Textron Aviation Defense LLC v. United States

In the United States Court of Federal Claims

No. 20-1903C

(Filed: August 12, 2022)

)

TEXTRON AVIATION DEFENSE LLC, )

)

Plaintiff, )

)

v. )

)

THE UNITED STATES, )

)

Defendant. )

)

Thomas A. Lemmer, Dentons US LLP, Denver, CO, for plaintiff. With him on the briefs

were Phillip R. Seckman and K. Tyler Thomas.

Daniel B. Volk, Commercial Litigation Branch, Civil Division, United States Department

of Justice, Washington, D.C., for Defendant. With him on the briefs were Brian M.

Boynton, Principal Deputy Assistant Attorney General, Civil Division, Patricia McCarthy,

Director, and Elizabeth M. Hosford, Assistant Director, Commercial Litigation Branch,

Civil Division, United States Department of Justice, Washington, D.C., and Peter M.

Casey and Debra A. Berg, Defense Contract Management Agency, Hanscom AFB, MA.

OPINION AND ORDER

SOLOMSON, Judge.

This Contract Disputes Act (“CDA”) case involves the arcane subject of pension

cost allocations — a process of such complexity that, if it were just a game, it would

make professional poker look like a round of go fish. 1 In this case, the stakes are

substantial: Plaintiff, Textron Aviation Defense LLC (“Textron AD”), seeks

approximately $19.4 million from Defendant, the United States, following Textron AD’s

1See generally Steven L. Briggerman, CAS 413: Determining Segment Closing Adjustments Triggered

by Sale of a Segment—Part I, 24 No. 3 Nash & Cibinic Rep. ¶ 10 (March 2010) (describing CAS 413

as “one of the most complex and difficult regulations in Government contracting”).

1

acquisition of another company reorganized as part of bankruptcy proceedings in late

2012 and early 2013.

Notwithstanding that Textron AD’s counsel were dealt some bad cards in this

case — Textron AD delayed submitting its required administrative claim until 2020 —

they played a solid hand, giving this Court serious pause about whether the

government held the winning trump card: an ironclad statute of limitations defense.

Ultimately, however, the Court concludes that government was not bluffing: the statute

of limitations indeed bars Textron AD’s complaint from moving forward.

I. LEGAL FRAMEWORK

A. The Government Cost Accounting Standards

In 1968, the United States House of Representatives’ Banking and Currency

Committee held a series of hearings on whether to renew the Defense Production Act of

1950. 2 Witness testimony, including that of United States Navy Admiral Hyman G.

Rickover, identified several problems stemming from the lack of uniform cost

accounting standards — ranging from risks that “defense suppliers could make

excessive profits and disguise them as overhead costs” to difficulties in “assess[ing]

costs incurred on contracts” and in “compar[ing] costs among prospective contractors’

cost estimates.” 3 As a result, Congress created the Cost Accounting Standards Board

(the “Board”) in 1970. 4

The Board “has exclusive authority to prescribe, amend, and rescind cost

accounting standards, and interpretations of the standards, designed to achieve

uniformity and consistency in the cost accounting standards governing measurement,

assignment, and allocation of costs to contracts with the Federal Government.” 41

U.S.C. § 1502(a)(1). Between 1972 and 1980, the Board issued nineteen Cost Accounting

Standards (“CAS”) “intended to ensure that incurred costs were appropriately allocated

to government contracts.” 5 Today, the CAS are recognized as “accounting principles

that regulate how the costs of Government contractors are defined and measured,

assigned to cost accounting periods, and allocated to contracts.” 2 Karen L. Manos,

Government Contract Costs & Pricing § 60.1 (June 2021 update). Federal Acquisition

Regulation (“FAR”) 52.230-2, a standard contract clause, is incorporated into CAS-

2U.S. Gov’t Accountability Off., GAO-20-266, Cost Accounting Standards: Board Has Taken Initial

Steps to Meet Recent Legislative Requirements 3 (2020) [hereinafter GAO-20-266].

3 GAO-20-266 at 3.

4 GAO-20-266 at 4.

5 GAO-20-266 at 4.

2

covered contracts and requires contractors to “[c]omply with all CAS, including any

modifications and interpretations[.]” FAR 52.230-2(a)(3).

B. Cost Accounting Standard 413

At issue in this case is CAS 413, “Adjustment and Allocation of Pension Cost.”

48 C.F.R. § 9904.413. 6 Pension plans are deferred-compensation plans maintained by

employers that pay benefits to employees after they retire. 48 C.F.R. § 9904.413-

30(a)(12). Because pension plans are inherently future-oriented, companies that provide

employees with pensions must determine, in each individual accounting period, how

much money to invest in the plans to meet the required future payouts. See Gates, 584

F.3d at 1064. For federal contractors, these pension plan costs qualify as contract costs

that “are paid, in part, by the government.” Id.

Determining the proper amount to contribute to pension plans in each period

requires contractors to make estimates on “a wide range of variables, such as the

expected growth of the pension fund’s assets and the length of time before participants

retire.” Raytheon Co. v. United States, 747 F.3d 1341, 1345–46 (Fed. Cir. 2014). 7 Congress

vested the Board with the power to promulgate cost accounting standards in part to

help contractors navigate the complexity of these estimates. Allegheny Teledyne, 316 F.3d

at 1370. In that regard, CAS 412 and 413 specifically provide rules for calculating and

allocating pension costs to particular business segments and to individual contracts

within segments. See Gates, 584 F.3d at 1064–65 (citing 48 C.F.R. §§ 9904.412-40(d),

9904.413-40(c)).

CAS 412 “establishes the basis on which pension costs shall be assigned to cost

accounting periods,” 48 C.F.R. § 9904.412-20(a), and “requires contractors to fund

pension costs within the cost accounting period in which those costs are assigned,”

Raytheon Co., 747 F.3d at 1345 (citing 48 C.F.R. § 9904.412-50(d)(1)). Our appellate court,

6“The CAS provisions can be found in the Code of Federal Regulations. CAS xyz corresponds

to 48 C.F.R. § 9904.xyz.” Gates v. Raytheon Co., 584 F.3d 1062, 1064 n.2 (Fed. Cir. 2009). The

Board amended CAS 413 in 1995 and made two important changes. First, the Board

“specifically defined ‘segment closing.’” Allegheny Teledyne Inc. v. United States, 316 F.3d 1366,

1371 (Fed. Cir. 2003) (quoting CAS 413–30(a)(20) (1995)). Second, the Board promulgated “a

specific formula for allocating a pension surplus or deficit between the contractor and the

government.” Id. (citing CAS 413.50(c)(12)). Textron AD’s case here deals only with the revised

CAS 413 provisions. See ECF No. 10 at 8–9 n.2 (describing pre- and post-1995 CAS revisions

and noting that only “[r]evised CAS 413 is relevant to this case”).

7See also DIRECTV Grp., Inc. v. United States, 670 F.3d 1370, 1372 (Fed. Cir. 2012) (“Like

contributions made by the employer-contractor, the amount of the Government’s contributions

to the plan depends on actuarial assumptions regarding mortality rate, employee turnover,

compensation levels, pension fund earnings, changes in values of pension fund assets, etc.”).

3

the United States Court of Appeals for the Federal Circuit, explained the basic allocation

process, as follows:

The contractor first determines its pension cost as a whole,

then allocates those costs among its different segments, then

further allocates them among various contracts. Those

pension costs allocated to cost-type government contracts are

paid by the government if allowed under the [FAR] and the

terms of the particular contract.

Allegheny Teledyne, 316 F.3d at 1371.

CAS 413, on the other hand, describes accounting standards for contractors to

apply when they close a segment 8 of their business. See 48 C.F.R. § 9904.413. The

normal rule is that “CAS 413 requires actuarial gains and losses to be amortized in

equal annual installments over a 15-year period.” Raytheon Co., 747 F.3d at 1346. When

a business segment closes, however — by virtue of discontinuing operations, being

sold, or ceasing to perform government contracts 9 — this 15-year amortization period is

not available. See id. (“When a business segment closes, however, there are no future

periods within which to adjust the pension costs applicable to that segment.”). Instead,

when a business segment closes, CAS 413 provides that the contractor must “determine

the difference between the actuarial accrued liability for the segment and the market

value of the assets allocated to the segment.” 48 C.F.R. § 9904.413-50(c)(12); see also

Raytheon Co., 747 F.3d at 1346 (describing this process). If there is a surplus, the

government “may be entitled” to recover that surplus from the contractor; if there is a

deficit, the contractor “may be entitled” to recover that deficit from the government. Id.

at 1346–47. In either case, the requisite adjustment is known as a “segment closing

adjustment.” Gates, 584 F.3d at 1065. “In more simple terms, if the plan was

overfunded at the time of the sale, the contractor owe[s] the Government its share of

that overfunding; if it was underfunded, the Government ha[s] to contribute its share of

the underfunding.” Steven L. Briggerman, Cost Accounting Standards: Liability for

8The CAS defines “segment” as “one of two or more divisions, product departments, plants, or

other subdivisions of an organization reporting directly to a home office, usually identified with

responsibility for profit and/or producing a product or service.” 48 C.F.R. § 9904.13-30(a)(19);

see also FAR 2.101 (same definition).

