Nova group/tutor-saliba v. United States

In the United States Court of Federal Claims

No. 15-885C

(Filed: July 22, 2016)

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Contract Disputes Act, 41 U.S.C.

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§ 7101 et seq; Transfer; Time

NOVA GROUP/TUTOR-SALIBA, A Joint *

Limit for Appealing Contracting

Venture, *

Officer’s Decision; Time-Barred

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Appeal; Waiver of Sovereign

Plaintiff, *

Immunity.

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v. *

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THE UNITED STATES, *

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Defendant. *

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Gerald Scott Walters and Steven L. Reed, Smith Currie & Hancock, LLP, 2700 Marquis

One Tower, 245 Peachtree Center Avenue, NE, Atlanta, GA 30303, for Plaintiff.

Benjamin C. Mizer, Robert E. Kirschman, Jr., Steven J. Gillingham, and Adam E. Lyons,

United States Department of Justice, Civil Division, Commercial Litigation Branch, P.O. Box

480, Ben Franklin Station, Washington, D.C. 20044, for Defendant.

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OPINION AND ORDER DENYING PLAINTIFF’S MOTION TO TRANSFER

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WILLIAMS, Judge.

On May 31, 2016, Plaintiff filed an unopposed motion to transfer the above-captioned

case to the Armed Services Board of Contract Appeals (“ASBCA”) pursuant to 41 U.S.C. §

7107(d). Plaintiff represents that it presently has an appeal pending before the ASBCA arising

under the same contract at issue in this action. Because the claim pending in this Court would be

time-barred at the ASBCA and the claim pending in this Court involves wholly different facts

than the ASBCA claim, Plaintiff’s motion to transfer is denied.

Background

On May 2, 2008, the Naval Facilities Engineering Command (“NAVFAC”) awarded

Contract No. N44255-08-C-6000 for the design and construction of a ship repair wharf (“Pier

B”) at the Puget Sound Navy Shipyard in Bremerton, Washington to Plaintiff, Nova

Group/Tutor-Saliba. Nova Group/Tutor-Saliba v. United States, 125 Fed. Cl. 469, 470 (2016).

Although NAVFAC approved Plaintiff’s design submissions on November 12, 2009, the

project’s construction manager later questioned Plaintiff’s design on March 8, 2010. Id. In

response to the construction manager’s letter raising this design issue, Plaintiff stopped

construction and began a re-evaluation of the design, which lasted from March 8 until May 27,

2010. Id. at 471. As part of this re-evaluation, Plaintiff’s architect-engineer and designer of

record, KPFF Consulting (“KPFF”), hired an independent third-party designer, Ben C. Gerwick,

Inc. (“Gerwick”), to analyze KPFF’s original design. Id. Gerwick concluded that KPFF’s

design complied with the requirements of the contract and that KPFF had chosen an appropriate

design method. Id. Plaintiff resumed construction on May 27, 2010. Id. Upon resuming

construction, Plaintiff accelerated the remaining work, increasing manpower, equipment, and

overtime. Id.

Two Requests for Equitable Adjustment (“REA”) are implicated in the instant motion - -

REAs 9 and 14. In REA 14, the subject of the suit in this Court, Plaintiff seeks compensation for

the work stoppage and acceleration stemming from the design re-evaluation in 2010. Plaintiff

stated:

The Government issued Serial No. 0106, dated March 8, 2010 advising of Berger

ABAM’s concerns that the final approved design may not be in conformance with

the RFP . . . . The concern that the design was not in conformance with the RFP

required all work on Pier B to be stopped until these issues were resolved. This

delay impacted all Pier B work for several months and has required NTS to

accelerate the falsework operation to mitigate the delay to the construction

schedule.

Compl. Ex. 3, at 3.

