Free Joint Preliminary Status Report - District Court of Federal Claims - federal

Case 1:06-cv-00377-GWM

Document 16

Filed 03/23/2007

Page 1 of 5

IN THE UNITED STATES COURT OF FEDERAL CLAIMS Washington, D.C. ROME RESEARCH CORPORATION, Plaintiff, v. THE UNITED STATES, Defendant. JOINT PRELIMINARY STATUS REPORT Pursuant to Appendix A, the parties hereby submit their Joint Preliminary Status Report. a. b. c. d. e. f. g. Plaintiff states that the Court has jurisdiction. The Government states that it currently is unaware of any reason why the Court would not possess jurisdiction. The case should not be consolidated with any other case. Trial should not be bifurcated. Further proceedings should not be deferred. Remand or suspension will not be sought. Additional parties will not be joined. The parties may file motions under Rule 56. The parties propose that they be provided an opportunity at the close of discovery to submit a proposed briefing schedule. However, either Plaintiff or the Government may seek summary judgment upon certain claims prior to the close of fact discovery. Plainitiff states that the relevant factual issues are (subject to modification following discovery): 1. Whether, and in what amount, Rome Research Corporation ("RRC") experienced actual increases in the cost of providing fringe benefits, increased gross receipts taxes, increased overtime expenses, and other increased costs alleged in the complaint? Whether the Parties established a course of dealing and/or course of performance in which the Government agreed, through the issuance of contract modifications to RRC and to other contractors, to grant any one or more of the aforementioned price adjustments? Whether RRC submitted one or more proposals seeking the award of No. 06-377C (Judge George W. Miller)

h.

2.

3.

-1-

Case 1:06-cv-00377-GWM

Document 16

Filed 03/23/2007

Page 2 of 5

Government contracts in reliance upon this course of dealing and/or course of performance? 4. Whether the Government and RRC were mistaken about a fact, i.e. a mutual mistake that a long-standing practice of permitting a price adjustment for increased fringe benefit costs, increased gross receipts taxes, increased overtime, and other increased costs alleged in the complaint? The Government agrees with the first factual issue identified by plaintiff, assuming for the sake of argument only, that plaintiff can prove entitlement. Assuming for the sake of argument only, that the other three issues identified by plaintiff present viable legal theories in this case, and without admitting that there is a genuine issue of material fact regarding those issues, because plaintiff has identified those issues, they may have to be litigated and, therefore, they are issues in this case. The Government adds the following issue: Whether under the contract at issue and applicable law, plaintiff may recover under the theories referred to in the second through fourth issues identified by plaintiff. The relevant legal issues are (subject to modification following discovery): 1. Whether RRC is entitled to a price adjustment under Federal Acquisition Regulation ("FAR") §52.222-43, the Fair Labor Standards Act and Service Contract Act ­ Price Adjustment (Multiple Year and Option Contracts) (May 1989) (the "SCA Price Adjustment clause") for the increase in the costs of providing certain fringe benefits in the option years of the contract at issue in this litigation? Whether the decision of Lear Siegler v. United States, 457 F.3d 1262 (Fed. Cir. 2006) requires the United States as a matter of law to provide an SCA price adjustment in the amount of $476,007 plus interest pursuant to the Contract Disputes Act for the increased costs of providing health & welfare, life insurance and accidental death & dismemberment insurance benefits? Whether an established course of dealing between the Government and a contractor, if proven, provides a basis for recovery in a claim for equitable adjustment. Whether RRC is entitled to an equitable adjustment of the contract at issue in this case where the Government did not grant a price adjustment for increased fringe benefit costs, increased gross receipts taxes, increased overtime, and other increased costs alleged in the complaint. Whether an alleged mistake of fact between the Government and RRC, i.e. a alleged mutual mistake that an alleged long-standing practice of permitting a price adjustment for increased fringe benefit costs, increased gross receipts taxes, increased overtime, and other increased costs alleged in the complaint, -2-

2.

3.

4.

5.

Case 1:06-cv-00377-GWM

Document 16

Filed 03/23/2007

Page 3 of 5

entitles RRC to reformation of the contract and damages for breach of any such reformed contract? 6. i. Whether, as a matter of law, plaintiff's mistake theory expressed in paragraph no. 5 immediately above, can form a basis for damages in this case?

On December 4, 2006, the Parties advised the Court that they had agreed to a proposed settlement that could be recommended to the authorized representative of the Attorney General that would resolve a substantial part of this case. This settlement has yet to be finalized because the Government determined that it was necessary to perform an audit of RRC's asserted costs. RRC has cooperated with the Defense Contracting Audit Agency's auditors, and the Parties understand that the audit is nearing completion. The Parties have been discussing the settlement of the remaining issues in dispute and have committed to continuing their dialogue and a settlement proposal recently was made and currently is pending. The parties may consider ADR if direct settlement negotiations prove unsuccessful.

i. j. k.

If the case is not settled or resolved on Rule 56 motions, the parties anticipate proceeding to trial. The parties do not request expedited trial scheduling. There are no special issues regarding electronic case management needs. There is no other information that needs to be brought to the court's attention at this time.

Proposed Discovery Plan Plaintiff proposes the following dates for discovery: · · · · · · Rule 26(a)(1) disclosures Rule 26(a)(2) disclosures Rule 26(a)(2)(c) rebuttal disclosures Last day to file discovery requests Last day to take depositions Close of Discovery -- April 13, 2007 -- June 1, 2007 -- June 15, 2007 -- May 15, 2007 -- July 13, 2007 -- July 13, 2007

The Government disagrees with plaintiff's proposal and proposes the following alternative discovery plan:

-3-

Case 1:06-cv-00377-GWM

Document 16

Filed 03/23/2007

Page 4 of 5

· · · ·

Rule 26(a)(1) disclosures Rule 26(a)(2) disclosures discovery. Rule 26(a)(2)(c) rebuttal disclosures disclosures. Fact Discovery Deadline

-- April 23, 2007 -- 60 days after the close of fact -- 30 days after the Rule 26(a)(2) -- March 21, 2008

Respectfully submitted,

Daniel B. Abrahams s/ PETER D. KEISLER Assistant Attorney General JEANNE E. DAVIDSON Director s/Bryant G. Snee Bryant G. Snee Deputy Director s/Richard P. Schroeder Richard Schroeder, Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit, 8th Floor 1100 L. Street, N.W. Washington, D.C. 20530 (202) 305-7788 Attorneys for Defendant Daniel B. Abrahams Epstein Becker & Green P.C. 1227 25th Street, N.W. Washington, D.C. 20037 (202) 861-0900 Facsimile: (202) 296-2882 Of Counsel: Howard A. Wolf-Rodda Epstein Becker & Green, P.C. 1227 25th Street, N.W., Suite 700 Washington, DC 20037 Telephone: (202) 861-0900 Facsimile: (202) 296-2882 Attorneys for Plaintiff Rome Research Corporation

-4-

Case 1:06-cv-00377-GWM

Document 16

Filed 03/23/2007

Page 5 of 5

CERTIFICATE OF SERVICE I hereby certify under penalty of perjury that on this 23rd day of March 2007, a copy of the foregoing "Joint Preliminary Status Report" was 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.

Daniel B. Abrahams s/ Daniel B. Abrahams

-5-