DENIED IN PART; DISMISSED IN PART FOR LACK OF JURISDICTION:

DENIED IN PART; DISMISSED IN PART FOR LACK OF JURISDICTION:

April 13, 2022

CBCA 7195, 7211

HEROES HIRE LLC,

Appellant,

v.

DEPARTMENT OF VETERANS AFFAIRS,

Respondent.

Jessica House, Chief Executive Officer of Heroes Hire LLC, Loganville, GA,

appearing for Appellant.

Kathleen Ellis-Ramos, Office of General Counsel, Department of Veterans Affairs,

Arlington, TX, counsel for Respondent.

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

LESTER, Board Judge.

In these appeals,1 appellant, Heroes Hire LLC (Heroes Hire), challenges a Department

of Veterans Affairs (VA) contracting officer’s decision terminating for cause Heroes Hire’s

contract for nursing services. The VA has filed a motion seeking summary judgment in its

favor and asking the Board to uphold the termination. In response, Heroes Hire expresses

1

Both CBCA 7195, which was filed on August 20, 2021, and CBCA 7211,

which was filed on September 13, 2021, challenge the same contracting officer’s decision,

dated August 19, 2021, terminating the contract at issue for cause. We elected to consolidate

the two appeals rather than require briefing on the necessity of the second appeal.

CBCA 7195, 7211

2

its disappointment in having been “taken advantage of by [the VA] and a ‘third party’” – a

lender to which Heroes Hire assigned its contract payments – that Heroes Hire alleges the

VA should not have recognized as a valid assignee. Appellant’s Response to Respondent’s

Summary Judgment Motion at 1. Although Heroes Hire argues that both the VA and the

Board have failed to protect it against a predatory lender and that the VA should have paid

contract proceeds directly to Heroes Hire despite the assignment, Heroes Hire ignores the

precarious position into which it placed the VA by demanding direct payment after telling

the VA incorrectly that the VA could ignore the assignment. It was Heroes Hire that entered

into a contractual relationship with a lender that it now views as predatory, and it was Heroes

Hire that signed an assignment of all contract proceeds to that lender.

When the VA, in response to Heroes Hire’s and the lender’s competing demands for

direct payment, stated that it could not ignore the assignment, Heroes Hire improperly

refused to perform any more work under the contract. Had the VA acquiesced in Heroes

Hire’s demand, the VA needlessly would have faced duplicative liability to Heroes Hire’s

lender, which had a vested interest in Heroes Hire’s contract proceeds, and Heroes Hire’s

refusal to continue performance was a breach of its contract obligations. In such

circumstances, the VA’s termination of Heroes Hire’s contract for cause was proper, and we

deny Heroes Hire’s challenge to that termination. We also dismiss for lack of jurisdiction

Heroes Hire’s monetary requests.

Statement of Uncontested Facts

The Contract

On April 21, 2021, the VA awarded contract no. 36C25221C0064 (the contract), a

fixed-price contract in the amount of $184,320, to Heroes Hire for the provision of technical

support, management, and labor to fulfill the need for Community Care Registered Nurse

(RN) services at the Clement J. Zablocki Veterans Affairs Medical Center in Milwaukee,

Wisconsin. The contract expressly stated that the immediate need for nursing services

resulted from increased care needs because of the COVID-19 pandemic. The contract period

of performance was from April 21 to September 30, 2021. Appeal File, Respondent’s

Exhibit 1 at 3.2

2

Unless otherwise noted, all exhibits referenced in this decision are contained

in the appeal file. We identify each exhibit as “Respondent’s Exhibit” or “Appellant’s

Exhibit,” referencing the party that filed it, to differentiate between duplicate exhibit

numbers.

CBCA 7195, 7211

3

The contract required three RNs “to provide services [at the medical center] 8-hours

per day, Monday through Friday,” and indicated that “[o]vertime and work on a federal

holiday may be requested.” Respondent’s Exhibit 1 at 3. The contract’s price schedule

identified three RNs by name who were to provide the RN services under the contract for a

collective total of 2280 regular hours and 528 overtime and holiday hours. Id. at 4.

The “Contract Terms and Conditions – Commercial Items (Oct 2018)” clause from

section 52.212-4 of the version of the Federal Acquisition Regulation (FAR) then in effect,

48 CFR 52.212-4 (2020) (FAR 52.212-4), was incorporated into the contract, and it provided

that, if a dispute were to arise during contract performance, “[t]he Contractor shall proceed

diligently with performance of this contract, pending final resolution of [the] dispute.”

