Parsons Evergreene, LLC v. Secretary of the Air Force

968 F.3d 1359

• Court: Court of Appeals for the Federal Circuit
• Decided: August 7, 2020
• Docket: 19-1931
• Status: Published

Opinion

Case: 19-1931 Document: 58 Page: 1 Filed: 08/07/2020

United States Court of Appeals for the Federal Circuit ______________________

PARSONS EVERGREENE, LLC, Appellant

v.

SECRETARY OF THE AIR FORCE, Cross-Appellant ______________________

2019-1931, 2019-1975 ______________________

Appeals from the Armed Services Board of Contract Appeals in Nos. 58634, 61784, Administrative Judge J. Reid Prouty, Administrative Judge Craig S. Clarke, Ad- ministrative Judge Richard Shackleford. ______________________

Decided: August 7, 2020 ______________________

CAMERON HAMRICK, Miles & Stockbridge PC, Washing- ton, DC, argued for appellant. Also represented by RAYMOND MONROE.

ROBERT R. KIEPURA, Commercial Litigation Branch, Civil Division, United States Department of Justice, Wash- ington, DC, argued for cross-appellant. Also represented by ETHAN P. DAVIS, STEVEN JOHN GILLINGHAM, ROBERT EDWARD KIRSCHMAN, JR.; LORI R. SHAPIRO, Office of Gen- eral Counsel, United States General Services Administra- tion, Washington, DC. Case: 19-1931 Document: 58 Page: 2 Filed: 08/07/2020

______________________

Before DYK, CLEVENGER, and HUGHES, Circuit Judges. DYK, Circuit Judge. Parsons Evergreene, LLC (“Parsons”) appeals from two decisions by the Armed Services Board of Contract Appeals (“Board”). The Board granted in part and denied in part Parsons’ claims for equitable adjustment on a contract for the design and construction of two buildings at McGuire Air Force Base. The government cross-appeals, contending that the Board lacked jurisdiction; that we lack jurisdiction in part; and, on the merits, that the Board erroneously re- quired it to disprove the reasonableness of Parsons’ claimed costs. We affirm in part, reverse in part, dismiss in part, and remand. BACKGROUND On December 12, 2003, the government awarded Par- sons a $2.1 billion indefinite-delivery, indefinite-quantity contract (“Contract”) for planning and construction work. 1 The work was to be described in subsequent task orders. On July 13, 2005, the government issued a $34 million task order (“Task Order”) under the Contract to complete an ex- isting, concept-level design and construct two facilities, known as the Temporary Lodging Facility and the Visiting Quarters, at the McGuire Air Force Base in New Jersey. The Temporary Lodging Facility was to be a 50-unit tran- sitional housing facility for use by military and civilian per- sonnel. The Visiting Quarters was to be a 175-unit facility similar to a hotel with individual rooms and private bath- rooms. Design and construction were completed, and the

1 The contract was originally awarded to Parsons In- frastructure and Technology Group Inc. The contract was transferred to Parsons via novation on September 7, 2004. Case: 19-1931 Document: 58 Page: 3 Filed: 08/07/2020

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U.S. Department of the Air Force (“Air Force”) accepted the completed facilities for “beneficial use” on September 11, 2008. J.A. 96. On June 29, 2012, Parsons submitted a claim to the Air Force seeking approximately $34 million in additional costs that Parsons allegedly incurred in the design and con- struction process. The contracting officer issued a final de- cision on March 27, 2013 almost entirely denying Parsons’ claim, which Parsons appealed to the Board under the Con- tract Disputes Act (“CDA”). In separate decisions in ASBCA Nos. 58634 and 61784, the Board denied in part and sustained in part Parsons’ claim, awarding Parsons about $10.5 million plus interest. Parsons appeals. The government cross-appeals, con- tending that the Board lacked jurisdiction; that we lack ju- risdiction in ASBCA No. 61784; and that on the merits the Board erroneously required it to disprove the reasonable- ness of Parsons’ claimed costs. We review the Board’s legal conclusions de novo and its factfinding for substantial evi- dence. 41 U.S.C. § 7107(b). DISCUSSION I At the outset, we must resolve a jurisdictional chal- lenge. The government contends that the Board lacked CDA jurisdiction over this case. We disagree. The CDA provides a process for dispute resolution of certain contract claims against the government. As rele- vant here, the CDA applies to contracts “made by an exec- utive agency” for “the procurement of services” or “the procurement of construction . . . of real property.” 41 U.S.C. § 7102(a)(1), (3). Claims by contractors are first submitted to a contracting officer, who issues a decision on the claim. 41 U.S.C. § 7103(a)(1), (d). The contractor may appeal the contracting officer’s decision to a Board of Case: 19-1931 Document: 58 Page: 4 Filed: 08/07/2020

