Free Motion for Miscellaneous Relief - District Court of Federal Claims - federal

Case 1:06-cv-00377-GWM

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS ROME RESEARCH CORPORATION, Plaintiff, v. THE UNITED STATES Defendant. ) ) ) ) ) ) No. 06-377C ) (Judge George W. Miller) ) ) )

DEFENDANT'S MOTION TO FILE INDIVIDUAL STATUS REPORT IN LIEU OF JOINT STATUS REPORT Defendant, the United States, respectfully requests leave to file the individual status report, incorporated below, in lieu of the joint status report due May 8, 2007. The reason for

requesting this relief is that we have been advised by plaintiff's counsel that the parties' views are too far apart to enable them to file a joint status report. Because plaintiff has

decided to file an individual status report instead of a joint status report, the Government must request the same relief. Accordingly, we respectfully request that the Court accept for filing the status report incorporated below. DEFENDANT'S STATUS REPORT Defendant, the United States, respectfully submits the following status report. The Court has directed the parties to report upon the results of the DCAA audit. Although the audit has been

performed, a final audit report has not yet been approved or issued by DCAA. It is the Government's understanding that

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plaintiff, Rome Research Corp. ("RRC"), and its counsel, were actively involved in the audit process. Although a final audit

report has not been issued, the auditor's proposed findings have been provided to Government counsel. These are subject to

revision during the DCAA approval process. The most significant proposed finding relates to the health & welfare issue. The auditor has questioned a significant The auditor found

portion of that claim, which is for $476,007.

that, in preparing its bid, RRC's estimates for medical and dental costs were unrealistically high, and exceeded the actual costs later incurred. This raises an issue of whether there has

been a violation of the warranty requirement in FAR 52.222-43(b). That provision provides: "The Contractor warrants that the prices in this contract do not include any allowance for any contingency to cover increased costs for which adjustment is provided under the [price adjustment] clause." Because the auditor has raised this issue, the Government must further investigate the underlying factual circumstances, as well as the legal principles involved, before it will be in a position to settle this case. This can take place in the course The

of settlement negotiations, through discovery, or both.

Government understands that it is plaintiff's position that, as a matter of law, the auditor's concerns are unfounded. The

Government will consider RRC's arguments in that regard when reviewing the issue raised by the auditor. The Government still

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intends to engage in further settlement negotiations with RRC and believes that the issue raised by the auditor may factor into those negotiations. Because the health and welfare benefits claim is such a substantial portion of RRC's case, neither a global settlement nor a settlement of the health and welfare claim can be completed until the issue raised by the auditor is resolved, or at least further explored in discussions between counsel. will work diligently to try to resolve the issue. The Government The auditor

also has raised other issues, most significantly regarding RRC's Guam Gross Receipts Tax claim. Apart from entitlement, the

auditor has questioned the quantum sought by RRC in connection with this claim. Respectfully submitted, PETER D. KEISLER Assistant Attorney General JEANNE E. DAVIDSON Director

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s/Bryant G. Snee by SJG BRYANT G. SNEE Deputy Director s/Richard P. Schroeder RICHARD P. SCHROEDER Trial Attorney Commercial Litigation Branch Civil Division U.S. Department of Justice Attn: Classification Unit Eighth Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 305-7788 Fax: (202) 353-7988 Attorneys for Defendant May 8, 2007

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CERTIFICATE OF FILING I hereby certify under penalty of perjury that on this 8 day of May 2007, "DEFENDANT'S MOTION TO FILE INDIVIDUAL STATUS REPORT IN LIEU OF JOINT STATUS REPORT," and "DEFENDANT'S STATUS REPORT," were filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.
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s/Richard P. Schroeder