Seh Ahn Lee v. United States

In the United States Court of Federal Claims

No. 15-1555C

(Filed: August 24, 2016)

)

SEH AHN LEE, et al., ) Claims for civilian pay and breach of

) contract; Back Pay Act, 5 U.S.C. § 5596;

Plaintiffs, ) absence of appointment to the civil service;

) implied contract precluded by an express

v. ) contract dealing with the same subject;

) dismissal pursuant to RCFC 12(b)(1) and

UNITED STATES, ) (6)

)

Defendant. )

)

John P. Pierce, Themis PLLC, Washington, D.C., for plaintiffs. With Mr. Pierce at the

hearing and on the briefs were David L. Engelhardt and Michael Cone, Themis PLLC,

Washington, D.C.

Hillary A. Stern, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,

United States Department of Justice, Washington, D.C., for defendant. With her at the hearing

was Elizabeth Parish, Interim General Counsel, Broadcasting Board of Governors, Washington,

D.C. With Ms. Stern on the briefs were Benjamin C. Mizer, Principal Deputy Assistant Attorney

General, Civil Division, and Robert E. Kirschman, Jr., Director, and Steven J. Gillingham,

Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of

Justice, Washington, D.C.

OPINION AND ORDER

LETTOW, Judge.

Plaintiffs Seh Ahn Lee, Irina Ryan, Ahmad Nariman, and Mark Peach claim they are

entitled to civilian pay and damages for breach of contract, alleging that the Broadcasting Board

of Governors (“Broadcasting Board” or the “Board”), an independent agency of the United

States (the “government”), denied plaintiffs full compensation and benefits for their work as

contractors for the agency. Plaintiffs assert that although they were hired by the Broadcasting

Board as purchase order vendors (or nonpersonal service contractors), they were in reality acting

in the capacity of personal service contractors. Plaintiffs assert that they should be awarded

monetary relief under the Back Pay Act, 5 U.S.C. § 5596, for certain wages, benefits, and tax

payments to which they would have been entitled if their contracts had been properly classified

as personal service contracts. Alternatively, plaintiffs claim they should receive monetary

damages as a result of the government’s breach of an implied contract for compensation

commensurate with their services in the capacity of personal service contractors. Plaintiffs have

included class allegations in their complaint and amended complaint, contending that

“approximately 660 persons [at the Board] have been providing personal services by means other

than by federal appointment at any given time, including at present.” Am. Compl. ¶ 102, ECF

No. 7. In that connection, plaintiffs have filed a motion to certify a class of persons who are said

to have worked in the capacity of personal service contractors. Pls.’ Mot. to Certify Class, ECF

No. 17.

Pending before the court is the government’s motion to dismiss plaintiffs’ complaint

pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the United States Court of Federal

Claims (“RCFC”). Regarding plaintiffs’ civilian pay claim, the government asserts that plaintiffs

have failed to state a valid claim for relief because the Back Pay Act only applies to government

“employees” as defined by 5 U.S.C. § 2105(a), and plaintiffs have not alleged they fall within

this defined group. Def.’s Mot. to Dismiss (“Def.’s Mot.”) at 7-8, ECF No. 12. Regarding

plaintiffs’ breach of contract claim, the government argues that this court lacks subject matter

jurisdiction because, under the Contract Disputes Act (“CDA”) of 1978, recodified at 41 U.S.C.

§§ 7101-7109, plaintiffs must first submit a claim to the appropriate contracting officer, and they

have not done so. Def.’s Mot. at 5-7.

The motions have been briefed and were addressed at a hearing on August 16, 2016. For

the reasons discussed, the government’s motion to dismiss plaintiffs’ complaint is GRANTED,

and plaintiffs’ motion to certify a class is DENIED as moot.

BACKGROUND

The Broadcasting Board was established in 1994 to streamline management of the

government’s international broadcasting activities through organizations such as Voice of

America, Radio Free Europe, and Radio Martí. See United States International Broadcasting Act

of 1994, Pub. L. No. 103-236, §§ 301-15, 108 Stat. 382 (1994) (codified at 22 U.S.C. §§ 6201-

16); see also Am. Compl. ¶ 21; 5 U.S.C. § 104(1). The Board initially operated as part of the

United States Information Agency, but it became an independent government agency in 1999

under the general oversight of the Secretary of State, who serves as one of the nine voting

members of the Board. See Omnibus Consolidated and Emergency Supplemental

Appropriations Act of 1999, Pub. L. No. 105-277, § 1323, 112 Stat. 2681 (1998).

Plaintiffs are four individuals who provided services to various elements of Voice of

America – an organization within the Broadcasting Board – either directly through individual

purchase order vendor contracts or as independent subcontractors to staffing agencies under

prime contracts with the Board. Am. Compl. ¶¶ 22-25. Mr. Lee is a naturalized U.S. citizen

from South Korea who has worked as a contractor for nearly 13 years, including under a

subcontract with Technologist, Inc. Am. Compl. ¶ 22. Ms. Ryan is a naturalized U.S. citizen

from Russia who has worked as a contractor for approximately nine years, including through a

subcontract with Computer Technology Services, Inc. Am. Compl. ¶ 23. Mr. Nariman is a

naturalized U.S. citizen from Iran who formerly worked as a contractor for approximately six

years from 2007 to 2013. Am. Compl. ¶ 24. Mr. Peach is a U.S. citizen who has worked as a

contractor for approximately eight years. Am. Compl. ¶ 25. As noted earlier, plaintiffs allege

that approximately 660 potential class members served under similar contracts with the Board.

Am. Compl. ¶ 9.

2

In 2013, the Department of State’s Office of Inspector General (“OIG”) conducted an

audit of the Board’s Office of Contracts “to evaluate whether [the Board] had adequate

acquisition policies and procedures and to assess the efficacy of those policies and procedures.”

Pls.’ Opp’n to Def.’s Mot. to Dismiss (“Pls.’ Opp’n”) Ex. A, at 1 (Audit of the Broadcasting

Board of Governors Administration and Oversight of Acquisition Functions (June 2014) (“OIG

Report”)), ECF No. 15-2. As a result of its audit, OIG concluded that, among other things, the

“[Board] awarded contracts that were personal in nature, resulting in [the Board] exceeding its

statutory authority to award personal service[] contracts.” Id. In its analysis, OIG used the

definition of a personal service contract in 48 C.F.R. (Federal Acquisition Regulations, or

“FAR”) § 37.104(a), which states that such a contract “is characterized by the employer-

employee relationship it creates between the [g]overnment and the contractor’s personnel.” Id.

at 10. OIG looked to the following six factors outlined in FAR § 37.104(d) to assess whether

certain Broadcasting Board contracts were personal service contracts:

(1) Performance on site.