Contract Appeals. Id. § 7104(a). The Board’s decision may, in turn, be appealed to this court. Id. § 7107(a)(1). A The government first contends that the Board lacked jurisdiction under the so-called “NAFI doctrine.” The Board concluded that it had jurisdiction because the NAFI doctrine had been abrogated by this court’s decision in Slattery v. United States, 635 F.3d 1298 (Fed. Cir. 2011) (en banc). Beginning in the late 1960s, our predecessor court held in a line of cases that neither the Court of Federal Claims (“Claims Court”) nor the Boards of Contract Appeals had jurisdiction over contract disputes with nonappropriated fund instrumentalities (“NAFIs”). Kyer v. United States, 369 F.2d 714 (Ct. Cl. 1966). “A ‘nonappropriated fund in- strumentality’ is one which does not receive its monies by congressional appropriation.” United States v. Hopkins, 427 U.S. 123, 125 n.2 (1976). As relevant to Board juris- diction, these cases construed the phrase “executive agency” in the CDA to exclude contracts made by NAFIs. See, e.g., Furash & Co. v. United States, 252 F.3d 1336, 1343 (Fed. Cir. 2001); Strand Hunt Const., Inc. v. West, 111 F.3d 142 (Fed. Cir. 1997) (unpublished table decision). As to Claims Court jurisdiction, these cases construe the Tucker Act’s authorization of suits against “the United States” to exclude NAFIs. See 28 U.S.C. § 1491(a)(1); Kyer, 369 F.2d at 719 . In 2011, in our en banc decision in Slattery, we held that the Claims Court had Tucker Act jurisdiction over a dispute between a contractor and the Federal Deposit In- surance Corporation (“FIDC”), even though the FDIC was a NAFI. 635 F.3d at 1310, 1314. In so holding, we abro- gated the NAFI doctrine for Tucker Act claims. Id. at 1321. We have not yet decided whether Slattery also abrogated the NAFI doctrine for CDA disputes appealed to a Board of Case: 19-1931 Document: 58 Page: 5 Filed: 08/07/2020

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Contract Appeals. We expressly reserved that the question in one later case. See Minesen Co. v. McHugh, 671 F.3d 1332, 1337 (Fed. Cir. 2012). The government asserts that the Board lacked CDA ju- risdiction under the NAFI doctrine. It points out that the Board found that the Task Order was made by the Air Force Services Agency (“AFSVA”), a NAFI. We need not decide the current status of the NAFI doctrine as applied to the Boards of Contract Appeals because, even under pre- Slattery precedent, the dispute here would not be barred. Contrary to the Board’s finding, the contract is not a NAFI contract. The contracting documents show that the Task Order was made by the Air Force and not by the AFSVA. The Contract on which the Task Order is based was “Issued By” the “Air Force Materiel Command” (“AFMC”), a part of the Air Force that the government admits is not a NAFI, and was to be “Administered By” the “Department of the Air Force.” J.A. 733. The request for proposal (“RFP”) that led to the Task Order uses “Department of the Air Force” let- terhead and states that “[t]he USAF intends to issue a com- petitive [Task Order].” J.A. 4823 (emphasis added). The Task Order, like the Contract, was “Issued By” the “Air Force Materiel Command” and “Administered By” the “De- partment of The Air Force.” J.A. 798. The contracting of- ficer who signed the Task Order was from the AFMC. The government has not identified any mention of the AFSVA or any other NAFI in either the Contract or the Task Order. The contractual terms further support the conclusion that this was not a NAFI contract. Air Force Manual 64- 302, which “provid[es] guidance and procedures for Air Force NAF contracting,” states that “when FAR clauses are used in NAFI contracts, the contracting officer will delete references to ‘Government’ and substitute ‘NAFI.’” Depart- ment of the Air Force, Manual 64-302, Nonappropriated Case: 19-1931 Document: 58 Page: 6 Filed: 08/07/2020

