DENIED: March 25, 2025

DENIED: March 25, 2025

CBCA 8124, 8137

1102 COMPANY,

Appellant,

v.

DEPARTMENT OF HOMELAND SECURITY,

Respondent.

Lewis P. Rhodes of Reston Law Group LLP, Reston, VA, counsel for Appellant.

H. Weston Miller and Denise McLane, Office of the General Counsel, Federal

Protective Service, Department of Homeland Security, Philadelphia, PA, counsel for

Respondent.

VERGILIO, Board Judge.

The 1102 Company (contractor) disputes decisions by a contracting officer for the

Department of Homeland Security (agency) denying contractor claims to receive the full

monthly prices in the contract. As initially signed, and through modifications, the contract

was a firm, fixed-price contract for set monthly dollar amounts for specific numbers of hours

for particular personnel positions the contractor was to provide to the agency. The contract

specified the number of hours required for each position and that the contractor was only to

invoice for actual hours performed. The contractor contends that the contract is a firm, fixedprice, lump sum contract under which it is to receive full payment, without regard to the

hours of service provided. In two appeals, here consolidated, the contractor seeks payments

under its lump sum theory, although it did not fill one position for one month, as detailed in

the first appeal, and another position for three months, as detailed in the second appeal. The

contracting officer denied payment for these positions unfilled for four months.

CBCA 8124, 8137

2

The contract also requires contractor personnel to have security clearances. The

individuals the contractor selected to fill the positions lacked clearances for the months the

positions were unfilled. Separate from its “lump sum” theory, the contractor seeks payment,

however, contending that it had hired the individuals who were ready to perform or

performing various tasks and that the Government delayed the finalization of the clearance

process. The contracting officer found no such delay and denied relief.

The contractor has elected the small claims procedure, such that this decision by one

judge is final, conclusive, and non-precedential and may be set aside only in the event of

fraud. 41 U.S.C. § 7106(b) (2018); Rule 52 (48 CFR 6101.52 (2024)). The fixed-price

contract specifies that the contractor is to invoice only the actual number of hours of

performance. The “fixed” price of the contract relates to the hours required for each position

and the monthly rate. The contractor does not receive the full contract price when it does not

provide the number of personnel for each hour required under the contract. The contractor

also contends that the agency improperly impeded the contractor from filling the two

positions by taking excessive time and making errors during the security clearance process.

This argument fails because the record does not establish agency impropriety. The Board

denies each appeal.

Findings of Fact

The contract

The parties entered into a contract under which the contractor provides personnel,

supervision, and services necessary to perform continuous administrative support services

for a base year (June 1, 2021 through May 31, 2022) with option years. Exhibit 5 at 2.1

Under the firm, fixed-price contract, the contractor is to provide services as full time

equivalents at fixed monthly rates for a stated number of hours for identified positions. The

contract requires full-time equivalent work days of eight hours each work day for each

position. Required positions are described by title, qualifications, duties, other such

information, and the number of hours to be worked. Clearances are required for the

personnel here at issue. Exhibits 5 at 19; 10 at 1, 5-7, 26-28.

In addition to establishing fixed monthly prices for each position, associated with a

number of hours of work, the contract specifies that the contractor “is responsible for

submitting accurate invoices that reflect the actual services provided each month. . . . The

Contractor shall compute the invoice price to reflect the actual amount of hours performed.”

Exhibit 5 at 21.

1

All exhibits are in the appeal file.

CBCA 8124, 8137

3

The contract identifies security clearance requirements. Contractor personnel must

complete background investigations and obtain a favorable decision permitting entry on duty

prior to commencing work. Exhibits 5 at 71-73; 10 at 26-28. The agency recognizes that it

responded to a question presented prior to the submission of the proposals when it specified

that the length of time to obtain a favorable entry on duty decision after the submission of

completed security forms is approximately thirty days, with the caveat that the timeline could

vary, depending upon the background check for the individual. Exhibit 26 at 1-2.

