Opinion

Michael Roth & Associates v. United States

133 Fed. Cl. 279
2017 U.S. Claims LEXIS 874
2017 WL 3188390

Court: United States Court of Federal Claims
Filed: Jul 27, 2017
Status: Published
Author: Kaplan
On the bench: Elaine D. Kaplan
Cited by: 0 cases
Authority: More cited than 3.8%

observing that “jurisdiction over an appeal of a [CO’s] decision is lacking” unless the claim is first presented to the CO for decision

How later courts described this case

observing that “jurisdiction over an appeal of a [CO’s] decision is lacking” unless the claim is first presented to the CO for decision
noting that generally the use of the word “may” “conveys some degree of discretion”

Written by the judges who cited it.

The opinion

In the United States Court of Federal Claims

No. 13-626C

(Filed: July 27, 2017)

) Keywords: Contract Disputes Act; Motion

MICHAEL ROTH & ASSOCIATES, ) to Dismiss; Claim; Architect-Engineer

ARCHITECTS & PLANNERS INC., ) Services; Design Within Funding

) Limitations Clause; Changes Clause.

Plaintiff, )

)

v. )

)

THE UNITED STATES OF AMERICA, )

)

Defendant. )

)

Lawrence P. Kaplan, Kaplan Associates, LLC, St. Louis, MO, for Plaintiff.

Jessica L. Cole, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of

Justice, Washington, DC, with whom were Franklin E. White, Jr., Assistant Director, Robert E.

Kirschman, Director, and Benjamin C. Mizer, Principal Deputy Assistant Attorney General, for

Defendant.

OPINION AND ORDER

KAPLAN, Judge.

This case involves a contract dispute between Plaintiff Michael Roth & Associates,

Architects & Planners, Inc. (MRA) and the Department of Veterans Affairs (VA). Specifically,

MRA seeks an equitable adjustment of the contract price based on what it alleges were changes

to the scope of the contract ordered by the VA.

Currently before the Court is the government’s motion to dismiss for lack of subject

matter jurisdiction or, in the alternative, for summary judgment. For the reasons set forth below,

the government’s motion to dismiss is GRANTED and the case is DISMISSED without

prejudice.

BACKGROUND1

I. The Contract

On November 1, 2005, MRA and the VA entered into a contract in which MRA agreed to

provide “professional services necessary for the design of various projects against task order

delivery contracts when ordered” by certain VA medical centers. Compl. Ex. A at 1, ECF

No. 1-2. The architectural, interior design, and structural services to be provided included the

“preparation of studies, schematics, investigative services, design development, construction

documents, cost estimates, construction period services, visits to the site, miscellaneous reports

and other related activities.” Id.

The contract was an indefinite-quantity contract in which all “supplies and services to be

furnished” were to be “ordered by issuance of delivery orders or task orders.” Id. at 19.

Specifically, the parties described the agreement as a “master contract obligating the Architect-

Engineer to provide services by task-order on various projects.” Id. at 12. The initial contract

term was one year, with four one-year options, and an annual contract ceiling of $450,000. Id.

Under the contract, the VA would issue task orders upon agreement “by the Architect-

Engineer and the [CO]” as to their terms. See id. The VA would first issue a “statement of work”

with a “request for a proposal to perform the required services.” Id. MRA was then required to

“promptly submit a proposal . . . includ[ing] a detailed cost or pricing breakdown on a VA form

08-6298, Architect-Engineer Fee Proposal.” Id. Once MRA and the VA agreed on the “services

to be performed, fee, and time for completion,” the CO would “issue a Task Order against the

contract, reflecting all terms agreed upon.” Id. If MRA and the VA could not reach agreement

over a particular statement of work, “neither party [would] be under any obligation to the other,

with respect to the services covered by the particular statement of work.” Id. at 13.

