Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 1 of 40
In the United States Court of Federal Claims
No. 04-718 C (E-Filed: December 30, 2004) _________________________________________ ) ) CW GOVERNMENT TRAVEL, INC., ) ) Plaintiff, ) ) v. ) ) THE UNITED STATES, ) ) Defendant. ) ) _________________________________________ ) Motion to Dismiss, RCFC 12(b)(1) and 12(b)(6); Summary Judgment, RCFC 56; Whether a "claim" and a "final decision" have been submitted under 41 U.S.C. § 605(a); Declaratory judgment interpreting contract terms; Anticipatory breach; Ambiguity of contract terms
Lars E. Anderson, Washington, DC, for plaintiff. Michael W. Robinson, Benjamin A. Winter, and Julia M. Kiraly, Washington, DC, of counsel. Lisa B. Donis, with whom were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and James M. Kinsella, Deputy Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, for defendant. OPINION AND ORDER HEWITT, Judge This contract case is before the court following oral argument on Defendant's Motion to Dismiss or, in the Alternative, Motion for Summary Judgment (Def.'s Mot.).1
In addition to defendant's motion, the court has before it Carlson's Response in Opposition to Defendant's Motion to Dismiss or, in the Alternative, Motion for Summary Judgment (Pl.'s Opp.), Defendant's Reply to Plaintiff's Response in Opposition to Our Motion to Dismiss or, in the Alternative, Motion for Summary Judgment (Def.'s Reply), Defendant's Proposed Findings of Uncontroverted Fact (Def.'s Facts), and Plaintiff's Counterstatement of
1
1
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 2 of 40
Plaintiff CW Government Travel, Inc. (Carlson) filed its complaint in this action on April 26, 2004, seeking a declaratory judgment that it is the exclusive provider of "`traditional' travel services" to fifty-four Military Entrance Processing Stations (MEPS) under four competitively-awarded, long-term travel management contracts (Contract(s)) with the Department of the Army (defendant). See Compl. at 12; id. at 2526, ¶¶ A, B. Carlson also asks this court to issue preliminary and permanent injunctions "ordering the Army not to transfer" MEPS travel service requirements to other contractors "so long as th[e] Contracts are in effect," id. at 26, ¶ C. For the following reasons defendant's motion is DENIED in its entirety. I. Background 2 A. Carlson's Contracts
On February 27, 2002, "following full and open competition," the United States Army's Surface Deployment and Distribution Command awarded Carlson five contracts to provide "traditional travel services" for the Army in five Department of Defense (DoD) Defense Travel Regions (DTRs). Compl. at 3, ¶ 4; Def.'s Facts at 1, ¶ 1. "The basic terms of these contracts are identical; the location of requirements and prices are different." Def.'s Mot. at 3. Four of the five contracts contain clauses requiring Carlson to provide traditional travel services to "a total of 54 Military Entrance Processing [Stations]." Def.'s Facts at 1, ¶ 2; see also Compl. at 2. Each Contract contains "exclusivity clauses," which provide: 1.7.1. The Contractor has the exclusive right to provide all official commercial travel services at all sites covered in this contract. 1.7.2. No person, private organization, or commercial travel service, including competing travel agencies, direct suppliers, or travel software vendors, will be permitted direct access to areas under DoD control to advertise, sell, provide or promote official travel services to those sites, unless the Contractor has first declined to provide the particular service or
Facts and Proposed Additional Facts (Pl.'s Facts). Unless otherwise noted, facts cited to the filings of only one party do not appear to be disputed in connection with the pending motion. 2
2
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 3 of 40
the Contractor's levels of service are determined by the Contracting Officer to be unresponsive and/or unsatisfactory. Pl.'s Opp., App. Ex. 1 (Contract) at 26, ¶ 1.7.1.2. Each Contract also permits defendant to delete or add work sites to that Contract's Scope of Work provision, if the revision is prompted by military base closures and/or realignments: 1.1.1. Due to projected base closures and realignments, the Government cannot forecast how the revenue for official travel will be affected. As site(s) are identified for addition or deletion, the Contracting Officer will issue a modification to the contract. A 60-day written notice will be provided to the contractor. Contract at 22, ¶ 1.1.1. See generally Defense Base Realignment and Closure Act of 1990 (BRAC), 10 U.S.C. § 2687 (2000); see also Transcript of Nov. 22, 2004 Oral Argument (Tr.) at 45:1218 (statement of plaintiff's counsel that paragraph 1.1.1 permits deletion of work "in a BRAC situation"); id. at 60:89 (statement of defendant's counsel that "1.1.1 deals only with base closures"). "The contracts additionally incorporate, by reference, the standard contract clause for commercial items (FAR [§] 52.212-4)[,] . . . [which] contains a provision allowing termination of the contract for the Government's [sole] convenience." Def.'s Facts at 2, ¶ 6. Carlson's Contracts provide for a base term of one year, which ran from October 1, 2002 through September 30, 2003, followed by eight six-month option periods which, if all exercised, would extend the Contracts through September 30, 2007. Def.'s Facts at 2, ¶ 4; Pl.'s Opp. at 7. In addition, "[t]he [C]ontracts include the standard `Option to Extend the Term of the Contract' clause, FAR § 52.217-9, that permits, but does not require, the Government to exercise options." Def.'s Mot. at 4. To date, defendant has exercised options "for all of Carlson's contracts, thereby extending performance through March 31, 2005." Pl.'s Facts at 3, ¶ 4. Although defendant need not exercise its next option until March 1, 2005, see Tr. at 50:2551:2, Carlson is "absolute[ly] certain[]" that defendant is "going to exercise the next six-month option and extend Carlson's [C]ontracts from 1 April to 30 September [2005]." 3 Id. at 36:1922; cf. id. at 58:1215 (statement of
According to Carlson, defendant has "no alternative" but to exercise the next option: "There are hundreds and hundreds of military installations covered by these [Contracts] . . . and [defendant] can't not provide travel management services for all those facilities." Tr. at 50:1821. Carlson claims that it would take "at least a year" to replace the existing Contracts; therefore, "[o]f necessity, they're going to exercise the option to extend Carlson's contracts." Id. at 51:811. See also id. at 36:2337:8 ("Virtually they have no other option . . . because these 3
3
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 4 of 40
defendant's counsel that "[i]t looks like the government may exercise CW's [next] option. Something else could happen in the meantime to . . . cause the government not to exercise the option. We don't know what will happen."). 1. The "Traditional Travel Services" Requirement
Carlson's Contracts require it to provide "traditional travel services" to five Army DTRs. See generally Contract at 2226. The term, "traditional travel services," id. at 26, ¶ 2, refers to "commercial travel services such as reservations and ticketing for all modes of travel, Government and commercial lodging reservations, rental car arrangements, ticket delivery, and support services . . . through conventional means," such as a travel agent, rather than through an automated or software-based travel management system. CW Gov't Travel, Inc. v. United States, 61 Fed. Cl. 559, 563 (2004) (internal quotation and footnote omitted); see also Contract at 33, ¶ 7 (providing a similar, but more detailed, definition of "Commercial Travel Services"). Accordingly, Carlson is required to "equip and staff [contracted] travel office (CTO)4 facilities at Government locations, and/or provide centralized reservation centers staffed with travel counselors thoroughly familiar with Government travel regulations and policies." Compl. at 7, ¶ 30; see also Contract at 23, ¶ 1.3.1 (requiring Carlson to employ "capable and qualified" personnel). Under the Contracts, Carlson's travel counselors must personally handle all aspects of official government travel, to include (1) making confirmed airline, rental car and lodging reservations that comply with government programs and discounts, Compl. at 78, ¶¶ 3136; (2) providing advice to travelers concerning their itineraries, expenses, and any penalties or travel restrictions, id. at 8, ¶¶ 37, 39, 41; and (3) issuing to the government reports that reconcile travel billing statements and detail the "travel performed," id. at 8, ¶¶ 4345. See generally Contract at 2633, ¶¶ 2.13.24, 56.2 (describing the "traditional travel services" contemplated by Carlson's Contracts). 2. The Defense Travel System Common User Interface
