Government’s motion to dismiss for lack of subject matter jurisdiction is, for the most part, denied. The government alleged the contractor’s certified claim asserted two separate claims but did not state a sum certain for each claim. The board, however, found that the two theories arose from the same operative facts and thus were not separate claims that required separate sums. The government also alleged that the contractor had asserted a new claim for commercial impracticability on appeal. The board agreed, noting that nothing in the underlying claim put the government on notice of the impracticability claim. What’s more, the damages sought were only 20 percent of contract value, which is not the type of senseless expense required for a commercial impracticability claim. The board granted the government’s motion with respect to the impracticability claim.
Background
ECC International had a contract with the Army Corps of Engineers for construction of a military police school. ECC submitted a claim alleging the Corps had breached its warranty of specification and the duty of good faith and fair dealing by requiring 365 project timeline when the agency knew the project would take 600 days.
The Corps denied the claim, and ECC appealed to the ASBCA. In its complaint on appeal, ECC reasserted its theories of breach of warranty of specification of beach of duty of good faith. But ECC also added additional theories for commercial impactability and superior knowledge.
The Corps moved to dismiss the appeal for lack of subject matter jurisdiction. The Corps argued that in its underlying claim, ECC had submitted two separate claims—warranty and good faith—that each relied on different operative facts. But, the Corps reasoned, ECC had not submitted a sum certain for each separate claim, so the board lacked jurisdiction over the appeal.
The Corps also argued that ECC had submitted new claims on appeal, i.e,, commercial impracticability and superior knowledge. Because those claims had not been presented to the contracting officer, the board could not consider them on appeal.
Legal Analysis
- ECC’s Certified Claim Asserted Two Theories But Only One Claim – The board found that while ECC’s certified claim contained two legal theories for breach of warranty and breach of duty of good faith, it only asserted one claim. Both of those claims relied on the same operative facts concerning the government’s pre-award knowledge and post-award actions. The board had jurisdiction over those two legal theories.
- Commercial Impracticability Claim Was New Claim Asserted on Appeal – The board was less receptive to ECC’s claim for commercial impracticability. To show impracticability, a contractor must demonstrate that a requirement is so expensive it’s commercially senseless. ECC’s certified claim did not allege any added expense was commercially senseless. Indeed, the claimed damages were only 20 percent of the contract, which does not approach the level of expense required to demonstrate senselessness.
- Superior Knowledge Theory Relied on the Same Facts Asserted in Underlying Claim – Lastly, the board found that the facts underlying the new superior knowledge were the same facts that ECC relied on for its breach of warranty and breach of good faith theories. As a result, this was not a new claim. The board had jurisdiction to consider it.
ECC is represented by R. Dale Holmes and Amy M. Kirby of Cohen Seglias Pallas Greenhall & Furman PC. The government is represented by Michael P. Goodman, Sarah L. Hinkle, Matthew Tilghman, Micheal E. Taccino, and Kathryn G. Morris of the Army Corps of Engineers.
