Diversified Maintenance Systems, Inc. v. United States

103 Fed. Cl. 431, 2012 U.S. Claims LEXIS 66, 2012 WL 542536
CourtUnited States Court of Federal Claims
DecidedFebruary 21, 2012
DocketNo. 11-504 C
StatusPublished
Cited by13 cases

This text of 103 Fed. Cl. 431 (Diversified Maintenance Systems, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Diversified Maintenance Systems, Inc. v. United States, 103 Fed. Cl. 431, 2012 U.S. Claims LEXIS 66, 2012 WL 542536 (uscfc 2012).

Opinion

OPINION

BUSH, Judge.

Now pending before the court is defendant’s motion to dismiss, which has been fully briefed and is ripe for a decision by the court. Because the court does not possess subject matter jurisdiction over the claims set forth in the complaint, defendant’s motion to dismiss the complaint pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (RCFC) is granted.

BACKGROUND1

In this case, plaintiff seeks damages stemming from the government’s alleged breach of a contract with plaintiff. Defendant has moved to dismiss the complaint on the ground that plaintiff did not submit a claim to the contracting officer before commencing its suit in this court, as required under the Contract Disputes Act of 1978, 41 U.S.C.A. §§ 7101-7109 (West Supp. 2011) (CDA). For that reason, defendant asserts that the claim must be dismissed pursuant to RCFC 12(b)(1) for lack of subject matter jurisdiction.

I. Factual History

The United States, through the Department of the Navy (Navy), awarded Contract No. N69450-09-D-0756 to plaintiff Diversified Maintenance Systems, Inc. (DMS) on December 18, 2008. The contract, according to the complaint, was initially solicited and awarded to DMS as a job order contract to provide services in support of Naval Support Activity Panama City.

In January 2009, the Navy informed DMS that the subject contract had been solicited [433]*433and awarded with the wrong specifications. For that reason, the Navy requested that DMS agree to substitute new specifications for those that had been set forth in the solicitation. DMS agreed to accept the new specifications without any adjustment in contract price and also entered into several other agreements with the Navy regarding the administration and performance of the contract.

Following its acceptance of the new specifications, DMS commenced the performance of several task orders under the contract. DMS asserts that the Navy has withheld payments for those task orders as liquidated damages based on delays that were caused by the government’s mismanagement of the job order contract. DMS also alleges that the Navy prepared a derogatory evaluation of DMS and submitted that evaluation into the Construction Contractor Appraisal Support System (CCASS). The submission of the CCASS evaluation, according to DMS, violated CCASS regulations and was contrary to the Navy’s prior assurances to DMS that it would not finalize the evaluation before meeting with DMS to discuss its contents. In addition, DMS alleges that the Navy refused to accept invoices from DMS unless they contained a waiver of related claims.

On January 7, 2010, DMS sent a letter to the contracting officer responsible for the subject contract. See Def.’s Mot. Ex. A. In that letter, DMS demanded that the Navy release all payments withheld as liquidated damages, subject to certain specified exceptions. Plaintiff also demanded that the Navy retract its CCASS evaluation of DMS. Finally, DMS demanded that the Navy immediately cease its “harassment and vexation of DMS and DMS’s employees — ” Id. at 1. The Navy did not respond to the January 2010 letter. Def.’s Mot. at 6.

II. Procedural History

DMS filed its complaint in this case on August 8, 2011. In its complaint, DMS asserts that the Navy has breached the express terms of its contract with DMS. Plaintiff also alleges that the Navy has breached its implied duties of good faith and cooperation, and has effected a cardinal change to the requirements of the job order contract. DMS requests damages in the amount of $614,142.40, which represents the difference between the amount billed by DMS for work performed under the contract and the amount actually paid to DMS by the Navy. DMS also requests a preliminary injunction ordering the immediate payment of all invoices submitted by DMS to the Navy, as well as a preliminary injunction invalidating all claim waivers on delivery orders.2 While the complaint sets forth claims for breach of contract, plaintiff does not cite the CDA as the jurisdictional basis of those claims; rather, DMS states that this “court has jurisdiction pursuant to 28 U.S.C. § 1491(b) [(2006)].” Compl. ¶ 2.

On October 7, 2011, defendant filed a motion to dismiss the complaint in its entirety. In its motion, defendant argues that this court does not possess subject matter jurisdiction over any of the claims set forth in the complaint because DMS did not submit a valid claim to the contracting officer before commencing its suit in this court. Defendant notes that plaintiff has failed to allege that it has satisfied that jurisdictional prerequisite, and argues that the letter sent by DMS to the contracting officer in January 2010 was not a proper claim because it did not request a sum certain and did not contain the certification required for claims that exceed $100,000. For those reasons, defendant argues that the claims set forth in DMS’s complaint must be dismissed pursuant to RCFC 12(b)(1).

DMS filed its response to defendant’s motion on November 7, 2011. In its response, DMS does not dispute defendant’s assertion that plaintiff did not submit a certified claim to the contracting officer before commencing this suit. Rather, DMS argues that this court may exercise jurisdiction over the claims set forth in the complaint under 28 U.S.C. § 1491(b). DMS rejects the govern[434]*434ment’s assertion that the subject matter jurisdiction conferred upon the court by section 1491(b) is limited to bid protests. Because the governmental actions challenged by plaintiff in its complaint are “in connection with a procurement,” DMS argues that its claims fall squarely within the ambit of section 1491(b), which does not require the submission of a claim to the contracting officer as a jurisdictional prerequisite to a suit in this court. DMS further states that the remedies requested in the complaint are not primarily or predominantly monetary, but injunctive in nature.

Defendant replied to DMS’s response on November 25, 2011. In its reply, the government argues that the claims set forth in DMS’s complaint are precisely the type of claims covered by the CDA, which is the exclusive legal mechanism for the resolution of the type of breach-of-contract claims now before the court. When a claim is covered by the terms of the CDA, defendant argues, that claim must be brought under the CDA and not under section 1491(b), which does not apply to claims by a contract awardee related to a dispute over post-award contract administration. Defendant also contends that while a cardinal change is a material breach that releases the non-breaching party from its obligations under the contract, it cannot release that party from the statutory requirements of the CDA.

Oral argument was neither requested by the parties nor deemed necessary by the court.

DISCUSSION

I. Standard of Review

In rendering a decision on a motion to dismiss for lack of subject matter jurisdiction pursuant to RCFC 12(b)(1), this court must presume all undisputed factual allegations to be true and must construe all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes,

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103 Fed. Cl. 431, 2012 U.S. Claims LEXIS 66, 2012 WL 542536, Counsel Stack Legal Research, https://law.counselstack.com/opinion/diversified-maintenance-systems-inc-v-united-states-uscfc-2012.