MOTION TO DISMISS FOR LACK

MOTION TO DISMISS FOR LACK

OF JURISDICTION DENIED: July 5, 2017

CBCA 5760

SFM CONSTRUCTORS, INC.,

Appellant,

v.

DEPARTMENT OF VETERANS AFFAIRS,

Respondent.

Colin K. McCarthy of Lanak & Hanna, PC, Orange, CA, counsel for Appellant.

David G. Fagan, Office of General Counsel, Department of Veterans Affairs,

Portland, OR, counsel for Respondent.

Before Board Judges SOMERS, VERGILIO, and KULLBERG.

SOMERS, Board Judge.

This appeal involves a claim by appellant, SFM Constructors, Inc. (SFM), seeking an

equitable adjustment for extra work and cost overruns, which it asserts arose from the actions

of contract administrators with the Department of Veterans Affairs (VA). SFM alleges that

it suffered damages due to the VA’s alleged failure to manage the sequencing of SFM’s

work. The VA has filed a motion to dismiss for lack of subject matter jurisdiction. For the

reasons set forth below, we deny the motion.

CBCA 5760

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Background

On December 30, 2013, the VA awarded SFM a construction contract at the VA Loma

Linda Healthcare System, Loma Linda, California, to SFM. The VA issued a notice to

proceed on May 15, 2014.

As a result of a dispute regarding the renovation and remodeling of certain public

restroom facilities at the VA facility, SFM alleges that it suffered damages. On January 9,

2017, SFM submitted its certified claim to the VA contracting officer. The certified claim

included a detailed thirty-nine page request for equitable adjustment for $467,859, and

sought the remaining contract balance of $18,711. SFM’s president certified the claim. The

letter transmitting the claim to the contracting officer, signed by SFM’s attorney, stated that

the claim “seeks payment of at least $486,570.00.”

The contracting officer received SFM’s request for a final decision on January 12,

2017. The contracting officer advised SFM that, due to the complexity of the claim, the VA

anticipated issuing a decision no later than May 12, 2017.

When SFM did not receive the contracting officer’s final decision by that date, it filed

a notice of appeal, received and docketed by the Board on June 1, 2017. In the complaint

accompanying the notice of appeal, SFM asked for “compensation from the Department of

Veterans Affairs in the amount of at least $473,319.”

Discussion

The VA has filed a motion to dismiss this appeal for lack of subject matter jurisdiction

on the ground that SFM’s claim does not state a “sum certain.” The Contract Disputes Act

(CDA) grants a limited waiver of sovereign immunity by allowing the Federal Government

to be sued in its capacity as a contracting party. As a waiver of sovereign immunity, this

grant must be strictly construed. Systems Management & Research Technologies Corp. v.

Department of Energy, CBCA 4068, 15-1 BCA ¶ 35,976, at 175,787 (citing Cosmic

Construction Co. v. United States. 697 F.2d 1389, 1390 (Fed. Cir. 1982). The CDA provides

that “each claim by a contractor against the Federal Government relating to a contract [shall

be in writing and] shall be submitted to the contracting officer for decision.” 41 U.S.C. §

7103(a)(1) (2012); Systems Management & Research Technologies Corp., 15-1 BCA at

175,787. Since the Act does not define the term “claim,” the definition that is set forth in

Federal Acquisition Regulation (FAR) 2.201, 48 CFR 2.201 (2016), is relied upon by

tribunals. ASP Denver, LLC v. General Services Administration, CBCA 2618, 12-1 BC

¶ 35,007, at 172,041 (citing Reflectone, Inc. v. Dalton, 60 F.3d 1572, 1575 (Fed. Cir. 1995)

(en banc); Essex Electro Engineers, Inc. v. United States, 960 F.2d 1576, 1581-82 (Fed. Cir.

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3

1992)). 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.” 48

CFR 2.101; see ARI University Heights, LP. v. General Services Administration, CBCA

4660, 15-1 BCA ¶ 36,085, at 176,186 (citing Construction Group LLC v. Department of

Homeland Security, CBCA 4459, 15-1 BCA ¶ 35,900, at 175,506).

A contractor must “submit in writing to the contracting officer a clear and unequivocal

statement that gives the contracting officer adequate notice of the basis and amount of the

claim” to make a monetary claim in a sum certain. See Contract Cleaning Maintenance, Inc.

v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987). A claim for monetary relief is not clear

and unequivocal when a contractor’s “qualifying language leaves the door open for the

request of more money on the same basis.” See ARI University Heights, 15-1 BCA at

176,186 (quoting Precision Standard, Inc., ASBCA 55865, 11-1 BCA ¶ 34,669, at 170,788).

In short, the sum certain requirement demands a fixed amount be stated in the claim. ASP

Denver, 12-1 BCA at 172,041 (citing Red Gold, Inc. v. Department of Agriculture, CBCA

2259, 12-1 BCA ¶ 34,921 (2011)).

The sum certain requirement is satisfied, or not, at the time the contractor submits its

claim to the contracting officer. ARI University Heights, 15-1 BCA at 176,186 (citing

Morgan & Son Earthmoving, Inc., ASBCA 53524, 02-2 BCA ¶ 31,874, at 157,482). Here,

the Government asserts that SFM’s monetary claim is not stated as a sum certain because the

dollar amount is preceded by the phrase “at least.” As SFM points out, this language is found

in the SFM transmittal letter, not in the actual certified claim. The transmittal letter, standing

alone, would not establish a claim pursuant to FAR section 52.233-1(c), as it does not seek,

as a matter of law, the payment of a sum certain, it is not certified, and it does not seek a final

decision from the contracting officer. By contrast, the actual certified claim contains no

qualifying language. The certified claim here fulfills the sum certain requirement where the

sum is “readily calculable by simple arithmetic” from a formula included in the claim. See

McAllen Hospitals, LP, v. Department of Veterans Affairs, CBCA 2774, et al., 14-1 BCA

¶ 35,758 at 174,975 n.9 (citations omitted). The formula here includes the claim for

$467,859, combined with an outstanding contract balance of $18,711, for a total claim of

$486,570.

In support of its motion to dismiss, the VA asserts that the fact that SFM requested

a different monetary amount in its complaint ($473,319), which is less than the amount

sought in the certified claim, proves that the claim cannot be construed as a sum certain.

SFM explains in response:

The amount prayed for on the face of SFM’s complaint is less than the amount

prayed for in its certified claim due to a payment by the VA to SFM in the

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interim period from the submission of SFM’s certified claim to the contracting

officer[] and its filing of the complaint with this Board.

In short, the amount claimed by SFM for damages as a result of the VA’s actions is

unchanged. The variance in the total amount sought is caused by changes to the outstanding

contract balance. The Government possesses all of the information necessary to calculate

the precise figure it owes SFM for the outstanding contract balance. See Metric

Construction, Inc. v. United States, 1 Cl. Ct. 383, 391 (1983) (sum certain requirement met

with data which allows for reasonable determination of the recovery available at the time the

claim is presented and/or decided by the contracting officer).

Decision

The VA’s motion to dismiss for lack of jurisdiction is DENIED.

___________________________

JERI KAYLENE SOMERS

Board Judge

We concur:

_______________________________

JOSEPH A. VERGILIO

Board Judge

______________________________

H. CHUCK KULLBERG

Board Judge