Financial & Realty Services, LLC v. United States

In the United States Court of Federal Claims

No. 15-1532C

(Filed: November 21, 2016)

*************************************

FINANCIAL & REALTY SERVICES, *

LLC, *

*

Plaintiff, *

RCFC 12(b)(6); RCFC 10(c); Breach of

*

Contract; Duty; Damages; Firm-Fixed-

v. *

Price Task Order; Contract Interpretation

*

THE UNITED STATES, *

*

Defendant. *

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Eden Brown Gaines, White Plains, MD, for plaintiff.

Anthony F. Schiavetti, United States Department of Justice, Washington, DC, for defendant.

OPINION AND ORDER

SWEENEY, Judge

In this case, plaintiff Financial & Realty Services, LLC (“FRS”) claims it is entitled to

payments pursuant to a firm-fixed-price task order with the General Services Administration

(“GSA”) of the United States government. Defendant United States moves to dismiss FRS’s

complaint for failure to state a claim upon which this court can grant relief. For the reasons set

forth below, the court denies in part and grants in part the motion to dismiss.

I. BACKGROUND

FRS was awarded a firm-fixed-price task order (GS-P-07-13-UD-0028) on September 10,

2013, to provide project management services to the GSA in support of the GSA’s repairs and

alterations program at its New Orleans field office. 1 Compl. 1; Compl. Ex. 3-5. The task order

was awarded to FRS under its GSA schedule contract (GS-00F-0056M). 2 Compl. 1; Compl. Ex.

1

The court derives the facts in this section from plaintiff’s complaint (“Compl.”) and the

exhibit attached to the complaint (“Compl. Ex.”). References to averments set forth in the

complaint are to page numbers since the paragraphs of the complaint are not numbered.

2

The GSA schedule contract (GS-00F-0056M) that governs the task order at issue is not

included in the record before the court.

3-5. It included two firm-fixed-price line items for the base year, and a single firm-fixed-price

line item for each of the three option years. Specifically, the base year included a line item for

project management services—$8,809.60 per month for twelve months, totaling $105,715.20—

and a line item for a $12,000 travel allowance. Compl. Ex. 4. The start date of the task order

was October 1, 2013, and the completion date was September 30, 2014. Id. at 3. The task order

also set forth a delivery date of September 30, 2014, and a period of performance of July 29,

2013, to July 28, 2014. 3 Id. at 4. Similarly, each of the option years listed a line item for the

project management services. Id. at 4-5. The first option year was priced at $8,809.60 per

month for twelve months (October 1, 2014, to September 30, 2015), the second option year was

priced at $8,987.20 per month for twelve months (October 1, 2015, to September 30, 2016), and

the third option year was priced at $8,987.20 per month for twelve months (October 1, 2016, to

September 30, 2017). Id. The total evaluated price for the services was $427,123.20 for the base

year and three option years. 4 Id. at 2, 4-5.

The task order was governed by a Performance Work Statement (“PWS”) that outlined

the responsibilities of both FRS and the GSA. Id. at 6-21. Under the PWS, FRS was responsible

for “providing qualified personnel” who had to be approved by the GSA. Id. at 6. Sections

1.5.6, 1.5.12, and 6.3 of the PWS contemplated that the project management services would be

provided on site at the GSA’s New Orleans field office by one full-time project manager. Id. at

9-10, 21. Section 1.5.12 of the PWS also mandated that an alternate be designated to act in the

absence of the project manager. Id. at 10. FRS was required to “maintain an adequate workforce

for the uninterrupted performance” of its responsibilities. Id. at 8-9. A position would be

deemed “delinquent” if left unfilled for thirty days. Id. at 6. All FRS personnel working under

the task order were, pursuant to section 4.2 of the PWS, subject to security screening

requirements. Id. at 14. Specifically, personnel were required to undergo a National Agency

Check with Inquiries (“NACI”) or equivalent investigation, which includes a Federal Bureau of

Investigation (“FBI”) national criminal history (i.e., fingerprint) check. Id. The preliminary step

of receiving a favorable fingerprint determination was necessary prior to entry on duty. Id.

Section 1.5.8 of the PWS specified that NACI clearance must be obtained within three months of

the task order award and maintained “for the life of the contract.” Id. at 9.

