36 Fed. Cl. 122 | Fed. Cl. | 1996
OPINION
I. INTRODUCTION
Cupey Bajo Nursing Home, Inc., d/b/a Hospital Nuestra Señora de Los Angeles (Cupey Bajo or plaintiff), brings a government contract action against the United States (the government or defendant) pursuant to the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 601-613 (1988 & Supp. V 1993). In its complaint, as amended,
In response to Cupey Bajo’s claim, defendant filed an answer, affirmative defenses, and a counterclaim on May 18,1993, seeking recovery of $239,730, which it asserts the government overpaid Cupey Bajo under the contract during the calendar year 1983. In short, therefore, the dispute before this court is whether, based on the terms of the contract and the applicable regulatory provisions, plaintiff was underpaid or overpaid under its cost reimbursement type contract with the VA during 1983. This court held a five-day trial to resolve the parties’ dispute, commencing May 17, 1995 and concluding May 23, 1995, in San Juan, Puerto Rico.
II. FACTS
A. Background
1. The Contract
On April 1,1982, defendant awarded a cost reimbursement type contract, Contract No. V455P-1531, to Cupey Bajo for the performance of hospital services, including psychiatric care, to veteran patients at its inpatient facility in Rio Pedras, Puerto Rico (the contract). The life of the contract at issue was initially scheduled for a one-year period commencing on April 1,1982.
The payment terms of the contract directed the government to reimburse plaintiff for costs incurred in providing inpatient hospital services to YA beneficiaries based upon an “all-inclusive inpatient day cost basis”, or “per diem rate.” Jt.Ex. 1, 112; Pl.Ex. 1, II 4(a). Cupey Bajo would receive such “per diem” reimbursement each day a veteran received inpatient care at the hospital, otherwise referred to as a ‘YA inpatient service day.” Pl.Ex. 1,114(b).
For the payment of contract performance costs invoiced during 1983, the contract established a provisional, or “interim”, per diem rate of $65.93.
Approximately one year after the contract’s expiration on October 31,1983, Cupey Bajo, on October 23, 1984, reported the foregoing figures on Form JHF-001, captioned “Hospital Statement of Reimbursable Cost.”
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This “final” per diem rate of $72.95, calculated by Cupey Bajo, for reimbursable costs during 1983 exceeded the contract estimate, or “provisional,” per diem rate of $65.93 by $7.02. In other words, based on plaintiffs final per diem rate calculation, defendant allegedly underpaid plaintiff $7.02 for each of the 24,203 ‘YA inpatient service days” allegedly serviced during 1983. Accordingly, Cu-pey Bajo multiplied $7.02 by the 24,203 ‘YA inpatient service days” as follows:
Def.Ex. 2 at 072; Pl.Ex. 11. Therefore, Cu-pey Bajo averred that the VA owed it $169,-905 in costs not invoiced by Cupey Bajo or paid by the government for services performed in 1983.
After Cupey Bajo provided this statement of proposed actual costs dated October 23,1984, to the VA, neither the VA nor Cupey Bajo acted on this matter until the spring of 1987. At that time, Mr. Oyóla sent a letter to the CO on June 8, 1987, asserting that Cupey Bajo was due additional compensation of $169,905 under the contract based on the alleged difference between (i) the contract’s provisional interim rate paid to the hospital; and (ii) the alleged final per diem cost rate incurred by the hospital.3 ****
3. The Audit
In July 1987, the VA attempted to verify Cupey Bajo’s claim and requested the DCAA to perform an audit of plaintiffs 1983 records as anticipated by the terms of the contract. In August and September, 1987, Ms. Maria Melendez Davey, a senior auditor for DCAA at the time, audited plaintiffs costs allegedly incurred during contract performance in 1983. The audit report states that it was “performed in accordance with generally accepted Government auditing standards ... [and] the cost principles contained in Subpart 1-15.2 of the [FPR] and Medicare Manual HIM-15.” Def.Ex. 2 at 1. The results of her audit were reviewed and approved by her supervisor, Mr. Ted Traylor. The DCAA audit results reported a number of alleged deficiencies in Cupey Bajo’s cost calculations. Plaintiff now challenges several of these alleged deficiencies before this court.
B. The Parties’ Dispute
Essentially, the parties’ dispute requires this court to determine the final per diem rate reflecting the total allowable inpatient costs incurred by plaintiff in 1983 under its contract with the VA Only then may this court find whether plaintiff was underpaid or overpaid by defendant for inpatient care at the hospital under the terms of their cost reimbursement type contract and, if either, by what amount. The court recognizes, however, that during the trial and in their post-trial briefs, the parties unequivocally agreed on several distinct factors relevant to the determination of plaintiff’s 1983 final per diem rate. These factors are as follows.
First, plaintiff had initially disputed the DCAA’s recommendation that the total number of “inpatient service days” provided by Cupey Bajo under the contract during 1983 was 47,330. In its post-trial briefing, however, plaintiff accepts defendant’s assertion that the total number of inpatient service days provided by Cupey Bajo in 1983 is 47,330, rather than 43,705. See Plaintiffs Post Trial Brief filed August 24, 1995, at 15.
Finally, plaintiff has never contended that the government wrongfully disallowed $44,-176 of the total 1983 costs of $3,188,443 plaintiff claimed under the contract. Plaintiff concedes that the costs amounting to $44,-176.00 — constituting (i) donations, $800; (ii) bad debt expense, $10,000; and (in) penalties and fines, $33,376 — are expressly unallowa-ble under the terms of the FPR governing the contract.
In sum, therefore, plaintiff and defendant agree on three main factors used to determine plaintiff’s final per diem rate for 1983 under the contract: (1) the total number of “inpatient service days” is ¡7,330; (2) the total number of “VA inpatient service days” is 23,936; and (3) the total 1983 inpatient services costs claimed ($3,188,443) must be initially decreased at least by expressly unal-lowable expenses of $44,176, resulting in total costs claimed of $3,10.,267, a portion of which is at issue at bar.
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1. Plaintiffs Claim
Notwithstanding the foregoing undisputed facts, however, plaintiff challenges defendant’s disallowance of certain 1983 costs claimed by plaintiff. Specifically, the DCAA audit report of plaintiffs 1983 costs questioned $507,040 of the total $3,188,443 costs Cupey Bajo claimed. Defendant argues that, as part of the challenged $507,040 sum, outpatient expenses in the amount of $40,202 are expressly unallowable under paragraph 4(a) of the contract. Conversely, Cupey Bajo argues that it did not include any outpatient costs in its total inpatient cost pool and, therefore, the government improperly disallowed $40,202 of its costs.
In addition, plaintiff argues that specific costs it incurred in performing the contract should not have been questioned by the DCAA and disallowed by defendant. These costs now before this court consist of six (6) items as follows:
See Pl.Exs. 4, 5; Def.Ex. 2 at 085-087; Tr. 174-75 (Roche). Thus, plaintiff challenges the VA’s disallowance of $461,864 in costs claimed for performing the contract during 1983.
2. Defendant’s Counterclaim
The government contends that the VA determined an “actual per diam rate” of $56.65 for 1983 under the contract by (i) employing the auditor’s figures for the number of total “inpatient service days” of 47,330; (ii) using the auditor’s figure for ‘VA inpatient service days” of 23,936, and (iii) decreasing Cupey Bajo’s cost pool by $507,040.
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As a result of the foregoing, the VA informed Cupey Bajo in writing that the government had determined upon its review of the DCAA audit that Cupey Bajo had received a total overpayment of $239,730 ($222,126 + $17,604) under the contract and, accordingly, it did not owe Cupey Bajo any additional sums, including the $169,905 averred by plaintiff, under the contract.
Cupey Bajo disputed this finding to no avail during a meeting with the CO on August 10,1988, and in a letter to the CO dated August 31,1988. On December 21,1988, the CO issued a final decision rejecting Cupey Bajo’s claim for $169,905 under the contract and, on February 7,1989, issued a Collection Voucher, formally requesting reimbursement of the government’s $239,730 alleged overpayment under the contract. Cupey Bajo filed its original complaint on December 20, 1989, and its amended complaint on April 23, 1993.
