Court Opinion

ID: 626138
Source: CourtListenerOpinion
Date Created: 2012-03-27 15:11:35+00
Date Added: 2024-06-11T17:51:14.418472
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
               __________________________

      J.P. DONOVAN CONSTRUCTION, INC.,
                  Appellant,
                            v.
RAYMOND E. MABUS, SECRETARY OF THE NAVY,
                Appellee.
               __________________________

                       2011-1162
               __________________________

   Appeal from the Armed Services Board of Contract
Appeals in No. 55335, Administrative Judge David W.
James, Jr.
              _________________________

                Decided: March 27, 2012
               _________________________

   FREDERICK L. WRIGHT II, Vaughn, Wright & Boyer
LLP, of Marietta, Georgia, for appellant.

    A. BONDURANT ELEY, Trial Attorney, Commercial
Litigation Branch, Civil Division, United States Depart-
ment of Justice, of Washington, DC, for appellee. With her
on the brief were TONY WEST, Assistant Attorney General,
JEANNE E. DAVIDSON, Director, and HAROLD D. LESTER,
JR. Assistant Director.    On counsel was PAMELA J.
JP DONOVAN CONSTRUCTION   v. NAVY                         2

NESTELL, Attorney, United States Department of the
Navy, NAVFAC Litigation HQ, of Washington, DC.
             __________________________

 Before RADER, Chief Judge, MOORE, Circuit Judge and
                AIKEN, District Judge. *
Opinion for the court filed by Chief Judge RADER. District
            Judge AIKEN concurs in the result.
RADER, Chief Judge.
    The Armed Services Board of Contract Appeals dis-
missed the claim of J.P. Donovan Construction, Inc.
(“Donovan”) for lack of jurisdiction. J.P. Donovan Constr.,
Inc., ASBCA No. 55335, 10-2 BCA ¶ 34,509, 2010 WL
2899029 (July 16, 2010). The Board held that Donovan
did not submit a valid claim under the Contract Disputes
Act of 1978 ("CDA"), 41 U.S.C. §§ 601-13 (1998), in view of
the Federal Acquisition Regulation (“FAR”). In the ab-
sence of any reversible error, this court affirms.
                             I.
    On September 18, 2002, Donovan entered into Con-
tract No. N62467-02-C-2747 (“Contract”) with the United
States Navy Department (“Navy”) to repair runways at
the Naval Air Station, Key West, Florida. [JA 2, 21, 33.]
The Contract contained the FAR disputes clause, which
defined “claim” as "a written demand or . . . assertion by
one of the contracting parties seeking, as a matter of
right, the payment of money in a sum certain . . . ." 48
C.F.R. § 52.233-1 (2002). [JA 2.] The Contract also
contained a Defense Federal Acquisition Regulations

   *   The Honorable Ann L. Aiken, Chief Judge, United
States District Court for the District of Oregon, sitting by
designation.
3                         JP DONOVAN CONSTRUCTION   v. NAVY

(“DFARS”) clause regarding requests for equitable ad-
justment. 48 C.F. R. § 252.243-7002 (1998).
    In October 2002, Donovan subcontracted with Costello
Industries, Inc. (“Costello”). [JA 2, 21.] Work began on
November 13, 2002 and was completed on May 9, 2003.
On August 9, 2004, on behalf of Costello, Donovan sub-
mitted a letter (“August Letter”) to the contracting officer
requesting an equitable adjustment (“REA #2”). In part,
the August letter stated: “Of the $559,764.00 that
Costello is claiming, Donovan is herein stating that
Donovan has or will have approximately $55,000.00 of
additional direct and administrative costs that should be
added to this Costello requested amount.” J.A. 124. The
contracting officer rejected this request for exceeding the
simplified acquisition threshold; for missing the certifica-
tion requirement of title 10, section 2410(a); and for
insufficient “disclosure of all relevant facts.” J.A. 126.
     On January 14, 2005, Costello submitted to Donovan
another REA for $559,764.00 and asked Donovan to
certify and submit the claim to the Navy. [JA 2.] On
March 7, 2005, Donovan submitted Costello’s REA and a
CDA certification to the contracting officer. [JA 2.]
Donovan’s March 7, 2005 letter (“March Letter”) was
titled “Submittal of Claim for Equitable Adjustment . . . ”
and stated, in relevant part:
    Of the $559,764.00 that Costello is claiming,
    Donovan is herein stating that Donovan has or
    will have approximately $65,000.00 of additional
    direct and administrative costs that should be
    added to this Costello requested amount. These
    Donovan costs are for previous expenditures for
    Donovan's consultants whilst the Claim was enti-
    tled REA#2 as well as for previous costs expended
    by Donovan for necessary outside legal efforts.
JP DONOVAN CONSTRUCTION    v. NAVY                         4

