Engage Learning, Inc. v. Salazar

• Citation: 660 F.3d 1346
• Decision Date: 05 October 2011
• Docket Number: No. 2011–1007.,2011–1007.
• Parties: ENGAGE LEARNING, INC., Appellant, v. Ken SALAZAR, Secretary of the Interior, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

660 F.3d 1346

ENGAGE LEARNING, INC., Appellant,

v.Ken SALAZAR, Secretary of the Interior, Appellee.

No. 2011–1007.

United States Court of Appeals, Federal Circuit.

Oct. 5, 2011.

Ellis B. Freatman, III, Roberts & Freatman, of Ypsilanti, MI, argued for appellant.

Jane W. Vanneman, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for appellee. With her on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Brian M. Simkin, Assistant Director. Of counsel on the brief were Sarah T. Zaffina and Aaron S. Lax, United States Department of Interior, of Washington, DC.

Before RADER, Chief Judge, and LOURIE and O'MALLEY, Circuit Judges.

O'MALLEY, Circuit Judge.

Engage Learning, Inc. (“Engage”) appeals from a decision of the Civilian Board of Contract Appeals (“the Board”) dismissing its appeal for lack of subject matter jurisdiction. The Board held that it did not have jurisdiction under the Contract Disputes Act of 1978 (“CDA”), 41 U.S.C. § 601 et seq., because Engage failed to establish that it had a contract with the government for the unpaid services. Engage Learning, Inc. v. Dep't of the Interior, CBCA 1165, 2010 WL 2484235 (June 15, 2010) (“ Board Op. ”). Because we conclude that the Board erred in dismissing the appeal on jurisdictional grounds, but could have dismissed in part for failure to state a claim upon which relief can be granted, we affirm in part, vacate in part, and remand.

Background

Engage provides professional training, curriculum development, and technical assistance to schools, teachers, and administrators. Since 2001, Engage has provided these services to schools run by the Bureau of Indian Affairs (“BIA”), United States Department of the Interior, through the BIA's Family and Child Education (“FACE”) program. The BIA funds services for its FACE program in two ways: (1) directly through BIA contracts, or purchase orders, with a service provider; and (2) indirectly through the distribution of funds under the No Child Left Behind Act of 2001 (“NCLB Act”), 20 U.S.C. § 6301 et seq., to BIA schools, which in turn contract with a provider. Engage seeks payment from the BIA for services provided to BIA-operated schools during two time periods: (1) October 1 through November 22, 2002; and (2) March 1–4 and April 5–7, 2004. According to Engage, it rendered these services pursuant to an express or implied-in-fact contract with the BIA. With respect to the services performed in 2004, Engage also alleges that those services were covered by a contract with the principal of a BIA-run school under the NCLB Act.

Regarding the 2002 time period, it is undisputed that in August 2002 the BIA awarded contract SMK0E020259 (“PO 20259”) to Engage. Under the terms of this contract, Engage was to provide (1) a five-day teacher training on August 5–9, 2002; and (2) an unspecified number of site visits to thirty-two BIA schools between August 12, 2002, and June 30, 2003, to support implementation of the FACE program. The total contract was for $66,480: $30,480 for the teacher training and $36,000 for the site visits. Lana Shaughnessy, Special Assistant to Keith King, the Director of the Office of Indian Affairs (“OIA”), requested the services included in PO 20259 on June 17, 2002, via requisition K00E20–2–270. The requisition was also signed by Approval Official William Mehojah, Director of the Office of Indian Education Programs. The contract, dated August 8, 2002, was signed by Contracting Officer (“CO”) Sonia Nelson.

PO 20259's contract price of $66,480 was significantly lower than what Engage originally proposed to the government. Earlier in the year, Engage had submitted a contract proposal to the BIA for services to be performed in 2002 and 2003 totaling $1,182,866, including $62,960 for two teacher trainings and $710,744 for four site visits to thirty-two BIA-operated schools. Two amendments were later made to requisition K00E20–2–27. The first amendment, dated August 28, 2002, includes an additional teacher training and additional site visits as well as two principal/administrator trainings and technology support, for a total cost of $796,304. The second amendment, dated October 8, 2002, includes additional site visits for $118,539. Both amendments were requested by Shaughnessy and approved by Mehojah. No contracts signed by a CO accompany these requisition amendments. CO Nelson did sign one amendment to PO 20259 on December 18, 2002. This amendment, however, makes only an administrative change—a change to the accounting code—and specifically states that the “purchase order amount is not effective [sic] by this amendment.” J.A. 95. There is only one other contract in the record from the 2002 time period: PO 20395, dated September 16, 2002, and signed by OIA Director and CO King. This contract authorizes $31,480 for a five-day teacher training. Later, in February 2003, King signed a contract with Engage for over a million dollars in services to be provided through December 31, 2003.

