Government’s motion to dismiss appeals is denied. The contractor appealed in the name of a predecessor entity that was no longer party to the contract. The government argued the appeal should be dismissed due to lack of privity. The board, applying Federal Rule of Civil Procedure 17, found that it was appropriate to allow the contractor to substitute the real party in interest. The appeal had mistakenly named the predecessor entity, and the government had not been prejudiced by the mistake.
Alares LLC had a contract with the Department of Veterans Affairs to replace an intensive care unit at a medical center. While Alares was performing, it novated the contract to another entity, Alares Construction.
Alares Construction submitted several certified claims to the VA, which were denied. Those claims were appealed to the ASBCA, but they were in appealed in the name of the predecessor entity, Alares LLC, not Alares Construction. Thus, the government moved to dismiss the appeals, arguing that Alares LLC did not have privity of contract with the government.
The board noted that it has previously applied Federal Rule of Civil Procedure 17 to appeals. Under that rule, a tribunal may not dismiss an action for failure to prosecute in the name of the real party of interest until the real party has been given notice of the action and allowed a reasonable time for substitution. A substitution is allowed when a party has mistakenly named the wrong party in the appeal, and the other party will not be prejudiced by the substitution.
Here, Alares Construction persuasively argued that it had mistakenly taken the appeals in the name of Alares LLC. The board reasoned there was little prejudice to the government in allowing a substitution. The appeals identified the proper contract number and final decisions, and they were all timely filed. The VA received timely notice of each appeal. Alares was allowed to substitute the proper party.
Alares is represented by Douglas L. Patin and Lee-Ann Brown of Bradley Arant Boult Cummings LLP. The government is represented by Jennifer Hedge, Donald C. Mobly, and Kathleen Ellis Ramos of the Department of Veterans Affairs.
