DISMISSED FOR LACK OF JURISDICTION;

DISMISSED FOR LACK OF JURISDICTION;

MOTION TO DIRECT RESPONDENT TO ISSUE

FINAL DECISIONS BY A SPECIFIC DEADLINE DENIED:

July 29, 2022

CBCA 7392

4K GLOBAL-ACC JOINT VENTURE, LLC,

Appellant,

v.

DEPARTMENT OF LABOR,

Respondent.

Karl Dix, Jr., Lochlin B. Samples, Jonathan R. Mayo, and Gesuè A. Staltari of Smith,

Currie & Hancock LLP, Atlanta, GA, counsel for Appellant.

José Otero, Jonathan I. Pomerance, Joshua L. Caplan, C. Cleveland Fairchild, and

Christopher L. Sanders, Office of the Solicitor, Department of Labor, Washington, DC,

counsel for Respondent.

Before Board Judges BEARDSLEY (Chair), LESTER, and KULLBERG.

LESTER, Board Judge.

In a notice of appeal filed May 4, 2022, appellant, 4K Global-ACC Joint Venture,

LLC (4KG-ACC), asserted that it was appealing “the Contracting Officer’s government

claim under the Contract Disputes Act [(CDA), 41 U.S.C. §§ 7101-7109 (2018),] regarding

alleged default termination damages incurred by the [Department of Labor (DOL)]” under

contract no. 1630DC-17-0024 (the contract). DOL has filed a motion seeking to dismiss the

appeal for lack of jurisdiction, arguing that the letter from the contracting officer upon which

CBCA 7392

2

4KG-ACC is relying, issued March 23, 2022, was not a “final decision” from which

4KG-ACC could appeal. For the reasons set forth below, we grant DOL’s motion.

4KG-ACC has asked that, if the Board dismisses this appeal, it preclude DOL from

issuing a series of piecemeal “final decisions” asserting Government claims under the

terminated contract and direct DOL to issue any and all “final decisions” associated with the

March 23 letter by a date certain in July 2022. Because the Board lacks authority to control

the timing of the Government’s issuance of final decisions asserting Government claims, we

deny 4KG-ACC’s request.

Background

The Contracting Officer’s March 23, 2022, Claim Letter

Accompanying 4KG-ACC’s May 4, 2022, notice of appeal was a letter from the DOL

contracting officer to 4KG-ACC’s managing members dated March 23, 2022, which

4KG-ACC contends constitutes an appealable final decision under section 7103(a)(3) of the

CDA (41 U.S.C. § 7103(a)(3)). The letter reads in its entirety as follows:

Re:

Government Claim for Default Termination Damages

Under Contract No. 1030DC-17-C-0024

Construction of the Atlanta Job Corps Center – Project 1046

Dear Mr. McKnight and Ms. Sapp:

In accordance with the [CDA], 41 U.S.C. Chap. 71, Federal Acquisition

Regulation (FAR) 33.206, and the terms of the above-referenced Contract, the

United States Government, acting through [DOL], hereby asserts a claim

against [4KG-ACC] in the amount of $5,552,959.51.

This amount represents damages the Government has incurred to date as a

result of the Joint Venture’s default of the above-referenced Contract. . . . The

Government’s damages include:

Attch. Nature of work performed DOL Contract No.

A

Designer of Record

(TAG) review of Project

specifications and plans

following 12/6/19

DOL-ETA-16-C0062

Paid to Date

$2,475,509.31

CBCA 7392

3

B

Spectrum Mgt., LLC (site

caretaker security and

maintenance) following

12/6/19

1630DC-20-P00005

$1,792,355.58

C

Harbor Enterprises, LLC

(site caretaker security

and maintenance)

following 12/6/19

1630AE-21-C0003

$1,285,094.62

Total

$5,552,959.51

In support of these damages, we are providing the attached contracts and

invoices, as well as accompanying agency payment summaries.

Note that DOL expects to incur significant additional damages as a result of

the Joint Venture’s default. DOL will assert additional claims as those future

costs are incurred and identified. DOL expects that a contract for the

completion of the Project will be awarded in the future. At that time, DOL

expects additional obligation of funds, far in excess of the funds that remained

unspent on the Contract at the time of the termination. Such excess

procurement costs will be the subject of future Government claims against the

Joint Venture.

DOL requests that you provide any facts, documentation, or argument that you

believe is relevant to this Government claim, and that you do so within 30 days

of your receipt of this letter. DOL will consider your response before issuing

its final decision.

