Systems Development Corp. v. McHugh
2011 U.S. App. LEXIS 19604
| Fed. Cir. | 2011Background
- SDC and the Army entered a May 9, 2000 contract worth $430,000 for 24 circuit card assemblies for HAWK missiles, with disputes over defective specifications.
- SDC requested termination for convenience on November 13, 2001; CO advised on June 2, 2003 that a final decision could not issue due to insufficient information.
- CO terminated for convenience on February 17, 2004; SDC submitted a new termination settlement proposal on April 23, 2004, and later offered to reduce it on November 12, 2004, while no equitable adjustments were claimed at that time.
- TCO issued a final decision on March 25, 2005 awarding $403,563 and denying other claimed costs as unsupported; SDC could appeal to the Board within 90 days or to the CF Claims court within 12 months.
- SDC filed in the Court of Federal Claims on March 24, 2006 and later dismissed; in 2008 SDC submitted new termination costs and over $7 million in equitable adjustments to the Army CO; the Board dismissed in 2010 for lack of jurisdiction.
- The Federal Circuit reviews the Board’s jurisdiction de novo while upholding Board findings of fact unless specific defects are shown.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction over termination settlement costs | SDC contends timely Board review of the TCO decision was possible within the CDA. | Board lacked jurisdiction because the 90-day appeal window had lapsed and SDC did not timely appeal the March 25, 2005 decision. | Board lacked jurisdiction. |
| Jurisdiction over equitable adjustments | Accrual did not occur until impasse, not earlier. | Equitable adjustments accrued no later than November 13, 2001 and were timely presented after accrual. | Board lacked jurisdiction due to accrual preceding presentment beyond six years. |
Key Cases Cited
- Arctic Slope Native Ass'n v. Sebelius, 583 F.3d 785 (Fed.Cir.2009) (jurisdictional deadline to present claims to CO under CDA)
- Rex Systems, Inc. v. Cohen, 224 F.3d 1367 (Fed.Cir.2000) (impasse not required for all CDA claims; outlines when a termination proposal ripens into a claim)
- Ellett Constr. Co. v. United States, 93 F.3d 1537 (Fed.Cir.1996) (limits when a termination settlement proposal ripens into a CDA claim)
- Winter v. FloorPro, Inc., 570 F.3d 1367 (Fed.Cir.2009) (standard of review for Board's factual findings and jurisdictional determinations)
- Fruin-Colnon Corp. v. United States, 912 F.2d 1426 (Fed.Cir.1990) (treatment of agency interpretations and deference to Board's expertise)
- Titan Corp. v. West, 129 F.3d 1479 (Fed.Cir.1997) (defer to Board's FAR interpretations in government contracting disputes)