Case Name: UNIVERSAL CANVAS, INC., Appellant, v. Michael P.W. STONE, Secretary of the Army, Appellee
Court: United States Court of Appeals for the Federal Circuit
Jurisdiction: United States
Decision Date: 1992-09-14
Citations: 975 F.2d 847
Docket Number: No. 92-1061
Parties: UNIVERSAL CANVAS, INC., Appellant, v. Michael P.W. STONE, Secretary of the Army, Appellee.
Judges: Before MAYER, Circuit Judge, COWEN, Senior Circuit Judge, and RADER, Circuit Judge.
Reporter: Federal Reporter 2d Series
Volume: 975
Pages: 847–854

Head Matter:
UNIVERSAL CANVAS, INC., Appellant, v. Michael P.W. STONE, Secretary of the Army, Appellee.
No. 92-1061.
United States Court of Appeals, Federal Circuit.
Sept. 14, 1992.
J. William Eshelman, Schmeltzer, Aptaker & Shepard, P.C., Washington, D.C., argued for appellant. With him on the brief was Suzanne Langford Sanford.
Joan M. Bernott, Sp. Litigation Counsel, Commercial Litigation Branch, Dept, of Justice, Washington, D.C., argued for ap-pellee. With him on the brief were Stuart E. Schiffer, Deputy Asst. Atty. Gen., David M. Cohen, Director and Terrence S. Hartman.
Before MAYER, Circuit Judge, COWEN, Senior Circuit Judge, and RADER, Circuit Judge.

Opinion:
MAYER, Circuit Judge.
Universal Canvas, Inc. appeals the Armed Services Board of Contract Appeals denial of an equitable adjustment and of a motion to vacate its decision for lack of jurisdiction. Universal Canvas, Inc., ASBCA No. 36141, 1991 WL 104149, 1991 WL 130398 (April 29, 1991; July 3, 1991). We reverse.
Background
On August 31, 1984, the Natick Army Research, Development and Engineering Center (Natick) awarded to Universal Canvas, Inc. contract number DAAK60-84-C-0062 (contract 0062), for the manufacture of TEMPER tents (Tent, Expandable, Modular, Personnel) along with related components. The contract provided that the government would supply cotton oxford cloth to be used as the liner for the tents. But during manufacture, Universal had difficulties with the government furnished material (GFM). As a result, Universal alleges that its performance of the contract was delayed and it incurred expenses beyond what it had anticipated.
Universal started as a small awning shop in Corpus Christi, Texas, and was purchased in 1977 by Edward Cantu. After it received its first government contract in 1983, immediately preceding contract 0062, Universal acquired a 100,000 square foot facility in Brownsville, Texas, about 150 miles away from Corpus Christi. This new facility is where contract 0062 was performed. During performance of the contract, Cantu was mainly at the Corpus Christi facility. Joe Flores, Universal's Vice President of Accounting, one of three vice presidents reporting directly to Cantu, was also based at the Corpus Christi facility, which served as the corporate headquarters. Initially, the Brownsville plant was managed by Ruben Solano, Cantu's brother-in-law and Universal's Vice President for Operations. In 1985, Cecil Hinojo-sa took over the management of the Brownsville plant from Solano.
On February 6, 1987, Universal filed a claim for an equitable adjustment for $3.3 million, later reduced to $3 million, certified by Flores. The claim was based on alleged problems with the GFM, such as tearing, width variations, and government delay in delivery. The contracting officer denied the claim, and Universal appealed to the Armed Services Board of Contract Appeals. The board held that Universal was not entitled to an equitable adjustment because its inefficiencies, and not any defects in the GFM, were to blame for the cost overrun. Specifically, the board found that Universal's new, inexperienced management and production personnel, in addition to its start-up costs, poor material handling, and poor planning caused the cost overruns.
After the board's decision was handed down, Universal filed a motion to vacate the judgment and dismiss the appeal for lack of subject-matter jurisdiction, based on the then-recent United States v. Grumman Aerospace Corp., 927 F.2d 575 (Fed.Cir.1991), because its claim was not properly certified. In its motion, Universal argued that its certification did not meet the requirements of the Federal Acquisition Regulations (FAR), 48 C.F.R. § 33.207 (1991), as interpreted by Grumman, 927 F.2d 575, and Ball, Ball & Brosamer, Inc. v. United States, 878 F.2d 1426 (Fed.Cir.1989). Relying on United States v. Newport News Shipbuilding and Dry Dock Co., 933 F.2d 996 (Fed.Cir.1991), however, the board thought this was a case in which "the certification by a corporate officer, without explanation, [implies] that the officer has overall responsibility and may prop erly sign the certification. It reasoned that since Universal is a small business and since Flores served as Vice President of Accounting, reporting directly to the President and providing information to the government to support the equitable adjustment claim, Flores could properly certify the claim. It also said that "the remedy which appellant seeks flies in the face of the Contract Disputes Act and the intent of its drafters. Claim certification was intended by Congress to be a Government shield, and appellant is attempting to wield it as its own sword." In response to Universal's motion to reconsider the denial of its motion to vacate, the board said there was no reason to dismiss the case because at the time of certification there was "no defect on the face of appellant's certification." This appeal followed.
Discussion
The Contract Disputes Act provides, "All claims by a contractor against the government relating to a contract shall be in writing and shall be submitted to the contracting officer for a decision." 41 U.S.C. § 605(a) (1988). Further,
For claims of more than $50,000, the contractor shall certify that the claim is made in good faith, that the supporting data are accurate and complete to the best of his knowledge and belief, and that the amount requested accurately reflects the contract adjustment for which the contractor believes the government is liable.