Section 2.20 of the contract, entitled “52.243-1 Changes—Fixed-Price (Aug 1987)

Alternate III (Apr 1984),” incorporated the language from the Federal Acquisition Regulation’s

(FAR) changes clause. Part I, App. to Def.’s Mot. to Dismiss for Lack of Subject-Matter

Jurisdiction or, in the Alternative, for Summ. J. (Def.’s Mot. App. Pt. I) at DA29, ECF No. 28-2.

It states, in pertinent part:

(a) The Contracting Officer may at any time, by written order, and

without notice to the sureties, if any, make changes within the

general scope of this contract in the services to be performed.

(b) If any such change causes an increase or decrease in the cost of,

or the time required for, performance of any part of the work under

this contract, whether or not changed by the order, the Contracting

The facts in this section are based on the allegations in MRA’s complaint, as well as on

jurisdictional facts from the deposition transcripts and documentary evidence supplied by the

parties.

Officer shall make an equitable adjustment in the contract price, the

delivery schedule, or both, and shall modify the contract.

....

(f) No services for which an additional cost or fee will be charged

by the Contractor shall be furnished without the prior written

authorization of the Contracting Officer.

Id.

In addition, Section 2.14 of the contract set forth the language of the clause contained at

FAR 52.236-22, entitled “Design Within Funding Limitations (Apr 1984).” Id. at DA27. That

provision stated as follows:

(a) The Contractor shall accomplish the design services required

under this contract so as to permit the award of a contract, using

standard Federal Acquisition Regulation procedures for the

construction of the facilities designed at a price that does not exceed

the estimated construction contract price as set forth in paragraph

received that exceed the estimated price, the Contractor shall

perform such redesign and other services as are necessary to permit

contract award within the funding limitation. These additional

services shall be performed at no increase in the price of this

contract. However, the Contractor shall not be required to perform

such additional services at no cost to the Government if the

unfavorable bids or proposals are the result of conditions beyond its

reasonable control.

(b) The Contractor will promptly advise the Contracting Officer if it

finds that the project being designed will exceed or is likely to

exceed the funding limitations and it is unable to design a usable

facility within these limitations. Upon receipt of such information,

the Contracting Officer will review the Contractor’s revised

estimate of construction cost. The Government may, if it determines

that the estimated construction contract price set forth in this

contract is so low that award of a construction contract not in excess

of such estimate is improbable, authorize a change in scope or

materials as required to reduce the estimated construction cost to an

amount within the estimated construction contract price set forth in

paragraph (c) below, or the Government may adjust such estimated

construction contract price. When bids or proposals are not solicited

or are unreasonably delayed, the Government shall prepare an

estimate of constructing the design submitted and such estimate

shall be used in lieu of bids or proposals to determine compliance

with the funding limitation.

described in this contract is [insert price].

Id. The contract also provided that if the low bid for constructing the design exceeded this

clause’s estimated construction contract price, the VA could “relieve[] [MRA] of th[e]

requirement [of FAR 52.236-22 to design within the construction limitation] by the award of a

construction contract, notwithstanding the relation of the award price to the authorized

construction cost.” Id. at DA32.

II. The Task Order

In 2008, the VA issued a task order for architectural-engineering services. See id. at

DA59. The task order’s scope of work encompassed “A/E services . . . to prepare Schematics,

Design Documents (DD), Construction Documents [(]CD), Cost Estimates and Construction

Period Services (CPS) for Project 657-330, Expand Open Heart Surgery/Relocate Cardiology, B-

1, JC at the John Cochran Division of the VA Medical Center, St. Louis, Missouri.” Id. at DA60.

It also provided that the VA would pay MRA a flat fee of $311,924.97 for these services. Id. at

DA59. The task order stated that “[i]n accordance with 52.236-22, Design Within Funding

Limitation (Apr 1984), the estimated construction contract price for this project is $3,688,000,

not including any contingency.” Id. at DA61 (emphasis in original).