The project manager provided by FRS was required to submit a monthly report to the

GSA contracting officer’s representative (“COR”), update the project tracking database at least

weekly, manage project meetings, develop and maintain project schedules, review and comment

on building and system design submissions, prepare draft inspection reports, analyze change

orders, draft responses to requests for information, and participate in weekly conference calls to

3

The record before the court does not reflect a reason for the discrepancy among the

effective dates, the delivery date, and the period of performance set forth in the task order.

4

The travel allowance was not included in the $427,123.20 total evaluated price of the

award (apparently since travel expenses were paid on a reimbursement basis when incurred),

Compl. Ex. at 2, 4-5, 102-04, and is not at issue in this case.

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discuss project-related issues. 5 Id. at 17-18. Failure to submit a monthly report by the tenth of

the month would result in a $500 penalty, and all other failures to meet performance standards

could result in the GSA invoking its “contractual remedies.” Id.

On September 24, 2014, Amy Schissel, the project manager at the time, notified FRS’s

principal, Claude Gregory, of her intention to resign effective October 9, 2014. Id. at 26; Compl.

1. Two days later, Joyce Johns, a GSA contract specialist, asked Mr. Gregory about filling the

upcoming project manager vacancy and reminded him that the GSA was required to approve the

replacement. Compl. 1; Compl. Ex. 27. On October 3, 2014, Ms. Johns again asked Mr.

Gregory about filling the upcoming vacancy, reiterated the requirement that the GSA approve the

replacement, and notified him that the GSA “intend[ed] to exercise the option.” 6 Compl. Ex. 28;

accord Compl. 2.

On October 7, 2014, Mr. Gregory forwarded the resume of Isaac Williams to three

individuals: (1) Elizabeth Crawford, the contracting officer, Compl. Ex. 23-24, 33; (2) Norman

Bissenden, the COR, id. at 29; Compl. 2; and (3) Ms. Johns. Compl. 2; Compl. Ex. 29-31. The

next day, Ms. Johns notified Mr. Gregory that the GSA had approved Mr. Williams as project

manager. Compl. 2; Compl. Ex. 32. The GSA also initiated the background check for Mr.

Williams at that time. Compl. 2; Compl. Ex. 57. Ms. Schissel completed her last day of work as

project manager on October 9, 2014. Compl. 2.

FRS and the GSA executed a Modification of Contract on November 3, 2014, for the first

option year, adding a $12,000 travel allowance and changing the delivery date and period of

performance. Compl. Ex. 24-25, 33-34. The new delivery date was November 3, 2015, and the

new period of performance was November 4, 2014, to November 3, 2015. Id. at 25, 34.

On December 2, 2014, Mr. Gregory advised Mr. Bissenden that because Mr. Williams’s

background check remained pending, he was submitting the resume of Debra Lombard as a

replacement candidate. Id. at 35-39, 55, 73; Compl. 2. Mr. Bissenden then proposed a January

8, 2015 start date for Ms. Lombard. Compl. Ex. 35, 54, 73. On December 10, 2014, after Mr.

Gregory confirmed Ms. Lombard’s availability for the January 8, 2015 start date, the GSA

approved her hire. Id. at 40-41, 52-53, 73; Compl. 2. Mr. Williams’s preliminary background

check cleared two days later, on December 12, 2014. Id. at 42, 57, 73; Compl. 2.

Also on December 10, 2014, Mr. Gregory submitted an invoice to Mr. Bissenden for

October 2014. Compl. 2; Compl. Ex. 41, 52. Mr. Bissenden replied the same day, asking Mr.

Gregory to revise the invoice to reflect that Ms. Schissel was employed as project manager for

only nine calendar days. Compl. Ex. 40, 52-53. On December 16, 2014, Mr. Gregory sent Mr.

5

Section 6.2 of the PWS contained a deliverables schedule listing reports and other

documents to be submitted by the project manager. Compl. Ex. at 19-20.

6

The “option” referenced by Ms. Johns apparently was the first option year of the task

order.

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Bissenden a revised invoice. 7 Id. at 51. The following day, Mr. Gregory and Mr. Bissenden

traded a series of electronic-mail messages in which Mr. Bissenden indicated that the GSA

would not pay for the entire month of project management services because FRS only provided a

project manager through October 9. Id. at 49-51; Compl. 2. In turn, Mr. Gregory stated that the

contract was a “firm fixed monthly fee” and “not an hourly rate,” emphasizing that the “hours

the [project manager] work[s] will vary each month.” Compl. Ex. 49-51.