In REA 9, the subject of the appeal before the ASBCA, Plaintiff raises a differing site

condition claim, stating:

REA #9 was assigned to differentiate the pile driving [Differing Site Condition]

and related issues between the Mole, REA #5 and Pier B. After completion of the

pile driving at the Mole Quay-wall, [American Civil Contractors], our pile driving

subcontractor moved to the adjacent Pier B footprint and experienced the same or

similar pile related problems at Pier B that it experienced at the Mole structure

including inability to drive to design tip elevation and alignment issues, all caused

by unknown subsurface conditions. Our design engineer attempted to mitigate the

issue by modifying the driving criteria, just as Berger/ABAM did at the Mole. In

both cases the criteria did not mitigate the uneven and variable elevations that

would typically have been identified by the Indicator Pile Program. The extra

scope of work includes the same elements as REA #5 but also includes additional

scope including: engineering review and design changes, falsework modifications

for bump-outs, reinforcing detailing and material changes, installation of 29

additional piles and CIP crossbeams. This work is ongoing and all associated cost

and schedule impacts are being compiled for inclusion into the REA.

Id. at 2. The contracting officer issued a final decision denying REA 14 on September 4, 2014,

and a final decision denying REA 9 on August 12, 2015. Pl.’s Mot. 3-4.

2

Plaintiff filed its complaint in this Court on August 17, 2015, appealing the contracting

officer’s final decision denying REA 14. On October 16, 2015, Defendant filed a motion to

dismiss Plaintiff’s complaint for failure to state a claim upon which relief could be granted,

arguing that Plaintiff failed to give timely written notice of its claim for constructive changes.

The Court denied Defendant’s motion on March 16, 2016, finding that Plaintiff’s failure to

timely provide written notice did not require dismissal of its complaint, as Plaintiff plausibly

alleged that Defendant had actual knowledge of Plaintiff’s work stoppage and acceleration.

Nova Group, 125 Fed. Cl. at 474. In the meantime, on November 4, 2015, Plaintiff appealed the

contracting officer’s denial of REA 9 to the ASBCA.

On April 6, 2016, Defendant filed an unopposed motion to stay this action solely based

on Plaintiff’s representation that it was considering requesting a transfer to the ASBCA. On

April 15, 2016, Plaintiff filed a status report indicating that it was still assessing whether to file a

motion to transfer. On May 31, 2016, Plaintiff filed the instant motion to transfer, representing

that Defendant did not oppose a transfer.

Discussion

Plaintiff seeks to transfer the instant case to the ASBCA, or, in the alternative, to transfer

the case currently pending before the ASBCA to this Court.

Plaintiff avers that because it did not timely file an appeal regarding REA 14 with the

Board, the ASBCA would not have jurisdiction over that appeal.1 Pl.’s Mot. 6-7 (“NTS had the

right to but did not timely file a Notice of Appeal with the ASBCA after receiving the CO’s final

decision denying NTS’s claim on REA 14. As such, the Board cannot now exercise jurisdiction

over a direct appeal since NTS failed to file an appeal within 90 days of the CO’s decision.”)

(internal citations omitted). Nonetheless, Plaintiff argues that this Court can bestow “derivative

jurisdiction” upon the ASBCA via a transfer, invoking Section 7107(d) of the Contract Disputes

Act (“CDA”). That provision states:

If 2 or more actions arising from one contract are filed in the United States Court

of Federal Claims and one or more agency boards, for the convenience of the

parties or witnesses or in the interest of justice, the United States Court of Federal

Claims may order the consolidation of the actions in that court or transfer any

actions to or among the agency boards involved.

41 U.S.C. § 7107(d) (2012). While the referenced provision authorizes transfer, it does not

speak to the propriety of transferring a case that would be time-barred.

1

The Contract Disputes Act requires that appeals to the Board be filed within 90 days of

receiving a contracting officer’s final decision. Section 7104 states that a “contractor, within 90

days from the date of receipt of a contracting officer’s decision . . . may appeal the decision to an

agency board . . .” or may appeal directly to the Court of Federal Claims “within 12 months from

the date of receipt of a contracting officer’s decision . . . .” 41 U.S.C. § 7104(a), (b)(3) (2012).

