Strobe Data, Inc.

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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