Agility Logistics Servs. Co. KSC v. Mattis
| Decision Date | 16 April 2018 |
| Docket Number | 2015-1555 |
| Citation | 887 F.3d 1143 |
| Parties | AGILITY LOGISTICS SERVICES COMPANY KSC, Appellant v. James N. MATTIS, Secretary of Defense, Mark T. Esper, Secretary of the Army, Appellees |
| Court | U.S. Court of Appeals — Federal Circuit |
John Patrick Elwood, Vinson & Elkins LLP, Washington, DC, argued for appellant. Also represented by Michael Charness, Joshua Stephen Johnson.
William James Grimaldi, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for appellees. Also represented by Chad A. Readler, Robert E. Kirschman, Jr., Claudia Burke.
Before Prost, Chief Judge, Lourie and Chen, Circuit Judges.
This is an appeal from a decision of the Armed Services Board of Contract Appeals ("Board") dismissing for lack of jurisdiction. The Board found that the Contract Disputes Act of 1978 ("CDA"), 41 U.S.C. §§ 7101 – 7109, does not provide it with jurisdiction in this case. We agree and affirm the Board's decision in that regard. The Board also found that it lacked jurisdiction under its charter. Because that decision was not made pursuant to the CDA, we lack jurisdiction to review it. We therefore affirm in part and dismiss in part.
In 2003, the United States and its coalition partners created the Coalition Provisional Authority ("CPA") to rule in Iraq pending transfer of that authority to a newly constituted Iraqi government. J.A. 1–2; see id. at 318–19.
On June 6, 2004, the CPA awarded appellant Agility Logistics Services Company KSC ("Agility") the contract at issue (the "Contract").1 See J.A. 598–671. Agility's scope of work under the Contract was to "establish and operate two distribution center warehouses and staging areas as part of a supply chain management system supporting the reconstitution of Iraqi security forces, and for the reconstruction support of Iraq civil infrastructure." J.A. 2 (citing J.A. 603). The Contract provided for the issuance of task orders setting forth specific work required. J.A. 604.
The Contract also specified that J.A. 3–4 (quoting J.A. 670). The CPA's Memorandum No. 4 defined "Iraqi funds" to include funds from the Development Fund for Iraq ("DFI").2 J.A. 340 ¶ 8.
The Contract further required Agility to acknowledge the impending transfer of authority and the CPA's scheduled dissolution:
[Agility] hereby recognizes that a transfer of authority (TOA) from the [CPA] to the interim Iraqi Governing Council is scheduled to take place June 30, 2004. Furthermore, [Agility] recognizes that upon the TOA on June 30, 2004, or upon any later TOA date if delayed, the CPA is dissolved. The CPA, U.S. Government or Coalition Government will not be liable to the contractor for any performance undertaken after the TOA.
In preparation for the transfer of authority to the Iraqi Interim Government ("IIG"), the CPA issued Memorandum No. 15 in mid-June 2004. J.A. 370–71. Memorandum No. 15 allowed the IIG Minister of Finance to delegate "responsibility to monitor and confirm performance, certify and/or make payments, and otherwise administer contracts or grants funded with monies from the [DFI]." J.A. 370. The memorandum allowed the IIG to delegate these responsibilities to the CPA's Program Management Office ("PMO") or, "following the transfer of full governance authority to the [IIG], the Chief of Mission of the United States Embassy, Baghdad and/or the Commander of the Multi-National Force-I." Id.
On June 15, 2004, the IIG Minister of Finance delegated contract-administration responsibility concerning DFI-funded contracts to the PMO. J.A. 373a–75a; see id. at 5–6. The delegation did "not authorize [the PMO] to terminate, amend, or novate any contracts or grants" covered by the delegation. J.A. 374a. It further stated:
The powers, privileges, rights and authorities granted to [the PMO] under this designation may be further delegated. They shall transfer to the Chief of Mission of the United States Embassy Baghdad and the Commander of the Multi-National Force-I on June 30, 2004, both of whom shall also have the authority to delegate these powers, privileges, rights, and activities further.
Four days later, on June 19, 2004, Task Order No. 3 issued under the Contract. Unlike the first two task orders, Task Order No. 3 obligated U.S. funds. J.A. 803.
On or about June 28, 2004, the CPA dissolved and sovereignty transferred from the CPA to the IIG. J.A. 5. In accordance with the IIG Minister of Finance's June 15, 2004 memorandum, the PMO's contract-administration authority transferred to the Chief of Mission of the United States Embassy Baghdad and the Commander of the Multi-National Force-I effective June 30, 2004. J.A. 6–7.
