COUNCIL FOR TRIBAL EMPLOYMENT RIGHTS, Plaintiff, v. UNITED STATES, Defendant.
No. 12-326C
United States Court of Federal Claims.
Filed: August 27, 2013
112 Fed. Cl. 231
LETTOW, Judge.
The clerk is directed to enter judgment for defendant and against plaintiff as specified.
No costs.
It is so ORDERED.
Joseph E. Ashman, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With him on the
Claim of breach of a contract entered under the Indian Self-Determination and Education Assistance Act of 1975,
OPINION AND ORDER1
LETTOW, Judge.
Council for Tribal Employment Rights (“Council“), a national intertribal nonprofit organization which represents the employment interests of certain Indian tribes, seeks $500,000 in damages for the alleged breach of two agreements which involved the Council, the Office of Indian Energy and Economic Development (“the Office“), a component of the Bureau of Indian Affairs (“the Bureau“), U.S. Department of the Interior, and the Spirit Lake Tribe (“Spirit Lake” or “the Tribe“), a federally recognized Indian tribe. Both agreements were executed as amendments to an existing contract between the Office and Spirit Lake. The first, Amendment 2, involved the provision of funds to support a Native Construction Careers Initiative (“NCCI“) commercial construction training program, and called upon the Council to conduct the training program. The second, Amendment 6, allocated funds to support training projects approved by the Federal Highway Administration (“FHWA“). The statement of work for that Amendment referenced an FHWA training program agreement which contemplated that the Council would provide training to develop certain certification programs for road construction activities.
Several years after the execution of Amendments 2 and 6, the Council submitted to the Office a certified claim for $200,000 for an alleged breach of contract relating to Amendment 2, as well as a certified claim for $300,000 for an alleged breach of contract arising from Amendment 6. See Compl. ¶ 15; Pl.‘s Resp. to Order of Aug. 15, 2013, Attach. A (Certified Claim (Feb. 21, 2012)), Attach. B (Certified Claim (Mar. 13, 2012)), ECF No. 62.2 The Office did not respond to Council‘s claims. See Def.‘s Mot. to Dismiss, or in the Alternative, Mot. for Summary Judgment (“Def.‘s Mot.“) at 10, ECF No. 25. The Council then filed a complaint in this court on May 23, 2012. The government filed a motion to dismiss, or in the alternative, motion for summary judgment on December 11, 2012, and Council filed a motion for partial summary judgment as to its third-party beneficiary status in relation to Amendments 2 and 6 on April 16, 2013. The motions have been briefed, and a hearing was held on June 4, 2013. Supplemental submissions were filed on June 7 and 13, 2013, and on August 19, 2013.
STATUTORY FRAMEWORK
A. The Indian Self-Determination and Education Assistance Act of 1975
In 1975, Congress passed the Indian Self-Determination and Education Assistance Act of 1975, Pub. L. 93-638, 88 Stat. 2203 (codified at
commitment to the maintenance of the [f]ederal [g]overnment‘s unique and continuing relationship with, and responsibility to, individual Indian tribes and to the Indian people as a whole through the establishment of a meaningful Indian self-determination policy which will permit an orderly transition from the [f]ederal domination of programs for, and services to, Indians to effective and meaningful participation by the Indian people in the planning, conduct, and administration of those programs and services.
Pertinent to this litigation, ISDA confers upon the Secretary of the Interior the authority to “enter into a self-determination contract or contracts with a tribal organization to plan, conduct, and administer programs or portions thereof.”
the recognized governing body of any Indian tribe; any legally established organization of Indians which is controlled, sanctioned, or chartered by such governing body or which is democratically elected by the adult members of the Indian community to be served by such organization and which includes the maximum participation of Indians in all phases of its activities: Provided, [t]hat in any case where a contract is let or grant made to an organization to perform services benefiting more than one Indian tribe, the approval of each such Indian tribe shall be a prerequisite to the letting or making of such contract or grant.
ISDA sets forth a model agreement that must be contained within, or incorporated by reference in, any self-determination contract entered into pursuant to
Additionally, amendments to ISDA in 1988 made the Contract Disputes Act (“CDA“), now codified at
B. Indian Employment, Training and Related Services Demonstration Act of 1992
In 1992, Congress passed the Indian Employment, Training and Related Services Demonstration Act of 1992, Pub. L. 102-477, 106 Stat. 2303 (codified at
shall, upon the receipt of a plan acceptable to the Secretary of the Interior submitted by an Indian tribal government, authorize the tribal government to coordinate, in accordance with such plan, its federally funded employment, training, and related services programs in a manner that integrates the program services involved into a single, coordinated, comprehensive program and reduces administrative costs by consolidating administrative functions.