(2) Principal tools and equipment furnished by the [g]overnment.

(3) Services are applied directly to the integral effort of agencies or an

organizational subpart in furtherance of assigned function or mission.

(4) Comparable services, meeting comparable needs, are performed in the same

or similar agencies using civil service personnel.

(5) The need for the type of service provided can reasonably be expected to last

beyond one year.

(6) The inherent nature of the service, or the manner in which it is provided

reasonably requires directly or indirectly, [g]overnment direction or

supervision of contractor employees in order to –

(i) Adequately protect the [g]overnment’s interest;

(ii) Retain control of the function involved; or

(iii) Retain full personal responsibility for the function supported in a

duly authorized [f]ederal officer or employee.

Id. at 10-11 (quoting FAR § 37.104(d)) (correcting typographical errors in the quotations as

stated in the OIG report).

OIG noted that the FAR generally prohibits personal service contracts “without explicit

statutory authority.” OIG Report at 10 (citing FAR § 37.104(b)).1 In terms of the Broadcasting

Board’s contracting efforts, the Foreign Relations Authorization Act, Fiscal Year 2003, Pub. L.

No. 107-228, § 504, 116 Stat. 1350 (2002) (codified at 22 U.S.C. § 6206 note) established a pilot

program in which the Director of the International Broadcasting Bureau (an office within the

Broadcasting Board) is authorized to hire up to 60 “United States citizens or aliens” under

1

The pertinent regulation states: “The [g]overnment is normally required to obtain its

employees by direct hire under competitive appointment or other procedures required by the civil

service laws. Obtaining personal services by contract, rather than by direct hire, circumvents

those laws unless Congress has specifically authorized acquisition of the services by contract.”

FAR § 37.104(a).

3

personal service contracts not to exceed two years in duration. Id. at 10 & n.13.2 OIG found

that, “[b]ased on an estimate provided by an agency official,” during the pertinent time (fiscal

years 2011 and 2012), the Broadcasting Board “awarded approximately 660 services contracts

that may have been personal in nature, 44 of which, according to [Board] officials, were

appropriately classified as [personal service contracts].” Id. at 10; see also id. at 75 (defining the

scope of OIG’s analysis of the Board’s domestic contracts). OIG also performed its own

analysis in which it “selected and reviewed 23 service[] contracts and found that 13 were labeled

as nonpersonal service[] contracts, 5 were identified as [personal service contracts], 2 were

identified both as a [personal service contract] and a nonpersonal service[] contract, and 3 had no

indication of whether they were personal or nonpersonal service[] contracts.” Id. at 11-12

(footnotes omitted). Of the 16 contracts that were either identified as nonpersonal service

contracts or not classified, OIG determined that at least 14 should have been classified as

personal service contracts under the criteria in FAR § 37.104(d). Id. at 12-14. By extrapolating

from this sample of contracts, OIG “concluded that [the Board] likely exceeded the statute’s

limit on the number of [personal service contracts] employed by awarding an overwhelming

majority of all services contracts as nonpersonal service[] contracts, though they were personal in

nature.” Id. at 15.3

The Broadcasting Board disagreed with OIG’s determination that it had exceeded its

statutory authority, asserting that the contracts in question were not personal service contracts but

rather “purchase order vendor” contracts, which are not subject to the same limitations. OIG

Report at 16-17; see also id. at 94-96 (Letter from Richard M. Lobo, Director, International

Broadcasting Bureau, to Steve A. Linick, Inspector General, Department of State (Nov. 22,

2013)). Nevertheless, the Board indicated that it would move away from entering into purchase

order vendor contracts and instead use staffing agencies that would subcontract for the requisite

services to alleviate the concerns raised in the OIG report. OIG Report at 17. The Board also

stated that it would “reissue clear guidance to each manager about the distinction between

independent contractors and personal service[] contractors.” Id.

2

Under the terms of the statute, this pilot program was to “terminate on December 31,

2005,” and all contracts under the program were to remain in effect no longer than six months

beyond this date. 22 U.S.C. § 6206 note, subsection (c). According to the OIG report, “[t]his

provision [of the authorization act] was extended each year via appropriations bills or continuing

resolutions, keeping the authority in effect through September 30, 2014.” OIG Report at 11. At

the hearing held on August 16, 2016, the court was advised that this authorization remains in

effect. Hr’g Tr. 7:5-14 (Aug. 16, 2016) (The date will be omitted from further citations to the

transcript of the hearing.).

3

OIG also concluded that the Broadcasting Board did not comply with certain procedural

requirements of the personal service contract pilot program, observing that some of the contracts

exceeded two years in duration, and, in certain cases, the Director of the International

Broadcasting Bureau did not directly approve the contract, nor did he or she make the required

“determination that personnel resources were insufficient or that the need was not permanent.”

OIG Report at 14-15 (citing 22 U.S.C. § 6206 note, subsection (b)).

4

Plaintiffs filed their original complaint on December 21, 2015, followed by an amended

complaint on March 7, 2016. Specifically, they allege that their contracts with the Broadcasting

Board, as well as those of other potential class members, fall within the type of contracts that,

according to the OIG’s analysis, should have been classified as personal service contracts. Am.

Compl. ¶¶ 73-78. Accordingly, plaintiffs allege that they are entitled to additional compensation

and benefits – including rates of pay commensurate with the General Schedule rates applicable to

federal employees, paid leave and holidays, retirement and insurance benefits, and certain tax-

related benefits – that are provided to personal service contractors under internal Department of

State rules and the rules of similar agencies. Am. Compl. ¶¶ 85-93. Plaintiffs advance two

alternative claims that they are entitled to monetary relief: (1) that they are entitled to back pay

and other monetary relief under the Back Pay Act and related statutes and regulations, Am.

Compl. ¶¶ 94-98, 108-15; and (2) that they are entitled to monetary damages because the

government has breached implied contracts with plaintiffs to compensate them in the same

manner as contractors performing under actual personal service contracts, Am. Compl. ¶¶ 116-

26.

ANALYSIS

A. Count One: Plaintiffs’ Claim for Monetary Relief Under the Back Pay Act

In its motion to dismiss, the government argues that Count One of plaintiffs’ complaint

should be dismissed for failure to state a claim upon which relief can be granted under RCFC

12(b)(6) because they have not alleged that they are or were “employees” of the federal

government within the meaning of the Back Pay Act, 5 U.S.C. § 5596. Def.’s Mot. at 7-8. The

Back Pay Act authorizes the payment of previously earned wages to “[a]n employee of an

agency who, on the basis of a timely appeal or an administrative determination . . . is found by an

appropriate authority under applicable law, rule, regulation, or collective bargaining agreement,

to have been affected by an unjustified or unwarranted personnel action which has resulted in the

withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee.” 5

U.S.C. § 5596(b)(1). For the purposes of Title 5 of the United States Code, an “employee” is

defined as “an individual who is . . . appointed in the civil service” by a federal employee acting

in an official capacity. 5 U.S.C. § 2105(a)(1). The government argues that although plaintiffs

claim they were providing “personal services” to the government “in the manner of federal

employees,” e.g., Am. Compl. ¶ 4, they do not allege they were ever actually appointed to the

civil service, Def.’s Mot. at 7-8. Therefore, the government asserts that plaintiffs have failed to

state a cognizable claim under the provisions of the Back Pay Act. Id.

