Court Opinion

ID: 9900081
Source: CourtListenerOpinion
Date Created: 2023-11-18 22:00:22.331315+00
Date Added: 2024-06-11T09:20:59.452576
License: Public Domain

DOCUMENT FOR PUBLIC RELEASE
   The decision issued on the date below is subject to an ASBCA Protective Order.
                  This version has been approved for public release.

               ARMED SERVICES BOARD OF CONTRACT APPEALS
 Appeal of -                                  )
                                              )
 Chugach Federal Solutions, Inc.              )    ASBCA No. 61320
                                              )
 Under Contract No. N44255-14-D-9000          )

 APPEARANCES FOR THE APPELLANT:                    Richard B. O’Keeffe, Jr., Esq.
                                                   William A. Roberts III, Esq.
                                                   Gary S. Ward, Esq.
                                                   Cara L. Lasley, Esq.
                                                    Wiley Rein LLP
                                                    Washington, DC

 APPEARANCES FOR THE GOVERNMENT:                   Craig D. Jensen, Esq.
                                                    Navy Chief Trial Attorney
                                                   David M. Marquez, Esq.
                                                   Robyn L. Hamady, Esq.
                                                   Anthony Hicks, Esq.
                                                    Trial Attorneys

      OPINION BY ADMINISTRATIVE JUDGE D’ALESSANDRIS ON THE
       GOVERNMENT’S MOTION FOR PARTIAL RECONSIDERATION

       Pending before the Board is the government’s motion for reconsideration of
portions of our June 8, 2023 decision in this appeal. See Chugach Federal Solutions,
Inc., ASBCA No. 61320, 23-1 BCA ¶ 38,372. For the reasons stated below we deny
the government’s motion.

   I. Standard Of Review For Motions For Reconsideration

       A motion for reconsideration is not the place to present arguments previously
made and rejected. “[W]here litigants have once battled for the court’s decision, they
should neither be required, nor without good reason permitted, to battle for it again.”
Dixon v. Shinseki, 741 F.3d 1367, 1378 (Fed. Cir. 2014) (quoting Official Comm. of
the Unsecured Creditors of Color Tile, Inc. v. Coopers & Lybrand, LLP, 322 F.3d 147,
167 (2d Cir. 2003)). Moreover, “[m]otions for reconsideration do not afford litigants
the opportunity to take a ‘second bite at the apple’ or to advance arguments that
properly should have been presented in an earlier proceeding.” Dixon, 741 F.3d
at 1378; see also Avant Assessment, LLC, ASBCA No. 58867, 15-1 BCA ¶ 36,137
at 176,384. On the other hand, if we have made mistakes in the findings of fact or
conclusions of law, or by failing to consider an appropriate matter, reconsideration
                        DOCUMENT FOR PUBLIC RELEASE
     The decision issued on the date below is subject to an ASBCA Protective Order.
                    This version has been approved for public release.

may be appropriate. See Robinson Quality Constructors, ASBCA No. 55784, 09-2
BCA ¶ 34,171 at 168,911; L&C Europa Contracting Co., ASBCA No. 52617, 04-2
BCA ¶ 32,708. The Board has summarized the standard for reconsideration stating
“[i]n short, if we have made a genuine oversight that affects the outcome of the appeal,
we will remedy it.” Relyant, LLC, ASBCA No. 59809, 18-1 BCA ¶ 37,146
at 180,841. Here, as in Relyant, no such mistakes have been identified.

     II. Procedural History

       In its motion for partial reconsideration, the government asserts two errors in
our decision: first, that we “erroneously concluded that the Navy did not identify
specific costs for non-performed or late-performed work in FY16” (gov’t mot. at 2-3);
and second, that we “erred in holding that the Navy cannot withhold payment for late-
performed work” (gov’t mot. at 3-6).

