Court Opinion

ID: 4682785
Source: CourtListenerOpinion
Date Created: 2021-04-30 15:01:10.727637+00
Date Added: 2024-06-11T08:04:10.980759
License: Public Domain

Case: 20-1219   Document: 29     Page: 1   Filed: 04/30/2021

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

   PACIFIC COAST COMMUNITY SERVICES, INC.,
               Plaintiff-Appellant

                            v.

                   UNITED STATES,
                   Defendant-Appellee
                 ______________________

                       2020-1219
                 ______________________

     Appeal from the United States Court of Federal Claims
 in No. 1:17-cv-00854-RAH, Judge Richard A. Hertling.
                  ______________________

                 Decided: April 30, 2021
                 ______________________

    TIMOTHY TURNER, Whitcomb, Selinsky, PC, Denver,
 CO, for plaintiff-appellant. Also represented by JOSEPH
 ANTHONY WHITCOMB.

     ALISON VICKS, Commercial Litigation Branch, Civil Di-
 vision, United States Department of Justice, Washington,
 DC, for defendant-appellee. Also represented by JEFFREY
 B. CLARK, ROBERT EDWARD KIRSCHMAN, JR., LOREN MISHA
 PREHEIM.
                  ______________________
Case: 20-1219    Document: 29      Page: 2    Filed: 04/30/2021

 2                PACIFIC COAST COMMUNITY    v. UNITED STATES

     Before MOORE, HUGHES, and STOLL, Circuit Judges.
 HUGHES, Circuit Judge.
      This is a government contracts appeal. The Court of
 Federal Claims held that the government was entitled to
 summary judgment because, despite a showing by Pacific
 Coast Community Services, Inc. that the government or-
 dered a constructive change, the contractor nevertheless
 failed to prove that it suffered any damages. We agree with
 the Court of Federal Claims and affirm.
                               I
      In August 2012, Federal Protective Service (FPS) is-
 sued a solicitation for commercial administrative support
 services with a period of performance of one base year and
 four subsequent one-year option periods. The solicitation
 required offerors to provide five full-time equivalent em-
 ployees for four Contract Line Item Numbers (CLINs). The
 solicitation contemplated an award of a firm-fixed-price
 contract 1 charged at a monthly rate for each of the CLINs
 calculated from employees’ productive hours—excluding,
 for example, federal holidays. The solicitation incorporated
 a “Proposal Pricing Worksheet” on which offerors were to
 provide the hourly and monthly rates and the total price by
 CLIN. This worksheet calculated total productive hours as
 the hours in an employee’s work year (2,080 hours) less fed-
 eral holidays (80 hours) and an unspecified number of va-
 cation hours. J.A. 233. The solicitation also incorporated by
 reference FAR 52.212-4, J.A. 75, and expressly required
 the contractor to submit “accurate invoices that reflect the
 services provided each month” and to attach to the invoices

     1    “A firm-fixed-price contract provides for a price
 that is not subject to any adjustment on the basis of the
 contractor’s cost experience in performing the contract.”
 FAR 16.202-1. Thus, under a firm-fixed-price contract, the
 risk of unforeseen costs is borne wholly by the contractor.
Case: 20-1219     Document: 29     Page: 3    Filed: 04/30/2021

 PACIFIC COAST COMMUNITY   v. UNITED STATES                  3

 a separate sheet detailing variance from the contract re-
 quirements, if any, id. at 180. The solicitation additionally
 required the contractor to notify FPS in advance of any con-
 tractor employee’s absence of longer than two weeks and to
 provide a replacement employee to perform the duties re-
 quired by the position.
      Pacific Coast submitted a proposal listing 1,888 pro-
 ductive hours per employee per year, or 2,000 hours less
 annual vacation as disclosed in its Proposal Pricing Work-
 sheet. FPS awarded the contract to Pacific Coast and Pa-
 cific Coast began performance in October 2012.
     In June 2013, FPS assigned a new Contracting Officer
 to the contract who began requiring Pacific Coast to per-
 form 2,000 hours of productive hours with full replacement
 of any absent employee regardless of the duration of their
 absence. Over the next few years, as FPS awarded Pacific
 Coast subsequent option years, FPS and Pacific Coast dis-
 puted whether the contract required 2,000 or 1,888 produc-
 tive hours per employee per year, with Pacific Coast
 continuing to provide no more than 1,888 productive hours
 and FPS accordingly rating Pacific Coast’s performance as
 “marginal.” J.A. 4, 9 (Pacific Coast expressly disclaimed be-
 fore the trial court “that [its] level of performance exceeded
 1,888 productive hours per year, per CLIN.”). This dispute
 culminated in Pacific Coast filing suit in the Court of Fed-
 eral Claims for, among other things, breach or constructive
 change of contract. Pacific Coast argued that it was owed
 the difference between the 1,888 productive hours it prom-
 ised in its proposal and the 2,000 productive hours FPS de-
 manded.
     Following discovery and the parties’ cross motions for
 summary judgment, the Court of Federal Claims agreed
 with Pacific Coast that the contract required only 1,888
 productive hours per employee per year and that the gov-
 ernment had constructively changed the contract when it
 demanded 2,000 productive hours. However, the Court of
Case: 20-1219     Document: 29       Page: 4    Filed: 04/30/2021

