Kellogg Brown & Root Services, Inc. v. United States

In the United States Court of Federal Claims
No. 13-169 C
(Filed March 7, 2014)
* * * * * * * * * * * * * * * Contract Dispute; 41 U.S.C.
KELLOGG BROWN & ROOT * § 7103 (Supp. V 2011); RCFC
SERVICES, INC., * 12(b)(1); Sharman Analysis –
* Contracting Officer’s Authority
Plaintiff, * to Consider Claims Barred by
* Litigation Pending in This
v. * Court; Failure to Present Claim
* for Sum Certain to Contracting
THE UNITED STATES, * Officer; Failure to Wait Sixty
* Days before Filing Suit under a
Defendant. * Deemed Denial Theory.
* * * * * * * * * * * * * * *
Raymond Biagini, Washington, DC, for plaintiff. Herbert Fenster, Denver,
CO, and Kurt Hamrock, Washington, DC, of counsel.
J.Reid Prouty, United States Department of Justice, with whom were Stuart
F. Delery, Assistant Attorney General, Bryant G. Snee, Acting Director,
Washington, DC, for defendant. Alex P. Hontos, United States Department of
Justice, Washington, DC, of counsel.
_______________________
OPINION
_______________________
Bush, Senior Judge.
Before the court is defendant’s fully briefed motion to dismiss, based on
Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (RCFC).
Oral argument was held on August 20, 2013; thereafter, supplemental briefing was
permitted.1 For the reasons set forth herein, defendant’s motion to dismiss is
granted.
BACKGROUND2
I. The Contract
The parties refer to the contract at issue in this case, Contract No. DACA63-
03-D-0005, as the Restore Iraqi Oil (RIO) contract. Am. Compl. ¶¶ 8-9.
According to plaintiff, the RIO contract services were provided to the United
States Army Corps of Engineers (the Corps) by Kellogg Brown & Root Services,
Inc. (KBR) in support of Operation Iraqi Freedom, beginning in 2003. Id. ¶¶ 2, 23.
The services “assist[ed] in assessing, refurbishing, and rebuilding the Iraqi oil
infrastructure.” Id. ¶ 8.
II. The Dispute
According to the complaint, the RIO contract included an indemnification
provision against “unusually hazardous” risks in contract performance, as well as
other provisions relevant to plaintiff’s claims in this suit. Am. Compl. ¶¶ 11-13,
19. While working at the Qarmat Ali Water Treatment Plant (Qarmat Ali), KBR
personnel were provided with “force protection” by the government, protection
which involved National Guard personnel and British soldiers. Id. ¶¶ 21, 33.
Sodium dichromate, a potentially hazardous chemical, had been used at Qarmat Ali
and the site may have been contaminated with this chemical. Id. ¶ 31.
After the presence of sodium dichromate was discovered, plaintiff alleges
that KBR was reimbursed for the additional costs of encapsulation of “potential
1
/ Plaintiff’s supplemental brief included a cursory request for a second oral argument
which the court rejects as unnecessary. Pl.’s Supp. Br. at 1-2.
2
/ The facts recounted here are taken primarily from the first amended complaint (Am.
Compl.), with additional facts provided by the parties’ briefs and attachments thereto and, unless
otherwise noted, are undisputed. The court makes no findings of fact in this opinion other than
those necessary to determine this court’s jurisdiction over the complaint. A companion decision
issued earlier today dismissing Kellogg Brown & Root Services, Inc. v. United States, No. 12-
780C (Fed. Cl. Mar. 7, 2014) (KBR I), provides a more detailed discussion of the background
facts relevant to this case. The complaint in KBR I is cited as “780 Compl.”
2
sodium dichromate contamination” at the Qarmat Ali site. Am. Compl. ¶ 31.
Nonetheless, KBR was eventually sued by persons involved in force protection at
Qarmat Ali who claimed that they had been injured from exposure to sodium
dichromate and that KBR was subject to tort liability for those injuries (hereinafter,
the third-party suits). Id. ¶ 33. A dispute arose between KBR and the Corps as to
whether the indemnification provision of the RIO contract required that the
government provide “indemnification for claims asserted by third persons for
personal injury allegedly arising out of risks previously defined as ‘unusually
hazardous’ under Contract No. DACA63-03-D-0005 and that [the Corps] actively
engage in the defense and resolution of certain claims and disputes arising under
the contract.” Pl.’s Resp. Ex. 4 at 1.
III. The December 2010 Claim Was Denied by the Contracting Officer in
November 2011
As discussed more thoroughly in KBR I, a claim was submitted to the
contracting officer (CO) in December 2010, which, when standing alone as well as
when interpreted in light of a June 2011 letter from KBR to the CO, contained
requests for monetary and nonmonetary relief. The claim included a request for
monetary relief, in the form of indemnification for the litigation defense and
settlement expenses of KBR in the third-party suits, as well as a request that the
Corps actively participate in the litigation of the third-party suits against KBR.
These requests for money damages and participation were denied in a November
2011 letter from the CO.
IV. KBR I Was Pending when KBR Submitted Certified Claims to the
Contracting Officer in December 2012 and February 2013
KBR submitted invoices to the Corps in July and August of 2012 for its
litigation expenses in the third-party suits. Am. Compl. ¶ 46. These invoices also
included legal fees and other costs incurred by KBR when responding to a
Department of Defense Inspector General’s investigation of the “alleged sodium
dichromate exposure at Qarmat Ali” and related events (“the IG costs”). Id. ¶¶ 41,
46. The vouchers were not paid. In November 2012, KBR filed suit in this court,
Case No. 12-780C, contesting the denial of the December 2010 claim submitted to
the CO (the 780 suit).
Approximately a month after filing the 780 suit and while the 780 suit was
3
pending, KBR, on December 21, 2012, submitted a certified claim to the
contracting officer for $23,146,997.59, which represented all of KBR’s litigation
expenses in the third-party suits as of that date (the December 2012 claim). Def.’s
Mot. Ex. A; Am. Compl. ¶ 49. However, although the December 2012 claim
specifically alleged KBR’s entitlement to the IG costs, and KBR had attached
copies of unpaid vouchers that included the IG costs, the December 2012 claim did
not include or expressly set forth the IG costs in the quantum of the certified claim.
See Def.’s Mot. Ex. A at 14, 16, 19, 21; id. Ex. B at 16 n.5; Am. Compl. ¶ 52.
While the 780 suit was still pending in this court, on February 21, 2013 KBR
filed a second certified claim with the CO for $23,597,168.27 (the February 2013
claim), which again represented all of KBR’s litigation expenses in the third-party
suits as of that date, but now included the IG costs as well. Am. Compl. ¶ 52. The
increased quantum of $450,170.68 reflects that the February 2013 claim includes
the IG costs and, possibly, two additional months of litigation costs in the third-
party suits. Def.’s Mot. Ex. B at 16 & n.5; Am. Compl. ¶ 52 (stating that “the
February certified claim updated the quantum sought to include outside legal costs
KBR[] incurred in responding to the Department of Defense subpoena [the IG
costs], which had been discussed but not included in the quantum sought in the
December 2012 certified claim”). The proffered reason for the filing of the second
certified claim was that the “instant Claim encompasses the same legal fees and
involves many of the same underlying facts [as the December 2012 claim], but
seeks recovery based on a separate and distinct theory.” Def.’s Mot. Ex. B. at 2;
see Am. Compl. ¶ 52 (“The February certified claim arises from the same set of
operative facts as the December 2012 claim, but was based on [the Corps’] failure
to reimburse KBR[] for its legal costs because of an alleged lack of funding.”).
V. The Contracting Officer Declines to Issue a Decision on KBR’s Certified
Claims, Citing Pending Litigation in This Court; KBR Files Another
Suit in This Court and Later Amends the Complaint
On February 11, 2013, the CO acknowledged receipt of the December 2012
claim, but stated that because the pending 780 suit was “substantially the same” as
the December 2012 claim, he was no longer “the federal authority with respect to
this matter.” Pl.’s Resp. Ex. 2. On March 5, 2013, KBR filed its complaint in this
case, Case No. 13-169C (the 169 suit). On March 29, 2013, the CO acknowledged
receipt of the February 2013 claim, but stated that because the 780 suit and the 169
suit were “substantially the same” as the February 2013 claim, once again he was
4
no longer “the federal authority with respect to this matter.” Pl.’s Resp. Ex. 3.
On April 30, 2013, plaintiff amended the complaint in the 169 suit.3
Although the amended complaint alleges that “[m]ore than 60 days ha[ve] passed
since KBR[] submitted its December 2012 and February 2013 certified claims
without a decision by the CO,” Am. Compl. ¶ 54, this statement, although true, is
somewhat misleading. When the 169 suit was initiated in this court on March 5,
2013, the contracting officer had received the February 21, 2013 claim only twelve
days earlier. Thus, the court’s analysis of its jurisdiction over the 169 suit must
take into account this twelve-day period, as well as the sixty-eight day period
separating the submission of the February 2013 claim to the CO and the filing of
the amended complaint on April 30, 2013. The court reserves a more thorough
discussion of KBR’s claims, and defendant’s challenge to this court’s jurisdiction
over those claims, for the analysis section of this opinion.
