Court Opinion

ID: 2756137
Source: CourtListenerOpinion
Date Created: 2014-11-28 15:00:26.682652+00
Date Added: 2024-06-11T12:17:01.481137
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of --                                 )
                                              )
Amaratek                                      )      ASBCA Nos. 59149, 59395
                                              )
Under Contract No. W9124R-l 1-P-1054          )

APPEARANCE FOR THE APPELLANT:                        Mr. David P. Dumas
                                                      President

APPEARANCES FOR THE GOVERNMENT:                      Raymond M. Saunders, Esq.
                                                      Army Chief Trial Attorney
                                                     CPT Cali Y. Kim, JA
                                                     Trial Attorney

                OPINION BY ADMINISTRATIVE JUDGE MCILMAIL

        In these consolidated appeals, appellant, Amaratek, seeks compensation for
work performed in October 2013, during part of which the government shut down
appellant's operations. Appellant elected to proceed under Board Rule 12.2, 1 and the
parties have waived an oral hearing. Both entitlement and quantum are at issue. The
Board sustains the appeals, in part, and denies them, in part.

                                  FINDINGS OF FACT

        On 26 May 2011, the Department of the Army, Mission & Installation
Contracting Command Center-Yuma (government) awarded appellant Contract
No. W9124R-11-P-1054 for material analysis laboratory services at the Yuma Proving
Ground in Yuma, Arizona (R4, tab 1 at 1, 3). The total award amount was $977,432
(id. at 1). The contract provided for a base period of 1July2011through30 June 2012,
and two options periods: 1 July 2012 through 30 June 2013, and 1July2013 through
30 June 2014 (R4, tab 1 at 8-9, 13). Option Period 2, from 1 July 2013 through 30 June
2014, consisted of 12 units of service of one month each, with each unit priced at
$58,947 (R4, tab 1 at 13). The contract was a Commercial Items contract and
incorporated by reference the Federal Acquisition Regulation (FAR) 52.212-4,
CONTRACT TERMS AND CONDITIONS-COMMERCIAL ITEMS (JUNE 2010) (R4, tab 1
at 21).

1
    A decision under Board Rule 12.2 shall have no value as precedent, and in the
        absence of fraud, shall be final and conclusive and may not be appealed or set
        aside.
     The contract also incorporated by reference the FAR 52.242-15, STOP-WORK
ORDER (AUG 1989) clause (R4, tab 1 at 21 ), which provides, at paragraph (b ):

                      If a stop-work order issued under this clause is
               canceled or the period of the order or any extension thereof
               expires, the Contractor shall resume work. The
               Contracting Officer shall make an equitable adjustment in
               the delivery schedule or contract price, or both, and the
               contract shall be modified, in writing, accordingly, if--

                      (1) The stop-work order results in an increase in the
               time required for, or in the Contractor's cost properly
               allocable to, the performance of any part of this contract;
               and

                       (2) The Contractor asserts its right to the adjustment
               within 30 days after the end of the period of work
               stoppage; provided, that, if the Contracting Officer decides
               the facts justify the action, the Contracting Officer may
               receive and act upon a proposal submitted at any time
               before final payment under this contract.

       On 27 June 2013, the government exercised Option Period 2 for the period
1July2013 through 30 June 2014 (app. 19 August 2014 hr., attach. A, Mod.
No. P00015). On 1 October 2013, at 11 :10 a.m., the government ordered appellant to
stop work, citing "the Government shutdown in the absence of FY2014
appropriations" (R4, tab 3). On 22 October 2013, at 3:18 p.m., the government
authorized appellant to "recall personnel in support of the subject contract" (R4,
tab 11). On 23 October 2013, the government modified the contract "to obligate
additional Fiscal Year 2013 funding" (R4, tab 12). 2

       On 6 November 2013, appellant presented Invoice No. 2030 to the government,
requesting payment in the amount of $62,718.35, for services and supplies for October
2013 (R4, tab 13). On 21November2013, the government rejected the invoice, and
requested that appellant resubmit the invoice "prorated to reflect only that portion of
the month for which funds were available and that service was actually performed (the
six workdays from October 23-31, 2013)" (id.). Later on 21November2013,
appellant presented to the contracting officer (CO) a Request for Equitable Adjustment
(REA), in the amount of $69,677: $58,947 for services provided in October 2013, and
$10,730 in costs that appellant asserted were caused by the government's order to stop

2
    It is unclear whether the reference to "Fiscal Year 2013 funding" should read
          "Fiscal Year 2014 funding," given the October 2013 date of the modification.

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work (R4, tab 14). The REA "request[e]d an equitable adjustment of $10,730 beyond
the $58,947 due" (id. at 4-5). The REA states that:

               These added costs were a direct result of the government
               shutdown, failure to allocate funds for [appellant's]
               contract, and the issuance of a stop work order. The total
               cost beyond the standard monthly labor cost of $58,947
               that should be equitably added is $10,730 .

               ... [I]t is [appellant's] position that the standard monthly
               labor cost of $5 8,94 7 should not be prorated for the
               percentage of days work. Rather, this amount should be
               paid in full ....

               ... [T]he full amount of $58,947 is rightfully due to
               [appellant].

               ... [Appellant] has demonstrated ... that it is entitled to an
               equitable adjustment as a direct result of the government's
               failure to allocate funds to its contract and the issuance of a
               stop work order.

(Id. at 3-4)

       The CO denied the REA on 6 February 2014 (R4, tab 17). The denial is not
labeled a final decision, and does not apprise appellant of appeal rights. Appellant
filed an appeal docketed as ASBCA No. 59149 on 7 February 2014, from the denial of
the REA. On 24 April 2014, appellant submitted to the CO a certified claim in the
amount of $81,161.75, 3 based upon the same facts as was based the 21 November
2013 REA. The CO has not issued a final decision upon that claim. On 1 July 2014,
appellant filed an appeal docketed as ASBCA No. 59395, ostensibly from the "deemed
denial" of the 24 April 2014 certified claim.

3
    Under the Contract Disputes Act (CDA), only claims over $100,000 require
        certification. 41 U.S.C. § 7103(b)(3).

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                                      DECISION

       Jurisdiction

        The Board possesses jurisdiction to entertain these appeals. A contractor's
submission of a valid CDA claim in writing to the CO for decision, and a contractor's
appeal from that decision, or from the CO's failure timely to issue a decision, are
prerequisites to the Board's jurisdiction to entertain its appeal. Madison Lawrence,
Inc., ASBCA No. 56551, 09-2 BCA ii 34,235 at 169,206. Appellant's 21 November
2013 REA is a valid CDA claim because it is a "written assertion ... seeking, as a matter
of right, the payment of money in a sum certain" (FAR 2.101 (defining "claim"));
namely, $69,677, consisting of (1) $58,947 for services provided in October 2013, and
(2) an equitable adjustment in the contract price in the amount of $10,730. The
government denied that claim on 6 February 2014, and, on 7 February 2014, appellant
timely appealed from that denial, and it was docketed as ASBCA No. 59149.

       Appellant's 24 April 2014 submission to the CO is also a valid CDA claim, for
$81,161.75. By 1July2014, when appellant filed the appeal in ASBCA No. 59395, more
than 60 days had passed since the submission of that claim. Therefore, the claim is
deemed denied. Aqua-Fab, Inc., ASBCA No. 34283, 87-2 BCA ii 19,851at100,440.

       Merits

        Appellant is entitled to $58,947 for service provided in October 2013. When it
exercised Option Period 2, the government ordered 12 units of monthly service at
$58,947 per unit. The government received service in October 2013, albeit, by the
government's count, for only six days (R4, tab 13). That the government received
only a few days of service in October 2013 is attributable to the government's order
that appellant stop providing service during part of October 2013 (id.). In this respect,
this case is not like Olympiareinigung, GmbH, ASBCA No. 53643, 04-1 BCA
ii 32,458, or B.F.I. Waste Systems, ASBCA No. 30076, 86-2 BCA ii 18,842, both of
which were cited by the government. In those cases the units of work that the
government contended were not provided were the same units specified in the
contracts: square meters in Olympiareinigung, and cans and trips B.F.I. Waste
Systems. Here, the government relies upon a unit of work that the contract does not
specify (days) instead of the unit of work that the contract specifies (months). Because
the government ordered service for the month of October 2013, and received all the
service it allowed appellant to provide during that month, it owes appellant the
contract's unit price for that service: $58,947.