Ms. Lombard began working as project manager on January 12, 2015, her start date

having been delayed for a few days due to an illness. 8 Id. at 63, 67-68, 71-72, 116.

On January 27, 2015, Mr. Gregory submitted invoices totaling $26,428.80 to Ms.

Johns—$8,809.60 per month for October 2014, November 2014, and December 2014. Id. at 57-

58; Compl. 2. These invoices were rejected on February 6, 2015, per Mr. Gregory’s direction.

Compl. 2; Compl. Ex. 59-66, 75-76. On February 11, 2015, Ms. Crawford contacted Mr.

Gregory to summarize her understanding of the issues related to the October 2014, November

2014, and December 2014 invoices. Compl. 2; Compl. Ex. 63.

Meanwhile, on February 10, 2015, Mr. Gregory submitted an invoice for January 2015.

Compl. Ex. 68. Mr. Bissenden responded the same day, stating that the GSA could only pay for

project management services actually rendered (thus, beginning January 12, 2015) and not for

the entire month. Id. at 67-68. Mr. Bissenden followed up two days later. Id. at 67. Mr.

Gregory then requested that Ms. Crawford provide the GSA’s position in writing. Id. at 70;

Compl. 2.

In her February 17, 2015 response, Ms. Crawford reiterated that the GSA could not pay

for services not rendered because the contract was “considered a performance based contract and

payment [was] based on [FRS’s] ability to provide the deliverables.” Compl. Ex. 71; see also

Federal Acquisition Regulation (“FAR”) 37.601(b) (listing required components of performance-

based contracts). Ms. Crawford indicated a willingness to reach a “fair and reasonable

7

Also on December 16, 2014, FRS executed a Modification of Contract relating to a

different task order (GS-P-07-13-UD-0034) under a separate GSA schedule contract (GS-06F-

0022P). Compl. Ex. 43-48. This modification was not addressed by the parties. See, e.g., id. at

97-99 (containing a timeline of events that omits the December 16, 2014 modification).

Consequently, it has no bearing on this case and is disregarded by the court.

The court notes that a similar dispute to the one in this case arose under task order GS-P-

07-13-UD-0034. FRS sought relief from the Civilian Board of Contract Appeals (“CBCA”), but

the CBCA dismissed FRS’s complaint under its small claims procedure on August 28, 2016, for

failure to state a claim upon which relief could be granted. Fin. & Realty Servs., LLC v. Gen.

Servs. Admin., CBCA 5354, 16-1 BCA ¶ 36,472. However, since that dispute relates to a

different task order, the CBCA’s ruling on that dispute is similarly disregarded by the court.

8

Ms. Lombard entered duty before her full NACI background check had been

completed, but after receiving preliminary approval. Compl. Ex. at 71. Her full background

check was not complete until March 11, 2015. Id. at 85-86; Compl. 3. The record before the

court does not reflect the precise date when Ms. Lombard received preliminary approval.

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settlement based on the deliverables and services that were provided” for October 2014 and

January 2015, and suggested the possibility of either extending the contract to make up for the

time when there was no project manager on site or allowing extra hours to be paid for addressing

the backlog of work that accrued during that time. Compl. Ex. at 71-72.

Mr. Gregory answered Ms. Crawford the following day, placing responsibility for the

absence of a project manager on the slow pace of the government’s security screening process.

Id. at 73-74. He also observed that FRS had not been notified of any deficiencies, that FAR

subpart 37.6 does not contain procedures for reducing the price of a firm-fixed-price task order,

and that FRS had not agreed to any modification of the firm-fixed price but nonetheless hoped to

reach a solution. Id.

On February 20, 2015, Ms. Crawford formally offered to extend the contract by three

months and to pay the January 2015 invoice in full (to represent the partial months of services

provided in October 2014 and January 2015) in exchange for FRS agreeing not to invoice for

October 2014, November 2014, and December 2014. Id. at 77; Compl. 3. Mr. Gregory rejected

the offer on February 24, 2015, insisting on full payment for October 2014 through January 2015

and offering to modify the task order to a labor-hours task order after such payment. Compl. 3;

Compl. Ex. 81. That same day, Mr. Gregory also submitted an invoice for January 2015 in the

amount of $8,809.60 for the full month of services. Compl. Ex. 82-84.

