ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of --

Parsons Evergreene, LLC 

Under Contract No. FA8903-04-D-8703 

APPEARANCES FOR THE APPELLANT: 

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APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 61784 

Douglas S. Oles, Esq. 

James F. Nagle, Esq. 

Adam K. Lasky, Esq. 

Howard W. Roth III, Esq. 

Oles Morrison Rinker & Baker LLP 

Seattle, WA 

Jeffrey P. Hildebrant, Esq. 

Air Force Deputy Chief Trial Attorney 

Michelle D. Coleman, Esq. 

Trial Attorney 

OPINION BY ADMINISTRATIVE JUDGE PROUTY 

REGARDING ALLEGEDLY TARDY REQUESTS FOR PAYROLL RECORDS 

As stated in footnote 1 of the majority opinion for ASBCA No. 58634 and in 

our order issued today on the matter, for reasons of clarity and judicial efficiency, 

we *issue this separate opinion under a new appeal number upon the subject of 

appellant, Parsons Evergreene, LLC's (PE's), demand for compensation of costs 

associated with the Air Force's (AF's) allegedly tardy requests for payroll records. 

Judge Clarke, who presided over the hearing in this matter, believes, for those 

reasons set forth in his dissent, that the AF's failure to engage in a "prompt" investigation 

of the payroll matter should entitle PE to compensation pursuant to Federal Acquisition 

Regulation (FAR) 22.406-1. As we explain below, although we adopt the material 

findings of fact made by Judge Clarke's majority opinion in ASBCA No. 58634, 

concurrently filed today, PE's appeal based upon FAR 22.406-1 is denied. 

* Because the two judges who reviewed Judge Clarke's original opinion in ASBCA 

No. 58634 (Judges Shackleford and Prouty) came to a different conclusion than 

Judge Clarke on the payroll review issue, the remaining two judges from 

Judge Clarke's division were asked to consider it, consistent with Board practice and 

procedure. As reflected below, they concurred with Judges Shackleford and Prouty. 
We deny this appeal because FAR 22.406-1 does not provide a remedy to a 

contractor for the government's untimely investigation of complaints relating to labor 

standards. Under longstanding law: 

In order for a private contractor to bring suit against 

the Government for violation of a regulation, that 

regulation must exist for the benefit of the private 

contractor. 

Freightliner Corp. v. Caldera, 225 F.3d 1361, 1365 (Fed. Cir. 2000) (citing Cessna 

Aircraft Co. v. Dalton, 126 F.3d 1442, 1451 (Fed. Cir. 1997); and Rough Diamond Co. 

v. United States, 351 F .2d 636, 640-42 (Ct. Cl. 1965)). Cessna was particularly clear: 

The primary intent of a statute or regulation must be to 

protect or benefit a class of persons in order for that class 

to be able to bring suit against the government for violating 

the statue or regulation. 

126 F.3d at 1451 (citing Rough Diamond, 351 F.2d at 640, 642). To be sure, a regulation 

may be intended to benefit more than one class of persons, see, e.g., Todd Cons tr., L.P. v. 

United States, 656 F.3d 1306, 1314 (Fed. Cir. 2011) (performance evaluation regulation 

meant to benefit both government and contractor), but Freightliner and Cessna make 

clear that the operative test is not that application of the regulation merely be to the 

benefit of the contractor in the particular controversy for which it is bringing suit, but that 

the contractor has been an intended beneficiary all along. 

With this in mind, we tum to the text of FAR 22.406-1. That FAR provision is 

entitled, "Policy," which underscores, to us, that the section is meant as a broad explanation 

of later FAR provisions as well as an instruction for contracting agencies about the goals of 

their labor standards programs. Subsection (a) of FAR 22.406-1 provides, in full: 

General. Contracting agencies are responsible for 

ensuring the full and impartial enforcement of labor 

standards in the administration of construction contracts. 

Contracting agencies shall maintain an effective program 

that shall include -

(I) Ensuring that contractors and subcontractors are 

informed, before commencement of work, of their 

obligations under the labor standards clauses of the 

contract; 

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(2) Adequate payroll reviews, on-site inspections, 

and employee interviews to determine compliance by the 

contractor and the subcontractors, and prompt initiation of 

corrective action when required; 

(3) Prompt investigation and disposition of 

complaints; and 

( 4) Prompt submission of all reports required by 

this subpart. 

The remainder of FAR 22.406-1, subsection (b), directs the issuance ofpreconstruction 

letters and the arrangement of preconstruction conferences with contractors. 

