Court Opinion

ID: 2752222
Source: CourtListenerOpinion
Date Created: 2014-11-17 19:00:10.077681+00
Date Added: 2024-06-11T11:26:41.769560
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                  )
                                              )
Environmental Safety Consultants, Inc.        )      ASBCA No. 58343
                                              )
Under Contract No. N62470-95-B-2399           )

APPEARANCE FOR THE APPELLANT:                        Mr. Peter C. Nwogu
                                                      President

APPEARANCES FOR THE GOVERNMENT:                      Ronald J. Borro, Esq.
                                                      Navy Chief Trial Attorney
                                                     Ellen M. Evans, Esq.
                                                      Senior Trial Attorney

               OPINION BY ADMINISTRATIVE JUDGE FREEMAN ON
                APPELLANT'S MOTION FOR RECONSIDERATION

       In our decision dated 25 July 2014, we granted in part the government's motion
to dismiss the appeal for lack of jurisdiction. We granted the motion to the extent of
the contractor's claimed amount of $897,082 in costs incurred that exceeded the
contract price at termination. As to those claimed costs we found that they had not
been timely submitted as claims for price adjustment to the contracting officer under
the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109, and accordingly,
were outside our jurisdiction. See Environmental Safety Consultants, Inc., ASBCA
No. 58343, 14-1BCAif35,681. Familiarity with that decision is assumed.

       Environmental Safety Consultants, Inc. (ESCI) moves for reconsideration
on various grounds. First it contends that its 22 October 2003 CDA claims for:
(i) additional work in the amount of $457,000 and (ii) breach damages in the amount
of$1,000,000 were "within the statutory period statute of limitation from June 12,
1998 when the Navy wrongfully terminated the Contract" (mot. at 9). We disagree.
The 22 October 2003 claims were found by this Board and the Court of Federal
Claims to have accrued prior to 22 October 1997 and were accordingly outside the
six-year CDA statute of limitations. See Environmental Safety Consultants, Inc.,
ASBCA No. 54615, 07-1BCAif33,483, and Environmental Safety Consultants, Inc.
v. United States, 97 Fed. Cl. 190 (2011).

       ESCI contends that its timely appeal of the default termination tolled the statute
of limitations as to its monetary claims until the default termination appeal was
decided (mot. at 10). We do not agree. To preserve its rights to assert price
adjustment and other monetary claims, all ESCI had to do was to timely submit them
for decision by the contracting officer as specified in the CDA. Such submission was
in no way hindered or precluded by the appeal of the default termination. Nor was
entitlement to the price adjustment and other monetary claims contingent on a
successful appeal of the default termination.

        With respect to our conclusion that the final contract price at termination was
the amount set in bilateral Modification No. P00006 ($561,873.25), ESCI contends
that "the parties signed the bilateral Contract Modification P00006 with the condition
precedent that the Government will be making payment for Invoice No. 7" (mot.
at 19). There is no reference in Modification No. P00006 to Invoice No. 7 as an
attachment or otherwise representing that the modification was contingent on payment
of the invoice (ASBCA No. 51722, R4, tab 2 at 11-12).

        ESCI contends that the Board erred by failing to acknowledge "the clear special
relationship between the government and small business concerns warranting equitable
tolling" (mot. at 6). ESCI states that as a small disadvantaged African-American
business it is entitled to the same standard for equitable tolling of the CDA statute of
limitations as was applied to the native association in Arctic Slope Native Ass 'n v.
Sebelius, 699 F.3d 1289 (Fed. Cir. 2012). In Arctic Slope, the Court held that
extraordinary circumstances and the "special relationship" 1 of the government with
Indian communities justified equitable tolling of the CDA statute of limitations for the
native association's claims against the government. The extraordinary circumstances
involved class actions in which Arctic Slope Native Association "reasonably relied
upon controlling authority, which held that it did not need to exhaust administrative
remedies to be a class member." Id. at 1298. There are no such extraordinary
circumstances in ESCI' s case. There was no "controlling authority" leading ESCI to
believe that a small disadvantaged contractor did not need to file a CDA claim within
the statutory time limit to recover its alleged increased costs and damages caused by
the government. Indeed, ESCI's filing of its 22 October 2003 CDA price adjustment
claims shows that it was well aware of the requirement. We also find nothing in Arctic
Slope implying that any special relationship of the government with small
disadvantaged businesses would alone, without extraordinary circumstances, be a
sufficient basis for tolling the CDA statute of limitations.

       In its 11 September 2014 amendment to its Motion for Reconsideration ESCI
argues that when Alternate I (Apr 1984) of the FAR 52.249-2 Termination clause is
specified, the paragraph (e) provision limiting the amount of the termination settlement
''whether under this paragraph (e) or paragraph (f) below" does not apply (amended

1
    The "special relationship" with Indian communities was defined by the Court as a
        relationship where the government's conduct must meet "the most exacting
        fiiduciary standards." 699 F.3d at 1298 (citing Seminole Nation v. United
        States, 316 U.S. 286, 297 (1942)).
                                            2
mot. at 3-4). Paragraph (t) in the basic clause applies to supply and service contracts.
Paragraph (t) in the Alternate I clause applies to construction contracts. Paragraph (e)
is the same in both the basic clause and the Alternate I clause. There is nothing in the
common paragraph (e) and nothing in the Alternate I, paragraph (t) stating or implying
that the paragraph (e) limitation does not apply to the Alternate I, paragraph (t).

       On reconsideration we find ESCI's arguments without merit and affirm our
decision of 25 July 2014.

       Dated: 7 November 2014

                                                ef:J::EtiE~
                                                 Administrative Judge
                                                 Armed Services Board
                                                 of Contract Appeals

I concur                                         I concur

~~#
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. 58343, Appeal of
Environmental Safety Consultants, Inc., rendered in conformance with the Board's
Charter.

       Dated:

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

                                           3