III. Modification of the Task Order

By October 2010, MRA believed it was “95 percent complete with the construction

documents.” Part II, App. to Def.’s Mot. to Dismiss for Lack of Subject-Matter Jurisdiction or, in

the Alternative, for Summ. J. (Def.’s Mot. App. Pt. II) at DA235, ECF No. 28-3 (July 10, 2014

deposition of Michael Roth); see also Def.’s Mot. App. Pt. I at DA74. At that time, MRA

estimated that the cost of constructing the facility it designed would be $3,782,082, which

exceeded the budget established under the task order by $94,082. Def.’s Mot. App. Pt. I at

DA70.

On or about February 22, 2011, the contracting officer (CO) issued a statement of work

requesting revisions to certain aspects of the project. See id. at DA74–76. The purpose of the

revisions was “to incorporate scope changes from the original professional services contract after

the 95% Submittal dated October 7, 2010 beginning with the November 23, 2010 meeting.” Id.

at DA74; see also id. at DA74–76 (describing revisions required under statement of work,

including, among other things, changes needed to reflect the requirements for new imaging

equipment for use in the new cardiology unit’s electrophysiology and cardiac catheterization

labs). Additionally, the CO wrote that the “Change Order” was intended “to compensate the

Architect/Engineer for the scope changes to bring the project back up to the 95% completion

level for those elements of the project affected by the scope changes, including cost estimating

services.” Id. at DA74. The modification would also “compensate[] the A/E for the services

required on the scope changes from the 95% completion level through construction completion.”

Id.

The statement of work specified a reduced “Project Construction Cost” of $3,122,000. Id.

It also noted that MRA’s “additional service fees” for the Change Order would “reduce the funds

available for project construction.” Id. It reiterated that “[t]he A/E [was] responsible for

designing the project within the Project Cost Amount.” Id. Under the terms of the proposed

Change Order, MRA would also be required to include “[d]eductive alternates . . . in the

Contract Documents to reduce the probable Construction Cost to at least 10% below the current

Project Construction Cost Amount.” Id.

On March 22, 2011, MRA proposed that it be paid a flat fee of $176,101.33 to complete

the work required by the task order as modified. Id. at DA77. The VA accepted MRA’s fee

proposal and, “pursuant to the authority of: FAR A/E Changes Clause,” it issued Modification

Number 2 to the task order, with an effective date of May 9, 2011. See Def.’s Mot. App. Pt. II at

DA113. Under the modification, MRA would “[p]rovide design revisions per [the] Statement of

Work dated 2/22/11 and in accordance with [its] revised proposal dated March 22, 2011” for a

total additional fee of $176,101.33. Id. Modification Number 2 also stated that “[t]he Project

Construction Cost Amount [was] to be reduced from $3,122,000.00 to $2,945,900.00.” Id.

Additionally, it included the requirement that “[d]eductive alternates . . . be included in the

Contract Documents to reduce the probable Construction Cost to at least 10% below the Project

Construction Cost Amount of $2,945,900.00.” Id. Finally, the modification also included a

release, stating that “[t]he consideration represents a complete equitable adjustment for all costs,

direct and indirect, associated with the work and time agreed to herein, including, but not limited

to, all costs incurred for extended overhead, supervision, disruption or suspension of work, labor

inefficiencies, and this change’s impact on unchanged work.” Id. Both Michael Roth and the CO,

Pauline Czajkowski, signed the modification. Id.

IV. MRA’s Cost Estimates For Construction Under the Task Order as Modified

After the task order was modified, MRA continued to complete its design work,

including the required revisions. See id. at DA114. In August 2011, it informed the CO’s

technical representative (COTR) via voicemail that its construction cost estimates for the project

as modified were above the Project Construction Cost Amount. See id.

The COTR responded to the voicemail with an email in which he opined that MRA’s

project cost estimates were “overly conservative” and inconsistent with MRA’s prior estimates.

Id. In fact, the COTR observed, MRA had increased its project cost estimate by more than 40%

over its previous estimate. Id. The COTR advised MRA to “update and refine” its estimates by

the conclusion of the design development stage. Id. “If the project is still over budget at that

time,” he observed, “we can discuss what elements need to be addressed to bring the project

scope within budget.” Id.