Reviewing the full text confirms our view that the FAR' s requiring "prompt 

investigation and disposition of complaints," see FAR 22 .406-1 ( a )(3 ), was, at most, for the 

benefit of labor, for whose advantage labor standards are required to be enforced, not for 

the benefit ofthe contractor. See Freightliner, 225 F.3d at 1365. Moreover, nothing in the 

language of the FAR provision comes close to suggesting that its "primary intent" was to 

"protect or benefit" the contractor class. See Cessna, 126 F.3d at 1451. 

Alternatively, we could conclude that FAR 22 .406-1, in setting out general policies 

for contracting agencies to follow, but not specifics, was meant merely for the benefit of 

the government as a "housekeeping regulation," providing guidance to government 

employees about how to establish their labor standards programs, and thus its violation 

gives no class any enforceable rights. See, e.g., Hartman v. Nicholson, 483 F.3d 1311, 

1315-16 (Fed. Cir. 2007). Ultimately, we need not decide between whether labor or the 

government was the intended beneficiary to determine that the subject provision was not 

intended for the benefit of the contractor. Creation of a cause of action against the 

government does not occur by happenstance, and there is not enough here to create one 

anew. Thus, we respectfully disagree with our colleague and deny the portion of PE's 

appeal seeking compensation for the allegedly tardy AF request for payrolls. 

Dated: September 5, 2018 

(Signatures continued) 

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J .' REID PROUTY 

Administrative Judge 

Vice Chairman 

Armed Services Board 

of Contract Appeals 
I concur 

RICHARD SHACKLEFORD 

Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

I concur 

ALEXANDER 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

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I concur 

DA YID D' ALESSANDRIS 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

I dissent (see separate opinion) 

Administrative Judge 

Armed Services Board 

of Contract Appeals 
DISSENTING OPINION BY ADMINISTRATIVE JUDGE CLARKE 

REGARDING ALLEGEDLY TARDY REQUESTS FOR PAYROLL 

I respectfully disagree with my colleagues. 

PE claims $762,130 for the government's violation of FAR 22.406-1 Policy, 

dealing with enforcement of labor standards, in particular payroll reviews. In order for 

a contractor to have a cause of action against the government for violation of a 

regulation, it must prove that the regulation exists for the benefit of the contractor. 

Freightliner Corp. v. Caldera, 225 F.3d 1361, 1365 (Fed. Cir. 2000). 

FAR 22.406-1 requires that if a problem is found during payroll reviews, on-site 

inspections and employee interviews there will be "prompt initiation of corrective action," 

"Prompt investigation and disposition of complaints," and "Prompt submission of all reports 

required by this subpart" (finding 201 ).* I infer from this that the payroll reviews themselves 

must also be prompt or the entire regulatory scheme becomes meaningless. 

PE and its subcontractors submitted payrolls commencing in 2005 (finding 203). 

The Air Force (AF) "sampled" payrolls and found no problems until the first labor 

interview on 6 December 2007 (id.). The interview caused the AF to look closer at the 

payrolls. This started the lengthy process of the AF requiring PE to resubmit past payrolls 

and respond to AF questions between 2008 and as late as 2012 (findings 203-07). The 

AF took beneficial occupancy on 11 September 2008 (finding 197). I accept PE's 

position that the AF's waiting to commence interviews and detailed payroll reviews until 

2008, when the contract was almost over, made it much more difficult and expensive for 

PE to comply. 

PE has proven that the government failed to conduct payroll reviews promptly and 

as a result it was much more difficult and expensive for PE to respond. I conclude that 

proof of such direct and predictable harm to a contractor is prima facie evidence that a 

regulation, in this case FAR 22.406-1, exists for the benefit of the contractor. The 

government is then required to come forward with evidence to contest the prima facie 

case. If the government fails to do so, the prima facie case stands uncontroverted and the 

party with the burden of proof will have established its case by a preponderance of the 

evidence. Environmental Safety Consultants, Inc., ASBCA No. 53485, 05-1 BCA 

~ 32.903 at 163,019. In this case. the government presented no evidence or argument on 

the benefit issue. I agree with my colleagues that FAR 22.406-1 also benefits workers, 

* References to findings are to the companion decision issued simultaneously with this 

decision. 

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but it is unlikely workers will ever avail themselves of the cause of action so my 

colleagues concession is academic. I sustained this claim and awarded PE $571,598 for 

the government's violation of FAR 22 .406-1. 

Dated: September 5, 2018 

CRAIG CLJ\E 

Administrative Judge 

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. 61784, Appeal of Parsons 

Evergreene, LLC, rendered in conformance with the Board's Charter. 

Dated: 

6 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals