Petition for Writ of Certiorari — Frank Calapristi, Petitioner v. United States
Supreme Court briefJan 30, 2023
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APPENDIX TABLE OF CONTENTS
OPINIONS AND ORDERS
Judgment of the United States Court of Appeals
for the Federal Circuit (November 3, 2022) ...... 1a
Judgment of the United States Court of Federal
Claims (September 28, 2021) ............................. 3a
Order and Opinion of the United States Court of
Federal Claims (September 28, 2021) ............... 5a
OTHER DOCUMENTS
First Amended Class Action Complaint
(June 3, 2019) ................................................... 21a
Exhibit 1. Declaration of Ernest Vodney
(February 2, 2018) ............................................ 56a
Exhibit 2. Policies and Procedures for
Pension Programs Under Operating and
Onsite Service Contracts.................................. 59a
Exhibit 3. Transfer Agreement
(September 30, 1996)........................................ 78a
Exhibit 4. DOE Press Releases ....................... 88a
Ex.4a. Department of Energy Clarifies
Benefits for Employees of Project Hanford
Management Contract Enterprise Companies
(October 11, 1996).......................................... 88a
Ex.4b. DOE Press Release: DOE Issues Final
RFP for Hanford’s Tank Waste Cleanup
(July 2, 2007) ................................................. 99a
APPENDIX TABLE OF CONTENTS (Cont.)
Ex.4c. DOE Press Release: DOE Issues Final
RFP for Hanford’s Central Plateau Cleanup
(June 25, 2007) ............................................ 102a
Ex.4d. DOE Press Release: DOE to Issue
Final RFP for Mission Support Contract at
Hanford (May 2, 2007) ................................ 105a
RELATED CASE
TURPING ET AL. V. UNITED STATES
913 F.3D 1060 (FED. CIR. 2019)
Opinion of the United States Court of Appeals for
the Federal Circuit (January 9, 2019) ........... 108a
App.1a
JUDGMENT OF THE UNITED STATES COURT
OF APPEALS FOR THE FEDERAL CIRCUIT
(NOVEMBER 3, 2022)
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
________________________
FRANK CALAPRISTI, AND
OTHER SIMILARLY SITUATED PERSONS,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
________________________
No. 2022-1080
Appeal from the United States Court of Federal
Claims in No. 1:18-cv-00612-TMD,
Judge Thompson M. Dietz.
Before: MOORE, Chief Judge, LOURIE and
PROST, Circuit Judges.
JUDGMENT
THIS CAUSE having been heard and considered,
it is
ORDERED and ADJUDGED:
App.2a
PER CURIAM:
AFFIRMED. See Fed. Cir. R. 36.
Entered by Order of the Court
/s/ Peter R. Marksteiner
Clerk of Court
Date: November 3, 2022
App.3a
JUDGMENT OF THE UNITED STATES
COURT OF FEDERAL CLAIMS
(SEPTEMBER 28, 2021)
IN THE UNITED STATES
COURT OF FEDERAL CLAIMS
________________________
FRANK CALAPRISTI
v.
THE UNITED STATES
________________________
No. 18-612 C
JUDGMENT
Pursuant to the court’s Order and Opinion, filed
September 28, 2021, granting defendant’s motion to
dismiss,
IT IS ORDERED AND ADJUDGED this date,
pursuant to Rule 58, that plaintiff’s complaint is dismissed for failure to state a claim upon which relief
can be granted.
Lisa L. Reyes
Clerk of Court
By: /s/ Debra L. Samler
Deputy Clerk
App.4a
NOTE: As to appeal to the United States Court of
Appeals for the Federal Circuit, 60 days from this
date, see RCFC 58.1, re number of copies and listing
of all plaintiffs. Filing fee is $505.00.
App.5a
ORDER AND OPINION OF THE UNITED
STATES COURT OF FEDERAL CLAIMS
(SEPTEMBER 28, 2021)
IN THE UNITED STATES
COURT OF FEDERAL CLAIMS
________________________
FRANK CALAPRISTI,
Plaintiff,
v.
THE UNITED STATES,
Defendant.
________________________
No. 18-612
Implied-in-fact Contract; Mutuality of Intent;
Failure to State a Claim; RCFC 12(b)(6).
Before: Thompson M. DIETZ, Judge.
ORDER AND OPINION
DIETZ, Judge.
Plaintiff, Frank Calapristi, sues for breach of an
implied-in-fact contract that he claims existed between
the United States and government contractor employees who worked on a United States Department of
Energy nuclear site. His case presents nearly identical
facts and claims as those in Turping v. United States, a
directly related case. In Turping, the Federal Circuit
affirmed this Court’s dismissal for failure to state a
App.6a
claim because the plaintiffs had not established
mutuality of intent to contract. Before the Court in
this case is the government’s motion to dismiss pursuant
to Rules 12(b)(1) and 12(b)(6) of the Rules of the Court
of Federal Claims. Because Mr. Calapristi’s complaint
fails to allege sufficient facts to establish the government’s intent to contract, the same defect in Turping,
the government’s motion to dismiss is GRANTED.
I.
Background
A. Factual Background
The United States operates a plutonium production
facility in southeastern Washington called the Hanford
Nuclear Reservation (the “Hanford Site”). Am. Compl.
¶ 6, ECF No. 17. Since 1977, the United States Department of Energy (“DOE”) has served as the lead government agency in charge of the Hanford Site. Id. ¶ 10.
From 1982 to 1987, Hanford Engineering and Development Laboratory (“HEDL”), a subsidiary of the
Westinghouse Corporation, operated the Hanford Site
under a prime contract with DOE. Id. ¶ 11. There were
multiple other contractors also performing work on
the Hanford Site. Id. ¶ 12. In the normal course of
operations, when a particular contractor was replaced,
employees performing work for the old contractor
would continue to perform the same work at the
Hanford Site as an employee of the new contractor. Id.
¶¶ 19-20. This change in employer apparently caused
administrative burdens when transferring individual
employee pension plans and associated funds. Id. ¶ 23.
To ease the administrative burdens, sometime
before 1987, DOE instructed HEDL and other Hanford
Site contractors to draft a multi-employer pension plan
App.7a
(the “MEPP”) to cover all workers at the Hanford Site.
Am. Compl. ¶¶ 30, 34; Am. Compl. Ex. 1. The Hanford
Site contractors submitted the MEPP to DOE for review
and approval. Id. ¶ 39. In 1987, DOE issued a solicitation for a new Hanford Site prime contract, which
required the new prime contractor to implement the
MEPP. Id. ¶ 49. In June 1987, DOE awarded the new
prime contract to Westinghouse Hanford Company
(“WHC”). Id. ¶ 52. Around that same time, WHC and
its subcontractors implemented the MEPP “at the
direction of DOE.” Id. ¶ 53. All contractor employees
at the Hanford Site became “Participants” in the MEPP.
Id.
The MEPP states that it was “established effective
June 29, 1987 . . . by the Employers for the benefit of
Eligible Employees.” Def.’s Mot. to Dismiss Ex. A at
A6, ECF No. 20 [hereinafter Def.’s MTD].1 The MEPP
sets forth which contractors are “Employers” and
which contractor employees are “Eligible Employees.”
Id. at A8-A9. The MEPP is administered by an independent pension committee (the “Plan Administrator”)
charged with the authority to control and manage the
MEPP, including the ability to modify the plan, determine questions relating to eligibility, and compute the
amount and type of benefits payable to any plan
participant. Id. at A40-A41. Most relevant to Calapristi’s
1 The Court may consider documents attached to a motion to
dismiss as part of the pleadings if they are referred to in the
plaintiff’s complaint and are central to their claim. Ambrose v.
United States, 106 Fed. Cl. 152, 156 n.4 (2012); see also Brooks v.
Blue Cross and Blue Shield of Fl., Inc., 116 F.3d 1264, 1269 (11th
Cir. 1997); Wright v. Assoc. Ins. Cos., 29 F.3d 1244, 1248 (7th Cir.
1994).
App.8a
complaint, Article 29 of the MEPP, titled “Terminations
for Transfer,” states:
In the case of a Termination for Transfer, an
Employee who becomes a Participant hereunder shall be entitled to credit for eligibility
under Article 2, benefit accrual under Article
3 and vesting under Article 6 to such a
degree as shall be determined by the Plan
Administrator in order to assure that the
Participant receives a benefit at normal
retirement date which is reflective of his years
of service on the Hanford Reservation. The
Plan Administrator’s decision shall be adopted
by a rule pursuant to Article 11. A Termination
for Transfer means a termination from one
contractor on the Hanford Reservation to
another [contractor] which is determined to
be in the best interests of the government.
Id. at A79 (emphasis added).
In 1996, DOE again solicited bids for a new Hanford
Site prime contractor. Am. Compl. ¶ 75. The new prime
contract, referred to as the Project Hanford Management Contract, had a transition date of October 1,
1996. Id. The solicitation required the new prime contractor and its major subcontractors to hire employees
from the workforce of the incumbent prime contractor
and its subcontractors and to “assume the assets,
liabilities, and other obligations and continue the defined
benefit pension plans . . . of the incumbent contractor
and integrated subcontractors.” Id. ¶¶ 78-79. In this
regard, the eventual prime contractor, Fluor Daniel
Hanford, Inc. (“FDH”), submitted a bid whereby most
of the Hanford Site workforce would continue to participate in the MEPP; however, a portion of the workforce
App.9a
would be assigned to new entities referred to as the
“Enterprise Companies.” Id. ¶ 82. The Enterprise
Companies would be subcontractors to FDH and would
not become “sponsoring employers” under the MEPP.
Id. ¶¶ 82, 84.
DOE announced on August 6, 1996 that management of the Hanford Site would be transferred from
WHC and its subcontractors to FDH and its subcontractors on October 1, 1996. Am. Compl. 1 88. As part
of the transfer, DOE executed a Transfer Agreement
with WHC and FDH, which set forth, inter alia, which
employers “would leave the MEPP and which would
remain.” Id. ¶¶ 91-93. Since the Enterprise Companies
did not become “Employers” under the MEPP, the
MEPP was modified to provide that Enterprise Company
employees, which included Calapristi, would remain
“Participants” in the MEPP; however, upon retirement,
their respective retirement benefits would be calculated
using the highest five-year salary (the “High-Five
Benefit”) during their service at the Hanford Site and
would not include the number of years worked for the
Enterprise Company. Id. ¶ 103. As a result, on or
about October 2014, when employees of the Enterprise
Companies began to retire and seek pension benefits
under the MEPP, the Plan Administrator began paying
benefits based on the High-Five Benefit approach, not
the total years of service at the Hanford Site. Id. ¶¶ 13637. Calapristi alleges this is a breach of an implied-infact contract that existed between the government
and Enterprise Company employees, and he now seeks
relief for the alleged breach. Id.
App.10a
B. Procedural History
Calapristi filed his original class action complaint
on April 30, 2018. Compl., ECF No. 1. The case was
stayed shortly thereafter pending the outcome of
Turping v. United States, 134 Fed. Cl. 293 (2017), aff’d,
913 F.3d 1060 (Fed. Cir. 2019), a related case on appeal
before the Federal Circuit. See Notice of Directly Related
Cases at 1-2, ECF No. 2 (stating the Turping case
alleges “an essentially identical legal claim”).
In Turping, a group of former Hanford Site workers
employed by Lockheed Martin Services, Inc. (“Lockheed”), one of the Enterprise Companies, alleged an
implied-in-fact contract with the government. Turping,
913 F.3d at 1060. The Turping plaintiffs claimed that
DOE breached the contract by changing the benefits
that the Lockheed employees were entitled to receive
under the MEPP. Id. at 1064. This Court dismissed the
case finding that the employees failed to allege facts
sufficient to establish that the government intended
to enter an implied-in-fact contract with the employees.
Turping, 134 Fed. Cl. at 306-07. The Federal Circuit
affirmed the dismissal finding that the employees
failed to meet their burden of proving mutuality of
intent. Turping, 913 F.3d at 1065.
After the Federal Circuit affirmed the dismissal,
the Court lifted the stay, and Calapristi filed an
amended complaint, setting forth additional facts by
which he hopes to cure the defects present in Turping.
See Am. Compl. The government subsequently filed a
motion to dismiss for lack of subject-matter jurisdiction
and for failure to state a claim upon which relief may
be granted. Def.’s MTD at 23. After the motion was
fully briefed, the Court conducted oral argument. See
ECF No. 27. Upon motion by Calapristi, the Court
App.11a
held a supplementary oral argument after reassignment
of the case to the undersigned. See ECF No. 35.
II. Legal Standards
A challenge to this Court’s ability to “exercise its
general power with regard to the facts peculiar to the
specific claim” is properly raised by a Rule 12(b)(6)
motion. Palmer v. United States, 168 F.3d 1310, 1313
(Fed. Cir. 1999). When deciding a Rule 12(b)(6) motion
to dismiss for failure to state a claim upon which
relief may be granted, the Court construes the complaint’s allegations in favor of the plaintiff. RCFC
12(b)(6); Scheuer v. Rhodes, 416 U.S. 232, 236 (1974),
abrogated on other grounds by Harlow v. Fitzgerald,
457 U.S. 800, 814-15 (1982). The Court must inquire
whether the complaint contains “enough facts to state
a claim to relief that is plausible on its face.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).
In other words, the Court must assess whether “a
claim has been stated adequately” and whether “it
may be supported by [a] showing [of] any sets of facts
consistent with the allegations in the complaint.” Id.
at 563. The plaintiff’s factual allegations “must be
enough to raise a right to relief above the speculative
level.” Id. at 555.2
2 The government also seeks to dismiss Calapristi’s complaint
under RCFC 12(b)(1). The government asserts that Calapristi
fails to properly plead the elements of a contract with the government, and, therefore, the complaint should be dismissed for
lack of subject-matter jurisdiction. Def.’s MTD at 23. Calapristi’s
complaint alleges an implied-in-fact contract with the government, and this Court has jurisdiction under the Tucker Act to
adjudicate “any claims against the United States founded . . . upon
any express or implied contract with the United States.” 28
U.S.C. § 1491 (emphasis added). Based on the allegations,
App.12a
III. Discussion
This case presents nearly identical facts and allegations to those in Turping. See Pl.’s Resp. at 2 (“The
Plaintiffs in this matter are a different group of
Hanford workers who are making essentially the same
claim against the [g]overnment as the Plaintiffs in
Turping.”), ECF No. 23. Calapristi seeks to distinguish
his case from Turping by manufacturing a “test” derived
from a footnote in the Federal Circuit’s Turping decision and presenting additional facts that he argues
demonstrate mutuality of intent. Id. at 10-11; see also
Turping, 913 F.3d at 1067 n.2. The government asserts
that, even with the additional facts, the Turping decision controls the outcome of this case. Def.’s MTD at
1-3. Because the additional facts presented by Calapristi
fail to demonstrate the government’s intent to contract—the same defect identified in Turping—his
complaint likewise must be dismissed.3
Like the plaintiffs in Turping, Calapristi has the
burden of proving the existence of an implied-in-fact
contract. Pac. Gas & Elec. v. United States, 3 Cl. Ct.
329, 339 (1983), aff’d, 738 F.2d 452 (Fed. Cir. 1984).
An implied-in-fact contract with the federal government
requires: (1) mutuality of intent, (2) consideration, (3)
an unambiguous offer and acceptance, and (4) “actual
Calapristi’s complaint survives the government’s motion to
dismiss on jurisdictional grounds. See Trauma Serv. Grp., Inc. v.
United States, 104 F.3d 1321, 1325 (Fed. Cir. 1997) (a wellpleaded allegation of an implied-in-fact contract is sufficient to
overcome a jurisdictional challenge).
3 The Court does not consider the remaining three required
elements of an implied-in-fact contract because the Court dismisses
the complaint on the grounds that Calapristi fails to prove
mutuality of intent—a threshold condition.
App.13a
authority” on the part of the government’s representative to bind the government in contract. Id.; see City
of El Centro v. United States, 922 F.2d 816, 820 (Fed.
Cir. 1990). While the requirements for an implied-infact contract are indistinguishable to those for an
express contract, the nature of the evidence differs.
Hanlin v. United States, 316 F.3d 1325, 1328 (Fed.
Cir. 2003). Implied-in-fact contracts are agreements
“founded upon a meeting of minds and [are] inferred,
as a fact, from the conduct of the parties showing, in
the light of the surrounding circumstances, their tacit
understanding.” Trauma Serv. Grp., Inc. v. United
States, 104 F.3d 1321, 1326 (Fed. Cir. 1997) (quoting
Hercules, Inc. v. United States, 526 U.S. 417, 424 (1996)).
An agreement will not be implied “unless the meeting
of minds was indicated by some intelligible conduct,
act or sign.” Balt. & Ohio R.R. Co. v. United States,
261 U.S. 592, 598 (1923). “In short, an implied-in-fact
contract arises when an express offer and acceptance
are missing but the parties’ conduct indicates
mutual assent.” City of Cincinnati v. United States,
153 F.3d 1375, 1377 (Fed. Cir. 1998).
Most critical to this case, binding precedent clearly
establishes that mutuality of intent to contract is a
threshold condition for contract formation. Anderson
v. United States, 344 F.3d 1343, 1353 (Fed. Cir. 2003).