The court agrees that Count One of plaintiffs’ amended complaint must be dismissed,

but for a more fundamental reason. Before the court can consider whether plaintiffs have stated

a claim upon which relief can be granted under RCFC 12(b)(6), the court “must first consider

whether jurisdiction is proper.” Herrmann v. United States, 124 Fed. Cl. 56, 67 n.18 (2015)

(citing Greenlee Cnty. v. United States, 487 F.3d 871, 876 (Fed. Cir. 2007); Reynolds v. Army &

Air Force Exch. Serv., 846 F.2d 746, 747 (Fed. Cir. 1988)); see also Mendoza v. United States,

87 Fed. Cl. 331, 335 (2009) (“Only after completing this initial jurisdictional inquiry will the

court address the specific question of whether the facts in the plaintiffs’ case [state a claim upon

5

which relief can be granted].”).4 In this instance, plaintiffs invoke this court’s jurisdiction under

the Tucker Act, which grants the court “jurisdiction to render judgment upon any claim against

the United States founded . . . upon the Constitution, or any Act of Congress or any regulation of

an executive department.” 28 U.S.C. § 1491(a)(1); see also Am. Compl. ¶ 17 (invoking this

court’s jurisdiction under the Tucker Act). However, the Tucker Act alone cannot serve as a

basis for this court’s jurisdiction; a plaintiff also “must identify a separate source of substantive

law that creates the right to money damages.” Fisher v. United States, 402 F.3d 1167, 1172

(Fed. Cir. 2005) (en banc in relevant part). The Back Pay Act can serve as such a “money

mandating” statute when it is invoked as a basis for monetary relief for “violations of [other]

statutes or regulations covered by the Tucker Act.” Mendoza, 87 Fed. Cl. at 335 (quoting

Worthington v. United States, 168 F.3d 24, 26 (Fed. Cir. 1999)); see also United States v.

Connolly, 716 F.2d 882, 887 (Fed. Cir. 1983) (en banc) (the Back Pay Act “is merely derivative

in application,” and therefore must be coupled with allegations of other violations of statutes or

regulations within the purview of the Tucker Act). Nonetheless, the Court of Federal Claims has

jurisdiction under the Back Pay Act only for claims of “presently due money damages.” Todd v.

United States, 386 F.3d 1091, 1095 (Fed. Cir. 2004). “[T]he long-standing rule [is] that ‘one is

not entitled to the benefit of a position until he has been duly appointed to it.’” Id. at 1095

(quoting United States v. Testan, 424 U.S. 392, 402 (1976)). That rule applies “even though he

may have performed the duties of another position or claims that he should have been placed in a

higher grade.” Testan, 424 U.S. at 406. Without first obtaining the appointment, such a plaintiff

has no claim for “presently due” money, and the court must dismiss the case for lack of

jurisdiction. Caraway v. United States, 123 Fed. Cl. 527, 533 (2015) (citing Todd, 386 F.3d at

1095) (dismissing a case for lack of jurisdiction when plaintiffs alleged that they should have

been promoted), appeal pending, No. 16-1322 (Fed. Cir.).

In connection with their Back Pay Act claim, plaintiffs allege that the Broadcasting Board

violated numerous statutes, regulations, and internal agency rules pertaining to compensation for

federal employees and contractors. Am. Compl. ¶¶ 85-93, 115 (citing various sections of Titles

5, 21, and 29 of the United States Code, which pertain to employee compensation and tax

contributions, as well as sections of Titles 5 and 48 of the Code of Federal Regulations, which

apply to federal employees and contractors, respectively). In this connection, plaintiffs must

make “a nonfrivolous assertion that [they are] within the class of plaintiffs entitled to recover

under the money-mandating source.” Mendoza, 87 Fed. Cl. at 335 (quoting Jan’s Helicopter

Servs., Inc. v. Federal Aviation Admin., 525 F.3d 1299, 1307 (Fed. Cir. 2008)). Because

plaintiffs have invoked the Back Pay Act as the money-mandating statute, they must accordingly

make a non-frivolous assertion that they fall within the class of individuals covered by the statute

– in other words, “employees” defined under 5 U.S.C. § 2105(a) as individuals “appointed in the

civil service.” See Greenlee Cnty., 487 F.3d at 877 (finding the Court of Federal Claims had

4

In its motion to dismiss, the government did not challenge the court’s subject matter

jurisdiction over Count One of plaintiffs’ complaint. See Def.’s Mot. at 5-6 (focusing its

jurisdictional challenge under RCFC 12(b)(1) on Count Two of the complaint). Nevertheless,

“[s]ubject-matter jurisdiction may be challenged at any time by the parties or by the court sua

sponte.” Folden v. United States, 379 F.3d 1344, 1354 (Fed. Cir. 2004) (citing Fanning,

Phillips, Molnar v. West, 160 F.3d 717, 720 (Fed. Cir. 1998) (“[The court] therefore ha[s] a

special obligation to satisfy [itself] of [its] own jurisdiction.”)).

6

subject matter jurisdiction because the plaintiff had established it was a “unit of local

government” within the meaning of the money-mandating statute pertinent in that case, i.e., the

Payment in Lieu of Taxes Act). Here, the plaintiffs allege that they were “never” appointed, Am.

Compl. ¶¶ 10, 102, but that they “should have been,” Am. Comp. ¶ 14. Because the plaintiffs

acknowledge that they were not appointed to the civil service, they cannot invoke jurisdiction

under the Back Pay Act. See Todd, 386 F.3d at 1095.

The court is not persuaded by plaintiffs’ citation to FAR § 37.104(a), which states that a

“personal service[] contract is characterized by the employer-employee relationship it creates

between the [g]overnment and the contractor’s personnel,” Am. Compl. ¶ 33, nor by their related

assertion that they “were providing personal services in the manner of federal employees,” Am.

