Court Opinion

ID: 9483438
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:20:27.771105+00
Date Added: 2024-06-11T17:49:37.773121
License: Public Domain

*851COWEN, Senior Circuit Judge,
dissenting.
There has been unanimous recognition by the courts and by the boards of contract appeals that the purpose of the certification requirement in section 6 of the Contract Disputes Act (CDA), 41 U.S.C. § 601 et seq. (1988), is to prevent the filing of fraudulent and unwarranted claims against the government, and that the burden of proof is on the contractor to establish that its certification complies with the CDA and FAR 33.207(c), its implementing regulation. Against that background of decisional law, this court has today reversed the decision of the Armed Services Board of Contract Appeals (ASBCA or Board), denying Universal’s motion to vacate the Board’s decision for lack of jurisdiction. The motion, which was not made by Universal until after the completion of a lengthy trial and the issuance of the board's decision denying Universal’s claim on the merits, was based on Universal’s allegation that its own certification did not comply with the provisions of the CDA and the FAR. For the reasons to be set forth, I would affirm the Board’s decision in all respects.
I.
Universal submitted a claim for an equitable adjustment to the contracting officer on February 7, 1987. The CO initially rejected the claim due to formal deficiencies. Universal then retained an attorney to prepare the claim, including the required certification. Through counsel, who has represented the contractor in all the proceedings in this ease, including this appeal, Universal resubmitted its claim to the contracting officer.
The claim certification was signed by “Joe R. Flores, Vice President, Accounting.” On the basis of the certification, the ASBCA accepted jurisdiction of Universal’s appeal from the contracting officer’s denial of the claim. There ensued an eleven-day hearing before the ASBCA, with testimony from more than twenty witnesses and the introduction into evidence of more than 300 documentary exhibits. Universal Canvas is a small business which has three vice-presidents. Mr. Cantu, the president of the company, who must have been fully acquainted with the functions and authority of Mr. Flores, testified in support of the contractor’s claim. Neither he nor anyone else during the course of the eleven-day trial questioned the qualifications of Mr. Flores to sign the claim certification. While the appeal was pending, counsel for Universal sent two letters to the Board requesting a prompt decision on the merits. The first of these letters was sent on October 3, 1990, nearly nine months after this court’s decision in Ball, Ball & Brosamer, Inc. v. United States, 878 F.2d 1426 (Fed.Cir.1989). The second was sent on March 11, 1991, eleven days after our decision in United States v. Grumman Aerospace Corp., 927 F.2d 575 (Fed.Cir.1991). No suggestion was made in either letter that Universal’s claim contained a defective certification.
After the Board issued a decision on April 29, 1991, denying the contractor’s claim, Universal filed a motion to dismiss the appeal for lack of jurisdiction. Relying on Grumman, Universal alleged, inter alia, that Mr. Flores was not a proper certifying official under FAR 33.207(c)(ii) because his duties were entirely financial in nature.
The Board treated the submission as a motion to vacate the Board’s April 29, 1991, decision, and denied it, stating:
Here, [the contractor] is a small business. During the time period in question, [Universal] had a president, and Mr. Flores, the certifying official, was one of three vice presidents reporting directly to the president. Together with [Universal’s] president, Mr. Flores was active in providing information to the Government in support of the claim, and the record suggests that his position was senior to that of the other vice presidents. Although [Universal's] counsel asserts that Mr. Flores’ duties were only financial in nature, the record contains no evidence to support that allegation, nor does it indicate the extent of his responsibility over [Universal’s] operations. FAR Section 33.207(c) was promulgated prior to *852the submission of [Universal’s] claim, and [Universal] presented Mr. Flores as an appropriate certifying official while presumably having knowledge of the regulation. On this record, we are not prepared to conclude that Mr. Flores did not possess the requisite responsibility to certify the claim.
Universal thereafter filed a motion for reconsideration which was also denied by the Board. Universal provided no evidence to substantiate the conclusory, unsworn statements in the motions that Mr. Flores was not qualified to certify its claim in this case.
I have set forth the foregoing statement, because I believe it necessary to set forth the facts underlying the Board's decision and because the statement is relevant to other issues in this appeal. However, I do not suggest that the contractor’s attorney was guilty of any improper or unethical conduct. I agree with the Board that he had a right to proceed as he did. But I do say that there is no merit to his position and that the majority erred in adopting it.
II.
Neither the Board nor the Army has taken the position that Mr. Flores was “[a] senior company official in charge at the contractor’s plant or location involved” under FAR 33.207(c)(2)(i). That portion of the regulation is not in issue. Involved here is the second prong of the regulation, FAR 33.207(c)(2)(H), which authorizes certification by “[a]n officer or general partner of the contractor having overall responsibility for the conduct of the contractor’s affairs.” Based on the record evidence, the Board determined that Mr. Flores met the requirements of the second prong of the regulation. The issue in this appeal is whether the contractor has discharged its burden of demonstrating that the Board’s decision is not supported by substantial evidence or that it is incorrect as a matter of law.
III.
