Court Opinion

ID: 4117673
Source: CourtListenerOpinion
Date Created: 2017-01-23 17:00:09.610045+00
Date Added: 2024-06-11T14:34:49.432075
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                            )
                                        )
Public Warehousing Company K.S.C.       )          ASBCA No. 59020
                                        )
Under Contract Nos. SP0300-03-D-306 l )
                    SPM300-05-D-3 l l 9 )
                    SPM300-05-D-3128 )

APPEARANCES FOR THE APPELLANT:                     Michael R. Charness, Esq.
                                                   Jamie F. Tabb, Esq.
                                                   Ralph C. Mayrell, Esq.
                                                    Vinson & Elkins LLP
                                                    Washington, DC

                                                   Richard Marmara, Esq.
                                                    Skadden, Arps, Slate, Meagher &
                                                     Flom LLP
                                                    Los Angeles, CA

                                                   Kristin N. Tahler, Esq.
                                                    Quinn Emanuel Urquhart &
                                                     Sullivan, LLP
                                                    Los Angeles, CA

APPEARANCES FOR THE GOVERNMENT:                    Daniel K. Poling, Esq.
                                                    DLA Chief Trial Attorney
                                                   Steven C. Herrera, Esq.
                                                   Keith J. Feigenbaum, Esq.
                                                   Kari L. Scheck, Esq.
                                                    Trial Attorneys
                                                    DLA Troop Support
                                                    Philadelphia, PA

         OPINION BY ADMINISTRATIVE JUDGE THRASHER
  ON THE GOVERNMENT'S MOTION TO DISMISS OR ALTERNATIVELY
                      STAY THIS APPEAL

       This appeal arises from three Prime Vendor contracts between appellant,
Public Warehousing Company, K.S.C. (PWC), and the Defense Supply Center
Philadelphia, since renamed DLA Troop Support, a component of the Defense
Logistics Agency (DLA). PWC appeals from the denial of its 28 November 2011
certified claim, as revised by its 26 February 2013 letter, seeking $4,605,594.53 in
interest penalties allegedly due pursuant to the Prompt Payment Act, as amended, 31
U.S.C. §§ 3901-3907, and the terms of the captioned contracts. The DLA moves to
dismiss this appeal without prejudice under Armed Services Board of Contract
Appeals (ASBCA) Rule 18 pending resolution of the ongoing criminal proceedings
involving PWC, in the U.S. District Court for the Northern District of Georgia
(District Court). In the alternative, DLA requests a stay of this appeal. DLA asserts
the affirmative defenses of fraud in the inducement and first material breach based
on the same conduct at issue in PWC's criminal proceeding currently being litigated
in the District Court.

         STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

       1. DLA awarded Contract No. SP0300-03-D-306 l (PVI) to PWC on 30 May
2003 (R4, tab 20). DLA also awarded Contract Nos. SPM300-05-D-3119 (Bridge)
and SPM300-05-D-3128 (PVII) to PWC on 17 February 2005 and 7 July 2005,
respectively. The contracts were Prime Vendor subsistence contracts to provide food
to U.S. military personnel and other authorized customers in Iraq and Kuwait. (R4,
tabs 30, 41)

       2. PWC was paid under the contract by submitting invoices to DLA either
through the Electronic Data Interchange (EDI) system or manually "offline". 1 The
contracts (and the solicitations incorporated by reference into the contracts) included
terms stating that payment would be made in accordance with the Prompt Payment
Act (PPA) (R4, tab 20 at 16, tab 36 at 79).