Respondent’s Exhibit 1 at 27 (quoting FAR 52.212-4(d)). The clause further provided that,

if the contractor failed to perform the services required by the contract, it “shall be liable for

default unless nonperformance is caused by an occurrence beyond the reasonable control of

the Contractor and without its fault or negligence . . . .” Id. (quoting FAR 52.212-4(e)). The

clause allowed the Government to “terminate this contract, or any part hereof, for cause in

the event of any default by the Contractor, or if the Contractor fails to comply with any

contract terms and conditions, or fails to provide the Government, upon request, with

adequate assurances of future performance.” Id. at 30 (quoting FAR 52.212-4(m)).

Payment under the contract was to be made through the System for Award

Management (SAM), and Heroes Hire was responsible for maintaining current, accurate, and

complete data within SAM throughout contract performance. Respondent’s Exhibit 1 at

33-34 (incorporating the clause at FAR 52.204-13 (Oct. 2018)). To the extent that the

contractor assigned payments to a financial institution, the contractor was “not [to] change

[its] name or address for [electronic funds transfer (EFT)] payments or manual payments, as

appropriate, in SAM record to reflect an assignee for the purpose of assignment of claims.”

Id. at 35. Instead, “[a]ssignees [were to be] separately registered in SAM,” with payment to

be made to the assignee directly and in the assignee’s name. Id.

Heroes Hire’s Assignment of Payments

On April 23, 2021, Heroes Hire executed a document titled “Instrument of

Assignment” in which it agreed to “assign to FACTORS SOUTHWEST, LLC [FSW] . . . as

Assignee, all monies due or to become due under Contract Number: 36C25221C0064 dated

April 21, 2021 and all delivery orders, task orders, or purchase orders issued thereunder

issued by [the VA].” Respondent’s Exhibit 9 at 80. By email on April 26, 2021, seemingly

in conflict with the requirements of FAR 52.204-13, FSW directed Heroes Hire to enter

FSW’s banking information in the remittance portion of Heroes Hire’s SAM account, which

Heroes Hire did. Appellant’s Exhibit 6; Answer ¶ 8.

CBCA 7195, 7211

4

FSW subsequently forwarded its assignment agreement with Heroes Hire to the VA

contracting officer, requesting that the contracting officer “make all necessary changes to the

contract so that payment remittance information . . . can be made effective as soon as

possible.” Respondent’s Exhibit 9 at 78. The VA contracting officer received the

assignment on May 11, 2021. Id.

The VA contracting officer did not immediately accept the assignment. By email

dated May 21, 2021, the VA contracting officer questioned Heroes Hire about the necessity

of an assignment given the relatively short duration of this contract. Respondent’s Exhibit 12

at 94-95. Heroes Hire responded that, “[i]nitially, we thought we would need it, but at this

time, we do not need an Assignment of Claims for this contract” and asked the contracting

officer to “disregard this document.” Id. at 94. The contracting officer then asked Heroes

Hire to “send [her] something official from your company and the assignee withdrawing this

request.” Id. at 93. Heroes Hire responded on May 24, 2021, that it was “in the process of

changing [its] assignment of claims to a different lender,” that “[t]he lender will send out the

new assignment of claims which could take a few weeks,” and that Heroes Hire would

“forward the Cancellation of Assignment of Claims once [it] ha[d] wrapped final details.”

Id. The VA contracting officer did not take action on the assignment following Heroes

Hire’s response.

On May 28, 2021, Heroes Hire asked about the payment status of its first invoice,

which it said it needed approved that day so that it could make payroll. Appellant’s

Exhibit 7. The contracting officer responded that the invoice had been approved and paid

on May 21, 2021. Id. It appears that, in light of the FSW banking information that Heroes

Hire had entered into its SAM account, that money had gone into FSW’s bank account.

Later that day, Heroes Hire changed the remittance information in its SAM account to reflect

a Heroes Hire bank account number. Appellant’s Exhibit 8; Answer ¶ 9. As a result, when

the VA made payment on the next Heroes Hire invoice through SAM on June 4, 2021, the

money went directly to Heroes Hire. Id.

When FSW learned of the redirected June 4 payment, it challenged Heroes Hire’s

change in the SAM system as fraudulent and threatened legal action. Appellant’s Exhibit 8;

Respondent’s Exhibit 16. Further, on June 10, 2021, FSW sent an email to the VA

contracting officer complaining that it had not received the June 4 payment to which it

claimed it was entitled:

FSW would like to following [sic] up on the status of the Federal Assignment

of Claims for Heroes Hire account. FSW Funding received a payment from

the VA on 5/24/2021. We were informed today that there was a misdirected

payment sent to the Heroes Hire account on 6/4/2021. Can you please help us

with getting an update on this?

CBCA 7195, 7211

5

Respondent’s Exhibit 15 at 107.

The contracting officer expressed surprise later that day that FSW had received the

May 24 payment, given that she had never processed the original notice of payment

assignment. Respondent’s Exhibit 15 at 106. FSW then told the VA contracting officer that

Heroes Hire had “borrowed money from [FSW] and has misdirected payment,” that “[t]he

Assignment of Claims was signed by [Heroes Hire] and is valid,” and that FSW “will be

pursuing [Heroes Hire] legally for breach of contract among other items.” Id. It asked the

contracting officer to “sign the original assignment documents and send back to FSW,”

representing itself as “the senior secured lender for Heroes Hire.” Id. Heroes Hire submitted

its own response to the VA contracting officer, telling the contracting officer to “please

refrain from communicating with any persons affiliate[d] with FSW Funding. We are

currently reporting them. You can call me if you have any questions.” Id. at 105.

FSW again contacted the VA contracting officer on June 14, 2021, notifying her that,

“[s]ince the paperwork was sent to you per the requirements of [FAR] 32.8, the Federal

Assignments of Claims would be valid.” Respondent’s Exhibit 17 at 111. It again requested

that “the VA honor the properly submitted Federal Assignment of Claims so that FSW can

post such payments against funded invoices.” Id. The contracting officer responded by

email dated June 15, 2021, notifying FSW that all assignments had to be reviewed by VA

legal counsel before they were processed and that she had initiated that contact.

Respondent’s Exhibit 18. FSW requested in response that “no further payment be made until

this is resolved.” Id.

Subsequently, the VA legal counsel indicated that the contracting officer had no

choice but to recognize the assignment, although FSW needed to forward proper paperwork

to implement it. FSW provided that documentation on June 22, 2021, and again requested

confirmation “that going forward all payments will be sent to [FSW].” Respondent’s

Exhibit 28. In bilateral modification P00002, which both Heroes Hire and the VA executed

on June 23, 2021, the VA recognized the assignment to FSW effective June 25, 2021, and

agreed to make any future payments due or to become due to FSW. Respondent’s

Exhibit 31.

Performance After the Assignment

Early in the performance of the contract, one of the three RNs named in the contract

became unavailable to continue working. Through bilateral modification P00001, dated

June 21, 2021, the parties reduced that RN’s hours under the contract to those that she had

actually performed and agreed to a contract price reduction to reflect the elimination of the

hours that she would not be working. Respondent’s Exhibit 25. On July 1, 2021, the second

of the three RNs identified in the contract failed to report to the medical center and, by

CBCA 7195, 7211

6

July 6, had reported that she would not return. Respondent’s Exhibit 43. The VA agreed to

pay for the time that the second RN had worked and to modify the contract to eliminate the

hours listed that she had not. At this point, only one of the original three RN positions

identified in the contract remained a part of the contract.

On July 9, 2021, FSW received payment from the VA on the outstanding invoice.

Respondent’s Exhibit 50. Heroes Hire immediately demanded that FSW execute and send

a release of assignment letter, asserting that the payment fully satisfied Heroes Hire’s debt

to FSW. Id. FSW did not do so, contending that additional liability remained that precluded

a release, a position that Heroes Hire disputed.

Unable to obtain FSW’s signature on a release, Heroes Hire itself signed a “Release

of Instrument of Assignment” on July 14, 2021, in which it identified its desire “to

reestablish its rights to receive further payments eliminating FACTORS SOUTHWEST, LLC

. . . as its Assignee.” In the “release,” Heroes Hire represented that “[n]o further assignment

or reassignment is in effect” and that “[a]ll monies due to Assignee (FACTORS

SOUTHWEST LLC) ha[ve] been satisfied by Assignor (HEROES HIRE LLC), under

Contract Number: 36C25221C0064 as of July 9, 2021.” The “release” then stated that “[a]ll

delivery orders, task orders, or purchase orders issued thereunder by [the VA] will be

released to Assignor (HEROES HIRE LLC), effective immediately.” Although Heroes

Hire’s managing member signed the release, as did a notary, FSW did not.

Heroes Hire then provided its self-executed release to the VA contracting officer and

stated in the forwarding email that “FSW is not required to sign a release that is requested

by the Assignor for reestablishment of its rights due to a debt being paid in full,” directing

the contracting officer to “reference FAR 32.802 for any clarity.” Respondent’s Exhibit 52.

The contracting officer responded that, although “[w]hat [Heroes Hire] provided satisfies the

written notice of release,” the VA still “need[ed] the release of assignment instrument from

FSW” as required by FAR 32.802(c)(3). Appellant’s Exhibit 3. She indicated that VA legal

counsel had reported that “[o]nly the Assignee can release the Assignor from the assignment”

and that Heroes Hire “cannot release itself.” Respondent’s Exhibit 53. She requested “the

true copy of the release of assignment from FSW.” Id.

On July 20, 2021, the only remaining RN who was still performing contract work

represented to the VA that Heroes Hire had told her not to report for duty because of

“invoicing issues.” Respondent’s Exhibit 55. She departed the medical center mid-shift on

July 20 and did not return the following day or thereafter. Id. After the Branch Chief for the

VA’s Medical Sharing Contract Team inquired about her continued absence, Heroes Hire on

July 26, 2021, reported that the VA had no justification for not accepting Heroes Hire’s selfexecuted assignment release and that Heroes Hire would not allow the RN to return to the

medical center until the VA accepted and acted upon that release. Respondent’s Exhibit 56

CBCA 7195, 7211

7

at 310. A few days later, Heroes Hire requested appointment of a mediator “because your

office is incorrect about the Release of Assignment of Claims,” id. at 306, but did not resume

the RN’s nursing services.

The VA contracting officer contacted FSW on August 3, 2021, to ask about the status

of obtaining a release from FSW, and FSW responded that it “can’t sign the release at this

time. [The assignment] is still effective.” Respondent’s Exhibit 57. FSW reiterated that

position on August 9, 2021, asserting that “FSW will not release the assignment until the

Heroes Hire obligation to FSW is paid in full.” Respondent’s Exhibit 59.

On August 19, 2021, the VA contracting officer issued a decision terminating Heroes

Hire’s contract for cause in accordance with the termination provision in FAR 52.212-4(m).

In support, the contracting officer cited Heroes Hire’s instruction to its employee on July 20,

2021, not to report to the medical center and Heroes Hire’s intentional failure to provide any

nursing services since that time, in violation of the terms of its contract. Respondent’s

Exhibit 61 at 352. In her decision, the VA contracting officer indicated that, according to the

VA’s records, Heroes Hire was entitled to payment of $3577.50 for services previously

rendered and that, upon receipt of an invoice that Heroes Hire had not yet submitted, the VA

would pay it. Id.

Activity During the Appeal

Heroes Hire timely appealed the termination decision to the Board and, in its notice

of appeal, sought payment of $21,030 for nursing services provided for which it had not yet

been paid, although there was no outstanding invoice or claim for that money. Because of

the nature of the claim at issue and because of Heroes Hire’s self-represented status, we

elected to require the VA to file the complaint. In its answer, Heroes Hire alleged that the

VA had “willfully and knowingly conspired with a third party predatory lender, [FSW], to

prey on a Service Disabled Veteran Owned Small Business” and “did what they did to cover

up their mistakes knowingly and willingly,” which “damaged the reputation of Heroes Hire.”

Answer ¶ 1. It alleged that the VA failed to cooperate with Heroes Hire during contract

performance by denying a request made in June 2021 to increase the invoice submission

frequency of the contract and by failing to issue a cure notice prior to terminating the contract

for cause. Id. ¶¶ 2, 15. Heroes Hire also stated that it “has reason to believe” that the VA

terminated the contract “in an effort to directly hire” Heroes Hire’s RN employee. Id. ¶ 3.

It added an additional monetary request in its answer, asking, in addition to payment of

$21,030 for nursing services rendered, for “[t]ermination cost in the sum of $100,000 to

compensate for . . . total end of contract, pain and suffering of Contractor, and consent and

release” of Heroes Hire’s last RN. Id. ¶ 38.

CBCA 7195, 7211

8

Subsequently, Heroes Hire filed a motion for emergency relief, seeking immediate

cancellation of the payment assignment to FSW and direct payment to Heroes Hire for

unpaid nursing services rendered. By decision dated October 7, 2021, we denied that motion,

holding that we lacked authority to grant the type of injunctive relief that Heroes Hire sought

and lacked jurisdiction to consider Heroes Hire’s monetary request. See Heroes Hire, LLC

v. Department of Veterans Affairs, CBCA 7195, et al., 21-1 BCA ¶ 37,940.

Heroes Hire continued its efforts to obtain a signed release from FSW, while

continuing to argue that Heroes Hire’s own signature on a release was sufficient to eliminate

the assignment. On November 17, 2021, as part of an arbitration between Heroes Hire and

FSW, Heroes Hire delivered to FSW an executed general release encompassing any claims,

known or unknown, that Heroes Hire had or might have had at the time of signing the release

against FSW arising out of an earlier factoring and security agreement between those entities.