A plaintiff cannot meet its burden if it fails to show
mutuality of intent. Hanlin, 316 F.3d at 1330; see also
Columbus Regional Hospital v. United States, 990
F.3d 1330, 1344-45 (Fed. Cir. 2021) (finding plaintiff failed to meet its burden of establishing mutual
intent to contract).
Calapristi argues that an implied-in-fact contract
arose from the government’s offer “that if the employees
App.14a
worked at the Hanford [S]ite, the [g]overnment would
fund the MEPP and enforce Article 29 of the MEPP.”
Am. Compl. ¶ 69. To advance his argument, Calapristi
strings together the government’s conduct in connection
with the MEPP to demonstrate that the government
intended to be contractually bound to Enterprise Company employees, like Calapristi, under the MEPP. Id.
¶¶ 30, 38-41, 45-46, 49, 53. The problem for Calapristi
is that this argument mirrors the argument rejected
by the Federal Circuit in Turping.
In Turping, the Federal Circuit found that
“nothing in the MEPP indicates intent by the [g]overnment to be in privity of contract with Lockheed’s
employees.” 913 F.3d at 1066. The MEPP does not list
the government as a party to the contract and only
evidences a contractual relationship between the
participating employers and employees. Id. The MEPP
also specifies that the Plan Administrator, not the
government, is the entity that funds the plan and
makes benefits determinations. Id. The Federal Circuit
concluded that the “[g]overnment funds Lockheed
and other [e]mployers to manage Hanford, but there
is no evidence that the [g]overnment intended to be
contractually obligated to Lockheed’s or other [e]mployer’s employees, either through the MEPP or by
other means.” Id. at 1067. For these same reasons,
Calapristi’s argument in this case also fails.
To salvage his complaint from the same outcome
as Turping, Calapristi manufactures a “test” derived
from the following footnote in the Federal Circuit’s
Turping decision:
Appellants argue that WHC acted as the
[g]overnment’s “agent” in drafting Article
29 of the MEPP, which provided for Hanford
App.15a
workers to receive benefits reflective of their
total years of service. Appellants do not plead
sufficient plausible facts to support this
agency argument. Likewise, Appellants cannot
support their broad allegation that only the
[g]overnment—a non-party to the MEPP—
had the authority to “enforce” Article 29 and
compel subcontractors to remain in the MEPP.
913 F.3d at 1067 n.2 (citations omitted). Calapristi
states that this footnote “essentially [lays] out a
roadmap for . . . the Court to determine whether the
parties’ conduct in this matter demonstrated the
requisite mutual assent to form a contract.” Pl.’s Resp.
at 10. Calapristi argues all that is needed to demonstrate
the government’s intent is a showing that: (1) the
WHC acted as an agent of the government in drafting
Article 294 and (2) only the government had authority
to enforce Article 29 and compel contractors to remain
in the MEPP. Id. Calapristi presents “new facts” to
satisfy his “test.”
The Court is not persuaded by Calapristi’s interpretation of the Turping footnote or the “new facts”
alleged in his amended complaint. Calapristi overstates
4 There appears to be a factual discrepancy with which contractor was directed by DOE to draft the MEPP. The Turping
plaintiffs’ stated “WHC . . . draft[ed] Article 29 of the MEPP[,]”
Turping, 913 F.3d at 1067 n.2 (citing Appellant Op. Br. at 54),
and Calapristi states HEDL and various Hanford Site contractors drafted the MEPP. Am. Compl. ¶ 30. Resolution of this
discrepancy is not necessary for the Court to reach its decision.
Whether it was WHC or HEDL, Calapristi’s agency argument
still fails because there is no evidence that either contractor was
acting as an authorized agent of the government in connection
with the MEPP.
App.16a
the meaning of the footnote. The footnote did not
create a “test” for demonstrating intent to contract—
a well-established threshold condition for contract
formation—but instead simply rejected alternative
arguments raised, but not sufficiently supported, by
the Turping plaintiffs. The defect identified in Turping
is the plaintiffs’ failure to provide any evidence of the
government’s intent to contract, and the new facts
presented in this case, however packaged, do not remedy
this defect.
Calapristi points to a sworn statement from
Ernest Vodney (“Vodney”) to satisfy the first prong of
his “test” by showing that HEDL, the prime contractor
whose employees assisted with drafting the MEPP,
was acting as an “agent” of the government in
drafting Article 29 of the MEPP. See Am. Compl. Ex.
1 [hereinafter Vodney Decl.]; see also Am. Compl. ¶ 35.
Calapristi argues that the sworn statement “shows
conclusively that the [g]overnment contractor, HEDL,
was acting under contract with the DOE and at the
explicit direction of the DOE” when it created the
MEPP and “was thereby acting as an ‘agent’ of the
[g]overnment.” Pl.’s Resp. at 11. Calapristi presumably
advances this agency argument to avert the general
rule that subcontractors—like Calapristi and other
Enterprise Company employees—are not in privity of
contract with the government. See Turping, 913 F.3d
at 1066.
This argument is unpersuasive. Vodney was
employed as the Controller at HEDL and was one of
two employees of HEDL involved in drafting the
MEPP. Vodney Decl. ¶ 6; Pl.’s Resp. at 11. To establish
a contract with the United States, the plaintiff must
show that the government representative who entered
App.17a
or ratified the agreement had actual authority to bind
the government. Trauma Serv. Grp, 104 F.2d at 1326;
H.F. Allen Orchards v. United States, 749 F.2d 1571,
1575 (Fed. Cir. 1984), cert denied, 474 U.S. 818 (1985).
While it may be true that DOE tasked HEDL with
drafting the MEPP, HEDL was acting in its role as a
government contractor—and Vodney as an employee of
a HEDL—when drafting the MEPP. Neither were
acting as an agent of the government with authority
to bind the government to contractual obligations. See
BGT Holdings LLC v. United States, 984 F.3d 1003,
1015 (Fed. Cir. 2020) (actions by unauthorized government employees do not bind the government). There
is no clear contractual consent for HEDL or Vodney to
act as an agent of the government with respect to the
MEPP, and nothing in the MEPP or otherwise provides that the government will be directly liable to
participating employees under the MEPP. See Central
Freight Lines, Inc. v. United States, 87 Fed. Cl. 104,
110 (2009) (citing United States v. Johnson Controls,
Inc., 713 F.2d 1541, 1551 (Fed. Cir. 1983)).
To satisfy the second prong of his “test,” Calapristi
points to the Transfer Agreement executed by DOE, a
DOE policy governing pension programs, and various
press releases issued by DOE to show that the government exclusively controlled the operation and enforcement of Article 29 of the MEPP. Am. Compl. ¶¶ 47,
93-95, 100, 102, 116; Pl.’s Resp. at 2-3.
Calapristi argues that the Transfer Agreement
“demonstrates conclusively that the [g]overnment, as
a party to the Transfer Agreement, exercised complete
and total control over which subsequent contractors
(and thus which Hanford [S]ite employees) would be
included in the MEPP.” Pl.’s Resp. at 12. The purpose
App.18a
of the Transfer Agreement was to “facilitate an orderly
transfer of . . . documents, agreements and property”
between the contractors, and, in furtherance of this
purpose, it addressed a broad spectrum of Hanford
Site operational and management items. Am. Compl.
Ex. 3 at 50. While the fact that DOE was a party to
the Transfer Agreement may show that DOE exercised control over which contractors would assume
liability and responsibility for the MEPP, as the Federal Circuit made clear in Turping, the degree of government involvement or control over a government
project does not indicate an implied-in-fact contract
enforceable against the government. 913 F.2d at 106667. The control exercised by DOE as a party to the
Transfer Agreement is a natural part of DOE’s role as
lead government agency at the Hanford Site overseeing
the transition between contractors and ensuring continuity of operations. This control does not evidence
DOE’s intent to enter a contract with government contractor employees. Further complicating this argument
is the fact that the Transfer Agreement does not indicate
any government role in the administration of the
MEPP and instead assigns all administrator responsibilities to the new prime contractor, FDH. Am. Compl.
Ex. 3 at 65 (“FDH accepts all responsibility as administrator for the [MEPP.]”).
Calapristi next points to DOE Order 3830.1 (the
“Order”) to demonstrate that “DOE had the ‘authority’
to enforce Article 29 and compel subcontractors to
remain in the MEPP” and “also the responsibility to
do so.” Pl.’s Resp. at 13. The purpose of the Order is
“to establish policies, procedures, responsibilities, and
authorities relating to establishment, continuity, and
termination of pension programs applicable to operating
App.19a
and onsite service contracts” and to set forth objectives
and requirements for “pension programs funded by
DOE.” Am. Compl. Ex. 2. at 37-38, 40. However,
nothing in the Order demonstrates the government’s
intent to establish privity of contract with anyone, let
alone government contractor employees. See D & N
Bank v. United States, 331 F.3d 1374, 1378-79 (Fed.
Cir. 2003) (“[P]erformance of . . . regulatory or sovereign
functions [do] not create contractual obligations.”).
Further, Calapristi does not identify any specific
provision in the Order that provides DOE with the
authority or responsibility to enforce Article 29 of the
MEPP. By issuing this Order, the government does
not intend to bind itself in contract. See Turping, 134
Fed. Cl. at 307 (citing Anderson, 344 F.3d at 1357)
(“DOE Order 350.1 does not evidence an intent to contract with Plaintiffs, because it is a ‘regulation of an
executive agency,’ and ‘regulatory proclamations are
insufficient to create contractual obligations.’”); see
also Nat’l R.R. Passenger Corp. v. Atchison Topeka &
Santa Fe Ry. Co., 470 U.S. 451, 465-66 (1985).
Calapristi also identifies four press releases
which he argues “makes . . . clear that it is the DOE,
and the DOE alone, who decides which Hanford area
employees will be included in the MEPP when there
is a change in contractors.” Pl.’s Resp. at 12. Three of
the press releases identified by Calapristi communicate
information about upcoming Hanford Site solicitations,
and one communicates information about pension
benefits for individuals accepting employment with
Enterprise Companies. See Am. Compl. Ex. 4 at 7688. These press releases illustrate DOE’s oversight
function as the lead government agency at the Hanford
Site. None of the press releases provide any indication
App.20a
that the government intends to create privity of contract with government contractor employees, and this
degree of government involvement does not indicate
an implied-in-fact contract enforceable against the
government. Turping, 913 F.2d at 1066-67.
IV. Conclusion
As in Turping, the underlying defect in this case
is a failure to establish intent by the government to
enter a contract. Without sufficient facts to demonstrate
mutuality of intent, Calapristi fails to meet his
burden of proving an implied-in-fact contract, and his
complaint must be dismissed under RCFC 12(b)(6).
For the reasons set forth in this opinion, the government’s Motion to Dismiss is GRANTED. The Clerk
of the Court is DIRECTED to enter judgment accordingly.
IT IS SO ORDERED.
/s/ Thompson M. Dietz
Judge
App.21a
FIRST AMENDED
CLASS ACTION COMPLAINT
(JUNE 3, 2019)
IN THE UNITED STATES
COURT OF FEDERAL CLAIMS
________________________
FRANK CALAPRISTI, AND
OTHER SIMILARLY SITUATED PERSONS
v.
THE UNITED STATES
________________________
No. 18-cv-00612-VJW
I.
Introduction
1. This case is filed on behalf of the above named
Plaintiffs whose pension retirement benefits were
substantially reduced by the United States of America
(hereafter the “Government”) in breach of an implied
contract in fact that existed, and continues to exist,
between an executive agency of the Government, the
United States Department of Energy (hereafter the
“DOE”), and the Plaintiffs. The Plaintiffs are entitled
under the Tucker Act to obtain just compensation
from the Government for the Government’s breach of
the implied contract in fact.
II. Jurisdiction
2. This Court has exclusive subject matter jurisdiction pursuant to 28 U.S.C. § 1491 because the
App.22a
United States is the defendant; the amount being sought
by Plaintiffs individually, and each and every member
of the Class, exceeds $10,000; and these claims are
brought within six (6) years.
III. Venue
3. Washington D.C. is the appropriate venue pursuant to 28 U.S.C. § 1491.
IV. Parties
4. The Plaintiffs (hereafter “Plaintiffs” or “Class
Members”) are all individuals who
a)
were employed by contractors at the United
States Government’s Hanford site in southeastern Washington state between 1987 and
October 1, 1996,
b)
were Participants in The Hanford MultiEmployer Pension Plan, Engineering and
Operations (hereafter the “MEPP”) on September 30, 1996,
c)
had their contractor (employer) terminated
from the Hanford site by the Government on
or about September 30, 1996,
d)
were transferred to a contractor which was a
so-called “Enterprise Company” by the Government on or about October 1, 1996, and
e)
have made a claim for their retirement
benefits in the six years preceding the initiation of this action, or who have the right to
make a claim for their retirement benefits at
any point in the future.
App.23a
5. The Defendant is the United States of America
(“Government”) together with The Hanford MultiEmployer Pension Plan, Engineering and Operations
(the MEPP) which Plaintiffs allege is an entity so completely controlled by the United States Department of
Energy that it is in fact and law a part of the United
States Government.
V.
Operative Facts
6. In January 1943 the United States Government
made the decision to build the United States plutonium
production facilities at the Hanford site in southeastern
Washington state.
7. Ultimately, that decision would lead to the
Hanford site becoming the largest and most dangerous
nuclear and hazardous waste site in the United States
and perhaps the world.
8. From the beginning of the Government’s activities at the Hanford site and continuing to this day,
the work on the Hanford site, including but not
limited to manufacturing plutonium and cleaning up
the waste generated by that manufacturing, is performed by individuals either employed by the Government or by individuals employed by prime or sub-tier
contractors of the Government.
9. All of these employees are performing tasks,
including but not limited to manufacturing plutonium
at a Government-owned facility and cleaning up the
waste generated by manufacturing plutonium at a
Government-owned facility, that are the sole and
exclusive responsibility of the United States Government, and are thus decidedly governmental in nature.
App.24a
10. On October 1, 1977 the United States Department of Energy became the lead agency for the Government’s management of the Hanford site.
11. Between 1982 and 1987 a subsidiary of the
Westinghouse Corporation called the Hanford
Engineering and Development Laboratory (hereafter
“HEDL”) was operating the Hanford site under a
prime contract with the United States Department of
Energy.
12. By 1987, along with HEDL, no fewer than
seven separate contractors were providing services to
the Government at the Hanford site.
13. The contractors and their employees at the
Hanford site had numerous characteristics in common.
14. All of the contractors, and all of the contractor’s employees, were performing work on the
Hanford site for the sole and exclusive benefit of the
Government.
15. Directly or indirectly, all contractors and all
of their employees were paid for their services by the
Government.
16. All contractors offered retirement benefits to
their employees upon retirement that included a
defined benefit pension.
17. At all times relevant to this litigation, the
funding for the defined benefit pension was directly or
indirectly provided exclusively by the Government.
18. At all times relevant to this litigation, the
participation of all prime and sub-tier contractors,
and the participation of all of their employees, in the
App.25a
defined benefit pension plan, was controlled exclusively
by the Government.
19. Prior to 1987, when a particular contractor
was replaced with a new contractor, or when a portion
of work performed by one contractor was transferred
to another contractor, (often referred to as a “successor
contractor”) the actual workers who performed that
work would typically continue to perform their same
jobs, in the same locations.
20. Prior to 1987, when a contractor on the
Hanford site lost their contract and left the Hanford
site, their employees would have a choice; they would
either be transferred to a successor contractor and
stay on the Hanford site, or they would stay employed
with their old employer and leave the Hanford site
along with their employer.
21. Prior to 1987, if they left the Hanford site to
stay with their old employer, their participation in
their old employer’s pension plan would typically
continue in an uninterrupted fashion.
22. Prior to 1987, if they stayed at the Hanford
site, the credit for their years of service with their old
employer’s pension plan would typically be transferred
to their new employer, and the funds necessary to
fund their years of service would also typically be
transferred from their old employer’s pension plan to
their new employer’s pension plan.
23. Prior to 1987, the termination of one contractor
and transfer of the work to a successor contractor by
the Government therefore created a significant
administrative burdens and costs for the Government
related to transferring the pension funds for thousands
App.26a
of employees from the old contractor to the new contractor.
24. To relieve the Government from these costs
and burdens created when the Government terminated
a contractor and hired a successor contractor, in 1986
the United States Department of Energy decided to
create a pension plan for the workers of the Hanford
site contractors that would be separated from their
employers.
25. It was the intention of the Government that
this new pension plan would separate the obligations
of the pension plan to the Hanford site workers from
their continued employment with any particular
Hanford site employer.
26. This new pension plan was created by the
Government to directly and explicitly tie the employees’
pensions to their continuing to work on the Government’s behalf at the Hanford site.
27. It was the intention of the Government that
this new pension plan would allow the Government to
remove and replace contractors doing work on the
Hanford site in and out of the pension plan at the Government’s convenience, while keeping all of the
Hanford site employees in the pension plan.
28. To do so, and in exchange for removing these
Hanford employees from their company-based pension
plans, the Government included provisions in the new
pension plan that explicitly promised that these
Hanford employees would continue to participate in the
new pension plan even if the Government terminated
their old contractor/employer and transferred them to
a new contractor/employer.
App.27a
29. Within the new pension plan, the Government
also explicitly guaranteed the Hanford employees
that their years of service at the Hanford site would
be counted in the calculation of their retirement
benefits at their retirement even if, from time to time,
the Government terminated their old contractor/
employers and transferred them to new contractor/
employers.
