Contractor Sufficiently Alleged that Government Misappropriated Its Work Product; Appeal of AECOM Technical Services, Inc. ASBCA No. 62800

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Government’s motion to dismiss for failure to state a claim is denied. The contractor alleged the government misappropriated designs. The government contended it was allowed to keep the designs under the FAR as proposal materials. The board found that the contract had a clause that required the government to exercise a purchase option and pay the contractor for designs. In light of this clause, the contractor had sufficiently pleaded that the government converted the designs.

AECOM Technical Services had an IDIQ contract with the Army Corps of Engineers for the design and construction of energy saving projects. The Corps issued a task order to AECOM for a project at an Air Force base. AECOM submitted designs as part of the project, but the Corps decided not to pursue the project.

AECOM submitted a claim for the costs incurred developing the designs. The corps denied the claim. AECOM appealed to the ASBCA. The government moved to dismiss for lack of jurisdiction, alleging (1) it never had a contract with AECOM, and (2) that AECOM’s claim was really a conversion claim, which sounded in tort, so the board could not consider it. The government argued that AECOM’s complaint failed to state a claim,

The board issued an opinion denying  the government’s motion dismiss for lack of jurisdiction. The board found that AECOM had sufficiently pleaded the existence of a contract and a plausible claim for tortious breach of the contract. The board now ruled on whether AECOM’s complaint failed to state a claim.

In its complaint, AECOM alleged that the government breached the contract by converting AECOMs’ designs without compensation. The government argued that it was allowed to keep the designs under FAR 4.803(a)(10), which allows the government to retain proposal materials.

The board, however, found that the contract had a separate clause that stated the government could only retain designs if it elected to exercise an option to purchase the designs and to pay the contractor appropriate consideration.  In light of this clause, AECOM had alleged facts that plausibly suggested the government owed the company money for the designs.

AECOM is represented by Manju Gupta, William D. Edwards, Jonathan R. King of Ulmer & Berne LLP. The government is represented by Micheal Goodman, Karen L. King Vanek, and Margaret P. Simmons of the Army Corps of Engineers.

ASBCA - AECOM Technical Services