Professional Management Consulting Services, LLC ( 2020 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of -- )
)
Professional Management Consulting ) ASBCA Nos. 61861, 62173
Services, LLC )
)
Under Contract Nos. GS-35F-015GA, P.O. )
WMATA-0000119479 )
APPEARANCE FOR THE APPELLANT: Eden Brown Gaines, Esq.
Brown Gaines LLC
Washington, DC
APPEARANCE FOR THE AUTHORITY: Jon B. Crocker, Esq.
Chief Counsel
Washington Metropolitan Area
Transit Authority
Washington, DC
OPINION BY ADMINISTRATIVE JUDGE D’ALESSANDRIS
In September 2017, appellant, Professional Management Consulting Services, LLC
(PMCS) submitted an unsolicited contract proposal to respondent, the Washington
Metropolitan Area Transit Authority (WMATA). After some discussions, WMATA
issued a Purchase Order (P.O.) containing terms that differed from those in PMCS’ offer.
PMCS did not sign the WMATA-generated Purchase Order; however, a contract was
created by performance. WMATA issued a conformed contract consisting of its purchase
order, a WMATA scope of work, PMCS’ General Services Administration (GSA) IT
Schedule 70, and PMCS’s September 5, 2017 technical and cost proposals.
The contract required PMCS to develop a Disadvantaged Business Enterprise
(DBE) Standard Operating Procedure (SOP) manual, and other tasks, for a total contract
price of $509,340.16. The parties subsequently modified the contract to add additional
work that is not at issue in these appeals. PMCS performed under the contract, receiving
payment of its invoices, until the last invoice in the amount of $66,015.16. WMATA
initially offered PMCS a partial payment of the invoice, alleging that PMCS’
performance of the contract was deficient. PMCS rejected WMATA’s settlement offer
and filed a claim seeking payment of the invoice. WMATA issued an unsigned
contracting officer’s final decision (COFD) denying the claim. PMCS appealed to the
Board, and we possess jurisdiction pursuant to the deemed denial of the claim (ASBCA
No. 61861).
After PMCS’ ASBCA No. 61861 was docketed, WMATA issued a final decision
asserting an affirmative claim for return of advanced payments in the amount of
$164,425.36. PMCS appealed from that final decision (ASBCA No. 62173) and the
appeals were consolidated. The Board held a one-day hearing on the consolidated
appeals in November 2019. At the hearing, PMCS asserted that it was performing under
a GSA schedule contract, rather than the WMATA-issued task order. Following the
hearing, WMATA filed a motion to dismiss PMCS’ appeal (ASBCA No. 61861) for lack
of subject matter jurisdiction, asserting that PMCS’ argument requires the interpretation
of the terms of the GSA schedule agreement, and that a GSA contracting officer
possesses exclusive jurisdiction to entertain such an argument.
Due to the unusual circumstances surrounding the creation of the contract, the
parties disagree not only regarding the interpretation of the contract, also the terms of the
contract itself. Thus, this opinion first determines what the terms of the contract, in fact,
are. Next, we deny WMATA’s motion to dismiss PMCS’ appeal, finding that our
resolution of these appeals does not require interpretation of PMCS’ GSA schedule.
Finally, we address the appeals on the merits, sustain both appeals, and enter judgment in
favor of PMCS in the amount of $66,015.16.
FINDINGS OF FACT
I. Contract Formation
PMCS is a disadvantaged small business located in Washington, D.C. (ASBCA
No. 61861 (61861) R4, tab 1 at WMATA-034, 37-38). In late August 2017, or
thereabout, PMCS’ president, Mr. Dwight Franklin, was approached by an acquaintance,
Mr. John Gilmore, with a business opportunity to perform work for WMATA
(tr. 1/140-41). Mr. Franklin testified that it was his understanding that Mr. Gilmore had
attended high school with WMATA purchasing employee Monique Anderson and also
had a previous relationship with Ms. Anderson as well as another WMATA purchasing
employee, Ms. Suzette Moore (tr. 1/141). According to Mr. Franklin, Mr. Gilmore
proposed that PMCS retain Mr. Gilmore’s company as a subcontractor on the contract
with WMATA, in exchange for his bringing the work to PMCS (id.). Under this
proposal, Mr. Gilmore would serve as the liaison between PMCS and WMATA (id.).
Mr. Gilmore apparently approached PMCS because he was looking to partner with a
company that had an existing GSA schedule (tr. 1/21; 61861 R4, tab 1 at WMATA-039).
PMCS, working with Mr. Gilmore’s company, prepared a proposal to provide
various services, including preparation of a procedures manual to the WMATA DBE
program, with Mr. Gilmore largely responsible for the details of the proposal (tr. 1/24, 31).
The proposal, dated September 5, 2017, included a scope of work with a Phase 1 to be
performed September 2017 – March 2018, and Phases 2 and 3 for follow-on support that
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were not delineated in the scope of work (61861 R4, tab 1 at WMATA-042). Within
Phase 1, PMCS identified 5 tasks and 3 optional tasks:
• Task 1: Project Management Approach & Methodology (All Tasks)
• Task 2: Business Process Analysis
• Task 3: Standard Operating Procedure Development
• Task 4: Process and Performance Metric Identification
• Task 5: Training Manual Development
• Optional Task 1: Small Business Outreach Strategy
• Optional Task 2: SOP Review Program Manual
• Optional Task 3: Training Strategy Development
(Id.)
The proposal further specified deliverables for each task. The deliverables for
Task 1 included: (1) a project charter; (2) a project schedule; (3) bi-weekly status reports;
and, (4) monthly status reports (61861 R4, tab 1 at WMATA-045). The deliverable for
Task 2 was a “Business Process Diagram and Workflow Recommendations” (id.
at WMATA-052). The deliverables for Task 3 included: (1) a comprehensive list of
SOPs and process workflows; (2) development of a standard SOP template; (3) SOPs; and
(4) process workflows (id. at WMATA-053). For Task 4 the deliverables were:
(1) process metrics; and (2) performance metrics (id. at WMATA-054). The deliverable
for Task 5 was the training manual comprised of the SOPs and process workflows (id.).
PMCS’ proposal contained the following provision regarding acceptance of
deliverables:
18. DELIVERABLE ACCEPTANCE CRITERIA
PMCS will deliver all formal products concurrently to the
DBE Project Lead (and other technical customers, as
appropriate), and the Contracting Officer. Electronic
transmission will be the primary delivery mechanism;
however, PMCS will provide hard copies as appropriate.
The DBE Project Lead will notify PMCS of deliverable
acceptance or provide comments in writing within five (5)
business days of receipt of a deliverable. If PMCS does not
receive comments, feedback or formal acceptance within this
five (5) business day period then the deliverable will be
considered approved by WMATA. Upon the DBE Project
Lead notification of comments and feedback regarding a
deliverable, PMCS will address identified needs for
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deliverable approval and resubmit the updated deliverable to
the DBE Project Lead within a mutually agreeable timeframe.
(61861 R4, tab 1 at WMATA-058)
Accompanying PMCS’ proposal was a separate cost proposal, also dated
September 5, 2017 (61861 R4, tab 1 at WMATA-080-84). The cost proposal priced the
five tasks in Phase 1 of the proposal at $396,090.96 and represented that its costs were in
accordance with its GSA IT Schedule 70 (id. at WMATA-083). The cost proposal also
provided that the “period of performance for this effort is 6 months from date of contract
award” (id.).
Following discussions between the parties, WMATA responded with a WMATA
Purchase Order containing terms and conditions that differed from those in PMCS’
proposal. The administrative record contains a document purporting to be the conformed
contract, dated September 15, 2017 (61861 R4, tab 1 at WMATA-002). This conformed
Contract No. CQ17013, lists the contents of the contract as including: (1) “Purchase Order
119479 Issued 09/15/2017;” (2) “GSA Contract Number GS35F015GA with Price Schedule
Sheet;” (3) “Scope of Work;” and, (4) “Contractors Proposal” (id. at WMATA-003). The
purchase order (id. at WMATA-004-08) has a date of September 15, 2017, and a revision
date of December 21, 2017 (id. at WMATA-004). A second version of the purchase order,
without the revision, is also in the record (ex. A-1). Neither version of the WMATA
purchase order is signed by PMCS (id. at WMATA-004-08; ex. A-1).