30. To achieve that end, sometime prior to 1987,
officials with the United States Department of Energy
who had the actual authority to bind the United States
Government instructed the President of HEDL, John
Nolan, and the heads of the other various Hanford contractors, to work together to draft a multi-employer
pension plan (hereafter the multi-employer pension
plan, or the “MEPP”) that would cover all of their
employees in anticipation of a consolidated Hanford
contract being awarded in 1987.
31. By combining the worker’s separate, company
based pensions into a single pension plan that was
separated from their employers and tied instead to
their continued work at the Hanford site, the United
States Department of Energy sought to simplify the
Government’s administrative burden of transferring
any particular work scope from one contractor to a
successor contractor.
32. Absent DOE’s explicit orders and instructions
to do so, none of the contractors or their employees
ever had the power or authority to draft a new
pension plan and impose it on all of the workers at the
Hanford site, particularly a contract that contained obligations that would extend beyond their contracts with
the Government.
App.28a
33. The Government therefore had the sole
authority to create, administer, and dictate the terms
of the MEPP.
34. To comply with the Government’s directive,
sometime prior to the consolidation of the Hanford
work into a single prime contract in 1987, HEDL and
the various Hanford contractors each appointed two
employees to a working group tasked with drafting
the multi-employer pension plan that would become
the MEPP.
35. HEDL appointed Earnest Vodney and Paul
Matthews to the working group.
36. Earnst Vodney was the Controller of HEDL
at the time.
37. Paul Matthews was the head of the Human
Resources department of HEDL at the time.
38. During the process of drafting the multiemployer pension plan, officials with the United States
Department of Energy who had the actual authority
to bind the United States Government would periodically review the working group’s drafting activities
and coordinate with the working group to provide the
Government’s input into the terms and conditions of
the emerging multi-employer pension plan.
39. When the working group completed the multiemployer pension plan, it was submitted to the United
States Department of Energy for final review and
approval by officials with the United States Department of Energy who had the actual authority to bind
the United States Government to the responsibilities
contained within the multi-employer pension plan.
App.29a
40. When the working group completed the multiemployer pension plan, officials with the United States
Department of Energy who had the actual authority
to bind the United States Government to responsibilities contained within the multi-employer pension
plan provided their final review and approval of the
multi-employer pension plan.
41. The officials with the United States Department of Energy who had the actual authority to bind
the United States Government to responsibilities contained within the multi-employer pension plan intended
to bind the Government to those responsibilities set
forth in the muti-employer pension plan that could
only be fulfilled by the Government at the time that
they provided their final review and approval of the
multi-employer pension plan.
42. The sworn statement of Earnest Vodney
attesting to these actions by the United States Department of Energy is attached herewith as Exhibit 1.
43. The responsibilities set forth in the mutiemployer pension plan that could only be fulfilled by
the Government at the time the MEPP was implemented were two-fold; to provide the funding to the
Hanford area contractors to fund the MEPP, and to
insure that Hanford area employees would continue to
participate in the MEPP when the Government
terminated their old contractor/employer and replaced
them with a new contractor/employer.
44. The Government acknowledged its responsibility to provide the funding to the Hanford area contractors to fund the MEPP and to insure that Hanford
area employees would continue to participate in the
App.30a
MEPP when the Government terminated their contractor/employer and replaced them with another contractor/employer in the Department of Energy’s official
policies.
45. At the time the MEPP was put in place in 1987,
and at all times thereafter, the Government maintained
exclusive authority over the management of Department of Energy reimbursed contractor pension programs.
46. The Department of Energy’s exclusive authority over the management of Department of Energy
reimbursed contractor pension programs was set forth
in DOE Order 3830.1, which was made effective 8-231982 and which remained in effect up to and through
1987, and which stated, in pertinent part:
1.
Purpose. To establish policies, procedures,
responsibilities, and authorities relating to
establishment, continuity and termination of
pension programs applicable to operating
and onsite service contracts subject to Department of Energy (DOE) Procurement Regulation (PR) 9-50.001.
2.
Scope. The provisions of this Order apply to
all elements of DOE which have cognizant
authority over operating and onsite service
contractor operations and to operating and
onsite service contractors performing work
for DOE.
6. RESPONSIBILITIES AND AUTHORITIES
d. Contracting Officer shall:
(1) After approval by Director of Industrial
Relations, execute approval on contract
App.31a
provisions relating to pension programs
which affect:
(a) New contracts or contract renewals;
(b) Changes in plan provisions
47. DOE Order 3830.1 thereby directed the DOE
contracting officers to control “contract provisions
relating to pension programs which affect new contracts
or contract renewals” and “changes in (pension) plan
provisions.
48. A copy of DOE Order 3830.1 is attached
herewith as Exhibit 2.
49. In the solicitation for the Hanford prime
contract in 1987, officials with the United States
Department of Energy who had the actual authority
to bind the United States Government to responsibilities contained within the MEPP then required the
contractors who bid on the prime contract to implement
the MEPP as part of the scope of work for the new
prime contract.
50. Because the Government controlled the terms
and conditions of all contracts and subcontracts for all
entities and individuals working on the Hanford site,
and consistent with the DOE’s policy, the DOE’s contracting officers had the sole and exclusive power and
authority to determine which contractors and which
Hanford site employees would participate in the MEPP.
51. Absent DOE’s contracting officer’s direct
authorization, none of the contractors, past, present,
or future, ever had, or ever will have, the ability or
authority to require any entity, including themselves,
to implement or participate in any multi-employer
pension plan at the Hanford site.
App.32a
52. On June 29, 1987 Westinghouse Hanford Company (WHC) was awarded the prime contract for the
Hanford site by contracting officers with the United
States Department of Energy who had the actual
authority to bind the United States Government, and
WHC was given overall responsibilities for site
management & operations at the Hanford site.
53. On or about the same date, contracting officers
with the United States Department of Energy who
had the actual authority to bind the United States
Government directed WHC and WHC’s subcontractors
to implement the MEPP as set forth in the solicitation
and, at DOE’s direction, all of the employees of the
contractors and sub-contractors at the Hanford site
thereby became “Participants” in the MEPP in 1987
as the term “Participants” is defined in the MEPP.
54. At the time that Westinghouse Hanford Company (WHC) was awarded the prime contract for the
Hanford site, contracting officers with the United
States Department of Energy who had the actual
authority to bind the United States Government,
intended to bind the Government to the responsibilities
set forth in Article 29 of the MEPP.
55. At the direction of DOE’s contracting officer,
and as set forth in the terms and conditions of the
MEPP, the pension funds that had been earned by
these employees under their prior employer’s pension
plans, and the obligations of those pension plans, were
all then transferred into the MEPP.
56. The MEPP included at least one implied obligation and at least one explicit obligation that could only
ever be fulfilled by the Government.
App.33a
57. The implied obligation was for the Government to provide the money to the Hanford contractors,
present and future, so that they could in turn
adequately fund the MEPP.
58. To fulfill that implied obligation, the Government’s contracting officers implicitly agreed to include
in contracts with Hanford contractors the obligation
that the Hanford contractors who received government funds for work at the Hanford site would use
some portion of those funds to fund the obligations of
the MEPP.
59. No one except the Government ever had the
intention, authority, ability or obligation to fund the
MEPP, because everyone, including particularly the
contracting officers with the United States Department
of Energy with the actual authority to bind the United
States Government, knew that the contracting officers
and the Government had the sole and exclusive ability
to authorize any and all payments to any and all contractors and subcontractors at the Hanford site, and
that the Government further had the sole and exclusive
ability to require that those contractors and subcontractors use a portion of those funds to fund the MEPP.
60. The explicit obligation created by the Government when the Government implemented the MEPP
was to insure that when the Government decided to
change contractors, the Government’s contracting
officers would draft all new contracts with the new
contractors to insure that a Participant in the MEPP
would continue to accrue credit for their “Years of
Service on the Hanford Reservation” to “assure that
the Participant receives a benefit at Normal Retirement
Date which is reflective of his Years of Service on the
App.34a
Hanford Reservation” as was required by Article 29 of
the MEPP.
61. The explicit obligation was set forth as Article
29 in the MEPP, which states: Termination and
Transfer
In the case of a Termination for Transfer, an
Employee who becomes a Participant hereunder shall be entitled to credit for eligibility under Article 2, Benefit Service under
Article 3 and Vesting Service under Article 6
to such a degree as shall be determined by
the Plan Administrator in order to assure that
the Participant receives a benefit at Normal
Retirement Date which is reflective of his
Years of Service on the Hanford Reservation.
The Plan Administrator’s decision shall be
adopted by a rule pursuant to Article 11. A
termination for transfer means a termination
from one contractor on the Hanford reservation to another contractor which is determined to be in the best interests of the Government.
62. At the time the MEPP was put in place at the
Hanford site, the contracting officers with the United
States Department of Energy who had the actual
authority to bind the United States Government,
intended to bind the Government to enforcing Article
29 of the MEPP, because they knew that the Government was the only entity that could ever enforce the
terms of Article 29, and if the Government was not
bound to Article 29, no one was.
63. While Article 29 of the MEPP purports to
create an obligation of the “Plan Administrator,” at
App.35a
the time the MEPP was put in place at the Hanford
site, contracting officers with the United States Department of Energy who had the actual authority to bind
the United States Government knew that the Plan
Administer lacked the authority to enforce Article 29
of the MEPP.
64. While Article 29 of the MEPP purports to
create an obligation of the “Plan Administrator,” at
the time the MEPP was put in place at the Hanford
site, contracting officers with the United States Department of Energy who had the actual authority to bind
the United States Government knew that the Government was the only entity that held the ability and
authority to enforce Article 29 of the MEPP.
65. While Article 29 of the MEPP purports to
create an obligation of the “Plan Administrator,”
beginning with the Government’s creation of the
MEPP, and at all times relevant to this litigation, contracting officers with the United States Department of
Energy who had the actual authority to bind the
United States Government have actually controlled
the operation and implementation of Article 29 of the
MEPP.
66. No one except the Government ever had the
intention, authority, ability or obligation to enforce
Article 29 of the MEPP, because everyone, including
particularly officials with the United States Department
of Energy with the actual authority to bind the United
States Government who formed and then administered
the MEPP, always knew that the Government had the
sole and exclusive ability to determine the terms, conditions, and requirements of all contracts at the Hanford
site, and to determine the inclusion or exclusion of
App.36a
all future contractors and contractor employees in the
MEPP.
67. At the time the Government put the MEPP
in place in 1987, and as set forth in DOE Order 3830.1,
the Government’s contracting officers (and not the Plan
Administrator of the MEPP) had the sole authority
to “execute approval on contract provisions relating to
pension programs which affect . . . New contracts or
contract renewals (and) Changes in plan provisions.”
68. By making the implicit promise to fund the
MEPP and the explicit promise set forth in Article 29
of the MEPP, the contracting officers acting on behalf
of the United States Government made an offer to the
employees at the Hanford site in 1987.
69. The terms of the government’s offer were
that if the employees worked at the Hanford site, the
Government would fund the MEPP and enforce Article
29 of the MEPP.
70. When employees accepted the Government’s
offer by working on the Hanford site, they formed a
contract in fact between the Government and themselves obligating the government to fund the MEPP
and further obligating the Government to honor
Article 29 of the MEPP in exchange for their continued
work at the Hanford site.
71. Even if the Government’s conduct in forming
the MEPP did not constitute an offer, the Government
nevertheless formed a contract in fact between the
Government and the Participants in the MEPP obligating the Government to fund the MEPP and obligating the Government to enforce Article 29 of the
MEPP when contracting officers with the United States
Department of Energy who had the actual authority
App.37a
to bind the United States Government exercised complete and total control over the administration of
Article 29 of the MEPP.
72. Beginning concurrently with the implementation of the MEPP the Government began making payments to the Hanford contractors to fund the MEPP.
73. The Government’s payments to fund the
MEPP have continued to this day.
74. The Government is the only entity that has
ever funded the MEPP, and the funds paid by the Government to the various Hanford contractors to be paid
into the MEPP are the only funds that have ever been
paid into the MEPP.
75. In 1996 the Government asked for bids on a
new prime contract for the management of the Hanford
site called the Project Hanford Management Contract
(PHMC) with a transition date of October 1, 1996.
76. The Government’s decision to transition to
the PHMC was the first instance of a “Termination for
Transfer” that would trigger the enforcement of
Article 29 of the MEPP, and therefore the first opportunity for the Government’s contracting officers to
demonstrate the Government’s complete control over
the implementation and enforcement of Article 29 of
the MEPP.
77. When the Government first made the decision
to transition to the PHMC in 1996, the Government
initially indicated to the Participants in the MEPP
that the Government would enforce the requirements
of Article 29 of the MEPP for all Hanford employees
as part of the transition to the PHMC contract.
App.38a
78. The Government’s solicitation for the PHMC
contract contained a specific requirement that the
Contractor who was awarded the PHMC contract
would be required to ensure that the Plaintiffs would
continue to participate in the MEPP under exactly the
terms and conditions that they had prior to the termination for transfer, in a manner that was fully consistent with the Government’s assent to the Government’s obligations under Article 29 of the MEPP.
79. The Government’s Solicitation, in pertinent
part, stated:
The Contractor agrees to the following:
In filling employment positions for work under
the contract, other than management positions, the Contractor and Major Subcontractors, agrees to hire employees who are or can
become qualified by the time the work commences from the workforce of the incumbent
contractor and its integrated subcontractors
(Westinghouse Hanford Company, ICF Kaiser
Hanford, and Boeing Computer Services Richland). The Contractor and Major Subcontractors shall assume the assets, liabilities,
and other obligations and continue the defined
benefit pension plans (does not include any
defined contribution plans) of the incumbent
contractor and integrated subcontractors.
80. In setting forth this requirement, the Government clearly indicated that the Government assented
to, and intended to enforce, the requirements of
Article 29 of the MEPP.
81. Shortly thereafter, one of the bidders on the
PHMC contract, Fluor Daniel Hanford, Inc. (FDH),
App.39a
submitted a bid that, if accepted, would require the
Government to repudiate the Government’s obligations
under Article 29 of the MEPP to a sub-set of the
Hanford area employees.
82. As set forth in FDH’s bid, the majority of the
Hanford workforce would continue to participate in
the MEPP as DOE had intended, but a portion of the
workforce would be assigned to new entities,
created to be sub-contractors to FDH, which were
termed “Enterprise Companies.”
83. As had happened in the past, and as set forth
in FDH’s bid, the actual workers who performed the
work assigned to these Enterprise Companies would
continue to perform their same jobs, in the same locations at the Hanford site, including being exposed to
highly dangerous radioactive and toxic materials that
have given some members of the Class cancer and
other fatal health consequences.
84. As set forth in FDH’s bid, these Enterprise
Companies would not become “sponsoring employers”
of the MEPP.
85. As set forth in FDH’s bid, since these Enterprise Companies would not become “sponsoring employers” of the MEPP, it would result in a financial
savings to the Government.
86. FDH’s bid therefore enticed the Government
to repudiate the obligations to the Hanford site
employees who would work for those Enterprise
Companies as those obligations were set forth in Article
29 of the MEPP, in the DOE’s policy, and in the Government’s solicitation.
App.40a
87. The Government did not have to accept the
terms of FDH’s bid.
88. On August 6, 1996, the Government announced
that the prime contract for the management of the
Hanford site was to be terminated and transferred by
the United States Department of Energy from the
incumbent contractors Westinghouse Hanford Company (WHC) and its subcontractors to the successor
contractor Fluor Daniel Hanford, Inc. (FDH) and its
team of integrated subcontractors with a transition
date of October 1, 1996 (hereafter the “1996 changeover”).
89. For the vast majority of the Hanford workforce
affected by the 1996 changeover, the Government
would honor the implied contract the Government had
with those workers and would require their new
employers would be identified as “Employers” under
the terms of the MEPP.
90. However, for the employees of “Enterprise
Companies,” the Government would repudiate the
Government’s obligations as those obligations were
set forth in Article 29 of the MEPP, in the DOE’s
policy, and in the Government’s solicitation.
91. On or about September 30, 1996 the Government entered into a “Transfer Agreement” with
Westinghouse Hanford Company, ICF Kaiser Hanford
Company, and FDH.
92. A copy of the Transfer Agreement is attached
as Exhibit 3.
93. Within the terms of the Transfer Agreement,
the Government dictated which companies would
leave the MEPP and which would remain, thereby
App.41a
demonstrating the Government’s complete control over
the operation of Article 29 of the MEPP.
94. The Plan Administrator of the MEPP was not
a participant or signatory to the Transfer Agreement,
demonstrating that obligations that purported to be
the responsibilities of the Plan Administrator in
Article 29 of the MEPP were actually the responsibilities of the Government.
95. At all times subsequent to the Transfer
Agreement, the Government also continued to dictate
the operation of the MEPP, particularly Article 29.
96. By failing to require that the Enterprise
Companies become “Employers” in the MEPP in the
Transfer Agreement, the Government repudiated the
Government’s obligation to the employees of the
Enterprise Companies to enforce Article 29 of the
MEPP at their retirement.
