Ryste & Ricas v. Harvey

United States Court of Appeals for the Federal Circuit
06-1196
RYSTE & RICAS, INC.,
Appellant,
v.
Francis J. Harvey, SECRETARY OF THE ARMY,
Appellee.
James S. DelSordo, Cohen Mohr, LLP, of Washington, DC, argued for appellant.
Michael S. Dufault, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for appellee. With him
on the brief were Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director; and Bryant G. Snee, Assistant Director.
Appealed from: United States Armed Services Board of Contract Appeals
Administrative Judge Alexander Younger
United States Court of Appeals for the Federal Circuit
06-1196
RYSTE & RICAS, INC.,
Appellant,
v.
Francis J. Harvey, SECRETARY OF THE ARMY,
Appellee.
__________________________
DECIDED: February 16, 2007
__________________________
Before NEWMAN, SCHALL, and BRYSON, Circuit Judges.
SCHALL, Circuit Judge.
Ryste & Ricas, Inc. (“RRI”) appeals the final decision of the Armed Services
Board of Contract Appeals (“Board”) in Ryste & Ricas, Inc., 06-1 B.C.A. (CCH) ¶ 33,124
(A.S.B.C.A. Nov. 14, 2005). In its decision, the Board granted summary judgment in
favor of the Department of the Army (“Army”), ruling that RRI’s termination settlement
proposal was not timely filed under 48 C.F.R. § 52.259-2(e). Ryste & Ricas, Inc., 06-1
B.C.A. (CCH) ¶ 33,124. We affirm.
BACKGROUND
I.
On September 29, 1997, the Army awarded RRI a contract for the repair and
renovation of a building located at Fort Belvoir, Virginia. The Contract Disputes Act
(“CDA”), 41 U.S.C. § 602(a), governed the contract.1
Effective August 14, 1998, the Army terminated RRI’s contract for default. RRI
timely appealed the default termination to the Board. On May 29, 2002, the Board
issued a decision converting the termination for default to a termination for the
convenience of the government. Ryste & Ricas, Inc., 02-2 B.C.A. (CCH) ¶ 31,883
(A.S.B.C.A. May 29, 2002). Counsel for RRI received the Board’s decision on June 8,
2002.
When a contract is terminated for the convenience of the government, the
contractor may submit a termination settlement proposal within one year from the
effective date of termination. Federal Acquisition Regulation (“FAR”) § 52.249-2(e), 48
C.F.R. § 52.249-2(e). A settlement proposal is “a proposal for effecting settlement of a
contract terminated in whole or in part, submitted by a contractor or subcontractor in the
form, and supported by the data, required by this part.” FAR § 49.001, 48 C.F.R.
§ 49.001. RRI asserted that, following the Board’s decision, it submitted a termination
settlement proposal to the contracting officer on July 23, 2003. The Army, however,
maintained that it did not receive the proposal. Having received no response from the
Army regarding its termination settlement proposal, RRI resubmitted the proposal on
1
The CDA applies to contracts for (1) the procurement of property, other
than real property in being; (2) the procurement of services; (3) the procurement of
construction, alteration, repair or maintenance of real property; and (4) the disposal of
personal property. 41 U.S.C. § 602(a).
06-1196 2
October 23, 2003. RRI never received a response from the Army concerning the
proposal. It therefore appealed the contracting officer’s deemed denial to the Board
under 41 U.S.C. § 605(c)(5).2
II.
On August 13, 2004, the Army moved for summary judgment before the Board.
In its motion, the Army contended that RRI’s termination settlement proposal was
untimely filed under FAR § 52.249-2(e).3 The Army argued that RRI’s termination
settlement proposal, regardless of whether it was submitted on July 23, 2003, or
October 23, 2003, was time-barred because RRI had failed to submit the proposal
within one year of when its previous counsel received the Board’s decision on June 8,
2002.
In opposing the Army’s motion, RRI contended that summary judgment should
be denied because the date when RRI submitted its termination settlement proposal
was disputed. In addition, RRI argued that that the “effective date of termination” under
FAR § 49.001 (now FAR § 2.101)4 was September 29, 2002, the date following the
expiration of the period for seeking an appeal, rather than June 8, 2002, the date RRI’s
previous counsel received the Board’s decision. RRI relied on Melkonyan v. Sullivan,
501 U.S. 89 (1991), and Melka Marine, Inc. v. United States, 29 Fed. Appx. 594 (Fed.
Cir. 2002) (unpublished decision), two cases decided under the Equal Access to Justice
2
41 U.S.C. § 605(c)(5) provides, in relevant part:
Any failure by the contracting officer to issue a decision on a contract
claim within the period required will be deemed to be a decision by the
contracting officer denying the claim and will authorize the
commencement of the appeal or suit on the claim as otherwise provided in
this Act.
06-1196 3
Act (“EAJA”), as well as House v. United States, 12 Cl. Ct. 454 (1987), a case decided
under the Uniform Relocation Act (“URA”), to argue that the effective date of termination
was the date when the period for appealing the Board’s decision converting the
termination for default to a termination for the convenience of the government expired.
On November 14, 2005, the Board issued its final decision, granting the Army’s
motion for summary judgment. Ryste & Ricas, Inc., 06-1 B.C.A. (CCH) ¶ 33,124, at
164,148. The Board determined that the effective date of termination under FAR
§ 49.001 (now FAR § 2.101) was June 8, 2003, when RRI’s previous counsel received
the Board’s decision converting the termination for default to a termination for the
convenience of the government. Id. at 164,147. The Board, in rejecting RRI’s
argument that the effective date of termination was when the appeal period expired,
stated that “[w]e see no reason to engraft the requirements of [the EAJA and URA] onto
the straightforward procedure for submission of termination for convenience settlement
proposals,” adding that “it would be odd to import a tolling provision from EAJA or the
[URA] when the court of appeals has already recognized that the time limits for
(Cont’d. . . .)
3
The pertinent language of FAR § 52.249-2(e), 48 C.F.R. § 52.249-2(e), is
as follows:
After termination, the Contractor shall submit a final termination settlement
proposal to the Contracting Officer in the form and with the certification
prescribed by the Contracting Officer. The Contractor shall submit the
proposal promptly, but no later than 1 year from the effective date of
termination, unless extended in writing by the Contracting Officer upon
written request of the Contractor within this 1-year period.
4
FAR § 2.101 states that the “effective date of termination means the date
on which the notice of termination requires the contractor to stop performance under the
contract. If the contractor receives the termination notice after the date fixed for
termination, then the effective date of termination means the date the contractor
receives the notice.” FAR § 2.201, 48 C.F.R. § 2.101.
06-1196 4
submission of termination settlement proposals are ‘[a]part from the requirements of the
CDA.’” Id. (citing England v. Swanson Group, Inc., 353 F.3d 1375, 1377 (Fed. Cir.
2004)). Additionally, the Board noted that it did not have to resolve whether the
proposal was submitted on July 23, 2003, or on October 23, 2003, because the
undisputed material facts were that RRI “neither submitted its proposal by June 9, 2003
[(one year from the effective date of termination)], nor requested an extension by that
date.” Id. at 164,648. Accordingly, the Board dismissed RRI’s appeal as untimely. Id.
RRI timely appealed the Board’s decision to this court on January 25, 2006. We
have jurisdiction pursuant to 28 U.S.C. § 1295(a)(10).
DISCUSSION
I.
Under the CDA, we review legal conclusions of the ASBCA without deference.
41 U.S.C. § 609(b); England v. Contel Advanced Sys., Inc., 384 F.3d 1372, 1377 (Fed.
Cir. 2004). We must accept the ASBCA’s findings of fact unless they are: (1)
fraudulent; (2) arbitrary or capricious; (3) so grossly erroneous as to necessarily imply
bad faith; or (4) not supported by substantial evidence. 41 U.S.C. § 609(b); Contel
Advanced Sys., Inc., 384 F.3d at 1377.
