Government’s motion to dismiss an appeal for lack of jurisdiction is denied, where the dispute involved a task order issued under the appellant’s Federal Supply Schedule contract but not the terms and conditions of the FSS contract itself, and therefore GSA was not required to issue the final decision. The board also held that the Copyright Act’s Preemption Provision did not deprive it of jurisdiction to hear the appeal, which involved a claim the agency breached the terms of its contract by exceeding the number of software licenses it acquired.
immixTechnology Inc. appealed the Department of Interior’s denial of its claim that the Small Business Administration breached various software licensing terms in a task order issued by DOI under a General Services Administration Federal Supply Schedule contract. The agency moved to dismiss, arguing that immix’s complaint is a copyright infringement claim that is not subject to the board’s jurisdiction, and that the DOI CO was not authorized to issue a decision in a dispute involving the terms of an FSS contract.
DOI issued immix a task order for software licenses and support services, on behalf of the Small Business Administration. Shortly thereafter, SBA began planning an infrastructure update. As part of this effort, SBA engaged in discussions with immix’s software vendor, Software AG Government Solutions, to determine what software and maintenance SBA would need for the hardware refresh. These discussions led to Software AG submitting to SBA a budgetary cost proposal, which identified and priced those items.
The DOI CO explained these items were obtained via a modification to immix’s existing order, which incorporated a quote from immix. According to the CO, while immix’s quote contained the same items, it made no reference to Software AG’s budgetary cost proposal, specific processor core types or operating systems. The CO further stated that the items in the Immix quote were expressly identified as being licensed on a ‘CPU’ [central processing unit] basis.
Immix contested this interpretation of the modification. According to immix, SBA representatives admitted to exceeding the software licenses contained in this modification. When negotiations between the parties to resolve the matter failed, immix submitted its certified claim alleging that SBA exceeded the number of software licenses purchased and used the software on unlicensed servers, on an unlicensed operating system, and in unlicensed system environments. When the DOI CO denied the claim, immix appealed. 4
The agency moved to dismiss, arguing that CBCA lacked jurisdiction over the claim, which amounted to a copyright infringement dispute. DOI also argued the CO should have referred the matter to GSA for a final decision.
First, the board rejected the agency’s assertion that it lacked jurisdiction to hear the case. The board found nothing in the Copyright Act’s Preemption Provision to support this argument. The board held the Copyright Act does not preempt other federal rights-conferring statutes such as the Contract Disputes Act, which creates a statutory right for contractors to appeal the final decisions of contracting officers. Further, the Copyright Act could not preempt the CDA because Congress’ power to “preempt” a law is based on the Supremacy Clause of Article VI of the United States Constitution, and one federal statute does not preempt another.
Next, the board considered DOI’s assertion that the claim should have been reviewed by GSA for a final decision, because the dispute involved an FSS contract. Specifically, DOI asserted that the dispute pertained to the terms and conditions of the schedule contract, and therefore the CO was obligated to comply with GSA’s referral requirements. Under the provision cited by DOI, all disputes requiring interpretation of the schedule contract go to the schedule CO, even if those disputes also require interpretation of the order, or involve issues of performance under the order. Accordingly, the board would require a final decision of the cognizant GSA CO to maintain jurisdiction.
However, CBCA disagreed with the agency’s characterization of the dispute as involving interpretation of the underlying schedule contract. Further, once the agency made this assertion, immix submitted its claim to GSA for its decision. The GSA CO denied the claim, explaining that the items in dispute relate to DOI’s delivery order, not immixTechnology’s Schedule 70 contract.
CBCA held that the terms of the modification would guide the resolution of the appeal. The board found that the schedule contract is silent regarding the following issues at the core of the dispute: (1) the number of licenses granted to the ordering agency, (2) the environments in which the licenses allowed the software to be run, (3) the processor types covered by the licenses, and (4) the operating systems covered by the licenses. In contrast, the modification indicated the number of software licenses, the licensed environments, and restrictions on processor types. Accordingly, the board concluded that the license-conferring document was the modification.
A central issue in the dispute is whether the licenses granted to DOI/SBA are on a per-CPU or per-processor core basis. The modification defines CPU, processor core, and operating system, and how the software was licensed for deployment on certain operating systems. The schedule contract terms did not address whether the software was licensed for installation on a CPU or core processor basis.
The agency argued that immix’s references to provisions of the schedule contract in its claim were sufficient to require a final decision from GSA, but the board disagreed. The fact that immix included a provision from its schedule contract in its claim did not raise a jurisdictional issue, since the ordering agency can apply undisputed provisions of the schedule contract without referring the dispute to GSA. The board noted that the schedule contract is not irrelevant to the dispute, but explained that the actual terms of the schedule contract were not themselves in dispute.
immixTechnology Inc. is represented by Tenley A. Carp, Sara M. Lord, and Samuel M. Shapiro of Arnall Golden Gregory, LLP. The government is represented by Murphy H. Peterson, Jr., Office of the Solicitor, Department of the Interior; and Sam Q. Le, Office of General Counsel, Small Business Administration.
