               ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                              )
                                          )
Parsons Government Services, Inc.         )           ASBCA No. 62113
                                          )
Under Contract No. W912DY-09-D-0062 et al.)

APPEARANCES FOR THE APPELLANT:                        Kevin J. Slattum, Esq.
                                                      Aaron S. Ralph, Esq.
                                                       Pillsbury Winthrop Shaw Pittman LLP
                                                       Los Angeles, CA

APPEARANCES FOR THE GOVERNMENT:                       Arthur M. Taylor, Esq.
                                                       DCMA Chief Trial Attorney
                                                      Srikanti Schaffner, Esq.
                                                       Trial Attorney
                                                       Defense Contract Management Agency
                                                       Carson, CA

             OPINION BY ADMINISTRATIVE JUDGE D’ALESSANDRIS

        Pending before the Board is the motion to dismiss for lack of subject matter
jurisdiction filed by respondent, the Defense Contract Management Agency
(DCMA or government). Appellants, Parsons Government Services, Inc. (PGSI),
formerly Parsons Infrastructure & Technology Group (PI & TG), and Parsons
Constructors & Fabricators (PCFI) (collectively Parsons) appeal from a contracting
officer’s final decision denying its claim regarding incurred costs from the sale and
leaseback of a building in Pasadena, California. We find that the claim is barred by
the statute of limitations and that it fails to assert a valid Contract Disputes Act (CDA)
claim, and grant the government’s motion to dismiss.

             STATEMENT OF FACTS (SOF) FOR PURPOSE OF THE MOTION

        The relevant facts are not in dispute. PGSI and PCFI are both wholly-owned
subsidiaries of the Parsons Corporation (PC) (compl. ¶¶ 5-9). 1 In the 1970s the parent
entity (PC) constructed the Pasadena Tower Building (compl. ¶ 21). The government
compensated Parsons for the use of the building through depreciation charges and later use

1
    On August 28, 2019, Parsons submitted a request to file a first amended complaint to
        correct the omission of damage amounts in paragraphs 187 and 199, and to
        correct typographical errors. None of these changes are relevant to the pending
        motion to dismiss.
charges recovered through Parsons’ incurred cost submissions (compl. ¶¶ 22-36). In 2011,
PC sold the Pasadena Tower Building, and other nearby buildings, to a non-affiliated third
party (compl. ¶¶ 38-39). The parent entity, PC, through another subsidiary then leased-back
the Pasadena Tower Building with a 15 year lease (compl. ¶¶ 45-47; R4, tab 3).

         In September 2012, Parsons submitted to the government its FY2011 2 final
indirect cost rate proposals which included PGSI and PCFI’s allocated portion of the
lease costs for the Pasadena Tower Building and the gain on the sale of the building
(R4, tabs 4-6). Parsons’ incurred cost proposals were still pending in March 2018,
when, during discussions with the government regarding the incurred cost proposals,
Parsons sent a letter to the Corporate Administrative Contracting Officer (CACO)
arguing that it was entitled to building lease costs in excess of the amounts it proposed
in its indirect rate proposal roughly five and half years earlier (R4, tab 13). Parsons
concluded the letter by “respectfully request[ing] that the Government recalculate
lease cost allowability, as well as the separate allowability of the other building costs
the company incurred in 2011 and 2012 (id. at G-533-34). Notably, Parsons did not
submit a revised indirect cost rate proposal incorporating the costs asserted in the
letter, and did not include a claim certification.

        In September 2018, the CACO issued separate unilateral rate determinations for
PGSI and PCFI for FY2011. The unilateral rate determinations rejected certain lease
costs included in Parsons’ indirect cost rate proposals, and did not address Parsons’
costs that were first raised in its May 2018 letter. (R4, tabs 15-16) Relevant to this
appeal, the CACO stated in her unilateral rate determinations that “it is my final
determination that [PGSI] included $1,237,603 of unallowable indirect costs in its
Proposal” (R4, tab 16 at G-543; see also R4, tab 15 at G-538 for nearly identical
language in the unilateral rate determination for PCFI). The CACO directed Parsons
to submit adjustment vouchers for all affected contracts if the unilaterally determined
rates differed from the rates used in Parsons’ interim billings (R4, tab 15 at G-542,
tab 16 at G-548). However, the unilateral rate determinations did not include the
customary notice of appeal rights (R4, tabs 15-16). The CACO sent the separate
unilateral rate determinations to Parsons by Federal Express, and Parsons signed for
the delivery on September 13, 2018 (gov’t mot, ex. G-1, declaration of CACO Grace
Kim, dated September 3, 2019; ex. C).

