Government’s motion to dismiss an appeal for lack of jurisdiction is denied, where the government’s arguments—that no contract was signed, and the contract specialist had no authority to bind the government—went to the merits of the case, not jurisdiction. The board also found the appeal was timely, because the appellant did not appeal the final decision on its original claim, but argued the government breached the terms of its contract and the duty of good faith and fair dealing by not adhering to its verbal agreement to pay certain costs in the original claim.
Long Wave Inc. sought additional payments related to vacation pay, wage increases, and severance pay on a contract with the Navy. The government moves to dismiss, contending that the appeal was untimely and did not relate to or arise under an agreement for which the board had jurisdiction.
On November 28, 2012, the Navy awarded Long Wave a contract for firm-fixed-price operation and maintenance services for a communication facility. In 2015, the Navy re-solicited the work and awarded the contract to another bidder, giving rise to the present dispute. On June 23, 2016, Long Wave submitted a certified claim seeking $40,336.63 for vacation pay liability, $41,494.50 for severance pay, and $51,152 for collective bargaining agreement wage adjustments for its former employees.
In a final decision, the contracting officer agreed that Long Wave was entitled to additional payments for the severance pay and CBA wage adjustments, provided that Long Wave furnished the Navy with additional documentation. However, the CO concluded that vacation pay liability was not subject to the contract’s disputes clause and must be pursued with the Department of Labor, per contract clause FAR 52.222-17(g); however, the contract did not contain this clause.
During a conference call on the issue, the agreed to pay a vacation claim, provided the numbers were substantiated and allowable. Thereafter, Long Wave provided the agency with an invoice substantiating payment for severance and vacation pay, along with the actual pay check stubs of the employees. The agency later informed Long Wave that legal counsel had approved the supporting documentation and that a modification would be issued when funds were available. The parties also agreed to a total of $139,791.93.
However, despite assurances from the government, no contract modification was issued. The agency informed Long Wave that legal counsel had found some new information about vacation pay and that the Navy had decided to halt processing that portion of the claim, but would continue with the severance pay and CBA wage increase issues. Later, the agency stated that it would not pay general and administrative, overhead, or profit on the CBA wage adjustments.
Long Wave submitted a certified claim asking the CO to stand by the original agreement. In response, the agency stated that the original final decision had not changed and that it did not consider the second claim submission to be a new claim, since the issue was addressed. Eventually, the CO informed Long Wave that the Navy had found information indicating Long Wave had already been paid the vacation amount sought in its claim. The Navy’s final offer for a settlement included $23,790.65 for severance pay and $32,000.69 for CBA wage increases for a total of $55,791.34.
Long Wave appealed. The government moved to dismiss, arguing that the purported settlement of the original claim did not result in a contract for which the board possessed jurisdiction; and that the appeal is untimely.
First, the board found no dispute that the parties entered into a contract or that Long Wave submitted a properly certified claim, the deemed denial of which it properly appealed. Instead, the government argued that the original claim agreement was faulty. While the contract specialist informed Long Wave that the proposed $139,791.93 was “agreeable,” the government argued that no SF 30 was signed, that the agreement lacked consideration for the government, and that the contract specialist lacked authority to bind the government.
The board rejected this reasoning, finding that the arguments go to the merits of Long Wave’s appeal, not to jurisdiction.
Next, the government argued the appeal was untimely. According to the government, the CO issued his decision on Long Wave’s original claim on September 12, 2016, tolling the 90-day deadline for appeal. However, Long Wave did not file until January 11, 2018. The Navy acknowledged that Long Wave submitted a second claim, but argued the claim was subterfuge to evade the appeal time limit.
The board disagreed, finding no indication the appellant sought a review of the original claim. Rather, the issues raised in the second claim and the appeal are whether the government breached the contract by refusing to effectuate the settlement or breached the covenant of good faith and fair dealing by not abiding by the terms of the purported agreement. The board found that the enforceability of the purported settlement is a distinct legal issue from the merits of the original claim. Because the contracting officer never issued a final decision on the second claim, Long Wave’s appeal is timely.
Long Wave Inc. is represented by Stephen D. Knight and Sean K. Griffin of Smith Pachter Mc Whorter PLC. The government is represented by Craig D. Jensen, Navy Chief Trial Attorney, and by Richard W. Carlile and Melissa Martin, Trial Attorneys.
