Raytheon Company ( 2015 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
Raytheon Company ) ASBCA No. 58849)
Under Contract Nos. N00019-05-G-0008 )
W911QX-04-C-0108 )
APPEARANCES FOR THE APPELLANT: Paul E. Pompeo, Esq.
Dominique L. Casimir, Esq.
Arnold & Porter LLP
Washington, DC
APPEARANCES FOR THE GOVERNMENT: E. Michael Chiaparas, Esq.
DCMA Chief Trial Attorney
Stephen R. Dooley, Esq.
Senior Trial Attorney
Alexander M. Healy, Esq.
Kara M. Klaas, Esq.
Debra E. Berg, Esq.
Trial Attorneys
Defense Contract Management Agency
Boston, MA
OPINION BY ADMINISTRATIVE JUDGE DICKINSON
ON APPELLANT'S MOTION TO DISMISS
This appeal arises under Contract Nos. NOOO 19-05-G-0008 and
W911QX-04-C-O108 awarded by the government to Raytheon Company (Raytheon or
appellant) and administered by the Defense Contract Management Agency (DCMA).
DCMA asserted a government claim against Raytheon alleging that Raytheon's
accounting treatment of certain 401 (k) forfeitures violated Cost Accounting Standards
(CAS) 403 and 415. Raytheon moves to dismiss the appeal for lack of jurisdiction
asserting that the government's claim was not asserted within the six-year period
required by the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109. Raytheon
also moves to dismiss that portion of the appeal based on anything other than CAS 415
because the contracting officer's final decision allegedly failed to assert a claim on any
basis other than CAS 415. The government opposes the entirety of Raytheon's
motion.
A. Jurisdiction
Appellant's motion and supporting brief, as well as the government's
opposition and the parties' further reply briefing, were all submitted prior to the
10 December 2014 decision of the Court of Appeals for the Federal Circuit in Sikorsky
Aircraft Corp. v. United States, 773 F.3d 1315 (Fed. Cir. 2014). In Sikorsky the Court
held that the CDA' s six-year statute of limitations is not jurisdictional and, therefore,
cannot provide the basis to dismiss an appeal for lack of jurisdiction. Id. at 1320-22.
Instead, an allegation that a claim is time-barred is properly asserted in the pleadings
as an affirmative defense, 1 which is subject to a determination on the merits. Harris
Corp., ASBCA No. 37940, 89-3 BCA ii 22,145 at 111,460 (citing Do-Well Machine
Shop, Inc. v. United States, 870 F.2d 637, 639 (Fed. Cir. 1989)). The party asserting
the affirmative defense (the moving party) has the burden of proof in a subsequent
merits proceeding, whether that be a hearing or a motion for summary judgment.
The Boeing Co., ASBCA No. 54853, 12-1BCAii35,054 at 172,197. This burden of
proof is the opposite of the requirement under a motion to dismiss for lack of
jurisdiction where the proponent of jurisdiction (the nonmoving party) has the burden
of proof. Raytheon Missile Systems, ASBCA No. 58011, 13 BCA ii 35,241 at
173,016; Aries Marine Corp., ASBCA No. 37826, 90-1BCAii22,484; Reynolds
v. Army & Air Force Exchange Service, 846 F.2d 746, 748 (Fed. Cir. 1988).
After the Sikorsky decision, the Board ordered the parties to submit
supplemental briefs addressing the impact of the Sikorsky decision upon the
Raytheon's motion to dismiss. Appellant's supplemental brief took the position that,
even after Sikorsky, we have the discretion to dismiss an appeal on the basis of a
failure to meet the CDA's six-year statute of limitations. In the alternative, Raytheon
argued that the Board could appropriately treat its existing motion to dismiss as either
a motion for summary judgment or a motion to dismiss for failure to state a claim.
The government's supplemental brief opposed appellant's positions.
For reasons including the significant difference in the burden of proof stated
above, it has long been our precedent that briefing submitted in support of a motion to
dismiss for lack of jurisdiction will not necessarily be considered in rendering a
decision on the merits. Combat Support Associates, ASBCA Nos. 58945, 58946, 15-1
1
While not specifically asserted as an affirmative defense in its initial pleading,
Raytheon did assert its position that the government's claim was time-barred by
the CDA requirement that claims be filed within six years of their accrual.
Under the circumstances that Raytheon's pleading was filed over a year before
the Sikorsky decision, Raytheon may amend its pleading to assert the
affirmative defense. See Kaman Precision Products, Inc., ASBCA Nos. 56305,
56313, 10-2 BCA ii 34,529 at 170,288-89 (permitting amendment of answer to
assert omitted affirmative defenses when justice so requires).
2
BCA ~ 35,923; Tele-Consultants, Inc., ASBCA No. 58129, 13 BCA ~ 35,234; Aries
Marine, 90-1BCA~22,484 at 112,846 (citing Do-Well Machine Shop, 870 F.2d 637at 639-40 (a motion to dismiss for lack of jurisdiction may not be converted to a
motion for summary judgment)).
Further, it is well established that disposition of an appeal on summary
judgment is premature in the absence of adequate discovery and development of the
record. 2 "Under summary judgment procedures 'it is usually necessary for the
nonmoving party to have an adequate opportunity for discovery, and summary
judgment should not be granted where the nonmovant has been denied the chance to
discover information essential to its opposition."' Coronet Machinery Corp., ASBCA
Nos. 55645, 56899, 09-2 BCA ~ 34,306 at 169,464 (quoting Environmental Chemical
Corp., ASBCA No. 54141, 05-1BCA~32,938 at 163,176); GAP Instrument Corp.,
ASBCA No. 55041, 06-2 BCA ~ 33,375 at 165,458 ("an adequate opportunity for
discovery must usually precede summary judgment") (citing Burnside-Ott Aviation
Training Ctr., Inc. v. United States, 985 F.2d 1574, 1582 (Fed. Cir. 1993)).
Also operating against the appropriateness of a motion for summary judgment on
the issue of when the government's claims accrued and started the six-year statute of
limitations period, is the "should have been known" test of claim accrual which "has a
reasonableness component [based] upon what facts were reasonably knowable to the
claimant." Laguna Construction Company, ASBCA No. 58569, 14-1BCA~35,618 at
174,459. Summary judgment is not normally appropriate where reasonableness and
subjective knowledge are facts at issue. MICICCS, Joint Venture, ASBCA No. 58242,
14-1BCA~35,612at174,436; The Boeing Co., 12-1BCA~35,054at172,198.
B. Scope of the Government Claim
We find, on the basis of the record before us on the motion as well as
consideration of the filings of the parties, that the contracting officer's final decision
unambiguously asserts a government claim on the basis of noncompliance with both
CAS 403 and CAS 415.
2
Raytheon acknowledges that the parties have engaged only in discovery on the
subject of jurisdiction and have not conducted discovery on the merits of the
appeal (app. supp. mot. at 1, 3-5).
3
CONCLUSION
For the foregoing reasons, we deny Raytheon's motion to dismiss in its entirety.
Dated: 27 May 2015
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DIANA S. DICKINSON
Administfative Judge
Armed Services Board
of Contract Appeals
I concur
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Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 58849, Appeal of
Raytheon Company, rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
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