Plaintiff filed its appeal regarding REA 14 with this Court 11 months after the contracting officer

issued her final decision.

3

Plaintiff argues that the Federal Circuit’s decision in Glenn v. United States, 858 F.2d

1577 (Fed. Cir. 1988), would permit transfer to the Board even though that claim would be time-

barred at the Board. In Glenn, the contracting officer issued a liability decision which Glenn

appealed to the ASBCA. The contracting officer subsequently issued a quantum decision, which

Glenn appealed to the Claims Court, as he was outside of the 90-day time limit to file with the

ASBCA. Glenn sought transfer from the Claims Court to the ASBCA, but the trial court denied

Glenn’s motion, finding that a failure to appeal the contracting officer’s final decision on

quantum within the 90-day deadline could not be cured by a transfer from the court to the board.

Id. at 1578-79. The Federal Circuit disagreed, finding that because the quantum decision

“supplemented” the liability decision, the ASBCA had jurisdiction over both appeals, despite

Glenn’s failure to appeal the quantum decision within 90 days. Id. at 1581.

The Federal Circuit in Glenn articulated a narrowly circumscribed rule permitting

transfer to a forum where a supplement to a claim would be time-barred - - not the broad rule

Plaintiff attempts to construct here - - and emphasized the sui generis quality of Glenn. The

Court stated: “the unique circumstances of this case require that the Claims Court’s order be

vacated and the case be remanded to the Claims Court with instructions to transfer Glenn’s

appeal to the board, for consolidation with the appeal pending before that tribunal.” Id.

(emphasis added). The Court continued that even if the ASBCA determined that the quantum

decision did not supplement the liability decision, it “should nonetheless, in this particular and

unusual case, consolidate the two appeals” in order to “avoid the necessity of two tribunals

concurrently deciding appeals on interrelated issues and the possibility of inconsistent

decisions.” Id. (emphasis added). In Glenn, the quantum decision involved the same factual

circumstances as the liability decision and was a continuation of the liability decision, and

permitting adjudication of these two actions in different fora posed a risk of conflicting

decisions. Plaintiff is asking this Court to interpret Glenn, a “unique” and “unusual” case in a

manner that would greatly broaden its narrow holding and permit Plaintiff to circumvent the

statute of limitations governing appeals to the boards of contract appeals.

Plaintiff suggests that the unusual outcome in Glenn would justify consolidating a

differing site condition claim with a wholly separate acceleration claim stemming from a work

stoppage due to a design re-evaluation. The claim before the Board - - REA 9 - - is not a

continuation of REA 14, as was the case in Glenn, but rather is an entirely separate claim, based

upon different occurrences, at a different time, seeking different relief. Unlike in Glenn, there is

no risk of inconsistent decisions here if the tribunals were to grant one appeal and deny the other,

as the claims do not involve the same facts or legal issues. In the claim underlying this action,

REA 14, Plaintiff seeks a $1,881,900 price adjustment due to the re-evaluation of Pier B’s pile

design and the subsequent acceleration of construction activities due to the work stoppage that

occurred during the March 8 to May 27, 2010 re-evaluation period. Pl.’s Mot. 3-4. In REA 9, a

differing site condition claim pending at the ASBCA, Plaintiff seeks a $10,498,284.85 price

adjustment for additional costs incurred in the design modification and construction of a subset

of Pier B’s piles, due to an unexpected subsurface condition in the ground contour of the site.

Pl.’s Mot. Ex. 2. Because the differing site condition claim at the Board involves wholly

separate factual and legal issues than the work stoppage claim pending at the Court, Glenn is

distinguishable and does not warrant transfer.

4

The main impediment to transfer, however, is that this procedural tack would permit

Plaintiff to pursue its work stoppage claim in a forum where that claim would be time-barred.

