Court Opinion

ID: 5139184
Source: CourtListenerOpinion
Date Created: 2021-12-21 16:00:12.84241+00
Date Added: 2024-06-11T08:24:15.803067
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS
    Appeal of -                                )
                                               )
    StructSure Projects, Inc.                  )    ASBCA No. 62927
                                               )
    Under Contract No. W9127S-17-D-6004        )

    APPEARANCE FOR THE APPELLANT:                   Michael S. Alfred, Esq.
                                                     Hallett & Perrin, P.C.
                                                     Dallas, TX

    APPEARANCES FOR THE GOVERNMENT:                 Michael P. Goodman, Esq.
                                                     Engineer Chief Trial Attorney
                                                    Michael T. Geiselhart, Esq.
                                                    Liz K. Harris, Esq.
                                                     Engineer Trial Attorneys
                                                     U.S. Army Engineer District, Little Rock

                    OPINION BY ADMINISTRATIVE JUDGE EYESTER
                     ON THE GOVERNMENT’S MOTION TO DISMISS

       StructSure Projects, Inc. (appellant or StructSure) filed an appeal alleging it is
owed money for the government’s use of certain temporary phasing facilities and other
services. The U.S. Army Corps of Engineers (government or USACE) has moved to
dismiss the appeal, arguing that: (1) the notice of appeal was filed by StructSure’s
project manager, who did not have the requisite authority to file such an appeal; and
(2) StructSure lacks proper representation because it is represented by its subcontractor’s
counsel who, for several reasons, has a conflict of interest. Because we find that the
notice of appeal was filed properly and StructSure is represented by an individual who
meets the requirements of Board Rule 15, we deny the government’s motion.

            STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

       1. On July 14, 2017, USACE awarded multiple award task order contract
(MATOC) No. W9127S-17-D-6004 to StructSure for design-build construction services
(R4, tab 1 at 2-3). 1 Subsequently, on September 27, 2018, USACE issued task order
No. W9127S-18-F-0112 to StructSure for various services, including design and
alteration services for and temporary phasing facilities at the David Grant Medical

1
    The MATOC was actually awarded to United Excel Corporation (R4, tab 1 at 3).
        However, on July 1, 2019, the government issued a modification changing the
Center, Travis Air Force Base (R4, tab 2 at 46, 48-52). StructSure’s subcontractor for the
temporary phasing facilities was Sustainable Modular Management (Sustainable
Modular) (see R4, tab 13 at 158).

         2. In March and April of 2020, the government issued several notices to
StructSure stating that the task order award was designated non-mission essential and
StructSure and its subcontractors could not continue on-site construction activity until
later notified (R4, tabs 4, 7-9). On April 29, 2020, the government informed StructSure
that it could recommence immediately on-site construction activities (R4, tab 10 at 134).

       3. StructSure submitted a request for equitable adjustment (REA) stating that the
temporary phasing facilities and associated rental furniture and equipment were in use by
the government during the time the project was classified as non-mission essential and as
such, StructSure incurred extended rental costs (R4, tab 13 at 155). The agency denied
the REA, and StructSure next submitted a claim seeking reimbursement for the same
costs (R4, tabs 14-18). The claim was signed by Mark Benne, a program manager for
StructSure (R4, tab 15 at 170). The claim was later certified by C. Kevin Rogers, chief
executive officer of StructSure (R4, tab 18 at 190). On March 30, 2021, USACE issued a
contracting officer’s final decision (COFD) denying the claim (R4, tab 19 at 191-92).

       4. On May 14, 2021, StructSure filed a notice of appeal of the COFD with the
Board, which was signed by StructSure’s project manager, Matt Callaway, and submitted
on StructSure letterhead. Copies of the notice of appeal were also sent to several
individuals, including: StructSure’s chief executive officer, president, and vice president;
Michael S. Alfred, Esq., of Hallett and Perrin; the chief executive officer for Sustainable
Modular; and the contracting officer. (Notice of Appeal at 1) The notice also included
several attachments, including the COFD (id. at 4-5). Another attachment was a letter to
Matt Callaway from Michael S. Alfred, Esq., stating that Mr. Alfred’s firm represents
Sustainable Modular who “expresses its intent for [StructSure] to facilitate the appeal of
the [COFD]” (id. at 2).

