Combat Support Associates ( 2016 )


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  •                 ARMED SERVICES BOARD OF CONTRACT APPEALS
    Appeals of.--                                    )
    )
    Combat Support Associates                        )      ASBCA Nos. 58945, 58946
    )
    Under Contract No. DASA02-99-C-1234              )
    APPEARANCE FOR THE APPELLANT:                           Karen L. Manos, Esq.
    Gibson, Dunn & Crutcher LLP
    Washington, DC
    APPEARANCES FOR THE GOVERNMENT:                         E. Michael Chiaparas, Esq.
    DCMA Chief Trial Attorney
    Douglas R. Jacobson, Esq.
    Trial Attorney
    Defense Contract Management Agency
    Bloomington, MN
    David C. Hoffman, Esq.
    Deputy General Counsel
    Defense Contract Audit Agency
    Fort Belvoir, VA
    OPINION BY ADMINISTRATIVE JUDGE MCILMAIL ON THE
    GOVERNMENT'S MOTION TO DISMISS FOR LACK OF JURISDICTION
    Appellant, Combat Support Associates (CSA), appeals from two contracting
    officer's final decisions: one establishing indirect cost rates and the other demanding
    payment of an alleged overpayment. Those two decisions have been rescinded, and
    the government requests dismissal of the appeals with prejudice, for lack of
    jurisdiction. CSA opposes, contending that live issues remain. We dismiss the
    appeals as moot.
    STATEMENT OF FACTS FOR PURPOSES OF THE MOTION
    On 13 July 1999, the Department of the Army (government) awarded Contract
    No. DASA02-99-C-1234 to CSA for the provision of support and security services in
    Kuwait (R4, tab 1 at 1). On 30 April 2007, CSA submitted to the government its fiscal
    year (FY) 2006 incurred cost submission (ICS) (ex. 3 at 2). On 17 June 2013, the Defense
    Contract Audit Agency (DCAA) issued a report of an audit of the ICS (R4, tab 2). In the
    report, DCAA questioned $3,504,263 in costs and "qualified" $48,245, 100 in other costs
    (id. at G-42).
    On 23 August 2013, the administrative contracting officer (ACO), having reviewed
    the DCAA audit report, issued two final decisions, one demanding that CSA pay the
    government $332,167 in disallowed direct costs (R4, tab 4 at G-166), and the other
    disallowing certain indirect costs and unilaterally determining CSA's indirect cost rates
    for FY 2006 (R4, tab 5 at G-171 ).
    On 2 October 2013, CSA timely filed an appeal docketed as 
    ASBCA No. 58945
    (appealing the ACO's final decision demanding payment of disallowed direct costs), and
    filed an appeal docketed as 
    ASBCA No. 58946
     (appealing the ACO's final decision
    disallowing indirect costs and determining indirect cost rates). In its complaint, CSA
    asserted that the government's claims were time-barred by the six-year statute of
    limitations, because, CSA contended, the government's claims accrued no later than
    20 May 2007, by when the government was in possession of CSA's "complete FY 2006
    ICS" (compl. at 9, il 34).
    On 20 February 2014, CSA filed a motion to dismiss the appeals for lack of
    jurisdiction, contending that the government's claims were time-barred. On
    30 November 2014, the Board scheduled a hearing of the appeals to commence on
    2 November 2015. On 16 March 2015, upon reconsideration of an earlier decision
    denying CSA's motion to dismiss on the merits, Combat Support Associates, ASBCA
    Nos. 58945, 58946, 14-1BCAil35,782, we vacated that decision and denied CSA's
    motion to dismiss, pursuant to Sikorsky Aircraft Corp. v. United States, 
    773 F.3d 1315
    (Fed. Cir. 2014), on the ground that the six-year statute of limitations set forth in the
    Contract Disputes Act, 
    41 U.S.C. § 7103
    (a)(4), is not jurisdictional. Combat Support
    Associates, ASBCA Nos. 58945, 58946, 15-1BCAil35,923 at 175,591. On
    29 October 2015, the ACO rescinded her two, 23 August 2013 decisions, stating:
    I hereby withdraw the Contracting Officer's Final Decision
    (COFD) and demand for payment dated August 23, 2013.
    CSA is hereby released of the Government claim for
    $332,167 of direct costs. Also, I rescind the COFD dated
    August 23, 2013 which unilaterally set CSA's indirect
    rates for FY 2006 and disallowed $1,409 ,464 of indirect
    costs. The Government has no intention of issuing another
    COFD disallowing the costs in the August 23, 2013
    COFDs.
    (R4, tab 6)
    On 2 November 2015, the Board commenced a two-day hearing of the appeals,
    and the government moved for dismissal of the appeals with prejudice, contending that
    as a result of the rescission of the government's claims, there were no longer any claims
    before the Board to adjudicate. On 20 November 2015, CSA opposed the motion.
    2
    Characterizing its reliance upon the statute of limitations as an affirmative defense, CSA
    contended that the appeals should be sustained on the merits of that affirmative defense,
    despite the rescission of the government's claims, because the government's practice of
    "disallowing costs more than six years after submission of an adequate ICS" is "capable
    of repetition, yet evading review" (app. opp'n at 13).
    DECISION
    Where a contracting officer unequivocally rescinds a government claim and the
    final decision asserting that claim, with no evidence that the action was taken in bad
    faith, there is no longer any claim before the Board to adjudicate, and the appeal is
    dismissed. KAMP Systems, Inc., 
    ASBCA No. 54253
    , 09-2 BCA ii 34,196 at 168,995.
    In such circumstances, the government's voluntary action moots the appeal, cf Teddy's
    Cool Treats, 
    ASBCA No. 58384
    , 14-1 BCA ii 35,601at174,410 (dismissing appeal as
    moot where government changed default termination to a notice termination), leaving
    the Board without jurisdiction to entertain the appeal further. See Lasmer Industries,
    Inc., 
    ASBCA No. 56411
    , 10-2 BCA ii 34,491 at 170,123.
    That is the case here. The ACO unequivocally rescinded the final decisions
    asserting the government's claims that are the subject of the appeals, expressly stating
    that "[t]he Government has no intention of issuing another COFD disallowing the
    costs in the August 23, 2013 COFDs," thereby voluntarily providing the relief sought
    in the appeals. In addition, there is no suggestion that the rescissions are in bad faith.
    Consequently, there are no longer any claims before us to adjudicate, and the appeals
    are moot. CSA points to certain costs, including those that DCAA "qualified," that
    CSA suggests are still at issue between the parties (app. opp'n at 11-12). However,
    because the ACO unequivocally rescinded her final decisions, there is nothing left of
    the merits of the appeals for us to adjudicate, and, therefore, there are no costs at issue
    before us.
    We disagree with CSA that we are confronted with a dispute that is "capable of
    repetition, yet evading review." A case is moot when the issues presented are no
    longer "live" or the parties lack a legally cognizable interest in the outcome. Humane
    Society of the United States v. Clinton, 
    236 F.3d 1320
    , 1331 (Fed. Cir. 2001).
    However, a claim is not moot ifthat action is capable of repetition, yet evading review.
    
