Santa Fe Engineers, Inc. v. Garrett, 92-1361

• Decision Date: 27 April 1993
• Docket Number: No. 92-1361,92-1361
• Citation: 991 F.2d 1579
• Parties: 38 Cont.Cas.Fed. (CCH) P 76,506 SANTA FE ENGINEERS, INC., Appellant, v. H. Lawrence GARRETT, III, Secretary of the Navy, Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1579

991 F.2d 1579

38 Cont.Cas.Fed. (CCH) P 76,506

SANTA FE ENGINEERS, INC., Appellant, v. H. Lawrence GARRETT, III, Secretary of the Navy, Appellee.

No. 92-1361.

United States Court of Appeals Federal Circuit.

April 27, 1993.

Sally B. Pfund, Williams & Jensen, P.C., Washington, DC, argued for appellant. With her on the brief was Robert J. Martinez.

Donna C. Maizel, Attorney Commercial Litigation Branch, Dept. of Justice, Washington, DC, argued for appellee. With her on the brief were Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director and Mary Mitchelson, Deputy Director. Of counsel was Sharon Y. Eubanks.

Before RICH, Circuit Judge, COWEN, Senior Circuit Judge, and MAYER, Circuit Judge.

COWEN, Senior Circuit Judge.

The appellant (Santa Fe or Contractor) entered into a contract with the Navy for the construction of a facility for the retrieval of spent space shuttle rocket booster tubes at Port Hueneme, California. After completion of the contract, Santa Fe filed a claim for an equitable adjustment in an amount exceeding $50,000 with the contracting officer. Upon denial of the claim, the contractor appealed to the Armed Services Board of Contract Appeals (ASBCA), which held a hearing on the merits.

After the hearing had been completed, this court issued its decisions in United States v. Grumman Aerospace Corp., 927 F.2d 575 (Fed.Cir.1991), and Dawco Construction, Inc. v. United States, 930 F.2d 872 (Fed.Cir.1991). The Board determined that these decisions raised a question regarding the Board's jurisdiction over the appeal. Therefore, instead of deciding the case on the merits, the Board issued an order requiring Santa Fe to show cause why the appeal should not be dismissed. Both parties were directed to comment on the effect of the two decisions on the Board's jurisdiction. After considering the parties' responses, the Board dismissed the appeal for lack of subject matter jurisdiction, without prejudice to Santa Fe's submittal of a properly certified claim to the contracting officer, ASBCA No. 36292, 92-2 BCA (CCH) p 24795 (1992).

The Board held: (1) The claim submitted by the contractor to the contracting officer did not meet the requirements of a claim under the Contract Disputes Act (CDA), 41 U.S.C. § 605 (1988), as implemented by the Defense Acquisition Regulation, DAR 7-103.12, and as interpreted by Dawco; and (2) the contractor's vice president, who signed the certification, was not an appropriate certifying individual under the contract and the same regulation, as interpreted by Grumman.

For the reasons to be set forth, we affirm the Board's decision that Santa Fe's submissions did not constitute a claim under the CDA. Therefore, we need not decide whether Santa Fe's vice president was qualified to certify the claim.

BACKGROUND

Although Santa Fe challenges the conclusions which the Board drew from its factual findings, there is little or no dispute as to the underlying, material facts. The claim which culminated in this appeal had its origin in the discovery by Santa Fe on June 14, 1984, of unsuitable soil conditions in the area where a ramp was to be constructed. The Navy issued a stop work notice for the ramp and sent Santa Fe a proposed change order (PCO 46), in which the Navy requested that Santa Fe submit a proposal for solving the unsuitable soil conditions in the ramp area. Santa Fe's first proposal for PCO 46 was a ballpark estimate, which was rejected and resulted in the Navy's cancellation of PCO 46 on August 7, 1984. On the same date, the Navy issued PCO 47, which proposed a deletion of the ramp.

On November 21, 1984, Santa Fe submitted a cost proposal in the amount of $265,942, based on the stop work notice and the related ramp problems. The proposal included a time extension request of 72 days. The letter stated that a certification of the proposal would be forthcoming. The Board found that the parties were not in dispute over the proposal at that time.

On December 11, 1984, a meeting was held among Mr. Stephen Riley, Santa Fe's vice president, and the Navy representatives to negotiate the changes relating to the deletion of the ramp. A bilateral agreement was reached by the parties granting the government credit in the amount of $14,115. The results of the meeting with respect to Santa Fe's cost proposal of November 21, 1984, were confirmed in a letter from the Navy to Santa Fe dated January 2, 1985, which read in part:

A meeting was held on 11 Dec 84 with your Stephen Riley to discuss the ramp deletion change.... It was determined that more information and justification was needed before the government could properly evaluate your proposed costs.