       Over six months later, on March 24, 2019, Parsons submitted a certified claim
to the CACO, captioned “Certified Claim for Allowability of FY2011 Leaseback
Costs, Withdrawal of Unilateral Rate Determination and Interpretation of FAR
Contract Terms” (R4, tab 17). Parsons asserted a breach of contract due to the
government’s failure to allow and pay leaseback costs, and other related costs, for
FY2011. Parsons requested withdrawal of the unilateral rate determinations and return

2
    The contractor’s fiscal year is the calendar year (compl. ¶ 95).

                                              2
of the portion of the rates paid on invoices applying the unilaterally determined rates
(R4, tab 17 at G-555). Parsons’ claim also asserted a purported claim for contract
interpretation regarding the Federal Acquisition Regulation (FAR) provisions for
leaseback costs (id.). On May 24, 2019, the CACO issued a final decision denying
Parsons’ claim and finding that it was not a valid claim because it did not assert a sum
certain, and because it was barred by the six-year statute of limitations (R4, tab 18).
On July 1, 2019, Parsons submitted this appeal to the Board.

                                           DECISION

       A. Standard of Review

       Parsons 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 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 United States Court of Appeals for 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. 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)).

       B. The September 2018 Unilateral Rate Determination Is A Final And
          Unappealed Government Claim

        Resolution of the Government’s motion to dismiss requires that we first address
the September 2018 unilateral rate determination. As set forth in the facts above, this
appeal involves the treatment of Parsons’ leaseback costs for the Pasadena Tower
Building. It is well settled that a unilateral rate determination is a government claim.
See FAR 52.216-7(d) (4) (“Failure by the parties to agree on a final annual indirect
cost rate shall be a dispute within the meaning of the Disputes clause.”); Edward
Hayes, as Liquidator of Base Operation Services GMBH, ASBCA No. 59829,
16-1 BCA ¶ 36,412 at 177,541; Fiber Materials, Inc., ASBCA No. 53616, 07-1 BCA
¶ 33,563 at 166,251. Upon receipt of the unilateral rate determination, Parsons could
either accept the determined indirect cost rate as the final rate, or appeal the unilateral
rate to this Board or the Court of Federal Claims within the time permitted by the
CDA. Parsons did not appeal within the allowable time period (90 days for appeals to
the Board) and the FY2011 unilateral rate determination became Parsons’ final
indirect cost rate. See FAR 2.101 (“Final indirect cost rate means the indirect cost
rate established and agreed upon by the Government and the contractor as not subject
to change.”).


                                             3
        Parsons’ March 2018 letter regarding additional lease costs does not change the
finality of Parsons’ FY2011 indirect cost rate. The parties disagree whether the lease
costs at issue could be raised by Parsons’ letter, or whether Parsons was required to
submit a revised indirect cost rate proposal to properly place the costs before the
CACO (gov’t mot. at 9-10; app. resp. at 6-7, 9-10); however, the proper procedure is
irrelevant to our analysis. If Parsons’ lease costs were properly raised by the letter,
they were rejected by the unilateral rate determination which is now the final indirect
cost rate for FY2011. If Parsons’ lease costs were not properly raised by the letter,
they were not considered in the unilateral rate determination, and the unilateral rate
determination is still the final indirect cost rate for FY2011.

