              ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of -                                    )
                                               )
Mountain Movers/Ainsworth-Benning, LLC         ) ASBCA No.         62164
                                               )
Under Contract No.     W9128F-12-D-0027        )


APPEARANCE FOR THE APPELLANT:                     Timothy A. Furin, Esq.
                                                   Ward & Berry, PLLC
                                                   Washington, DC

APPEARANCES FOR THE GOVERNMENT:                   Michael P. Goodman, Esq.
                                                   Engineer Chief Trial Attorney
                                                  William G. Latka, Esq.
                                                   Engineer Trial Attorney
                                                   U.S. Army Engineer District, Omaha

     OPINION BY ADMINISTRATIVE JUDGE D’ALESSANDRIS ON THE
    GOVERNMENT’S MOTION TO DISMISS FOR LACK OF JURISDICTION

        Pending before the Board is the motion to dismiss for lack of subject matter
jurisdiction, filed by respondent, the United States Army Corps of Engineers (USACE
or government). The government contends that the Board is without jurisdiction to
entertain this appeal due to a suspicion of fraud involving appellant, Mountain
Movers/Ainsworth-Benning, LLC (MM/AB) related to the contract in this appeal.

       This appeal involves a 2014 task order for repairs to the Fort Peck Dam in
Montana. MM/AB was delinquent in obtaining bonding for the task order, and in
November 2014, the government terminated MM/AB for default, in a contracting
officer’s final decision that may have suffered from procedural problems. MM/AB
informed the government that the bonding problems related to financial problems with
joint venture partner Ainsworth-Benning. In a series of factually disputed
communications in December 2014, the government contends that MM/AB made false
representations regarding Ainsworth-Benning’s participation in MM/AB. There is no
dispute, however, that the government rescinded the termination for default, and
MM/AB obtained the required bonds in January 2015, and performed the contract. In
June 2019, MM/AB filed a claim for certain work on the project, and in August 2019,
the contracting officer issued a final decision finding partial merit in the claim. MM/AB
timely filed an appeal to the Board. Approximately two months after the appeal was
docketed, the contracting officer rescinded his final decision, upon discovery of the
purportedly fraudulent statements made by MM/AB in December 2014.
        The government moves to dismiss MM/AB’s appeal for lack of subject matter
jurisdiction because the contracting officer rescinded his final decision based upon a
determination of fraud. The government’s motion essentially seeks to create a
government right of removal that would allow the government to unilaterally compel
contractors to litigate their appeals before the United States Court of Federal Claims.
As the government’s motion is directly contrary to the binding precedent of the United
States Court of Appeals for the Federal Circuit, and our own precedent, we deny the
government’s motion.

                   STATEMENT OF FACTS (SOF) FOR PURPOSES
                       OF THE GOVERNMENT’S MOTION

       With the exception of the details of a December 2014 telephone conversation, the
parties generally agree regarding the facts of this appeal. The Board is permitted to
decide jurisdictional facts in resolving a motion to dismiss; however, as explained
below, we do not find the disputed facts to be material to resolving the pending motion.1

        On April 17, 2012, the government issued Solicitation No. W9128F-12-R-0030,
restricted to USACE Region VIII small businesses, for design-build and construction
services under a Multiple Award Task Order Contract (MATOC) intending to award up
to five contracts (R4, tab 1 at USACE 5, 27-28). The solicitation required bidders to
disclose “Contractor Team Arrangements” in their bids “(i.e., Mentor-Protege
agreements, joint ventures, partnerships, etc.)” (R4, tab 1 at USACE 51). MM/AB
asserts that it detailed the identities of its joint venture partners in its proposal (app. resp.
at 3-4). On June 25, 2012, MM/AB received one of the MATOC awards (R4, tab 2).

       On September 25, 2014, the government awarded to MM/AB task order
No. W9128F-12-D-0027-0002 for rehabilitation of emergency gate control systems at
Fort Peck, Montana, in the amount of $2,401,011.84 (R4, tab 3).

       Pursuant to the task order, MM/AB was to submit performance and payment
bonds within 10 days of its receipt of the notice of award, which occurred on
September 25, 2014 (R4, tab 3 at USACE 397, 406). It is undisputed that MM/AB did
not timely submit performance and payment bonds, and that the government did not
follow-up with MM/AB regarding the missing bonds until sometime in
November 2014. On November 24, 2014, Ms. Jacqueline Nettleton, President of




1
    For this reason, we deny MM/AB’s request for an evidentiary hearing.
                                               2
MM/AB, sent an email to Thomas Westenburg, the Administrative Contracting Officer
stating:

                I was notified late last week that the bonding company
                (Travelers) for MM/AB could not honor indemnifications
                from Ainsworth Benning. Basically, their bonds are not
                good, James Benning has left the state with his family,
                literally in the middle of the night, another one of their
                partners (in a different company - which I am not involved
                in) has been arrested.

                I am uncovering more information literally hourly.

(R4, tab 5) On December 3, 2014, Donald Miller, the USACE Contracting Officer (CO)
terminated MM/AB for default (R4, tab 7). The government did not issue a cure notice
to MM/AB before terminating the contract for default (R4, tab 14 at USACE 511).

        Between December 3 and December 18, 2014, Ms. Nettleton and CO Miller
exchanged several emails regarding the termination for default (R4, tab 8). In short,
the government rejected MM/AB’s proposal to have bonds issued in the name of
Mountain Movers, rather than the MM/AB joint venture (R4, tab 8 at USACE 468-69).
By letter dated December 15, 2014, MM/AB’s attorney advised CO Miller that the
termination for default would be appealed to the ASBCA (R4, tab 9). Based on
subsequent documentation, it appears that the government was concerned that its
failure to promptly enforce the bonding requirement could be held to constitute an
implied waiver, requiring that it first issue a cure notice before terminating the
contractor (R4, tab 14 at USACE 511).2 These communications culminated in a
December 18, 2014 phone call that is the basis for the government’s allegations of
fraud.

        On December 18, 2014, CO Miller and his supervisor, Lee McCormick,
discussed the termination with Ms. Nettleton by telephone (R4, tab 014 at USACE 510).
The parties have submitted conflicting declarations regarding the specific statements
made by Ms. Nettleton during the telephone call. The government contends that, during
the telephone call, its representatives stated that a major concern was the financial status
of the MM/AB joint venture (R4, tab 14 at USACE 510). According to the government,
Ms. Nettleton represented that Ainsworth­Benning Construction, Inc. was the entity that
was in financial difficulty but that a different company, Ainsworth Benning of
Wyoming, Inc., was the joint venture partner of Mountain Movers Construction, Inc.

2
    The termination for default was subsequently rescinded, and is not before us. We
         make no findings of fact as to whether the termination would have been
         sustained.
                                            3
under the MATOC (id.). MM/AB contends that Ms. Nettleton actually stated that
Ainsworth-Benning Construction, Inc. no longer had an interest in the MM/AB joint
venture (app. sur-reply, ex. 1). Earlier that same day, Ainsworth-Benning Construction,
had withdrawn from the MM/AB joint venture, leaving Mountain Movers as the sole
member of the joint venture (app. sur-reply, ex. 1 at ¶¶ 16-17, decl. ex. 1). MM/AB
further contends that Ms. Nettleton raised the possibility that, to resolve the bonding
issue, Ainsworth-Benning of Wyoming, could take the place of Ainsworth-Benning
Construction in the MM/AB joint venture, if the SBA approved of this change (app.
sur-reply, ex. 1 at ¶¶ 10, 17). On January 5, 2015, Ms. Nettleton signed articles of
incorporation for Ainsworth-Benning of Wyoming, which was organized as a
South Dakota corporation (R4, tab 13 at USACE 501).3 The South Dakota Secretary of
State issued a certificate of incorporation for Ainsworth-Benning of Wyoming on
January 12, 2015 (R4, tab 13 at USACE 499).

        Following the telephone call, the Government issued MM/AB a cure notice,
dated December 19, 2014 (R4, tab 10). The cure notice contained the government’s
recitation of the discussion during the telephone conversation the previous day:

                The detailed explanation that you provided stated that
                Ainsworth-Benning (A-B) has multiple subsidiaries, and
                that one of the subsidiaries, Ainsworth-Benning
                Construction, Inc., was the entity that was encountering
                managerial collapse that affected the remaining A-B
                subsidiaries[’] ability to bond. You further explained that
                the Mountain Movers/ Ainsworth-Benning LLC JV is
                solvent because your JV is with Ainsworth-Benning of
                Wyoming, Inc., not Ainsworth-Benning Construction, Inc.

                      ....