At the time Carlson's traditional travel services Contracts were drafted, DoD "[wa]s acquiring under a separate contract a Defense Travel System [(DTS)] software contracts are providing [essential] travel services for hundreds of military bases. . . . We know they're going to exercise that option and we have no doubt that if the contracting officer were brought before you, she would tell you that yes, right now, we fully intend and know we have to exercise those options to extend Carlson's [Contracts]."). Contracted Travel Offices (CTOs) "provid[e] commercial travel services for a DoD/Government activity and eligible patrons under the contract." Contract at 33, ¶ 7. 4
4
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 5 of 40
application that uses a Common User Interface (CUI) that will provide connectivity to commercial travel offices." Contract at 3132, ¶ 3.25. The contract to develop the "DTS CUI," which was awarded in 1998, Def.'s Mot. at 2, n.1, has been the subject of litigation.5 When it becomes fully operational, the DTS CUI will enable DoD travelers "to directly access the information related to airline flights, hotels, and car rentals, and to make . . . reservations . . ., tasks currently being done by the CTOs using the traditional methods." AirTrak Travel, B-292,101, B-292,101.2, B-292,101.3, B-292,101.4, B292,101.5, 2003 WL 21499653, at *3 (Comp. Gen. June 30, 2003) (GAO Bid Protest Decision); see also Tr. at 7:1415 (statement of defendant's counsel that "[t]he goal [of the DTS CUI] is to have all of the military be able to get its travel requests from their desktop computers"). "The Government has yet to implement a fully functional DTS [CUI]"; however, "deployment has begun of a limited capability DTS [CUI]." Pl.'s Opp. at 8. During oral argument, defendant's counsel noted that Carlson's "[C]ontract was entered into under the shadow of this DTS [CUI] system." Tr. at 8:1617; see also id. at 30:1618 (statement of plaintiff's counsel that "[a]t the same time [the Contracts were awarded] there was . . . a contract to develop the automated system known as DTS."). This appears to be confirmed by certain provisions of the Contracts themselves. For example, paragraph 3.25 provides notice that the DTS CUI is being deployed worldwide for all DoD travelers and may be deployed during the performance period of this contract. The award of [this contract] . . . and the CUI deployment are independent efforts and will most likely not
In CW Government Travel, Inc. v. United States, 61 Fed. Cl. 559 (2004), the court evaluated a number of post-award modifications made by the parties to the 1998 DTS CUI contract. Id. at 56970. The court determined that a modification adding traditional travel service requirements effectuated a cardinal change to the original contract, and concluded that the agency's failure to issue a competitive solicitation for these newly-added traditional travel services violated the "free and open competition" requirement in the Competition in Contracting Act (CICA), 41 U.S.C. § 253(a)(1)(A) (2000). 61 Fed. Cl. at 574. Accordingly, the court granted plaintiff's request for a permanent injunction enjoining performance of traditional travel services and ordered the agency to recompete the work. Id. at 576. However, the court also determined that plaintiff was not entitled to injunctive relief on its claim that contracting agency violated CICA by failing to issue a new solicitation when it changed the contract from firm fixedprice to cost reimbursement because the harm to the government and to the public interest resulting from further delays to the deployment of the DTS CUI would outweigh any injury to the plaintiff. Id. at 57879. 5
5
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 6 of 40
occur on the same timeline. Because the CUI may be deployed to locations included in this contract, the Government reserves the right to negotiate, under this contract, CTO connectivity to the [DTS] common CUI. Contract at 32, ¶ 3.25. The development of the DTS CUI also appears to be contemplated by the Contracts' options clause, which specifically discusses the impact of the DTS CUI deployment on Carlson's traditional travel services Contracts: 1.1.1.2. The Army/other DoD agencies may exercise options included within the contract. However, if during the life of the contract, the DoD implements the Defense Travel System (DTS) and is able to provide the Army/other DoD agencies with travel services under the new system, some or all options may not be exercised under the contract resulting from this solicitation. Id. at 22, ¶ 1.1.1.2. The parties agree that the term, "DTS" in paragraph 1.1.1.2 refers to the DTS CUI. See Tr. at 8:1620 (statement of defendant's counsel that "it would have been impossible for the government to enter into a contract without informing a contractor that [the DTS] was out there. So this was very specific language saying that the government may exercise options, but please be advised that there's something else out there."); id. at 64:1517 (statement of plaintiff's counsel that "[t]he reference to DTS [in paragraph 1.1.1.2] . . . only meant the automated system"). Although the parties disagree about the extent to which the DTS CUI must be implemented to permit defendant not to exercise an option, both parties acknowledge that defendant's non-exercise of an option was contemplated only in conjunction with some level of deployment of the DTS CUI. Compare Pl.'s Opp. at 8 ("At the time Carlson's four contracts were awarded, all parties understood and agreed that the phrase `DoD implements the Defense Travel System (DTS)' meant the implementation of a fully functional, end-to-end travel management system to perform all of DoD's travel services electronically."), with Def.'s Reply at 3 ("[T]he clause is clear upon its face that the Army `may' exercise options and may choose not to exercise some options so that it could transfer some requirements in the event DTS was operational."). Section 1.6 of the Contracts, titled "Transition Plan (Phase-in/Phase-[o]ut)," see generally Contract at 2425, states that it is designed "to ensure there is no break in service during the transition between [Carlson] and any previous or successor Contractor during [the] phase in and phase out of travel operations" id. at 24, ¶ 1.6.1. In contrast to paragraphs 1.1.1.2, and 3.25, the provisions in section 1.6 do not specifically refer to the implementation of the "DTS." For example, paragraph 1.6.7 provides: 6
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 7 of 40
