sic] are 

included in this amount with the exception of consideration 

for unabsorbed overhead, to which Sauer wishes to reserve 

the right to request further consideration if they choose. 

"CONTRACTOR'S STATEMENT OF RELEASE" 

Acceptance of this modification by the contractor 

constitutes an accord and satisfaction and represents 

payment in full for both time and money for any and all 

costs, impact effect, and for delays and disturptions [sic] 

arising out of, or incidental to, the work as herein revised. 

(R4, tab 4 at 140) 

5. By letter dated 18 November 2014, Sauer submitted a certified claim to the 

CO in the amount of $130,899 for unabsorbed home office overhead for the 

government suspension covered in Mod 1 7. The certified claim did not mention 

Sauer's earlier request, dated 18 June 2013, to add $57,535 in home office overhead 

for the cost increases related to the government suspension of work. (R4, tab 11) 

2 The Board expresses no opinion as to whether this letter is a contracting officer's 

final decision (COFD). 

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6. The government denied Sauer's certified claim by a contracting officer's 

final decision (COFD), dated 16 September 2015. The COFD did not mention Sauer's 

earlier request, dated 18 June 2013, to add $57,535 in home office overhead for the 

cost increases related to the government suspension of work. (R4, tab 15) Sauer 

timely appealed to this Board on 11 December 2015. 

7. Sauer' s complaint, dated 13 January 2016, alleges that it is entitled to 

$130,899 for unabsorbed home office overhead due to the government suspension 

covered in Mod 17 and $57,535 for home office overhead associated with the cost 

increases ofMod 17 (compl. ~ 48). 

8. By motion dated 13 May 2016, the government moved to dismiss the 

$57,535 home office overhead portion of the complaint. 

DECISION 

The government argues that Sauer' s request for relief for home office overhead 

should be dismissed for lack of jurisdiction because it was not first presented to the CO 

and Mod 1 7 precluded Sauer from submitting any claims other than for unabsorbed 

home office overhead during the government suspension of work. Sauer argues in 

reply that both requests for relief in its complaint arise from the same set of operative 

facts and whether Mod 17 precludes Sauer's request for home office overhead is a 

government affirmative defense and is not relevant to determining whether both 

requests for relief arise from the same set of operative facts. 

Under the CDA, the Board has jurisdiction over disputes based upon claims 

that a contractor has first submitted to the CO for decision. 41 U.S.C. §§ 7103-7105. 

We lack jurisdiction over claims raised for the first time on appeal, in a complaint or 

otherwise. Whether a claim before the Board is new or essentially the same as 

presented to the CO depends upon whether the matters derive from common operative 

facts. Dawkins General Contractors & Supply, Inc., ASBCA No. 48535, 03-2 BCA 

~ 32,305 at 159,844. As we stated in Shams Engineering & Contracting Co. & Ramli 

Co., ASBCA Nos. 50618, 50619, 98-2 BCA ~ 30,019 at 148,524-25: 

The mere introduction of additional facts or the assertion 

of a new legal theory of recovery, when based upon the 

same operative facts as included in the original claim, do 

not constitute a new claim. However, where the proof of 

the new legal theory of recovery contains operative facts 

which differ from those asserted in the original claim, the 

essential nature of the claim has been changed and we do 

not have jurisdiction over the new claim until it is 

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presented to the contracting officer for decision. Trepte 

Construction Company, Inc., ASBCA No. 38555, 90-1 

BCA ii 22,595; Service Engineering Company, ASBCA 

No. 42137, 94-3 BCA ii 27,064. 

In determining a claim's scope, we are not limited to the claim document but 

can examine the totality of the circumstances. No particular wording is necessary to 

express it, but the CO must have "adequate notice" of the basis and amount of the 

claim. Versar, Inc., ASBCA No. 56857, 10-1 BCA ii 34,437 at 169,957. 

Sauer's request for relief for home office overhead in its complaint was not 

mentioned in its certified claim that was presented to the CO (SOF ii 5). While both 

requests for relief in Sauer's complaint derive from the government suspension, the 

proof for $57,535 the home office overhead contains different operative facts from 

those for the $130,899 unabsorbed home office overhead. Sauer's request for 

unabsorbed home office overhead is for overhead related to the original contract 

amount that was unabsorbed, whereas home office overhead is for overhead related to 

the increased contract amount from Mod 17 (SOF ii 7). Thus, the request for home 

office overhead has operative facts different from those for unabsorbed home office 

overhead. Sauer even recognizes this in its complaint as it states "[t]he inclusion of a 

home office overhead rate applied to additional contract costs is standard in the 

industry and is distinct from and additional to any claim for unabsorbed home office 

overhead" (compl. ii 44). 

When looking at the totality of the circumstances, it is clear that the CO did not 

have adequate notice that Sauer's request for home office overhead was part of its 

claim submitted for a COFD. The COFD itself made no mention of the home office 

overhead associated with the cost increases of Mod 17 (SOF ii 6). While the basis and 

amount for the home office overhead was discussed in Sauer's letter, dated 18 June 

2013, there is nothing in Sauer's claim to put the CO on notice that Sauer was 

requesting a decision on the home office overhead (SOF ii 5). 

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CONCLUSION 

Accordingly, we find that the request for relief for home office overhead derives 

from different operative facts than the claim for unabsorbed home office overhead. 

The government's motion is granted and the request for $57,535 in home office 

overhead is stricken from the complaint. 

Dated: 17 November 2016 

I concur 

~~A4(_ Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

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. 60366, Appeal of Sauer 

Incorporated, rendered in conformance with the Board's Charter. 

Dated: 

5 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals