Heyl & Patterson, Inc. v. O'Keefe, s. 91-1446

• Decision Date: 12 February 1993
• Docket Number: Nos. 91-1446,92-1072,s. 91-1446
• Citation: 986 F.2d 480
• Parties: 38 Cont.Cas.Fed. (CCH) P 76,475 HEYL & PATTERSON, INC., Appellant, v. Sean C. O'KEEFE, Acting Secretary of the Navy, Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 480

986 F.2d 480

38 Cont.Cas.Fed. (CCH) P 76,475

HEYL & PATTERSON, INC., Appellant, v. Sean C. O'KEEFE, Acting Secretary of the Navy, Appellee.

Nos. 91-1446, 92-1072.

United States Court of Appeals Federal Circuit.

Feb. 12, 1993.

Sterling C. Scott, Jenner & Block, Washington, DC, argued, for appellant. With him on the brief, was D. Joe Smith, of counsel.

Lisa B. Donis, Atty., Commercial Litigation Branch, Dept. of Justice, argued, for appellee. With her on the brief, were Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Sharon Y. Eubanks, Asst. Director, and Joan M. Bernott. Also on the brief, were James H. Phillips, Asst. Director, and James H. Haag, Navy Litigation Counsel, Washington, DC, of counsel.

Before RICH, NEWMAN, and MICHEL, Circuit Judges.

MICHEL, Circuit Judge.

Heyl & Patterson, Inc. appeals two decisions of the Armed Services Board of Contract Appeals (the Board). In its first decision, dated April 17, 1991, the Board held that it lacked jurisdiction over Heyl & Patterson's November 21, 1989 claim because the claim was not properly certified as required by the Contract Disputes Act (CDA), 41 U.S.C. § 605(c)(1) (1988). Heyl & Patterson, Inc., ASBCA Nos. 40604 & 42589, 91-2 BCA p 23,972, 1991 WL 81514 (1991) ("Heyl I "). In its second decision, dated July 31, 1991, the Board held that Heyl & Patterson's earlier submissions dated November 3, 1987, January 28, 1988, and March 23, 1988, were not "claims" within the meaning of the CDA because the amounts asserted were not in dispute at the time the submissions were made. Heyl & Patterson, Inc., ASBCA Nos. 40604 & 42589, 91-3 BCA p 24,233, 1991 WL 170094 (1991) ("Heyl II "). We affirm Heyl II but reverse and remand Heyl I for adjudication on the merits of the November 21, 1989 claim. The language of the November 21, 1989 certification satisfies the substantial compliance test set forth in United States v. General Elec. Corp., 727 F.2d 1567, 1569 (Fed.Cir.1984), and therefore, the certification met the requirements of section 605(c) and the Board does have jurisdiction over the claim. Because the Board's finding that the amounts asserted in the earlier submissions were not in dispute is supported by substantial evidence, the earlier submissions were not claims and were properly dismissed.

I. BACKGROUND

On November 14, 1984, Heyl & Patterson entered into Contract No. N62472-83-C-1468 with the Navy to design, fabricate and install a derrick at the Norfolk Naval Shipyard. On November 3, 1987, Heyl & Patterson submitted a "Request for Equitable Adjustment" on the contract. The request characterized itself as a "claim," but it was not certified and it did not request a final decision. The cover letter to the request stated: "We understand that your office will review this expeditiously and will advise us in several weeks of your preliminary position.... We are available to discuss this further after you have had an opportunity to study this request."

On January 28, 1988, Heyl & Patterson submitted a letter "addendum" to its "claim," which provided additional details and decreased the amount requested. The letter was not certified and did not request a final decision from the contracting officer. The letter stated: "We request that you review this Addendum as soon as possible after which time we could meet and review all of the items in the claim before we submit a formal request for Equitable Adjustment."

On March 23, 1988, Heyl & Patterson submitted another letter to the contracting officer enclosing copies of its November 3, 1987 and January 28, 1988 submissions, a completed Form 1411, entitled "Contract Pricing Proposal Cover Sheet," and, for the first time, a certification. The letter did not request a final decision, but indicated that Heyl & Patterson was "anxious to proceed with the settlement." The letter also stated: "If any other information is needed before the Audit can begin, please contact me immediately."

