Court Opinion

ID: 4405094
Source: CourtListenerOpinion
Date Created: 2019-06-10 16:00:06.708994+00
Date Added: 2024-06-11T13:41:55.371913
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

    Appeal of--                                   )
                                                  )
    A.A.K.C.C.                                    )      ASBCA No. 60399
                                                  )
    Under Contract No. 000000-00-0-0000           )

    APPEARANCE FOR THE APPELLANT:                        Mr. Abdul Ahad Khadim
                                                          Director

    APPEARANCES FOR THE GOVERNMENT:                      Raymond M. Saunders, Esq.
                                                          Army Chief Trial Attorney
                                                         LTC Robert B. Nelson, JA
                                                         L TC Timothy A. Furin, JA
                                                          Trial Attorneys

           OPINION BY ADMINISTRATIVE JUDGE HARTMAN ON THE
        GOVERNMENT'S MOTION TO DISMISS FOR LACK OF JURISDICTION

            The government has filed a motion to dismiss this appeal for lack of jurisdiction
    based upon appellant's failure to submit a claim to a contracting officer (CO) prior to
    filing its notice of appeal. Appellant, A.A.K.C.C., has responded to the government's
    motion by filing a number of documents relating to its asserted contract for canal work
    in Afghanistan.

               STATEMENT OF FACTS FOR PURPOSES OF THE MOTION

          An undated document executed by Lieutenant (LT) Edward Olson and
    Abdul Ahad Khadim provides as follows:

                  Abdul Ahad Khadim will assist in the supervision of the
                  Char Bagh Canal Cash for Work Program. In addition he
                  will provide any skilled and mechanical labor required to
                  fully repair the Char Bagh Canal System.

                  -Includes all Excavation Rental Stone Masonry Section
                  -Preference for Hiring Workers is to local Villages
                  Cost= $45,I I 7
                  Payment POC: IL T Edwards
                  Site    POC: IL T Olson
                  CFW     POC: ILT Chastain

I
(R4, tab 15) A "MEMORANDUM FOR RECORD" dated 12 April 2011, bearing the
name of Lieutenant Colonel (LTC) Rodger S. Lemons, "Commanding," "Department
of the Army, B Company, 1st Battalion, 66th Armor Regiment, 1st Brigade Combat
Team, 4th Infantry Division, Kandahar, Afghanistan," addresses the subject of "Eastern
Char Bagh Cash for Work Canal Cleaning program" and provides:

                1.    Synopsis: The town of Char Bagh (Vic 41R QR
                     50675 03900) is dependent on its canal system as its
                     economic foundation and farming support. This
                     project repairs the canal system to enable farming and
                     later improvement to the canals.

                2. Narrative: Canals in the Char Bagh area are central
                   to farming in the area, and require cleaning in order to
                   remain effective.

                3. Justification: The project repairs the canals that are
                   central to farming operations in the area. The project
                   will support current farming operations and enable
                   later projects to fortify the canal system to require
                   less consistent maintenance. It will cost
                   approximately 225000 Afghani to support.

(R4, tab 3) (Emphasis in original) Virtually identical "MEMORANDUM OF RECORD"
bearing the name ofLTC Lemons exists for the dates of 13, 14, 15, and 16 April 2011
(R4, tabs 3-11 ).

         In an email dated 17 April 2011 (R4, tab 12), Abdul Ahad Khadim, who listed
his title as "President of Abdul Abad Khadim Construction Company (A.A.K.C.C.)"
and address as "Kandahar, Afghanistan," advised LT Olson:

                    Attached is the final invoice for the subjected project
             and a copy of contract signed between me and you. Please
             let me know when I shall expect to receive the money.

Attached to the email were a "Final Invoice" (R4, tab 13), and a copy of the handwritten
document quoted above executed by LT Olson and Abdul Ahad Khadim (R4, tab 15).
The invoice, which was on A.A.K.C.C. letterhead, stated the project name was "Canal
Work in Char Bagh Village," and provided in pertinent part as follows:

                                            2
 DESCRIPTION                       QTY UNIT        UNIT PRICE       EXTENDED PRICE
 Mobilization & Demobilization         1    L.S            100000                 100000
 Stone Massonry                       50    MIL              3000                 150000
 Stone Massonrv                       50    MIL              3000                 150000
 New Canal                          1500    MIL               600                 900000
 Cleaning                           1725    MIL               200                 345000
 Site Cleaning                         1    L.S            100000                 100000
 Administration Cost                   5     %              20900                 104500
 Security                              5     %              20900                 104500
 Transportation                        5     %              20900                 104500
                                                         TOTAL            AF A 2,058,500
                                                     Total in US$             USD 45,117

(R4, tab 13) In response to his email, Abdul Ahad Khadim received an email dated
18 April 2011 from LT Olson stating:

             Attached are the letters that will get you paid, you will need
             to take them in, 2 at a time in order to receive payment.

             Thanks

(R4, tab 14) Attached to LT Olson's email appear to have been copies of the
Memorandum of Record of various dates bearing the name of L TC Lemons (compare
R4, tab 14, with R4, tabs 3-11 ). Abdul Ahad Khadim by email of the same date (R4,
tab 14 at 2), thanked LT Olson for the letters needed to get paid and asked:

             Where shall I take them in?

             How much time will be required between each payment?

LT Olson responded by email the same day as follows:

             Take them to the OCC-D and speak with LT Edwards.
             Start on Wednesday and leave 1-2 days between visit. I
             will send him an email for you.

(R4, tab 14 at 3) By email sent at 10:39 pm the same date (id. at 4), Abdul Ahad Khadim
advised LT Olson as follows:

             It is my pleasure to meet Mr Edwards more and more. The
             more I meet him, The more I can ask him for further
             projects in whole Arghandab District.

                                           3
             Thank you once again for cooperation, I wish I can work
             with you for further projects too in Char Bagh.
             The Designs for Rajan Kala Masques have been Completed,
             Me and my engineer are working togather [sic] on its price
             quote, We will submit that one too as soon as we complete
             it. [Punctuation and syntax in original]

       By email dated 1 January 2016, Abdul Abad Khadim notified the Armed
Services Board of Contract Appeals (ASBCA) as follows:

             In April 2011 me and 1LT Olson Edwards signed a contract
             for canal cleaning in Char Bagh Village, Kandahar,
             Afghanistan.

