New Hampshire Flight Procurement, LLC v. United States

• Decision Date: 29 August 2014
• Docket Number: No. 13-567C,13-567C
• Parties: NEW HAMPSHIRE FLIGHT PROCUREMENT, LLC Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Claims Court

NEW HAMPSHIRE FLIGHT PROCUREMENT, LLC Plaintiff, v. UNITED STATES, Defendant.

No. 13-567C

United States Court of Federal Claims

August 29, 2014

Motion to Dismiss; Third-Party Beneficiary; Privity of Contract.

Scott L. Levitt, Law Offices of Levitt Law, APC, Seal Beach, CA, for plaintiff.

Gregg P. Yates, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With him were Donald E. Kinner, Assistant Director, Commercial Litigation Branch, Robert E. Kirschman, Jr., Director, Commercial Litigation Branch, Civil Division, and Stuart F. Delery, Assistant Attorney General.

OPINION

HORN, J.

Plaintiff, New Hampshire Flight Procurement, LLC (New Hampshire) brings this action against the United States related to the National Aeronautics and Space Administration's (NASA's) alleged failure to pay plaintiff for the use of, and damage to, plaintiff's Gulfstream II airplane. Plaintiff, New Hampshire, alleges that as a subcontractor, it leased a Gulfstream airplane to Flight Test Associates, the prime contractor, which then used the airplane in a government contract between Flight Test Associates and NASA for "High Ice Water Content testing," contract NNC11BA04B (the prime contract). Plaintiff states that the prime contract between Flight Test Associates and NASA "was for the use of a jet aircraft (a Gulfstream II), to be fitted with government owned testing equipment and to be flown with such installed equipment in areas of high ice accumulation." Plaintiff claims it has an express and implied-in-fact contract with the government, and is "a third party intended beneficiary to the" prime contract between the government and Flight Test Associates. Plaintiff claims, therefore,that defendant (1) breached an express contract with plaintiff,¹ (2) breached an implied contract with plaintiff, (3) breached the covenant of good faith and fair dealing in contracts, and (4) is liable to plaintiff under a theory of quantum valebant. Plaintiff seeks as relief, "[l]ease Payments from September 1, 2012 through May 31, 2013," totaling $355,500.00, "[l]ease allocated 235 hours of flight time at $2,200 per hour," "[r]estoration of Gulfstream II," as well as interest, attorney's fees, and costs of the suit.²

Defendant filed a motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief might be granted, pursuant to Rule 12(b)(1) and Rule 12(b)(6) of the Rules of the United States Court of Federal Claims (RCFC) (2014). Defendant contends that this court lacks subject matter jurisdiction to hear plaintiff's first and second claims for relief, because plaintiff is not in contract privity with the government, either through an express or implied-in-fact contract. Defendant also argues that plaintiff is not an intended third-party beneficiary to the prime contract between the government and Flight Test Associates. Defendant contends that plaintiff's third claim for relief, for a breach of the implied covenant of good faith and fair dealing, fails to state a claim upon which relief can be granted, because, without a contract between the government and plaintiff, there cannot be a breach of this covenant. Finally, defendant contends that plaintiff's fourth claim for relief, under a theory of quantum valebant recovery, is an implied-in-law contract claim outside of this court's jurisdiction under the Tucker Act, 28 U.S.C. § 1491 (2012).

FINDINGS OF FACT

According to plaintiff, on December 20, 2010, NASA entered into a contract, NNC11BA04B, with Flight Test Associates for "High Ice Water Content testing." Plaintiff's complaint attaches a portion of the prime contract between Flight Test Associates and NASA, which was signed on behalf of NASA by contracting officerTimothy M. Bober and the president of Flight Test Associates, John Ligon. According to the prime contract's first page, the prime contract was awarded by NASA to Flight Test Associates on December 20, 2010.³

Defendant attaches to its motion to dismiss the prime contract's statement of work. The statement of work does not reference the prime contractor Flight Test Associates or the subcontractor New Hampshire. According to the introduction to the statement of work:

Over the past 10 years, there have been a significant number of jet engine power-loss events (flameout, stall, rollback and surge) occurring in and around areas of deep tropical convection at higher altitudes (mostly above 20,000 ft).

. . .