1.6.7. At a future date a DOD travel services contract(s) will be awarded replacing this contract and all other Service/Agency existing travel service contracts. Once the DOD travel services contract is awarded all DOD sites will transition in accordance with the implementation dates to the DOD travel services contract. Contract at 25, ¶ 1.6.7. Although the provisions in section 1.6 do not refer explicitly to the DTS, defendant itself interprets them as provisions that could come into play during a transition to a DTS CUI travel services contract. Def.'s Mot. at 45 (referring to paragraphs 1.1.1, 1.1.1.2, 1.6.7, and 1.6.8 as "special clauses . . . [that] were included to facilitate a smooth transition of requirements between Army and . . . [DTS] requirements"); cf. Pl.'s Opp. at 36 n.20 (conceding that paragraph 1.6.7 is not "limited to the meaning of `DTS' in Section 1.1.1.2," and "recogniz[ing] that . . . new, global DoD travel service contracts may necessarily have to be awarded well before the DTS is fully functional"). The only provision in section 1.6 that does not expressly or by implication refer to a transition of work to another contractor is paragraph 1.6.8, which provides: 1.6.8. At any time after the base period of this contract, with a 90-day notice from the Contracting Officer to the Contractor, the Government may identify any/or all workload in th[e] contract[s] to be deleted. Id. at 25, ¶ 1.6.8. 3. The MEPS Travel Requirements
The four Contracts at issue contain clauses requiring Carlson to provide traditional travel services at "a total of 54 Military Entrance Processing [Stations]." Def.'s Facts at 1, ¶ 2; see also Compl. at 2. MEPS facilities process new recruits into the armed services, Pl.'s Opp. at 6, and Carlson's Contracts require it to maintain the capacity "to support over 3500 MEPS recruits per year." Contract at 29, ¶ 2.1.29. According to Carlson, the 54 MEPS sites comprise "[$]35 to $40 million a year in travel . . . [out of] close to over $400 million a year [gross] in the four contracts." Tr. at 31:23, 89. Carlson argues that providing MEPS travel services is quite labor-intensive. "[U]nlike many DoD travelers, [MEPS recruits] show up . . . one . . . morning. If they pass their physical[s], they get on a plane that afternoon, in a large group, to go to a boot camp for one of the services." Tr. at 53:19, 2325. The unique nature of MEPS travel appears to be acknowledged by Carlson's Contracts, which provide: "The Contractor must convey . . . [its] ability to deal with last minute changes, last minute recruits, last 7
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 8 of 40
minute passenger substitutions and [its] flexibility in dealing with fast moving changes." Contract at 29, ¶ 2.1.29. "At least 95% of MEPS travel is group travel," Pl.'s Opp. at 7, which cannot be performed using an automated system like the DTS CUI. See Tr. at 53:2122 (statement of plaintiff's counsel); cf. Airtrak Travel, 2003 WL 21499653, at *16 (discussing previous solicitation for MEPS travel services, in which DoD representatives "advised offerors that 95 percent of travel at the MEPS would constitute group travel"). Therefore, "[a]ll the MEPS travel services require extensive personal effort of [Carlson's] Travel Counselors." Compl. at 9, ¶ 47. See also id. ("In the case of MEPS, . . . the most timeconsuming efforts are negotiating directly with air carriers to arrange for group travel of up to 50 or more recruits at special rates and restricted service. Such group travel cannot be booked via the [airlines'] automated Global Distribution System[] . . . used for individuals or small groups (nine or less)."). According to Carlson, "the Government has stated that the DTS will not be functional and capable of facilitating MEPS travel until Fiscal Year 2006 . . . at the earliest." Pl.'s Opp. at 8 (footnote omitted). This representation is consistent with testimony offered by DoD representatives in a GAO bid protest action concerning "a small business set-aside to acquire official travel management" services for MEPS facilities. AirTrak Travel, 2003 WL 21499653, at *3. In that proceeding, officials gave varying testimony on whether the DTS would accomplish MEPS travel, only definitively representing that the DTS will automate some aspects of the DoD travel process at the MEPS, such as reconciliation of accounts. While the agency expresses optimism that the DTS will eventually be fully utilized for the MEPS locations, it has set no dates for the deployment and admits that there are obstacles to achieving this goal. Id. at *16. Discussing the gradual deployment of the DTS CUI, DoD officials testified that, "with regard to MEPS locations . . . deployment of the DTS may not occur at all." Id. at *15. B. The MEPS Travel Solicitation and Carlson's Correspondence with its Contracting Officer
In February 2003, the Department of the Army, Information Technology, ECommerce and Commercial Contracting Center (ITEC4) issued a solicitation set-aside for small businesses to provide DTS CUI travel management services to eighty-nine military sites, AirTrak Travel, 2003 WL 21499653, at **1, 3 (footnote omitted), including "most of the MEPS locations in Carlson's . . . Contracts," Pl.'s Facts at 7, ¶ 8. The solicitation 8
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 9 of 40
was cancelled following a GAO bid protest decision,6 see generally AirTrak Travel, 2003 WL 21499653; "[h]owever, the Defense Travel System Program Management Office ("DTS PMO"), which sponsored the procurement, and ITEC4 . . . issued public statements to the industry to the effect that they intended to promptly reissue the solicitation for the same MEPS travel management service requirements." Pl.'s Facts at 7, ¶ 8. This proved to be the case. On October 8, 2003, Carlson learned that the DTS PMO and ITEC4 had "publicly announce[d] their intention to reissue such a small business set-aside Solicitation that include[d] the travel requirements for [all of] the MEPS sites covered by [Carlson]'s DTR Contracts." Pl.'s Opp., App. Ex. 3 (letter from plaintiff to Contracting Officer, Jackie Robinson-Burnette (CO or Contracting Officer), of Oct. 8, 2003 (Pl.'s First Letter)), at 1. 1. Carlson's First Letter to the Contracting Officer
Immediately upon learning about the proposed MEPS set-aside procurement, Carlson wrote a letter to its Contracting Officer, see generally id., with the subject line, "Improper Removal of Work Associated with MEPS in [the Contracts]; Request for a Contracting Officer's Final Decision," id. at 1. Quoting the exclusivity clauses in its Contracts, id. at 1 (quoting Contract at 26, ¶¶ 1.7.1.2), Carlson contended that the impending MEPS procurement interfered with its rights under those provisions:
6
The solicitation at issue in Airtrak contemplated the award of a fixed-price contract for
MEPS travel services and required offerors to utilize the nascent DTS CUI program to perform all non-traditional travel services under the resulting contract. 2003 WL 21399653, at *4. Prior to the closing date, several protestors balked at the fixed-price requirement and argued that this
requirement shifted all risks concerning uncertainties with the DTS CUI to the contractor. Id. at *6. Some of these protestors chose to submit proposals; others did not. Id. Responding to the protestors' concerns, DoD issued an amendment to the solicitation authorizing the contractor to file an equitable adjustment claim if the DTS CUI did not perform as expected. Id. at *13. However, DoD did not re-open the competition after issuing this amendment. Id. at *6. As a result, nonofferor protestors alleged that they improperly were excluded from the competition because they would have submitted offers under the revised, less risky, solicitation. Id. at *14. The GAO conceded that "a procurement requiring the use of developmental software poses risks for contractors," id. at *10, but determined that the initial solicitation in this case did not expose offerors to undue or unacceptable risks, id. at *11. However, the GAO determined that the amendment effectuated a "fundamental change[]" to the original solicitation because it "significantly alleviate[d] the risks associated with the DTS," and concluded that "the agency's failure to reopen the competition" after the amendment issued "prejudice[d] . . . the non-offeror protestors." Id. at *14. Concluding that the solicitation should have been reopened to ensure that the agency benefited from maximum competition and to alleviate the prejudice to non-offeror protestors, the GAO sustained the protest. Id. at **14, 17.
