In the United States Court of Federal Claims

No. 18-1032C

(E-Filed: August 30, 2019)

KUDSK CONSTRUCTION, INC.,

Plaintiff,

v.

THE UNITED STATES,

Defendant.

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Contract; RCFC 12(b)(6); Plausible 

Claim for Damages Due to Delayed 

Notice to Proceed; Reporting 

Requirements Not Necessarily 

Incorporated into Contract by 

Christian Doctrine.

William J. Braun, La Jolla, CA, for plaintiff. 

Rebecca S. Kruser, Trial Attorney, with whom were Joseph H. Hunt, Assistant 

Attorney General, Robert E. Kirschman, Jr., Director, and Deborah A. Bynum, 

Assistant Director, Commercial Litigation Branch, Civil Division, United States 

Department of Justice, Washington, DC, for defendant. MAJ Christopher A. 

Lacour, United States Army Litigation Division, Fort Belvoir, VA, of counsel.

OPINION

CAMPBELL-SMITH, Judge.

This matter is before the court on defendant’s motion for partial dismissal, filed 

pursuant to Rule 12(b)(6) of the Rules of the United States Court of Federal Claims 

(RCFC), addressing a portion of Count I and all of Count IV of plaintiff’s complaint. See

ECF No. 8. Plaintiff’s complaint, ECF No. 1, plaintiff’s response to defendant’s motion

to dismiss, ECF No. 9, and defendant’s reply, ECF No. 16, were also considered by the 

court. Oral argument was not requested by the parties nor required by the court. For the 

reasons set forth below, defendant’s motion is DENIED.
2

I. Background1

Plaintiff Kudsk Construction, Inc. (Kudsk) was awarded a construction contract, 

Contract No. W9124N-09-C-0040, by the United States Army Reserve Contracting 

Center (Army) on or about September 11, 2009. ECF No. 1 at 1-2. The contract was for 

the renovation of six barracks at an Army Reserve Training Area. Id. at 2. 

Approximately ten days after award, the Army notified Kudsk to suspend any work on 

the contract, because a bid protest had been filed. Id. On December 1, 2009, Kudsk was 

notified that the protest had been denied and that the work could proceed. Id. Kudsk 

filed a claim on December 30, 2009, under Federal Acquisition Regulation (FAR) 

52.233-3(b)(2), for “administrative and overhead” incurred while “waiting for [a] Notice 

to Proceed.”2

 Id.

After contract performance was complete, Kudsk filed a certified claim with the 

contracting officer. Id. at 3. Two elements of that claim, which was approved in part and 

denied in part, are at issue in the motion for partial dismissal now before the court. In 

Count I of the complaint, Kudsk seeks “increased costs and unabsorbed home office 

expenses” for the period of time Kudsk was on standby, from September 11, 2009, 

through December 11, 2009, when the Notice to Proceed issued. Id. at 4-5. This claim is 

in the amount of $66,738. Id. at 5.

In Count IV of the complaint, Kudsk asserts that on or about July 15, 2010, the 

Army directed Kudsk to comply with the reporting requirements of the American 

Recovery and Reinvestment Act of 2009 (ARRA), Pub. L. No. 111-5, Div. A, § 1512, 

123 Stat. 115, 287-88, pursuant to a regulation that was not part of this construction 

contract. ECF No. 1 at 8. Kudsk began complying with these reporting requirements 

under protest. Id. at 9. According to Kudsk, the cost of compliance with ARRA 

reporting requirements over the period of contract performance was $6,739, and this 

amount, too, was included in plaintiff’s certified claim. Id.

Defendant’s motion to dismiss asserts that the claim for unabsorbed home office 

overhead contained in Count I, and the claim for ARRA reporting costs in Count IV, 

should be dismissed for failure to state a claim upon which relief can be granted. To the 

extent that Count I also contains a claim for “increased costs” that is distinct from 

 1 The facts recounted here are taken from the complaint. The court makes no 

findings of fact in this opinion. Although the government invites the court to consider 

exhibits attached to its motion to dismiss to support the dismissal of a portion of Count I 

of the complaint, the court does not require these exhibits for its analysis. See ECF No. 8 

at 7 n.2.