V. MRA Seeks a Second Modification of the Task Order

On March 16, 2012, MRA emailed the CO and COTR to request a new modification to

the task order. See id. at DA123. It noted that the previous modification, which it described as

issuing in March 2011, covered “costs related to the change in work scope associated with

previously requested changes,” which were “made and completed by August, 2011.” Id. MRA

stated that its “newly requested modification request” was “to cover additional services requested

over the past 7 months,” including 1) “services related to the infrastructure project including

design”; 2) “documentation bidding services and site visits”; 3) “time spent trying to make use of

the laser scan data submitted”; 4) “time spent making changes to previously approved designs

including the 3D model of the EP lab”; 5) “changes to HVAC, lighting, data, power, etc. related

to changing the documents and a later decision to use a plenum box”; 6) “multiple changes to

casework and storage system layouts”; 7) “additional work due to the untimeliness of being able

to access the new cardiology area to measure it”; and 8) “the need to again refinalize and

recoordinate the final documents.” Id. MRA sought a fee increase of $37,737. Id.

On March 18, 2012, the CO responded by email. Id. at DA158. She indicated that she had

“not receiv[ed] anything at all from [MRA] . . . to show what work [it] had put into the design,”

and thus she did “not understand how [she] could . . . possibly have considered [MRA’s] request

for another mod[ification] for additional costs.” Id. Further, she requested additional drawings

representing the status of MRA’s design work at different points in time and stated that she

would “not be considering any additional service requests . . . until those files [were] provided.”

Id. at DA159.

VI. MRA’s Final Construction Cost Estimate

In April 2012, MRA submitted bid documents for the project to the VA. Id. at DA163. In

the documents, it estimated a project construction cost of $4,591,842.54, which was $1,645,943

over the $2,945,900 construction cost ceiling set forth in the task order as modified. See id. at

DA165, DA169. MRA also provided seven deductive alternates which in total reduced the

estimated construction cost to $3,348,864.25. See id. at DA165. This amount was still

$402,964.25 greater than the Project Construction Cost. See id.

VII. MRA Requests Compensation for Alleged Additional Changes in Contract Scope

Some four months later, on August 16, 2012, MRA wrote to the CO again requesting a

fee increase. Id. at DA170. It claimed that since its March 16, 2012 letter, “the scope [of the

project] ha[d] increased and [its] estimate [wa]s now $4,592,000 prior to bidding.” Id. MRA

explained that, in its view, its original fee was based on the original construction budget, and that

its hourly fees as agreed to in the contract were no longer applicable because they were only

good for four years (which had passed). Id. MRA wrote that because “the VA continu[ed] its

scope changes to realize a project over budget, MRA requests an increase in A/E fee

commensurate with the current estimate and future construction bid.” Id.

The CO responded on August 31, 2012. Id. at DA172–73. The CO quoted the text of

Modification 2 and observed that “[t]he square footage and scope of the project ha[d] not

changed since Modification 0002.” Id. at DA172. She reminded MRA that it had “agreed when

[it] signed the modification that the construction cost amount was to be reduced to $2,945,900”

and that it was paid an additional $176,101 for services provided in order to accomplish the tasks

required under the modified task order. Id. “Therefore,” the CO concluded, she “[would] not be

considering any prior issues to the modification of May 9, 2011.” Id. With respect to any claims

for “an increase in salary costs and for any services provided after Modification 0002,” the CO

told MRA, it would “need to provide the breakdowns and documentation.” Id. at DA173.