                Per the 3 December discussions and subsequent emails,
                you stated you will provide consideration in the amount of
                $48,000 if the Termination for Default was rescinded. The
                basis for consideration was stated that the original bonds
                bond fees have been reduced as part of the indemnification

3
    Adding to the confusion, Ms. Nettleton appears to have been a Vice President of a
        Wyoming corporation, named Ainsworth-Benning of Wyoming, that was
        dissolved for failure to pay taxes in 2012 (R4, tab 20 at USACE 571). It is not
        clear from the record whether Ms. Nettleton was suggesting replacing
        Ainsworth-Benning Construction Inc. in the MM/AB joint venture with the
        South Dakota corporation named Ainsworth-Benning of Wyoming, or with the
        Wyoming corporation, similarly named Ainsworth-Benning of Wyoming.
                                             4
             process for the bond for Mountain Movers/Ainsworth
             Benning JV. Mountain Movers/Ainsworth-Benning LLC
             also agreed not to appeal the Termination for Default with
             the Armed Services Board of Contract Appeals (ASBCA).

(R4, tab 10 at USACE 472) The cure notice then provides the government’s
conditions for holding the termination for default in abeyance:

             You are notified that the Government agrees to place the
             Termination for Default in abeyance until 31 December,
             2014 to allow Mountain Movers/Ainsworth-Benning LLC
             to submit proper performance and payment bonds that are
             legally and fiscally sufficient to cure the issue of providing
             bonds. In doing so, Mountain Movers/ Ainsworth-Benning
             LLC also agrees not to appeal the Termination for Default
             with the ASBCA and accept a $48,000 reduction of
             contract price.

(R4, tab 10 at USACE 472-73) Ms. Nettleton signed the Cure Notice Receipt, and
Agreement Acknowledged on December 30, 2014 (id. at USACE 473). The signature
block had an option allowing her to agree or not agree with the terms contained in the
cure notice. She checked the box that she agreed “with the terms contained herein”
(id.). The government cites Ms. Nettleton’s signature on the cure notice as proof that
she made the alleged statements during the December 18, 2014 telephone call, while
MM/AB contends that Ms. Nettleton’s signature was only with regard to the “agreed”
terms of the cure notice (viz. obtaining bonds by December 31, 2014, a reduction in
contract price of $48,000, and not appealing the termination to the Board) (gov’t mot.
at 4; app. resp. at 8).

        On December 30, 2014, the government issued an extension to the cure notice,
allowing MM/AB until January 9, 2015, to submit its bonds (R4, tab 11). On January 22,
2015, CO Miller drafted a written determination to modify task order two by rescinding
the termination for default (R4, tab 14). CO Miller indicated that Ms. Nettleton’s
representations regarding the Ainsworth-Benning corporate entity that made up the joint
venture had satisfactorily addressed a major Government concern about the financial
stability of MM/AB (R4, tab 14 at USACE 510). CO Miller then indicated that he had
determined that the termination for default was improper because the government “took
action that might be construed as a waiver to the contract delivery or performance date”
and had not first issued a cure notice pursuant to Federal Acquisition Regulation
(FAR) 49.402-3 (id. at USACE 511). CO Miller further determined that the construction
was still needed and that it would be advantageous to the government to reinstate the
delivery order (id.).


                                           5
       Effective February 2, 2015, the parties signed Modification No. 2, rescinding
the termination for default and reducing the task order by $48,000 to $2,353,011.84
(R4, tab 15). That same day, the government issued MM/AB a notice to proceed (R4,
tab 16). MM/AB subsequently performed the task order.

       On April 12, 2019, MM/AB submitted a request for equitable adjustment
(REA) to the contracting officer alleging entitlement to $535,056.87, plus interest, a
contract extension of 538 days, remission of liquidated damages in the amount of
$132,600 and the remaining contract balance of $181,121.23 (R4, tab 17). By letter
dated June 27, 2019, MM/AB converted its REA to a certified claim (R4, tab 18).
MM/AB’s certified claim reduced the amount sought to $507,083.71 due to a revision
of the amount sought associated with the reduction in bonding costs (id. at USACE
549-50 n.1). On August 26, 2019, CO Miller issued a contracting officer’s final
decision, finding partial merit to MM/AB’s claim (R4, tab 19). MM/AB timely
appealed to the Board by letter dated September 3, 2019.