BACKGROUND4
On February 17, 2009, Congress enacted the American Recovery and Reinvestment Act of 2009 (“ARRA“), Pub. L. 111-5, 123 Stat. 115, in which, among other things, it allocated $40 million to the Bureau of Indian Affairs for the operation of Indian “workforce training programs and the housing improvement program.” Pub. L. 111-5, 123 Stat. 115, at tit. VII. Some of these funds were apportioned internally to the Office, a component of the Bureau. In addition, ARRA allocated $550 million to FHWA “for investments in transportation at Indian reservations and [f]ederal lands.” Id. at tit. XII.
On June 1, 2009, the Office wrote to Spirit Lake and stated that funds had been allocated to the Tribe under the provisions of ARRA. See Def.‘s Mot.App. at A40 (Letter from Robert Middleton, Director of the Office, to Myra Pearson, chairperson of Spirit Lake). The funds would be administered through Contract No. GTK00T109AR (“the ARRA contract“), see Def.‘s Mot.App. at A39 (Letter from Middleton to Pearson (June 1, 2009)), a 638 contract between the Office and the Tribe, see id. at A41 (ARRA Contract Agreement). The ARRA contract was awarded on June 8, 2009. Def.‘s Mot. App. at A80. The ARRA contract‘s purpose was to “provide Indian [e]mployment, [t]raining, and [r]elated [s]ervices in accordance with the terms, provisions[,] and conditions of this contract and funding agreement; and provisions of [ARRA].” Def.‘s Mot.App. at A43 (638 Act, Section 108 Model Agreement for the ARRA Contract).
A. Amendment 2 to the ARRA Contract
On August 5, 2009, the Office issued Amendment 2 to the ARRA contract. Def.‘s Mot. App. at A83 (Amendment 2), A110 (ARRA Contract Amended Funding Agreement). Amendment 2 identified the Office and Spirit Lake as the parties to the ARRA contract, id. at A83, and noted that the “Contractor, Recipient, Tribe (ARRA related)” was Spirit Lake, id. at A88 (ARRA Contract Amended Funding Agreement). Amendment 2 was signed by Ms. Lynn Forcia, an awarding official from the Office, and Ms. Myra Pearson, chairperson of Spirit Lake. Id. at A83 (Amendment 2). Amendment 2 allocated ARRA funds for a Solar Heat Panel Training and Installation Project and the Native Construction Careers Initiative (“NCCI“) Project, a commercial construction training program. Id. at A94 (ARRA Contract Amended Funding Agreement). Separate statements of work for the two projects were attached. See id. at A111-13 (Solar Heat Panel Training and Installation Project Statement of Work), A114-24 (NCCI Project Statement of Work); see also id. at A94 (noting that statements of work for the two projects were attached to the amended funding agreement statement of work). The statement of work for the NCCI aspect noted that the Council “has nine (9) proposed projects called the Native Construction Careers Initiative (NCCI) to work with tribes nationwide to provide hands-on commercial construction training. [Spirit Lake] is well positioned to assist [the Council] to conduct these activities, to ensure contract compliance, issue quarterly payments, to collect quarterly data reports[,] including program and financial[,] from [the Council,] and related tasks.... Therefore, [Spirit Lake] proposes to enter into a contract with [the Council] to
B. Interagency Agreement between the Office and FHWA
On September 16, 2009, the Office and the FHWA entered into an interagency agreement, Def.‘s Mot.App. at A126 (Office-FHWA Interagency Agreement), which allowed the Office to use $1.5 million of the funds allocated to FHWA by ARRA to “provide support to disadvantaged tribes and tribal members to increase their participation in the highway construction workforce,” id. at A127. The statement of work that accompanied the interagency agreement noted that the Office in the past had collaborated with the Council to “establish[] partnerships with prime contractors and develop[] matchmaking opportunities to mentor Indian firms and provide supportive services to increase the American Indian Highway Construction business quotes/bids on highway construction projects.” Id. at A130 (Office-FHWA Interagency Agreement Statement of Work). The statement of work also lists the Council as a “key partner,” id. at A136, A139, and notes that $500,000 of the $1.5 million in available funds would be allocated to the Council to “provide funding for the [NCCI] that will be conducting on-site apprenticeship training programs to at least 6 tribes,” id. at A143.