Compl. ¶ 25.5 This is not the same as alleging that plaintiffs were in fact appointed to the civil

service during the relevant time period. In responding to the government’s motion to dismiss,

plaintiffs concede that they were not appointed to the civil service, but they assert that the

government’s “argument ignores the most important fact of the case: the [Broadcasting Board]

used illegal contracts fraught with material misrepresentations to lure [p]laintiffs and [m]embers

of the proposed [c]lass into providing personal services without the appointments to federal

service to which they were entitled.” Pls.’ Opp’n at 10.6 Plaintiffs further assert that “[n]o

5

In full, subsections (a) and (b) of FAR § 37.104 state:

(a) A personal services contract is characterized by the employer-employee

relationship it creates between the Government and the contractor’s personnel.

The Government is normally required to obtain its employees by direct hire

under competitive appointment or other procedures required by the civil

service laws. Obtaining personal services by contract, rather than by direct

hire, circumvents those laws unless Congress has specifically authorized

acquisition of the services by contract.

(b) Agencies shall not award personal services contracts unless specifically

authorized by statute (e.g., 5 U.S.C. 3109) to do so.

FAR § 37.104(a), (b).

6

Plaintiffs also assert that OIG determined that the Broadcasting Board engaged in

“fraud,” and that the Board has conceded this fraud. See, e.g., Am. Compl. ¶ 62 (“The [Board]

admitted that it deliberately mis-labeled contracts as if providing non-personal services in

knowing violation of law to avoid paying the compensation that was due to [p]laintiffs and

[c]lass [m]embers as providers of personal services.”); Pls.’ Opp’n at 1 (“The Inspector General

uncovered the agency-wide frauds in 2014 . . . . The [Board’s] leadership ultimately admitted

the essential facts of this case.”); id. at 4 (“Since at least 2010, the [Board’s] leadership has

known that its contracting officers were fraudulently labeling contracts for ‘non-personal

services’ . . . . Internally, the [Board] admitted that these findings were not only correct, but

were applicable to almost its entire roster of 660 contractors.”). The record is not so categorical,

however. The OIG report does not state that the Board engaged in fraud; it postulates that the

Board’s contracting officials “did not know the difference between personal and nonpersonal

service[] contracts,” or “may not have been fully aware of or properly trained on the proper

7

[c]ourt has issued a published decision that denies applicability of the [Back Pay] Act when the

lack of federal appointment is due solely to the agency’s fraud against its workers.” Id. at 11.

Even if these allegations of intentional error on the government’s part are taken as true,

plaintiffs have cited no authority to establish that “fraud” in a contract, or in the inducement to a

contract, would serve to convert a contract employee to a civil service appointee for the purposes

of claiming entitlement to monetary relief under the Back Pay Act. See Costner v. United States,

665 F.2d 1016, 1020 (Ct. Cl. 1981) (finding that even when a particular type of contract with the

government was “not legally authorized,” “there is no implication that the proper remedy is

retroactively to make [the contractors] employees” for the purposes of a claim under the Back

Pay Act); see also id. at 1021 (declining to apply common law to determine whether an

employer-employee relationship existed, observing that the requirements of the Back Pay Act are

more stringent).7 The situation might be different if plaintiffs were alleging that when they

implementation and specific limitations of applicable statutes.” OIG Report at 15. And,

plaintiffs have not provided any evidence that the Board has conceded it committed fraud against

its contractors. In its fifth and final response to the OIG report, the Board acknowledged that “it

cannot employ personal services contractors in excess of those authorized,” but stated that “the

Agency continues to assert, as a legal matter, that its use of independent contractors is consistent

with the FAR.” OIG Report at 102.

7

Plaintiffs assert that “on the same facts, the IRS and a U.S. district court entered three

separate rulings that ignored the [Broadcasting Board’s] fraudulent labeling of contracts and

granted contractors certain statutory rights of appointed employment.” Pls.’ Opp’n at 10. As the

“three separate rulings,” plaintiffs cite (1) Almutairi v. International Broad. Bureau, 928 F.

Supp. 2d 219 (D.D.C. 2013), (2) the internal Board memorandum from December 2013 in

response to the OIG report, and (3) their own amended complaint at paragraph 72, which

describes the Almutairi case. Id. Accordingly, plaintiffs only cite one “ruling[],” and they

mischaracterize that decision, which, in any event, is inapplicable to the present case.

The Almutairi case does not address the question of whether alleged “fraudulent labeling

of contracts” gives plaintiffs “statutory rights” to recovery under the Back Pay Act. That case

involved a factual dispute over whether an individual (Mr. Almutairi) had applied for a civil

service position or a purchase order vendor contract. Almutairi, 928 F. Supp. 2d at 226. After

addressing this dispute, the district court examined whether Mr. Almutairi could still sue the

government for discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”),

codified at 42 U.S.C. § 2000e et seq., and the Rehabilitation Act of 1973, codified at 29 U.S.C. §

701 et seq., even if he had only applied for a purchase order vendor contract. Id. at 229. The

district court noted that both Title VII and the Rehabilitation Act allow discrimination suits by

“employees or applicants for employment.” Id. (citing 42 U.S.C. § 2000e-16 and 29 U.S.C. §

794a(a)(1)). Unlike the Back Pay Act, however, the remedies provided under Title VII and the

Rehabilitation Act are not limited to civil service appointees; they apply to all employees and

applicants for employment. See, e.g., 42 U.S.C. § 2000e(f) (Title VII definition of an

“employee” as “an individual employed by an employer”). Therefore, the district court’s

discussion of whether Mr. Almutairi qualified as an “employee” (or, more precisely, an

“applicant for employment”) for the purposes of his discrimination claim has no bearing on this

8

signed a contract with the government, they thought they were actually being appointed to the

civil service because of misrepresentations by the government. But that is not the circumstance

alleged in the complaint. Plaintiffs in essence assert that to procure the type of work they were

performing, the Broadcasting Board should have entered into personal service contracts with

them, or if that contract option was unavailable (for example, because the Board had already

reached the statutory limit for such contracts), the Board should have appointed them to the civil

service. Am. Compl. ¶¶ 4, 10; see also Am. Compl. ¶ 27 (noting that Broadcasting Board had

the option of issuing up to 60 personal service contracts or appointing staff to the civil service).

What the Board should have done is irrelevant to the question of whether plaintiffs can establish

jurisdiction in this court under the Back Pay Act. See Testan, 424 U.S. at 407 (holding that

appointment is a prerequisite even if the plaintiff claims he “should have been placed in a higher

grade”) (emphasis added)). The operative circumstance is that plaintiffs have not alleged, nor

does it appear that they could non-frivolously allege, that they were in fact appointed to the civil

service by the Board. Accordingly, Count One of plaintiffs’ complaint must be dismissed for

lack of subject matter jurisdiction.