       C. Parsons’ March 2019 Claim Pertaining To FY2011 Indirect Rates, and
          Withdrawal of the Unilateral Rate Determination, Is Barred By The Statute
          Of Limitations

        Parsons submitted a claim to the CACO on March 24, 2019. The document
sought (1) FY2011 leaseback costs; (2) withdrawal of the unilateral rate determination;
and (3) interpretation of FAR contract terms (R4, tab 17 at G-555). Parsons’ claims
for (1) FY2011 leaseback costs and (2) withdrawal of the unilateral rate determinations
are barred by the statute of limitations. As noted in the facts, the CACO issued these
unilateral rate determinations on September 12, 2018 (R4, tabs 15-16). The CACO
sent the unilateral rate determination to Parsons by Federal Express, and Parsons
signed for the delivery on September 13, 2018 (gov’t mot. at ex. G-1, ex. C). The
CDA provides that a contractor must take an appeal to this Board within 90 days of
receipt of a final decision 41 U.S.C. § 7104(a). 3 Thus, Parsons must have filed its
appeal with the Board on or before December 12, 2018, for its claim to be timely.
Parsons did not file its appeal until July 1, 2019, more than six months after the
deadline and thus its appeal is untimely, unless the deadline was tolled, or unless there
was a defect in the final decision that prejudiced Parsons. We find that neither of these
exceptions apply.

        Board and Federal Circuit precedent holds that the 90 day statute of limitations is
jurisdictional. Military Aircraft Parts, ASBCA No. 60308, 17-1 BCA ¶ 36,680
at 178,609; Cosmic Construction v. United States, 697 F.2d 1389, 1390 (Fed. Cir. 1982).
The Board’s precedent holds that the Federal Circuit’s holding in Sikorsky Aircraft
Corp. v. United States, 773 F.3d 1315 (Fed. Cir. 2014) that the six-year statute of
limitations 4 is subject to equitable tolling did not overturn prior Federal Circuit

3
  Parsons could have appealed to the United States Court of Federal Claims within one
       year of the final decision. 41 U.S.C. § 7104(b) (3). However, that deadline has
       also passed.
4
  The six-year statute of limitations is for submitting a claim to the contracting officer.

                                             4
precedent, such as Cosmic, that the 90-day statute of limitations was jurisdictional.
Military Aircraft Parts, 17-1 BCA ¶ 36,680 at 178,609. As Parsons did not file its
appeal within 90 days of its receipt of the unilateral rate determination, its claim
pertaining to the FY2011 lease costs is barred by the statute of limitations.

       As noted in the facts above, the unilateral rate determinations did not include a
notice of appeal rights. The government’s failure to include the notice of appeal rights
does not render an otherwise valid final decision invalid. Alenia North America, Inc.,
ASBCA No. 57935, 13 BCA ¶ 35,296 at 173,271 (citing Placeway Construction Corp.
v. United States, 920 F.2d 903, 907 (Fed. Cir. 1990). The failure to include a notice of
appeal rights does not prevent the start of the appeal period unless the contractor
demonstrates that it was actually prejudiced by the lack of notice. Decker & Co.
v. West, 76 F.3d 1573, 1580 (Fed. Cir. 1996) (“A contractor in Decker’s position must
demonstrate that [incorrect appeal advice] actually prejudiced its ability to prosecute its
timely appeal before the limitation period will be held not to have begun.”);
Mansoor Int’l Dev. Services, ASBCA Nos. 59466 et al., 16-1 BCA ¶ 36,376 at 177,337.
Here, Parsons does not allege that it was actually prejudiced by the government’s failure
to include the notice of appeal rights. 5 Instead, Parsons attempts to distinguish the cited
cases because they involved terminations for default pursuant to different FAR clauses,
or defective rather than entirely missing appeal information (app. opp’n at 7-8). Our
precedent is not limited to termination for default cases. Moreover, our decision in
Mansoor notes that “[t]hree of the decisions at issue here lacked any mention of appeal
rights” Mansoor, 16-1 BCA ¶ 36,376 at 177,337. Thus, we reject Parsons’ attempt to
distinguish these cases.