C. Amendment 6 to the ARRA Contract
On June 11, 2010, the Office issued Amendment 6 to Spirit Lake‘s ARRA contract. See Def.‘s Mot.App. at A150 (Amendment 6); see also id. at A148 (Letter from Middleton to Pearson (June 11, 2010)). Amendment 6 identified the Office and Spirit Lake as the parties to the ARRA contract, id. at A150, and noted that the “Contractor, Recipient, Tribe (ARRA related)” was Spirit Lake, id. at A155 (ARRA Contract Second Amended Funding Agreement). Amendment 6 was signed by Ms. Forcia of the Office, and Ms. Pearson of Spirit Lake. Id. at A150. The statement of work for Amendment 6 noted that the funds were to be used in part to support the “Department of Transportation-Federal Highway Administration‘s approved training projects,” for which a separate statement of work was attached. Id. at A161 (ARRA Contract Second Amended Funding Agreement Statement of Work). That statement of work, entitled “Council for Tribal Employment Rights (CTER) Statement of Work for FHWA Project” (“FHWA Project Statement of Work“), noted that the purpose of Amendment 6 was “a modification to the current ARRA contract between [Spirit Lake, Council,] and adding the National Indian Ironworkers training center that is an ARRA project under an interagency agreement that is between [FHWA] and [t]he Department of the Interior/Indian Affairs.” Id. at A187 (FHWA Project Statement of Work). The statement of work allocated $500,000 to the Council to “develop Indian preference certification programs for road construction activity” to six Indian tribes. Id. The statement of work asserted that Spirit Lake was “well positioned” to assist
The statement of work for the FHWA project also assigned reporting requirements to the Council. Def.‘s Mot. App. at A188-89. Spirit Lake‘s duties included “administer[ing] the [Office-FHWA] project to ensure that the goals of the project are being met” and transferring funds to the Council and the National Indian Ironworkers. Id. at A190. The statement of work for the FHWA project was signed by Ms. Forcia for the Office on June 11, 2010, by Ms. Pearson for Spirit Lake on June 28, 2010, and by Mr. Conrad Edwards, president of the Council, on June 21, 2010. Id. at A192-93. It appears to include handwritten changes made by Mr. Edwards on June 21, which were initialed and accepted by Ms. Forcia on July 6, 2010. See id. at A188, A190.
D. The Awarding Official‘s Authority
At the times Ms. Forcia, the government awarding official, signed Amendments 2 and 6, she was designated as a “Level I Awarding Official” for the Office. See Def.‘s Mot.App. at A1-2 (Forcia Certification). Such designations are supervised by the Bureau, see id. at A1, which also publishes the “Indian Self-Determination Awarding Official Certification System (AOCS) Handbook” to give context to, and details about, the designation, id. at A3-38 (AOCS Handbook). The handbook is available to the public online.5 The handbook defines “Awarding Official” to mean a contracting officer possessing the authority to issue self-determination contracts and grants under ISDA:
Id. at A8. The handbook further notes that a “Level I Awarding Official” has authority that “covers all self-determination non-construction contracts, and grants.” Id. at A11 (emphasis added). Ms. Forcia‘s authority, however, was encumbered with an additional limitation not expressly contemplated by the Bureau‘s handbook. According to a letter from the director of the Bureau approving Ms. Forcia as a Level I Awarding Official, Ms. Forcia was “conditionally approved ... as a Level I Awarding Official to award only Pub. L. 102-477 grants.” Id. at A1; see also id. at A2.“Awarding Official” means Contracting Officer and shall be any person in the self-determination career field, who has been certified under the Awarding Official Certification System as an Awarding Official, other than an Approving Official, who has the delegated authority to award, modify, and administer all self-determination contracts as defined in the
25 U.S.C.A. Section 450b(j) , including where applicable construction contracts as defined in25 U.S.C.A. Section 450b(m) , as amended, and shall make decisions and issue findings and determinations with respect thereto. The awarding official shall also have the authority to award, modify[,] and administer self-determination grants.
E. Alleged Breach
In September 2011, Mr. Edwards, president of the Council, sent a letter to the Assistant Secretary for Indian Affairs at the Department of the Interior, stating that he had provided a letter to the assistant secretary almost a year earlier, in October 2010, “describing how two employees of [the Office] were engaged in inappropriate behavior designed to block [the Council] from successfully implementing the NCCI program.” Def.‘s Mot.App. at A201 (Letter from Edwards to The Hon. Larry Echo Hawk, Assistant Secretary, Indian Affairs, Department of the Interior (Sept. 14, 2011)). Mr. Edwards stated that Office employees subsequently had sent by facsimile copies of his October 2010 letter to “every 477 job training director in the country to turn those programs against [the Council]. One of those recipients was the director of [Spirit Lake‘s] 477 program, who ... served as administrator of [the Council‘s] NCCI contract.... She has since refused to take any steps to
Four months later, on February 21, 2012, the Council submitted to Karen Atkinson, Director of the Office, a certified claim for $200,000 related to the government‘s alleged breach of contract with respect to Amendment 2 and the NCCI program. See Pl.‘s Resp. to Order of August 15, 2013, Attach. A. On March 13, 2012, the Council submitted to Ms. Atkinson a second certified claim for $300,000 related to an alleged breach of contract with respect to Amendment 6 and the FHWA project. Id., Attach. B. The Office did not respond to these claims. Def.‘s Mot. at 10. On May 23, 2012, the Council filed its complaint in this court alleging breach of contract and requesting $500,000 in damages. See Compl. at 1.
