Contract Cleaning Maintenance, Inc. v. U.S.

• Decision Date: 12 February 1987
• Docket Number: No. 86-1123,86-1123
• Citation: 811 F.2d 586
• Parties: 33 Cont.Cas.Fed. (CCH) 75,065 CONTRACT CLEANING MAINTENANCE, INC., Appellant, v. The UNITED STATES, Appellee. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 586

811 F.2d 586

33 Cont.Cas.Fed. (CCH) 75,065

CONTRACT CLEANING MAINTENANCE, INC., Appellant, v. The UNITED STATES, Appellee.

Appeal No. 86-1123.

United States Court of Appeals Federal Circuit.

Feb. 12, 1987.

Carole Boltz and Sharon Gisselman, Wausau, Wis., argued for appellant. With them on brief was Gary R. McCartan, S.C.

Stephen J. McHale, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for appellee. With him on brief were Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director and Robert A. Reutershan, Asst. Director.

Before FRIEDMAN and RICH, Circuit Judges, and BALDWIN, Senior Circuit Judge. ^*

FRIEDMAN, Circuit Judge.

This is an appeal from an order of the United States Claims Court dismissing the appellant's complaint seeking the amount allegedly due it under a government contract. The ground of dismissal was that the complaint asserted a claim of more than $50,000 that was not certified, as section 6(c)(1) of the Contract Disputes Act of 1978, 41 U.S.C. Sec. 605(c)(1), required. We reverse.

I

The undisputed facts are as follows:

A. The General Services Administration (GSA) awarded the appellant a one-year contract to provide cleaning services for a federal office building. The appellant began performance of the contract in July 1974, and GSA exercised an option to extend the contract for one year. The contract expired at the end of July 1976.

Under the contract, the appellant was to be reimbursed for its actual costs up to a specified ceiling. The appellant submitted monthly invoices to GSA for the costs it incurred. Each of these invoices included a "certif[ication] that the amounts invoiced herein do not exceed the lower of (i) the contract price, or (ii) the maximum levels established in accordance with Executive Order 11695, January 11, 1973."

In a letter dated August 12, 1975, GSA informed the appellant that GSA's audit of the first year of performance of the contract determined that the appellant's "accounting system is quite unsatisfactory for use under our contract." The letter stated that "[i]mmediate action must be taken" and required a response by August 25. In a letter dated April 27, 1976, GSA notified the appellant that, as a result of this audit, "adjustments" of $17,240 would be made. The GSA official concluded:

I concur in the auditor's proposed adjustments and will appreciate a reply by May 3, 1976, advising me when a credit will be reflected on your billing.

In a May 12, 1976 response, the appellant excepted to some of the findings, requested more detailed information, and

suggest[ed] that I sit down with whomever prepared this summary along with the auditors report and we may be able to determine a final result.

(All of appellant's letters were written in the first person singular and signed by its president, Howard Boltz.)

On June 4, 1976, GSA acknowledged the appellant's letters

concerning your claim for compensation of $8,700 ... and the exceptions you take on some of the findings arising from the last audit of your company records.

Your claim for compensation of $8,700 has neither been denied or allowed, but is still under consideration, together with the other costs questioned by our auditors.

The letter referred to "our meeting on May 11, 1976," and requested "additional information to substantiate your claims."

As noted, the contract terminated at the end of July 1976. The appellant wrote to GSA again on October 15, 1976:

In further response to your letter of April 27, 1976, and the final financial adjustments to contract No. 65-05BB-41700 (Neg).

Your letter suggest an audit adjustment of $17,240. After the items that make up that amount are resolved, there are additional funds I am entitled too and I have outlined them here.

.... [The letter then described these "additional funds," which totalled $23,232.98.]

I am troubled that your offices have held up payment of billing # 12 of my second year of this contract. I'm informed that the action is a result of our mutual inability to satisfactorily conclude the first years final billing.

I am anxious to remedy any cause of these delays and fully prepared to act In a letter dated February 7, 1977, GSA reported to the appellant the results of its final audit of the appellant's performance of the contract:

promptly with you and your staff to finalize and conclude this matter.

The number and amounts of the cost adjustments are sizable, covering not only the final period adjustments but also those unresolved from the prior year audit. I concur with the results of the audit and wish to arrive at a settlement as soon as possible so final payment can be made. I note that our negotiations to settle the first year audit findings date back to April 27, 1976, and adjustments totalling $42,007 are still outstanding.