J.A. 3, 42. On November 1, 2005, the contracting officer
issued a final decision denying Donovan’s claim of
$624,764 which included Costello’s claim of $559,764 and
Donovan’s claim of $65,000. [JA 3, 43.]
    On January 27, 2006, Donovan filed a notice of appeal
of the contracting officer’s final decision with the Board
which stated, “[t]he amount of the claim is $624,764.00.”
[JA 4, 123.] In March 2006, Donovan filed a complaint
before the Board seeking money damages for Costello.
The complaint was amended in 2009 to include the follow-
ing prayer for relief: “Money damages for overhead costs
[Donovan] incurred arising from or related to [Costello's]
claim under its subcontract with [Donovan].” J.A. 4, 7,
25. The parties engaged in an extensive discovery period.
On January 28, 2010, the Navy submitted a motion to
dismiss for lack of jurisdiction or in the alternative motion
to stay proceedings, alleging that Donovan’s certification
was qualified and not made in good faith. [JA 135-56.]
    On March 23, 2010, the Board sent the parties a letter
asking sua sponte whether the language in Donovan’s
March Letter ("Donovan has or will have approximately
$65,000 of additional direct and administrative costs that
should be added to this Costello requested amount" of
$559,764.00) “result[s] in a claim which does not state a
‘sum certain,’ thus negating the Board’s jurisdiction of the
appeal.” J.A. 39-40. The parties briefed this issue and
the Navy submitted a motion to dismiss for failure to
state a sum certain. [JA 59.]
    The Board granted the Navy’s motion. Specifically,
the Board determined that it lacked jurisdiction because
Costello’s claim for $559,764.00 and Donovan’s “add-ons”
were not separate claims and that the entire claim was
not in a sum certain due to the qualifying language as to
Donovan’s claim. [JA 1-6.] The Board did not make a
5                         JP DONOVAN CONSTRUCTION       v. NAVY

determination concerning the Navy’s motion to dismiss
for lack of jurisdiction due to Donovan’s alleged bad faith.
Donovan appealed the Board’s decision, and this court
possesses jurisdiction under 28 U.S.C. § 1295(a)(10).
                             II.
    The statute sets this court’s standard of review:
    (1) the decision of the agency board on a question
    of law is not final or conclusive; but (2) the deci-
    sion of the agency board on a question of fact is fi-
    nal and conclusive and may not be set aside
    unless the decision is—(A) fraudulent, arbitrary,
    or capricious; (B) so grossly erroneous as to neces-
    sarily imply bad faith; or (C) not supported by
    substantial evidence.
41 U.S.C. § 7107(b). The Board’s dismissal for lack of
jurisdiction is a question of law. Transamerica Ins. Corp.
v. United States, 973 F.2d 1572, 1576 (Fed. Cir. 1992).
This court reviews the Board’s legal determinations
without deference. England v. Sherman R. Smoot Corp.,
388 F.3d 844, 848 (Fed. Cir. 2004).
    The “jurisdictional prerequisites to any appeal” under
the CDA are that “the contractor must submit a proper
claim . . . [and] . . . the contractor must have received the
contracting officer’s final decision on that claim.” M.
Maropakis Carpentry, Inc. v. United States, 609 F.3d
1323, 1328 (Fed. Cir. 2010) (citing James M. Ellett Constr.
Co. v. United States, 93 F.3d 1537, 1541-42 (Fed. Cir.
1996)). “Each claim by a contractor against the govern-
ment shall be in writing and shall be submitted to the
contracting officer for a decision,” 41 U.S.C. § 7103(a), and
the claim must “indicate to the contracting officer that the
contractor is requesting a final decision,” Maropakis, 609
F.3d at 1327 (citing Ellett, 93 F.3d at 1543).
JP DONOVAN CONSTRUCTION   v. NAVY                         6

