Court Opinion

ID: 3171332
Source: CourtListenerOpinion
Date Created: 2016-01-21 22:00:16.97226+00
Date Added: 2024-06-11T11:56:03.594646
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of--                                   )
                                              )
Strobe Data, Inc.                             )      ASBCA No. 60123
                                              )
Under Contract No. FA8224-10-C-0028           )

APPEARANCES FOR THE APPELLANT:                       Kevin A. Rosenfield, Esq.
                                                     Mark G. Jackson, Esq.
                                                      Jackson Rosenfield LLP
                                                      Seattle, WA

APPEARANCES FOR THE GOVERNMENT:                      Col Matthew J. Mulbarger, USAF
                                                      Air Force Chief Trial Attorney
                                                     Alexis Bernstein, Esq.
                                                      Trial Attorney

                OPINION BY ADMINISTRATIVE JUDGE DELMAN

        The Board sua sponte raised the issue whether the monetary claim of Strobe
Data, Inc. (appellant) to the contracting officer (CO) was asserted in a "sum certain"
for purposes of our jurisdiction under the Contract Disputes Act (CDA), 41 U.S.C.
§§ 7101-7109. In a novel reversal of roles, appellant contends that its claim was not
asserted in a sum certain; that the Board is without jurisdiction; and that its appeal
should be dismissed without prejudice. The Department of the Air Force (AF or
government) opposes a dismissal without prejudice on jurisdictional grounds,
contending that appellant's claim was asserted in a sum certain and the Board should
retain jurisdiction. For reasons stated below, we conclude we do not have jurisdiction
over this appeal.

       STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

       1. On 5 January 2010, the government awarded the subject contract to
appellant to provide two Kestrel DXPs rack-mounted systems, plus system integration
and testing for a firm-fixed price of $98,238 (R4, tab 3). The government sought these
components as a possible replacement for an obsolescent computer in its F-16 test
stations, known as the "Avionics Intermediate Stations" or AIS.

        2. It is undisputed that appellant timely shipped the units to the government;
that the government accepted the units; and paid appellant the full contract price (R4,
tab 6). 1 However, appellant was of the view that the AF improperly tested the units,
with the result that the units were ultimately disqualified by the government from
replacing the obsolescent computer in the F-16 test station (see claim letter below).

        3. By letter dated 15 May 2015, appellant submitted a lengthy certified claim to
the CO reciting the background of the dispute; describing the nature of the improper
testing and other AF failures. Appellant asserted that the government's conduct was a
breach of its duty of good faith and fair dealing. (R4, tab 8)

       4. Appellant's letter asserted a monetary claim for damages. Insofar as
pertinent, the letter stated as follows:

                Performance of this improper test, as well as other acts
                identified herein, constituted a breach of the Government's
                duty of good faith and fair dealing, and caused Strobe to
                incur an estimated $30,000,000 in damages .

                       .. .As a result, Strobe lost the opportunity to sell a
                minimum of 200 Kestrel QXP systems, based on the
                Government's own estimates (and likely more, given the
                importance of the HPlOOO A900 to the AIS for the C-5A,
                A-10, F-14, and the F-16). As each Kestrel had a profit
                margin of$150,000, Strobe's lost profits from the F-16
                market alone amount to $30,000,000. [Footnote omitted]

                                   IV. CONCLUSION

                      ...As such, Strobe's damages are, at a minimum,
                $30,000,000. Should you need any further clarification or
                documentation, please do not hesitate to contact me.
                [Emphasis added]

(R4, tab 8 at 1, 7, 9)

1
    Appellant alleges in its complaint that at the government's request, it agreed to
        replace the 2 DXPs with 2 QXPs, appellant's fastest computer, at no additional
        charge to the government (comp!. if 32). The government did not specifically
        admit or deny this allegation in its answer. We need not make any findings on
        this matter for purposes of this decision on jurisdiction.

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      5. By memorandum to appellant dated 13 July 2015, the CO denied appellant's
purported claim. The CO concluded, in part, as follows:

              For the reasons outlined above, the Air Force denies Strobe
              Data's claim that the Air Force owes a minimum of
              $30,000,000 in damages, a contractual relationship existed
              regarding testing of the Kestrel, and that the Air Force
              possessed foreknowledge of test failures.