Overall, Engage claims to have provided $462,052.20 in services to BIA schools between September and December 2002, including the $66,480 paid by the BIA under PO 20259. Shaughnessy sent much of the rest of the remaining amount to the schools, which Engage then billed directly. At dispute is the partial nonpayment for services Engage provided to fourteen schools between October 1 and November 22, 2002. Engage submitted invoices for services totaling $118,054, of which the BIA refused payment on $80,485 contained in eight invoices. In May 2004, Engage again requested payment of the outstanding $80,485 from King.

On July 28, 2004, King denied payment. In his letter, addressed to Ms. Diana Johnston, President and CEO of Engage, King states his determination that the “invoices are in fact the result of an unauthorized commitment, made by a Government employee who did not have the authority to enter into an agreement on behalf of the Government.” J.A. 101. King further states that he notified Shaughnessy and Johnston “prior to the work being performed which generated the above invoices, that there was not a contract in place for these services and that, until a contract is in place, that these services should not be provided.” J.A. 102. Shaughnessy disputes King's version of the facts. Specifically, she attests that, during this period, she “was the contracting officer representative” with “the authority to authorize and approve work performed by Engage Learning, Inc.,” including “the authority to direct the schools to contract for these services and to bind the Government in that commitment.” J.A. 898. Shaughnessy also attests that, during this period, “King's ability to perform his job was severely hampered by extensive absenteeism from work.” Id. Engage's Vice President also contests King's account. According to Engage's Vice President, “Keith King gave verbal authority to conduct four site support visits each to thirty-two different Indian schools during the 2002 to 2003 school year.” ¹ J.A. 893.

The reference in King's letter to notifying Johnston is the subject of a memorandum from King to Shaughnessy dated October 4, 2002.² In the memorandum, King states that he and Johnston had talked that day about the absence of a contract for upcoming training sessions and site visits and that they had agreed that Engage would not perform any services until a contract was in place. Johnston denies that the October 4, 2002, conversation with King, now deceased, took place. Rather, Johnston claims that King did not instruct her to pause work until December 2002, causing the company to halt all work between December 30, 2002, and approximately February 14, 2003, when King signed a new contract.

In addition to the $80,485 in unpaid invoices from 2002, Engage also seeks payment for educational training and support services provided to the Cottonwood Day School in Chinle, Arizona, on March 1–4 and April 5–7, 2004. Engage provided these services at the request of the school's principal, Esther Frejo, via a 2004 FACE Site Visit Planning Form, on which Frejo checked the box indicating that she “would like to contract” for two site visits between January and May of 2004. J.A. 829. Following the site visits in March and April, Engage submitted invoices for $11,500 to the BIA. Engage alleges that it had a contract with the school's principal pursuant to the NCLB Act, under which the supervisor of a BIA-operated school can secure services without competitive bidding if:

(i) the cost for any single item acquired does not exceed $15,000; (ii) the school board approves the acquisition; (iii) the supervisor certifies that the cost is fair and reasonable; (iv) the documents relating to the acquisition executed by the supervisor of the school or other school staff cite this paragraph as authority for the acquisition; and (v) the acquisition transaction is documented in a journal maintained at the school that clearly identifies when the transaction occurred, the item that was acquired and from whom, the price paid, the quantities acquired, and any other information the supervisor or the school board considers to be relevant.

25 U.S.C. § 2010(a)(3)(A).

On November 28, 2007, Engage submitted a claim under the CDA for $91,895 in unpaid services. The BIA, on March 5, 2008, relied on King's July 28, 2004, letter to deny Engage's claim. Engage filed a timely appeal with the Board in April 2008. At the Board, the government moved to dismiss Engage's complaint for lack of subject matter jurisdiction or for failure to state a claim under Board Rule 8(c)(1) or, alternatively, for summary relief (analogous to summary judgment) under Board Rule 8(c)(3).

On June 15, 2010, the Board granted the government's motion to dismiss for lack of subject matter jurisdiction, holding that it did not have jurisdiction under the CDA because Engage had...