Plaintiff contends that this Court has the authority to transfer this action even though it would

have been time-barred at the Board. In so arguing, Plaintiff presumes that the 90-day time limit

for filing at the Board is not jurisdictional. But that presumption may not be accurate, as the

Federal Circuit has expressly reserved ruling on whether or not the filing deadline in the CDA is

jurisdictional. See Guardian Angels Med. Serv. Dogs, Inc. v. United States, 809 F.3d 1244,

1252 (Fed. Cir. 2016) (stating that the court need not “decide whether compliance with the

twelve-month filing period set out in section 7104(b)(3) is a jurisdictional requirement”).2

It would not be prudent for this Court to transfer a case to a forum which might lack

jurisdiction. In the event the CDA’s filing deadline is ultimately determined to be jurisdictional,

transferring could have a deleterious effect as the Board would lack jurisdiction over the

transferred claim and its decision would be a nullity. See Schmittling v. Dep’t of Army, 219

F.3d 1332, 1337 (Fed. Cir. 2000) (stating that if a Board lacks jurisdiction, it “is without

authority to decide the issues presented” and that without jurisdiction, “the Board’s decision on

the merits of a petition is a nullity”); Nat’l Neighbors, Inc. v. United States, 839 F.2d 1539,

1542 (Fed. Cir. 1988) (stating that an “untimely appeal to the board is an absolute nullity

because the board lacks jurisdiction over such an appeal”); Cosmic Constr. Co. v. United States,

697 F.2d 1389, 1390 (Fed. Cir. 1982) (finding that the 90-day deadline for a contractor to

2

In Guardian Angels Medical Service Dogs, Inc., the court noted that the Supreme Court

recently stated that filing deadlines are ordinarily not jurisdictional, citing Sebelius v. Auburn

Regional Medical Center, 133 S. Ct. 817, 825 (2013), United States v. Kwai Fun Wong, 135 S.

Ct. 1625, 1632 (2015), and Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 439-42

(2011). 809 F.3d 1244, 1252 (Fed. Cir. 2016). The statute at issue in Auburn Regional Medical

Center, 42 U.S.C. § 1395oo(a)(3), states that a health care provider “may obtain a hearing” by

the Provider Reimbursement Review Board regarding reimbursement for services provided to

Medicare beneficiaries so long as the request is made within 180 days of a final determination by

government contractors known as fiscal intermediaries. Auburn Reg’l Med. Ctr., 133 S. Ct. at

824. The Court held that the provision “does not speak in jurisdictional terms,” and that

Congress’ choice of language did not reveal “a design to preclude any regulatory extension.” Id.

(internal citation and quotation marks omitted). Kwai Fun Wong involved the statute of

limitations for bringing a claim in district court under the Federal Tort Claims Act, 28 U.S.C. §

2401(b), and stated that in “enacting the FTCA, Congress . . . provided no clear statement

indicating that § 2401(b) is the rare statute of limitations that can deprive a court of jurisdiction.”

135 S. Ct. at 1629, 1632. Finally, Henderson addressed 38 U.S.C. § 7266(a), which states that a

veteran appealing a denial by the Board of Veterans’ Appeals must do so within 120 days of the

mailing of the Board’s final decision. 562 U.S. at 433-34. The Henderson Court held that this

deadline “does not have jurisdictional attributes,” as there was no evidence of Congressional

intent that the “provision was meant to carry jurisdictional consequences.” Id. at 441. The court

also noted its holding in Sikorsky Aircraft Corp. v. United States, which stated that the six-year

statute of limitations in Section 7103 of the CDA “does not create a jurisdictional bar” because it

“does not have any special characteristic that would warrant making an exception to the general

rule that filing deadlines are not jurisdictional.” Guardian Angels Med. Serv. Dogs, Inc., 809

F.3d at 1252 (internal citation and quotation marks omitted).