Thank you for your attention to this matter. Please contact me, DOL

Procurement José Otero . . . , or DOL attorney Jonathan Pomerance . . . with

any questions on this matter.

The letter did not contain any statement of 4KG-ACC’s appeal rights under the CDA.

The Contracting Officer’s June 3, 2022, Letter

On June 3, 2022, a month after this appeal was filed, the DOL contracting officer

issued another letter to 4KG-ACC, this one titled “Contracting Officer’s Final Decision on

Portion of Government Claim for Damages Following Default Termination of Contract

CBCA 7392

4

1630DC-17-C-0024 Construction of Atlanta Job Corps Center.” In that letter, the contracting

officer indicated as follows:

On March 23, 2022, [DOL] asserted a Government Claim against 4KG-ACC

Joint Venture, LLC (“the JV”) under Contract 1630DC-17-C-0024. The

Government Claim is for $5,552,959.51 in damages incurred by DOJ due to

the JV’s default of the Contract. In the Claim letter, I requested the JV

respond to the Government Claim. I indicated DOL would issue a final

decision after your response was received and considered. On April 22, 2022,

counsel for the JV provided the JV’s response to the Government Claim.

I am hereby providing DOL’s final decision with respect to a portion of the

Government Claim. Specifically, I am now deciding the portion of the

Government Claim related to the costs of site security, site protection and site

maintenance. DOL seeks such damages in the amount of $3,077,450.20 (this

is the total amount paid by DOL under two separate site caretaker contracts:

$1,792,355.58 paid to Spectrum Management LLC (Spectrum) and an

additional $1,285,094.62 paid to Harbor Enterprises, LLC (Harbor)). In the

Claim letter of March 23, 2022, I provide information and documents

supporting these costs, including copies of the relevant contracts and invoices.

Based upon DOL’s alleged entitlement to the amounts associated with site security, site

protection, and site maintenance originally identified in the March 23, 2022, letter

(collectively, the “caretaker costs”), the contracting officer stated that she “hereby issue[s]

this final decision” demanding that 4KG-ACC pay within thirty days “the amount of

$3,077,450.20, as a portion of damages related to the JV’s default of the Contract.” At the

end of the final decision, the contracting officer identified 4KG-ACC’s appeal rights under

the CDA, inclusive of the right to appeal the decision to the Board. The contracting officer

also indicated that “[t]he other portion of the [March 23, 2022] Government Claim, related

to services provided by the Designer of Record, is still under review by DOL” and that “[a]

separate final decision on that portion of the Claim will be issued in the near future.”

4KG-ACC has not filed an appeal of the contracting officer’s June 3 final decision.

DOL’s June 3, 2022, Motion to Dismiss and 4KG-ACC’s Response

The same day that the DOL contracting officer issued her June 3, 2022, final decision,

DOL filed a motion to dismiss this appeal, asserting that the March 23, 2022, letter upon

which this appeal is based is not a “final decision” under the CDA giving rise to a right to

appeal. DOL referenced the final decision issued earlier that day and argued that, if

4KG-ACC wanted to challenge that decision, it would need to file a new appeal. Further,

CBCA 7392

5

DOL argued that the remaining portion of the damages identified in the March 23, 2022,

letter but not addressed in the June 3, 2022, final decision would not be ripe for appeal until

the contracting officer issues an actual final decision on that portion of the Government’s

claim.

In response, 4KG-ACC, citing precedent from the Court of Appeals for the Federal

Circuit, argued that it is entitled to initiate an appeal based upon the March 23 letter. It

indicated that, for its own protection, it still intends to file an appeal from the June 3 decision,

but it asked that the Board direct DOL to issue any and all additional “decisions” relating to

the Government’s claim by a date certain in July 2022, with the goal of precluding piecemeal

adjudications. It asserted that “[t]his aim is especially important given the DOL’s stated

intention to lodge additional damages claims against [4KG-ACC], albeit without any

indication of when the DOL might do so.”

Discussion

DOL’s Motion to Dismiss

“[T]he linchpin for appealing claims under the [CDA] is the contracting officer’s

‘decision,’” and “[n]o appeal . . . to the agency board of contract appeals . . . may be taken

without such a ‘decision.’” Paragon Energy Co. v. United States, 645 F.2d 966, 967 (Ct. Cl.

1981). That rule applies whether the claim at issue is a contractor claim or a Government

claim. Computer Network Systems, Inc. v. General Services Administration, GSBCA 11368,

93-1 BCA ¶ 25,260, at 125,825 (1992); 41 U.S.C. § 7103(a)(3).

The “decision” on appeal here is the contracting officer’s letter dated March 23, 2022.