             The total amount of the project was $45,117.

             I completed the project and sent him the invoice.

             I was paid $15,000 of them, I was not paid rest of them
             which was $30,117.

             At that time, I did not know about your authority.

             Now I request you to register and proceed [sic] my claim
             and help in providing justice.

The Board docketed the matter as ASBCA No. 60399 on 4 January 2016.

        On 20 February 2016, Abdul Abad Khadim sent an email to the ASBCA
requesting the appeal be stayed for a period of 12 months to allow him "to come to the
USA" and "visit the law houses to find a perfect lawyer for my Claim(s)." Four days
later, the government filed an opposition to the request for a 12-month stay and a
motion to dismiss for lack of jurisdiction. The ASBCA's Recorder notified the parties
by letter dated 4 March 2016 that the Board would consider appellant's request for an
extended suspension after resolving the government's motion to dismiss for lack of
jurisdiction and appellant shall have 30 days, to and including 3 April 2016, within
which to file a response to the government's motion to dismiss.

       On 7 March 2016, appellant sent the ASBCA by email a number of photos of work
being performed at the canal that appeared to also have been sent to LT Olson during
April 2011, and emails indicating that (a) LT Olson asked A.A.K.C.C. for a copy of a
bridge assessment it had completed that he wished to share with his commander and (b)
met with Abdul Ahad Khadim at the canal on or about 8 April 2011 regarding the canal

                                           4
work. Appellant did not, however, file any written response addressing the government's
assertion that the ASBCA lacks authority to entertain its appeal.

                                   LEGAL FRAMEWORK

        The U.S. Department of State is the government's lead foreign policy agency. It
sets overall policy for supply of foreign assistance in a given country or region and
 coordinates actions of other agencies administering U.S. foreign assistance, such as the
U.S. Agency for International Development (USAID). Pub. L. No. 87-195, 75 Stat. 424
(codified as amended at 22 U.S.C. § 2151); Exec. Order No. 10973, available at
https://bulk.resource.org/gao.gov/ 87-195/000057AO.pdf; 22 U.S.C. § 2656; Carl B. Kress,
 The United States Government and Post-Co-njUct Economic Reconstruction, 11 UC DA VIS
J. OF INT'L L. & POL'Y 75, 85 (2004). The State Department possesses the legal authority
and funding to conduct foreign assistance pursuant to the Foreign Assistance Act of 1961,
22 U.S.C. § 2151. When contracting with entities to deliver U.S. foreign assistance,
USAID operates in accord with federal contracting regulations. It normally takes USAID
eight or more months to conduct a "full and open" competition for complex services or
supplies and award a contract based on a weighted combination of cost and technical
considerations. See Kress, The United States Government and Post-Conflict Economic
Reconstruction, 11 UC DAVIS J. OF INT'L L. & PoL'Y at 85; Jeffrey Marburg-Goodman,
 USAID 's Iraq Procurement Contracts: Insider's View, 39 THE PROCUREMENT LA WYER
Fall 2003 at 10-12 (A.B.A.), available athttp://pdf.usaid.gov/ pdf_docs/Pcaab390.pdf;
see generally Shams Eng'g & Contracting Co. and Ramli Co., ASBCA Nos. 50618, 50619,
98-2 BCA ,r 30,019 at 148,522; STV!Lyon Assocs., Inc., ASBCA No. 49871, 97-1 BCA
,r 28,765.
        Except for interoperability and safety training of foreign forces, the Department of
Defense (DoD) funds foreign aid or assistance only pursuant to an express statutory
exception. During 1984, the Comptroller General ruled that the Army had violated fiscal
law (specifically 31 U.S.C. § 1301(a)) when itused Operation and Maintenance (O&M)
funding to provide humanitarian assistance in Honduras absent an interagency order or
agreement under the Economy Act because Congress had designated other funds for that
purpose under the Foreign Assistance Act of 1961. The Honorable Bill Alexander,
B-213137, 63 COMP. GEN. 422 (19~4); LTC Mark Martins, No Small Change of
Soldiering: The Commander's Emergency Response Program (CERP) in Iraq and
Afghanistan, ARMY L. at 15 n.106 (Feb. 2004), available at http://www.jagcnet.army.mil/
DOCLIBS/ARMYLAWYER.NSF (citing Foreign Assistance Act§§ 531-35 (22 U.S.C.
§§ 2346-46d)) (it is intent of Congress military units not undertake development or
infrastructure construction projects typically funded within programs managed by State
Department and USAID); Operational Law Handbook 215 (Judge Advocate Gen. Legal
Ctr. & Sch., 2011), available athttps://www.loc.gov/rr/frd/ Military_Law /pdf/operational-
law-handbook_2011.pdf; The Commander's Emergency Response Program (CERP), ATP

                                           5
1-06.2 (Headquarters, Department of Army) (April 2013), available at http://armypubs.
us.army .mil/ doctrine/index.html.

