Michael Roth & Associates v. United States
133 Fed. Cl. 279
| Fed. Cl. | 2017Background
- MRA (architect/engineer) had an IDIQ master contract with the VA and a 2011 task order (flat fee $311,924.97) for cardiology renovation; Modification 2 (May 9, 2011) increased MRA’s fee by $176,101.33 and reduced the Project Construction Cost amount to $2,945,900, with deductive alternates required.
- MRA later estimated construction costs well above the modified Project Construction Cost (final estimates/bids ranged up to ~$4.59M; low construction contract award was $3,050,300 including some alternates).
- MRA submitted multiple requests to the contracting officer (CO) seeking additional compensation for alleged extra work and submitted timesheets; the CO rejected the requests, citing (among other things) the Modification 2 release language and lack of certified/adequate claim documentation.
- MRA filed a certified CDA claim in May 2013 for $107,777 (or $125,405 claim figure asserted elsewhere) and the CO issued a final decision denying entitlement; MRA sued in the Court of Federal Claims seeking an equitable adjustment for alleged scope changes and claiming the VA violated the contract’s Design Within Funding Limitations clause.
- The government moved to dismiss for lack of jurisdiction (failure to present the specific claim to the CO) or alternatively for summary judgment; the court dismissed without prejudice for lack of jurisdiction and explained that MRA had not presented the particular legal theory it pursued in court to the CO.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court has jurisdiction under the CDA because plaintiff presented the operative claim to the CO | MRA argued it raised claims of increased scope and requested equitable adjustment in its CO communications and certified CDA submission | Gov't argued MRA never presented the particular legal theory (claim based on the Design Within Funding Limitations clause / constructive change theory) to the CO | Court: Dismissed for lack of jurisdiction — CO was not given opportunity to consider the specific claim/theory; claim not presented as required under the CDA |
| Whether the VA constructively changed the contract by insisting designs continue despite known funding shortfall (Design Within Funding Limitations clause theory) | MRA contended that after it warned the VA the design would exceed the funding limit, the VA should have changed scope or adjusted estimated construction price and that its failure to do so created a constructive change entitling MRA to adjustment | Gov't asserted the Design Within Funding Limitations clause only imposed a duty to review MRA’s estimate and conferred discretion to change scope or adjust price; no written change was directed and services remained those in the modified task order | Court: Even on the merits the clause is discretionary; no constructive change occurred as a matter of law because no written order changed MRA’s obligations and VA’s inaction did not create entitlement to adjustment |
| Whether FAR fee limitation (6% of estimated construction cost) entitles MRA to an increased fee tied to final/actual construction cost | MRA argued that an upward adjustment of estimated construction cost would trigger an increased A/E fee (6% rule) | Gov't argued FAR 15.404-4(c)(4)(i)(B) caps negotiated A/E fee at 6% of the estimated construction cost but does not automatically entitle the contractor to 6% of final/actual construction cost absent agreement | Court: Held the FAR provision does not give MRA a right to a fee equal to 6% of final or actual construction cost; no automatic entitlement absent agreement |
Key Cases Cited
- England v. The Swanson Grp., Inc., 353 F.3d 1375 (Fed. Cir. 2004) (definition of a CDA "claim" as a written demand for a sum certain)
- M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323 (Fed. Cir. 2010) (both a valid claim and a CO final decision are prerequisites to Tucker Act jurisdiction for CDA disputes)
- K-Con Bldg. Sys., Inc. v. United States, 778 F.3d 1000 (Fed. Cir. 2015) (matters presenting materially different legal theories or remedies constitute different claims for CDA exhaustion purposes)
- Contract Cleaning Maint., Inc. v. United States, 811 F.2d 586 (Fed. Cir. 1987) (a claim must give the CO adequate notice of the basis and amount of the claim)
- McBryde v. United States, 299 F.3d 1357 (Fed. Cir. 2002) (statutory language using "may" typically confers discretion)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (summary judgment standards; genuine issue of material fact framework)