Fund (NAF) Contracting Procedures, at 1, 15 (Nov. 3, 2000), http://afpubs.hq.af.mil. Yet the Contract includes many FAR clauses referring to “Government” and no refer- ences to the contracting entity’s being a “NAFI.” The government contends that the Task Order is a NAFI contract because the Air Force did not and could not have lawfully funded it with appropriations. The govern- ment points out that the funds used for the Task Order were “non-appropriated funds.” Cross-Appellant’s Reply 4 (citing J.A. 804). The government contends that “a military department must make a specific request to Congress for funding for a specified building project, and Congress must grant funding authority for that project, in order for a mil- itary department to be allowed to expend appropriated funds for a military construction project.” Id. at 11. 2

2 For this proposition, the government relies on 10 U.S.C. § 2802(a), which provides that “the Secretaries of the military departments may carry out such military con- struction projects . . . as are authorized by law.” See also 10 U.S.C. § 114(a) (“No funds may be appropriated . . . to or for the use of any armed force or obligated or expended for . . . military construction . . . unless funds therefor have been specifically authorized by law.”); G. James Herrera, Cong. Rsch. Serv., R44710, Military Construction: Author- ities, Process, and Frequently Asked Questions 2 (2019) (“In practical application of [sections 2802 and 114], Con- gress has required project-by-project authorization and ap- propriation for military construction projects.”). The government also cites to the 2005 National De- fense Authorization Act, Pub. L. 108–375, 118 Stat. 1811, 2108–11 (2004) (“Authorization Act”). The Authorization Act listed and provided appropriations for construction at dozens of Air Force bases, but did not authorize construc- tion at McGuire Air Force Base, where the Visiting Case: 19-1931 Document: 58 Page: 7 Filed: 08/07/2020

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Congress did not provide the Air Force with the required authorization here, the government asserts, so the Task Order must have been a NAFI contract. Even assuming arguendo that the Air Force could not have used appropriated funds for the Task Order, the gov- ernment’s argument fails. The government relies on Hop- kins and Furash to suggest that a contract paid from nonappropriated funds is a NAFI contract. Despite some language in prior cases suggesting that the NAFI exclusion turns on the “activity” at issue, the exclusion did not de- pend on whether the contract itself was to be funded with appropriations. See United States v. Gen. Elec., 727 F.2d 1567, 1570 (Fed. Cir. 1984). Instead, the nature of the con- tracting entity governed: namely, whether the contract was “made by” a NAFI. And an agency is only a NAFI where there is “a clear expression by Congress that it intended to separate the agency from general federal revenues.” Furash, 252 F.3d at 1339. Thus, our predecessor held that a contract made by the Agency for International Development (“AID”) did not im- plicate the NAFI doctrine—even though the program im- plemented by the contract was to be run without appropriated funds—because AID (as a whole) received ap- propriated funds. McCarthy v. United States, 670 F.2d 996, 1002 (Ct. Cl. 1982). The court explained that “the nonap- propriated funds exclusion is limited to instances when, by law, appropriated funds not only are not used to fund the agency, but could not be.” Id.; see also L’Enfant Plaza Props., Inc. v. United States, 668 F.2d 1211, 1212 (Ct. Cl. 1982) (explaining that, to implicate the NAFI doctrine, “there must be a clear expression by Congress that the agency was to be separated from general federal