2 All citations to the Federal Acquisition Regulation (FAR) in this opinion are to the 

2018 version of Title 48 of the Code of Federal Regulations, unless otherwise noted.
3

plaintiff’s unabsorbed home office overhead claim, such a claim is not addressed in 

defendant’s motion for partial dismissal. ECF No. 8 at 10-11; ECF No. 16 at 1 n.1. For 

the reasons set forth below, neither of the claims identified by defendant’s motion can be 

dismissed pursuant to RCFC 12(b)(6).

II. Standard of Review

When considering a motion to dismiss brought under RCFC 12(b)(6), “[w]e must 

presume that the facts are as alleged in the complaint, and make all reasonable inferences 

in favor of the plaintiff.” Cary v. United States, 552 F.3d 1373, 1376 (Fed. Cir. 2009) 

(citing Gould Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991)). It is wellsettled that a complaint should be dismissed under RCFC 12(b)(6) “when the facts 

asserted by the claimant do not entitle him to a legal remedy.” Lindsay v. United States, 

295 F.3d 1252, 1257 (Fed. Cir. 2002). “To survive a motion to dismiss, a complaint must 

contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is 

plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

III. Analysis3

A. Count I – Unabsorbed Overhead Claim

1. Introduction

When the government delays a construction contract, so that no direct costs are 

incurred by the contractor for a period of time, fixed home office overhead costs, which 

normally are paid proportionally through payments for the direct costs of various 

construction projects, may be “unabsorbed.” Defendant’s motion provides this 

explanation of the concept: 

A contractor recovers these indirect costs, such as home office overhead, by 

allocating a share of these costs to each contract throughout the year, with 

allocation proportional to the direct costs of each contract. When the 

Government suspends performance under the contract, the contractor ceases 

to incur direct costs. If the Government requires the contractor to be on 

standby during the suspension, so to begin work immediately or on short 

notice, then the contractor may be unable to take on replacement work and 

recover the proportional share of the home office overhead originally 

allocated to the suspended project. This unrecovered home office overhead 

 3 The court has considered all of the parties’ arguments. The court only discusses in 

this opinion the arguments that were dispositive.
4

is unabsorbed during the period of suspension and, under very specific 

circumstances, a contractor may be entitled to compensation.

ECF No. 8 at 11 (internal quotations and citations omitted). Plaintiff’s Count I clearly 

contains a claim for unabsorbed home office overhead. ECF No. 1 at 4-5; see also ECF 

No. 9 at 5 (“The reasonable implication of these allegations is that KUDSK was unable to 

bid on new work to cover its overhead costs during the suspension period, and that during 

that period of time the project was unable to cover its share of overhead expenses.”). 

This type of claim is often referred to as a claim for Eichleay damages, but here it is 

better to describe plaintiff’s claim as a claim for unabsorbed overhead. See ECF No. 8 at 

11-12 (citing Eichleay Corp., ASBCA No. 5183, 60-2 BCA ¶ 2688, 1960 WL 538 (July 

29, 1960)).

2. Fact Issue Not Readily Resolved on a Motion to Dismiss

Before turning to the elements of proof for unabsorbed overhead, and the question 

of whether plaintiff has stated a claim for unabsorbed overhead in this suit, the court 

notes that one of the elements of this type of claim is often fact intensive. The contractor 

must prove that while it was on standby, alternative work could not be performed during 

the delay in performance due to the contractor’s commitment to the government to return 

to the government’s project on short notice. See, e.g., P.J. Dick Inc. v. Principi, 324 F.3d 

1364, 1371 (Fed. Cir. 2003) (stating that “the contractor must show that during that delay 

it was required to be ready to resume work on the contract, at full speed as well as 

immediately”) (citation omitted). The question of whether the contractor was on standby 

is more commonly addressed by this court on summary judgment than through the 

resolution of a motion to dismiss, and this factual question is not always even susceptible 

to resolution on summary judgment. See H.J. Lyness Constr., Inc. v. United States, 121 

Fed. Cl. 287, 292-94, 296 (2015) (granting summary judgment in favor of the 

government because the contractor was not on standby during the period of delay), aff’d, 

652 F. App’x 972 (Fed. Cir. 2016) (table); JMR Constr. Corp. v. United States, 117 Fed. 

Cl. 436, 443-45 (2014) (denying the government’s motion for partial summary judgment 

as to the standby issue regarding the first period of delay, but granting summary 

judgment in favor of the government on the standby issue for the second period of delay); 

Redland Co. v. United States, 97 Fed. Cl. 736, 751 (2011) (granting summary judgment 

in favor of the government on the standby issue); Oak Envtl. Consultants, Inc. v. United 

States, 77 Fed. Cl. 688, 702 (2007) (denying cross motions for summary judgment, in 

part, because further fact-finding was needed to determine whether the contractor had 

been placed on standby); Ryco Constr., Inc. v. United States, 55 Fed. Cl. 184, 202 (2002) 

(denying the government summary judgment on Eichleay damages because it was “a 

triable issue whether plaintiff was on standby”). With this procedural consideration in 

mind, the court turns to the parties’ arguments regarding plaintiff’s claim for unabsorbed 

overhead in the circumstances of this contract dispute.

