ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of -- ) 

) 

Cooper/Ports America, LLC ) 

) 

Under Contract No. HTC711-15-D-R036 ) 

APPEARANCES FOR THE APPELLANT: 

APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 61461 

W. Barron A. Avery, Esq. 

William T. DeVinney, Esq. 

William B. O'Reilly, Esq. 

Katherine L. McKnight, Esq. 

BakerHostetler LLP 

Washington, DC 

Jeffrey P. Hildebrant, Esq. 

Air Force Deputy Chief Trial Attorney 

Caryl A. Potter III, Esq. 

Lt Col Byron G. Shibata, USAF 

Maj Sondra B. Nensala, USAF 

Christopher S. Cole, Esq. 

Danielle A. Runyan, Esq. 

Trial Attorneys 

OPINION BY ADMINISTRATIVE JUDGE O'SULLIVAN ON THE 

GOVERNMENT'S MOTION TO DISMISS FOR LACK OF JURISDICTION 

The government has filed a motion to dismiss this appeal for lack of subject 

matter jurisdiction. It argues that appellant, Cooper/Ports America, LLP (CPA) cannot 

bring the claim that is the subject of this appeal because CPA was not the "contractor" 

within the meaning of the Contract Disputes Act at the time the claim accrued. CPA 

opposes the government's motion and argues that under the novation agreement 

executed by the government, it has the legal right to assert claims that pre-date tlie 

novation agreement. 

STATEMENT OF FACTS FOR PURPOSES OF THE MOTION 

On 28 January 2015, the government awarded Contract No. HTC71 l-15-D-R036 

(the contract) to Shippers Stevedoring Co. ("Shippers") for stevedoring and related 

terminal services in support of the United States Transportation Command (gov't mot. 

at 2). Shippers soon began to incur financial losses on the contract and entered into 
negotiations with other firms to take over the contract. On 15 November 2016, CPA, 

Shippers, and the government executed a novation agreement with an effective date of 

30 September 2016 (id. at 3). On or about 1 October 2016, CPA took over performance 

of the contract pursuant to the novation agreement (id. at 2). CPA has since filed a 

number of claims against the government, but the claim that is the subject of this appeal 

is a claim for unilateral mistake in bid based, in part, on the fact that Shippers' bid was 

63% below that of the next lowest bidder, Ports America, one ofCPA's owners, and 

contained mistakes that should have been apparent to the government (R4, tab 21). 

that: 

Pursuant to the novation agreement, all three parties agreed (in relevant part) 

( 1) The Transferor [Shippers] confirms the transfer to the 

Transferee [CPA], and waives any claims and rights 

against the Government that it now has or may have in the 

future in connection with the contracts. 

(2) The Transferee agrees to be bound by and to perform 

each contract in accordance with the conditions contained 

in the contracts. The Transferee also assumes all 

obligations and liabilities of, and all claims against, the 

Transferor under the contracts as if the Transferee were the 

original party to the contracts. 

(3) The Transferee ratifies all previous actions taken by 

the Transferor with respect to the contracts, with the same 

force and effect as if the action had been taken by the 

Transferee. 

( 4) The Government recognizes the Transferee a:s the 

Transferor's successor in interest in and to the contracts. 

The Transferee by this Agreement becomes entitled to all 

rights, titles, and interests of the Transferor in and to the 

contracts as if the Transferee were the original part'/ to the 

contracts. Following the effective date of this Agreement, 

the term "Contractor," as used in the contracts, shall refer 

to the Transferee. 

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I (5) Except as expressly provided in this Agreement, 

nothing in it shall be construed as a waiver of any rights of 

the Government against the Transferor. 

(R4, tab 17 at 8-9) The language of the novation agreement closely tracks the 

suggested format contained in FAR Part 42.1204. 

DECISION 

The government contends that CPA lacks the required privity of contract to 

qualify as a "contractor" with standing to pursue a claim that accrued at a time that it 

was not a party to the contract (i.e., pre-novation) (gov't mot. at 6). As amplified in its 

reply brief, the government asserts that there must have been an express assignment of 

that claim to which the government consented in order for the Board to find a valid 

government waiver of the statutory prohibition against assignment of claims (gov't 

reply at 2-3). 

For its part, CPA responds that both the plain language of the nova ti on 

agreement and Board legal precedent make it clear that CPA, as the successor in 

interest under the contract, has the right to assert a claim accruing prior to the novation 

(app. resp. at 1). 