The final audit concluded that additional "adjustments" for the second year of $35,787 were required, bringing the overall total adjustments to $77,794. In its response on February 15, 1977, the appellant requested that "a preliminary meeting be arranged ... to ascertain what exactly should be resolved and how to achieve satisfaction without a lot of lost time."

The appellant wrote again to GSA on March 15, 1979, concerning "the monies my company still has coming":

My contention is that I am owed my 12th and 13th bill of the second year totaling $66,605.45, plus additional sums not previously billed that I wrote your office about October 15, 1976; this is an additional $23,232.98 and reflects a credit for some figures that were in error previously. I was not aware until our last meeting with your auditor that I was entitled to bonding costs which amounted to $9,427.00. Now these four items mentioned total $99,609.69.

....

There have been inconsistencies that have greatly contributed to the resulting delay in settling the financial conclusions of this contract and I suggest we resolve this matter with negotiation as opposed to further bookkeeping and auditor effort.

In a letter dated April 11, 1980, GSA "acknowledge[d the appellant's] March 10, 1980 letter concerning settlement," and stated that the appellant "must provide evidence to substantiate the unpaid claims that have not been resolved."

B. On September 23, 1983, GSA sent a certified letter to the appellant which read in full:

This is in regard to our expired contract GS-05B-41770 [sic] which was for cleaning services at the Federal Building, 1819 Pershing Road, Chicago, Illinois.

In 1977 our auditors advised that under the above contract there was $77,794.00 adjustments outstanding in the above contract. Numerous efforts have been made by GSA to resolve this amount disputed by your firm.

Please be advised that should you have any documentation pertaining to this amount you should present it to the undersigned no later than October 17, 1983. No further delays will be accepted in resolving this and closing out this contract.

The appellant responded on October 17, 1983, with a letter that substantially duplicated its letter of March 15, 1979.

GSA issued a "final decision of the Contracting Officer" on October 25, 1983, which stated that the appellant had "failed to provide any documentation to refute the GSA claim of $77,794.00 costs questioned in the GSA audit report." The contracting officer ruled, however, that the appellant was entitled to a credit of $9,427.00 for bonding costs, which reduced the amount due GSA to $68,367.00. Since GSA had withheld $66,605.45 by not paying two of the appellant's invoices, GSA concluded that the appellant owed it $1,762.55.

C. The appellant filed a timely suit in the Claims Court under the Contracts Dispute Act, 41 U.S.C. Secs. 601-13 (1978) (Disputes Act), seeking $99,265.43 under the contract. The Claims Court granted the government's motion to dismiss. It held that the appellant's letter of March 15, 1979, constituted a "claim" for more than $50,000 which, under the Disputes Act (which had become effective on March 1 since each of the mentioned submissions was, in fact, a "written demand or assertion by one of the parties, seeking, as a matter of right, the payment of money, adjustment, or interpretation of contract terms, or other relief arising under or relating to this contract." Z.A.N. Co. v. United States, 6 Cl.Ct. [298,] 304 [ (1984) ].

1979), was required to be certified, and that because of this noncertification, the court had no jurisdiction over the suit. The court stated that prior to the March 15, 1979 "claim," the appellant "had submitted a claim to GSA dated October 15, 1976, in the amount of $23,232.96 [sic]" which the "March 15, 1979 claim included...." The court rejected the government's contention that the appellant's submissions prior to March 1, 1979, were not "claims,"

II

A. Section 6(a) of the Disputes Act provides in relevant part:

All claims by a contractor against the government relating to a contract shall be in writing and shall be submitted to the contracting officer for a decision.

41 U.S.C. Sec. 605(a). For claims of more than $50,000, the contractor must

certify that the claim is made in good faith, that the supporting data are accurate and complete to the best of his knowledge and belief, and that the amount requested accurately reflects the contract adjustment for which the contractor believes the government is liable.

41 U.S.C. Sec. 605(c)(1). If such a claim has not been certified, the Claims Court lacks jurisdiction over an appeal from the decision of the contracting officer denying the claim. See W.M. Schlosser Co. v. United States, 705 F.2d 1336, 1338-39 (Fed.Cir.1983).

"[W]hen[, however,] a contracting officer renders a decision after the effective date of the Act on an uncertified claim submitted prior to that date, the contractor may proceed under the Act and appeal to this court." Folk Constr. Co., 226 Ct.Cl. 602, 605 (1981). Since none of the appellant's invoices or letters included this certification, the "seminal...