DISCUSSION
I. Standard of Review for a Motion to Dismiss for Lack of Jurisdiction
In rendering a decision on a motion to dismiss for lack of subject matter
jurisdiction pursuant to RCFC 12(b)(1), this court must presume all undisputed
factual allegations to be true and construe all reasonable inferences in favor of the
plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), abrogated on other
grounds by Harlow v. Fitzgerald, 457 U.S. 800, 814-15 (1982); Reynolds v. Army
& Air Force Exch. Serv., 846 F.2d 746, 747 (Fed. Cir. 1988). Nonetheless,
plaintiff bears the burden of establishing subject matter jurisdiction, Alder Terrace,
Inc. v. United States, 161 F.3d 1372, 1377 (Fed. Cir. 1998) (citing McNutt v. Gen.
Motors Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936)), and must do so by a
preponderance of the evidence, Reynolds, 846 F.2d at 748. When,
as here, jurisdictional facts are challenged, the court may weigh the evidence
presented and may make findings of fact pertinent to its jurisdiction. See, e.g.,
Ferreiro v. United States, 350 F.3d 1318, 1324 (Fed. Cir. 2003) (“A trial court may
weigh relevant evidence when it considers a motion to dismiss that challenges the
truth of jurisdictional facts alleged in a complaint . . . .”) (citations omitted).
3
/ As stated above, the court cites to the amended complaint as “Am. Compl.”; the
original complaint in this case is cited as “Compl.” See supra note 2.
5
Plaintiff’s burden, in this circumstance, is to establish jurisdiction by
competent proof. McNutt, 298 U.S. at 189. The court’s fact-finding in this regard
is not limited to the pleadings. E.g., Rocovich v. United States, 933 F.2d 991, 994
(Fed. Cir. 1991) (citations omitted); Reynolds, 846 F.2d at 747. If jurisdiction is
found to be lacking, this court must dismiss the action. RCFC 12(h)(3).
II. Pertinent Jurisdictional Requirements of the Contract Disputes Act
The Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109 (Supp.
V 2011), is a money-mandating source of law sufficient to confer jurisdiction in
this court under the Tucker Act, 28 U.S.C. § 1491 (2012). See 28 U.S.C.
§ 1491(a)(2) (citing 41 U.S.C. § 7104(b)(1)); Salt River Pima-Maricopa Indian
Cmty. v. United States, 86 Fed. Cl. 607, 616 (2009) (citations omitted). For this
court to take jurisdiction over a CDA claim, however, the contractor must have
first presented a written claim to the contracting officer. 41 U.S.C. § 7103(a)(1)-
(2); see, e.g., M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1328
(Fed. Cir. 2010) (M. Maropakis) (stating that “for the Court of Federal Claims to
have jurisdiction under the CDA, the contractor must submit a proper claim – a
written demand that includes (1) adequate notice of the basis and amount of a
claim and (2) a request for a final decision”). For monetary claims, the contractor
must state the “sum certain” of its claim. M. Maropakis, 609 F.3d at 1329. The
contractor must submit the claim to the contracting officer within six years after
the accrual of the claim. 41 U.S.C. § 7103(a)(4).
Both the presentment requirement and the six-year limitations period for the
submission of CDA claims are deemed to be jurisdictional requirements for the
litigation of CDA claims in this court. See, e.g., Arctic Slope Native Ass’n v.
Sebelius, 583 F.3d 785, 793 (Fed. Cir. 2009) (stating that “the timely submission of
a claim to a contracting officer is a necessary predicate to the exercise of
jurisdiction by a court or a board of contract appeals over a contract dispute
governed by the CDA”). For claims that exceed $100,000, a further jurisdictional
requirement is that the claim presented to the contracting officer be certified by the
contractor. 41 U.S.C. § 7103(b)(1); Northrop Grumman Computing Sys., Inc. v.
United States, 709 F.3d 1107, 1112 & n.3 (Fed. Cir. 2013) (Northrop Grumman
Computing). An additional requirement for a CDA claim filed in this court is that
the suit be filed within one year of the contractor’s receipt of the final decision
issued by the contracting officer on that claim. See 41 U.S.C. § 7104(b)(3); Renda
6
Marine, Inc. v. United States, 509 F.3d 1372, 1380 (Fed. Cir. 2007).
