Nwogu v. United States

• Decision Date: 30 August 2010
• Docket Number: No. 09-268C,09-268C
• Parties: PETER C. NWOGU, d/b/a, ENVIRONMENTAL SAFETY CONSULTANTS, INC., Plaintiff. v. UNITED STATES,Defendant.
• Court: U.S. Claims Court

PETER C. NWOGU, d/b/a, ENVIRONMENTAL SAFETYCONSULTANTS, INC., Plaintiff.

v.UNITED STATES, Defendant.

No. 09-268C

United States Claims Court.

Filed: August 30, 2010

Joshua A. Moses, Silver Spring, Md., for the plaintiff.

David D'Alessandris, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for the defendant. With him were Byrant G. Snee, Deputy Director, Jeanne E. Davidson, Director, Commercial Litigation Branch, and Tony West, Assistant Attorney General, Civil Division, Washington, D.C. Of counsel, Ellen M. Evans, Senior Trial Attorney, Naval Facilities Engineering Command, Washington Navy Yard, Washington, D.C.

OPINION

HORN, J.

FINDINGS OF FACT

Plaintiff, Environmental Safety Consultants, Inc. (ESCI), seeks payment of a $93,989.00 judgment, plus interest, awarded by the Armed Services Board of Contract Appeals (ASBCA) on a contract dispute between plaintiff and the United States Navy. The Navy, however, indicates it has taken setoff action against this amount for monies the government argues it is owed on a second Navy contract, also with the plaintiff. In addition to breach of contract, plaintiff, Peter C. Nwogu and plaintiff's attorney have made allegations of due process and equal protection violations pursuant to the Fifth and Fourteenth Amendments to the United States Constitution, as well as a charge ofslavery, pursuant to the Thirteenth Amendment to the Constitution, civil rights violations, including national origin discrimination pursuant to 42 U.S.C. § 1983 (2006), violation of the Takings Clause of the Fifth Amendment to the United States Constitution, and violation of the Prompt Payment Act.¹

The history of plaintiff's litigation with the Navy involves multiple contracts between the parties, as well as numerous disagreements and multiple trips to the ASBCA and to the United States Court of Appeals for the Federal Circuit. In relevant part, the relationship began on May 23, 1991, when the Navy awarded ESCI Contract No. N62472-90-C-5164 to remove, transport, and dispose of industrial waste sludge from two lagoons at the Naval Air Development Center in Warminster, Pennsylvania (Contract I). See Envtl. Safety Consultants, Inc., ASBCA Case No. 47498, 00-1 BCA H 30, 826, at 152, 129 (Feb. 29, 2000). According to the complaint, the contract was awarded with "Mr. Nwogu as the project manager." Mr. Nwogu was the founder, owner, President and only employee of ESCI at the time the contract was awarded. The contract was awarded as a small business set-aside. According to the decision of the ASBCA on Contract I, the contractor and subcontractors encountered conditions that were more difficult to deal with than anticipated, progress on the contract was delayed, and a serious deterioration of the relationship between the parties occurred. A cure notice was issued to the plaintiff and, ultimately, the Navy and ESCI entered into a bilateral agreement to terminate Contract I in March 1992. Subsequently, in June 1992, ESCI filed a claim with the contracting officer asserting, as also stated in ESCI's complaint in this court, that ESCI incurred increased costs in performing Contract I because the "waste sludge [was] materially different from the information specified in the contract." As a result, ESCI requested an equitable adjustment of $150,587.95 from the Navy.

On February 2, 1994, the contracting officer issued a final decision denying the majority of ESCI's Contract I claim, but concluding that ESCI was entitled to $10,869.00. Pursuant to the Contract Disputes Act (CDA), 41 U.S.C. § 606 (2006), ESCI appealed the contracting officer's final decision (COFD) on Contract I to the ASBCA (ASBCA Case No. 47498), requesting recovery for increased costs, quantum meruit for the reasonable value of services provided, and damages for procurement fraud, bad faith, and conspiracy by the government and its agents. kd. at 152, 142. The government counter-claimed for an assessment of liquidated damages and also argued that the contracting officer's award of $10,869.00 was in error. kd. at 152, 147.

The ASBCA decision on Contract I in ASBCA Case No. 47498 contains numerous references to the breakdown of the relationship between Mr. Nwogu and Navy personnel and to the behavior of both parties. The ASBCA opinion also stated:

This appeal involves a claim for additional costs incurred to remove, transport, and dispose of industrial waste sludge from two lagoons at a Navy facility. Appellant has claimed it encountered conditions that differed from those indicated in the contract and that the Government's failure to cooperate caused its costs to increase. Appellant has also alleged that it is entitled to recovery in quantum meruit for reasonable value of services provided and to damages for procurement fraud, bad faith, and a conspiracy by the Government and its agents. The Government maintains that appellant has not established entitlement under any theory. Mr. Nwogu represented the appellant pro se. Only entitlement is before us for decision.

