Guardian Angels Med. Serv. Dogs, Inc. v. United States

• Decision Date: 08 January 2016
• Docket Number: No. 2015–5058.,2015–5058.
• Citation: 809 F.3d 1244
• Parties: GUARDIAN ANGELS MEDICAL SERVICE DOGS, INC., Plaintiff–Appellant v. UNITED STATES, Defendant–Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

809 F.3d 1244

GUARDIAN ANGELS MEDICAL SERVICE DOGS, INC., Plaintiff–Appellant

v.UNITED STATES, Defendant–Appellee.

No. 2015–5058.

United States Court of Appeals, Federal Circuit.

Jan. 8, 2016.

Joseph A. Davidow, Willis & Davidow, LLC, Naples, FL, argued for appellant.

Robert C. Bigler, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for appellee. Also represented by Deborah A. Bynum, Robert E. Kirschman, Jr., Benjamin C. Mizer.

Before REYNA, MAYER, and CHEN, Circuit Judges.

MAYER, Circuit Judge.

Guardian Angels Medical Service Dogs, Inc. ("Guardian Angels") appeals a final judgment of the United States Court of Federal Claims dismissing its claim as time-barred. Guardian Angels Med. Serv. Dogs, Inc. v. United States, 118 Fed.Cl. 87, 88 (2014) ("Trial Court Decision "). We reverse and remand.

I. BACKGROUND

Guardian Angels entered into a firm fixed-price blanket purchase agreement, Contract No. VA248–BP–0218 ("BPA 218"), with the Department of Veterans Affairs ("VA") on June 26, 2011. Pursuant to this agreement, Guardian Angels agreed to furnish service dogs trained to meet the needs of disabled veterans and to provide health insurance for the dogs it supplied. On August 5, 2011, the parties executed a modification to BPA 218 which required Guardian Angels to provide an increased number of service dogs.

Approximately one year later, the contracting officer sent Guardian Angels an email stating that "some questions ha[d] been raised" about its performance under the contract. On August 31, 2012, the contracting officer sent Guardian Angels a notice terminating BPA 218 for default and suspending any open delivery orders issued under the contract. The default termination notice informed Guardian Angels that it had the right to appeal the termination under the disputes clause of the parties' contract. This disputes clause incorporated by reference Federal Acquisition Regulation ("FAR") 52.233–1, a lengthy provision which states, among other things, that "[t]his contract is subject to 41 U.S.C. chapter 71," and that a "Contracting Officer's decision shall be final unless the Contractor appeals or files a suit as provided in 41 U.S.C. chapter 71." 48 C.F.R. § 52.233–1(a), (f).

On December 21, 2012, Guardian Angels sent a letter to Dr. Sunil Sen–Gupta, an official at the VA's Rehabilitation Research & Development Service. In this letter, Guardian Angels argued that it had fulfilled its duties under BPA 218 and that the default termination should be converted to a termination for the convenience of the government. On February 28, 2013, Guardian Angels sent a letter to the contracting officer, stating that it was making a "formal demand against the [VA]" and that it "materially disagree[d]" with the decision to terminate BPA 218 for default. Guardian Angels further asserted that because BPA 218 should have been terminated for convenience rather than cause, it was entitled to be paid "a percentage of the contract price reflecting the percentage of work performed prior to the notice of termination, plus reasonable charges that have resulted and will continue to result from the termination."

On March 21, 2013, the contracting officer sent Guardian Angels a letter stating that she had received the claim that it had submitted on February 28, 2013, but that she could not "reasonably evaluate or respond to [that] claim due to the lack of supporting documentation provided with the claim." The contracting officer directed Guardian Angels to "provide all expense documentation" supporting its claim at its "earliest convenience," and explained that once the VA had received this documentation it could "proceed with a review of the material and provide a response as required by the [FAR]."

Guardian Angels then began compiling documentation supporting its claim. On May 3, 2013, however, the contracting officer sent Guardian Angels another letter, stating that she had not yet received the documentation she had requested in her March 2013 letter and that she had not reconsidered, and would not reconsider, her August 2012 default termination decision. The contracting officer advised Guardian Angels that it had "the right to appeal [the default termination] decision at the U.S. Court of Federal Claims pursuant to 41 U.S.C. § 7104(b)."

On January 7, 2014, Guardian Angels brought suit in the Court of Federal Claims. In its complaint, it alleged that it had fulfilled its contractual obligations under BPA 218 and that the contract should have been terminated for convenience rather than cause. Guardian Angels sought damages of $1,046,474.30, asserting that it was entitled to be paid for work performed under the contract prior to the notice of termination and to be compensated for the "reasonable charges" resulting from that termination.