5

appeal a contracting officer’s final decision is “part of a statute waiving sovereign immunity,

which must be strictly construed, and which defines the jurisdiction of the tribunal, here the

[ASBCA]”) (internal citations omitted); Gregory Lumber Co. v. United States, 229 Ct. Cl. 762,

763 (1982) (finding that Congress set a 12-month limit for a contractor to appeal a contracting

officer’s final decision in this Court, thus “this court cannot and should not read into it

exceptions and tolling provisions Congress did not contemplate or authorize”) (internal citation

omitted); Jacobs Eng’g Grp., Inc. v. United States, 75 Fed. Cl. 752, 760 n.9 (2007); States

Roofing Corp. v. United States, 70 Fed Cl. 299, 300 (2006) (stating that the 90-day period for

appealing to the Board is a jurisdictional limitation that may not be waived); Olsberg

Excavating Co. v. United States, 3 Cl. Ct. 249, 252 (1983).3

Finally, the practical reason Plaintiff constructs to support transfer is not persuasive.

Plaintiff argues that the appeal proceeding before the ASBCA, filed two and a half months after

this suit, and spawning no published decision, “has progressed further” than the lawsuit

proceeding before this Court. Pl.’s Mot. 15 (stating that the appeal pending before the ASBCA

“is proceeding at a much faster clip,” as Plaintiff has already filed its complaint in that appeal,

Defendant has submitted its Rule 4 submission and answer to the complaint, written discovery

has been served by both parties, and fact discovery is anticipated to close by November 30,

2016); see Nova Group, 125 Fed. Cl. at 474. Even accepting Plaintiff’s suggestion that its Board

appeal is farther along than this action, that circumstance is wholly due to Plaintiff’s own

procedural tacks in both fora.4 Plaintiff represented that it wished to stay proceedings in this

Court in order to determine whether it would seek to transfer this matter to the ASBCA. See

Def.’s Mot. to Stay 1; Pl.’s Status Report 1. Although Defendant ultimately requested the stay

on April 6, 2016, because it had a filing deadline, the sole reason supporting the request was

Plaintiff’s deliberations over whether it would seek a transfer. Def.’s Mot. to Stay 1. Written

discovery completed at the Board can be used in this proceeding as appropriate.

In short, the procedural posture of these matters especially at this early stage should not

be used to effect an end run around a filing deadline that may be jurisdictional. In any event, the

alternative relief Plaintiff requested can achieve Plaintiff’s goal of resolving these appeals in a

single forum. As such, the Court grants Plaintiff’s alternative request to transfer the ASBCA

case to this Court where there is no timeliness issue.

3

Plaintiff also relies on Southwest Marine, Inc. on Behalf of Universal Painting &

Sandblasting Corp. v. United States, 680 F. Supp. 327 (N.D. Cal. 1988), decided nine months

before Glenn. In Universal Painting, the plaintiff sought transfer to the ASBCA of a case that

would have been time-barred before the Board. The district court permitted transfer, interpreting

the CDA to allow transfer of “any” case, not only those filed within 90 days. The district court

noted that neither party was able to provide either a court or Board decision resolving the

question of whether a Board could accept a transfer of a time-barred case. Universal Painting is

not binding, and this Court declines to adopt its rationale in light of Guardian Angels Medical

Service Dogs, Inc., Cosmic Construction and its progeny, and the uncertainty surrounding

whether the CDA’s 90-day and 12-month filing deadlines are jurisdictional.

4

The same counsel represents Plaintiff at the ASBCA and in this action.

6

Conclusion

Plaintiff’s motion to transfer the instant action to the Armed Services Board of Contract

Appeals is DENIED, and Plaintiff’s alternative request to transfer the ASBCA appeal to this

Court is GRANTED.

Pursuant to 41 U.S.C. § 7107(d), Plaintiff’s pending appeal before the ASBCA, No.

60312, shall be transferred to this Court and consolidated with Plaintiff’s claim pending before

this Court in the above-captioned case. The Clerk shall serve a copy of this order on the Acting

Chairman of the ASBCA.

The Court will convene a telephonic status conference on September 15, 2016, at 11:00

a.m. E.D.T. The Court will initiate the call.

s/Mary Ellen Coster Williams

MARY ELLEN COSTER WILLIAMS

Judge

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