Perhaps due to the unusual circumstances surrounding the award of the contract,
the conformed contract was poorly drafted. WMATA’s acceptance of an unsolicited
proposal was unusual, with Ms. Sylvia Edwards, WMATA’s Director of the Small
Business Programs Office, commenting that it was the first unsolicited proposal she had
seen in 14 years in the WMATA procurement department (tr. 1/257). Relevant to these
appeals, the documents comprising the conformed contract conflict regarding the
timeframe for performance, the deliverables required pursuant to the contract, and the
inspection of deliverables. The lack of consistency regarding contractual terms is best
illustrated by the deadline for performance where three of the four documents contain
different performance periods, and the original and revised purchase orders give
conflicting performance dates, such that there are four different dates provided by three
documents.
The document referenced in the administrative record as the September 15, 2017
WMATA Purchase Order No. WMATA-0000119479, is marked as revision 2 and dated
December 21, 2017. Contract Line Item Number (CLIN) 1-1, in the amount of
$509,340.16 included the DBE manual at issue in these appeals, which comprised
$396,090.96 of the CLIN, and an additional $113,249.20 for staff augmentation, that was
not included in PMCS’ original cost proposal but was contained in PMCS’ revised cost
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proposal dated September 12, 2018 (61861 R4, tab 1 at WMATA-004; ASBCA
No. 62173 (62173) R4, tab 2 at WMATA-279-80). The staff augmentation portion of the
contract is not at issue in these appeals. The revised cost proposal states that “PMCS will
perform the following scope of work in addition to the work outlined in the Technical
Proposal to support the DBE program” (62173 R4, tab 2 at WMATA-279). On
December 21, 2017 the parties agreed to an additional CLIN to perform DBE
Certification and general compliance support in the amount of $278,658.95 (61861 R4,
tab 1 at WMATA-004; tr. 1/36). Purchase Order revision 2, indicates that CLIN 1-1 (the
DBE SOP manual and related tasks) has a performance due date of November 30, 2017
(that is, a date three weeks prior to the date of the modification, for work that was still
being performed), and CLIN 2-1 (the DBE certification and compliance support) has a
performance due date of September 17, 2018 (id.). The purchase order contains a
break-out of the costs for the DBE certification and compliance support line item with
specified hourly labor rates and hours for different labor categories and amounts for
training and travel. The WMATA purchase order specifies a not-to-exceed amount for
the line item of $278,658.95. (61861 R4, tab 1 at WMATA-004) Conversely, the
purchase order does not specify labor rates, the number of labor hours, or amounts for
training or travel for the DBE manual CLIN, and does not specify that the $509,340.16
amount is a not-to-exceed limit, rather than a fixed amount (id.). Mr. Franklin testified
that PMCS did not provide signed timesheets to the government until the DBE
certification and compliance CLIN was added to the contract. Mr. Franklin testified to
his understanding that the DBE manual was a firm-fixed-price line item, but that the DBE
certification and compliance CLIN was flexibly-priced. (Tr. 1/35-36, 65-66).
As noted above, the staff augmentation line item is not at issue in either of the
appeals before us. However, the original purchase order (only one page of which is in the
record) contains a due date for CLIN 1-1 of September 17, 2018 (ex. A-1). The original
purchase order additionally has a hand-written notation indicating that it is a “Firm fixed
price” contract (id.); however, neither side elicited any testimony as to who made the
handwritten notation or when it was written.
The conformed contract does not specify a contract type. The WMATA
Procurement Procedures Manual, Version 7.4, like federal procurement policy, disfavors
the use of time and material and labor hour contracts (app. supp. R4, tab 18 at PMCS659,
665-66). The WMATA policy provides that a “firm-fixed price contract shall be used for
acquiring commercial products or services . . . when the Contracting Officer can establish
fair and reasonable prices” (id. at PMCS659). Ms. Anderson testified that WMATA used
the GSA schedule as a reference for pricing (tr. 1/296). Conversely, the WMATA
procurement manual provides that the use of time and material and labor hour contracts
require advance written approval from the Chief Procurement Officer and a
determination by the contracting officer that it is not possible to define the scope or
duration of work or to estimate the contract costs with any degree of confidence and that
no other type of contract would be suitable (app. supp. R4, tab 18 at PMCS666). The
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record in these appeals does not contain such a determination or contracting officer
authorization for either CLIN.
The WMATA purchase order incorporates by reference WMATA’s standard
purchase order terms and conditions (61861 R4, tab 1 at WMATA-006, tab 8). Relevant
to these appeals, the WMATA standard purchase order terms and conditions acceptance
clause ¶ 1.a, provides that:
The Authority shall accept or reject tendered supplies as
promptly as practicable after delivery, unless otherwise
provided in this Contract. The Authority’s failure to inspect
and/or accept or reject the supplies shall not relieve the
Contractor from responsibility for, nor impose liability upon,
the Authority for nonconforming supplies.
(61861 R4, tab 8 at WMATA-238) The terms and conditions additionally contain an
inspection of services clause at ¶ 26.b, providing:
If any of the services performed do not conform to Contract
requirements, the Authority may require the Contractor to
perform the services again in conformity with Contract
requirements, without additional cost. When the defects in
performance cannot reasonably be corrected by such further
performance, the Authority may:
i. Direct the Contractor to take necessary action to ensure
that future performance conforms to contract
requirements; and/or
ii. Reduce the contract price to reflect the reduced value
of the services performed.
(61861 R4, tab 8 at WMATA-253) The WMATA terms and conditions additionally
provide that a contractor is in default if it breaches a material obligation of the contract
(id. at WMATA-265). In the event of a material breach, the contracting officer can send
a notice of breach to the contractor, stating that the contractor has 10 days, or such
additional time specified by the contracting officer, to cure the breach (id.).
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Both the original and the revised purchase orders state that “his [sic] purchase order
is written in accordance with the terms and conditions of GSA contract GS35F01GA”
(61861 R4, tab 1 at WMATA-004; ex. A-1 1). The GSA schedule (61861 R4, tab 1
at WMATA-014-25) provides at ¶ 3.b that “[a]ll task orders are subject to the terms and
conditions of the contract. In the event of conflict between a task order and the contract,
the contract will take precedence” (id. at WMATA-017). The GSA schedule, at ¶ 6,
additionally incorporates Federal Acquisition Regulation (FAR) 52.212-4, CONTRACT
TERMS AND CONDITIONS – COMMERCIAL ITEMS (MAR 2009) (ALTERNATE I
– OCT 2008) (DEVIATION 1 – FEB 2007) for firm-fixed-price orders and FAR 52.212-4
for time and materials and labor hour contracts2 (id. at WMATA-019). The FAR
deviation applicable to firm-fixed-price orders provides in relevant part:
(a) Inspection/Acceptance.
...
(3) Unless otherwise specified in the contract, the
ordering activity will accept or reject services and
materials at the place of delivery as promptly as
practicable after delivery, and they will be presumed
accepted 60 days after the date of delivery, unless
accepted earlier.
(4) At any time during contract performance, but not later
than 6 months (or such other time as may be specified in
the contract) after acceptance of the services or materials
last delivered under this contract, the ordering activity
may require the Contractor to replace or correct services
or materials that at time of delivery failed to meet contract
requirements.
FAR 52.212-4, (MAR 2009) (ALTERNATE 1 – OCT 2008) (DEVIATION 1 – FEB
2007). The standard FAR provision applicable pursuant to the GSA schedule to time and
materials and labor hour contracts provides:
1 Ex. A-1 lists the GSA contract number as “GS35f015A” rather than “GS35F01GA.”
2 The copy of the PMCS’ GSA IT Schedule 70 contained in the record has illegible
overprinted text in ¶ 6 “Inspection of Services” following the specification of
FAR 52.212-4 for time and materials and labor hour contracts, that may indicate
an alternate version of the FAR clause. In supplemental briefing, neither party
could identify the specific FAR provision contained in the schedule as applicable
to time and materials and labor hour contracts (app. supp. br. at 2-3; WMATA
supp. br. at 3-4).