The ASBCA’s grant of summary judgment is a legal conclusion, which we review
without deference. Rex Sys., Inc. v. Cohen, 224 F.3d 1367, 1371 (Fed. Cir. 2000).
Summary judgment is appropriate when the record, when examined in a light most
favorable to the non-movant, indicates that “there is no genuine issue of material fact
and the movant is entitled to judgment as a matter of law.” Flexfab L.L.C. v. United
States, 424 F.3d 1254, 1259 (Fed. Cir. 2005); Mingus Constructors, Inc. v. United
06-1196 5
States, 812 F.2d 1387, 1390 (Fed. Cir. 1987). “Only disputes over facts that might
affect the outcome of the suit under the governing law will properly preclude the entry of
summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
According to RRI, the Board erred in determining that the termination settlement
proposal was not timely filed under FAR § 52.249-2(e) because the Board’s May 29,
2002 decision was not an enforceable final judgment until the running of the 120-day
appeal period set forth at 41 U.S.C. § 607(g)(1)(A)5 had expired on September 29,
2002. RRI again relies on Melkonyan, Melka Marine, Inc., and Houser, to argue that a
lower tribunal’s decision is not final and effective until the applicable appeal period has
expired. RRI also contends that when RRI submitted its termination settlement
proposal to the contracting officer is a disputed material fact, which should have
precluded the Board’s grant of summary judgment in favor of the Army.
In response to RRI’s arguments, the Army argues that the Board properly
determined that the effective date of termination under FAR § 2.101 was the date when
RRI’s previous counsel received the Board’s termination notice, June 8, 2002, because
RRI received the termination notice (in this case, the decision of the Board in its favor)
after the date fixed for termination, August 14, 1998. The Army notes that this court, in
5
41 U.S.C. 607(g)(1) states that:
(A) a contractor may appeal such a decision to the United States Court of
Appeals for the Federal Circuit within one hundred twenty days after the
date of receipt of a copy of such decision, or
(B) the agency head, if he determines that an appeal should be taken, and
with the prior approval of the Attorney General, transmits the decision of
the board of contract appeals to the Court of Appeals for the Federal
Circuit for judicial review under section 1295 of Title 28, within one
hundred and twenty days from the date of the agency's receipt of a copy
of the board's decision.
06-1196 6
Swanson Group, 353 F.3d at 1377, explained that “FAR § 2.101 defines the ‘effective
date of termination’ as ‘the date the contractor receives the notice [of termination]’ if the
notice is received after the date fixed for termination.” The Army contends that because
RRI’s termination settlement proposal was not filed within one year of the effective date
of termination on June 8, 2002, the precise date on which RRI submitted its termination
settlement proposal (either July 23, 2003 or October 23, 2003) is not a material fact.
II.
We hold that the Board did not err in granting summary judgment in favor of the
Army. We find RRI’s argument that the one-year time period for submitting the
termination settlement proposal did not begin to run until the 120-day appeal period had
expired unpersuasive. The clear language of FAR § 52.249-2(e) required RRI to file the
termination settlement proposal within one year of the effective date of termination,
expressly defined in FAR § 2.101 as the date that RRI received the notice of
termination. Here, RRI received the Board’s decision converting the default termination
to a termination for convenience on June 8, 2002, but RRI failed to submit its
termination settlement proposal within one year of this June 8, 2002 effective date.
Our previous decision in Swanson Group, 353 F.3d 1375, supports our
conclusion that the effective date of termination was when RRI received the Board’s
decision. In Swanson Group, the government appealed the Board’s decision awarding
termination settlement costs to The Swanson Group (“Swanson”). 353 F.3d at 1376.