 4                 PACIFIC COAST COMMUNITY     v. UNITED STATES

 Federal Claims held also that Pacific Coast had failed to
 prove that any harm had resulted from the government’s
 constructive change and awarded no damages. This appeal
 followed.
                                II
     We review a grant of summary judgment by the Court
 of Federal Claims without deference. Alamo v. United
 States, 850 F.3d 1349, 1351 (Fed. Cir. 2017). Summary
 judgment is appropriate when, viewing the facts in the
 light most favorable to the non-moving party, there are no
 genuine issues of material fact and the movant is entitled
 to judgment as a matter of law. Id. This court reviews the
 Court of Federal Claims’ legal conclusions de novo. Shell
 Oil Company v. United States, 896 F.3d 1299, 1306
 (Fed. Cir. 2018).
     Pacific Coast argues that the Court of Federal Claims
 erred by requiring Pacific Coast to prove damages in order
 to recover for constructive change of a firm-fixed-price con-
 tract. Instead, Pacific Coast asserts it is entitled to the dif-
 ference between the price it might have bid for 2,000 hours
 per year and the price it bid for 1,888 hours per year to
 reflect the added risk it bears under a firm-fixed-price con-
 tract. See Appellant’s Br. 17–18. But it is well-established
 that a claim for compensation cannot be based on a specu-
 lative theory of damages. Indiana Michigan Power Co. v.
 United States, 422 F.3d 1369, 1373 (Fed. Cir. 2005); San
 Carlos Irr. & Drainage Dist. v. United States, 111 F.3d
 1557, 1563 (Fed. Cir. 1997). And courts cannot award an
 equitable adjustment when doing so would result in a
 windfall. See Admiral Fin. Corp. v. United States, 378 F.3d
 1336, 1345 (Fed. Cir. 2004). Since Pacific Coast admitted
 that it did not provide a “level of performance exceed[ing]
 1,888 productive hours per year, per CLIN,” J.A. 9, Pacific
 Coast’s failure to provide any evidence to show costs in-
 curred as a result of the government’s constructive change
 is fatal. The Court of Federal Claims properly rejected
Case: 20-1219     Document: 29     Page: 5    Filed: 04/30/2021

 PACIFIC COAST COMMUNITY   v. UNITED STATES                  5

 Pacific Coast’s argument that it should be entitled to a
 speculative increase in the “value” of the contract.
      Pacific Coast’s reliance on Empire Blue Cross & Blue
 Shield v. United States, 26 Cl. Ct. 1393 (1992), to support
 its claim for “value” compensation is misplaced. Appellant’s
 Br. 17–23. In Empire, the government sought to claw back
 additional payments made to a firm-fixed-price contractor
 whose staffing levels had decreased despite the govern-
 ment’s purchase of additional work. Empire, 26 Cl. Ct at
 1395. Empire is easily distinguished for at least three rea-
 sons. First, in Empire, it was the government who sought
 reimbursement from the contractor under a firm-fixed-
 price contract as opposed to, as here, a contractor seeking
 additional payment from the government. Id. Second, the
 Court of Federal Claims in Empire found that the contrac-
 tor had actually incurred costs by dedicating idle staff to
 completing the new work under a theory of alternative uti-
 lization of available resources. Id. at 1396. Finally, in Em-
 pire the government actually bought new work which the
 contractor actually performed. Id. Here, Pacific Coast did
 not and cannot advance such a claim because it produced
 no evidence to show that it actually provided work in excess
 of 1,888 productive hours per year and, even more, has ad-
 mitted that it did not perform beyond the contracted-for
 1,888 hours. J.A. 9. Empire is thus inapposite.
     Pacific Coast also argues on appeal that the Court of
 Federal Claims erred by requiring it to prove damages be-
 cause the hours requirement of the contract was not a de-
 liverable. Appellant’s Br. 23. But Pacific Coast itself
 argued to the trial court that the contract only required
 1,888 productive hours per employee per year and pre-
 vailed. See, e.g., J.A. 568. It is unclear whether Pacific
 Coast preserved this argument below, but even if we con-
 sider it, the argument fails. The contract requires that con-
 tractor staff be physically present on site for the contracted
 number of hours, id. at 55, and further requires the con-
 tractor to provide invoices reflecting those hours, id. at 75,
Case: 20-1219    Document: 29     Page: 6   Filed: 04/30/2021

 6                PACIFIC COAST COMMUNITY   v. UNITED STATES

 180. The Court of Federal Claims properly interpreted the
 contract to require 1,888 hours per employee per year as a
 deliverable.
                            III
     We have considered Pacific Coast’s remaining argu-
 ments and find them unpersuasive. Because we agree with
 the Court of Federal Claims that Pacific Coast was re-
 quired to prove damages resulting from the government’s
 constructive change and failed to do so, we affirm.
                       AFFIRMED