Case Information
*1 Before P ROST Chief Judge, N EWMAN and T ARANTO , Cir-
cuit Judges.
T ARANTO , Circuit Judge .
K-Con Building Systems, Inc., entered into a contract with the federal government to construct a building for the Coast Guard. Once K-Con finished, the government imposed liquidated damages for delay in completion. K- Con sued in the Court of Federal Claims, seeking two forms of relief. First, it requested remission of the liqui- dated damages on two grounds—that the contract’s liquidated-damages clause was unenforceable and that K- Con was entitled to an extension of the completion date. Second, it requested additional compensation based on work performed in response to government requests that K-Con alleges amounted to contract changes. The Court of Federal Claims held that the contract’s liquidated- damages clause is enforceable and that K-Con did not comply with the written-notice precondition for invoking the contract clause governing changes. It also held that K-Con’s claim for an extension on the completion date must be dismissed for lack of jurisdiction. We affirm.
B ACKGROUND
On January 20, 2004, K-Con entered into a contract with the Coast Guard, under which K-Con would con- struct a “cutter support team building” in Port Huron, Michigan, for $582,641. The project was to be completed by November 20, 2004, with K-Con agreeing to pay $589 in liquidated damages for each day of delay. On May 23, 2005, the Coast Guard accepted the building as substan- tially complete. It withheld payment of $109,554 as liquidated damages for what it calculated to be tardiness of 186 days. No party challenges the calculation.
On July 28, 2005, K-Con sent a letter to the govern- ment contracting officer requesting remission of the liquidated damages “wrongfully withheld from the con- tract.” J.A. 259, Letter from K-Con to Contracting Officer (July 8, 2005) (first letter). As grounds for remission, K- Con asserted that the “liquidated damages [constituted] an impermissible penalty” and that the Coast Guard “failed to issue extensions to the completion date as a result of changes to the contract.” Id. It provided no details regarding its request for a time extension based on contract changes. After the contracting officer denied K- Con’s request for remission, K-Con sued in the Court of Federal Claims under the Contract Disputes Act (CDA), 41 U.S.C. §§ 601-613 (2006). [1] K-Con sought remission of $109,554 plus interest in liquidated damages on the two grounds asserted in its July 28, 2005 letter. Original Complaint, K-Con Bldg. Sys., Inc. v. United States , No. 05-01054C (Fed. Cl. Sept. 30, 2005).
On December 15, 2006, while litigation in the Court of Federal Claims was underway, K-Con submitted a second letter to the contracting officer. J.A. 263–64, Letter from K-Con to Contracting Officer (Dec. 15, 2006) (second letter). The second letter extensively details the contract changes allegedly made by the Coast Guard during the contract term and asks for a new remedy—$196,126.38 for additional work necessitated by the changes—as well as an extension of the completion date of the contract. The contracting officer denied K-Con’s requests. K-Con then amended its complaint in the Court of Federal Claims to add allegations about the matter covered in its second letter and to seek, beyond the liquidated-damages relief, a judgment of $196,126.38 and a 186-day extension. Amended Complaint, K-Con Bldg. Sys. , No. 05-01054C (Fed. Cl. Mar. 18, 2007).
The Court of Federal Claims first ruled, in deciding an initial government motion for summary judgment, that the contract’s liquidated-damages clause is enforceable. The court later issued two rulings in deciding a second government motion for summary judgment. It held that K-Con did not provide valid written notice regarding contract changes and therefore had not satisfied a pre- condition to claiming additional compensation under the contract’s changes clause. And it dismissed, for lack of jurisdiction, K-Con’s time-extension claim for remission of liquidated damages.
K-Con appeals all three rulings. We have jurisdiction under 28 U.S.C. § 1295(a)(3).
D ISCUSSION
Whether the Court of Federal Claims had jurisdiction
under the CDA is a question of law we decide de novo.
Reflectone, Inc. v. Dalton
, 60 F.3d 1572, 1575 (Fed. Cir.