(R4, tab 10 at 3)

      6. Appellant filed a timely notice of appeal to this Board, which was docketed
as ASBCA No. 60123.

                                       DECISION

        Our jurisdiction under the CDA is predicated upon the filing of a claim by one
of the contracting parties, 41 U.S.C. § 7103(a). The CDA does not define "claim," but
the Federal Acquisition Regulation (FAR) does so. FAR 2.101 states in pertinent part
as follows:

                      Claim means a written demand or written assertion
              by one of the contracting parties seeking, as a matter of
              right, the payment of money in a sum certain, the
              adjustment or interpretation of contract terms, or other
              relief arising under or relating to the contract. However, a
              written demand or written assertion by the contractor
              seeking the payment of money exceeding $100,000 is not a
              claim under the Contract Disputes Act of 1978 until
              certified as required by the Act. [Emphasis added]

        The specific issue before us is whether appellant's claim letter to the CO, dated
15 May 2015, asserts a claim in a "sum certain" in accordance with this definition. If
it does not, appellant has not asserted a proper claim, and we do not have jurisdiction.

       Appellant's claim letter seeks damages in the "minimum" amount of
$30,000,000. We have held that a contractor's quantification of claim amounts
through the use of qualifying language such as "a minimum of $1,957,236.84" does
not assert a claim in a sum certain. Daniel S. Sinclair, Callan E. Sinclair and Cayman
C. Sinclair, ASBCA No. 56768 et al., 12-2 BCA ~ 35,105 at 172,383; see also
Sandoval Plumbing Repair, Inc., ASBCA No. 54640, 05-2 BCA ~ 33,072 ("no less
than" claim amount is not a sum certain).

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        The government acknowledges this qualifying language, but argues that it is
countermanded by a simple, mathematical calculation in the claim letter that results in
a sum certain, i.e., the number of units appellant expected to sell to the AF, 200,
multiplied by the claimed profit per unit, $150,000, resulting in a "sum certain"
amount of$30,000,000 (gov't br. at 2). The government misreads appellant's claim
letter. The letter does not state that appellant expected to sell 200 units to the
government; rather, the letter states that appellant "lost the opportunity to sell a
minimum of200 [units], based on the Government's own estimates (and likely
more ...)" (SOF ~ 4). The number upon which the government relies to compute a sum
certain is itself uncertain. The government's position is without merit.

        The government argues however that appellant's complaint before the Board
"contains no equivocation - it states in 'sum certain' terms that [appellant's] damages
amount to $30,000,000" (gov't br. at 3). This statement, albeit true, has no bearing on
the jurisdictional issue. The law requires that appellant's claim to the CO be asserted
in a sum certain, not its complaint before the Board.

        The government attacks appellant's claim for addressing potential lost
opportunities on programs other than the F-16 program, contending that appellant
had no basis, contractual or otherwise, to make such assertions (gov't br. at 1). The
government's argument addresses the merits of appellant's monetary claim. Whether
appellant's claim is speculative, or otherwise unsupported by its contract is not before
us. Our task is to evaluate appellant's claim, as asserted, to determine whether it
complies with the claim definition in the FAR. We believe it does not. The
government's additional suggestion that appellant may not challenge the Board's
jurisdiction of its own claim is also incorrect. See Universal Canvas, Inc. v. Stone,
975 F.2d 847, 850 (Fed. Cir. 1992) (a jurisdictional limitation "does not run only in
favor of the government").

      We have considered all the government's other arguments, but they are
unpersuasive. Appellant's reference in its claim letter to the sale of a "minimum" of
200 units and "likely more," when multiplied by its claimed expected profit rate of
$150,000 per unit, is perfectly consistent with its conclusion that its damages were a
"minimum" of $30,000,000. In accordance with the FAR definition and our case law,
we conclude appellant's request for damages using this type of qualifying language
was not asserted in a sum certain.

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                                  CONCLUSION

       Appellant has not asserted a proper claim under the CDA and we dismiss for
lack of jurisdiction.

      Dated: 5 January 2016

                                               \~~--
                                                Administrative Judge
                                                Armed Services Board
                                                of Contract Appeals

I concur                                        I concur

   ~/                                           MARK A. MELNICK
Administrative Judge                            Administrative Judge
Acting Chairman                                 Acting 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. 60123, Appeal of Strobe
Data, Inc., rendered in conformance with the Board's Charter.

       Dated:

                                                JEFFREY D. GARDIN
                                                Recorder, Armed Services
                                                Board of Contract Appeals

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