III. DISCUSSION
A. The Contract
The final decisions of a contracting officer regarding a government contractor’s cost claims are not binding on this court. Assurance Co. v. United States, 813 F.2d 1202, 1206 (Fed.Cir.1987); Lathan Co., Inc. v. United States, 20 Cl.Ct. 122, 125 (1990) (citing The Contract Disputes Act of 1978, 41 U.S.C. §§ 605(a), 609(a)(1)). Therefore, although this court reviews the facts and law decided by a contracting officer similar to other evidence before it, nonetheless, we are constrained to decide the facts and law de novo. Seaboard Lumber Co. v. United States, 903 F.2d 1560, 1562 (Fed.Cir.1990), cert. denied, 499 U.S. 919, 111 S.Ct. 1308, 113 L.Ed.2d 243 (1991). Accordingly, this court must look to the contract entered into between plaintiff and the VA, as the procuring authority, as well as the regulations governing the parties’ relationship so as to determine whether the alleged contract costs are allowable. Of course, it is well established that contract interpretation is a question of law. Fortec Constructors v. United States, 760 F.2d 1288, 1291 (Fed.Cir.1985). Also, “the Federal Procurement Regulations [FPR] have the force of law,” American Gen. Leasing, Inc. v. United States, 587 F.2d 54, 57, 218 Ct.Cl. 367, 372 (1978), of which the contractor is charged with constructive knowledge. General Eng’g & Mach. Works v. O’Keefe, 991 F.2d 775, 780 (Fed.Cir.1993) (“Federal regulations which are based upon a grant of statutory authority ‘have the force and effect of law, and, if they are applicable, they must be deemed terms of the contract even if not specifically set out therein, knowledge of which is charged to the contractor.’ ”) (quoting De Matteo Const. Co. v. United States, 600 F.2d 1384, 1391, 220 Ct.Cl. 579, 591 (1979)).
Here, as an initial matter, the subject contract explicitly incorporates the FPR, and provides that—
Pl.Ex. 1 at 1, 114(a). Moreover, the contract states that “[e]xcept for [FPR § 1-15.207-17] nothing herein is understood to make allowable any of the costs which are otherwise not allowable under the provisions of [FPR, § 1-15, Part 2].” Id. at 2,114(a).
Turning to the FPR provisions incorporated by reference into the contract, § 1-15.201-2 describes the “Factors affecting al-lowability of costs.” This section provides, in part:
Factors to be considered in determining the allowability of individual items of cost include (a) reasonableness, (b) allocability, (c) standards promulgated by the Cost Accounting Standards Board, if applicable, otherwise, generally accepted accounting principles and practices appropriate to the particular circumstances, and (d) any limitations or exclusions set forth in this Sub-part 1-15.2 or otherwise included in the contract as to the types or amounts of cost items____
41 C.F.R. § 1-15.201-2 (1982).
With these stated guidelines in mind, this court reviews the foregoing costs claimed by plaintiff seriatim to determine their allowa-bility under the contract.
1. The Specific Cost Items Discussed
As mentioned above, Cupey Bajo challenges the VA’s disallowance of six (6) particular costs it allegedly incurred pursuant to its contract performance: (i) hospital rental expense ($97,800); (n) legal and audit expenses ($15,000); (iii) management fees ($234,700); (iv) representation expenses ($10,857); (v) interest expenses ($38,354); and (vi) capital improvement expenses ($39,-300). Aggregated, these questioned inpatient costs are $436,011, supra.
i. Hospital Rental Expense
Plaintiff seeks the allowance of $97,-800 in accrued rental expense it allegedly incurred during its occupation and use of the hospital property during the first six months of the 1983 calendar year. Further, plaintiff argues that it is also entitled to the allowance of additional rental costs for the approximate five-month period of July 1983 through November 22, 1983 (pro rated), at a rate of approximately $16,300 per month, or a sum of $76,989. This additional rental expense allegedly increases plaintiffs total 1983 costs claimed under the contract from $3,144,267 to $3,221,256. As a result, plaintiffs most recent calculation of its alleged total underpayment under the contract is as follows:
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As mentioned previously, plaintiff originally filed its complaint in this court on December 20,1989, and subsequently filed an amended complaint on April 23,1993. Plaintiff did not express its intention to claim rental expense for the months of July through November 22, 1983, however, except briefly during cross-examination of defendant’s expert witness, Ms. Davey. Tr. 674-75, 681-83; Transcript dated June 12, 1995, at 23, 27 (closing argument); Plaintiffs Post Trial Submissions filed August 24,1995, at 16 IT 71, and October 12, 1995, at 6. Although this court freely grants a party leave to amend its pleadings “when justice so requires” as instructed by RCFC 15, this court has broad discretion to deny a motion to amend when it is unduly delayed. First Interstate Bank of Billings v. United States, 61 F.3d 876, 881-82 (Fed.Cir.1995); TeMoak Bands of Western Shoshone Indians of Nevada v. United States, 948 F.2d 1258, 1260 (Fed.Cir.1991) (stating that “[n]otwithstanding the view that Fed.R.Civ.P. 15(a) is to be construed liberally, courts have not hesitated to deny motions to amend that have been filed after significant delay.”). Thus, the Federal Circuit has adopted the rule that a party seeking to amend its complaint after significant delay bears the burden of justifying the delay. Te-Moak Bands, 948 F.2d at 1263.
Here, however, plaintiff has proffered absolutely no excuse for its approximate six-year delay in claiming rental expense for the months of July 1983 through November 22, 1983. Indeed, by merely addressing the issue on cross-examination of defendant’s witness, plaintiff did not actually argue this claim until closing argument on June 12, 1995. Not surprisingly, defendant opposes plaintiffs belated motion to amend its pleadings. Given that the government apparently played no role in plaintiffs extreme delay in bringing forth its claim for additional rental expense, this court cannot view plaintiffs utter failure to justify its significant six-year delay as excusable. Accordingly, this court denies plaintiffs motion to amend its pleadings to claim additional rental expense for the months of July 1983 through November 22,1983.
In addition, defendant’s expert witness, Mr. Ted Traylor, opined that contractor compliance with the cost reasonableness requirement under the FPR requires that the “contractor has a responsibility to establish whether there is, in fact, a legal obligation to make [the] rental payment before they bill the government for [the] rental payment.” Tr. 843-44; see also Tr. 841, 845, 847. That is to say, based on generally accepted accounting principles, Mr. Traylor reasoned that if there is no liability, “[t]hen there is no incurred expense,” and accordingly, there is no justification for booking an accrual. Tr. 833-34. Here, however, defendant asserts that Cupey Bajo did not have a liability to pay rental expense in 1983 for its use and occupancy of the hospital premises, because allegedly there was no form of agreement, express or implied, obligating plaintiff to pay rent to the owner of the hospital property in 1983. Notwithstanding this fact, defendant avers that if this court finds that the parties established an implied-in-fact lease agreement, then the government has a right to set
Although the parties’ contract does not expressly refer to the allowability of rental expense for the hospital premises, the contract terms incorporate the FPR. In this connection, the FPR allows the reimbursement of rental costs incurred in “short term leasing” real property under certain, specified conditions.
1. A contract granting occupation or use of property during a certain period in exchange for a specified rent. 2. The term or duration of a lease. 3. Property occupied or used under the terms of a lease.
WEBSTER’S II NEW RIVERSIDE UNIVERSITY DICTIONARY 683 (1984). Therefore, to determine whether plaintiff properly claims leasing costs for which the government is obligated to allow plaintiff as an appropriate cost pursuant to the parties’ contract and the FPR, plaintiff must first establish that a lease in fact existed between plaintiff and HUD.
Prior to 1982, respecting said property, Cupey Bajo had a mortgage on the hospital property it operated under its contract with the VA. It failed to make mortgage payments on the property, however, for six or seven years prior to 1982. As a result of the foregoing, in September of1982, the holder of Cupey Bajo’s mortgage, Banco Popular, foreclosed against the mortgage. Foreclosure proceedings concluded September 22, 1982. Consequently, on October 1, 1982, the guarantor of plaintiffs mortgage, the United States Department of Housing and Urban Development (HUD), acquired legal title to all of the hospital’s real and personal property.