Ms. Lombard received her final NACI security clearance on March 11, 2015. Id. at 85-

86; Compl. 3.

Two days later, the GSA rejected FRS invoices for October 2014, November 2014,

December 2014, and January 2015, pending resolution of the dispute. Compl. 3; Compl. Ex. 99.

On March 19, 2015, Mr. Gregory submitted a formal claim to the GSA’s contracting

officer pursuant to the Contract Disputes Act of 1978, 41 U.S.C. §§ 7101-7109 (2012), and FAR

33.206 for payment of the outstanding invoices for October 2014, November 2014, December

2014, and January 2015. Compl. 3; Compl. Ex. 96-99. The total amount of the claim was

$35,238.40 ($8,809.60 for each month). Compl. Ex. 96-97. The claim was based on the

contention that the task order was a firm-fixed-price task order, that FRS made good-faith efforts

to provide personnel, and that any delay in providing project management services was due to

the government security screening process, over which FRS had no control. Id. at 99.

On May 8, 2015, Ms. Crawford issued the contracting officer’s final decision pursuant to

FAR 33.211, agreeing to pay the January 2015 invoice and rejecting the invoices for October

2014, November 2014, and December 2014. 9 Compl. 3; Compl. Ex. at 115-18. This action

9

Unrelated to the invoice dispute, Ms. Crawford also issued a notice of termination for

convenience pursuant to FAR 52.249-1 on May 8, 2015. Compl. 3; Compl. Ex. 119.

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followed on December 16, 2015. 10 Compl. 1. In its complaint, FRS claims that it is entitled to

full payment of its invoices for October 2014, November 2014, and December 2014 because

(1) the GSA was not entitled to reject invoices under a firm-fixed-price task order, (2) FRS made

a good-faith effort to perform by timely proposing replacement project managers, and (3) the

delay in performance was due to the inaction of the government. Id. at 3-4. In short, FRS claims

that the GSA breached the task order by failing to pay the three invoices. Id. Accordingly, FRS

seeks the $26,428.80 it claims was due under those invoices. Id. at 3. The United States

subsequently moved to dismiss the complaint. The motion is fully briefed, and the court deems

oral argument unnecessary.

II. DISCUSSION

A. Standard of Review

The United States brings its motion to dismiss pursuant to Rule 12(b)(6) of the Rules of

the United States Court of Federal Claims (“RCFC”), contending that because FRS is not entitled

to payment for services it did not perform regardless of the firm-fixed-price nature of the task

order, the complaint fails to state a claim upon which relief can be granted. To survive such a

motion, a plaintiff must include in its complaint “enough facts to state a claim to relief that is

plausible on its face” sufficient for the defendant to have “fair notice” of the claim and the

“grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007)

(internal quotation marks omitted). In other words, a plaintiff must “plead[] factual content that

allows the court to draw the reasonable inference that the defendant is liable for the misconduct

alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). In

ruling on such a motion, the court must “accept as true all of the factual allegations contained in

the complaint” and any attachments thereto. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per

curiam) (citing Twombly, 550 U.S. at 555-56); accord RCFC 10(c) (“A copy of a written

instrument that is an exhibit to a pleading is part of the pleading for all purposes.”); Pennington

Seed, Inc. v. Produce Exch. No. 299, 457 F.3d 1334, 1342 n.4 (Fed. Cir. 2006) (noting that

“materials attached to a complaint may be considered as exhibits that are part of the complaint

for determining the sufficiency of the pleadings” under Rule 10(c) of the Federal Rules of Civil

Procedure 11).

10

Mr. Gregory filed the complaint on FRS’s behalf, proceeding pro se. FRS was

substituted as plaintiff after retaining counsel. Order, Feb. 23, 2016.

11

RCFC 10(c) mirrors Rule 10(c) of the Federal Rules of Civil Procedure.