Even if plaintiffs’ Count One claim were to be interpreted as an implied assertion that

they were “employees” within the definition of the Back Pay Act, that claim would have to be

dismissed for failure to state a claim under RCFC 12(b)(6). Under the standards for a motion

under RCFC 12(b)(6), the court must examine whether the complaint “contain[s] sufficient

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft

v. Iqbal, 556 U.S. 662, 678, (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007)). As applicable here, “[t]he question of whether a government employee is serving by

contract or appointment depends upon the ‘relevant statutory language and regulations and the

language of the hiring documents.’” Calvin v. United States, 63 Fed. Cl. 468, 472 (2005)

(quoting American Fed’n of Gov’t Employees Local 1 v. Stone, 342 F. Supp. 2d 619, 625 (N.D.

Tex. 2004)). Plaintiffs have alleged that they were all serving under express contracts during the

relevant time period, either directly with the Broadcasting Board or as subcontractors to a

staffing agency holding a prime contract with the Board. Am. Compl. ¶¶ 22-25. As this court

previously stated in Calvin, “[w]hile the Supreme Court has not explicitly held that employment

by appointment and by contract are mutually exclusive, its reasoning implies such a principle,

and courts have interpreted [Army & Air Force Exchange Serv. v. Sheehan, 456 U.S. 728

court’s determination of whether a similar type of contractor would qualify as a civil service

appointee under the Back Pay Act.

The internal Board memorandum is similarly inapposite. The cited portion of the

memorandum discusses a 2010 IRS tax audit in which the IRS determined that the Board should

have treated purchase order vendor contractors “as employees for tax reporting purposes,

including by withholding income and Social Security taxes.” Board Memorandum at 9. The

Board cited the potential tax liability as a reason for using “external service provider[s],” i.e.,

staffing agencies, to obtain purchase order vendor contractors instead of contracting with them

directly. Id. at 9-10. The IRS’s determination of whether purchase order vendor contractors

should be treated as employees for tax purposes has little bearing on whether plaintiffs can be

“employees” within the meaning of the Back Pay Act.

9

(1982),] and like precedents to require mutual exclusivity.” 63 Fed. Cl. at 472 (citing Collier v.

United States, 56 Fed. Cl. 354, 356-57 (2003)). Plaintiffs have provided no reason to disturb this

principle that individuals serving under contract with the government cannot simultaneously be

serving as appointees in the civil service.8 Accordingly, they have not plausibly alleged that they

were federal employees during the relevant time period. For the reasons stated, the

government’s motion to dismiss Count One of plaintiffs’ amended complaint is GRANTED.

B. Count Two: Plaintiffs’ Claim for Monetary Damages for Breach of an Implied Contract

1. Subject matter jurisdiction.

The government has moved to dismiss Count Two of plaintiffs’ complaint for lack of

subject matter jurisdiction. Def.’s Mot. at 5-7. The government asserts that plaintiffs’ breach of

contract claim is barred under the provisions of the CDA, specifically 41 U.S.C. § 7103(a),

because it was not first submitted to and denied by a contracting officer. Id. The CDA “applies

to any express or implied contract . . . made by an executive agency for . . . the procurement of

services.” 41 U.S.C. § 7102(a)(2). Under the Act’s provisions, “[e]ach claim by a contractor

against the [f]ederal [g]overnment relating to a contract shall be submitted to the contracting

officer for a decision.” 41 U.S.C. § 7103(a)(1). After such a claim has been made, “a contractor

may bring an action directly on the claim in the United States Court of Federal Claims.” 41

U.S.C. § 7104(b)(1). The government asserts that plaintiffs did not submit their breach of

contract claim to a contracting officer, and this court consequently lacks jurisdiction to entertain

the claim. Def.’s Mot. at 5-6 (citing Advanced Materials, Inc. v. United States, 46 Fed. Cl. 697,

701 (2000); Witherington Constr. Corp. v. United States, 45 Fed. Cl. 208, 211 (1999); Cincinnati

Elecs. Corp. v. United States, 32 Fed. Cl. 496, 505 (1994)).

As with Count One, the court agrees that Count Two must be dismissed for lack of

subject matter jurisdiction, but for a different reason than that asserted by the government.9 The

8

If the court were to find that plaintiffs were serving as civil service appointees, this

finding likely would be fatal to plaintiffs’ breach of contract claim in Count Two. See Calvin, 63

Fed. Cl. at 473 (“In light of the evidence adduced by the parties, as well as the principle that

‘federal employees do not have contractual relationships with the government, barring an explicit

agreement to the contrary executed by a federal officer who has authority to contract,’ Darden v.

United States, 18 Cl. Ct. 855, 859 (1989), plaintiffs are appointees, and their claims of breach of

employment contract are precluded.”).

9

Although the court finds there is a separate basis upon which to dismiss plaintiffs’

allegations in Count Two, it notes that for at least two reasons, the provisions of the CDA

requiring submission of a “claim” to the contracting officer before bringing a case before this

court likely do not apply here. First, plaintiffs’ alleged contracts with the Broadcasting Board do

not appear to fall within the class of contracts intended to be covered under the CDA. As this

court recently noted, “[t]he Federal Circuit has observed for many years that the CDA ‘does not

cover all government contracts.’” Anchor Tank Lines, LLC v. United States, __ Fed. Cl. __, __,

2016 WL 3910852, at *8 (2016) (quoting Bailey v. United States, 46 Fed. Cl. 187, 210 (2000) (in

turn quoting Coastal Corp. v. United States, 713 F.2d 728, 730 (Fed. Cir. 1983))). “In particular,

10

. . . the CDA does not apply to contracts that do not comport with the ‘cost and competition’

policy considerations underlying the CDA’s enactment by Congress, and where applying the

CDA would not ‘do justice to the realities of the situation.’” Id. (quoting Institut Pasteur v.

United States, 814 F.2d 624, 627 (Fed. Cir. 1987)). As discussed infra at 12 n.10, plaintiffs’

express contracts with the Broadcasting Board constituted contracts with the government for the

purposes of this court’s jurisdiction under the Tucker Act. These contracts may be of the type

intended to be covered by the CDA, although to a certain extent the Board’s contracting

procedures were largely “unencumbered by normal FAR clauses, constraints, and policies.”

Bailey, 46 Fed. Cl. at 211-12; see also OIG Report at 6, 30-31 (noting that the Board primarily

awarded contracts pursuant to the simplified acquisition procedures in FAR §§ 13.000 to 13.501,

using “quarterly sources sought notices” generally announcing opportunities for freelance talent,

which resulted in “a solicitation process absent any competition”). Count Two, however, is not

based on these express contracts, but rather on implied contracts with the government that

purportedly included additional compensation terms. Although the government correctly notes

that the provisions of the CDA apply to implied contracts as well as express contracts, Def.’s

Mot. at 7, the implied contracts in question must still comport with the additional standards

described in Institut Pasteur and related precedents. Here, plaintiffs have specifically alleged

that these implied contracts were not the result of a normal government procurement efforts, but

rather arose because plaintiffs were providing services that would typically have been

compensated in a different manner. See Am. Compl. ¶ 121. Accordingly, and assuming

arguendo that the court found a basis for such implied contracts to exist, which it does not, these

contracts would not “comport with the cost and competition policy considerations underlying the

CDA’s enactment.” Anchor Tank, __ Fed. Cl. at __, 2016 WL 3910852, at *8 (internal quotation

marks omitted).