        On October 29, 2019, CO Miller issued a new final decision purporting to
rescind the August 26, 2019 final decision (R4, tab 20). In the October 29 final
decision, CO Miller indicated that he had recently obtained a copy of MM/AB’s
March 1, 2011 operating agreement indicating that Ainsworth-Benning Construction,
Inc., and not Ainsworth-Benning of Wyoming, was a member of the joint venture
(id. at USACE 570). Mr. Miller determined that Ms. Nettleton had knowingly
misrepresented the identity of the Ainsworth-Benning entity that was a member of the
MM/AB joint venture in December of 2014 following the termination for default (id).
He also concluded that he had a reasonable suspicion that MM/AB had made
fraudulent misrepresentations to the government in connection with that matter, which
had the effect of divesting his authority to issue a final decision under FAR 33.210(b)
(id. at USACE 571).

                                      DECISION

   I. Standard of Review

       Mountain Movers bears the burden of proving the Board’s subject matter
jurisdiction by a preponderance of the evidence. Reynolds v. Army & Air Force
Exchange Service, 846 F.2d 746, 748 (Fed. Cir. 1988); United Healthcare Partners,
Inc., ASBCA No. 58123, 13 BCA ¶ 35,277 at 173,156. Pursuant to the Contract
Disputes Act (CDA) 41 U.S.C. §§ 7101-09, a contractor may, “within 90 days from
the date of receipt of a contracting officer’s decision” under 41 U.S.C. § 7103 appeal
the decision to an agency board. 41 U.S.C. § 7104(a). Our reviewing court, the
Federal Circuit, has held that CDA jurisdiction requires “both a valid claim and a
contracting officer’s final decision on that claim.” M. Maropakis Carpentry, Inc.


                                           6
v. United States, 609 F.3d 1323, 1327 (Fed. Cir. 2010) (citing James M. Ellett Constr.
Co. v. United States, 93 F.3d 1537, 1541-42 (Fed. Cir. 1996)).

        When a motion to dismiss for lack of subject matter jurisdiction denies or
controverts allegations of jurisdiction, only uncontroverted factual allegations are
accepted as true for purposes of the motion, and other facts underlying the
jurisdictional allegations are subject to fact-finding. Cedars-Sinai Medical Center v.
Watkins, 11 F.3d 1573, 1583-84 (Fed. Cir. 1993); Arbaugh v. Y&H Corp., 546 U.S.
500, 514 (2006). The facts supporting jurisdiction are subject to fact-finding by the
Board based on our review of the record. CCIE & Co., ASBCA Nos. 58355, 59008,
14-1 BCA ¶ 35,700 at 174,816; Raytheon Missile Sys., ASBCA No. 58011, 13 BCA
¶ 35,241 at 173,016. However, when the factual dispute involves the allegation of a
fact that is not jurisdictional, but an essential element of a claim for relief, this is a
matter that goes to the merits. Arbaugh, 546 U.S. at 514.

  II. Limitations On The Board’s Jurisdiction Regarding Fraud

       The government’s motion is premised upon its novel theory it should be entitled
to unilaterally remove litigation from the boards of contract appeals, whenever it
suspects fraud. The government argues:

              Congress did not intend for the Government to have to
              defend claims involving fraud in agency boards, where the
              government has no ability to avail itself of the various
              defenses and fraud based counterclaims that would be
              available were the same contract claim to have been filed
              in federal court. See [Martin J. Simko Construction, Inc. v.
              United States, 852 F.2d 540, 543-44 (Fed. Cir. 1988)]. If
              the Board were to retain jurisdiction over this claim, it
              would provide a safe forum for contractors perpetrating
              fraud to sue the government while avoiding any liability
              for its related fraudulent behavior. Both the CDA and
              judicial economy considerations recommend the resolution
              of such cases in the Court of Federal Claims rather than the
              boards of contract appeals.