9See 48 C.F.R. § 9904.413-30(a)(20) (“Segment closing means that a segment has (i) been sold or

ownership has been otherwise transferred, (ii) discontinued operations, or (iii) discontinued

doing or actively seeking Government business under contracts subject to this Standard.”).

4

Interest Under CAS 413 When Terminating a Pension Plan, 24 No.1 Nash & Cibinic Rep.

¶ 1 (Jan. 2010).

II. FACTUAL AND PROCEDURAL BACKGROUND

A. Claim Origins — Textron Inc.’s Acquisition of Beechcraft Entities

Textron AD’s predecessor-in-interest was Hawker Beechcraft Defense Company,

LLC (“HBDC”). ECF No. 1 (“Compl.”) ¶ 79. HBDC’s parent company was the Hawker

Beechcraft Corporation (“HBC”). Compl. at 2; Compl. ¶ 12. In May 2012, HBC and its

related entities (collectively, “Beechcraft”) began formal bankruptcy proceedings.

Compl. ¶ 15.

Through December 31, 2012, HBDC had been performing contracts with the

federal government (the “Contracts”), which incorporated FAR § 52.230-2 and were

CAS-covered. Compl. ¶¶ 26, 79. HBC contributed to three employee pension plans:

(1) the “Salaried Plan”; (2) the “Base Plan”; and (3) the “Hourly Plan.” Compl. ¶ 13. As

part of the bankruptcy proceedings, on December 31, 2012, Beechcraft terminated the

Salaried Plan and the Base Plan, and curtailed the Hourly Plan. Compl. ¶¶ 13, 16, 18,

23. Also as part of the bankruptcy proceedings, Beechcraft transferred the assets and

liabilities of both the Salaried Plan and the Base Plan, along with $11 million in cash, to

the Pension Benefit Guaranty Corporation (“PBGC”) on February 13, 2013. Compl.

¶¶ 19–20. Beechcraft’s bankruptcy proceedings concluded on February 15, 2013.

Compl. ¶ 41. In total, the PBGC received $441.7 million in liabilities and $422.1 million

in assets from the Salaried and Base Plans. Compl. ¶ 20.

Beechcraft emerged from bankruptcy as a reorganized company, the highest-

level parent company of which was Beech Holdings, LLC. Compl. ¶ 41. On March 14,

2014, Textron Inc. acquired Beech Holdings, including the Contracts. Compl. ¶ 43.

Through a series of corporate acquisitions, mergers, and new entity formations, 10

10After the bankruptcy, Beech Holdings continued to perform the Contracts through

subsidiaries, including HBC and HBDC. Compl. ¶ 41. On March 1, 2013, HBDC changed its

name to Beechcraft Defense Company, LLC, and HBC changed its name to Beechcraft

Corporation. Compl. ¶ 42. On March 14, 2014, Textron Inc. acquired Beechcraft Holdings,

including the assets and liabilities of the Contracts. Compl. ¶ 43. On May 13, 2014, Textron Inc.

formed Textron Aviation Inc. (“TAI”) as the corporate parent of Beech Holdings. Compl. ¶ 44.

On January 1, 2017, Textron Inc. merged Beech Holdings into TAI; as a result, Beechcraft

Defense Company (formerly HBDC) became a wholly-owned subsidiary of TAI. Compl. ¶ 45.

On April 5, 2017, Beechcraft Defense Company changed its name to Textron Aviation Defense

LLC (i.e., “Textron AD,” the plaintiff in this matter). Textron AD is a wholly-owned subsidiary

of TAI. Compl. ¶ 46.

5

Textron AD acquired the contractual rights and obligations arising from the termination

of the Salaried Plan and Base Plan and the curtailment of the Hourly Plan. Compl. ¶ 47.

B. Textron AD’s CAS 413 Submission and CDA Claim

On April 4, 2018, Textron Inc. submitted a payment demand (what Textron AD

has termed its “CAS 413 Submission”) to the cognizant administrative contracting

officer (“ACO”) at the Defense Contract Management Agency, asserting that the

government’s share of the adjustment amount for all three pension plans was $18.9

million. Compl. ¶¶ 48, 61, 63. In other words, pursuant to CAS 413-50(c)(12), Textron

Inc. calculated the government’s share of the pension cost adjustment to be $18.9

million and requested that the government pay Textron Inc. that amount. In February

2020, the Defense Contract Audit Agency audited that submission and determined that

the government’s share of the terminated plans should be approximately $19.4 million.

Compl. ¶¶ 64, 70. As of April 6, 2020, however, the government had not paid any

Textron entity any of the money Textron Inc. demanded and rejected the payment

demand. Compl. ¶ 69.

On April 6, 2020, Textron Aviation Inc. (“TAI”) submitted a certified CDA claim

(the “TAI Claim”) for $19,407,515, alleging breach of contract based on the

government’s failure to pay TAI the requested pension cost adjustment. Compl. ¶ 70.

The divisional ACO denied TAI’s CDA claim on June 1, 2020, because, inter alia, the

“test contract” described in the TAI Claim was a Textron AD contract, not a TAI

contract. Compl. ¶¶ 72, 73; ECF No. 9-1 at A1. 11 To remedy that error, Textron AD

resubmitted, on July 22, 2020, that same certified CDA claim to the cognizant

contracting officer. Compl. ¶ 74. Indeed, Textron AD’s certified CDA claim seeks

payment of the same sum, $19,407,515, based on the same operative facts first alleged in

the TAI Claim. Compl. ¶¶ 5, 74–75. The contracting officer denied Textron AD’s CDA

claim on September 8, 2020. Compl. ¶¶ 7, 77; ECF No. 9-1 at A98–100 (concluding that

the claim “is time barred by the Statute of Limitations at 41 [U.S.C. §] 7103”).

C. Procedural History

On December 18, 2020, Textron AD filed its complaint against the United States

in this Court, seeking the same sum claimed in — and effectively challenging the final

decision denying — Textron AD’s CDA claim. Compl. at 1. Textron AD alleges three

11See ECF No. 9-1 at A2 (Textron AD explaining that “[f]or purposes of this Claim, [Textron AD]

has selected a representative or ‘test’ contract”); see also Gates, 584 F.3d at 1064 n.1 (explaining

that the parties in that case “selected . . . an open, CAS-covered contract between [the

contractor] and the Government, as a ‘test’ contract for purposes of establishing Board

jurisdiction”).

6

breaches of contract: (1) a failure to pay the $6,541,645 government share of the

adjustment amount under the Salaried Plan, Compl. ¶¶ 78–91 (Count One); (2) a failure

to pay the $3,105,900 government share of the adjustment amount under the Base Plan,

Compl. ¶¶ 92–105 (Count Two); and (3) a failure to pay the $9,759,970 government

share of the adjustment amount under the Hourly Plan, Compl. ¶¶ 106–120 (Count

Three). In all, Textron AD seeks $19,407,515, as well as CDA interest. Compl. at 22. 12

On February 16, 2021, the government moved to dismiss the complaint pursuant

to Rule 12(b)(6) of the Rules of the United States Court of Federal Claims (“RCFC”) for

failure to state a claim, or, in the alternative, for summary judgment pursuant to RCFC

56. ECF No. 9 (“Def. Mot.”). Specifically, the government argues that Textron AD

submitted its July 22, 2020, certified CDA claim more than six years after that claim

accrued and, thus, the claim is time-barred under the CDA’s six-year statute of

limitations. Id. at 3. The government contends that Textron AD’s claim accrued, at the

latest, on February 15, 2013, at which point “Beechcraft’s bankruptcy was complete and

the disposition of the relevant pension plans was set in stone.” Id. at 7.

On March 16, 2021, Textron AD filed its response and cross-motion for partial

summary judgment. ECF No. 10 (“Pl. Resp.”). The government filed a combined

response and reply brief, ECF No. 11 (“Def. Resp.”), and Textron AD filed a reply in

support of its cross-motion, ECF No. 12 (“Pl. Reply”).

