Ikhana, LLC ( 2017 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of -- )
)
Ikhana, LLC ) ASBCA Nos. 60462, 60463, 60464
) 60465,60466,61102
)
Under Contract No. W912DR-13-C-0051 )
APPEARANCE FOR THE APPELLANT: William A. Scott, Esq.
Pedersen & Scott, P.C.
Charleston, SC
APPEARANCES FOR THE GOVERNMENT: Thomas H. Gourlay, Jr., Esq.
Engineer Chief Trial Attorney
Michael T. Shields, Esq.
David B. Jerger, Esq.
Engineer Trial Attorneys
U.S. Army Engineer District, Baltimore
OPINION BY ADMINISTRATIVE JUDGE SWEET ON THE GOVERNMENT'S
MOTION TO DISMISS, OR IN THE ALTERNATIVE FOR SUMMARY JUDGMENT
AND SURETY'S MOTION TO INTERVENE AND TO
WITHDRAW THE APPEALS, OR FOR SUMMARY JUDGMENT
Appellant Il671 F.3d 1332, 1340-41 (Fed. Cir. 2012);
Burnside-Ott Aviation Training Ctr. v. Dalton, 107 F.3d 854, 859 (Fed. Cir. 1997).
"Permitting parties to contract away Board review entirely would subvert this
purpose." Burnside-Ott, 107 F.3d at 859. Thus:
[A]ny attempt to deprive the Board of power to hear a
contract dispute that otherwise falls under the CDA
1
For purposes of this opinion, we also assume, without deciding, that the Anti-Assignment
Act, 31 U.S.C. § 3727, 41 U.S.C. § 6305 does not prohibit any assignment.
4
conflicts with the normal de novo review mandated by the
CDA and subverts the purpose of the CDA .... Congress
commanded that the CO's decision on any matter cannot
be denied Board review.
Id. at 858 (holding that a contractor cannot waive its right to appeal a CO's decision to
the Board). 2
Here, the indemnity and settlement agreements impermissibly attempt to
deprive us of our power to hear these appeals, which otherwise fall under the CDA.
Admittedly, that attempted deprivation is less direct than was the attempted
deprivation in Burnside-Ott. In Burnside-Ott, the contractor directly waived its right
to appeal to the Board in its contract with the government. 107 F .3d at 856. In this
case, Umana indirectly waived its right to appeal to the Board by assigning the claims
subject to these appeals to the surety, which then agreed with the government to
withdraw these appeals. (SOF iii! 3, 13) However, that is a distinction without a
difference. Regardless of the particular manner in which the contractor waived its
CDA right to Board review, the end result is the same-the contractor impermissibly
has contracted away its unwaivable CDA right to impartial review of the CO's
decisions. Burnside-Ott, 107 F.3d at 859.
The government argues that the surety had to be able to settle Ikhana's claims
because otherwise it had no incentive to devote any resources to project completion
prior to resolution of the appeals, which would defeat the purpose of a bond.
However, the government provides no authority in support of that argument. (Gov't
mot. at 11) On the contrary, that argument is belied by the facts of this case. During
their settlement negotiations, both the surety and the government expressed their
willingness to fund project completion without settling Ikhana's claims (SOF iii! 11,
12). In any event, the government's equitable argument cannot override Ikhana's
unwaivable CDA right to Board review of the CO's decision and deemed denials.
Also misplaced is the surety's reliance upon Safeco Insurance Company of
America, ASBCA No. 52107, 03-2 BCA if 32,341 (surety mot. to withdraw at 14).
Unlike in the present case, it was the government-not the contractor-that was
seeking to nullify the assignment of the contractor's claim to the surety in Safeco.
03-2 BCA if 32,341 at 160,013-14. That distinction makes a difference because it
2
Minesen declined to extend Burnside-Ott to cases where the parties waive their rights
to appeal from the Board to the United States Court of Appeals for the Federal
Circuit. 671 F.3d at 1340-41. Burnside-Ott-instead of Minesen-applies to
this appeal because the issue here is a contractor's access to the Board, not its
right to appeal Board decisions to the Federal Circuit.
5
means that, unlike in the present case, there was no assertion by the contractor that it
had been compelled to waive its CDA right to Board review in Safeco. ld. 3
In sum, any assignment of the claims Ikhana appeals was invalid under Burnside-Ott.
As a result, Ikhana has standing to bring these appeals, the surety does not have standing,
and the surety therefore cannot withdraw the appeals.
CONCLUSION
The government's motion to dismiss, or in the alternative for summary
judgment is denied. The surety's motion to intervene is denied. The surety's motion
to withdraw the appeals or, in the alternative, motion for summary judgment is denied.
Dated: 18 October 2017
JAMES R. SWEET
Administrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
RICHARD SHACKLEFORD OWEN C. WILSON
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
3
Maharaj Construction Inc., LBCA 2001-BCA-3, 2005 WL 166315-which the
government and the surety cite (gov't mot. at 13-14; surety mot. to withdraw at
14)-is not binding upon us. Nor do we find it persuasive because it does not
address Burnside-Ott, which is binding precedent.
6
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. 60462, 60463, 60464, 60465, 60466,
61102, Appeals of Ikhana LLC, rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
7