Accordingly, during the period October 1, 1982 through November 22, 1983, HUD owned the hospital property, while Cupey Bajo merely managed it pursuant to its contract with the VA. Although HUD knew of, and acquiesced in, Cupey Bajo’s use, possession, and occupancy of the hospital during the period of January 1, 1983 through November 22, 1983, both parties agree that at no time did HUD and Cupey Bajo execute an oral or 'written lease agreement respecting use or occupancy of the hospital. Therefore, lacking an express lease agreement, plaintiff now contends that Cupey Bajo and HUD established an implied-in-fact lease agreement through their negotiations and correspondence.
To prove the existence of an implied-in-fact agreement, plaintiff must, of course, show an agreement “ ‘founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding.’ ” Hercules Inc. v. United States, — U.S. —, —, 116 S.Ct. 981, 986, 134 L.Ed.2d 47 (1996) (quoting Baltimore & Ohio R. Co. v. United States, 261 U.S. 592, 597, 43 S.Ct. 425, 426-27, 67 L.Ed. 816 (1923)).
In a languid attempt to prove that an implied-in-fact lease agreement existed between the parties, plaintiff contends that when HUD sold the hospital property on November 23, 1983, HUD recouped funds in excess of the debt value of the mortgage. Specifically, in a letter to the VA dated December 21,1988, and before this court, plaintiff argues:
Pl.Ex. 3 at 5; Pl.Ex. 5 at 3; see Tr. 122. In other words, plaintiff avers that HUD received over $400,000 in excess funds over Cupey Bajo’s obligation for the hospital mortgage when HUD sold the property. As a result, although Cupey Bajo admittedly did not make any specific monetary payments for rent during January 1 through November 22, 1983, plaintiff alleges that HUD received rental payments “in kind” at Cupey Bajo’s expense.
Inasmuch as plaintiff asserts the foregoing as a basis establishing an implied-in-fact contract between plaintiff and HUD, this court holds that, based on all of the foregoing, the evidence in the record does not establish that through their actions, the parties had an agreement regarding a lease of the hospital premises.
For example, on October 28, 1982, HUD acknowledged receipt of plaintiffs “offer to purchase the Real Estate Property of the Cupey Bajo Nursing Home,” but informed plaintiffs director, Dr. Murcia, that “... HUD regulations do not permit us to consider your offer.” Def. Ex. 4. Shortly thereafter, HUD clarified its October 28th letter, stating:
... HUD cannot now accept your offer [to purchase the hospital]____ Because of the interest that you and others have shown in purchasing this project, this office will promptly prepare a disposition program on it.
Selling HUD owned projects by negotiation with defaulted mortgagors is accomplished infrequently and only in exceptional circumstances. This office cannot authorize or commit the Department to such a sale at this time____ Furthermore, we wish to point out that HUD regulations would prohibit you as former mortgagor from participating in any competitive bidding in connection with the sale of the property. There are certain exceptions to this rule which might allow your participation____
Def.Ex. 5 (emphasis added). Notably, the two foregoing letters issued by HUD to plaintiff on October 28 and December 7, 1982, merely address, in a general way, a potential sale and purchase of the hospital property; nowhere in the foregoing correspondence does HUD address a potential or actual consideration in leasing the hospital property to plaintiff.
On January 11, 1983, Cupey Bajo requested that HUD enter a negotiated sale of the hospital property or, alternatively, execute a “15 year Rental Contract with option to purchase with a monthly rental payment of $10,-000.00.” Def.Ex. 6 at 2. To follow up this proposal, Cupey Bajo wrote to HUD again on January 27,1983, stating:
As you are aware, we are in the process of negotiating with your office a one year lease agreement with option to purchase the [hospital].
Our counsel, Mr. Charles Edson ... and Mr. Jose Garrido Monje, have met with your area counsel Mr. Rafael Pieras, and have discussed the lease provision which H.U.D. desires.
Our counsel are preparing such lease agreement and will be submitting it to your office shortly.
Def.Ex. 7. In a responding letter dated February 2, 1983, HUD’s Area Manager, Mr. Jose E. Febres-Silva, acknowledged meeting with Cupey Bajo’s counsel in January 1983, but stated that — “This office has no written proposal on said offer nor have we been advised by Central Office as to their reaction to your proposal.” Def.Ex. 8. HUD added, however, that it was “considering entering into a short term leasing agreement on a month to month basis with your Corporation. As we stated to you on above referenced meeting, the consideration for the lease of our premises would be a minimum of $16,-271.69 per month. Entering into such lease agreement is also subject to approval by our Central Office.” Id. (emphasis added). Finally, the record shows that in an undated letter written by HUD in response to plaintiffs letter dated May 31, 1983, HUD informed plaintiff that it could not accept plaintiffs request for a month-to-month lease. Def.Ex. 12.
In sum, based on the foregoing correspondence and actions of Cupey Bajo and HUD, this court cannot conclude that plaintiff and the government acquired or reached a meeting of the minds and consummated a tacit agreement to lease the hospital premises during 1983. As a result, we hold that plaintiff did not incur rental expense for its use and occupancy of the hospital premises in 1983 and, accordingly, has no basis for claiming such expense under the subject contract,
ii. Legal and Audit Expenses
Plaintiff claims that $15,000 in legal and audit expenses it incurred performing the contract in 1983 are allowable costs. Conversely, defendant argues that such expenses are not allowable under the contract because they were not paid within a reasonable time after the debts were incurred. The DCAA auditor, also defendant’s expert witness, Ms. Davey, could not point to a contract provision or section of the FPR that specifically disallows the subject legal and audit fees on this record. Instead, referring to the FPR, Ms. Davey justified her recommendation to disallow the costs based on the FPR’s reasonableness standard incorporating the “prudent business practice” standard.
Pursuant to the FPR, “reasonableness” is defined as follows:
A cost is reasonable if, in its nature or amount, it does not exceed that which would be incurred by an ordinarily prudent person in the conduct of competitive business. The question of the reasonableness of specific costs must be scrutinized with particular care in connection with firms or separate divisions thereof which may not be subject to effective competitive restraints. What is reasonable depends upon a variety of considerations and circumstances involving both the nature and amounts of the cost in question. In determining the reasonableness of a given cost, consideration shall be given to:
(a) Whether the cost is of a type generally recognized as ordinary and necessary for the conduct of the contractor’s business or the performance of the contract;
(b) The restraints or requirements imposed by such factors as generally accepted sound business practices, arm’s length bargaining, Federal and State laws and regulations, and contract terms and specifications;
(c) The action that a prudent businessman would take in the circumstances, considering his responsibilities to the owners of the business, his employees, his customers, the Government, and the public at large; and
(d) Significant deviations from the established practices of the contractor which may unjustifiably increase the contract costs.
41 C.F.R. § 1-15.201-3 (1982). In short, although the FPR does not establish a specific time frame in which an expense must be paid to be considered “reasonable,” the FPR does recognize that “reasonableness” is subjectively determined on an ad hoc basis, in light of the relevant objective circumstances and ordinary business practice concerning the cost incurred.
In this connection, defendant does not dispute that plaintiff incurred and properly accrued the $15,000 in legal and audit fees in 1983. In fact, the DCAA auditor, Ms. Davey, admitted that plaintiffs claimed legal and audit fees were a “properly accruable item.” Tr. 436, 439-40; see also Def.Ex. 2 at 049 (Supervisory auditor’s approval of auditor’s statement that the costs are allowable under 41 C.F.R. § 1-15.205-31). Therefore, from a general standpoint, defendant does not challenge the nature and amount of the legal and audit expenses plaintiff claims under the contract. It is the length of time that plaintiff has allowed to pass without paying the expense that causes defendant to now deem the expense unallowable.