1995) (en banc). A plaintiff “bears the burden of estab-
lishing subject matter jurisdiction by a preponderance of
the evidence.”
Reynolds v. Army & Air Force Exch. Serv
.,
A
Before turning to the merits, we must determine which issues the Court of Federal Claims had jurisdiction to decide under the CDA. “The CDA grants [the Court of Federal Claims] jurisdiction over actions brought on claims within twelve months of a contracting officer’s final decision.” James M. Ellett Constr. Co. v. United States , 93 F.3d 1537, 1541 (Fed. Cir. 1996) (citing 41 U.S.C. § 609(a)). Jurisdiction requires both that a claim meeting certain requirements have been submitted to the relevant contracting officer and that the contracting officer have issued a final decision on that claim. Id. at 1541–42.
A claim is “ ‘a written demand or written assertion by
one of the contracting parties seeking, as a matter of
right, the payment of money in a sum certain, the ad-
justment or interpretation of contract terms, or other
relief arising under or relating to the contract.’ ”
Reflec-
tone
,
Identifying what constitutes a separate claim is important. We have long held that the jurisdictional standard must be applied to each claim, not an entire case; jurisdiction exists over those claims which satisfy the requirements of an adequate statement of the amount sought and an adequate statement of the basis for the request. See Joseph Morton Co. v. United States , 757 F.2d 1273, 1281 (Fed. Cir. 1985) (“Congress did not intend the word ‘claim’ to mean the whole case between the contrac- tor and the Government; but, rather, that ‘claim’ mean each claim under the CDA for money that is one part of a divisible case.”); see also M. Maropakis Carpentry, Inc. v. United States , 609 F.3d 1323, 1327–32 (Fed. Cir. 2010) (reaching different results for different claims in deter- mining Court of Federal Claims jurisdiction). Claim identification is important also for application of the rule that, once a claim is in litigation, the contracting officer may not rule on it—even if the claim is not properly in litigation because it was not properly submitted to and denied by the contracting officer before it was placed in litigation. Sharman Co. v. United States , 2 F.3d 1564, 1571–72 (Fed. Cir. 1993) (“Once a claim is in litigation, the Department of Justice gains exclusive authority to act in the pending litigation . . . [,] divest[ing] the contracting officer of his authority to issue a final decision on the claim.”) (citing 28 U.S.C. §§ 516–520), overruled on other grounds , Reflectone, 60 F.3d 1572; see also John Cibinic, Jr., et al., Administration of Government Contracts 1292– 93 (4th ed. 2006) (“The contracting officer’s authority to settle claims does not extend to cases in which litigation has commenced in a court. . . . [N]o final decision may be issued on a matter that is already in litigation.”).
Our longstanding demand that a claim adequately
specify both the amount sought and the basis for the
request implies that, at least for present purposes, we
should treat requests as involving separate claims if they
either
request different remedies (whether monetary or
non-monetary)
or
assert grounds that are materially
different from each other factually or legally.
Con-
tract Cleaning
,
We have not treated the different-remedies compo- nent as imposing so rigid a standard as to preclude all litigation adjustments in amounts “based upon matters developed in litigation.” Tecom, Inc. v. United States , 732 F.2d 935, 937–38 (Fed. Cir. 1984) (“ ‘It would be most disruptive of normal litigation procedure if any increase , in the amount of a claim based upon matters developed in litigation before the court [or board] had to be submitted to the contracting officer before the court [or board] could continue to a final resolution on the claim.’ ”) (alterations in original; quoting J.F. Shea Co. v. United States , 4 Cl. Ct. 46, 54 (1983)). But we have differentiated claims seeking different types of remedy, such as expectation damages versus consequential damages. Case, Inc. v. United States , 88 F.3d 1004, 1010 (Fed. Cir. 1996) (hold- ing that two cases “involved different claims” even though both “arose out of the same underlying set of facts and involved [similar, if not the same] allegations of defective specifications,” because the later-filed case requested “additional compensation” beyond the progress payments requested in the other case, including lost profits). In a similar vein, merely adding factual details or legal argu- mentation does not create a different claim, but present- ing a materially different factual or legal theory ( e.g. , breach of contract for not constructing a building on time versus breach of contract for constructing with the wrong materials) does create a different claim. Santa Fe Eng’rs, Inc. v. United States , 818 F.2d 856, 858–60 (Fed. Cir. 1987) (holding that a claim for damages related to three change orders was different from a claim for dam- ages related to “ ‘the collective nature of all the problems, changes and directives issued on the project’ ”) (emphasis in original). We have gone beyond the face of claims to make these distinctions. See, e.g. Sharman , 2 F.3d at 1571 (equating claims that “allege[d] entitlement to the same money based on the same partial performance, only under a different legal label”); Scott Timber Co. v. United States , 333 F.3d 1358, 1366 (Fed. Cir. 2003) (“Scott may have posed slightly different legal theories for the breach, but Scott’s claim is essentially the same as presented to the CO.”).