The intent of this contract is for a Contractor to provide an aircraft modified with Government furnished instrumentation to conduct High Ice Water Content (HIWC) flight research during a trial flight campaign and primary flight campaign(s) based out of Darwin Australia during the monsoon season between January - March. This Statement of Work (SOW) sets forth the requirements to conduct HIWC research through an Aircraft Services Contract. The research to be conducted by the Government will require close coordination between Government and Contractor personnel during all phases of this contract.

According to the scope of the statement of work for the prime contract between Flight Test Associates and NASA, "[t]he Contractor shall provide all personnel (including pilots), equipment, tools, etc., except as provided in Section 4.1 or as otherwise noted, necessary to conduct the HIWC [High Ice Water Content] research flights required to meet NASA's testing requirements." The statement of work also explains that:

The Contractor shall provide . . . Aircraft Preparation . . . an aircraft as specified in Section 4.3 and integrate all instrumentation as specified in Section 4.1 of this document on the aircraft while coordinating the instrument locations, mounting design concepts and fabrication, and instrument installation with NASA and partner researchers and aviation safety personnel.

(emphasis in original). The statement of work indicates that the prime contractor, Flight Test Associates, was to be further responsible for: "Trial Flight Campaign," "Primary Flight Campaign(s)," and "Aircraft final de-integration and return of Government Furnished Properly (GFP) and partner hardware" (emphasis in original). Section 4.2 of the statement of work discusses where the plane would be based: "Both flight campaigns includes [sic] the round trip ferry flight to and from the airport base of operation for the trial campaign. The point of origin for the ferry flights is the aircraft's home base of operation designated by the Contractor."

The prime contract between Flight Test Associates and NASA states under "SCOPE OF CONTRACT," that, "[t]he contractor shall, except as otherwise specified herein, furnish all personnel, facilities, materials and services required to perform the work outlined in Section C hereof." (capitalization and emphasis in original). The prime contract was to be a firm fixed price contract for $9,962,787.00. The prime contract between Flight Test Associates and NASA states that payments to the contractor were to be milestone-based, with separate payments after plaintiff completed "Aircraft Preparation," "Trial Flight Campaign," "Primary Flight Campaign," "Aircraft De-integration and Return of GFP [government-furnished property]," with an "Option for an Additional Flight Campaign." The prime contract further states that, "[o]nly the Contracting Officer may issue task orders to the Contractor," and that "[n]o other costs are authorized unless otherwise specified in the contract or expressly authorized by the Contracting Officer."

The prime contract between Flight Test Associates and NASA put the risk of delay or issues with the aircraft on the prime contractor, Flight Test Associates:

In accordance with Section 8.5 of the Statement of Work, the following performance standards will exist for calculating payments for aircraft usage under task orders:

(a) Should the aircraft preparation schedule get delayed due to Contractor issues and prevent NASA from conducting the flight campaigns as stated in this SOW, the Government will not incur any costs for occupying the aircraft from the start of the originally proposed flight campaign to the start of the actual flight campaign.

(b) When a flight is not possible during a given day due to failure of the Contractor's equipment or documentation to pass NASA safety requirements, the aircraft occupancy payment may be reduced by 10% for each day lost for that week.

(c) NASA will not pay for flights benefiting the Contractor, such as flights for maintenance testing, for ferrying to and from maintenance facilities, flights required following an engine change, commercial charters, and flights solely for transporting Contractor's personnel.

The prime contract between Flight Test Associates and NASA also incorporates by reference Federal Acquisitions Regulations "52.233-4 APPLICABLE LAW FOR BREACH OF CONTRACT CLAIM (OCT 2004)," "52.242-13 BANKRUPTCY (JUL 1995)," as well as "52.249-8 DEFAULT (FIXED PRICE SUPPLY AND SERVICE) (APR 1984)." (capitalization and emphasis in original).

Plaintiff alleges that, "FTA [Flight Test Associates] does not, nor has it ever owned a Gulfstream II aircraft, or any other aircraft that could be used under the Contract." Plaintiff further alleges that "[d]efendant had complete knowledge of the fact that FTA, the 'Contractor' under the Contract did not own such aircraft." Plaintiff contends that Section H.13 of the prime contract between Flight Test Associates and NASA makes clear that the prime contractor, Flight Test Associates, would have to rely on a subcontractor to provide the aircraft. According to Section H.13 of the prime contract between Flight Test Associates and NASA:

H.13 MONITORING OF SUBCONTRACTOR

The parties agree that this contract was negotiated on the basis that the Contractor's proposed operations subcontractor, Threshold Aviation Group,[⁴] will provide the aircraft under lease to the prime contractor and will be

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