Here, plaintiff admittedly did not pay the legal and audit expenses as of 1987, when the DCAA audited plaintiffs 1983 costs. Nevertheless, at no point in time did Cupey Bajo inform the DCAA that it did not intend to pay the expenses once plaintiff had the funds available. Moreover, had plaintiff paid the $15,000 in legal and audit expenses in 1984 or 1985, or even three days prior to the 1987 audit, Ms. Davey conceded in response to the court’s questioning that she “would have probably allowed it” and “would not have questioned it.” Tr. 632-33, 642. Similarly, the DCAA recognized in the audit report:
Of the $392,031 questioned amount, $76,-442 relates to the five year old unpaid
Def.Ex. 2 at 005, H2 (emphasis added). Upon reviewing the audit report, the YA agreed with this assessment, stating that the contractor’s payment of the “five year old unpaid debts ... could reduce the contract overpayment” from $239,730 to $163,134. Def.Ex. 3 at 2, H 3 (letter transmitted internally in the VA dated December 24, 1987). Therefore, towards the end of 1987, both the DCAA and the VA viewed plaintiffs accrued legal and audit expenses of $15,000 as unal-lowable simply because plaintiff had not yet paid the expense.
Notwithstanding the fact that expenses are generally paid by the contractor before they are reimbursed by the government under a cost reimbursement type contract, it is significant that Cupey Bajo ceased operations in 1983. Yet Cupey Bajo adamantly asserts that it intended and still intends to pay the $15,000 of accrued legal and audit expenses to its creditors, but has been without liquid ñmds to do so since 1983. This representation was not seriously challenged by defendant at trial nor controverted by the record. The DCAA’s representation that plaintiff is not likely to pay the expense is mere speculation. Thus, this court holds that a lack of liquid funds due to the complete termination of operations in the year that the entity incurs the expense stands as a reasonable and valid basis for not having paid the expenses up to five years subsequently. Accordingly, plaintiffs legal and audit expenses are allowable costs under the contract.
iii. Management Fees
Plaintiff contends that defendant improperly disallowed the sum of $234,700 in management fees incurred pursuant to its management agreement (Agreement) executed on April 5, 1982, and accrued in 1983. The Agreement provided that a related, commonly-owned and managed company, Hospital Medical Group (HMG), would supply management and hospital support services during the period January 1982 through December 1985.
The Agreement explicitly states that the maximum compensation plaintiff would owe HMG thereunder annually was limited to five percent of Cupey Bajo’s gross income. Both Cupey Bajo and HMG maintained independent accounting records. HMG recorded the funds owed for services rendered under the Agreement as an account receivable. Cupey Bajo reflected the cost of services provided by HMG under the Agreement as an expense, and maintained records of such services by HMG through invoices prior to 1983. Accordingly, in 1983, Cupey Bajo accrued $50,000 in management fees at a rate of $10,000 per month for five months, January through May 1983. Although HMG submitted invoices to Cupey Bajo for services rendered in 1983 for a total of $50,000, Cupey Bajo has paid only $18,000 of this amount.
In the latter part of 1983, however, plaintiff did not obtain invoices from HMG reflecting the cost of services rendered during 1983, but instead relied solely on the Agreement as the pricing mechanism. As a result, although HMG did not invoice plaintiff for costs of services beyond $50,000 in 1983, Cupey Bajo nonetheless accrued an addition
Defendant disallows plaintiffs claimed management fees primarily based on the DCAA’s report that plaintiff—
was unable to provide adequate documentation to enable [DCAA] to determine what services, if any, were actually provided to the hospital. Most services ... cited in the management agreement are actually performed by various departments within the hospital____ Additionally, those executives provided or hired by the management company are paid by the hospital. Therefore, in the absence of any documentary evidence of services actually provided, we questioned the total incurred costs [of $234,700 in management fees].
Tr. 491 (Davey) (quoting Def.Ex. 2 at 8,11 e); Def.Ex. 2 at 99. In short, the DCAA recommended disallowing plaintiffs total management fees because the DCAA believed that Cupey Bajo, and not HMG, actually performed the services delegated to HMG under the Agreement. As a result, defendant concluded that the Agreement represented merely an agreement by HMG to provide “nothing more than “backup’ or ‘on-call’ management services on an ‘as needed basis’ with an affiliated company for expenses that were grossly in excess of what a full-service management agreement would cost through competitive bidding.”
[cjosts of professional and consultant services rendered by persons who are members of a particular profession or possess a • special skill and who are not officers or employees of the contractor are allowable, subject to paragraph (b), (c), (d), and (e) of this § 1-15.205-31, when reasonable in relation to the services rendered and when not contingent upon recovery of the costs from the government____
41 C.F.R. § l-15.205-31(a) (emphasis added).
In turn, paragraph (b) of § 1-15.205-31 specifically delineates a list of nonexclusive factors that are relevant in determining the allowability of such costs in individual cases. Before performing a lengthy review of the factors in paragraph (b), however, this court first refers to paragraph (c), which appears to set forth more accurately the justifiable basis for the government’s denial of plaintiffs claim. Paragraph (e) requires:
(e) Except for retainers (see paragraph (c) of this section [not relevant here]), fees for services rendered shall be allowable only when supported by evidence of the nature and scope of the services furnished. (See also § l-15.205-37(e) [not applicable here]).
41 C.F.R. § l-15.205-31(e) (emphasis added).
In connection with the foregoing, this court reviews the record to determine whether defendant correctly found that Cupey Bajo completely failed to set forth such evidence supporting its claimed accrual of $234,700 for services performed by HMG.
Upon reviewing plaintiffs claim that it incurred the management fees as costs of its employee health insurance plan, this court holds that plaintiff substantially fell short of providing proof of medical plan services, as required by FPR § l-15.205-31(e), supra. Although Cupey Bajo allegedly enrolled 125 of its employees and their families in a medical insurance plan in 1982, plaintiff failed to submit the medical plan documents to the DCAA, Tr. 181-82, and also failed, without proffering any form of justification, to introduce the health plan documents as evidence at trial. Indeed, plaintiff even failed to elicit descriptive testimony from available witnesses specifically identifying the terms of the HMG health plan.
Plaintiffs hospital administrator, Mr. Oyóla, testified at trial that HMG maintained Cupey Bajo’s insurance and related records, but not its accounting, billing, patient, and collection records. Because Cupey Bajo moved to HMG’s facilities upon its ouster from the hospital on November 22, 1983, plaintiff presumably had access to its records maintained by HMG. Thus, when a party has the ability to introduce available evidence to support its claim and yet fails to do so, a negative inference arises that the evidence is unfavorable to the party’s claim, unless the party proffers a sufficient explanation for the omission of the evidence. Interstate Circuit, Inc. v. United States, 306 U.S. 208, 225-26, 59 S.Ct. 467, 473-74, 83 L.Ed. 610 (1939); Goldberger Foods, Inc. v. United States, 23 Cl.Ct. 295, 309 (1991), aff'd, 960 F.2d 155 (Fed.Cir.1992). Since plaintiff failed to provide any basis for its failure to call witnesses with knowledge of the health plan and, moreover, failed to introduce any documentation supporting its claim, this court must infer that such evidence, if presented, would have been decidedly detrimental to plaintiffs claim.
b. Management Fees Accrued for Services Allegedly Rendered
Plaintiff contends that the parties’ Agreement serves as sufficient evidence of the nature and scope of services furnished in 1983. Cupey Bajo’s hospital administrator, Mr. Oyóla, and plaintiff’s accountant, Mr. Roche, testified at trial that the Agreement allowed Cupey Bajo access to the service of specialists and general staff members employed by HMG to cover plaintiffs absentees on a daily basis. For example, Mr. Oyóla, testified that HMG provided plaintiff “specialists, laboratory work, radiology and paramedical personnel that may be required on any given day, such as during the evenings, such as weekends” to supplement insufficient personnel staffing at the hospital whenever needed.
