Lavezzo v. United States

74 Fed. Cl. 502, 2006 U.S. Claims LEXIS 386, 2006 WL 3615061
United States Court of Federal Claims·Decided December 7, 2006·No. No. 05-575C·Published·Cited by 4 cases

Opinion

OPINION AND ORDER

WHEELER, Judge.1

This case presents an unusual circumstance under the Contract Disputes Act, 41 U.S.C. § 601 et seq., of a contractor suing to enforce a contracting officer’s final decision in its favor. The Government disclaims this final decision for lack of contracting officer authority, and asserts instead that later decisions from a different contracting officer denying the contractor’s claims are binding. The record reflects considerable agency discord in the handling of Plaintiffs claims, and Plaintiffs understandable confusion upon receiving two conflicting contracting officer final decisions addressing the same claims. The Government also questions the validity of the underlying contracts because Plaintiff, a sole proprietorship, did not personally sign the contracts. Instead, a vice-president signed the contracts.

[504] The parties have filed cross-motions for summary judgment on the enforceability of the contracting officer’s final decision favorable to the contractor. Plaintiff has treated the favorable final decision as the only binding decision, and has not appealed from the later unfavorable final decisions. Defendant has moved to dismiss for lack of subject matter jurisdiction, asserting there is no privity of contract between Plaintiff and the Government.

For the reasons explained below, the Court finds that it has subject matter jurisdiction of this ease. While the sole proprietor should have signed the contracts, this technical flaw at most made the contracts voidable at the election of the Government. Certainly, there is no evidence of intentional deception on Plaintiffs part, and no harm or prejudice to the Government. The agency could have verified Plaintiffs public business records on file in Alexandria, Virginia at any time. If the lack of a proper signature is at all actionable, the Court finds that the Government waived whatever rights it had to void the contracts by accepting Plaintiffs performance and paying Plaintiff for its work. Finding otherwise would leave Plaintiff without a remedy to pursue its contract claims. Defendant’s motion to dismiss for lack of jurisdiction is denied.

With regard to the conflicting contracting officer final decisions, the Court finds that both decisions are tainted by the agency’s internal discord and the interference of an agency supervisor, who is not a contracting officer. The agency supervisor should not have interfered by transferring Plaintiffs claims from the assigned contracting officer to a different decision-maker outside the agency. The procurement process is not well-served where a supervisor’s meddling results in two conflicting final decisions, neither of which focuses particularly upon the merits of Plaintiffs claims. The agency has not complied with the fundamental requirement that final decisions on contract claims ought to reflect the independent determination of the contracting officer. See e.g., Pacific Architects & Eng’rs, Inc. v. United States, 203 Ct.Cl. 499, 518, 491 F.2d 734, 744 (1974); New York Shipbuilding Corp. v. United States, 180 Ct.Cl. 446, 460, 385 F.2d 427, 435 (1967).

The Court therefore will remand the case to the agency for a period not to exceed 60 days, during which time the agency shall appoint a new contracting officer with no prior involvement in these contracts to review Plaintiffs claims and issue a proper final decision. Upon receipt of a new contracting officer’s final decision, Plaintiff shall advise the Court whether it accepts this decision, or wishes to have the Court review it. The Court will retain jurisdiction of this matter during the 60-day remand period. The parties’ cross-motions for summary judgment are denied.

Factual Background1 2

Plaintiff Phillip J. Lavezzo is the sole proprietor of a business known as DKO Technologies (“DKO”). JS UU12. On January 23, 2003, Mr. Lavezzo registered DKO as a sole proprietorship in Alexandria, Virginia after learning of a business opportunity with the Federal Labor Relations Authority (“FLRA”), an agency of the United States. JS HIT 1, 10, 11, 13. Donald K. Ourecky is DKO’s Vice President. JS U14. Dr. Our-ecky learned of the business opportunity from an FLRA contracting officer, Gary Crawford, and informed Mr. Lavezzo. JS If 11. Mr. Lavezzo authorized Dr. Ourecky to execute documents, sign checks, communicate with the FLRA, and interview potential subcontractors. JS If 15.

Acting on DKO’s behalf, Dr. Ourecky entered into two service contracts with the FLRA. Dr. Ourecky signed Contract No. 8095-03-035 (“the Help Desk Contract”) on December 29, 2002, and committed DKO to staffing a computer help desk at the FLRA from January 1, 2003 until September 30, 2003. JS II21. Dr. Ourecky signed Contract No. 8095-03-001 (“the Oracle Contract”) on April 3, 2003, an agreement for DKO to [505] provide Oracle database programming services to the FLRA. JS 1128; JA Tab 28. The Oracle Contract ran from April 3, 2003 to October 30, 2003. JS 1131. Mr. Crawford served as the FLRA’s contracting officer and signed the Help Desk and Oracle Contracts for the FLRA. JS HH 22, 29. Both contracts included options to extend for additional years at escalating hourly rates. JS HIT 24, 31.

DKO successfully performed the Help Desk and Oracle Contracts. JS H 39. While the FLRA did not officially exercise its options for additional years, the FLRA issued unilateral modifications extending the contract performance period of the Help Desk Contract and of the Oracle Contract at the same hourly rates as the initial contracts. JS HH 23, 30, 40; JA Tabs 23, 30. The FLRA did not extend the Help Desk Contract beyond January 31, 2004, or the Oracle Contract beyond April 30, 2004. JS 1141, 43.3

Pursuant to the Contract Disputes Act, 41 U.S.C. §§ 601-613, DKO submitted two claims to the FLRA concerning the Help Desk and Oracle Contracts on December 9, 2004. JS 111145, 46. The claims are worded similarly for each contract, and essentially claim that the FLRA constructively exercised the first option year, but ended the contracts before the option year was completed. JA Tab 45. DKO also broadly alleged wrongful interference with performance, breach of the duty of fair dealing, and improper contract administration. Id. DKO claimed $28,704 on the Help Desk Contract, and $57,408 on the Oracle Contract. Id. The FLRA received the claims in its mail room on December 13, 2004. JS 1146; JA Tab 45.

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Lavezzo v. United States, 74 Fed. Cl. 502, 2006 U.S. Claims LEXIS 386, 2006 WL 3615061 (uscfc 2006).

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