MidAtl. Constr. & Design Assocs. v. United States

1

MIDATLANTIC CONSTRUCTION & DESIGN ASSOCIATES, INC., Plaintiff, v. UNITED STATES, Defendant.

No. 22-447C

United States Court of Federal Claims

May 5, 2023

NOT FOR PUBLICATION

Ruth E. Ganister, Rosenthal and Ganister, LLC, West Chester, PA for plaintiff.

Robert C. Bigler, Trial Attorney, Commercial Litigation Branch Civil Division, U.S. Department of Justice, Washington, DC for defendant, with whom on the briefs were Brian M. Boynton Principal Deputy Assistant Attorney General, and Patricia M. McCarthy, Director, and Elizabeth M. Hosford, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, DC.

OPINION AND ORDER ^[1]

Armando O. Bonilla, Judge

Pending before the Court is Defendant's Motion to Dismiss for lack of subject matter jurisdiction pursuant to RCFC 12(b)(1) (ECF 6). The crux of the government's motion is that plaintiff failed to timely submit a duly certified claim to the contracting officer under the Contract Disputes Act (CDA), 41 U.S.C. § 7103. Noticeably absent from both parties' briefs is a citation to-let alone any discussion of-Sikorsky Aircraft Corp. v. United States, 773 F.3d 1315 (Fed. Cir. 2014), wherein the United States Court of Appeals for the Federal Circuit squarely held: "§ 7103 is not jurisdictional and need not be addressed before deciding the merits." Id. at 1322. For the reasons set forth below, defendant's motion is DENIED.

BACKGROUND

On September 21, 2012, the U.S. Department of Defense, Defense Logistics Agency (DLA) awarded Midatlantic Construction &Design Associates, Inc. (MCDA) a nearly $3 million firm fixed-price construction contract to repair and upgrade fire sprinkler systems in 38 government facilities located in New Cumberland and Mechanicsburg, Pennsylvania.^[2] The scheduled contract performance period was October 2, 2012, through September 30, 2013 (i.e., Fiscal Year 2013). Due to contested delays (e.g., building access and accessibility, stop work orders, response time for requests for information and change orders, inspections, differing site conditions, availability of government personnel, weather conditions, government furlough, subcontractor demobilization and remobilization) and disputed contract requirements (e.g., delivery and format of construction and maintenance drawings), performance continued through February 10, 2015.

Two years later, on May 8, 2017, MCDA submitted a request for equitable adjustment (REA) in the amount of $405,929.21 for "unabsorbed corporate overhead costs incurred as a result of the changes and delays experienced under [the DLA] contract."^[3] See ECF 1-2 at 25.^[4] The contractor specifically noted that the request did not include $108,180.93 in "jobsite unabsorbed overhead costs" purportedly incurred and "not recovered through the various modifications to the contract." See id. In closing, the REA states:

We are willing to discuss this request for equitable adjustment with you, and we are willing to meet with you concerning the same. We are submitting this request as a Request for Equitable Adjustment (REA). It is our understanding that your agency is willing to review and resolve this matter with MCDA on that basis. However, we reserve the right to present this request as a formal claim pursuant to the Contract Disputes Act. We would appreciate your early review of this matter.

As noted, should we receive any claims from vendors and subcontractors concerning this job, we reserve the right to amend this REA to include the same. We also reserve the right to amend this REA to include jobsite unabsorbed overhead as appropriate.

We will contact you to set a time to discuss this matter with you further.

Id. at 36. The REA does not include a certification or any representations regarding the nature and accuracy of the information included or the identity or authorization of the author.

Over the next four years, MCDA engaged DLA and the Defense Contract Audit Agency (DCAA) in intermittent communications regarding the sufficiency of MCDA's supporting documentation, the allowability of certain costs, and the REA's missing certification. See, e.g., ECF 1-2 at 40-41, 43-44, 46-47, 49, 51-53, 55-56, 61; ECF 1-3 at 2-8, 10-11, 13-14, 16-17; see also ECF 1-5 at 3-5 ("Timeline of Correspondence"). In the interim, on November 2, 2018, MCDA met with DLA and DCAA officials, at which time the contracting officer recommended MCDA engage professional assistance to substantiate the REA. See ECF 1 ¶ 30; ECF 8 at 48-49 ¶ 9. Two years and two months later, on January 8, 2021, MCDA requested the opportunity to submit a revised REA. See ECF 1-3 at 16. DLA authorized MCDA's request and then twice extended the submission deadline to March 1, 2021. See ECF 1-3 at 19, 21-22.

On March 1, 2021, MCDA submitted a revised REA seeking to recover $855,038 in alleged unforeseen increases in labor, equipment, and overhead costs attributable to government (in)actions and delays. See ECF 1-4. The revised REA more than doubled MCDA's initial request of $405,929.21 and presents different valuations and calculations. Signed by MCDA's President, the revised REA includes the following certification: "I certify that the request is made in good faith, and that the supporting data are accurate and complete to the best of my knowledge and belief." Id. at 16. The revised REA does not formally request a contracting officer's final decision.

The DLA contracting officer rejected MCDA's submission on March 22, 2021, explaining that MCDA changed its theory of recovery without providing the documentary proof necessary to substantiate the requested equitable adjustment. See ECF 1-5 at 2-5. After outlining the protracted effort to resolve MCDA's May 8, 2017 REA, the contracting officer closed, stating:

. . . both DLA and DCAA exerted a considerable amount of time and effort assisting MCDA in submitting an adequate REA proposal. From the outset of this effort, however, MCDA failed to reciprocate in its efforts to provide substantiating documentation to support its REA. At this point, and given that MCDA abandoned its REA for over two years and then provided no new information to support its revised REA, DLA believes that any further discussion concerning this matter is no longer fruitful. Accordingly, DLA has concluded its review of this matter.

Id. at 5.

On April 1, 2021, MCDA requested that DLA reconsider the decision not to perform a substantive review or DCAA audit of MCDA's March 1, 2021 revised REA. See ECF 1-5 at 7-8. Citing DLA's initial allowance of the revised REA and subsequent extension of the submission deadline, MCDA asserted the government was acting in "bad faith" in not considering the revised REA. See id. at 8. At a minimum, MCDA concluded, the contractor was entitled to a contracting officer's final decision from which to "take an appropriate appeal." Id. On May 6, 2021, following DLA's refusal to issue a final decision citing MCDA's failure to file a formal CDA claim, MCDA's President requested a final decision and executed the following certification:

I certify that the claim as submitted and revised under cover of our letter of March 1, 2021 is made in good faith; that the supporting data are accurate and complete to the best of Midatlantic's knowledge and belief and that the amount requested accurately reflects the contract adjustment for which Midatlantic believes the Government is liable. As President of Midatlantic I have the authority to provide this certification.

ECF 1-5 at 15; see id. at 10-11. On May 20, 2021, the contracting officer refused to consider the matter further, citing the previously noted defects in MCDA's prior submissions and the expiration of the six-year statute of limitations governing CDA claims. See id at 17.

DISCUSSION

I. Standard of Review

To withstand a motion to dismiss filed under RCFC 12(b)(1), plaintiff must demonstrate by a preponderance of the evidence that the Court possesses subject matter jurisdiction. J.E. McAmis, Inc. v. United States, No. 22-570, 2023 WL 2657005, at *5 (Fed. Cl. Mar. 10, 2023) (citing cases). In assessing the arguments presented, "[t]he Court 'must accept as true all undisputed facts asserted in the plaintiff's complaint and draw all reasonable inferences in favor of the plaintiff.'" Id. (quoting Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011)). Any disputed facts must be resolved if material to determining the Court's authority to adjudicate the merits of plaintiff's claims. H&M Assocs., LLC v. United States,___ Fed. Cl.___, No. 22-110, 2023 WL 2727621, at *4 (Fed. Cl. Mar. 31, 2023) (citing cases).

II. Accrual Date

Under the CDA, "[a] claim accrues . . . as of 'the date when all events[] that fix the alleged liability of either the Government or the contractor and permit assertion of the claim[] were known or should have been known." Bowman Const. Co. v. United States, 154 Fed.Cl. 127, 136 (2021) (quoting Elec. Boat Corp. v. Sec'y of Navy, 958 F.3d 1372, 1375 (Fed. Cir. 2020)). At this juncture, the precise accrual date(s) of MCDA's purported claims against the government is not clear. However, as pled in the complaint, the last alleged government-caused delay occurred in connection with DLA's final acceptance of the construction and maintenance drawings on February 10, 2015. This moment is critical since, under the terms of the contract, the drawings were due "within 30 calendar days after completion of the work." ECF 1-1 at 27 (emphasis added). Regardless of when MCDA actually knew of the events giving rise to a CDA claim, the company should have been aware of them by the time the work was completed and accepted by DLA.

III. Certified Claim

In defining a "claim" under the CDA, the Federal Circuit has...