Public Warehousing Company K.S.C.
ASBCA No. 59020
| A.S.B.C.A. | Jan 12, 2017Background
- PWC held three Prime Vendor subsistence contracts with DLA to supply food in Iraq/Kuwait. PWC submitted invoices via EDI and offline and claimed Prompt Payment Act interest for late payments.
- PWC filed a certified claim (Nov. 28, 2011), later revised to $4,605,594.53; contracting officer denied the claim (Nov. 1, 2013); PWC appealed to the ASBCA (ASBCA No. 59020).
- DLA amended its answer to assert affirmative defenses including fraud in the inducement and first material breach based on conduct that is the subject of pending criminal and civil fraud prosecutions against PWC in the U.S. District Court for the Northern District of Georgia.
- The U.S. Attorney asked DLA to seek dismissal without prejudice or a stay of the ASBCA appeal because of substantial overlap between ASBCA defenses and the criminal indictment; DOJ had produced extensive discovery in the criminal case.
- The Board weighed docket-management authority, the CDA contractor right to Board resolution, potential prejudice from civil discovery to criminal proceedings, and the risk of stale evidence, concluding dismissal was inappropriate but granting a one-year stay of the appeal.
Issues
| Issue | Plaintiff's Argument (PWC) | Defendant's Argument (DLA/US Attorney) | Held |
|---|---|---|---|
| Whether the ASBCA appeal should be dismissed or stayed because of overlap with pending criminal proceedings | Dismissal or stay not justified; contract issues are narrower; PPA interest determination won't interfere with criminal case; government must show clear hardship | Substantial factual/issue overlap; civil discovery could be used to circumvent criminal discovery and prejudice prosecution; request dismissal or stay | Dismissal denied; stay granted for one year |
| Whether facts, issues, and witnesses are substantially similar across proceedings | Issues are contractual and narrower; not identical to criminal charges | Facts, witnesses and many issues are substantially similar/overlapping with the indictment | Board found substantial similarity; factor favors government |
| Whether going forward would compromise the criminal investigation/prosecution | No: DOJ already produced voluminous discovery; DLA can litigate its defenses; speculative harm insufficient | Yes: civil discovery and Board proceedings likely to compromise criminal case and grant PWC tactical advantages | Board concluded there is real risk civil proceedings could compromise criminal case; factor favors government |
| Whether the duration of a stay/dismissal would be reasonable or prejudicial to PWC | Indefinite delay would harm PWC (stale evidence, fading witness memory); dismissal/stay for long period improper | Criminal timing uncertain; staying or dismissing preserves resources and avoids interference with criminal case | Board rejected indefinite stay/dismissal as unreasonable; granted limited one-year stay and required joint status report thereafter |
Key Cases Cited
- Landis v. North American Co., 299 U.S. 248 (Sup. Ct.) (court may stay proceedings when balancing competing interests; stays require clear showing of hardship to the non-moving party)
- Afro-Lecon, Inc. v. United States, 820 F.2d 1198 (Fed. Cir.) (district/administrative stay considerations and balancing of interests)