On July 29, 2021, the Court held oral argument. ECF Nos. 13, 16 (“Tr.”). At oral

argument, counsel for Textron AD relied heavily on the Federal Circuit’s decision in

Parsons Global Services, Inc. v. McHugh, 677 F.3d 1166 (Fed. Cir. 2012). See, e.g., Tr. 50:23–

53:4. The Court subsequently ordered the parties to file supplemental briefs addressing

Parsons. See ECF No. 14 (supplemental briefing order); ECF No. 17 (“Pl. Supp. Brief”);

ECF No. 18 (“Def. Supp. Brief”). 13

Finally, on February 24, 2022, the Court ordered the parties to submit additional

supplemental briefing regarding how the rationale of Gates v. Raytheon Co., 584 F.3d

1062 (Fed. Cir. 2009), should be applied to this case, if at all. ECF No. 20. The parties

submitted their supplemental briefs on March 24, 2022. ECF No. 21 (“Def. Second

12On February 2, 2021, the parties filed a joint motion to consolidate this case with Textron

Aviation Inc. v. United States, No. 20-1883. ECF No. 7. On February 8, 2021, the Court held a

status conference with the parties to discuss the motion to consolidate. Minute Order (Feb. 3,

2021). On February 9, 2021, the Court denied the motion without prejudice. ECF No. 8.

On October 6, 2021, Textron AD filed a notice of supplemental authority, addressing Triple

13

Canopy, Inc. v. Secretary of the Air Force, 14 F.4th 1332 (Fed. Cir. 2021). ECF No. 19.

7

Supp. Brief”); ECF No. 22 (“Pl. Second Supp. Brief”). The Court held a supplemental

oral argument on March 31, 2022. ECF No. 28 (“Supp. Tr.”).

III. JURISDICTION AND STANDARD OF REVIEW

The Tucker Act, as amended by the CDA, Pub. L. No. 95-563, 92 Stat. 2383 (1978),

provides this Court “jurisdiction to render judgment upon any claim by or against, or

dispute with, a contractor arising under section 7104(b)(1) of title 41 . . . on which a

decision of the contracting officer has been issued under [the CDA].” 28 U.S.C.

§ 1491(a)(2). As a prerequisite to this Court’s CDA jurisdiction, all claims by a

contractor against the government relating to a CDA-covered contract must be in

writing and submitted to the contracting officer for a decision. 41 U.S.C. § 7103(a). If

the claim made by the contractor is for more than $100,000, the contractor must certify

the claim. Id. § 7103(b)(1). The contractor’s claim submission and the requirement that

the contracting officer render a final decision on the claim are mandatory and are

jurisdictional prerequisites for a contractor to file a CDA suit in this Court. See M.

Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1327 (Fed. Cir. 2010)

(“[J]urisdiction thus requires both a valid claim and a contracting officer’s final decision

on that claim.”); England v. Swanson Grp., Inc., 353 F.3d 1375, 1379 (Fed. Cir. 2004).

“[A] contractor has the option of appealing a contracting officer’s decision on a

CDA claim either to the appropriate board of contract appeals or [this Court].”

Guardian Angels Med. Serv. Dogs, Inc. v. United States, 809 F.3d 1244, 1247 (Fed. Cir. 2016)

(citing 41 U.S.C. § 7104). “Regardless of which forum a contractor elects, however, only

final contracting officer decisions may be appealed.” Id.

The CDA contains two statutes of limitations. The first governs the time period

within which a contractor must submit claims to a contracting officer for a final

decision, which, as noted above, is a prerequisite for a CDA action in this Court (or for

an appeal to a board of contract appeals). See 41 U.S.C. § 7103(a)(4)(A). It requires

contractors to submit such CDA claims within six years of the claim’s accrual. See id.

(“Each claim by a contractor against the Federal Government relating to a contract

. . . shall be submitted within 6 years after the accrual of the claim.”).

The second statute of limitations provision governs the time within which a

contractor must challenge in this Court — or in an appeal to a board of contract appeals

— a contracting officer’s final decision on a contractor’s CDA claim. See 41 U.S.C.

§ 7104. In particular, a contractor has one year to proceed to this Court from an adverse

contracting officer’s final decision, see id. § 7104(b)(3), or “90 days from the date of

receipt of a contracting officer’s decision” to appeal to a board, id. § 7104(a).

8

Although the latter limitations period (for challenging or appealing a contracting

officer’s final decision) may be jurisdictional, 14 the former is not. See Sikorsky Aircraft

Corp. v. United States, 773 F.3d 1315, 1320–22 (Fed. Cir. 2014); Kellogg Brown & Root

Servs., Inc. v. Murphy, 823 F.3d 622, 630 (Fed. Cir. 2016) (“KBR”) (“The court has

confirmed that the limitations period of the Contract Disputes Act is not

jurisdictional.”). Accordingly, in an action in this Court premised upon a CDA claim

that was not submitted to the contracting officer within six years of the claim’s accrual,

the government may seek dismissal pursuant to RCFC 12(b)(6) for failure to state a

claim or via a motion for summary judgment. See, e.g., Al-Juthoor Contracting Co. v.

United States, 129 Fed. Cl. 599, 621 (2016) (dismissing, pursuant to RCFC 12(b)(6),

several CDA claims submitted to a contracting officer more than six years after accrual);

Kansas City Power & Light Co. v. United States, 143 Fed. Cl. 134, 137, 143 (2019) (granting

government’s motion for summary judgment for portion of plaintiff’s CDA claim that

plaintiff filed “more than six years after it accrued”).

In evaluating a motion to dismiss for failure to state a claim, the Court accepts as

true all factual allegations — but not conclusory legal assertions — contained in the

complaint and views them in the light most favorable to the plaintiff. See Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 555 (2007); Am. Bankers Ass’n v. United States, 932 F.3d 1375,

1380 (Fed. Cir. 2019). To survive a motion to dismiss, a complaint must allege facts that

yield a “reasonable inference that the defendant is liable for the misconduct alleged.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Pursuant to RCFC 56(a), summary judgment is appropriate when “the movant

shows that there is no genuine dispute as to any material fact and the movant is entitled

14 Compare Am-Pro Protective Agency, Inc. v. United States, 281 F.3d 1234, 1238 (Fed. Cir. 2002)

(“As to jurisdiction, the CDA allows for two avenues of ‘appeal’ from the decision of a

[contracting officer]: (1) appealing to the appropriate board of contracting appeals within 90

days; or (2) filing suit in the Court of Federal Claims within one year.”), Inter-Coastal Xpress, Inc.

v. United States, 296 F.3d 1357, 1365 (Fed. Cir. 2002) (“Although characterized as a statute of

limitations, the filing period[ ] established by . . . the CDA [is] ‘jurisdictional in nature,’ for [it]

operate[s] as [a] limit[ ] on the waiver of sovereign immunity by the Tucker Act, which

otherwise entitles a contractor to sue the government in the Court of Federal Claims[.]”)

(citations and internal quotation marks omitted), and Cosmic Constr. Co. v. United States, 697 F.2d

1389, 1390 (Fed. Cir. 1982) (“The ninety day deadline is thus part of a statute waiving sovereign

immunity, which must be strictly construed, . . . and which defines the jurisdiction of the

tribunal, here the board.” (citations omitted)), with Guardian Angels Med. Serv. Dogs, Inc., 809

F.3d 1252 (“Nor need we decide whether compliance with the twelve-month filing period set

out in section 7104(b)(3) is a jurisdictional requirement.”), and Bowman Constr. Co. v. United

States, 154 Fed. Cl. 127, 136 (2021) (“It is an open question whether the one-year statute of

limitations in the CDA is jurisdictional.”).

9

to judgment as a matter of law.” A “material fact” is one that could affect the outcome

of the suit, and a genuine dispute is one that could permit a court to find in the non-

moving party’s favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “When

both parties move for summary judgment, the court must evaluate each motion on its

own merits, resolving reasonable inferences against the party whose motion is under

consideration.” Silver State Land LLC v. United States, 155 Fed. Cl. 209, 212 (2021)

(quoting First Commerce Corp. v. United States, 335 F.3d 1373, 1379 (Fed. Cir. 2003)); see

also Lippmann v. United States, 127 Fed. Cl. 238, 244 (2016) (“The [RCFC 56] standard also

applies when the Court considers cross-motions for summary judgment.”).

In this case, “the issue at the core of the dispute has been treated as purely legal”

and “there has been no serious contention that the facts are contested.” Easter v. United

States, 575 F.3d 1332, 1336 (Fed. Cir. 2009). Because “this case involves essentially

undisputed facts and turns on the legal consequences that attach to those facts . . . ,

nothing of significance turns on the distinction between a ruling on the pleadings and

summary judgment.” Id.; see also Richardson v. United States, 157 Fed. Cl. 342, 353–54

(2021) (describing this standard).

