James M. Ellett Const. Co., Inc. v. U.S., 94-5161

• Decision Date: 26 August 1996
• Docket Number: No. 94-5161,94-5161
• Citation: 93 F.3d 1537
• Parties: 41 Cont.Cas.Fed. (CCH) P 76,997 JAMES M. ELLETT CONSTRUCTION COMPANY, INC., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1537

93 F.3d 1537

41 Cont.Cas.Fed. (CCH) P 76,997

JAMES M. ELLETT CONSTRUCTION COMPANY, INC., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.

No. 94-5161.

United States Court of Appeals, Federal Circuit.

Aug. 26, 1996.

Michael E. Haglund, Haglund & Kirtley, Portland, Oregon, argued, for plaintiff-appellant. With him on the brief was Kathleen A. Pool.

Sharon Y. Eubanks, Deputy Director, Commercial Litigation Branch, Civil Division, Department of Justice, Washington, D.C., argued, for defendant-appellee. With her on the brief were Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, and Steven E. Gordon, Trial Attorney. Of counsel was James M. Kinsella.

Before MAYER, MICHEL and BRYSON, Circuit Judges.

MAYER, Circuit Judge.

James M. Ellett Construction Company, Inc. appeals the judgment of the United States Court of Federal Claims, No. 90-641 C (July 29, 1994), dismissing its suit challenging a contracting officer's final decision for want of subject matter jurisdiction because Ellett had not submitted a "claim" that complied with the requirements of the Contract Disputes Act. Subsequent to the court's dismissal, this court clarified the definition of a claim, overruling the cases upon which the trial court had relied in dismissing Ellett's complaint. Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed.Cir.1995) (in banc). Because Ellett submitted both a "claim" as that term is explained in Reflectone, and a termination settlement proposal that ripened into a claim which the contracting officer settled by determination, there was jurisdiction. Therefore, we reverse and remand for further proceedings.

Background

In July 1988, the Forest Service of the United States Department of Agriculture (agency) awarded Ellett a contract to construct a 2.7 mile logging road in the Siskiyou National Forest, Oregon. The contract contained the April 1984 version of the Federal Acquisition Regulation (FAR) clause authorizing the government to terminate the contract for its convenience, 48 C.F.R. § 52.249-2 (Alternate I), which states, in pertinent part:

(d) After termination, the Contractor shall submit a final termination settlement proposal to the Contracting Officer in the form and with the certification prescribed by the Contracting Officer....

(e) Subject to paragraph (d) above, the Contractor and the Contracting Officer may agree upon the whole or any part of the amount to be paid because of the termination....

(f) If the Contractor and the Contracting Officer fail to agree on the whole amount to be paid the Contractor because of the termination of work, the Contracting Officer shall pay the Contractor the amounts determined as follows, but without duplication of any amounts agreed upon under paragraph (e)....

....

(i) The Contractor shall have the right of appeal, under the Disputes clause, from any determination made by the Contracting Officer under paragraph (d) [or] (f).... If the Contracting Officer has made a determination of the amount due under paragraph (d) [or] (f) ..., the Government shall pay the Contractor (1) the amount determined by the Contracting Officer ... if no timely appeal has been taken, or (2) the amount finally determined on appeal.

On July 28, 1988, the agency issued Ellett a partial notice to proceed, which authorized the construction of just 4,000 feet of the road, because of pending legislation to limit entry into the area. The agency then terminated the remainder of the contract for convenience on September 30, 1988.

By letter dated November 17, 1988, the stated purpose of which was "to file formal notice of claim pursuant to the Contract Disputes Act of 1978 [ (CDA) ]," Ellett sought to recover $545,157.19 from the agency. Specifically, the company claimed: (1) a $136,964.81 equitable adjustment for government-ordered changes; (2) $32,036.50 for "unforeseen and unexpected security costs" that were "not disclosed in the prospectus"; and (3) $376,155.88 in lost profits. Although not submitted on the forms the FAR requires for settlement proposals, see 48 C.F.R. § 49.206-1(c) (1995) ("Settlement proposals must be on the forms prescribed in 49.602...."), Ellett says this letter, like a termination settlement proposal, was intended to recover all money due under the contract. The contracting officer responded by letter of December 2, 1988, that FAR Part 49 governs "the settlement of termination proposals and requests for contract modification." The letter said Ellett needed to submit a settlement proposal on Standard Forms (SF) 1436 (Settlement Proposal (Total Cost Basis)) and 1439 (Schedule of Accounting Information), which were enclosed.

On March 3, 1989, Ellett submitted a settlement proposal on the required forms, requesting a net payment of $494,826. It admits that the amount sought in this request was largely duplicative of its November 17, 1988 submission, although different in some respects because of the requirements of the forms and unspecified intervening events. The parties then began to negotiate a mutually agreeable settlement.

