PHA-JMR JV ( 2014 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
PHA-JMR JV ) ASBCA No. 59032)
Under Contract No. FA4686- l O-C-0018 )
APPEARANCES FOR THE APPELLANT: Martin R. Salzman, Esq.
Kevin S. Dale, Esq.
David M. Gersh, Esq.
Hendrick Phillips Salzman & Flatt, P.C.
Atlanta, GA
APPEARANCES FOR THE GOVERNMENT: Col Robert J. Preston II, USAF
Acting Air Force Chief Trial Attorney
Christopher M. McNulty, Esq.
Capt Eric J. Singley, USAF
Trial Attorneys
OPINION BY ADMINISTRATIVE JUDGE JAMES
ON JURISDICTION
On 25 February 2014, the Board, sua sponte, asked the parties to briefthe
question whether the 30 April 2013 Contract Disputes Act (CDA) certification signed by
Scott Manning, treasurer of subcontractor Progressive Roofing as "Attorney-in-fact for
JMR," one of the PHA-JMRjoint venturers, by a limited power of attorney that expired
on 31 January 2013, was a valid CDA certification. Both parties submitted briefs. At the
parties' request, the Board also heard oral argument. Upon review of the parties' briefs,
attached exhibits and the transcript of the oral argument, we refocus the question as
follows: whether either appellant's 25 January 2013 claim or 30 April 2013 claim is
within the CDA jurisdiction of this Board.
STATEMENT OF FACTS (SOF)
I. On 11 August 2010, the U.S. Air Force 9th Contracting Squadron entered into
Contract No. FA4686-10-C-0018 (the contract) with PHA-JMR JV to construct roof
sections A and B for Building No. 1086 at Beale Air Force Base, California (R4, tab 1
at 1-3).
2. For PHA-JMR JV, "PHILIP L. HA WK.INS, MANAGING PARTNER"
signed the contract and its bilateral Modification Nos. P00002, P00003 and P00004
(R4, tabs 1, 3-5).
3. "JMR" subcontracted with Progressive Services, Inc. (Progressive) for a
portion of the contract roofing work, including demolition (Salzman aff., ex. 1 at 1). As
our following Statement of Facts demonstrate, there are many confusing aspects of this
appeal. We place "JMR" in quotes for the following reasons, and note that neither the
Progressive subcontract nor the Joint Venture agreement is in evidence. The "JMR"
citation is to appellant's undated initial "claim" letter (see SOF if 8). The "claim" is on
the subcontractor's letterhead and is signed by the subcontractor's treasurer. While it is
denominated as PHA-JMR JV's claim, the body of the letter stated: "Please accept the
letter as PHA-JMR's (' JMR') certified claim submission and request for a final
Contracting Officer's decision on behalf of its subcontractor, Progressive Services, Inc.
d/b/a Progressive Roofing." It is unclear in the record what appellant intended by its
parenthetical ("JMR") in this sentence. In various documents sometimes PHA-JMR JV
is used to refer to the contractor and appellant in this appeal, and sometimes JMR is
used. Of course, JMR is only one of the JV partners and not the contractor itself.
4. On 1 November 2010, during the initial roof demolition, Progressive's "Roof
Warrior" cutting device struck several metal plates atop the concrete deck underlying the
existing roofing. Progressive notified the government of this discovery on the next day.
(Salzman aff., ex. 1 at 2, exs. IA, lB)
5. PHA-JMR JV's Request for Information 003 (RFI #3) dated 10 November
2010 was authored by John Morrill of JMR, who provided further information to the
government regarding the alleged differing site condition (Salzman aff., ex. lE).
6. On 3 June 2011 Progressive sent JMR a $57,210.00 change request consisting
of$51,080 for labor and $6,130 for "Overhead & Profit@ 12%" relating to the metal
plates (supp. R4, tab 10 at 4of9).
7. The 16 June 2011 letter of JMR's John Morrill to contracting officer
(CO) Pank, on PHA-JMR JV letterhead, forwarded Progressive's 3 June $57,210.00
request, to which was added "MIU $8,582.00" ("Profit overhead=@ 15%") and "Bond
$1,144.00" for a total of$66,936.00 (supp. R4, tab 10 at 2-3 of9).