In the meantime, on December 12, 2012, the VA entered into a contract with JW Fuller

Construction for the renovation work at the St. Louis VA Medical Center. Id. at DA174–75. The

contract award amount was $3,050,300. Id. at DA175. This amount included four of the

deductive alternates. Id. at DA176. JW Fuller also offered to complete an additional six optional

bid items for an aggregate total of approximately $1,360,000. Id. at DA177–79.2

Six weeks later, on January 29, 2013, MRA submitted another request for increased

compensation. Id. at DA183–84. It again alleged that it was owed compensation by the VA “for

an increase in work scope above and beyond Modification 2, which adjusted our compensation

upward by $176,101.” Id. at DA183. It further stated that “[t]he VA increased and adjusted work

scope beyond that of Modification 2, and at the same time decreased the project budget from

$3,122,000 to $2,945,900.” Id. According to MRA, the COTR had “increased and revised the

work scope [by] adding refinements and details resulting in a significant cost increase in the

construction cost.” Id. It also complained that even though it had warned the VA about its

estimates being over-budget, the VA’s only response had been to dispute the validity of MRA’s

estimates. Id.

Additionally, MRA asserted that because the construction contract had been awarded for

more than the $2.945 million Project Construction Cost, there must have been “an increase in

unacknowledged work scope.” Id. It thus informed the VA that it expected to make an

“additional compensation request . . . between $120-125,000.” Id. at DA184.

CO Czajkowski responded by email on January 30, 2013. Id. at DA185. She reminded

MRA that in her August 31, 2012 letter she had indicated that she would consider an increase in

salary costs for services provided after Modification 2, but that in order to provide such an

increase she would need for MRA to supply a breakdown of costs, along with documentation. Id.

She pointed out that MRA had still not provided any documentation to support its request. Id.

On February 6, 2013, MRA submitted timesheets for November 2010 through August

2012 to “substantiate [MRA’s conclusions regarding] the total monetary value of the actual time

MRA spent versus the amount provided in the approved Modification 2.” Id. at DA186. It

requested an additional fee of $107,777, representing the difference between the fee approved to

provide the services outlined in the modification and what MRA contended was the actual value

of the services provided by Mr. Roth and the two members of his design team who worked on

the task order as modified. Id. at DA187.3

The CO responded on April 4, 2013. Id. at DA191. She began by noting that MRA’s

“demand was not certified as set out in 48 CFR § 52.233-1,” and thus she did not “consider [it] a

‘claim’ for purposes of the Contract Disputes Act.” Id. Further, she told MRA that based on the

documentation and her consultation with the VA’s legal department, the VA “ha[d] no legal

VA procurement staff subsequently requested that additional funds be allocated to the project

by the VA’s Office of Capital Asset Management and Support, Def.’s Mot. App. Pt. II at

DA180–82, but that request was denied in February 2013, id. at DA188.

MRA claimed that it was actually entitled to $125,405 for the additional work. Def.’s Mot.

App. Pt. II at DA186–87. Mr. Roth, however, agreed to reduce his hours by 50%, which he said

“more accurately reflect[ed his] effort.” Id.

basis to make the payment [it] . . . demanded.” See id. She referred MRA to the concerns raised

in her August 31, 2012 letter, and also referenced the release language contained in the change

order. Id. In addition, she stated that MRA’s “request for ‘the total monetary value of the actual

time MRA spent versus the amount provided in the approved Modification 2’ has already been

addressed by Modification 2,” which had “provided for a cash payment in exchange for all costs

associated with the work specified in the modification.” Id. (quoting id. at DA186).

The CO also noted that the contract required that changes in scope be approved in writing

by the CO. Id. at DA192. Therefore, she advised that if MRA were alleging a change in scope

that she had authorized in writing, and could show how it specifically increased MRA’s costs,

she would consider such a demand. Id. But, she explained, “[t]wo years of timesheets itemizing

hours worked as ‘VA-JC Cardiology’ provide no basis for me to consider additional payment.”

Id. “At best,” the CO concluded, “they show your firm was doing the work both parties

contemplated when Modification 2 was signed.” Id.

MRA responded by letter on April 25, 2013. Id. at DA193–94. MRA set out the

“components [which] constitute[d] the sources of extra work performed in [its] substantial time

overage for modifications which were requested via emails but not formally approved by the

VA.” Id. at DA193. First, MRA stated that the VA had required it to design “a larger project.” Id.

