The government filed motions to dismiss two appeals; one was denied, the other was granted. In the first motion, the government argued that the contractor had submitted an REA, not a claim. Thus, the government alleged, the board lacked jurisdiction over what was essentially an appeal of on REA. The board, however, found that the REA was, in fact, a defective claim, and that the contractor had subsequently cured the defect with an affidavit. In the second motion, the government argued that the appealed claim had simply restated a claim that had been denied four years earlier. The board agreed with the government, finding that the recent claim restated the language from the previously-denied claim almost verbatim. The recent claim was thus not a new claim, and appeal from the claim was untimely.
The Restoration Claim
Penna Group, LLC had a contract with the Army Corps of Engineers for an ecosystem restoration project in Texas. In 2015, Penna emailed the Corps requesting an equitable adjustment on the restoration contract. Although the email requested an equitable adjustment, it included some of the language required for a certified claim. Confused, the Corps asked Penna whether it was requesting an equitable adjustment or submitting a claim. Penna confirmed that it submitted an REA. The Corps responded to the REA in 2016.
But in 2018, Penna sent the Corps additional information to supplement the 2015 REA. The Corps notified Penna that the REA had been addressed in 2016, and the government would not reopen negotiations. Penna then sent the Corps an affidavit from its managing partner, stating that he was recertifying the restoration claim. The affidavit included the CDA’s certification language.
The Corps did not respond to the affidavit. Penna appealed the deemed denial to the ASBCA
The Construction Claim
Penna had another contract with the Corps for the design and construction of an office. In 2012, Penna submitted an REA, seeking recovery for government-caused delays. The Corps denied the REA. But in 2014, Penna sent the Corps a claim certification document and asked the agency to convert the REA into a claim. The Corps agreed, and found that the claim had partial merit entitling Penna to $52,000. Penna acknowledged the decision on the claim in December 2014.
Nevertheless, in 2018, Penna submitted a new certified claim seeking damages for the construction contract. The Corps denied the claim, reasoning that it was essentially the same claim that Penna had submitted in 2014. Penna appealed the denial of its construction claim. That appeal was consolidated with the appeal of restoration claim.
Penna Properly Certified the Restoration Claim
The government moved to dismiss appeal of the restoration claim. The government argued that Penna had confirmed in 2015 that it had submitted what it now called a claim as an REA. The government contended that Penna never requested a final decision on the REA and never certified the claim. Thus, there was no real claim for the company to appeal.
The board, however, found that the REA submitted in 2015 was in fact a claim. The REA actually requested a final decision using CDA language. To be sure, Penna had told the agency to treat the 2015 as an REA instead of a claim. But the board noted that even where a contractor disavows any intention of submitting a claim, they will still be found to have submitted a claim if the submission makes a non-routine request for payment as a matter of right. Here Penna asked for a final decision and payment in the REA.
Moreover, the board found that Penna had properly certified the claim. The 2015 REA, while defective, included most of the language required for certification of a claim. Penna cured the defective certification in 2018, when its managing partner submitted an affidavit that expressly recertified the claim and included the CDA’s certification language.
Penna Failed to Revive the Construction Claim
The government also moved to dismiss the appeal of the 2018 construction claim, arguing that it was essentially a resubmittal of the denied 2014 claim. Penna had not appealed the 2014 decision. Thus, the 2018 appeal was an untimely appeal of the 2014 claim.
The board agreed with the government. Aside from language in the opening paragraph, the overwhelming majority of the 2018 claims was recreated nearly verbatim from the 2014 claim. The 2018 claim did not contain any new operative facts. To the extent it raised new legal theories, they were based on the same operative facts as the 2014 claim. The 2018 claim was thus the same 2014 claim. An appeal of the 2014 was now untimely.
Penna attempted to argue that 2014 decision was not final because it had stated that no proceeds would be disbursed until an unrelated stakeholder appeal involving Penna’s surety had been resolved. But the board reasoned that this language merely notified Penna that the amount it would receive would depend on the outcome of an ancillary appeal. It did not affect the finality of the decision.
Penna further argued that the 2014 decision was not final because it was contingent on an investigation into the company’s labor practices. The board found that nothing in the 2014 decision indicated that it was contingent on the outcome of the labor investigation.
Penna Group is represented by Bryant S. Banes and Sean D. Forbes of Neel, Hooper & Banes, P.C. The government is represented by Michael P. Goodman, Katherine S. Talbot, and Blake Hedgecock of the Army Corps of Engineers.