8. The undated letter to CO Pank on the letterhead of Progressive Roofing, signed
by Scott Manning, submitted a $240,767 equitable adjustment for "Unforeseen Site
Conditions," for the metal plates, and requested a CO's final decision. The $240,767
adjustment included the $66,936 requested by Progressive and JMR on 16 June 2011 and
added "extended overhead in the sum of at least $173,831.00 for which }MR/Progressive
is entitled to be reimbursed" (emphasis added). (Salzman aff., ex. 1 at 1-2) We find that
PHA-JMR JV or JMR added "$8,582.00" (for profit and overhead at 15%), "Bond
$1,144.00" and "$173,831.00" in extended overhead costs, to Progressive's $57,210
claim that included $6, 13 0 for "Overhead & Profit @ 12 %. "
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9. Accompanying Progressive's letter were two documents each entitled
"CONTRACTOR'S CERTIFICATION." The first was on plain bond, whose text
complied with FAR 33.207(c) and was signed by "Scott Manning, Attorney-in-fact for
JMR." The second was on Progressive letterhead, signed by "Scott Manning, Treasurer,"
its text was the same as the other certification. (Salzman aff., ex. 1 at 1, 5-7)
Mr. Salzman mailed the foregoing "written certified claim ... to the [CO] on behalf of
Appellant on or about January 25, 2013" (Salzman aff. at 1).
10. On 13 March 2013 CO Sandra Siiberg rejected the claim because it did not
appear to originate from the prime contractor, PHA-JMR JV, but was presented on a
subcontractor's letterhead, and the claim certifier "is variously represented as either the
apparent claim author ... designated attorney for a partial component (JMR) of the prime
contractor PHA-JMR JV (with no firm letterhead representation), or, a principal
(treasurer) of the ... subcontractor" (Salzman aff., ex. 2).
11. The 30 April 2013 letter of "PHA-JMR JV ('JMR')" to CO Siiberg repeated
the statements and included the "CONTRACTOR'S CERTIFICATION" signed by
"Scott Manning, Attorney-in-fact for JMR" in its January 2013 claim letter, and
appended the following:
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
JMR Construction Corp .... pursuant to a separate Joint
Prosecution agreement, JMR is. pursuing the claims of
Progressive Services, Inc .... ("Progressive") against the
Project Owner pertaining to a differing site condition alleged
by Progressive pertaining to roofing removal and replacement
in connection with ... the Air Force Contract for Repair Roof,
Flightline Support, B 1086 at Beale AFB, California.... In
connection with the pursuit of the said claims, the Contract
Disputes Act requires a Contractor Certification that the
claims are made in good faith, that the supporting data is
accurate and complete to the best of the contractor's
knowledge and belief, and that the amount requested
accurately reflects the contract adjustment for which the
contractor believes the Government is liable. JMR does not
have sufficient or personal knowledge, particularly as to
Progressive' s supporting data, to execute such a certification.
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Scott Manning, Treasurer for Progressive, does possess such
knowledge.
Accordingly, the undersigned hereby names,
nominates and appoints Scott Manning .. .in JMR's name,
place and stead, to sign its name and execute on its behalf the
Contractor's Certification. The undersigned does hereby
consent to, ratify and confirm everything which the said
attorney-in-fact, pursuant to the powers herein contained,
shall legally do by virtue of these presents.
This Limited Power of Attorney shall not be affected
by any disability and shall expire January 31, 2013.
IN WITNESS WHEREOF, the undersigned have
hereunto executed this document on this 21st day of
December, 2012.
JMR Construction Corp.
JoAnne [illegible] By: Ron [illegible]
Witness Its: Vice President
(Gov't resp., attach. 1 at 8 of 8)
12. CO Siiberg denied PHA-JMR's 30 April 2013 claim on 26 August 2013.
PHA-JMR timely appealed from that decision on 22 November 2013.
