Smith v. United States

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-5008
RODGER SMITH,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
Rodger Smith, of Atlanta,Georgia, pro se.
Michael S. Dufault, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, for defendant-appellee. With
him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen,
Director, and Patricia M. McCarthy, Assistant Director.
Appealed from: United States Court of Federal Claims
Judge Nancy B. Firestone
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-5008
RODGER SMITH,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
___________________________
DECIDED: March 8, 2007
___________________________
Before RADER, Circuit Judge, ARCHER, Senior Circuit Judge, and GAJARSA, Circuit
Judge.
PER CURIAM.
The petitioner, Rodger Smith, seeks review of a final decision of the United
States Court of Federal Claims dismissing his claim for lack of subject matter
jurisdiction. Smith v. United States, No. 05-1246C (Ct. Fed. Cl. Aug. 22, 2006). We
affirm.
BACKGROUND
On September 23, 1998, on behalf of the Morale, Welfare and Recreation
(“MWR”) Office, an Air Force contracting officer issued a solicitation for “leisure travel,
nonappropriated fund instrumentality official travel, and combined official and leisure
travel services.” The solicitation included the statement: “NO APPROPRIATED FUNDS
OF THE UNITED STATES SHALL BECOME DUE OR BE PAID A CONTRACTOR BY
REASON OF THIS CONTRACT.”
Rodger’s Travel Services (“RTS”), which is owned by Mr. Smith, submitted a bid
and was awarded the concession contract on November 4, 1998. The concession
contract included several standard Nonappropriated Fund Instrumentality (“NAFI”)
clauses and stated that it was principally designed to serve the recreational needs of Air
Force servicemen through the MWR. The concession fee was to be based upon “total
sales of official travel (NAFI official and appropriated fund official when combined with
leisure travel), leisure travel in conjunction with either type of official travel, and all other
leisure travel for all [m]odes”.
On July 2005 Mr. Smith filed a claim with the contracting officer alleging that the
concession fees were illegal rebates on tariff-controlled international airfares in violation
of 49 U.S.C. §§ 46309 1 and 41510 2 and seeking reimbursement for the concession fees
paid on international airfares ($3,116.00). Approximately four months later, before the
contracting officer issued a decision upon his claim, Mr. Smith filed a complaint under
the Contracts Disputes Act (“CDA”) of 1978, 41 U.S.C. §§ 601-613, with the United
States Court of Federal Claims (“CFC”) seeking reimbursement of all his expenses
1
Under 49 U.S.C. § 46309, criminal penalties are authorized against any
person that receives a rebate or concession in connection with purchasing a foreign
airfare at a price that varies from the tariff.
2
Under 49 U.S.C. § 41510, it is unlawful for a person to charge a price for
foreign air travel that is different from the price specified in the tariff of the carrier.
2007-5008 2
($82,635.97) under the contract. 3 The CFC dismissed his appeal for lack of subject
matter jurisdiction because his complaint arose from a contract entered into with the
MWR, which is a NAFI and not an entity subject to the Tucker Act, 28 U.S.C. §
1491(1)(a).
DISCUSSION
This court has jurisdiction over an appeal of a final decision of the CFC based on
28 U.S.C. § 1295(a)(3). Whether the CFC properly dismissed the appellant’s complaint
for lack of subject matter jurisdiction is a question of law that we review de novo. Boyle
v. United States, 200 F.3d 1369, 1372 (Fed. Cir. 2000).
The CFC does not have jurisdiction over contract claims against the United
States involving NAFIs, 4 except for certain exchanges listed in the Tucker Act, 28
U.S.C. § 1491(a)(1). 5 Core Concepts of Florida, Inc. v. United States, 327 F.3d 1331,
1334, 1338 (Fed. Cir. 2003); see Furash & Co. v. United States, 252 F.3d 1336, 1338-
1339 (Fed. Cir. 2001) (Under the non-appropriation doctrine, the CFC lacks jurisdiction
over an action against the United States in which congressionally appropriated funds
cannot be used to pay the resulting judgment); 28 U.S.C. § 2517. Contracts with NAFIs
outside the enumerated exchanges are not covered by the CDA. Furash, 252 F.3d at
1343. This court has already held that an MWR is a NAFI outside of the exchanges
3
At the time Mr. Smith filed suit in the CFC, sufficient time had elapsed
since the filing of his claim with the contracting officer for it to be deemed a decision by
the contracting officer denying the claim under the CDA. 41 U.S.C. § 605(c)(5) (2000).
4
A NAFI is a federal government entity whose “monies do not come from
congressional appropriation but rather primarily from [their] own activities, services, and
product sales.” El-Sheikh v. United States, 177 F.3d 1321, 1322 (Fed. Cir. 1999).