Appellant’s Exhibit 23 at 2. On December 20, 2021, the arbitrator, having found Heroes

Hire’s general release against FSW enforceable, directed FSW to release its liens and

assignments against Heroes Hire. Appellant’s Exhibit 29. On December 22, 2021, FSW

provided the VA with a letter informing it that “FSW Funding no longer has an interest in

the accounts receivable of Heroes Hire” and that “[a]ll future payments may be mailed as

directed to Heroes Hire.” Appellant’s Exhibit 28. The VA recognized the release and, after

Heroes Hire submitted an invoice for its remaining unbilled labor time and expenses, paid

the invoice amount to Heroes Hire.

In November 2019, while Heroes Hire was in arbitration with FSW, the VA filed a

motion for summary judgment on the validity of its termination decision. Heroes Hire, in

its response to the motion filed February 28, 2022, did not present any specific evidence to

the Board but asserted that it had been treated unfairly by the VA and that dismissal was not

appropriate “since we have not been given a fair opportunity to present our case.”

Appellant’s Response at 1.

Discussion

Standard of Review

Heroes Hire has elected to represent itself through one of its corporate officers,

without an attorney, in this matter. Generally, we give greater procedural latitude to

self-represented litigants than to parties represented by attorneys. 1-A Construction & Fire,

LLP v. Department of Agriculture, CBCA 2693, 15-1 BCA ¶ 35,913. We have done so here.

“[T]his more lenient standard for interpreting pleadings,” however, “does not change a [selfrepresented] litigant’s burden of proof or our weighing of the factual record.” House of Joy

Transitional Programs v. Social Security Administration, CBCA 2535, 12-1 BCA ¶ 34,991.

CBCA 7195, 7211

9

“Resolving a dispute on a motion for summary [judgment] is appropriate when the

moving party is entitled to judgment as a matter of law, based on undisputed material facts.”

Au’Authum Ki, Inc. v. Department of Energy, CBCA 2505, 14-1 BCA ¶ 35,727. “The

moving party bears the burden of demonstrating the absence of genuine issues of material

fact,” and “[a]ll justifiable inferences must be drawn in favor of the nonmovant.” Id.

Nevertheless, to preclude entry of summary judgment, “the party opposing summary

judgment must show an evidentiary conflict on the record; mere denials or conclusory

statements are not sufficient.” Mingus Constructors, Inc. v. United States, 812 F.2d 1387,

1390-91 (Fed. Cir. 1987). “Only disputes over facts that might affect the outcome of the suit

under the governing law will properly preclude the entry of summary judgment.” Navigant

SatoTravel v. General Services Administration, CBCA 449, 08-1 BCA ¶ 33,821 (quoting

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

The Validity of the VA’s Termination Decision

“[A] government decision to terminate a contractor for [cause] is the assertion of a

government claim against such contractor within the meaning of the [Contract Disputes Act,

41 U.S.C. §§ 7101–7109 (2018)].” Johnson & Gordon Security, Inc. v. General Services

Administration, 857 F.2d 1435, 1437 (Fed. Cir. 1988). As such, the Government bears the

initial burden of showing that the termination was justified. Lisbon Contractors, Inc. v.

United States, 828 F.2d 759, 765 (Fed. Cir. 1987). Once the Government has satisfied its

burden and default has been established, the burden shifts to the contractor to demonstrate

that the causes of the default were excusable under the terms of the contract – that is, that

they were beyond the contractor’s control and not due to its own fault or negligence.

Emiabata v. United States, 792 F. App’x 931, 937 (Fed. Cir. 2019). The contractor’s burden

includes “showing that the contracting officer acted in bad faith when he terminated the

contract for default” if the contractor decides to take such a position. Vanquish Worldwide,

LLC v. United States, 140 Fed. Cl. 460, 480 (2018).

“A clear violation of contract terms by the contractor supports a finding that a

reasonable, contract-related basis for the termination exists.” Keeter Trading Co. v. United

States, 79 Fed. Cl. 243, 253 (2007). When the Government shows that a contractor with a

service contract requiring daily performance of necessary services, like the contract at issue

here, has failed to perform those services over the course of even a short period of time, it

has established default:

The Government is entitled to strict compliance with the provisions of its

service contracts. Furthermore, a separate and distinct ground for default

arises each and every time that a contractor fails to deliver services in

accordance with the terms of the contract. Thus, there is literally a ‘default’

whenever there is less than 100 percent complete and on time performance of

CBCA 7195, 7211

10

the service at the end of any given performance period. Since occasional

failures to render perfect performance during each service performance is

inherent in such contracts, a termination for default will be sustained only if

the performance failure is more than de minimis and reasonably substantial.