IV. THE STATUTE OF LIMITATIONS PRECLUDES TEXTRON AD’S CDA

CLAIM

As a general matter, the CDA is a jurisdictional minefield of the first order. See

Volmar Constr., Inc. v. United States, 32 Fed. Cl. 746, 761 (1995) (“Only Congress can

address the fundamental problem that the CDA has become a jurisdictional maze —

atypically hard on the Government in this case and usually a minefield for the

contractor. The real loser is the fisc. Heavily litigated jurisdictional requirements just

make the cost of contracting with the Government higher.”); United Partition Sys., Inc. v.

United States, 59 Fed. Cl. 627, 631 (2004) (noting “the complexity of the Contract

Disputes Act’s claim requirements, which are jurisdictional in this Court”).

In this case, the issue is a narrow one: whether Textron AD submitted a timely

CDA claim to the cognizant contracting officer — i.e., within six years of the claim’s

accrual. While the universe of relevant CDA rules is thankfully limited, that does not

necessarily mean they are easy to apply. That is, however, the Court’s mission in this

case. Here are the basic rules:

1. A proper CDA 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, the adjustment or interpretation of contract terms, or other relief

arising under or relating to the contract.” FAR 2.101 (defining “claim”).

10

2. A CDA claim accrues on “the date when all events, that fix the alleged

liability of either the Government or the contractor and permit assertion of

the claim, were known or should have been known.” FAR 33.201; see also

Sikorsky Aircraft Corp., 773 F.3d at 1320 (quoting FAR 33.201). 15

3. A CDA claim must be submitted to the contracting officer for a final decision

within six years of the claim’s accrual. See 41 U.S.C. § 7103(a)(4)(A); FAR

33.206(a) (“Contractor claims shall be submitted, in writing, to the contracting

officer for a decision within 6 years after accrual of a claim . . . .”).

4. A “routine request” for a contract payment — a term of art discussed in detail

below, see infra Section IV.B — is not a CDA claim, although such a request

may be converted into a CDA claim if it is first disputed either as to liability

or amount or is not acted upon in a reasonable time. 16

5. The six-year “limitations period does not begin to run if a claim cannot be

filed because mandatory pre-claim procedures have not been completed.”

KBR, 823 F.3d at 628; see also Triple Canopy, Inc., 14 F.4th at 1339–40 (finding

that “a ‘mandatory pre-claim procedure’ . . . had to be completed in order for

[the contractor]’s claims to accrue and the CDA limitations period to begin to

run”).

Whether based on the non-conclusory factual allegations in Textron AD’s

complaint or this Court’s review of the record, there simply is no dispute of material

fact that Textron AD knew or should have known all of the information necessary to file

15“[B]y FAR definition, a ‘claim’ for ‘the payment of money’ does not ‘accrue’ until the amount

of the claim, a ‘sum certain,’ FAR 2.101, is ‘known or should have been known.’” KBR, 823 F.3d

at 627 (quoting FAR 33.201); see also id. at 628 (“Accrual in accordance with FAR § 33.201 does

not occur until [the contractor] requests, or reasonably could have requested, a sum certain

from the government.”); but see FAR 33.201 (“For liability to be fixed, some injury must have

occurred. However, monetary damages need not have been incurred.”).

16See FAR 2.101 (“A voucher, invoice, or other routine request for payment that is not in dispute

when submitted is not a claim. The submission may be converted to a claim, by written notice

to the contracting officer as provided in 33.206(a), if it is disputed either as to liability or amount

or is not acted upon in a reasonable time.”); Reflectone, Inc. v. Dalton, 60 F.3d 1572, 1576 (Fed. Cir.

1995) (en banc) (explaining that the FAR “specifically excludes only undisputed routine

requests for payment from the category of written demands for payment that satisfy the

definition of ‘claim,’” and that necessarily “implies that all other written demands seeking

payment as a matter of right are ‘claims,’ whether already in dispute or not”).

11

a CDA claim at least as early as December 31, 2012, 17 and certainly no later than

February 15, 2013. See Supp. Tr. 24:5–14 (Textron AD conceding that it was “not

impossible” for Textron AD’s predecessor-in-interest to have calculated, as of December

31, 2012, the sums the government allegedly owes); Supp. Tr. 23:20–24 (Textron AD

arguing only that performing the calculations as of December 31, 2012 “wasn’t practical”

(emphasis added)); Tr. 24:13–14 (Textron AD conceding that the predecessor-in-interest

“could have done [the calculations] faster. You know, perhaps they could have if they

absolutely focused on it.”); Pl. Second Supp. Brief at 9 (contending only that submitting

its CAS 413 Submission “in 2012” was “not practical[] . . . given the pension plans were

terminated and curtailed on the last day of 2012 and the records . . . had to be analyzed

by various experts”). 18

Textron AD did not submit its CDA claim to the contracting officer, however,

until July 22, 2020, Compl. ¶ 74 — well after the six-year CDA claim submission

limitations period had run. Textron AD nevertheless contends that its CDA claim did

not accrue in December 2012 or February 2013 for two reasons: (1) Textron AD first had

to comply with a mandatory pre-claim procedure, to include its so-called CAS 413

Submission, Pl. Resp. at 7–11; and (2) any request for payment on that date would have

been a routine request for payment and, thus, by definition, could not qualify as a

proper CDA claim (absent a pre-existing dispute), id. at 11–13.

The Court rejects both of Textron AD’s arguments, and thus grants the

government’s pending motion to dismiss or, in the alternative, for summary judgment.

A. CAS 413 Does Not Contain a Mandatory Pre-claim Procedure

CAS 413 does not contain a mandatory pre-claim procedure that Textron AD was

required to follow prior to submitting its CDA claim seeking the sum at issue in this

case. Textron AD contends that “when a segment is closed, a pension plan is

17See ECF No. 9-1 at A99 (contracting officer’s final decision concluding that claim accrual

“occurred no later than December 31, 2012”).

18Textron AD’s concessions during oral argument are binding. See Sergent’s Mech. Sys., Inc. v.

United States, 157 Fed. Cl. 41, 54 (Fed. Cl. 2021) (collecting cases for the proposition that clear

statements of counsel bind parties). The government repeatedly argues that Textron AD’s

certified CDA claim accrued as early December 21, 2012, and as late as February 15, 2013. Def.

Mot. at 7; Def. Resp. at 5 n.2, 15; Def. Supp. Brief at 6, 8; Def. Second Supp. Brief at 3, 7. The

government provides supporting facts and logic for each date and Textron AD makes no real

effort to refute those possible accrual dates, aside from its two primary legal arguments, which

the Court addresses below. The Court need not decide the precise date of accrual because, as

noted, the Court concludes that the certified CDA claim at issue accrued no later than February

15, 2013.

12

terminated, or a pension plan is curtailed, CAS 413-50(c)(12) requires that a three-step

process be followed.” Pl. Resp. at 8. But that provision specifies nothing more than

how “the contractor shall determine” (i.e., calculate) either what the government owes

the contractor or what the contractor owes the government. 48 C.F.R. § 9904.413-

50(c)(12). Textron AD repeatedly refers to something it calls the “CAS 413

Submission” 19 — capitalized, as if that were some sort of defined term of art — but

Textron AD identifies no language in CAS 413, or in any statute, regulation, or case law,

to support the notion that there is some specific documentation that must be provided

to the government for review prior to a contractor’s submission of a CDA claim seeking

CAS 413 pension costs. 20

Textron AD further asserts that CAS 413 “involves the parties negotiating and

reaching [an] agreement regarding the amount of the payment.” Pl. Resp. at 10. But

Textron AD cites no regulatory language or case to support that proposition, and for

good reason: CAS 413 says no such thing. It neither expressly mandates nor implicitly

contemplates negotiations as a prerequisite to a CDA claim. In an attempt to trigger

negotiations, a contractor may always submit to the government an informal request for

payment, in lieu of a CDA claim, for any amount the contractor calculates it is owed

(including for a segment closing adjustment). Similarly, for example, both a request for

an equitable adjustment (“REA”) and a proper CDA claim may induce the government

to enter into negotiations with a contractor. But, even if negotiations are anticipated or

otherwise make good business sense for both parties, that does not mean that such

negotiations are tantamount to a mandatory pre-claim procedure. Indeed, an REA

specifically designed to trigger negotiations may itself qualify as a proper CDA claim;

and, even if an REA is missing elements necessary to qualify as a proper CDA claim,

that does not stop the statute of limitations from running. 21

19 See Compl. ¶¶ 4, 48–49, 51–64, 68–70, 74, 81, 83–84, 95, 97–98, 109–110, 112–113; Pl. Resp. at 2,

4, 6–7, 9–14; Pl. Reply at 1, 3–5, 9–15; Pl. Supp. Brief at 4–6.

