Court Opinion

ID: 4215965
Source: CourtListenerOpinion
Date Created: 2017-10-30 17:00:05.428192+00
Date Added: 2024-06-11T13:26:17.272125
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of --                                )
                                             )
Ikhana, LLC                                  )      ASBCA Nos. 60462, 60463, 60464
                                             )                 60465,60466,61102
                                             )
Under Contract No. W912DR-13-C-0051          )

APPEARANCE FOR THE APPELLANT:                       William A. Scott, Esq.
                                                     Pedersen & Scott, P.C.
                                                     Charleston, SC

APPEARANCES FOR THE GOVERNMENT:                     Thomas H. Gourlay, Jr., Esq.
                                                     Engineer Chief Trial Attorney
                                                    Michael T. Shields, Esq.
                                                    David B. Jerger, Esq.
                                                     Engineer Trial Attorneys
                                                     U.S. Army Engineer District, Baltimore

 OPINION BY ADMINISTRATIVE JUDGE SWEET ON THE GOVERNMENT'S
MOTION TO DISMISS, OR IN THE ALTERNATIVE FOR SUMMARY JUDGMENT
          AND SURETY'S MOTION TO INTERVENE AND TO
      WITHDRAW THE APPEALS, OR FOR SUMMARY JUDGMENT

        Appellant Il671 F.3d 1332, 1340-41 (Fed. Cir. 2012);
Burnside-Ott Aviation Training Ctr. v. Dalton, 107 F.3d 854, 859 (Fed. Cir. 1997).
"Permitting parties to contract away Board review entirely would subvert this
purpose." Burnside-Ott, 107 F.3d at 859. Thus:

                [A]ny attempt to deprive the Board of power to hear a
                contract dispute that otherwise falls under the CDA

1
    For purposes of this opinion, we also assume, without deciding, that the Anti-Assignment
         Act, 31 U.S.C. § 3727, 41 U.S.C. § 6305 does not prohibit any assignment.

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                conflicts with the normal de novo review mandated by the
                CDA and subverts the purpose of the CDA .... Congress
                commanded that the CO's decision on any matter cannot
                be denied Board review.

Id. at 858 (holding that a contractor cannot waive its right to appeal a CO's decision to
the Board). 2

       Here, the indemnity and settlement agreements impermissibly attempt to
deprive us of our power to hear these appeals, which otherwise fall under the CDA.
Admittedly, that attempted deprivation is less direct than was the attempted
deprivation in Burnside-Ott. In Burnside-Ott, the contractor directly waived its right
to appeal to the Board in its contract with the government. 107 F .3d at 856. In this
case, Umana indirectly waived its right to appeal to the Board by assigning the claims
subject to these appeals to the surety, which then agreed with the government to
withdraw these appeals. (SOF iii! 3, 13) However, that is a distinction without a
difference. Regardless of the particular manner in which the contractor waived its
CDA right to Board review, the end result is the same-the contractor impermissibly
has contracted away its unwaivable CDA right to impartial review of the CO's
decisions. Burnside-Ott, 107 F.3d at 859.

        The government argues that the surety had to be able to settle Ikhana's claims
because otherwise it had no incentive to devote any resources to project completion
prior to resolution of the appeals, which would defeat the purpose of a bond.
However, the government provides no authority in support of that argument. (Gov't
mot. at 11) On the contrary, that argument is belied by the facts of this case. During
their settlement negotiations, both the surety and the government expressed their
willingness to fund project completion without settling Ikhana's claims (SOF iii! 11,
12). In any event, the government's equitable argument cannot override Ikhana's
unwaivable CDA right to Board review of the CO's decision and deemed denials.

      Also misplaced is the surety's reliance upon Safeco Insurance Company of
America, ASBCA No. 52107, 03-2 BCA if 32,341 (surety mot. to withdraw at 14).
Unlike in the present case, it was the government-not the contractor-that was
seeking to nullify the assignment of the contractor's claim to the surety in Safeco.
03-2 BCA if 32,341 at 160,013-14. That distinction makes a difference because it

2
    Minesen declined to extend Burnside-Ott to cases where the parties waive their rights
        to appeal from the Board to the United States Court of Appeals for the Federal
        Circuit. 671 F.3d at 1340-41. Burnside-Ott-instead of Minesen-applies to
        this appeal because the issue here is a contractor's access to the Board, not its
        right to appeal Board decisions to the Federal Circuit.

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means that, unlike in the present case, there was no assertion by the contractor that it
had been compelled to waive its CDA right to Board review in Safeco. ld. 3

       In sum, any assignment of the claims Ikhana appeals was invalid under Burnside-Ott.
As a result, Ikhana has standing to bring these appeals, the surety does not have standing,
and the surety therefore cannot withdraw the appeals.

                                     CONCLUSION

       The government's motion to dismiss, or in the alternative for summary
judgment is denied. The surety's motion to intervene is denied. The surety's motion
to withdraw the appeals or, in the alternative, motion for summary judgment is denied.

         Dated: 18 October 2017

                                                   JAMES R. SWEET
                                                   Administrative Judge
                                                   Armed Services Board
                                                   of Contract Appeals

    I concur                                       I concur

    RICHARD SHACKLEFORD                            OWEN C. WILSON
    Administrative Judge                           Administrative Judge
    Acting Chairman                                Vice Chairman
    Armed Services Board                           Armed Services Board
    of Contract Appeals                            of Contract Appeals

3
    Maharaj Construction Inc., LBCA 2001-BCA-3, 2005 WL 166315-which the
        government and the surety cite (gov't mot. at 13-14; surety mot. to withdraw at
        14)-is not binding upon us. Nor do we find it persuasive because it does not
        address Burnside-Ott, which is binding precedent.

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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. 60462, 60463, 60464, 60465, 60466,
61102, Appeals of Ikhana LLC, rendered in conformance with the Board's Charter.

      Dated:

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

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