       3. PWC filed a certified claim on 28 November 2011, asserting entitlement to
$5,381,777.62 for late payment interest penalties due under the PPA related to
invoices submitted under the three contracts (R4, tab 1). The claim included two
spreadsheets detailing the interest penalties alleged due on thousands 2 of invoices
submitted for payment (app. supp. R4, tab 49). The amount claimed was later
revised downward on 26 February 2013 to $4,605,594.53 (R4, tab 7A at 1-4). The
contracting officer issued her final decision on 1November2013, denying the claim
(R4, tab 13). PWC filed its complaint with the Board dn 20 December 2013, and
DLA filed its answer on 21 March 2014. The government moved to partially
dismiss this appeal for lack of jurisdiction on 30 June 2014, but later moved for
summary judgment on 4 March 2015. The Board denied both motions on 2 May

1
    Most offline or manual invoices appear to have been submitted by email.
2
    389 pages of EDI invoices totaling $2,059,701.93 and 30 pages of offline invoices
         totaling $5,381, 777 .62.

                                           2
2016. Public Warehousing Company, K.S.C., ASBCA No. 59020, 16-1 BCA
, 36,366.

Discovery

        4. During a conference call on 8 June 2016, the parties discussed the status of
DLA's review of the disputed invoices. DLA represented it had only reviewed a
small number of the invoices at issue and could not provide a date certain for
completing its review. As a result, the Board ordered DLA to identify the invoices it
had already reviewed and to provide the Board with an estimate of how long it will
take to review the remaining invoices, identify any discrepancies and inform PWC
of the specific basis for any discrepancies.

        5. On 22 July 2016, DLA filed an amended answer with the Board, asserting
affirmative defenses including fraud in the inducement, first material breach, and
payment. 3 DLA's fraud in the inducement affirmative defense is based on PWC's
alleged false market basket pricing for its proposal for PVII (amended answer
at 38-39, ,, 8-16). DLA's first material breach affirmative defense is based on
several different alleged actions by PWC (id. at 40-43, ,, 17-51 ). DLA asserts PWC
materially breached the contracts by systemically overcharging DLA by failing to
purchase a less expensive product than it was instructed to purchase because the
vendor did not offer PWC a prompt-payment discount (id. at 40-41, ,, 17-27). DLA
also asserts that PWC materially breached the contracts by manipulating and
inflating the delivered price of its products under the contracts by concealing their
distribution fees and by urging vendors to use interchange port services (id. at 41-42,
,, 28-39). DLA further asserted that PWC materially breached the contracts by
failing to pass on rebates and discounts received for purchase of Local Market Ready
(LMR) items and Fresh Fruits and Vegetables (FF & V) from The Sultan Center (id.
at 42-43, ,, 40-51).

        6. On 29 June 2016 the DLA provided PWC with a letter describing
examples of invoice discrepancies purporting to comply with the Board's order of
8 June 2016. On 12 July 2016 PWC submitted a letter to the Board asserting DLA's
response failed to comply with the Board's order and requested the Board order
DLA to comply with its order. In response, the Board initiated a conference call
with the parties on 25 July 2016. During that call, the Board agreed with PWC that
DLA failed to comply with its previous order. DLA explained that: it was having a
difficult time locating and examining the invoices; that there are thousands of
invoices; the invoices have been archived; and it takes approximately two to three

3
    DLA also asserted affirmative defenses of laches (amended answer at 37-38, ,, 1-5)
        and statute of limitations (amended answer at 38, ,, 6-7).

                                           3
hours to pull the information from their system on one invoice. Therefore, DLA
stated that individual review of each invoice will require tremendous expenditure of
resources from each party.

        7. The government also stated during the conference call that it planned to
file a motion to dismiss this appeal without prejudice because the affirmative
defenses in its amended answer overlap with an ongoing criminal proceeding against
DLA. The Board asked DLA when it became aware of the criminal proceeding and
was told 2009.

       8. The parties also addressed the issue of reviewing the invoices during the
call. PWC stated that the spreadsheet used in support of its claim represented the
EDI invoices and was derived from its electronic system for invoicing DLA. The
contract required this system to interface with the government's system for filing
EDI invoices. PWC also clarified that its estimate of 32,000 individual invoices,
(previously discussed in a conference call), more realistically is about 11,400 ESI
invoices and 1,000 offline invoices.

