128 Fed. Cl. 788
Fed. Cl.2016Background
- USACE awarded FCI a firm-fixed-price contract (≈ $4.9M) to construct a medical warehouse in Qatar; performance issues, cure and show-cause notices followed, and USACE issued a default termination in August 2015.
- FCI sought reimbursement (~$33,997) for bond premiums and repeatedly disputed an interim "unsatisfactory" performance appraisal (CPARS), requesting its withdrawal; CO denied withdrawal and finalized the evaluation.
- FCI submitted multiple letters to the CO contesting the default termination, alleging government-caused delay (dig permit), breach of good faith, and requesting conversion to a termination for convenience.
- FCI filed suit in the Court of Federal Claims asserting four counts: (I) breach of duty of good faith; (II) failure to reimburse bond premium; (III) wrongful termination for default (seek conversion to convenience termination); (IV) challenge to the unsatisfactory performance evaluation.
- Government moved to dismiss Counts I, II, and IV for lack of CDA exhaustion/failure to present valid claims to the contracting officer; FCI cross-moved for default judgment on Count III.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Court has jurisdiction over monetary breach claims (Counts I & II) under the CDA | FCI contends its responses to Cure/Show Cause and termination correspondence effectively presented its breach claims to the CO and termination notice operated as a CO final decision | Government: FCI never submitted certified claims seeking a sum certain (and thus failed CDA exhaustion and certification for claims >$100,000) | Dismissed Counts I & II for lack of jurisdiction (no valid CDA claims; no sum certain; certification requirement unmet) |
| Whether Court has jurisdiction over challenge to unsatisfactory performance evaluation (Count IV) | FCI argues its June/June 29 letters formally requested withdrawal and thus sought a CO decision; it received denial and finalization | Government contends those letters were mere requests and not final-demand CDA claims | Jurisdiction exists over Count IV: FCI submitted a written demand seeking relief and received a CO final decision |
| Whether default judgment is appropriate on Count III because defendant didn’t separately answer that count | FCI cites authority that moving on part of a complaint does not extend time to answer other counts; seeks default | Government and the Court: RCFC 12(a) (like FRCP 12) suspends the answer deadline when a partial 12(b) motion is filed; other courts decline to follow Gerlach | Default judgment denied; Court finds no prejudice and accepts that the motion tolled the answer deadline |
| Case management: whether to stay the proceeding pending CO decision on dismissed claims | FCI: proceeded to litigation on termination claim; moved for default on Count III | Government sought stay until CO resolves Counts I & II | Court stayed the case pending CO final decision on Counts I & II and ordered a joint status report |
Key Cases Cited
- PODS, Inc. v. Porta Stor, Inc., 484 F.3d 1359 (Fed. Cir. 2007) (threshold jurisdictional inquiry; dismissal if no jurisdiction)
- Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (U.S. 1998) (court must dismiss if no subject-matter jurisdiction)
- Trusted Integration, Inc. v. United States, 659 F.3d 1159 (Fed. Cir. 2011) (accept factual allegations but plaintiff must prove jurisdictional facts when challenged)
- M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323 (Fed. Cir. 2010) (CDA exhaustion: contractor must submit valid claim and obtain CO final decision)
- Northrop Grumman Computing Sys., Inc. v. United States, 709 F.3d 1107 (Fed. Cir. 2013) (valid CDA claim for payment requires written demand, as a matter of right, and sum certain)
- Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed. Cir. 1995) (elements of a valid CDA claim and requirement that contractor seek a CO decision)
- Dalton v. Sherwood Van Lines, Inc., 50 F.3d 1014 (Fed. Cir. 1995) (CDA provides exclusive mechanism when it applies)
- James M. Ellett Constr. Co. v. United States, 93 F.3d 1537 (Fed. Cir. 1996) (contractor need not make a single magic-words request for a final decision; substance controls)