DWS, Inc. v. United States

35 Cont. Cas. Fed. 75,739, 18 Cl. Ct. 453, 1989 U.S. Claims LEXIS 211, 1989 WL 125994
CourtUnited States Court of Claims
DecidedOctober 24, 1989
DocketNos. 18-87 C, 317-87 C
StatusPublished
Cited by2 cases

This text of 35 Cont. Cas. Fed. 75,739 (DWS, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DWS, Inc. v. United States, 35 Cont. Cas. Fed. 75,739, 18 Cl. Ct. 453, 1989 U.S. Claims LEXIS 211, 1989 WL 125994 (cc 1989).

Opinion

OPINION

RADER, Judge.

On October 1, 1985, DWS, Inc. (DWS or plaintiff), entered into a one-year contract with the United States Army. Under this contract, DWS agreed to train helicopter pilots at the Army Aviation Center in Fort Rucker, Alabama. The contract required DWS to provide instruction pilots, command pilots, and administrative personnel. After several months of performance, DWS stopped all contract work. The next day the contracting officer terminated plaintiff’s contract for default.

Plaintiff challenged the termination for default before the Armed Services Board of Contract Appeals (ASBCA or Board). Following a five-day trial, the ASBCA upheld the default termination on June 17, 1987. Plaintiff appealed the ASBCA decision to the United States Court of Appeals for the Federal Circuit. DWS, Inc. v. United States, Appeal No. 87-1589. On March 17, 1988, the Federal Circuit dismissed the case for failure to prosecute.

After beginning proceedings before the ASBCA, plaintiff filed Claim No. 18-87C with the United States Claims Court for $3,232,783.00 on January 14, 1987. Additionally, DWS filed Claim No. 317-87C for $1,467,950.00 on June 3, 1987. The Claims Court consolidated these cases on October 1, 1987.

On September 22, 1987 plaintiff filed a motion for summary judgment in the present action. Defendant responded by filing a cross-motion for summary judgment. Subsequently, plaintiff withdrew its motion for summary judgment on January 19, 1989.

Counsel for plaintiff first entered his appearance on February 13, 1989. By this date plaintiff’s former counsel had completed all briefing in opposition to Defendant’s Motion for Summary Judgment. On February 15, 1989, the court granted plaintiff leave to file a brief supplementing the briefs filed by plaintiff’s former counsel.

On February 18, 1989, this court dismissed without prejudice three of plaintiff’s claims for lack of jurisdiction. Two of these claims lacked proper certification under the Contract Disputes Act of 1978, 41 U.S.C. § 605(c)(1). Plaintiff had not submitted the third, DWS’s claim for lost profits, to the contracting officer for a decision.

Two claims remain at issue. The Army’s contracting officer denied plaintiff’s certified claim in the amount of $545,647.00 on August 11, 1986 and a second certified claim for $1,128,230.00 on December 16, 1986.

Defendant contends that the ASBCA previously litigated all facts necessary to resolve the pending claims. Based on that litigation, defendant argues that the doctrine of collateral estoppel bars plaintiff from relitigating the same issue in the Claims Court.

Plaintiff contends that the ASBCA only considered the propriety of the termination for default. Plaintiff did not raise the issue of Government negligence before the ASBCA. Therefore, plaintiff argues that the ASBCA decision did not deal with the substance of the claims before this court.

After briefing and argument, this court grants defendant’s summary judgment motion. This court finds that Board previously litigated the facts necessary to determine plaintiff’s claims.

[455]*455FACTS

In 1985, the Department of the Army (Army) awarded DWS1 a contract2 to train helicopter pilots. Under this contract, plaintiff received a fee for each student entering the program.3 The pilot training took place in five phases at the Army Aviation Center at Fort Rucker, Alabama. The one-year contract began October 1, 1985. Plaintiff abandoned the contract on July 14, 1986 and ceased performance the next day. As a result, the contracting officer terminated the contract for default on July 15, 1986.

The Army’s original solicitation included a flow chart which projected student enrollment in the flight training course. Plaintiff used information from this chart to determine the amount of its bid. The chart featured Government historical data. The Army used identical information in solicitation of other flight training contracts.

The flow chart showed that llh% attrition would likely occur as students flunked out of early training exercises. DWS, Inc., 87-3, BCA at 101,041-43. The chart projected an additional 5% attrition to occur later during advanced training. Thus, the chart suggested that plaintiff would need fewer flight instructors as training progressed.

The flow chart influenced plaintiff’s bid. However, DWS knew, prior to placing its bid, that the actual attrition rate on other training contracts had been 2%—3%, much lower than the flow chart’s projections. Id. Plaintiff learned the actual attrition rate from written questions and answers to pre-bid inquiries provided to each prospective contractor.4 The actual attrition rate during the DWS contract was less than 2%.

The contract contained lengthy specifications for each phase of training. The contract syllabus detailed the number of training hours each pilot must complete. It also [456]*456designated Government standards that each pilot must accomplish. Prior to advancing to the next phase, student pilots had to master flight skills at earlier levels.

The contract specified five consecutive training phases: (1) Indoctrination; (2) Primary; (3) Contact; (4) Advanced Instruction; and (5) Tactical. Plaintiff undertook to train students in the primary (2) and advanced (4) phases. Military personnel conducted training in other phases. The contract established a specific number of DWS support staff. Contract specifications for primary and advanced flight training required a ratio of one instructor per two students.

The Army agreed to pay plaintiff Method of Instruction (MOI) costs to train additional flight instructors when student enrollment increased. The contract required thirty days advance notice prior to an increase or decrease in student enrollment. This notice allowed the contractor to add or delete flight instructor personnel.

Students who did not pass the eight-week primary training had to repeat the training. These repeating students remained in the class until they mastered the skills or flunked out. The contract specifically stated that the Army would pay no additional fees for repeating students.5 Historical records for the five preceding years indicated that an average of 4% of primary students and 12% of advanced students repeated those phases. DWS, Inc.,. 87-3, BCA at 101,041. One and one-half percent of primary students and 15y2% of advanced students on plaintiffs contract actually repeated those phases of training. Plaintiff's Motion for Summary Judgment, filed Sept. 22, 1987, Appendix at 161-62.

After plaintiff commenced performance, the United States Congress—operating under the Gramm-Rudman-Hollings Act6—reduced the availability of funds. The reduction affected this pilot training program. The Army cut back student enrollment significantly during May and June 1986. Specific contract line items permitted those reductions. The contract price was reduced by $1,459,558.00 (8%) through completion of the contract. Prior to May and June, more students than anticipated had enrolled.

On January 9, 1986, the contracting officer met with plaintiff.

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35 Cont. Cas. Fed. 75,739, 18 Cl. Ct. 453, 1989 U.S. Claims LEXIS 211, 1989 WL 125994, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dws-inc-v-united-states-cc-1989.