For example, testimony at trial supports defendant’s assertion that all of the record keeping delegated to HMG under the Agreement was performed, in fact, by Cupey Bajo’s employees. Moreover, plaintiffs witness testimony confirmed that the management fee includes costs associated with HMG’s assumption of plaintiffs laboratory work after 3:00 p.m. in the afternoon, when plaintiffs laboratory closed. Rather than perform the laboratory work itself, however, HMG’s laboratory services were actually contracted out to third parties. In addition, the evidence supports defendant’s contention that personnel and accounting responsibilities delegated to HMG under the Agreement were performed by Cupey Bajo’s employees. For instance, although the Agreement delegated the responsibility for hiring and paying the hospital administrator, Mr. Oyóla (the hospital administrator) admitted that Cupey Bajo actually hired him and served as his employer. Furthermore, plaintiff made the following journal entries for personnel costs incurred for services in 1983 — notwithstanding the fact that such services were similarly covered by the terms of the Agreement:
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DefiEx. 2 at 94-95; Tr. 494-98 (Davey).
In light of the foregoing nonexclusive listing of payments made by plaintiff directly to its agents, and the substantial lack of any other specific evidence, written or verbal, to evidence the services actually furnished by HMG pursuant to the Agreement during 1983, plaintiffs evidence that it utilized substantial services of HMG is obviously weak, vague, and non-probative. In contrast, defendant introduced evidence that, after Cu-pey Bajo left the hospital premises on November 22, 1983, HUD operated the hospital under a separate management agreement with another contractor at a cost of $5,000 per month. In light of this evidence of market rates for hospital management services, which is admittedly somewhat limited, this court recognizes that the management fee of $234,700 accrued by plaintiff for services performed by HMG, averaging approximately $21,000 per month in 1983, substantially exceeds a reasonable rate for similar management services. Moreover, the $234,700 for the accrued management fee substantially exceeds the $50,000 actually invoiced by HMG. Therefore, in light of the evidence presented at trial, or, more accurately, the lack thereof, this court holds that the entire management fee claimed by plaintiff in 1983 is not reasonable within the meaning of FPR § 1-15.201-3.
Against this background, therefore, this court holds that the record contains insuffi-
iv. Representation Expenses
As part of its total 1983 costs claimed under the contract, Cupey Bajo seeks allowance of $10,857 in car expense payments it made to its employees, Dr. Murcia, Mr. Oyóla, and Ms. Santiago. Dr. Murcia received $8,757.02 in car allowance payments for 1983. Mr. Oyóla received approximately $100 to $200 per month, or a total of $900, as a car allowance during 1983, from plaintiff by checks. Finally, as the third employee of Cupey Bajo to receive representation expenses, Ms. Raquel Santiago received car allowance checks in the amount of $2,000 in 1983. These foregoing payments made to plaintiffs employees amount to a total of $11,657.02, rather than $10,857, which defendant disallowed and plaintiff challenged at trial.
Defendant contends that plaintiffs total car allowance payment of $10,857 should be disallowed under the contract because plaintiff failed to provide adequate documentation substantiating the fact that these costs were actually incurred by the three individuals in their representation of the company. For instance, Cupey Bajo failed to provide any employee documentation, such as expense reports or receipts, supporting these costs. Defendant avers, moreover, that Dr. Murcia used his personally-leased vehicle for personal matters and work involving both Cupey Bajo and a second company, HMG, which he also owned and directed.
Unrefuted testimony shows that Cupey Bajo and its employees treated the car allowance as additional compensation to the annual salary paid and received. During the DCAA’s audit, Mr. Oyóla informed the auditor, Ms. Davey, that the representation costs served as a fringe benefit, which compensated the employees for gasoline, car repairs, and other miscellaneous expenses associated with the employees’ transportation used to carry out their responsibilities. Ms. Davey testified that she “looked at the personnel file, which confirmed what he was saying.” Tr. 468. Moreover, defendant acknowledges that plaintiff paid these 1983 costs. Tr. 502 (Davey). In fact, during the audit, the DCAA reviewed the cancelled checks which evidenced the fact that the employees received the payment. In furtherance of its position, plaintiff argues that public transportation in San Juan is “not adequate” and, nonetheless, “it is not reasonable to find that the main officials of [Cupey Bajo] had to resort to public transportation to avoid the cost of their car allowances.” Id. at 18.
Based on the foregoing facts, this court is compelled to hold that defendant erroneously disallowed reimbursement of plaintiffs representation costs in the amount of $10,857. Section l-15.205-6(a)(l) of the FPR broadly interprets compensation for personal services
v. Interest Expenses
Plaintiff also challenges defendant’s disal-lowance of certain claimed interest expense in the amount of $38,354, consisting of two items, (i) $28,354 and (ii) $10,000, as a portion of its total costs for 1983 under the contract.
With respect to the first of the two items of interest expense, plaintiff claims $28,354 in interest expense in 1983, accrued on a $283,718.63 promissory note assumed by plaintiff for the purchase of the hospital property in 1970. Plaintiff guaranteed the note and later assumed the debt from Cupey Bajo’s original stockholders. The note matured in 1973. Cupey Bajo did not pay any interest or principal on the note.
In 1977, the FDIC provided assistance to the deteriorating bank holding the said note, and, in so doing, acquired the note.
Defendant contends that the $28,354 interest expense is not an allowable cost under the contract. It argues that the dispute reflected in the Federal Deposit Insurance Corporation’s (FDIC) amended complaint filed against Cupey Bajo pertaining to the promissory note was resolved in 1982 and, therefore, whatever interest accrued on the $283,718.63 note actually accrued before 1983. Moreover, the DCAA questioned the interest expense because plaintiff had not made any payments on the note and, therefore, based on generally accepted accounting principles, it is allegedly not a prudent business practice to retain and continue to accrue a five-year old debt. Defendant does not contend that the interest costs were nonalloeable or unreasonable.
This court, upon its review of the record, finds that the accrued interest cost was reasonably incurred in obtaining hospital premises for the performance of the services anticipated by the contract, and, moreover, is not unreasonable in its amount. Again, the DCAA recommends disallowance of this $28,-354 interest cost merely because it had not been paid by 1987. This court rejects the DCAA’s recommendation, however, for the same reasons this court found that plaintiff is entitled to its legal and audit fees. That is to say, this court cannot find that plaintiff is not entitled to costs incurred under its contract with the VA merely because it terminated operations in 1983 and thereafter lacked liq
The second item of interest expense plaintiff seeks to recover under the contract, however, is a different matter. Plaintiff claims $10,000 interest cost representing “accrued interest on a mortgage held by the Banco Popular.” Def.Ex. 2 at 125-26; Tr. 659 (Davey). Cupey Bajo defaulted on the mortgage note in 1973, and HUD, as the guarantor of the loan, paid the mortgage loan and took possession of the mortgage property in 1982. Defendant asserts that the $10,-000 was improperly accrued by plaintiff as a 1983 expense under the contract because (1) plaintiff was not making payments on the note as of 1987 and (2) HUD, as the insurer of the first mortgage note on the hospital property, acquired the property prior to 1983, on October 1,1982.
This court agrees with defendant. Plaintiff has not shown that the $10,000 interest expense claimed under the contract is an allowable 1983 cost. There is no evidence in the record supporting plaintiffs contention that the $10,000 interest cost was incurred as an expense in 1983 as part of its performance of the contract, after HUD had assumed ownership of the hospital property through foreclosure proceedings in 1982. As a result, plaintiff has failed to prove to this court that its $10,000 interest cost is an allowable 1983 cost.
Accordingly, plaintiffs 1983 interest expense in the amount of $28,354 is allowed. Plaintiffs claim for $10,000 interest expense in 1983 is not allowed.
vi. Capital Improvement Expenses
Cupey Bajo accrued capital expenditures of $39,300 in 1983, as a result of hiring an architect, Mr. Jorge Amauiy Rodriguez, to perform work in 1982. The work involved preparing plans to convert the nursing home to a full general hospital facility. The hospital administrator for Cupey Bajo, Mr. Oyóla, testified that the conversion of the hospital property was necessary, and demanded by the VA in 1979-80, so that plaintiff could perform the psychiatric services required under the contract. Mr. Rodriguez charged Cupey Bajo a total of $125,000 for the drawings prepared in 1982. In December 1982, Mr. Rodriguez notified plaintiff by mail that a balance remained due of approximately $45,000. Plaintiff paid Mr. Rodriguez $39,-300 in 1983, and reflected the payment in its books as an expense incurred in 1983, allegedly according to generally accepted accounting principles. Cupey Bajo did not make any improvements to the nursing home facility prior to or during 1983. However, plaintiff represents that it did obtain a license as a general hospital in 1982.