On November 21, 1989, Heyl & Patterson filed a formal, certified claim with the contracting officer. In it, Heyl & Patterson sought $4,342,245 plus interest based upon a breach of contract theory, or in the alternative, $1,751,052 plus interest based upon "constructive changes, overinspections, defective specifications and the delay and disruption that is described in the company's claim." 91-2 BCA p 23,972 at 119,985, 1991 WL 81514. The attached certification stated:

Heyl & Patterson certifies that all claims identified herein are made in good faith, that the data are accurate and complete to the best of our knowledge and belief, and that the amounts requested accurately reflect the contract adjustments for which Heyl & Patterson believes the government is liable.

For claim items previously presented to the government by Heyl & Patterson on November 3, 1987 and January 28, 1988, this certification reaffirms the prior certification of those claim items that were provided to the government by Heyl & Patterson on March 23, 1988.

(Emphasis added.)

On December 26, 1990, the contracting officer issued a final decision on the claim submitted on November 21, 1989. The contracting officer separately analyzed each item of that claim and allowed only a small portion of the total amount requested. The contracting officer also awarded interest on the amount allowed. Although the contracting officer allowed interest from March 23, 1988, his decision did not address the adequacy of the March 23, 1988 "claim" or its certification.

Heyl & Patterson appealed to the Board. On April 17, 1991, the Board issued a decision (Heyl I ) regarding the November 21, 1989 claim, holding that it lacked jurisdiction because the claim was not properly certified. In particular, the Board held that the certification was defective because it asserted merely that "the data are accurate and complete" and not that "the supporting data are accurate and complete," which is the exact language of section 605(c) of the CDA. The Board stated:

Without the term "supporting," we are left wondering what data it is that is accurate and complete.... Appellant's affirmation leaves open the interpretation that some universe of data, other than the "supporting data," is the universe that is accurate and complete. Perhaps the "supporting data" is neither accurate nor complete, but documentation elsewhere would make it so. The contractor's certification should not leave us with such concerns.

Heyl I, 91-2 BCA p 23,972 at 119,986-87, 1991 WL 81514. The Board deferred consideration of the March 23, 1988 claim, giving both Heyl & Patterson and the government time to submit evidence concerning the adequacy of the claim and its certification.

On August 1, 1991, the Board issued a decision (Heyl II ) regarding the March 23, 1988 "claim" and the submissions dated November 3, 1987 and January 28, 1988. Quoting Dawco Constr., Inc. v. United States, 930 F.2d 872, 878 (Fed.Cir.1991), the Board stated that "a claim must seek payment of a sum certain as to which a dispute exists at the time of submission." Heyl II, 91-3 BCA p 24,233 at 121,196, 1991 WL 170094. The Board analyzed each of the three submissions and found that the amounts were not in dispute at the time the submissions were made, but rather the parties were negotiating. Accordingly, the Board dismissed the appeals "without prejudice to appellant's submission of a properly certified claim to the contracting officer." Id.

Heyl & Patterson appealed both Board decisions to this court. Heyl I was assigned appeal number 91-1446. Heyl II was assigned appeal number 92-1072. We consolidated the appeals for decision.

We have jurisdiction over the appeals pursuant to 28 U.S.C. § 1295(a)(10) (1988) and 41 U.S.C. § 607(g)(1) (1988). Our review is limited by statute [T]he decision of the agency board on any question of law shall not be final or conclusive, but the decision on any question of fact shall be final and conclusive and shall not be set aside unless the decision is fraudulent, or arbitrary, or capricious, or so grossly erroneous as to necessarily imply bad faith, or if such decision is not supported by substantial evidence.

41 U.S.C. § 609(b) (1988).

II. ANALYSIS

A. The Heyl I decision. The Contract Disputes Act (CDA) provides:

For claims of more than $50,000, the contractor shall 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. § 605(c)(1) (emphasis added). Except for omitting "supporting," Heyl recited the operative words of this provision verbatim in its November 21, 1989 certification. The government argues, nonetheless, that omission of the word "supporting" renders the certification defective because "the CDA explicitly requires that a certification contain the word 'supporting.' " Although the government does not cite any provision of the CDA in support of its assertion, we presume the government relies on section 605(c)(1). However, section 605(c)(1) contains no such requirement. While section 605(c)(1) explicitly requires that the contractor make three affirmations, it does not explicitly require that the contractor do so in the exact words of the statute, and it certainly does not require the word "supporting." ¹

This court has already considered whether a contractor must use the exact language of section 605(c)(1) in making the required affirmations in General Electric, 727 F.2d 1567. The court concluded that the exact language is not required. Id. at 1569. In particular, the court reviewed the validity of a certification which failed to use the language of section 605(c)(1) concerning the affirmation that "the amount requested accurately reflects the contract adjustment for which the contractor believes the government is liable." 41 U.S.C. § 605(c)(1). The court...