That letter is titled “Government Claim for Default Termination Damages.” In the letter’s

first paragraph, the contracting officer states that she is “assert[ing] a claim against

[4KG-ACC] in the amount of $5,552,959.51” and that “[t]his amount represents damages the

Government has incurred to date as a result of the Joint Venture’s default.” Towards the end

of the letter, however, the contracting officer gives 4KG-ACC the opportunity to “provide

any facts, documentation, or argument that [it] believe[s] is relevant to this Government

claim” and states that “DOL will consider [4KG-ACC’s] response before issuing its final

decision.”

The FAR defines a “claim” as “a written demand or written assertion by one of the

contracting parties seeking, as a matter of right, the payment of money in a sum certain.”

FAR 2.101 (48 CFR 2.101 (2021)). Even though the contracting officer here expressly

asserted a Government claim in a sum certain, DOL tells us that the final statement in the

March 23 letter indicating that the contracting officer would consider information that

4KG-ACC might submit “before issuing [DOL’s] final decision” places a qualification on

CBCA 7392

6

the contracting officer’s earlier statements and renders any appeal of the Government claim

premature.

On its face, DOL’s argument appears somewhat at odds with the Federal Circuit’s

decision in Placeway Construction Co. v. United States, 920 F.2d 903 (Fed. Cir. 1990).

There, the appellate court reviewed a letter in which a contracting officer found the

contractor “liable because of delayed performance and effectively ruled that damages would

be the contract balance, $297,226.12, subject to revision if he concluded that different

damages were due at some indeterminate time in the future.” Id. at 907. The Federal Circuit

held that the contracting officer’s determination that the contractor was liable and

identification of a sum certain that the contractor should pay outweighed any suggestion in

the letter that the contracting officer might revise that number at some future date:

[W]e conclude that the [contracting officer (CO)] effectively made a final

decision on the government claim. It was undisputed that Placeway had

completed performance of the contract. Moreover, the contract price for the

work completed was undisputed and was due upon completion of work.

Although the CO may have implied that the amount of the claimed set off

would be redetermined in the future, the CO effectively granted the

government’s claim in the amount of $297,057.12 when he declined to pay

Placeway the balance due on the contract. That the CO might decide Placeway

owed more or less at a later time does not affect the finality of the decision

made granting the government a sum certain, $297,057.12.

Id. at 906. The Federal Circuit noted that, “[e]ven if the CO’s letter is construed as merely

a statement that he is investigating the government’s claim to decide liability,” similar to

what DOL is arguing here, “we find no authority for [the contracting officer] effectively to

award fixed damages prematurely and speculatively, i.e., prior to liability being established

and a quantum being ascertained.” Id. at 907 n.2. It also found that “[t]he decision is no less

final because it failed to include boilerplate language” – that is, the notice of appeal rights

– “usually present for the protection of the contractor.” Id. at 907. Accordingly, the

appellate court found that the letter was sufficiently final to allow the contractor to challenge

it and that the trial court possessed jurisdiction to consider that challenge.

Yet, subsequent to Placeway, the Federal Circuit issued a decision in Sharman Co.

v. United States, 2 F.3d 1564 (Fed. Cir. 1993), overruled in part on other grounds,

Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed. Cir. 1995) (en banc), that at least one court

(Volmar Construction, Inc. v. United States, 32 Fed. Cl. 746, 754 (1995)) has found

inconsistent with Placeway. In Sharman, the Government sent a letter to the contractor

seeking repayment of progress payments in the amount of $2,066,696.36, which it

characterized as a “notice of demand for payment of contract debt,” and notified the

CBCA 7392

7

contractor that, if it disputed the amount sought, it could submit a proposal for deferment of

collection. Id. at 1567. The contractor challenged the notice in a suit filed with the Court

of Federal Claims, but the Federal Circuit held that the invitation in the notice allowing the

contractor to submit a proposal for deferring or eliminating the identified debt, coupled with

the nature of a notice and demand for payment, rendered the notice insufficiently “final” to

constitute an appealable final decision:

On its face, this letter simply states that it is a “notice and demand for

payment”; it does not contain the customary designation “final decision.” The

text of the September letter also makes clear that it is not a final decision

because it specifically invites Sharman to submit a proposal for deferment of

collection “if immediate payment is not practicable or if the amount is

disputed.” As the Claims Court itself acknowledged, such notices are

“tentative determinations issued to invite contractor comment rather than as

final decisions.” The September letter, therefore, is not a final decision.