III. Analysis
A. The Monetary Claim in the 780 Suit Is the Same as All But One of
the Claims in the December 2012 and February 2013 Claims
Presented to the Contracting Officer, Depriving This Court of
Jurisdiction over These Claims
1. Sharman
Both parties rely, as they must, on Sharman Co. v. United States, 2 F.3d
1564 (Fed. Cir. 1993), overruled in part on other grounds by Reflectone, Inc. v.
Dalton, 60 F.3d 1572 (Fed. Cir. 1995) (en banc), for its precedential analysis of the
effect of pending litigation on a CDA claim presented to a contracting officer. The
key passage in Sharman states that
[o]nce a claim is in litigation, the Department of Justice
gains exclusive authority to act in the pending litigation.
That exclusive authority divests the contracting officer of
his authority to issue a final decision on the claim.
2 F.3d at 1571-72 (citations omitted). Thus, a suit predicated on the final decision
of such a claim submitted to a contracting officer, or the deemed denial of such a
claim presented to a contracting officer,4 is not properly before this court because
the contracting officer’s final decision or deemed denial of the claim would be a
4
/ A deemed denial occurs when the contracting officer has failed to render a decision on
a valid claim within sixty days; thus, after sixty days have elapsed with no decision on such a
claim by a contracting officer, the claimant may appeal the deemed denial to a board of contract
appeals or this court. 41 U.S.C. § 7103(f). Plaintiff’s 169 suit is premised on deemed denials of
the December 2012 and February 2013 claims, Am. Compl. § 54; Pl.’s Resp. at 1, 5, although, as
noted supra, only twelve days separated the submission of the February 21, 2013 claim and the
filing of this suit.
7
“nullity.” Id. at 1572; see Case, Inc. v. United States, 88 F.3d 1004, 1009 (Fed.
Cir. 1996) (stating that “when a contracting officer lacks authority to issue a final
decision on a claim, there can be no valid deemed denial of the claim so as to
confer CDA jurisdiction” on this court). Yet, for the Sharman jurisdictional bar to
apply, the claim in the pending litigation must be the “same claim” or “effectively
the same claim” as the claim submitted to the contracting officer. Sharman, 2 F.3d
at 1570.
2. The Proper Test for Claims Barred by Sharman
The breadth or narrowness of the Sharman jurisdictional bar is disputed by
the parties. According to plaintiff, relying principally on Case, only “mirror
image” claims or “identical” claims qualify as the same claims for Sharman
purposes and fall prey to the bar. Pl.’s Resp. at 6-8. According to defendant,
relying principally on Scott Timber Co. v. United States, 333 F.3d 1358 (Fed. Cir.
2003), and K-Con Building Systems, Inc. v. United States, 107 Fed. Cl. 571 (2012),
claims which “‘arise from the same operative facts [and] claim essentially the same
relief’” are the same claim for Sharman purposes. Def.’s Mot. at 6 (quoting Scott
Timber, 333 F.3d at 1365, and citing K-Con, 107 Fed. Cl. at 592). Although KBR
cites two decisions of this court which appear to adopt plaintiff’s strict and narrow
definition of the “same claim” in the Sharman context, Pl.’s Resp. at 8 (citing
Extreme Coatings, Inc. v. United States, No. 11-895C, 2012 WL 4747248, at *3
(Fed. Cl. Oct. 3, 2012), and Buse Timber & Sales, Inc. v. United States, 45 Fed. Cl.
258, 266 (1999)), the court is persuaded that Sharman, Case, and Scott Timber are
correctly interpreted in this court’s K-Con decision. The proper focus, in a
Sharman analysis, is on operative facts and the relief sought so as to determine
whether a CDA claim is the same as another. This view is supported by Sharman,
Case, and Scott Timber and a number of other precedential decisions from the
United States Court of Appeals for the Federal Circuit.
a. The Framing of the “Same Claim” Test in Sharman
and Case
Sharman provides no explicit guidance as to the breadth or narrowness of
the terms “same claim” or “effectively the same claim.” 2 F.3d at 1570. The case
8
citations in Sharman are of some help, however. One of the cases relied upon by
the Federal Circuit in Sharman for its holding that pending litigation may divest
the contracting officer of the authority to decide a CDA claim is Durable Metal
Products, Inc. v. United States, 21 Cl. Ct. 41 (1990). 2 F.3d at 1571-72 (citing
Durable Metal, 21 Cl. Ct. at 46). The Durable Metal decision noted that this court
may issue a decision on fewer than all of the claims presented in a CDA suit,
relying on a provision of the CDA now codified at 41 U.S.C. § 7107(3). 21 Cl. Ct.
at 46. In the circumstances of that case, the court declined to do so, however,
“since none of [the] plaintiff’s claims [we]re fully developed to the extent that any
one claim could logically and reasonably be separated from another.” Id.
