Court Opinion

ID: 2791498
Source: CourtListenerOpinion
Date Created: 2015-04-06 18:00:04.438263+00
Date Added: 2024-06-11T11:28:58.465502
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                  )
                                              )
Tech Projects, LLC                            )      ASBCA No. 58789
                                              )
Under RFP Nos. W9124Q-08-T-0003               )
               W9124Q-08-R-0004               )

APPEARANCE FOR THE APPELLANT:                        Joseph E. Schmitz, Esq.
                                                      Schmitz & Socarras LLP
                                                      McLean, VA

APPEARANCES FOR THE GOVERNMENT:                      Raymond M. Saunders, Esq.
                                                      Army Chief Trial Attorney
                                                     CPT Evan C. Williams, JA
                                                      Trial Attorney

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

        Appellant Tech Projects, LLC (Tech Projects), a participant in the Small
Business Set-Aside Program, seeks to recover costs incurred in connection with two
requirements issued by the White Sands Missile Range, New Mexico (White Sands or
Army). The first requirement was to design and install a virtual fence, and the second
was to operate and maintain target control services. The government subsequently
withdrew one requirement and cancelled the other. The government now moves to
dismiss, arguing that we lack jurisdiction because no contracts were awarded. Tech
Projects opposes, chiefly arguing that it has made the requisite non-frivolous allegation
of jurisdiction. We deny the motion.

           STATEMENT OF FACTS FOR PURPOSES OF THE MOTION

A. Virtual Fence Requirement

        1. By letter to White Sands dated 12 May 2008, a lead business development
specialist in the Small Business Administration (SBA), pursuant to section 8(a) of the
Small Business Act, 15 U.S.C. § 637(a), accepted a requirement for design and
installation of a virtual fence on behalf of Tech Projects (gov't mot., ex. G-1 ).

       2. In his letter to White Sands, the specialist stated that SBA's "preliminary
analysis indicates that this requirement is suitable for 8(a) contracting, and that TECH
PROJECTS, LLC has the requisite capabilities to ... perform the work" (gov't mot.,
ex. G-1).

       3. By letter to SBA dated 8 September 2008, White Sands advised of its
decision "to withdraw the Virtual Fence requirement from Tech Projects" based upon
"difficulties in getting detailed information from the contractor in a timely manner"
(gov't mot., ex. G-2 at 1).

B. Target Control Services Requirement

       4. By letter to White Sands dated 23 May 2008, a lead business development
specialist at SBA, pursuant to section 8(a), accepted a requirement for the operation,
maintenance, and other support of Target Control Services on behalf of Tech Projects
(gov't mot., ex. G-3).

        5. By email dated 26 September 2008 to SBA, the contracting officer advised
that the requirement "has been cancelled in its entirety and will be performed in-house
by government personnel" (gov't mot., ex. G-4 ).

C. Claim and Appeal

       6. By letter to the contracting officer dated 10 December 2008, Tech Projects
submitted a certified claim aggregating $185,346.40 for both the Virtual Fence and the
Target Control System requirements (R4, tab 27).

       7. Following multiple difficulties in auditing the claim, as well as an initial
decision in 2009, and a reconsideration request in 2011, the contracting officer
rendered his final decision by date of 22 March 2013. The contracting officer
determined that Tech Projects was entitled to reimbursement for a portion of its initial
claim and denied a supplemental claim in its entirety. (R4, tab 50 at 10) In his
decision, the contracting officer also asserted that "[t]he government is in agreement
with Tech Projects that there is an implied contract when SBA acceptance occurs" (id.
at 3). The contracting officer further stated that "[i]t is understood that there was never
a formal written contract but the SBA Acceptance Letter and actions by the
government could be reasonably perceived by Tech Projects (or any other 8 (a)
contractor) to constitute an implied contract" (id. at 4).

        8. By letter to the Recorder dated 20 June 2013, Tech Projects brought this
appeal. In its notice of appeal, which is in the nature of a complaint, Tech Projects
alleges that the contracting officer "properly recognized that there was a contract in
fact" regarding the Target Control System requirement (Notice of Appeal at 2). Tech
Projects further asserted that it disputed the contracting officer's assertion that "there
was no contract for the Virtual Fence requirement" and asked the Board to

                                             2
"acknowledge that there were two contracts and that[,] in each case, the Contracting
Officer's actions amounted to a termination for the convenience of the Government"
(id. at 2).

A. Contentions of the Parties
                                       DECISION
                                                                                             I
       In moving to dismiss, the Army first contends that we lack jurisdiction because
the two requirements were withdrawn before contract award (gov't mot. at 3-4). The
Army also urges that Tech Projects fails to allege sufficient facts to establish an
implied-in-fact contract (id. at 4-5). Finally, the Army asserts that we lack jurisdiction
over implied-in-law contracts (id. at 5-6).

        In opposing the Army's motion, Tech Projects asserts that it does not claim
jurisdiction "based on either an express contract or an implied-in-law contract"
(Memorandum of Law in Opposition to Government's Motion to Dismiss for Lack of
Jurisdiction (app. opp'n) at 1). Tech Projects then argues that the contracting officer's
determination that "there is an implied contract when SBA acceptance occurs" (see
statement 7) is conclusive (app. opp'n at 2-5).