    Although the CDA does not define the term “claim,”
the FAR supplies a definition: “Claim, as used in this
clause, 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 adjust-
ment or interpretation of contract terms, or other relief
arising under or relating to this contract.” 48 C.F.R.
52.233-1(c) (2002) (emphasis added). See also Reflectone,
Inc. v. Dalton, 60 F.3d 1572 (Fed. Cir. 1995) (en banc)
(holding “that the FAR requires a ‘claim’ to be a written
demand seeking a sum certain . . . as a matter of
right . . . is consistent with the ordinary meaning of the
term“). As stated in Contract Cleaning Maintenance, Inc.
v. United States:
   We know of no requirement in the [CDA] that a
   “claim” must be submitted in any particular form
   or use any particular wording. All that is required
   is that the contractor submit in writing to the con-
   tracting officer a clear and unequivocal statement
   that gives the contracting officer adequate notice
   of the basis and amount of the claim.
811 F.2d 586, 592 (Fed. Cir. 1987) (citing Tecom, Inc. v.
United States, 732 F.2d 935, 936-37 (Fed. Cir. 1984);
Metric Constr. Co. v. United States, 1 Cl. Ct. 383, 392
(1983)). See also Maropakis, 609 F.3d at 1327 (citing
Contract Cleaning, 811 F.2d at 592). “Moreover, . . . a
sum certain naturally must be asserted. It is, after all,
the defining measure of that right.” Essex Electro Engi-
neers, Inc. v. United States, 960 F.2d 1576, 1581 (Fed. Cir.
1992).
   The contracting officer rejected Donovan’s claim for
$624,764 in its entirety, stating:
   You offer no justification or legal premise for this
   element of your claim. Inasmuch as we find no en-
7                          JP DONOVAN CONSTRUCTION    v. NAVY

    titlement to the underlying claim of your subcon-
    tractor, likewise you are not entitled to any costs
    allegedly incurred in association with such claim.
J.A. 2-3, 41-42. The contracting officer viewed the claim
as Costello’s costs and the balance for Donovan’s “direct
and administrative costs.”      The Board stated that
“. . . when a claim describes a cost as approximate and
never states that sum certain that it is demanding, the
sum certain requirement is not met” and “[w]here . . . the
qualifying language is used in the claim in relation to a
cost but the sum certain being demanded is expressly
stated (or ascertainable) elsewhere in the claim, the
requirement is met.” J.A. 4.
    Accordingly, the Board determined Costello’s costs
were a sum certain but Donovan’s statement and “add-
ons” rendered the entire claim to be uncertain because of
Donovan’s use of qualifying language (i.e., the word
“approximately”). The parties do not dispute Costello’s
costs and Donovan’s “additional direct and administrative
costs” are not separate claims. See Placeway Constr.
Corp. v. United States, 920 F.2d 903, 907 (Fed. Cir. 1990)
(“to determine whether two or more separate
claims . . . exist[ ], the court must assess whether . . . the
claims are based on a common or related set of operative
facts. If the court will have to review the same or related
evidence to make its decision, then only one claim exists”).
As such, the only jurisdictional prerequisite at issue is
whether the March Letter for Donovan’s “direct and
administrative costs” claimed a “sum certain.”
    A draft of the August Letter included the following
statement: “ . . . What about a markup on Costello’s
dollars?—What about $65,000 for anticipated administra-
tive fee for handling the REA?” J.A. 81. Donovan’s
August Letter included the same language as the March
JP DONOVAN CONSTRUCTION   v. NAVY                        8

