Opinion ID: 2263053
Heading Depth: 2
Heading Rank: 1

Heading: The Contract and the CAB Proceedings

Text: On February 1, 1993, Eagle entered into a contract with DPW to receive, process, and market recyclable materials collected by the District. The contract required Eagle to have a fully operational processing facility within the District by the first day of the second year of the contract, [4] and included a bilateral modification stating that the District recycling facility would be the sole responsibility of the contractor. Eagle began its performance of the contract on March 22, 1993. In June 1993 Recycling Solutions, Inc. (RSI), filed a bid protest with the CAB, challenging DPW's decision to award the contract to Eagle. On April 15, 1994, the CAB sustained RSI's protest and declared the contract between Eagle and DPW void ab initio pursuant to D.C.Code § 2-302.05(d)(1), supra note 3. [5] See Recycling Solutions, Inc., CAB No. P-337, 42 D.C. Register 4550 (August 18, 1995). The CAB determined that the contract award was arbitrary and did not meet other requirements of a procurement contract. [6] Accordingly, the CAB ordered DPW to cancel the contract on that ground. Instead, however, DPW sent a letter to Eagle on April 24, 1995, purporting to cancel the contract on the ground that DPW had insufficient funding to continue performance ( i.e., a termination for convenience), pursuant to the contract's Article 6. On April 28, 1995, upon receipt of this letter, Eagle submitted a demand to DPW for a termination payment of $6,644,777.05. [7] Eagle continued its recycling work for the District until approximately April 30, 1995. The CAB later learned that DPW had violated its order of April 15, 1994, by canceling the contract for insufficient funds. On June 6, 1995, the CAB again ordered DPW to inform Eagle that the contract had been declared void ab initio and was therefore canceled for that reason. [8] The CAB also stated that Eagle was entitled to actual costs reasonably incurred, but not profit, under D.C.Code § 2-302.05(d)(2). [9] The CAB then directed DPW to make a determination under the statute of the appropriate compensation for costs actually incurred by Eagle. Between the signing of the contract in February 1993 and the termination of the contract at the end of April 1995, Eagle submitted invoices for payments and received payments from DPW in the amount of $2,070,056. DPW did not, as the CAB had directed it to do, make a statutory determination of Eagle's costs. It did, however, award Eagle an emergency contract for recycling services in June of 1995, under which Eagle performed essentially the same functions as it had under the 1993 contract. [10] On January 2, 1996, DPW sent Eagle a check for $1,071,966 in an apparent attempt to settle the matter, although it still had not made the required determination under D.C.Code § 2-302.05(d)(2) with respect to compensation for Eagle's performance costs. Thus, as of January 1996, the District had paid Eagle a total of $3,142,022. [11] In March 1996 the CAB asked Eagle and DPW to prepare and submit detailed schedules of Eagle's actual costs and revenue associated with its recycling work. The Office of the Corporation Counsel (now known as the Office of the Attorney General) then requested the Office of the Inspector General (OIG) to conduct an audit of Eagle's costs and revenue. The OIG completed its initial audit on August 10, 1996, and the CAB reviewed it with the parties on September 17, 1996. The following day, the CAB ordered Eagle to produce additional documentation to support findings of allowability and allocability of claimed costs, [12] and directed the OIG to prepare a supplemental audit report based on this additional information. After several more CAB orders directing Eagle to produce documentation and other information, Eagle provided the requested material on December 18, 1996. The OIG issued its final audit report on March 5, 1997, concluding that, because Eagle's actual costs were $3,688,075 and the District made $3,142,022 in payments, the District owed Eagle an additional $546,053. The CAB then held a series of evidentiary hearings in March, April, and May 1997 and requested yet more documentation from Eagle.