The court’s careful review of the record finds that the facts regarding plaintiff’s claimed architectural fees are largely undisputed. It is the interpretation of the facts where the parties diverge from their harmonious acquiescence. The parties do not dispute that the VA requested plaintiff to make certain improvements to the hospital property in order for plaintiff to provide psychiatric care to VA patients, as anticipated by the contract. In addition, the parties do not dispute that the architectural fees were directly related to the hospital improvements the VA requested. Thus, through the contract, the VA served as the beneficiary of the architect’s work designs intended for use in modifying the hospital premises.
Defendant questioned plaintiffs capital expenditures, however, arguing that such costs were not allowable under the contract for 1983. Initially, the DCAA questioned the architectural fees, arguing that the costs should have been capitalized by plaintiff over
At trial, however, given the undisputed facts pertaining to the mortgage foreclosure and transfer of ownership of the hospital property to HUD in 1982, and assuming the absence of a leasehold relationship between HUD and Cupey Bajo, the DCAA auditors who qualified as expert witnesses, Ms. Davey and Mr. Traylor, opined that the architectural fees should have been expensed in 1982 when they were incurred, and not capitalized or expensed in 1983 when they were paid. In other words, the expert witnesses testified that under the circumstances presented in the record, indicating that plaintiff lost ownership of the hospital property in 1982, plaintiff should have terminated all capital improvements in 1982, thereby precluding it from incurring capital improvement costs in 1983.
Plaintiffs accountant, Mr. Roche, testified that Cupey Bajo was not required to expense the fees in 1982, because it did not abandon the capital improvement project until 1983. As a result, plaintiff contends that the $39,-300 architectural fees paid to Mr. Rodriguez in 1983, before plaintiff abandoned the conversion project on November 22, 1983, when it was ousted from the hospital property, are allowable 1983 costs under the contract.
This court agrees with plaintiff. Although HUD assumed ownership of the hospital and provided actual notice to plaintiff of its intent to sell same in 1982, substantial evidence shows that plaintiff continued to pursue, albeit unsuccessfully, a purchase or lease of the hospital property in 1983 through negotiations with agents at HUD. Given this record as a whole, we are constrained to conclude that Cupey Bajo did not intend to abandon the premises and, in fact, was not requested or required to abandon said premises in 1982. Rather, it was only upon the ouster of Cupey Bajo from the hospital premises on November 22, 1983, that plaintiff abandoned the hospital property. As a result of said abandonment in 1983, the capital improvement expenditure converted to an expense, and is an allowable 1983 cost under the contract,
vii. Expenses Associated With Outpatient Care
Defendant contends that plaintiff erroneously claimed $40,202 in outpatient costs as part of its total cost basis of $3,188,443 used for calculating its final per diem rate for 1983. These costs consisted of expenses associated with administration, laundry, housekeeping, utilities, maintenance, and miscellaneous services. The DCAA audit report dated September 29, 1987, at note 2, stated:
Costs Allocated to Outpatient Care. Questioned costs [of $40,202] represent costs allocated to outpatient care. The contractor’s accounting system does not segregate costs incurred for outpatient care. Therefore, we allocated costs on the basis of the ratio of outpatient revenues to total revenues.
Def.Ex. 2 at 9.
The total allowable costs for hospital inpatient services shall be essentially the total expenses allowable ... less all outpatient costs as determined by multiplying the ratio of outpatient revenues over total revenues by total costs____
Pl.Ex. 1 at 1 (emphasis added). Plaintiffs challenge to DCAA’s report questioning $40,-202 of its total 1983 claimed expenses as improperly allocated outpatient costs merely argues that it:
... did not include the outpatient costs in the total amount of costs, [citing page 3 of Plaintiffs Exhibit 2 “that shows that outpatient costs are listed in a separate column.”] Actually, the form provided by VA makes it impossible to include outpatient costs as part of the claim.
Plaintiffs Post Trial Reply Brief at 4, If 7. It is not the form provided by the VA for the
IV. CONCLUSION
Plaintiff seeks additional payment under its contract with the VA, claiming it was underpaid its cost of performance in 1983 by approximately $35,000. Conversely, defendant contends that plaintiff was, in fact, overpaid during the year of 1983, and is required to refund the government $239,730. Upon a thorough review of the record and a careful consideration of the parties’ arguments, the court holds that plaintiff is not due any amount of funds from defendant for its contract performance in 1983. Defendant is due, however, $167,682.03 on its counterclaim, representing an overpayment made to plaintiff in 1983. This overpayment is calculated as follows:
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Based on the foregoing disallowance of $333,702, plus the $14,349 in allowable costs plaintiff failed to claim, the total 1983 disallowed costs are $319,353. As a result, defendant is entitled to the following recovery on its counterclaim:
[[Image here]]
In addition to the total overpayment of $150,078.72, based on the audited number of 47,330 inpatient service days provided by Cupey Bajo and the allowable reimbursable costs of $2,823,914, plaintiff was overpaid an excess of 267 (24,203 minus 23,936) inpatient service days at the contract provisional rate of $65.93. Accordingly, defendant is entitled
IT IS SO ORDERED.
. On December 20, 1989, Cupey Bajo filed its original complaint in this court pursuant to 41 U.S.C. § 609(a). Because this court found that Cupey Bajo had not properly certified its claim for $169,905 to the contracting officer (CO) prior to filing its complaint in this court, we dismissed Cupey Bajo’s claim without prejudice for lack of subject matter jurisdiction. The proceedings were then stayed by the court, awaiting Cupey Bajo’s proper certification and submission of its claim to the CO (on September 17, 1991). This having occurred, Cupey Bajo filed an amended complaint in this court on April 23, 1993, substantially averring that which it complained of in its original complaint filed on December 20, 1989, and requesting recovery of $169,905 under the terms of the contract.
Subsequently, during opening argument at trial on May 17, 1995, Cupey Bajo again amended its complaint, informing the court that it had discovered an inadvertent typographical error in its complaint(s). As a result, plaintiff reduced the money it claimed Cupey Bajo was underpaid under the contract from $169,000 to $35,000. See Transcript dated May 17, 1995, at 15. On yet another subsequent occasion, during closing argument held on June 12, 1995, and in its post trial briefs, plaintiff attempted to amend its complaint once again to adjust its monetary claim against the government from $35,000 to $50,-983.68. See Transcript dated June 12, 1995, at 28. See infra note 19 and accompanying text.
. The Veterans Administration is now the Department of Veterans Affairs.
. Hereinafter, "Pl.Ex.” and “Def.Ex.” refer to plaintiff’s exhibits and defendant’s exhibits, respectively, introduced into evidence at trial. “Tr.” refers to the transcript of the trial held in this case during the period May 17 through May 23, 1995.
. Originally, the contract was issued in 1973 to provide services for VA beneficiaries.
. Notwithstanding this fact, both plaintiff’s and defendant’s evidence proffered at trial without objection addressed costs allegedly incurred for performance of the contract through November 22, 1983.
. Although the original contract indicates a provisional per diem rate of $55.53, effective January 1, 1983, the provisional per diem rate was established as $65.93 based on the Defense Contract Audit Agency's (DCAA) audit of plaintiff's 1982 accrued costs. See Pl.Ex. 9 at 7 (contract modification dated January 1, 1983 and signed by Cupey Bajo on June 6, 1983).
. On November 7, 1994, defendant filed a motion in limine, seeking to exclude from trial two hospital statements of reimbursable costs completed by plaintiff: (i) Plaintiff’s Hospital Statement of Reimbursable Cost dated October 23, 1984, covering the period January 1, 1983 through December 31, 1983, and (ii) Plaintiff's Hospital Statement of Reimbursable Cost dated March 14, 1983, covering the period from January 1, 1982 through December 31, 1982. During a pretrial telephonic conference, the court informed the parties that it would reserve its ruling on defendant’s motion and determine the merits of the motion upon reviewing plaintiff's eviden-tiary foundation proffered at trial. See Transcript dated February 3, 1995, at 8. At trial, plaintiff introduced both items into evidence as exhibit 2 and exhibit 10, respectively. See Tr. 55, 60, 249, & 250. Defendant failed to object to the introduction of either item into evidence at trial, thereby waiving its right to oppose such introduction. See Tr. 60, 250. Therefore, said motion is hereby denied as moot.