(Gov’t mot. at 11) Thus, under the government’s theory, a contracting officer could
unilaterally withdraw a final decision at any point and thus, divest jurisdiction from an
agency board of contract appeals. According to the government, the contractor would
still have a remedy before the Court of Federal Claims (gov’t. mot. at 9-10 n.1).
However, the government has not explained how its interpretation of the CDA as
divesting this Board of jurisdiction would not similarly divest the Court of Federal
Claims of its jurisdiction, since the jurisdiction of both fora originate with a contracting

                                             7
officer’s final decision as specified in 41 U.S.C. § 7103. Further, the government’s
argument that the Board provides a “safe forum for contractors perpetrating fraud to sue
the government while avoiding any liability for its related fraudulent behavior” (gov’t
mot. at 11) ignores the Board’s ability to consider the affirmative defense of prior
material breach, Laguna Construction Co., Inc. v. Carter, 828 F.3d 1364 (Fed. Cir.
2016), the Board’s ability to make findings of material misrepresentation of fact in
holding a contract void ab initio, Vertex Construction & Engineering, ASBCA
No. 58988, 14-1 BCA ¶ 35,804, and the government’s ability to bring suit pursuant to
the False Claims Act in Federal District Court. 31 U.S.C. § 3729.

        The CDA provides the agency contracting officer with authority to decide
claims submitted by contractors. 41 U.S.C. § 7103(a)(3). However, the CDA “does
not authorize an agency head to settle, compromise, pay, or otherwise adjust any claim
involving fraud.” 41 U.S.C. § 7103(c)(1). As noted above, the Board’s jurisdiction
depends on a valid contractor claim, and a contracting officer’s decision on that claim.
M. Maropakis Carpentry, 609 F.3d at 1327. Consistent with the CDA, the FAR
provides that a contracting officer’s “authority to decide or resolve claims does not
extend to . . . (b) The settlement, compromise, payment or adjustment of any claim
involving fraud.” FAR 33.210. However, by the plain language of the CDA, the
restriction on the contracting officer’s authority applies to “any claim involving fraud”
and not “any contract.” Thus, the alleged fraud must relate to the “claim” and not just
be a belief that there was fraud somewhere in the contract. Joseph Morton, Co. v.
United States, 757 F. 2d 1273, 1281 (Fed. Cir. 1985).

        Even if the contracting officer issues a final decision on a contractor claim
involving fraud, the Board possesses jurisdiction to review that final decision if the
final decision asserts a basis that the contracting officer is permitted to assert – that is, a
basis other than fraud. Daff v. United States, 78 F. 3d 1566, 1572 (Fed. Cir 1996);
PROTEC GmbH, ASBCA No. 61161 et al., 18-1 BCA ¶ 37,010 at 180,244-45; Sand
Point Services, LLC, ASBCA Nos. 61819, 61820, 19-1 BCA ¶ 37,412 at 181,859.
However, if a contracting officer issues a final decision based solely upon a suspicion
of fraud it is not a valid contracting officer’s final decision and does not provide the
Board with jurisdiction to entertain an appeal. Medina Construction, Ltd. v. United
States, 43 Fed. Cl. 537, 556 (1999).

  III. The Board Possesses Jurisdiction To Entertain The USACE’s August 26, 2019
       Final Decision Because It Was Not Based On A Finding Of Fraud, And The
       USACE’s October 29, 2019 Final Decision Did Not Divest The Board Of
       Jurisdiction

      The government asserts that the Board is without jurisdiction to entertain
MM/AB’s appeal due to the contracting officer’s suspicion of fraud. According to the
government the “Contracting Officer and this Board lack jurisdiction to render any

                                              8
decision on a claim involving fraud” (gov’t mot. at 1). According to the government, a
“reasonable suspicion of fraud deprives the Board of jurisdiction” (gov’t reply at 2).
The government additionally contends that:

             It is of no moment that the Contracting Officer issued the
             [final decision finding partial merit to MM/AB’s claim]
             without knowledge of MM’s fraudulent misrepresentations
             that took place during the course of the contract. The
             Contracting Officer’s prior reasons for the [sic] denying
             the claim are rescinded, because the agency (including the
             Board) does not have authority to raise or settle other
             issues when there is a reasonable suspicion of fraud.

(Gov’t reply at 3) The government’s statement is plainly incorrect as a matter of law.
As explained above, a contracting officer may issue a final decision resolving a claim
on a basis other than fraud, and the Board possesses jurisdiction to review such a
decision. Daff, 78 F. 3d at 1572; PROTEC GmbH, 18-1 BCA ¶ 37,010 at 180,244-45;
Sand Point Services, 19-1 BCA ¶ 37,412 at 181,859. Here, the contracting officer
issued a final decision on August 26, 2019, finding partial merit to MM/AB’s claim
(R4, tab 19). The August 26 final decision was not based on a finding of fraud. The
decision did not mention fraud. In fact, the final decision could not be based on fraud,
because the contracting officer contends that he was unaware of the purported fraud
at the time he issued his final decision (R4, tab 20 at USACE 570). MM/AB timely
appealed to the Board on September 3, 2019. Thus, the Board possesses jurisdiction to
entertain MM/AB’s appeal.