9
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 10 of 40
It is CWGT's position that so long as the DTR Contracts are in effect, CWGT is the exclusive provider of travel services to the MEPS sites . . ., and any transfer of that travel service business to another contractor, small business or otherwise, would constitute a breach of CWGT's . . . Contracts. Id. at 2. Stating that "Section 1.1.1.2 . . . provides that if the [DoD] . . . implements the [DTS] . . . and is able to provide the Army/other DoD agencies with [end-to-end] travel services under the new system[,] . . . then some of the DTR Contract options may not be exercised," Carlson argued that "this does not give the Government the right to remove significant travel service requirements piecemeal" from the Contracts. Id. Carlson cited the "well known" fact that "travel services required by MEPS cannot be provided by DTS CUI," and argued that, as a result "the award of other travel service contracts by or on behalf of the DTS PMO cannot justify [the] removal [of] or transfer of the MEPS travel requirements" from the Contracts." Id. Carlson asked the Contracting Officer to "confirm" its position that the [MEPS] travel requirements . . . will continue to be performed by [Carlson] throughout the total contract period[,] . . . including all options that are exercised by the Government. In other words, so long as a DTR Contract remains in effect, none of the [MEPS] travel requirements . . . may be transferred to any other contractor. Id. The letter concluded with a request that the Contracting Officer "promptly issue a Final Decision pursuant to the Contract Disputes Act of 1978" (CDA) if she determined "that the travel requirements of the MEPS sites covered by the . . . Contracts may be transferred to another contractor, including pursuant to a small business set-aside." Id. On October 9, 2003, one day after Carlson sent this letter, ITEC4 issued a draft solicitation for a small business set-aside containing "the travel requirements for 63 MEPS locations, including the 54 MEPS locations contained in Carlson's . . . Contracts." Pl.'s Facts at 1718, ¶ 11. 2. The Contracting Officer's Response to Carlson's First Letter
The Contracting Officer responded to Carlson's letter on October 17, 2003. Pl.'s Opp., App. Ex. 4 (CO's First Resp.). Stating that there were "no plans to delete the 10
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 11 of 40
MEPS travel service requirements from [Carlson's] contracts," the Contracting Officer "[could] not promise that the MEPS requirements never [would] be removed." Id. The Contracting Officer stated that paragraph 1.6.7 "provide[s] for the transition of travel services in accordance with [the] implementation dates of future DOD travel services contracts," and noted that the Contracts contained both the "standard termination for convenience clause[]" and an option clause, which may not be exercised in the future. Id. The letter concluded: I also cannot provide a Final Decision on this matter pursuant to the [CDA]. I do not know whether these MEPS requirements ever will be deleted from these contracts or (if so) what the circumstances of such a removal of work may be. The [CDA] does not contemplate contracting officer decisions for hypothetical and speculative situations. Id. 3. Carlson's Second Letter to the Contracting Officer
On November 3, 2003, Carlson responded to the Contracting Officer's letter. Pl.'s Opp., App. Ex. 5 (Pl.'s Second Letter), at 1. Noting that a draft MEPS solicitation had been issued, Carlson argued that its "request was not in regard to any hypothetical or speculative situations." Id. Carlson stated that it was not asking for a "guarantee" that the government would not exercise its right to terminate the contract for convenience, but claimed that "if such a partial termination for convenience was done . . . to transfer the [MEPS] requirements to another contractor, that would not be a good faith exercise of such a termination for convenience," and would either constitute a material breach of the contract, or entitle Carlson to a "very substantial" equitable adjustment. Id. Restating its understanding of the exclusivity clauses, Carlson asked for a "Final Decision" that "confirm[ed] this fundamental contractual right, particularly in light of contrary action by ITEC4 and the DTS PMO." Id. at 12. Carlson advised that it would consider a "response similar to [the Contracting Officer's] letter of October 17, 2003," to be "an adverse Final Decision and [would] proceed accordingly." Id. at 2. 4. Carlson's Third Letter to the Contracting Officer
The Contracting Officer did not immediately reply to Carlson's second letter. However, in letters dated November 17 and 18, 2003, she notified Carlson that the Army intended to modify the Contracts "to add a reporting requirement." Pl.'s Opp., App. Ex. 6, at 1; see also id. Ex. 7, at 1 (Workload Data Letters). Pursuant to this new requirement, the Contracting Officer requested on behalf of ITEC4, "in their effort to support the 11
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 12 of 40
Department of Defense (DOD) Defense Travel Service (DTS) Program," that Carlson "submit[] . . . [all] travel workload data" for its Contracts' MEPS locations during fiscal year 2003. Id. Ex. 6, at 1; id. Ex. 7, at 1. The letters, which did not request data for any other sites covered by Carlson's Contracts, stated that Carlson "shall provide the [MEPS] data . . . by completing a[] . . . questionnaire form at the Government's [DTS] web site." Id. Ex. 7, at 12. On December 1, 2003, Carlson sent a third letter to its Contracting Officer. Pl.'s Opp., App. Ex. 8 (Pl.'s Third Letter). Referencing the Workload Data Letters, Carlson quoted a statement on the DTS web site that the data was being collected to provide "prospective offerors the most accurate and current workload data available. The workload data is being provided to prospective offerors for their preparation of proposals in regard[] to the Government's Small Business Final Request for Proposals for Travel Management Services." Id. at 1 (quotation omitted). Carlson claimed that this statement contradicted the Contracting Officer's representation in her letter "that the Government has no plans to delete the MEPS requirements from CWGT's contracts and that [the Contracting Officer was] unaware of any intent . . . to procure other contractors to provide travel services to the MEPS currently under CWGT's contracts." Id. Stating that such a procurement violated its "exclusive contract rights," id., Carlson requested that the Contracting Officer respond to its outstanding request for a "final decision on this subject without further delay." Id. at 2. Carlson also noted that, although it would "promptly and fully respond" to the workload data request, it considered the request "to be an anticipatory breach" of its Contracts. Id. 5. The Contracting Officer's Response to Carlson's Second and Third Letters
The Contracting Officer responded to Carlson's second and third letters on December 29, 2003. Pl.'s Opp., App. Ex. 9 (CO's Second Resp.). Reiterating that "there is no current intention to delete the MEPS requirements from your travel services contracts," the Contracting Officer stated that she could not "assure . . . that at some future date these services [would] not be deleted and/or transferred to a [DoD] travel service contract," and noted that such a transfer would "depend[] primarily on the outcome of the proposed acquisition set-aside for small business[es] by the Defense Travel System (DTS) Program Management Office (PMO) for travel services at MEPS sites, including those currently within [Carlson's] Army contract." Id. at 1.