Thus, although there is no indication that the Federal Circuit in Sharman
relied on this particular commentary in Durable Metal, it is evident that claims
which can be logically separated from other claims are not necessarily the “same
claim.” See Case, 88 F.3d at 1010 (holding that the claims in that dispute were not
the same because they were “separate and distinct”). Conversely, a claim which
cannot logically be separated from another claim may, indeed, be the same claim.
See Sharman, 2 F.3d at 1571 (noting that the claims at issue in that dispute were
the same because they “allege[d] entitlement to the same money based on the same
partial performance, only under a different legal label”). The court turns now to
Hughes Aircraft Co. v. United States, 534 F.2d 889 (Ct. Cl. 1976), the other case
cited in Sharman, for its analysis of the effect of pending litigation on the authority
of a government agency to render decisions.
In Hughes Aircraft the government argued that pending litigation in a federal
court had removed the authority of an executive agency to render a decision on an
arguably related matter before the agency. 534 F.2d at 901. The Federal Circuit
disagreed, noting that the pending litigation, at the time the disputed agency action
was taken, only encompassed matters related to the Skynet II F1 satellite, not the
Skynet II F2 satellite. Id. at 901-02. Because the agency’s decision primarily
related to the Skynet II F2 satellite, and because the pending litigation at that time
contained no allegations regarding matters related to that Skynet II F2 satellite, the
agency’s authority to make the decision regarding the Skynett II F2 satellite had
not been removed from the agency and transferred to the Department of Justice.
Id. Thus, in Hughes Aircraft, because the claim in the pending litigation addressed
different disputed government actions, the agency was not divested of authority to
9
render a decision in a related but separate matter. Id. Despite the fact that it is not
a CDA case, Hughes Aircraft stands for the proposition that related but separate
matters do not constitute the same claim for purposes of the Sharman jurisdictional
bar.
As the court reads the Case decision, the test applied there is no different
than the one applied in Sharman. Although plaintiff suggests that Case “closely
construed” Sharman, Pl.’s Resp. at 7, Case focused on whether claims are
“separate and distinct,” 88 F.3d at 1010; whether claims constitute “‘divisible’”
parts of a case, id. (citing Joseph Morton Co. v. United States, 757 F.2d 1273, 1281
(Fed. Cir. 1985)); and, of most practical use to a trial court, whether the specific
facts that provide the “grounds” for the claims, as well as the specific monetary
relief requested in the claims, are different, id. This test is in no way at odds with
the analysis applied in Sharman. Further, although this test for identifying the
“same claims” is indisputably characterized as “narrow[]” by the Federal Circuit,
Case, 88 F.3d at 1011, the test is nowhere near as narrow as the “identical” or
“mirror image” test proposed by plaintiff here. Indeed, as defendant notes,
plaintiff’s allegation that claims must be “identical” to be the same claim, for the
purposes of the Sharman inquiry, is nowhere expressed in Case.
b. K-Con Applies Scott Timber to the Sharman Inquiry
Having discerned that Case reviewed the factual “grounds” of the claims and
the monetary relief sought to identify any claims that would be the “same” and thus
barred by the Sharman jurisdictional test, it is no surprise, then, that this court in
K-Con adopted Scott Timber’s definition of “same claim” containing elements
indistinguishable from those employed in Case:
Thus, if a contractor submits a new claim to the
contracting officer while its prior claim is in litigation,
and the new claim “arise[s] from the same operative
facts, claim[s] essentially the same relief, and merely
assert[s] differing legal theories for that recovery,” Scott
Timber Co. v. United States, 333 F.3d 1358, 1365 (Fed.
Cir. 2003), the contracting officer lacks the authority to
10
act on the new claim.