       5. The Board issued an Order on May 20, 2021, stating that the record did not
identify Mr. Callaway as a corporate officer or attorney and therefore, StructSure was
directed to show it was represented by a person meeting the requirements of Board
Rule 15(a), or to designate a proper person as its representative. On May 26, 2021,
Michael S. Alfred, Esq., entered a notice of appearance “as counsel for Sustainable
Modular Management, Inc., which is prosecuting the above-referenced appeal in the
name of Appellant, StructSure Projects, Inc.” (notice of appearance at 1). It is not
disputed that Mr. Alfred is a duly licensed attorney in Texas.

       contractor’s name to StructSure Projects, Inc. on the MATOC and all task order
       awards (R4, tab 3 at 116).

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       6. On June 21, 2021, “Appellant, Sustainable Modular Management, Inc. [],
which is prosecuting this appeal on behalf of StructSure Projects, Inc.” filed a complaint
(compl. at 1). A footnote in the complaint stated the following: “By prosecuting this
appeal, [Sustainable Modular] is not waiving any of its rights, claims, positions or
remedies against [StructSure] and/or its surety, Arch Insurance Company, all of which
are expressly reserved” (compl. at 2 n.2). The complaint’s caption stated it was the
appeal of StructSure (compl. at 1). The complaint was signed by Michael S. Alfred of
Hallett & Perrin, PC, as attorney for Sustainable Modular (compl. at 2).

       7. On June 23, 2021, the government filed its motion to dismiss (gov’t mot. at 1).

        8. On June 29, 2021, StructSure’s chief executive officer, Kevin Rogers, filed a
letter with the Board stating that “Matt Callaway, Project Manager, is an authorized
representative for StructSure Projects [and StructSure] has named Matt Callaway as an
authorized agent for the purposes of filing claims or taking appeals on behalf of
[StructSure]” (app. corr. ltr. dtd. June 29, 2021).

        9. In addition, in its response to the government’s motion, Michael S. Alfred, Esq.,
clarified that Sustainable Modular “is pursuing this appeal in the name of [StructSure]” as
permitted by the subcontract between the two companies. Mr. Alfred also stated that as
“the undersigned counsel [he] is representing [StructSure] for purposes of this appeal
based on the waiver of a conflict of interest set forth” in the subcontract. As such,
Mr. Alfred states that because he represents StructSure in “this narrow and limited
situation,” Sustainable Modular has not waived any of its rights against StructSure or the
surety for monies that may be owed under the subcontract. (App. resp. at 1)

       10. The Board finds that Matt Callaway was authorized to file the notice of appeal
on behalf of StructSure and that Mr. Alfred, a licensed attorney, represents StructSure in
this matter.

                                       DECISION
Authority to File Appeal

       The government contends that Mr. Callaway, as the project manager for
StructSure, did not have authority to file an appeal on behalf of the company at the time
the appeal was filed and therefore, the Board lacks jurisdiction over the appeal (gov’t
reply at 3-4). As support, the government argues that since Mr. Callaway did not submit
the claim to the agency, and was not authorized as an agent of StructSure until after the

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appeal was filed, he did not have authority to pursue the timely filed appeal at the Board
(gov’t reply at 4).

       The Contract Disputes Act states that a contractor--a party to a Federal
government contract--may appeal a COFD to the Board. 41 U.S.C. §§ 7101(7), 7104(a).
To take an appeal, an appellant (contractor) must file a notice of appeal with the Board
within 90 days from the date of receipt of the COFD. Board Rule 1(a). We have
previously held that an authorized representative or agent may file a notice of appeal on
behalf of a contractor. See, e.g., Left Hand Design Corp., ASBCA No. 62458, 21-1 BCA
¶ 37,916 at 184,142-43 (holding that an administrative assistant was acting as an
authorized agent on behalf of the contractor when she filed the appeal); Garrison
Engineers Constr., Inc., NW Mech., Inc., ASBCA Nos. 29015, 29536, 85-1 BCA
¶ 17,731 at 88,514.

       Matt Callaway was authorized to file the notice of appeal on behalf of StructSure
(SOF ¶ 10). In this case, it is irrelevant that StructSure’s chief executive officer notified
the Board that Mr. Callaway was an authorized representative after the notice was filed
because the notification serves as a clear indication that Mr. Callaway was acting on
appellant’s behalf at the time the appeal was filed. In other words, and to state the
obvious, if the chief executive officer of StructSure did not believe Mr. Callaway should
have filed the notice of appeal, he would have said so in the correspondence with the
Board rather than specifically name Mr. Callaway as an authorized agent to take appeals
on behalf of the company.