. In its answer filed on May 18, 1993, defendant asserted that plaintiff’s claim is barred by the equitable doctrine of laches. To prove this affirmative' defense, a defendant must prove that (1) plaintiff’s delay in litigating its claim is unreasonable and unjustified; and (2) the delay caused defendant to suffer undue prejudice. Nuss v. Office of Personnel Mgmt., 974 F.2d 1316, 1318 (Fed.Cir.1992); Cornetta v. United States, 851 F.2d 1372, 1377-78 (Fed.Cir.1988). At trial, however, defendant failed to present any evidence supporting these two necessary elements of proof, and, indeed, failed to even raise this issue. As a result, this court holds that defendant did not carry the burden of proving its affirmative defense of laches.
. See 41 C.F.R. § 1-15.205-2 (bad debts expressly unallowable), 41 C.F.R. § 1-15.205-8 (donations expressly unallowable), and 41 C.F.R. § 1-15.205-13 (fines and penalties expressly unallowable).
. As a result, the "actual per diem rate” calculated according to the results of the audit reflects $9.28 less than the $65.93 provisional per diem rate originally estimated by the contract and used by Cupey Bajo for invoicing the government during 1983. In other words, the “actual” per diem rate based on the DCAA audit was $16.30 less than the $72.95 per diem rate Cupey Bajo had claimed in its post-performance statement of actual costs dated October 23, 1984. Pl.Ex. 2.
. See supra, note 1 and infra note 19.
. The Cost Accounting Standards referenced in subparagraph (c) of the foregoing regulation are inapplicable to the following analysis. The audit report of plaintiffs 1983 costs prepared by the DCAA states — "Compliance with Cost Accounting Standards (CAS) was not reviewed since the contractor is exempt from CAS coverage in accordance with FPR l-3.1203(a)(2)(iii)." Def.Ex. 2 at 001, 070, 263. The parties do not dispute this point.
. Notwithstanding the foregoing, even if this court were to permit plaintiff to amend its complaint with its claim for additional rental expense, this court would be required to hold that it does not have proper subject matter jurisdiction over such claim under the CDA. For this court to possess subject matter jurisdiction over plaintiff’s claims pursuant to CDA §§ 605 and 609, plaintiff must have submitted a valid claim to the VA’s contracting officer for a final decision. As defined in the FAR, 48 C.F.R. § 33.201 (1991), a valid claim presents—
a written demand or written assertion ... seeking, as a matter of right, the payment of money in a sum certain, ... or other relief arising under or relating to the contract. A request for payment that is not in dispute when submitted is not a claim under the Act.
In short, the claim, to be valid, must give the contracting officer sufficient notice of the amount and the basis for a decision on the contractor’s claim. Contract Cleaning Maintenance, Inc. v. United States, 811 F.2d 586, 592 (Fed.Cir. 1987). Moreover, if the contractor’s claim exceeds $50,000, the CDA requires that the contractor certify the claim, attesting, inter alia, that the amount claimed "accurately reflects the contract adjustment for which the contractor believes the government is liable.” 41 U.S.C. § 605(c)(1).
Although it is undisputed that plaintiff submitted a claim to the CO for rental payments allegedly incurred during the months of January through June 1983, in the amount of $97,800, this court raises the issue, sua sponte, concerning its jurisdiction over plaintiff's claim for the reimbursement of rental cost allegedly accrued during the months of July 1983 through November 22, 1983. See RCFC 12(h)(3) ("Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.”); Booth v. United States, 990 F.2d 617, 620 (Fed. Cir.1993) ("A party, or the court sua sponte, may address a challenge to subject matter jurisdiction at any time, even on appeal.”); Arctic Comer, Inc. v. United States, 845 F.2d 999, 1000 (Fed. Cir.1988) ("A court may and should raise the question of its jurisdiction sua sponte at any time it appears in doubt.”).
Here, this court’s careful review of the record finds that plaintiff’s claim for $76,989 in rental expense allegedly accrued during the latter part of 1983 was made for the very first time at trial and in its post-trial briefs. Indeed, plaintiff's total expenses claimed under the contract of $3,188,443 did not include rental expense allegedly accrued and claimed for the months of July 1983 through November 22, 1983. See Transcript dated June 12, 1995, at 26-27. Therefore,
Similarly, in Santa Fe Engineers, Inc. v. United States, 818 F.2d 856 (Fed.Cir.1987), plaintiff appealed the Board of Contract Appeals dismissal of its claim for lack of jurisdiction under the CDA. There, plaintiff certified and submitted a claim to the contracting officer for a final decision and, subsequently, increased the basis and amount of the claim. Id. at 859-60. Specifically, before the Board, plaintiff claimed additional delay and impact costs arising from three certain, specific contract change orders. Id. at 859. Later, in proceedings on the merits of plaintiff’s claim, plaintiff asserted additional delay and impact costs arising "from the collective nature of all the problems, changes and directives that were issued on the project.” Id. On appeal, the Federal Circuit characterized plaintiff's change as an "addition of a claim ... entirely new [which] had never been presented to the contracting officer, or certified to him." This "new” claim addressed change orders and design difficulties unrelated to the original three change orders. Id. Consequently, because this new claim had not been certified and submitted to the contracting officer, the court held that this new claim was not properly within the Board's jurisdiction. Id. at 860.
Here, plaintiff's claim for additional rental expense allegedly accrued during a separate and distinct time period from that which plaintiff originally claimed in its complaint. That is to say, plaintiff's new claim for rental expense covers the performance period of June 1983 through November 22, 1983, whereas plaintiff's original claim sought entitlement to rental expense accruing from January through June, 1983. Thus, plaintiff claims additional rental expense that is clearly based on a different period of performance under the contract. In light of this distinction, this court cannot exercise subject matter jurisdiction over plaintiff's belated claim. Sharman Co. v. United States, 2 F.3d at 1568 ("Under the CDA, a final decision by the contracting officer on a claim, whether asserted by the contractor or the government, is a 'jurisdictional prerequisite' to further legal action thereon.”) (citing 41 U.S.C. § 605(a) & (b)) (footnotes omitted); see also Daff v. United States, 78 F.3d 1566, 1571 (Fed.Cir.1996) (citing Sharman's holding that a valid CO decision is a jurisdictional prerequisite under the CDA). As a result, the court’s decision here is limited to a review of plaintiff's claim for reimbursement of rental expense accruing from January through June, 1983.
. Generally, the FPR, 41 C.F.R. § 1-15.205-34, states:
Rental Costs (including sale and leaseback of property).
(a) This [section] is applicable to the cost of renting or leasing all property, real and personal, except automatic data processing equipment (ADPE)____
(1) “Short term leasing” means leasing where the cumulative term of the use or occupancy (initial term plus additional terms whether or not pursuant to a renewal option) is ... 5 years or less for real property.
. Plaintiff filed a motion for judicial notice on June 12, 1995, and supplemented the motion with a brief filed on July 11, 1995, in which plaintiff seeks judicial notice of the terms of HUD’s public sale of the hospital in 1983. This issue is discussed infra.
. Plaintiff requests that this court take judicial notice of the terms of HUD’s sale of the hospital property contained in a motion allegedly filed by the United States in a separate case, United States v. Valcarcel, Civil No. 89-1049 (GG) (D.P.R.). By taking judicial notice of a fact, the court may inform itself of a particular fact without resort to evidentiary proof. Judicial notice is proper, however, only if the fact(s) noticed are not subject to reasonable dispute. Fed.R.Evid. 201(b). Therefore, the fact(s) must be either “(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b).