STANDARDS FOR DECISION
Jurisdiction
Subject matter jurisdiction must be established before a case can proceed on its merits. See Steel Co. v. Citizens for a Better Env‘t, 523 U.S. 83, 88-89 (1998). In considering a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) of the Rules of the Court of Federal Claims (“RCFC“), the court will ordinarily construe the allegations of the complaint favorably to the pleader. See Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 747 (Fed. Cir. 1988) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Air Prod. & Chems., Inc. v. Reichhold Chems., Inc., 755 F.2d 1559, 1562 n. 4 (Fed. Cir. 1985)). Nonetheless, the burden of establishing the court‘s jurisdiction rests with the party seeking to invoke it, McNutt v. General Motors Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936), and this burden must be satisfied by a preponderance of the evidence, Reynolds, 846 F.2d at 748.
Motion to Dismiss for Failure to State a Claim
A complaint must be dismissed under RCFC 12(b)(6) “when the facts asserted by the claimant do not entitle him to a legal remedy.” Lindsay v. United States, 295 F.3d 1252, 1257 (Fed. Cir. 2002). While “the allegations of the complaint should be construed favorably to the pleader,” Grayton v. United States, 92 Fed. Cl. 327, 331 (2010) (quoting Scheuer, 416 U.S. at 236), “[t]he court must also inquire whether the complaint meets the ‘plausibility standard’ ... i.e., whether it adequately states a claim and provides a ‘showing [of] any set of facts consistent with the allegations in the complaint,‘” id. at 331-32 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 560-63 (2007)). The “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. If the plaintiff has not alleged a set of facts constituting a plausible claim to relief, the complaint will be dismissed for failure to state a claim upon which relief can be granted. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 570).
Motions for Summary Judgment
A grant of summary judgment is warranted when the pleadings, affidavits, and evidentiary materials filed in a case reveal that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” RCFC 56(a). A material fact is one “that might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine dispute is one that “may reasonably be resolved in favor of either party.” Id. at 250.
The party moving for summary judgment has the burden of demonstrating the absence of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Accordingly, “the inferences to be drawn from the underlying facts ... must be viewed in the light most favorable to the party opposing the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986)
To establish “that a fact cannot be or is genuinely disputed,” a party must “cite[] to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations ... admissions, interrogatory answers, or other materials,” RCFC 56(c)(1)(A), or “show[] that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact,” RCFC 56(c)(1)(B). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial,‘” and summary judgment is appropriate. Matsushita, 475 U.S. at 587 (quoting First Nat‘l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289 (1968)).
ANALYSIS
I. Express Contract Claims
A. Tucker Act Jurisdiction
“Absent an unequivocal consent to suit, [this court] lacks authority to grant relief against the United States.” Travelers Cas. & Sur. Co. of Am. v. United States, 103 Fed. Cl. 101, 103 (2012) (citing United States v. Testan, 424 U.S. 392, 399 (1976)). Under the Tucker Act, this court has subject matter jurisdiction over disputes arising under the recodified Contract Disputes Act. See
The government asserts that the Council‘s claims should be dismissed for lack of subject matter jurisdiction because no valid contracts were entered between the Council and the Office. See Def.‘s Mot. at 16, 19. However, the Federal Circuit has held that “jurisdiction under [the Tucker Act] requires no more than a non-frivolous allegation of a
Moreover, for the purpose of the court‘s jurisdictional inquiry, the Council also qualifies as a “contractor” under the CDA. Additionally, the Council‘s submissions of its written, certified claims to the director of the Office satisfy the requirements of the CDA. See, e.g., Tri-Ad Constructors v. United States, 21 Cl. Ct. 789, 791-92 (1990) (deeming that a claim was submitted to the contracting officer within the meaning of the CDA even though the claim was embodied in letter addressed to another official in the contracting officer‘s office); American Pac. Roofing Co. v. United States, 21 Cl. Ct. 265, 267-68 (1990) (same); see also J & E Salvage Co. v. United States, 37 Fed. Cl. 256, 262 (1997) (noting that in Tri-Ad and American Pacific, jurisdiction was found because the submissions were made to the appropriate procurement agency and logically found their way to the pertinent contracting officer). Accordingly, this case is properly before the court, and the Council‘s complaint will not be dismissed for lack of subject matter jurisdiction.