        9. On 20 September 2016, DLA filed a report of its invoice data review in
accordance with the Board's scheduling order. Only 328of11,430 EDI invoices
had been reviewed as of the date of the report. DLA's review alleges it identified
discrepancies including, missing interest payment data, incomplete invoice data or
incorrect accrual dates and "hundreds of invoices" barred by the statute of
limitations. DLA did not review any of the "offline" invoices given its position that
the contract required invoices be submitted through the EDI system. The
20 September report was supplemented on 28 September 2016 with an attached list
of invoices (2,447 EDI and 124 offline) with interest payments that DLA alleges do
not match the spreadsheet list submitted by PWC.

       10. On 23 November 2016, PWC filed a motion for sanctions in the form of
adverse inferences and exclusion of evidence, a motion to compel, and a request for
expedited briefing. Because the discovery sought is necessarily an issue in deciding
this motion, the Board stayed discovery in this appeal until 13 January 2017, or until
the date the Board issues its decision on DLA's motion, whichever is earlier.

Fraud Investigation and Prosecution of PWC

        11. DOJ conducted civil and criminal fraud investigations concerning PWC's
performance under the three contracts. A relator filed a civil qui tam False Claims
Act case against PWC in the District Court in 2005 alleging PWC committed fraud
under the contracts at issue in this appeal. The government intervened in that case
and filed its own complaint in January 2011. On 9 November 2009, PWC was

                                          4
indicted in the District Court. The six-count indictment (original indictment)
charged PWC with conspiracy to defraud the United States, conspiracy to commit
major fraud, major fraud, wire fraud, and abetting wire fraud. Both the criminal and
civil fraud cases against PWC are currently pending.

       12. A superseding indictment (superseding indictment) was issued on
9 February 2010, which made largely the same allegations as the original indictment
(gov't mot., ex. 3). The government's theories include allegations that PWC
misrepresented the expected prices of a market basket of goods in submitting its
proposal for the contract on the PVII contract and that it overcharged the
government in a variety of ways, including: the use of costlier vendors that provided
PWC a prompt payment discount; improperly charging the government for
warehousing and distribution costs; inflating prices from distributors and vendors;
improperly retaining rebates, allowances and discounts; and reducing the pack size
of products to increase distribution fees on all three contracts (id.).

Letter from the US. Attorney for the Northern District of Georgia

       13. The U.S. Attorney for the Northern District of Georgia, John Hom,
submitted a letter to DLA, dated 12 August 2016, requesting that DLA seek that
ASBCA No. 59020 be dismissed without prejudice, or, in the alternative, stayed
(gov't mot., ex. 1 at 1). The letter states that the U.S. Attorney's Office reviewed
DLA's amended answer in ASBCA No. 59020 and that "there is substantial overlap
between the affirmative defenses alleged in the answer and the ongoing criminal
prosecution of Public Warehousing Company in the United States District Court for
the Northern District of Georgia" (id.).

         14. The U.S. Attorney states that "[t]he affirmative defenses included in
DLA's July 22, 2016 amended answer in ASBCA No. 59020 encompass identical
issues as the pending criminal case in the Northern District of Georgia" (gov't mot.
at 3 of 9, ii 7). He concludes that "[l]itigation on those affirmative defenses in
ASBCA No. 59020 will thus involve the issues pending in the ongoing criminal
proceeding" (id.). The U.S. Attorney compares and contrasts the affirmative
defenses with the allegations in the indictment, and concludes that they "almost
identically track" with the indictment (id. at 3-4of9, iiii 9-12). The U.S. Attorney's
letter also states that "there is potential overlap of the substantive issues in ASBCA
No. 59020 and the criminal proceedings," because of the potential for the invoices at
issue in ASBCA No. 59020 to be implicated in the criminal proceedings (id. at 4
of 9, ii 13).