        In April of 2003, days after the toppling of the statue of Saddam Hussein in
Baghdad, Iraq, U.S. soldiers found about $650 million in cash in aluminum boxes in a
residential cottage of regime officials and another $112 million in cash hidden in a
nearby animal shelter. Evidence that this cash had been obtained by illicit skimming of
oil sale profits in violation of United Nations sanctions caused coalition leaders to reject
the notion that individual senior Ba'athists were rightful owners of the property and U.S.
Central Command (CENTCOM) announced coalition forces were taking possession of
and safeguarding "movable property" of the State of Iraq, rather than personal property
of its citizens. DoD, in coordination with the Office of Management and Budget,
determined that the seized funds were not to be regarded as miscellaneous receipts of the
U.S. because such funds were not received "for the Government" within the meaning of
federal appropriations law (see 31 U.S.C. § 3302(b)). Due to an urgent need for
humanitarian response in Iraq and availability of the seized regime cash, the Coalition
Commander established a "Brigade Commander's Discretionary Recovery Program to
Directly Benefit the Iraqi People." In June of 2003, the Administrator of the Coalition
Provisional Authority (CPA), Ambassador Paul Bremer, renamed the program and
formally linked it to governing law and authorities relating to Iraqi property.
Having been delegated authority by the Deputy Secretary of Defense over "Certain
State-or-Regime-Owned Property in Iraq," Ambassador Bremer signed a memorandum
on 16 June 2003 re-delegating some of that authority to the Commander of Coalition
Forces. The memorandum authorized the Commander "to take all actions necessary to
operate a Commanders' Emergency Response Program (CERP)" to "respond to urgent
humanitarian relief and reconstruction requirements within their areas of responsibility,
by carrying out programs that will immediately assist the Iraqi people and support the
reconstruction of Iraq." Accordingly, CERP was created as a commander-run program
utilizing non-appropriated funds. Martins, No Small Change of Soldiering, ARMY L. at 3,
5-6 & n.17, at 19, 26, 32, 33, available at http://www.jagcnet.army.mil/ DOCLIBS/
ARMYLA WYER.NSF; accord L TC Thomas D. Netzel, Commander's Emergency
Response Program: An Effects Based Approach at 6 (U.S. Army War College Strategy
Research Project 2013), available at http://oai.dtic.mil/oai/oai?verb=getRecord&
metadataPrefix=html &identifier= ADA589298; Kress, The United States Government
and Post-Conflict Economic Reconstruction, 11 UC DAVIS J. OF INT'L L. & POL'Y, No. 1
at 81; Heidi L. Osterhout, No More "Mad Money": Salvaging the Commander's
Emergency Response Program, 40 PUB. CONT. L.J. 937, 938-39 (Summer 2011).

       Combat units normally are not equipped with either contracting authority or
monetary resources to hire substantial numbers oflocal workers. CERP, however,
provided military commanders access to seized Hussein Regime cash to accomplish local
reconstruction activities. Kress, The United States Government and Post-Conflict
Economic Reconstruction, 11 UC DA VIS J. OF INT'L L. & POL'Y at 81; Martins, No Small

                                            6
Change ofSoldiering, ARMY L. at 4-6, 12-15, 19 & n.35, available at http://www.
jagcnet.army .mil/ DOCLIBS/ ARMYLAWYER.NSF. CERP was considered a tool in the
form of "money" commanders could utilize on projects within their area of responsibility
to foster goodwill between residents and coalition forces, to shed a positive light upon the
government of the supported nation, and to "delegitimize" the insurgency. It was part of a
military methodology known as "Money as a Weapons System" designed to win both the
hearts and minds of the population to reduce violence and defeat insurgent threats.
USAID monies for "reconstruction" normally are coordinated through both the combatant
command and State Department (requiring long lead times for approval), and thus can be
problematic if commanders are dealing with counterinsurgency (COIN) operations, which
often are very fluid and require a short lead time to obtain desired effects. In sum, CERP
enabled ground commanders to very quickly focus money upon priority targets to realize
desired effects in a difficult COIN environment. Commander's Guide to Money as a
Weapons System at i, 1, 13-17 (Center for Army Lessons Learned Apr. 2009), available at
http://www.usma.edu/ cnrcd/siteassets/sitepages/ govemment%20publications/ call%
20maaws% 20handbook% 2009-27%20%28april% 2009%29.pdf; see Martins, No Small
Change ofSoldiering, ARMY L. at 12 (streamlined procedures under which seized regime
cash could be spent was compared to delays plaguing reconstruction funds handled by
USAID), available athttp://www.jagcnet.army.mil/DOCLIBS/ARMYLAWYER.NSF.

       Given the slow pace at which Iraq non-military reconstruction efforts were
proceeding, Ambassador Bremer decided to fund the CERP with additional millions of
seized assets in excess of the original spending cap for the program. From early June .to
mid-October of 2003, commanders executed more than 11,000 construction projects
such as schools, medical clinics, roads, sewers, and water treatment facilities.
Martins, No Small Change ofSoldiering, ARMY L. at 9-11 & n.68, available at
http://www.jagcnet.army.mil/DOCLIBS/ARMYLAWYER.NSF.

        The captured funds, however, would not last forever so a request for more
funding from Congress was attached to the Global War on Terrorism supplemental
appropriation request by CENTCOM. By the time the administration was prepared to
request a specific dollar amount for CERP funding, the House and Senate versions of
the supplemental appropriation were almost ready to be sent to the joint conference
charged with reconciling remaining differences. Before conference start, managers of
the House bill included a provision authorizing expenditure of up to $180 million of
DoD O&M funds for CERP in Iraq and to establish a similar program for commander
use in Afghanistan. See H.R. Rep. No. 108-312 at 31 (2003), available at http://
asafm.army .mil/Documents/OtherDocuments/Conginfo/BLDL/HR//04SUPh.pdf.
Upon receiving the House version of the bill, Senate Appropriations Committee staffers
identified the CERP provision as one that had not been part of the President's original
request, and sought more information on what ''CERP" was and on how such a
provision would be implemented if it became law. The Joint Staff briefed Senate
staffers, explaining CERP funding (when well-spent) persuaded Iraqis the coalition was

                                            7
truly committed to their well-being, increased the flow of intelligence to commanders
and soldiers about hostile actors in the community, and improved security and
economic conditions. While Senate staffers were concerned especially with the
administration's request O&M funding be available for use "notwithstanding any other
provision of law," in both oral replies and follow-up written submissions, the Joint
Staff maintained this phrase was essential to keeping the CERP a flexible and
responsive tool, unencumbered by procedures normally associated with procurement.
In response to one question concerning the phrase, the Joint Staff stated in writing:

             OGC, the General Counsel for CPA, and OCJCS Legal
             Counsel all believe that the language is important because
             Commanders using CERP funds right now are not using
             Armed Services Procurement Act, Competition in
             Contracting Act, Foreign Claims Act, and myriad other
             procedures that would arguably be required by law and
             implementing regulations (e.g., the Federal Acquisition
             Regulation) were CERP to be funded with U.S.
             appropriations. Also without the "notwithstanding"
             language, various provisions of past, current and even
             future Foreign Operations Appropriations Acts or organic
             Foreign Assistance legislation, could arguably be said to
             apply to the program were it to become funded, as
             proposed, with appropriated funds. In short, the
             "notwithstanding" phrase is intended to keep the program
             the useful tool that it is for commanders in the field and not
             have it encumbered by processes and procedures in other
             provisions of law.

