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Government’s motion for summary judgment alleging that appeal is barred by doctrine of res judicata is denied. The government alleged that a COFC decision dismissing contractor’s claim related to a termination was a final judgment that barred the contractor from raising any termination-related claim before the ASBCA. The board, however, found that the court had dismissed the termination claim for lack of jurisdiction. The court had never ruled on the merits of the termination claim, so the claim before the board was not barred by res judicata.

The Army awarded Nexagen a task order for software and systems engineering services. During the base year of performance, the Army terminated the contract for default, but two weeks later changed it to a termination for convenience. The Army then cancelled the task order and issued a new task order request.

Nexagen filed a complaint with the Court of Federal Claims that was in part a bid protest challenging the decision to issue to a new task order and partly a claim for damages arising from the cancelled task order. The court dismissed the claim for damages because it had not been submitted to the contracting before filing suit. The court further found that to the extent the action challenged the termination for default, it was moot due to conversion of the termination into one for convenience before Nexagen filed suit.

Nexagen submitted a claim to the contracting officer, alleging the Army breached the contract and seeking consequential and expectation damages. The contracting officer denied the claim. Nexagen appealed to the ASBCA.

In the appeal, the Army moved for summary judgment on Nexagen’s damages. The board granted the motion with respect to most of the damages, but Nexagen still had claim for about $10 million in damages pending.

The Army then filed a second motion for summary judgment, alleging that Nexagen’s claim was barred by the doctrine of res judicata. The Army argued that the court had dismissed the portions of Nexagen’s complaint that challenged the termination. The government alleged that this dismissal amounted to an adjudication on the merits of Nexagen’s damages claim as a result of wrongful termination.

But the board disagreed The doctrine of res judicata only bars a claim when a previous, related claim has proceeded to final judgment on the merits. In this case, because the contracting officer converted the termination to one for convenience before Nexagen filed suit, there was never a real case or controversy concerning termination before the court. By converting the termination, the contracting officer had already provided the only relief that the court could have provided. The court dismissed the claim for lack of jurisdiction; it did not rule on the merits of the termination claim.

The Army also moved for summary judgment on Nexagen’s claims for damages from the option years, arguing that because the contract had been terminated during the base year, damages for the option years were too speculative and remote. The board, however, found that the record was not developed enough to grant this motion. There were still disputed issues of fact concerning alleged government bad faith during the base year that required witness testimony.

Nexagen is represented by David A. Rose of Rose Consulting Law Firm as well as Kendall R. Enyard and Caitlin T. Conroy of Steptoe & Johnson LLP. The government is represented by Scott N. Flesch and Dana J. Chase of the U.S. Army.