Second, the “claim” at issue in Count Two of plaintiffs’ complaint does not appear to be

the type of claim contemplated by the CDA in terms of its requirements for submission to a

contracting officer. The CDA does not separately define a “claim,” but the FAR defines a claim

as 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.” 48 C.F.R. § 2.101. Again, plaintiffs are

not seeking monetary relief arising from their express contracts with the Broadcasting Board, nor

are they asking for “adjustment or interpretation” of those contracts’ terms. Rather, they are

alleging that the government has breached a different set of compensation terms derived from

implied contracts. As evidenced by plaintiffs’ complaint, these are not claims for a “sum

certain,” but rather a yet-to-be-determined amount roughly equivalent to the compensation that

would have been given to a federal employee doing the same type of work during the same time

period. See Am. Compl. ¶¶ 122-23. Plaintiffs further complicate the issue by alleging that the

implied contracts arose as a result of the government’s “fraud” or misrepresentation in

mislabeling the express contracts as ones for “nonpersonal services.” Pls.’ Opp’n at 11-17.

Without addressing whether the type of fraud alleged by plaintiffs constitutes an exception to the

CDA under 41 U.S.C. § 7103(c)(1), the court finds that it would likely not “do justice to the

realities of the situation” to require plaintiffs to submit the type of claim alleged in Count Two to

a contracting officer before bringing a suit in this court. Institut Pasteur, 814 F.2d at 627.

11

court recently noted that “[t]he general rule is that so long as the plaintiffs have made a non-

frivolous claim that they are ‘entitled to money from the United States’ . . . because they have a

contract right, this court has jurisdiction to settle the dispute.” Anchor Tank, __ Fed. Cl. at __,

2016 WL 3910852, at *7 (quoting Adarbe v. United States, 58 Fed. Cl. 707, 714 (2003) (in turn

quoting Ralston Steel Corp. v. United States, 340 F.2d 663, 667 (Ct. Cl. 1965))); see also City of

Cincinnati v. United States, 153 F.3d 1375, 1377 (Fed. Cir. 1998) (holding that a “non-frivolous

assertion of an implied contract with the United States” is sufficient to establish subject matter

jurisdiction in this court). The four named plaintiffs allege that they worked for the Broadcasting

Board under “independent contracts,” including “purchase orders” or orders under “blanket

purchase agreements,” and that approximately one year ago, two of the four plaintiffs (Mr. Lee

and Ms. Ryan) began providing services through subcontracts with staffing agencies retained by

the Board. Am. Compl. ¶¶ 22-25.10 Plaintiffs’ claim in Count Two, however, is not based on an

entitlement to money damages under these express contracts. Instead, plaintiffs allege they also

had implied-in-fact contracts with the government that entitled them to additional “benefits, tax

payments, wages or salaries, and other consideration.” Am. Compl. ¶ 121.

Plaintiffs have failed to make a non-frivolous claim of an implied-in-fact contract with

the government above and beyond the provisions of their express contracts. “The existence of an

express contract precludes the existence of an implied contract dealing with the same subject,

unless the implied contract is entirely unrelated to the express contract.” Atlas Corp. v. United

States, 895 F.2d 745, 754-56 (Fed. Cir. 1990) (finding that plaintiffs were not entitled to

additional payments to cover the costs of tailings stabilization because those costs were not

“‘entirely unrelated’ to the costs included in the contract prices,” and affirming dismissal for lack

of jurisdiction); see also Algonac Mfg. Co. v. United States, 428 F.2d 1241, 1255 (Ct. Cl. 1970)

(“[A]s a general rule there can be no implied contract where there is an express contract between

the parties covering the same subject.”); Cummings v. United States, 17 Cl. Ct. 475, 480 n.8

(1989) (quoting Algonac Mfg. and disposing of plaintiff’s claim of an implied contract without

further comment because plaintiff had already alleged a written contract on the same subject);

Trauma Serv. Grp., Ltd. v. United States, 33 Fed. Cl. 426, 432 (1995) (also citing Algonac Mfg.),

aff’d, 104 F.3d 1321 (Fed. Cir. 1997). Here, plaintiffs do not allege that their entitlement to

additional compensation is based on work done outside the scope of their express contracts.

Rather, they argue that their express contracts should have been styled as personal service

contracts, in which case plaintiffs would have been entitled to compensation in the same manner

10

The court does not doubt that the plaintiffs, as direct contractors and not subcontractors,

worked under express contracts with the government for the purposes of the court’s jurisdiction

under the Tucker Act. See DaVita, Inc. v. United States, 110 Fed. Cl. 71, 81 (2013) (“A

purchase order ‘is an offer by the government to the supplier to buy certain supplies or services

upon specific conditions. A contract is established when the supplier accepts the order, by

furnishing the supplies or services ordered or by . . . substantial performance prior to the due

date.’” (quoting Canal 66 P’ship v. United States, 87 Fed. Cl. 722, 726 (2009) (in turn quoting

Zhengxing v. United States, 71 Fed. Cl. 732, 738 n.21 (2006)), aff’d, 204 Fed. Appx. 885 (Fed.

Cir. 2006) (alteration in Canal 66 P’ship)). The pertinent question, however, is whether

plaintiffs have made a non-frivolous claim of entitlement to money damages under an implied

contract with the government beyond the terms of their express contracts.

12

as federal employees. Am. Compl. ¶¶ 118-24. Plaintiffs do not allege that the government

actually offered to provide them additional compensation, or that they were pressed into

providing services beyond what was contemplated in their express contracts, thus entitling them

to additional compensation. Such allegations might form the basis for an implied contract

“entirely unrelated” to the terms of the express contracts already held by the plaintiffs. Atlas

Corp., 895 F.2d at 754. Absent these or similar allegations, however, the court lacks jurisdiction

to consider a claim that an implied contract has been breached when there is no basis on which

such an implied contract could be established.