12
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 13 of 40
Acknowledging that the draft MEPS Solicitation had been issued, the Contracting Officer stated that if a DTS contract were awarded "during the performance of your contracts, DTS PMO [would] need to coordinate the transition of MEPS services with the Army. However, as of this date, DTS PM[O] has not asked me to delete any MEPS travel sites from your contract for [a] transition to a DTS contract." Id. The Contracting Officer stated that she could not "predict the date of such an award (if it ever occurs)," id., nor could she predict how the Government would effectuate a transfer of services. However, she posited that the MEPS travel requirements could be transferred "in conjunction with a non-exercise of options," and opined that a transfer via a partial termination for convenience "may be allowable under some circumstances." Id. at 12. Claiming that it was "premature . . . to speculate as to how (if ever) MEPS travel services will be transferred" because such a transfer might never occur, and emphasizing that she could "not speak for DTS PMO or fully anticipate what it [might] request from the Army in the future," the Contracting Officer declined to "absolute[ly] confirm[] . . . [Carlson's] contract interpretation." Id. at 2. The Contracting Officer concluded: I do not consider th[e] inability to provide the absolute commitment that you have requested to be a Final Decision . . . . I simply lack the knowledge of future events that would enable that type of commitment. In my opinion, there is no current dispute over the contract terms that govern your ongoing performance under these travel services contracts. Id. 6. Carlson's Fourth (and Final) Letter to the Contracting Officer
Carlson responded with a letter dated January 6, 2004, which began: "The issue in controversy is simple, straightforward and the Contractor is entitled to a non-evasive final decision regarding the interpretation of contract terms pursuant to the [CDA] . . . and the Disputes Clause . . . in the above contracts." Pl.'s Opp., App. Ex. 10 (Pl.'s Fourth Letter), at 1. Quoting the exclusivity provisions in its Contracts, Contract at 26, ¶¶ 1.7.1.2, Carlson reiterated its position that, under these clauses, so long as the . . . Contracts are in effect, [Carlson] is the exclusive provider of travel services to all the sites listed in the contracts, including the MEPS sites, and any transfer of such travel service business to another contractor, small business or otherwise, would constitute a breach . . . . The removal of MEPS travel requirements from [the] contracts would have a significant adverse impact on CWGT's performance of those contracts. 13
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 14 of 40
Id. at 2. Carlson also claimed that "a partial termination for convenience that removes the MEPS requirements . . . for the purpose of transferring the business to contracts awarded on behalf of the DTS PMO would be a subterfuge for breaching the exclusivity provisions . . . and could not be considered an act in good faith." Id. at 2, n.1. Carlson rejected the Contracting Officer's argument that she could not render a "final decision" because she did "not know what DTS PMO intends to do in regard to the MEPS sites." Id. at 2. Carlson pointed out that ITEC4's draft solicitation and workload data requests made Carlson's "concern regarding a breach of its contractual rights . . . not hypothetical." Id. at 2, n.2. Accordingly, Carlson stated that it was entitled, as a matter of right, to your independent determination in regard to all matters relating to these contracts, including an interpretation of contract terms. The interpretation of the terms . . . should not depend upon the intent of the DTS PMO, or other Government solicitations. It also is noted that these contracts . . . [as well as] your final determination in regard to the interpretation of contract terms . . . bind[] the entire U.S Government [including DTS PMO]. We understand and appreciate the fact that you cannot control the actions of the DTS PMO and ITEC4. However, you, not they, are responsible for the interpretation of the above contracts, and resolution of any disputes or controversy arising thereunder. Id. at 23. Carlson concluded with a request that the Contracting Officer "confirm, without equivocation, that so long as the above cited contracts are in effect, and CWGT is satisfactorily performing, none of the MEPS travel requirements currently included in these contracts may be transferred to another contractor," id. at 3, and stated that, if the Contracting Officer would not "confirm the exclusivity terms of these contracts, then the failure to agree with CWGT's interpretation [would] be taken as an adverse final decision." Id. 7. The Response to Carlson's Final Letter
On February 13, 2004, before the Contracting Officer responded to Carlson's final letter, ITEC4 issued its solicitation seeking six small business subcontractors to provide travel management services to sixty-seven MEPS sites, including the fifty-four MEPS sites covered under Carlson's contracts. See Compl. at 14, ¶ 80; Def.'s Mot. at 7; see generally Pl.'s Opp., App. Ex. 2 (Solicitation W91QUZ-04-R-0007) (MEPS Solicitation). "Carlson is not a small business concern and is thus precluded from competing under this MEPS Solicitation." Compl. at 15, ¶ 83. The MEPS Solicitation "purported to seek proposals to provide both DTS CUI-facilitated travel services and traditional travel 14
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 15 of 40
services for MEPS locations," id. ¶ 84, and required each contractor to begin providing travel management services on April 1, 2005, Pl.'s Facts at 18, ¶ 12 (citing MEPS Solicitation § C.4.2.1 and § J, Attach. 9, Technical. Ex. A). On March 1, 2004, after the MEPS Solicitation issued, the Contracting Officer answered Carlson's "request for [a] Contracting Officer's Decision regarding [the] potential transfer of MEPS services." Pl.'s Opp., App. Ex. 11 (CO's Final Resp.). She began the letter by noting that Carlson's most recent request "differed slightly" from its predecessors: In previous letters[,] . . . you requested that I "confirm that the official travel requirements for all MEPS sites included in the four DTR contracts . . . will continue to be performed by CWGT throughout the total contract period . . . including all options . . . ." As I explained in previous responses[,] . . . I am unable to provide the absolute commitment requested because I "lack the knowledge of future events that would enable that type of commitment." Id. at 1. The Contracting Officer stated that Carlson's fourth letter was different because [it] request[ed] an interpretation of the exclusivity clauses of the subject contracts . . . . You also assert that "so long as the above DTR Contracts are in effect, CWGT is the exclusive provider of travel services to all the sites listed in the contracts, including the MEPS sites, and any transfer of such travel service[s] . . . would constitute a breach of CWGT's DTR Contracts." In other words, you are asking me to agree that the exclusivity clauses absolutely prohibit a transfer of travel service businesses (including . . . "MEPS" services) to another contractor. Id. In response to this "different" request, the Contracting Officer opined: The exclusivity clauses clearly prohibit the Government from obtaining like services from another contractor while the services are part of your contract requirements. However, the exclusivity clauses do not absolutely prohibit a transfer of services. The subject contracts allow for the non-exercise of options and a termination of services for the convenience of the government. Id.