20We continue to reference Textron AD’s “CAS 413 Submission,” but the Court’s use of that

term is not intended to imply that it is anything other than a non-routine payment demand that

could have been submitted as a certified CDA claim as early as December 31, 2012, and

certainly no later than February 15, 2013.

21See Hejran Hejrat Co. Ltd v. United States Army Corps of Engineers, 930 F.3d 1354, 1357 (Fed. Cir.

2019) (rejecting “[t]he government’s argument that an REA cannot constitute a claim”). The

Federal Circuit, in its recent decision in Zafer Construction Co. v. United States, explained some of

the relevant factors for a contractor to consider in deciding whether to submit an REA or a CDA

claim:

Contractors must choose between submitting a claim—which starts

the interest clock but requires the contracting officer to issue a final

13

Textron AD relies upon KBR, but neither that case nor its progeny support

Textron AD’s view. In KBR, the appellant contractor, Kellogg Brown & Root (“KBR”),

demonstrated that the six-year statute of limitations had not run prior to KBR’s

submission of the CDA claim at issue. 823 F.3d at 623–24. In that case, KBR filed the

relevant CDA claim with the contracting officer on May 2, 2012, and thus, “the critical

date of accrual for limitations purposes [was] May 2, 2006.” Id. KBR, however,

demonstrated that, as of that critical date, KBR could not have calculated the required

sum certain for its claim, a contention the government was unable to refute. Id. at 626–

67. Moreover, “the Army required that KBR resolve disputed costs with [its]

subcontractor before KBR could present a claim for reimbursement of those costs.” Id.

at 628 (emphasis added). That instruction, according to the Federal Circuit, constituted

a mandatory pre-claim procedure. See id. (“As the Army repeatedly told KBR here, it

would not consider any of KBR’s submissions until after resolution of the subcontractor

decision within 60 days—and submitting a mere request for

equitable adjustment—which does not start the interest clock but

gives the contractor more time to negotiate a settlement and

possibly avoid hefty legal fees. See Government Contract

Compliance Handbook §§ 16:7, 16:11 (5th ed. Cumulative

Supplement 2021–2022). The overlap between these two types of

documents might create room for gamesmanship. For example, a

contractor could submit a document that is a claim—starting the

interest clock—but appears to be a mere request for equitable

adjustment—causing the contracting officer to not issue a final

decision within the 60-day deadline and allowing interest to accrue

for months or years.

-- F.4th --, 2022 WL 2793596, at *5 (Fed. Cir. 2022) (holding that “[b]ecause Zafer’s December

2014 request for equitable adjustment implicitly request[ed] a final decision[, it] therefore is a

claim” (emphasis added)). Another related consideration is that the statute of limitations clock

may run while an REA is pending, something commentators have consistently cautioned about.

See Ralph C. Nash, Slow Negotiation: A Dangerous Course of Action, 34 Nash & Cibinic Rep. ¶ 41

(July 2020) (advising contractors against relying on the “argument that its claim did not accrue

until it could calculate a sum certain” and suggesting instead that “[a] contractor (as a well as a

Government agency) should assume that a claim starts to accrue when it learns that it is entitled

to assert a claim” because “[a]t that point the clock is running” and “[i]t’s up to the contractor to

keep time”); Ralph C. Nash, The Statute of Limitations: Requests for Equitable Adjustment Don’t

Count, 35 Nash & Cibinic Rep. NL ¶ 17 (Mar. 2021) (“[A] contractor must be aware that the

clock is running from an early date. It is a good idea to tab that date before beginning

negotiations with the [contracting officer] and to keep it in mind if the negotiations are

extended. Before you turn into a pumpkin, file a CDA claim.”).

14

issues.”). Here, in contrast to the facts in KBR, the government did not provide Textron

AD with any similar instruction— and Textron AD has not argued otherwise.

Textron AD does not even attempt to demonstrate that it was somehow

precluded, by law or in fact, from calculating in December 2012 (or February 2013) the

very same sums Textron AD ultimately demanded in its various submissions to the

contracting officer. Indeed, Textron AD conceded that such a calculation could have

been performed as of December 31, 2012. See Supp. Tr. 23:20–24 (Textron AD arguing

only that such a calculation “wasn’t practical”); Supp. Tr. 24:5-14 (Textron AD

conceding that “it’s arguable the contractor could have run the numbers” and that

doing so was “not impossible”); Tr. 24:13–14 (Textron AD conceding that its

predecessor-in-interest “could have done [the calculations] faster . . . if they absolutely

focused on it”).

The Federal Circuit’s subsequent decision in Electric Boat Corp. v. Secretary of

Navy, 958 F.3d 1372 (Fed. Cir. 2020), further supports this Court’s conclusion that there

is no mandatory pre-claim procedure applicable to Textron AD’s CDA claim at issue

here. In Electric Boat, the Federal Circuit read KBR the way this Court does: the key fact

in KBR was that “the Army required that the contractor resolve disputed costs with the

subcontractor before filing a claim for reimbursement.” 958 F.3d at 1376 (citing KBR,

823 F.3d at 628). Again, in Textron AD’s case here, the government imposed no such

similar requirement.

The facts and reasoning of Electric Boat critically undermine Textron AD’s

hypothesis that a mandatory pre-claim process applied to its eventual CDA claim. The

contract at issue in Electric Boat at least “required” the contractor to “follow the

standard equitable adjustment procedures” and “to ‘promptly notify’” the government

of a particular triggering event for increased compensation. 958 F.3d at 1376. The

Federal Circuit nevertheless concluded that the contractor “was not required to await a

unilateral price adjustment prior to filing a claim.” Id. Our appellate court thus held

that the government’s delay in “formally refus[ing] to adjust the price . . . does not

excuse Electric Boat’s failure to timely file a claim in compliance with the CDA.” Id. at

1377 (emphasis added). Unlike Electric Boat, Textron AD cannot even point to a similar

requirement, let alone agency instructions, contract language, or regulatory provisions

precluding Textron AD from submitting a timely CDA claim to the contracting officer

for a final decision.

The Federal Circuit’s recent decision in Triple Canopy Inc. v. Secretary of the Air

Force, 14 F.4th 1332 (Fed. Cir. 2021), applied KBR’s mandatory pre-claim procedure rule

but is easily distinguishable from Textron AD’s case. Indeed, if anything, Triple Canopy

demonstrates that this Court should not apply KBR to save Textron AD’s claim. In

15

Triple Canopy, the Federal Circuit held that a provision of the Foreign Tax Clause, FAR

52.229-6, contained “a ‘mandatory pre-claim procedure’ that had to be completed in

order for Triple Canopy’s claims to accrue and the CDA limitations period to begin to

run.” 14 F.4th at 1339–40 (quoting KBR, 823 F.3d at 628). The Foreign Tax Clause,

however, contained express mandatory language: “[t]he Contractor shall take all

reasonable action to obtain exemption from . . . any taxes or duties . . . .” Id. at 1339

(quoting FAR 52.229-6(i)). The Federal Circuit thus “agree[d] with Triple Canopy that

because it was seeking reimbursement of a [foreign tax] assessment pursuant to the

Foreign Tax Clause, it had to comply with [FAR 52.229-6(i)]’s requirement that it ‘take

all reasonable action’ to obtain ‘exemption’ from the assessment,” which “meant

appealing the assessment.” Id. (quoting FAR 52.229-6(i)). In sum, our appellate court

concluded that both “the structure and language of the Foreign Tax Clause defeats any

suggestion that . . . pursuing an appeal of the . . . assessment before Triple Canopy

submitted its claims to the [contracting officer] was optional.” Id. at 1340 (emphasis

added). In contrast, Textron AD does not identify, and this Court cannot find, anything

in CAS 413’s “structure and language” remotely suggesting the existence of a

mandatory pre-claim procedure.

This Court thus agrees with the government that “Textron AD does not identify

any language in CAS 413 that required it to wait to submit its certified claim.” Def.

Resp. at 6. And, critically, Textron AD “does not argue that it lacked any information or

was otherwise unable to perform its calculations on February 15, 2013, or on any date

thereafter.” Id. at 9. Plaintiff’s reply brief does not respond with any specificity to the

first assertion and does not respond at all to the latter.

Finally, this Court’s conclusion that CAS 413 does not contain a mandatory pre-

claim procedure is buttressed further by the Federal Circuit’s decision in Gates v.