B. Authority to Enter the Contracts Between the Council and the Government
The government next urges this court to reject the Council‘s claims regarding the existence of contracts between Council and the government because Ms. Forcia—the awarding official who signed the agreements—lacked the requisite authority to bind the United States in contract. See Def.‘s Mot. at 20.
1. A non-published limitation on the contracting officer‘s authority.
To establish an express contract with the United States, a plaintiff “must show a mutual intent to contract[,] including an offer, an acceptance, and consideration.” Trauma Serv. Grp. v. United States, 104 F.3d 1321, 1325 (Fed. Cir. 1997). A “contract with the United States also requires that the [g]overnment representative who entered or ratified the agreement had actual authority to bind [the government].” Id. “[A]ny party entering into an agreement with the [g]overnment accepts the risk of correctly ascertaining the authority of the agents who purport to act for the [g]overnment.” Monarch Assurance P.L.C. v. United States, 244 F.3d 1356, 1360 (Fed. Cir. 2001); see also Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384 (1947) (“[A]nyone entering into an arrangement with the [g]overnment takes the risk of having accurately ascertained that he who purports to act for the [g]overnment stays within the bounds of his authority.“). The Court in Federal Crop Insurance cautioned that “[t]he scope of this authority may be explicitly defined by Congress or be limited by delegated legislation, properly exercised through the rule-making power. And this is so even though ... the agent himself may have been unaware of the limitations upon his authority.” 332 U.S. at 384.
The Federal Circuit‘s application of the rule espoused in Federal Crop Insurance has continued to place the burden of knowing the scope of a contracting officer‘s authority on the contractor.8 In one instance, a question
Id. at 1433.It appears evident that, if Harbert/Lummus had examined the [contracting officer‘s] delegation of authority, it could not have reasonably believed it had entered into a binding contract with the government in the absence of the required written approval by the [contracting officer]. Because there is no evidence of such prior, written approval by the [contracting officer] of the unilateral contract, we hold that the [contracting officer] lacked the authority to enter into the oral contract and it is therefore not binding upon the government.
Nonetheless, the Federal Circuit has acknowledged that the government must provide evidence that an act is outside a contracting officer‘s authority if such an act is prima facie within the contractor‘s area of assignment:
LDG Timber Enters., Inc. v. Glickman, 114 F.3d 1140, 1143 (Fed. Cir. 1997). The Federal Circuit in LDG Timber observed in that case that “[n]o statute, regulation, or rule was cited as violated by the contract extensions and representations of [the contracting officer], and indeed nothing in these routine arrangements reasonably suggested lack of authority.” Id. Consequently, denial of plaintiff‘s claim could not be sustained on the ground that the contracting officer exceeded his authority. Id.Attorney argument is insufficient to overcome the presumed regularity of an act of contract administration that is prima facie within the contracting officer‘s assignment. In contrast, in Federal Crop Insurance a publicly available regulation expressly prohibited the act of the government agent on which the private contractor had relied.... When the actions of the contracting officer are within the authority that pertains to the subject matter of the contract, and no statute or regulation limits that authority, as in Federal Crop Insurance, the agency bears the burden of coming forward with evidence of lack of authority for the actions of the contracting officer. This burden is not met simply by attorney allegation in a litigation context.
Taken together, these cases establish a general rule that places the burden of knowledge of the scope of a contracting officer‘s authority on a contractor, so long as the government has provided evidence of the scope of the authority of the official in question. Here, Ms. Forcia, the government representative who signed Amendments 2 and 6, bore the title of “Level I Awarding Official.” See Def.‘s Mot.App. at A1. The Bureau‘s publicly available handbook stated that officials holding that designation had the authority to enter into “self-determination nonconstruction contracts, and grants.” Id. at A11.
This constraint must be judged against the fact that 477 authority relates to a program that does not independently provide for grants or other funding. See, e.g.,
The Parks Declaration is of some aid to the court in deciphering what the Department of the Interior means when referring to 477 grants. Mr. Parks confirms that the 477 program allows tribes “to combine [f]ederal grant funds related to employment and training activities into a single plan with a single budget and a single reporting system.... No separate funding or contracting authority is associated with the 477 demonstration project.” Parks Decl. ¶ 3 (emphasis added). According to Mr. Parks, “[t]raditionally, all 477 program funds are distributed through [ISDA] agreements.” Id. He further explains that Ms. Forcia, who was directly involved with the 477 program, “did not need general contracting authority or general self-determination agreement authority because the 477 demonstration project does not encompass these areas. Therefore, her authority was specifically limited to grant agreements under the 477 demonstration project whereby the funding would be distributed through an [ISDA] agreement.” Id. ¶ 4. In Mr. Parks‘s view, this meant that “she could only award funds within the 477 demonstration project. For instance, law enforcement services are proper to include in a typical [ISDA] agreement, but are not encompassed by the 477 demonstration project and, therefore, Ms. Forcia had no delegated authority to award funds for a law enforcement program.” Id. ¶ 5. In short, Mr. Parks explained that the 477 grant limitation on Ms. Forcia‘s authority restricted the subject matter of the ISDA agreements to which she could bind the government.