The Joint Staff subsequently received word that the Senate would recede to the House
version of the CERP provision, which had amended the administration's request by
adding a quarterly reporting requirement. After a week of debate on other aspects of
the legislation, both houses passed the bill, which authorized commanders to continue
CERP with "appropriated" funds and expressly provided:

             SEC 1110. During the current fiscal year, from funds made
             available in this Act to the Department of Defense for
             operation and maintenance, not to exceed $180,000,000
             may be used, notwithstanding any other provision of law,
             to fund the Commander's Emergency Response Program,
             established by the Administrator of the Coalition
             Provisional Authority for the purpose of enabling military
             commanders in Iraq to respond to urgent humanitarian relief
             and reconstruction requirements within their areas of

                                           8
              responsibility by carrying out programs that will
              immediately assist the Iraqi people, and to establish and
              fund a similar program to assist the people of Afghanistan:
              Provided, That the Secretary of Defense shall provide
              quarterly reports, beginning on January 15, 2004, to the
              congressional defense committees regarding the source of
              funds and the allocation and use of funds made available
              pursuant to the authority provided in this section.
              [Emphasis added]

On 6 November 2003, the President signed the bill into law and effective fiscal year
(FY) 2004 "federal appropriations" could be utilized for the first time to fund CERP
projects in Iraq and Afghanistan. Emergency Supplemental Appropriations Act
for Defense and for the Reconstruction of Iraq and Afghanistan, 2004, Pub. L.
No. 108-106, § 1110, 117 Stat. 1209, 1215; H.R. Conf. Rep. 108-337, at 7 (2003),
available at https://www.congress.gov/bill/108th-congress/house-bill/32 89/text/pl; The
White House, Remarks by the President at the Signing ofH.R. 3289 (Nov. 6, 2003),
available at https://georgewbush-whitehouse.archives.gov/news/releases2003/l l/
20031106-4.html; Martins, No Small Change ofSoldiering, ARMY L. at 9-11, available
at http://www.jagcnet.army.mil/DOCLIBS/ARMYLA WYER.NSF.

         The Under Secretary of Defense (Comptroller) issued guidance on use of
appropriated CERP funds on 25 November 2003, recognizing CERP is "a very
powerful tool for the military commanders in carrying out their current security and
stabilization mission" and expressing the DoD's intent appropriated CERP funding
"preserve the same flexibility and responsiveness ... maintained with the original CERP
that was funded with seized Iraqi assets." The guidance tasked CENTCOM and the
Department of the Army to develop operating procedures for use of such funds.
LTC Mark S. Martins, The Commander's Emergency Response Program, 37 JOINT
FORCE QUARTERLY 46, 50 (Nat. Defense U. 2005), available at http://www.dtic.mil/
dtic/tr/fulltextLu2/a523853.pdf. The Army subsequently promulgated procedures for
spending funds appropriated for CERP in fragmentary orders and a regularly updated
manual called Money as a Weapon System (often called "the MAA WS"). Osterhout,
No More "Mad Money," 40 PUB. CONT. L.J. at 947 & n.84.

       During October 2004, Congress enacted the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005, Pub. L. No. 108-375, 118 Stat. 1811, to
authorize appropriations for FY 2005 defense activities, including $500 million for
CERP. In section 1201(c) of the Act, Congress expressly granted the Secretary of
Defense, "for purposes of the exercise of the authority ... making funding available for
[CERP]," "the authority to waive any provision oflaw ... that would (but for the waiver)
prohibit, restrict, limit or otherwise constrain the exercise of that authority." Id. at 2078.

                                              9
       In April 2005, DoD issued a new financial management regulation, DoD 7000.14-R,
vol. 12, ch. 27, available at http://comptroller.defense.gov/Portals/45/ documents/fmr
/archive/12arch/12_27.pdf, addressing CERP which provided:

              2703   RESPONSIBILITIES

                     270301. Under Secretary ofDefense (Comptroller)
              (USD(C)). The USD(C) shall establish and supervise the
              execution of principles, policies and procedures to be
              followed in connection with the CERP, and ensure that
              congressional oversight committees are timely informed of
              CERP activities through the quarterly reports required ....

                    270302. Secretary of the Army. Pursuant to [DoD
             Directive 5101.1, "DoD Executive Agents," 23 Sept. 2002],
             the Secretary of the Army shall serve as executive agent for
             the CERP, and in that capacity shall promulgate detailed
             procedures as necessary to ensure that unit commanders
             carry out the CERP in a manner consistent with applicable
             laws, regulations, and this guidance ....

                    270408. Contracts and Grants. U.S. appropriations
             and other funds made available for the CERP may be
             expended through contracts and grants that are prepared and
             executed in accordance with regulations designed to ensure
             transparency, fairness and accountability. To the
             maximum extent practicable, these regulations shall be
             consistent with Coalition Provisional Authority
             Memorandum Number 4, Contract and Grant
             Procedures Applicable to Vested and Seized Iraqi
             Property and the Development Fund for Iraq, dated
             August 19, 2003. [Emphasis added]

       CPA Memorandum No. 4 provided that contracts funded from vested and seized
Iraqi property were not subject to the Contract Disputes Act of 1978, as amended (then
codified at 41 U.S.C. §§ 601-613), but such contracts could include a "disputes" clause
providing that the parties' failure to reach agreement "on any request for equitable
adjustment, claim, appeal, or action arising under or relating to th[ e] contract" was a
"dispute" pursuant to Federal Acquisition Regulation (FAR) 52.233-2 that could be
appealed exclusively to the ASBCA. See generally Agility Logistics Servs. Co. KSC,
ASBCA No. 57415 et al., 15-1 BCA i) 35,840 at 175,263; MAC Int'! FZE, ASBCA

