               ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                  )
                                              )
Latifi Shagiwall Construction Company         )      ASBCA No. 58872
                                              )
Under Contract No. W91B4K-09-C-RP19           )

APPEARANCE FOR THE APPELLANT:                        Mr. Abdul Khalil Latifi
                                                      Director
                                                                                            t
APPEARANCES FOR THE GOVERNMENT:                      Raymond M. Saunders, Esq.
                                                      Army Chief Trial Attorney
                                                     CPT Harry M. Parent, JA                I
                                                                                            I
                                                     MAJ John R. Longley, JA
                                                      Trial Attorneys

         OPINION BY ADMINISTRATIVE JUDGE DICKINSON ON THE
             GOVERNMENT'S AMENDED MOTION TO DISMISS
                     FOR LACK OF JURISDICTION

       Appellant Latifi Shagiwall Construction Company (LSCC) seeks a total of
$887,496 for three claims arising under Contract No. W91B4K-09-C-RP19. The
government moves to dismiss the appeal for lack of jurisdiction on the basis of three
alleged jurisdictional defects. Appellant opposes the motion. We grant the
government's motion and dismiss the appeal for lack of jurisdiction.

       STATEMENT OF FACTS CSOF) FOR PURPOSES OF THE MOTION

        1. Contract No. W91B4K-09-C-RP19 was awarded to LSCC on 7 April 2009
for $1, 135,457 .15 to design and build a gravel road 8.5 kilometers long near the Valley
of Pashagar, Nurgaram District, Nuristan Province, Afghanistan. The contract was
awarded under the Commanders' Emergency Response Program (CERP), Purchase
Request No. CERPJAF9F00142. (R4, tab 1)

        2. The CERP is the successor of a program of humanitarian expenditures
originally established by the Administrator of the Coalition Provisional Authority
(CPA) expressly for the benefit of the Iraqi people and funded with Development Fund
for Iraq (DFI) funds (R4, tab 51 [National Defense Authorization Act for Fiscal Year
2006 (NDAA FY06), Pub. L. No. 109-163, § 1202(e), 119. Stat. 3136, 3456 (2006)];
                                                                                            t
see also http://www.iraqcoalition.org/regulations/, Regulation 2). Upon dissolution of      f
                                                                                            I
the CPA on 28 June 2004 1, the CERP was established and funded with United States
Government appropriated funds for the purpose of enabling United States military
commanders in Iraq to respond to urgent humanitarian relief and reconstruction
requirements within their areas of responsibility by carrying out programs to
immediately assist the Iraqi people (R4, tab 51 ). 2 No later than December 2008 the
CERP also funded humanitarian and reconstruction efforts for the benefit of the people
of Afghanistan (R4, tab 50).

        3. Congress expressed its intent that the CERP program was to be executed
with a minimum of administrative functions (see H.R. Rep. No. 108-622 at 381
(2004)) and delegated significant authority to the Department of Defense (DoD) to
craft regulations and procedures to exercise its CERP authority. Section 1201 of the
Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 granted
the Secretary of Defense the authority to "waive any provision of law ... that would
(but for the waiver) prohibit, restrict, limit, or otherwise constrain the exercise of that
authority." Pub. L. No. 108-375, § 1201(c), 118 Stat. 1811, 2078 (2004). This waiver
authority has been continually extended to the present. See, e.g., National Defense
Authorization Act for Fiscal Year 2006, Pub. L. No. 109-163, § 1202(d), 119 Stat.
3136, 3456; Duncan Hunter National Defense Authorization Act for Fiscal Year 2009,
Pub. L. No. 110-417, § 1214, 122 Stat. 4356, 4630 (2008); National Defense
Authorization Act for Fiscal Year 2012, Pub. L. No. 112-81, § 120l(d), 125 Stat.
1298, 1620 (2011); National Defense Authorization Act for Fiscal Year 2014, Pub. L.
No. 113-66, § 1211, 127 Stat. 672, 904-05 (2013). Further the Conference Report on
the Fiscal Year 2005 authorization provided:

                       It is the understanding of the conferees that the
                CERP program is currently being implemented pursuant to
                the guidance issued by the [Under Secretary of Defense]
                Comptroller on July 27, 2005.