Thus, according to MRA, “the primary reason we incurred additional hours on the Cardiology

project is that we were directed to design a project 1.5 times larger than the available budget.” Id.

It further asserted that when it informed the COTR of its over-budget estimates, the COTR told

MRA that it was “wrong and instructed [it] to continue with producing construction documents.”

Id. According to MRA, it was required to work an additional 1,253.25 hours in order to satisfy

the VA’s demands. Id.

In addition to its general allegation that the VA directed MRA to design a project that

was larger than the available budget, MRA also claimed that it spent additional hours on certain

specified tasks. Id. at DA193–94. These included working on a “3D Point Cloud” (sixteen extra

hours), designing demountable ceilings (twenty extra hours), designing a relocation of the piping

(twenty-four extra hours), providing plans and specifications for furniture and equipment (sixty

extra hours), changing mechanical designs based on updated VA design guidelines (eight extra

hours), adding rooms and widening a lobby (twenty-four extra hours), and revising casework for

laboratories (thirty-two extra hours). Id.

Shortly afterwards, MRA sent another letter to the CO, dated May 13, 2013, with the

subject line “Claim Under the Contract Disputes Act of 1978 as Amended.” Id. at DA195. The

letter stated that it included “materials supporting the claim of Michael Roth & Associates,

Architects & Planners, Inc. (MRA) for work performed on the . . . project including [its]

letter . . . of April 25, 2013.” Id. MRA claimed an entitlement to increased compensation in the

amount of $107,777 “per [its] letter on February 6, 2013.” Id. MRA also included the Contract

Disputes Act’s certification language. Id.

On July 22, 2013, the CO responded. Id. at DA196–201. She observed that MRA’s claim

for additional hours worked based on the construction cost of the project (which represented

87.2% of the total additional hours claimed) was not compensable under the changes clause

because “[t]he scope of The Project did not change since the acceptance of Modification #002 to

the contract.” Id. at DA196–97. The CO explained that “[w]hile the construction cost is a

material issue in the computation of whether or not MRA’s fee is within the mandated 6% A/E

Fee Limitation of 836.606-73, the construction cost is not a material issue since MRA’s fees

were negotiated on the basis of man-hours and project scope, not construction cost.” Id. at

DA197.

The CO then addressed and rejected each of the specific alleged tasks for which MRA

claimed that it was entitled to additional compensation in its April 25, 2013 letter. See id. at

DA197–201. The CO also found that, in any event, the timesheets MRA had submitted for

additional man-hours were defective because, among other things, they were prepared solely for

purposes of making a claim and not in the normal course of business, contained major

discrepancies, and appeared to be inflated. Id. at DA200–01.

In short, the CO found that MRA’s claim for an equitable adjustment in the amount of

$107,777 for changes in the scope of work lacked merit. See id. at DA201. Accordingly, she

advised MRA that her letter was “the final decision of the Contracting Officer” and informed it

of its appeal rights under the disputes clause. Id.

VIII. This Action

On August 30, 2013, MRA filed a complaint in this court. ECF No. 1. In its complaint,

MRA alleges that the VA directed “changes . . . to the scope of the contract and the services

performed,” which “caused an increase in both the time and costs required for performance.”

Compl. ¶ 21. It further alleges that the VA violated the changes clause in the contract by not

making an equitable adjustment in the contract price. Id. ¶¶ 21–22; see also id. ¶¶ 5–7, 10. MRA

seeks $125,405 in damages. Id. at 4.

After discovery was completed, the government filed a motion to dismiss and motion for

summary judgment on February 6, 2015. ECF No. 28. MRA responded on March 9, 2015. ECF

Nos. 29–32. Oral argument was held before Judge Wolski (to whom this case was previously

assigned) on June 11, 2015. See Order, ECF No. 39. Judge Wolski then requested supplemental

briefing, which was completed on February 3, 2016. ECF Nos. 40–44, 49–50, 52–53. On March

30, 2017, the case was reassigned to the undersigned. ECF No. 57.