        The government’s reliance on Martin J. Simko Construction, Inc. v. United
States, 852 F.2d 540 (Fed. Cir. 1988); Medina Constr., 43 Fed. Cl. at 555-56; and
Savannah River Nuclear Solutions, LLC v. Dept of Energy, CBCA No. 5287, 17-1
BCA ¶ 36,749 is clearly misplaced. The government’s citation of Medina and
Savannah River are easily distinguishable. In Medina, the contracting officer
explicitly premised the final decision on unproven allegations of fraud. Medina,
43 Fed. Cl. at 556. The court held:

             Even if the CO’s final decision is read in the broadest
             possible light, the government has not established that the
             CO incorporated a reason, separate and distinct from the
             fraud allegations, for the denial of Medina’s [termination




                                           9
                settlement proposal] which would form a basis for its
                validity and thereby support this Court’s jurisdiction.
                Cf. Daff, 78 F.3d at 1572.

Id. Thus, the Medina court recognized that it would possess jurisdiction to entertain a
claim premised on a basis other than fraud pursuant to the Federal Circuit’s holding in
Daff, but that the final decision at issue in that case was solely based on fraud. Here,
the contracting officer issued a final decision that could not have been premised upon
fraud, because the contracting officer was not even aware of the purportedly fraudulent
statements when he issued the August 26, 2019 final decision.

        The facts in Savannah River are similarly distinguishable. In that appeal, the
Department of Justice filed a False Claims Act suit against the contractor while the
contractor’s CDA claim was pending before the contracting officer. The contracting
officer issued a letter to the contractor, indicating that he suspected that costs in the
claim were fraudulent, and that he had referred the matter to the relevant agency
officials, and that he was without authority to take action on the claim. Savannah
River, 17-1 BCA ¶ 36,749 at 179,114. The Civilian Board of Contract Appeals held
that the contracting officer was not authorized to issue a final decision, and that there
could not be a deemed denial of a claim where the contracting officer was without
jurisdiction to issue a final decision.4 Id. at 179,115-16. We recently held in
ESA South, Inc., ASBCA Nos. 62242, 62243, 2020 WL 4355244 (June 9, 2020) that
we possess jurisdiction to entertain an appeal on facts similar to those in Savannah
River. In ESA, the contractor appealed from a deemed denial of its claim before the
contracting officer issued a letter declining to issue a final decision due to a suspicion
of fraud. Id.

        The government cites Martin J. Simko Constr., the only one of the three cited
decisions that is binding authority for us, for the unremarkable proposition that
Congress intended that fraud claims be resolved outside the disputes resolution process
(gov’t reply at 2-3). However, here, the contracting officer did not know of MM/AB’s
alleged fraud when he issued his final decision, and did not assert fraud as a basis for
his final decision.

       Similarly, we find the government’s attempts to distinguish our holdings in
PROTEC and Sand Point unavailing. The government contends that PROTEC does
not control because the final decision in PROTEC did not mention fraud (gov’t reply

4
    Decisions of the Civilian Board of Contract Appeals are not binding on us. As we
         hold that we possess jurisdiction to entertain MM/AB’s appeal from the
         August 26, 2019 contracting officer’s final decision, we do not reach the issue
         of whether, under proper circumstances, we would possess jurisdiction under a
         deemed denial theory.
                                             10
at 24). The government is apparently trying to distinguish PROTEC based on the
October 29, 2019 final decision purporting to rescind the earlier, August 26, 2019 final
decision. However, the August 26, 2019 final decision, the document that created
jurisdiction in this Board, similarly did not mention fraud.

        The government also attempts to distinguish our holding in Sand Point because
the contracting officer in that appeal did not refer the matter to the appropriate agency
officials for investigation (gov’t reply at 24). As noted above, the contracting officer
issued the August 26, 2019 final decision without referring the matter for a fraud
investigation. According to the government, the Board established a jurisdictional
test in Sand Point, providing that the Board possesses jurisdiction to entertain an
appeal involving fraud if “we do not have to make factual determinations of fraud”
(id. at 24-25, quoting Sand Point, 19-1 BCA ¶ 37,412 at 181,859). The government
then contends that the Board would need to make factual determinations of fraud to
adjudicate this appeal (gov’t reply at 25). We disagree.

