Court Opinion

ID: 3201636
Source: CourtListenerOpinion
Date Created: 2016-05-09 18:01:01.510807+00
Date Added: 2024-06-11T14:28:17.368793
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of.--                                    )
                                                 )
Combat Support Associates                        )      ASBCA Nos. 58945, 58946
                                                 )
Under Contract No. DASA02-99-C-1234              )

APPEARANCE FOR THE APPELLANT:                           Karen L. Manos, Esq.
                                                         Gibson, Dunn & Crutcher LLP
                                                         Washington, DC

APPEARANCES FOR THE GOVERNMENT:                         E. Michael Chiaparas, Esq.
                                                         DCMA Chief Trial Attorney
                                                        Douglas R. Jacobson, Esq.
                                                         Trial Attorney
                                                         Defense Contract Management Agency
                                                         Bloomington, MN

                                                        David C. Hoffman, Esq.
                                                         Deputy General Counsel
                                                         Defense Contract Audit Agency
                                                         Fort Belvoir, VA

       OPINION BY ADMINISTRATIVE JUDGE MCILMAIL ON THE
    GOVERNMENT'S MOTION TO DISMISS FOR LACK OF JURISDICTION

        Appellant, Combat Support Associates (CSA), appeals from two contracting
officer's final decisions: one establishing indirect cost rates and the other demanding
payment of an alleged overpayment. Those two decisions have been rescinded, and
the government requests dismissal of the appeals with prejudice, for lack of
jurisdiction. CSA opposes, contending that live issues remain. We dismiss the
appeals as moot.

           STATEMENT OF FACTS FOR PURPOSES OF THE MOTION

        On 13 July 1999, the Department of the Army (government) awarded Contract
No. DASA02-99-C-1234 to CSA for the provision of support and security services in
Kuwait (R4, tab 1 at 1). On 30 April 2007, CSA submitted to the government its fiscal
year (FY) 2006 incurred cost submission (ICS) (ex. 3 at 2). On 17 June 2013, the Defense
Contract Audit Agency (DCAA) issued a report of an audit of the ICS (R4, tab 2). In the
report, DCAA questioned $3,504,263 in costs and "qualified" $48,245, 100 in other costs
(id. at G-42).
       On 23 August 2013, the administrative contracting officer (ACO), having reviewed
the DCAA audit report, issued two final decisions, one demanding that CSA pay the
government $332,167 in disallowed direct costs (R4, tab 4 at G-166), and the other
disallowing certain indirect costs and unilaterally determining CSA's indirect cost rates
for FY 2006 (R4, tab 5 at G-171 ).

        On 2 October 2013, CSA timely filed an appeal docketed as ASBCA No. 58945
(appealing the ACO's final decision demanding payment of disallowed direct costs), and
filed an appeal docketed as ASBCA No. 58946 (appealing the ACO's final decision
disallowing indirect costs and determining indirect cost rates). In its complaint, CSA
asserted that the government's claims were time-barred by the six-year statute of
limitations, because, CSA contended, the government's claims accrued no later than
20 May 2007, by when the government was in possession of CSA's "complete FY 2006
ICS" (compl. at 9, il 34).

        On 20 February 2014, CSA filed a motion to dismiss the appeals for lack of
jurisdiction, contending that the government's claims were time-barred. On
30 November 2014, the Board scheduled a hearing of the appeals to commence on
2 November 2015. On 16 March 2015, upon reconsideration of an earlier decision
denying CSA's motion to dismiss on the merits, Combat Support Associates, ASBCA
Nos. 58945, 58946, 14-1BCAil35,782, we vacated that decision and denied CSA's
motion to dismiss, pursuant to Sikorsky Aircraft Corp. v. United States, 773 F.3d 1315
(Fed. Cir. 2014), on the ground that the six-year statute of limitations set forth in the
Contract Disputes Act, 41 U.S.C. § 7103(a)(4), is not jurisdictional. Combat Support
Associates, ASBCA Nos. 58945, 58946, 15-1BCAil35,923 at 175,591. On
29 October 2015, the ACO rescinded her two, 23 August 2013 decisions, stating:

              I hereby withdraw the Contracting Officer's Final Decision
              (COFD) and demand for payment dated August 23, 2013.
              CSA is hereby released of the Government claim for
              $332,167 of direct costs. Also, I rescind the COFD dated
              August 23, 2013 which unilaterally set CSA's indirect
              rates for FY 2006 and disallowed $1,409 ,464 of indirect
              costs. The Government has no intention of issuing another
              COFD disallowing the costs in the August 23, 2013
              COFDs.

