Jacobs Engineering Group, Inc. v. United States

75 Fed. Cl. 752, 2007 U.S. Claims LEXIS 87, 2007 WL 925360
United States Court of Federal Claims·Decided March 26, 2007·No. No. 02-1500 C·Published·Cited by 4 cases

Opinion

[753] OPINION AND ORDER

GEORGE W. MILLER, Judge.

This matter is before the Court on the parties’ cross-motions for summary judgment relating to damages. Plaintiff Jacobs Engineering Group, Inc. filed its motion for summary judgment (“Pl.’s Mot.,” docket entry 65) on July 14, 2006. Defendant filed an opposition to plaintiffs motion and a cross-motion for summary judgment (“Def.’s Cross-Mot.,” docket entry 75) on October 2, 2006. Plaintiff filed an opposition to defendant’s cross-motion for summary judgment and a reply in support of its motion (“Pl.’s Opp’n,” docket entry 80) on October 25, 2006. Defendant filed a reply in support of its cross-motion (“Def.’s Reply,” docket entry 83) on November 21, 2006.

For the reasons set forth below, the Court grants plaintiffs motion in part and denies it in part; the Court grants defendant’s cross-motion. Accordingly, the Court directs the entry of judgment for plaintiff in the amount of $919,672 plus interest pursuant to the Contract Disputes Act, 41 U.S.C. § 601 et seq. (2000) (“CDA”), from April 29, 2002, until paid.

BACKGROUND

I. Facts1

On September 30, 1992, the United States Department of Energy (“DOE”) awarded Contract No. DE-AC21-92MC-28202 (“Contract”) to CRS Cirrine Engineers, Inc. (“CRS”) to develop, design, fabricate, and construct a coal gasification facility in Morgantown, West Virginia. Jacobs Eng’g Group, Inc. v. United States, 63 Fed.Cl. 451, 454 (2005) (“Jacobs I”). In August 1994, plaintiff purchased CRS and all of CRS’s rights and obligations under various contracts, including the Contract. Pl.’s PFUF 1.

The Contract provided that the Government and plaintiff would share the costs associated with plaintiffs performance. The Cost-Sharing Arrangement clause of the Contract provided that the Government would bear 80 percent of the cost of the work to be accomplished, and plaintiff would bear the other 20 percent:

B. Cost Sharing. The Contractor and the Government agree to share the cost of the effort for Phase I and Phase II as follows:

Government Contractor Total
(80%) (20%) (100%)
Phase I $19,850,784 $4,962,696 $24,813,480
Phase II $ 3,149,515 $ 787,379 $ 3,936,894
Total $23,000,299 $5,750,075

Footnotes

Appendix to Pl.’s Mot. (“App.”) 00003. The parties calculated “foregone fee” by adding 5 percent to plaintiffs reimbursable costs. See Def.’s Suppl. Br. on Foregone Fee (docket entry 47) 1; Pl.’s Reply to Def.’s Suppl. Br. on Foregone Fee (docket entry 51) 2.2 For billing and payment purposes, this foregone fee was added to reimbursable costs incurred by plaintiff and its subcontractors and submitted to DOE for payment; DOE paid plaintiff 80 percent of the invoiced amount. Jacobs I, 63 Fed.Cl. at 454.

The Contract contains a termination clause, which provides that “[t]he Government may terminate performance of work under this contract ... if the Contracting Officer determines that a termination is in the Government’s interest.” Id. at 455 (quoting 48 C.F.R. § 52.249-6(a) (1986)). After such a termination for convenience, a contractor must submit a final settlement pro[754] posai to the Contracting Officer (“CO”), who may agree to pay all or any part of the amount proposed. Id. The termination clause also provides:

(h) If the Contractor and the Contracting Officer fail to agree in whole or in part on the amount of costs and/or fee to be paid because of the termination of work, the Contracting Officer shall determine, on the basis of information available, the amount, if any, due the Contractor, and shall pay that amount, which shall include the following:
(1) All costs reimbursable under this contract, not previously paid, for the performance of this contract before the effective date of the termination, and part of those costs that may continue for a reasonable time with the approval of or as directed by the Contracting Officer; however, the contractor shall discontinue these costs as rapidly as practical.
(4) A portion of the fee payable under the contract, determined as follows:
(i) If the contract is terminated for the convenience of the Government, the settlement shall include a percentage of the fee equal to the percentage of completion of work contemplated under the contract, but excluding subcontract effort included in subcontractors’ termination proposals, less previous payments for fee.
(m) The provisions of this clause relating to fee are inapplicable if this contract does not include a fee.

App. 00097-99. The Contract also contains a no-fee provision, which states, “The Government shall not pay to the Contractor a fee for performing this contract.” Id. at 00121.

In August 1995, the Government terminated the Contract for convenience. PL’s PFUF 115. In accordance with the termination clause, plaintiff submitted a termination settlement proposal to the DOE Contract Administrator. Jacobs I, 63 Fed.Cl. at 455. The proposal stated that (1) plaintiff was entitled to be paid 100 percent of its reimbursable costs plus a fee in the total amount of $7,121,780, (2) plaintiff had been paid $5,579,582, and (3) plaintiff was therefore entitled to a net payment of $1,542,198. App. 00178. The parties attempted and failed to negotiate a settlement. Thus, on April 29, 2002, plaintiff submitted a certified request for final decision of the CO. PL’s PFUF IT 7. In September 2002, the CO issued a final decision which concluded that plaintiffs reimbursable costs under the Contract, including foregone fee, totaled $7,064,722. The CO calculated that the Government’s 80 percent share of plaintiffs costs including foregone fee was $5,651,778. Because the DOE had already paid plaintiff $5,579,601, the CO concluded that the DOE owed plaintiff an additional $72,177. Jacobs I, 63 Fed. Cl. at 455.

II. Proceedings

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Jacobs Engineering Group, Inc. v. United States, 75 Fed. Cl. 752, 2007 U.S. Claims LEXIS 87, 2007 WL 925360 (uscfc 2007).

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