3. Precedential Guidance in Nicon Applied to This Case
5

According to defendant, plaintiff’s unabsorbed overhead claim is barred by the 

United States Court of Appeals for the Federal Circuit’s decision in Nicon, Inc. v. United 

States, 331 F.3d 878 (Fed. Cir. 2003). ECF No. 8 at 13. The government has three 

propositions that are derived from its reading of Nicon. First, according to the 

government, no Eichleay damages can be awarded for delays that occur before a Notice 

to Proceed has issued. ECF No. 8 at 13 (citing Nicon, 331 F.3d at 885). Second, the 

government argues that no alternative compensation formula, different from the Eichleay

formula, is applicable in this case, because the alternative formula permitted in Nicon can 

only be used in situations where unabsorbed overhead should be included in a 

termination for convenience settlement. Id. at 14 (relying on Nicon, 331 F.3d at 888; 

Redland, 97 Fed. Cl. at 748). Third, defendant argues that Kudsk cannot show that it 

meets the strict prerequisites for an award of unabsorbed overhead, as these prerequisites 

are stated in Nicon. Id. at 15 (citing Nicon, 331 F.3d at 885). The court notes that 

defendant relies, to a great extent, on this court’s Redland decision for its interpretation of 

Nicon.

4

 Id. at 11, 14-17; ECF No. 16 at 2-8.

a. No Categorical Bar in Nicon Regarding Unabsorbed 

Overhead Claims for Pre-Performance Delays Caused by the 

Government

There are two statements in Nicon which might bar unabsorbed overhead claims 

for delays that occur prior to the issuance of a Notice to Proceed. First, “[w]e agree with 

the Court of Federal Claims that constructive figures may not be substituted into the 

Eichleay formula and that use of the formula is limited to situations in which contract 

performance has begun and has been suspended by the government, causing the 

performance to take longer than originally anticipated.” Nicon, 331 F.3d at 884. 

Similarly, the Federal Circuit reaffirmed this aspect of its holding: “The Court of Federal 

Claims was therefore correct in concluding that the Eichleay formula is only applicable in 

situations in which contract performance has begun.” Id. The court notes, however, that 

each of these statements categorically limits the use of the Eichleay formula to delays that 

occur after a Notice to Proceed has issued, but neither of these statements addresses the 

question of whether unabsorbed overhead might be available if the quantum of the claim 

were calculated in some other way.5

 4 Decisions of this court do not establish binding precedent for this case. E.g., 

W. Coast Gen. Corp. v. Dalton, 39 F.3d 312, 315 (Fed. Cir. 1994).

5 It should be noted that the Armed Services Board of Contract Appeals (ASBCA), 

in one decision, has interpreted the holding in Nicon to apply only to situations where the 

delay occurred before performance began and where the contract was never performed. 

See Alderman Bldg. Co., ASBCA No. 58082, 15-1 BCA ¶ 35841, 2014 WL 7260695 

(Dec. 9, 2014) (suggesting that the Eichleay formula still applies to pre-performance 

delays where contract performance later occurred, if the prerequisite elements to support 
6

In Redland, this court interpreted those statements from the Federal Circuit, which 

limited the use of the Eichleay formula, as a ban on the availability of unabsorbed 

overhead for delays occurring before contract performance had begun. 97 Fed. Cl. at 

747-48 (citing Nicon, 331 F.3d at 884-85, 888). Here, the court prefers to adhere strictly 

to the text of Nicon. Plaintiff cannot benefit from the Eichleay formula, but there is no 

holding in Nicon which categorically bars plaintiff from recovering unabsorbed overhead 

for the three-month delay before the Army issued its Notice to Proceed.6

Indeed, the viability of a claim for unabsorbed overhead brought by a contractor 

who is prevented from starting construction is one of the primary holdings in Nicon. 331 