107 Fed. Cl. at 592. All elements of the Scott Timber test reflect the test used in
Sharman and Case. See Case, 88 F.3d at 1010 (distinguishing between different
claims sharing the “same underlying facts,” which are mere background facts, and
the same claims which share the “grounds actually asserted” to support claims,
which are operative facts); id. (noting that the claim in the pending litigation
identified $2.8 million as monetary relief, whereas the claim later presented to the
contracting officer sought recovery “over and above” the amount sought in the
pending litigation of an additional $1.8 million); Sharman, 2 F.3d at 1571 (finding
claims to be the same despite the use of “different legal label[s]”). This court thus
endorses the test for identifying the “same claim” set forth in Scott Timber and
adopted by K-Con for use in the Sharman inquiry.
c. Other Federal Circuit Decisions Address the “Same
Claim” Issue in Various CDA Contexts by Discussing
Operative Facts in a Manner Consistent with Scott
Timber
The need to determine whether a CDA claim is the same as another arises in
a variety of contexts. It is not necessary for the purposes of this opinion to
examine those contexts in detail. The court notes, simply, that the inquiry
commonly focuses on whether the operative facts are the same in two or more
CDA claims.
For example, in determining whether claims were distinct and separate, or
unitary (all part of the same claim), the Federal Circuit stated:
Because the Claims Court did not base its analysis on
whether the claims presented to the CO arose from a
common or related set of operative facts, and the
government has not cited support in the record that only a
unitary claim exists, we remand for the Claims Court to
conduct fact finding consistent with this opinion.
11
Placeway Constr. Corp. v. United States, 920 F.2d 903, 908 (Fed. Cir. 1990). In
another context, to determine whether a CDA claim has been improperly split and
the second CDA claim is barred by res judicata principles, this court must examine
whether “[t]he two claims plainly are based on a single set of operative facts.”
Phillips/May Corp. v. United States, 524 F.3d 1264, 1272-73 (Fed. Cir. 2008). In
yet another context, a claim was determined to be new, not the same, because “a
profound alteration occurred in the scope of th[e] claim,” expanding the focus on
operative facts from three change orders to a “multiplicity of change orders.”
Santa Fe Eng’rs, Inc. v. United States, 818 F.2d 856, 859 (Fed. Cir. 1987). All of
these cases show the Federal Circuit’s consistent approach in determining whether
one CDA claim is the same as another. Following these cases, as well as Sharman,
Case, Scott Timber and K-Con, this court must examine the operative facts and
relief sought in the two CDA claims, not the legal labels placed on those claims, to
determine whether those two CDA claims are the same.
3. The Same Operative Facts and Essentially the Same
Requests for Relief Are Found in the Monetary Claim in
KBR’s 780 Suit and in the December 2012 and February
2013 Claims
Although the monetary claim presented in the 780 suit is evident throughout
the complaint filed in that case, the most succinct expression of that monetary
claim is found in this statement:
KBR[] is entitled to recover all such fees, costs, and other
related expenses in connection with its defense of the
various third-party [suits] arising from its work under the
RIO contract, including these and other such fees, costs,
expenses, and other monetary liabilities that may be
incurred in the future.
780 Compl. ¶ 37. The operative facts for such a claim are not hard to discern. The
costs incurred by KBR in the third-party suits must arise from its work at the
Qarmat Ali plant and the presence of sodium dichromate at the site, and the
government must have refused to reimburse KBR for these costs. Here, the same
12
operative facts underlie the December 2012 and February 2013 claims presented to
the CO. See Def.’s Mot. Exs. A-B. Further, the 780 suit as well as the December
2012 and February 2013 CDA claims sought essentially the same monetary relief,
i.e., incurred and future costs of the third-party suits against KBR. Under the
precedent discussed supra, pending litigation before this court contained the same
claims as those presented to the CO in 2012 and 2013, and he therefore had no
authority to consider those claims. Lacking a final CO decision or a valid deemed
denial of KBR’s December 2012 and February 2013 claims, this court lacks
jurisdiction over all of the claims (save one discussed infra) in the 169 suit due to
the jurisdictional bar explained in Sharman.