        Parsons additionally alleges that the unilateral rate determination was not clearly
final (app. opp’n at 8). We reject this argument also. The final decisions plainly
announce that “it is my final determination that” (R4, tab 15 at G-538, tab 16 at G-543).
The decisions clearly state that they are unilaterally determining the final indirect cost
rates, and direct Parsons to submit adjustment vouchers (R4, tab 15 at G-542;
tab 16 at G-548) (“you must submit adjustment vouchers if the rates unilaterally
determined herein differ from the rates used for [Contractor Fiscal Year 2011] in your
previous interim billings”). These adjustment vouchers are the last step in the process
for reimbursing contractors for indirect costs. Parsons’ argument that the unilateral rate

5
    The government asserts that Parsons appealed from unilateral rate determinations
         that were missing a notice of appeal rights in ASBCA Nos. 60218 and 61309.
         As this is a challenge to the Board’s jurisdiction, we would be permitted to
         consider evidence beyond the pleadings; however, the government did not
         include copies of the relevant documents with its motion. The referenced
         information is not contained in our dispositions of those appeals, and we
         decline to take judicial notice of non-public information. Thus, we do not
         consider the government’s unsubstantiated allegations.

                                            5
determination was “not clearly final” (app. opp’n at 8) is contrary to the undisputed
evidence.

        Parsons further asserts that the additional lease costs first raised in its May 2018
letter were not considered by the government in the September 2018 unilateral rate
determinations. According to Parsons, these costs were raised in its March 2019
certified claim, and thus, are properly before the Board. As explained above, we find
that the unilateral rate determination is a final and unappealed government claim that
precludes consideration of “new” costs in a later asserted contractor claim. However,
even if Parsons were correct that it could raise a claim for new indirect costs after the
establishment of the final indirect cost rates by the unilateral determination, Parsons’
claim here would be barred by the six-year statute of limitations. Parsons’ claim
asserts a sum certain for FY2011 costs, but not for any later years. Thus, to be timely,
Parsons’ claim would have had to have been submitted by the end of 2017, but it was
not submitted until March of 2019.

        The six-year statute of limitations, unlike the 90-day statute of limitations for
filing an appeal, is subject to equitable tolling; however, Parsons has not alleged any
basis for why it was unable to file its claim within six years. Thus, we find that
Parsons’ claim for additional lease costs for FY2011, contained in its March 2019
claim, is barred by the statute of limitations.

       D. Parsons’ March 2019 Claim Fails To State A Claim For Contract
          Interpretation

       Parsons’ certified claim also purportedly seeks contract interpretation of the
FAR provision for allowability of contractor leaseback costs. The government moves
to dismiss this portion of Parsons’ appeal as a monetary claim that fails to state a sum
certain (gov’t mot. at 13-14). We hold that Parsons is asserting a monetary claim
mischaracterized as a claim for contract interpretation. Parsons correctly cites Board
precedent finding jurisdiction to entertain non-monetary claims for contract
interpretation (app. opp’n at 9-13). However, the cases cited predate the Federal
Circuit’s decision in Securiforce International America, LLC v. United States, 879 F.3d
1354, 1360 (Fed. Cir. 2018). Securiforce did not change the jurisdiction of the Board
to consider non-monetary claims. Instead, Securiforce clarified when a purported
non-monetary CDA claim actually seeks monetary relief. In Securiforce the circuit
explained that “[i]f ‘the only significant consequence’ of the declaratory relief sought
‘would be that [the plaintiff] would obtain monetary damages from the federal
government,’ the claim is in essence a monetary one.” Securiforce, 879 F.3d at 1360
(quoting Brazos Elec. Power Coop., Inc. v. United States, 144 F.3d 784, 787 (Fed. Cir.
1998)).




                                             6
       In Garrett v. General Elec. Co., 987 F.2d 747 (Fed. Cir. 1993), the Federal
Circuit held that the CDA provides jurisdiction to entertain nonmonetary claims for
contract interpretation. In that case, the court held that, pursuant to that contract’s
inspection clause, the government had three options when it found that the contractor
had not fulfilled the contract’s requirements; it could have: 1) reduced the contract
price by an equitable portion of the contract price; 2) demanded that the contractor
repay an equitable portion of the contract price; or 3) directed the contractor to correct
or replace the defective product. General Electric, 987 F.2d at 749. In General
Electric, contract interpretation could relieve the contractor from its obligation to
perform, and this would have been a “significant consequence” of the relief sought that
was not monetary in nature. (Id.)