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(a) Inspection/Acceptance. The Contractor shall only tender
for acceptance those items that conform to the requirements
of this contract. The Government reserves the right to
inspect or test any supplies or services that have been
tendered for acceptance. The Government may require
repair or replacement of nonconforming supplies or
reperformance of nonconforming services at no increase in
contract price. If repair/replacement or reperformance will
not correct the defects or is not possible, the Government
may seek an equitable price reduction or adequate
consideration for acceptance of nonconforming supplies or
services. The Government must exercise its postacceptance
rights (1) [w]ithin a reasonable time after the defect was
discovered or should have been discovered; and (2) [b]efore
any substantial change occurs in the condition of the item,
unless the change is due to the defect in the item.
FAR 52.212-4(a).
The WMATA scope of work, which is captioned as a task order (61861 R4, tab 1
at WMATA-027–33) does not specify the type of contract, but clearly contemplates a
labor hour contract. For example, the statement of work provides that:
The offeror shall complete Appendix A - Personnel and
Price Proposal and include the proposed labor categories and
approved rates on the resumes submitted for the above
requested resources. For each resource submitted, the
Offeror shall indicate the number of hours per week the
resource is available for the performance period and the dates
the resource is available to onboard and begin onsite work
at WMATA
(Id. at WMATA-030-31) The WMATA scope of work additionally provides that the
period of performance will “commence immediately after award through June 2018”
(id. at WMATA-031).
The scope of work also defines the deliverables for the contract. The task order
list of deliverables differs from the list of deliverables contained in PMCS’ proposal.
1. DELIVERABLES
1.1 Basis of Acceptance of Deliverables
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The engagement deliverables will be discussed at the start of
the engagement and will likely include, but is not limit [sic]
to:
• Participation in meetings and discussions of DBE goals;
• On-site visits to process DBE applications;
• Contract compliance;
• On-site visits to work site to ensure DBE compliance;
• Periodic reporting and updates to DBE management;
• Completed forms and reports as required by the program; and
• Complete evaluations and assessments with appropriate
opinions and conclusions.
1.2. Standard Deliverables
All deliverables shall be provided in either Microsoft Word,
Excel, PowerPoint or Visio, unless otherwise agreed upon.
Status deliverables for this contract include:
• Bi-weekly Resource/Timesheet Reports . . .
• Bi-weekly General and Cumulative Performance . . .
• Bi-weekly Status Report
(61861 R4, tab 1 at WMATA-028-29) The scope of work has lines for a company
representative to sign and date the document, but the copy in the record is unsigned (id.
at WMATA-033). At the hearing, Mr. Franklin testified he had not previously seen the
WMATA scope of work, but that it was generally consistent with his understanding of
the scope of work for the project (tr. 1/33-34).
II. Contract Performance
Following contract award, PCMS held a kick-off meeting with WMATA
(tr. 1/44). WMATA was represented primarily by Franklin Jones, chief of WMATA’s
Department of Fair Practices (id.). At the meeting the parties discussed the deliverables
under the contract, with Mr. Jones emphasizing performance of the SOP manual
(tr. 1/47-49). According to Mr. Franklin, these discussions defined the scope of work for
the contact (tr. 1/43-45). Mr. Franklin testified that Mr. Jones instructed PMCS to
perform tasks 1, 2, 3, and 5 of PMCS’ proposal, but that Mr. Jones was not interested in
focusing on task 4 (Process and Performance Metric Identification) (tr. 1/49).
Mr. Franklin additionally testified that the parties agreed that the SOP project would be
completed within 6 months, or by March 15, 2018 (tr. 1/154, 156, 169).
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At this time, PMCS dealt primarily with WMATA’s Department of Fair Practices,
and had little if any contact with Management, Audit, Risk and Controls (MARC), a
division within WMATA’s purchasing department (tr. 1/53-54). In October 2017,
Ms. Sylvia Edwards, WMATA’s subject matter expert on DBE, began participating in
the project (tr. 1/54-56). Ms. Edwards made changes to the contract deliverables,
including changing the template for the SOP manual (tr. 1/56-57). Mr. Franklin testified
that Mr. Gilmore was concerned that PMCS would take him out of the contract
(tr. 1/141). According to Mr. Franklin, Contracting Officer Monique Anderson
threatened PMCS not to “take John Gilmore off the project because there wouldn’t be a
project without him on it” during a meeting in November 2017 (tr. 1/142).3
In January 2018, WMATA transferred control of the project from the Fair
Practices Division to the Procurement Division (tr. 1/66-67, 123). With the change in
oversight, PMCS was to work with Ms. Suzette Moore, WMATA’s counsel office, and
the MARC office (tr. 1/77-78). PMCS contends that the different stakeholders demanded
conflicting changes and provided conflicting feedback (tr. 1/71, 78-79, 101-02, 110-14).
Mr. Franklin testified that, at several points, WMATA demanded successive changes that
required PMCS to add information that it had previously been instructed to remove or to
remove information it had previously been instructed to add (tr. 1/208-10). During
performance of the contract, PMCS submitted monthly status reports to WMATA (app.
supp. R4, tabs 26-29). PMCS also submitted vouchers for payment and was paid by
WMATA.
PMCS submitted a draft of the SOP manual to WMATA on February 14, 2018
(app. supp. R4, tab 10), at a time when Ms. Edwards, the primary WMATA subject
matter expert was on vacation (tr. 1/78, 256). The other stakeholders provided comments
to PMCS regarding the draft and PMCS incorporated the proposed changes (tr. 1/92-93).
This was an iterative process with WMATA reviewing and commenting on the revisions
(tr. 1/101-02, 128). Mr. Sheffield, of the MARC office, sent an email to several of the
stakeholders indicating his approval of PMCS’ work and complimenting the quality of
the draft (ex. A-2).
The parties dispute whether PMCS provided the deliverables required by the
contract. Mr. Franklin was questioned regarding the deliverables enumerated in PMCS’
technical proposal. He testified that PMCS provided the agenda, draft project charter,
and meeting minutes that were deliverables for the project kick-off meeting (tr. 1/150;
61861 R4, tab 1 at WMATA-043). The deliverables, as defined in PMCS’ technical
3 Neither party questioned Ms. Anderson about this statement during the hearing.
WMATA asserts that the relationship between PMCS and WMATA had “soured”
and that PMCS continued on the project, apparently without Mr. Gilmore, despite
its “lack of DBE expertise” (WMATA reply br. at 2). Mr. Franklin alluded to the
existence of “issues” with Mr. Gilmore (tr. 1/141).
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proposal for Task 1, included: (1) a project charter; and (2) a project schedule (61861
R4, tab 1 at WMATA-045). Mr. Franklin testified that PMCS prepared a project charter,
but was unable to identify the document in the record, and could not recall whether a
copy of the charter was produced in discovery (tr. 1/160). Mr. Franklin also testified that
the project schedule was provided as part of the monthly status report (tr. 1/161). Task 1
also required biweekly and monthly status reports, and Mr. Franklin testified that they
were provided (tr. 1/161-62).
Task 2 of the statement of work required a business process diagram and
workflow recommendations (61861 R4, tab 1 at WMATA-052). Mr. Franklin testified
that this deliverable was satisfied by the SOP manual (tr. 1/162). According to
Mr. Franklin, “part of [the SOP manual] is the business process diagram and the work
flow” (tr. 1/163).
Mr. Franklin similarly testified that the deliverables for Task 3 ((1) a
comprehensive list of SOPs and process workflows; (2) developing a standard SOP
template; (3) SOPs; and (4) process workflows (61861 R4, tab 1 at WMATA-053)) were
all contained in the SOP manual (tr. 1/164). Task 4 required process and performance
metrics as deliverables (id. at WMATA-054), and Mr. Franklin testified that these were
contained in the monthly reports (tr. 1/164-65). Finally, Mr. Franklin testified that the
training manual that was the deliverable for Task 5, was incorporated into the SOP
manual (tr. 1/165).
