Court Opinion

ID: 4671023
Source: CourtListenerOpinion
Date Created: 2021-03-24 19:00:24.215096+00
Date Added: 2024-06-11T08:02:20.938377
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS
    Appeal of -                                 )
                                                )
    GSC Construction, Inc.                      )   ASBCA No. 62530
                                                )
    Under Contract No. W912HN-10-D-0049         )

    APPEARANCE FOR THE APPELLANT:                   James S. DelSordo, Esq.
                                                     Argus Legal, PLLC
                                                     Manassas, VA

    APPEARANCES FOR THE GOVERNMENT:                 Michael P. Goodman, Esq.
                                                     Engineer Chief Trial Attorney
                                                    Laura J. Arnett, Esq.
                                                     Engineer Trial Attorney
                                                     U.S. Army Engineer District, Savannah

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

      Before us is the government’s motion to dismiss for lack of jurisdiction. * For the
reasons set forth below the motion is denied.

           STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

       1. Contract No. W912HN-10-D-0049 is a Multiple Award Task Order Contract
(MATOC) for construction or design build general construction services to be provided
within the South Atlantic Division of the United States Army Corps of Engineers
(USACE) (R4, tab 3.01 at 1). Task Order 0015, dated January 22, 2015 in the original
amount of $5,870,585.00, was for the design and construction of renovated HVAC
systems and related work at Building 54, Robins Air Force Base, GA (R4, tab 3.12 at 1-4).

        2. By letter dated June 25, 2019, appellant, GSC Construction, Inc. (GSC)
submitted a certified claim comprising six sub claim items, including sub claim number 4,
a request for a change order in the amount of $604,985.16 for providing a catwalk in lieu
of a platform it asserted was required by the task order (R4, tab 2.01 at 1-2, 38-72).

*   The government also submitted a motion to stay the appeal pending our decision on this
         motion. By order dated July 15, 2020, the Board partially granted the motion for a
         stay, placing the appeal in suspense until September 18, 2020. The order indicated
         the government could apply for a further stay if it believed it was warranted. The
         government failed to do so. The Board considers the motion for a stay to be moot.
       3. By letter dated May 18, 2020, GSC submitted its notice of appeal from the
contracting officer’s deemed denial of the claim (R4, tab 1.01).

        4. In her declaration submitted in support of the government’s motion to dismiss,
the contracting officer states that review of documents GSC submitted in support of its
claims and of litigation between GSC and its mechanical subcontractor revealed potential
false statements and false claims, that USACE has requested assistance from the Army’s
Criminal Investigative Command to investigate the suspected false statements and
claims, that none of the information provided by GSC has allayed the government’s
concerns regarding the suspected false statements and claims, that the investigation is
ongoing and that because of the information the government has indicating that GSC
made false statements in support of its claim and false claims seeking payment from the
government she has refrained from issuing a final decision on GSC’s claim. (Gov’t mot.
at ex. A)

        5. The government’s motion to dismiss is also supported by a declaration from
John T. Purcell, a Special Agent with the United States Air Force Office of Special
Investigations (OSI) (gov’t mot. at ex. B). Mr. Purcell states that OSI and other federal
agencies have opened an investigation relating to the suspected false statements and
claims arising from GSC’s claim (id.). Mr. Purcell also states that the government’s
position may be substantially prejudiced and undercut by ASBCA proceedings occurring
before GSC’s potential liability under the False Claim Act or other federal statutes for
false claims and false statements are resolved (id.). Neither Mr. Purcell’s, nor the
contracting officer’s, declaration includes any description of the suspected false
statements and claims. Nor does Mr. Purcell provide any explanation as to how
proceedings before the Board may prejudice or substantially undercut the government’s
position.

       6. The record includes copies of transcripts of Mr. George McKnight’s, GSC’s
owner and president, deposition and trial testimony as well as an affidavit by Mr. McKnight
relating to litigation in the United States District Court for the Middle District of Georgia,
which involves GSC’s work under Task Order 0015 (R4, tabs 9.01-9.03).

                             POSITIONS OF THE PARTIES

       Relying on the transcripts and Mr. McKnight’s affidavit, the government argues
the Board will necessarily have to decide whether GSC has falsely claimed that the
catwalk work that is the subject of sub claim No. 4 is additional work beyond the scope
of the work included in Task Order 0015 (SOF ¶ 2), or that Mr. McKnight made a false
statement under oath in the United States District Court proceedings, when he allegedly
asserted the work that is the subject of the catwalk sub claim was included in the scope of
work in Task Order 0015 (gov’t mot. at 9). The government correctly argues, the Board

                                             2
lacks jurisdiction to make factual determinations relating to fraud and cannot determine
whether a contractor has violated the False Claims Act. (id. at 6-9).

       GSC argues that mere allegations of fraud do not divest the Board of jurisdiction
over an otherwise properly filed appeal (app. resp. at 2-3).

                                       DECISION

        We have often held that we have jurisdiction over appeals involving allegations of
fraud so long as we are not required to make factual determinations of fraud. ESA South
Inc., ASBCA Nos. 62242, 62243, 20-1 BCA ¶ 37,647 at 182,772, citing Sand Point
Servs., LLC, ASBCA No. 61819, 19-1 BCA ¶ 37, 412 at 181,859. Although the
government argues that we must necessarily decide whether fraud has occurred, we
disagree. We understand the issue presented in the appeal with respect to the catwalk is
whether this work, apparently claimed by GSC to be additional work, is required by the
contract. This is a matter of contract interpretation, which will depend on what the
contract’s plans, specifications, Statement of Work and other contract provisions provide.
Foley Co. v. United States, 11 F.3d 1032, 1034 (Fed. Cir. 1993) (citing Gould, Inc. v.
United States, 935 F.2d 1271, 1274 (Fed.Cir.1991) (contract interpretation begins with
analysis of the written agreement)). Mr. McKnight’s statements in the United States
District Court litigation may be evidence of GSC’s interpretation of the contract prior to
the existence of a dispute and as such would be both relevant and given great evidentiary
weight, but are not necessarily controlling. B. R. Services, Inc., ASBCA No. 47673 et al.,
99-2 BCA ¶ 30,397 at 150,280 (citing Max Drill, Inc. v. United States, 192 Ct. Cl. 608,
620 (1970)). See also Ver-Val Enterprises, Inc., ASBCA No. 43766, 95-1 BCA ¶ 27,334
at 136,232. Although we may consider Mr. McKnight’s statements, if they are relevant,
it will not be necessary to determine whether fraud has been committed to decide whether
the claimed additional work is required by the contract.

                                     CONCLUSION

       The government has failed to establish that deciding the catwalk issue will require
that we make determinations of fraud as it argues. The motion to dismiss is denied.

      Dated: March 1, 2021

                                                  CHRISTOPHER M. MCNULTY
                                                  Administrative Judge
                                                  Armed Services Board
                                                  of Contract Appeals
(Signatures continued)

                                            3
 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. 62530, Appeal of GSC
Construction, Inc., rendered in conformance with the Board’s Charter.

       Dated: March 2, 2021

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

                                            4