15
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 16 of 40
Turning to Carlson's claim that a partial termination for convenience would be a termination in bad faith, the Contracting Officer stated that, while "the Government may not terminate for convenience the services in a requirements contract in bad faith in order to transfer such services to another contractor," she could not determine whether "any partial termination for convenience of MEPS services to transfer them to contracts awarded by . . . [DTS PMO] necessarily would not be in good faith." Id. at 2. "Therefore, it is not simply a matter of interpreting the exclusivity clauses. It is a matter of knowing whether a proposed transfer involves [an] act of bad faith by the Government. I cannot determine that [such] a transfer . . . inevitably would be in bad faith." Id. The letter concluded: Accordingly, I am unable to provide a contracting officer's final decision in response to the hypothetical you have posed. Nonetheless, I will consider your interpretation of contract requirements if DTS PMO requests such a transfer of MEPS requirements services in the future. Once again, I do not consider this inability to provide the commitment that you have requested as a Final Decision under the [CDA]. In my opinion, there is no dispute over the contract terms that affect your ongoing performance under these travel services contracts. Id. (footnote omitted). 8. Amendment 4 to the MEPS Solicitation
"On April 16, 2004, ITEC4 released Amendment 4 to the MEPS Solicitation." Compl. at 15, ¶ 86. Whereas the original procurement sought contractors to perform both DTS CUI-based and traditional travel services, the Amendment altered the Solicitation to require "only traditional travel services." Id. ¶ 89. According to Carlson, the MEPS Solicitation, as amended, does not require offerors to propose "prices for performing DTS CUI facilitated travel services during any portion of the five-year contract." Id. ¶ 111. Rather, it "states that the Government intends to negotiate transaction fees for DTS CUIfacilitated travel services in the second year of performance," id. ¶ 112, and "estimates for evaluation and contract award purposes[,] that tickets will only be issued via traditional travel services through [fiscal year] 2009," id. ¶ 114. "Offerors submitted proposals in response to the MEPS Solicitation on June 11, 2004." Pl.'s Facts at 18, ¶ 14. However, the award of the contract, originally scheduled for October 2004, see id. ¶ 17, has been "continually delayed," Tr. at 6:10 (statement of defendant's counsel). At oral argument, defendant represented that "[t]he last award was 16
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 17 of 40
scheduled for November 30[, 2004]. However, that has now slipped. An award may not be made until some time in December [2004]." Id. at 6:1113; see also id. at 52:1719 (statement of plaintiff's counsel that "[t]his procurement has been going on for some time and they're representing that they are going to make awards in December."). Notwithstanding these delays, defendant stated that performance on the MEPS small business contract "wouldn't begin . . . until April [1], 2005," the day after Carlson's current option expires. Id. at 6:1820; see also id. at 59:1415 (same). Interpreting Amendment 4, in conjunction with the Contracting Officer's final letter, to be a "constructive [adverse] Final Decision" under the CDA, Compl. at 1415, ¶ 82, Carlson filed its complaint in this court on April 26, 2004. Carlson seeks, inter alia, (1) a declaratory judgment that it is "the exclusive provider of travel services for all the MEPS sites" in its Contracts "so long as those Contracts are in effect;" or (2) a declaratory judgment that it is "the exclusive provider of travel services for all the MEPS sites" in its Contracts "unless and until the DTS CUI is operationally deployed and capable of providing the majority of travel requirements at each MEPS site;" and (3) preliminary and permanent injunctions ordering the Army not to transfer any of the MEPS travel requirements under the Contracts "so long as those Contracts are in effect, unless and until a DTS CUI is operationally deployed and able to provide the majority of required travel services" at each MEPS site. Compl. at 2526. II. Discussion
In its motion, defendant asks the court to dismiss Carlson's complaint for lack of subject matter jurisdiction and/or for failure to state a claim upon which declaratory relief can be granted. Def.'s Mot. at 1 (citing Rules of the Court of Federal Claims (RCFC) 12(b)(1) and 12(b)(6). Alternatively, defendant suggests that summary judgment is an appropriate means for disposing of Carlson's complaint. Id. Because subject matter jurisdiction is a "threshold matter" that must be addressed before the court reaches the merits of Carlson's claim, the court considers defendant's motion under RCFC 12(b)(1) first. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 9495 (1998); see also Nippon Steel Corp. v. United States, 219 F.3d 1348, 1352 (Fed. Cir. 2000). A. Whether the Court has Jurisdiction Over Carlson's Complaint 1. Standard of Review
RCFC 12(b)(1) governs dismissal of a claim for lack of subject matter jurisdiction. RCFC 12(b)(1). In ruling on a Rule 12(b)(1) motion to dismiss, the court is generally "obligated to assume all factual allegations to be true and to draw all reasonable 17
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 18 of 40
inferences in plaintiff's favor." Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995) (citing Scheuer v. Rhodes, 416 U.S. 232, 23637 (1974)). However, plaintiff, as the non-moving party, bears the burden of establishing jurisdiction by a preponderance of the evidence. Alder Terrace, Inc. v. United States, 161 F.3d 1372, 1377 (Fed. Cir. 1998); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988). "A wellpleaded allegation in the complaint is sufficient to overcome challenges to jurisdiction." Trauma Serv. Group v. United States, 104 F.3d 1321, 1325 (Fed. Cir. 1997); cf. Fisher v. United States, 364 F.3d 1372, 137778 (Fed. Cir. 2004) (noting that the test for determining whether a claim falls within this court's subject matter jurisdiction is fairly "relaxed", and stating that "a non-frivolous allegation that a particular statute is reasonably amenable, with fair inferences drawn, to a reading that it mandates money damages [states] a basis for jurisdiction [under 28 U.S.C. § 1491(a)(1)]."). 2. Jurisdiction of the Court of Federal Claims Over CDA Claims
The United States Court of Federal Claims is a court of "limited jurisdiction." United States v. King, 395 U.S. 1, 3 (1969). The Tucker Act, 28 U.S.C. § 1491 (2000), vests this court with jurisdiction over certain claims against the United States; however, the Tucker Act does not create a substantive right enforceable against the sovereign. United States v. Testan, 424 U.S. 392, 398 (1976); Khan v. United States, 201 F.3d 1375, 1377 (Fed. Cir. 2000). The Tucker Act sets out this court's jurisdiction over disputes arising under the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 60113 (2000): The Court of Federal Claims shall have jurisdiction to render judgment upon any claim by or against, or dispute with, a contractor arising under section 10(a)(1) of the [CDA], including a dispute concerning termination of a contract, rights in tangible or intangible property, compliance with cost accounting standards, and other nonmonetary disputes on which a decision of the contracting officer has been issued under [section 605 of the CDA]. 28 U.S.C. § 1491(a)(2); Alliant Techsystems, Inc. v. United States, 178 F.3d 1260, 1264 (Fed. Cir. 1999) (quoting same). Section 605(a) of the CDA requires that "[a]ll claims by a contractor against the government relating to a contract . . . be in writing and . . . be submitted to the contracting officer for a decision." 41 U.S.C. § 605(a). This provision also requires "the contracting officer [to] issue his decisions in writing, and . . . [to] furnish a copy of the decision to the contractor." Id. The Federal Circuit has interpreted section 605(a) to impose two distinct prerequisites to this court's jurisdiction over disputes between contractors and the government: the contractor must have submitted a "claim" to a contracting officer, and 18
