Rig Masters, Inc. v. United States

42 Cont. Cas. Fed. 77,417, 42 Fed. Cl. 369, 1998 U.S. Claims LEXIS 277, 1998 WL 835097
CourtUnited States Court of Federal Claims
DecidedNovember 24, 1998
DocketNo. 97-19C
StatusPublished
Cited by9 cases

This text of 42 Cont. Cas. Fed. 77,417 (Rig Masters, 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
Rig Masters, Inc. v. United States, 42 Cont. Cas. Fed. 77,417, 42 Fed. Cl. 369, 1998 U.S. Claims LEXIS 277, 1998 WL 835097 (uscfc 1998).

Opinion

OPINION

BRUGGINK, Judge.

This action arises out of a contract between Rig Masters, Inc., and the Army Corps of Engineers (“Corps”). Rig Masters was to inspect, operate, maintain, and repair several facilities owned by the Corps. In this suit, the contractor seeks recovery for a value engineering change proposal (“VECP”) it alleges the Corps accepted and from which the Corps derived benefits. Pending is defendant’s motion to dismiss plaintiffs amended complaint for lack of subject matter jurisdiction or in the alternative, for summary judgment. In its motion to dismiss, defendant argues that this dispute is subject to the Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613 (1994) (“CDA”) and, because Rig Masters did not submit a claim to the Contracting Officer (“CO”) pursuant to the CDA, this court lacks subject matter jurisdiction.

Plaintiff has moved to sever defendant’s motion to dismiss in order for the court to initially address only that motion. For good cause, the motion to sever is granted and the court will address only the motion to dismiss, as it is dispositive. The matter has been fully briefed and oral argument is deemed unnecessary. For the reasons stated below, the motion to dismiss is granted.

BACKGROUND

On February 2, 1993, the Army Corps of Engineers, Vicksburg District, awarded Rig [371]*371Masters contract number DACW38-93-D-0010 (“contract”) to inspect, operate, maintain, and repair several facilities, including the Tensas-Cocodrie Pumping Plant (“TCPP”). The Contract included Federal Acquisition Regulation (“FAR”) 52.248-1, 48 C.F.R. § 52.248-1 (1997), commonly known as the Value Engineering Clause. This clause states that “[t]he Contractor is encouraged to develop, prepare and submit value engineering change proposals voluntarily. The Contractor shall share in any net acquisition savings1 realized from accepted VECP’s____” Id. 52.248-l(a). Paragraph (b)(3) of the clause defines a VECP as a proposal that results in a change to the contract and reduces “the overall projected cost to the agency without impairing essential functions or characteristics____”

Rig Masters’ ability to challenge the Corps’ acceptance or rejection of such proposals is addressed by FAR 52.248-l(e)(3). That section permits the CO to accept a VECP proposal, in whole or in part, through issuance of a modification to the contract. The section goes on, moreover, to provide that “[t]he Contracting Officer’s decision to accept or reject all or part of any VECP and the decision as to which of the sharing rates applies shall be final and not subject to the Disputes clause or otherwise subject to litigation under the Contract Disputes Act of 1978 (41 U.S.C. 601-613).” Id. Rig Masters relies on this latter provision to show that the dispute is not subject to the requirements of the CDA.

On February 16, 1994, Rig Masters submitted to the CO, Ms. June A. Hebler, a VECP which included a plan showing how certain changes in the operating procedures for the TCPP would result in the plant using less electricity and labor. On September 6, 1984, she responded that, although the VECP “had merit,” the reduction in electricity costs proposed in the VECP would not be considered acquisition savings because Rig Masters’ contract with the Corps did not require it to provide electricity.2 The CO took the position that any savings resulting from the VECP would be considered collateral savings,3 for which it was not obligated to pay.4 Rather, the VECP clause permitted the contractor to share in “net acquisition savings,”5 and that term was limited by regulation to savings “on this, the instant contract.”6 The CO nevertheless stated that even though the contract did not include a savings provision for collateral costs, she would seek a one-time waiver from Corps’ Principal Assistant Responsible for Contracting (“PARC”) to allow Rig Masters to participate in any collateral savings resulting from the VECP. On December 19,1994, the PARC denied this request.

Rig Masters alleges that the Corps implemented the changes included in the VECP and that such changes resulted in substantial savings to the defendant. The contractor also claims that as a result of the success of these changes at the TCPP, the Corps implemented the plan at other plants with the same result. For the purposes of this motion, the court will assume that these allegations are correct.

In correspondence to the CO dated August 8 and August 24, 1995, Rig Masters once again requested participation in cost savings as a result of the VECP. On September 18, [372]*3721995, the Corps again informed Rig Masters that any savings as a result of the VECP would be considered “collateral” under the terms of the contract and therefore not com-pensable.

On May 22, 1996, Rig Masters filed suit in the United States District Court for the Western District of Louisiana. Finding that it did not have subject matter jurisdiction, the district court transferred the matter to this court pursuant to 28 U.S.C. § 1631 (1994). On February 6, 1997, Rig Masters filed its amended complaint. To date, the contractor has not submitted a certified claim to the CO pursuant to the CDA.

DISCUSSION

In its motion to dismiss, defendant asserts that this court lacks jurisdiction over Count I of the amended complaint, the breach of contract count, because the dispute is subject to the CDA and because plaintiff failed to submit a properly certified claim to the CO. Rig Masters responds that disputes under the VECP clause were specifically exempted from the CDA by the inclusion in the contract of standard clause FAR 52.248-l(e)(3). Instead, Rig Masters relies on this court’s general jurisdiction to review contract claims under the Tucker Act, 28 U.S.C. § 1491(a)(1). Defendant moves to dismiss Counts II, III, and IV on the ground that this court has no jurisdiction over claims for specific performance, unjust enrichment or punitive damages.

The primary issue here is whether the contract provision exempting disputes over the VECP is enforceable. If it is, then Rig Masters can ignore the claims process of the CDA and come straight to this court under the Tucker act. In deciding this initial question, we begin with the premise that the rule-making power of an agency “is not the power to make law ... but the power to adopt regulations to carry into effect the will of Congress as expressed by the statute.” Dixon v. United States, 381 U.S. 68, 74, 85 S.Ct. 1301, 14 L.Ed.2d 223 (1965) (quoting Manhattan Gen. Equip. Co. v. Commissioner, 297 U.S. 129, 134, 56 S.Ct. 397, 80 L.Ed. 528 (1936)). The statute in this case is the CDA.

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Cite This Page — Counsel Stack

Bluebook (online)
42 Cont. Cas. Fed. 77,417, 42 Fed. Cl. 369, 1998 U.S. Claims LEXIS 277, 1998 WL 835097, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rig-masters-inc-v-united-states-uscfc-1998.