In its amended complaint in this case, K-Con present- ed three discrete claims— i.e. , three distinct combinations of a request for a remedy and a basis for that request. First, it claimed that the liquidated-damages clause is unenforceable and on that basis sought remission of $109,554 plus interest in liquidated damages withheld by the Coast Guard. Second, as an additional basis for seeking the same remedy of remission, it claimed that it was entitled to time extensions that the Coast Guard never provided. Third, it claimed that, because of con- tract changes made by the Coast Guard, it had to do additional work that entitled it to $196,126.38 over and above remission of liquidated damages. We agree with the Court of Federal Claims that it had jurisdiction to decide the first and third claims, which relate to enforcea- bility of the liquidated-damages clause and to alleged contract changes, but not the second claim, which chal- lenges the Coast Guard’s failure to grant time extensions.
Jurisdiction over the unenforceability claim is undis- puted, and properly so. There was adequate pre-suit notice to the contracting officer in K-Con’s first letter, in which K-Con clearly requested a sum certain ($118,950.68 plus interest, in remission of liquidated damages) on the ground that the liquidated damages imposed in this case amounted to an “impermissible penalty.” J.A. 259. There was also, in the contracting officer’s first denial, a valid pre-suit final decision rejecting K-Con’s contentions.
Jurisdiction over the contract-changes claim is dis- puted. Like the Court of Federal Claims, we conclude that there was CDA jurisdiction over that claim, based on K-Con’s second letter to the contracting officer. That letter provides ample detail regarding the basis for the claim, including what specific actions by the Coast Guard allegedly made constructive changes to contract require- ments; and the letter clearly requests award of a sum certain as a remedy ($196,126.38 in compensation for extra work performed).
The government urges that there was no authorized final decision on that claim before litigation on it com- menced, because K-Con sent its second letter after filing its original complaint, which the government says already contained the contract-changes claim. Sharman , 2 F.3d at 1571–72. We disagree with the premise that the second letter’s contract-changes claim was already in litigation when K-Con sent that letter. The original complaint does complain about contract changes and include some factual assertions shared by the contract- changes claim presented in the second letter. Compare J.A. 68 (original complaint) (“[T]he Coast Guard changed and modified the Contract in among other ways, by failing to properly review and approve drawings submitted by K- Con, and directing K-Con to perform additional work that was not required by the Contract.”) with J.A. 264–66 (second letter) (complaining of contract-changes from the Coast Guard’s review of design submittals). But the remedy requested in the two documents is categorically different: the original complaint asks for remission of liquidated damages, whereas the second letter asks for compensation for extra work performed. That is enough to make the requests different claims. Consequently, the contracting officer’s rejection of the second letter’s con- tract-changes claim, a rejection issued upon full consider- ation of its merits, was an authorized final decision sufficient to establish jurisdiction in the Court of Federal Claims.