                                           10
No. 56355, 10-2 BCA ,i 34,591 at 170,51 O; Laudes Corp. v. United States, 84 Cl. Ct.
298, 303 (2008).

       Congress continued to authorize funds for CERP after FY 2005. E.g.,
Ike Skelton National Defense Authorization Act for Fiscal Year 2011, Pub. L.
No. 111-383, § 1212, 124 Stat. 4137, 4389-4390 (2011); National Defense
Authorization Act for Fiscal Year 2010, Pub. L. No. 111-84, § 1222, 123 Stat. 2518
(2009); Department of Defense Appropriations Act, 2010, Pub. L. No. 111-118, § 9005,
123 Stat. 3409, 3465 (2009); Duncan Hunter National Defense Authorization Act for
Fiscal Year 2009, Pub. L. No. 110-417, § 1214, 122 Stat. 4356, 4630 (2008); National
Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 1205, 122 Stat.
3,366 (2008); Department of Defense Appropriations Act for Fiscal Year 2007, Pub. L.
No. 109-289, § 9006, 120 Stat. 1257, 1306 (2006); National Defense Authorization Act
for Fiscal Year 2006, Pub. L. No. 109-163, § 1202, 119 Stat. 3136, 3455 (2006);
Emergency Supplemental Appropriations Act for Defense, the Global War on Terror
and Tsunami Relief, 2005, Pub. L. No. 109-13, § 1006, 119 Stat. 231,243 (2005).

       In April 2009, the Army issued a commander's guide to MAA WS, which stated
that projects to "increase agricultural production" and "repair or reconstruct irrigation
systems, including canal cleanup" were among the specific uses for CERP funds.
Commander's Guide to Money as a Weapons System at 15, 67, available at http://
www.usma.edu/cnrcd/siteassets/sitepagesLGovemment publications/call maaws
handbook 09-27(april 09).pdf. The same month, the Joint Contracting
Command-Iraq/Afghanistan issued an Acquisition Instruction stating that:

              CERP is a battlefield tool that commanders can use to
              create an immediate effect on the ground. Congress and
              DoD recognized this and made sure only a minimum of
              rules apply to CERP.

The instruction further stated "[ n ]o CERP ... contract...shall include any clauses by
reference." Rather, "all clauses shall be included in full text only." Joint Contracting
Command Iraq/Afghanistan Acquisition Instruction at 28 ( 1 April 2009), available at
https://acc.dau.mil/adl/en-US/233923/file/43754/ JCCIA%20Acq%20Instruction%
2020090401.pdf.

       On 10 May 2010, the Deputy Secretary of Defense issued a memorandum
providing:

                     Pursuant to the authority provided in section 1202 of
              the National Defense Authorization Act for Fiscal Year
              2006 (Public Law 109-163), as amended, and section 9005
              of the Department of Defense Appropriations Act, 2010

                                            11
             (Public Law 111-118), the Secretary of Defense is
             authorized to use funds made available to the Department of
             Defense for operation and maintenance to enable military
             commanders in Iraq and Afghanistan to respond to urgent
             humanitarian relief and reconstruction requirements within
             their areas of responsibility by carrying out programs that
             will immediately assist the Iraqi and Afghan people,
             respectively.

                   Given the importance of the Commander's
            Emergency Response Program (CERP) to the Department's
            counterinsurgency strategy in Afghanistan and Iraq, the
            purpose of this memorandum is to update oversight
            processes and clarify the roles and responsibilities of
            Components implementing the program.

                    I hereby establish a CERP Steering Committee
            (CSC) to provide senior-level oversight of CERP activities.
            The Under Secretary of Defense for Policy (USD(P)) and
            the Under Secretary of Defense (Comptroller)(USD(C)), or
            their designees, shall serve as co-chairs of the CSC. The
            co-chairs will report to the Deputy Secretary of Defense ....

                   I affirm the designation of the Secretary of the Army
            as DoD Executive Agent for the CERP, pursuant to DoD
            Directive 5101.1, "DoD Executive Agents," dated
            September 23, 2002, and consistent with guidance provided
            in DoD 7000.14-R, "DoD Financial Management
            Regulations," Volume 12, Chapter 27.

Memorandum from the Deputy Secretary of Defense to Secretaries of the Military
Department's, Chairman of the Joint Chiefs of Staff, Under Secretaries of Defense,
Commanders of the Combatant Commands, and others (10 May 2010), available at
http://www.oaa.army.mil/FetchFile.ashx?DocID=347. Two weeks later, on 24 May
2010, the Deputy Secretary of Defense issued another memorandum regarding "Waiver
of Limiting Legislation for Commander's Emergency Response Program (CERP)"
further providing:

                  Section 1202 of the National Defense Authorization
            Act (NDAA) for FY 2006 (Public Law 109-163), as
            amended by section 1205 of the NDAA for FY 2008

                                         12
              (Public Law 110-181), section 1214 of the Duncan Hunter
              NDAA for FY 2009 (Public Law 110-417), and section
              1222 of the NDAA for FY 2010 (Public Law 111-84)
              authorizes the use of Department of Defense Operation and
              maintenance funds in FY 2010 for the CERP established for
              Iraq, and a similar program for Afghanistan.

                     Section 1202, as amended, also authorizes the
              Secretary of Defense to waive any provision of law that, if
              not waived, would prohibit, restrict, limit, or otherwise
              constrain the exercise of authority under CERP during
              FY 2010.

                     The nature of the CERP precludes the application of
              federal procurement and contracting rules, and requires
              payments to individuals and other nongovernmental entities
              that may not be consistent with federal laws, or are subject
              to military claims laws and procedures. This memorandum
              records my waiver of the following provisions of law,
              effective October 1, 2009, and applies to future
              extensions and expansions of the CERP authority,
              provided the waiver provision remains unchanged:

                 •   Title 10, United States Code (USC) Chapters 137,
                     140, and 141, relating to federal procurements.

                 •   Title 41, USC Chapter 4, relating to federal
                     procurements.

                 •   Title 10, USC Chapter 163, relating to military
                     claims.

                 •   Title 22, USC Chapter 32, relating to foreign
                     assistance. [Emphasis added]

Memorandum from the Deputy Secretary of Defense to Secretaries of the Military
Departments, Chairman of the Joint Chiefs of Staff, Under Secretaries of Defense,
Commanders of the Combatant Commands, and others (24 May 2010) available at
http://www.oaa.army.mil/aea_attributes.aspz?ID=203.

        When Congress extended authority for CERP to FY 2011, the provision
allowing for waiver of any provision of law that, if not waived, would prohibit, restrict,
limit, or otherwise constrain exercise of authority under CERP remained unchanged.