Raytheon Co., 584 F.3d 1062 (Fed. Cir. 2009). In Gates, the Federal Circuit held that the

contractor violated CAS 413-50(c)(12) because it “did not make the required segment

closing adjustments until 2004” when they instead should have been made in 1998 and

2000. Id. at 1067–68 (concluding “that CAS 413 requires a current period adjustment

(i.e., payment in the current period), rather than simply dictating the appropriate

accounting treatment”). 22

22See also Gates, 584 F.3d at 1068–69 (“Because CAS 413–50(c)(12) contemplates adjustment to

any or all contracts that are open during the period of the segment closing, it is on these open

contracts that the Government has paid increased costs. That is, during 1998 (for [one business

segment]) and 2000 (for [another segment]), CAS 413–50(c)(12) required that Raytheon adjust

the prices of its open contracts. Raytheon did not do so. Thus, the Government overpaid on

those contracts open during 1998 and 2000, and that overpayment was a result of Raytheon's

16

We learn at least two things from Gates. First, the Federal Circuit reads CAS 413

as requiring that any adjustment attributable to a segment closing be calculated and

applied during the period of that closing. The clear and necessary implication is that a

contractor cannot delay its calculation and adjustment as Textron AD did here. 23 Cf.

Gen. Elec. Co. v. United States, 60 Fed. Cl. 782, 796 (2004) (“The time to settle-up with the

government for any surplus or deficit attributable to government contributions relating

to the closed units is at the time of the segment closing.”). Second, there is not even a

hint in Gates that CAS 413 specifies some sort of mandatory pre-claim procedure that a

contractor must follow, in conjunction with the government, to effectuate an

adjustment. 24 In sum, Gates cannot be squared with Textron AD’s hypothesis that CAS

413 contains a mandatory pre-claim procedure. See Def. Resp. at 10 (“Textron AD’s

own inaction cannot suffice to extend [its claim] accrual date.”).

B. Textron AD’s Demand for Payment Was Not Routine and Could Have Been

Submitted as a Proper CDA Claim in December 2012 or February 2013

Textron AD contends that it could not have submitted a proper CDA claim in

December 2012 or February 2013 — and thus its CDA claim did not begin to accrue —

because any payment demand would have been nothing more than a routine request

for payment, akin to an undisputed invoice or voucher. Pl. Resp. at 11–13; cf. Parsons,

677 F.3d at 1172 (“What [a contractor] cannot do is classify its request as non-routine so

it can submit it directly to the [contracting officer] as a claim without pursuing the

proper avenues under the prime contract.”). Instead, Textron AD posits that it could

not have submitted a proper CDA claim until the government first disputed its so-

called “CAS 413 Submission on February 26, 2020 . . . or, more likely, [until] some

reasonable time later when the government failed to act upon the CAS 413 Submission

in a reasonable period of time.” Pl. Resp. at 13 (arguing that “[i]t was not until this time

failure to properly credit the segment closing adjustment in those periods as required by CAS

413–50(c)(12).”).

23See Steven L. Briggerman, Cost Accounting Standards: Liability for Interest Under CAS 413 When

Terminating a Pension Plan, 24 No.1 Nash & Cibinic Rep. ¶ 1 (Jan. 2010) (summarizing Gates and

concluding that “[o]n the noncompliance issue, the court — as had the board in its initial

decision — equated the language in [CAS] 413-50(c)(12)(vii) with a requirement that actual

payment be made within the same time period of the segment’s closing”).

24Now, granted, Textron AD may respond that the adjustment at issue in Gates, 584 F.3d at

1063, was a payment or credit owed to the government and thus Gates does not teach anything

about a situation where, as here, the government allegedly owes money to the contractor. See,

e.g., Pl. Second Supp. Brief at 1–2. Textron AD, however, points to no language in CAS 413 — or

any interpretive case law — that even remotely suggests the existence of different procedures

depending upon which party may owe, or claims it is owed, money.

17

that [Textron AD] was permitted, pursuant to the definition of claim in FAR § 2.101, to

convert the CAS 413 Submission into a ‘claim’” (emphasis added)).

The Court rejects Textron AD’s argument for two primary reasons. First, as

demonstrated above, Textron AD’s underlying premise that there is such a thing as a

routine request for payment known as a “CAS 413 Submission” is Textron AD’s own,

albeit creative, fiction. There is simply no such required submission defined in any

statute, regulation, or contract provision, either expressly or implicitly. Second, Textron

AD’s CAS 413 Submission is, in any case, a non-routine demand for payment — it is not

remotely like an invoice — and thus could have been submitted long ago to the

contracting officer in the form of a proper CDA claim. Indeed, the FAR defines an

“invoice” as “a contractor’s bill or written request for payment under the contract for

supplies delivered or services performed.” FAR 2.101 (emphasis added). Accordingly,

Textron AD’s failure to submit a timely CDA claim is fatal to its complaint.

Because the distinction between routine and non-routine requests for payment is

a sticky wicket of epic proportions in Federal Circuit jurisprudence, we start at the very

beginning — with Reflectone, Inc. v. Dalton, an en banc Federal Circuit decision that held

a contractor’s REA constituted “a CDA ‘claim.’” 60 F.3d at 1573. Reflectone reached that

conclusion based on the FAR’s definition of “claim,” now located (as noted supra) at

FAR 2.101. In Reflectone, the Federal Circuit explained how the fact that the FAR

specifically excludes only undisputed routine requests for

payment from the category of written demands for payment

that satisfy the definition of “claim” implies that all other

written demands seeking payment as a matter of right are

“claims,” whether already in dispute or not. The inclusion of

only one exception to the definition of “claim”—undisputed,

routine requests—implies the exclusion of any others.

Reflectone, 60 F.3d at 1576. According to Reflectone, any broad requirement for a pre-

existing dispute would make little sense: “it is illogical to require a dispute before a

demand for payment rightfully due can be a ‘claim’ because to have a dispute the

contractor first must make a demand as a matter of right, i.e., a claim, that is then

refused.” Id.

What is crystal clear from Reflectone is that the form of the payment demand may,

in fact, be critical; as the Federal Circuit explained, “neither the CDA, its legislative

history, nor the FAR, nor its history, suggests that a dispute must pre-date the

contractor’s submission of the claim to the CO when the claim is in the form of a non-

routine demand as of right.” Reflectone, 60 F.3d at 1576 (emphasis added).

18

The Federal Circuit even explained why the form of the payment demand — and

the distinction between routine and non-routine requests for payment — is so critical:

The distinction excluding routine requests for payment from

the definition of “claim” relieves COs from the requirement

of issuing a CDA final decision on each and every voucher

that the government is obligated to pay under the express

terms of the contract during its ordinary progression,

including “progress payments.” The process for converting

such routine requests, if disputed, into claims assures that

only those submissions that need final decisions will require

them.

Id. at 1576 n.6. The operative FAR provision and the Federal Circuit were obviously

concerned with straightforward, practical problems: a contracting officer cannot be

expected to issue a final decision on each and every ordinary invoice — and, relatedly,

contractors should not be able to run to court simply because their routine payment

requests are unduly delayed or expressly denied. Permitting contractors to engage

judicial machinery based upon the government’s rejection of routine payment requests

would defeat the point of the CDA’s administrative claim submission process: to enable

the parties to settle disputes without the need for judicial involvement.

The Federal Circuit concluded, however, that “an REA is anything but a ‘routine

request for payment’” because “[i]t is a remedy payable only when unforeseen or

unintended circumstances . . . cause an increase in contract performance costs.” 60 F.3d at

1577 (emphasis added) (holding that “[a] demand for compensation for unforeseen or

unintended circumstances cannot be characterized as ‘routine’”). Notably, the Federal

Circuit made clear that not “every non-routine submission constitutes a ‘claim’ under

the FAR” — i.e., “submissions which do not seek payment as a matter of right are not

claims.” Id. at 1577 n.7. But the central reason why an invoice or voucher is a routine

request for payment is that they are “submitted for work done or equipment delivered

by the contractor in accordance with the expected or scheduled progression of contract

performance.” Id. at 1577 (emphasis added). In contrast, “[a]n REA can hardly be

compared to an invoice, voucher or progress payment [request].” Id.

Applying Reflectone’s instructions and rationale, this Court concludes that

Textron AD’s position — that its CAS 413 Submission was “routine” even though it

demanded a sum arising from an unanticipated bankruptcy — is wrong. If anything,

the so-called CAS 413 Submission was a classic non-routine demand for payment which

could have been submitted as a proper CDA claim as early as December 31, 2012, or by

February 15, 2013, at the latest. The CAS 413 Submission itself claimed that “Textron is

19

entitled to recover from the government a total of $18.9M pursuant to CAS § 413-

50(c)(12).” ECF No. 9-1 at A37. Accordingly, at a minimum, the submission is non-

routine for the simple reason that the alleged amount owed to Textron AD has no

connection whatsoever to the “expected or scheduled progression of contract

performance,” Reflectone, 60 F.3d at 1577, but rather arises from an unanticipated

bankruptcy and associated segment closings, cf. James M. Ellett Constr. Co. v. United

States, 93 F.3d 1537, 1542–43 (Fed. Cir. 1996) (“A request for payment submitted after

the government has terminated the contract . . . is a far cry from a request submitted in

accordance with the expected or scheduled progression of contract performance”).