Contentions of the Parties
Appellant argues that once the appeal record added the Limited Power of
Attorney appointing Scott Manning as attorney-in-fact on behalf of JMR to certify
PHA-JMR N's claim, PHA-JMR N's January 2013 "written certified claim" met all
the statutory requirements. The 31 January 2013 expiration of such power of attorney
did not impair the validity of its January 2013 certification. If appellant's January 2013
certification was defective, it is correctible pursuant to the amended CDA. (App.
br. at 1-3, 5-7; tr. 6-10) Respondent argues that appellant ignores a fatal defect in its
January 2013 certification: court and board decisions precluding delegation to a
subcontractor of the prime contractor's authority to execute the prime contractor's CDA
certification. An updated limited power of attorney for Mr. Manning to correct a defect
is futile, because his power of attorney is invalid. (Gov't resp. at 1-6, attach. 3 at 6;
tr. 25, 27-29)
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DECISION
We first identify the pertinent statutory, regulatory and decisional requirements and
rules for submitting a CDA claim.
For a contractor claim the CDA requires that: (1) the
contractor must submit the demand in writing to the CO, (2)
the contractor must submit the demand as a matter of right,
and (3) the demand must contain a sum certain. HL. Smith,
Inc. v. Dalton, 49 F .3d 1563, 1565 (Fed. Cir. 1995). The
claim must request, expressly or implicitly, a final decision of
the CO, who must issue a decision thereon, or fail to decide
the claim within the prescribed time. See James M Ellett
Construction Co. v. United States, 93 F.3d 1537, 1542-43 n.4
(Fed. Cir. 1996). If the contractor's claim exceeds $100,000,
it must be certified. See 41 U.S.C. § 7103(b)(l).
ERKA Construction Co., ASBCA No. 57618, 12-2 BCA ii 35,129 at 172,473-74.
The requirement for a "sum certain" is not in the CDA but is in the FAR § 2.101
definition of a "claim" as "a written demand or written assertion by one of the contracting
parties seeking, as a matter of right, the payment of money in a sum certain." See
Rejlectone, Inc. v. Dalton, 60 F.3d 1572, 1575 (Fed. Cir. 1995) (applying the FAR
definition of "claim"); see also Precision Standard, Inc., ASBCA No. 55865, 11-1 BCA
ii 34,669 at 170,788-89 ("at least $151,749.06" is not a sum certain because "the
contractor's use of qualifying language leaves the door open for the request of more
money on the same basis," so appeal dismissed for lack of CDAjurisdiction).
On 11August2011, when the contract was awarded to PHA-JMR JV, the CDA
provided in 41 U.S.C. § 7103(b):
(b) Certification of claims.-
( l) Requirements generally.-For claims of more than
$100,000 made by a contractor, the contractor shall certify
that-
(A) the claim is made in good faith;
(B) the supporting data are accurate and complete to the
best of the contractor's knowledge and belief;
(C) the amount requested ac.curately reflects the contract
adjustment for which the contractor believes the Federal
Government is liable; and
(D) the certifier is authorized to certify the claim on
behalf of the contractor.
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(2) Who may execute certification.-The certification
required by paragraph ( 1) may be executed by an individual
authorized to bind the contractor with respect to the claim.
(3) Failure to certify or defective certification .... A defect
in the certification of a claim does not deprive a court or an
agency board of jurisdiction over the claim. Prior to the entry
of a final judgment by a court or a decision by an agency
board, the court or agency board shall require a defective
certification to be corrected.
We conclude that appellant's January and April 2013 claims are not proper CDA
claims for three reasons.
First, appellant's claims demanded "at least $173,831.00" for extended overhead
costs added to Progressive's $57,210 subcontractor claim (SOF ii 8). See Precision
Standard, 11-1 BCA ii 34,669 at 170,788-89 (amount qualified by "at least" is not a sum
certain); JP. Donovan Construction, Inc., ASBCA No. 55335, 10-2 BCA ii 34,509 at
170,171, ajf'd, JP. Donovan Construction, Inc. v. Mabus, 469 F. App'x 903 (Fed. Cir.
2012) ($559,764 subcontractor claim was a sum certain, however, appeal was dismissed
for lack of jurisdiction due to the qualification "approximately $65,000" of prime's added
claim costs).
Second, signing the PHA-JMR JV claims, as distinguished from signing the
claim certification, was not within Mr. Manning's limited power of attorney (SOF ii 11 ).
Mr. Manning's limited power of attorney was issued by JMR, not by PHA-JMR JV.