                                            13
Ike Skelton National Defense Authorization Act for Fiscal Year 2011, Pub. L.
No. 111-383, § 1212, 124 Stat. 4389-4391. The waivers by the Deputy Secretary of
Defense of statutory provisions relating to federal procurements thus continued in
effect during FY 2011.

       The Department of Defense created this Board by Charter. Part I, paragraph I
of our Charter, in effect on the date of the notice appeal, provided as follows:

              There is created the Armed Services Board of Contract
              Appeals which is hereby designated as the authorized
              representative of the Secretary of Defense, the Secretary of
              the Army, the Secretary of the Navy and the Secretary of
              the Air Force, in hearing, considering and determining
              appeals by contractors from decisions of contracting
              officers or their authorized representatives or other
              authorities on disputed questions. These appeals may be
              taken (a) pursuant to the Contract Disputes Act of 1978
              (41 U.S.C. Sections 7101-7109), (b) pursuant to the
              provisions of contracts requiring the decision by the
              Secretary of Defense or by a Secretary of a Military
              Department or their duly authorized representative, or
              (c) pursuant to the provisions of any directive whereby
              the Secretary of Defense or the Secretary of a Military
              Department or their authorized representative has
              granted a right of appeal not contained in the contract
              on any matter consistent with the contract appeals
              procedure. The Board may [also] determine contract
              disputes for other departments and agencies by
              agreement as permitted by law.

48 C.F.R. ch. 2, appx. A, pt. 1 (2007).

                                          DECISION

       A.A.K.C.C. contends it entered into a one-page "contract" with the Department
of the Army executed by LT Edward Olson for performance of skilled and mechanical
labor required to fully repair the Char Bagh Canal System in Afghanistan and has not
been paid fully the amount agreed upon for such work, $45,117. It submits to us
"MEMORANDUM OF RECORD" by L TC Rodger Lemons, "Commanding,
Department of the Army, B Company, 1st Battalion, 66th Armor Regiment, 1st Brigade
Combat Team, 4th Infantry Division, Kandahar, Afghanistan," for five different dates in
April 2011 stating the canals in Char Bagh area "are central to farming in the area,"

                                             14
"require cleaning in order to remain effective," and project repairs are justified because
the "canals [] are central to farming operations in the area."

        The Department of the Army moves to dismiss A.A.K.C.C. 's appeal for lack of
jurisdiction based on failure "to submit a claim to a contracting officer prior to filing its
notice of appeal." It contends the Board's jurisdiction under the CDA is predicated
upon a written claim by the contractor. (Gov't mot. at 1-2)

        Submission of a claim by the contractor to the government's CO is a
jurisdictional prerequisite where a contractor is pursuing a contractor claim under the
Contract Disputes Act (CDA). E.g., 41 U.S.C. § 7103; Parsons Global Servs. v.
McHugh, 677 F.3d 1166, 1170 (Fed. Cir. 2012). Accordingly, the initial or threshold
issue for resolution is whether the contract alleged is one "governed by the CDA." If it
is not, a failure to satisfy a CDA requirement cannot be a basis for dismissal of the
appeal.

       Contrary to the assertion of the Army, the contract upon which A.A.K.C.C.
premises its appeal is not a contract governed by the CDA, 41 U.S.C. §§ 7101-7109.
The one-page document relied upon by A.A.K.C.C., which appears to have been
executed by LT Olson and justified by LTC Lemons, Commander, Department of the
Army, B Company, I st Battalion, 66th Armor Regiment, I st Brigade Combat Team, 4th
Infantry Division, during April 2011 in Afghanistan appears, on its face, to be an
agreement for performance of work pursuant to the Commander's Emergency Response
Program, commonly known as CERP. The work to be performed under this agreement
is work specifically authorized under CERP, i.e., increase of "agricultural production"
and "canal cleanup." Commander's Guide to Money as a Weapons System at 15, 67,
available at http://www.usma.edu/ cnrcd/ siteassets/ sitepages/Government publications/
call maaws handbook 09-27 .pdf; Latifi Shagiwall Constr. Co., ASBCA No. 58872, 15-1
BCA 135,937 at 175,631. Also, there was a "justification" to enter into this agreement
issued by an Army Commander indicating the work being performed was in response to
an urgent humanitarian and reconstruction need within the Commander's area of
responsibility in Afghanistan and designed to assist the Afghan people. See Ike Skelton
National Defense Authorization Act for Fiscal Year 2011, Pub. L. No. 111-383, § 1212,
124 Stat. 4137, 4389-4390); National Defense Authorization Act for Fiscal Year 2006,
Pub. L. No. 109-163, § 1202, 119 Stat. 3136, 3455-56. As we discussed above,
humanitarian and reconstruction needs in a foreign nation are not generally addressed by
DoD through the use of appropriated O&M funds other than pursuant to a CERP
contract.

        While not cited by the Army in its motion to dismiss here, we have previously
issued a decision addressing whether a CERP contract is governed by the CDA. In
Latifi Shagiwall, 15-1BCA135,937 at 175,633, we expressly held that "the CDA is
not applicable to a CERP contract."

                                             15
        In issuing that decision, id. at 175,633-34, we did not cite or discuss any of our
early decisions where we dismissed pro se appeals premised upon a CERP contract for
lack of jurisdiction for failure to submit a claim in accordance with the requirements of
the CDA. Esood Al Blad Company, ASBCA No. 58425, 14-1 BCA i! 35,572
at 174,331; Favor Company, ASBCA No. 58843, 14-1 BCA ,i 35,778 at 175,028; Zara
Company, ASBCA No. 58632, 14-1 BCA ,i 35,588 at 174,381; cf Anwar Alsabah
Company, ASBCA No. 59737-957, 15-1 BCA ,i 35,907 at 175,525 (authority to issue
order under Board Rule l(a)(5) directing issuance of CO decision "presupposes
jurisdiction" under the CDA). 1 As a result, although we have repeatedly held we lack
jurisdiction to entertain appeals that involve CERP contracts, confusion may exist as to
our basis for holding we lack jurisdiction over such claims. To the extent the Army is
asking us to revisit the issue of CERP contracts not being governed by the CDA and
disregard our most recent decision in Latifi, we set forth below in detail our legal
rationale and adhere to our holding in Latifi that the "CDA is not applicable to a CERP
contract."