Letter but only asked for “approximately $55,000.” J.A.
124. On the same day that the August Letter was sub-
mitted, internal correspondence of Donovan stated:
   Note that on the cover letter we sent to Jean Tarl-
   ton [Supervisory Contract Specialist for the
   Navy], I stated that JPD was requesting an addi-
   tional amount of approx $55,000 for previous and
   future additional administrative costs attributable
   to the Donovan handling of this document. Realiz-
   ing that the Feds need to see backup documents
   for this amount, I thought it best to include a
   lump sum amount in order for us to work toward
   as if we ask for nothing, we will get nothing. We
   will provide them backup for the correct amount
   when and if the time comes.
J.A. 83. The March Letter stated: “ . . . Donovan is
herein stating that Donovan has or will have approxi-
mately $65,000.00 of additional direct and administrative
costs that should be added to this Costello requested
amount.” J.A. 42 (emphasis added). Also, Thomas L.
Fraser, Donovan’s representative who signed the August
and March Letters, testified the additional $55,000 or
$65,000 was for “administrative expenses and legal ex-
penses” to be added to Costello’s claim. J.A. 56. Mr.
Donovan was questioned concerning the claim for $65,000
by the Supervisory Auditor with the Defense Contract
Audit Agency and “Mr. Donovan stated that they had
proposed $65,000 as they expected additional legal cost
before the case was settled.” J.A. 86. During this confer-
ence, Donovan learned that this expense was “expressly
unallowable” under the FAR. Id. Additionally, J.P.
Donovan, Sr., Donovan’s representative who signed the
CDA certifications, testified that he had a claim for
$65,000 against the Navy. J.A. 131. As such, the refer-
ences to “additional direct and administrative costs”
9                        JP DONOVAN CONSTRUCTION    v. NAVY

support the finding that the March Letter intended to put
the contracting officer on notice of the basis and amount
of Donovan’s claim.
    The Court of Federal Claims has stated that “[t]he
sum certain requirement is met if the contracting officer
can determine the amount claimed by a simple mathe-
matical calculation.” Modeer v. United States, 68 Fed. Cl.
131, 137 (2005). In Modeer, the parties entered into a
lease agreement which stated that upon its termination
“rent [would] accru[e] at the pro rata rate of $793,509 per
year,’ or $66,125.75.” 68 Fed. Cl. at 137. One month after
the parties’ lease agreement terminated, plaintiffs’ sub-
mitted a letter to the contracting officer for one month of
holdover rent. Defendant asserted that the letter did not
state a sum certain. However, the Court of Federal
Claims held that the letter did state a sum certain be-
cause it specified a monthly amount that was owed by the
holdover tenant and that the amount could be multiplied
by a number of months to calculate the total amount of
holdover rent claimed. This court agreed with and
adopted the reasoning of the Court of Federal Claims.
Modeer v. United States, 183 Fed. App’x 975, 977 (Fed.
Cir. 2006).
    In contrast to Modeer, Donovan’s claim used qualify-
ing language, “approximately $65,000,” and did not in-
clude supporting documents that would allow the
contracting officer to substantiate the claim. Donovan
submitted the March Letter without supporting docu-
ments. In that form, the claimed amount was unascer-
tainable. Accordingly, substantial evidence supports the
Board’s determination. Because Donovan has failed to
establish that the Board committed an error of law or
fact, this court affirms the Board’s dismissal of Donovan’s
appeal for lack of jurisdiction.
JP DONOVAN CONSTRUCTION   v. NAVY                       10

     Before the Board and this court, the Navy has argued
alternative grounds for dismissal of the complaint for lack
of jurisdiction because the certification was allegedly
qualified and not made in good faith. Because this court
affirms the Board’s determination on the sum certain
issue, we do not have to address the alternative grounds
presented by the Navy.
   For the foregoing reasons, the Board’s dismissal of
Donovan’s complaint is hereby affirmed.
                      AFFIRMED
                          COSTS
No Costs.