Petition for Writ of Certiorari — Essex Electro Engineers, Inc. v. Widnall
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Supreme Court, U.S.
rage
, \
‘gy. 417 SEP - 8 1997
No.orric OF THE CLERK
IN THE
Supreme Court of the United States
OcTOBER TERM, 1997
Essex ELECTRO ENGINEERS. INC.
Petitioner
Vv.
SHEILA E. WIDNALL.
SECRETARY OF THE AIR FORCE.
Respondent,
On Petition for a Writ of Certiorari to the
United States Court of Appeals for the Federal Circuit
PETITION FOR A WRIT OF CERTIORARI
CHARLES E. RALEY
Counsel of Record
W. DREW MALLENDER
WATT, TIEDER & HOFFAR, L.L.P
7929 Westpark Drive
Suite 400
McLean, Virginia 22102
(703)749-1000
Attomeys for Petitioner
September 5, 1997
QUESTION PRESENTED
Under 41 U.S.C. §§ 607, is a dismissal by an
agency board without prejudice to refiling a “decision”
from which an appeal to the United States Court of
Appeals for the Federal Circuit is mandatory within one
hundred twenty days or is such a dismissal “other
appropriate action” by the board with the matter to be
reinstated if the cause for the interlocutory dismissal is
removed within three years as required by Rule 30 issued
under the authority of the Act?
1i
PARTIES TO THE PROCEEDING
Petitioner is Essex Electro Engineers, Inc., a small
business concer. Pursuant to Supreme Court Rule 29.6,
petitioner states that it has no parent company or
subsidiaries.
A343
TABLE OF CONTENTS
Page
QUESTION PRESENTED ..................... i
PARTIES TO THE PROCEEDING ............. li
Some Wr PAD TIuiGe .................005. iv
So 8 SES | 1
Ot te 2
STATUTORY PROVISIONS AND RULES ......... 2
STATEMENT OF THECASE ................... 6
The Relationship Between the Parties........... 6
The Proceedings Below...................... 8
REASONS FOR GRANTING THE PETITION ..... 10
The Appellate Court has Abrogated the Rule Issued
for the Board to Carry Out the Provisions of the Act
and Contradicted the “Norm” Defined by this Court..1Z
Essex has been Foreclosed from its Right to
an Efficient and Fair Resolution of its Claims .... 16
ES 21
SE a a Attached
lv
TABLE OF AUTHORITIES
Page
Cases:
Beam, James B., Distilling Co. v. Georgia,
501 U.S. 529, 111 S.Ct. 2439 (1991). 12, 14-15
Califomia v. Harvier,
700 F.26 1217 (th Ce. 1965) ............ 13
Dawco Construction, Inc. v. United States,
930 F.2d 872 (Fed.Cir. 1991)..... 8,9, 10, 11,
17,18, 19-21
Ellett, James M., Construction Co.
v. United States,
93 F.3d 1537 (Fed.Cir. 1996) .......... 12, 19
Electronics & Space Corp., ASBCA No. 37352,
Se 20
Die WN ET ok ee en ieee 20
Mayfair Consiruction Company v.
United States, 841 F.2d 1576 (Fed.Cir. 1988),
cert. den., 488 U.S. 980 (1988) ...... 7-11, 18
Mediax Interactive Technologies, Inc.,
ASBCA No. 43961, 93-3 BCA] 26,071 ..... 20
Mesa v. United States,
Oi F.oG au (110) Ge. 1905) ...... 2.22055. 13
Midland Maintenance, Inc..,
ENG BCA Nos. 6080, et a/.,
OG-T BOA G27 OGs «www ecw ee 20-21
Peters v. Welsh Development Agency,
920 F.2d 438 (7th Cir. 1990) ............. 13
Reflectone, Inc. v. Dalton,
60 F.3d 1572 (Fed.Cir.1995)...... 10, 11, 12,
15-21
reversing, Reflectone, Inc., ASBCA No. 43081,
93-1 BCA 925,812 .......... 8, 20
Page
Cases [Continued]:
United States v. Grumman Aerospace Corp.,
927 F.2d 575 (Fed.Cir. 1991),
cert.denied, 502 U.S. 919, 112 S.Ct. 330 ... 20
Statutes, Rules, and Other Authorities:
28 U.S.C. § 1254(1) . 0.2 ee. 2
28 U.S.C.§ 1291.0... ee 4,12
28 U.S.C.§ 1292 ................. 2,4, 5, 12-13
28 U.S.C.§ 1295 ................. 2,4, 5, 12, 14
41U.S.C.§ 401 ....... 0... eee ee 3
44 U.S.C. S GOS ow. ce en cn wen 117.1
41U.S.C.§ 607 ................. i, 2, 3, 5, 12-14
OT UDG. BGS go cc eee anne eeee weenie 2
P.L. 102-572, § 907, 6 Stat.4518 ............. 20
PRR SDAA occ ieee aces reas dea en 18
FAR § 49.101(d) ........0.0. 000.000.0000, 8
Supreme Court Rule 29.6 ............. ...... ii
Federal Claims Court Rule 41(b) .............. 13
O.F.P.P. Board Rule $ ...............0008- 4,14
O.F.P.P. Board Rule 30......... 4,10, 11, 14, 16,
20, 21
S.Rep. No. 1118, 95th Cong., 2d Sess. 4 (1978),
repnnted, 1978 U.S.C.C.A.N. 5235 ........ 17
Blacks Law Dictionary,
W¥@Ot, Gir OG. (TOG) oc 5 cies vac vse ew ues 13
eee
IN THE
Supreme Court of the United States
OCTOBER TERM, 1997
No.
Essex ELECTRO ENGINEERS, INC.
Petitioner,
V.
SHEILA E. WIDNALL,
SECRETARY OF THE AIR FORCE,
Respondent,
—_—_———_
On Petition for a Writ of Certiorari to the
United States Court of Appeals for the Federal Circuit
PETITION FOR A WRIT OF CERTIORARI
Essex Electro Engineers, Inc. ["Essex’],
respectfully petitions for a writ of certiorari to review the
judgment of the United States Court of Appeals for the
Federal Circuit.
OPINIONS BELOW
The Federal Circuit's decision, published at 116
F.3d 461, is reproduced in the Appendix (App.) at 1.
The dismissal of Essex’s appeals without prejudice by
the Armed Services Board of Contract Appeals
2
["Board”], published at 94-2 BCA J 26,902, is
reproduced at App. 10. The reconsideration by the
Board affirming the dismissal without prejudice,
published at 95-1 BCA ¥] 27,302, is reproduced at App.
6. The Board’s decision not to reinstate Essex’s
appeals after the cause for the dismissal was removed,
published at 96-2 BCA 4] 28,600, is reproduced at App.
4.
JURISDICTION
The Board had jurisdiction for its final decision
not to reinstate the appeals under 41 U.S.C. § 607. The
earlier dismissal without prejudice by the Board was
based on finding that at the time it lacked jurisdiction to
proceed with the appeals to a decision. The Court of
Appeals had jurisdiction under 41 U.S.C. §§ 607 and
609 and 28 U.S.C. § 1295. The judgment of the Court
of Appeals was entered June 24, 1997. This Court has
jurisdiction to issue the Writ under 28 U.S.C. § 1254(1).
STATUTORY PROVISIONS AND RULES
This case requires an analysis to resolve the
inherent tension that exists between the statutory
authority of the agency boards to render “decisions” or
to “take other appropriate action” on submitted appeals
under 41 U.S.C. § 607 and the consequent effect on
appeal rights to the Federal Circuit. This analysis is
particularly critical in the absence of rules issued under
this Court's authority in 28 U.S.C. § 1292(e) and
involves consideration of the following provisions:
3
41 U.S.C. § 607. Agency boards of contracts
appeals.
(d) Jurisdiction.
Each agency board shall have jurisdiction
to decide any appeal from a decision of a
contracting officer...In exercising this jurisdiction,
the agency board is authorized to grant any relief
that would be available to a litigant asserting a
contract claim in the United States Court of
Federal Claims.
(e) Decisions.
An agency board shall provide to the
fullest extent practicable, informal, expeditious,
and inexpensive resolution of disputes, and shall
issue a decision in writing or take other
appropriate action on each appeal submitted....
(g) Review.
(1) The decision of an agency board of
contract appeals shall be final, except that--
(A) a contractor may appeal such a
decision to the United States Court of Appeals for
the Federal Circuit within one hundred twenty
days after the date of receipt of a copy of such
decision....
(h) Procedural guidelines.
Pursuant to the authority conferred under
the Office cf Federal Procurement Policy Act [41
U.S.C. § 401 et seq.J, the Administrator is
authorized and directed, as may be necessary or
desirable to carry out the provisions of this
ee
+
chapter, to issue guidelines with respect to
criteria for the establishment, functions, and
procedures of the agency boards....
Agency Board Rule 5. Motions.
(a) Any motion addressed to the jurisdiction of
the Board shall be promptly filed....The Board
shall have the right at any time and on its own
initiative to raise the issue of its jurisdiction to
proceed with a particular case, and shall do so by
an appropriate order, affording the parties an
opportunity to be heard thereon.
Agency Board Rule 30. Suspensions; dismissal
without prejudice.
...In certain cases, appeals docketed
before the Board are required to be placed in a
suspense status and the Board is unable to
proceed with disposition thereof for reasons not
within the control of the Board. Where the
suspension has continued, or may continue, for
an inordinate length of time, the Board may, in its
discretion, dismiss such appeals from its docket
without prejudice to their restoration when the
cause of suspension has been removed. Unless
either party or the Board acts within three years
to reinstate any appeal dismissed without
prejudice, the dismissal shall be deemed with
prejudice.
28 U.S.C. § 1291. Final decisions of district courts.
... The jurisdiction of the United States Court of
Appeals for the Federal Circuit shall be limited to
the jurisdiction described in sections 1292(c) and
(d) and 1295 of this title.