       In Securiforce, the government issued a partial termination for convenience and
then terminated the contractor for default. The contractor filed its initial complaint in
the Court of Federal Claims to challenge the termination for default and then filed a
claim with the contracting officer challenging the termination for convenience.
Securiforce, 879 F.3d at 1358-59. Thus, at the time Securiforce filed its claim, it had
already been terminated for default and it could not obtain any relief other than money
damages because it was no longer performing on the contract.

        Parsons cites to our holding, predating Securiforce, in Greenland Contractors
I/S, ASBCA Nos. 61113, 61248, 18-1 BCA ¶ 36,942 at 179,973, for the proposition
that that the Board can entertain a claim for contract interpretation. However, Parsons
does not cite our subsequent holding in Greenland Contractors I/S, ASBCA
Nos. 61113, 61248 19-1 BCA ¶ 37,259, applying facts not present in the initial
decision, and determining that Greenland was, in fact, seeking to assert a monetary
claim because it had already performed some of the work for which it sought an
interpretation of contractual terms. We held that, because Greenland had already
performed some of the work, there was no other significant consequence of a claim for
contract interpretation, other than money damages. Greenland, 19-1 BCA ¶ 37,259
at 181,332.

        In a similar (though not binding on us) case, the Civilian Board of Contract
Appeals held in Duke University v. Dept. of Health and Human Services, CBCA
No. 5992, 18-1 BCA ¶ 37,023, that the contractor had “already incurred costs
associated with its contract interpretation dispute, and it could have quantified those
costs and stated them in a sum certain in a claim to the contracting officer.” Duke,
18-1 BCA ¶ 37,023 at 180,291. The Civilian Board explained that a “ruling in Duke’s
favor would not result in Duke avoiding costs, but instead would be used only to
entitle Duke to monetary relief in a separate proceeding. In such circumstances, it is
clear that Duke has an uncertified and unquantified monetary claim.” (Id.) We find
the Civilian Board’s reasoning here to be persuasive.



                                            7
        Here Parsons asserts that it is seeking an interpretation of contract terms related
to the “calculation of allowable rent costs pursuant to FAR 31.205-36(b) and
FAR 31.205-16(b), as applicable to FY2011 and all subsequent fiscal years in which
these costs have been and will be charged to the Government” (app. opp’n at 11)
(emphasis omitted). However, the only “significant consequence” of Parsons’ claim for
contract interpretation would be the payment of money. The parent corporation, PC,
signed a 15 year lease for the Pasadena Tower Building in 2011 and Parsons has
continuously occupied space in the building (compl. ¶¶ 21-47). Thus, unlike the
contractor in General Electric, Parsons will not be able to avoid performance of a
contractual task by virtue of its claim for contractual interpretation. Parsons has already
occupied the building pursuant to the lease for over eight years, and is obligated, by
lease, to stay in the building until June 30, 2026. Thus, Parsons does not assert a valid
non-monetary claim for contract interpretation.

        Moreover, to the extent Parsons’ claim for contractual interpretation for years
after FY2011 could be interpreted as a claim for money damages, Parsons admits that
its claim for years after FY2011 are only for contract interpretation (app. resp.
at 10 (“Parsons’ Claim . . . articulates a sum certain for the FY 2011 year while at the
same time seeking a non-monetary claim for contract interpretation for future years.”)).
Thus, Parsons’ appeal purporting to assert a non-monetary claim for contract
interpretation is dismissed for lack of jurisdiction.

                                        CONCLUSION

      For the reasons stated above, Parsons’ appeal is dismissed for lack of jurisdiction.
Parsons’ August 29, 2019 motion for leave to file a first amended complaint is denied as
moot.

       Dated: April 15, 2020




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


(Signatures continued)


                                            8
 I concur                                         I concur




 RICHARD SHACKLEFORD                              J. REID PROUTY
 Administrative Judge                             Administrative Judge
 Acting Chairman                                  Vice Chairman
 Armed Services Board                             Armed Services Board
 of Contract Appeals                              of Contract Appeals


      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. 62113, Appeal of
Parsons Government Services, Inc., rendered in conformance with the Board’s
Charter.

       Dated: April 15, 2020



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




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