The Court of Federal Claims did not have jurisdiction over K-Con’s time-extension claim. At bottom, the time- extension claim is a request for remission of liquidated damages on the ground that the Coast Guard failed to issue time extensions for additional work added to the contract. [2] K-Con squarely placed that claim in litigation through its original complaint, which means that K-Con had to present that claim adequately in its first letter, not in the post-suit second letter. But the first letter plainly fails to allege enough detail to provide adequate notice of the basis for any time extension. Indeed, K-Con admitted to the Court of Federal Claims that its first letter “could not be a valid [time-extension] claim.” J.A. 44.
11
B
On the merits, we first address K-Con’s claim that the
liquidated-damages clause is unenforceable as imposing
an impermissible penalty. K-Con faces a steep climb in
trying to establish unenforceability. “When damages are
uncertain or difficult to measure, a liquidated damages
clause will be enforced as long as ‘the amount stipulated
for is not so extravagant, or disproportionate to the
amount of property loss, as to show that compensation
was not the object aimed at or as to imply fraud, mistake,
circumvention or oppression.’ ”
DJ Mfg. Corp. v. United
States
,
K-Con counters that the rate cannot reflect a reason- able estimate of costs because it includes personnel costs that “would have been incurred no matter what.” Appel- lant’s Br. at 19. Specifically, K-Con argues that Coast Guard “personnel did not work any more hours, work any differently, or get paid any more or any less” due to delay under the contract. Id . This argument is meritless. It is reasonable to expect that delay, if it occurs, will require personnel to devote more time and resources to the project than they would have if the project had been completed on time. Moreover, even if the same personnel might work the same number of hours regardless of delay, it is rea- sonable to expect that delay would force them to re- allocate their hours and impair their ability to give planned attention to other projects, to the detriment of those other projects. In short, inefficiency plausibly breeds administrative costs, which the agreed-upon rate 13 here properly estimated. See Jennie-O Foods, Inc. v. United States , 580 F.2d 400, 413 (Ct. Cl. 1978). K-Con has not raised a genuine issue of material fact regarding the rate’s reasonableness.
The second merits issue involves K-Con’s claim that it is entitled to compensation for additional work it per- formed because of what it says were constructive changes made to the contract by the Coast Guard. The relevant portion of the contract’s changes clause reads as follows:
(b) Any other written or oral order . . . from the Contracting Officer that causes a change shall be treated as a change order under this clause; provided, that the Contractor gives the Contract- ing Officer written notice stating (1) the date, circumstances, and source of the order and
(2) that the Contractor regards the order as a change order.
. . . .
(d) . . . [E]xcept for an adjustment based on de- fective specifications, no adjustment for any change under paragraph (b) of this clause shall be made for any costs incurred more than 20 days be- fore the Contractor gives written notice as re- quired.
48 C.F.R. § 52.243-4 (Aug. 1987); see J.A. 145 (contract incorporating the changes clause).
K-Con alleges that the Coast Guard made two sets of changes to the contract. First, it alleges that, on January 28, 2004, the Coast Guard requested that the building’s eave height be increased by four inches. Second, it alleges that, starting in April 2004 and continuing through July 2004, the Coast Guard requested various changes upon reviewing K-Con’s design submissions. We agree with the Court of Federal Claims that, with regard to all of the alleged changes, K-Con did not comply with the written- notice requirement of the contract’s changes clause.
Throughout the period that the Coast Guard was al- legedly making changes, K-Con never objected to the Coast Guard’s actions or suggested that it was entitled to an adjustment of contract terms. Rather, K-Con repeat- edly expressed its intent to incorporate the Coast Guard’s requests as though they were consistent with the terms of the contract. E.g. , J.A. 345–46 (K-Con responding to Coast Guard’s review comments with brief, affirmative statements, such as “[w]ill comply,” “[c]orrection will be made,” and “[d]etail will be revised”). It was only once K- Con submitted its contract-changes claim in its second letter to the contracting officer—more than two years after any of the changes at issue were allegedly ordered— that K-Con seems to have provided written notice ade- quate under paragraph (b). Only then did K-Con identify the “date, circumstances, and source of the order[s]” it objected to and indicate that it “regard[ed] the order[s] as change order[s].” 48 C.F.R. § 52.243-4(b).