Johnson Management Group CFC Inc., HUD BCA 97-C-109-C2, 99-2 BCA ¶ 30,520

(citations omitted). Here, the contract at issue expressly provided that the need for nursing

services was a result of the COVID-19 pandemic, and Heroes Hire’s failure to provide any

nursing support beginning July 20, 2021, not only violated the terms of its contract, but

placed the VA in the position of losing essential services at a medical center during a

pandemic. The VA has established that Heroes Hire was in default and that the termination

for cause was justifiable.

Since the VA has met its burden of establishing justification for the termination, the

burden shifts to Heroes Hire to justify its failure to perform and its declaration to the VA that

it would not resume nursing services until the VA released it from the payment assignment

to FSW. Under the assignment, all monies for which Heroes Hire invoiced were being paid

to the assignee, FSW. Heroes Hire’s main defense to the termination is that the VA

improperly refused to accept the self-executed “release” of the assignment that Heroes Hire

provided and make payment directly to Heroes Hire. As explained above and in our prior

decision in this matter dated October 7, 2021, FSW refused to sign it and, in fact, repeatedly

told the VA contracting officer that it was unwilling to release Heroes Hire.

We rejected Heroes Hire’s arguments regarding the assignment release in our

October 7, 2021, decision. FAR 32.805(c)(3) provides that, “[i]f the assignee releases the

contractor from an assignment of claims under a contract, the contractor, in order to establish

a right to receive payment of the balance due under the contract, must file a written notice

of release together with a true copy of the release of assignment instrument with the

addressees noted in 32.802(e).” 48 CFR 32.805(c)(3) (emphasis added). Contrary to Heroes

Hire’s position, and as we discussed in detail in our October 7, 2021, decision, that provision

requires a written release from the assignee and does not entitle the assignor to “self-release”

the assignment on its own. Even without that FAR language, the security interest (if not a

more extensive transfer of ownership rights) in contract proceeds that a payment assignment

provides the assignee precludes the assignor from voiding the assignment without the express

permission of the assignee:

If the assignee owns or at least has a security interest in Heroes Hire’s contract

payments, how could Heroes Hire, which has forfeited or at least surrendered

its ownership rights over contract payments, have any ability on its own to

eliminate the assignee’s security or ownership interest, without the permission

of and without any written confirmation of release by the assignee? Heroes

CBCA 7195, 7211

11

Hire’s attempt to parse words in the FAR into individual components in a

manner that would eliminate the need for an affirmative release by the

assignee who owns the right to receive contract payments violates the purpose

of a security interest and the concept of “ownership.”

Heroes Hire.

In this case, not only did the VA receive a payment assignment notice that it was

required to recognize, Heroes Hire executed a bilateral modification expressly

acknowledging FSW’s right to receive contract payments. Heroes Hire’s assertions that the

VA could simply void the assignment on Heroes Hire’s say-so and modify the contract to

eliminate the assignee’s payment rights ignores the risk of duplicate liability that the VA

would assume to the assignee were it to do what Heroes Hire demanded:

A complete or partial assignment of the right to be paid the proceeds of the

contract imposes an obligation on the promisor, once it has received notice of

the assignment, to make payments under the contract in accordance with that

assignment. The promisor can be held liable on that obligation to the assignee

if the promisor makes payments to the assignor, rather than to the assignee in

accordance with the terms of the assignment.

D&H Distributing Co. v. United States, 102 F.3d 542, 547 (Fed. Cir. 1996). Because the VA

could not accept Heroes Hire’s self-executed “release” of the assignment, the VA’s refusal

to act upon that “release” does not justify Heroes Hire’s refusal to perform.

Heroes Hire has asserted that the termination is invalid because the VA failed to issue

a ten-day cure notice before terminating the contract. FAR 12.403(c)(1) provides that, for

commercial item contracts, “[t]he contracting officer shall send a cure notice prior to

terminating a contract for a reason other than late delivery.” 48 CFR 12.403(c)(1). Failure

to provide a cure notice, when required, will invalidate a default termination. Kisco Co. v.