DISCUSSION

The government has moved to dismiss MRA’s complaint. It contends that the Court lacks

jurisdiction over MRA’s claim for an equitable adjustment because MRA failed to first present

its claim to the CO as required by the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101–09.

Alternatively, the government contends that MRA’s claim lacks merit and that it is entitled to

judgment as a matter of law.

For the reasons set forth below, the Court agrees that the claim MRA is pursuing in this

Court was not presented to the CO. Accordingly, the Court lacks jurisdiction to consider it and

MRA’s complaint must be dismissed.

I. Standards for Motions to Dismiss on Jurisdictional Grounds

Generally, in deciding a motion to dismiss for lack of subject matter jurisdiction, the

court accepts as true all undisputed facts in the pleadings and draws all reasonable inferences in

favor of the plaintiff. Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir.

2011). However, if a movant disputes the basis of the Court’s jurisdiction, the allegations in the

complaint are not controlling and the Court may review evidence extrinsic to the pleadings.

Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583–84 (Fed. Cir. 1993). The plaintiff bears

the burden of establishing subject matter jurisdiction by a preponderance of the evidence. Brandt

v. United States, 710 F.3d 1369, 1373 (Fed. Cir. 2013); see also Reynolds v. Army & Air Force

Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988). If the court does not have subject matter

jurisdiction, it must dismiss the claim. Rules of the Court of Federal Claims (RCFC) 12(h)(3).

II. Jurisdiction Under the Contract Disputes Act

The Tucker Act grants the United States Court of Federal Claims the power “to render

judgment upon any claim against the United States founded either upon the Constitution, or any

Act of Congress or any regulation of an executive department, or upon any express or implied

contract with the United States, or for liquidated or unliquidated damages in cases not sounding

in tort.” 28 U.S.C. § 1491(a)(1). Further, the Court has “jurisdiction to render judgment upon any

claim by or against, or dispute with, a contractor arising under [the CDA], including a dispute

concerning termination of a contract.” Id. § 1491(a)(2).

The CDA applies to any express or implied contract made by an executive agency for,

among other things, the procurement of services. 41 U.S.C. § 7102(a)(2). Under the CDA, when

a contractor has a claim against the government, the “claim . . . shall be submitted to the [CO] for

a decision.” Id. § 7103(a)(1). This must be done in writing. Id. § 7103(a)(2). Further, all claims

for more than $100,000 must be certified. Id. § 7103(b)(1).

Under the CDA, a “claim” is 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.” See

England v. The Swanson Grp., Inc., 353 F.3d 1375, 1379 (Fed. Cir. 2004) (quotation omitted);

see also Paradigm Learning, Inc. v. United States, 93 Fed. Cl. 465, 472 (2010) (citing FAR

52.233-1(c)); FAR 2.101 (defining “claim). The written demand or assertion must be non-

routine. See James M. Ellett Constr. Co. v. United States, 93 F.3d 1537, 1542 (Fed. Cir. 1996).

Further, a claim under the CDA must contain a “clear and unequivocal statement that gives the

[CO] adequate notice of the basis and amount of the claim.” Contract Cleaning Maint., Inc. v.

United States, 811 F.2d 586, 592 (Fed. Cir. 1987). A claim may be established based upon the

submission and consideration of multiple documents, as long as the combination “make[s] clear

how much the plaintiff is willing to accept in settlement of its claim” and the additional

documents are sufficiently cross-referenced to permit the CO to understand that together they

constitute the claim. N. Star Alaska Hous. Corp. v. United States, 76 Fed. Cl. 158, 185–86

(2007); see also Kvaas Constr. Co. v. United States, 22 Cl. Ct. 740, 742 (1991).

Once a claim is submitted, the CO must issue a decision in writing. 41 U.S.C. § 7103(d).