Plaintiff’s reliance on Case to avoid the jurisdictional bar is misplaced. In
Case the claims were not the same because they were “separate and distinct.” 88
F.3d at 1010. Different government actions were addressed in the claims (default
termination in one, failure to issue an equitable adjustment of the contract in the
other), and the monetary relief requested was distinct. Id. at 1010-11. Here, in
contrast, the presence of sodium dichromate at Qarmat Ali and the government’s
failure to reimburse KBR for the costs of the third-party suits is the focus of both
suits, and the monetary relief requested is the same.5
The only distinction between the pending litigation (the 780 suit) and the
December 2012 and February 2013 claims submitted to the CO and at issue in this
case are the legal labels placed on the claims. In the 780 suit, KBR relied
exclusively on the indemnification provision in the RIO contract. That same
provision is just one of several bases for recovery cited in the December 2012 and
February 2013 claims submitted to the CO. These later claims also alleged
violations of certain Federal Acquisition Regulation (FAR) provisions including
FAR 52.216-7 and FAR 52.228-7, breach of the obligation to provide KBR with a
“benign” work environment, and breach of the obligation to ensure that adequate
funding is available to pay for services provided under the contract. Yet, as noted
in Sharman, a “different legal label” does not transform the same CDA claim into a
5
/ Increases in the amount of a claim due to the mere passage of time do not generally
change a CDA claim into a new claim. See, e.g., Contract Cleaning Maint., Inc. v. United
States, 811 F.2d 586, 591 (Fed. Cir. 1987) (citing Tecom, Inc. v. United States, 732 F.2d 935,
937-38 (Fed. Cir. 1984)).
13
new claim. 2 F.3d at 1571.
Following Sharman, Case, Scott Timber and K-Con, the monetary claim in
this suit (except for a small portion discussed infra) must be dismissed because the
same claim was pending in the 780 suit when the December 2012 and February
2013 claims were submitted to the CO.6 The court now turns to the one arguably
“new” claim presented in the December 2012 and February 2013 certified claims
submitted to the CO – the IG costs claim.
B. The IG Costs Claim, although Similar in Nature to the Costs of
Defending the Third-Party Suits, Is Not Necessarily Barred by the
Sharman Doctrine, But Is Certainly Barred by the Failure to State
a Sum Certain in the December 2012 Claim
There is no mention of an IG costs claim in the 780 suit, nor are the costs of
responding to an IG investigation necessarily subsumed within the costs of
responding to the third-party suits against KBR. The December 2012 certified
claim clearly attempts to present a claim for IG costs. Def.’s Mot. Ex. A at 14, 16,
19, 21, 29. No dollar amount was set forth therein for the IG costs, although the IG
costs claim appears to constitute a substantial portion, if not the entirety, of the
$450,170.68 omitted from the December 2012 certified claim. Id. Ex. B at 16 &
n.5; Am. Compl. ¶ 52. Applying a narrow interpretation of the jurisdictional bar
described in Sharman and Case, plaintiff’s IG costs claim does not appear to have
been “in litigation,” Case, 88 F.3d at 1011, when the December 2012 claim was
presented to the CO.
The court notes, however, that a contrary conclusion is possible. Plaintiff’s
IG costs, and its third-party suit costs, both arise from KBR’s work at Qarmat Ali
and the presence of sodium dichromate at the site. KBR combined in the same
invoices its costs from the third-party suits and the IG investigation. Am. Compl. ¶
46; Def.’s Mot. Ex. A at 16. These legal costs were incurred contemporaneously
6
/ The court need not reach defendant’s additional jurisdictional argument that any
breach of contract claim related to the government’s alleged failure to provide benign site
conditions at Qarmat Ali is also barred by the CDA’s six-year statute of limitations.
14
and are closely related.
In light of the foregoing, whether KBR’s IG costs claim is truly “separate
and distinct” from its third-party suit expenses claim, Case, 88 F.3d at 1010,
presents a close question. Certainly, the contrast between KBR’s legal fees
incurred in responding to the IG investigation and KBR’s legal fees incurred in
responding to the third-party suits is minimal when compared to the “separate and
distinct” claims discussed in Case. See 88 F.3d at 1010-11 (contrasting a claim
disputing a default termination, asserting that a delivery schedule was unreasonable
and waived, with a claim requesting an equitable adjustment of the contract price,
asserting defective specifications and overly strict government inspection). One
possibly determinative factor is that KBR’s IG costs claim requests a separate
amount of money that was not clearly included in the 780 suit. For this reason, the
court finds that the Sharman analysis does not necessarily bar plaintiff’s IG costs
claim in the instant suit.
Surviving the Sharman analysis provides little benefit to plaintiff, however,
because KBR’s IG costs claim cannot be considered by this court for a different
reason. The IG costs claim in the December 2012 certified claim presented to the
CO failed to present a sum certain for IG costs. See Am. Compl. ¶ 52; Def.’s Mot.