The letter detailed the nature of the information which the Navy requested. The Board found that the parties were not in dispute over the cost proposal at that time.

Santa Fe responded to the Navy's letter of January 10, by its letter of February 6, 1985, stating that the Navy officials:

[M]ay well totally misunderstand the effect of stopping work, requesting proposals and canceling work and misguiding future directives. We therefore, find it necessary to consider our cost proposal in response to your PCO-46 a claim and shall certify it as such.

The letter was signed by Santa Fe's vice president and included a certification in compliance with the CDA. Santa Fe did not request a decision of the contracting officer at that time. On February 6, 1985, the same day that Santa Fe certified its cost proposal as a claim, Santa Fe wrote the Navy stating that Santa Fe would be providing additional data "to help the owner better understand the proposal."

By letter of April 16, 1985, Santa Fe wrote the Navy in part as follows: "You have requested previously additional costs associated with changes and delays at the Wharf Construction area. Your letter of January 2, 1985, acknowledged our claim but requested additional information." The letter enclosed certain data but did not request a decision of the contracting officer. Instead, Santa Fe requested that a meeting be held to continue negotiations. The letter also reduced Santa Fe's claim for time extensions from 72 to 57 calendar days.

Another meeting was held on September 24, 1985, following which Santa Fe provided the Navy with additional material in support of its proposal of November 21, 1984.

A year later on December 2, 1986, Santa Fe wrote the government stating in part: "Our claim to you for this time, as well as the direct costs, has been in to you and certified for some time. If you care to have another meeting on this matter prior to my requesting a final decision, please let me know within (10) days." The Navy replied by letter of March 17, 1987, stating that it had found insufficient justification for a time extension associated with the ramp deletion and advised Santa Fe that if it disagreed, it should proceed in accordance with the Disputes clause of the contract.

Santa Fe replied on May 28, 1987, stating in part as follows: "Due to the length of time this claim has been before your office and in light of our previous certification, we at this time request the issuance of a written final decision from the Contracting Officer concerning this claim." Although more than two years had elapsed since February 6, 1985, when Santa Fe certified its proposal as a claim, Santa Fe did not attach a claim certification to its letter, and did not otherwise execute a new claim certification.

On September 29, 1988, the contracting officer issued his decision, denying Santa Fe's claim for direct costs in part and its claim for delayed costs in total.

The Board found that the parties were in dispute on May 28, 1987, when Santa Fe requested a decision of the contracting officer.

DISCUSSION

I.

In part, the Board's decision involved interpretations of DAR 7-103.12, which was incorporated in the contract as its Disputes clause. Such interpretations present questions of law which are subject to our de novo review. United States v. Newport News Shipbuilding & Dry Dock Co., 933 F.2d 996, 997 (Fed.Cir.1991). However, the Board's findings of fact are binding on us if they are supported by substantial evidence.

II.

The Disputes clause of the contract is the standard Disputes clause contained in DAR 7-103.12 and provided in pertinent part:

DISPUTES (1980 JUN)

....

(b) Except as provided in the Act, all disputes arising under or relating to this contract shall be resolved in accordance with this clause.

(c)(1) As used herein, "claim" means a written demand or assertion by one of the parties seeking, as a matter of right, the payment of money, adjustment, [sic] or interpretation of contract terms, or other relief, arising under or relating to this contract. However, a written demand by the Contractor seeking the payment of money in excess of $50,000 is not a claim until certified in accordance with (d) below.

(2) A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a claim for the purposes of the Act. However, where such submission if subsequently disputed either as to liability or amount or not acted upon in a reasonable time, it may be converted to a claim pursuant to the Act by complying with the submission and certification requirements of this clause.

(3) A claim by the Contractor shall be made in writing and submitted to the Contracting Officer for decision. A claim by the Government against the Contractor shall be subject to a decision by the Contracting Officer.

III.

Santa Fe urges us to reverse the Board's decision on the ground that the contractor's letter of February 6, 1985, which identified its proposal of November 21, 1984 as a claim and attached a certification, was a claim which was then in dispute. We disagree. In Dawco, this court declared:

Clearly, the FAR mandates that, inter alia, a claim must seek payment of a sum certain as to which a dispute exists at the time of submission.

Similarly, the contract's...