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B. Breach of Contract

The court must determine whether the factual allegations in FRS’s complaint are

sufficient to state a plausible claim for breach of contract. To prove a breach of contract, a

plaintiff must establish “(1) a valid contract between the parties; (2) an obligation or duty arising

from that contract; (3) a breach of that duty; and (4) damages caused by the breach.” Century

Expl. New Orleans, LLC v. United States, 110 Fed. Cl. 148, 163 (2013) (citing San Carlos Irr. &

Drainage Dist. v. United States, 877 F.2d 957, 959 (Fed. Cir. 1989)). Once a breach of contract

is established, the burden shifts to the defendant to plead and prove affirmative defenses that

excuse performance. Shell Oil Co. v. United States, 751 F.3d 1282, 1297 (Fed. Cir. 2014) (citing

Stockton E. Water Dist. v. United States, 583 F.3d 1344, 1360 (Fed. Cir. 2009)).

Damages are awarded in breach-of-contract cases in an amount “sufficient to place the

injured party in as good a position as it would have been had the breaching party fully

performed.” Ind. Mich. Power Co. v. United States, 422 F.3d 1369, 1373 (Fed. Cir. 2005);

accord Bluebonnet Sav. Bank, F.S.B. v. United States, 339 F.3d 1341, 1344-45 (Fed. Cir. 2003)

(“One of the basic principles of contract damages is that ‘damages for breach of contract shall

place the wronged party in as good a position as it would have been in, had the breaching party

fully performed its obligation.’” (quoting Mass. Bay Transp. Auth. v. United States, 129 F.3d

1226, 1232 (Fed. Cir. 1997))). They are calculated by “perform[ing] the necessary comparison

between the breach and non-breach worlds.” Yankee Atomic Elec. Co. v. United States, 536

F.3d 1268, 1273 (Fed. Cir. 2008).

To be recoverable, damages must be “reasonably foreseeable by the breaching party at

the time of contracting,” the breach must be a substantial cause of the damages, and the damages

must be “shown with reasonable certainty.” Sys. Fuels, Inc. v. United States, 666 F.3d 1306,

1311 (Fed. Cir. 2012) (quoting Ind. Mich. Power Co., 422 F.3d at 1373 (internal quotation marks

omitted)). A party may not recover damages that could have been avoided with reasonable

efforts. Ind. Mich. Power Co., 422 F.3d at 1375 (citing Robinson v. United States, 305 F.3d

1330, 1333 (Fed. Cir. 2002)).

C. FRS Has Pled a Plausible Breach-of-Contract Claim for a Portion of the Time Period at

Issue

The issue at this stage of litigation is not the sufficiency of the United States’ potential

defenses or the likelihood of FRS’s eventual success on the merits of its claim, but simply

whether FRS has alleged specific facts describing a plausible claim for relief. See Chapman Law

Firm Co. v. Greenleaf Const. Co., 490 F.3d 934, 938 (Fed. Cir. 2007) (“The court must

determine ‘whether the claimant is entitled to offer evidence to support the claims,’ not whether

the claimant will ultimately prevail.” (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974))).

FRS asserts that the parties entered into a firm-fixed-price task order on September 10,

2013. In other words, it alleges the existence of a valid contract. FRS further contends that the

GSA was required, pursuant to the task order, to pay it $8,809.60 each month for October 2014,

November 2014, and December 2014, but that it failed to do so. In other words, it alleges the

existence of a contractual duty and the GSA’s breach of that duty. Finally, FRS states that the

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GSA’s failure to pay the $26,428.80 due under the invoices deprived it of funds it was owed. In

other words, it alleges damages caused by the GSA’s breach of contract.

Both the September 10, 2013 task order and the November 3, 2014 modification

explicitly reflect that the monthly price of the project management services was $8,809.60.

Thus, the GSA was on notice of the exact amount of potential damages for breach of contract

arising out of its failure to pay the three invoices at issue.

The United States does not challenge the existence of a valid contract between the GSA

and FRS or the foreseeability of damages in the event of its breach, but instead argues that the

GSA had no duty to pay FRS for services that were, by FRS’s own admission, not rendered.

Whether the GSA had such a duty is a matter of contract interpretation. Contract interpretation

is a matter of law, and government contracts are no exception. Medlin Constr. Grp., Ltd. v.