5
The CFC has jurisdiction over the following exchanges: “the Army and Air
Force Exchange Service, Navy Exchanges, Marine Corps Exchanges, Coast Guard
Exchanges, or Exchange Councils of [NASA].” 28 U.S.C. § 1491(a)(1) (2000).
2007-5008 3
listed in §1491(a)(1). Pacrim Pizza Co. v. Pirie, 304 F.3d 1291, 1293 Fed. Cir. 2002)
(holding that the court lacked jurisdiction to hear a contract claim under the CDA
because an MWR is an NAFI outside the exchanges covered by § 1491(a)(1)).
In the present case, the CFC properly found that the MWR was a separate NAFI
within the Air Force, and that the MWR is overseen and supported by the Air Force
Services Agency (“AFSVA”). Mr. Smith argues that because the MWR merged with the
AFSVA in 1992, the concession contract was not with a NAFI but instead with the
AFSVA. In support, Mr. Smith relies on statements in an Air Force Fact Sheet, which
had been posted on the internet. Specifically, those statements are: “MWR and
Services merged Air Force wide in 1992[,]” and “[o]n Jan. 1, 1994, the Air Forces
[MWR] and Services Agency was renamed Air Force Services Agency.” However, the
CFC properly found that the MWR was not merged with the AFSVA, but rather that the
AFSVA oversees and supports the MWR. The same fact sheet that Mr. Smith cites also
states:
The [Air Force Services Agency] manages Air Force central
nonappropriated funds (NAFs) and operates central systems for field
support such as banking, investments, purchasing, data flow, and
insurance benefits programs, and the personnel system for NAF
employees. AFSVA supports the Air Force Morale, Welfare, and
Recreation Advisory Board and interacts with other agencies and armed
services in areas affecting Services.
(emphasis added). Even though the AFSVA oversees and supports the MWR, the
MWR is still an NAFI. A.F. Instructions 32-201, Ch. 2, 3 (June 17, 2002).
The CFC properly also found that the contract was between RTS and the MWR.
The fact that the contract was signed by an Air Force contracting officer does not
convert it into a contract with the Air Force. As custodians of the various NAFIs, the
2007-5008 4
heads of Services may contract upon behalf of the NAFI. AFI 34-201, Chapter 2,
Section 2.5.4 (June 17, 2002). Furthermore, the contract itself provided that the contract
was between RTS and the MWR and that the MWR was a NAFI.
Mr. Smith argues that the CFC does have jurisdiction because, although the
concession contract was with the MWR, the contract involved appropriated funds. Mr.
Smith has not established that the MWR activities at issue here were actually funded
with appropriated funds. In his brief, Mr. Smith states that it is “clear that appropriated
funds were being used to support the activities of the MWR.” He also declares that he
created a report regarding all travel arrangements made using appropriated funds for
the Defendant. However, he did not include this report or receipts in the record to
corroborate that appropriated funds actually funded the MWR activities at issue.
The fact that tickets may have been purchased using appropriated funds does
not mean that the MWR as an entity is funded with appropriated funds. From the terms
of the contract, it appears that the travel services were to be purchased by “customers”
or “patrons” and not the MWR. RTS’s customers may have paid for the travel using
appropriated funds, but that does not necessarily mean that the MWR is an entity that
received appropriated funds. Rather, the concession fee appears to be consideration
paid by RTS for the opportunity to sell travel services to Air Force servicemen. Mr.
Smith has not established that the servicemen received their funding from the MWR to
buy these tickets.
Mr. Smith correctly points out that, to establish jurisdiction, the plaintiff need not
show that appropriated funds have actually been used for the agency’s activities, but
only that “under the agency’s authorizing legislation Congress could appropriate funds if
2007-5008 5
necessary.” Furash, 252 F.3d at 1339 (quoting L’Enfant Plaza, 668 F.2d at 1212).
However, Mr. Smith has not cited a statute (or regulation) showing that Congress could
appropriate funds if necessary for the MWR for leisure travel combined with official
travel or NAF official travel for Air Force Servicemen, and we have not found one.
Mr. Smith argues that the terms of the contract establish that appropriated funds
would be used to support the MWR’s activities. The fact that the contract specified that
it could cover certain “appropriated fund travel” did not convert the contract with a NAFI
into a contract with an appropriated funds entity. As discussed above, just because
tickets may have been purchased using appropriated funds does not mean that the
MWR as an entity is funded with appropriated funds. Furthermore, the contract explicitly
specified that NAFI contracts “do not obligate appropriated funds of the United States.
NO APPROPRIATED FUNDS OF THE UNITED STATES SHALL BECOME DUE OR
BE PAID A CONTRACTOR BY REASON OF THIS CONTRACT.” (emphasis included).
CONCLUSION
For the foregoing reasons, the CFC properly dismissed Mr. Smith’s contract
claim against the MWR, which is an NAFI, for lack of subject matter jurisdiction. We
therefore affirm the judgment of the CFC.
No costs.
2007-5008 6