Agency’s motion to dismiss a contractor’s complaint is, for the most part, granted, where the court lacked jurisdiction over the contractor’s claims for wrongful termination, breach of contract, and breach of the duty of good faith and fair dealing because they were untimely or had not been presented to the contracting officer. The court also found the contractor failed to state a claim for various counts of differing site conditions, constructive change, and misrepresentation, because it could not demonstrate the agency had made assertions about the condition of soil in the area or that the agency had directed any additional work. Finally, the court denied the plaintiff’s motion to amend, finding that an amendment would be future given the other defects in the claim.
RMA Engineering S.A.R.L. had a contract with the Army to build training facilities for the Saudi Arabian National Guard in Riyadh. After several performance delays, the Army terminated the contract for default. RMA submitted a series of claims seeking an equitable adjustment for undisclosed conditions at the construction site, changes to the contract, and delays. The Army denied RMA’s claims and refused the company’s request to convert the termination for default into a termination for convenience.
RMA filed a 23 count complaint with the Court of Federal Claims, contending that the Army had wrongfully terminated and seeking damages for undisclosed conditions, changed circumstances, and misrepresentations. The Army moved to dismiss the complaint, arguing lack of jurisdiction and failure to state a claim. As part of responding to the Army’s motion to dismiss, RMA also moved for leave to amend its complaint.
The court first considered the Army’s claim that the court lacked jurisdiction over some of RMA’s claims. The Army argued the court lacked jurisdiction over RMA’s claim for wrongful termination of the contract because RMA did not file its complaint within twelve months of receiving the notice of termination. RMA argued that the notice of termination did not adequately advise the company of its appeal rights and thus did not trigger the limitations period.
The court agreed with the government. RMA’s complaint was three years too late, and the notice of default provided adequate information on how to appeal. The court further found that while the contracting officer had sent RMA SF 1436—a form used to propose settlement terms—that form was sent more than a year after RMA should have appealed the default, so the contracting officer no longer had authority to reconsider RMA’s termination.
The Army next alleged that the court lacked jurisdiction to hear RMA’s claims for delay, breach of contract, and breach of the duty of good faith and fair dealing because the company had not properly presented those claims to the agency before filing suit. Again, the court agreed with the government. RMA had not presented all the delays it asserted in court to the agency, and the company’s requests for equitable adjustment had not notified the Army that RMA was claiming either an express breach of the contract or interference with performance.
Two additional counts in RMA’s complaint alleged differing site conditions: one for the condition of the soil and one for a misidentified waterline. The Army claimed that these counts failed to state a claim. The court agreed with respect to the count concerning the soil condition, finding that (1) neither the contract nor the Army made any representations about the soil condition, and (2) that the soil was not materially different than what is normally encountered in Riyadh.
But the court found that the waterline count did state a differing site conditions claim. That count identified a contract drawing that showed the waterline in a definite location. RMA had relied on the drawing and then incurred costs to move the waterline when it turned out to be in a location different than shown in the drawing.
The Army also argued that fourteen other counts in the RMA’s complaint, which alleged various constructive changes to the contract, failed to state a claim. The court noted that a constructive change claim has two elements: (1) that the contractor performed work beyond that the contract requirements, and (2) that the additional work was ordered by the government. The court found RMA could not satisfy the second prong. None of the counts specified that the contracting officer ordered or ratified additional work. Rather the court found that all of these counts were conclusory, simply alleging that the government knew or should have known about the additional work.
RMA asserted two other counts alleging the Army had misrepresented that the company would be compensated for pre-award designs and that it would receive other, future contracts. The court, however, found that RMA did not allege that these representations had been made by anyone with the authority to bind the government. Thus, these counts did not state a claim.
RMA asserted a final count for post-termination costs, contending that it had incurred various costs following contract termination. Because the court had already determined that it lacked jurisdiction to consider the wrongful termination claim, it could not convert the termination for default into a termination for convenience. Accordingly, because a termination for convenience was precluded, RMA could not recover post-termination costs.
Lastly, the court considered RMA’s motion for leave to amend its complaint. While noting that leave to amend should be liberally granted, the court noted that an amendment will not be granted if it would be futile or prejudice the opposing party. The court determined that RMA’s proposed amended complaint did not allege material, new facts or remedy the deficiencies in the previous complaint. Accordingly, allowing the amendment would be futile. What’s more, the court noted given the passage of time and the acceptance of earlier amendments, accepting another amendment would simply result in undue delay and prejudice to the government.
The court granted the government’s motion to dismiss as to every count except for the single count on the misplaced waterline. The court denied RMA’s motion for leave to amend.
RMA Engineering S.A.R.L. is represented by John M. Manfredonia of Manfredonia Law Offices, LLC. The government is represented by Sean Siekkinen, Department of Justice.