       At issue in this motion for reconsideration are the government’s withholdings
of contract funds. In November 2015, the government withheld approximately
$450 thousand for specifically identified tasks that were not performed and positions
that were not filled. See, Chugach, 23-1 BCA ¶ 38,372 at 186,387; (R4, tab 12.632.3
at GOV421048-1, tab 12.632.2 [native] (spreadsheet detailing deductions)). These
deductions are not in dispute. In addition, the withholding letter provided that the
government would be making “temporary” withholdings, and that if the performance
problems persisted the withholdings would be made permanent at the end of the fiscal
year “once the full extent of the non-conformance is determined” (R4, tab 12.632.3
at GOV421048-2). The withholding amount was initially 10 % of contract payments
due, but was reduced to 5 %. Chugach, 23-1 BCA ¶ 38,372 at 186,388.

       In its opening post-hearing brief, Chugach argued that the government had not
established a right to withhold a generalized “10% or 5% withholding of the
negotiated contract price” and that the government could not establish that the
withholdings bore a “reasonable relationship” to the damages suffered by the
government (app. br. at 164). 1 With Chugach having raised these issues, it was
incumbent upon the government to identify the legal basis for its withholding. In
addition, it was incumbent upon the government to establish that there was late-
performed or non-performed work and to demonstrate some rational relationship
between the identified work and the withholding.

1
    Chugach argued that there was no relationship between the withholding and the harm
        to the government because the government was responsible for Chugach’s
        non-performance and late-performance.

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                      DOCUMENT FOR PUBLIC RELEASE
   The decision issued on the date below is subject to an ASBCA Protective Order.
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      In its Rule 11 brief, the government addressed Chugach’s argument with three
sentences and a string-cite of its proposed findings of fact. In its entirety, the
government’s argument was:

             Moreover, NAVFAC documented significant instances of
             CFSI’s nonperformance, including failure to perform
             required preventative maintenance across multiple
             annexes, failure to meet required completion deadlines,
             and failure to fill key positions required by the WSBOS
             Contract. Navy PFF Nos. 375-384. CFSI admitted that it
             had not fully performed required work in either FY15 or
             FY16, the two claim years. Navy PFF Nos. 378, 380,
             385-386. The work that CFSI failed to perform – e.g.,
             unstaffed key positions, time-based maintenance, late
             completion, etc. – was not amenable to re-performance.
             Navy PFF No. 385.

(Gov’t br. at 82-83) Although not included in the Navy’s string cite, our opinion cited
the Navy’s proposed finding of fact number 387 as the only support for the Navy’s 5
percent retainage. This was a declaration by a contracting officer, (but not the
contracting officer that instituted the withholding nor the contracting officer that
reduced the withholding rate to 5%) stating that “NAVFAC estimated the cost of the
FY16 non-performed work as 5% of the contract value of the recurring work.” We
held that this conclusory statement by a contracting officer was:

             [U]nsupported by citation to any workpapers or
             documentation of non-performed work. Moreover,
             Mr. Sandoval does not state that he personally estimated
             the value of the non- performed [work], but just that
             “NAVFAC” estimated the cost without identifying the
             individual or individuals that purportedly estimated the
             value to be 5 percent.

Chugach, 23-1 BCA ¶ 38,372 at 186,400 (citing gov’t ex. 1 ¶ 20).

       In its Rule 11 reply brief, Chugach again challenged the Navy’s withholding as
being without a rational relationship to the unperformed work, although this time
arguing that the Navy failed to carry its burden and relied “on items it either already
valued in its deductive modifications (which suggest double withholding) or late work
that Chugach admittedly performed (for which Chugach is entitled to be paid)” (app.
reply at 107). Chugach requested, and was granted, leave to file a sur-reply, but did
not respond to this issue in its sur-reply.

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                          DOCUMENT FOR PUBLIC RELEASE
       The decision issued on the date below is subject to an ASBCA Protective Order.
                      This version has been approved for public release.