Quarters and Temporary Lodging Facility were built. See Authorization Act §§ 2301–02. Case: 19-1931 Document: 58 Page: 8 Filed: 08/07/2020

revenues”). Here, there is no question that the Air Force “has authority to use appropriated funds if and to the ex- tent appropriated, and that is sufficient to avoid the non- appropriated funds exclusion.” See McCarthy, 670 F.2d at 1002. 3 The Task Order was made by the Air Force, and not the AFSVA. The NAFI doctrine, even if it survives under the CDA, is inapplicable. B The government argues alternatively that the CDA is limited to contracts for “the procurement of services” or “the procurement of construction . . . of real property,” and the contract here does not qualify. Cross-Appellant’s Br. 29–30 (citing 41 U.S.C. § 7102(a)). The contract here was for the design and construction of two buildings, the Tem- porary Lodging Facility and the Visiting Quarters. The Task Order falls neatly within the CDA’s “procurement” language. The government nevertheless contends that this was not a “procurement,” relying principally on 31 U.S.C. § 6303. Section 6303 provides that: An executive agency shall use a procurement con- tract . . . when—(1) the principal purpose of the in- strument is to acquire . . . property or services for the direct benefit or use of the United States Gov- ernment; or (2) the agency decides in a specific

3 Our decision in General Electric supports this con- clusion. There, as here, the fact that the governmental counterparty to the contract was the Air Force was suffi- cient to place the dispute outside the NAFI doctrine. 727 F.2d at 1570. Case: 19-1931 Document: 58 Page: 9 Filed: 08/07/2020

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instance that the use of a procurement contract is appropriate. The government asserts that the buildings at issue here were built for the purpose of “support[ing] the morale, wel- fare, and recreation of the service member[s] or other guests,” which the government contends is “a distinct pur- pose from that of the Air Force, whose primary function is national defense.” Cross-Appellant’s Br. 36. Thus, to the government, the Task Order is not “for the direct benefit or use of the United States Government,” under the meaning of 31 U.S.C. § 6303. The government’s argument lacks merit. Section 6303 is not part of a statutory definition of CDA jurisdiction. It is in a separate title of the United States Code. It does not control the interpretation of the term “procurement” as used in the CDA. In any event, the government’s position that a project supporting the morale and welfare of service- members is not for the “direct benefit” of the government is at odds with the Supreme Court’s holding in Standard Oil Co. of California v. Johnson, 316 U.S. 481 (1942), which held that military post exchanges were “essential for the performance of governmental functions.” Id. at 485. The government’s position is also inconsistent with the Secre- tary of the Air Force’s responsibility for “the morale and welfare of [Air Force] personnel.” 10 U.S.C. § 9013(b)(9). Finally, section 6303 does not require that procurement contracts be for the “direct benefit or use” of the govern- ment. It states that agencies “shall use” procurement con- tracts in certain circumstances, but does not otherwise foreclose their use. Section 6303 contemplates procure- ment contracts even when not for the government’s direct benefit so long as “the agency decides” that a procurement contract “is appropriate.” The Task Order is a “procure- ment” contract under the CDA. Case: 19-1931 Document: 58 Page: 10 Filed: 08/07/2020

The government’s reliance on G.E. Boggs & Assocs., Inc. v. Roskens, 969 F.2d 1023 (Fed. Cir. 1992), and New Era Construction v. United States, 890 F.2d 1152 (Fed Cir. 1989), is similarly unavailing. In each of those cases, we held the contractual dispute to be not subject to the CDA. But G.E. Boggs and New Era, unlike this case, involved contracts with entities—the Syrian Arab Republic and the Sac and Fox Tribe of Missouri, respectively—that were not executive agencies. G.E. Boggs, 969 F.2d at 1024; New Era, 890 F.2d at 1153. We conclude that the Board had CDA jurisdiction. II We next consider the timeliness of Parsons’ appeal from ASBCA No. 61784 as it relates to our own jurisdiction. Parsons contends that the Board erred in denying recovery for costs Parsons allegedly incurred as a result of delays caused by a payroll review by the Air Force to determine Parson’s compliance with the Davis-Bacon Act. The Act re- quires federal construction contractors to pay laborers and mechanics at least the prevailing wage for their work. 40 U.S.C. § 3142(a). Under FAR § 22.406–8, the government was authorized to ensure Davis-Bacon Act compliance by “[c]onduct[ing] labor standards investigations when avail- able information indicates such action is warranted.” Par- sons asserts that it is entitled to compensation because the Air Force unreasonably delayed initiating and conducting such a review. We do not reach the merits of Parsons’ pay- roll claim because we lack jurisdiction to consider it. The procedural history of Parsons’ payroll claim is as follows. On June 29, 2012, Parsons submitted the claims at issue here to the contracting officer, including its payroll claim. The contracting officer denied recovery and, on April 22, 2013, Parsons appealed to the Board. Parsons’ appeal was initially docketed as ASBCA No. 58634. Liti- gation continued and, on September 5, 2018, the Board Case: 19-1931 Document: 58 Page: 11 Filed: 08/07/2020

