Court Opinion

ID: 4436614
Source: CourtListenerOpinion
Date Created: 2019-09-09 17:00:06.139197+00
Date Added: 2024-06-11T14:51:19.298596
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                 )
                                             )
Advanced Powder Solutions, Inc.              )     · ASBCA No. 61818
                                             )
Under Contract Nos. FA9300-10-C-3002         )
                    HQ0006-06-C-7351         )
                    HQ0006-07-C-7601         )

APPEARANCES FOR THE APPELLANT:                         Bry'.:,ant S. Banes, Esq.
                                                       Sean D. Forbes, Esq.
                                                        Neel, Hooper & Banes, P.C.
                                                        Houston TX

APPEARANCES FOR THE GOVERNMENT:                        Arthur M. Taylor, Esq.
                                                        DCMA Chief Trial Attorney
                                                       Amelia R. Lister-Sobotkin, Esq.
                                                        Trial Attorney
                                                        Defense Contract Management Agency
                                                        Chantilly VA

                OPINION BY ADMINISTRATIVE JUDGE MELNICK

        This appeal is about a withdrawn government claim. On June 29, 2018, a Defense
Contract Management Agency (DCMA) Administrative Contracting Officer (ACO)
issued a final decision to appellant, Advanced Powder Solutions, Inc. (APS). The ACO
found certain costs identified by APS in its Incurred Cost Proposal for Fiscal Years (FY)
2011-2013 to be unallowable. The ACO applied those findings to unilaterally establish
final indirect cost rates for the affected years. Using her rates, the ACO determined that
APS was provisionally overpaid a total of$350,970 on three contracts and sought
repayment. They are FA9300-10-C-3002 (the Air Force contract), HQ0006-06-C-7351,
and HQ0006-07-C-7601 (the Missile Defense contracts). (R4, tab 28) APS appealed that
decision. In addition to challenging the government's entitlement to the amounts sought,
APS' complaint suggested that it was asserting its own claim against the government for
failure to follow proper procedures and breach of the duty of good faith and fair dealing
(compl.).

      On December 28, 2018, APS requested that the ACO defer collection of the
$350,970 demanded by the ACO (app. reply in support of partial mot. to dismiss, ex. A).

       On-February 11, 2019, the ACO issued what she characterized as an amended
decision. Abandoning the original claims, the new decision accepted "the pools, bases,
and rates proposed by APS in its final indirect cost rate proposals for FYs 11-13." (Gov't
mot., ex. G-1) Thus, the new decision "completely [withdrew] all claims arising under or
relating to FYs 2011-2013" eliminating "any dispute regarding [the government's]
demand for payment relating to" those fiscal years (answer part II). The ACO's change
of course led her to withdraw the entire portion of the original $350,970 claim applicable
to the Air Force contract, which was $73,873 (gov't mot., ex. G-1).

        The ACO was not finished with the Missile Defense contracts. Though satisfied
with APS' indirect cost rates for FYs 2011-13, the ACO advanced a new claim for those
two contracts, contending that APS had been paid more in cumulative allowable costs for
each contract than had been agreed to by the parties in FY 2006 through 2010 indirect
cost rate agreements. This new overpayment claim for the Missile Defense Contracts
totaled $134,069. (Id.)

     · In May of 2019, the ACO provided APS the requested draft agreement that would
defer collection of the $350,970 sought in the original ACO decision. APS objected,
observing that the ACO had withdrawn the demand for that amount. (App. reply in
support of partial mot. to dismiss, ex. A) There is no indication that the parties did
anything more regarding deferment.

        The government has moved to dismiss APS' allegations that the government failed
to follow proper procedures and breached the duty of good faith and fair dealing,
contending that the Board lacks jurisdiction to consider that action. In response, APS
denies that it is asserting such claims (app. opp'n at 9). APS' response is deemed to have
withdrawn those allegations and they require no further consideration.

      _ The government also initially sought dismissal as moot the portion of the appeal
pertaining to the Air Force contract claim. The governm_ent noted that the ACO now
accepts APS' proposed FY 2011-13 indirect cost rates and has withdrawn its claim for
amounts due on the Air Force contract. In later briefing, the government expanded 'that
request, seeking dismissal of the entire appeal since its reasons equally apply to the
original decision's demands related to the Missile Defense contracts.