       15. The U.S. Attorney also states that "[i]fthe case is not dismissed without
prejudice or stayed, PWC will have grounds to request discovery (including

                                          5
interrogatories, depositions, and requests for documents) in ASBCA No. 59020
concerning DLA's affirmative defenses" (gov't mot, at 5of9, ~ 16). The U.S.
Attorney also notes that "PWC has a history of using ASBCA proceedings to affect
the criminal case," and identifies three other appeals where "PWC has somehow
sought to use the proceedings before the Board to gain evidence or other further
knowledge of the criminal proceedings" (id. at 5of9, ~ 17).

        16. On 28 September 2016, the District Court's U.S. Magistrate Judge issued
a non-final report and recommendation to the court on PWC's motion for a change
in venue in the criminal case (gov't reply hr., ex. 1, U.S. Magistrate Judge's
non-final report and recommendation on defendant's venue motion, Sept. 28, 2016).
In that report the Magistrate addressed the magnitude of undertaking the prosecution
and opined on a trial schedule, stating:

                      The government indicates that it has produced
              twenty-four million documents to PWC in discovery
              (citation omitted). PWC states that trial is expected to
              last at least three months, (citation omitted), and the
              Government repeatedly states that it expects the trial to
              be "lengthy" (citation omitted). Moreover, while the
              undersigned appreciates the Government's optimism in
              presuming that trial is imminent, (citation omitted), and
              the Court is now in a position to roll out rulings on
              dispositive and non-dispositive motions, but trial will not
              likely occur until next year.

(Gov't reply hr., ex. 1 at 40-41)

                                         DECISION

        The Board has inherent authority and discretion to manage its docket and to
stay, suspend or dismiss without prejudice in appropriate circumstances weighing the
competing interests of the parties against any prejudice. Kellogg Brown & Root
Services, Inc., ASBCA Nos. 57530, 58161, 13 BCA ~ 35,243 at 173,022. However,
exercise of such authority "calls for the exercise of judgment, which must weigh
competing interests and maintain an even balance." Public Warehousing Company,
K.S.C., ASBCA No. 56116, 08-1BCA~33,787 at 167,226 (citing Landis v. North
American Co., 299 U.S. 248, 254-255 (1936)); Afro-Lecon, Inc. v. United States,
820 F.2d 1198 (Fed. Cir. 1987). In exercising our discretion, we also recognize that,
under the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109, "a contractor is
entitled to have a properly asserted appeal litigated before, and decided by, the
Board." Kellogg Brown & Root Services, Inc., ASBCA Nos. 56358, 57151, 11-1

                                           6
BCA ~ 34,614 at 170,603 (citing TRW, Inc., ASBCA Nos. 51172, 51530, 99-2 BCA
~ 30,407 at 150,332), and that we have a statutory mandate to provide "informal,
expeditious, and inexpensive resolution" of contract disputes. 41 U.S.C. § 7105(g)(l).

        We normally consider four factors in exercising our discretion under these
circumstances summarized as: ( 1) whether the facts, issues, and witnesses in both
proceedings are substantially similar; (2) whether the on-going investigation or
litigation would be compromised by going forward with the case before us; (3) the
extent to which the proposed stay could harm the non-moving party; and (4) whether
the duration of the requested stay is reasonable. Public Warehousing, 08-1 BCA
~ 33,787 at 167,227; Kellogg Brown & Root, 11-1BCA~34,614 at 170,603. Where
"there is even a fair possibility" that a stay will work damage to the non-movant, the
government must demonstrate a "clear case of hardship or inequity in being required
to go forward." Landis v. North American Co., 299 U.S. 248, 255 (1936). We also
ask whether consideration of "[j]udicial efficiency counsels granting the stay."
Kaman Precision Products, Inc. formerly dba Kaman Dayron, Inc., ASBCA
No. 56305 et al., 10-2 BCA ~ 34,499 at 170, 153. Each factor will be examined in
tum.