5
28 U.S.C. § 1295. Jurisdiction of the United States
Court of Appeals for the Federal Circuit.
(a) The United States Court of Appeals for
the Federal Circuit shall have exclusive
jurisdiction--
(3) of an appeal from a final decision of
the United States Court of Federal Claims...
(10) of an appeal from a final decision of
an agency board of contract appeals pursuant to
section 8(g)(1) of the Contract Disputes Act of
1978 (41 U.S.C. 607(g)(1))...
28 U.S.C. § 1292. Interlocutory decisions.
(d)(2)...when any judge of the United States
Court of Federal Claims, in issuing an
interlocutory order, includes in the order a
statement that a controlling question of law is
involved with respect to which there is a
substantial ground for difference of opinion and
that an immediate appeal from that order may
materially advance the ultimate termination of the
litigation, the United States Court of Appeals for
the Federal Circuit may, in its discretion, permit
an appeal to be taken from such order, if
application is made to that Court within ten days
after the entry of such order.
(e) The Supreme Court may prescribe rules, in
accordance with section 2072 of this title, to
provide for an appeal of an interlocutory decision
to the courts of appeals that is not otherwise
provided for under subsection (a), (b), (c), or (d).
6
STATEMENT OF THE CASE
The Relationship Between the Parties
At the end of December, 1989, the government
awarded two competitive, fixed price, small business
contracts to Essex, Contract F41608-90-D-0410
["Contract-0410"] for Floodlight Sets and Contract
F41608-90-C-0409 ["Contract-0409"] for related spare
parts. [App. 10]. Essex could not proceed with
production and delivery until completion and government
approval of first article testing, which was scheduled for
August 2, 1990. Deliveries were scheduled to be
completed in February, 1991.
Beginning in March, 1990, and continuing through
July, 1990, Essex discovered and notified the
government of deficiencies in the government's
drawings and specifications [App. 11]. During meetings
in July, 1990, the government representatives reviewed
and discussed Essex’s plan to obtain diesel engine
generators for the floodlight sets from a source other
than the “Suggested Source” on the government's
drawing. [App. 11].
Yet, months later, after the drawing deficiencies
were corrected and Essex had completed the first article
and was ready to proceed with the testing, in January,
1991, a new contracting officer withheld approval to start
testing unless Essex used the “suggested” engine
generator or “qualified” Essex’s selected engine
generator source by performing criteria and testing in
addition to the first article tests in the Contract. [App.
13]. Essex immediately notified the contracting officer
that the additional qualification criteria and testing
7
violated the Contract and required a_ contract
modification. [App. 13-14]. In April, 1991, the
contracting officer again stated that he would not
authorize first article testing unless Essex either used
the “suggested” engine generator or qualified Essex's
selected source [App. 14]. In early May, 1991, Essex
notified tie contracting officer that it was his “obligation
to issve a Final Decision” ordering performance in
accordance with his interpretation. [App. 16].
The Government then issued “termination for
convenience” notices in late June, 1991, on “Contract-
0410” and in late July, 1991, on “Contract-0409." [App.
18].
Essex made a written submission for Contract-
0410 in June, 1992, containing a recitation of the facts
and seeking $635,434, as “[oJur Claim, certified as
required by the Act..for changes including the
Government-caused first article delays and production
disruption...[and] the previous disputes regarding the
specification control drawings and deficient Government
technical data...” [App. 19-20]. Essex further demanded
a contracting officer's decision and insisted “upon the
time requirements of the Contract Disputes Act for a
response to this claim.” [App. 20]. In July, 1992, Essex
made a similar submission for Contract-0409 seeking
$20,603, and including the foregoing statements, except
noting that, since the amount did not exceed $50,000,
a CDA certification was not necessary. [App. 22-23].
in essentially duplicate letters, in July and August,
1992, a Termination Contracting Officer ["“TCO"]
asserted that each of Essex’s submissions were “not a
claim for purposes of the Act.” The letters cited Mayfair
8
Construction Company v. United States, 841 F.2d 1576
(Fed.Cir. 1988), and Dawco Construction, Inc. v.
United States, 930 F.2d 872 (Fed.Cir. 1991). [App. 20-
24).
By letters in September and October, 1992,
Essex resubmitted its claims “solely for the purpose of
preserving Essex’s rights and in no way...a waiver of the
existence of the valid and lawful claim.” Essex noted
that the TCO had “already failed to take prompt action
to resolve the claims as required by FAR § 49.101(d)
[which is applicable to a small business concern such as
Essex] and the CDA...” [App. 24-28].
The Proceedings Below
No decisions by the contracting officer were
issued on Essex’s claims. After waiting six and seven
months, respectively, in January, 1993, Essex filed
notices of appeal to the Board from the contracting
officer's failure to decide. The appeals were docketed
as ASBCA No. 45663 and 45664. [App. 28]. Essex filed
its Complaints and served discovery requests in March,
1993. The government filed no answer to the
Complaints. Rather, in June, 1993, the government filed
a Motion for a Protective Order to foreclose any
discovery by Essex and a Motion to Dismiss, citing
Mayfair, supra., and Dawco, supra.
Ten months later in April, 1994, the Board
dismissed Essex’s appeals “without prejudice” to
resubmission of “proper” claims. The Board relied on
Mayfair, supra., and Dawco, supra., and its own
decision in Reflectone, Inc., ASBCA No. 43081, 93-1
BCA {| 25,512, holding that Essex’s submissions were
9
not CDA claims because “there was no underlying
dispute” before the claims were submitted and ‘[t]his
Board, of course, is obliged to follow the precedents of
the Federal Circuit.” [App. 30-31, 34].
Eleven days later, on May 5, 1994, Essex moved
the Board for reconsideration and, while continuing to
question the applicability and validity of Mayfair, supra..,
and Dawco, supra., Essex pointed out that its demand
of May 6, 1991, for a contracting officer's decision on
the specification control drawing dispute was itself a
proper CDA claim for an interpretation of contract terms
or, at least, evidenced a pre-existing dispute. [App. 8].
In November, 1994, the Board affirmed its earlier
dismissals without prejudice. [App. 9].
In the meantime, on June 14, 1993, Essex had
submitted a separate CDA certified claim for damages
for the government's breach and repudiation in ending
Contract-0410 in bad faith. Eight months later, no final
decision had been rendered by the contracting officer
and Essex filed another appeal to the Board, which was
docketed as ASBCA No. 47167. The filing of that
appeal allowed Essex to begin discovery.
After two years, in July, 1994, a contracting
officer issued a decision on Essex’s first claim, allowing
less than 10% and nothing for the increased costs for
the drawing deficiencies and the delays and disruptions.
Essex filed another appeal and requested consolidation
with its earlier appeals. Essex also filed another notice
of appeal from the contracting officer's continuing failure
to decide the initial claim on Contract-0409 and also
requested consolidation. To date, the merits of Essex's
claims have not been resolved.
10
On July 26, 1995, the United States Court of
Appeals for the Federal Circuit issued its en banc
decision in Reflectone, Inc. v. Dalton, 60 F.3d 1572
(Fed.Cir. 1995), specifically reversing the Board's
decision in Reflectone, supra., restricting Mayfair,
supra., and overruling Dawco, supra., and “all cases
relying on Dawco.” Thirteen days later, on August 8,
1995, Essex filed its motion to set aside the Board's
prior dismissals without prejudice and to reinstate the
appeals, citing the Board’s Rules, the guidance provided
by the Federal Rules of Civil Procedure, and the
decision in Reflectone. [App. 4].
More than one year later, in October, 1996, the
Board issued its decision, denying Essex’s motion to
reinstate the appeals and holding that the dismissals
were final. [App. 6]. Essex’s Appeal to the Federal!
Circuit followed immediately. On June 24, 1997, the
Court of Appeals affirmed the Board’s refusal to
reinstate, holding that the Board’s earlier dismissal.
without prejudice had become final 120 days after it was
entered and could not thereafter be appealed. The
Court reached its conclusion even though it recognized
that “Rule 30 provides that an appeal dismissed without
prejudice becomes an appeal dismissed with prejudice
if not reinstated within three years.” [App. 1-3].
REASONS FOR GRANTING THE PETITION
The decision of the Court of Appeals has affirmed
action by the Board which materially departs from the
authority for Board proceedings mandated by Congress
in the Contract Disputes Act, as implemented in the
Board’s own Rules, and alters the appellate jurisdiction
11
conferred on the Court of Appeals. Essex has thus
been denied access to the Board for a decision on the
merits of its initial appeals with the consequent denial of
fundamental rights afforded by the Act.
The Board dismissed Essex’s appeals “without
prejudice” by concluding that it was prevented from
proceeding to a decision based on its own Reflectone
decision, and because it was “obliged to follow” the
decisions of the Federal Circuit in Mayfair and Dawco,
supra., which had held that there can be no explicit or
presumed decision of a contracting officer if it is found
that no dispute had existed before a Contract Disputes
Act “claim” was submitted.’ Nine months after the
Board reconsidered and reiterated its dismissal without
prejudice, the Federal Circuit decided Reflectone,
supra., en banc, reversing, restricting, and overruling
every reason for the Board's inability to proceed with
Essex’s appeals. Essex immediately moved the Board
to reinstate its appeals. The Board's ultimate decision,
refusing to reinstate the appeals, rendered the
dismissals final with prejudice. The Court of Appeals
affirmed the Board’s refusal to vacate and reinstate for
two stated reasons [App. 2-3]:
1. Even though “Rule 30 provides that an appeal
dismissed without prejudice becomes an appeal
dismissed with prejudice if not reinstated within three
years...[i]t does not, however, provide a mechanism to
reinstate a dismissed appeal.” An appeal to the Federal
‘Explicit and presumed decisions by contracting
officers are defined in 41 U.S.C. § 605(a) and (c),
respectively.