     III. The Government’s Assertions of Error

         A. The Navy Did Not Identify Specific Costs For Non-Performed or Late-
            Performed Work in FY16

       In its motion for reconsideration, the government notes that one of its proposed
findings of fact, Navy PFF No. 383, cited a Contactor Performance Assessment Rating
System (CPAR) review that identified unstaffed positions and late-performed work (gov’t
mot. at 3). Specifically, this proposed finding of fact establishes that two unstaffed
positions that were the subject of specific, enumerated dollar value deductions in FY15
remained unstaffed into FY16. We addressed this evidence in our decision noting that
the evidence was not specific and that the government had not cited any probative
evidence to link the non-performed and late-performed work in the CPAR to the
withholding amount. Chugach, 23-1 BCA ¶ 38,372 at 186,400. Even with the
government finally identifying a specific example of unperformed work (two positions
that were already the subject of a deductive modification) we fail to see a rational
relationship between these two positions that were unfilled for portions of the fiscal year,
and the $1.6 million dollar retainage. See, e.g., E. Mass. Prof. Standards Review Org.,
ASBCA No. 33639, 91-3 BCA ¶ 24,301 at 121,432 (requiring withholding to bear “some
reasonable relationship” to the work not performed). 2

         Under these circumstances, we see no basis to revisit our findings on this issue.

         B. We Did Not Hold That The Navy Could Not Withhold Payment For Late
            Performed Work

       The government’s second argument is that we improperly held that the Navy could
not withhold payment for late-performed work (gov’t mot. at 3-6). As noted above,
Chugach argued in its Rule 11 brief that the government had not established a right to
withhold a generalized 5% or 10% of the contract price (app. br. at 164). It was
incumbent upon the government to respond to this argument in its brief. In its motion for
reconsideration, the government asserts that the Board erred and now cites to
Clause 9303(a)(2) (NAVFAC clause 5252.246-9303), providing that the government can
assess liquidated damages; however, the government did not cite that provision in its
post-hearing response brief, or its proposed findings of fact (gov’t mot. at 4-5). In its
response to the motion for reconsideration, Chugach identified this as being a new
argument (app. resp. at 4-5). In reply, the government digs deep into the Rule 4 file to
find mentions of liquidated damages that were not cited in the Rule 11 briefing (gov’t

2
    The amount of the withholding is not specified in the Rule 11 briefing, but the
         contracting officer’s final decision references the amount as $1,663,634.80 (R4,
         tab 4-44 at GOV29305). It is unclear whether this amount includes the $439,353
         in specified deductions in FY15 (R4, tab 3-26 at GOV18659-60).

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                       DOCUMENT FOR PUBLIC RELEASE
    The decision issued on the date below is subject to an ASBCA Protective Order.
                   This version has been approved for public release.

reply at 1). We deny the government’s motion as it raises an argument that was not
raised in the post-hearing briefing. That said, our decision is based upon the record in
this appeal and did not hold that the Navy was prohibited from withholding payment for
late work. Rather, we held that the Navy had not established entitlement to withhold
payment.

                                    CONCLUSION

       For the reasons stated above, the government’s motion for partial reconsideration
is denied.

      Dated: October 24, 2023

                                                  DAVID D’ALESSANDRIS
                                                  Administrative Judge
                                                  Armed Services Board
                                                  of Contract Appeals

 I concur                                          I concur

 RICHARD SHACKLEFORD                               J. REID PROUTY
 Administrative Judge                              Administrative Judge
 Acting Chairman                                   Vice Chairman
 Armed Services Board                              Armed Services Board
 of Contract Appeals                               of Contract Appeals

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                       DOCUMENT FOR PUBLIC RELEASE
    The decision issued on the date below is subject to an ASBCA Protective Order.
                   This version has been approved for public release.

      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. 61320, Appeal of Chugach
Federal Solutions, Inc., rendered in conformance with the Board’s Charter.

      Dated: October 24, 2023

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

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