Following the CPA's dissolution, contract-administration authority was further delegated to the Project and Contracting Office ("PCO"), a temporary organization within the Department of Defense that later became part of the Department of the Army. J.A. 7. On July 24, 2004, the PCO issued a memorandum providing its understanding of its authority under the IIG Minister of Finance's June 15, 2004 memorandum, stating:
In accordance with the Ministry of Finance's letter[,] dated 15 June 2004, the [PCO] will continue to monitor and confirm performance, certify and/or make payments, and otherwise administer contracts or grants financed by [the DFI] and awarded under the former [CPA]. The delegation letter does not grant us the authority to award, terminate, amend, or novate any contracts or grants under that delegation.
Several task orders issued under the Contract through December 2007. Of these, Task Order Nos. 3, 6, 9–12, and 14–20 (collectively, the "Task Orders") are at issue in this appeal. Each of the Task Orders obligated U.S. funds.
In September 2010, after a period of negotiations between the parties, a U.S. contracting officer ("CO") issued final decisions regarding each of the Task Orders. The CO determined that Agility owed the government almost $81 million due to the government's overpayment. Agility appealed all but one of these decisions to the Board.
Separately, in April 2011, Agility submitted a certified claim to the CO seeking approximately $47 million for unpaid fees on the Task Orders. The CO denied the claim, and Agility appealed that decision to the Board as well.
The government moved to dismiss the appeals for lack of jurisdiction. Agility opposed the motion and argued that the Board had jurisdiction under the CDA, or alternatively under the Board's charter.
The Board rejected Agility's arguments and dismissed the appeals for lack of jurisdiction. J.A. 1–15. The Board first observed that its CDA jurisdiction was limited to contracts "made by an ‘executive agency.’ " J.A. 9 (citing 41 U.S.C. §§ 7101(8), 7102(a) ). Board precedent held that the CPA was not an executive agency within the meaning of the CDA. Because the CPA undisputedly awarded the Contract, and because the Board found that the IIG assumed responsibility over the Contract as of the IIG's June 15, 2004 memorandum, the Board determined that it would lack CDA jurisdiction absent some showing that the Contract was novated or assigned to an executive agency. Id. The Board found no evidence of such a novation or assignment. Rather, it found that the government acted as a contract administrator, not as a contracting party. Id. at 9–10. Thus, the Board concluded that it lacked jurisdiction under the CDA. Id. at 11. In a separate discussion, the Board concluded that it lacked jurisdiction under its charter. Id. at 11–12.
Agility timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(10).
Whether the Board has jurisdiction over Agility's claims is a question of law we review de novo. E.g. , Arnold M. Diamond, Inc. v. Dalton , 25 F.3d 1006, 1010 (Fed. Cir. 1994).
Contract interpretation is also a question of law we review de novo, though we give the Board's interpretation of government contracts careful consideration given its considerable experience and expertise. Interstate Gen. Gov't Contractors, Inc. v. Stone , 980 F.2d 1433, 1434 (Fed. Cir. 1992). Whether a contract existed between Agility and the government is a mixed question of law and fact. Estes Express Lines v. United States , 739 F.3d 689, 693 (Fed. Cir. 2014). And the Board's fact findings are final unless "fraudulent, arbitrary, or capricious," "so grossly erroneous as to necessarily imply bad faith," or "not supported by substantial evidence." 41 U.S.C. § 7107(b).
As it did before the Board, Agility argues that the Board had jurisdiction under the CDA and the Board's charter. We address these arguments in turn.
The CDA applies to contracts "made by an executive agency," 41 U.S.C. § 7102(a), and gives the Board jurisdiction to decide appeals of contracting officer decisions relating to such contracts, see id. § 7105(e)(1)(A). Therefore, to determine whether the Board had jurisdiction under the CDA, we must decide whether the Contract was "made by" an executive agency. We conclude that it was not.
The Contract's plain language compels our conclusion. The Contract's first page confirms that the CPA awarded the Contract, J.A. 598, and Agility does not contend that the CPA is an "executive agency" within the meaning of the CDA.4 Agility nevertheless presents several theories as to why the Contract—or, at least, each of the Task Orders—was made by an executive agency.
First, Agility contends that the IIG never assumed responsibility over the Contract. Though not entirely clear from its briefing, Agility's argument seems to be: given that the CPA dissolved, if the IIG never assumed responsibility over the Contract, the government must have emerged as the contracting party.
In support of its position, Agility...
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