12
Circuit from the earlier dismissals without prejudice was
required within 120 days from the date they were
entered and “could not thereafter be appealed. See
James B. Beam Distilling Co. v. Georgia, 501 U.S. 529,
541 (1991).”
2. The Court of Appeals was not being
“inconsistent with James M. Ellett Construction Co. v.
United States, 93 F.3d 1537 (Fed.Cir. 1996). In that
case, the appellant filed a notice of appeal within 120
days of the judgment of the Court of Federal Claims and
requested a stay pending our decision in Reflectone, a
situation completely different from this one.”
The Appellate Court has Abrogated the Rule Issued
for the Board to Carry Out the Provisions of the Act
and Contradicted the “Norm” Defined by this Court
The Board's authority extends only to issuing a
“decision” on an appeal from a decision of a contracting
Officer or taking “other appropriate action” on a
submitted appeal. [41 U.S.C. § 607(d) & (e)]. The
Federal Circuit's jurisdiction on appeals that are required
to be filed “within one hundred twenty days” is limited to
review of a “decision” of the Board, with no mention of
reviewing “other appropriate action” the Board may take
on a submitted appeal. [41 U.S.C. §607 (g)(1)(A); 28
U.S.C. § 1295(a)(10)].
The Court of Federal Claims has explicit statutory
authority to issue interlocutory orders with the Federal
Circuit then having jurisdiction for a discretionary
appeal, if the necessary statement is included in the
lower court's order. [28 U.S.C. §§ 1291 & 1292(d)(2)].
“Interlocutory” is defined as “[s]omething intervening
ad eS Date erik Heine USI N Cale
i3
between the commencement and the end of a suit which
decides some point or matter, but is not a final decision
of the whole controversy.” Black’s Law Dictionary,
West, 6th ed., p. 815 (1990). A dismissal without
prejudice to refiling would not be an adjudication upon
the merits in a proceeding under Rule 41(b) of the Rules
of the Court of Federal Claims and would not be
appealable because it contemplates further proceedings
in the same forum. [Cf., Peters v. Welsh Development
Agency, 920 F.2d 438, 440 (7th Cir. 1990); California v.
Harvier, 700 F.2d 1217, 1218-19 (9th Cir. 1983); Mesa
v. U.S., 61 F.3d 20, 21 (11th Cir. 1995)].
The only statutory authority for the Board to issue
such interlocutory orders resides in the provision for
“other appropriate action” under procedural guidelines to
be issued “to carry out the provisions” of the Act. [41
U.S.C. § 607(d), (e) & (h)]. It must be recognized that,
while the authority of the Court of Federal Claims to
issue interlocutory orders and discretionary appeals from
those orders is clearly expressed in the statutory
provisions, the Supreme Court has not exercised its
rule-making authority to “provide for an appeal of an
interlocutory decision to the courts of appeals,” in
connection with such decisions by the Board. [28 U.S.C.
§ 1292(e)]. In addition, if interlocutory authority of the
Board resides in the provision for “relief that would be
available” in the Court of Federal Claims [41 U.S.C. §
607(d)], the Board’s dismissals of Essex’s appeals
without prejudice did not contain the statement required
for such a decision by the Court of Federal Claims that
would then give rise to a discretionary appeal to the
Federal Circuit. [28 U.S.C. § 1292(d)(2)].
14
Among the Rules that have been issued for the
Board “to carry out the provisions” of the Act, Rule 5
concerns the potential for a limitation on the Board’s
jurisdiction that would prevent it from proceeding to a
decision in a particular case. Rule 30 is the only Rule
which then addresses a dismissal without prejudice by
the Board, if the “Board is unable to proceed with
disposition...[of a case] for reasons not within the control
of the Board...” The Board may “dismiss such appeals
from its docket without prejudice to their restoration
when the cause of suspension has been removed.”
Either party or the Board may then act “within three
years to reinstate any appeal dismissed without
prejudice.” Contrary to the conclusion of the Federal
Circuit, Rule 30 establishes not only the mechanism but
also the time limit for reinstating “any appeal dismissed
without prejudice.” Such a dismissal is not a “final
decision of an agency board” under the Contract
Disputes Act from which an appeal to the Federal Circuit
is required within 120 days, particularly here, where the
predicate for the Board's dismissal was that there had
been no “claim” or decision of the contracting officer on
which the Board could render a decision in the appeals
under the Act. [41 U.S.C. § 607(g)(1)(A); 28 U.S.C. §
1295(a)(10)].
The Federal Circuit's citation to this Court's
decision in James 8. Beam Distilling Co. v. Georgia,
901 U.S. 529, 111 S.Ct. 2439, 115 L.Ed.2d 481 (1991),
is misplaced and neither expands the meaning of
“decision” of the Board, in contrast with “other
appropriate action” by the Board, nor does it restrict the
reinstatement period defined by Rule 30. James B.
Beam Distilling Co. involved an action filed in Georgia
seeking a refund of taxes paid under Georgia law
15
applicable to 1982 through 1984, based on a decision of
this Court in 1984, holding that similar laws in Hawaii
violated the Commerce Clause. The Court held that the
retroactivity of a decision is a choice-of-law question:
“As a matter purely of judicial mechanics, there
are three ways in which the choice-of-law
problem may be resolved. First, a decision may
be made fully retroactive, applying to the parties
before the court and to all others by and against
whom claims may be pressed, consistent with res
judicata and procedural barriers such as statutes
of limitations. This practice is overwhelmingly
the norm....” 501 U.S. at 535, 111 S.Ct. at 2443;
emphasis added.
As for a second way of resolving the problem, “a
purely prospective method of overruling” is used by
“announcing the new” as effective only after the date of
the decision. 501 U.S. at 536, 111 S.Ct. 2443. There
was no announcement of prospectivity by the Federal
Circuit in Reflectone, supra.
The third way of resolving the problem would be
“selective prospectivity” but that “breaches the principle
that litigants in similar situations should be treated the
same, a fundamental component of stare decisis and
the rule of law generally...[SJelective prospectivity
appears never to have been endorsed in the civil
context.” 501 U.S. at 537-38, 111 S.Ct. at 2444-5.
In its citation to James B. Beam, the Federal
Circuit below only refers to 501 U.S. at 541, without
discussing the foregoing choice-of-law analysis and the
“norm” defined by this Court. At the cited page in the
16
decision, this Court merely reiterated the rule that
retroactivity is limited only “by res judicata or by statutes
of limitation or repose.” A dismissal without prejudice to
refiling is not a decision on the merits and has no res
judicata effect. The only “limitation” that exists with
respect to a Board dismissal without prejudice is Rule
30 providing for reinstatement within a period of three
years if the cause for the dismissal is removed. The en
banc decision in Reflectone, supra., removed the cause
for the Board's dismissals of Essex’s appeals without
prejudice and Essex timely sought reinstatement within
sixteen months after the initial dismissals and less than
nine months after the Board’s reconsideration and
reiteration of the dismissals without prejudice.
Essex has been Foreclosed from its Right to an
Efficient and Fair Resolution of its Claims
In May, 1991, Essex submitted a written demand
for a contracting officer's final decision on the dispute
regarding the interpretation of the contract terms
applicable to the Specification Control Drawing. In
June, 1992, Essex submitted a written demand for a
contracting officer's final decision on an amount
exceeding $50,000 with a proper certification required
by the Contract Disputes Act. In July, 1992, Essex
submitted a written demand for a contracting officer's
final decision on an amount on the second contract
which was less than $50,000. In September and
October, 1992, Essex resubmitted its previous demands.
After more than five years, no decision has yet been
rendered on the merits of Essex’s claims and appeals to
the Board.
. 17
When it overruled the cause for the Board's
dismissal of Essex’s appeals wiithout prejudice, the
Federal Circuit acknowledged that--
“Dawco has proven to be inimical to at least two
goals of the CDA: providing for the efficient and
fair resolution of contract claims. See, Report of
the Senate Governmental Affairs Committee and
the Senate Judiciary Committee on the Contract
Disputes Act of 1978, S.Rep. No. 1118, 95th
Cong., 2d Sess. 4 (1978), reprinted in 1978
U.S.C.C.A.N. 5235, 5238."
ark
“A dispute requirement _ that allows the
government to unilaterally designate when a
submission becomes a ‘claim’ disrupts the
4 balance of power between the government and
contractors that the CDA sought to establish.
(/d.]...The purpose of awarding interest to
contractors from the submission date of a
successful claim is to compensate them for 2
legitimate cost incurred when required by the
government to perform the additional work of a
changed contract. /d...at 5266. Allowing the
government to unilaterally determine a claim's
submission date would vitiate this purpose.
: “The parties are not prevented or discouraged
i from settling their differences because the first
4 written demand for payment...is recognized and
treated as a CDA ‘claim.’ If anything, such a rule
promotes settlement by preventing
procrastination.” Reflectone, 60 F.3d at 1580, 82-
83.
RO on ee or
18
The dismissal of Essex’s appeals without
prejudice denied Essex’s right to fundamental “goals” in
the Contract Disputes Act, and has allowed massive
procrastination in the resolution of the merits of Essex’s
claims. In Reflectone, 60 F.3d at 1578, under the
heading, “Dawco’s Holding is Overruled’, the Federal
Circuit first discussed its prior decision in Mayfair
Construction Co., supra., which had served as the
underpinning for Dawco and for the Board's dismissal
without prejudice here. The Reflectone Court held that
Mayfair was “mistakenly quoted in Dawco,” because it
had been based on--
“...interim regulatory language incorporated into
the contract's disputes clause explicitly requiring
that a claim be in dispute when submitted....,
therefore, Mayfair provides no support for
requiring a pre-existing dispute in any case
involving contracts resulting from solicitations
issued after June 1, 1980.” Reflectone, 60 F.3d
at 1579.
The Reflectone Court then concluded:
“We hold that properly construed for its plain
meaning, the language of FAR 33.201 does not
require that a payment demand contained in a
purported CDA claim be in dispute before being
submitted for decision to the CO unless that
demand is a ‘voucher, invoice or other routine
request for payment.’ To the extent that Dawco
and cases relying on Dawco can be read to
suggest otherwise, they are overruled.” /d., 60
F.3d at 1583; emphasis added.