On August 29, 2014, the Court of Federal Claims dismissed Guardian Angels' complaint for lack of jurisdiction. In the court's view, Guardian Angels' claim was time-barred because it "failed to file its complaint within 12 months of receiving the Contracting Officer's August 31, 2012 decision to terminate the contract for default." Trial Court Decision, 118 Fed.Cl. at 90. In rejecting Guardian Angels' argument that it was required to file a written claim with the contracting officer prior to filing suit, the court explained that a default termination is a government claim which is "immediately appealable." Id. at 91. The court found no merit in Guardian Angels' assertion that the formal dispute letter it sent to the contracting officer in February 2013 extended the statutory appeal period, concluding that this contention was premised on a "fundamental misunderstanding of the nature of a termination for default under the procedural regime established by the Contract Disputes Act." Id.

On September 18, 2014, Guardian Angels filed a motion for reconsideration. It argued that the Court of Federal Claims erred in dismissing its complaint as untimely because it was not until it received the contracting officer's May 3, 2013 letter that its "rights ... were terminated, thereby triggering the twelve (12) month statute of limitations under [41 U.S.C. § 7104(b)(3) ]." The trial court rejected this argument. See Guardian Angels Med. Serv. Dogs, Inc. v. United States, 120 Fed.Cl. 8, 9–10 (2015) ("Reconsideration Decision "). The court determined that Guardian Angels' February 2013 formal dispute letter qualified as a request for reconsideration of the contracting officer's August 2012 decision to terminate BPA 218 for default. Id. at 10. It further acknowledged that, under certain circumstances, "a request for reconsideration of a contracting officer's final decision may toll the statute of limitations." Id. The court concluded, however, that because the contracting officer "spent no time reviewing" Guardian Angels' request for reconsideration, that request did not suspend the running of the twelve-month appeal period. Id. According to the court, because the contracting officer "did not reconsider her decision, the statute of limitations was never tolled, and the appeal period expired 12 months after [Guardian Angels] received the Contracting Officer's August 31, 2012 decision to terminate for default." Id.

Guardian Angels then appealed to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3). While we review the legal conclusions of the Court of Federal Claims de novo, we review its factual findings for clear error. Sikorsky Aircraft Corp. v. United States, 773 F.3d 1315, 1322 (Fed.Cir.2014) ; Raytheon Co. v. United States, 747 F.3d 1341, 1348 (Fed.Cir.2014).

II. DISCUSSION

A. The Requirement of a Final Decision from the Contracting Officer

Under the Contract Disputes Act ("CDA"), a contractor has the option of appealing a contracting officer's decision either to the appropriate board of contract appeals or the Court of Federal Claims. See 41 U.S.C. § 7104. Regardless of which forum a contractor elects, however, only final contracting officer decisions may be appealed. See M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1327 (Fed.Cir.2010) (emphasizing that the Court of Federal Claims' authority to adjudicate a CDA claim "requires both a valid claim and a contracting officer's final decision on that claim"); James M. Ellett Constr. Co. v. United States, 93 F.3d 1537, 1541 (Fed.Cir.1996) (explaining that the CDA extends to "actions brought on claims within twelve months of a contracting officer's final decision"); Reflectone, Inc. v. Dalton, 60 F.3d 1572, 1573 (Fed.Cir.1995) (en banc) ("Board jurisdiction is grounded in the CDA which authorizes Board review only of a contracting officer's final decision on a ‘claim.’ "). Accordingly, although a termination for default is deemed to be a government, rather than a contractor, claim, see Malone v. United States, 849 F.2d 1441, 1443–44, modified on other grounds, 857 F.2d 787 (Fed.Cir.1988), the linchpin for the start of the statutory appeal period is a final decision by a contracting officer terminating a contract for cause. See Placeway Constr. Corp. v. United States, 920 F.2d 903, 906 (Fed.Cir.1990) ("Generally, exhaustion of administrative remedies should occur before a case is ripe for judicial review."); see also Pathman Constr. Co. v. United States, 817 F.2d 1573, 1579 (Fed.Cir.1987) ("Compelling the contractor to file suit at what may be a relatively early stage of its negotiations and discussions with the contracting officer is likely to impede the free exchange of vital information between the contractor and the contracting officer that is necessary for a settlement.").

Resolution of the present appeal turns on when the contracting officer issued a final decision terminating BPA 218 for default. The government argues that the contracting officer's August 2012 default termination notice was a final decision, and that Guardian Angels' claim is time-barred because it failed to file suit within twelve...