In a January 12, 1990 letter to the contracting officer, Ellett observed that it had been "nearly 14 months" since the November 17, 1988 CDA "claim" and one year since the settlement proposal. Consequently, it said that unless the "outstanding claim" were resolved satisfactorily within thirty days, it would file suit in the United States Court of Federal Claims. ¹ The agency responded with a settlement offer of $120,649, which Ellett rejected in a March 31, 1990 letter which also said that unless the agency agreed to a settlement of $250,000 within two weeks, it would file suit.

The government rejected the $250,000 settlement offer, and the contracting officer prepared a document styled "Contracting Officer's Findings and Determination," dated June 25, 1990. There he evaluated the termination settlement proposal and concluded that Ellett was entitled to termination costs of $416,144.01, less progress payments the agency had already made, for a net of $22,779.01.

On July 13, 1990, Ellett filed a complaint in the Court of Federal Claims, seeking $451,084 plus interest, costs, and attorneys fees. The government moved to dismiss for lack of subject matter jurisdiction because the November 17, 1988 letter did not qualify as a valid claim under the CDA, and even if it were a valid claim, it was not properly certified. The court agreed that the letter was not properly certified and dismissed the suit. James M. Ellett Constr. Co. v. United States, No. 90-641 C (Cl.Ct. Feb. 6, 1991). We reversed. James M. Ellett Constr. Co. v. United States, No. 91-5071, 1992 WL 82447 (Fed.Cir. Apr. 24, 1992).

On remand, the government renewed its motion to dismiss, arguing that Ellett had not yet submitted a claim to the contracting officer for purposes of the CDA. In granting the motion, the court said Ellett had to establish that "(1) [it] asserted in writing and with sufficient specificity a right to additional compensation, (2) the government disputed that right, and (3) [it] communicated [its] desire for a contracting officer decision." Slip op. at 10 (citing Heyl & Patterson, Inc. v. O'Keefe, 986 F.2d 480 (Fed.Cir.1993); Transamerica Ins. Corp. v. United States, 973 F.2d 1572 (Fed.Cir.1992)). It also relied on Santa Fe Engineers, Inc. v. Garrett, 991 F.2d 1579 (Fed.Cir.1993); Dawco Construction, Inc. v. United States, 930 F.2d 872 (Fed.Cir.1991); and Mayfair Construction Co. v. United States, 841 F.2d 1576 (Fed.Cir.1988), for the proposition that there must be a preexisting dispute for a submission to be a claim. ² The court held that because there was not an existing dispute on November 17, 1988, Ellett's letter of that date was not a "claim"; it was a "unilateral cost (i.e. settlement) proposal." Slip op. at 11. The court also said that the November 17, 1988 letter did not request a final determination by the contracting officer, but was only an invitation to enter negotiations. It concluded that Ellett's March 3, 1989 termination settlement proposal was not a claim because it did not seek a final decision from the contracting officer. This appeal followed.

Discussion

Both parties agree that all pertinent facts are in the record and are not disputed; thus, the issue of whether Ellett's submissions constitute "claims" is ripe for review. Jurisdiction is a question of law which we review de novo. Reflectone, 60 F.3d at 1575.

The United States "is immune from suit save as it consents to be sued ... and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 770, 85 L.Ed. 1058 (1941) (citations omitted); see also Hercules Inc. v. United States, --- U.S. ----, ----, 116 S.Ct. 981, 985, 134 L.Ed.2d 47 (1996); Central Ark. Maintenance, Inc. v. United States, 68 F.3d 1338, 1341 (Fed.Cir.1995) (federal courts, with the exception of the Supreme Court, have "jurisdictional reach only so far as Congress allows"). The Court of Federal Claims has jurisdiction " 'only of those [claims] which by the terms of some act of Congress are committed to it.' " Hercules, --- U.S. at ----, 116 S.Ct. at 985 (quoting Thurston v. United States, 232 U.S. 469, 476, 34 S.Ct. 394, 395, 58 L.Ed. 688 (1914)).

The CDA grants the court jurisdiction over actions brought on claims within twelve months of a contracting officer's final decision. 41 U.S.C. § 609(a) (1994). Thus, for the court to have jurisdiction under the CDA, there must be both a valid claim, a term the act leaves undefined, and a contracting officer's final decision on that claim. ³ See Reflectone, 60 F.3d at 1575; Sharman Co. v. United States, 2 F.3d 1564, 1568-69 (Fed.Cir.1993). Consequently, the controlling question here is whether Ellett submitted a proper claim upon which the contracting officer has issued a decision. Our answer is based on the FAR definition of a claim, the...