F.3d at 881 (“We . . . remand for further proceedings to determine if Nicon may recover 

unabsorbed overhead damages as part of its termination for convenience settlement by 

some other method of allocation”); id. at 884 (“However, [just because the Eichleay

formula is inapplicable] does not mean that a contractor, who is required to remain on 

standby because of a government-caused delay but is never allowed to begin 

performance, may not receive some of its unabsorbed home office overhead as part of its 

termination for convenience settlement by some other method of allocation.”); id. at 886 

(“Even if there is no date set in the contract by which a notice to proceed must issue, 

there is an implied obligation on the part of the government to issue the notice to proceed 

within a reasonable time.” (citing Ross Eng’g Co. v. United States, 92 Ct. Cl. 253 

(1940)); id. at 888 (“[I]n situations in which contract performance has not yet begun, but 

the government terminates the contract for convenience after a period of delay, the 

contractor is not left without a remedy. The contractor may recover unabsorbed overhead 

costs as part of its termination for convenience settlement if a reasonable method of 

allocation can be determined on the facts of the case and the contractor can otherwise 

satisfy the strict prerequisites for recovery of unabsorbed overhead costs.”). Thus, the 

Federal Circuit allowed a claim for unabsorbed overhead to be litigated, where 

performance had not begun and the contract was terminated for the convenience of the 

government. In the court’s view, the text of the Nicon decision does not include a 

categorical bar on claims for unabsorbed overhead based on delays that occur before a 

Notice to Proceed is issued, and respectfully disagrees with the Redland decision on this 

point.

b. Alternative Formulas Not Necessarily Barred by Nicon

There are two plausible readings of Nicon regarding the use of alternative 

formulas, other than the Eichleay formula, to support an unabsorbed overhead claim. 

 

a claim for Eichleay damages are met (citing Nicon, 331 F.3d at 888)). In the court’s 

view, this reading of Nicon is not persuasive. See infra note 7.

6 The court notes that the interpretation of Nicon presented in Redland has not been 

cited in later decisions on the topic of claims for unabsorbed overhead.
7

Relying on Redland, the government argues that in Nicon, alternative formulas were only 

approved for use in the circumstance where a pre-performance delay was followed by a 

termination for convenience before performance could occur.7

 ECF No. 8 at 14 (citing 

Redland, 97 Fed. Cl. at 748); ECF No. 16 at 3-4 (citing Redland, 97 Fed. Cl. at 747). 

One could also read Nicon as creating an exception which allows for the use of 

alternative formulas in the context of pre-performance delays followed by a termination 

for convenience, and leaving open the possibility that this exception could be extended to 

other pre-performance delay scenarios.

This court’s decision in Redland notes that using alternative formulas to show 

unabsorbed overhead for anything other than a termination for convenience settlement 

would be an extension of Nicon. See Redland, 97 Fed. Cl. at 748 (stating that “the court 

need not decide whether Nicon’s holding can be extended to other situations”). The court 

has not found any binding precedent on this topic. In the absence of binding precedent as 

to the possible extension of the exception created by the Nicon decision for alternatives to 

the Eichleay formula, the court cannot state that Kudsk’s unabsorbed overhead claim is 

foreclosed as a matter of law by the Nicon decision.

c. Nicon’s Strict Prerequisites for Unabsorbed Overhead Claims 

Involve Disputed Facts

As the Federal Circuit’s most recent pronouncement on unabsorbed overhead 

claim prerequisites, Nicon provides binding precedent that must be applied in this case.8

 

 7 In Alderman, the ASBCA also construed the Nicon exception, allowing alternative 

formulas to support a claim for unabsorbed overhead, as a narrow one that only applies to 

termination for convenience cases. See Alderman, 2014 WL 7260695 (asserting that the 

Nicon “court stressed that its holding did not extend to cases in which ‘performance of 

the contract does eventually occur or resume after the government-caused delay’” 

(quoting Nicon, 331 F.3d at 883) (emphases added)). But that quote in Alderman is not 

the holding of Nicon. The full sentence in Nicon, which is only partially quoted by the 

ASBCA, is not a holding but a description of other cases which are distinguishable

because they arose from different facts: “In the typical cases dealing with the application 

of the Eichleay formula, performance of the contract does eventually occur or resume 

after the government caused delay.” 331 F.3d at 883. The clear holding in Nicon is 

found, instead, in this statement: “the Eichleay formula is only applicable in situations in 

which contract performance has begun.” Id. at 884.