Harvey, 449 F.3d 1195, 1199-1200 (Fed. Cir. 2006). Moreover, interpreting a contract is proper

at this stage of the proceedings. See S. Cal. Edison v. United States, 58 Fed. Cl. 313, 321 (2003)

(“Contract interpretation is a matter of law and thus may be addressed by the Court in resolving a

motion to dismiss.”), quoted in Bell/Heery v. United States, 739 F.3d 1324, 1330 (Fed. Cir.

2014); Varilease Tech. Grp., Inc. v. United States, 289 F.3d 795, 798 (Fed. Cir. 2002) (“Contract

interpretation is a question of law generally amenable to summary judgment.”).

As a general rule, “the government is entitled to strict compliance with contract

specifications.” TEG-Paradigm Envtl., Inc. v. United States, 465 F.3d 1329, 1342 (Fed. Cir.

2006). The contract at issue is a firm-fixed-price task order, a type of contract that “provides for

a price that is not subject to any adjustment on the basis of the contractor’s cost experience in

performing the contract.” FAR 16.202-1. In other words, the task order price would not be

adjusted if FRS’s cost to perform the services described in the task order increased or decreased.

Id.; see also Dalton v. Cessna Aircraft Co., 98 F.3d 1298, 1305 (Fed. Cir. 1996) (“Because fixed-

price contracts do not contain a method for varying the price of the contract in the event of

unforeseen circumstances, they assign the risk to the contractor that the actual cost of

performance will be higher than the price of the contract.”). However, notwithstanding the firm-

fixed-price nature of the task order, FRS remained obligated to perform. See TEG-Paradigm

Envtl., 465 F.3d at 1342 (“[T]he government is entitled to strict compliance with contract

specifications.”); TPL, Inc. v. United States, 118 Fed. Cl. 434, 436 (2014) (noting that one of the

contracts at issue itself stated that “[t]he negotiated firm-fixed price reflects full consideration to

the contractor for its performance under the contract”); Agility Def. & Gov’t Servs., Inc. v.

United States, 115 Fed. Cl. 247, 251 (2014) (noting that the plaintiff’s “obligation to perform”

under a firm-fixed-price contract “was not the result of the Government’s unilateral insistence,

but rather the parties’ agreement” (emphasis added)); LB&B Assocs. Inc. v. United States, 91

Fed. Cl. 142, 154 (2010) (“A firm-fixed-price contract requires the contractor to perform a task

for a set price . . . .” (emphasis added)); cf. Mil-Mar Century Corp. v. United States, 111 Fed. Cl.

508, 541 (2013) (discussing an agency’s use of a price realism analysis to avoid the potential risk

of poor performance on a fixed-price contract).

Section 1.5.5 of the PWS required FRS to “at all times maintain an adequate workforce

for the uninterrupted performance of all tasks” outlined in the PWS. Further, FRS was required

to provide a project manager pursuant to sections 1.5.12 and 6.3 of the PWS, and designate an

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alternate who could act in the project manager’s absence pursuant to section 1.5.12 of the PWS.

In accordance with section 1.5.6 of the PWS, the project manager’s work was to be performed on

site at the GSA’s New Orleans field office. Section 1.5.8 of the PWS further mandated that all

personnel were to meet the security screening requirements (outlined in section 4.2 of the PWS)

by December 10, 2013, and thereafter were to “maintain the level of security required for the life

of the contract.” 12

In spite of these requirements, FRS provided neither a project manager nor an alternate

who met the security screening requirements from October 10, 2014, to January 11, 2015. FRS’s

failure to provide such personnel necessarily meant that it failed to provide the contracted-for

project management services. See, e.g., Westlands Water Dist. v. United States, 109 Fed. Cl.

177, 193 (2013) (“A contract is breached when a party fails to perform a contractual duty when it

is due. Non-performance includes defective performance as well as an absence of performance.”

(citations and internal quotation marks omitted)). Consequently, the GSA was not obligated to

pay the invoices for the disputed time periods because there is no duty to pay when the obligor

fails to perform. See Laguna Constr. Co., Inc. v. Carter, 828 F.3d 1364, 1372-73 (Fed. Cir.

2016) (noting that the contractor’s prior material breach excused the government’s

nonperformance); United States v. Amdahl Corp., 786 F.2d 387, 393 (Fed. Cir. 1986) (“[I]t is

only fair and just that the Government pay for goods delivered or services rendered and accepted

under it.”); FAR 32.904(b)(1)(ii) (setting the payment due date in reference to services

performed).

