Fidelity Const. Co. v. U.S.

• Decision Date: 18 February 1983
• Docket Number: No. 27-82,27-82
• Citation: 700 F.2d 1379
• Parties: 30 Cont.Cas.Fed. (CCH) 70,827 FIDELITY CONSTRUCTION COMPANY, Appellant, v. The UNITED STATES, Appellee. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 1379

700 F.2d 1379

30 Cont.Cas.Fed. (CCH) 70,827

FIDELITY CONSTRUCTION COMPANY, Appellant, v. The UNITED STATES, Appellee.

Appeal No. 27-82.

United States Court of Appeals Federal Circuit.

Feb. 18, 1983.

Maurice J. Mountain, McLean, Va., argued for appellant. With him on the brief were William B. Barton, Jr. and Brown, Younger & Fadoul, P.C., McLean, Va.

Robert G. Giertz, Washington, D.C., argued for appellee. With him on the brief was J. Paul McGrath, Asst. Atty. Gen., Washington, D.C.

Before FRIEDMAN, NICHOLS, and BALDWIN, Circuit Judges.

NICHOLS, Circuit Judge.

This is an appeal from a decision of the Department of Transportation Contract Appeals Board (board) which found that appellant was not entitled to attorney fees under the Equal Access to Justice Act, Pub.L. No. 96-481, 94 Stat. 2325, 28 U.S.C. Sec. 2412 (Supp. V 1981) (EAJA), and which also found that appellant was entitled to interest on its claims under the Contract Disputes Act of 1978, 41 U.S.C. Sec. 601 et seq. (Supp. V 1981), (CDA), from the date it submitted a claim reasonably reflective of the actual dollars and efforts expended due to the causes alleged. Fidelity Construction Co., 82-1 B.C.A. p 15,633. We affirm, but on different grounds than the board gave.

I

Appellant, Fidelity Construction Company (Fidelity), was awarded a contract for a VICON experimental lighting system at Bradley International Airport in Windsor Locks, Connecticut, by the Federal Aviation Administration (FAA) on April 19, 1979. The specification required the construction of signal lights along the length of three runways, together with underground electrical cables to connect these lights with the control tower, in accordance with FAA specifications. The contract was not a lump sum fixed price contract, as 13 of the 20 bid items called for the submission of unit prices on the basis of an estimated quantity stated for each item. The parties used an estimated contract price of $176,999.99 for accounting and budgeting purposes.

Disputes arose between the parties during performance of the contract culminating in a 25 item claim totaling $237,348.12, which was filed with the contracting officer on October 26, 1979. Fidelity subsequently revised its claim on three separate occasions: revisions on November 15, 1979, November 30, 1979, and again on January 23, 1980, brought the total claim to approximately $251,000. The final decision of the contracting officer, dated March 28, 1980, found that Fidelity had supported $37,648.29 of the total amount claimed, but denied the claim in its entirety because of the belief that fraud was involved in its submission.

Fidelity appealed the final decision of the contracting officer to the board. At a pretrial conference, the board advised Fidelity and the contracting officer that the certification requirement had not been met. After the docketing of the appeal to the board, by letter dated May 29, 1980, addressed to the contracting officer, Fidelity, having retained present counsel, submitted a revised claim totaling $257,066. This revision was the first and only revision that was certified as required by section 6(c)(1) of the CDA. The certified claim was submitted to the contracting officer and the board. The contracting officer did not alter his position on the claim, and Fidelity proceeded with its appeal.

Fidelity's presentation at the board hearing sought $308,475. After completion of the hearing, the board determined that Fidelity was entitled to $199,032.99 for items priced by contract schedule and $121,740.05 in equitable adjustments resulting in a final contract price of $320,773.04 "plus interest on hitherto unpaid amounts, computed in accordance with the Contract Disputes Act from the date of filing of the certified claim, May 19, 1980, ¹ until payment, on those amounts not previously paid." Fidelity Construction Co., 81-2 B.C.A. p 15,345 at 76,018.

Fidelity filed a Motion for Reconsideration requesting both an award of attorney fees under the EAJA and an award of interest from October 26, 1979, the date of the initial submittal of the claim, rather than the date of the filing of the certified claim. The board held that the EAJA did not authorize the board to award fees earned by services before October 1, 1981. Since the fees sought by Fidelity were all incurred prior to that date, the board dismissed the motion.