Clearances

The contractor provided security information for one individual on July 28, 2023, and

obtained a clearance and approval for entry on duty on August 23, 2023. That individual did

not perform services under the contract prior to early September 2023. Exhibit 11 at 1, 4.

The contractor provided security information for another individual on December 13,

2023. On December 27, 2023, the agency sent an email seeking information for its

background investigation. The email was incorrectly addressed. On January 3, 2024, the

agency sent the email to the correct address. The employee submitted a package for final

adjudication on January 23, 2024. Exhibit 17 at 3-4, 6-7. On January 25 and 26, and

thereafter, the agency reached out to the individual to obtain additional information, because

the security review entailed inquiries and analysis, beyond the initial submission. The

preliminary adjudication was approved on March 1, 2024, which allowed entry on duty. Id.

at 12, 14-15.

The record does not indicate that the second individual would have responded any

earlier than occurred had the email initially been sent to the correct address. The record is

silent on the individual’s availability to respond between December 27 and January 3. The

record further does not support a conclusion that the agency acted improperly in reviewing

the application and ultimately approving the individual’s security clearance. The situation

is consistent with the agency’s pre-proposal comment that some background checks may

require more than thirty days to obtain clearance and approval to work under the contract.

Invoices

The contractor invoiced the agency seeking payment for August 2023. Included in

the amount sought was $10,094 for the “first” individual who had not received a clearance

to enter on duty during the month. The agency did not pay that portion of the invoice.

Exhibit 13.

The contractor invoiced the agency seeking payment for December 2023 and January

2024, reflecting charges for the position which it had not filled. The contractor noted in its

CBCA 8124, 8137

4

invoice for February 2024 that it would be seeking payment for the position which it had not

filled. At issue is the “second” individual who had not yet received the necessary clearance

to begin work under the contract. The contractor sought in a claim, and here seeks, a total

of $16,076.58 relating to the individual who had not received a clearance to enter on duty

during those months. The agency did not pay the portion of the invoices relating to the

individual who lacked clearance and denied the claim for the amount. Exhibits 19, 21, 23.

Discussion

The contractor seeks payment of $10,094 and $16,076.58 under the plain language

of the firm, fixed-price contract. As separate bases for relief, it contends that the agency

acted improperly in using excessive time to grant each clearance.

Firm, fixed-price contract

In asserting that it is entitled to a fixed amount each month, with the amount not tied

to the number or hours worked by personnel, the contractor misconstrues the contract. The

firm, fixed-price aspect refers to the rates for the positions. The contract does not obligate

the agency to pay the contractor a lump sum per month without regard to the hours worked

by each individual for each position. The contract is clear. The contract requires full time

equivalent work days of eight hours each work day for each position. The contractor is to

invoice only for hours worked: “The Contractor is responsible for submitting accurate

invoices that reflect the actual services provided each month. . . . The Contractor shall

compute the invoice price to reflect the actual amount of hours performed.” Exhibit 5 at 20.

The agency has paid the contractor for the actual number of hours of work performed; the

two individuals, for whom the contractor seeks payment, did not “work” under the contract

during the months in question. The contractor has not established a basis for relief under this

theory. There is no agency breach in paying the contractor pursuant to the terms of the

contract.

Obtaining required clearances

The contractor asserts that the agency inhibited its ability to readily staff positions,

given the time the agency expended in granting clearances, including the agency’s use of an

incorrect email address. The contractor has not established agency liability. The contract

requires that individuals possess clearances. It takes time to obtain a clearance. For the

“first” individual, from application submission to approval, the period was less than thirty

days. For the “second” individual, the time from submittal to approval and clearance was

two and one-half months. Given the need for further information to complete the clearance

review, the record does not demonstrate that the time from submission to approval was

excessive. Regarding the initial use of the incorrect email address, the record does not

CBCA 8124, 8137

5

demonstrate that the individual could or would have responded any sooner had the initial

email been properly addressed or that the time for approval would have been shortened. For

both individuals, the record fails to support the theory of an agency breach of duty with

respect to the clearance processing times.

Decision

The Board DENIES the appeals.

Joseph A. Vergilio

JOSEPH A. VERGILIO

Board Judge