Ex. B at 16 n.5. Failure to present a monetary claim for a sum certain to the CO
renders a claim invalid and beyond this court’s jurisdiction. See M. Maropakis,
609 F.3d at 1329. Accordingly, KBR’s monetary claim for IG costs presented in
the December 2012 claim must also be dismissed.7
C. The IG Costs Claim in the February 2013 Claim, and Every
Other Claim in the February 2013 Claim, Are Barred by KBR’s
Failure to Await a Deemed Denial before Filing Suit in This Court
7
/ Although the record before the court is not sufficiently detailed to conclusively decide
whether the IG costs claim in the December 2012 claim was large enough to require
certification, failure to certify the IG costs claim, unless cured, might provide an independent
reason to deprive this court of jurisdiction over the KBR’s IG costs claim in the December 2012
submission to the CO. See 41 U.S.C. § 7103(b); Northrop Grumman Computing, 709 F.3d at
1112 & n.3; M. Maropakis, 609 F.3d at 1329.
15
Finally, the court must conclude that the February 2013 certified claim does
not save KBR’s IG costs claim. As noted supra, the instant suit was filed on
March 5, 2013, only twelve days after the February 2013 claim was submitted to
the CO. No final decision was issued on the February 2013 claim. No deemed
denial of the February 2013 claim could have occurred before April 2013. See 41
U.S.C. § 7103(f). Thus, the IG costs claim, as well as the other claims in the
February 2013 certified claim, were filed before a deemed denial would permit an
appeal of the CO’s “decision” in this court. E.g., Mendenhall v. United States, 20
Cl. Ct. 78, 84 (1990); Claude E. Atkins Enters. v. United States, 15 Cl. Ct. 644, 646
(1988). As this court has explained,
a claim premature for lack of a contracting officer’s final
decision does not ripen into a mature claim, while suit is
pending, with the passage of sixty (60) days. Once
plaintiff’s claim . . . became the subject of litigation in
this court, upon the filing of the original complaint, the
authority to resolve that claim was withdrawn from the
contracting officer and resided within the exclusive
authority of the Attorney General . . . . Under these
circumstances, plaintiff’s claim . . . cannot be deemed
denied, and the court must dismiss [this claim] on
jurisdictional grounds for lack of a contracting officer’s
final decision.
Sipco Servs. & Marine Inc. v. United States, 30 Fed. Cl. 478, 485 (1994) (citations
omitted).
Furthermore, plaintiff may not rely on its amended complaint to cure any
jurisdictional defect in its premature appeal of a “deemed denial” of the February
2013 claim. Am. Compl. ¶ 54; Pl.’s Resp. at 5. The general rule is that
“jurisdiction must be determined” at the time the original complaint was filed.
Sharman, 2 F.3d at 1569, 1571 n.10. An exception to this rule, that jurisdiction
over new claims introduced into a CDA suit by an amended complaint is
determined as of the time of the filing of the amended complaint, Buse Timber, 45
Fed. Cl. at 266 (citing Sharman, 2 F.3d at 1569-72, and Sipco, 30 Fed. Cl. at 485),
is inapplicable here.
16
There is no new claim in the April 30, 2013 amended complaint that was not
presented in the March 5, 2013 complaint filed in this court in the 169 suit; the
principal difference between the complaints is the addition of a “different legal
label,” Sharman, 2 F.3d at 1571, to support KBR’s recovery in this suit. The court
notes, in particular, that the IG costs claim is presented in both the March 5, 2013
complaint and in the amended complaint. Compare Compl. ¶¶ 38, 43, 62, with
Am. Compl. ¶¶ 41, 46, 70. Because the amended complaint did not introduce a
new claim into the 169 suit, the time of filing of the amended complaint has no
bearing on whether a deemed denial of the February 2013 claim had occurred
before plaintiff filed suit in this court. Because no deemed denial of the February
2013 certified claim had occurred before the filing of the 169 suit, this court has no
jurisdiction over the IG costs claim, or any other claim, in the February 2013
certified CDA claim presented to the CO.
CONCLUSION
For the foregoing reasons, the court lacks jurisdiction over all of the claims
in the amended complaint and it is hereby ORDERED that
(1) Defendant’s Motion to Dismiss, filed May 22, 2013, is GRANTED;
(2) The Clerk’s Office is directed to ENTER final judgment in favor of
defendant DISMISSING plaintiff’s amended complaint for lack of
subject matter jurisdiction, without prejudice; and
(3) Each party shall bear its own costs.
/s/ Lynn J. Bush
LYNN J. BUSH
Senior Judge
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