8 This type of unabsorbed overhead claim is the subject of “long standing” guidance 

in binding precedent, Capital Elec. Co. v. United States, 729 F.2d 743, 747 (Fed. Cir. 

1984), and the Nicon decision must be presumed to correctly apply this entire body of 

precedent, see Johnston v. IVAC Corp., 885 F.2d 1574, 1579 (Fed. Cir. 1989) (“Where 

conflicting statements . . . appear in our precedent, the panel is obligated to review the 

cases and reconcile or explain the statements, if possible.”); see also P.J. Dick, 324 F.3d 
8

The three prerequisites are as follows: (1) “there must have been a government-caused 

delay of uncertain duration”; (2) “[t]he contractor must also show that the delay extended 

the original time for performance or that, even though the contract was finished within 

the required time period, the contractor incurred additional costs because he had planned 

to finish earlier”; and (3) “the contractor must have been on standby and unable to take 

on other work during the delay period.” Nicon, 331 F.3d at 883 (citations omitted). The 

government appears to concede that the complaint alleges a government-caused delay of 

uncertain duration. ECF No. 8 at 15.

As to the second and third prerequisites, plaintiff argues that the complaint 

proffers sufficient facts for these elements, or, in the alternative, that leave to amend the 

complaint should be given to set forth adequate facts in support of these elements. ECF 

No. 9 at 5-6. As a threshold matter, the court notes that the parties dispute whether 

plaintiff’s contract was completed on time. ECF No. 1 at 3; ECF No. 7 at 2 (answer). 

The parties also hotly dispute whether plaintiff was on standby from September 11, 2009, 

through December 11, 2009. ECF No. 8 at 16-17; ECF No. 9 at 5-6; ECF No. 16 at 6-7. 

In this regard, plaintiff has alleged that its bonding capacity, strained by the government’s 

project, would not allow it to take on other work while it was on standby. ECF No. 1 at 

4.

The court concludes that the complaint contains a plausible unabsorbed overhead 

claim in Count I, under Nicon.

9

 Both parties intend to file motions for summary 

judgment at the close of discovery. See ECF No. 17 at 2 (joint preliminary status report). 

Whether plaintiff’s unabsorbed overhead claim will survive cross-motions for summary 

judgment is a question the court reserves for further inquiry. Plaintiff may seek leave, at 

its option, to amend its complaint in light of the court’s holdings in this opinion regarding 

Count I.

B. Count IV – ARRA Reporting Requirements

 

at 1372 (looking to the Federal Circuit’s “later decisions” for guidance on the standby 

prerequisite for unabsorbed overhead claims).

9 Plaintiff relies upon Interstate General Government Contractors, Inc. v. West, 12 

F.3d 1053 (Fed. Cir. 1993), as support for the viability of an unabsorbed overhead claim 

based on pre-performance delay, and as support for recovery through FAR 52.233-3. 

ECF No. 9 at 3-4. The court agrees that Interstate, when read in conjunction with the 

majority’s opinion in Nicon, adds plausibility to plaintiff’s claim in Count I. The court 

notes, too, that Interstate contains seminal guidance regarding the elements of proof for 

an unabsorbed overhead claim, as evidenced by extensive citations to Interstate in both 

Nicon and P.J. Dick. To the extent that defendant’s reply brief could be read to conclude 

that Interstate is no longer good law, the court would disagree. ECF No. 16 at 5.
9

According to Count IV of the complaint, Kudsk “incurred administrative costs 

preparing and submitting ARRA reports to the Contracting Officer along with its monthly 

payment applications.” ECF No. 1 at 9. Plaintiff views these costs as flowing from a 

unilateral change to the contract for which the government must pay. Id. The 

government argues that ARRA reporting requirements must be incorporated into the 

contract through the Christian doctrine and that the Army owes nothing to Kudsk for the 

costs of compliance with these requirements. See ECF No. 8 at 19, 22-25 (citing G. L. 

Christian & Assocs. v. United States, 320 F.2d 345 (Ct. Cl. 1963) (Christian II); G. L. 

Christian & Assocs. v. United States, 312 F.2d 418 (Ct. Cl. 1963) (Christian I). It is not 

clear to the court, however, that the Christian doctrine applies to ARRA reporting 

requirements in the circumstances of this case.