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issued its decisions on the merits of Parsons’ claims, includ- ing the payroll claim. For all claims except the payroll claim, the Board issued its decision in the original case, ASBCA No. 58634. For the payroll claim, “[f]or reasons of judicial efficiency and clarity,” the Board issued a separate opinion under a new appeal number, ASBCA No. 61784. J.A. 1 n.1. Parsons received the Board’s decisions on Sep- tember 10, 2018. On October 10, 2018, Parsons moved for reconsideration of the Board’s decision on several claims in ASBCA No. 58634. Parsons did not seek reconsideration of the payroll claim in ASBCA No. 61784. The Board issued its decision denying Parsons’ reconsideration request in ASBCA No. 58634 on January 23, 2019, which Parsons re- ceived on January 28, 2019. Parsons appealed the Board’s decisions on its claims, including the payroll claim, to this court on May 23, 2019. Parsons’ appeal of its payroll claim was not timely filed. The statute governing appeals from the Board to this court provides that “a contractor may appeal the decision [of an agency board] within 120 days from the date the contractor receives a copy of the decision.” 41 U.S.C. § 7107(a)(1)(A). The 120-day appeal period runs from contractor’s receipt of the Board’s decision on reconsideration, if reconsideration is sought. Although Parsons sought reconsideration of the Board’s decision in ASBCA No. 58634 (and its appeal in that case is timely), Parsons did not seek reconsideration in ASBCA No. 61784. Parsons’ appeal in ASBCA No. 61784 was filed 255 days after it received a copy of the final deci- sion in that action. The 120-day deadline was not tolled by the request for reconsideration in ASBCA No. 58634. Therefore, we lack jurisdiction to review the Board’s deci- sion in ASBCA No. 61784. See Placeway Const. Corp. v. United States, 713 F.2d 726, 728 (Fed. Cir. 1983) (dismiss- ing for lack of jurisdiction an appeal from the Board filed after the 120-day deadline). We dismiss Parsons’ appeal as to its payroll claim. Case: 19-1931 Document: 58 Page: 12 Filed: 08/07/2020

III We turn to the merits of Parsons’ appeal in ASBCA No. 58634. Parsons argues that the Board erred in denying re- covery on Parsons’ claim that it was not required to apply wall coatings from Duroplex-Triarch Industries and Plex- ture-Triarch Industries (collectively, “Triarch”) to the Vis- iting Quarters. Triarch is not “paint” in the conventional sense, though it is a paint-like substance. The Board rejected Parsons’ theory that it was required to apply Sherwin-Williams instead of Triarch, holding that Parsons was required to apply Triarch. The Board found dispositive the terms of Request for Proposal No. FA8903- 05-R-8234 (“RFP”), on which the Task Order was based. The RFP “required ‘Duroplex – Triarch Industries’ and ‘Plexture – Triarch Industries’ for interior paints.” J.A. 132 (quoting RFP § 09911). Parsons does not now challenge the determination that it was required to apply Triarch. The Board, however, introduced a new theory of liabil- ity, finding the government liable for Parsons’ costs in ap- plying Sherwin Williams paint due to the Air Force’s “indecision on what wall coating it wanted, causing [Par- sons] to start applying Sherwin Williams paint in the [Vis- iting Quarters].” J.A. 132. But because Parsons did not argue this theory before the Board and did not quantify its cost in using Sherwin Williams, the Board denied Parsons recovery. On appeal, Parsons argues that the Board erred in denying Parsons recovery under the Board’s theory. We disagree. A required element of a claim for equitable adjustment is proof of damages. The contractor has the “obligation . . . to provide a basis for making a reasonably correct approx- imation of the damages” for which the government is liable. Wunderlich Contracting Co. v. United States, 351 F.2d 956, 969 (Ct. Cl. 1965). It was Parsons’ burden to prove its Case: 19-1931 Document: 58 Page: 13 Filed: 08/07/2020