The CO’s written decision “shall state the reasons for the decision reached and shall inform the

contractor of the contractor’s rights,” but “[s]pecific findings of fact are not required.” Id.

§ 7103(e). A contractor that has received a CO’s written decision on its claim may bring an

action directly in the Court of Federal Claims “in lieu of appealing the decision of a [CO] . . . to

an agency board.” Id. § 7104(b)(1). The contractor must do so within twelve months from “the

date of receipt of a [CO]’s decision.” Id. § 7104(b)(3).

Compliance with the dispute resolution procedures set forth in the CDA is a prerequisite

to the Court’s exercise of jurisdiction over claims covered by that act. See England, 353 F.3d at

1379 (observing that “jurisdiction over an appeal of a [CO’s] decision is lacking” unless the

claim is first presented to the CO for decision). Thus, for the Court to have subject matter

jurisdiction over a CDA dispute, as in the present case, there must be “both a valid claim and a

[CO’s] final decision on that claim.” M. Maropakis Carpentry, Inc. v. United States, 609 F.3d

1323, 1327 (Fed. Cir. 2010) (citing James M. Ellett Constr. Co., 93 F.3d at 1541–42).

III. The Merits of the Government’s Motion to Dismiss

The first task before the Court in determining whether the CDA’s exhaustion requirement

has been satisfied is to identify precisely the nature of the claim MRA is pursuing before this

Court. Once the Court has identified the claim before it, it must then decide whether that claim

was presented to the CO prior to MRA bringing it in this Court.

In this case, discerning the basis for MRA’s claim of entitlement to an equitable

adjustment is a challenge. Its complaint cites the changes clause and alleges that the VA directed

changes in the scope of the contract. The complaint does not, however, identify what those

changes to the scope of the contract were or what additional services it performed as a result of

the changes. Thus, it is not at all clear based on MRA’s complaint whether it is seeking an

adjustment based on its performance of any of the alleged additional tasks specified in its April

25, 2013 letter or its other correspondence with the VA.

Nor does MRA’s brief in opposition to the government’s motion to dismiss reference any

specific work that it was required to perform that was outside the scope of the task order as

modified. In that brief, however, MRA does clarify, at least to some extent, the legal theory

underlying its claim before this Court. That theory is apparently based in large part on its rather

novel interpretation of the design within funding limitations clause.

Thus, MRA observes that its “claims concern the government’s breach of the IDIQ

terms . . . after MRA provided the information that it was impossible to build the Project

according to the requested designs for $2.945 million.” Pl.’s Resp. to Def.’s Mot to Dismiss for

Lack of Subject Matter Jurisdiction & Mot. for Summ. J. (Pl.’s Resp.) at 8, ECF No. 31. It

contends that “[t]he [CO] did not adequately address MRA’s warnings according to its revised

estimate of construction cost, failed to authorize a change in scope, and failed to adjust the

estimated construction contract price.” Id. “Instead,” MRA argues, “the VA insisted on designs

that equated to a $4 million construction budget—fundamentally changing the terms of the task

order.” Id. Thus, “[r]ather than reducing the scope of the task order by eliminating the design of

the two cath labs, the VA required acts beyond the scope of the IDIQ, including redefining the

cath lab designs as ‘alternate deducts’ and ‘bid option.’” Id. “Although the contract

fundamentally changed,” MRA asserts, and despite its “repeated requests,” “the VA failed to

equitably adjust the contract payment to MRA.” Id.

As noted, MRA’s rather opaque legal theory is based on the notion that the VA failed to

comply with obligations imposed upon it by section 2.14 of the contract, the design within

funding limitations clause. That clause, as described above, required MRA to design the project

within the limitations of the project construction cost set forth in the task order as modified. It

further provided that re-designs to meet the construction cost limitation would be provided by

MRA at no cost to the government, unless unfavorable bids or proposals received were “the

result of conditions beyond its reasonable control.” Def.’s Mot. App. Pt. I at DA27. The clause

further stated that:

The Contractor will promptly advise the Contracting Officer if it