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The government’s motion to dismiss multiple counts of the appellant’s claims is denied, where the appellant’s claim of constructive change was based on the same operative facts as its claim of mutual mistake, which was presented to the contracting officer. The board also rejected the government’s motion to dismiss the appellant’s allegation that it was misled by the agency’s discussions and negotiations, finding that the complaint went to the claim of mutual mistake and request for equitable adjustment, and did not amount to a challenge to the evaluation or a bid protest, as the agency asserted.

The Navy moved to dismiss multiple counts of Chugach Federal Solutions Inc.’s appeal of the agency’s denial of claims seeking additional payments under a facility support services contract.

During its initial evaluation of proposals, the Navy concluded that Chugach’s proposed staffing levels were significantly low in some areas. After identifying similar issues with other proposals, the agency concluded that the solicitation requirements were not clear and issued an amended PWS to provide additional information. In an evaluation notice, the Navy asked Chugach to ensure that its work hour estimates and FTE staffing for certain annexes adequately addressed the revised PWS. When the appellant did not substantially revise its proposal, the Navy concluded that the response did not address its concerns. Chugach’s subsequent proposal revisions reduced its level of proposed FTEs further. However, after reopening discussions, the agency did not identify any significant concerns with Chugach, instead stating that its overall recurring work FTEs were within an acceptable range. In its final proposal revision, Chugach again downwardly adjusted its proposed FTEs. Nonetheless, the agency awarded Chugach the contract, without further addressing its initial concerns about staffing.

Almost immediately, Chugach struggled to meet the Navy’s requirements. In response, the appellant hired additional staff and authorized overtime hours to maintain staff levels and meet schedules.

In its claims, Chugach argued the Navy caused it to negotiate staffing levels for the firm fixed-price contract that were materially inadequate, causing it significant financial losses. Chugach maintained that had it known of the agency’s concerns, it would have increased its staffing levels. For this reason, Chugach asserted it was entitled to an equitable adjustment on the contract price. The appellant alleged theories of mutual mistake at contract formation, arguing that the parties mistakenly based the current contract requirements on historical data that did not reflect the agency’s needs.

Chugach argued that by requiring staffing levels above those negotiated at contract formation, the Navy constructively changed the contract. For example, even though the parties negotiated a contract under which Chugach would begin performing with a staff of 311 FTEs, by the end of the first year, the Navy had pushed it to expand its staff to 458 personnel. The appellant argued the Navy established enhanced performance requirements, as well as an accelerated schedule for service calls, and argued the agency pressured it to increase staffing. Chugach also asserted a theory of superior knowledge on the government’s part and alleged the agency breached the implied duty of good faith and fair dealing.

The Navy moved to dismiss multiple counts. In its motion to dismiss Count 1, the Navy argued that Chugach’s complaints about the Navy’s discussions amounted to a bid protest, as it made allegations about the Navy’s evaluation of Chugach’s proposal, rather than to contract performance. The boar disagreed, as Chugach was not a disappointed bidder, but the awardee, and the claim related to the contract, not the evaluation. In fact, Chugach sought an adjustment to the contract price, albeit in relation to the agency’s conduct of discussions and negotiations. Moreover, the board held that Chugach’ s negligent negotiations claim is actually, for all intents and purposes, an element of its superior knowledge claims that is not subject to the Navy’s motion to dismiss.

In its motion to dismiss Count III, Chugach’s assertion of mutual mistake, the Navy argued that Chugach alleged a mutual mistake regarding a prediction or judgment of future events, which cannot form a basis for an allegation of mutual mistake at contract formation. In response, Chugach argued that its claim does not depend on predictions of future events, but is based on facts and circumstances in existence at the time of contract formation. Chugach asserted that its claim was based on mutual mistakes in historical data and the parties’ understanding of permissible cross-utilization and productive hours under the collective-bargaining agreement. The board held that Chugach plausibly asserted mutual mistake to the extent that its claim could proceed.

Finally, the Navy argued the board lacked jurisdiction to entertain the appellant’s claim for constructive change, because it was not presented to the contracting officer for a final decision. In response, Chug

The government’s motion to dismiss multiple counts of the appellant’s claims is denied, where the appellant’s claim of constructive change was based on the same operative facts as its claim of mutual mistake, which was presented to the contracting officer. The board also rejected the government’s motion to dismiss the appellant’s allegation that it was misled by the agency’s discussions and negotiations, finding that the complaint went to the claim of mutual mistake and request for equitable adjustment, and did not amount to a challenge to the evaluation or a bid protest, as the agency asserted.

The Navy moved to dismiss multiple counts of Chugach Federal Solutions Inc.’s appeal of the agency’s denial of claims seeking additional payments under a facility support services contract.

During its initial evaluation of proposals, the Navy concluded that Chugach’s proposed staffing levels were significantly low in some areas. After identifying similar issues with other proposals, the agency concluded that the solicitation requirements were not clear and issued an amended PWS to provide additional information. In an evaluation notice, the Navy asked Chugach to ensure that its work hour estimates and FTE staffing for certain annexes adequately addressed the revised PWS. When the appellant did not substantially revise its proposal, the Navy concluded that the response did not address its concerns. Chugach’s subsequent proposal revisions reduced its level of proposed FTEs further. However, after reopening discussions, the agency did not identify any significant concerns with Chugach, instead stating that its overall recurring work FTEs were within an acceptable range. In its final proposal revision, Chugach again downwardly adjusted its proposed FTEs. Nonetheless, the agency awarded Chugach the contract, without further addressing its initial concerns about staffing.