During performance of the project, PMCS regularly invoiced WMATA. Despite
the fact that the WMATA statement of work contemplated a labor hour type contract, in
performance, the parties treated the DBE manual as a firm-fixed-price CLIN. The
invoices for CLIN 1-1, the DBE manual, and staff augmentation, do not contain a labor
hour breakdown and simply list a quantity of “1” for consulting services in the amount of
$66,015.16 or a similar amount 4 (app. supp. R4, tabs 33-36, 39-40). Some of the invoices
provide detailed breakouts of activities during the period, but without labor hours or labor
rates being specified (e.g., 62173 R4, tab 3 at WMATA-282-85). The invoice amount was
based on the invoicing schedule contained in PMCS’ cost proposal and divided the
$396,090.96 line item cost estimate into six equal payments of $66,015.16 (61861 R4,
tab 1 at WMATA-083). By contrast, the vouchers that included work for CLIN 2-1, DBE
certification and compliance support, included variable quantities of labor hours that were
invoiced at specific labor hour rates (app. supp. R4, tabs 37, 41-42).
4 Invoices # 677 and # 696 were actually in the amount of $61,319.88 (app. supp. R4,
tabs 33, 35). Invoice # 688 was in the amount of $122,639.76 (double $61,319.88)
(app. supp. R4, tab 34).
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III. PMCS’ Submission of the DBE SOP Manual
On February 8, 2018, in response to a status update, Ms. Moore questioned PMCS
regarding “slippage” in the project schedule (app. supp. R4, tab 12 at PMCS551).
Mr. Franklin responded that the project schedule had slipped due to the addition of more
stakeholders to the review process, the receipt of additional documentation, changes to
the final document delivery, and modification of the scope of the SOPs, and he indicated
that there would be no additional charge for the slippage (id. at PMCS550). Ms. Moore
indicated that an extension of the performance deadline was unacceptable, and requested
performance by March 14, 2018 (id. at PMCS548). Mr. Franklin indicated that PMCS
would do what needed to be done to meet the March 14, 2018 deadline (id.). By email
dated March 8, 2018, Mr. Franklin informed WMATA that the project would not be
completed by March 14, 2018, and requested a meeting to discuss the project (app. supp.
R4, tab 11 at PMCS544). Mr. Franklin indicated that he wanted to discuss the project
scope, schedule, and the cost impact for completing the remaining work (id.
at PMCS542). Ms. Moore reminded Mr. Franklin of his previous statement that there
would be no additional charge for additional slippage, and indicated that there had been
no change in scope of the project (id. at PMCS540-41). Mr. Franklin responded, on
March 9, 2018, that PMCS intended to provide the SOP deliverables by March 19, 2018
and provided a detailed explanation of outstanding issues and options for addressing the
issues (id. at PMCS537-39). Ms. Moore responded on March 13, 2018 (four days later,
and the day before the asserted March 14, 2018 deadline), by providing guidance on the
issues but did not respond to PMCS’ proposal to deliver the SOP manual by March 19,
2018 (id. at PMCS536). Mr. Franklin interpreted Ms. Moore’s response as agreeing to an
extension of time until March 19, 2018 (tr. 1/100). PMCS delivered the SOP manual by
email at 12:40 am on March 17, 2018 (app. supp. R4, tab 24).
IV. WMATA’s Review of the DBE SOP Manual
Upon receipt of PMCS’ SOP manual, Ms. Edwards reviewed the document with
two attorneys from the WMATA Office of General Counsel (tr. 1/218). They spent 6
weeks reviewing the SOP manual, reviewing 12 or so pages per day (id.). Their review
uncovered hundreds of errors, including items that they considered to be critical errors
(61861 R4, tab 2; tr. 1/218-23). For example, the draft SOP submitted by PMCS
referenced the Freedom of Information Act (FOIA) (61861 R4, tab 2 at WMATA-113);
however, WMATA is not a federal government entity and is not subject to FOIA
(tr 1/183, 221). Instead, for WMATA purposes, the correct reference would be to the
Public Access to Records Policy (PARP), a term with which Mr. Franklin was unfamiliar
at the hearing (tr. 1/182, 221).
During this review process, WMATA never communicated with PMCS to have
PMCS revise or correct its SOP manual. Mr. Franklin testified that he didn’t know of
any WMATA concerns until “around” July 2018 (tr. 1/188). On June 21, 2018, over
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three months after PMCS’ submission, Ms. Anderson emailed a copy of WMATA’s
comments on the SOP manual in track changes format, with a comment that PMCS
should “review and [WMATA] will contact you next week to further discuss” (app. supp.
R4, tab 15). At a meeting in July 2018, PMCS offered to make the changes requested in
WMATA’s comments, but Ms. Anderson indicated that the issues had already been
resolved (tr. 1/107, 110).
V. The Parties’ Negotiations Regarding PMCS’ Final Invoice
PMCS submitted its invoice # 728, in the amount of $66,015.16, to WMATA for
payment on March 20, 2018 (61861 R4, tab 3). WMATA paid PMCS’ prior invoices late
or behind schedule (tr. 1/62). On May 16, 2018, PMCS received a notification from
WMATA that its invoice had been approved and was “awaiting payment” (app. supp. R4,
tab 14). At the July 2018 meeting mentioned above, Ms. Anderson proposed to pay
PMCS $45,000, rather than the invoice amount of $66,015.16 (tr. 1/110, 129-30).
Internal WMATA emails produced during discovery demonstrate that Ms. Moore, the
chief procurement officer, had indicated that she was “willing to pay some portion for the
labor, but as I said, the product is poor. I do not want to pay the entire invoice” (app.
supp. R4, tab 21 at PMCS996). Mr. Franklin rejected Ms. Anderson’s offer of $45,000
on behalf of PMCS (tr. 1/110-12).
VI. PMCS’ Appeal
As this appeal involves a contract with WMATA, which is not a federal
government agency, the Contract Disputes Act (CDA) 41 U.S.C. §§ 7101-09, does not
apply to these appeals. Instead, WMATA’s Standard Non-Federal Purchase Order Terms
and Conditions (61861 R4, tab 8) 5 provides the disputes clause relevant to this appeal.
The disputes clause provides:
Any dispute concerning a question of fact arising under or
related to this Contract that is not disposed of by agreement,
shall be decided by the Contracting Officer, who shall reduce
his/her decision to writing and provide a copy to the
Contractor. The Contracting Officer’s decision shall be final
and conclusive unless, within thirty (30) calendar days from
5 We note that the WMATA purchase order references the standard non-federal purchase
order terms and conditions hosted on the WMATA webpage (61861 R4, tab 1
at WMATA-006). The terms and conditions on the WMATA webpage contain a
different disputes clause providing a right of appeal to the federal district courts in
Washington, DC, Maryland and Virginia, rather than to this Board. We rely upon
the terms and conditions submitted to the record of this appeal by WMATA and
without objection from PMCS.
13
the date of its receipt, the Contractor provides the Contracting
Officer with a written notice of appeal addressed to the
Authority’s Board of Directors. . . . The Armed Services
Board of Contract Appeals (ASBCA) is the Board of
Director’s [sic] authorized representative for final decisions
on appeal.
(61861 R4, tab 8 at WMATA-245)
Also relevant to these appeals is the FAR disputes provision for schedule
contracts, which provides in relevant part:
8.406–6 Disputes.
(a) Disputes pertaining to the performance of orders
under a schedule contract. (1) Under the Disputes clause
of the schedule contract, the ordering activity contracting
officer may—
(i) Issue final decisions on disputes arising from
performance of the order (but see paragraph (b) of this
section); or
(ii) Refer the dispute to the schedule contracting officer.
(2) The ordering activity contracting officer shall notify the
schedule contracting officer promptly of any final decision.
(b) Disputes pertaining to the terms and conditions of
schedule contracts. The ordering activity contracting officer
shall refer all disputes that relate to the contract terms and
conditions to the schedule contracting officer for resolution
under the Disputes clause of the contract and notify the
schedule contractor of the referral.
(c) Appeals. Contractors may appeal final decisions to
either the Board of Contract Appeals servicing the agency
that issued the final decision or the U.S. Court of Federal
Claims.
FAR 8.406-6. This FAR provision is also reflected in the WMATA Procurement
Procedures Manual, Version 7.4, which provides that disputes pertaining to the
performance of orders under a schedule contract can be decided by WMATA contracting
14
officers, or the contracting officer may refer the dispute to the GSA contracting officer
(app. supp. R4, tab 18 at PMCS775).