       (1) Whether the facts, issues, and witnesses in both proceedings are
substantially similar

        In support of its motion, the government submits a letter from the U.S.
Attorney requesting the government move to dismiss this appeal pending the
outcome of the criminal case. The U.S. Attorney's letter contends the government's
affirmative defenses "encompass identical issues as the pending criminal case" in the
district court (SOF ~ 14). Likewise, the government contends that, "[a] review of
both DLA' s amended answer and the criminal indictment reveal that the facts,
issues, and witnesses are substantially similar, if not identical, in this appeal and the
criminal proceeding" (gov't mot. at 11 ). This conduct, the government argues, is the
same conduct alleged in count two of the superseding indictment (id. at 11-12).

       The government further alleges that appellant materially breached the
contracts by manipulating and inflating the delivered price of its products by
demanding its vendors conceal their distribution fees in their prices and urged
vendors to use interchange port services which appellant could then charge the
government. Additionally, the government alleges that appellant failed to pass on
rebates and discounts from The Sultan Center. These affirmative defense allegations
describe conduct identical to those alleged in count two of the superseding
indictment. (Gov't mot. at 12)

                                            7
        The government also contends some of the substantive issues raised in this
appeal may potentially overlap with DOJ' s criminal investigation. The
government's amended answer alleges appellant acquire most of its LRM items and
FF&V through the Sultan Center and appellant's claim includes interest on some of
the invoices for payment of these items. The amended answer also alleges appellant
submitted false market basket items and thus any interest on these items may also be
subject to DOJ criminal investigation. Consequently, both the government and
appellant will have to request discovery regarding these invoices and may have to
call the same witnesses as the criminal proceeding. (Gov't mot. at 12-13)

        Appellant does not dispute that the affirmative defenses and criminal
proceeding will involve the same basic facts and witnesses. 4 However, appellant
does contend the affirmative defenses (issues) are contractual and narrower than the
criminal claims (app. opp'n at 13). In support of this contention, appellant notes that
all but one of the government's affirmative defenses require only a determination of
a material breach, not specific intent as required by the criminal statutes (id.).
Similarly, the fraudulent inducement defense requires proof of "intent to induce
action in reliance upon misrepresentation," but not intent to defraud (id.).
Consequently, appellant contends the Board can decide this case, and the
government's defenses, without ever deciding these issues or whether PWC violated
these criminal statutes (id. at 14).

      PWC also contends the PPA claims do not substantively overlap with the
criminal case, stating:

                       The fact that certain invoices in PWC's claim may
                include food or other items that are the focus of
                allegations in the criminal case, such "overlap" in no
                way deprives the Board of the ability to determine
                whether PPA interest accrued on such invoices, and such
                a determination by the Board would not interfere with
                the criminal proceedings.

(App. opp'n at 14-15)

4
    Additionally, appellant notes that the fraudulent inducement defense only applies to
         the PVII contract and would not justify dismissing the entire appeal (app.
         opp'n at 13).

                                            8
      Furthermore, PWC asserts that DLA' s concern about overlap is entirely
hypothetical, explaining:

                      "Mere allegations," and the mere possibility of
              overlap with a criminal case, do not justify a stay. That
              is particularly true here, where the Government has had
              eleven years to finely hone its case, and it is well aware
              of what it believes are its supportable allegations.
              [Citations omitted]

(App. opp'n at 15)

        We conclude that the facts, witnesses and issues in both proceedings are
substantially similar. Although the issues do not precisely align in the two
proceedings, they are substantially similar. Accordingly, we conclude there is
sufficient similarity between the facts, issues and witnesses and that this factor
weighs in favor of the government.