       In establishing the parameters of CDA jurisdiction, the United States Court of
Appeals for the Federal Circuit has resolved two appeals similar to this one where the
contract asserted provided a "benefit" to a foreign nation. The Court held that one
contract was governed by the CDA, but the other was not. In both appeals, the Federal
Circuit examined the statutory and legislative history of the authorization for entry into
the asserted contract to determine whether the CDA governed the contract and provided
a grant of jurisdiction to entertain the contract appeal.

       In the first appeal, United States v. General Electric Co., 727 F.2d 1567 (Fed.
Cir. 1984 ), there was an agreement between the Air Force and General Electric Co.
(GE) for procurement of jet engines that GE asserted was governed by the CDA. The
government argued the opposite on the grounds that the agreement was a foreign
military sales contract pursuant to the Arms Export Control Act (AECA) where the
engines would be provided to and benefit a foreign nation (rather than the United
States) and not be paid for with appropriated funds (but with monies furnished the
United States by a foreign government pursuant to a separate agreement entered into
with the Air Force). Id. at 1569-72.

       In the second appeal, G.E. Boggs & Associates, Inc. v. Ros kens, 969 F .2d I 023
(Fed. Cir. 1992), there was a "host country" contract between G.E. Boggs & Associates
(Boggs) and Syria to improve the water supply to Damascus that was formally
"adopted by" USAID as a contract of the United States pursuant to the Department of

1
    As we noted in Zara, 14-1 BCA ,i 35,588 at 174,381, our jurisdiction to decide an
        appeal is typically governed by the CDA. In these early CERP appeals where
        appellant lacked benefit of counsel, we appear to have presumed (without
        expressly deciding) that there was a contract governed by the CDA at issue.

                                            16
State Authorization Act Fiscal Years 1984 and 1985. Boggs asserted the contract was
governed by the CDA but the government asserted otherwise. Id. at 1026-27.

        In GE, the Federal Circuit held the contract between GE and the Air Force to
obtain jet engines for a foreign nation was a contract governed by the CDA. The court
concluded it possessed jurisdiction over the appeal pursuant to the CDA. In sum, it
held that the contract between GE and the Air Force was a contract to procure goods
Get engines) and the fact a foreign nation benefited from and funded that contract were
not relevant to or determinative of applicability of the CDA. 727 F .2d at 1569-72. The
Court examined both AECA and the statutory authorization for foreign military sales.
It stated:

              Congress contemplated that sales under the Arms Export
              Control Act would be at no cost to the government. It also
              contemplated payment should be provided to the contractor.
              Pursuant to the Act, the foreign government could be
              required to deposit money in a trust fund, which would be
              used to pay the contractor.... [T]he non-appropriated funds
              exclusion is limited to instances when, by law, appropriated
              funds not only are not used to fund the agency, but could
              not be. It is clear that the Air Force and Department of
              Defense have authority to use appropriated funds to the
              extent appropriated ....

Id. at 1570. The appeals court added, under AECA, the President may, without
requirement for charge to any appropriation or contract authorization, enter into a
contract for the procurement of defense articles or services for any eligible foreign
country if such country agrees to pay not less than the full cost to the United States. Id.
at 1570-71, see also id. at 1574 (concurrence of Judge Nies).

        In Boggs, the Federal Circuit held the contract between Boggs and USAID to
supply services/repair work for improvement of water supply in Damascus, Syria, was
not a contract governed by the CDA. 969 F.2d at 1027-28. The Court concluded that
neither it nor the ASBCA possessed jurisdiction over the appeal pursuant to the CDA.
Id. The court examined the statutory and legislative history of the authorization for
entry into the asserted contract, i.e., Department of State Authorization Act, Fiscal Years
1984 and 1985, Pub. L. No. 98-164, § 1004, 97 Stat. 1017, 1057. It determined that,
after two terrorist attacks in Beirut, Lebanon, in which Syria may have played a role,
Congress passed a joint resolution (as part of a continuing resolution making
appropriations for FY 1984) directing USAID to terminate U.S. economic assistance to
Syria and authorizing USAID to adopt as a contract of the United States any contract
with a United States contractor which had been funded by USAID assistance prior to the
resolution. Id. at 1025 25. Boggs' contract for work on Syrian water supply was one of

                                             17
the contracts adopted by USAID pursuant to this provision. Id. at 1025. The appeals
court agreed with the ASBCA that the contractual relationship between Boggs and
USAID was not entered into for the purpose of procurement, but for the purpose of
mitigating the effects of termination of economic assistance and related contracts
dictated by the joint resolution. Id. at 1025-27. In distinguishing its prior holding in
GE, the appeals court stated:

               General Electric directly contracted with an executive
               agency of the U.S. government to produce jet engines. The
               engines' final point of transfer was irrelevant to General
               Electric. By contrast, Boggs directly contracted with Syria
               to build the waterworks. The AID administrator never
               contracted to receive such a water system ....

Id. at 1028.

        Following the practice of the Federal Circuit in both GE and Boggs, we examine
the statutory authorization for entry into CERP contracts and its legislative history to
determine if the CDA governs such contracts and authorizes an appeal here. As we
discussed above, when CERP began in 2003, it relied for funding upon monies soldiers
seized in Iraq which were deemed to have been obtained by illicit skimming of oil sale
profits in contravention of UN-imposed sanctions and determined not to constitute
"miscellaneous receipts" of the U.S. Ambassador Bremer and the CPA administered
contractual agreements funded with seized Iraqi assets pursuant to CPA Memorandum
No. 4, "Contract and Grant Procedures Applicable to Vested and Seized Iraqi Property,"
which provided such contracts were not subject to the CDA of 1978, as amended. See
generally Agility Logistics, 15-1 BCA 135,840 at 175,263; MAC Int'!, 10-2 BCA 134,591
at 170,510; Laudes Corp., 84 Cl. Ct. at 303.

