Court Opinion

ID: 4022941
Source: CourtListenerOpinion
Date Created: 2016-08-09 21:00:11.317031+00
Date Added: 2024-06-11T14:37:29.209461
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of --                                )
                                             )
Kellogg Brown & Root Services, Inc.          )      ASBCA Nos. 57530, 58161
                                             )
Under Contract No. DAAA09-02-D-0007          )

APPEARANCES FOR THE APPELLANT:                      Douglas L. Patin, Esq.
                                                     Bradley Arant Boult Cummings LLP
                                                     Washington, DC

                                                    Kerry M. McMahon, Esq.
                                                     Porter Hedges, LLP
                                                     Houston, TX

                                                    Craig D. Margolis, Esq.
                                                    Amy L. Riella, Esq.
                                                     Vinson & Elkins LLP
                                                     Washington, DC

APPEARANCES FOR THE GOVERNMENT:                     E. Michael Chiaparas, Esq.
                                                     DCMA Chief Trial Attorney
                                                    Carol L. Matsunaga, Esq.
                                                     Senior Trial Attorney
                                                     Defense Contract Management Agency
                                                     Carson, CA

                                                    John A. Kolar, Esq.
                                                    Russell B. Kinner, Esq.
                                                     Senior Trial Counsel
                                                     Department of Justice
                                                     Washington, DC

OPINION BY ADMINISTRATIVE JUDGE MELNICK ON THE GOVERNMENT'S
         MOTION TO SUSPEND OR DISMISS THESE APPEALS

       On 19 February 2016, the Board reinstated these appeals to its docket after they
had been previously dismissed without prejudice for three years under former Board
Rule 30 (now Rule 18). See Kellogg Brown & Root Services, Inc., ASBCA
Nos. 57530, 58161, 13 BCA if 35,243. The appeals involve the government's
disallowance of KBR subcontract settlement costs. KBR submitted certified claims
respecting these costs in 2010. The Board had dismissed the appeals without prejudice
because of a pending suit filed by the United States against KBR in the United States
District Court for the Central District of Illinois. The suit alleges that KBR's Requests
for Equitable Adjustment and other costs that were the subject of its claims were
knowingly inflated and false and violated the False Claims Act (FCA), 31 U.S.C.
§ 3729, and the Contract Disputes Act (CDA), 41 U.S.C. § 7103(c)(2). United States
v. Kellogg Brown & Root Services, Inc., No. 4: 12-cv-04110 (C.D. Ill. filed Nov. 20,
2012). The government now again seeks dismissal without prejudice or a stay because
its FCA case has not progressed passed the discovery stage. After this new motion
was fully briefed the Board heard oral argument. The motion is denied.

        When ruling upon the government's original motion to dismiss without
prejudice, the Board considered four factors summarized as: (1) whether the facts,
issues, and witnesses in the two proceedings were similar; (2) whether the parallel
matter would be compromised by proceeding here; (3) whether the non-moving party
would be harmed by more delay; and (4) whether the duration of the suspension
sought was reasonable. Kellogg Brown & Root Services, 13 BCA ~ 35,243 at 173,021.
The Board also stressed that it possessed inherent authority "to manage [its] docket
and to stay, suspend or dismiss appeals without prejudice in appropriate
circumstances, applying [its] judgment to weigh the competing interests of the parties
and assess any prejudice." Id. at 173,022. Originally, the Board found that these
factors dictated dismissal without prejudice, subject to reinstatement within three
years. They do not favor repeating that process.

        Starting with the fourth factor, continuing to delay the appeals for the FCA
action with no indication as to when the suit will be resolved is essentially an
indefinite stay. Such an act would be an abuse of discretion absent a pressing need.
See Landis v. North Am. Co., 299 U.S. 248, 255 (1936). Concerning the third factor,
KBR has satisfied the Board that another dismissal could prejudice it, given the length
of time that has already transpired since it submitted its certified claims. When
initially dismissing the appeal without prejudice, the Board contemplated
reinstatement within three years, which it concluded "allow[ ed] a reasonable period of
time for the resolution of the FCA action and all related matters." Kellogg Brown &
Root Services, 13 BCA ~ 35,243 at 173,022. More than that amount of time has
passed and the government cannot state when the FCA matter will be resolved. There
is a substantial risk that evidence will become stale or unavailable should more
significant delay of this appeal occur. As far as the second factor is concerned, when
asked at oral argument whether proceeding here would compromise the government's
FCA case, the government stated it would not as long as the government could obtain
complete discovery and a full record (tr. 1/29). Finally, although there are similarity
of facts, witnesses, and some issues in the two proceedings, that factor alone is
insufficient to dismiss the appeal again. The government has already been granted one
three-year dismissal to avoid duplicative proceedings.

                                            2
       This Board has been conferred with jurisdiction to decide this appeal regarding
appellant's entitlement to contract costs. Given that the government admits it will not
be prejudiced by proceeding upon a complete record, it is the Board's judgment that a
dismissal without prejudice is not appropriate. Nor is a stay deemed necessary at this
time. Accordingly, the government's motion is denied.

       Dated: 25 July 2016

 I concur                                         I concur

                                                  RICHARD SHACKLEFORD
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 Nos. 57530, 58161, Appeals of
Kellogg Brown & Root Services, Inc., rendered in conformance with the Board's Charter.

      Dated:

                                                  JEFFREYD. GARDIN
                                                  Recorder, Armed Services
                                                  Board of Contract Appeals

                                           3