Pursuant to the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101 et seq., 

the Board's jurisdiction extends only to appeals brought by a "contractor." A 

"contractor" is defined as "a party to a Government contract other than the 

Government." 41 U.S.C. §7101(7). In the instant case, CPA entered into a novation 

agreement with both the government and its predecessor, Shippers, in which Shippers 

waived any claims and rights it might have against the government, and the 

government recognized CPA as the "successor in interest in and to the contracts," 

"entitled to all rights, titles and interests of the Transferor in and to the contracts as if 

the Transferee were the original party to the contracts" (R4, tab 17 at 8-9). The Board 

has previously held that a successor in interest under a novation agreement, pursuant to 

which it is "entitled to all the rights" of its predecessor as if it were "the original party" 

to the contract, is recognized by the government as the successor in interest for all 

purposes, including the right to pursue any claims its predecessor could have pursued. 

Vought Aircraft Company, ASBCA No. 47357, 95-1 BCA ,r 27,421 at 136,666. 

The government argues that, notwithstanding the novation agreement and our 

decision in Vought, the Federal Circuit's decision in Delmarva Power & Light Co. v. 

United States, 542 F.3d 889 (Fed. Cir. 2008) requires that there must have been an 

express assignment of a claim, to which the government consented, in order for the 

Board to find a valid government waiver of the statutory prohibition against 

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assignment of claims (gov't reply at 2-3). We disagree. There was no novation 

agreement in Delmarva to which the government was a party. Delmarva stands for the 

proposition that, in the absence of government consent by way of a novation 

agreement, the government may, in other ways, recognize an assignment of claims. In 

that case, the government had filed with the Court of Federal Claims a document 

purporting to accept the assignment of claims contained in a Transfer Agreement to 

which it had not been a party. In upholding the decision of the Court of Federal 

Claims validating the assignment, the Federal Circuit followed the analysis and 

reasoning of its predecessor, the Court of Claims, in Tuftco Corp. v. United States, 

614 F.2d 740 (Ct. Cl. 1980). 

The Anti-Assignment Act consists of two separate statutory provisions. 

Fireman's Fund Ins. Co. v. England, 313 F.3d 1344, 1349 (Fed. Cir. 2002); Tuftco 

Corp., 614 F.2d at 744. One provision, 41 U.S.C. § 15(a) (now 41 U.S.C. § 6305) 

prohibits the assignment of contracts, but allows monies due from the United States to 

be assigned to a financing institution. The other, 31 U.S.C. § 3727(a) prohibits the 

assignment of claims against the United States and contains a similar exception for 

assignments to financing institutions. Both Delmarva and Tuftco recognized that the 

government may validly waive the application of the Anti-Assignment Act; in each 

case the issue was whether the government, by its actions, had in fact done so. 

Tuftco involved the assignment of contracts rather than the assignment of 

claims and, as in Delmarva, there was no novation agreement. The court observed that 

while it is unclear precisely what actions by the government will constitute recognition 

of an assignment, "[t]he soundest and most accepted method of establishing 

recognition by the Government is for all three parties to enter into a novation 

agreement." Tuftco Corp., 614 F.2d at 745. However, it continued, a novation 

agreement is not the exclusive means of establishing recognition, and where the 

government's course of conduct, its statements to the parties, and its dealings with the 

assignee indicate it recognizes the assignee as the contractor, recognition has been 

found. Id. Tuftco proceeded to find that the actions of the government were sufficient 

to constitute recognition of the assignments. 

In this case, it is unnecessary for us to conduct such an analysis because the 

government expressly recognized CPA as the "contractor" in the novation agreement. 

Moreover, it recognized CPA as "entitled to all rights, titles and interests of the 

Transferor in and to the contracts as if the Transferee were the original party to the 

contracts." To read this broad recognition as excluding the right to pursue a claim 

accruing to the original contractor, as the government urges us to do in this case, 

would do violence to the clear intent of the agreement. If the tables were turned, and 

CPA had urged us to limit its assumption of "all obligations and liabilities of, and all 

claims against, the Transferor under the contracts as if the Transferee were the original 

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party to the contracts" to those liabilities or claims expressly spelled out in the 

agreement by the government, we doubt the government would acquiesce. 

That the reciprocal provision entitling the transferee to "all rights, titles, and 

interests" of the transferor does not expressly include the word "claims" does not 

change our conclusion. We reject as lacking merit the government's argument that the 

absence of the word "claims" in the paragraph recognizing CPA as the successor in 

interest reflects an intent on the part of the drafters of the FAR to exclude from the 

novation agreement a transferee's ability to pursue pre-novation claims (gov't reply at 

7-8). The right to pursue pre-novation claims is well within the government's 

recognition that CPA possesses all "rights, titles, and interests" as if it "were the 

original party to the contracts." Vought Aircraft Co., 95-1 BCA ,r 27,421 at 136,666. 

The government's motion to dismiss for lack of jurisdiction is denied. 

Dated: 2 May 2018 

!concur~ 

RICHARD SHACKLEFORD 

Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

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~ 

concur ..:/__,,, /Y 

J. REID PROUTY 

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. 61461, Appeal of 

Cooper/Ports America, LLC, rendered in conformance with the Board's Charter. 

Dated: 

5 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals