Court Opinion

ID: 4546977
Source: CourtListenerOpinion
Date Created: 2020-07-09 14:00:07.163954+00
Date Added: 2024-06-11T08:12:01.215016
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of --                            )
                                         )
Arcade Travel, Inc. d/b/a Boersma Travel )          ASBCA Nos. 62009, 62010, 62076
 Services                                )
                                         )
Under Contract Nos. H98210-18-C-0002     )
                     HHSP233201300026I )
                     HHSP233201400010I )

APPEARANCE FOR THE APPELLANT:                       Bryant S. Banes, Esq.
                                                     Neel, Hooper & Banes, P.C.
                                                     Houston, TX

APPEARANCES FOR THE GOVERNMENT:                     Hattie R. DuBois, Esq.
                                                     Associate General Counsel
                                                    Mathew W. Ponzar, Esq.
                                                     Trial Attorney
                                                     Defense Human Resources Activity
                                                     Alexandria, VA

       OPINION BY ADMINISTRATIVE JUDGE WOODROW ON THE
    GOVERNMENT’S MOTION TO DISMISS FOR LACK OF JURISDICTION

        Arcade Travel, Inc. d/b/a Boersma Travel Services (Boersma or appellant) has
appealed the Defense Human Resources Activity’s (DHRA’s or government’s)
terminations for cause of Contract Nos. H98210-18-C-0002, HHSP233201300026I,
and HHSP233201400010I (travel services contracts). This appeal has been docketed
as ASBCA No. 62009. It also appeals DHRA’s claim for $311,700 for credit
monitoring services, docketed as ASBCA No. 62010, and the denial of Boersma’s
certified claim for $664,379.33 related to various alleged breaches by the government,
docketed as ASBCA No. 62076. The government moves to dismiss ASBCA
Nos. 62009 and 62010, the appeal of the termination for cause and appellant’s request
to prevent collection of the government’s claim for lack of jurisdiction. The
government’s motion does not address ASBCA No. 62076.

       For the reasons discussed below, we deny the motion as to the termination for
cause under ASBCA No. 62009. With regard to ASBCA No. 62010, we grant the
motion in part, striking appellant’s request that the Board restrain the government from
collecting its alleged claim during the appeal, but deny the remaining portion of the
motion.
           STATEMENT OF FACTS FOR PURPOSES OF THE MOTION

       1. On September 30, 2013, the Department of Health and Human Services (HHS)
signed Boersma Contract No. HHSP233201300026I, an Indefinite Delivery Indefinite
Quantity (IDIQ) contract for travel services for the Missile Defense Agency
(2013 contract) (R4, tab 1 at 1). HHS also awarded Contract No. HHSP233201400010I,
another IDIQ Contract, for travel services for the Defense Intelligence Agency (the 2014
contract). Though the contract provided has no date, it is effective May 1, 2014. (Id.
at 158) On December 1, 2017, DHRA awarded Contract No. H98210-18-C-0002 to
Boersma (the 2017 contract) (id. at 503). This was a Firm-Fixed-Price contract for travel
management support services for the Air Force in Travel Area 1, which is composed of
several installations located in Louisiana, Colorado, California, Arizona, Montana, and
Florida (id. at 536).

        2. The 2017 contract incorporated by reference Federal Acquisition Regulation
(FAR) 52.233-1, DISPUTES (MAY 2014), which defines a claim as “a written
demand or written assertion by one of the contracting parties seeking, as a matter of
right, the payment of money in a sum certain, the adjustment or interpretation of
contract terms, or other relief arising under or relating to this contract” (R4, tab 1
at 562; FAR 52.233-1(c)). This contract also incorporated FAR 52.242-15,
STOP-WORK ORDER (AUG 1989) and Defense Federal Acquisition Regulation
Supplement (DFARS) 252.204-7012, SAFEGUARDING COVERED DEFENSE
INFORMATION AND CYBER INCIDENT REPORTING (OCT 2016) (id.). This
first clause empowers the contracting officer (CO) to “require the Contractor to stop
all, or any part, of the work called for by this contract for a period of 90 days” after
which the CO can cancel the stop work order or terminate the work, “as provided in
the Default, or the Termination for Convenience of the Government, clause of this
contract.” FAR 52.242-15(a). The 2013, 2014, and 2017 contracts incorporated
FAR 52.212-4, CONTRACT TERMS AND CONDITIONS-COMMERCIAL ITEMS
(JUL 2013), (SEP 2013), and (JAN 2017) respectively (id. at 58-64, 212-18, 561).
The revisions to this clause between July 2013 and January 2017 are not relevant here.

        3. By letter dated October 4, 2018, the government issued a stop work order to
appellant for the 2017 contract, effective the same day, “due to the recent notification
of a data breach to the Boersma Travel Services Information technology systems”
(R4, tab 2 at 627). By two letters dated October 5, 2018, HHS issued appellant stop
work orders on the 2013 and 2014 contracts effective immediately for the same reason
(id. at 636, 638.)

       4. On October 25, 2018, the government signed Contract No. GS10FCA017
with Identity Theft Guard Solutions, Inc., for two years of “credit monitoring and
identity theft protection services” for individuals affected by “the recent data breach
incident” (R4, tab 3 at 640, 651, 655).

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       5. On October 29, 2018, HHS issued bilateral modifications on both the 2013
and 2014 contracts, transferring administration to DHRA (R4, tabs 4-5). DHRA
modified these contracts again on November 27, 2018, to cancel the stop work order
and accept administration of the contracts. Appellant was to recommence work on
December 13, 2018. (R4, tab 8 at 719-20, 749) However, the government sent
appellant another Stop Work Order for the contracts on that day (R4, tab 9).

        6. By letter dated March 11, 2019, DHRA terminated the travel services
contracts for cause (R4, tab 11 at 772). The government cited an assessment
conducted by its cybersecurity team and found appellant “non-compliant with National
Institute of Standards and Technology (NIST) Special Publication (SP) 800-171” (id.).
The letter also asserts a government claim against appellant for $311,700 “as a result
of Boersma’s breach of these contracts” (id.). However, the government states HHS
failed to include this requirement in the 2013 and 2014 contracts (gov’t mot. at 3).

       7. Appellant filed a notice of appeal with the Board by letter dated March 19,
2019. The Board docketed the challenge to the terminations for cause as ASBCA
No. 62009, and the government claim for $311,700 as ASBCA No. 62010. A separate
appeal from the denial of a Boersma claim in the amount of $664,379.33 for various
alleged breaches by the government was docketed on May 23, 2019 as ASBCA
No. 62076; which was subsequently consolidated with these appeals, but is not
relevant to the present motion.

       8. In a consolidated complaint filed with the Board on June 21, 2019, appellant
requests that the Board “[d]eny all of DHRA’s claims and dismiss any portion of
DHRA’s claim that is for $311,700 and restrain collection of same allegedly related to
a breach of contract by Boersma” (compl. ¶ 14).

                                     DECISION

       The government moves to dismiss both appellant’s challenge to the propriety of
the March 11, 2019 terminations of the travel services contracts for cause and the
request by appellant to “restrain collection” of the $311,700 for costs resulting from
Boersma’s alleged breaches of these contracts for lack of jurisdiction. In motions to
dismiss for lack of jurisdiction, the nonmoving party bears the burden of proof of
jurisdiction. Cedars-Sinai Medical Center v. Watkins, 11 F.3d 1573, 1583 (Fed.
Cir. 1993).

      1. Terminations for Cause – ASBCA No. 62009

       The government argues that the Board lacks jurisdiction over the terminations
for cause claim because FAR 2.101 defines “claim” as “payment of money in a sum

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certain,” and “[a]ppellant’s challenge to the termination for cause . . . fails to state a
sum certain” (gov’t mot. at 5). Further, the government argues that “Boersma’s
challenge to the terminations for cause is not monetary in nature, it is not a claim
within the meaning [of] the CDA [Contract Disputes Act] and accordingly the ASBCA
does not have jurisdiction over it” (gov’t reply at 6). In both its motion and reply, the
government cites no cases to support the contention that the Board lacks jurisdiction
over appeals from terminations for cause. Appellant argues the Board has authority to
convert terminations for default to terminations for convenience (app. reply at 2). We
agree.

       It is well settled that a termination for default is considered to be a government
claim that does not require a contractor to file a claim for the Board to exercise its
jurisdiction. Ro. VI.E. Sri, ASBCA No. 56198, 09-1 BCA ¶ 34,068 (default
termination is considered a government claim). We will not disturb this settled area of
law. In the appeal at issue, the DHRA CO issued a written, final decision to the
contractor terminating the travel services contracts for cause. Accordingly, we find
that we possess jurisdiction to entertain appellant’s appeals of the government’s
terminations for cause. Thus this portion of DHRA’s motion is denied.

       2. Restraining Collection of Costs on the Government’s Claim –ASBCA
          No. 62010

       Appellant requests in its consolidated complaint for the Board to “restrain
collection” of DHRA’s claim for $311,700, and further clarifies that it requests the
Board restrain collection of the government’s “alleged claim until the Board has
decided this matter” (consolidated compl. ¶ 14; app. resp. at 5).

       The government argues this is injunctive relief, and the Board lacks jurisdiction
to grant such relief (gov’t mot. at 5). The government’s motion “requests removal
from the accepted issues, and dismissal. . . . DHRA respectfully requests that these
portions of Boersma’s appeal be dismissed, and all reference stricken from the record
as accepted issues in controversy” (id. at 5-6). We interpret DHRA’s request as a
motion to strike Boersma’s request to “restrain collection” as an improper request for
injunctive relief (id. at 5).

       In its response, appellant argues two things simultaneously. First, it asserts that
the Board possesses jurisdiction to determine the entitlement of the $311,700 which
the government claims, as these costs are founded upon a termination for cause which
appellant also challenges. Second, it asserts that the Board possesses jurisdiction to
prevent the government’s collection of these fees while this appeal is being decided.
(App. resp. at 3-5).

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       As to the first assertion, the Board indeed has jurisdiction over this government
claim. This is the type of claim considered by the CDA when it enabled Boards like
this one to review a “claim by the Federal Government against a contractor relating to
a contract . . . .” 41 U.S.C. § 7103(a)(3).

        However, the second argument is something different. The Board has long
held, as DHRA has asserted, that the government’s decision to collect on a claim
“pending a hearing, rather than waiting until a final judgment, is ‘an administrative
matter over which the Board has no jurisdiction.’” Applied Ordnance Tech., Inc.,
ASBCA Nos. 51297, 51543, 98-2 BCA ¶ 30,023 at 148,543 (quoting Southern
Disposal, ASBCA No. 11031, 66-2 BCA ¶ 5,867 at 27,252). While we may decide
ultimate entitlement to a monetary claim, we are not empowered by the CDA to
prevent the government collecting on its claim while that claim is the subject of an
appeal. Such a request is for injunctive relief, and the Board lacks jurisdiction to grant
this relief. Lulu’s Ostrich Ranch, ASBCA Nos. 59252, 59450, 14-1 BCA ¶ 35,769
at 175,000.

       To the extent the complaint requests the Board restrain collection of the
government’s claim during the appeal, that request for relief is dismissed for lack of
jurisdiction. To the extent the government requests that we dismiss appellant’s
challenge to the government’s claim of ultimate entitlement to the $311,700 claim,
which includes the challenge to the government’s termination for cause, the motion is
denied.

                                    CONCLUSION

        For the reasons discussed above, the motion is denied in part and granted in
part.

        Dated: July 1, 2020

                                                   KENNETH D. WOODROW
                                                   Administrative Judge
                                                   Armed Services Board
                                                   of Contract Appeals

(Signatures continued)

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 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 Nos. 62009, 62010, 62076,
Appeals of Arcade Travel, Inc. d/b/a Boersma Travel Services, rendered in
conformance with the Board’s Charter.

       Dated: July 2, 2020

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

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