SMS Data Products Group, Inc. v. United States

36 Cont. Cas. Fed. 75,820, 19 Cl. Ct. 612, 1990 U.S. Claims LEXIS 73, 1990 WL 18945
CourtUnited States Court of Claims
DecidedMarch 1, 1990
DocketNo. 361-88 C
StatusPublished
Cited by31 cases

This text of 36 Cont. Cas. Fed. 75,820 (SMS Data Products Group, 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
SMS Data Products Group, Inc. v. United States, 36 Cont. Cas. Fed. 75,820, 19 Cl. Ct. 612, 1990 U.S. Claims LEXIS 73, 1990 WL 18945 (cc 1990).

Opinion

OPINION

RADER, Judge.

This motion is the most recent chapter in a long history of litigation between SMS Data Products Group, Inc. (plaintiff or SMS) and the Department of Health and Human Services (HHS). In 1986, the Government awarded plaintiff a contract for computer services. HHS terminated the contract for default before performance and excluded SMS from reprocurement.

Plaintiff claimed before the Government Services Board of Contract Appeals (GSBCA) that HHS wrongfully excluded it from submitting another bid. GSBCA denied the claim, but the United States Court of Appeals for the Federal Circuit reversed on appeal. SMS Data Prods. Group, Inc. v. United States, 853 F.2d 1547, 1549 (Fed.Cir.1988) (SMS I). Before the United States Claims Court, plaintiff moved for summary judgment on an issue not resolved by the Federal Circuit — whether HHS wrongfully terminated the contract for default. This court granted plaintiff’s motion. SMS Data Prods. Group, Inc. v. United States, 17 Cl.Ct. 1 (1989) (SMS II).

On July 19, 1989, plaintiff moved for summary judgment seeking lost profits and consequential damages. Defendant cross-moved for summary judgment. On February 5, 1990, after a status conference with this court, defendant filed a motion to dismiss plaintiff’s lost profits claim for lack of jurisdiction.

On February 14, 1990, this court permitted oral argument on the pending motions. This court grants defendant’s motion to dismiss and denies plaintiff’s motion for summary judgment.

FACTS

This court relies on the facts set forth in its previous opinion. SMS II, 17 Cl.Ct. at 1-6. This court also adopts the facts contained in the Federal Circuit’s opinion. SMS I, 853 F.2d at 1547-53.

This court finds the following undisputed jurisdictional facts for purposes of resolving defendant’s RUSCC 12(b)(1) motion. On April 20, 1987, plaintiff filed a claim against HHS with Janet Miller, the Contracting Officer. In pertinent part, the claim alleged that HHS unilaterally changed the acceptance test requirements of the contract at the behest of plaintiff’s competitors. The claim further alleged that HHS did not conduct a competitive reprocurement after defaulting SMS. Instead, HHS purportedly succumbed to pres[614]*614sure from plaintiff’s competitors in excluding plaintiff from reprocurement.

Plaintiff asked the contracting officer for $288,652.96 to compensate for HHS’s improper termination. This amount reflected bid and proposal costs, the costs of preparing for the acceptance test, the cost of performing the acceptance test, and attorney fees. The contracting officer specifically denied this claim for relief.

DISCUSSION

Plaintiff claims lost profits and other consequential damages on two grounds. First, HHS allegedly terminated the contract at issue in bad faith. Second, SMS contends that HHS may not use the termination for convenience clause to escape consequential damages in these circumstances. Defendant rejects these contentions. Both parties move for summary judgment. Defendant also moves to dismiss for lack of jurisdiction.

Jurisdiction

The United States, as sovereign, is immune from suit unless Congress specifically waives immunity. United States v. Testan, 424 U.S. 392, 399, 96 S.Ct. 948, 953, 47 L.Ed.2d 114 (1976); Soriano v. United States, 352 U.S. 270, 276, 77 S.Ct. 269, 273, 1 L.Ed.2d 306 (1957). In actions under the Contract Disputes Act, 41 U.S.C. § 601 et seq. (1982), Congress has placed conditions on the waiver of sovereign immunity. Plaintiff must submit a written and properly certified claim to the contracting officer. Section 605(a) of the Contract Disputes Act states:

All claims by a contractor against the government relating to a contract shall be submitted to the contracting officer for a decision.

41 U.S.C. § 605(a).

If the contractor’s claims exceed $50,-000.00, then the contractor must attest to the good faith of the underlying allegations. Section 605 explains:

For claims of more than $50,000, the contractor shall certify that the claim is made in good faith, that the supporting data are accurate and complete to the best of his knowledge and belief, and that the amount requested accurately reflects the contract adjustment for which the contractor believes the government is liable.

41 U.S.C. § 605(c). The Contract Disputes Act waives immunity for suits in this court only after the contracting officer has rendered a decision. Section 609 states:

Except as provided in paragraph 2 [actions against Tennessee Valley Authority], and in lieu of appealing the decision of the contracting officer ... to an agency board, a contractor may bring an action directly on the claim in the United States Claims Court____

41 U.S.C. § 609(a)(1) (1982).

Congress required contractors to file all claims with the contracting officer to provide the Government with an opportunity to settle the case or otherwise avoid unnecessary litigation. The Senate report stated:

I. PURPOSE

The Contract Disputes Act of 1978 provides a fair, balanced, and comprehensive statutory system of legal and administrative remedies in resolving Government contract claims. The act’s provisions help to induce resolution of more contract disputes by negotiation prior to litigation; equalize the bargaining power of the parties when a dispute exists; provide alternate forums suitable to handle the different types of disputes; and insure fair and equitable treatment to contractors and Government agencies.

S.Rep. No. 1118, 95th Cong., 2d Sess. 1 (1978), U.S.Code Cong. & Admin.News 1978, p. 5235 (emphasis added). The certification provisions also discourage frivolous and fraudulent claims. Contract Disputes Act of 1978: Joint Hearings on S.2292, S.2787 & S.S178 Before the Sub-comm. on Federal Spending Practices and Open Government of the Senate Comm. on Governmental Affairs and the Subcomm. on Citizens and Shareholders Rights and Remedies of the Senate [615]*615Comm. on the Judiciary, 95th Cong.2d Sess. 21 (1978).1

The Disputes Act’s limitations on the waiver of sovereign immunity necessarily restrict the jurisdiction of this court. The Court of Claims explained:

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Bluebook (online)
36 Cont. Cas. Fed. 75,820, 19 Cl. Ct. 612, 1990 U.S. Claims LEXIS 73, 1990 WL 18945, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sms-data-products-group-inc-v-united-states-cc-1990.