The board also found that its initial determination that interest was to be computed from the date of filing of the certified claim must be reconsidered in light of the decision in Brookfield Construction Co. and Baylor Construction Corp. v. United States, 661 F.2d 159 (Ct.Cl.1981). The board held that interest would run from "the date on which [Fidelity] first submitted a claim which was not grossly overstated but which in fact was reasonably reflective of the actual dollars and effort expended due to the causes alleged." Fidelity Construction Co., 82-1 B.C.A. p 15,633 at 77,226. This was the certified claim.

II

We shall first consider the issue of the date on which interest under the CDA will begin to run on a post-CDA contract claim.

At the initial hearing, the board undertook to analyze each of the claim items submitted by the contractor before certification, and to show they were so grossly inflated as not to be a proper basis for a settlement. Apparently they were prepared in the old manner, so objected to by Admiral Rickover, with little relation to facts and intended only as a starting point for bargaining. See Contract Disputes Act of 1978: Joint Hearings on S. 2292, S. 2787 & S. 3178 Before the Subcomm. on Federal Spending Practices and Open Government of the Senate Comm. on Governmental Affairs and the Subcomm. on Citizens and Shareholders Rights and Remedies of the Senate Comm. on the Judiciary, 95th Cong., 2d Sess. 27 (1978). (Testimony of Adm. Hyman G. Rickover, Deputy Commander, Nuclear Power Directorate, Naval Sea Systems Command.)

The contractor's first actual notice of the certification requirement was apparently also its first awareness of its need for properly substantiated claims. Thus the certification requirement served exactly the purpose for which it was intended. The originally filed claims were not so much in excess of the amount later approved by the board, but they overstated some items and failed to mention others. The parties have debated before us the relevance of these facts. Since, however, the certification requirement is jurisdictional, it would not have made any difference if the original claims had, except for the absence of certification, been in perfect order. The discussions and arguments critical of the original claims are, therefore, irrelevant, and, for reasons discussed below, the board was right the first time in holding, without qualification, that interest did not start to run before certification.

An allowance of interest on a claim against the United States, absent constitutional requirements, requires an explicit waiver of sovereign immunity by Congress. Such express consent to the payment of interest must be found in either a specific statutory or an express contractual provision. United States v. N.Y. Rayon Co., 329 U.S. 654, 658-59, 67 S.Ct. 601, 603-604, 91 L.Ed. 577 (1947); Bromley Contracting Co. v. United States, 596 F.2d 448, 450 (Ct.Cl.1979). See 28 U.S.C. Sec. 2516(a). The intent by Congress to permit the recovery of interest cannot be implied. Moreover, if an express consent is found in a statute or contractual provision, it must be strictly construed. United States v. N.Y. Rayon Co., 329 U.S. at 659, 67 S.Ct. at 604.

The Contracts Disputes Act of 1978 contains the specific statutory consent to the payment of interest and governs the claim at bar. Section 12 of the CDA provides:

Interest on amounts found due contractors on claims shall be paid to the contractor from the date the contracting officer receives the claim pursuant to section 6(a) from the contractor until payment thereof. The interest provided for in this section shall be paid at the rate established by the Secretary of the Treasury pursuant to Public Law 92-41 (85 Stat. 97) for the Renegotiation Board.

Fidelity argues that the language of the interest provision is unambiguous in providing for interest on a claim submitted under section 6(a) and that the certification requirement is irrelevant. Fidelity contends that certification is merely intended to establish a date by which the contracting officer is obligated to act on a claim. Fidelity also argues that the legislative history of the CDA and the Brookfield decision established that there is no relationship between the interest provision and the certification requirement. We cannot agree.

As a general proposition, we would say that a waiver of sovereign immunity, or consent to be sued, or to the creation of money liability by judgment of a court, is construed by rules peculiar to itself. Not only may the consent not be implied, but even a seemingly explicit consent will not be effective if the language used appears too sweeping and contrary to the overall statutory scheme as judicially deduced.

An example of this is found in the history of the original Tucker Act, 24 Stat. 505, Act of March 3, 1887. It consented to suit on "[a]ll claims founded upon * * * any contract * * * in respect of which claims the party would be entitled to redress against the United States either in a court of law equity, or admiralty, if the United States were suable," yet it was soon held that the "equity" language meant only use of equitable doctrines in suits at law for money, and did not encompass suits for specific performance of contracts, then a typical branch of equity jurisprudence. United States v. Jones, 131 U.S. 1, 9 S.Ct. 669, 33 L.Ed. 90 (1889). The reason stated was that the whole statutory machinery, considered all together, justified a doubt whether Congress intended to confer jurisdiction upon courts to order...