J.M.T. Mach. Co., Inc. v. U.S.

• Decision Date: 30 April 1987
• Docket Number: No. 86-1288,86-1288
• Citation: 826 F.2d 1042
• Parties: 34 Cont.Cas.Fed. (CCH) 75,326 J.M.T. MACHINE COMPANY, INC., Appellant, v. UNITED STATES, Appellee. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 1042

826 F.2d 1042

34 Cont.Cas.Fed. (CCH) 75,326

J.M.T. MACHINE COMPANY, INC., Appellant, v. UNITED STATES, Appellee.

Appeal No. 86-1288.

United States Court of Appeals, Federal Circuit.

April 30, 1987.

Unpublished Opinion Issued April 30, 1987.

Published Opinion July 10, 1987.

Fred Barakat, Oxford, Pa., argued, for appellant.

Lynn J. Bush, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued, for appellee. With him on the brief, were Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director and Thomas W. Petersen, Asst. Director. Also on the brief, was Capt. Martin Healey, Office of the General Counsel, Dept. of the Army, of counsel.

Before RICH, Circuit Judge, SKELTON, Senior Circuit Judge, and ARCHER, Circuit Judge.

SKELTON, Senior Circuit Judge.

DECISION

The consolidated decisions of the Armed Services Board of Contract Appeals (ASBCA or Board) in ASBCA Appeal No. 29739 allowing interest owed to contractor J.M.T. Machine Company, Inc. (JMT) on the quantum of a termination inventory claim from the date a properly certified claim was filed by JMT with the contracting officer on February 20, 1984, instead of from May 12, 1980, as claimed by JMT, and denying JMT's application for an attorney fee in ASBCA Appeals Nos. 23928, 24298 and 24536 because it was untimely filed, are affirmed.

OPINION

The facts in this case are complicated but not in dispute. The case has been litigated extensively in the ASBCA, as is partially shown by the background information below. The interest question and the attorney fee controversy are the only two issues involved in the appeal.

BACKGROUND

The case involves a supply contract awarded in 1976 by the United States Army to JMT for 124 telescope mounts for howitzers. The contract was terminated by the Government for default on September 5, 1979. As a result of this termination, three appeals to the Armed Services Board of Contract Appeals arose: (1) an appeal by JMT from the termination for default (ASBCA No. 24298); (2) an appeal by JMT from the contracting officer's decision granting an equitable adjustment in the contract price for additional work (ASBCA No. 23928); and (3) an appeal by the Government on its demand for the return of unliquidated progress payments (ASBCA No. 24536). These three appeals were consolidated by the Board for hearing and decision.

After the cases had been briefed by the parties and heard by the Board, the Government moved to dismiss the appeals for lack of jurisdiction on the ground that JMT had failed to comply with the claim certification requirement of the Contract Disputes Act of 1978 (CDA), 41 U.S.C. Sec. 605(c)(1). With the exception of the unquantified monetary claims in the default termination complaint, the Board denied that motion on January 12, 1984. In that decision, the Board dismissed without prejudice as premature JMT's alleged "claim" for "costs of terminated inventory." The Board noted there had been no contracting officer's decision on that "claim," nor any appeal therefrom, and JMT had submitted no certification of its so-called claim as required by the CDA. JMT appealed from this dismissal order in its ASBCA Appeal No. 29739, claiming that it had certified its termination inventory claim on May 12, 1980, and that it should recover interest from that date. Nevertheless, JMT filed another termination inventory claim with the contracting officer on February 20, 1984, properly dated, signed and certified and demanding a decision. On December 27, 1985, the Board issued its opinion in this appeal in favor of the Government by holding that interest should begin to accrue on February 20, 1984, instead of on May 12, 1980, as claimed by JMT.

In the meantime, in a December 19, 1984, decision on the merits, the Board ruled in favor of JMT in all three consolidated appeals. In ASBCA No. 23928, the equitable adjustment granted by the Board was more than that allowed in the contracting officer's decision. In ASBCA No. 24298, the default termination was converted into a termination for the Government's convenience, and in ASBCA No. 24536, the Government's demand for the return of unliquidated progress payments was denied.

On December 2, 1985, JMT filed an application for award of attorney's fees under the Equal Access to Justice Act, 5 U.S.C. Sec. 504 and 28 U.S.C. Sec. 2412, (EAJA) in the three consolidated appeals, ASBCA Nos. 23928, 24298, and 24536.