       (2) Whether the on-going investigation or litigation could be compromised by
going forward with the case before us

        Both DLA and U.S. Attorney Horn contend PWC will gain an inappropriate
advantage in the criminal proceedings if allowed to use the more liberal civil
discovery process to circumvent the more limited criminal discovery in district court.
Specifically, PWC will be able to request civil discovery and engage in motion
practice on issues involved in the criminal proceeding, and DLA would also need to
conduct discovery and motion practice on the same issues. The U.S. Attorney's
letter emphasizes that if the appeal goes forward, the Board would "be compelled to
hold a fact finding hearing regarding the affirmative defenses, and the Board would
have to issue a decision regarding the various affirmative defenses asserted by
DLA." In doing so, "the Board would be placed in the position of making factual
and legal findings regarding the criminal case, including but not limited to whether
PWC, in fact, committed fraud in the performance of or in the inducement of the
contract." (Gov't mot., ex. 1 at 5of9, ,-i 16)

        In support of its motion, DLA contends appellant has a history of attempting
to use the Board's discovery process to obtain information for use in other forums:

              As far back as 2007, PWC filed an appeal and submitted
              discovery requests to obtain information at issue in the
              fraud investigation (that later led to its indictment). See
              Public Warehousing Co., K.S.C., ASBCA No. 56116,

                                           9
             2008-1 BCA ~ 33,787 at 167,229 (stating that it was
             "clear... that PWC's primary purpose in wishing to
             proceed with the appeal is to use the Board's decision to
             influence the direction of the on-going investigations,
             and to help its position in potential settlement
             discussions."). The Board ordered a six-month stay of
             proceedings in that appeal. Id. Ultimately, the appeal
             was dismissed without prejudice. See Public
             Warehousing Co., K.S.C., ASBCA No. 56116, 2009-2
             BCA ~ 34,264 at 169,302.

                    PWC also clandestinely used a deposition in
             ASBCA Appeal No. 56022 in order to obtain
             information regarding the fraud case. See Public
             Warehouse Company, Inc., ASBCA No. 56022, 12-1
             BCA ~ 35,201. In connection with that appeal, PWC's
             counsel had stated that his firm (Vinson & Elkins) works
             closely with PWC's criminal defense counsel on all of
             PWC's litigation, including the civil and criminal fraud
             cases and the ASBCA litigation. Ex. 1, ~ 23.

                    Lastly, the Board has already dismissed a PWC
             appeal without prejudice based on the overlap of the
             issues involved in that appeal and the fraud cases. See
             Public Warehousing Company, K.S.C., ASBCA
             No. 58078, 14-1 BCA ~ 35,574. In dismissing PWC's
             appeal without prejudice, the Board noted PWC's
             tendency to "[push] the envelope of permissible
             discovery" and agreed with DLA that allowing the
             ASBCA appeal to proceed could compromise the
             criminal case. [Quote omitted] Id. at 174,342.

(Gov't mot. at 15-16)

       Additionally, the government notes issues raised by the U.S. Attorney's letter
that highlight the possibility of placing DLA counsel in the difficult position of
trying to defend the government on the issues involved in DOJ's criminal
proceeding, and that to proceed concurrently with the criminal proceeding would
create economic waste (gov't mot. at 17). The U.S. Attorney's letter emphasizes
that '"DLA counsel is not charged with prosecuting the criminal case, nor has the
DOJ assigned DLA counsel with the task of safeguarding the DOJ' s interests in a
complex criminal matter involving multiple fraud schemes' thus 'DLA counsel will

                                         10
be unprepared to protect the interests of DOJ and the Government regarding the
criminal case'" (id.).

       In response, PWC contends the DLA must "make out a clear case of hardship
or inequity in being required to go forward," and that the government's motion is
"notably devoid of specificity on this point" (app. opp'n at 15). Further, appellant
contends the government's brief speaks only in generalities about the harm it will
face and that "mere statements that the related criminal investigation will be
prejudiced is insufficient without a clear showing why" (id. at 16 (citing £-Systems,
Inc., ASBCA No. 32033 et al., 88-2 BCA i120,753 at 104,871)). PWC argues the
government's reference to other cases to establish the adverse impact associated with
going forward with the appeal are distinguishable and its conduct in prior Board
appeals is not a basis for establishing proceedings in this case will prejudice the
criminal case (id. at 16-18). PWC also contends, "[ t ]hose decisions to stay or
dismiss were made years ago in the life of the criminal case, and relied on the
hopeful belief that the criminal case would proceed in a timely fashion, which it
certainly has not" (id. at 17) (citation omitted).