Except in the most general sense that CAS covers the eventuality of segment closings, as

discussed infra, segment closings have nothing to do with contract performance and are

not anticipated by the parties. Textron AD’s CAS 413 Submission does not purport to

have anything to do with the performance of any specific contract. ECF No. 9-1 at A25

(“This letter represents [Textron AD’s] submission under [CAS] § 413-50(c)(12).”); id. at

A35 (“the government’s obligation exists pursuant to CAS § 413-50(c)(12)”).

Nor is the form of Textron AD’s CAS 413 Submission at all similar to the routine

payment requests that the FAR and Reflectone identify, such as a “voucher [or] invoice,”

FAR 2.101, “that the government is obligated to pay under the express terms of the

contract during its ordinary progression,” Reflectone, 60 F.3d at 1576 n.6. Indeed,

Textron AD’s so-called CAS 413 Submission “request[ed] government payment

[directly] to Textron” in lieu of “[c]ontract adjustments,” which Textron AD itself

asserted were “not appropriate because the former Beechcraft business no longer

exists.” ECF No. 9-1 at A37. Given Textron AD’s own admission that “[c]ontract

adjustments” were “not appropriate” in this case, id., that strikes the Court as a reliable

sign that the payment demand at issue was not similar to a voucher or invoice, both of

which seek sums payable during a contract’s “ordinary progression,” Reflectone, 60 F.3d

at 1576 n.6. And the degree to which a request for payment is similar to a “voucher or

invoice” must be this Court’s touchstone, as the remaining part of the FAR’s definition

— referencing “other routine request[s] for payment,” FAR 2.101 — must be interpreted

consistent with the noscitur a sociis canon of construction. 25

A short thought experiment further demonstrates Textron AD’s error. All the

Court has to do is consider the counterfactual: what if Textron AD had submitted its

25“[W]e rely on the principle of noscitur a sociis — a word is known by the company it keeps —

to ‘avoid ascribing to one word a meaning so broad that it is inconsistent with its accompanying

words . . . .’” Yates v. United States, 574 U.S. 528, 543 (2015) (quoting Gustafson v. Alloyd Co., 513

U.S. 561, 575 (1995)); see also United States v. Williams, 553 U.S. 285, 295 (2008) (“[T]he

commonsense canon of noscitur a sociis . . . counsels that a word is given more precise content by

the neighboring words with which it is associated.”).

20

July 22, 2002, certified CDA claim years ago, in December 2012 or February 2013, and

then timely proceeded to this Court following the contracting officer’s denial of the

claim? If that had occurred and the government had moved to dismiss a subsequent

CDA action in this Court for lack of jurisdiction — on the grounds that the submission

to the contracting officer was nothing more than a routine request for payment (like an

invoice) masquerading as a CDA claim — what would the Federal Circuit’s

jurisprudence dictate? Would the Federal Circuit have held that such a demand for

payment is a proper CDA claim or an improper, routine request for payment that did

not require a contracting officer’s final decision (even if one had been rendered)? This

Court thinks the answer may be readily deduced from Reflectone’s view of REAs — as

well as the Federal Circuit’s recent decision in Zafer Construction Co. v. United States,

2022 WL 2793596, at *1 (holding that an REA constituted a proper CDA claim even

though the REA did not expressly request a contracting officer’s final decision and even

though the contractor later converted the REA to a claim at the government’s request).

Characterizing Textron AD’s CAS 413 Submission as a routine payment request,

such that Textron AD could not have submitted it as a proper CDA claim years earlier,

would promote precisely the type of mechanical inefficiency the Federal Circuit

cautioned against in Reflectone: “The parties are not prevented or discouraged from

settling their differences because the first written demand for payment as a matter of

right that is not merely a routine request for payment is recognized and treated as a

CDA ‘claim.’ If anything, such a rule promotes settlement by preventing procrastination.” 60

F.3d at 1583 (emphasis added). This Court has no doubt that it would have treated

Textron AD’s CDA claim as a proper submission had it been transmitted to the

contracting officer in a timely fashion (i.e., within six years of February 15, 2013, at the

latest). The other side of that coin is that this Court must reject Textron AD’s argument

that it could not have submitted a claim until April 4, 2018, or February 26, 2020, as

Textron AD variously argues. See Pl. Resp. at 7, 13. Endorsing Textron AD’s position

would do anything but “promote[] settlement by preventing procrastination.”

Reflectone, 60 F.3d at 1583. 26

The Federal Circuit’s decision in James M. Ellett Construction Co. v. United States

further supports this Court’s conclusion that Textron AD’s CAS 413 Submission

constituted a non-routine demand for payment (and, thus, that Textron AD’s CDA

claim was untimely). In that case, the Federal Circuit rejected the government’s

preferred definition of “routine” — “[i]n accordance with established procedure” — in

favor of defining it as “‘habitual; regular,’ and ‘[n]ot special; ordinary,’” as well as “of a

26There is no suggestion that contracting officers need to be “relieve[d]” from the burden of

issuing final decisions addressing the unusual situation of segment closing adjustments, lest

they be overwhelmed with unnecessary work. Reflectone, 60 F.3d at 1576 n.6.

21

commonplace or repetitious character.” Ellett, 93 F.3d at 1543 (first quoting American

Heritage Dictionary 1074 (2d ed. 1982), then quoting Webster’s New Collegiate

Dictionary 1001 (150th anniversary ed. 1981)). The Federal Circuit concluded that

“[o]nce the government terminates for convenience, the procedures used to determine a

contractor’s recovery could be perceived as routine, in the sense that the same ones are

followed each time” but “that does not make them routine in the overall scheme of the contract

and the parties’ expectations.” Id. (emphasis added).

In this case, the contractor (here, Textron AD) and the government have

essentially swapped their respective positions from Ellett, with the contractor in this

case now arguing that its payment request would have been routine because it was

“made under the contract.” Pl. Resp. at 12. The government staked out a similar

position in Ellett but the Federal Circuit rejected it, explaining that “[t]he government’s

interpretation falls of its own weight, however, because in Reflectone itself, the claim was

submitted pursuant to the Changes clause of the contract for additional costs incurred

in part from government-caused delays” and yet the request for payment was held to

be non-routine. 93 F.3d at 1543.

Accordingly, the critical question is not whether a payment request can be tied in

some manner to a contract provision — or that it is submitted “under the contract” —

but rather whether the payment request “seek[s] compensation because of unforeseen

or unintended circumstances, in contrast to routine submissions, which are made

‘under the contract’ because they are made ‘in accordance with the expected or

scheduled progression of contract performance.’” Ellett, 93 F.3d at 1543 (emphasis

added) (quoting Reflectone, 60 F.3d at 1577). Ellett thus makes clear that when the

Federal Circuit used the phrase “under the contract” in Reflectone, our appellate court

did not create a rule that any request for payment that invokes a contract clause or

provision is, per se, routine. Textron AD’s position here was soundly rejected when the

government advanced it in Ellett, and this Court rejects it as well. 27

Further undermining any notion that the payment demand at issue is routine is

the fact that Textron AD’s CDA claim is based, in part, upon an interpretation of an

27Notably, the Federal Circuit in Zafer distinguished Ellett on the grounds that “[u]nlike the

[contractor] in Ellett, Zafer was not contractually required to propose and attempt to negotiate a

settlement with the government before submitting a claim, so the reasoning of Ellett does not

apply here.” Zafer, 2022 WL 2793596, at *4. In Ellett, the Federal Circuit held that “while [the

contractor]’s termination settlement proposal met the FAR’s definition of a claim, at the time of

submission it was not a [proper] claim because it was not submitted to the contracting officer

for a decision.” 93 F.3d at 1544. As was the case for the contractor in Zafer, Textron AD points

to no contractual obligation for either the government or Textron AD to negotiate with each

other to settle pension cost amounts “before submitting a claim.” Zafer, 2022 WL 2793596, at *4 .

22

agreement with PBGC necessitated by the bankruptcy proceedings. ECF No. 9-1 at

A14–15 (asserting that “the terms of the PBGC Agreement establish the arrangement

between the parties regarding the treatment of the pension plans”); A17 (arguing that

the government “ignores the wording of the PBGC Agreement and the economic

substance of [Textron AD’s] agreement with PBGC regarding the terminated plans”).