United States, 610 F.2d 742, 750-51 (Ct. Cl. 1979); Brent Packer v. Social Security

Administration, CBCA 5039, 16-1 BCA ¶ 36,260. Nevertheless, a cure notice is not

necessary if the contractor has already failed to perform some services that were previously

due, particularly where the contractor has announced its intention not to perform. See, e.g.,

Marble & Chance, HUD BCA 85-908-C2, 87-1 BCA ¶ 19,337 (1986); Machelor

Maintenance & Supply Corp., ASBCA 7789, 1962 BCA ¶ 3411. The circumstances in

Johnson & Gordon Security, Inc., GSBCA 7804, 87-3 BCA ¶ 20,074, aff’d sub nom.

Johnson & Gordon Security, Inc. v. General Services Administration, 857 F.2d 1435 (Fed.

Cir. 1988), a case in which the General Services Board of Contract Appeals (in a decision

affirmed by the Court of Appeals for the Federal Circuit) found no need for a cure notice,

mirror those in this case:

CBCA 7195, 7211

12

It is certain from the facts in this case that a ten day cure notice would have

been a futile act on the part of the contracting officer. On January 15, 1985,

the date [the contract] was terminated for default, [the contractor] had

abandoned its post and was unable and unwilling to continue to perform as

required by the contract. [The Government] did not order [the contractor] to

leave the premises. Even though a ten day cure notice would have been

required before [the Government] could have terminated for [the contractor’s]

failure to possess a license, the contracting officer never waived the basic

contract requirement to provide guard services as of January 1, 1985,

irrespective of [the contractor’s] ability to obtain a license, a matter directly

related to the contractor’s responsibility. Under the Default clause [of the

contract], termination may be effected without a cure notice if the contractor,

as here, fails to provide required services.

Id. The lack of a cure notice does not invalidate the termination here.

The only other possible basis for Heroes Hire’s challenge to the termination decision

relates to allegations that Heroes Hire raised in its answer of a conspiracy by the VA and

FSW to “prey” on Heroes Hire. Answer ¶ 1. Although a default termination that is

accomplished for the purpose of ridding an agency of a particular contractor is arbitrary and

capricious, Darwin Construction Co. v. United States, 811 F.2d 593, 596 (Fed. Cir. 1987),

there is no evidence in this record to support any such finding. In other submissions and

conferences with the Board, Heroes Hire clarified that the bad faith to which it refers was

that the VA contracting officer, often without copying Heroes Hire, worked with FSW to

perfect the notice of assignment and to obtain the proper form from FSW to allow the VA

to implement the assignment. As we discussed in our October 7, 2021, decision, Heroes Hire

has not presented any evidence that the VA contracting officer’s actions were in any way

improper, particularly in light of the precarious position in which the Government places

itself if it receives but fails to comply with a payment assignment. Similarly, Heroes Hire

has presented no evidence to support its assertion that the termination for cause was a pretext

to “an effort to directly hire” Heroes Hire’s RN employee. See Answer ¶ 3. In response to

a summary judgment motion, the responding party cannot rely upon “mere allegations, but

must set forth by affidavit or other evidence specific facts, which for purposes of the

summary judgment motion will be taken as true.” FastShip, LLC v. United States, 892 F.3d

1298, 1307 (Fed. Cir. 2018) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561

(1992)). The absence of any supporting evidence eliminates the need for us to address the

CBCA 7195, 7211

13

extent to which purported ill motives by the contracting officer could invalidate an otherwise

justifiable termination decision.3

Although not raised by the parties in their briefing, we are aware of the Federal

Circuit’s recent decision in JKB Solutions & Services, LLC v. United States, 18 F.4th 704

(Fed. Cir. 2021), in which the Court held that the commercial items contract clause at FAR

52.212-4 “does not apply to service contracts,” and found that the service contract at issue

there was “not a commercial item contract.” Id. at 710. The termination for cause provision

upon which the VA relied in terminating this contract is a part of that clause, see FAR

52.212-4(m), and the contract at issue here is a commercial services contract. Despite the

similarities of the contracts in this case and in JKB Solutions, we do not believe that the JKB

Solutions decision affects the result in this case. First, Heroes Hire waived any argument

challenging the inclusion of FAR 52.212-4 in its contract by not protesting its inclusion

before contract award, Whitaker Electronic Systems v. Dalton, 124 F.3d 1443, 1446 (Fed.