The third reason requires a brief summary of the pertinent rules regarding joint
venture claims, which are stated in WorleyPdrsons International, Inc., ASBCA
No. 57930, 14-1 BCA ii 35,482 at 173,959-60 (government claim against one JV "partner"
dismissed for lack of jurisdiction):
A joint venture is an association of partners established
by contract to carry out a single business activity for joint
profit. It is essentially a partnership created for a limited
purpose. Sade/mi Joint Venture v. Dalton, 5 F.3d 510, 513
(Fed. Cir. 1993). Typically, ajoint venture has an
independent existence from its partners. See Pine Prods.
Corp. v. United States, 945 F.2d 1555, 1560 (Fed. Cir. 1991).
Thus, when the government contracts with a joint venture, the
joint venture is the entity with whom the government is in
privity of contract, not its partners. Brother's Cleaning Serv.,
Inc. v. United States, 38 Fed. Cl. 106, 108 (1997); see also
Pine Prods. 945 F .2d at 1561. Contrary to its contention here,
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the government has historically opposed efforts by joint
venture partners to claim independent privity on their joint
ventures' government contracts, and attempts by partners to
assert claims in their own names upon such contracts have
been dismissed.
See Wackenhut International, Inc. v. Department of State, CBCA No. 1235, 09-2 BCA
-,r 34,255 at 169,260 (appeal dismissed when one venturer sought to pursue a claim in its
own right, rather than by the JV); Bellinco, Inc. and A-1 Construction Co., Inc. d/b/al A-1
Bellinco, Inc. v. Babbitt, 1996 U.S. App. LEXIS 31362 (Fed. Cir. 1996) (JV agreement
provided for a two member committee, Bell and Roberts, but was silent as to whether one
member alone could bind or act for the JV; court affirmed Board's dismissal of appeal by
Bell alone for lack of jurisdiction); Kiewit/Tulsa-Houston v. United States, 981 F .2d 531,
534-45 (Fed. Cir. 1992) (without an express delegation by both venturers, the managing
party's general manager lacked authority to bind the JV and so his claim certification was
inadequate).
An exception to the foregoing rule arises when a joint venture agreement expressly
authorizes one venturer or partner to assert a claim against the government and to execute
a CDA certification on behalf of the JV. E.g., Newberg-Brinderson, ASBCA No. 44845,
94-3 BCA -,r 27,095 at 135,009 (Dale Gold, vice-president of Newberg, the "Managing
Venturer," and authorized by both venturers to execute "all other documents ... necessary
... to perform and complete construction contracts" had authority to sign the claim
certification); Stradedile/Aegis Joint Venture, ASBCA No. 39818, 95-1BCA-,r27,397 at
136,587-88 (the presidents of both co-venturers signed the CDA certification of the JV's
claim, though not expressly so authorized by the JV agreement; government's motion to
dismiss for lack of jurisdiction denied). This exception is not applicable here.
Applying the foregoing JV rules to this dispute, JMR's vice president executed
Mr. Manning's limited power of attorney on behalf of JMR (SOF -,r 11 ). There is no
evidence, such as the PHA-JMR JV joint venture agreement, that JMR was authorized to
execute a power of attorney on behalf of the PHA-JMR JV or for Mr. Manning to sign
PHA-JMR JV's claim (SOF -,r-,r 3, 11 ). And in fact the limited power of attorney does not
mention the joint venture or the joint venture's claim that is in addition to Progressive's
claimed amount. For the foregoing reasons, we hold that appellant has not submitted a
valid CDA claim. Therefore, we need not decide whether a subcontractor's treasurer can
be authorized to execute a CDA certification pursuant to a limited power of attorney
signed by one of the two venturers of PHA-JMR JV.
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CONCLUSION
We dismiss the appeal for lack of jurisdiction, without prejudice to appellant's right
to submit a compliant CDA claim to the CO. We encourage PHA-JMR JV (the contractor)
to pay particular attention to who is signing claims and certifications, and in what capacity
they are signing.
Dated: 1August2014
Armed Services
of Contract Appeals
I concur I concur
``
MARK N. STEMPLER
Administrative Judge Ad ' mistrative Judge
Acting Chairman Acting 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. 59032, Appeal of PHA-JMR JV,
rendered in conformance with the Board's Charter.
Dated:
JEFFREYD. GARDIN
Recorder, Armed Services
Board of Contract Appeals
8,