Two years is well beyond the 20-day time limit im- posed by paragraph (d). And the notice provision serves an important purpose in a contract in which some gov- ernment requests are plainly contemplated under the contract. Timely written notice differentiates requests the contractor views as outside the contract from those it deems contemplated by the contract. See Singer Co. Librascope Div. v. United States , 568 F.2d 695, 711 (Ct. Cl. 1977) (“[T]he work was done without notice to the contracting officer that Librascope considered the effort involved to be extra-contractual. . . . The contractor’s failure to protest, while perhaps not an outright bar to the claim, is nevertheless an evidentiary consideration which, in these circumstances, takes on controlling signifi- cance.”). And it gives the government timely notice of what amounts it might be on the hook for, so that it will not be surprised by money claims later, as well as an opportunity to address demands for more money when it might yet avoid them.
Sometimes, extenuating circumstances have weighed
against strict enforcement of the time limit.
generally Powers Regulator Co.
, GSBCA No. 4668, 80-2 BCA
¶ 14,463 (Apr. 30, 1980) (reviewing how the time limit has
been enforced by boards of contract appeals and enumer-
ating exceptions to its strict enforcement);
see also Hoel-
Steffen Const. Co. v. United States
,
K-Con’s sole counterargument is that it did not have to comply with the notice provision of the changes clause because compliance would have been futile. Even if a futility exception exists, however, K-Con’s argument fails because it has not shown that compliance would have been futile. The Coast Guard never stated or implied in advance that it would reject allegations of contract chang- es. J.A. 252 (“Design Coordination Review Com- ments” form, which left a space for the contractor to respond with action code “dc,” meaning “[d]o not concur with [the Coast Guard’s] comment for reasons as indicat- ed”). And although the contracting officer, in response to K-Con’s second letter, did ultimately reject K-Con’s con- tract-changes claim, deeming that fact sufficient to estab- lish futility would threaten to erase the notice requirement. In any event, it is unknown what would have happened had K-Con broached the issue of changes around the time the Coast Guard made the work requests at issue. The submission of the second letter prompted the Coast Guard to make a choice between giving in to K- Con’s demands or subjecting itself to further litigation; timely objections would have presented a very different choice between at least four options—refraining from making requests regarding K-Con’s work, altering the nature of the requests, keeping the requests the same but making equitable adjustments to the contract, or rejecting the allegations of changes altogether and thereby risking litigation or a halt to the project. K-Con failed to comply with the changes clause, and its after-the-fact specula- tions about what would have happened had it complied do not create a genuine dispute of material fact regarding whether it should be excused for its failure.
C ONCLUSION
For the foregoing reasons, the judgment of the Court of Federal Claims is affirmed.
AFFIRMED
Notes
[1] The cited provisions apply to this case. Since 2011, the Contract Disputes Act has been codified at 41 U.S.C. §§ 7101-7109. Pub. L. No. 111-350, 124 Stat. 3677 (2011).
[2] It might be argued that there are in fact two time- extension claims at issue: (1) a time-extension claim from the first letter and original complaint requesting remis- sion of liquidated damages; and (2) a time-extension claim from the second letter and amended complaint requesting a declaratory judgment of a 186-day extension. Compare J.A. 259 (first letter) (requesting remission in part be- cause “the government failed to issue extensions”), and J.A. 68 at ¶ 6, 11 (original complaint) (same), with J.A. 266 (second letter) (requesting “an extension in the con- tract performance period resulting from [certain contract] changes”), and J.A. 85 (amended complaint) (same). But K-Con has identified only one concrete benefit it would receive from its requested declaratory judgment of enti- tlement to a 186-day extension: remission of the liquidat- ed damages withheld for tardiness under the contract. See Sharman , 2 F.3d at 1571. In other circumstances, a declaratory judgment of a time extension might be a free- standing and independently meaningful remedy.