      This case is also not like South Pittsburgh Cable Co., ASBCA No. 40014,
91-3 BCA ii 24,125, also cited by the government. There, the government asserted a

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deductive change claim. Here, the appeal is from a contractor claim for services rendered,
not a government claim for a credit for the value of unperformed work. Nor does FAR
clause 52.242-15 help the government. The stop work clause concerns (1) the
government's right to order a work stoppage, and (2) whether a contractor is entitled to an
increase in the contract price in the event of such a stoppage. Whether appellant is
entitled to the unit price for work that the government ordered concerns neither the
government's right to stop work nor an increase in the contract price. Because the
government received the service it allowed appellant to provide in October 2013,
appellant is entitled to the unit price for October 2013 - $58,947 -with interest pursuant
to the CDA, 41 U.S.C. § 7109(a)(l), from 21November2013 (the date the CO received
the certified claim) until the date of payment. 4 The government has pointed to no
provision in the contract that gave it the authority to avoid paying the monthly charge.

       Equitable Adjustment of the Contract Price

       Appellant does not demonstrate entitlement to an equitable adjustment in the
contract price. Appellant presented the REA to the CO on 21November2013, within
30 days of the 22 October 2013 end of the period of work stoppage; consequently,
under FAR 52.242-15(b), the issue is whether the stop-work order resulted in an
increase in the time required for, or in the Contractor's cost properly allocable to, the
performance of any part of the contract.

       Appellant is not entitled to any additional amounts. Appellant seeks two
categories of"costs": (1) $5,810 for what appellant characterizes as the cost of
terminating a research and development project, (2) $64,206 in 261 hours of what
appellant characterizes as contract administration performed by its president,
Mr. David P. Dumas, through 15 October 2014 (app. 14 October 2014 br. at 34).

       First, appellant cannot recover $5,810 for the termination of a research and
development project. That "cost" appears to consist of "lost profits" that appellant
contends would have been realized if it had not had to shut down a research and
development program as part of the October 2013 government shutdown (app.
19 August 2014 br. at 43). However, lost profits that might have been realized on
other business endeavors are too remote and speculative to be compensable.
Muhtesem Co., ASBCA No. 57538, 12-1 BCA 'i) 34,946 at 171,815.

4
    We reject any request for Prompt Payment Act interest upon the as-yet unpaid
       $58,947 for October 2013. Payment of that amount has been in dispute between
       the parties (R4 tabs 13, 14); therefore, pursuant to 31U.S.C.§3907(c), Prompt
       Payment Act interest is not applicable. See Dillingham Construction Pacific
       Basin, Ltd., ASBCA Nos. 53284, 53414, 03-1 BCA 'i) 32,098 at 158,664.

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I
           Second, appellant does not demonstrate entitlement to an increase in the
    contract price for additional contract administration costs. The timesheets for
    Mr. Dumas for the weeks ending 5 October 2013 through 18 October 2014 reflect that
    nearly all of the labor hours for which appellant seeks compensation were incurred in
    connection with the prosecution of appellant's claim against the government
    (including these appeals filed in 2014), and, therefore, are not recoverable. See Bill
    Strong Enterprises, Inc. v. Shannon, 49 F.3d 1541, 1549-50 (Fed. Cir. 1995),
    overruled on other grounds by Rejlectone, Inc. v. Dalton, 60 F.3d 1572, 1579 n.10
    (Fed. Cir. 1995). Although the timesheets also note 12 "shutdown" hours performed
    by Mr. Dumas in October 2013, the documentary record does not provide sufficient
    information from which to determine that those hours reflect (as required by
    FAR 52.242-15) "an increase in the time required for, or in the Contractor's cost
    properly allocable to, the performance of any part of this contract." Indeed, the
    timesheets appear to demonstrate no such increase: Mr. Dumas worked 40 hours per
    week both before and during the shutdown. (App. 14 October 2014, attach. 1)

                                       CONCLUSION

          For these reasons, the Board sustains the appeals in the single amount of
    $58,947, with interest upon that amount pursuant to the CDA, 41 U.S.C. § 7109(a)(l),
    from 21 November 2013 until the date of payment. The appeals are otherwise denied.

          Dated: 10 November 2014

                                                    Administrative Judge
                                                    Armed Services Board
                                                    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. 59149, 59395, Appeals of
    Amaratek, rendered in conformance with the Board's Charter.

          Dated:

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

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