        DoD believed CERP increased the flow of intelligence to commanders about
hostile actors in the community, improving both security and economic conditions. As
the seized monies which funded CERP approached exhaustion, DoD urged Congress
to keep CERP the useful tool it was for commanders in the field "not encumbered by
processes and procedures in other provisions of law." It asked Congress to appropriate
funds to continue CERP "notwithstanding any other provision of law." DoD advised
that the foregoing language was necessary in statutorily authorizing such funding to
keep CERP a flexible and responsive tool unencumbered l:>y procedures associated
with procurement arguably required by law and implementing regulations if CERP
relied on appropriated funds. Congress acquiesced to DoD's request and authorized
funding of CERP in FY 2004 not to exceed $180 million "notwithstanding any other
provision of law." Emergency Supplemental Appropriations Act for Defense and for
the Reconstruction of Iraq and Afghanistan, 2004, Pub. L. No. 108-106, § 1110, 117
Stat. 1209, 1215; H.R. Conf. Rep. 108-337, at 7 (2003), available at https://www.

                                            18
congress.gov/bill/I 08th-congress/house-bill/3289/text/pl; Martins, No Small
Change ofSoldiering, ARMY L. at 9-11, available at http://www.jagcnet.army.
mil/DOCLIBS/ARMYLA WYER.NSF.

       Thereafter, DoD issued guidance expressing its intent that the use of CERP
appropriations "preserve the same flexibility and responsiveness ... maintained with the
original CERP that was funded with seized Iraqi assets." DoD also issued a new
financial management regulation providing that, "[t]o the maximum extent practicable,
these regulations shall be consistent with [CPA] Memorandum Number 4, Contract and
Grant Procedures Applicable to Vested and Seized Iraqi Property ... dated August 19,
2003," which specified that contracts funded from vested and seized Iraqi property were
not subject to the CDA. DoD 7000.14-R, vol. 12, ch. 27, available at http://comptroller.
defense.gov/Portals/45/documents/fmr/archive/12arch/ 12_27 .pdf; Martins, The
Commander's Emergency Response Program, 37 JOINT FORCE QUARTERLY at 50,
available athttp://www.dtic.mil/dtic/tr/fulltext/u2/ a523853.pdf.

       In sum, it was the inte])t of Congress (and DoD) that CERP contracts funded
with U.S. appropriations (like those funded by seized Iraqi assets) not be subject to the
CDA. Accordingly, as we held in Latifi, we do not possess authority under the CDA to
entertain appeals involving CERP contracts. 2

2
    In Latifi, we did not follow the practice of the Federal Circuit of examining the legal
         authorization for entry into the asserted contract, but set forth a "benefit"
         analysis stating that there was no direct benefit to the United States from a CERP
         contract. 15-1 BCA il 35,937 at 175,633. We note now that, in seeking millions
         of dollars from Congress to fund CERP contracts, DoD advocated such contracts
         were of benefit to it (and Congress apparently agreed). We additionally note that
         no "benefit" analysis is necessary here because the CDA does not state that
         contracts governed are only ones directly of benefit to the United States (as
         evidenced by the Federal Circuit's decision in GE that foreign military sale
         contracts are governed by the CDA). While there is dicta in both Wesleyan Co.
         v. Harvey, 454 F.3d 1375, 1378 (Fed. Cir. 2006); and New Era Constr. v. United
         States, 890 F.2d 1152, 1157 (Fed. Cir. 1989), referencing the existence of"direct
         benefit," neither case held that such benefit was necessary for the CDA to
         govern a contract. In New Era Constr., 890 F.2d at 1157, the contractor did not
         possess a contract with the United States, only with a local housing authority.
         Relying on a long line of precedent that a separate contract between a housing
         authority and HUD did not furnish a contractor a right to sue HUD, the appeals
         court dismissed for lack of CDA jurisdiction due to lack of a contract with an
         Executive agency. In Wesleyan, 454 F.3d at 1378-79, the court of appeals held
         an unsolicited proposal and bailment agreement were donative in nature and did
         not involve "procurement" for purposes of the CDA but executive agency
         purchase orders also at issue in the appeal did constitute a procurement contract

                                             19
        Because the ASBCA Charter also provides for jurisdiction over appeals pursuant
to provisions of contracts requiring a decision by the Secretary of Defense or by
 Secretary of a Military Department and over appeals where the Secretary of Defense or
the Secretary of a Military Department has granted a right of appeal not contained in
the contract on any matter consistent with the contract appeals procedure, 48 C.F.R.
ch. 2, appx. A, part 1 ( 14 May 2007), the lack of CDA jurisdiction over CERP contracts
does not end our analysis of jurisdiction here. Rather, we must also ascertain ifthere is
any contract provision or directive that could serve as a basis for us to exercise
jurisdiction. Agility Logistics Servs., 15-1 BCA ,r 35,840 at 175,267; Latifi Shagiwall,
 15-1 BCA ,r 35,937 at 175,634.

         With respect to whether a right of appeal to this Board has been granted by
provision of contract, the one-page contract relied on by A.A.K.C.C. as the basis for its
appeal here contains no provision requiring a decision by the Secretary of Defense or
Secretary of a Military Department. Moreover, we are unaware of, and neither party to
the appeal has brought to our attention, any provision of a directive where the DoD
Secretary or a Secretary of a Military Department has granted a right of appeal to the
Board for CERP contracts not contained in those contracts on a matter consistent with
our contract appeals procedure. Accordingly, the Board has no choice but to conclude
that it lacks jurisdiction to entertain the appeal here. 48 C.F .R. ch. 2, appx. A, pt. 1
(14 May 2007); Agility Logistics Servs., 15-1 BCA ,r 35,840 at 175,267-68; Latifi
Shagiwall, 15-1 BCA ,r 35,937 at 175,634.

                                        CONCLUSION

       The government's motion to dismiss for lack of jurisdiction is granted for the
reasons set forth above.

       Dated: May 29, 2019

                                                  TERRENCE S. HARTMAN
                                                  Administrative Judge
                                                  Armed Services Board
                                                  of Contract Appeals
(Signatures continued)

      governed by the CDA. In sum, in both cases, the dismissals for lack of
      jurisdiction were based on lack of existence of a contract with an Executive
      agency, not lack of a direct benefit to the U.S. from the contract pleaded.

                                           20
                                                  OWEN C. WILSON
                                                  Administrative Judge
                                                  Vice Chairman
                                                  Armed Services Board
                                                  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. 60399, Appeal of
A.A.K.C.C., rendered in conformance with the Board's Charter.

       Dated:

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

                                           21