        Just as the contracting officer was able to review MM/AB’s claim in rendering
his final decision without reference to fraud, the Board can review the claim without
reference to fraud. As explained in Sand Point, a determination of fraud would require
the board to “determine whether any incorrect statements were made knowingly and
with the intent to deceive.” Sand Point, 19-1 BCA ¶ 37,412 at 181,859, (quoting SIA
Constr., Inc., ASBCA No. 57693, 14-1 BCA ¶ 35,762 at 174,984 (quoting Pub.
Warehousing Co., K.S.C., ASBCA No. 58078, 13 BCA ¶ 35,460 at 173,896)). Here,
the government alleges that the entire contract performance was fraudulent because the
alleged misrepresentations induced the contracting officer to reinstate the contract
(gov’t reply at 23). As noted above, the CDA jurisdictional prohibition applies to
alleged fraud related to the claim, and does not apply to a general belief that there was
fraud somewhere in the contract. Joseph Morton, 757 F.2d at 1281. At best, the
government notes that MM/AB’s claim seeks to modify the $48,000 contract price
reduction discussed in the December 18, 2014 phone call and contained in the
December 19, 2014 cure notice (gov’t reply at 10, 25). However, we can adjudicate
this claim based on the terms of the modification. We do not need to determine
whether MM/AB agreed to the modification of the contract amount “knowingly and
with the intent to deceive.” The simple fact that MM/AB agreed to a price adjustment
with such terms, subject to any defenses MM/AB may assert, would allow us to
adjudicate the claim.

       Having found that we possess jurisdiction to entertain MM/AB’s appeal from
the August 26, 2019 final decision, we hold that the contracting officer’s final decision
dated October 29, 2019, purporting to rescind the August 26, 2019 final decision, does
not divest us of jurisdiction. The government argues that once the contracting officer
rescinded the August 26, 2019 final decision, “there was neither a valid decision nor a
deemed denial of the claim upon which to base CDA jurisdiction” (gov’t mot. at 11).

                                           11
However, the government is incorrect in asserting that the contracting officer’s
purported rescission of the August 26, 2019 would have any effect on our jurisdiction.
The Board was vested with jurisdiction when MM/AB filed its notice of appeal on
September 3, 2019. Triad Microsystems, Inc., ASBCA No. 48763, 96-1 BCA
¶ 28,078 at 140,196. “Once the Board is vested with jurisdiction over a matter, the
contracting officer cannot divest it of jurisdiction by his or her unilateral action.”
Id. (citing Fairfield Scientific Corp., ASBCA No. 21151, 78-1 BCA ¶ 13,082
at 63,905-06 aff’d on reconsid. 78-2 BCA ¶ 13,429, aff’d in part rev’d in part on other
grounds 611 F.[2]d 854 (Ct. Cl. 1979)). Moreover, the government’s rescission of the
August 26, 2019 final decision did not moot the issues before us, because MM/AB has
not received all the relief requested, as would be the case if the government had
withdrawn a government claim. Shiloh Services, Inc., ASBCA No. 61134, 18-1 BCA
¶ 37,117 at 180,662 (citing Chapman Law Firm Co. v. Greenleaf Constr. Co.,
490 F.3d 934, 939 (Fed. Cir. 2007)).

                                   CONCLUSION

        For the reasons stated above, the government’s motion to dismiss is denied.
The government is directed to answer MM/AB’s complaint within 30 days of the date
of this opinion.

      Dated: August 7, 2020




                                                 DAVID D’ALESSANDRIS
                                                 Administrative Judge
                                                 Armed Services Board
                                                 of Contract Appeals

 I concur                                        I concur




 RICHARD SHACKLEFORD                             OWEN C. WILSON
 Administrative Judge                            Administrative Judge
 Acting Chairman                                 Vice Chairman
 Armed Services Board                            Armed Services Board
 of Contract Appeals                             of Contract Appeals

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      I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 62164, Appeal of
Mountain Movers/Ainsworth-Benning, LLC, rendered in conformance with the
Board’s Charter.

       Dated: August 7, 2020




                                                  PAULLA K. GATES-LEWIS
                                                  Recorder, Armed Services
                                                  Board of Contract Appeals




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