Representation of Appellant

       The government also contends that, to the extent Mr. Alfred has clarified he
represents StructSure in this matter, Mr. Alfred is not a “proper” representative due to
conflicts of interest (gov’t reply at 1-3). 2 According to the government, Mr. Alfred also
represents Sustainable Modular, who has sued StructSure’s surety in the Eastern District
Court of California on these exact claims. The government argues that the surety would
only be liable if StructSure has wrongfully failed to pay. (Id. at 2) Further, according to
the government, since Sustainable Modular states it is not waiving any rights against
StructSure or its surety, it is not proper for Mr. Alfred to represent both the subcontractor
and prime contractor here (gov’t reply at 2; gov’t mot. at 5).

       Board Rule 15(a) states that a corporation may be represented by one of its
officers or a licensed attorney. There is no dispute that Mr. Alfred, a licensed attorney,

2
    The government initially argued that StructSure was not represented by a corporate
         officer or licensed attorney as required by Board Rule 15(a) (gov’t mot. at 1).
         Mr. Alfred, a licensed attorney, clarified that he represents StructSure (SOF ¶ 9),
         and the government subsequently amended its argument.
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represents StructSure in this matter (SOF ¶ 10). Although the government argues the
appeal should be dismissed for lack of proper representation due to a conflict of interest,
we interpret the government’s contention as an attempt to have Mr. Alfred disqualified as
appellant’s attorney, thereby creating a Board Rule 15(a) compliance conundrum. 3

       The Board has entertained motions to disqualify counsel before as the discretion to
regulate attorney conduct is inherent in our judicial capacity. Asahi Gen. Trading &
Cont. Co. W.L.L., ASBCA No. 62445, 21-1 BCA ¶ 37,767 at 183,323. For example, “[i]f
a conflict of interest resulting in demonstrable bias is shown to exist, it may have an
effect on the proceeding.” AEC Corp., ASBCA No. 42920, 95-2 BCA ¶ 27,750
at 138,354. The moving party bears the burden of proving that we should disqualify
counsel and the issue is resolved based upon the established record and parties’
submissions. Asahi General Trading & Cont. Co. W.L.L., 21-1 BCA ¶ 37,767
at 183,323.

        As the government has acknowledged, sponsorship by a prime contractor of a
subcontractor’s claim has long been allowed by the Board, approved by the Federal
Circuit, and is expressly permitted by regulation. TPS, Inc., ASBCA No. 52421, 01-1
BCA ¶ 31,375 at 154,917; Federal Acquisition Regulation 44.203(c). However, the
government believes that this appeal is somehow different in that if the appeal fails, the
prime contractor may ultimately owe the subcontractor, and there has been no express
waiver of the conflict (gov’t reply at 3). The government has not shown how any of this
will prejudice the government in defending its case or affect the current proceeding, nor
has it specifically identified any statute, regulation, case law, or code of professional
responsibility to support its position.

        At this time, both StructSure and Sustainable Modular maintain the same position-
-that the government owes StructSure the rental costs associated with the use of
temporary phasing facilities, rental furniture and equipment during the time the project
was classified as non-mission essential. Therefore, on this record, we are unable to
conclude that any of the alleged adverse interests would create a conflict of interest in
counsel representing both companies as to essentially require disqualification of
StructSure’s counsel. See AEC Corp., 95-2 BCA ¶ 27,750 at 138,354. Further, as
Mr. Alfred, an attorney at law, has confirmed to the Board that he represents StructSure
for purposes of this appeal, and StructSure itself has not alleged there is any conflict of
interest, we will not require StructSure to expressly waive any perceived conflict.

3
    In this regard, it is not clear why, even if there were an issue with representation, the
          Board would not first provide an opportunity for StructSure to obtain a new
          representative and file a new notice of appearance.
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                                   CONCLUSION

      For the foregoing reasons, the government’s motion is denied.

      Dated: December 2, 2021

                                                LAURA EYESTER
                                                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

       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. 62927, Appeal of StructSure
Projects, Inc., rendered in conformance with the Board’s Charter.

      Dated: December 2, 2021

                                              PAULLA K. GATES-LEWIS
                                              Recorder, Armed Services
                                              Board of Contract Appeals

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