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19
Further, on August 26, 1996, the Federal Circuit
decided James M. Ellett Constr. Company, Inc. v.
United States, 93 F.3d 1537 (Fed.Cir. 1996), which was
an appeal from a final judgment entered by the Court of
Federal Claims dismissing Ellett’s suit in relying on
Dawco, supra. AS a consequence of its en banc
decision in Reflectone, “overruling the cases upon which
the trial court had relied in dismissing Ellett's complaint,”
the Court reversed and remanded Ellett’s case to the
lower court for further proceedings. E//ett, 93 F.3d at
1539. Also, pertinent to the termination claims here, the
Court in El/ett, observed:
“it is difficult to conceive of a less routine
demand for payment than one which is submitted
when the government terminates a contract for its
convenience. Such a demand...is certainly less
routine than a request for an equitable
adjustment.” /d., 93 F.3d at 1542.
The Board's own Rules, issued under the
statutory authority for guidelines to “carry out the
provisions” of the Contract Disputes Act, deny finality to
a dismissal without prejudice for a period of three years
and render “any appeal” subject to reinstatement when
the cause for dismissal has been removed within that
period. The cause for the dismissal of Essex’s appeals
without prejudice was emphatically removed by the
Federal Circuit's decision in Reflectone, as was further
emphasized by the Federal Circuit's decision in E/ett.
Yet, when Essex acted to obtain reinstatement of its
appeals, the Board refused.
The Board's decision denying reinstatement cited
neither its Rules nor any authority. It referenced only its
20
Opinion in Electronics & Space Corp., ASBCA No.
37352, 95-1 BCA J 27,306. [App. 5]. Yet, that case had
not involved Dawco, supra., nor Reflectone, supra., nor
the Board's Rule 30. In Electronics & Space, the
contractor sought to vacate a prior dismissal that had
been entered in Electronics & Space Corp., ASBCA No.
37352, 92-2 BCA ¥ 24,978, which had been based on
the Federal Circuit’s decision in United States v.
Grumman Aerospace Corp., 927 F.2d 575 (Fed.Cir.
1991), cert. denied, 502 U.S. 919, 112 S.Ct. 330. The
Grumman decision had held that the CDA certification
was a jurisdictional prerequisite to a CDA “claim.” As
the Board held in Electronics & Space, 95-1 BCA ¥
27,306, Grumman Aerospace, supra., Was never
overruled and, when Congress eliminated any
jurisdictional effect in the CDA certification, it expressly
barred a_ retroactive effect. Federal Courts
Administration Act of 1992, Public Law No. 102-572, §
907, 6 Stat. 4518. Electronics & Space Corp. was
patently inapposite to the instant situation.
In reality, the Board’s decision here created a
direct conflict with its own decision in Mediax Interactive
Technologies, Inc., ASBCA No. 43961, 93-3 BCA J
26,071, at p. 129,582 [dismissal without prejudice “did
not render appellant's original proposal a ‘nullity’
preventing consideration seven years later], and with a
decision by the Engineers Board of Contract Appeals in
an identical situation. In Midland Maintenance, Inc..,
ENG BCA Nos. 6080, et al., 96-1 BCA J 27,983, the
Board had earlier dismissed the appeals for lack of
jurisdiction based on the Federal Circuit's initial panel
decision in Reflectone, which had affirmed the Board's
dismissal in Reflectone, Inc., 93-1 BCA § 25,512.
Then, after the en banc decision in Reflectone, Inc. v.
Pet ea oe st een ve.
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21
Dalton, supra., vacated the panel decision, reversed the
Board's decision, and overruled Dawco, supra., the
Board in Midland, 96-1 BCA J 27,983, vacated its
earlier dismissals and reinstated the dismissed appeals.
Rule 30, issued to “carry out the provisions” of the
Contract Disputes Act, is the same for the Engineers
Board of Contract Appeals as it is for the Armed
Services Board of Contract Appeals.
Well within three years, the reason that prevented
the Board from proceeding to a decision and caused the
interlocutory dismissal of Essex's appeals without
prejudice ceased to exist when the Federal Circuit
decided Reflectone, supra. The appeals were required
to be reinstated as provided in Rule 30. The Board's
ultimate decision refusing to do so was plainly wrong, as
is the Federal Circuit's decision to affirm that refusal.
CONCLUSION
For these reasons, Essex’s petition for writ of
certiorari should be granted.
Respectfully submitted,
CHARLES E. RALEY
Counsel of Record
W. DREW MALLENDER
WATT, TIEDER & HOFFAR, L.L.P.
7929 Westpark Drive
Suite 400
McLean, Virginia 22102
(703)749-1000
Attorneys for Petitioner
September 5, 1997
BC RR TEARAA, neviivnuamenaialill “evi :
IN THE
Supreme Court of the United States
: OCTOBER TERM, 1997
NO.
ESSEX ELECTRO ENGINEERS, INC..,
Petitioner,
V.
SHEILA E. WIDNALL,
: SECRETARY OF THE AIR FORCE,
‘ Respondent,
: On Petition for a Writ of Certiorari to the
; United States Court of Appeals for the Federal Circuit
| APPENDIX
APPENDIX
TABLE OF CONTENTS
Essex Electro Engineers, Inc., v.
Widnall, 116 F.3d 461 (Fed.Cir. 1997) ....... 1
Essex Electro Engineers, Inc.,
ASBCA Nos. 45663, 45664,
es ie 4
Essex Electro Engineers, Inc.,
ASBCA Nos. 45663, 45664,
poe... GS-1 BOAT 2! cue... «6... cee eee 7
Essex Electro Engineers, Inc.,
ASBCA Nos. 45663, 45664,
a 10
h-
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
97-1046
ESSEX ELECTRO ENGINEERS, INC.,
Appellant,
V.
AIR FORCE,
Appellee.
DECIDED: June 24, 1997
Before MAYER, Circuit Judge, SKELTON, Senior Circuit
Judge, and BRYSON, Circuit Judge.
PER CURIAM.
Essex Electro Engineers, inc. appeals the decision
of the Armed Services Board of Contract Appeals.
ASBCA Nos. 45663 and 45664, 96-2 BCA J 28,600,
denying Essex's motion to vacate the board's prior
decision dismissing Essex's appeal without prejudice, for
lack of jurisdiction. We affirm.
Essex entered into two contracts with the Air Force
for the manufacture and delivery of floodlight sets and
spare parts. Prior to completion of the contracts, the Air
Force terminated the contracts for convenience. Essex
then submitted settlement proposals to the termination
contracting officer (TCO), seeking termination costs and
interest on these costs. Relying on Mayfair Construction
Co. v. United States, 841 F.2d 1576 (Fed.Cir. 1988), and
1
Dawco Construction, Inc. v. United States, 930 F.2d 872
(Fed.Cir. 1991), the TCO determined that the interest
Essex sought was not recoverable and that each
submission was a “voucher, invoice, or other routine
request for payment that [was] not in dispute when
submitted and [was] not a claim for purposes of the
[Contract Disputes] Act.” Essex appealed the decision to
the board, which dismissed the appeal for lack of
jurisdiction, also relying on this court's Mayfair and Dawco
cases, as well as the board's decision in Reflectone, Inc.,
ASBCA No. 43081, 93-1 BCA ¥ 25,512 (1992).
More than eight months later, we reversed the
board's decision in Reflectone, holding that a submission
need not be in dispute before it can be a claim under the
Act. Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed.Cir.
1995)(en banc)(overruling Dawco, in part). Thirteen days
later, Essex moved to vacate the board's earlier
dismissal, and asked for retroactive application of this
court's Reflectone. The board denied the motion.
The board's first decision was not the result of
inadvertent error or a mistake of law. It correctly relied
upon precedent binding at the time, and Essex chose not
to appeal. As a result, that decision became final 120
days after it was entered, 41 U.S.C. § 607(g)(1)(A)
(1994), and could not thereafter be appealed. See,
James B. Beam Distilling Co. v. Georgia, 501 U.S. 529,
541 (1991).
Essex argues that ASBCA Rule 30 permits
reopening an appeal up to three years after it has been
dismissed. Rule 30 provides that an appeal dismissed
without prejudice becomes an appeal dismissed with
prejudice if not reinstated within three years. It does not,
however, provide a mechanism to reinstate a dismissed
2
et At a pe GE OO tt ag Vit
a Tih. ihe SE A a Rate sto Lilies i a Ril Is eet
eh eee
appea!. Nor is the result reached today inconsistent with
James M. Ellett Construction Co. v. United States, 93
F.3d 1537 (Fed.Cir. 1996). In that case, the appellant
files a notice of appeal within 120 days of the judgment of
the Court of Federal Claims and requested a stay pending
our decision in Reflectone, a situation completely different
from this one.
Accordingly, the decision of the Armed Services
Board of Contract Appeals is affirmed.
AFFIRMED.
ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of --
)
)
Essex Electro Engineers, Inc. ) ASBCA Nos. 45663
) and 45664
Under Contract Nos. )
F41608-90-D-0410 )
)
F41608-90-C-0409
OPINION BY ADMINISTRATIVE JUDGE PAUL
ON APPELLANT'S MOTION TO VACATE EARLIER OPINIONS
Dated: October 15, 1996
On 20 April 1994, the Board issued a decision, 94-
2 BCA ¥ 26,902, in which it dismissed these appeals
without prejudice for lack of jurisdiction. Noting that
appellant Essex Electro Engineers, Inc.'s (Essex)
termination for convenience settlement proposals were
not in dispute at the time they were submitted, we held
that Essex had not filed cognizable claims under the
Contract Disputes Act, 41 U.S.C. §§ 601 ef seg. (CDA).