However, the inquiry does not end there. Both parties have an “implied duty of good

faith and fair dealing,” i.e., the duty “not to hinder and . . . to cooperate.” Precision Pine &

Timber, Inc. v. United States, 596 F.3d 817, 827 (Fed. Cir. 2010); accord Universal Constr., Inc.

v. United States, 71 Fed. Cl. 179, 187 (2006) (“The government has an implied obligation to

refrain from hindering or delaying the performance of a contractor, and must do whatever is

necessary to enable the contractor to perform.”). In other words, a party to a contract may not

“interfere with another party’s rights under the contract.” Gulf Grp. Gen. Enters. Co. W.L.L. v.

United States, 114 Fed. Cl. 258, 397 (2013) (citing Restatement (Second) of Contracts § 205

cmt. d).

Government contracts typically include a “delay” clause setting forth specific

requirements when a government-caused delay is alleged, but in this case, neither the entire

contract nor any reference to such a clause is before the court. Nevertheless, “[t]here are three

potential causes of delay in performance of a contract: the contractor’s actions, the

government’s actions, and forces outside the control of both parties.” England v. Sherman R.

Smoot Corp., 388 F.3d 844, 857 (Fed. Cir. 2004). A contractor’s delay in performance must not

result from the contractor’s actions to be excusable. See, e.g., P.R. Burke Corp. v. United States,

277 F.3d 1346, 1359-60 (Fed. Cir. 2002) (explaining that the plaintiff must “establish that the

government alone delayed the work” in order to recover); George Sollitt Constr. Co. v. United

States, 64 Fed. Cl. 229, 238 (2005) (explaining that government-caused delays “will not be

12

Although the December 10, 2013 date was not explicitly stated in the PWS, section

1.5.8 mandated that security screening requirements be completed within three months of the

task order award, which occurred on September 10, 2013.

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compensable if the contractor, or some other factor not chargeable to the government, has caused

a delay concurrent with the government-caused delay”). Furthermore, recovery is limited to

“unnecessary or unreasonable” delays. P.R. Burke Corp., 277 F.3d at 1360; see also id.

(distinguishing between delays caused by the government and those incurred as a result of the

government’s contractual right); Redland Co. v. United States, 97 Fed. Cl. 736, 754 (2011)

(“When the government does delay a contractor’s performance, however, liability attaches only

when the actions causing the delay are unreasonable.”).

According to FRS, any nonperformance on its part that would otherwise excuse payment

by the GSA was the result of government actions that interfered with its ability to perform under

the task order. This delay argument is the thrust of FRS’s claim. FRS alleged that it was not

able to provide project management services during October 2014, November 2014, and

December 2014 due to the delay caused by the government security screening process, over

which it had no control, 13 and that it met its implied duty of good faith and fair dealing by taking

“immediate steps” to fill the project manager position pursuant to Section 4.1 of the PWS by

nominating replacement candidates in a timely fashion. FRS further asserts that the GSA did not

issue any delinquency or cure notices and did not assert any claims against FRS for inexcusable

delay or default, and that it could have performed the work without having cleared personnel.

Essentially, FRS attributes the delay in performance—i.e., the lack of a project manager

performing services on site during October 2014, November 2014, and December 2014—solely

to the government. The United States, on the other hand, attributes the delay to FRS’s failure to

have in place qualified personnel at all times, as specified in sections 1.5.5, 1.5.8, 1.5.12, 4.1,

4.2, and 6.3 of the PWS.