In addition to limiting the subject matter of the ISDA agreements, the 477 grant restriction ostensibly limits the parties with whom Ms. Forcia had the authority to contract. While ISDA enables the government to enter into self-determination contracts with tribes and tribal organizations, see
In the instant case, Amendments 2 and 6 were modifications to the ARRA contract, entered pursuant to ISDA. Moreover, the projects contemplated by Amendments 2 and 6 were workplace training programs, which are encompassed within the authorization of the 477 Act. See
2. A statutory prerequisite to contract entry.
A further question arises respecting compliance with a restriction in ISDA, namely, that all grants are to be made to tribes or to “tribal organization[s].”
As discussed supra p. 237, ISDA gives the Secretary of the Interior the authority to “enter into a self-determination contract or contracts with a tribal organization to plan, conduct, and administer programs or portions thereof” for the benefit of Indians.
the recognized governing body of any Indian tribe; any legally established organization of Indians which is controlled, sanctioned, or chartered by such governing body or which is democratically elected by the adult members of the Indian community to be served by such organization and which includes the maximum participation of Indians in all phases of its activities: Provided, [t]hat in any case where a contract is let or grant made to an organization to perform services benefiting more than one Indian tribe, the approval of each such Indian tribe shall be a prerequisite to the letting or making of such contract or grant.
In this instance, the government and Spirit Lake entered into the ARRA contract pursuant to ISDA. See Def.‘s Mot.App. at A41 (ARRA Contract), A43 (ARRA Contract Attached Model Agreement). Amendments 2 and 6 modified that ARRA contract. Amendment 2 included a statement of work for the NCCI project that described the types of construction training the Council would provide to eight Indian tribes and one Alaska Native Village, and it identified by name the eight Indian tribes and one Alaska Native Village who would be involved. See id. at A114-19. Amendment 6 also contemplated that the Council would provide training assistance to multiple tribes. Id. at A187 (“[the Council] will provide training that will be conducted in groups.... [T]he training should be associated with a federal highway/roads project, for at least 6 tribal projects at the cost of $50,000 per tribal project.“); see also id. at A188 (“The contract will involve six [t]ribal projects identified by [the Council].“). Amendment 6 required the Council to identify the tribes to which it would provide services and to provide the government with tribal resolutions agreeing to the projects by July 31, 2010, id. at A188,13 a date occurring about a month after Spirit Lake, the Council, and Ms. Forcia had signed and entered into Amendment 6, see id. at A192-93. No written approval from any Indian tribe other than Spirit Lake appears in the record, and neither party asserts that such approvals existed prior to the execution of Amendments 2 and 6.
Both parties acknowledge that it had been customary for officials at the Office and the Bureau to enter into certain types of contracts designed to benefit multiple tribes without receiving approval from each tribe prior to the making of such a contract, as required by
In all events, initially the court must address “the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984). Only “if the statute is silent or ambiguous with respect to the specific issue” does the court consider and afford deference to the agency‘s interpretation of a statute. Id. at 843. Because
In short, the Council did not come within the definition of a ” tribal organization” specified by ISDA to be eligible to form a contract in the circumstances at hand, and Amendments 2 and 6 contravene ISDA as a result.
3. Consequences of the contracting officer‘s absence of authority.
The court must next consider whether violation of ISDA renders Amendments 2 and 6 unenforceable. “Invalidation of [a] contract is not a necessary consequence when a statute or regulation has been contravened, but must be considered in light of the statutory or regulatory purpose, with recognition of the strong policy of supporting the integrity of contracts made by and with the United States.” American Tel. & Tel. Co. v. United States, 177 F.3d 1368, 1374 (Fed. Cir. 1999) (en banc) (“AT & T“). In the post-award bid protest context, the Court of Claims instructed that “where a problem of the validity of the invitation or the responsiveness of the accepted bid arises after the award, the court should ordinarily impose the binding stamp of nullity only when the illegality is plain.” John Reiner & Co. v. Unit-
ISDA states that its statutory provisions are designed to enable the “establishment of a meaningful Indian self-determination policy which will permit an orderly transition from the [f]ederal domination of programs for, and services to, Indians to effective and meaningful participation by the Indian people in the planning, conduct, and administration of those programs and services.”