In reaching its decision, the Board relied upon a host of
precedents, including Dawco Construction Inc. v. United
States, 930 F.2d 872 (Fed.Cir. 1991), and Reflectone,
Inc., ASBCA No. 43081 93-1 BCA 7] 25,512. Essex filed
a timely motion for reconsideration which we denied in a
decision, 95-1 BCA J 27,302, dated 18 November 1994.
Essex did not perfect an appeal to the United States
Court of Appeals for the Federai Circuit.
On 26 July 1995, the Federal Circuit issued its
opinion in Reflectone, Inc. v. Dalton, 60 F.3d 1572
(Fed.Cir. 1995), in which it reversed the Board's decision
and overruled its opinion in Dawco, supra. On 8 August
3
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*
4
f
i
Sickithimmbnkes stmadate tater esac co cea t tn cop
BOER
SP ae
0 a ATS ENE
1995, Essex filed a motion to vacate our earlier decision
dismissing its appeals for lack of jurisdiction. It cited, inter
alia, the Federal Circuit's opinion in Reflectone and “the
guidance provided by the Federal Rules of Civil
Procedure.” The parties briefed this issue extensively
over a period of several months.
DISCUSSION
A similar situation arose in Electronics & Space
Corp., ASBCA No. 37352, 95-1 BCA 4] 27,305. Appellant
moved to vacate the Board's earlier decision, 92-2 BCA
{| 24,978, “which found the certification of appellant's
claim for over $7 million was inadequate and dismissed
the appeal without prejudice...” After we issued our initial
decision, appellant failed either to file a motion for
reconsideration or to perfect an appeal with the Federal
Circuit. Subsequently, our appellate court issued a string
of decisions which undermined earlier opinions upon
which the Board had relied. Thereupon, appellant filed its
motion to vacate.
Citing the FRCP as guidance, the Board ruled that
its earlier decision was not “the result of an inadvertent
error or a mistake of law under such exceptional
circumstances as would justify vacating” it. The Board
noted also “[a]ppellant's decision not to seek court review
of the adverse Board decision,” as well as its delay in
filing the motion to vacate. We denied the motion.
It is true that, in this instance, Essex filed a timely
motion for reconsideration; however, like the appellant in
Electronics & Space, supra, it did not appeal to the
Federal Circuit. It thus acquiesced in the correctness of
our decision until it became award of the appellant court's
decision in Reflectone, supra. At the time we issued our
5
initial opinion, the Board was correct in relying upon such
binding precedent as Dawco, supra. Therefore, it cannot
be stated that our decision was “the result of an
inadvertent error or a mistake of law.” As a result of
Essex's failure to appeal, the decision became final and
constitutes the law of this case.
CONCLUSION
The motion is denied.
ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of --
)
)
Essex Electro Engineers, Inc. ) ASBCA Nos. 45663
) and 45664
Under Contract Nos. )
F41608-90-D-0410 )
)
F41608-90-C-0409
OPINION BY ADMINISTRATIVE JUDGE PAUL
ON APPELLANT'S MOTION FOR RECONSIDERATION
Dated: November 18, 1994
In a lengthy decision issued on 20 April 1994, 94-2
BCA {| 26,902, the Board dismissed appellant Essex
Electro Engineers, Inc.'s (Essex) appeals without
prejudice for lack of jurisdiction. Explicating the
underlying facts in great detail, we ruled that “[iJt is now
well-settled that when the parties are in a pre-dispute,
negotiation posture, a contractor's submissions will not be
considered claims even though he has invoked the CDA
[Contract Disputes Act] and has characterized his
submissions as claims.” We also gave credence to the
affidavit of the Government's auditor which attributed the
time consumed in processing Essex's submissions to
Essex’ lack of cooperation rather than to any delay on the
Government's part.
Essex subsequently filed a motion for
reconsideration in which it set forth 5-1/2 pages of “facts”
and several pages of “discussion.” A detailed review of
Essex's “facts” demonstrates that appellant has failed to
elicit any new material and has simply distilled the factual
narratives from its earlier briefs. Similarly, Essex's legal
7
arguments are largely a recitation of the contentions
which it had already raised in this proceeding.
The boards of contract appeals have repeatedly
denied motions for reconsideration where a party has
presented no new evidence or arguments which were not
considered in the initial decision. Boeing Aerospace
Operations, Inc., ASBCA No. 46274, 46275 (slip op. 9
Nov. 1994): Scott Peterson Construction Co., ASBCA No.
47028 (slip op. 15 Aug. 1994); Optimal Data Corp.,
NASABCA No. 381-2, 85-2 BCA 4] 18,165, affd, 802 F.2d
469 (Fed.Cir. 1986); Ben Henderson Logging, AGBCA
No. 86-288-1, 86-3 BCA 4] 19,212; Eagle Contracting,
Inc., AGBCA No. 92-197-R, 93-1 BCA J 25,320.
Moreover, as the United States Claims Court held in
Weaver-Bailey Contractors, Inc. v. United States, 20
Cl.Ct. 158, 158-59 (1990): “[A] motion for reconsideration
should not be used as a substitute for an appeal.” To the
extent that Essex has simply rehashed facts and
arguments which we have already carefully considered,
we see no basis for altering our decision.
Two matters raised by Essex, however, deserve
further analysis. First, in a supplement to its motion,
Essex contends that the Board's decision in S-TRON,
ASBCA No. 45890, 94-2 BCA 4 26,957, is “in direct
conflict with the decision in the instant appeals.” Essex is
mistaken. In S-TRON, supra, we took jurisdiction over the
appeal at least partially on the basis that the Government
had delayed “for an unreasonable length of time” in
processing the contractor's submissions. Here, we gave
credence in our initial decision to the auditor's affidavit
which attributed the time consumed in processing Essex's
submissions to Essex rather than to the Government.
The auditor's affidavit was unrebutted, and Essex has not
convinced us that we erred in this regard. Hence, our
8
decision in S-TRON, supra, is distinguishable from our
initial decision in these appeals.
Essex also belatedly attacks the auditor's affidavit
and contends, somewhat surprisingly, that it was not
given an opportunity to rebut the auditor's statements.
First, the Board simply notes that, as pointed out by the
Government in its opposition brief, Essex could have
rebutted these assertions if it chose to do so. Indeed.
Essex filed a motion to strike the auditor's affidavit:
however, it did not append to its motion any evidentiary
materials rebutting his statements. Therefore, this
argument must fail. Finally, even at this juncture, Essex
has not persuaded us that we erred by giving credence to
the auditor's assertions.
CONCLUSION
We have reconsidered our initial decision and
affirm it.
ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of --
)
)
Essex Electro Engineers, Inc. ) ASBCA Nos. 45663
) and 45664
Under Contract Nos. )
F41608-90-D-0410 )
)
F41608-90-C-0409
OPINION BY ADMINISTRATIVE JUDGE PAUL
Dated: April 20, 1994
The Government moves to dismiss these appeals
for lack of jurisdiction, asserting that appellant's
termination for convenience settlement proposals were
not proper claims under the Contract Disputes Act of 1978
(CDA), 41 U.S.C. §§ 601-613. Appellant Essex Electro
Engineers, Inc. (Essex) opposes the Government's
motions. It contends that the settlement proposals were
presented to the contracting officer under a disputatious
context, and, thus, constituted proper CDA claims. We
present the following facts solely for the purpose of
resolving these motions.
FACTUAL BACKGROUND
The Government awarded Essex contract No.
F41608-90-D-0410 (0410), for the supply of an indefinite”
quantity of TF-1 floodlight sets (ASBCA No. 45663), and
contract No. F41608-90-C-0409 (0409), for the supply of
spare parts for the TF-1 floodlight sets (ASBCA No.
45664). Both contracts contained the following relevant
clauses:
10
TERMINATION FOR CONVENIENCE
OF THE GOVERNMENT
(FIXED-PRICE) (Apr 1984)
(a) The Government may terminate
performance of the work under this contract in
whole or, from time to time, in part if the
Contracting Officer determines that a termination
is in the Government's interest. The Contracting
Officer shall terminate by delivering to the
Contractor a Notice of Termination specifying the
extent of termination and the effective date.
zx**
(i) The Contractor shall have the right of
appeal, under the Disputes clause, from any
determination made by the Contracting Officer...
xx
DISPUTES (Apr 1984)
(a) The contract is subject to the Contract
Disputes Act of 1978 (41 U.S.C. 601-613).
(R4, tab 1)
In July 1990, Essex informed the Government that
it had discovered several defects in the design drawings
during the course of assembling the first article unit
(complaint at 7). On 10 July 1990, the Government
conducted a post-award conference at Essex's facility.
During the conference, appellant advised the Government
of its intention to substitute an alternate engine and
generator. At the Government's request, appellant
agreed to provide sufficient information demonstrating
that the alternate engine and generator met the “form, fit
11
and function” requirements of contract No. 0410 (ASBCA
45663, R4, tab 29).
By letter dated 8 January 1991, the contracting
officer (CO) stated that if appellant intended to use an
alternate engine and generator -- as discussed during the
10 July 1990 post-award conference -- it had to submit a
substitution proposal, including “all relevant technical and
pricing data.” The CO asserted:
2. If the contractor intends to make any
substitution of part numbers identified in notes, bill
of materials, or control drawings; the contractor
shall submit alternate items for coordination. This
requirement is specifically stated in the contract on
AFLC Form 762 page 9, Note 7.1, sentence two,
“Any substitution of parts from data package shall
be coordinated with government procurement
agency prior to installation.”
