ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of-- )
)
Sauer Incorporated ) ASBCA No. 60366
)
Under Contract No. N69450-09-D-1274 )
APPEARANCE FOR THE APPELLANT: Kevin J. Kelly, Esq.
General Counsel
APPEARANCES FOR THE GOVERNMENT: Ronald J. Borro, Esq.
Navy Chief Trial Attorney
Richard A. Gallivan, Esq.
Trial Attorney
OPINION BY ADMINISTRATIVE JUDGE CLARKE
ON THE GOVERNMENT'S MOTION TO DISMISS
The United States Navy (government) moves to partially dismiss this appeal
alleging that Sauer Incorporated (Sauer) raised a new claim for the first time in its
complaint. We treat this as a motion to strike part of the complaint and grant the
motion.
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION
1. The government and Sauer entered into IDIQ Contract No. N69450-09-D-1274
(contract) on 3 June 2009 (R4, tab 1). Task Order 4 was awarded to Sauer on
18 November 2009 for design and repairs to Hangar 1552 at Naval Station Mayport,
Florida (R4, tab 3). The contract incorporates by reference FAR 52.233-1, DISPUTES
(JUL 2002), ALTERNATE I (DEC 1991) (R4, tab 1at9).
2. By letter 1 dated 18 June 2013, Sauer stated to the contracting officer (CO)
that during earlier negotiations regarding compensation for a government suspension
of work, Sauer's home office overhead at 6.22% was "inadvertently left out of the
settlement" and requested an additional $57,535 be added onto the settlement. The
contractor further stated:
Sauer's position is that there is entitlement to the standard
home office overhead and feels the best way to proceed is
to include the [$57,535] overhead into the pending mod.
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The Board expresses no opinion as to whether this letter is a claim.
By doing so, the Eichleay total [for unabsorbed overhead]
will be reduced accordingly and Eichleay negotiations can
still proceed at a later time.
(R4, tab 8)
3. By letter2 dated 20 June 2013, the CO rejected Sauer's request to add home
office overhead to the settlement stating among other things, that "because a fair and
reasonable bottom line price was negotiated ... there is no merit to Sauer's request for
'standard overhead rate"' (R4, tab 10 at 1001 ).
4. The government and Sauer entered into Modification No. 17 (Mod 17) of
Task Order 4 on 26 September 2013. The stated purpose of the modification was to
adjust the task order for time and money due to the government's suspension of work
for over a year as referenced in Sauer' s 18 June 2013 letter. The settlement in Mod 17
was for a lump sum of $925,000 and a time extension of 437 days. The modification
provides, in relevant part:
The negotiated amount incorporates extention [sic] of
warranties and escalation of price for labor and material.
All changes associated with the susupension [sic] are
included in this amount with the exception of consideration
for unabsorbed overhead, to which Sauer wishes to reserve
the right to request further consideration if they choose.
"CONTRACTOR'S STATEMENT OF RELEASE"
Acceptance of this modification by the contractor
constitutes an accord and satisfaction and represents
payment in full for both time and money for any and all
costs, impact effect, and for delays and disturptions [sic]
arising out of, or incidental to, the work as herein revised.
(R4, tab 4 at 140)
5. By letter dated 18 November 2014, Sauer submitted a certified claim to the
CO in the amount of $130,899 for unabsorbed home office overhead for the
government suspension covered in Mod 17. The certified claim did not mention
Sauer's earlier request, dated 18 June 2013, to add $57,535 in home office overhead
for the cost increases related to the government suspension of work. (R4, tab 11)
2 The Board expresses no opinion as to whether this letter is a contracting officer's
final decision (COFD).
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6. The government denied Sauer's certified claim by a contracting officer's
final decision (COFD), dated 16 September 2015. The COFD did not mention Sauer's
earlier request, dated 18 June 2013, to add $57,535 in home office overhead for the
cost increases related to the government suspension of work. (R4, tab 15) Sauer
timely appealed to this Board on 11 December 2015.