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 19 of 40
the contracting officer must have issued a "final decision" concerning the contractor's claim. See, e.g., England v. The Swanson Group, Inc., 353 F.3d 1375, 1379 (Fed. Cir. 2004); Alliant, 178 F.3d at 1264; Bath Iron Works Corp. v. United States, 20 F.3d 1567, 1578 (Fed. Cir. 1994); Sharman Co. v. United States, 2 F.3d 1564, 156869 (Fed. Cir. 1993), overruled in part on other grounds by Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed. Cir. 1995). The parties agree that Carlson must establish both jurisdictional prerequisites to proceed in this court. See Def.'s Mot. at 8; Pl.'s Opp. at 19. The parties also agree that Federal Circuit's decision in Alliant provides the relevant standard for determining "whether a request for an interpretation of a contract qualifies as a CDA `claim'," Def.'s Mot. at 11, and whether a letter from a contracting officer that expressly "refus[es] to issue a final decision on [a] claim," can nonetheless constitute a "final decision" under the CDA, Pl.'s Opp. at 2223. The court agrees that Alliant, in conjunction with the CDA and the Federal Acquisition Regulations (FAR), lays out the proper legal framework. a. The Federal Circuit's Decision in Alliant
Alliant involved a contract with the Army, which "incorporated by reference the standard `disputes clause,'" requiring the contractor to perform "`pending final resolution of any request for relief, claim, [or] appeal . . ., and [to] comply with any decision of the Contracting Officer.'" 178 F.3d at 126364 (quoting FAR § 52.233.1(i). The contract also contained an option clause that specified "the time period during which the option could be exercised." Id. at 1263. After that time period had lapsed, the Army's contracting officer notified Alliant that he planned to exercise the option, and "issued a unilateral modification of the contract purporting to exercise the option." Id. at 1264. Alliant sent a letter to the contracting officer, which "set out [its] position that the attempt to exercise the option was ineffective [under the option clause]," id. at 1265, and "advised the contracting officer that `if you disagree . . . please consider this letter a claim and request for a final decision under the CDA,'" id. The contracting officer responded in a letter stating that it "disagreed with Alliant's interpretation" of the option clause. Id. at 1264. The letter also "made it clear that he did not intend for the letter to constitute a final decision." Id. at 1267. "Alliant filed a complaint in the Court of Federal Claims seeking a declaration that it was not required to perform the option . . . [and] an injunction barring the government from enforcing the option clause . . . ." Id. at 1264. The court determined that it possessed jurisdiction to issue a declaratory judgment, but lacked jurisdiction to issue an injunction. Id. On appeal to the Federal Circuit, the government argued that the Court of Federal Claims lacked jurisdiction over the complaint "because [it] was not preceded by 19
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 20 of 40
either a qualifying claim . . . or a final decision by the contracting officer." Id. at 126465. As discussed below, the Federal Circuit rejected both arguments and held that the contractor's letter constituted a valid "claim" and the contracting officer's letter constituted a valid "final decision" under the CDA. Id. at 1268. Against this backdrop, the court discusses each "jurisdictional prerequisite" in turn. b. Whether Carlson Submitted a Valid Claim to its Contracting Officer
Although the term, "claim," is not explained in the CDA, it is defined in the FAR: "Claim means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract." 48 C.F.R. § 2.101 (2004). The court recognizes that, "[t]o state a [valid] non-monetary claim, there is no requirement that the contractor make a request for a sum certain." Clearwater Constructors, Inc. v. United States, 56 Fed. Cl. 303, 309 (2003); see also GPA-I, LP v. United States, 46 Fed. Cl. 762, 766 (Fed. Cl. 2000). Rather, "the phrase `as a matter of right' in the regulatory definition of a `claim' requires only that the contractor specifically assert entitlement to the [non-monetary] relief sought. That is, the claim must be a demand for something due or believed to be due . . . ." Alliant, 178 F.3d at 1265. Defendant argues that none of Carlson's letters makes out a valid CDA claim. Noting that "the first three letters . . . do not clearly and unequivocally seek an interpretation of contract terms," defendant insists that these letters do not constitute valid claims. Def.'s Mot. at 9. According to defendant, these letters "asked that the contracting officer `confirm that the travel requirements for all MEPS sites . . . will continue to be performed by [Carlson] throughout the total contract period, including all options exercised by the Government.'" Id. (quoting Pl.'s First Letter at 2). Defendant insists that, based upon the above-quoted language, "[t]hese letters clearly demanded an expression of the agency's intent rather than an interpretation of contract terms." Id. Defendant concedes that, in its fourth letter, Carlson "plainly submitted a demand couched in terms of requesting an interpretation of contract terms." Id. However, defendant argues that, because this letter, like its predecessors, asked the Contracting Officer to "`confirm without equivocation, that . . . none of the MEPS travel requirements . . . may be transferred to another contractor,'" id. at 10 (quoting Pl.'s Fourth Letter at 3), Carlson "was not asking for an `interpretation' of the contract terms, but rather, for a guarantee of how the Government would act if, in the future, the DTS PMO requested a transfer of MEPS sites to its proposed small business set-aside contracts," id.
20
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 21 of 40
Not surprisingly, Carlson argues that, through repeated requests for "a confirmation of the meaning of the Exclusivity Clauses and its contractual rights in the context of specific Governmental actions," Pl.'s Opp. at 1819, it submitted four valid claims seeking an interpretation of contract terms. Accusing defendant of recasting its claims "as requests for information about a hypothetical future event," Carlson insists that each letter "request[ed] that the Contracting Officer provide her interpretation about whether the contracts ensure Carlson the exclusive right to provide travel services to the MEPS sites while the . . . contracts are in effect, notwithstanding the pending ITEC4 MEPS Solicitation." Id. at 20. Accordingly, Carlson argues that each letter "constitute[s] a valid claim for purposes of establishing jurisdiction under the Tucker Act [because] [e]ach letter contains Carlson's written demand seeking, as a matter of right, an interpretation of the contract terms." Id. at 1920. The court finds that Carlson did submit a valid written claim to its Contracting Officer seeking an interpretation of contract terms. Contrary to defendant's assertion, the fact that the plain language of Carlson's first three letters does not "clearly and unequivocally seek an interpretation of contract terms," Def.'s Mot. at 9, is not determinative. The CDA does not require "that a `claim' . . . use any particular wording. All that is required is that the contractor submit in writing to the contracting officer a clear and unequivocal statement that gives the contracting officer adequate notice of the basis . . . of the claim." Contract Cleaning Maint., Inc., v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987). If a contractor's written request for an interpretation of contract terms "assert[s] specific contractual and legal grounds for [the contractor's] interpretation" of those terms, that contractor has submitted a valid claim under the CDA. Alliant, 178 F.3d at 1265. Here, at least two of Carlson's letters plainly state the contractual and legal bases for its request that the Contracting Officer interpret the exclusivity clauses in its Contracts. See Pl.'s First Letter at 12 (quoting Contract ¶¶ 1.1.1.2, 1.7.1 and 1.7.2); Pl.'s Fourth Letter at 1 (quoting Contract ¶¶ 1.7.1 and 1.7.2). Like the contractor in Alliant, Carlson submitted to its Contracting Officer its interpretation of several contractual provisions and asked the Contracting Officer to "confirm" that interpretation. Both the first and final letters to its Contracting Officer articulate Carlson's interpretation that, under its exclusivity clauses, "so long as a DTR Contract remains in effect, none of the travel requirements of the MEPS sites . . . may be transferred to any other contractor." Pl.'s First Letter at 2; see also Pl.'s Fourth Letter at 3. Both letters also request that the Contracting Officer "promptly issue a Final Decision pursuant to the [CDA]" if she disagreed with Carlson's interpretation. Pl.'s First Letter at 2; see also Pl.'s Fourth Letter at 1 (repeating Carlson's "[r]equest for [a] Contracting Officer's [f]inal [d]ecision"); id. at 23 (requesting the Contracting Officer's "independent . . . final determination" and 21