3. Installation of substitute parts without
coordination is cause for disapproval of the first
article and first article testing.... “Nonconformance
with any specified requirements or presence of one
or more deviations may constitute cause for
rejection.” Deviation as used in this context
includes all deviations from commercial parts
specified or controlled by government furnished
data.
xx
5. With specific reference to substitution of an
alternate item for Generator Set, Diesel Engine-
6KW, identified by 8324322-10 in government
furnished data, Note 2 on drawing 8324322
specifies MODEL NO 6.0 DJE-3CE/24365AE as
12
a i Dai
the proper part. If, as EEE has indicated,
Substitution for this generator is planned, then EEE
is required to identify the proposed alternate
generator set and submit a proposal, including all
relevant technical and pricing data, to verify
equivalence and compliance to requirements to
Diesel Driven Generator Set, 8324322-10. EEE's
previous attempts to provide the needed
information through DCMDC GCAB-FC (Mrs. Krist)
letter 17 Sept 90 (Atch 1) did not provide sufficient
technical information for us to determine whether
this proposed alternate generator set will be an
acceptable substitute for the specified generator
set.
6. In reflection on the development to this contract
requirement, no substitution of an alternate
generator set was intended or provided for in the
first article testing requirements. The specification
control drawing is not complete enough to meet all
of the salient characteristics of the Air Force
needs. In order to qualify any substitute generator
set, the criteria outlined in Generator Set Appendix
(ATCH #2) must be met and additional first article
tests are required.
(ASBCA 45663, R4, tab 41)
On 14 January 1991 appellant stated that it had
completed the fabrication of the first article test unit and
requested that the Government establish a date to
commence first article testing. In addition, Essex
characterized the CO's demand that the installation of the
engine in the first article test unit be qualified and
Subjected to additional tests to be n violation of both the
explicit terms of the contract and of DOD-STD-100C:
13
Based on the foregoing we request you reconsider
the statement in the Letter Para 6.... The drawings
are specification of the contract and are warranted
by the Government to be complete, accurate, and
current, and that if followed will result in an item
conforming to the contract requirements. The
attachment that you cite is not part of the contract.
The addition of ATCH #2 of the contract would
required the issuance of a contract modification.
zx
Based on the foregoing, we do not believe that
there is a unilateral uncompensated right in the
Government to refuse to accept as First Articles
and Production Units, supplies meeting contract
requirements because they are fabricated using
the Essex generator.
(ASBCA 45663, R4, tab 42)
By letter dated 25 April 1991, the CO stated he
would authorize first article testing to commence only if
Essex either 1) provided a first article test unit which
contained the exact engine suggested in the
Government's specification control drawing or 2) qualified
an alternate engine in accordance with the requirements
of the CO's letter of 8 January 1991:
1. In your 14 January 91 letter, paragraph 1, it is
“ stated that Essex Electro Engineers (Essex) had
previously informed SA-ALC that the first Article
has been completed and that Essex is ready to
schedule first article testing. That statement is not
consistent with the available information. No
written notice of a completed first article unit was
received until your letter of 12 April 1991. In view
14
a
of the discussion below, it would seem impossible
for a first article to be completed especially with the
open issues regarding your Proposed substitution
of the engine/generator set, the problems hat you
encountered regarding the mast assembly and the
issue of the compressor that you allege has
become obsolete.
2. It is noted in your correspondence and
conversations that you unequivocally ignore the
Significance of note 7.1 of the AFLC Form 762,
which is an integral part of the contract... The
intent of this note is to give the PCO the right to
review and approve any substitute parts. The
contractor is obligated to submit sufficient data to
permit a proper evaluation of the impact on unit
operation.
3. It is stated in your 14 Jan 91 letter, “Essex is
entitled and obligated to rely on the adequacy of
your Specification Control Drawing for the
procurement of an_ interchangeable part.”
However, you fail to note the following germane
and significant facts:
a) Note 7.1 of the AFLC Form 762, modifies the
drawing in that approval by the PCO is required
before a substitution can be made.
b) What you are Proposing is an engine/generator
set of your own manufacture, apparently untested
and only theoretical.
Cc) In an attempt to work with you and not
categorically deny your proposal, we have
repeatedly requested that you provide
15
supplementary information so that we could
adequately evaluate your proposed alternate.
d) You have repeatedly refused or delayed
submission of adequate data.
xx *
12. The Government is entitled and obliged to rely
upon the integrity and tenacity of those companies
and individuals with whom we contract. Your
failure to identify your proposed substitution of the
engine/generator set to the PCO prior to award or
even early in the First Article production process,
as well as your refusals to provide adequate
information and data for us to evaluate your
proposed change violates a relationship in which
the producer receives fair and reasonable
consideration and the government receives a
usable item. It is incomprehensible that a
manufacturer would insist on substituting an
untested, major component of a system and not
comply with the desires of the purchaser to
evaluate its effect on performance, especially
when the terms of the contract give that specific
right.
(ASBCA 45663, R4, tab 47)
On 6 May 1991 appellant responded by stating that
it had been prepared to commence first article testing in
January 1991. Appellant concluded by requesting a final
decision to be issued if the CO disagreed with its
interpretation of the contractual requirements:
We hereby respond to your letter dated April
25, 1991. We reject the implicit and explicit
16
EEE
SERGEY WR BR ERAN SN int
ree
As ei cali dha SE air Rc noc AM ce cmb de oe is saalntbcssuans ts cae nse tease ee
invective in your letter and the threats implicit in
that invective. We request an early meeting with
you to discuss and resolve the contract issues
discussed herein. In particular we require and
desire an immediate resolution of the
Government's use of Previously undisclosed
contract interpretations and requirements to justify
a refusal to cooperate in the conduct of
contractually required First Article tests on the
completed Essex First Article unit.
zs**
Your {] 12 is insulting and demeaning to our
Status as a reputable small business Supplier to
the Government of the United States. We are
distressed that an individual endowed with a U.S.
Government Contracting Officers [Sic] warrant
should consider it appropriate to require
performance on a matter other than by the terms
of the contract, and threaten to besmirch Essex's
integrity and tenacity because Essex would not
involuntarily accede to what you have
acknowledged were “unacceptable terms.”
It is Essex [sic] desire to provide the flood
lights at the accepted Price and in accordance with
the contract requirements. If you disagree with our
interpretation of the requirements then it is your
obligation to issue a Final Decision documenting
an ordered performance in accordance with that
interpretation. A delivery schedule does not
presently exist in the Contract. Any schedule
unilaterally mandated by you must be reasonable.
zee
| would suggest an early meeting at which
17
we may discuss this contract and how we are to
proceed.
(ASBCA 45663, R4, tab 48)
By letter dated 28 June 1991, the Termination
Contracting Officer (TCO) notified Essex that Contract-
0410 was being terminated for the convenience of the
government:
NOTICE OF TERMINATION FOR CONVENIENCE
Contract Number F41608-90-D-0410, dated 27
December 1989, and order 0001, dated 27
December 1989 are completely terminated under
contract Clause No 1-684, effective 28 June
1991... Detailed instructions follow...
Termination modifications will follow.
(ASBCA 45663, R4, tab 6) The TCO terminated
Contract-0409 for the convenience of the Government on
22 July 1991 (ASBCA 45664, tab 7).
By letter of 11 July 1991, the TCO provided
instructions to appellant regarding the preparation of the
settlement proposal under Contract-0410. The letter
provided, in relevant part:
In accordance with our telephone conversation of
10 Jul 91, enclosed are the following forms to be
used by your firm in preparation of a Settlement
Proposal on subject completely terminated
contract.
xx
Should you be considering settlement expenses,
18
Der acerca ae i a sn
FAR 31.205-42 addresses this subject. Please
maintain separate records for the directly, charged
settlement expenses, the time, type of task
performed, and employee performing the effort.
The cost must be reasonable, i.e. related to time a
person or company would expend on their own, in
the normal conduct of business, without expecting
reimbursement by another party.
zx
Please advise me no later than 2 August 91 of the
estimated amount of your proposal to facilitate the
required recommendation for release of excess
funds in accordance with FAR 49.105-2.
(Gov't mot. exh. A)
Modification P00001 for Contract-0410 and
modification P00001 for Contract-0409 confirmed the
termination of both contracts for the convenience of the
Government. The modifications were signed by the TCO
on 2 August 1991 (ASBCA 45564, R4, tab 2: ASBCA
45663, R4, tab 7)
Essex proffered its submission under Contract-
0410 on 26 June 1992 in which it requested payment of
$635,434. The submission stated in part:
In accordance with the Contract Disputes Act and
FAR § 49.114, as well as the termination of the
referenced Contract allegedly for the convenience
of the Government on June 28, 1991, enclosed
you will find our Claim, certified as required by the
Act. The enclosure includes Claims for changes
including the Government-caused first article
delays and production disruption, as well as the
19
Government's breach by its wrongful termination in
bad faith, totaling $635,434, after crediting prior
progress payments. In accordance with the cited
Regulation, the enclosure encompasses the
previous demands for final decisions submitted by
Essex on May 6, 1991, with respect to disputes
regarding specification control drawings and
deficient Government technical data on which
interest has been accruing since that date.
zx*
In accordance with the Contract Disputes Act, we
hereby certify that the enclosed claim is made in
good faith, that supporting data is accurate and
complete to the best of our knowledge and belief,
and that the amount requested accurately reflects
the contract adjustment for which Essex Electro
Engineers, Inc., believes the Government is liable.
In addition, consistent with the current state of
decisions, negotiation of this claim is abandoned,
a final decision is hereby demanded, the net
payment claimed is a sum certain, and, although
we will consider accepting a reasonable and timely
payment by you of the amount due in order to
resolve this matter, we insist upon the time
requirements of the Contract Disputes Act for a
response to this claim.
The proposal was signed by Frank J. Pawlowski, Essex's
president (ASBCA 45663, R4, tab 52).
By letter of 1 July 1992, the TCO responded to
Essex's submission under Contract-0410, stating in
relevant part:
Reference your 26 June 1992 subrfittal in
20
)
:
-
:
response to the termination of the subject contract.
It has been noted that in your cover letter
Submitting subject termination settlement proposal.
you certified the proposal as a claim.
Please be advised that under the Contract
Disputes Act of 1978, “a voucher, invoice, or other
routine request for payment that is not in dispute
when submitted is not a claim for the purpose of
the Act.” In Mayfair Construction Company v.