By letter dated July 24, 2018, PMCS sent a letter to WMATA requesting a written
decision from the contracting officer regarding the unpaid invoice (61861 R4, tab 7). The
record contains an unsigned letter 6 from WMATA dated August 3, 2018, denying PMCS’
request for payment (app. supp. R4, tab 9 at PMCS470-71). The unsigned final decision
states that WMATA denied payment of the invoice because PMCS provided an
“unusable work product” and failed to meet the professional standards contained in the
project because the final document “(1) omitted procedures critical to establishing a
compliant DBE program; (2) included procedures that were incomplete or incorrect; and
(3) contained numerous typos and other grammatical errors” (id. at PMCS470). The
unsigned final decision includes a notice of appeal rights to this Board (id. at PMCS471).
PMCS filed a notice of appeal and complaint, dated October 31, 2018 (app. supp. R4,
tab 17).
PMCS’ appeal was docketed as ASBCA No. 61861. PMCS’ complaint sought
payment of invoice # 728 in the amount of $66,015.16, plus Prompt Payment Act interest,
and attorney fees and costs under the Equal Access to Justice Act, and requested to
participate in the Board’s Small Claims (Expedited) procedure pursuant to Board
Rule 12.1(a). By Order dated November 7, 2018, the Board advised the parties that
WMATA appeals are governed by the Board’s rules effective September 1, 1973, and the
1973 rules do not provide for expedited review, but that the Board would consider PMCS’
request if WMATA consented to the procedure (Bd. Order Nov. 7, 2018). WMATA, in
fact, objected to the expedited review and by Order dated November 29, 2018, the Board
denied PMCS’ request to proceed under Board Rule 12.1(a) due to the objection (Bd.
Order Nov. 29, 2018).
VII. WMATA’s Affirmative Claim
Following PMCS’ appeal to the Board, WMATA issued a COFD, dated June 7,
2019, demanding repayment of $164,425.36, the amount paid to PMCS for work that
WMATA contends was defective or missing (62173 R4, tab 1 at WMATA-271-72). In
the final decision, Ms. Anderson found that PMCS had invoiced WMATA in a total
amount of $711,125.65, and that WMATA had paid $556,333.51 (id. at WMATA-272).
In addition to PMCS’ invoice # 728 in the amount of $66,015.16 at issue in PMCS’
appeal, WMATA also found that it had denied PMCS’ invoice # 733 in the amount of
$44,739.28 and invoice # 735 in the amount of $44,037.70 (id.). Mr. Franklin testified on
behalf of PMCS that invoices 733 and 735 were, in fact, paid by WMATA (tr. 1/306).
Ms. Anderson found that PMCS had provided the personnel and consulting services
6 WMATA states that the unsigned final decision was issued to PMCS (WMATA supp.
br. at 5).
15
under the staff augmentation portion of CLIN 1-1 and the DBE certification and
compliance support required by CLIN 2-1 (62173 R4, tab 1 at WMATA-272-73).
However, Ms. Anderson found that the work described in the original technical proposal
(the SOP manual) and priced at $396,090.96 was “delivered late, in poor condition, or not
at all” (id. at WMATA-273).
In her final decision, Ms. Anderson found that PMCS had defaulted on the
contract by failing to complete the work during the period of performance, eliminating
WMATA’s obligation to pay (id.). Ms. Anderson additionally found that the deliverables
listed in the statement of work were only partially delivered, and that the work submitted
was in “draft” rather than final format and was unusable (id.).
At the hearing, Ms. Anderson testified that she based her final decision on the
deliverables contained in PMCS’ technical proposal and that the deliverables listed in the
WMATA scope of work were completely unrelated to the technical proposal deliverables
(tr. 1/299-300). Ms. Anderson was generally unable to identify the deliverables that she
contended had not been provided by PMCS under the contract (tr. 1/270-98). She
testified that she had relied upon the review performed by the Contracting Officer’s
Technical Representative (COTR), Ms. Edwards, and others, to assemble the information
used as a basis for her final decision (tr. 1/300).
Ms. Edwards, the COTR and DBE expert, did not attend the kick-off meeting
where Mr. Franklin contends the scope of the project was changed (tr. 1/230).
Ms. Edwards additionally testified that she had not seen the statement of work for the
project or PMCS’ technical proposal (tr. 1/230-31). Ms. Edwards testified that she did
not need to read the scope of work because she had a discussion with PMCS defining and
outlining what WMATA needed (tr. 1/232). Additionally, Ms. Edwards indicated that
she compared PMCS’ work to the requirements of 49 C.F.R. Part 26, setting the
requirements for a DBE program because “[y]ou have to have a desk book that follows
the parameters of that” (tr. 1/233). PMCS timely appealed the June 7, 2019 COFD.
DECISION
As a first step, we decide WMATA’s motion to dismiss by determining the proper
construction of the conformed contract. After resolving the jurisdictional question, we
turn to the merits of the appeals.
I. WMATA’s Motion To Dismiss
A. Standard of Review
PMCS bears the burden of proving the Board’s subject matter jurisdiction by a
preponderance of the evidence. Reynolds v. Army & Air Force Exch. Serv., 846 F.2d
16
746, 748 (Fed. Cir. 1988); United Healthcare Partners, Inc., ASBCA No. 58123, 13
BCA ¶ 35,277 at 173,156 (citing Cedars-Sinai Med. Center v. Watkins, 11 F.3d 1573,
1584 (Fed. Cir. 1993)).
B. WMATA’s Motion to Dismiss is Denied
At the hearing, counsel engaged in the following colloquy:
MR. CROCKER [WMATA counsel]: Objection, Your
Honor. Once again, the GSA contract terms and conditions
were supplied by the appellant. They are incorporated into
the conformed contract. They are not the contract.
MS. BROWN GAINES [counsel for PMCS]: My question
was just that . . . it’s a task order under the GSA contract. I
didn’t ask about this, whether this was the contract.
MR. CROCKER: It if [sic] were true that this was a GSA
contract, the Board would be denied jurisdiction with this
case.
MS. BROWN GAINES: Well then, we have a problem.
Because it’s a GSA contract. And I don’t know if the Board is
deprived of jurisdiction. Maybe you have jurisdiction over it.
But this is unequivocally a GSA contract. They produced the
GSA contract.
(Tr. 1/289; see also tr. 1/6, 252) Based on these statements by PMCS’ counsel, WMATA
filed a motion to dismiss ASBCA No. 61861 for lack of subject matter jurisdiction.
WMATA argues that “[w]hen resolution [of] a contract dispute requires
interpretation of the terms and conditions of a GSA schedule contract, it must be
presented to the GSA schedule contracting officer for resolution” (WMATA mot. at 3)
(citing FAR 8.406-6(b) and quoting Sharp Elec. Corp. v. McHugh, 707 F.3d 1367 (Fed.
Cir. 2013)). Thus, according to WMATA, the Board is without jurisdiction to entertain
ASBCA No. 61861, because the claim seeks, at least in part, an interpretation of the GSA
schedule payment provisions (WMATA mot. at 4). PMCS opposes the motion, arguing
that the issue is the performance of a delivery order, and not the terms of the GSA
schedule, and that the WMATA contracting officer issued a final decision and, thus,
vested jurisdiction in the Board 7 (app. opp’n at 1-2).
In order to resolve WMATA’s jurisdictional motion, we first interpret the
conformed contract to determine whether resolution of PMCS’ appeal requires the
7 We note that an invalid COFD cannot create jurisdiction in this Board. See, e.g., United
Partition Sys., Inc., ASBCA Nos. 53915, 53916, 03-2 BCA ¶ 32,264 at 159,597.
17
interpretation of PMCS’ GSA IT Schedule 70. As WMATA notes, the FAR provides
that either an “ordering activity” contracting officer (here a WMATA contracting officer)
or a schedule contracting officer (here a GSA contracting officer) may issue a final
decision resolving disputes “arising from performance of the order” issued pursuant to a
schedule contract. FAR 8.406-6(a)(1). However, the FAR provides that an ordering
agency contracting officer must refer to a schedule contracting officer “all disputes that
relate to the contract terms and conditions.” FAR 8.406-6(b). Additionally, the Court of
Appeals for the Federal Circuit has interpreted FAR 8.406-6 as requiring the schedule
contracting officer to resolve mixed disputes requiring interpretation of the schedule
terms and conditions as well as performance issues. Sharp Elec., 707 F.3d at 1373.