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 22 of 40
stating that "failure to agree with [Carlson's] interpretation [would] be taken as an adverse decision under the Contract Disputes Act"). Further, like the contractor in Alliant, Carlson argued in each letter that the government took actions inconsistent with those cited provisions. See, e.g., Pl.'s First Letter at 1 (discussing the announcement that DTS PMO and ITEC4 planned to reissue the MEPS Solicitation); Pl.'s Second Letter at 1 (discussing the recently-issued draft Solicitation); Pl.'s Third Letter at 1 (discussing the workload data requests); Pl.'s Fourth Letter at 2, n.2 (discussing the recently-issued MEPS Solicitation). As in Alliant, Carlson requested that the Contracting Officer agree or disagree with its interpretation of contractual provisions. As in Alliant, Carlson's request was prompted by actions taken by the government that potentially affected its contractual rights. By submitting its interpretation of the exclusivity provisions in light of the MEPS Solicitation, and by asking the Contracting Officer to "confirm" or refute its interpretation, Carlson sought a contracting officer's interpretation of contract terms, rather than a guarantee that the government would behave a certain way under the contract. Contrary to defendant's assertion, the way Carlson phrased its request is not outcome-determinative. The Federal Circuit "has definitively stated that certain `magic words' need not be used [to establish a claim under the CDA;] . . . [rather,] the intent of the `claim' governs." Transamerica Ins. Corp. v. United States, 973 F.2d 1572, 1578 (Fed. Cir. 1992), overruled on other grounds by Reflectone, 60 F.3d 1572. Here, Carlson asked the Contracting Officer to "confirm" or reject Carlson's understanding of the exclusivity provisions. Although Carlson did not use the magic word, "interpretation," until its final letter, it is apparent that Carlson intended to request a contracting officer's interpretation of terms. Accordingly, Carlson submitted a valid "claim" under the CDA. Further, the court agrees with Carlson that "it matters little whether . . . one or four letters . . . demand[ed]" that the Contracting Officer issue an interpretation of contract terms. Pl.'s Opp. at 19. One valid demand constitutes a "claim" for purposes of the CDA and, as discussed above, at least Carlson's first and fourth letters each fulfill the criteria for a "claim." The court also notes that "a series of letters can be read together to comprise a clear and unequivocal statement giving the contracting officer notice of the basis for the contractor's claim." Kalamazoo Contractors, Inc. v. United States, 37 Fed. Cl. 362, 368 (1997) (citation omitted), quoted in Clearwater Constructors, 56 Fed. Cl. at 309; see also Contract Cleaning Maint., 811 F.2d at 592 (finding that two letters, read together, constitute a claim, and noting that the CDA does not require "that a `claim' . . . be submitted in any particular form."). Accordingly, even if none of Carlson's letters individually cleared the jurisdictional bar, the series of letters, which "specifically 22
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 23 of 40
assert[s] entitlement" to non-monetary relief by "assert[ing] specific contractual and legal grounds for [Carlson's] interpretation" of its exclusivity clauses, see Alliant, 178 F.3d at 1265, constitutes a valid claim under the CDA. c. Whether the Contracting Officer Issued a Final Decision
Even where a contractor has submitted a valid "claim" to its contracting officer, this court lacks jurisdiction to review that claim until "a decision of the contracting officer has been issued under section 6 of [the CDA]." 28 U.S.C. § 1491(a)(2); see also Paragon Energy Corp. v. United States, 645 F.2d 966, 967 (Ct. Cl. 1981) ("[T]he linchpin for appealing claims under the Contract Disputes Act is the contracting officer's `decision.' No appeal, whether . . . to the agency board of contract appeals or to this court . . . may be taken without such a `decision.'"). To protect the contractor's "unique" right of appeal,7 this jurisdictional requirement may be satisfied by either the contracting officer's action or her inaction. If a contracting officer issues a written statement detailing "the reasons for [her] decision . . . and . . . inform[ing] the contractor of his rights," that statement constitutes a "decision" under the CDA. 41 U.S.C. § 605(a). Alternatively, if a contracting officer fails to issue a written decision within sixty days after receiving a contractor's claim, that failure is "deemed to be a decision by the contracting officer denying the claim and will authorize the commencement of the appeal or suit on the claim." Id. § 605(c)(1), (5). Here, the court finds that, at minimum, the Contracting Officer's March 1, 2004 letter constitutes a final decision under the CDA. As a threshold matter, the court notes defendant's statement that, in this letter,
"The Senate Report on the Act makes clear that "one reason for giving contractors `unique' appeal rights from adverse decisions by contracting officers is that contractors are obligated under the disputes clause to continue work without `stopping to litigate.'" Alliant, 178 F.3d at 1266 (quoting S. Rep. No. 95-1118, at 32 (1978), reprinted in 1978 U.S.C.C.A.N. 5235, 5266). The Federal Circuit has been mindful of Congress' intent to "equalize the bargaining power of the parties when a dispute exists." S. Rep. No. 95-1118, at 1, quoted in Burnside-Ott Aviation Training Ctr. v. Dalton, 107 F.3d 854, 858 (Fed. Cir. 1997). See also Alliant, 178 F.3d at 1268 ("The government cannot, in response to a claim, demand that a contractor obey the contracting officer's directive . . . while characterizing that directive as nonfinal."); Applied Cos. v. United States, 144 F.3d 1470, 1478 (Fed. Cir. 1998) ("The Contract Disputes Act was intended primarily to create opportunities for informal dispute resolution at the contracting officer level and to provide contractors with clear notice as to the government's position regarding contract claims."). 23
7
Case 1:04-cv-00718-ECH
Document 29
Filed 12/30/2004
Page 24 of 40
the contracting officer provided an interpretation of the exclusivity contract clauses referenced by the contractor in its [fourth letter]. While she noted that the exclusivity clauses prohibited the Government from obtaining travel services from another contractor while CW was providing the services, the clauses did not absolutely prohibit a transfer of those services. Def.'s Mot. at 13. Notwithstanding this concession, defendant insists that the Contracting Officer did not render a "final decision" because she expressly refused to answer Carlson's "demand[] that [she] determine how those clauses would be applied if certain hypothetical events occurred." Id. Defendant argues that, "[a]ssuming, for the sake of argument, that this demand represents a valid claim, the contracting officer did not decide the matter adversely to the contractor. Instead, [she] refused to issue a decision unless and until facts arose which made such a determination possible." Id. Given the circumstances presented here, defendant's argument lacks merit. A contracting officer's written refusal to render a "final decision" does not provide an endrun around this court's jurisdiction; the substance, rather than the form of the letter is determinative. "Whether a contracting officer's letter may be taken as a final expression of an agency's position on a claim . . . is ultimately to be judged by wha