II. Third-Party Beneficiary Claims
As an alternative theory of recovery, the Council has asserted that it was a third-party beneficiary to Amendments 2 and 6 of the ARRA contract between Spirit Lake and the Office, and that it was also a third-party beneficiary to the funding agreement between FHWA and the Office. Compl. at 1. The government responds that the third-party beneficiary claim relating to the agreement between the FHWA and the Office should be dismissed because an interagency agreement is not enforceable in this court. Def.‘s Mot. at 36-38. It also argues that the claims regarding the ARRA contract should be dismissed because Council cannot be a third-party beneficiary to agreements that were invalid because Ms. Forcia did not have the authority to bind the government to them. Def.‘s Reply in Support of its Mot. to Dismiss or, in the Alternative, Mot. for Summary Judgment (“Def.‘s Reply“) at 7-8.
A. The Agreement Between FHWA and the Office
The inter-agency agreement between FHWA and the Office in 2009 allowed the Office to use $1.5 million of the funds allocat-
The government argues that “interagency agreements are not enforceable contracts,” Def.‘s Mot. at 36 (heading, capitals omitted), and thus that the Council has no rights as a purported third-party beneficiary to the FHWA-Office agreement to allocate ARRA funds. Id. at 36-37. A hallmark of the third-party beneficiary rule “is that the party standing outside of privity by contractual obligation stands in the shoes of a party within privity.” First Hartford Corp. Pension Plan & Trust v. United States, 194 F.3d 1279, 1289 (Fed. Cir. 1999). This argument by the government thus follows the “long-recognized general principle that no person may sue himself.” United States v. Interstate Commerce Comm‘n, 337 U.S. 426, 430 (1949). The Council responds that the agreement between the Office and FHWA would be enforceable because it obligates funds, and a failure to transmit the funds would provoke a “typical breach of contract suit” like one litigated in court. Pl.‘s Cross-Mot. at 22. To support its contention, the Council points to an observation by this court in a contractual dispute involving the Tennessee Valley Authority and the United States that “[t]his is not a fight over policy. It is a dispute over money.... Who will absorb the cost of DOE‘s failure to perform the contract, the Treasury, or TVA‘s rate payers?” See Tennessee Valley Auth. v. United States, 51 Fed. Cl. 284 (2001) at 21 (quoting Tennessee Valley Auth. v. United States, 51 Fed. Cl. 284, 286 (2001)). The Council‘s argument is unavailing. Here, FHWA and the Office do not possess the requisite independent identities necessary for a justiciable interagency case or controversy. Unlike the Tennessee Valley Authority, FHWA and the Office do not possess corporate charters; nor do they have the power to sue and be sued in their own names.18 Furthermore, one of the recent TVA cases involved a contract between TVA and the Department of Energy which mirrored contracts between private utilities and the Department. See 51 Fed. Cl. at 285-86. By contrast, the agreement between FHWA and the Office has no counterpart in any contract involving a private party. Rather, that agreement memorialized FHWA‘s commitment to transfer a portion of its allocation of ARRA funds to the Office so that the money could be more easily used to fulfill Congress‘s intended purpose—i.e., indirectly to invest in transportation projects at Indian reservations. See Def.‘s Mot. App. at A126-27; American Recovery and Reinvestment Act of 2009, Pub. L. 111-5, 123 Stat. 115, at tit. XII (allocating $550 million to the FHWA “for investments in transportation at Indian reservations and [f]ederal lands“). Accordingly, a suit between FHWA and the Office concerning the agreement would not be justiciable.
Because FHWA could not bring suit against the Office in this court, the Council cannot stand in the shoes of FHWA and do so. As such, the Council‘s third-party benefi-
B. Amendments 2 and 6 to the ARRA Contract
Amendments 2 and 6 to the ARRA Contract purport to be contracts in their own right, with the Council as the principal performing party. If the Council is not party to an express contract with the Office and Spirit Lake, then it argues that it is the designated third-party beneficiary of those contracts. Pl.‘s Cross-Mot. at 6, 17-21.
The CDA states that a “contractor” pursues a claim by appealing to an agency board,
The Federal Circuit has nonetheless indicated that this court may possess jurisdiction over third-party beneficiary claims through Paragraph (a)(1) of the Tucker Act,
As discussed supra pp. 245-48, however, Amendments 2 and 6 violated ISDA and are consequently unenforceable. Again, a tenet of third-party beneficiary claims “is that the party standing outside of privity by contractual obligation stands in the shoes of a party within privity.” First Hartford Corp. Pension Plan & Trust, 194 F.3d at 1289. Because this court has found that Amendments 2 and 6 would be unenforceable by either the government or Spirit Lake, the Council cannot attempt to stand in place of Spirit Lake and successfully enforce the contract.20 As such, Council‘s third-party beneficiary claims premised upon Amendments 2 and 6 of the ARRA contract must be dismissed.