1. Christian Doctrine Overview

Generally, “under the Christian doctrine, a court may insert a clause into a 

government contract by operation of law if that clause is required under applicable 

federal administrative regulations.” K-Con, Inc. v. Sec’y of Army, 908 F.3d 719, 724 

(Fed. Cir. 2018) (citation omitted). “For a court to incorporate a clause into a contract 

under the Christian doctrine, it generally must find (1) that the clause is mandatory; and 

(2) that it expresses a significant or deeply ingrained strand of public procurement 

policy.” Id. (citation omitted). The first prong of the doctrine is satisfied if the clause is 

mandatory, i.e., if the clause is required by statute or regulation. Id. The second prong 

often examines how long a particular practice or policy has been in existence. See id. at 

726 (noting that the bonding requirement discussed in that case had been a feature of 

government construction contracts since 1935). A court may also consider whether the 

policy or practice serves a vital purpose in protecting the government from excessive 

contract payments. See, e.g., Gen. Eng’g & Mach. Works v. O’Keefe, 991 F.2d 775, 780 

(Fed. Cir. 1993) (General Engineering) (incorporating into a government contract an 

omitted, mandatory clause because, in part, it “discourages the unnecessary and wasteful 

spending of government money”).

2. Christian Doctrine Prong One: Whether ARRA Reporting 

Requirements Were Mandatory for Plaintiff’s Contract

The inquiry into the first prong of the Christian doctrine, as it might apply to 

plaintiff’s construction contract, focuses, first, on regulatory language. As defendant 

argues, the relevant FAR provisions were phrased in terms that were mandatory in nature, 

so that contractors benefiting from ARRA funds were required to submit reports which 

tracked the expenditure of ARRA funds in various ways. See ECF No. 8 at 21-22 (citing 

Federal Register for amendments to the FAR addressing ARRA reporting requirements, 

such as former provisions, specifically FAR 4.1500, FAR 4.1501(c), FAR 4.1502, and 

FAR 52.204-11, which are no longer contained in the current FAR); see also FAR Case 

2009-009, American Recovery and Reinvestment Act of 2009 (the Recovery Act)--

Reporting Requirements, 74 Fed. Reg. 14639, 14644-46 (Mar. 31, 2009)). Thus, there 
10

appears to be no real dispute that under the version of the FAR that was applicable when 

Kudsk entered into its contract with the Army, ARRA reporting requirements were 

established in the FAR as mandatory. This determination does not end the inquiry, 

however.

It is not clear from the record that Kudsk’s contract with the Army, Contract No. 

W9124N-09-C-0040, was funded in whole or in part by ARRA funds. The complaint 

alleges that the contracting officer informed Kudsk it should begin submitting ARRA 

reports in July 2010, approximately ten months after contract award and approximately 

seven months after Kudsk received the Notice to Proceed with contract performance. 

ECF No. 1 at 8. Nowhere in defendant’s answer, motion to dismiss, or reply brief, 

however, does the government affirmatively state that Contract No. W9124N-09-C-0040 

was funded in whole or in part with ARRA funds. Instead, defendant merely asserts that 

“Kudsk does not allege that its contract was not funded through the ARRA, or any other 

reason why the ARRA reporting requirements would not be applicable.” ECF No. 8 at 

25. Thus, defendant’s argument that ARRA reporting was mandatory for Contract No. 

W9124N-09-C-0040 is not supported by any evidence that ARRA funding for this 

contract triggered the mandatory reporting requirements set forth in the FAR at that time.

Nor has defendant alleged that Kudsk was on notice that its contract was funded in 

whole or in part by ARRA funds. Indeed, the most obvious, and mandatory, provision of 

such notice would have been the inclusion of FAR 52.204-11 setting forth ARRA 

reporting requirements with which Kudsk would need to comply. See ECF No. 8 at 

21-22 (arguing that at this time FAR 4.1502 required contracting officers to insert FAR 

52.204-11 into all solicitations funded in whole or in part by ARRA). Plaintiff’s 

complaint states that FAR 52.204-11 was not included in Contract No. 

W9124N-09-C-0040, and that Kudsk refused to sign a bilateral modification that would 

have inserted this clause into the contract after performance had begun. ECF No. 1 at 

8-9. Defendant accepts this allegation in the complaint as true for the purposes of its 

motion to dismiss. ECF No. 8 at 23. Further, the government does not contend that 

notice of ARRA funding for Contract No. W9124N-09-C-0040 was provided to Kudsk 

by some other means.

Lack of notice, on this record, undermines defendant’s argument that Kudsk 

cannot escape the incorporation of FAR 52.204-11 into its contract. Defendant argues 

that Kudsk was aware, or should have been aware, of ARRA reporting requirements. 

ECF No. 8 at 25 (citing General Engineering, 991 F.2d at 780). But unless Kudsk was on 

notice that its contract, Contract No. W9124N-09-C-0040, used ARRA funds and thus 

would be subject to ARRA reporting requirements, its awareness, or presumed 

awareness, of ARRA reporting requirements in the FAR would be immaterial.

To restate the court’s analysis regarding prong one of the Christian doctrine 

inquiry, the court agrees with defendant that ARRA reporting requirements were 

mandatory. However, the record does not establish that Contract No. 
11

W9124N-09-C-0040 was funded in whole or in part with ARRA funds, or that plaintiff 

was on notice that it was entering into a contract subject to ARRA reporting 

requirements. Given the current state of the record before the court, prong one of the 

Christian doctrine has not been satisfied. In other words, defendant has not shown that 

FAR 52.204-11 was a mandatory contract clause that should be incorporated into 

Contract No. W9124N-09-C-0040 pursuant to the Christian doctrine.

3. Christian Doctrine Prong Two: Whether ARRA Reporting 

Requirements Expressed a Deeply Ingrained Public Procurement 

Policy

The government does not fare any better when the court examines, under prong 

two, the public policies expressed in ARRA reporting requirements. Plaintiff notes that 

ARRA reporting requirements only remained part of federal government procurement 

policy for about five years, beginning with 2009, the year Kudsk entered into this 

contract with the Army. ECF No. 9 at 7. Indeed, it is difficult to see a parallel between 

the venerable procurement policy discussed in Christian I—the right for the government 

to terminate a contract for convenience, which has been consistently protected since 

World War II—or the bonding requirement in K-Con, which has been in place since 

1935. K-Con, 908 F.3d at 726; Christian I, 312 F.2d at 426. The court must agree with 

plaintiff that ARRA reporting requirements, which were newly-minted to track the effects 

of a specific economic stimulus package, were not the expression of a deeply ingrained 

federal procurement policy.

Defendant argues, nonetheless, that ARRA reporting requirements were similar to 

other contract clauses incorporated into procurement contracts by the Christian doctrine, 

because these requirements discouraged “‘unnecessary and wasteful spending of 

government money,’” and thus satisfied the significant and deeply ingrained procurement 

policy prong of the doctrine. ECF No. 16 at 10 (quoting General Engineering, 991 F.2d 

at 780). The government’s argument is colorable, in that some of the various ARRA 

reporting requirements could, indeed, help identify wasteful government spending. But 

the focus of ARRA reporting requirements, as evidenced by the expiration of these 

reporting requirements after five years, appears to have been on ensuring accountability 

to the American public with respect to a massive and time-limited effort to leverage this 

country out of an economic recession. See ECF No. 8 at 19-21 (describing the purposes 

of ARRA). ARRA reporting requirements were not, therefore, analogous to the contract 

clauses expressing deeply ingrained and significant procurement policies incorporated 

into the contracts discussed in Christian I, K-Con, or General Engineering.

Based on its review of the record now before the court, neither prong of the 

Christian doctrine analysis supports the incorporation of ARRA reporting requirements 

into plaintiff’s contract. Count IV, in consequence, survives defendant’s motion to 

dismiss.
12

IV. Conclusion

Both Count I and Count IV of the complaint contain plausible claims. On or 

before September 20, 2019, if desired, plaintiff may move to amend its complaint in 

light of the court’s holdings in this opinion regarding Count I. Any such motion must

present the proposed amended complaint as an attachment to the motion and must also 

state the government’s position on the motion. 

In accordance with the foregoing, defendant’s motion for partial dismissal, ECF 

No. 8, is DENIED. On or before September 20, 2019, the parties are directed to FILE a 

joint status report proposing the next steps in this litigation. In addition, should this 

decision require the parties to request leave to amend the discovery schedule in this 

matter, see ECF No. 18 (order), the parties shall do so by filing an appropriate joint 

motion with the court. 

IT IS SO ORDERED.

s/Patricia E. Campbell-Smith 

PATRICIA E. CAMPBELL-SMITH

Judge