97. When it became apparent that their Enterprise
Company employers were not named as “Employers”
in the MEPP, certain Enterprise Company employees
(who are not Plaintiffs in this action) sought to begin
withdrawing their pension benefits from the MEPP,
as was their right under the terms of the MEPP and
under ERISA 29 U.S.C. § 1001 et seq.
98. The Government, acting through the MEPP,
refused to allow these employees to begin drawing
their pensions because the MEPP had insufficient
resources to pay these pension benefits and the MEPP
would not remain adequately funded under ERISA if
these employees were permitted to withdraw their
pensions, which would result in the Government
being forced to make additional contributions to the
MEPP.
App.42a
99. On October 10, 1996 the Government, realizing
that it could not afford to have the Enterprise Company employees withdraw their pension benefits from
the MEPP and keep the MEPP adequately funded
under the requirements of ERISA, announced that the
Enterprise Company employees who continued to
work at the Hanford site would be forced to remain in
the MEPP.
100. On October 11, 1996 the Department of
Energy issued a press release describing how the Government would amend the MEPP and the terms under
which the Enterprise Employees would remain in the
MEPP.
101. A copy of the October 11, 1996 press release
is attached herewith within Exhibit 4.
102. On January 15, 1997, the Government then
amended the MEPP in the manner set forth in the
October 11, 1996 press release (hereafter the “January
15, 1997 Amendment”).
103. The January 15, 1997 Amendment recited
that the Enterprise Company employees would remain
Participants in the MEPP, and upon retirement the
MEPP would calculate Enterprise Company employees
pension benefits using the highest five year salary
during their employment at the Hanford site (hereafter
the “high five benefit”), but that calculation would
not include the number of years they worked for
Enterprise Company, thereby explicitly repudiating
the contract in fact between the Plaintiffs and the
Government set forth at Article 29 of the MEPP.
104. By its own terms, the January 15, 1997
Amendment was made retroactive to September 30,
1996.
App.43a
105. When the Government put in place the January 15, 1997 Amendment, it created a new financial
obligation to the Plaintiffs, the high five benefit.
106. The high five benefit required ongoing contributions to the MEPP to account for the fact that the
Plaintiffs were continuing to work and get raises at
the Hanford site, thereby increasing the amount the
MEPP would ultimately be required to pay them at
retirement.
107. Since the Government dictated that the Plaintiff’s employers, the Enterprise Companies, were
never “Employers” in the MEPP in the Transfer
Agreement, the Enterprise Companies therefore had
no ability or obligation to fund the Plaintiffs’ high five
benefit.
108. Beginning in 1997 and continuing to this day,
the Government has made payments into the MEPP
to account for the ongoing increases in the Plaintiffs’
high five benefit.
109. By making payments into the MEPP on the
Plaintiffs’ behalf to account for the Plaintiffs’ high five
benefit, the Government has demonstrated that the
Government assented to having obligations directly to
the Plaintiffs by virtue of the MEPP.
110. Plaintiffs are still Participants in the MEPP.
111. Article 29 is still a term of the MEPP.
112. Subsequent to the Government’s repudiation
of the contract in fact between the Government and
the Plaintiffs, on numerous occasions the Government
acting by and through its agent the MEPP has
instructed the Plaintiffs that they could not challenge
App.44a
the purported changes in the Plaintiff’s retirement
benefits until the Plaintiffs retired.
113. While the MEPP purports to have an independent pension committee charged with the administration and operation of the plan (the Plan
Administrator), at all times relevant to this litigation,
the United States Department of Energy has actually
controlled the terms, administration, and operation of
the MEPP.
114. The Transfer Agreement was one example of
the Government exercising control over the terms,
administration, and operation of the MEPP.
115. Another example of the Government’s control
of the MEPP is the fact that all actions of the Plan
Administrator that would have a financial impact on
the MEPP require the prior written approval of the
United States Department of Energy.
116. Another example of the Government’s total
and complete control of the MEPP is the Government’s
control over which contractors and which employees
will be participants in the MEPP, and under what
terms and conditions, which the Government has
announced prior to or during every contract change on
the Hanford Site through a press release wherein the
United States Department of Energy describes how
the Government will direct the Plan Administrator to
amend the MEPP to comply with the decisions made
by the United States Department of Energy.
117. Copies of some of those press releases are
attached herewith within Exhibit 4.
118. Another example of the Government’s control
of the MEPP is the fact that any amendments to the
App.45a
MEPP by the Plan Administrator require the prior
written approval of a contracting officer with the United
States Department of Energy.
119. Another example of the Government’s control
of the MEPP includes the fact that the United States
Department of Energy provides the funding for all
costs of the MEPP including, but not limited to, the
high five benefit.
120. Another example of the Government’s control
of the MEPP is the fact that the United States Department of Energy created the MEPP.
121. Another example of the Government’s control
of the MEPP is the fact that the United States
Department of Energy has controlled all amendments
subsequent to the formation of the MEPP through its
control of various Hanford site contractors who were
controlled by, and at all times act as agents of, the
United States Department of Energy.
122. Another example of the Government’s control
of the MEPP is the fact that at all times relevant to
this litigation, the Plan Administrator has always
consisted of individuals employed by contractors who
were in turn controlled by the United States Department of Energy.
123. Another example of the Government’s control
of the MEPP and all other aspects of contractor post
retirement benefits at the Hanford Site is the fact that
the Government admitted it controlled all aspects of
contractor pensions and benefits when, on or about
March 19, 2007, the Department of Energy sent a
letter signed by Keith Klein, manager of the Richland
Operations Office and Shirley J. Olinger, Acting Manager of the Office of River Protection, to Ms. Susan
App.46a
Leckband, Chair of the Hanford Advisory Board, stating,
in pertinent part: “The U.S. Department of Energy
(DOE) headquarters (HQ) is responsible for establishing the Department’s policy and implementation
for contractor pensions and benefits.”
124. Another example of the Government’s control
of the MEPP includes the fact that at all times relevant
to this litigation, on each and every occasion that the
Plan Administrator has sought to change any of the
provisions of the MEPP, the United States Department of Energy has required the Plan Administrator
to seek and receive approval by the United States
Department of Energy for any such changes before
such changes became effective.
125. Another example of the Government’s control
of the MEPP is the fact that on or about 9/24/2008,
Fluor Hanford President and CEO Bruce Hanni sent
a letter to the United States Department of Energy
seeking permission and approval for Fluor Hanford’s
intended actions discontinuing accruing vesting service
and compensation for certain Hanford site employees
under the MEPP.
126. Another example of the Government’s control
of the MEPP is the fact that on or about 11/25/2008,
Sally Sieracki, contracting officer for the United States
Department of Energy sent the Government’s reply,
providing that permission and concurrence.
127. Another example of the Government’s control
of the MEPP is the fact that on or about 7/28/2009,
Fluor Hanford President and CEO David Ruscitto sent
a letter to the United States Department of Energy
seeking approval for the fourth and fifth amendments
to the MEPP.
App.47a
128. Another example of the Government’s control
of the MEPP is the fact that on or about 08/12/2009,
Sally Sieracki, contracting officer for the United
States Department of Energy sent the Government’s
reply, “approving” the fifth amendment to the MEPP,
and “not approving” the fourth amendment to the
MEPP.
129. Another example of the Government’s control
of the MEPP is the fact that subsequent to the
08/12/2009 correspondence from Sally Sieracki, the
Plan Administrator adopted the fifth amendment to
the MEPP and revoked the fourth Amendment to the
MEPP, thereby plainly demonstrating that the Plan
Administrator had no actual independence, and was
merely in place to carry out the directions of the
United States Department of Energy.
130. Another example of the Government’s assent
to being bound by Article 29 of the MEPP includes the
fact that on every occasion subsequent to the 1996
contract changeover, in each and every case where the
Government has caused contracts to be issued resulting in workers moving from one contractor to another,
the Government has written these new contracts to
require that the new contractor continue to promise
the workers the same post retirement benefits.
131. It was only for a small group, for the Plaintiffs herein, and only on the occasion of the 1996
changeover, that the Government repudiated its contract in fact to provide the post retirement benefits
after a “termination for transfer.”
132. Evidence of the Government’s assent to an
implied contract between the Plaintiffs and the Government obligating the Government to enforce Article
App.48a
29 of the MEPP also includes the fact that at all times
relevant to this litigation, the United States Department of Energy has held in place an official policy that
required the Government to effectuate the terms of
Article 29 during a termination for transfer.
133. Included in the Government’s official policy
was a requirement that any changes to the MEPP
required the approval of a contracting officer.
134. Subsequent to the October 1, 1996 termination and transfer of the Plaintiffs from their prior
employers to Enterprise Companies, all of the Plaintiffs
herein continued to perform their work at the Hanford
site.
135. The Government has received the full benefit
of the Plaintiffs’ work at the Hanford site subsequent
to the Government’s repudiation of the contract in fact
between the Government and the Plaintiffs.
136. Beginning on or about October, 2014, various
Enterprise Company employees began retiring and
notified the Plan Administrator that they wished to
begin drawing retirement benefits under the MEPP.
137. The Government, acting through the MEPP
and the Plan Administrator, responded by beginning
to pay those Enterprise Company employees retirement
pension benefits that were not calculated using their
entire term of service at the Hanford Site as required
under Article 29 of the MEPP, thereby breaching the
contract in fact that existed between those employees
and the Government.
138. The employees appealed.
139. The Government, acting through the MEPP
and the Plan Administrator, declined those appeals
App.49a
and ruled that these employees benefits did not include
the entire term of their service at the Hanford Site, as
required by Article 29 of the MEPP and the contract
in fact between those employees and the Government.
140. When each Class Member retires, the Plaintiffs believe, and therefore allege, that the Government,
acting through the MEPP and the Plan Administrator,
will determine that each member of the Class is not
entitled to have that member’s pension benefits
calculated using that member’s entire term of service
at the Hanford Site, thereby breaching the Article 29
and the Government’s contract in fact with the Class
Member.
141. In the event that any Class Member appeals
any such future determination by the Government
acting through the MEPP and the Plan Administrator,
that the Class Member is not entitled to have that
Class Member’s pension benefits calculated using that
Class Member’s entire term of service at the Hanford
Site, the Plaintiffs believe, and therefore allege, that
the Government, acting through the MEPP and the
Plan Administrator, will deny such appeal, rendering
all such future appeals futile.
VI. Class Action Allegations
142. This action is brought and may be properly
maintained as a class action pursuant to RCFC 23
(a)(1-4) and RCFC 23(b)(2-3). This action satisfies the
numerosity, commonality, typicality, adequacy, predominance, and superiority prerequisites of Rule 23. The
named class representatives seek to maintain this
case as an opt-in class action on behalf of a class (“the
Class”) as defined as follows:
App.50a
The Class is defined as any person who was
a Participant in the MEPP on or prior to
September 30, 1996 who was transferred to
an Enterprise Company between about
August and December of 1996 and who have
made a claim for their retirement benefits in
the six years preceding the initiation of this
action, or who have the right to make a claim
for their retirement benefits at any point in
the future.
143. The Class is comprised of more than 500
individuals making joinder impractical.
144. The disposition of the claims of these class
members in a single class action will provide substantial
benefits to all parties and to the Court.
145. There is a well-defined community of interest
among members of the Class.
146. The proposed Class meets the prerequisites
of RCFC 23(a). First, the proposed Class is so numerous
that the individual joinder of all members is
impracticable. While the exact number and identities
of the members of the Class are unknown at this time
and can be ascertained only through appropriate discovery, Plaintiff believes that the class consists of
more than 500 members.
147. As required by RCFC 23(a)(2), common questions of law and fact exist as to all members of the
Class and predominate over any questions affecting only
individual members of Class.
148. Plaintiffs, like all class members, had, or will
have, the continuation of their retirement benefits unilaterally terminated in breach of a contract in fact
App.51a
existing between DOE and the Plaintiffs in direct contradiction of the DOE’s own regulations.
149. Plaintiffs, like all Class members, were damaged or will be damaged as a result of the termination
of the continuation of their retirement benefits.
150. Among the questions of law and fact common
to the members of the Class are the following:
151. Whether the actions of the Government are
compensable under the Tucker Act;
152. The appropriate nature of class-wide relief;
and
153. Whether the Government is liable for damages to Plaintiffs and members of the Class.
154. As required by RCFC 23(a)(3), Plaintiffs’
claims are typical of the claims of the members of the
Class, as all such claims arise out of the breach by the
Government of a contract between the members of the
Class and the Government, and the consequent
injuries they suffered as a proximate result of the Government’s common course of conduct as alleged herein.
155. As required by RCFC 23(a)(4), Plaintiffs will
fairly and adequately protect the interests of the members of the Class and have no interest antagonistic to
those of members of the Class.
156. Plaintiffs have retained counsel experienced
in the litigation of class actions.
157. This action is maintainable as class action
pursuant RCFC 23(b)(1) because the Government
acted or refused to act on grounds generally applicable
to the Class, conduct making the subject of this action
a common course of conduct involving standardized
App.52a
documents, regulations, policies, contracts, and actions
applicable to the Class as a whole.
158. As required by RCFC 23(b)(2), the questions
of law or fact common to members of the Class
predominate over any questions affecting only individual members.
159. In this regard the common question, among
other common questions, of whether the actions of the
Government, in reducing the Plaintiff’s pension and
other post retirement benefits in the manner set forth
herein give rise to compensation predicated on the
Tucker Act, the provisions of which apply to members
of the Class.
160. Further, a class action is superior to other
available methods for the fair and efficient adjudication
of this controversy, since individual joinder of all
members of the Class is impracticable. Furthermore,
the expense and burden of individual litigation would
make it difficult or impossible for individual members
of the Class to redress the wrongs done to them. The
cost to the court system of adjudicating such individualized litigation would be substantial. While the individual claims are large, many of the members of the
Class are unable to pursue their individual claims due
to the financial hardship caused by the loss of their
post retirement benefits.
161. The conduct of this action as a class action
presents fewer management difficulties, conserves
the resources of the parties and the court system, and
protects the rights of each member of the Class. Notice
of the pendency and any resolution of this action can
be provided to members of the Class by a combination
of publication and individual notice, based upon
App.53a
records maintained by the United States Department
of Energy and/or Government contractors and/or Plaintiff’s counsel.
VII. The Claims for Damages
162. Paragraphs 1 through 137 are incorporated
by reference as though fully set forth in this cause of
action.
163. The Tucker Act provides that Plaintiffs and
the members of the Class be fully compensated for the
breach of an implied contract in fact as described
above.
164. Beginning with the Government’s implementation of the MEPP in 1987, the Government formed an
implied contract in fact with the Plaintiffs obligating
the Government to provide pension retirement benefits
that accounted for the Plaintiffs’ years of service on
the Hanford site at their normal retirement date, as
set forth in Article 29 of the MEPP.
165. Beginning with the contract changeover in
1996, the Government repudiated that obligation.
166. When Plaintiffs herein have retired, the
Government has breached the contract in fact formed
between the Government and the Plaintiffs.
167. Plaintiffs are entitled to be compensated for
the Government’s breach of the implied contract in
fact under the Tucker Act.
PRAYER
WHEREFORE, Plaintiffs and the putative members of the Class seek judgment against the United
States as follows:
App.54a
1. That the Court certify this case as an opt-in
class action under RCFC 23(b);
2. For appointment of the above named Plaintiffs
as representative of the certified class;
3. For appointment of Douglas E. McKinley, Jr.
as counsel for the certified class;
4. That the Court declare the rights and duties of
the parties consistent with the relief sought by Plaintiffs;
5. That Plaintiffs and each of the putative members of the Class recover compensatory damages in
amount equal to the value of their economic losses,
each individual claim being more than $10,000.00;
6. For an award of damages to the Class in an
amount to be proven at trial but which for purpose of
pleading is alleged to be one hundred million dollars.
7. That Plaintiffs and the putative members of
the Class recover an award of reasonable attorney’s
fees, costs, and expenses; and
8. For leave to amend these pleadings to conform
to the evidence presented at trial;
9. For judgment against the Government in an
amount to be determined at trial;
10. Such other additional relief as the interests
of justice may require.
App.55a
/s/Douglas E. McKinley
DOUGLAS E. MCKINLEY, Jr.
WSBA#20806
Attorney for Plaintiffs
DOUGLAS E. MCKINLEY, Jr.
Law Office of Douglas E. McKInley, Jr.
1030 N. Center Parkway
Kennewick, WA 99336
tel. (509) 628-0809
fax (509) 392-8083
email: doug@mckinleylaw.com
App.56a
EXHIBIT 1 –
DECLARATION OF ERNEST VODNEY
(FEBRUARY 2, 2018)
IN THE UNITED STATES
COURT OF FEDERAL CLAIMS
________________________
FRANK CALAPRISTI, AND
OTHER SIMILARLY SITUATED PERSONS
v.
THE UNITED STATES
________________________
No. 18-cv-00612-VJW
1) My name is Ernest Vodney, I am over the age
of 18 and am otherwise competent to testify and have
personal knowledge of the facts set forth herein.
2) From 1982 to 1987 I was employed as the
Controller at the Hanford Engineering Development
Laboratory (HEDL) which was a subsidiary of the
Westinghouse Corporation and was operating at the
Hanford nuclear reservation under a prime contract
with the United States Department of Energy (DOE).
3) I reported directly to John Nolan, who was at
that time the President of HEDL.