Envtl. Safety Consultants, Inc., ASBCA Case No. 47498, 00-1 BCA H 30, 826, at 152, 129.

On February 29, 2000, the ASBCA granted the equitable adjustment for "extra work" performed on Contract I, and "improper interference with [ESCI's] performance" by the government. ki at 152, 147-48. The Board also indicated that it did not have jurisdiction to address plaintiff's allegations regarding quantum meruit or punitive damages. ki at 152, 146-47. The ASBCA referred the question of the amount of the equitable adjustment, and for return of the liquidated damages, for resolution by the parties or referral to the contracting officer for a subsequent decision, with attendant appeal rights. Jd at 152, 148.

Also relevant to this litigation, the Navy awarded an additional contract to ESCI, Contract No. N62470-95-C-2399, for work in Yorktown, Virginia (Contract II). On June 6, 1998, the contracting officer issued a COFD terminating Contract II for default, based on ESCI's "failure to make progress to ensure timely completion of the work and for other defaults in performance."² Subsequent to the termination of Contract II, the Navy awarded Contract No. N62470-98-C-5027 to a reprocurement contractor, to remedy and complete ESCI's work on Contract II. In a December 3, 2001 COFD, the Navy contracting officer issued another appealable, final decision regarding Contract II, holding that ESCI owed the Navy $167,691.75 in reprocurement costs and liquidated damages and demanding payment. In the contracting officer's December 3, 2001 COFD, ESCI was advised that:

If payment is not received within 30 days from the date you receive this notice, the debt record will be transferred to the Defense Finance & Accounting System [DFAS] for collection. The Federal AcquisitionRegulation (FAR) Part 32.6 and Defense Federal Acquisition Regulation (DFAR) 232.6, prescribe the policies and procedures for ascertaining and collecting contract debts, which includes the ability to withhold and set off contractor's debts from monies otherwise due the contractor.

ESCI appealed the COFD on the termination for default of Contact II to the ASBCA (ASBCA Case No. 51722). Plaintiff's Notice of Appeal stated that ESCI "hereby appeals pursuant to the Contract Disputes Act of 1978, each and every aspect of the decision of June 6, 1998 of the Contracting Officer to Terminate the referenced Contract for Default," plaintiff also claimed an equitable adjustment of $334,687.85 for breach of contract, entitlement to additional compensation and specific performance.³ Defendant filed an answer and partial motion to dismiss in ASBCA Case No. 51722 on Contract II. In ASBCA Case No. 51722, the ASBCA found it had no jurisdiction regarding plaintiff's claim for money damages, due to plaintiff's failure to submit a claim for an equitable adjustment to the contracting officer. Therefore, ASBCA Case No. 51722 appears only to concern the validity of the termination for default in Contract II.

Based on the record before the court, in contrast to the timely appeal from the COFD on the termination for default in Contract II (ASBCA Case No. 51722), it appears that ESCI never timely appealed the contracting officer's assessed reprocurement costs and liquidated damages under Contract II. The plaintiff seems to confirm the limited nature of ASBCA Case No. 51722 when it states, "[t]he only issue in ASBCA No. 51722 is the propriety of default of [Contract II]...the issue in ASBCA 51722 is [an] equitable non-monetary claim." The defendant has argued that the COFD assessing reprocurement costs and liquidated damages is final and, therefore, "the Navy's set-off is not before the ASBCA."

Subsequently, the plaintiff filed multiple claims with the contracting officer for an equitable adjustment on Contract II. After receiving no COFD, ESCI filed a "deemed denied" claim with the ASBCA regarding its equitable adjustment claim for Contract II, docketed as ASBCA Case No. 54615. See Envtl. Safety Consultants, Inc., ASBCA Case No. 54615, 07-1 BCA ¶ 33, 483, at 165, 965 (Jan. 31, 2007). Defendant acknowledges that ESCI presented claims to the contracting officer, on which the contracting officer did not issue a decision and that ESCI treated the absence of a COFD as a deemed denial by the contracting officer. See 41 U.S.C. § 605(c)(5) (2006) ("Any failure by the contracting officer to issue a decision on a contract claim within theperiod required will be deemed to be a decision by the contracting officer denying the claim and will authorize the commencement of the appeal or suit on the claim as otherwise provided in this chapter.").

In its January 31, 2007 decision in Case No. 54615, the ASBCA addressed ESCI's claims on Contract II that were before the Board. Even though ESCI had presented some claims to the contracting officer which were not addressed by the contracting officer and, thus, were deemed denied, the...