The fact that Textron AD’s various payment demands require the government to refer

to, and interpret, a separate agreement with the PBGC further emphasizes the

distinction between, on the one hand, such non-routine payment demands and, on the

other hand, a routine contract payment request like an invoice that the FAR excludes

from the definition of the term “claim.” 28

Finally, nothing in Parsons Global Services, Inc. v. McHugh, 677 F.3d 1166 (Fed. Cir.

2012), is inconsistent with this Court’s conclusion or otherwise requires this Court to

side with Textron AD.

The Federal Circuit in Parsons explained that “[t]he distinction between a routine

and non-routine request for payment is a factual one, dependent on the circumstances

in which the requested costs arose.” 677 F.3d at 1170. Just as in Reflectone and Ellett, the

Federal Circuit in Parsons reaffirmed that, in general, “[a] routine request is one

incurred and submitted ‘in accordance with the expected or scheduled progression of

contract performance.’” Id. (quoting Ellett, 93 F.3d at 1542–43).

As Textron AD notes, Pl. Supp. Brief at 3, Parsons provided several examples of

non-routine requests for payment and commented that “[a] common thread among

these examples is the presence of some unexpected or unforeseen action on the

government’s part that ties it to the demanded costs,” 677 F.3d at 1170–71. Observing a

common thread among a few examples, however, is a far cry from conclusively

defining a term. Indeed, the same page of the opinion clarifies that government action

is merely one type of unanticipated activity that can give rise to a non-routine payment

request. Id. at 1171 (“The payment Parsons now seeks . . . is not a result of intervening

unforeseen circumstances or government action.” (emphasis added)). Government

action is thus not the sine qua non of a non-routine payment request; rather, “unforeseen

circumstances” alone may suffice. Id. Moreover, Parsons did not purport to provide an

exhaustive list of examples of the term “non-routine,” nor did that case address CAS

413 pension cost issues.

In Parsons, the Federal Circuit concluded that the contractor’s request for

payment at issue was routine because “[t]he costs originate from scheduled contract

28Textron’s CAS 413 Submission is similarly replete with references to the PBGC Agreement.

See, e.g., ECF No. 9-1 at A26–28, A30, A38.

23

work,” “[n]one of the work was additional or unforeseen work at the government’s

behest,” and “[t]he prime contract explicitly covers these costs.” 677 F.3d at 1171. In

other words, “[b]ecause Parsons’s request should be submitted under the prime

contract and in accordance with the expected progression of contract performance, it is

routine.” Id. (emphasis added). In so holding, Parsons, like Ellett, specifically relied on

the Federal Circuit’s decision in Reflectone for the proposition that routine requests are

those “submitted for work done or equipment delivered by the contractor in accordance

with the expected or scheduled progress of contract performance.” Parsons, 677 F.3d at

1171–72 (quoting Reflectone, 60 F.3d at 1577). Applying that rationale to the facts in this

case, this Court cannot conclude that the pension costs at issue here are “for work done

. . . by the contractor” or otherwise “in accordance with the expected or scheduled

progress of contract performance.” Id. Again, the disputed pension costs have nothing

to do with the work covered by the contracts upon which Textron AD relies to assert its

claim for the recovery of pension costs. 29

****

A final comment is warranted here. “It has been said that the life of the law is

experience.” Johnson v. United States, 576 U.S. 591, 601 (2015) (paraphrasing Oliver

Wendell Holmes, The Common Law 1 (1881)). Recent experience unfortunately

suggests that “in the CDA realm, . . . jurisdictional instability may be enjoying a

resurgence.” Steven L. Schooner, Postscript: Contract Disputes Act “Claims”: Is

“Additional Or Unforeseen Work At The Government's Behest” A Prerequisite?, 26 No. 8

Nash & Cibinic Rep. ¶ 40 (Aug. 2012). Or perhaps it never really abated. 30

29Parsons similarly concluded that “nothing in this opinion alters our previous holding that the

presence of contract clauses that set forth procedures for requesting costs in unforeseen

circumstances . . . alters the nature of an otherwise non-routine request.” 677 F.3d at 1172 n.6

(citing Ellett, 93 F.3d at 1542–43).

30See Ralph C. Nash & John Cibinic, The Contract Disputes Act: Can It Be Improved?, 1 No. 12

Nash & Cibinic Rep. ¶ 88 (Dec. 1987) (concluding that “there is far too much jurisdictional and

procedural litigation under the CDA” and that CDA jurisprudence makes it seem like “the goal

of the Act is to litigate esoteric legal issues rather than to end serious controversies”); Zafer

Constr. Co. v. United States, 151 Fed. Cl. 735, 741–42 (2020) (holding that a contractor’s “claim did

not comply with the requirements of the CDA” because “[w]hat was missing . . . was any

indication that [the contractor] was expecting a final decision” and that “the wording and the

parties’ subsequent conduct is inconsistent with treating the REA as a final demand for a

decision and payment”), rev’d and remanded, -- F.4th --, 2022 WL 2793596 (Fed. Cir. 2022)

(holding that the contractor’s REA “implicitly requests a final decision and therefore is a

claim”).

24

In any event, the Court cannot help but note, once again, that the parties’

respective positions in this case are the opposite of what we might ordinarily expect.

Typically, as in Zafer, a contractor is trying to have its case heard by this Court (or a

board of contract appeals) and the government argues that the underlying payment

demand is not a proper CDA claim and, thus, the Court (or board) lacks jurisdiction. In

this case, the issue is whether the statute of limitations has run and so naturally there is

somewhat of a role reversal: the contractor is arguing that had it submitted its CDA

claim when the government says it should have, the claim would not have been proper.

The fact that this case turns on the FAR’s definition of a “claim” — a term that is not

even defined in the CDA itself — and gives rise to the jurisprudential equivalent of

situational ethics, jurisdictional confusion and, thus, extensive litigation, is indeed

unfortunate and imposes unnecessary costs on the procurement system and, in turn, the

public fisc. See Volmar Constr., 32 Fed. Cl. at 761. And it is even more unfortunate when

the result of the jurisdictional complexity is that a contractor loses out on a payment (or

at least part of a payment) that the government otherwise appears to owe (or perhaps

even admits to owing). See Parsons, 677 F.3d at 1174 (Newman, J., dissenting) (“This

lengthy [CDA] litigation of a conceded governmental obligation is an embarrassment.”).

This Court, however, is bound to apply the statute of limitations as written,

without regard to whether the government may have actually owed the pension costs at

issue (or some portion of those costs). In that regard, this Court of course must follow

the Federal Circuit’s instruction that “we evaluate whether a particular request for

payment amounts to a claim based on the FAR implementing the CDA, the language of

the contract in dispute, and the facts of each case,” Parsons, 677 F.3d at 1170. Such an ad

hoc analysis is always challenging, but even more so where, as here, the ultimate CDA

claim appears to be a proper one, the government contends that it could have been

submitted long ago, but the contractor contends that an earlier “claim” would have

been nothing more than a mere routine request for payment. The circumstances of this

case suggest, however, that focusing on whether or not a particular payment demand is

like an invoice — the rejection of which does not permit a contractor to run to court —

would perhaps nudge the “routine” versus “non-routine” analysis closer to a bright line

rule that, in the long run, would save parties time and money. In this case, Textron

AD’s so-called CAS 413 Submission bears no resemblance to an “invoice” as that term is

separately and expressly defined in the FAR, see FAR 2.101, and the sum Textron AD

seeks is not for contract work (expected or otherwise). Textron AD’s payment demand

could have been submitted to the cognizant contracting officer as a CDA claim in

February 2013 at the latest.

25

V. CONCLUSION

The facts of this case make clear that Textron AD could have submitted its CAS

413 Submission as a certified CDA claim as early as December 31, 2012, or February 15,

2013. Thus, the CDA’s six-year statute of limitations ran by the time Textron AD

submitted its certified CDA Claim to the contracting officer, on July 22, 2020. Textron

AD’s complaint based upon that certified CDA Claim, therefore, is time-barred. None

of Textron AD’s arguments persuade the Court otherwise.

Accordingly, the Court GRANTS the government’s motion to dismiss Textron

AD’s complaint pursuant to RCFC 12(b)(6) for failure to state a claim upon which relief

may be granted and, in the alternative, for summary judgment pursuant to RCFC 56.

The Court DENIES Textron AD’s cross-motion for partial summary judgment pursuant

to RCFC 56.

The Clerk is directed to enter JUDGMENT for Defendant, the United States.

IT IS SO ORDERED.

s/Matthew H. Solomson

Matthew H. Solomson

Judge

26