       APS objects to dismissal of the appeal as moot. It agrees that the government has
withdrawn all of the claims that were contained in the first ACO final decision and that
are the subject of this appeal. It also concedes that it has not appealed the ACO's new
Missile Defense contract claims contained in the amended decision. It says this Board
has declined to dismiss as moot small contractor appeals from withdrawn government
claims because such parties might qualify for costs and attorney fees under the Equal
Access to Justice Act (EAJA), 5 U.S.C. § 504. Instead of dismissal, it argues that the
government's withdrawal of the original decision's claims entitle it to summary
judgment. Finally, stressing that it has not appealed the amended ACO decision's new
claims, APS separately seeks their dismissal anyway.

                                            2
       The contracting officer's unequivocal withdrawal of a government claim, as is the
case here, leaves nothing before the Board and therefore it does not retain jurisdiction
over the appeal. AeroVironment, Inc., ASBCA No. 58598,.16-1 BCA ,r 36,337
at 177,180. Accordingly; the appeal must be dismissed as moot. Quimba Software, Inc.,
ASBCA No. 59197, 19-1 BCA ,r 37,350. Nothing in EAJA excludes the appeals of small
businesses from this requirement. Nor do the other board decisions cited by APS. See
Synex, Inc., AGBCA No. 97-162-1, 97-2 BCA ,r 29,277; Thomas J. Murray, Jr., GSBCA
No. 6869, 84-1 BCA ,r 17,081. Indeed, the possible "availability of EAJA fees is not an
appropriate consideration ... when determining how to dispose of a case." Chapman Law
Firm Co. v. GreenleafConstr. Co., 490 F.3d 934, 939 (Fed. Cir. 2007).

         APS also objects to dismissal on the ground that the ACO's May 2019 draft
 deferment of the $350,970 shows that the government intends to resurrect that claim in
 the future. In other words, the government's February 11, 2019, withdrawal of the claim
 cannot be trusted. It cites language in Rothe Development Corp. v. Department of
Defense, 413 F .3d 1327, 1332 (Fed. Cir. 2005), for the proposition that voluntary
 cessation of an action does not moot a claim unless it is clear that the act cannot
reasonably be expected to recur. However, the "linchpin" of this Board's limited
jurisdiction is either a claim by the contractor or the government. TTF, LLC, ASBCA
No. 59511, 15-1 BCA ,r 35,883 at 175,433. Without one, the Board simply cannot
entertain an appeal. This distinguishes the facts here from those of Rothe, which included
·a district court's consideration of a due process claim. The amended ACO decision
unequivocally withdraws the claims at issue here. An unexecuted draft deferment does
not change that fact. Anyway, we are required to assume the government will carry out
its representations in good faith absent either clear and convincing evidence or "well-nigh
irrefragable proof' to the contrary.· Chapman Law Firm Co., 490 F.3d at 940 (internal
citations omitted); Am-Pro Protective Agency, Inc. v. United States, 281 F.3d 1234,
1239-40 (Fed. Cir. 2002). Against that backdrop, the draft deferment agreement does not
establish a reasonable expectation that the original claim will recur. Chapman Law Firm
Co., 490 F.3d at 940 (finding that when there is no reasonable expectation of recurrence
than dismissal is required). It is far more indicative of an error than a nefarious plan to
whipsaw APS back and forth.                                                       ·

                                            3
      The appeal is inoot and is dismissed for lack of jurisdiction.*

      Dated: August 19, 2019

                                           AL!&L  MARK A. l\tlELNICK
                                                  Administrative Judge
                                                                                '
                                                  Armed Services Board
                                                  of Contract Appeals

 I concur                                         I concur

                                                 ..??"/~
 RI~CKLEFORD
                                                 ~
                                                ~ROUTY
 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. 61818, Appeal of Advanced
Powder Solutions, Inc., rendered in conformance with the Board's Charter.

      Dated:

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

* Because nobody suggests that APS has appealed the new claims advanced by the ACO
     'in the amended decision, APS' separate motion to dismiss those claims is
     ·inapplicable and therefore denied. The government's motion to strike a sur-reply
      filed by APS is also denied.

                                            4