On January 13, 1986, the Government moved to dismiss as untimely JMT's application for attorney fees in the three consolidated appeals. The Board granted this motion on March 17, 1986, and dismissed the application as untimely.

JMT appeals, seeking an award of interest on the termination inventory claim, which claim the parties had settled for $131,300, from May 12, 1980, and seeking a ruling by this court that its application for attorney fees was timely and a remand of its application to the Board for consideration on the merits.

THE INTEREST CLAIM

Following the termination of the contract for the convenience of the Government, the parties settled all of the termination inventory claim, except the date from which interest was to be computed. The Board found that on September 18, 1979, the contracting officer requested JMT to submit an inventory of completed or partially completed supplies which had been produced or acquired for performance of the contract (termination inventory) for the purpose of considering purchase of these materials from JMT. This request was repeated several times, but JMT never submitted the requested inventory nor filed a claim. Finally, on January 17, 1980, the Government attorney included the request for a termination inventory in interrogatories directed to JMT. JMT sent its responses to the Government trial attorney on March 26, 1980, which consisted of a stack of 15 separate documents, none of which was identified as a claim. The documents were variously labeled "Settlement Proposal (Inventory Basis)," "Contractor's Offer," "Proposal Number 1," and "Interim Proposal." Also included were inventory lists and work schedules of the contract. None of the documents were signed or dated. These documents were not sent to the contracting officer by JMT. The Government trial attorney did not send them to the contracting officer either, as he did not consider them a claim, and JMT did not ask him to do so. The documents were not certified as required by the CDA, and no demand was made by JMT for a decision by the contracting officer.

The Government trial attorney wrote JMT on April 18, 1980, advising it of the certification requirement of CDA, whereupon JMT forwarded to the Board (and not to the contracting officer) on May 12, 1980, a certificate dated April 29, 1980, relating to all three appeals, none of which at that time included the termination inventory claim. The certificate did not refer to any specific claim but simply stated "our claim." The covering letter of May 12, 1980, referred to the three appeals by their ASBCA docket numbers. The contracting officer never received the termination inventory and did not know whether it existed on the date of the covering letter.

On June 8, 1980, the Government moved to dismiss all three appeals for lack of jurisdiction due to JMT's failure to properly certify its claims, including the termination inventory claim. JMT argued before the Board and contends here that its certification of May 12, 1980, covered all of its claims, including the termination inventory claim. On January 12, 1984, the Board granted the motion as to the termination inventory claim and dismissed that claim, saying:

We also dismiss without prejudice as premature appellant's stated claim for "costs of terminated inventory." There has been neither a contracting officer's decision on appellant's termination settlement proposal (on inventory basis) filed with the Government in March 1980 nor an appeal therefrom. [Citations omitted]

Furthermore, contrary to appellant's assertion (response to motion at para. 10, at 7), this claim in excess of $50,000 has not been certified. The certification of 29 April 1980 was submitted with respect to the appeals in ASBCA Nos. 23928, 24298 and 24536 (ltr of 12 May 1980, Board file), NONE OF WHICH AT THAT TIME INCLUDED THE TERMINATION SETTLEMENT CLAIM. [Emphasis added] (84-1 BCA at 85,238)

Following this decision by the Board, JMT submitted a proper termination inventory claim, duly signed and certified, to the contracting officer on February 20, 1984, with a request for a decision. This claim was in proper form and was properly submitted. Thereafter, the parties settled the claim as aforesaid, but could not agree when interest would start to accrue on the settlement. JMT filed an appeal to the Board in ASBCA Appeal No. 29739 for a determination of this issue, which is now before us.

JMT argued before the Board and argues here that interest on the termination inventory settlement began to accrue on May 12, 1980, the date it submitted a late certificate dated April 29, 1980, to its claims in the three pending appeals, which certificate was to apply retroactively to the 15 documents it had delivered to the Government trial attorney on March 26, 1980, in answer to interrogatories. The Board correctly held that the late and separate certification of May 12, 1980, to the submission sent to the attorney on March 26, 1980, was ineffective to create a claim on which interest could be allowed.

It is clear that JMT did not submit a claim on March 26 or May 12, 1980, meeting the requirements of Defense Acquisition Regulation (DAR) Sec. 7-103.12 entitled "Disputes" (1979 MAR) issued in March 1980 pursuant to the passage of the CDA, which defines a claim as follows:

(b) "Claim" means:

(1) a written request submitted to the Contracting Officer;

(2) for payment of money, adjustment of contract terms, or other relief;

(3) which is in dispute or remains unresolved after a reasonable time...