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Government’s motions to dismiss and for summary judgment are granted. The contractor appealed from the denials of several requests for equitable adjustment. While the appeals were pending, the contractor settled litigation against its surety. As part of that settlement, the contractor had granted one its subcontractors the right to settle the contractor’s claims against the government. The subcontractor ultimately exercised that right and settled the claims, releasing the government. Having settled, the government moved to dismiss the contractor’s appeals or for summary judgment. The board granted the motion to dismiss in part, finding that the contractor had not properly certified its REA’s as claims, so the board lacked jurisdiction over several of the appeals. But for the claims over which it had jurisdiction, the board granted the government summary judgment. The subcontractor had clear authority to settle those claims and had validly executed a settlement with a release of the government that was binding on the contractor.

JAAAT Technical Serviced had been awarded a task order by the Army Corps of Engineers for the design and construction of a brigade headquarters at Ft. Bragg, North Carolina. JAAAT submitted nine requests for equitable adjustments for various issues—defective specifications, delays, changes—on the contract. The contracting officer denied the REAs. JAAAT appealed the denials to the ASBCA.

While JAAAT was submitting the REAs, it was experiencing financial difficulties on several of its government contracts. JAAAT’s surety received several bond claims on JAAAT’s bonded projects. The surety sued JAAAT in federal district court for satisfaction of the surety bonds. The surety also sued one of JAAAT’s subcontractors, Tetra Tech, for satisfaction of the bonds issued in connection with JAAAT’s government contracts.

The parties to the surety litigation, including the Corps, participated in meditation and settle the surety litigation. JAAAT, Tetra Tech, and the surety entered an omnibus settlement. This omnibus agreement, included an agreement in principle between JAAAT and the Corps to settle the various REAs and disputes under the JAAAT’s task order.

Under the omnibus settlement, Tetra Tech agreed to pay the surety $3.8 million, and JAAAT was to pay the surety $2.8 million. JAAAT’s payment, however, was to be funded through the settlement of the task order with the Corps. As part of the omnibus settlement, Tetra Tech agreed to guarantee JAAAT’s payment to the surety. In exchange for that guarantee, JAAAT granted Tetra Tech a power of attorney, giving Tetra Tech the authority to act on JAAAT’s behalf and in JAAAT’s name to finalize settlement of JAAAT’s claims with the Corps.

Although the omnibus agreement contained an agreement in principle to settle JAAAT’s claims against the government, that agreement was not consummated by the time JAAAT’s payment to the surety was due. As guarantor of JAAAT’s obligation, Tetra Tech exercised it rights under the power of attorney to effect a settlement of JAAAT’s claims against the Corps. The Corps agreed to settle JAAAT’s claims for $3.1 million. The Corps issued a contract modification memorializing the settlement agreement. That agreement contained a release under which JAAAT agreed to release the government from all existing and potential claims.

Having settled JAAAT’s claims, the government moved to dismiss or for summary judgment on the various JAAAT appeals that were still pending before the ASBCA. The government argued that the board should dismiss the appeals because many of the REA’s had not been properly certified, depriving the board of jurisdiction. The government also argued that even if the board possessed jurisdiction, Tetra Tech had settled JAAAT’s claims and agreed to a release. Accordingly, JAAAT could no longer maintain its appeals.

For its part, JAAAT contended that it had properly certified its various claims. Additionally, JAAAT argued that the Tetra Tech settlement was invalid and that the government had misinterpreted the power of attorney granted to Tetra Tech.

The board first addressed the jurisdictional issue. The board reviewed each of the REAs to determine whether JAAT had properly certified a claim. For its first claim, which alleged defective specifications for storm water drainage, the board noted that JAAAT initially submitted that claim as an REA. Later, however, JAAAT sent a letter to the Corps formally requesting the contracting officer to issue a final decision on the storm water claim. The board reasoned that this letter expressed an intention to turn the REA into a claim. The board determined it had jurisdiction over the appeal of the storm water claim.

JAAAT had submitted three other claims that exceeded $100,000 and for which JAAAT never requested a final decision. The board reasoned that a contractor is required to submit a certification for any claim over $100,000. JAAAT never submitted a proper certification for those any of those three claims. The board therefore lacked jurisdiction over the appeal of those three claims.

The board next considered a claim arising out of a government punch list, which presented a more difficult scenario. The Corps had sent JAAAT a punch list for items that had not been completed or satisfactorily completed. The Corps exercised its authority under the contract’s change clause requesting the JAAAT provide the government with a credit for the punch list. JAAAT proposed a $9.880 credit. The Corps, however, believed that a $257,000 credit was reasonable. The parties were unable to agree. The Corps issued a unilateral contract modification reducing the contract price by $257,000. JAAAT submitted an REA seeking an adjustment to the contract reduction. The Corps denied the request, and JAAAT appealed.

The government argued that JAAAT had never properly certified the punch list REA, so the board lacked jurisdiction. The board, however, found that the contract modification was, in fact, a government claim. By issuing the modification, the government had made a written demand for payment in a sum certain.

The government argued that the modification was not a claim but rather a contract administration action to delete work that JAAAT had not performed. The board disagreed. The Corps did not merely delete work that had not been performed. Rather, the parties had a disagreement over the value of the unfinished work. The contract modification valued the work at an amount that was significantly different from the JAAAT’s estimate d value. That was, in essence a government claim.

The fact that the modification did not identify itself as a final claim or contain appeal rights was of no consequence. A notice of appeal rights exists for the benefit of a contractor. The government cannot rely on the absence of appeal rights to turn an otherwise valid final decision into an invalid decision.

Ultimately, because the punch list claim was a government claim, JAAAT did not need to certify it. The board had jurisdiction over the punch list appeal.

JAAAT had submitted several other REAs that were valued less than $100,000. Generally, a claim only needs to be certified if it exceeds $100,000. Nevertheless, after an extensive review of the difference between an REA and a claim, the board concluded that while these REA’s simply did not qualify as a claim. To count as a claim, a submission must request a final decision. For the REAs seeking less than $100,000, JAAAT never requested, either directly or by implication, a final decision. Indeed, the correspondence concerning these claims, indicated that JAAAT wanted to negotiate with the Corps. There was no indication the Corps had treated these REAs as anything other than REAs. The board thus lacked jurisdiction over the sub-$100,000 REAs.

Having found that it had jurisdiction over a couple of claims, the board turned to whether Tetra Tech had settled those claims on JAAAT’s behalf. The board found that Tetra Tech had the authority to settle JAAAT’s claims. The power of attorney was undeniably clear in granting Tetra Tech power to do all things necessary to settle JAAAT’s claims.

JAAAT contended that Tetra Tech did not have a right to execute a contract modification to settle the claims. But the board found that the JAAAT had failed to support this assertion with any language from the power of attorney or omnibus settlement. Tetra Tech had exercised the board powers granted to it under the power of attorney in agreeing to the modification. That modification contained a release that bound JAAAT. JAAAT had effectively released its claims and could no longer maintain its appeals.

JAAAT is represented by its Director of Finance, Rickey B. Barnhill, and Andrew T. Bodoh of Thomas H. Roberts & Associates, P.C. The government is represented by Michael P. Goodman, Justin P. McCorcle, and Aaron A. Bloemsma of the Army Corps of Engineers.