Almost immediately, Chugach struggled to meet the Navy’s requirements. In response, the appellant hired additional staff and authorized overtime hours to maintain staff levels and meet schedules.

In its claims, Chugach argued the Navy caused it to negotiate staffing levels for the firm fixed-price contract that were materially inadequate, causing it significant financial losses. Chugach maintained that had it known of the agency’s concerns, it would have increased its staffing levels. For this reason, Chugach asserted it was entitled to an equitable adjustment on the contract price. The appellant alleged theories of mutual mistake at contract formation, arguing that the parties mistakenly based the current contract requirements on historical data that did not reflect the agency’s needs.

Chugach argued that by requiring staffing levels above those negotiated at contract formation, the Navy constructively changed the contract. For example, even though the parties negotiated a contract under which Chugach would begin performing with a staff of 311 FTEs, by the end of the first year, the Navy had pushed it to expand its staff to 458 personnel. The appellant argued the Navy established enhanced performance requirements, as well as an accelerated schedule for service calls, and argued the agency pressured it to increase staffing. Chugach also asserted a theory of superior knowledge on the government’s part and alleged the agency breached the implied duty of good faith and fair dealing.

The Navy moved to dismiss multiple counts. In its motion to dismiss Count 1, the Navy argued that Chugach’s complaints about the Navy’s discussions amounted to a bid protest, as it made allegations about the Navy’s evaluation of Chugach’s proposal, rather than to contract performance. The boar disagreed, as Chugach was not a disappointed bidder, but the awardee, and the claim related to the contract, not the evaluation. In fact, Chugach sought an adjustment to the contract price, albeit in relation to the agency’s conduct of discussions and negotiations. Moreover, the board held that Chugach’ s negligent negotiations claim is actually, for all intents and purposes, an element of its superior knowledge claims that is not subject to the Navy’s motion to dismiss.

In its motion to dismiss Count III, Chugach’s assertion of mutual mistake, the Navy argued that Chugach alleged a mutual mistake regarding a prediction or judgment of future events, which cannot form a basis for an allegation of mutual mistake at contract formation. In response, Chugach argued that its claim does not depend on predictions of future events, but is based on facts and circumstances in existence at the time of contract formation. Chugach asserted that its claim was based on mutual mistakes in historical data and the parties’ understanding of permissible cross-utilization and productive hours under the collective-bargaining agreement. The board held that Chugach plausibly asserted mutual mistake to the extent that its claim could proceed.

Finally, the Navy argued the board lacked jurisdiction to entertain the appellant’s claim for constructive change, because it was not presented to the contracting officer for a final decision. In response, Chugach argued that this claim relied on the same operative facts as the claim presented to the CO and therefore was not a new claim for jurisdictional purposes. The board agreed, finding that Chugach’s initial claim alleged that the Navy had established enhanced performance requirements, required Chugach to perform trouble calls on certain pieces of equipment on an accelerated schedule, and pressured Chugach to increase staffing. The board found those allegations sufficient to support its jurisdiction. The board found these arguments encompassed by Chugach’s claim of mutual mistake, which had been presented to the CO for a decision.

The Navy also moved to dismiss Count V, Breach of the Duty of Good Faith and Fair Dealing, and Count VI, Improper Withholding of Payment, to the extent those counts were premised on Counts 1, III, and IV. However, as the board did not dismiss those other counts, it declined to grant the government’s motion here as well.

Chugach Federal Solutions Inc. is represented by Richard B. O’Keeffe, Jr., Gary S. Ward, Cara L. Lasley, Lindy C. Bathurst, and William A. Roberts III of Wiley Rein LLP. The government is represented by Craig D. Jensen, Navy Chief Trial Attorney, and David M. Marquez, and Anthony Hicks, Trial Attorneys.

ach argued that this claim relied on the same operative facts as the claim presented to the CO and therefore was not a new claim for jurisdictional purposes. The board agreed, finding that Chugach’s initial claim alleged that the Navy had established enhanced performance requirements, required Chugach to perform trouble calls on certain pieces of equipment on an accelerated schedule, and pressured Chugach to increase staffing. The board found those allegations sufficient to support its jurisdiction. The board found these arguments encompassed by Chugach’s claim of mutual mistake, which had been presented to the CO for a decision.

The Navy also moved to dismiss Count V, Breach of the Duty of Good Faith and Fair Dealing, and Count VI, Improper Withholding of Payment, to the extent those counts were premised on Counts 1, III, and IV. However, as the board did not dismiss those other counts, it declined to grant the government’s motion here as well.

Chugach Federal Solutions Inc. is represented by Richard B. O’Keeffe, Jr., Gary S. Ward, Cara L. Lasley, Lindy C. Bathurst, and William A. Roberts III of Wiley Rein LLP. The government is represented by Craig D. Jensen, Navy Chief Trial Attorney, and David M. Marquez, and Anthony Hicks, Trial Attorneys.