III. Recovery in Quantum Meruit
In the alternative, Council seeks to recover in quantum meruit $110,000 “for the provision of NCCI construction worker training to the Shoshone-Paiute Tribe” under the terms set forth by Amendment 2. See Compl. ¶ 105; see also Def.‘s Mot. at A115-16 (Amendment 2 Statement of Work). At common law, quantum meruit provided for “quasi-contractual” recovery for the value of services rendered. Fluor Enters. Inc., 64 Fed. Cl. at 495 n. 31. Recovery in quantum meruit is generally based upon contracts implied-in-law, over which this court does not possess jurisdiction, but an exception arises in situations “in which the plaintiff provided goods or services to the government pursuant to an express contract, but the government refused to pay for them because of defects in the contract that rendered it invalid or unenforceable.” Perri v. United States, 340 F.3d 1337, 1344 (Fed. Cir. 2003). In such
For an implied-in-fact contract to exist, “[a] plaintiff must show: (1) mutuality of intent to contract, (2) consideration, (3) unambiguous offer and acceptance, and, (4) if the United States is a party to the contract, plaintiff must also show that the party who entered the contract on behalf of the United States had actual authority to bind the government.” Bussie v. United States, 96 Fed. Cl. 89, 98 (2011) (citing Bank of Guam v. United States, 578 F.3d 1318, 1326 (Fed. Cir. 2009)), aff‘d, 443 F. App‘x 542 (Fed. Cir. 2011). Because Ms. Forcia did not possess the authority to bind the government to Amendments 2 or 6, see supra pp. 245, 248, the Council cannot demonstrate the existence of an implied-in-fact contract on which to base quantum meruit recovery. Its claim for such recovery must accordingly be denied.
No costs.
It is so ORDERED.
Vladimir KOGAN, MD, Plaintiff, v. The UNITED STATES of America, Defendant.
No. 11-148 C
United States Court of Federal Claims.
Filed: August 27, 2013
CONCLUSION
For the reasons stated, the government‘s motion to dismiss or, in the alternative, motion for summary judgment is GRANTED. The plaintiff‘s motion for partial summary judgment is DENIED. The complaint shall be dismissed pursuant to RCFC 12(b)(6) for failure to state a claim upon which relief can be granted.
The clerk shall enter judgment for the defendant.
Notes
[t]he Court of Federal Claims shall have jurisdiction to render judgment upon any claim by or against, or dispute with, a contractor arising under section 7104(b)(1) of title 41, including a dispute concerning termination of a contract, rights in tangible or intangible property, compliance with cost accounting standards, and other nonmonetary disputes on which a decision of the contracting officer has been issued under section 6 of that Act[,
41 U.S.C. § 7103 ].
RCFC 19(b); see Klamath Claims Comm. v. United States, 541 F. App‘x 974, 977-78 (Fed. Cir. 2013) (applying RCFC 19(b)). In this case, Spirit Lake will not be prejudiced by a judgment entered in its absence. “Under the doctrine of claim preclusion, a final judgment forecloses ‘successive litigation of the very same claim, whether or not relitigation of the claim raises the same issues as the earlier suit.’ Issue preclusion, in contrast, bars ‘successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment,’ even if the issue recurs in the context of a different claim.” Taylor v. Sturgell, 553 U.S. 880, 892 (2008) (quoting New Hampshire v. Maine, 532 U.S. 742, 748-49 (2001)) (internal citations omitted). In general, a person who was not a party to a suit has not had a “full and fair opportunity to litigate” the claims and issues settled in that suit, and thus there is a “general rule that ‘one is not bound by a judgment in personam in a litigation in which he is not designated as a party or to which he has not been made a party by service of process.‘” Id. (quoting Hansberry v. Lee, 311 U.S. 32, 40 (1940)). The exceptions to this rule, outlined in more detail in Taylor, 553 U.S. at 893-95, are inapplicable to Spirit Lake. Accordingly, res judicata would not bar Spirit Lake from later action with regard to its contractual interests, and it will not be prejudiced by a judgment entered in its absence. Nor will Council or the government be prejudiced by a judgment entered in Spirit Lake‘s absence.(1) the extent to which a judgment rendered in the person‘s absence might prejudice that person or the existing parties; (2) the extent to which any prejudice could be lessened or avoided by: (A) protective provisions in the judgment; (B) shaping the relief; or (C) other measures; (3) whether a judgment rendered in the person‘s absence would be adequate; and (4) whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder.