PARSONS GLOBAL EX REL. ODELL INTERN. v. McHugh
2012 U.S. App. LEXIS 8062
| Fed. Cir. | 2012Background
- Parsons Global Services, on behalf of Odell International, sought payment for Odell's subcontract costs under a U.S. Army design-build contract in Iraq.
- Odell and Parsons amended the subcontract in 2004–2005 to include a 1.75% markup to cover G&A and overhead, which Odell continued charging at 75% despite amendments.
- DCAA audit in 2006 found Odell's provisional indirect cost rate was 187%, but later clarified the 175% rate was fixed by the subcontract and applicable to Odell's costs.
- The Army terminated the relevant task orders for convenience in March 2006; Parsons submitted termination settlements and later a sponsored CDA claim for Odell's costs.
- DCAA audit in 2008 supported Odell's 175% markup; Parsons submitted a revised Odell invoice in 2008 and then a CDA-certified claim in December 2008, which the PCO denied in January 2009; Parsons appealed to the Board.
- The Armed Services Board of Contract Appeals dismissed the appeal for lack of jurisdiction, holding Parsons' request was a routine cost submission that was not in dispute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Board had CDA jurisdiction over Parsons' claim. | Parsons: routine invoices after termination can become CDA claims if disputed. | Government: routine requests require pre-existing dispute to be a CDA claim. | Board lacked jurisdiction; routine request not in dispute. |
| Whether Parsons' request for Odell's overhead/G&A markup is routine or non-routine. | Parsons: 2008 audit changed the markup; post-termination submission non-routine. | Government: despite audit, costs arose under contract and were routine. | Request classified as routine; ready for dispute requirement. |
| Whether post-termination payment rights mechanisms existed to convert routine costs into a CDA claim. | Procedures existed (voucher, TCO settlement) but were not pursued. | Parsons could have pursued post-termination payment mechanisms. | Post-termination mechanisms available; still insufficient to create a CDA claim without dispute. |
Key Cases Cited
- Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed. Cir. 1995) (en banc; non-routine demands need not be disputed)
- Ellett Constr. Co. v. United States, 93 F.3d 1537 (Fed. Cir. 1996) (routine vs non-routine analysis depends on contract context)
- Scan-Tech Sec., L.P. v. United States, 46 Fed.Cl. 326 (Fed. Cl. 2000) (non-routine/ routine contrast in termination scenarios)
- J. & E. Salvage Co. v. United States, 37 Fed.Cl. 256 (Fed. Cl. 1997) (preference for government to comply with obligations)
- Ky. Bridge & Dam, Inc. v. United States, 42 Fed.Cl. 501 (Fed. Cl. 1998) (damages from breach or cardinal change considerations)