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damages, i.e., the costs incurred in applying Sherwin Wil- liams paint. The Board did not err in concluding that Par- sons did not meet its burden. Parsons contends that the record at the time of the Board decision included sufficient evidence to calculate Parsons’ cost in using Sherwin Williams. But Parsons failed to include an alternative argument concerning the Air Force’s erroneous direction to apply Sherwin Williams in the Visiting Quarters, and did not identify its costs in doing so. Nothing in Southwest Electronics & Manufactur- ing Corporation v. United States, 655 F.2d 1078 (Ct. Cl. 1981), or any other authority cited by Parsons suggests that the Board was required to scour the tens of thousands of pages of record evidence in this case, without any guid- ance, to determine the amount of an award. 4 Parsons also asserts that the Board erred by failing “to seek the parties’ input as to whether the record supported recovery under the Board’s new theory prior to deciding the issue.” Appellant’s Br. 34. “The [Administrative Procedure Act] does not require the Board to alert a [claimant] that it may find the asserted theory,” or any other theory that the

4 In Southwest Electronics, the Board overturned the contracting officer’s award, on the basis that the contractor did not establish the exact amount of its damages. 655 F.2d at 1088. In reinstating the contracting officer’s award, our predecessor reasoned that the contractor “[did] supply some evidence of the damages for which [the gov- ernment] is liable, and the contracting officer’s award is a reasonable approximation of the damages which [the con- tractor] has proven.” Id. Here, by contrast, there is noth- ing to indicate that the contracting officer awarded Parsons the cost of using Sherwin Williams, nor did Parsons pro- vide the Board with evidence from which “a reasonable ap- proximation” of that cost could be determined. See id. Case: 19-1931 Document: 58 Page: 14 Filed: 08/07/2020

claimant could have argued, “lacking in evidence before it actually does so in [an opinion]. Nor is a [claimant] entitled to a pre-decision opportunity to disagree with the Board’s assessment of its arguments.” Fanduel, Inc. v. Interactive Games LLC, No. 2019-1393, 2020 WL 4342681 (Fed. Cir. July 29, 2020). While Parsons directed the Board to this evidence on reconsideration, this was simply too late. See Exxon Shipping Co. v. Baker, 554 U.S. 471, 485 n.5 (2008) (a motion for reconsideration “may not be used to . . . pre- sent evidence that could have been raised prior to the entry of judgment”). IV We next turn to Parsons’ contention that the Board erred in denying Parsons recovery for the added cost of us- ing the “Baker design” rather than the “structural-brick” design for the Visiting Quarters. The Board held that under the contract Parsons was entitled to use a structural-brick design to construct the Visiting Quarters. The Board also found that the govern- ment improperly denied Parsons the use of the structural brick design, and instead required Parsons to use what was called the “Baker design.” The structural-brick design used a single wall made of closure face brick. The Baker design used two walls: a first wall of concrete masonry units and a second wall of brick veneer. After the award, the government directed Parsons to use the Baker design and to modify the original Baker design to address prob- lems of progressive collapse, 5 a design choice that made construction more expensive.