Alternatively, plaintiffs argue that under the theory of quantum meruit (“as much as he

merited”), the government received the benefit of “personal services” performed by the plaintiffs

without providing the compensation that would typically be provided to personal services

contractors. Am. Compl. ¶ 126; see also United States v. Amdahl Corp., 786 F.2d 387, 393 n.6

(Fed. Cir. 1986) (defining “quantum meruit”). This contention is premised on accepting the

postulate that plaintiffs’ individual contracts were void because the Broadcasting Board entered

the contracts in contravention of FAR § 37.104. The court also lacks jurisdiction to consider this

argument. “A recovery in quantum meruit is based on an implied in-law contract. That is, a

contract in which there is no actual agreement between the parties, but the law imposes a duty in

order to prevent injustice.” International Data Prods. Corp. v. United States, 492 F.3d 1317,

1325 (Fed. Cir. 2007). The Court of Federal Claims generally does not have jurisdiction over

quantum meruit or implied-in-law contract claims. Id.; see also Trauma Serv. Grp., 33 Fed. Cl.

at 432 (“Claims for unjust enrichment on quantum meruit damages state claims for breaches of

contracts implied in law, over which the court has no jurisdiction.” (citing United States v.

Mitchell, 463 U.S. 206, 218 (1983); United States v. Minnesota Mutual Co. Inc., 271 U.S. 212,

217 (1926); Atlas Corp., 895 F.2d at 755)).11 The Federal Circuit has found an exception to this

general jurisdictional rule and allowed recovery under a quantum meruit or quantum valebant

(“as much as it was worth”) theory when a contractor provided goods or services to the

government in good faith under an express contract, but that contract was later rescinded for

invalidity. See Amdahl, 786 F.2d at 393; see also International Data Prods., 492 F.3d at 1325-

26 (acknowledging the exception in Amdahl but finding it was inapplicable because the contract

in question was “neither invalid nor unenforceable”); United Pac. Ins. Co. v. United States, 464

F.3d 1325, 1329-34 (Fed. Cir. 2006) (concluding that the exception in Amdahl was inapplicable

because the plaintiffs were paid “the full amount required by the contract”). In this instance, the

exception in Amdahl is not applicable to plaintiffs’ claim because the express contracts with

plaintiffs have not been found to be invalid, and plaintiffs have not alleged that they were not

paid in full under the express terms of those contracts.12 Accordingly, this court does not have

jurisdiction over plaintiffs’ quantum meruit claim.

11

This jurisdictional bar is based in part on the principle that no contract with the

government can arise without affirmative action by a contracting officer with the authority to

bind the government. See Trauma Serv. Grp., 33 Fed. Cl. at 431-32 (citing Merritt v. United

States, 267 U.S. 338, 341 (1925)).

12

At the hearing, plaintiffs raised for the first time the argument that their express

contracts with the Broadcasting Board might have been void ab initio due to fraud,

misrepresentation, or other defects, and that this could be an additional basis for their quantum

13

2. Failure to state a claim upon which relief can be granted.

Even if this court had jurisdiction over plaintiffs’ breach of contract claim in Count Two,

this claim would have to be dismissed under Rule 12(b)(6) for failure to state a claim upon which

relief can be granted. As discussed supra, a motion under RCFC 12(b)(6) requires the court to

examine whether there is sufficient factual matter in the complaint to establish a “claim to relief

that is plausible on its face.” Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 570. The

government’s motion to dismiss plaintiffs’ complaint cites both RCFC 12(b)(1) and 12(b)(6).

Def.’s Mot. at 1. Although the government focused its breach of contract arguments on

jurisdictional issues, the court may nonetheless also consider whether, under the standards

applicable to RCFC 12(b)(6), plaintiffs’ complaint states a plausible claim to relief.13 In Trauma

Serv. Grp., 104 F.3d at 1324-27, the court of appeals concluded that plaintiff’s allegations of an

express or implied contract with the government were sufficient to establish jurisdiction in the

Court of Federal Claims, but it nevertheless affirmed the trial court’s decision to dismiss the

complaint under RCFC 12(b)(6) because neither an express nor an implied contract could have

existed as a matter of law.

Although plaintiffs frame their claim in Count Two as a breach of an implied contract, it

could alternatively be viewed as an allegation that certain terms involving compensation were

omitted from their express contracts with the government. In that case, plaintiffs would be

meruit claim. Hr’g Tr. 26:23-25, 33:8-15. The government responded preliminarily at the

hearing, and, in a notice filed after the hearing at the court’s request, the government noted that

under the rationale in American Tel. & Tel. Co. v. United States, 177 F.3d 1368, 1373-74 (Fed.

Cir. 1999), plaintiffs’ contracts would not necessarily be void because of fraud or other

contravention of statute or regulation, and that the court must look instead to the purpose of the

pertinent statute or regulation that was allegedly violated. Def.’s Notice of Authority at 2, ECF

No. 22; see also American Tel. & Tel., 177 F.3d at 1374 (recognizing “the strong policy of

supporting the integrity of contracts made by and with the United States”). It is not necessary for

the court to address plaintiffs’ further merits-based argument, however, because it does not fit

within the jurisdictional exception contained in Amdahl. As was the case in United Pacific

Insurance, 464 F.3d at 1329-34, plaintiffs here have already been paid in full for contracts

spanning as far back as 2003, Hr’g Tr. 23:8-13; Am. Compl. ¶¶ 22-25. Accordingly, and even if

plaintiffs now wish to contend that these contracts are void, the court has no basis on which to

take jurisdiction over plaintiffs’ quantum meruit claim.

13

Plaintiffs advanced detailed arguments at the hearing as to why their breach of contract

count states a claim, see Hr’g Tr. 23:14 to 28:7, 32:23 to 35:4, 48:19 to 50:17, and 55:9 to 56:1,

and the government responded to those arguments, see Hr’g Tr. 42:10 to 44:7. Plaintiffs

elaborated on this oral submission with a supplemental brief addressing the government’s

arguments that no viable claims had been stated in Count Two. See Pls.’ Resp. to Def.’s Notice

of Authority, ECF No. 24. In these circumstances, the court may consider whether the pertinent

count of the complaint states a claim. See Anaheim Gardens v. United States, 444 F.3d 1309,

1315 (Fed. Cir. 2006) (“The trial court may dismiss sua sponte under Rule 12(b)(6), provided

that the pleadings sufficiently evince a basis for that action.”); see also Shockley v. Jones, 823

F.2d 1068, 1072-73 & n.3 (7th Cir. 1987) (stating that a sua sponte dismissal under Rule

12(b)(6) can be appropriate when plaintiff had notice and an opportunity to be heard).