Id. § 605(c)(1). FAR § 33.207(c)(2) provides for two categories of individuals to certify claims:
(i) A senior company official in charge at the contractor's plant or location involved; or
(ii) An officer or general partner of the contractor having overall responsibility for the conduct of the contractor's affairs.
48 C.F.R. § 33.207(c)(2). Grumman affirmed the validity and literal applicability of this regulation. 927 F.2d at 579.
The most telling aspect of this ease is the board's statement that, "Although appellant's counsel asserts that Mr. Flores' duties were only financial in nature, the record contains no evidence to support that allegation, nor does it indicate the extent of his responsibility over appellant's operations." Thus, the record is devoid of evidence of Flores' participation in the performance of the contract, presence at the contract site, prosecution of the claim, or responsibility within the company.
A certifying senior company official, under section 33.207(c)(2)(i), must "have both primary responsibility for the execution of the contract and a physical presence at the location of the primary contract activity." Grumman, 927 F.2d at 580. There is no evidence that Flores had either: he was based at the Corpus Christi plant, not the Brownsville Plant which was the place of performance, and the record contains no information about his responsibilities for the contract. Under section 33.207(c)(2)(ii), as confirmed by Grumman, an official must have overall responsibility for more than just the company's financial affairs. Again, there is no evidence on Flores' responsibility over corporate affairs.
We see this case as most similar to Ball, Ball, and Brosamer, 878 F.2d at 1427, in which a claim was certified by the "Chief Cost Engineer," a senior management position, reporting directly to the corporation's president, and the most senior official supervising and administering all "cost & claim aspects of the performance and completion of all the contracts." This was insufficient to satisfy the jurisdictional requirement absent evidence of the official's "general corporate authority." Because there was no evidence that he was in charge of the contractor's plant or location or had general corporate authority, he could not properly certify the claims. Here, Flores was a senior official reporting directly to the president, but he was based in Corpus Christi and, as stated by the board, there was no evidence that he had general corporate authority. All the board had were mere assertions of general authority by counsel; this is not a substitute for record evidence. Therefore, he could not properly certify the claims.
Newport News, 933 F.2d 996, does not alter our conclusion. In that case, a claim was certified by the sole Executive Vice President of Newport News Shipbuilding and Dry Dock Co. The record contained no information that he was in charge of the plant or location of the contract. But he could certify the claim under section 33.-207(c)(2)(ii) because by his title it appeared that the certification was by a corporate officer with "the requisite 'overall authority,' at least where his title is not inconsistent therewith," and on summary judgment the government offered no evidence to the contrary. Id. at 998 n. 2; see Grumman, 927 F.2d at 581. Ours, however, is a case in which the title of the corporate officer, vice president of accounting, is apparently inconsistent with the exercise of overall authority, and all the record shows is that the incumbent performed the limited duties expected of that position. Indeed, in Newport News we contrasted the sufficient position with titles like Flores', which would not qualify. 933 F.2d at 999 (e.g., Grumman, 927 F.2d at 580 (senior vice president and treasurer); Ball, Ball & Brosamer, 878 F.2d at 1426 (chief cost engineer); W.H. Moseley Co. v. United States, 230 Ct.Cl. 405, 677 F.2d 850, 852 (1982) (economist)). There must be proof that a vice president for accounting has overall responsibility before his certification can be sufficient.
The government argues that it is significant that Flores' name was listed below Cantu's in a letter and above Hinojosa's; we agree with appellant that this is just as readily a result of the names being alphabetized. That Flores executed a cover sheet for a cost proposal is more consistent with a role as simply a financial officer, than as an official with greater responsibility. And Flores' base at the Corpus Christi headquarters rather than the Brownsville plant, cuts against his standing under the regulation.
Similarly, it is not sufficient that Universal went to hearing on a claim that was not properly certified to sustain jurisdiction over it. Parties cannot bestow subject jurisdiction upon the board and the board cannot exceed its jurisdictional boundaries. Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 2104, 72 L.Ed.2d 492 (1982). We doubt our situation is one Congress foresaw, and it is likely to recur only rarely, but jurisdiction is an absolute concept; it either exists or it does not. UNR Indus. Inc. v. United States, 962 F.2d 1013, 1022 (Fed.Cir.1992). It does not run only in favor of the government. And contrary to the board it is neither a shield nor a sword; it is the predicate for the board's authority.
The government argues that an apparent concession by Universal's counsel "that he gave Universal infirm legal advice at the claim stage, and that he authored and signed a complaint containing erroneous allegations" should estop it from raising the jurisdictional impediment. We do not think so. That Universal's counsel thought the claim was properly certified, and did not anticipate Grumman is irrelevant to a jurisdictional analysis. Neither party, or the court for that matter, can be estopped from questioning jurisdiction. Nor do we agree with the government that this view could lead to widespread abuse of the certification process. All participants have a duty to assure there are no jurisdictional impediments at the earliest possible stage. After all, the purpose of this requirement is to ensure to the greatest possible extent that fraudulent, inflated and frivolous claims against the government are not presented. The hope is that truly responsible and authoritative individuals within a contractor's organization, large or small, will consider these claims in good faith and ensure their validity. To ignore the requirement is to subvert the purpose of the rule, the integrity of the federal procurement system and the public fisc.
Conclusion
Accordingly, the decision of the board on Universal's motion to vacate and dismiss for lack of jurisdiction is reversed.
REVERSED.