United States, 841 F.2d 1576 (Fed.Cir. 1988), the
Court held that a termination settlement proposal
was not a claim under the Contract Disputes Act,
and could not be converted into a claim by the
contractor's certification. The Court's reasoning
was that at the time of the proposal submission the
parties were still in a “pre-dispute negotiation
Posture.” In the absence of a dispute, the Court
held that the contractor was not entitled to interest.
Further, per FAR 49.112-2(d), Interest, “The
Government shall not Pay interest on the amount
due under a settlement or a settlement by
determination.” See also DA WCO Construction,
Inc. v. United States, 930 F.2d 872 (Fed.Cir.
1991).
In accordance with the above, your submission
cannot be considered a claim within the meaning
of the Contract Disputes Act. | have every reason
to believe that we will be able to reach a mutual
settlement through negotiations.
ek *
Your current proposal is being processed normally,
i.€., plant clearance has been requested
21
(approximate turn around time-six months) and a
DCAA Audit has been requested in accordance
with FAR 49.107. As questions arise regarding
items in your proposal, you will be contacted. After
all termination reviews and plant clearance have
been completed, negotiations can begin to resolve
your termination settlement proposal.
To date, no discussions subsequent to the initial
conference have taken place on this contract.
Since a settlement has never been discussed,
there is nothing to indicate this cannot be
negotiated, nor is this matter considered to be at
an impasse.
(Gov't mot., exh. B)
Essex proffered its submission under Contract-
0409 on 22 July 1992 in which it requested payment of
$20,603. It stated, in pertinent part, as follows:
In accordance with the Contract Disputes Act and
FAR § 49.114, as well as the termination of the
referenced Contract allegedly for the convenience
of the Government, effective August 12, 1991,
enclosed you will find Essex's Claim, which does
not require the certification under the Act because
it is less than $50,000. The enclosed Claim for
$20,603, involves the unamortized costs and profit
associated with the spare parts (CLIN 0002) and
the provisioning data (CLIN 0004) and post-
termination expenses.
In accordance with the Contract Disputes Act, the
enclosed Claim is submitted to you for a final
decision. IN addition, consistent with the current
22
State of decisions, negotiation of this claim is
abandoned, a final decision is hereby demanded,
the net payment claimed is a Sum certain, and,
although we will consider accepting a reasonable
and timely payment by you of the amount due in
order to resolve this matter, we insist upon the
time requirements of the Contract Disputes Act for
@ response to this claim. Further, if you consider
the enclosure to be a routine invoice or voucher
and not a claim, we demand payment within thirty
days or interest will accrue in accordance with the
Prompt Payment Act.
(ASBCA 45664, R4, tab 8)
By letter of 21 August 1991, the TCO responded to
appellant's proposal under Contract-0409, Stating:
It is noted that your 22 July 1992 submission of
your termination settlement proposal is certified as
a claim. It is also noted that this is your first
Submission as a result of the termination. No
reviews have been done previously regarding the
facts or amount contained therein. in addition, you
refer to the contract number as F41608-90-D-
0409.
Please be advised that under the Contract
Disputes Act of 1978, “a voucher, invoice, or other
routine request for payment that is not in dispute
when submitted is not a claim for th purpose of the
Act.” In Mayfair Construction Company v. United
States, 841 F.2d 1576 (Fed.Cir. 1988), the Court
held that a termination settlement proposal was not
a Claim under the Contract Disputes Act, and could
not be converted into a claim by the contractor's
23
certification. The Court's reasoning was that at the
time of the proposal submission the parties were
still in a “pre-dispute negotiation posture.” In the
absence of a dispute, the Court held that the
contractor was not entitled to interest. Further, per
FAR 49.112-2(d), Interest, “The Government shall
not pay interest on the amount due under a
settlement or a settlement by determination.”
In accordance with the above, | do not recognize
your certified submission as a claim within the
meaning of the Contract Disputes Act. | have
every reason to believe that we will be able to
reach a mutual settlement through negotiations.
xx*t
| consider contract F41608-90-D-0410/0001 and
contract F41608-90-C-0409 separate contracts.
They were awarded separately and | am treating
them separately. Since they are separate, please
submit separate documentation to support the
proposal for contract F41608-90-0409 so that
proper consideration can be given to that proposal.
xx*
Your Termination Settlement Proposal is being
process through normal channels. Plant clearance
and DCAA Audit have been requested. Once |
have received the requested reports, | will be
ready to open negotiations to settle this matter.
(ASBCA 45664, R4, tab 9)
By letter dated 16 September 1992, referencing
both Contract-0410 and Contract-0409, Essex, by its
attorney, contended:
24
Your letter of August 21, 1992. to our client,
Essex Electro Engineers, Inc.. regarding “Contract
F41608-90-C-0409”, indicates a certain amount of
confusion apparently attributable to your opinion
that Contract-0409 is somehow separable from the
above referenced Contract-0410. Regardless of
the manner in which you may choose to process
the claims submitted on the contracts, your opinion
fails to recognize that two contract numbers exist
only because the Government elected to create
two documents covering the requirements of a
Single solicitation, F41608-89-R-4743, and
Contract-0409 explicitly refers to its companion
Contract-0410. Also, your reference to “separate
documentation” was submitted on June 26, 1992,
and on July 22, 1992, of the “amount Claimed” for
each contract number on the forms and with the
certification on the forms prescribed by the TCO.
[See, FAR § 52.249-2(d).]
z**
Also, your reference to a certification of the claim
dated July 22, 1992. for Contract-0409 is not
understood since a CDA certification of the claim
was not provided and is not required because it
does not exceed $50,000. The claim dated June
26, 1992, for Contract-0410 included the
necessary CDA certification because it exceeds
$50,000.
Your letter disputes Essex's Claims and
Statutory right to interest and references Mayfair
Construction Company v. United States, 841 F.2d
1576 (Fed.Cir. 1988) and FAR § 49.112-2(d). As
you must know from a review of Mayfair, that
decision rested on an interim “Disputes”
25
Regulation which is not applicable here, and did
not address the specific requirements of the CDA
as requiring a “Dispute” before a “Claim” could
exist. The only evidence that could exist for your
apparent contention that each claim here is “a
voucher, invoice, or other routine request for
payment” that is not disputed would be your
immediate payment of the full amount of each
claim.
More recent decisions since Mayfair, Dawco
Construction Co., Inc. v. United States, 930 F.2d
872 (Fed.Cir. 1991), and Essex Electro Engineers,
Inc. v. United States, 960 F.2d 1576 (Fed.Cir.
1992), cert. pending, regrettably also contradict the
CDA and its legislative history as well as other
precedents in holding that all negotiations between
the parties must be abandoned in order for a claim
to exist. As noted in the claims for Contract-0409,
Essex has unqualifiedly abandoned negotiations
and demanded a final decision. We reject.your
premise that the Government may dictate when a
claim exists by the expedient of choosing when, if
ever, to characterize the matter as being “in
dispute.”
In addition, even if your reference to an
agency regulation, FAR § 49.112-2, was applicable
to this situation where negotiations have been
abandoned, that regulation has not force or effect
since it directly contradicts the CDA and its
legislative history. The executive agencies lack
the legislative authority to withhold a statutory right
enacted by Congress.
Accordingly, your dispute of the claims and
26
a
the statutory right to interest is unavailing. Further,
your stated belief that “we will be able to reach a
mutual _ settlement through _ negotiations”
unfortunately cannot occur because, in order to
preserve Essex's rights, Essex has been forced by
the foregoing decision to abandon all negotiations
and proceed in accordance with the law.
zee
Your agency has a track record; i.e.,
Contract N00140-85-C-1436 and DAAE07-87-C-
2665, of delays for years before any effort is made
to resolve terminations for convenience while the
contractor is left with financing the Government's
debt. We have no intention of allowing that record
to re-occur. While you have already failed to take
prompt action to resoive the claims as required by
FAR § 49.101(d) and the CDA and you have
disputed the claims, the right to interest and the
inclusion of the description of the “Target-Essex
Strategy”, there are some legal precedents, again
contradicting the CDA and its legislative history,
indicating a need for a resubmission of termination
claims in order for them to be considered claims.
Also, your letter cannot be reconciled with the CDA
unless it is simply a request for additional time as
Provided in the Act.
Consequently, taking your letter as a
request for additional time to resolve the claim and
in order to preserve Essex's rights in the event that
a forum might conclude that the existence of a
Claim depends upon a resubmission, enclosed is a
copy of the claim of June 26, 1992, for contract-
0410 with a renewed certification in accordance
with the language in the Contract Disputes Act. A
27
resubmission of the claim for Contract-0409 of July
22, 1992, will be made if no resolution has
occurred within the time required by the CDA.
This resubmission is made solely for the
purpose of preserving Essex's right and in no way
constitutes a waiver of the existence of the valid
and lawful claim submitted on June 26, 1992, and
on which interest is accruing from the receipt of
that claim to the date of payment of the amount
due. Further, this resubmission is not an offer to
negotiate nor to do other than proceed with the
formal claims process under the Contract Disputes
Act.
(ASBCA 45664, R4, tab 10)
By letter dated 2 October 1992, Essex resubmitted
its “claim” under Contract-0409. It stated:
As discussed in our letter of September 16,
1992, and subject to the same terms and
conditions stated therein, enclosed is_ the
resubmission of the subject claim.
(ASBCA 45664, R4, tab 11)
Appellant filed two notices of appeal on 27 January
1993. The Board docketed the appeal under Contract-
0410 as ASBCA No. 45663 and the appeal under
Contract-0409 as ASBCA No. 45664.
The Government attached the affidavit of DCAA
auditor Howard M. Salita to its 16 September 1993
Response to appellant's opposition. The affidavit stated,
in pertinent part:
28
iene ei tapas nar ct cea cee eee ee
The DCAA was not dilatory in its efforts to audit
Appellant's proposals. In fact the reverse is true.