       After filing its opposition to the government's motion, Tech Projects filed both
a supplemental response and a sur-reply. In both, Tech Projects asserted that the
record supports "two implied-in-fact contracts (if not two express contracts)"
(Supplemental Response to the Government's Motion to Dismiss for Lack of
Jurisdiction (app. supp. resp.) at 1-2; Sur-Reply to Government's Reply to
Supplemental Response to Government's Motion to Dismiss for Lack of Jurisdiction
(app. sur-reply) at 7). Tech Projects also says that it "need only prove that either an
express or an implied-in-fact contract exists" to establish jurisdiction (app. sur-reply
at 6). We address these contentions below.

B. Implied-In-Fact Contract

       We deny the Army's motion to dismiss. We conclude that Tech Projects has
made a non-frivolous allegation that it had implied-in-fact contracts with the
government. Under 41 U.S.C. § 7102(a), our Contract Disputes Act jurisdiction is
limited to appeals involving "express or implied contracts for the procurement of
services and property and for the disposal of personal property." Coastal Corp. v.
United States, 713 F.2d 728, 730 (Fed. Cir. 1983). In Engage Learning, Inc. v.
Salazar, 660 F.3d 1346 (Fed. Cir. 2011) the court recited its prior interpretation of a
comparable provision in the Tucker Act, 28 U.S.C. § 149l(a)(l), which it read to
"require[] no more than a non-frivolous allegation of a contract with the government."
Engage, 660 F.3d at 1353. The court further explained that "a plaintiff need only

                                            3
allege the existence of a contract to establish the Board's jurisdiction under the
[Contract Disputes Act] 'relative to' an express or implied contract with an executive
agency." Id.

         We followed Engage Learning in American General Trading & Contracting,
WLL, ASBCA No. 56758, 12-1 BCA ~ 34,905, and in Tele-Consultants, Inc., ASBCA
No. 58129, 13 BCA ~ 35,234. In American General, we rejected the government's
argument that the contractor "must prove the existence of an implied-in-fact contract
for the Board to exercise jurisdiction" over a breach claim. Instead, we quoted Engage
to reemphasize that "a claimant 'need only allege the existence of a contract to
establish the Board's jurisdiction." American General, 12-1BCA~34,905 at 171,640
(quoting Engage Learning, 660 F.3d at 1353). Similarly, in Tele-Consultants,
13 BCA ~ 35,234 at 172,994, we denied a motion to dismiss for lack of jurisdiction in
which the government argued that the record contained no evidence of an
implied-in-fact contract. We explained that "[g]iven [the contractor's] contention here
that it did indeed directly enter into an implied-in-fact contract with the government...,
we conclude we possess jurisdiction over this claim."

        The record here supports a similar conclusion. We reject the Army's argument
that the appeal must be dismissed because Tech Projects "does not allege adequate
facts to show that an implied-in-fact contract was ever formed" (gov't mot. at 5). To
the contrary, Tech Projects has advanced more than a "non-frivolous allegation,"
Engage, 660 F .3d at 1353. The record contains the contracting officer's decision, in
which he stated that "[t]he government is in agreement with Tech Projects that there is
an implied contract when SBA acceptance occurs" and then declared that "the SBA
Acceptance Letter and actions by the government could be reasonably perceived by
Tech Projects (or any other 8 (a) contractor) to constitute an implied contract"
(statement 7). Relying upon the contracting officer's decision, Tech Projects has
alleged that he "properly recognized that there was a contract in fact" regarding the
Target Control System requirement," and Tech Projects prayer for a determination
"that there were two contracts and that[,] in each case, the Contracting Officer's
actions amounted to a termination for the convenience of the Government"
(statement 8), cannot be dismissed as frivolous. Given their grounding, they must be
regarded as non-frivolous and sufficient to defeat the jurisdictional challenge posed by
the present motion.

       We stress that we here decide only the issue of whether we have jurisdiction
over Tech Projects' appeals. Our cases do not support converting a motion to dismiss
for lack of jurisdiction to one for summary judgment. Tele-Consultants, 13 BCA
~ 35,234 at 172,994; American General, 12-1 BCA ~ 34,905 at 171,640; Aries Marine
Corp., ASBCA No. 37826, 90-1 BCA ~ 22,484 at 112,846-47.

                                            4
We accordingly defer ruling whether contracts were formed regarding the two
requirements to a merits proceeding, whether on a motion for summary judgment or
after a hearing.

                                    CONCLUSION

       The government's motion to dismiss is denied.

       Dated: 26 March 2015
                                                                                        f

                                                 Administrative Judge
                                                 Armed Services Board
                                                 of Contract Appeals

I concur

~~~
Administrative Judge
                                                 RICHARD SHACKLEFORD
                                                 Administrative Judge
Acting Chairman                                  Vice Chairman
Armed Services Board                             Armed Services Board
of Contract Appeals                              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. 58789, Appeal of Tech
Projects, LLC, rendered in conformance with the Board's Charter.

       Dated:

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

                                            5