14

asking the court to insert implied terms to fill the gap left by this omission. Even under this

lenient reading of the complaint, plaintiffs have not plausibly alleged their express contracts with

the government omitted any essential terms. “It is not the habit of courts to resolve disputes over

omission concerning [contract] matters by resorting to implied terms.” E. Allan Farnsworth,

Disputes Over Omission in Contracts, 68 Colum. L. Rev. 860, 862 (1968) (advocating resolution

of omissions through inferences from the actual contract terms, or “basic principles of fairness or

justice,” id. at 877, rather than by inserting implied terms based on the parties’ presumed

intentions). An omission, or a “casus omissus” (“case which is not provided for”), generally

occurs where there is an event not accounted for in the express language of the contract and not

anticipated by the parties. Id. at 862 n.11, 873-76 (quoting 1 J. Bouvier, Law Dictionary 431

(8th ed. 1914)); see also Restatement (Second) Contracts § 204 cmt. b (1981) (“How omission

occurs. The parties to an agreement may entirely fail to foresee the situation which later arises

and gives rise to a dispute; they then have no expectations with respect to that situation.”). If an

omitted term is “essential,” i.e., it is necessary to the determination of the parties’ rights under

the contract, a court may fill this gap with “a term [that] is reasonable in the circumstances.”

Restatement (Second) Contracts § 204; see also Pacific Gas & Elec. Co. v. United States, 536

F.3d 1282, 1289 (Fed. Cir. 2008) (stating that the court can supply a minimum acceptance rate in

a contract for storage of spent nuclear fuel because without that term, “the contract would be

meaningless and nonsensical”); Howell v. United States, 51 Fed. Cl. 516, 520-21 (2002) (court

may supply a minimum quantity term to an indefinite-quantity contract when the parties failed to

include that term).

Here, plaintiffs have not demonstrated that additional compensation terms were

“essential” to their contracts.14 Again, nothing in plaintiffs’ complaint suggests that anything

14

In their amended complaint, plaintiffs assert that their express contracts with the

Broadcasting Board were required to contain the clause set out in FAR § 52.232-3, which

pertains to personal service contracts and states:

The Government shall pay the Contractor for the services performed by the

Contractor, as set forth in the Schedule of this contract, at the rates prescribed,

upon the submission by the Contractor of proper invoices or time statements to

the office or officer designated and at the time provided for in this contract. The

Government shall also pay the Contractor (a) a per diem rate in lieu of subsistence

for each day the Contractor is in a travel status away from home or regular place

of employment in accordance with Federal Travel Regulations (41 CFR [§] 101-

7) as authorized in appropriate Travel Orders; and (b) any other transportation

expenses if provided for in the Schedule.

Am. Compl. ¶ 86 (quoting FAR § 52-232-3 in part). Plaintiffs argue that the reference to “rates

prescribed” in this clause refers to rates prescribed for federal employees under Title 5 of the

Code of Federal Regulations, as well as by internal agency rules. Am. Compl. ¶¶ 87-91; see also

Hr’g Tr. 35:16 to 37:11. Plaintiffs concede that the Broadcasting Board has no such rules

prescribing certain rates of pay or benefits for personal service contracts, Am. Compl. ¶ 87-88,

but nevertheless assert that the wages and benefits prescribed in the rules of the Board’s “sister

and parent agencies,” namely, the United States Agency for International Development and the

15

changed with regard to the nature of their work under the contracts or the government’s

representations about how plaintiffs would be compensated. The only difference appears to be

the OIG’s report finding that the Broadcasting Board issued certain “nonpersonal service[]”

contracts that should have been identified and structured as “personal service[]” contracts. The

court cannot, however, use those findings as a basis to substitute or supplement compensation

terms in plaintiffs’ prior contracts with the Board with “implied” terms entitling plaintiffs to the

type of compensation they would have preferred to receive. Count Two of plaintiffs’ amended

complaint is unavailing.

Department of State, should be substituted in the absence of such rules for the Board, Am.

Compl. ¶¶ 89-91.

The contract clause contained in FAR § 52.232-3 falls within a group of sections (FAR

§§ 52.232-1 to -10) that pertain to “invoice payments” made under fixed-price contracts. See 2

Karen L. Manos, Government Contract Costs & Pricing § 85:8 (June 2016 ed.). Similar

provisions for payments under fixed-price contracts generally (FAR § 52.232-1) and payments

under fixed-price research and development contracts (FAR § 52-232-2) substitute the phrase

“rates prescribed” for “the prices stipulated in [the] contract.” The use of “rates prescribed” in

FAR § 52.232-3 is preceded by the phrase “as set forth in the Schedule of this contract,” which

indicates that the clause refers to the rates prescribed in the contract’s schedule, as well as to the

“services performed” under that schedule. Accordingly, addition of this clause to plaintiffs’

express contracts with the Broadcasting Board would not entitle plaintiffs to any wages or

benefits beyond those already specified in the contract. In this same vein, FAR § 52.232-3 refers

to entitlement to “per diem” rates related to travel, but plaintiffs have not alleged that their

express contracts omitted such entitlements. Plaintiffs list a total of 22 types of pay and benefits

they believe they were denied under their express contracts, but none of them involves

reimbursement for travel-related expenses. Am. Compl. ¶¶ 85, 115, 122.

At the hearing, plaintiffs also elaborated the argument that certain statutes and regulations

other than the FAR compelled the inclusion of additional terms related to compensation and

benefits in plaintiffs’ express contracts with the Broadcasting Board. Hr’g Tr. 35:13 to 37:11.

Although plaintiffs did not enumerate these provisions at the hearing, they referred to a list in

their amended complaint, Am. Compl. ¶¶ 85, 115, which included certain statutes and

regulations to be used as “proxies for determining reasonable compensation” allegedly owed to

plaintiffs. Am. Compl. ¶ 85. The court finds that the cited authorities are inapplicable to

plaintiffs even if, as they allege, they should have been compensated as personal service

contractors. For example, plaintiffs cite various provisions of Title 5 of the United States Code

related to basic rates of pay, premium pay, paid leave and holidays, compensation for work-

related injuries, and various retirement, health, and insurance benefits. Am. Compl. ¶ 85.

However, the same definition for “employee” that applies to the Back Pay Act applies to all

other provisions of Title 5, i.e., the provisions only apply to individuals “appointed in the civil

service.” 5 U.S.C. § 2105. The same is true for the regulations plaintiffs cite within Title 5 of

the Code of Federal Regulations (e.g., 5 C.F.R. Parts 304 and 511), which tellingly all fall within

Subchapter B entitled “Civil Service Regulations.” Am. Compl. ¶ 85. Accordingly, the cited

statutes and regulations do not require that any additional terms be included in plaintiffs’ express

contracts with the Broadcasting Board.

16

CONCLUSION

For the reasons stated, the government’s motion to dismiss plaintiffs’ complaint under

RCFC 12(b)(1) and 12(b)(6) is GRANTED.15 The clerk will enter judgment in accord with this

disposition.

No costs.

It is so ORDERED.

s/ Charles F. Lettow

Charles F. Lettow

Judge

15

Plaintiffs’ motion to certify a class of similarly situated contractors is DENIED as moot,

as is plaintiffs’ motion for an extension of time to file a reply in support of their motion to certify

a class.

17