In denying Universal’s motion to vacate, the Board considered our decisions in Ball, Ball & Brosamer and Grumman, and through its findings and conclusions, demonstrated that this case is clearly distinguishable from either of those decisions. The majority views this case as factually similar to Ball. However, the certifying official in that case was neither a corporate officer, nor a general partner of the corporation. Hence, the Ball certifier was not qualified under FAR § 33.207(c)(2)(H), notwithstanding the degree of authority he exercised within the corporation. Here, Mr. Flores is unquestionably a corporate officer, and the relevant inquiry concerns only the scope of his corporate responsibility-
The facts in Grumman are entirely dissimilar to the facts in the instant case. Although the certifier in Grumman held the title of “Senior Vice-President and Treasurer,” there is no indication that the Grumman court considered the descriptive title of the certifying official to be disposi-tive. Instead, the holding in that case was based on the undisputed evidence that the certifying official was not responsible “for anything more than simply deciding and reporting on whether particular dividend-like costs were employee compensation chargeable to a series of government contracts.” 927 F.2d at 580.
The majority attaches great significance to the Board’s statement that “although appellant’s counsel asserts that Mr. Flores’ duties were only financial in nature, the record contains no evidence to support that allegation, nor does it indicate the extent of his responsibility over appellant’s operations.” When the statement relied upon by the majority is read in context with the remainder of the Board’s decision quoted in Part I above, it shows that the Board determined that in view of the record, Universal’s unsupported attack on its own certification would not justify a finding that Mr. Flores lacked the authority to sign the certification. This determination by the Board is in full accord with our decision in United States v. Newport News Shipbuilding and Dry Dock Co., 933 F.2d 996, 999, 1000 (Fed.Cir.1991). Although the majority has attempted to distinguish Newport News, I *853think the court’s opinion is clearly inconsistent with the basic holding in that case.
In Newport News, the board granted summary judgment for the contractor, concluding that “since the government has offered no evidence or proffer that [the certifier] lacked the required responsibility, ... we find no basis for concluding that the certification was not valid.” On appeal, this court affirmed, holding that the government’s conclusory statements regarding the inadequacy of the certification did not create a material issue of fact which precluded summary judgment for the contractor.
Newport News establishes the proposition that when the record contains prima facie evidence that a claim was certified by an appropriate corporate officer, the party challenging the certification must present evidence that the officer lacked the authority to certify the claim. Because Universal was obligated to submit a compliant certification, it was under an even greater burden than the government in Newport News to produce concrete evidence, rather than unsupported allegations, to establish the Board’s lack of jurisdiction. Universal has failed to comply with that obligation. In accordance with the teaching of Newport News, we should not hold that the ASBCA was divested of jurisdiction where the record contains sufficient proof to cast the burden on Universal to proffer evidence that its own certification was inadequate.
IV.
The board properly resolved the certification question in this case by adopting the “totality of the circumstances” approach which the Claims Court and the boards of contract appeals have routinely applied in post-Grumman cases to determine whether a corporate officer with a qualified title is in fact a proper certifying official. See Aleman Food Servs., Inc. v. United States, 24 Cl.Ct. 345 (1991); Valcon II, Inc. v. United States, 24 Cl.Ct. 479 (1991); JAYCOR, ASBCA No. 40911, 91-3 BCA (CCH) ¶ 24,082, 1991 WL 121271 (1991), and Computer Sys. and Resources, Inc., ASBCA Nos. 39936, 42018, 91-3 BCA (CCH) 1124,236, 1991 WL 170086 (1991). This approach was suggested by Grumman, which expressly rejected the notion that only a CEO is qualified to sign a contractor’s certification. 927 F.2d at 581. The Claims Court and the boards have recognized that the regulation must be applied on a case-by-case basis, keeping in mind that similar corporate titles do not necessarily reflect commensurate levels of responsibility. Both tribunals have focused on certifying officials’ “actual” authority, rather than on the “apparent” authority suggested by his title. They have considered the duties and responsibilities of the certifier, the official to whom he reports, and the size and structure of the corporation in determining whether the FAR requirements have been met.
In the instant case, the Board looked beyond Mr. Flores’ title, considered the corporate structure of Universal and determined that Flores exercised broader actual authority than his title would suggest. The Board recognized that Universal was a small business. The Board found that Mr. Flores was one of three vice-presidents who reported directly to the president, that he occupied a position senior to the other vice-presidents, and was the only vice-president based at corporate headquarters. The board also called attention to the fact that Flores provided information in support of the claim.
On the basis of its findings of fact and the failure of Universal to submit any evidence supporting its allegation that Mr. Flores’ duties were only financial in nature, the Board properly concluded that the record would not support a determination that Mr. Flores did not possess “the requisite responsibility to certify the claim.” The Board’s findings are supported by substantial evidence. Furthermore, its decision, which is in accord with our decision in Newport News, is correct as a matter of law.
V.
In several decisions which have considered the legislative history of the CD A, this court has stated that the purpose of the *854certification requirement is to prevent the filing of fraudulent and unwarranted claims against the government. See Ball, Ball & Brosamer, 878 F.2d at 4429. As the Board correctly observed, claim certification is a requirement for the sole benefit of the government. Surely, Congress never intended that a contractor, who is obligated to file a proper certification, would be permitted to use his alleged failure to comply with that obligation to set aside a decision on the merits by a board of contract appeals. In adopting Universal’s position, the majority has granted this contractor a second opportunity to prevail on the same claim. With deference to my colleagues of the majority, I am convinced that the court’s holding today is so repugnant to the purposes for which the certification requirement was enacted and so inconsistent with our decision in Newport News that the majority’s decision should not stand.