However, the Federal Circuit clarified that not every dispute involving a schedule
contract was required to be decided by the schedule contracting officer. The court noted
that an ordering activity contracting officer could “apply the relevant provisions of the
schedule contract, as long as their meaning is undisputed.” Id. at 1374. The court
additionally noted that an ordering activity contracting officer resolving a performance
dispute as to whether goods were conforming could apply the schedule contract’s
provisions regarding nonconforming goods, but would not need to refer the dispute to the
schedule contracting officer unless it required an interpretation of the schedule contract
terms and conditions. Id.
With this guidance in mind, we hold that the resolution of ASBCA No. 61861 does
not require the interpretation of the terms and conditions of the GSA IT Schedule 70, and
deny WMATA’s motion to dismiss. These appeals do not involve a bilaterally signed
contract. Instead, the conformed contract consists of (1) the WMATA purchase order;
(2) PMCS’ GSA IT Schedule 70; (3) WMATA’s scope of work; and (4) PMCS’ proposal
including the September 5, 2017 cost proposal (61861 R4, tab 1 at WMATA-003). In
addition, the WMATA purchase order incorporates by reference WMATA’s standard
non-federal contract terms and conditions (id. at WMATA-006; tab 8). While the GSA IT
schedule contains a provision stating that the schedule should be interpreted as having
precedence over a conflicting task order (61861 R4, tab 1 at WMATA-017), the remainder
of the conformed contract does not contain an order of precedence provision. 8
PMCS asserts that it has a GSA IT Schedule contract with WMATA (app. resp.
at 2, tr. 1/6, 289). WMATA, conversely contends that the GSA IT Schedule comprised
part of PMCS’ offer, and that some of the terms of the offer were incorporated into the
conformed contract, but that the WMATA purchase order, incorporating WMATA’s
terms and conditions, is the controlling document (WMATA br. at 3). To the extent
PMCS is alleging that there is a GSA contract, WMATA contends that the Board lacks
8 The GSA IT Schedule 70 incorporates versions of FAR 52.212-4 (61861 R4, tab 1
at WMATA-019), which contain an order of precedence provision; however,
that FAR provision does not resolve the question before us.
18
jurisdiction (WMATA mot. at 3-4). We find that the WMATA purchase order is the
basis for the agreement between the parties.
Interpretation of the conformed contract presents what is often referred to as a
“battle of the forms.” Contract formation is typically subject to the mirror image rule,
and an acceptance containing additional or different terms is treated as a rejection of the
offer and as a counter-offer. See, e.g., First Commerce Corp. v. United States, 335 F.3d
1373, 1381 (Fed. Cir. 2003). This is also referred to as the “last shot” rule. Here, PMCS
made an offer to WMATA, consisting of its GSA schedule, and its cost and technical
proposals. Following negotiations, WMATA responded with its purchase order and
scope of work. The WMATA purchase order was not a mirror image of PMCS’
proposal. Rather, the purchase order contained numerous terms that differed from
PMCS’ offer. Thus, the WMATA purchase order did not constitute an acceptance of
PMCS’ offer, but was instead a counter-offer. PMCS did not sign the WMATA purchase
order, so it did not formally accept the terms of the WMATA purchase order. However,
PMCS accepted the terms of the WMATA purchase order through performance of the
contract. Thus, we hold that PMCS is not appealing from a GSA contract, and we deny
WMATA’s motion to dismiss. 9
II. PMCS’ Appeal (ASBCA No. 61861)
PMCS seeks payment of its invoice # 728, in the amount of $66,015.16. PMCS
contends that it timely provided WMATA the final deliverable, and that WMATA
accepted the deliverable, but refused to pay the invoice (app. br. at 10-12). PMCS’
argument is premised upon a scope of work that was orally modified at the kick-off
meeting, and WMATA’s acceptance of the work, based on the 5-day acceptance
provision contained in its technical proposal, or alternatively the 60-day acceptance
provision contained in its GSA supply schedule for fixed-price contracts. According to
PMCS, WMATA’s contractual remedy, pursuant to the fixed-price contract provisions of
the GSA schedule, was to require PMCS to correct the errors in its work. While PMCS
contends that it performed all the work required under the contract, it does not dispute
that there were errors in the SOP manual that it delivered to WMATA. PMCS contends
that it was willing to correct the errors, but that WMATA did not offer it an opportunity
to make revisions (app. br. at 9).
9 We note that PMCS appealed to the Board outside the 30-day appeal period specified in
the WMATA disputes clause (61861 R4, tab 8 at WMATA-245). WMATA has
not moved to dismiss on that basis. Our precedent holds that an unsigned COFD,
as is the case here (app. supp. R4, tab 9 at PMCS470-71), is not final and does not
start the appeal period. See, e.g., E-Sys., Inc., ASBCA No. 32033, 87-1 BCA
¶ 19,417 at 98,181; J.J. Bonavire Co., ASBCA No. 32733, 87-2 BCA ¶ 19,908
at 100,715. Accordingly, we possesses jurisdiction pursuant to a deemed denial of
PMCS’ claim. Cf. 41. U.S.C. § 7103(f)(5).
19
WMATA contends that PMCS did not fulfil the requirements of the contract,
based upon the statement of work contained in PMCS’ technical proposal, and the
WMATA standard terms and conditions, or alternatively the GSA Schedule acceptance
provisions for labor hour contracts (WMATA br. at 8-11).
As explained above, we find that the WMATA purchase order was a counter-offer
that PMCS accepted by performance. However, the WMATA purchase order is, itself,
ambiguous because it incorporates two conflicting sets of terms and conditions. The
purchase order states that it is “written in accordance with the terms and conditions of
GSA contract GS35F01GA” (61861 R4, tab 1 at WMATA-004), and WMATA admits
that the purchase order “incorporated by reference the terms and conditions of the GSA
Contract GS35F01GA” (WMATA br. at 3; 61861 R4, tab 1 at WMATA-006). Pursuant
to the WMATA terms and conditions, WMATA had a right of inspection, and could
order PMCS to correct deficient work, or could “[r]educe the contract price to reflect the
reduced value of the services performed” (61861 R4, tab 8 at WMATA-253). But, the
GSA schedule contains two additional acceptance provisions, depending on whether the
contract is a fixed-price contract, or a labor hour contract (id. at WMATA-019). In order
to determine whether the WMATA terms conflict with the GSA terms, we first must
determine whether the contract was a firm-fixed-price contract or a labor hour contract.
A labor hour contract is a type of time-and-materials contract where the parties
agree to fixed hourly rates for labor categories with payment based on hours incurred.
See, e.g., Dawkins General Contractors & Supply, Inc., ASBCA No. 48535, 03-2 BCA
¶ 32,305 at 159,845. For firm-fixed-price contracts, FAR 52.212-4, CONTRACT
TERMS AND CONDITIONS – COMMERCIAL ITEMS (MAR 2009) (ALTERNATE I
– OCT 2008) (DEVIATION 1 – FEB 2007) provides that services “will be presumed
accepted 60 days after the date of delivery, unless accepted earlier” (FAR 52.212-4(a)(3)
(Deviation 1 – FEB 2007)). However, for labor hour contracts, the GSA schedule
applies the standard FAR clause that provides that the government must exercise its
post-acceptance rights “within a reasonable time” and that that the government may “seek
an equitable price reduction or adequate consideration for acceptance of nonconforming
supplies or services.” FAR 52.212-4(a)
As noted above, the contract does not specify whether it is a fixed-price or a labor
hour contract, and the contract contains some provisions consistent with a labor hour
contract and other provisions consistent with a fixed-price contract. We find that the
DBE SOP manual was a firm-fixed-price CLIN. While the WMATA scope of work
appears to have been written in contemplation of a labor hour contract and requests that
offerors specify hourly labor rates (61861 R4, tab 1 at WMATA-004, 27-33), none of this
information is contained in the WMATA purchase order. The WMATA purchase order
contained in the administrative record does not specify hourly labor rates, numbers of
hours, or indicate that the CLIN amount is a not to exceed amount for the DBE SOP
20
manual (61861 R4, tab 1 at WMATA-004). Conversely, the WMATA purchase order
does contain hourly labor rates, numbers of hours and does specify that the line item
amount is a not to exceed amount for the DBE certification and compliance CLIN (id.).
