Motion to dismiss an appeal for lack of jurisdiction is denied, where the appellant properly submitted its claim for costs related to Service Contract Act compliance to the ordering agency CO, rather than to the CO of the agency that awarded the underlying IDIQ. The board concluded that a GWAC differs from a GSA schedule contract in this manner and found that the awarding agency assigned to the ordering agency the responsibility of identifying any additional labor categories on a task order that are governed by the SCA.
Sotera Defense Solutions Inc. appealed the Department of Agriculture’s deemed denial of its claims on two IT services task orders, in which it sought the costs of complying with the Service Contract Act and area wage determinations, after the Department of Labor directed that SCA clauses and wage determinations be incorporated into the first task order. USDA moved to dismiss, arguing that the NIH contracting officer should decide the applicability of the SCA, because the orders were issued through an NIH contract.
Prior to award of the underlying contract, the NIH contracting officer determined that the contract positions were bona fide executive, administrative, or professional positions and that all labor categories on the contract met the criteria for an SCA exemption. The contract stated that the positions on the contract were exempt from the SCA but advised that an ordering contracting officer would have to determine whether the SCA applied to any positions requested on a task order.
Neither of the task orders at issue included or incorporated by reference clauses regarding the SCA. After the award of the orders, the USDA CO received a notice from DOL’s Wage and Hour Division indicating that the task order contracts included work covered by the SCA, and directing the CO to amend the task order contracts to include FAR 52.222-41 and the applicable wage determinations. The CO complied, modifying the task orders to retroactively insert the relevant FAR clauses and citing the direction from DOL. The CO also attached wage determinations for sixteen localities throughout the United States. DOL later notified the CO and Sotera that it was investigating Sotera for possible violations of the SCA. DOL directed the CO to withhold $701,590.94 from funds due to Sotera on the task order.
During the investigation of the first task order, the USDA CO notified Sotera that it had been selected for award of a second task order. Following notification, Sotera asked whether the task order had any applicable wage determinations, and the CO provided the updated SCA/AWDs for each appropriate service location. The executed task order included both FAR 52.222-41 and 52.222-43. Later, the USDA CO forwarded a new contract to take the place of the task order executed in March 2017, along with sixteen wage determinations for the various locations the services would be performed. Sotera executed the replacement contract.
In the claim on the initial task order, Sotera sought $720,451 for the increased wage costs for itself and a subcontractor, the costs of complying with the SCA provisions and preparing the request for equitable adjustment. In the claim on the follow-on task order, Sotera sought $3,337,101 for the increased costs of performance in the base period and each of the option years as a result of the application of the SCA requirements as well as the costs to prepare the request for equitable adjustment. When the USDA CO failed to issue a decision within 60 days, Sotera appealed the deemed denial.
The board asked the parties for briefs on jurisdiction, inquiring whether the NIH contract and the USDA task orders were akin to GSA schedule contracts, which are governed by regulations that dictate which CO has authority to resolve a dispute. The board concluded that a GWAC differs from a GSA schedule contract, and that Sotera properly presented its claims to the USDA CO, as opposed to the NIH CO.
The NIH contract assigned to USDA the responsibility of identifying any additional labor categories on a task order that are governed by the SCA. The board found that assignment of responsibility understandable because the OCO would know the labor categories required and the locations where services would be provided on the task orders. NIH made a determination that the positions on the base contract were exempt, but left open the possibility that task orders could include SCA covered positions. Moreover, DOL addressed its concerns about the SCA coverage issues to the USDA CO rather than NIH because the alleged violations occurred on the task order and, presumably, because USDA had the funds to withhold. Because Sotera properly submitted its claims to USDA, the board held it had jurisdiction to hear the appeal.
Sotera Defense Solutions Inc. is represented by Nathanael D. Hartland and Katherine B. Burrows of Nelson Mullins Riley & Scarborough LLP. The government is represented by Antonio T. Robinson, Office of the General Counsel, Department of Agriculture.