(R4, tab 6)

        On 2 November 2015, the Board commenced a two-day hearing of the appeals,
and the government moved for dismissal of the appeals with prejudice, contending that
as a result of the rescission of the government's claims, there were no longer any claims
before the Board to adjudicate. On 20 November 2015, CSA opposed the motion.

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Characterizing its reliance upon the statute of limitations as an affirmative defense, CSA
contended that the appeals should be sustained on the merits of that affirmative defense,
despite the rescission of the government's claims, because the government's practice of
"disallowing costs more than six years after submission of an adequate ICS" is "capable
of repetition, yet evading review" (app. opp'n at 13).

                                        DECISION

        Where a contracting officer unequivocally rescinds a government claim and the
final decision asserting that claim, with no evidence that the action was taken in bad
faith, there is no longer any claim before the Board to adjudicate, and the appeal is
dismissed. KAMP Systems, Inc., ASBCA No. 54253, 09-2 BCA ii 34,196 at 168,995.
In such circumstances, the government's voluntary action moots the appeal, cf Teddy's
Cool Treats, ASBCA No. 58384, 14-1 BCA ii 35,601at174,410 (dismissing appeal as
moot where government changed default termination to a notice termination), leaving
the Board without jurisdiction to entertain the appeal further. See Lasmer Industries,
Inc., ASBCA No. 56411, 10-2 BCA ii 34,491 at 170,123.

        That is the case here. The ACO unequivocally rescinded the final decisions
asserting the government's claims that are the subject of the appeals, expressly stating
that "[t]he Government has no intention of issuing another COFD disallowing the
costs in the August 23, 2013 COFDs," thereby voluntarily providing the relief sought
in the appeals. In addition, there is no suggestion that the rescissions are in bad faith.
Consequently, there are no longer any claims before us to adjudicate, and the appeals
are moot. CSA points to certain costs, including those that DCAA "qualified," that
CSA suggests are still at issue between the parties (app. opp'n at 11-12). However,
because the ACO unequivocally rescinded her final decisions, there is nothing left of
the merits of the appeals for us to adjudicate, and, therefore, there are no costs at issue
before us.

        We disagree with CSA that we are confronted with a dispute that is "capable of
repetition, yet evading review." A case is moot when the issues presented are no
longer "live" or the parties lack a legally cognizable interest in the outcome. Humane
Society of the United States v. Clinton, 236 F.3d 1320, 1331 (Fed. Cir. 2001).
However, a claim is not moot ifthat action is capable of repetition, yet evading review.
Id. To qualify for this exception, the challenged action must meet two conditions. Id.
First, the action must in its duration be too short to be fully litigated prior to its
cessation or expiration. Id. Second, there must be a reasonable likelihood that the
party will again suffer the injury that gave rise to the suit. Id. CSA contends that the
government's practice of"disallowing costs more than six years after submission of an
adequate ICS" is capable of repetition, yet evading review, making the appeals still
live disputes.

                                             3
       A problem with CSA's argument is that its "dispute" with the government
regarding whether the statute of limitations begins to run upon the submission of an
"adequate" ICS is not a claim, it was the theory behind CSA's affirmative defense
against the government's claims in these appeals. Because the ACO unequivocally
rescinded those claims, there is nothing left of the appeals for CSA to defend against.
As such, CSA's request that we rule on the merits of its affirmative defense is,
essentially, a request for an advisory opinion regarding claim accrual, which we
decline to provide.

       Finally, we note that a dismissal of an appeal as moot is without prejudice to its
merits. See Textile Productions, Inc. v. Mead Corp., 134 F.3d 1481, 1486 (Fed. Cir.
1998); see also Lasmer Industries, 10-2 BCA ii 34,491 at 170, 123 (explaining that
dismissal of appeal "with prejudice," after rescission of government claim, was not on
the merits).

                                    CONCLUSION

       For these reasons, the appeals are dismissed as moot.

       Dated: 2 March 2016

                                                  '"'tIM011fY ~MIL
                                                   Administrative Judge
                                                   Armed Services Board
                                                   of Contract Appeals

I concur                                           I concur

e,~~ ~
Administrative Judge
                                                   RICHARD SHACKLEFORD
                                                   Administrative Judge
Acting Chairman                                    Vice Chairman
Armed Services Board                               Armed Services Board
of Contract Appeals                                of Contract Appeals

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     I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA Nos. 58945, 58946, Appeals of
Combat Support Associates, rendered in conformance with the Board's Charter.

      Dated:

                                               JEFFREY D. GARDIN
                                               Recorder, Armed Services
                                               Board of Contract Appeals

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