Id. at 1570 (citations omitted). The Sharman Court determined that its prior decision in

Placeway was distinguishable because, even though the contracting officer’s letter in

Placeway stated that the amount demanded was subject to possible reduction, it did not invite

negotiation in the same manner as the notice in Sharman:

[I]n Placeway Construction Corporation v. United States, 920 F.2d 903 (Fed.

Cir. 1990), a contracting officer’s decision was held to be final despite a

statement in the decisional letter that the amount could be revised at a later

date, because the decision was for the set amount of the contract balance

although it was subject to possible reduction depending on subsequent facts.

This case is distinguishable from Placeway, however, because here the

contracting officer’s September letter actually invited negotiation of the

amount demanded and therefore was not final.

Id. at 1571 n.9.

Like the court in Volmar Construction, we find it somewhat difficult to “resolve the

[seeming] inconsistency between the rule announced in Placeway and those set forth in

Sharman.” Volmar Construction, 32 Fed. Cl. at 754; see id. at 755 (comparing “the relaxed

final decision standard enunciated in Placeway” with the stricter standard in Sharman). We

must be guided, though, by the manner in which the Federal Circuit in Sharman

distinguished the situation there from the situation in Placeway, finding that, where “the

contracting officer’s . . . letter actually invited negotiation of the amount demanded,” as it

did in Sharman, the demand for payment “therefore was not final.” Sharman, 2 F.3d at 1571

n.9. Looking at the contents of the notice at issue in Sharman, it is clear that the “invitation”

CBCA 7392

8

to “negotiate” was implicit in the context of the notice rather than a broadly explicit request

for negotiations.

Specifically, the demand for payment at issue in Sharman was part of an established

process, set forth in FAR Part 32.6, that ultimately (unless the parties reach agreement on the

asserted debt) leads to the issuance of an appealable contracting officer’s final decision. See

Sharman Co. v. United States, 24 Cl. Ct. 763, 765 (1991) (quoting language from demand

letter that mirrors FAR 32.604(b)(5)(i) language), rev’d in part, 2 F.3d 1564 (Fed. Cir. 1993).

FAR 32.603 and .604 identify a process through which the contracting officer determines

that a contractor owes a contract debt to the United States and then issues a demand for

payment advising the contractor “[t]o contact the contracting officer if the contractor believes

the debt is invalid or the amount is incorrect.” FAR 32.604(b)(5)(i). If “[t]he contracting

officer and the contractor are unable to reach agreement on the existence or amount of a debt

in a timely manner,” the contracting officer then issues a final decision that is appealable to

the Board. Id. 32.605(a)(1). Accordingly, the “demand letter gives the contractor notice of

the potential claim and an opportunity to respond. If warranted, the [contracting officer’s]

appealable claim decision [then] follows.” Bean Horizon-Weeks Marine (JV), ENG BCA

6398, 99-1 BCA ¶ 30,134, at 149,060 (1998). In light of the demand for payment’s role in

the established FAR Part 32.6 process, the demand for payment letter in Sharman was

considered distinct and separate from the appealable final decision that was supposed to

come later.

In this case, the DOL contracting officer did not expressly indicate in her letter that

she was following the FAR Part 32.6 process in asserting DOL’s claim. In fact, she instead

referenced FAR 33.206, “Initiation of a claim,” which refers to the contracting officer’s

obligation to issue a written decision on any Government claim initiated against a contractor.

Nevertheless, the paragraph in the March 23 letter inviting 4KG-ACC to submit “any facts,

documentation, or argument that [4KG-ACC] believe[s] is relevant to this Government

claim” is similar to the language required for FAR 32.604 demand notices, and the letter

makes clear that the DOL contracting office intended to issue a “final decision” after

receiving 4KG-ACC’s response.1 That language indicates that the March 23 letter was a

“tentative determination[] issued to invite contractor comment rather than . . . [a] final

decision[].” Sharman, 2 F.3d at 1570; see Crippen & Graen Corp. v. United States, 18 Cl.

1

That statement is consistent with DOL’s representations in a notice that DOL

filed on March 31, 2022, in a related case (CBCA 6683, et al.) in which 4KG-ACC has

challenged the validity of DOL’s default termination. There, DOL informed the Board that

it had asserted a Government claim against 4KG-ACC but “has not yet issued a contracting

officer’s final decision with respect to this Claim.” The Government claim referenced in that

March 31 notice is the same one that is at issue in this appeal.

CBCA 7392

9

Ct. 237, 240 (1989) (where “the [contracting officer’s] letter invited the plaintiff to submit

any facts concerning the dispute and specifically stated that ‘. . . a final decision will be

issued in pursuit of an affirmative government claim,’ [t]he clear intent of the letter was to

allow the contracting officer to gather and consider all relevant information concerning the

dispute in rendering a final decision.”).