7. Sauer' s complaint, dated 13 January 2016, alleges that it is entitled to
$130,899 for unabsorbed home office overhead due to the government suspension
covered in Mod 17 and $57,535 for home office overhead associated with the cost
increases ofMod 17 (compl. ~ 48).
8. By motion dated 13 May 2016, the government moved to dismiss the
$57,535 home office overhead portion of the complaint.
DECISION
The government argues that Sauer' s request for relief for home office overhead
should be dismissed for lack of jurisdiction because it was not first presented to the CO
and Mod 17 precluded Sauer from submitting any claims other than for unabsorbed
home office overhead during the government suspension of work. Sauer argues in
reply that both requests for relief in its complaint arise from the same set of operative
facts and whether Mod 17 precludes Sauer's request for home office overhead is a
government affirmative defense and is not relevant to determining whether both
requests for relief arise from the same set of operative facts.
Under the CDA, the Board has jurisdiction over disputes based upon claims
that a contractor has first submitted to the CO for decision. 41 U.S.C. §§ 7103-7105.
We lack jurisdiction over claims raised for the first time on appeal, in a complaint or
otherwise. Whether a claim before the Board is new or essentially the same as
presented to the CO depends upon whether the matters derive from common operative
facts. Dawkins General Contractors & Supply, Inc., ASBCA No. 48535, 03-2 BCA
~ 32,305 at 159,844. As we stated in Shams Engineering & Contracting Co. & Ramli
Co., ASBCA Nos. 50618, 50619, 98-2 BCA ~ 30,019 at 148,524-25:
The mere introduction of additional facts or the assertion
of a new legal theory of recovery, when based upon the
same operative facts as included in the original claim, do
not constitute a new claim. However, where the proof of
the new legal theory of recovery contains operative facts
which differ from those asserted in the original claim, the
essential nature of the claim has been changed and we do
not have jurisdiction over the new claim until it is
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presented to the contracting officer for decision. Trepte
Construction Company, Inc., ASBCA No. 38555, 90-1
BCA ii 22,595; Service Engineering Company, ASBCA
No. 42137, 94-3 BCA ii 27,064.
In determining a claim's scope, we are not limited to the claim document but
can examine the totality of the circumstances. No particular wording is necessary to
express it, but the CO must have "adequate notice" of the basis and amount of the
claim. Versar, Inc., ASBCA No. 56857, 10-1 BCA ii 34,437 at 169,957.
Sauer's request for relief for home office overhead in its complaint was not
mentioned in its certified claim that was presented to the CO (SOF ii 5). While both
requests for relief in Sauer's complaint derive from the government suspension, the
proof for $57,535 the home office overhead contains different operative facts from
those for the $130,899 unabsorbed home office overhead. Sauer's request for
unabsorbed home office overhead is for overhead related to the original contract
amount that was unabsorbed, whereas home office overhead is for overhead related to
the increased contract amount from Mod 17 (SOF ii 7). Thus, the request for home
office overhead has operative facts different from those for unabsorbed home office
overhead. Sauer even recognizes this in its complaint as it states "[t]he inclusion of a
home office overhead rate applied to additional contract costs is standard in the
industry and is distinct from and additional to any claim for unabsorbed home office
overhead" (compl. ii 44).
When looking at the totality of the circumstances, it is clear that the CO did not
have adequate notice that Sauer's request for home office overhead was part of its
claim submitted for a COFD. The COFD itself made no mention of the home office
overhead associated with the cost increases of Mod 17 (SOF ii 6). While the basis and
amount for the home office overhead was discussed in Sauer's letter, dated 18 June
2013, there is nothing in Sauer's claim to put the CO on notice that Sauer was
requesting a decision on the home office overhead (SOF ii 5).
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CONCLUSION
Accordingly, we find that the request for relief for home office overhead derives
from different operative facts than the claim for unabsorbed home office overhead.
The government's motion is granted and the request for $57,535 in home office
overhead is stricken from the complaint.
Dated: 17 November 2016
Administrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
~~A4(_ ~
RICHARD SHACKLEFORD
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 60366, Appeal of Sauer
Incorporated, rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
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