Cir. 1997); E. Walters & Co. v. United States, 576 F.2d 362, 367-68 (Ct. Cl. 1978), and by

not raising in this appeal any challenge to the inclusion of the clause. Frank v. Department

of Transportation, 35 F.3d 1554, 1559 (Fed. Cir. 1994). Second, the FAR provisions in

effect when this contract was awarded defined a “commercial item” as including “services

of a type offered and sold competitively in substantial quantities in the commercial

marketplace based on established catalog or market prices,” FAR 2.101, and the nursing

services at issue here clearly fall within that FAR definition of a “commercial item”; we can

only presume that the service contract at issue in JKB Solutions involved services of a type

that fell outside of the FAR definition.4 Finally, even if for some reason the Commercial

Items clause were to be stricken from this contract, a non-defaulting party has a common-law

right to terminate a contract if the other party materially breaches it, even without a

termination clause, meaning that the VA had a common-law right to terminate Heroes Hire’s

contract for default here. David Kwok, GSBCA 7933, 90-1 BCA ¶ 22,292 (1989); see Bigda

3

Heroes Hire also alleged that the VA failed to cooperate with it during contract

performance by denying a request made in June 2021 to increase the invoice submission

frequency. Answer ¶¶ 2, 15. In the circumstances of this case, such an allegation is

irrelevant to whether Heroes Hire’s later decision to preclude its RN employee from

providing services at the medical center justified termination.

4

One commentator has indicated, based upon a review of the oral argument in

the Federal Circuit’s JKB Solutions case, that “[t]he Government did not dispute for the

purposes of summary judgment the contractor’s assertion that the service procured was not

commercial.” Vernon J. Edwards, “Commercial Item: Confusion in Court,” 35 Nash &

Cibinic Rep. ¶ 72 (Dec. 2021). Here, neither party has argued that the nursing services at

issue are anything but commercial.

CBCA 7195, 7211

14

v. Fischbach Corp., 898 F. Supp. 1004, 1011 (S.D.N.Y. 1995). Accordingly, the JKB

Solutions decision has no effect on the result in this appeal.

Heroes Hire’s Requests for Monetary Relief

In its notice of appeal filed August 20, 2021, Heroes Hire sought payment of $21,030

for nursing services that its employees had provided but for which Heroes Hire had not yet

invoiced and the VA had not yet paid. In our decision dated October 7, 2021, which

addressed a motion for emergency relief that Heroes Hire had filed, we discussed how, in

addition to lacking injunctive power, we lacked jurisdiction to entertain the monetary request

because Heroes Hire had not submitted a claim to the contracting officer seeking payment

of that money. Heroes Hire (citing Mayberry Enterprises, LLC v. Department of Energy,

CBCA 5961, 18-1 BCA ¶ 36,998; Foxy Construction, LLC v. Department of Agriculture,

CBCA 5632, 17-1 BCA ¶ 36,687). Nevertheless, we did not affirmatively dismiss the

request in that decision. It appears that this request may now be moot, given that, during the

pendency of these appeals, Heroes Hire submitted an invoice and the VA has paid it. Even

if it is not, we must dismiss the money request for lack of jurisdiction.5

In its answer, Heroes Hire added a request for payment of $100,000 to cover

“[t]ermination cost . . . to compensate for . . . total end of contract, pain and suffering of

Contractor, and consent and release” of Heroes Hire’s last RN. Answer ¶ 38. Because

Heroes Hire never submitted a claim to the VA contracting officer seeking that payment, we

lack jurisdiction to entertain it, as well. Foxy Construction.

Decision

We are not unsympathetic to the situation in which Heroes Hire found itself, faced

with a lender that would not sign a release of its payment assignment. That problem, though,

was not caused by the VA, and Heroes Hire had no right to demand that the VA step into the

middle of Heroes Hire’s dispute with its lender and take actions that would have risked

5

We note that, on December 29, 2021, Heroes Hire submitted two new appeal

file exhibits to the Board: one was a letter from Heroes Hire to the VA dated September 23,

2021, demanding payment of $19,059 for services previously rendered, and the other was an

invoice from Heroes Hire for those services that, although dated September 22, 2021, appears

to have been delivered to the VA on December 22, 2021. See Appellant’s Exhibits 25, 26.

Assuming that the letter dated September 23, 2021, was actually submitted to the contracting

officer and could be considered a claim, Heroes Hire never filed an appeal with the Board

following the “deemed denial” of that claim. Accordingly, we have no basis for assuming

jurisdiction over it.

CBCA 7195, 7211

15

liability for the VA. Because Heroes Hire had no justifiable basis for refusing to continue

work under its contract unless the VA agreed to ignore the payment assignment in which the

lender held a security interest, we uphold the agency’s termination of Heroes Hire’s contract

for cause. Heroes Hire’s appeal challenging that termination is DENIED. Heroes Hire’s

monetary requests are DISMISSED FOR LACK OF JURISDICTION.

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