We recognize that the bulk of the contracting officer’s March 23 letter makes clear

that the contracting officer has already decided that 4KG-ACC is liable, has identified and

documented the specific costs that she wants 4KG-ACC to pay, and is written in a manner

that makes it sound like a decision. We can also understand 4KG-ACC’s desire to speed the

Government’s excess reprocurement cost demands so that they may join a challenge to

DOL’s default termination decision that 4KG-ACC has already filed with and is pending

before the Board. Nevertheless, one of the purposes of the CDA was to establish a

mandatory administrative process that would “help to induce resolution of more contract

disputes by negotiation prior to litigation” before the Board. S. Rep. No. 95-1111, at 1

(1978) (emphasis added), reprinted in 1978 U.S.C.C.A.N. 5235, 5235. DOL’s March 23

letter, despite some of its wording, is only an initial step in that process. Because the March

23 letter asked for input from 4KG-ACC consistent with the FAR Part 32.6 process, we must

follow Sharman and find that the March 23 letter is not an appealable contracting officer’s

final decision. See Sharman, 2 F.3d at 1571 n.9.

4KG-ACC argues that, if the March 23 letter does not constitute an appealable final

decision, the Board can still assume jurisdiction over this appeal by substituting the

contracting officer’s June 3, 2022, final decision in place of that March 23 Government claim

letter. We disagree. This appeal was based solely on the March 23 letter. Further,

jurisdiction is established at the time that a notice of appeal is filed, Pros Cleaners v.

Department of Homeland Security, CBCA 5871, 17-1 BCA ¶ 36,904, at 179,807, and this

appeal was already pending when the contracting officer issued the June 3 decision. To the

extent that 4KG-ACC wants to appeal the June 3 final decision, it still has time to do so, but

must file a new notice.

4KG-ACC’s Request to Set a Definitive Date for Assertion of Claims

4KG-ACC has asked us that, if we dismiss this appeal for lack of jurisdiction, we

require DOL to issue decisions asserting all Government claims for excess reprocurement

costs under its terminated contract (or at least those arising out of the March 23 letter) by a

date certain in July 2022. Yet, when jurisdiction is lacking, “the only function remaining to

the [tribunal] is that of announcing the fact and dismissing the cause.” Ex Parte McCardle,

74 U.S. (7 Wall.) 506, 514 (1868). Even if we could consider 4KG-ACC’s request, the FAR

allows a contracting officer to “issue a written decision on any Government claim initiated

against a contractor within 6 years after accrual of the claim, unless the contracting parties

CBCA 7392

10

agreed to a shorter time.” FAR 33.206(b). 4KG-ACC has identified nothing that would

provide the Board any authority to shorten or override that six-year statute of limitations.

In support of its position that the Board can direct the DOL contracting officer to issue

a final decision on a Government claim by a date certain, 4KG-ACC cites to 41 U.S.C.

§ 7103(f)(4), which provides the Board authority to “direct a contracting officer to issue a

decision in a specific period of time, as determined by the tribunal concerned, in the event

of undue delay on the part of the contracting officer.” Although 4KG-ACC argues that,

under this section, we should be able to alter the Government’s deadline for issuing a

decision on a Government claim, it is clear reviewing section 7103 as a whole that subsection

7103(f) addresses the timing of final decisions on contractor claims. Under section

7103(f)(4), “the Board is authorized to alter a time extension that the contracting officer has

granted himself [for deciding a contractor claim] and to allow a contractor to appeal on a

‘deemed denial’ basis if the contracting officer fails to issue a decision by the Board’s

revised deadline for a decision.” Hawk Contracting Group, LLC v. Department of Veterans

Affairs, CBCA 5527, 16-1 BCA ¶ 36,572, at 178,120. That statutory provision does not

allow us to reduce the six-year statute of limitations that governs the Government’s right to

assert a Government claim under a contract or to find a decision on a Government claim

“deemed asserted.”

Decision

For the foregoing reasons, this appeal is DISMISSED FOR LACK OF

JURISDICTION. 4KG-ACC’s request that the Board set a deadline for the assertion of

additional Government claims is DENIED.

Harold D. Lester, Jr.

HAROLD D. LESTER, JR.

Board Judge

We concur:

Erica S. Beardsley

ERICA S. BEARDSLEY

Board Judge

H. Chuck Kullberg

H. CHUCK KULLBERG

Board Judge