A plain reading of the task order, which is governed by the PWS, supports the United

States’ position. FRS was required to maintain personnel for the continuous, uninterrupted

performance of project management services at the GSA’s New Orleans field office, and it failed

to do so. The project manager vacancy did not occur until over a year after the effective date of

the task order, during which time FRS was aware of the security screening requirements. In

addition, FRS has never alleged that it attempted to comply with section 1.5.12 of the PWS—

which requires that it have an alternate in place—beyond proposing a replacement two days in

advance of the vacancy. Furthermore, FRS’s arguments regarding the lack of delinquency or

cure notices and the absence of claims for inexcusable delay or fault are without merit. The GSA

reminded FRS multiple times (in writing) about the need to fill the project manager position, and

there were several occasions on which the GSA stated (also in writing) that it could not pay for

services not rendered, the initial such occasion being the same day that FRS first attempted to

invoice for nonperformance. FRS’s argument that it could have performed the work without

having cleared personnel is similarly meritless because it directly contradicts the contractual

requirement that the work be performed on site at the GSA’s New Orleans field office (under

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The preliminary portion of the screening process took sixty-five days (from October 8,

2014, to December 12, 2014) for Mr. Williams. Although the record before the court does not

reflect when Ms. Lombard received preliminary approval, her preliminary screening process

necessarily took thirty-three days or less (from her GSA hiring approval on December 10, 2014,

to her entry on duty on January 12, 2015), and her entire NACI screening process took ninety-

one days (from December 10, 2014, to March 11, 2015).

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section 1.5.6 of the PWS), and that personnel must be cleared to access federal buildings (under

section 4.2 of the PWS).

In short, FRS could have avoided any delay in performance simply by meeting its own

contractual obligations. Therefore, any government-caused delay in FRS’s performance cannot

be excused. See P.R. Burke Corp., 277 F.3d at 1359-60. Since there was no excuse for the delay

in performance, FRS has failed to allege facts plausibly demonstrating that the GSA had a duty

to pay for the period of nonperformance.

FRS also contends, in a footnote in its opposition to the United States’ motion to dismiss,

that the GSA waived FRS’s noncompliance for the months at issue by not issuing any cure

notices or assessing a contractual penalty, initiating the security screening process on project

manager candidates, and subsequently accepting and paying for project management services

after the time period in question. The court need not consider arguments advanced in footnotes.

See, e.g., SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1319-20 (Fed. Cir. 2006)

(“Our law is well established that arguments not raised in the opening brief are waived. . . .

Further, arguments raised in footnotes are not preserved.”). However, even if the court were, in

an exercise of its discretion, to consider FRS’s waiver argument, it would find the argument to be

without merit because (1) the GSA notified FRS multiple times of the need to fill the project

manager position since an uninterrupted workflow was essential, (2) not paying for services that

were never rendered is a “contractual remedy” contemplated by the PWS that the GSA invoked,

(3) the GSA could not have waived a defense against an obligation that never arose, and (4) the

GSA’s acceptance of and payment for services in subsequent months was unrelated to the

months at issue because each month stands on its own. Moreover, FRS failed to reference any

contractual provisions dealing with government wrongdoing (such as a “delay” clause) and any

steps it took to address the GSA’s alleged inaction beyond merely naming a replacement

candidate for the project manager position. Thus, the GSA cannot plausibly be deemed to have

waived FRS’s noncompliance with the task order’s requirements.

For its part, FRS has alleged that there was a valid contract between the parties, that the

GSA had a duty to pay because services were provided under the firm-fixed-price task order, that

the GSA breached that duty by failing to pay, that FRS suffered damages as a result of the

GSA’s breach, and that the amount of potential damages was known to an exact certainty by the

GSA prior to the breach. However, the GSA’s duty to pay is limited, as a matter of law, to the

period in which FRS actually performed its obligations under the task order because the facts

pled by FRS do not plausibly excuse its nonperformance. See Iqbal, 556 U.S. at 679 (“But

where the well-pleaded facts do not permit the court to infer more than the mere possibility of

misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to

relief.’” (quoting Fed. R. Civ. P. 8(a)(2)).

In short, FRS has established a prima facie breach-of-contract claim for the time period

of October 1, 2014, through October 9, 2014, but has failed to establish a prima facie breach-of-

contract claim for the time period of October 10, 2014, through December 31, 2014. The court

must therefore deny in part—with respect to October 1, 2014, through October 9, 2014—and

grant in part—with respect to October 10, 2014, through December 31, 2014—the United States’

motion to dismiss.

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III. CONCLUSION

For the foregoing reasons, the court DENIES IN PART and GRANTS IN PART the

United States’ motion to dismiss. The United States is directed to file its answer pursuant to

RCFC 12(a)(4)(A).

IT IS SO ORDERED.

s/ Margaret M. Sweeney

MARGARET M. SWEENEY

Judge

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