       Additionally, PWC responds that the government's argument "that DLA's
attorneys are unable to litigate the affirmative defenses [citation omitted] is both
absurd and implausible" (app. opp'n at 18). The argument is absurd, appellant
contends, because it was the government that pleaded the defenses to begin with, and
consequently, if they are unable to litigate the defenses, they should not have
asserted them. PWC contends that the argument is implausible because there is no
prohibition on DOJ lawyers litigating before the Board. In further response, PWC
contends that the majority of defenses relate to the first material breach allegations
which are contractual issues, and well within the DLA lawyer's capabilities. (Id.)

       Furthermore, PWC asserts the government has already made significant
productions in the criminal case, PWC Status Report 4, PWC Criminal Matter
(Oct. 18, 2012) [Dkt. 326] (Government produced 24 million pages of discovery)
and contends whatever might have occurred in broad discovery in this appeal is now
a moot issue (app. opp'n at 16).

        We conclude there is a danger that discovery in this appeal will potentially
compromise the ongoing criminal case. Notwithstanding PWC's argument that there
has already been substantial discovery in the criminal case, discovery in this case
related to the specific invoices has been limited and a continual issue of dispute
between the parties (SOF i1i14-10). Discovery in this appeal will now expand from
just the invoices into the affirmative defense facts, issues, and witnesses, which we
have already concluded are substantially similar to those in the criminal case.
Furthermore, contrary to PWC's arguments to the contrary, we conclude PWC's

                                          11
prior actions at the Board in this regard are relevant to predicting possible future use
of discovery in this appeal to circumvent the procedures in the criminal case, which
further buttresses the government's argument for potential harm.

         We conclude that this factor favors the government.

         (3) The extent to which the proposed stay could harm the non-moving party

        The government contends appellant will not be prejudiced by a dismissal
without prejudice because it will not be harmed financially. Appellant will continue
to accrue CDA interest and it is a large multi-billion-dollar company with financial
assets to wait for payment (gov't mot. at 18). Appellant responds that the company's
resources are inappropriate and irrelevant to the issue of whether its claim is
prejudiced by the delay (app. opp'n at 20).

        We take the government's point that appellant is a large company and will
likely be able to financially sustain itself through this litigation but that does not
mean appellant will not suffer some financial harm. However, in the context of this
analysis, we do not believe any financial harm appellant will sustain would outweigh
the potential harm to the government going forward. 5 -

         Additionally, the government argues:

                There is also little risk that the evidence required in this
                appeal will become stale or unavailable. The invoices at
                issue are already archived in the government's system
                because those invoices date from as early as 2004.
                Invoice data will remain archived following a dismissal,
                and this data is subject to [the government's] litigation
                hold so it will be available as long as that hold is in
                place.

(Gov't mot. at 18)

5
    We reject appellant's contention that the contractor's financial status is
        "inappropriate and irrelevant." In some instances it is an appropriate and
        relevant factor in accessing the potential financial harm that would result from
         a lengthy stay or dismissal. See Suh 'dutsing Technologies, LLC, ASBCA
        No. 58760, 15 BCA iJ 36,058 at 176,081 (small disadvantaged tribal
         business).