5 Progressive collapse is a phenomenon that occurs when certain structural members of a building are dam- aged and weight is transferred to other members that Case: 19-1931 Document: 58 Page: 15 Filed: 08/07/2020

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Parsons sought an equitable adjustment for the in- creased design and construction costs of the Baker design over that of the structural-brick design. The Board awarded Parsons a lesser amount for added construction costs: “the additional cost . . . required to make the Baker . . . design resist progressive collapse.” J.A. 120–21. The Board awarded Parsons $722,176 in design costs. The Board erred in not also awarding the full amount of Parsons’ additional construction costs for using the Baker design over the structural-brick design. The amount of an award for an equitable adjustment is “the difference between the reasonable cost of performing without the change . . . and the reasonable cost of performing with the change.” Morrison Knudsen Corp. v. Fireman's Fund Ins. Co., 175 F.3d 1221, 1244 (10th Cir. 1999) (quoting Celesco Indus., Inc., ASBCA No. 22251, 79–1 B.C.A. (CCH) ¶ 13,604, at 66,683 (1978)). Here, the “cost of performing without the change” is the cost of construction using struc- tural brick. The “cost of performing with the change” is the actual cost of construction (i.e., the cost of using the modi- fied double-wall design). Parsons was entitled to the dif- ference between these two amounts. We reverse the Board’s denial of recovery to Parsons for its claim to construction costs. On remand, the Board must award Parsons the difference between its cost in con- structing the Baker design compared to the cost Parsons would have incurred in constructing the structural brick design. V We turn finally to the government’s cross-appeal chal- lenging the Board’s reasonable-costs analysis.

cannot handle the additional weight. As a result, the build- ing collapses. Case: 19-1931 Document: 58 Page: 16 Filed: 08/07/2020

The government contends that the Board erroneously shifted the burden as to reasonableness to the government, when the burden should have been on Parsons to prove rea- sonableness. The government points to Judge Clarke’s opinion for the Board, which concluded that Parsons’ costs were reasonable in part because the Air Force’s did not pro- vide “specific, individualized challenges to each of Parsons’ claimed costs.” Cross-Appellant’s Br. 38. The government contends that this improperly saddled the government with the burden of proof. But Administrative Judge Clarke’s analysis on this issue was expressly disclaimed by the other two panel judges in a concurring opinion written by Administrative Judge Shackleford and joined by Admin- istrative Judge Prouty. Thus, Judge Shackleford’s opinion, not Judge Clarke’s opinion, is the Board’s controlling opin- ion on the reasonable-costs issue. The government does not contend that Judge Shackle- ford’s opinion commits the same purported burden-shifting error as Judge Clarke’s opinion. Instead, the government asserts that Judge Shackleford’s opinion is “so devoid of any analysis that it cannot be plausibly reviewed for legal sufficiency on appeal.” Cross-Appellant’s Br. 44. We disa- gree. Judge Shackleford clearly stated the governing law and its application to this case. The government has not shown error in the Board’s reasonable-costs analysis. The government’s challenge also fails because it has ar- ticulated no prejudice resulting from of the Board’s pur- ported error. “[T]he party that ‘seeks to have a judgment set aside because of an erroneous ruling carries the burden of showing that prejudice resulted.’” Shinseki v. Sanders, 556 U.S. 396, 409 (2009) (quoting Palmer v. Hoffman, 318 U.S. 109, 116 (1943)); see also SolarWorld Ams., Inc v. United States, No. 2019-1591, 2020 WL 3443470, at *4–*5 (Fed. Cir. June 24, 2020) (rejecting an appellant’s challenge to a purportedly unlawful agency action because the appel- lant did not establish that the action was prejudicial). Case: 19-1931 Document: 58 Page: 17 Filed: 08/07/2020

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Here, the government has not explained which, if any, of the costs awarded to Parsons would have been affected by the Board’s purported error or how they would have been affected. We conclude that the Board’s purported errors, if any, were harmless. We affirm the Board’s conclusion that Parsons’ costs awarded by the Board were reasonable. CONCLUSION We conclude that the Board had CDA jurisdiction over ASBCA No. 58634. We dismiss Parsons’ appeal as to its claim for costs associated with its payroll review (ASBCA No. 61784) as untimely. We affirm the Board’s decision de- clining to award Parsons its costs in using Triarch wall coatings. We reverse the Board’s decision declining to award Parsons its full costs in constructing the Baker de- sign over the costs of the structural-brick design. We af- firm the Board’s conclusion that Parsons’ claimed costs were reasonable. We remand for further proceedings con- sistent with this opinion. AFFIRMED IN PART, REVERSED IN PART, DISMISSED IN PART, AND REMANDED COSTS No costs.