The contractor was dilatory in its efforts to provide
the Government substantiation for many of the
questions raised during the audit. Essex has
caused a considerable delay in, and prolonged the
auditing process of its own proposals.
| must first point out that Appellant's
termination settlement proposals are not routine
termination settlement proposals. Most routine
settlement proposals require the audit of only one
contract. Under Contract 1410 Essex actually had
three audits built into one proposal.
The auditor concluded his affidavit by stating: “[T]he lack
of response and cooperation by Essex during our audit
efforts significantly impacted the time needed to complete
these audits.” (Gov't. resp., exh. A) 1/
On 31 September 1993, appellant filed a motion to
Strike the Government's “Response,” stating that the
“Governments 'Response’...boils down to nothing more
than a position that Essex may not pursue a resolution
here because the Government has refused to undertake
any action to resolve the claim and thus has avoided
giving voice to a ‘dispute’ and because the Government
issued multiple terminations which allegedly ‘overloaded’
its ‘audit' employee.” (App. mot. to strike at 2).
DECISION
It is axiomatic that “[aJll claims by a contractor
against the Government relating to a contract shall be in
writing and submitted to the contracting officer for a
decision.” (41 U.S.C. § 605(a)) Another prerequisite for
29
a Claim is that the parties must be involved in an existing
dispute. Dawco Construction Inc. v. United States, 930
F.2d 872 (Fed.Cir. 1991). In addition, if the contractor's
claim for money exceeds $50,000, it must be properly
certified. W.M. Schlosser Co. v. United States, 705 F.2d
1336 (Fed.Cir. 1983). Finally, a contractor must submit,
in writing, a “clear and unequivocal statement that gives
the contracting officer adequate notice of the basis and
amount of the claim.” Contract Cleaning Maintenance,
Inc. v. United States, 811 F.2d 586, 592 (Fed.Cir. 1987).
Appellant contends that both its 26 June 1992 and
22 July 1992 submissions are proper CDA claims in that
they: 1) expressly stated they were claims; 2) contained
the required certification language (when necessary); and
3) demanded the TCO's final decision. The Government
disagrees, arguing that Essex's submissions were merely
routine termination for convenience settlement proposals.
It also contends that since there was no dispute prior to
the submission of the proposals, they do not qualify as
claims under the CDA.
Under Dawco, supra., a cost proposal is not a
claim unless the parties are already in dispute over the
amount requested when the proposal is submitted.
Reflectone, Inc., ASBCA No. 43081, 93-1 BCA ¥ 25,512.
Furthermore, “[a] dispute cannot be manufactured and
interest cannot be made applicable by the mere assertion
that a submission is a claim.” Essex Electro Engineers,
Inc., ASBCA No. 46202 (decided 20 December 1994),
citing CPI Corp. v. United States, 25 Ci.Ct. 451, 455
(1992). It is also well-settled that a termination for
convenience proposal is ordinarily not considered a claim
when submitted. Mayfair Construction Company, ASBCA
No. 30800, 87-1 BCA 4 19,542, affd, Mayfair
Construction Company v. United States, 841 F.2d 1576
30
————
(Fed.Cir.), cert. denied, 488 US. 980 (1988).
Accordingly, appellant's submissions of 26 June 1992 and
22 July 1992 were merely the first Step in the opening of
negotiations. Reflectone, supra.; Electrodynamics,
ASBCA No. 43224, 93-1 BCA § 25,303: Hugo Auchter
GmbH, ASBCA No. 33123, 88-3 BCA {] 20,926. 2/
We find nothing in the record to establish the
existence of a certified dispute contemporaneous with the
submission of the 26 June 1992 or the 22 July 1992
settlement proposals. Therefore, neither of these
Submissions constituted a claim. Moreover, as the
Submissions were not claims, the requirement that a final
decision be issued within 60 days under the CDA did not
apply.
The events following Essex's 26 June 1992 and 22
July 1992 submissions present the issue in a different
light. Appellant's resubmissions (dated 16 September
1992 and 2 October 1992, respectively) did in fact invoke
the CDA, purported to “resubmit the termination claims,”
and- asserted that an appeal would be filed if a final
decision or other resolution was not forthcoming in 60
days. We recently faced a similar situation in Essex
Electro Engineers, Inc., ASBCA No. 46202 (slip op. 20
December 1993), where the Board held that no claim
existed because there was no underlying dispute.
It is now well-settled that when the parties are ina
pre-dispute negotiation posture, a_ contractor's
resubmissions will not be considered claims even though
he has invoked the CDA and has characterized his
submissions as claims. See Mayfair, supra. at 1577; CP/
Corp., supra. at 455. Here, the correspondence between
the parties did not rise to the level of a pre-dispute,
negotiation posture. The TCO's correspondence of 1 July
re |
en
1992 and 21 August 1992 served only to clarify to Essex
the process guiding the terminations for convenience and
to put it on notice that neither of its submissions was
considered a claim under the CDA. At best, the TCO
seemed overly optimistic that the parties would reach a
“mutual settlement through negotiations” once he had
received the requested “plant clearance” and “DCAA
audit” reports. Thus, we find that there was no “objective
manifestation” by the TCO that appellant's “claims” could
not be settled or that an “impasse” had been reached in
the negotiation process by failing to agree upon the
amount of a termination settlement as provided in the
Termination for Convenience clause. See R.G. Robbins
Co., ASBCA No. 26251, 82-1 BCA ¥ 15,643; Saco
Defense, Inc., ASBCA Nos. 44792, 45171, 93-3 BCA J
26,029.
When a contractor submits a certified claim in
excess of $50,000, the contracting officer, within 60 days
of receipt of the claim, must either issue a decision or
inform the contractor when a decision will be issued. 41
U-S.C. § 605(c)(2). If the contracting officer fails to
respond within 60 days, the contractor may appeal the
claim to the board of contract appeals based upon the
rationale that the Government has failed to act within a
“reasonable time.” 41 U.S.C. § 605(c)(3) and (5).
However, if the contracting officer does not
possess the requisite information, then he is not obliged
to render a decision. See Gauntt Construction Co.,
ASBCA No. 33323, 87-3 BCA ¥] 20,221. “Without such
information the contracting officer would be precluded
from making a meaningful review of the claim and thus be
unable to make the requested determination.” Logus
Manufacturing Co., ASBCA No. 26436, 82-2 BCA
16,025 at 79,416. To require the contracting officer to
32
render a decision on the basis of inadequate information
would amount to “an exercise in futility.” Logus, supra. \n
Such a situation, we would lack jurisdiction to consider the
purported appeal. J. J. Bonavire Co., ASBCA No. 29846,
86-2 BCA J 18,788.
It is not unreasonable for a TCO, in accordance
with standard procedures governing Termination
Settlement Proposals, to request a plant clearance and a
DCAA audit (as mandated by FAR 49.107) when
reviewing proposed settlement costs See generally,
Swiss Products, inc., ASBCA No. 40031, 93-3 BCA 7q
26,163; R.G. Robbins, supra. Here, the TCO apprised
Essex of this procedure and further indicated a
willingness to “open negotiations and settle this matter’
once he had received the reports.
It is not unreasonable to assume that a contractor
would provide full cooperation during the course of an
audit in order to settle its costs. Here, the auditor's
affidavit states the contrary. In fact, according to the
auditor, the time consumed by these audits was
attributable to Essex, not to the Government: “[T]he lack
of response and cooperation by Essex during our audit
efforts significantly impacted the time needed to complete
these audits.” (Emphasis added) In light of the affidavit,
unrebutted by appellant, and the surrounding
circumstances, we find that the contracting officer's failure
to render a final decision was reasonable.
Appellant also contends that the submissions
constituted claims for interest under the CDA. It is
axiomatic, however, that a request for CDA interest
cannot exist without an underlying claim under the Act.
CPT Corp., supra at 455, quoting Mayfair, supra at 1578:
Nab-Lord Associates v. United States, 682 F.2d 940, 943-
33
44, 230 Ct.Cl. 694 (1982). “Interest is...an adjunct to an
underlying claim with respect to the principal liability. By
terms of the [CDA], no interest arises absent some other
claim.” Essex, supra at 766. Because appellant's
termination for convenience settlement proposals were
not proper CDA claims, Essex is not entitled to interest
under the Act's provisions.
We find it unnecessary to address appellant's
contentions that such decisions as Mayfair, supra; Dawco,
supra, and Essex, supra, are a contradiction of the CDA
and its legislative history in holding that all negotiations
between the parties must be abandoned in order for a
claim to exist. These contentions were presented
verbatim previously by appellant (Gov't. resp., exh. B) and
were rejected by the Claims Court in 1991 (Essex Electro
Engineers, Inc. v. United States, 22 Cl.Ct. 757 (1991))
and later on appeal by the Federal Circuit in 1992 (Essex
Electro Engineers Inc., v. United States, 960 F.2d 1576
(Fed.Cir. 1992)). this Board, of course, is obliged to
follow the precedents of the Federal Circuit.
CONCLUSION
The Government's motion to dismiss for lack of
jurisdiction is granted, and the appeals are dismissed
without prejudice to the submission of proper claims to the
contracting officer.
NOTES
1. We deny Essex's motion to. strike the
Government's response.
2. Essex also contends that its demand of 6 May
34
———aoOeeeee aaa. 2.2.2.2.2.2.2.Q__
1991 for a CO's decision demonstrated that the
parties were in dispute prior to its 26 June 1992 or
22 July 1992 submissions. However. upon review
of the record, we do not view appellant's 6 May
1991 demand as a proper CDA submission.
Absent were the “clear and unequivocal
Statements that gives the contracting officer
adequate notice of the basis and amount of the
Claim." Contract Cleaning, supra. at 592. Essex
merely stated that if the CO disagreed with its
interpretation of the requirements of the contract,
then it was the CO's “obligation to issue a Final
Decision documenting an ordered performance in
accordance with that interpretation.”
35
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