United International Investigative Services v. United States

38 Cont. Cas. Fed. 76,369, 26 Cl. Ct. 892, 1992 U.S. Claims LEXIS 337, 1992 WL 166412
CourtUnited States Court of Claims
DecidedJuly 20, 1992
DocketNo. 407-89C
StatusPublished
Cited by15 cases

This text of 38 Cont. Cas. Fed. 76,369 (United International Investigative Services 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
United International Investigative Services v. United States, 38 Cont. Cas. Fed. 76,369, 26 Cl. Ct. 892, 1992 U.S. Claims LEXIS 337, 1992 WL 166412 (cc 1992).

Opinion

OPINION

FUTEY, Judge.

This government contract case is before the court on defendant’s motion to dismiss plaintiff’s amended complaint for lack of subject matter jurisdiction. Plaintiff contracted with the United States to supply security services, and seeks compensation for expenses incurred in complying with various United States Department of Labor (DOL) wage determinations. In its motion, defendant asserts that plaintiff lacks privity of contract with defendant, and, accordingly, the court lacks jurisdiction over plaintiff’s amended complaint. In addition, defendant contends that the court lacks jurisdiction over plaintiff’s claim as it falls within the labor standards disputes provision of the contract. Plaintiff counters that the contract’s general disputes provision governs its claim, and, consequently, the claim is properly before the court. For the reasons stated below, the court finds privity of contract between the parties, but, in accordance with the labor standards disputes provision of the contract, dismisses part of plaintiff’s amended complaint for lack of subject matter jurisdiction.

Factual Background

Plaintiff, United International Investigative Services (United International), is one of two closely held corporations whose existence factors into the issues presently before the court. The other corporation is United Security Unlimited, Inc. (United Security). Both were incorporated in the State of California—United Security on January 7, 1981, and United International on February 10,1986. Mr. William J. Guidice (Guidice) was the president and chief executive officer of both corporations.

On August 16, 1985, the United States Air Force (Air Force) issued an invitation for sealed bids on a contract to provide security services at New Boston Air Force Station, Amherst, New Hampshire. Performance was to begin on October 1, 1985, and run for a year, until September 30, 1986, with the Air Force receiving options to renew for fiscal years 1987, 1988, and 1989. However, the contract was not awarded until December 18, 1985, when United Security received Contract No. F19650-86-C0003. By modification entered into that same day, performance was to run from January 1, 1986 until October 1, 1986.

The contract was subject to the Service Contract Act of 1965 (SCA), 41 U.S.C. §§ 351-58, and incorporated a DOL wage determination that prescribed minimum hourly wage rates and fringe benefits for certain classes of service employees. See 29 C.F.R. § 4.3. The contract also contained a Performance Work Statement (PWS), which described in detail the services to be performed under the contract and established minimum qualifications for the various personnel required by the contract.

In a letter dated January 27, 1986, Guidice informed the Air Force contracting officer (CO) that he had been advised that all contract personnel must have at least 2 years of experience as a police officer. This requirement conflicted with Guidice’s reading of the contract. Guidice interpreted the contract to prescribe a minimum of 2 years of experience as a security officer, not as a police officer. If police officer experience was required, Guidice concluded, the DOL wage determination would have to be conformed to reflect this requirement.

In a modification issued January 29, 1986, the Air Force incorporated a revised DOL wage determination into the contract. This wage determination superseded the previous one and raised the wages plaintiff was required to pay its employees. The wage determination, however, was not conformed to reflect the requirement of 2 years experience as a police officer.

On April 16, 1986, United Security entered into a name change agreement with the Air Force. The agreement provided in relevant part:

(2) United Security Unlimited, Inc., by an amendment to its certificate of incorporation, dated February 10, 1986 [896]*896has changed its corporate name and address to United International Investigative Services, 1535 East Orange-wood Avenue, Suite 213, Anaheim, California 92805.
(3) This amendment accomplishes a change of corporate name and address only and all rights and obligations of the government and of the Contractor under the contracts are unaffected by this change.
(4) Documentary evidence of this change of corporate name and address has been filed with the government (See attached Articles of Incorporation).

Accordingly, the parties agreed to substitute the name of plaintiff, United International, for the name of United Security wherever United Security’s name appeared in the contract.

On May 12, 1986, the parties entered into a modification adjusting the contract price to account for the increased wages required by the revised wage determination. A day later, the name change agreement was incorporated into the contract by modification dated May 13, 1986. Pursuant to modification of September 26, 1986, the Air Force exercised its option to renew for fiscal year 1987, extending the contract until September 30, 1987.

In a letter dated October 23, 1986, James F. Blake, plaintiff’s contract manager and chief of police, advised the DOL that the current wage determination was inadequate. Blake claimed that the wage determination did not properly reflect either the qualifications required for employment under the contract or the duties performed.

According to plaintiff, it negotiated a collective bargaining agreement with its employees in December 1986. Pursuant to the agreement, plaintiff undertook to pay its employees significantly higher wages and provide greater fringe benefits. In a letter to the CO dated February 4, 1987, plaintiff acknowledged that the DOL had notified it of labor law violations and suggested replacing the current wage determination with the proposed collective bargaining agreement.

On June 9, 1987, the DOL provided the CO a conformed wage determination. This determination targeted employees required under the contract, but not listed in the current wage determination, establishing new classifications of service employees and corresponding wage rates. The employee classifications and wage rates virtually mirrored those set forth in plaintiff’s proposed collective bargaining agreement. The DOL explained that the conformed wage determination was to be applied retroactively to the beginning of contract performance. In August 1987, the DOL issued a conformed wage determination establishing fringe benefits for the classes of service employees set forth in the June 9, 1987, conformed wage determination. These fringe benefits were also to be provided retroactively.

In a letter dated September 18, 1987, the CO informed plaintiff that the Air Force would not exercise its option to renew the contract for fiscal year 1988. Accordingly, as of October 1, 1987, plaintiff’s contractual relationship with the Air Force would be at an end. In that letter, the CO also advised that, at the request of the DOL, all future payments under the contract would be suspended. The suspension was to last until the DOL determined the amount of back wages plaintiff owed its employees pursuant to the conformed wage determinations.

On October 13, 1987, plaintiff authorized the DOL to make payment to its current and former employees in the amount of $300,672.54.

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Cite This Page — Counsel Stack

Bluebook (online)
38 Cont. Cas. Fed. 76,369, 26 Cl. Ct. 892, 1992 U.S. Claims LEXIS 337, 1992 WL 166412, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-international-investigative-services-v-united-states-cc-1992.