This is consistent with Mr. Franklin’s testimony that PMCS did not submit signed
timesheets to WMATA until the flexibly-priced certification and compliance line item
was added to the contract (tr. 1/35-36, 65-66). Moreover, we note that the WMATA
Procurement Procedures Manual, Version 7.4, like federal procurement policy, disfavors
the use of time and material and labor hour contracts (app. supp. R4, tab 18 at PMCS659,
665-66). The WMATA policy provides that a “firm-fixed-price contract shall be used for
acquiring commercial products or services . . . when the Contracting Officer can establish
fair and reasonable prices” (app. supp. R4, tab 18 at PMCS659). Ms. Anderson testified
that WMATA used the GSA schedule as a reference for pricing (tr. 1/296). Conversely,
the WMATA procurement manual provides that the use of time and material and labor
hour contracts requires advance written approval from the Chief Procurement Officer and
a determination by the contracting officer that it is not possible to define the scope or
duration of work or to estimate the contract costs with any degree of confidence and that
no other type of contract would be suitable (app. supp. R4, tab 18 at PMCS666). The
administrative record does not contain a determination by the contracting officer that a
labor hour contact would be appropriate for the SOP manual CLIN. 10
Additionally, we note that the parties’ performance of the contract treated it as a
fixed-price contract. The PMCS purchase orders sought payment for a set percentage of
the fixed-price amount and did not contain any documentation of or support for the labor
hours performed (app. supp. R4, tabs 33-36, 39-40). The invoices for the DBE manual
simply list a quantity of “1” for consulting services in the amount of $66,015.16 (or a
similar amount) based on the invoicing schedule contained in PMCS’ cost proposal and
dividing the $396,090.96 line item cost estimate into six equal payments of $66,015.16
(61861 R4, tab 1 at WMATA-083; app. supp. R4, tabs 33-36, 39-40). By contrast, the
vouchers that included work for CLIN 2-1, the certification and compliance task, included
variable quantities of labor hours that were invoiced at the set labor hour rates (app. supp.
R4, tabs 37, 41-42). Thus, we find that the parties treated the DBE SOP manual CLIN as
a firm-fixed-price CLIN, and we accord the parties’ contemporaneous interpretation of the
contractual terms during performance of the contract, and prior to the contractual dispute,
great if not controlling weight in interpreting the contract.11 See, e.g., Reliable
Contracting Grp., LLC v. Dep’t of Veterans Affairs, 779 F.3d 1329, 1332 (Fed. Cir. 2015).
Having determined that CLIN 1-1 for the DBE SOP manual is firm-fixed-priced,
we find that FAR 52.212-4 CONTRACT TERMS AND CONDITIONS–
10 The administrative record does not contain a determination for the flexibly-priced
certification and compliance line item either.
11 This is especially true here, where there is a contract created by performance rather
than a bilateral contract.
21
COMMERCIAL ITEMS (MAR 2009) (ALTERNATE I – OCT 2008) (DEVIATION 1 –
FEB 2007), the provision from the GSA IT Schedule 70 conflicts with the WMATA
inspection and acceptance provisions, and that it is not possible to read the provisions to
give effect to both clauses.
In interpreting the WMATA purchase order, we apply the rule of interpretation
that “[w]here specific and general terms in a contract are in conflict, those which relate to
a particular matter control over the more general language.” Abraham v. Rockwell Int’l
Corp. 326 F.3d 1242, 1254 (Fed. Cir. 2003) (emphasis in original) (quoting Hills
Materials Co. v. Rice, 982 F.2d 514, 517 (Fed.Cir.1992)). Here, the CLIN providing that
the purchase order is written consistent with PMCS’ GSA schedule contract is a specific
provision, while the incorporation by reference of WMATA’s general terms and
conditions is a general provision. Accordingly, we find that the controlling contractual
provision for inspection and acceptance is FAR 52.212-4, CONTRACT TERMS AND
CONDITIONS – COMMERCIAL ITEMS (MAR 2009) (ALTERNATE I – OCT 2008)
(DEVIATION 1 – FEB 2007). Note that we reach this result by interpreting the
WMATA purchase order, and not by interpreting the GSA schedule. 12 Pursuant to the
acceptance provision in FAR 52.212-4, CONTRACT TERMS AND CONDITIONS –
COMMERCIAL ITEMS (MAR 2009) (ALTERNATE I – OCT 2008) (DEVIATION 1 –
FEB 2007), acceptance is presumed to have occurred within 60 days, unless accepted
earlier. FAR 52.212-4(a)(3) (Deviation 1 – FEB 2007).
WMATA contends that this SOP manual was a labor hour CLIN, and cites to the
inspection provision at FAR 52-212-4 for a six month time period after acceptance for
WMATA to notify the contractor of failure to meet the contractual requirements (WMATA
br. at 9). However, we found above, that this was a fixed-price contract. The FAR
deviation applicable to fixed-price contracts provides that within six months “the ordering
activity may require the Contractor to replace or correct services or materials that at time of
delivery failed to meet contract requirements.” FAR 52.212-4(a)(4) (Deviation 1 – FEB
2007). Unlike the general FAR clause, the FAR deviation clause contained in PMCS’ GSA
schedule does not contain the provision providing that “the Government may seek an
equitable price reduction or adequate consideration for acceptance of nonconforming
supplies or services.” FAR 52.212-4(a). Thus, pursuant to the contract, WMATA had a
contractual right to require PMCS to correct its work, but lacked a right to equitably reduce
12 Although we interpret the conformed contact such that we give effect to the GSA
Schedule terms and conditions, the WMATA purchase order is the document that
provides us with jurisdiction to entertain these appeals, and we look to the
WMATA disputes clause in interpreting our jurisdiction.
22
the contract amount. 13 WMATA did not offer PMCS an opportunity to fix its work
(tr. 1/110).
In its complaint and post-hearing brief, PMCS asserts entitlement to Prompt
Payment Act interest, and also asserts in its complaint entitlement to attorney fees and
costs pursuant to the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504 (compl. at 2;
app. br. at 13). WMATA did not address these issues in its post-hearing briefing.
However, we note that the Prompt Payment Act applies to federal agencies, and
WMATA is not a federal agency. 5 C.F.R. Part 1315. Moreover, our precedent makes
clear that WMATA has not waived immunity regarding pre-judgment interest. Delta
Eng’g, Inc., ASBCA No. 58063, 14-1 BCA ¶ 35,553 at 174,224; see also Kingston
Constructors, Inc. v. WMATA, 860 F. Supp. 886, 888 (D.D.C. 1994). To the extent that
PMCS is requesting a determination that it is a prevailing party in the litigation as part of
an application for attorney fees and costs pursuant to EAJA, we find that such a request is
premature.14 See Shiloh, 18-1 BCA ¶ 37,117 at 180,662.
Thus, for the reasons stated above, appeal ASBCA No. 61861 is sustained in the
amount of $66,015.16.
III. The Appeal of WMATA’s Claim (ASBCA No. 62173)
WMATA contends that it is entitled to a refund of the amounts advanced to PMCS
for the SOP manual based on the inspection of services clause discussed above with
regard to PMCS’ appeal. WMATA contends that PMCS was obligated to provide the
deliverables specified in its technical proposal, and that PMCS is not entitled to payment
for work product that did not fulfil the contract requirements (WMATA br. at 4-6, 8).
WMATA specifically relies upon PMCS’ amended cost proposal, stating that PMCS will
perform “the work outlined in the Technical Proposal to support the DBE program”
(WMATA br. at 4-5; 62173 R4, tab 2 at WMATA-279).
PMCS contends that it performed the requirements of the contract, as amended
at the kick-off meeting and based on the hearing testimony of Mr. Franklin. PMCS
additionally contends that SOP manual was a firm-fixed-price CLIN, and thus, that the
payments were progress payments and not advance payments subject to recovery by
WMATA (app. reply at 2-4).
13 If WMATA had notified PMCS of deficient work, and PMCS had failed to correct the
work, WMATA would have had the right to perform or reprocure the work and
deduct the costs from the contract amount. FAR 52.212-4(a)(5) (Deviation I).
14 Given that WMATA possesses sovereign immunity, it may also be immune to suit for
attorney fees.