    Id.
     To qualify for this exception, the challenged action must meet two conditions. 
    Id.
    First, the action must in its duration be too short to be fully litigated prior to its
    cessation or expiration. 
    Id.
     Second, there must be a reasonable likelihood that the
    party will again suffer the injury that gave rise to the suit. 
    Id.
     CSA contends that the
    government's practice of"disallowing costs more than six years after submission of an
    adequate ICS" is capable of repetition, yet evading review, making the appeals still
    live disputes.
    3
    A problem with CSA's argument is that its "dispute" with the government
    regarding whether the statute of limitations begins to run upon the submission of an
    "adequate" ICS is not a claim, it was the theory behind CSA's affirmative defense
    against the government's claims in these appeals. Because the ACO unequivocally
    rescinded those claims, there is nothing left of the appeals for CSA to defend against.
    As such, CSA's request that we rule on the merits of its affirmative defense is,
    essentially, a request for an advisory opinion regarding claim accrual, which we
    decline to provide.
    Finally, we note that a dismissal of an appeal as moot is without prejudice to its
    merits. See Textile Productions, Inc. v. Mead Corp., 
    134 F.3d 1481
    , 1486 (Fed. Cir.
    1998); see also Lasmer Industries, 10-2 BCA ii 34,491 at 170, 123 (explaining that
    dismissal of appeal "with prejudice," after rescission of government claim, was not on
    the merits).
    CONCLUSION
    For these reasons, the appeals are dismissed as moot.
    Dated: 2 March 2016
    '"'tIM011fY ~MIL
    Administrative Judge
    Armed Services Board
    of Contract Appeals
    I concur                                           I concur
    e,`` ~
    Administrative Judge
    RICHARD SHACKLEFORD
    Administrative Judge
    Acting Chairman                                    Vice Chairman
    Armed Services Board                               Armed Services Board
    of Contract Appeals                                of Contract Appeals
    4
    I certify that the foregoing is a true copy of the Opinion and Decision of the
    Armed Services Board of Contract Appeals in ASBCA Nos. 58945, 58946, Appeals of
    Combat Support Associates, rendered in conformance with the Board's Charter.
    Dated:
    JEFFREY D. GARDIN
    Recorder, Armed Services
    Board of Contract Appeals
    5
    

Document Info

Docket Number: ASBCA No. 58945, 58946

Judges: McIlmail

Filed Date: 3/2/2016

Precedential Status: Precedential

Modified Date: 5/9/2016