Swanson’s contract with the Department of the Navy (“Navy”) was terminated for
default, and Swanson appealed the default termination to the Board. Id. at 1377. The
Board issued a decision converting the termination for default to a termination for
06-1196 7
convenience; Swanson received this decision on November 17, 1997. Id. In our
decision, we explained that:
[T]he contractor may appeal from any termination settlement
determination by the contracting officer provided it (1) submits a
termination settlement proposal within one year of the “effective date of
termination” or (2) requests an extension of time for doing so. FAR
§ 52.249-2(e), (j), 48 C.F.R. § 52.259-2(e), (j). FAR § 2.101 defines the
“[e]ffective date of termination” as “the date the contractor received the
notice [of termination]” if the notice is received after the date fixed for
termination. 48 C.F.R. § 2.101.
Id. (alterations in original).
Instead of submitting a termination settlement proposal within the required one-
year period, Swanson’s counsel, prior to the expiration of the period on November 17,
1998, sent a letter to the Navy requesting a one-year extension of time to “initiate the
claim.” Id. The Navy denied Swanson’s request for an extension of time, and then
awarded Swanson termination settlement costs in a unilateral settlement determination,
which Swanson appealed to the Board. Id. at 1378. We held that the Board lacked
jurisdiction to entertain Swanson’s appeal from the contracting officer’s settlement
determination because, although Swanson submitted a letter requesting an extension of
time to file a claim within the required one-year period, it failed to present to the
contracting officer a “claim” within the meaning of the CDA prior to the contracting
officer’s settlement determination. Id. at 1378-79. We thus vacated the Board’s final
decision awarding Swanson termination settlement costs and remanded the case to the
Board with instructions to dismiss Swanson’s appeal. Id. at 1380-81.6 When viewed in
6
We noted, in Swanson Group, that the Board’s lack of jurisdiction over the
appeal did not bar Swanson from pursuing its claim by submitting a termination
settlement proposal after our decision. Id. at 1380. We explained that the contracting
officer then could reject this proposal as untimely or consider it on its merits. Id. If the
06-1196 8
context, the relevant portion of Swanson Group that is quoted above—explaining the
meaning of effective date of termination and standing for the proposition that when the
Board converts a termination for default to a termination for convenience, the effective
date of termination is the date the Board’s decision is received—is not dicta because
our statement regarding the definition of the effective date of termination was a
predicate of our decision. Because the Navy denied Swanson’s request for an
extension of time that was timely submitted within one year of the effective date,
Swanson did not have the opportunity to submit a termination settlement proposal that
could have ripened into a claim under the CDA. It was this failure to submit a claim that
was the basis for our holding that the Board lacked jurisdiction over Swanson’s appeal.
Finally, we reject RRI’s argument that the existence of a genuine issue of
material fact precluded the grant of summary judgment in favor of the Army. Although
the Army concedes that when RRI submitted its termination settlement proposal is
subject to dispute, the disputed date (July 23, 2003, according to RRI, or October 23,
2003, according to the Army) does not present a genuine issue of material fact. The
reason is that neither date is within one year of the effective date of termination of June
8, 2002.
In sum, in view of the plain language of the applicable regulations, see FAR
§ 52.249-2(e) and FAR § 2.101, and our decision in Swanson Group, RRI was required
to submit its termination settlement proposal within one year of the effective date of
termination. The effective date of termination was June 8, 2002, when RRI’s previous
(Cont’d. . . .)
contracting officer were to reject the proposal as untimely or deny the proposal on its
merits, Swanson would have the option of appealing the contracting officer’s decision as
a denial of a claim under the CDA. Id.
06-1196 9
counsel received the Board’s May 29, 2002 decision converting the termination for
default to a termination for the convenience of the government. Because RRI failed to
submit its proposal before June 9, 2003, we hold that the Board did not err in granting
summary judgment in favor of the Army.
CONCLUSION
For the foregoing reasons, the decision of the Board granting summary judgment
in favor of the Army is affirmed.
AFFIRMED
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