23
Having determined that WMATA accepted PMCS’ submission 60 days after
delivery pursuant to contract clause FAR 52.212-4(a)(3) (Deviation I), we must deny
WMATA’s appeal, as its only remedy pursuant to that clause, absent fraud, lack of good
faith, or willful misconduct not alleged in these appeals, was to require PMCS to replace
or correct its work. As an alternate basis for our holding, we find that, even if WMATA
had not accepted PMCS’ work by failing to reject it within 60 days, WMATA failed to
establish that PMCS did not perform the contractually-required tasks.
We again construe the WMATA purchase order as a counter-offer to PMCS’
proposal, and hold that PMCS accepted the counter-offer by performance. Accordingly,
we find that the scope of work contained in the conformed contract (61861 R4, tab 1
at WMATA-027-33) specifies the deliverables required under the contract, rather than the
list of deliverables contained in PMCS’ technical proposal. We find this to be the case
despite the fact that Mr. Franklin testified that he had never seen the scope of work before
(tr. 1/33), and that PMCS contends that there was not a statement of work in the
conformed contract (app. reply at 2 n.1).
The WMATA statement of work provides:
I. DELIVERABLES
1.1 Basis of Acceptance of Deliverables
The engagement deliverables will be discussed at the start of
the engagement and will likely include, but is not limit [sic]
to:
• Participation in meetings and discussions of DBE goals;
• On-site visits to process DBE applications;
• Contract compliance;
• On-site visits to work site to ensure DBE compliance;
• Periodic reporting and updates to DBE management;
• Completed forms and reports as required by the program; and
• Complete evaluations and assessments with appropriate
opinions and conclusions.
(61861 R4, tab 1 at WMATA-028) In addition, the statement of work lists a number of
standard deliverables such as timesheets, cumulative performance reports and status
reports (id. at WMATA-028-29). Mr. Franklin testified that this list of deliverables was
generally consistent with his understanding of the required deliverables for the project
(tr. 1/34). Notably, the scope of work provides that “deliverables will be discussed at the
start of the engagement” (61861 R4, tab 1 at WMATA-028). This is consistent with
Mr. Franklin’s testimony that the deliverables were discussed at the kickoff meeting, and
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that Mr. Jones instructed PMCS to perform tasks 1, 2, 3, and 5 of PMCS’ proposal, but
that Mr. Jones was not interested in focusing on task 4 (Process and Performance Metric
Identification) (tr. 1/50-51), and that he was later instructed to combine the training
manual and SOP manual into a single document (tr. 1/165). WMATA did not present
any testimony from the WMATA participants at the kickoff meeting. WMATA disputes
Mr. Franklin’s testimony as unsupported by documentary evidence (WMATA br. at 9).
However, WMATA’s statement of work provides that the deliverables will be
“discussed” at the start of the engagement, and does not provide that the deliverables will
be reduced to a writing. Thus, we accept Mr. Franklin’s unrebutted testimony regarding
the parties’ agreement as to deliverables.
Having defined the requirements of the contract, we turn to WMATA’s assertion
that PMCS did not provide the deliverables required by the contract. WMATA asserts
that PMCS was required to provide the deliverables identified in its technical proposal,
based upon a statement in the September 12, 2017 cost proposal (WMATA br. at 4-5).
However, the September 12, 2017 revised cost proposal is not part of the conformed
contract, and thus is parol evidence that may be used to interpret an ambiguous contract,
but cannot supply inconsistent contemporaneous and prior contract terms. See, e.g.,
Sylvania Elec. Prods, Inc. v. United States, 458 F.2d 994, 1005 (Ct. Cl. 1972). Moreover,
the revised cost proposal is dated before the date of the contract, so the statement
WMATA is relying on is a prior term that was not incorporated into the final contract.
WMATA relies on Mr. Franklin’s testimony that the contact amount in the purchase
order was for delivery of everything in the technical proposal; however, he also testified
that PMCS had, in fact, delivered everything specified (tr. 1/148-49, 156-57). The focus of
WMATA’s argument regarding non-delivery of project tasks is for items such as the
project charter, a deliverable that Mr. Franklin testified was prepared, but that he could not
identify in the record (tr. 1/158). However, the project charter was not specified as a
deliverable under the WMATA scope of work (61861 R4, tab 1 at WMATA-028-29). The
same is true for the business process diagram and workflow recommendations (tr. 1/162),
process metrics reports (tr. 1/164), and performance metrics (tr. 1/165). WMATA also
focuses on the non-delivery of task 5, the training manual that Mr. Franklin testifies was
combined with the SOP manual at the direction of WMATA (tr. 1/165). However, the
training manual is not specified as a deliverable on the WMATA scope of work (61861 R4,
tab 1 at WMATA-028-29).
An additional problem with WMATA’s claim is that WMATA attempts to
demonstrate the deficiencies in PMCS’ performance by comparing the SOP manual to the
applicable federal regulations, rather than to the requirements of the contract. While
WMATA clearly demonstrated that it did not get what it wanted from PMCS in the SOP
manual, it did not demonstrate by a preponderance of the evidence that it did not receive
what it contracted for. WMATA presented hearing testimony from Ms. Anderson, the
contracting officer, and Ms. Edwards, WMATA’s COTR and DBE expert, in support of
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its claim. At the hearing, Ms. Anderson was generally unable to identify the deliverables
that PMCS had or had not provided (tr. 1/270-98). Ms. Anderson additionally testified
that she based her decision upon PMCS’ technical proposal, rather than the “unrelated”
WMATA scope of work (tr. 1/299-300). Ms. Anderson further testified that she based
her decision upon information provided by Ms. Edwards, and others in the DBE office
(tr. 1/300-01). However, Ms. Edwards testified that she had never reviewed the scope of
work for the contract or PMCS’ technical proposal (tr. 1/230-31). Ms. Edwards instead
based her assessment on her discussions with PMCS and the provisions of 49 C.F.R.
Part 26, because the DBE program must follow the federal regulations (tr. 1/233). Thus,
independent of our finding that WMATA’s claim for return of contract funds must be
denied because WMATA did not reject PMCS’ deliverables within 60 days of delivery,
we hold, alternatively, that WMATA failed to demonstrate, by a preponderance of the
evidence, that PMCS failed to supply contractually required deliverables, or that the
deliverables were deficient.
Additionally, to the extent WMATA alleges that it can withhold payment of
PMCS’ invoice due to PMCS’ late provision of the SOP manual deliverable (62173 R4,
tab 1 at WMATA-273; WMATA br. at 7), we reject that justification as a basis for
WMATA’s affirmative claim for return of contract payments. Assuming, without
holding, that PMCS’ deadline for delivery of the SOP manual was March 14, 2018, and
not September 17, 2018 as specified in the WMATA purchase order (ex. A-1), or June
2018, as specified in the WMATA scope of work (61861 R4, tab 1 at WMATA-031), and
was not extended by Ms. Anderson to March 19, 2018 (app. supp. R4, tab 11
at PMCS536; tr. 1/100), we find that the conformed contract did not permit WMATA to
seek return of contract funds on that basis. The WMATA purchase order incorporates the
WMATA standard terms and conditions, 15 which provide that a contractor is in default if
it breaches a material obligation of the contract (61861 R4, tab 8 at WMATA-265). In
the event of a material breach, the contracting officer can send a notice of breach to the
contractor, stating that the contractor has 10 days, or such additional time specified by the
contracting officer to cure the breach (id.). However, WMATA did not terminate the
contract for default and simply seeks to apply the remedy for breach without actually
terminating the contract for breach. For these reasons, ASBCA No. 62173 is sustained,
and WMATA’s affirmative claim for return of contract funds is denied.
15 Here, the GSA schedule does not contain a conflicting provision, so we apply the
WMATA terms and conditions.
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CONCLUSION
For the reasons stated above, ASBCA Nos. 61861 and 62173 are sustained.
Judgment is entered in favor of PMCS in the amount of $66,015.16.
Dated: June 25, 2020
DAVID D’ALESSANDRIS
Administrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
RICHARD SHACKLEFORD J. REID PROUTY
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 Nos. 61861, 62173, Appeals of
Professional Management Consulting Services, LLC, rendered in conformance with the
Board’s Charter.
Dated: June 26, 2020
PAULLA K. GATES-LEWIS
Recorder, Armed Services
Board of Contract Appeals
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