4) Sometime prior to 1987, the DOE instructed
John Nolan and the other heads of various Hanford
contractors to draft a multi-employer pension plan
(hereafter the MEPP) in anticipation of a consolidated
Hanford contract being awarded in 1987.
App.57a
5) Each of the Hanford contractors whose workscope
was to be included in the consolidated contract assigned
two employees to be a part of the committee that was
assigned to draft the MEPP.
6) Paul Matthews, who at the time was the head
of the Human Resources department, and I were
assigned to represent the committee on behalf of HEDL.
7) Together with myself and Paul Matthews, the
committee, along with supporting staff and external
resources drafted the MEPP on behalf of the DOE.
8) During the drafting process, our work would
be coordinated and reviewed with DOE.
9) Upon completion, the MEPP was then submitted to the DOE for their final review and approval.
10) Sometime thereafter, the DOE approved the
MEPP.
11) In the solicitation for the Hanford prime contractor in 1987, the contractors who bid on the prime
contract were required to implement the MEPP by the
DOE.
12) When Westinghouse won the prime contract
in 1987, Westinghouse implemented the MEPP at the
Hanford site thereby binding the Hanford workforce
whose pensions were transferred to the MEPP to the
terms of the MEPP.
I declare under penalty of perjury that the
foregoing is true and correct.
App.58a
Executed on February 2, 2018.
/s/ Ernest Vodney
State of Washington
County of Benton
Signed and sworn to before me on February 2,
2018 by Ernest Vodney.
Dated: February 2, 2018
/s/ Tina L. Cook
Notary Public
State of Washington
Commission Expires 02-15-21
App.59a
EXHIBIT 2 –
DOE POLICIES AND PROCEDURES FOR
PENSION PROGRAMS UNDER OPERATING
AND ONSITE SERVICE CONTRACTS
.
________________________
1. PURPOSE. To establish policies, procedures, responsibilities, and authorities relating to establishment,
continuity, and termination of pension programs
applicable to operating and onsite service contracts
subject to Department of Energy (DOE) Procurement
Regulation (PR) 9-50.001.
2. SCOPE. The provisions of this Order apply to all
elements of DOE which have cognizant authority over
operating and onsite service contractor operations and
to operating and onsite service contractors
performing work for DOE.
3. DEFINITIONS
a.
Accrued Benefit
(1) Defined Benefit Plan. Employee’s retirement income
earned under the contractor’s plan as of the date of
determination, expressed in the form of an annual
benefit commencing at normal retirement age or
the actuarial equivalent thereof.
(2) Defined Contribution Plan. The employee’s account
balance as of the date of determination.
App.60a
b.
Normal Cost. The annual cost associated with the
current year by the actuarial cost method used for
the actuarial valuation.
c.
Past Service Costs. The amount which, together
with the present value of future normal costs,
will be exactly sufficient to provide all future
benefits of the group included in the actuarial
valuation.
d.
Pension Plan. Defined programs established and
maintained to provide payments to employees
following retirement. Future payments are
definite benefits determined and provided from
either defined benefit plans, defined contribution
plans, or a combination thereof. Plan benefits
may be self-insured where the investment of the
funds is handled by plan trustees. Alternatively,
plan funds may be placed with an insurance
company involving one of the following arrangements: totally insured (individual or deferred
group annuities are purchased), partially insured
(annuities are purchased at actual retirement-i.e.,
deposit administration or immediate participation
guarantee), or uninsured (where no annuities are
purchased-i.e., investment only type).
e.
Vesting. The attainment, by a participant in a
pension plan, of certain rights in the funds arising
out of the employer’s contributions made in behalf
of such participant: (Such rights ordinarily are
granted only after certain requirements of the
plan are met, such as the participant’s completion
of a specified number of years of service and/or
attainment of a particular age.)
App.61a
4. POLICIES AND OBJECTIVES. DOE’s policy is to
reach agreement with those contractors who operate
Government facilities or provide onsite services to
provide for pensions to employees working on DOE
contracts. The objective is to assure that employee
continuity in pension programs funded by DOE
contributions is protected in replacement contractor
situations and in event of facility shutdown; and that
the contractor neither gains nor loses financially from
properly providing pension benefits.
5. GUIDELINES FOR APPLICABILITY. When costtype contracts are negotiated for operation of a DOE
facility on a continuing basis, consideration should be
given to providing for pension cost reimbursements
subject to final accounting at contract expiration or
termination. In other situations when a continuing
pension obligation is not deemed in the best interest
of DOE, cost reimbursements should be made on a full
and final settlement basis each year. The following
guidance shall be considered in selecting the type of
pension arrangement:
a.
Pension arrangements which provide for a continuing DOE obligation should be considered for
use in contracts for operation of DOE facilities
when:
(1) The facility is a laboratory or institution for
which there is a projected continuing national
need for research and development in a scientific
area(s);
(2) The facility involves production of a
product for which there is a long term national
need;
App.62a
(3) Contractor management of such facility is
subject to being recompleted or changed at periodic
intervals;
(4) The work force will normally continue at the
facility under management of the replacement
contractor; or
(5) The long term life of the facility makes
preservation of the interests of all affected parties
of benefit to the Department.
b.
Full and final settlement arrangements are
normally considered appropriate for use in
demonstration, pilot plant, or other types of DOE
facilities when:
(1) The facility is expected to operate for a
limited period;
(2) Facility operation may involve one or more
private establishments with a contractual
interest in the facility;
(3) The facility will be shutdown or turned over
to industry when its program is complete;
(4) Employees operating the facility may remain
on the payroll of establishment(s) having an
interest in the program; and
(5) Departmental interest can be protected by
cost principles set forth in-Federal Procurement
Regulations, FPR 1-15.205.6(f)i “Deferred
Compensation.”
6. RESPONSIBILITIES AND AUTHORITIES
a.
Assistant Secretary, Management and Administration, shall be responsible for overall DOE
App.63a
management of DOE reimbursed contractor
pension programs.
b.
Director of Industrial Relations shall:
(1) Assist the Director of Procurement and
Assistance Management with:
(a) Preparation of proposed changes to DOE
procurement regulations relating to deferred
compensation; and
(b) Establishment and maintenance of cost
principles relating to allowability of costs for
contractor employee pension programs.
(2) Maintain liaison with Department of Labor,
Internal Revenue Service (IRS), and Pension
Benefit Guaranty Corporation (PBGC) on pension
matters.
(3) Provide consultation, guidance, and comments
as appropriate to contracting officers on:
(a) Policies and
compensation;
regulations
on
deferred
(b) Plan provisions and amendments;
(c) Actuarial valuation and accounting reports;
and
(d) Other pension-related matters.
(4) Approve for contracting officer execution:
(a) Pension arrangements at inception and at
contractor replacement,
(b) Reasonableness of pension cost figures
contained in the actuarial valuation report;
(c) Changes in plan provisions; and
App.64a
(d) Final settlement covering pension assets and
liabilities when contracts are terminated as a
result of the selection of a replacement contractor, the contract is partially terminated,
or the facility is shutdown.
c.
Director of Procurement and Assistance Management shall:
(1) Propose changes to DOE PR’s relating to
deferred compensation;
(2) Establish and maintain cost principles
relating to allowability of cost for contractor
employee pension programs; and
(3) Coordinate these pension matters
Director of Industrial Relations.
d.
with
Contracting Officer shall:
(1) After approval by Director of Industrial Relations, execute approval on contract provisions
relating to pension programs which affect:
(a) New contracts or contract renewals;
(b) Changes in plan provisions; and
(c) Final agreement on allocations of assets and
liabilities at partial or complete contract
terminations.
(2) Require and assure that contractors submit
pension-related reports in a timely manner;
and
(3) Assure completeness of all submissions and
provide the Director of Industrial Relations with
such or copy thereof.
App.65a
7. REQUIREMENTS. The following are requirements
of pension programs funded by DOE.
a.
Basic Requirements of DOE-Reimbursed Pension
Programs
(1) Plan shall satisfy requirements of IRS,
Department of Labor, 29 U.S.C. 1001, et seq.,
“Employee Retirement Income Security Act”
(ERISA), and any other Federal statutes and
regulations.
(2) Where a contractor’s program is exempt from
ERISA, the contractor shall, nevertheless,
follow the requirements of ERISA to the fullest
practical extent.
(a) There must be a formal written document
providing for payments to be made into a
trust or under a contract with an insurance
company. This must be communicated to the
employees as a pension program.
(b) The plan must be for the exclusive benefit of
the employees or their beneficiaries.
(c) The benefits must be definitely determinable
and reasonable.
(d) The plan must not discriminate in favor of
officers, stockholders, or highly paid
employees.
(e) Until the purposes of the plan have been
fulfilled, it must be impossible for the principal
or income of the plan to be diverted for any
other purpose.
App.66a
(f)
The vehicle that funds a pension plan may
not engage in transactions which would be
prohibited transactions under ERISA.
(3) Automatic cost-of-living adjustments are prohibited. However, ad hoc adjustments may be
permitted with prior DOE approval.
(4) Profit-sharing, employee stock ownership plan,
or other supplemental pension programs may
be considered provided they:
(a) Constitute a bona fide pension program
with primary purpose to provide pension
benefits at a specified retirement age (as
distinguished from an arrangement for the
distribution of profits to the contractor’s
officers and employees).
(b) Contain an acceptable method for the
determination of the value of the contractor’s
contributions, e.g., fair market value of
contractor stock provided to the employee
stock ownership plan.
(c)
Contain a definite method for the application
of the contractor’s contributions for pension
benefits of the employees.
(d) Meet the other pertinent requirements of an
acceptable pension program.
(5) Pension programs vary greatly as to the
benefits to be provided and also as to areas such
as provisions for vesting of rights and equities,
eligibility requirements, methods of funding, and
retirement ages. Regardless of a plan’s compliance
with ERISA, where it contains provisions for
benefits beyond the scope of a bona fide pension
App.67a
plan, such as for deferred compensation to be paid
to the employees before retirement, the plan
may be approved subject to the test of reasonableness of total compensation.
(6) The contractor is held accountable for proper
management of its pension program.
b.
Plan/Fund Structure for DOE-Reimbursed Pension
Programs. Contract should provide that the pension
plan and trust fund covering DOE contract employees are separate plans within the meaning of
Section 414 (1) of the Internal Revenue Code and
comply with page 8, paragraph 10, “Termination
Provisions.” If necessary to deviate from the
requirement for a separate plan, justification
for the deviation must resubmitted to DOE for
approval. Where a separate plan is not feasible,
the agreement must provide that annual accounting for contributions reimbursed by DOE must be
made and that assets attributable to contributions
reimbursed by DOE shall be used for the benefit
of contract employees. If an employee is transferred
by the employer to or from work covered by a
DOE contract, there shall be no transfer of funds.
Instead, the accrued benefit will become payable
from the appropriate fund at the time of actual
retirement. If a commingled trust fund is maintained, regardless of whether DOE contract
employees are covered by a separate plan, ongoing
pension contributions reimbursed by DOE shall
not be calculated using actuarial methods or
assumptions which differ from those being used to
calculate the contractor’s contribution for nonDOE contract employees, unless DOE approves
such difference.
App.68a
c.
Funding Media of DOE-Reimbursed Pension
Programs. Preferably pension funds will be selfinsured with benefits paid directly from the trust
fund. Contractors proposing to fund an ongoing
program through an insurance company shall
solicit proposals, on a participating basis, from
a number of insurers to assure reasonable cost to
DOE, taking into consideration expected costs,
guarantees, availability, and other pertinent
factors. Regardless of which medium, DOE
approval is required.
d.
Prior Approval. All pension programs (includes
aspects such as benefit plans, amendments, and
overall funding technique) and changes therein
where DOE reimbursements are involved require
DOE approval prior to becoming effective.
8. PENSION COSTS
a.
Funding. When contributions required as part of
the cost of a DOE contract are made, they must
be irrevocably deposited in the pension trust or
paid to the insurance company issuing the
contract through which the plan is funded.
b.
Pension Benefit Guaranty Corporation Premium.
(1) Separate Pension Plan. In the case of a
separate pension plan, the contractor should seek
PBGC determination as to whether or not its
program is a governmental plan. Unless and
until such determination that the plan is a
governmental plan, the PBGC premiums will be
considered as an allowable cost. Any premium
refunds made by PBGC shall revert to DOE.
App.69a
(2) Commingled Pension Plan. When DOE contract
employees are covered by the same plan as the
contractor’s other operations, the cost of the PBGC
premium for DOE contract employees is an allowable cost under the DOE contract.
9. REPORTING REQUIREMENTS. The contractor
shall be required to submit the following reports to
the contracting officer. Actuarial valuation reports
and copies of IRS Form 5500’s with schedules must be
submitted for DOE-reimbursed pension plans. In addition, accounting reports must be submitted for commingled trusts. Reports are due within 7 months after
the end of the plan year, and shall be submitted to
DOE within 30 days of completion.
a.
Actuarial Valuation Reports. Periodic (choice of
annual, biennial, or triennial-as prepared)
actuarial valuation reports are required for DOEreimbursed pension programs. Also, any special
actuarial reports, as prepared, are to be
submitted. When pension funds are commingled
both total and DOE portions must be listed. The
report shall include at least the following items:
(1) A summary of the plan, including the
actuarial assumptions, the value of the vested
benefits (computed on a unit credit basis without
discount for withdrawal), the value of accrued noninvested benefits (computed on a unit credit basis
with discount for future withdrawal), the cost
methods employed, a summary of the plan, and
suggested contribution for the ensuing year
(which must comply with ERISA). The report
required by the Financial Accounting Standards
Board pursuant to statement number 35 may be
acceptable in lieu thereof.
App.70a
(2) Total number of contract employees; number
of plan participants including their average age,
service, and salary; value of accrued liabilities in
each of the following categories: retirees; vested
terminus; and active employees. If available, a
breakdown of active employee liabilities by
decrement should be furnished, e.g., retirement,
death, withdrawal, and disability liabilities.
b.
Form 5500’s. A copy of IRS Form 5500 with
schedules, as submitted to IRS, is required for
each year.
c.
Accounting Reports. When pension funds are
commingled with other company pension funds
in a single trust, annual accounting reports are
required. The accounting report shall include at
least the following items:
(1) The amount of the fund at the beginning of
the year;
(2) DOE-reimbursed
during the year;
contributions
received
(3) Income (such as interest) including realized
and unrealized gains and losses which represent
a pro rata share of the total fund;
(4) Actual disbursements for pension benefits
excluding return of employee accumulations
made during the year;
(5) Pro rata share of expenses paid during the
year; and
(6) Fund balance at the end of the year.
10. TERMINATION PROVISIONS. Paragraph 10 does
not apply when a contract is extended or is
App.71a
recompleted with the same contractor receiving the
award. Paragraph 10 applies when a contract is
terminated or expires, and references to “contract
termination” and “terminated contractor” are inclusive,
herein, of both termination and expiration situations.
Further, the “replacement contractor” refers, herein,
to the immediate successor contractor to the terminated
contractor.
a.
Termination of Contract.
(1) No Replacement Contractor Situation. If upon
contract termination there is no replacement
contractor, then generally the pension plan is
considered terminated and immediate vesting of
accrued benefits, to the extent then funded, is
ruled on by IRS. In that case, for purposes of
this section DOE shall consider as vested only
those benefits which would have been vested
had termination not been ruled, plus that portion
of nonvested accrued benefits which can be
covered by the assets attributable to DOE, after
covering the vested benefit liability. For a pension
plan and/or trust fund where partial or complete
termination is not ruled, DOE shall require full
and immediate vesting of accrued benefits for
employees who are discharged as a result of
contract termination, provided such employees do
not withdraw their accumulated contributions.
(2) Replacement Contractor Situation. If there is
a replacement contractor, the immediate vesting of
accrued benefits may or may not be required
depending upon whether or not a termination or
partial termination of the pension plan is
determined to have occurred, on a case-by-case
basis. Whether or not termination is ruled, the
App.72a
rules described in subparagraph (1) will be followed.
The terminated and replacement contractors shall
assist DOE in preserving opportunities to attain
vested rights through continuity of service for
switched over employees for contract service both
preceding and following switchover. Also, care
must be taken to avoid giving duplicate benefits
solely on account of change of contractors.
(a) Pension Program Continuance. Where there
is a separate plan and trust, it is objective
that the replacement contractor take over
the terminated contractor pension program
for both past. and future service.
(b) Pension Program Discontinuance. If the replacement contractor is unable or refuses to
continue the terminated contractor separate
pension plan or if the terminated contractor
pension plan covers both DOE contract and
non-DOE employees, then the replacement
contractor shall establish a separate pension
program covering the ongoing contract
employees consistent with the following:
1
The replacement contractor, in cooperation with the terminated contractor, shall
set up a trust fund to provide accrued
benefits at the time of normal or early
retirement.
2
The employees’ service with the terminated DOE contractor shall apply as
service toward the participation requirements of the replacement contractor’s
plan, and also toward any length of service
requirements for benefit eligibility, for
App.73a
example, vesting, early retirement, or disability retirement under the plan. Prior
service shall not be credited where the
transferring employee at any time elects
early retirement under the terminated
contractor’s plan.
3
When the employee’s combined service
meets the vesting requirements under
either the terminated contractor or the
replacement contractor pension program,
the employee shall receive a credit for
the benefit earned under the replacement
plan for the total service, including that
with the terminated contractor. In no
event shall the employee receive duplicate
benefits for the same service. If the terminated contractor plan is a defined contribution plan and the replacement
contractor plan is a defined benefit plan,
for purposes of avoiding duplication of
benefits, the employee account balance
at contract termination shall be converted
into an annuity based on the actuarial
assumptions initially used by the replacement contractor in its regular actuarial
valuation.
4
Where the terminated contractor’s pension plan was a contributory plan and the
nonvested employees are to be refunded
their contributions and earnings thereon,
such employees shall be encouraged to
make their refunds accessible to the
replacement
contractor’s
pension
program to enable them to get credit for
App.74a
benefits consistent with the provisions
of the pension program in effect during
the periods for which contributions were
made. An employee not making refunds
available shall forfeit the accrued benefit
attributable to employer contributions
to the extent permissible under ERISA;
also, such employee will forfeit any credit
for service with the terminated contractor
toward participation and vesting under
the replacement contractor’s program.
b.
Methodology for Calculations at Pension Program
Termination. The contractor is held accountable
for proper custody and management of pension
funds.
(1) Assets. Assets shall include all accumulations of DOE-reimbursed contributions and all DOE
contract employee accumulations as determined
in the actuarial valuation report and/or annual
accounting report (as required for commingled
pension trusts) through the date of contract
termination. Contributions shall include those due
but unpaid as of contract termination.
(2) Liabilities for Present and Future Benefits. The terminated contractor actuary shall
determine liabilities for DOE contract employee
accrued vested-plan benefits as of the contract
termination date. Whether or not there is a replacement contractor, calculations shall reflect IRS
rules concerning partial or complete termination
and subsequent vesting. Except for active participants switched over to replacement contractor,
liabilities may be determined by purchase, through
competitive bidding, of nonparticipating annuities.
App.75a
(a) Nonactive Participants. For pensioners and
vested terminees prior to contract termination,
present value of accrued benefits shall be
calculated using the then PBGC rates of
interest and mortality.
(b) Active Participants Retained by Terminated
Contractor. For active employees who are
retained by the terminated contractor, present
value of accrued benefits shall be calculated
using unit credit funding method, service and
salary history as of the termination date, and
the then PBGC rates for interest, mortality,
and retirement. Where such employee subsequently terminates within 2 years after contract termination, the value of unvested
portion shall revert to DOE.
(c)
Active Participants Switched Over to Replacement Contractor. No determination by
terminated contractor is required by DOE.
(d) Active Participants Terminated at Contract
Termination. For active employees who are
not retained by terminated contractor and
who are not switched over to replacement
contractor, present value of vested accrued
benefits shall be calculated using unit credit
funding method and the then PBGC interest
and mortality rates.
(3) Financial Settlements.
(a) Reconciliation of Funding Obligations. Full
and final settlement shall be made, with the
only exception being the return to DOE of
subsequent nonvested DOE funds at employee
termination as described in subparagraph
App.76a
(2)(b), above. Assets, from subparagraph (1)
above, at market value shall be compared
with liabilities, from subparagraphs (Z)(a),
(b), and (d) above.
1
If assets are lesser than liabilities, then
DOE shall pay such difference to the
terminated contractor or at the contractor’s option directly into the plan of the
terminated contractor. These payments
may only be used to purchase annuity
contracts for vested employees for when
reimbursement is being made, or deposited into the pension plan of the terminated contractor. However, in the event
that PBGC termination insurance premiums have been paid and plan terminates within 6 months of contract
termination, the maximum shortage shall
be limited to the amount that the contractor is held liable for as determined by
PBGC; of such amount, DOE shall
reimburse only that proportional amount
which corresponds to the ratio of the
shortage of DOE reimbursable funds to
the overall shortage of funds. However,
DOE retains the right, upon fund termination or transfer, to settle fund deficits
in accordance with applicable contract
provisions, subject to the availability of
funds.
2
If assets are greater than liabilities, then
the terminated contractor shall pay such
difference into the replacement contractor
App.77a
pension plan for ongoing contract employees. However, if there is no replacement contractor, then the terminated
contractor shall refund such difference
to DOE. All payments are subject to IRS
requirements for mandatory disbursements to contributory employees and
shall include interest on the unpaid balance at an assumed rate of investment
return equal to that used by PBGC for
benefits in pay status.
(b) Terminated Contractor Retention of Assets
and Liabilities. The terminated contractor shall
retain liabilities and assets equal to liabilities
associated with subparagraph (2)(a) nonactive
participants, subparagraph (2)(b) active participants retained by terminated contractor,
and subparagraph (2)(d) active participants
terminated at contract termination.
(c)
Transfer of Assets and Liabilities Upon Establishment of a Replacement Pension Plan. Total
covered DOE contract service liability
associated with subparagraph (2)(c) active
participants switched over to replacement
contractor shall transfer with assets of subparagraph (3)(a) 2 above, if any.
William S. Heffelfinger
Assistant Secretary
Management and Administration
App.78a
EXHIBIT 3 –
TRANSFER AGREEMENT
RELEVANT EXCERPTS
(SEPTEMBER 30, 1996)
THIS TRANSFER AGREEMENT (“Agreement”) is
entered into effective as of 12:01 a.m. on October 1, 1996,
by and between the UNITED STATES OF AMERICA,
acting through the United States Department of
Energy, Richland Operation Office (“DOE”), represented
by the undersigned Contracting Officer, and FLUOR
DANIEL HANFORD, INC. (“FDH”), a corporation
organized and existing under the laws of the State of
Washington; and WESTINGHOUSE HANFORD
COMPANY (“WHC”), a corporation organized and
existing under the laws of the State of Delaware, on
behalf of itself and its subcontractor BCS Richland,
Inc. (“BCSR”); and ICF KAISER HANFORD
COMPANY (“ICF KH”), a corporation organized and
existing under the laws of the State of Delaware.
WHC, ICF KH, FDH and the DOE are referred to in
this Agreement collectively as the “Parties”, and
singularly as a “Party”.
WITNESSETH THAT:
WHEREAS, the DOE and WHC are parties to
Contract NO. DE-ACO6-87RL10930 (M&O Contract”),
pursuant to which WHC has management and
operational responsibilities for portions of the Hanford
Nuclear Reservation (“Hansford Site”) owned and
operated by the DOE; and
WHEREAS. WHC and ICF KH are parties to
Subcontract No. 360393 (“ICF KH Subcontract”),
App.79a
pursuant to which ICF KH has certain architect, engineering, infrastructure and construction management
responsibilities for the Hanford Site; and
WHEREAS, WHC and BCSA are parties to Subcontract No. 50930 (“BCSR Subcontract”). pursuant to
which BCSR performs information management
services for portions of the Hanford Site; and
WHEREAS, the DOE and FDH are parties to
Contract No. DE-AC06-96RL13200 (“PHMC Contract”),
which provides for FDH to commence its responsibilities
at the Hanford Site at 12:01 a.m. on October 1, 1996,
(hereinafter referred to as the “Transfer Date”); and
FDH has selected: (1) B&W Hanford Company, (2)
DE&S Hanford, Inc., (3) Lockheed Martin Hanford
Corporation, (4) Numantec Hanford, Inc., and (5) Rust
Federal Services of Hanford, Inc. (“Major Subcontractors”) as its subcontractors to perform portions of the
work under the PHMC Contract; and FDH has selected
(6) Floor Daniel Northwest, Inc., (7) Floor Daniel
Northwest Services, Inc., (8) DE&S Northwest, Inc.,
(9) Lockheed Martin Services, Inc., (10) SGN Eurisys
Services Corporation, and (11) B&W Protec, Inc.
(“Enterprise Subcontractors”) as its subcontractors to
perform portions of the work under the PHMC Contract;
and FDH has selected (12) DynCorp Tri-Cities Services,
Inc. (“DynCorp”) as its subcontractor to perform portions
of the work under the PHMC Contract; and all of said
FDH subcontractors are referred to, where appropriate,
in this Agreement collectively as “subcontractors”;
and
WHEREAS, effective at midnight, September 30,
1996, the DOE has terminated its M&O Contract with
WHC, and, in turn, at the direction of the DOE, WHC
has terminated the BCSR Subcontract; and
App.80a
WHEREAS, effective at midnight, September 30,
1996, the DOE, in accordance with terms of the
assignment agreement between the DOE, ICF KH
and WHC, dated October 14, 1993, has terminated the
ICF KH Subcontract; and
WHEREAS, the DOE has directed FDH and its
Subcontractors to hire certain, WHC, ICF KH, and
BCSR employees effective at 12:01 a.m. on October 1,
1996; and
WHEREAS, the Parties desire to facilitate an
orderly transfer of the documents, agreements, and
property referred to in this Agreement;
NOW, THEREFORE, in consideration of the
mutual covenants and understandings contained herein,
the Parties, and, as applicable, BCSR, agree as follows:
1.
Purpose
The purpose of this Agreement is to effectuate an
orderly transfer between the Parties as set forth herein,
and this Agreement in and of itself does not modify
the terms and conditions of the M&O Contract, the
ICF KH Subcontract of the PHMC Contract. In the
event of a conflict between the terms and conditions of
this Agreement and the M&O Contract, the ICF KH
Subcontract or the PHMC Contract, the terms and
conditions of the M&O Contract, the ICF KH Subcontract or the PHMC Contract shall control in connection with the respective parties to those contracts.
[...]
App.81a
11. Pension, Savings and Benefit Plans
A. Multiple Employer, Multi-Employer,
Guards and OPEIU Pension and
Savings Plans
The following pension and savings plans are
currently in effect:
(i)
WHC, ICF KH and BCSR are sponsoring
employers of the;
(a) Hanford Operations & Engineering
Pension Plan, and
(b) Hanford Operations & Engineering
Investment Plan.
The Operations & Engineering Pension and
Investment Plans are multiple employer
plans (the “Multiple Employer Plans”).
(ii) WHC, ICF KH and BCSR are sponsoring
employers of the:
(a) Hanford Contractors Multi-Employer
Defined Benefit Pension Plan for HAMTC
Represented Employees, and
(b) Hanford Contractors Multi-Employer
Savings Plan for HAMTC Represented
Employees.
The Hanford Contractors Multi-Employer
Defined Benefit Pension Plan and Savings
Plans for HAMTC Represented Employees are
multi-employer Plans (the “Multi-Employer
Plans”).
App.82a
WHC, ICF KH, and BCSR are not the only
sponsoring employers of the Multiple
Employer and Multi-Employer Plans.
(iii) WHC is the sole sponsoring employer of the:
(a) Westinghouse Hanford Company Pension
Plan, Hanford Guards Union, Local 21,
and
(b) Westinghouse Hanford Company Savings
Plan, Hanford Guards Union, Local 21,
(the “Guard Plans”).
(iv) ICF KH is the sole sponsoring employer of
the Retirement and Think Plan for Members
of Office and Professional Employees International Union, Local 11, (the “OPEIU Plan”).
B. Withdrawal from Multiple Employer,
Multi-Employer, Guards and OPEIU
Pension and Savings Plan
(i)
Effective as of the Transfer Date, WHC, ICF
KH and BCSR will withdraw as sponsoring
employers of the Multi-Employer Plans; and
WHC, ICF KH and BCSR shall be relieved of
further responsibility as sponsoring employers
under the Multi-Employer Plans.
(ii) Effective as of the Transfer Date, WHC will
withdraw as the sponsoring employer of the
Guards Plans; and WHC is relieved from
further responsibility as sponsoring employer
under the Guards Plans.
(iii) Effective as of the Transfer Date, ICF KH
will withdraw as the sponsoring employer
of the OPEIU Plan; and ICF KH is relieved
App.83a
from further responsibility as sponsoring
employer under the OPEIU Plan.
(iv) Effective as of the Transfer Date, WHC shall
be relieved of all further responsibility as
administrator for the Multiple Employer,
Multi-Employer, and Guards and OPEIU
Plans.
(v) WHC, ICF KH and BCSR will continue to be
sponsoring employers of the Multiple
Employer Plans until the Withdrawal Date.
(vi) Effective as of the Withdrawal Date, WHC,
ICF KH and BCSR will withdraw as sponsoring employers of the Multiple Employer Plans;
and WHC, ICF KH and BCSR shall be
relieved of further responsibility as sponsoring
employers under the Multiple Employer
Plans.
C. New Sponsoring Employers of Multiple
Employer, Multi-Employer, Guards and
OPEIU Plans
(i)
Effective as of the Transfer Date, FDH
agrees that it, its Major Subcontractors and
DynCorp shall become sponsoring employers
under the Multiple Employer Plans referred
to in Section 11.A. above, for which their
respective employees will be eligible. FDH,
its Major Subcontractors and DynCorp hereby
accept all liability and responsibility under
said plans as applicable to their eligible
employees for contributions and benefits,
including responsibility for benefits due
retirees or former employees with vested
App.84a
benefits under such plans, regardless of when
employment ceased or ceases.
(ii) Effective as of the Transfer Date, FDH agrees
that it shall become the sponsoring employer
under the Multi-Employer, Guards, and
OPEIU Plans referred to in Section 11.A.
above, for which its employees will be eligible.
FDH hereby accepts all liability and responsibility under said plans as applicable to its
employees for contributions and benefits,
including responsibility for benefits due
retirees or former employees under such
plans, regardless of when employment ceased
or ceases.
(iii) Effective as of the Transfer Date, FDH accepts
all responsibility as administrator for the
Multiple Employer Plans, the Multi-Employer
Plans, the Guards and OPEIU Plans.
[...]
J. Withdrawal Date
The “Withdrawal Date” shall be the date on
which WHC, ICF KH and BCSR no longer employ any
employees who are participants in the Multiple
Employer, Welfare Benefit Plans, and Additional
Employee Benefit Arrangements or Plans referred to
in Sections 11.A., 11.D., and 11.G. above. Until such
date, WHC, ICF KH and BCSR shall continue to be
sponsoring employers under said Plans, and shall
comply in all respects with their obligations there
under as sponsoring employers; provided that, effective
as of the Transfer Date, WHC, ICF KH and BCSR
shall each be entitled to elect representatives to the
App.85a
Administrative Committees of each of the Multiple
Employer Plans.
[...]
11-L. Amendment of Plans and Related
Agreements
As of the Transfer Date:
(i)
each pension, savings and welfare benefit
plan referred to in Sections 11.A. and 11.D.
above shall be amended by action of the Plan
Administrator by adoption of amendments
in form substantially identical to those
delivered to FDH prior to, or at the execution
of, this Agreement; and
(ii) the related third-party agreements, which
include, but are not limited to, actuaries,
record keepers, third-party administrator
agreements, pension and savings investment
manager agreements, related health, life
and other welfare benefit insurance contracts
listed on Attachment 11.L.(ii) to this
Agreement shall be transferred to FDH by
action of the Plan Administrator.
App.86a
[...]
20. Signatures
The individuals whose signatures appear below certify
that they are authorized to sign on behalf of of their
respective Parties to this Agreement. The individual
signing on behalf of WHC hereby certifies that WHC
has the right to bind BCSR to the actions identified in
this Agreement and that such actions may be enforced
against WHC. The individual signing on behalf of FDH
hereby certifies that FDH has the right to bind its Subcontractors to the actions identified in this Agreement
and that such actions may be enforced against FDH.
IN WITNESS WHEREOF, the Parties hereto have
executed this Agreement in several counterparts as of
the date and year first above written.
UNITED STATES OF AMERICA
BY: U.S. DEPARTMENT OF ENERGY
By: /s/ John D. Wagoner
Title: Manager and Contracting Officer
Date: 9/30/96
WESTINGHOUSE HANFORD COMPANY
By: /s/ Larry F. Peters
Title: Chief Financial Officer
Date: 9/30/96
App.87a
ICF KAISER HANFORD COMPANY
By: /s/ Robert L. Benedetti
Title: Executive Vice President, Deputy
General Manager and Acting President
Date: 9/30/96
FLUOR DANIEL HANFORD, INC.
By: /s/ Henry J. Hatch
Title: President
Date: 9/30/96
App.88a
EXHIBIT 4A
DOE PRESS RELEASE:
DEPARTMENT OF ENERGY CLARIFIES
BENEFITS FOR EMPLOYEES OF PROJECT
HANFORD MANAGEMENT CONTRACT
ENTERPRISE COMPANIES
(OCTOBER 11, 1996)
Media Contact;
Guy Schein, (509) 376-0413
guy_d_schein@rl.gov
The Department of Energy announced today three
steps to assist Hanford employees accepting employment with enterprise companies. First, during the
initial two years of employment with the enterprise
companies, employees of enterprise firms will be
entitled to the same layoff benefits as employees who
remain with Fluor Daniel Hanford (FDH) and its
primary subcontractors. This includes:
●
Protection of Separation Credits If the
enterprise company does not offer or has a
less generous separation pay program. FDH
will pay the difference between separation
pay that the enterprise company provides
and what the employees would have received
App.89a
had they continued to have been employed
with FDH.
●
Full Work Force Restructuring Plan Benefits
The Hanford Work Force Restructuring Plan
provides scaled-down benefits for subcontractor employees, which includes the
enterprise companies. FDH will provide to
eligible employees the full Work Force
Restructuring Plan Benefits they otherwise
would have received upon terminating.
Second, the Hanford Site Operations and Engineering Pension Plan will be amended to provide the
following benefits to enterprise companies employees
formerly employed by Westinghouse Hanford Company,
Boeing Computer Services, Richland, and ICF Kaiser
Hanford.
●
Recognition of actual age and eligibility service
for purposes of early retirement reductions.
●
Provide recognition of the salary employees
earn with the enterprise company for
determination of their pension benefit-under
the Operations and Engineering Plan.
●
Provide immediate vesting of all employees
who were not already vested in the Operations
and Engineering Pension Plan.
Finally, the Department will direct FDH to
commission an independent study of the compensation/
benefit programs of the enterprise companies. The
study will compare the compensation/benefit programs
of the enterprise companies with their other offices
that perform similar work within the United States
and to the commercial market in which the enterprise
App.90a
companies must compete for business. The results of
the study will be made available to employees and the
public. The Department may consider further options
based on the results of the study.
App.91a
SPECIAL NOTICE
SUBJECT: HANFORD CENTRAL PLATEAU ACQUISITION
Introduction
The purpose of this document is to provide
industry and other interested parties with preliminary
information as the U.S. Department of Energy (DOE)
develops its detailed plans for the Hanford Central
Plateau Acquisition. This document is not a Request
for Proposals (RFP). All interested parties are
encouraged to frequently access the DOE E-Center for
information.
The official website for the Hanford Central Plateau
Acquisition is the DOE E-Center at www.pr.doe.gov.
The DOE E-Center will be the sole distribution
medium for all information regarding this acquisition.
All interested parties are encouraged to frequently
access this website for information. DOE will not
distribute paper or other forms of information regarding
this acquisition.
Summary Description of the Hanford Central
Plateau Scope
Hanford Central Plateau cleanup of legacy waste
includes three major overarching objectives: safe work
performance that delivers on cleanup commitments,
protection of human health and the environment, and
effective use and stewardship of Federal resources. The
major elements of scope for the Hanford Central
Plateau include:
●
deactivation, decontamination,
decommissioning, and demolition (D4) of 970
surplus facilities across the Central Plateau;
App.92a
●
disposition of five ‘canyon’ facilities (former
radiochemical processing and supporting
facilities located on the Central Plateau);
●
remediation of 850 waste sites, including burial
grounds and liquid waste discharge sites
(cribs, ditches, and ponds);
●
management and remediation, as appropriate,
of six groundwater plumes;
●
operation of solid waste disposal facilities (such
as the new Integrated Disposal Facility (IDF)
and Central Waste Complex (CWC));
●
operation and closure of the 149 single-and
28 double-shell waste tanks and the supporting
infrastructure for tank waste storage, retrieval,
treatment, and disposal/storage;
●
management, storage, and/or disposal of
multiple, highly radioactive materials (such
as cesium and strontium capsules, and spent
nuclear fuel (SNF));
●
operation of the new tank waste treatment
and immobilization facilities, and supplemental technologies (currently under
construction and/or demonstration); and
●
operation, maintenance, curtailment, and
closure of the site infrastructure and support
services (water, power, sanitary waste, and
miscellaneous systems and services).
Hanford Central Plateau Acquisition Approach
DOE has developed an acquisition approach for
the Hanford Site Central Plateau, and will use the
competitive acquisition process described under Federal
App.93a
Acquisition Regulation (FAR) Part 15 to award three
new contracts. The acquisition approach is designed
to integrate the needs of both Richland Operations
Office (RL) and Office of River Protection (ORP) into a
group of coordinated contracts that will provide
continued cleanup of legacy waste on the Hanford Site
Central Plateau.
Three new major prime contracts will replace the
existing Project Hanford Management Contract (PHMC)
and the Tank Farm Operations Contract (TFC) at
Hanford, and include:
●
Hanford Mission Support Contract for
information management, site utilities, and
a broad range of site services managed by
RL;
●
Waste Material Storage and Disposition
Mission Contract that will be managed by
RL; and
●
Tank Farm Operations and Closure Mission
Contract that will be managed by ORP.
A phased approach will be used to implement this
acquisition. The Hanford Mission Support Contract will
be acquired first, followed by the Waste Material
Storage and Disposition, and Tank Farm Operations
and Closure acquisitions. Following the acquisition of
these three major prime contracts, future contracts
and/or task orders for individual projects would be
placed for surplus facility D4; remediation; and tank
farm projects.
To implement this acquisition approach, the PHMC
and TFC will be extended under existing contracts
until the mission support and mission acquisitions are
App.94a
completed. The duration of the extension period will
support completing the new acquisitions and the
transition to the three new contracts. Contract
extensions will be structured to sequentially perform
and transition scope through the extension period.
The acquisition approach does not include the existing
Waste Treatment Plant Contract and the River
Corridor Closure Contract (RCCC).
Summary Description of the Hanford Mission
Support Contract:
The Hanford Mission Support Contract includes
information management, site utilities, and a broad
range of site services:
●
information technology, telecommunications,
and federal information management;
operation and maintenance of site utilities
such as water, electrical, and roads;
●
safeguards and security, emergency services,
analytical laboratories, and radiological
dosimetry;
●
groundwater monitoring and management;
●
management services such as administration
of contractor employee pension and benefits,
site-wide integrated planning and interface
management, and property/real estate
management; and
●
project planning to define and negotiate
cleanup end states, and support DOE in
preparing and executing future task order
contracts.
App.95a
Under the existing Hanford contract structure,
the majority of these services have been assigned to
the PHMC to provide linkages with current operations
and support mission changes.
Summary Description of the Waste Material
Storage and Disposition Mission Contract:
The Waste Material Storage and Disposition
includes all non-tank farm activities required to
receive, retrieve, characterize, certify, package, treat,
store, and dispose/ship legacy and newly generated
wastes, including:
●
waste treatment, storage, and disposal
including liquid effluent treatment, mixed
waste treatment, and low level and mixed
waste disposal (including the IDF, Environmental Restoration Disposal Facility (ERDF)
(following completion of the RCCC), Waste
Receiving and Processing Facility (WRAP),
and CWC);
●
SNF and immobilized high-level waste (IHLW)
storage, completion of SNF sludge removal,
and special nuclear material (SNM) storage,
and possible off-site waste shipments to
Hanford; and
●
transuranic (TRU) retrieval (including suspect
TRU).
Under the existing Hanford contract structure,
the majority of these activities have been assigned to
the PHMC to provide linkages with current operations
and the ability to address emerging new scope.
Summary Description of the Tank Farm Operations
and Closure Mission Contract:
App.96a
The Tank Farm Operations and Closure Mission
Contract includes operations activities necessary to
continue to retrieve, treat, store, and dispose Hanford
tank waste, projects within the operating facilities,
and tank farm closure, including:
●
maintain and operate the tanks farms, the
242-A evaporator, and the 222-S building in
a safe, environmentally compliant and stable
configuration transuranic (TRU) retrieval
(including suspect TRU).
●
operate tank waste treatment, storage, and
disposal facilities;
●
retrieve tank waste, continuing single-shell
tank retrievals, and retrieve and package
contact handled TRU tank waste;
●
develop a comprehensive, integrated tank
waste treatment plan for the future;
●
treat and dispose of tank waste; and
●
close Tank Farms.
Under the existing Hanford contract structure,
these activities have been assigned to the TFC.
Other Areas of Interest
Small Business Opportunities:
Opportunities for small business were carefully
considered in the proposed acquisition approach; this
provides for a three-tier approach: potential small
business set asides within the mission support contract,
meaningful small business subcontracting opportunities
within the prime contracts, and defined future small
business opportunities using the existing DOE Office
App.97a
of Environmental Management (EM) Indefinite
Delivery/Indefinite Quantity contracts with small
business and new small business contracts. A key
feature of the acquisition approach is to establish a
project planning capability within the mission support
contract to provide the flexibility to define and effectively
break-out work for small business.
Contractor Employee Pension and Other Benefits:
The RFPs for these acquisitions will reflect the
Department’s standard practice under which
transferring incumbent employees would transition to
employment under the new contract with equivalent
pay for equivalent positions. With respect to the
pension plan component of the benefits package, the
RFPs will make it clear that contractor employees
who are currently participating in the site pension
program and are subsequently employed by the selected
contractors under the new contracts will remain in
their existing pension plan (pursuant to plan eligibility
requirements and applicable law); that is, “if you’re in,
you’re in.” However, the RFPs would also require the
contractors selected for award to provide marketbased pension plans for new, contractor employees
hired after award. With respect to medical benefits,
the Department is currently assessing its policies and
the RFPs will reflect, or will be modified to reflect,
those policies as concluded by the Department.
Contractor Employment Levels:
Hanford is a closure site and contractor employment
will trend down in the future. Each new contractor
will be required to establish the required organizational
structure, skill mix, and staffing levels for successful
contract performance. New contracts will require that
App.98a
incumbent employees be fairly considered for continued
employment under existing and new contracts.
The Department recognizes the contributions of
the existing contractor workforce to safe work performance; as part of the transition to closure contracts with
scope broader than traditional radioactive waste
management activities, the Department will continue
to retain existing trained and qualified workers and
develop new workforce capabilities.
Contracting Officer Name: Alan Hopko
Contracting Officer Phone: 509-376-2031
Contracting Officer E-mail:
AlanEHopko@RL.gov
Contracting Officer Address:
825 Jadwin Avenue
Contracting Officer City:
Richland
Contracting Officer State:
WA
Contracting Officer Zip:
99352
Archive Date: (mm/dd/yyyy)
12/31/2006
App.99a
EXHIBIT 4B
DOE PRESS RELEASE:
DOE ISSUES FINAL RFP FOR HANFORD’S
TANK WASTE CLEANUP
(JULY 2, 2007)
Media Contact;
Erik Olds, 509-372-8656
DOE Office of River Protection
The U.S. Department of Energy’s (DOE) Office of
River Protection (ORP) today released the final Request
for Proposals (RFP) for the Tank Operations Contract
(TOC) to continue cleanup of the central portion of the
Hanford Site. Proposals are due on September 17,
2007. The contract term consists of an initial five-year
base period, and could be extended up to an additional
five years. The contract will be worth an estimated
$8.2 billion. The RFP contains specific requirements
that mandate at least 15% of the contract work must
be performed by small businesses.
The RFP includes a performance-based approach
to tank farm operations for Hanford’s Central Plateau.
Work scope includes storage, retrieval and treatment
of Hanford tank waste, storage and disposal of treated
waste, and closure of tank farm waste management
areas to protect the Columbia River.
App.100a
Incumbent employees will continue to participate
in the Hanford Site Pension Plan (HSPP). This “if
you’re in, you’re in” approach means that incumbent
employees will remain in the HSPP if they move into
the TOC.
After releasing a draft RFP for the TOC in
November 2006, DOE held a public comment period
and exchanges with potential offerors. Changes to the
RFP scope include:
●
Adding the early feed and operation of the
Low Activity Waste facility, Balance of
Facilities, and the Analytical Laboratory at
the Waste Treatment and Immobilization
Plant;
●
Removing the scope that created an
Organizational Conflicts of Interest, as well
as the related solicitation provision and
contract clause.
Other changes to the RFP include adding a
“Community Commitment” Clause requiring the
successful contractor to conduct its work in accordance
with DOE’s policy to engage regional stakeholders in
issues and concerns of mutual interest and to recognize
that giving back to the community is a worthwhile
business practice; clarifying mentor-protégé agreement
requirements to ensure meaningful small business
participation; clarifying the environmental and regulatory roles, responsibilities and interfaces between
Hanford Site contracts; and outlining a process to reach
into a contractor’s parent organization to tap into
diverse experience.
App.101a
Release of the final RFP continues the Department’s
cleanup momentum at Hanford, building on such accomplishments as completing the removal of pumpable
liquids from underground single-shell tanks, completing
the retrieval of sludge and saltcake waste from seven
single-shell tanks, developing and deploying new
technologies to safely retrieve waste, and completing
the construction of the state-of-the-art Integrated
Disposal Facility.
The RFP is available on the DOE E-Center
Industry Interactive Procurement System website:
www.pr.doe.gov. The website will be the sole distribution
medium for the solicitation and related information.
App.102a
EXHIBIT 4C
DOE PRESS RELEASE:
DOE ISSUES FINAL RFP FOR HANFORD’S
CENTRAL PLATEAU CLEANUP
(JUNE 25, 2007)
Media Contact;
Colleen C. French, 509-373-5985
DOE Richland Operations Office
The U.S. Department of Energy (DOE)’s Richland
Operations Office (RL) today released the final Request
for Proposals (RFP) for the Plateau Remediation
Contract (PRC) to continue cleanup of the central
portion of the Hanford Site. Proposals are due on
September 21, 2007 and the contract term consists of
an initial five-year base period, and could be extended
for an additional five year period. The contract will be
worth an estimated $6.3 billion. The final RFP contains
specific requirements that mandate at least 17% of the
contract work must be performed by small businesses.
The RFP includes a performance-based approach to
continue cleanup of Hanford’s Central Plateau. Work
scope includes treating and disposing of low-level,
mixed low-level, and transuranic waste; managing the
groundwater/vadose zone project; cleaning up some
facilities and waste sites and keeping others in
minimum-safe condition; conducting near-term
shutdown activities and long term surveillance and
App.103a
maintenance on the Fast Flux Test Facility; cleaning
out and closing the Plutonium Finishing Plant; treating
radioactive sludge and completing cleanup of the K
East and K West Reactor areas; and developing
documents for regulatory and other decisions covering
groundwater, soil, and facilities.
Incumbent employees will continue to participate
in the Hanford Site Pension Plan (HSPP). This “if
you’re in, you’re in” approach means that incumbent
employees will remain in the HSPP if they move into
the PRC.
After releasing the Draft RFP for the PRC in
November 2006, DOE held a public comment period
and exchanges with potential offerors. Resulting changes
to the Final RFP scope include:
●
Adding the removal of water from the K East
reactor basin, demolition of the K East and
K West basins and superstructures, placing
the K East and K West Reactors in an
interim safe storage configuration (cocooning),
and remediating and closing the remainder
of the 100K Area;
●
Having the new contractor continue retrieval
of transuranic waste and provide support to
the Waste Isolation Pilot Plant’s Central
Characterization Project, which will characterize and certify the contact-handled waste;
●
Removing the long-term shutdown activities
at the Fast Flux Test Facility (FFTF). The
scope now assumes completion of short term
shutdown activities for long-term surveillance
and maintenance (leading to closure in 2030).
App.104a
Other changes to the RFP include adding a
“Community Commitment” Clause requiring the
successful contractor to conduct its work in accordance
with DOE’s policy to engage regional stakeholders in
issues and concerns of mutual interest and to recognize
that giving back to the community is a worthwhile
business practice; clarifying mentor-protégé agreement
requirements to ensure meaningful small business
participation; clarifying the environmental and
regulatory roles, responsibilities and interfaces between
Hanford Site contracts; and outlining a process to
reach into a contractor’s parent organization to tap
into diverse experience.
Release of the final RFP continues the Department’s
cleanup momentum at Richland, building on such
accomplishments this year as completing the removal
of radioactive sludge from the K East Reactor basin,
deploying new technologies to clean up groundwater,
completing cleanup of three high-priority burial grounds
in the River Corridor, and decontaminating and
demolishing highly contaminated buildings at the
Plutonium Finishing Plant.
The Final RFP is available on the DOE E-Center
Industry Interactive Procurement System website:
www.pr.doe.gov. The website will be the sole distribution
medium for the solicitation and related information.
App.105a
EXHIBIT 4D
DOE PRESS RELEASE:
DOE TO ISSUE FINAL RFP FOR MISSION
SUPPORT CONTRACT AT HANFORD
(MAY 2, 2007)
FOR IMMEDIATE RELEASE
May 2, 2007
The U.S. Department of Energy (DOE)’s Richland
Operations Office (RL) will release later today the
Final Request for Proposals (RFP) for the Mission
Support Contract (MSC), worth an estimated $325
million annually (excluding fee). The Mission Support
Contract will provide cost-effective infrastructure and
site services integral and necessary to accomplish the
Hanford Site cleanup mission.
The new approach to contracting for these services
is designed to enable the MSC contractor to focus on
right-sizing and improving the efficiency of site services
and free up the Hanford cleanup contractors to focus
on their remediation work. Ultimately, DOE anticipates
the cost of services to be driven down as portions of
the site are cleaned up, enabling more of the Hanford
budget to be spent on cleanup.
The contract term will consist of an initial fiveyear period, and could be extended up to an additional
five years. DOE-RL will administer the contract, and
App.106a
the contractor will provide services to both RL and the
DOE Office of River Protection. Proposals are due on
July 16, 2007.
The Final RFP includes a performance-based
approach to five primary functions: Safety, Security
and Environment; Site Infrastructure and Utilities;
Site Business Management; Information Resources/
Content Management; and Portfolio Management.
Examples of scope within these areas include
safeguards and security; site training services and
operation of the HAMMER training facility; public
safety and resource protection; administration of
employee benefit plans; strategic planning and program
management; information systems; records management; project acquisition and support; independent
analysis and assessments; worker safety and health
management; quality assurance; and a wide variety of
infrastructure and business services including utilities,
transportation, biological control, sewer, telecommunications, and correspondence control.
After releasing the draft RFP in November 2006,
DOE held a public comment period and meaningful
exchanges with potential offerors. Among the resulting
changes are the addition of a “Community Commitment
Clause” requiring the successful contractor to work in
accordance with DOE’s policy to engage regional
stakeholders in issues and concerns of mutual interest
and to recognize that giving back to the community is
a worthwhile business practice; clarifying mentorprotégé agreement requirements to ensure substantive
small business participation; and clarifying the
environmental and regulatory roles, responsibilities
and interfaces between the MSC and other Hanford
Site contracts.
App.107a
The Final RFP contains specific requirements
that provide an opportunity for small businesses to
apply their expertise and experience. At least 25% of
the overall contract work must be performed by small
businesses.
Incumbent employees will continue to participate
in the Hanford Site Pension Plan (HSPP). This “if
you’re in, you’re in” approach means that incumbent
employees will remain in the HSPP if they move into
the MSC. New employees will be offered a marketbased benefits plan.
The Final RFP will be available later today on the
DOE E-Center Industry Interactive Procurement
System website: www.pr.doe.gov. The website will be
the sole distribution medium for the solicitation and
related information.
App.108a
OPINION OF THE UNITED STATES COURT
OF APPEALS FOR THE FEDERAL CIRCUIT
(JANUARY 9, 2019)
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
________________________
PETER TURPING, DICK CARTMELL, PHILIP
ISAACS, GREG BROWN, JOHN BONGERS, AND
OTHER SIMILARLY SITUATED PERSONS,
Plaintiffs-Appellants,
v.
UNITED STATES,
Defendant-Appellee.
________________________
2018-1005
Appeal from the United States Court of Federal
Claims in No. 1:16-cv-00872-SGB,
Senior Judge Susan G. Braden
Before: LOURIE, CHEN, and STOLL,
Circuit Judges.
CHEN, Circuit Judge.
Appellants are a group of former employees of
Lockheed Martin Services, Inc. (Lockheed) who appeal
a U.S. Court of Federal Claims (Claims Court) decision
dismissing their contract claim against the U.S.
government (Government). Because the Claims Court
App.109a
correctly determined that Appellants did not prove
that an implied-in-fact contract between themselves
and the Government exists, we affirm the Claims
Court’s decision.
BACKGROUND
During World War II, the Hanford Nuclear
Reservation (Hanford) was established by the U.S.
Army Corps of Engineers (Army Corps) in the state of
Washington to produce nuclear material for use in
atomic weapons. J.A. 24-25. After the war, Hanford
continued to be used by the Government for nuclear
work, but eventually the Department of Energy (DOE)
assumed responsibility for managing Hanford. J.A. 25.
Since 1947, DOE and its predecessors engaged
contractors, whose employees performed work at
Hanford. J.A. 24-25. Each time the work performed by
one contractor was transferred to another contractor, the
employees that performed the work would stay the
same, and they would typically keep their same pay
and benefits, including retirement benefits. J.A. 28.
In 1987, DOE awarded a contract moving the
management and operation of Hanford to a contractor,
Westinghouse Hanford Company (WHC), and directed
WHC to create the Hanford Multi-Employer Pension
Plan (MEPP). J.A. 27, 29. The MEPP was a contract
between “Employers,” defined with specific contractor
and subcontractor names including WHC, and
“Employees,” who were employed by the Employers.
J.A. 201-202. Each time a new contractor performs
work at Hanford, the definition of “Employer” in the
MEPP adds that new contractor. See J.A. 102. According
to the preamble of the MEPP, the MEPP was created
by the Employers for the benefit of the Employees.
App.110a
J.A. 196. The Government is not listed as a party to
the MEPP.
The MEPP is run by a Plan Administrator, which
Article 11 of the MEPP defines as a committee
established by the Employers. J.A. 248. The Plan
Administrator may not amend the MEPP without
prior DOE approval and may not take any action that
has a financial impact on the MEPP without prior
written approval of DOE. J.A. 33. Article 10 requires
“[e]ach Employer [to] make contributions to the Plan
from time to time as the Plan Administrator shall
determine but in at least such amount as is required
by the minimum funding standards of federal law
applicable to the Plan.” J.A. 248.
Article 29 of the MEPP, entitled “Terminations
for Transfer,” requires that employees be able to
“receive[] a benefit at Normal Retirement Date which
is reflective of his Years of Service on the Hanford
Reservation.” J.A. 293. Reference to the Government
only appears once in the MEPP, and that is in Article
29, where the MEPP states: “A Termination for
Transfer means a termination from one contractor on
the Hanford Reservation to another which is determined
to be in the best interests of the government.” Id.
On August 6, 1996, DOE announced that the
Hanford Management Contract would be transferred
from the current contractor (WHC) to a new contractor
(Fluor Daniel Hanford or FDH). J.A. 30. The majority
of workers received the same post-retirement benefits
when the 1996 contract changeover occurred. J.A. 38.
On August 30, 1996, however, some WHC
employees were provided with an “Offer Letter” from
Lockheed, which was to be a subcontractor to FDH.
App.111a
J.A. 37. The Offer Letter stated: “[i]f your employee
benefits for this position are different than the current
site benefit program, a summary is enclosed,” but no
summary was enclosed. Id. The Offer Letter required
the WHC employees to sign it by September 9, 1996,
if they wanted to accept employment with Lockheed.
J.A. 38.
In September 1996, many former employees of
WHC, including Appellants, accepted employment at
Lockheed and were informed by Lockheed that, upon
their retirement, they would not receive retirement
benefits—including medical benefits, death benefits,
and pension compensation—that were previously
afforded under the MEPP. J.A. 39.
Despite being told earlier in October 1996 that
Appellants were no longer parties to the MEPP, on
October 10, 1996, Appellants were informed1 that
they would in fact remain in the MEPP. J.A. 40.
Instead of calculating their pension benefits based on
their total years in service, however, their benefits
would be calculated using the highest five year salary
during their employment at Hanford (the high-five
1 Appellants allege throughout their amended complaint that
“the Government” performed certain actions, including making
certain statements to Appellants. See, e.g., J.A. 39-41. At times,
Appellants also state that the Government made these statements
“acting through the MEPP” or “acting through its agent the
MEPP.” Id. These allegations as to what the Government told
Appellants, however, fail to reach the “plausible” level required
by Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“To survive a
motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’”) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). Moreover, the Government is not a party
to the MEPP and therefore cannot act “through” the MEPP.
App.112a
rule). J.A. 41. This was solidified in an amendment to
the MEPP, made retroactive to the end of September
1996. Id. The Lockheed employees were told that they
could not challenge the new changes to their benefits
until they retired. Id.
In October 2014, Peter Turping retired from
Lockheed and notified the Plan Administrator that he
intended to begin withdrawing pension benefits from
the MEPP. J.A. 42. The Plan Administrator used the
high-five rule to calculate Mr. Turping’s pension
benefits, rather than calculating the benefits using his
entire term of service at Hanford. Id.
In July 2016, Appellants, including Mr. Turping,
filed a class action lawsuit against the Government
under the Tucker Act, alleging, inter alia, that they
had an implied-in-fact contract with the Government
and that the Government breached that contract
when it refused to provide Appellants pension benefits
based on their total years in service. J.A. 22-52. The
Government subsequently filed a motion to dismiss
Appellants’ amended complaint under Rules of the
U.S. Court of Federal Claims (RCFC) 12(b)(1) and 12
(b)(6). J.A. 6. The Claims Court granted the Government’s motion, and Appellants timely appealed.
We have jurisdiction under 28 U.S.C. § 1295(a)(3).
STANDARD OF REVIEW
“This court reviews de novo whether the Court of
Federal Claims possessed jurisdiction and whether
the Court of Federal Claims properly dismissed for
failure to state a claim upon which relief can be granted,
as both are questions of law.” Wheeler v. United States,
11 F.3d 156, 158 (Fed. Cir. 1993).
App.113a
“Whether a contract exists is a mixed question of
law and fact.” Cienega Gardens v. United States, 194
F.3d 1231, 1239 (Fed. Cir. 1998). “We review the trial
court’s legal conclusions independently and its findings
of fact for clear error.” Cal. Fed. Bank, FSB v. United
States, 245 F.3d 1342, 1346 (Fed. Cir. 2001). Since we
accept all facts pleaded in the complaint as true at the
12(b)(6) stage, the issue of whether a party is in privity
of contract with the Government reduces to a question
of law, which we review de novo. Cienega Gardens,
194 F.3d at 1239. “Contract interpretation itself also
is a question of law, which we review de novo.” Id.
DISCUSSION
A.
Statute of Limitations
“Every claim of which the United States Court of
Federal Claims has jurisdiction shall be barred unless
the petition thereon is filed within six years after such
claim first accrues.” 28 U.S.C. § 2501. “Generally, a claim
against the United States first accrues on the date when
all the events have occurred which fix the liability of
the Government and entitle the claimant to institute
an action.” Bowen v. United States, 292 F.3d 1383,
1385 (Fed. Cir. 2002) (internal quotation marks omitted). Repudiation “ripens into a breach prior to the
time for performance only if the promisee elects to
treat it as such.” Franconia Assocs. v. United States,
536 U.S. 129, 143 (2002) (internal quotation marks
omitted). “[I]f the injured party instead opts to await
performance, the cause of action accrues, and the
statute of limitations commences to run, from the time
fixed for performance rather than from the earlier
date of repudiation.” Id. at 144 (internal quotation
marks omitted).
App.114a
We agree with the Claims Court that performance
occurred when each participant received his or her
benefits, i.e., on the participant’s “Normal Retirement
Date.” See J.A. 182. Because Mr. Turping did not
retire until 2014, which is fewer than 6 years before
he filed this lawsuit, Appellants’ contract claims are
not barred by the statute of limitations. See J.A. 5.
The Government argues that any repudiation
here was not wholly anticipatory because Appellants
allege that the Government breached multiple provisions
of the contract, and therefore the statute of limitations
should have started running immediately upon the
Government’s first breach of the MEPP, which took
place in 1996 or 1997. Appellee Br. at 36-40 (citing
Kinsey v. United States, 852 F.2d 556, 558 (Fed. Cir.
1988)). The Government then cites to specific facts in
the amended complaint (e.g., that the Government
refused to allow Appellants to withdraw their pensions,
in violation of MEPP Article 26 and federal statute)
that Appellants could have cited in support of an
allegation that the Government breached the MEPP.
Id. at 37-38.
But Appellants did not bring an action against
the Government’s alleged breach of Article 26 or its
alleged federal law violations. Accordingly, these
instances of potential contractual nonperformance are
not relevant to the analysis. We must focus on the
claim that is in front of us in this appeal, and that is
Appellants’ allegation that the Government breached
its implied-in-fact contract, the performance of which
took place at retirement.
App.115a
B.
Implied-in-Fact Contract
The Tucker Act provides the Claims Court with
jurisdiction to hear claims against the United States
that are founded upon, among other things, an express
or implied contract with the United States. 28 U.S.C.
§ 1491(a)(1). “An implied-in-fact contract is one founded
upon a meeting of minds and is inferred, as a fact,
from the conduct of the parties showing, in the light of
the surrounding circumstances, their tacit understanding.” Hanlin v. United States, 316 F.3d 1325, 1328
(Fed. Cir. 2003). “[T]he requirements for an impliedin-fact contract are the same as for an express contract;
only the nature of the evidence differs.” Id. An
implied-in-fact contract with the Government requires
proof of (1) mutuality of intent, (2) consideration, (3)
an unambiguous offer and acceptance, and (4) “actual
authority” on the part of the Government’s representative to bind the Government in contract. Id. Plaintiffs
have the burden to prove the existence of an impliedin-fact contract. Id.
“As a threshold condition for contract formation,
there must be an objective manifestation of voluntary,
mutual assent.” Anderson v. United States, 344 F.3d
1343, 1353 (Fed. Cir. 2003) (citing Restatement (Second)
of Contracts § 18 (1981)). “To satisfy its burden to
prove such a mutuality of intent, a plaintiff must show,
by objective evidence, the existence of an offer and a
reciprocal acceptance.” Id.
Appellants have not met their burden of proving
that mutuality of intent between the Government and
Lockheed’s employees exists. Appellants argue that
“[t]he government made two promises to the Hanford
workers” when the MEPP was formed: (1) an implicit
promise that the government would provide the funds
App.116a
to meet the pension obligations set forth in the MEPP;
and (2) an explicit promise in Article 29 of the MEPP
to workers that when they retire from Hanford, they
will receive credit in the calculation of their pensions
for all their years working at Hanford, even if the
Government changed contractors. Appellants Op. Br. at
7-8.
But nothing in the MEPP indicates intent by the
Government to be in privity of contract with Lockheed’s
employees. Rather, the MEPP only evidences a
contractual relationship between Lockheed and its
employees. Notably, the MEPP does not list the
Government as a party to the contract. Rather, the
MEPP states that it was created by “Employers” for
the benefit of their Employees. J.A. 197. Appellants do
not dispute that the “Employers” referenced in the
MEPP do not include the Government, but rather refer
to contractors and subcontractors such as Lockheed.
See J.A. 201-202. The MEPP also specifies that the
Plan Administrator, established by the Employers, is
the entity that funds the plan, not the Government.
J.A. 248. And the MEPP places responsibility for
benefits determinations into the hands of the Plan
Administrator, not the Government. J.A. 293.
“It is a hornbook rule that, under ordinary
government prime contracts, subcontractors do not
have standing to sue the government under the
Tucker Act, 28 U.S.C. § 1491. . . . ” Erickson Air Crane
Co. of Wash. v. United States, 731 F.2d 810, 813 (Fed.
Cir. 1984). “The government consents to be sued only
by those with whom it has privity of contract, which it
does not have with subcontractors.” Id. In two-tiered
contract schemes, the Government’s obligations are
directed to the contractor, with whom it shares a
App.117a
contract, and not the subcontractor, with whom it
shares no direct contractual relationship. Cienega
Gardens, 194 F.3d at 1245. “Aggrieved subcontractors
have the option of enforcing their subcontract rights
against the prime contractor in appropriate proceedings,
or of prosecuting a claim against the government
through and in right of the prime contractor’s contract,
and with the prime contractor’s consent and
cooperation.” Erickson, 731 F.2d at 813. Employees
are treated as subcontractors for the purposes of this
rule. United States v. Munsey Trust Co. of D.C., 332
U.S. 234, 241 (1947); see also Bolin v. United States,
221 Ct. Cl. 947, 948 (1979). Absent any indicia in the
MEPP or other evidence proffered by Appellants of the
Government’s specific intent to be contractually
obligated to Lockheed’s employees, we find that privity
of contract between Appellants and the Government
does not exist.
Appellants’ argument that the Government
“unilaterally forced the Hanford contractors and their
employees to participate in the MEPP,” and therefore
the Government intended to be bound, is unavailing.
Appellants Op. Br. at 32-33. The same is true for
Appellants’ focus on the Government’s alleged “control”
in the creation and administration of the MEPP. Id.
at 6. Our case law has made clear that the “degree of
[government] involvement with a project does not create
privity [between the government and a subcontractor]
so as to allow suit against the government.” Cienega
Gardens, 194 F.3d at 1245; see also id. at 1244-45
(“That the Federal Government has intimate control
over a project, including prior approval of plans and
costs, does not establish liability here for claims by a
contractor [whose contract is only with a third party].”)
App.118a
(quoting Marshall N. Dana Const., Inc. v. United States,
229 Ct. Cl. 862, 863 (1982)). “Nor does this degree of
involvement indicate an implied-in-fact contract
enforceable against the United States.” Dana Const.,
229 Ct. Cl. at 863.
In Dana Construction, a construction contractor
contracted with an Indian Housing Authority (IHA)
that received federal funds from the U.S. Department
of Housing and Urban Development (HUD) to build a
low-income housing project. Id. at 862. The Court of
Claims determined that the construction contractor
could not assert a claim for breach of contract against
HUD because the construction contractor’s privity of
contract was with the IHA, not HUD. Id. at 863. The
Court of Claims emphasized that, “[b]y funding and
regulating programs designed for the public good the
U.S. is acting in its role as a sovereign and the moneys
promised . . . do not establish any contractual obligation,
express or implied, on the part of the United States.”
Id. at 864.
The same principle applies in this case. The
Government funds Lockheed and other Employers to
manage Hanford, but there is no evidence that the
Government intended to be contractually obligated to
Lockheed’s or other Employers’ employees, either
through the MEPP or by other means. Without this
mutuality of intent, Appellants fail to meet their burden
of proving that an implied-in-fact contract exists between the Government and Lockheed’s employees.2
2 Appellants argue that WHC acted as the Government’s “agent”
in drafting Article 29 of the MEPP, which provided for Hanford
workers to receive benefits reflective of their total years of service.
Appellants Op. Br. at 54; J.A. 293. Appellants do not plead sufficient
App.119a
Because we determine no mutuality of intent
exists, we do not reach the question of whether the
other required elements of an implied-in-fact contract
exist in this case. We have reviewed Appellants’ other
arguments, but find them unpersuasive. Accordingly,
we affirm the Claims Court’s decision finding that no
implied-in-fact contract exists.
AFFIRMED
plausible facts to support this agency argument. Iqbal, 556 U.S. at
678. Likewise, Appellants cannot support their broad allegation
that only the Government—a non-party to the MEPP—had the
authority to “enforce” Article 29 and compel subcontractors to
remain in the MEPP. Appellants Op. Br. at 9-10; see Iqbal, 556
U.S. at 678.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.