Upon applying the foregoing test to plaintiff's request for judicial notice, this court holds that plaintiff's motion fails to satisfy the foregoing criteria of Rule 201 and, therefore, is denied. The subject of plaintiff’s motion for judicial notice are facts alleged by the United States in a post-trial motion entitled "Motion As To Additional Findings Of Fact" filed in a separate judicial proceeding. There is no indication on the subject post-trial motion or other evidence proving that the motion was actually filed in the United States District Court for the District of Puerto Rico. This court has been presented with not one scintilla of evidence that the district court presiding over Valcarcel, made a determination as to the validity of the facts alleged in the post-trial motion. Most significantly, however, plaintiff has not shown that the facts alleged in the motion are generally known anywhere within this court’s jurisdictional boundaries. Moreover, plaintiff has not presented to this court any testimony or documentation “whose accuracy cannot reasonably be questioned,” which would verily the facts stated in the subject motion. Thus, it is not proper pursuant to Rule 201 of the Federal Rules of Evidence for this court to take judicial notice of facts contained in the subject post-trial motion, merely because it is allegedly filed as a public document in a court, as proof of the truth of the facts asserted therein. Such facts, especially when they pertain to property transactions and valuation issues, clearly are subject to reasonable dispute. Accordingly, we are constrained to deny plaintiff’s request to take judicial notice of facts that are merely alleged in a party’s motion in a separate case as a basis for finding that such alleged facts are true.
Finally, and as an aside, the court notes that plaintiff failed to introduce the subject post-trial motion into evidence, i.e„ offer it against defendant at trial. For this reason alone, this court may not view the subject of plaintiff's request as an admission of a party opponent. Fed.R.Evid. 801(d)(2).
. Insofar as plaintiff seeks to be allowed rental expenses by establishing that HUD was unjustly enriched through the foreclosure and ultimate sale of the hospital property, plaintiff is asserting an implied-in-law contract over which this court clearly lacks subject matter jurisdiction. Hercules,— U.S. at —, 116 S.Ct. at 985.
. Interestingly, rather than book the alleged monthly rental costs of $16,271.69 on a monthly basis, January through July, 1983, plaintiff recorded the accrued rent of $97,800 as a single lump sum entry in its general ledger on July 7, 1983. Tr. 479 (Davey); Tr. 837 (Traylor). Rather than pass on the propriety of the accounting entry itself, this court merely notes that this evidence strongly suggests that plaintiff was not accruing monthly rental costs under an assumed month to month lease agreement as plaintiff suggests. Moreover, the court notes that plaintiff did not provide the DCAA the subject letter (Def.Ex. 12) during the DCAA’s audit of plaintiff’s claimed rental expenses.
. Indeed, plaintiff concedes that although HUD acquired legal title to the hospital property on October 1, 1982, HUD has "never made any efforts to collect" rental payments thereafter from plaintiff. Tr. 343 (Murcia).
. This court notices that Ms. Davey’s reference to the FPR’s § 1-15.205-1 (Tr. 433) and § 1-15.205-3 (Tr. 639), entitled "Advertising costs” and "Bidding costs,” respectively, for the reasonableness principle appears as a misstatement; Ms. Davey presumably meant to refer to 41 C.F.R. § 1-15.201-1 (Composition of total cost) and § 1-15.201-3 (Definition of reasonableness).
. See 41 C.F.R. § 1-15.201-2 (instructing that if Cost Accounting Standards (CAS) do not apply to the specific contract, a determination of allowa-bility of costs should be guided by generally accepted accounting principles and practices). See supra, note 18.
. Alternatively, defendant contends that Cupey Bajo waived its objection to such costs when it failed to inform the CO that the legal and audit expenses served a basis for challenging the government’s contention that it overpaid plaintiff under the contract. Defendant does not cite to pertinent case law to support this alleged requirement. Cases defendant cites simply address a contractor’s waiver of objection to conditions of contract performance when the contractor continues performance under such conditions. Notwithstanding the foregoing, as a factor deter
. It was established at trial that Dr. Murcia was a majority owner of both Cupey Bajo and HMG and served as president for both entities in 1983. Moreover, in 1982 and 1983, Dr. Murcia served as the Medical Director and President of the Board of Directors for both entities. The management agreement executed between Cupey Bajo and HMG was signed by Dr. Murcia, on behalf of HMG, and by Mr. Oyóla, on behalf of Cupey Bajo. Also, a signatory of the agreement on behalf of Cupey Bajo was Mr. Oppenheimer, who also served on the Board of Directors for HMG.
. The sum of the $50,000 accrued by Cupey Bajo plus the $166,700 lump sum, however, result in total management fees allegedly owed to HMG in the amount of $216,700, rather than the $234,700 claimed by plaintiff. Instead of accounting for the $18,000 Cupey Bajo already paid HMG as part of the total $50,000 accrued and invoiced by HMG, plaintiff apparently is erroneously adding the $18,000 to the $50,000 plus the $166,700 to arrive at the total sum of $234,700 in management fees for 1983. See Plaintiff's Brief filed August 24, 1995 at 11-12 (citing Def.Ex. 2, at 98). Plaintiff's approach effects an erroneous duplication to the extent of $18,000.
. Defendant’s Post-Trial Brief filed August 11, 1985, at 19 ¶ 28 (citing Tr. 859-61).
. Id. at 33-34.
. Briefly referencing the HMG medical plan, Dr. Murcia testified that Cupey Bajo never booked the costs of the medical plan provided by HMG and never invoiced the government for such costs between 1973 and 1982, because ‘‘[i]f it had appeared in the books, the per diem that Veterans had to pay would have been much higher____ And [plaintiff] would have lost the competitive force regarding the cost with other entities.” Tr. 351-52. In short, had plaintiff recognized the costs of the medical plan, its per diem rate would have been significantly higher. Tr. 369 (Murcia).
. At trial, however, Mr. Oyóla reviewed the Agreement and testified that he could not specify whether HMG performed any services in 1983 as listed in subparagraphs D and F of the agreement, except that HMG had performed building maintenance.
. Interestingly, however, Mr. Oyóla did not explain to the DCAA auditor the specific services rendered by HMG pursuant to the Agreement during the DCAA’s 1983 audit.
. The DCAA auditor, Ms. Davey, testified at trial that her work papers erroneously indicate that Ms. Santiago’s representation costs were $1,200 instead of the correct amount of $2,000. The difference of $800 accounts for the discrepancy between plaintiff’s claimed representation costs of $10,857 and the sum of the individual representation costs of $11,657.02.
. See supra, note 27.
. An exception contained in subparagraph (f) addresses deferred compensation, not applicable here.
. Plaintiffs 1982 financial statement described the $283,719 note as a "12% Note payable to Federal Deposit Insurance Corporation. This debt was assumed by the hospital as funds were used to provide for the equity on the original acquisition of the facilities.” Pl.Ex. 5 at 5, Ex. A.
. Similarly, in a letter dated April 14, 1988, the VA informed plaintiff that — "Questioned costs allocated to outpatient care are not segregated in your accounting system. Therefore, costs were arrived at on the basis of the ratio of outpatient care revenues to total revenues." Pl.Ex. 4 at 2.
. See infra note 19 and accompanying text.
. In addition to the $15,000 legal and audit expenses questioned by the DCAA, defendant asserts that the $1,000 plaintiff paid to Mr. Luis M. Oyóla and Mr. Miguel Aran, at a stun of $500 each, is unallowable under the contract. Although the $1,000 cost was reflected in plaintiff's records in the audit and legal expense account, the costs were described in the account as "representation costs” and were reviewed as such by the DCAA.
Here, however, plaintiff challenges the government’s disallowance of only $15,000 in legal and audit costs. Similarly, with respect to the representation costs plaintiff challenges, plaintiff does not include the $1,000 paid to Mr. Oyóla and Mr. Aran, but rather challenges only defendant’s dis-allowance of the specific car allowance of $10,-857. Indeed, plaintiff did not present any evidence or argument supporting the allowability of the $500 representation expenses categorized as “legal and audit expenses” and paid to both Mr. Oyóla and Mr. Aran. As a result, this court holds that plaintiff failed to cany its burden of proof
. See Tr. 592 (Davey).
. See Tr. 592-93.
. See Tr. 593.
. See Tr. 593-94; Def.Ex. 2 at 004.