Government’s partial motion to dismiss is denied, where the court found the plaintiff had presented to the contracting officer its claims for breach of the implied duty of good faith and fair dealing and cardinal change. The government alleged the plaintiff’s claim had not alleged the government interfered with contract performance nor that the requirements had materially changed, but the court found the claim addressed the deteriorating security conditions in Afghanistan, the military’s advice to the plaintiff to arm its personnel, and the military’s inability to provide armed escorts every time they were required.
In a suit before the Court of Federal Claims, Planate Management Group LLC argued the Army breached its contract to provide professional support services throughout Afghanistan by failing to reimburse Planate for the cost of arming its personnel with personal protection weapons. Plaintiff pled five alternative counts for relief, and sought damages of $84,864.85, attorney’s fees, costs, and prejudgment and post-judgment interest.
In this portion of proceedings, the government moved to dismiss two counts for lack of subject matter jurisdiction, and to merge two counts.
As part of contract performance, Planate personnel were embedded within military forces and were engaged in both field and office work. The military provided transportation for Planate personnel from their main work site to other locations, but Planate was expected to provide its own personal protective equipment and cell phones, and other equipment necessary to perform the services.
Prior to the start of performance, the military unit within which Planate was embedded was subject to an attack, and the chief of staff state his desire for all contractor personnel to be armed. The contracting officer’s representative recommended that Planate arm its staff, but no written agreement was signed. Further, when traveling with military personnel, Planate’s employees were required to assist with the defense of any vehicle that became disabled. Due to the continuing deterioration of safety conditions, the unit commander issued a directive requiring all personnel to travel in pairs, abide by a curfew, and limit travel. While active duty military personnel initially provided the required additional protection, Planate’s personnel did not have military escorts or other security personnel with them at all times.
At this time, Planate began discussions with the contracting officer regarding arming its in-theater staff, and when the contract’s first option year was exercised, it was modified to include authorized weapons for Planate personnel, which were to be provided by the military on an as-available basis. However, the contract modification did not include a line item for plaintiff to procure and manage weapons for its team despite Planate’s understanding that it would. The CO expressed a willingness to negotiate a weapons modification that included reimbursement for the cost of arming personnel but stated that approval from a higher authority was necessary because weapons were not within the scope of the contract.
Planate later provided guns and ancillary equipment to each of its in-theater personnel and submitted a request for equitable adjustment of $76,574.00 due to additional and unexpected costs related to personnel self-defense. Planate explained that the costs were not foreseeable because weapons were not authorized during original proposal development. However, there was no evidence the CO ever responded. A second REA followed, which was denied.
Planate submitted a formal claim, arguing that the change in the security situation represented a constructive change under the contract, as the true security risks were not understood by the government, reflected in the solicitation, nor communicated to offerors. Planate argued this constituted a mutual mistake of the parties. The CO denied the claim, explaining that Planate had not submitted its request to arm its personnel to the CO, was not so directed by any government employee with authority to do so, and had not contractual requirement or authorization to do so. The CO also argued Planate made no effort to raise the supposedly changed security arrangements nor communicate that the alleged changes compelled the company to arm its employees. According to the CO, the costs could have been avoided had Planate raised them properly when the issue was timely. This complaint followed.
In its complaint, Planate asserted five counts for relief, including an appeal of the final decision, breach of contract, breach of the covenant of good faith and fair dealing, constructive change, and cardinal change. Planate seeks $84,864.85 in damages plus attorney fees, costs, and prejudgment and postjudgment interest.
The government moved to dismiss Count III (breach of the covenant of good faith and fair dealing) and Count V (cardinal change) for lack of jurisdiction, arguing that they were not submitted to the CO. The government also moved to merge the appeal of the COFD and breach of contract claim.
The court denied the government’s motion to dismiss Counts III and V, concluding that these claims were before the contracting officer. The court noted that the implied duty of good faith and fair dealing is also referred o as the implied duty not to hinder and the implied duty to cooperate. Planate argued the government breached these duties by requiring Planate to arm its personnel and then failing to provide reimbursement. The government argued this complaint relied on a separate legal theory, as Planate did not allege to the CO that the government interfered with contract performance.
However, the court disagreed, noting that Planate’s certified claim highlighted the various force protection directives issued during contract performance and explained that because the military did not always have active duty personnel available to provide armed escorts, it was required to arm its own personnel to comply with the force protection directives. Planate’s certified claim also explicitly referred, in its certified claim the CO’s denial of its REA, as well as the contract modification in which it received authorization to arm its personnel but not the funds to do so. Therefore, the court held that Planate’s contention that defendant did not—by failure and later outright refusal—compensate plaintiff for arming its personnel was before the contracting officer.
The court also agreed that Planate had presented its claim of cardinal change to the CO. The government argued that the certified claim did not discuss an important aspect of a cardinal change: that the change be ‘materially different’ from what was bargained for in the contract. However, the court noted Planate discussed the change in the security environment, the advice of the unit chief of staff that it should arm its personnel, and the increased costs. The court found this narrative presented the cardinal change claim to the CO.
Finally, Planate argued against the government’s motion to merge Counts I and II, but the court found the theories and factual bases were the same and, if proven, would result in the same relief.
Planate Management Group is represented by Ryan C. Berry. The government is represented by Sean L. King, Department of Justice.