                                             12
       In response, appellant contends there is a very real possibility of the evidence
becoming stale and the memories of witnesses fading, noting that it has been twelve
years since the first invoice was billed and thirteen years since the contract began.
Additionally, appellant points out that the government's argument is contradicted by
its own complaints during the litigation of this appeal, stating:

                     Moreover, the Board should reject the
              Government's assertion that "[t]here is also little risk that
              the evidence required in this appeal will become stale or
              unavailable" (Mot. 18), since the Government itselfhas
              complained that the passage of time has "made it
              extremely difficult and burdensome to locate relevant
              documents" and made it "extremely difficult to contact
              personnel...who would have knowledge of the events in
              PWC's claim." Am. Answer at 38, ii 4. The
              Government has also repeatedly claimed that its invoice
              archiving system is slow and inefficient. Aug. Call.
              Mem. 2. As technology, and the Government's own
              systems, continue to change, it is likely the ability of the
              Government to efficiently access that system will only
              continue to worsen. Unless the Government takes
              precautionary measures, it is entirely possible that the
              system will eventually become completely obsolete and
              inaccessible.

(App. opp'n at 19-20)

        We agree with appellant that there is a real concern that evidence will become
stale or lost with a prolonged stay or dismissal period. The identification and access
to the invoices has been a continual issue in this appeal (SOF iiii 4-10). We conclude
the balancing of harm weighs in favor of appellant.

       (4) Is the duration of the requested stay is reasonable?

        The government does not propose a specific length for a stay. In fact, the
government concedes there is "an indefinite time frame for resolution of the criminal
matter" and, as a result, contends that a dismissal or stay is reasonable and "will best
conserve the parties' time and resources while avoiding interference with ongoing
criminal proceedings" (gov't mot. at 19 (citing ex. 1, ii 25)). However, the
government also proposes the magistrate's report on appellant's venue motion
(SOF ii 16) indicates a trial in the criminal case "will occur next year" (gov't reply
hr. at 1). We read the magistrate's statement to mean, at best, a trial might occur

                                           13
next year. Not surprisingly, appellant disagrees that a dismissal or stay is
appropriate contending that an indefinite delay is an abuse of discretion and a
dismissal would have the same effect with the result being that memories will fade
and evidence will become unavailable (app. opp'n at 21).

       We agree with appellant that a dismissal or lengthy stay is not appropriate in
this appeal. Consequently, the balancing of harm weighs in favor of appellant,
against a dismissal or indefinite stay.

Judicial Efficiency

         The U.S. Attorney also notes that having the cases proceed concurrently
would "create economic waste as resources would simultaneously be expended in
two forums looking into whether PWC committed fraud" (gov't mot. at 17 (citing
ex. 1, i! 22)). While it does not require citation that this Board does not make fraud
determinations, we agree judicial efficiency counsels in favor of a stay.

         We believe after balancing the parties competing interests and assessing any
potential prejudice to the parties that the best way to balance the parties' competing
interests is to allow the criminal case to proceed and stay this appeal for a limited
period of time. Additionally, we also conclude, on balance, judicial efficiency is
best served by a stay of limited duration. Consequently, we stay this appeal for one
year from the date of this decision. At the expiration of that year, the parties shall
file a joint status report suggesting further proceedings. If the criminal case is
resolved within the expiration period, the parties shall file a status report within two
weeks of conclusion of the criminal case.

                                           14
                                        CONCLUSION

        The government's motion to dismiss is denied. The government's motion to
stay is granted, for one year. 6

         Dated: 12 January 2017

                                                   Administrative Judge
                                                   Chairman
                                                   Armed Services Board
                                                   of Contract Appeals

    I concur                                       I concur
               //;J
                                                 ~-:JJ 0t arPlJi
                               I ./

    ~~:Ru:;;i                                        ICHAEL N. O'CONNELL
    Administrative Judge                           Administrative Judge
    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. 59020, Appeal of Public
Warehousing Company K.S.C., rendered in conformance with the Board's Charter.

         Dated:

                                                   JEFFREYD. GARDIN
                                                   Recorder, Armed Services
                                                   Board of Contract Appeals

6
    Given our decision to stay this appeal, a decision on appellant's motion for
         sanctions in the form of adverse inferences and exclusion of evidence, motion
         to compel, and request for expedited briefing is stayed as well.

                                           15