H.R. Rep. No. 109-360 at 799 (2005). The Comptroller's 27 July 2005 guidance
referred to in the conference report, above, was incorporated into Chapter 27 of
Volume 12 of the DoD's Financial Management Regulation (FMR), DoD 7000.14-R,
in September 2005 (R4, tab 52). Although the FMR was modified numerous times
after September 2005, the January 2009 edition of the FMR, current at the time of
award of the contract now at issue, retained all of the relevant language from the


1
    See MAC International FZE, ASBCA No. 56355, 10-2 BCA ~ 34,591at170,513.
2
    After the dissolution of the CPA, there were still contracts awarded for the benefit of
         the Iraqi people which are funded by Government of Iraq funds, not U.S.
         Government funds, and which are identified as 1-CERP contracts (see gov't
         mot., ex. 1 at 27-30; finding 4).

                                              2
September 2005 edition. The January 2009 edition of the FMR states, in pertinent
part:

             270 I PURPOSE AND APPLICABILITY



                 270 I 02. The CERP is designed to enable local
             commanders in Iraq and Afghanistan to respond to urgent
             humanitarian relief and reconstruction requirements within
             their areas of responsibility by carrying out programs that
             will immediately assist the indigenous population ....



                270104. The CERP may be used to assist the Iraqi
             and Afghan people in the following representative areas:

                A.    Water and sanitation.

                B.    Food production and distribution.

                 C.   Agriculture/Irrigation (including canal clean-up).

                D.    Electricity.

                E.    Healthcare.

                 F.   Education.

                 G.   Telecommunications.

                 H.   Economic, financial, and management
                      improvements.

                 I.   Transportation.

                 J.   Rule of law and governance.

                K.    Civic cleanup activities.

                 L.   Civic support vehicles.                                      I
                                           3
                    M.   Repair of civic and cultural facilities.

                    N.   Battle Damage/Repair.

                    0.   Condolence payments.

                    P.   Hero Payments.

                   Q.    Former Detainee Payments.

                   R.    Protective measures.

                    S.   Other urgent humanitarian or reconstruction projects.

                   T.    Temporary contract guards for critical infrastructure.

                   270105. This guidance applies to all U.S. Department
                of Defense (DoD) organizations and activities. A
                requirement to comply with this guidance shall be
                incorporated into contracts, as appropriate to cover the
                execution, management, recording and reporting of
                expenditures of U.S. appropriations and other funds made
                available for the CERP ....



                2703 PROCEDURES

                    270301. Improper Usage of Funds. Appropriated
                funds made available for the CERP shall not be used for
                the following purposes:

                   A.    Direct or indirect benefit to U.S., coalition, or
                         supporting military personnel.

(Bd. ex. 1)3 The United States Government commands in Iraq and Afghanistan4 were
required to publish in-theater guidance ''to evaluate CERP projects and ensure that the
projects meet the intent of the program" (id. § 270204).

3
    The Rule 4 file contains the 2005 FMR (R4, tab 52) which had been superceded at
         the time of contract award. A copy of the then-current 2009 FMR was received
         into the record as Board Exhibit 1 without objection by the parties. The
         January 2009 FMR remains the current edition as of the writing of this decision.

                                              4
       4. The Joint Contracting Command-Iraq/Afghanistan (JCC-1/A) is responsible
for contracting actions in-theater in Iraq and Afghanistan. 5 The JCC-1/A Acquisition
Instruction (1 April 2009), in effect on the date of award of the contract now at issue,
provided that:

              (a) CERP is a purchasing program "developed by MNF-I
              to enable commanders to respond to urgent humanitarian
              relief and reconstruction needs by executing programs that
              will immediately assist the indigenous population" ....

              (b) The CERP program is broad in scope and may be
              effectively utilized for rebuilding critical infrastructure
              (food distribution, utilities, transportation, economic,
              education, and other areas). CERP funds shall not be used
              for the benefit to [sic] U.S. or coalition forces or for
              equipping/training of Iraqi/Afghan forces.



             ( d) CERP is a battlefield tool that commanders can use to
             create an immediate effect on the ground. Congress and
             DoD recognized this and made sure only a minimum of
             rules apply to CERP. In keeping with the intent of the
             program, JCC-I/A policy is to streamline contracting
             processes to provide fast and effective support to the
             commanders.



             (f) No CERP ... contract issued by JCC-1/A shall include
             any clauses by reference. All clauses shall be included in
             full text. ...

             (g) [The FAR does not apply to CERP contracts].




4
  Multi-National Forces-Iraq (MNF-I), later Multi-National Corps-Iraq (MNC-I), and
       Combined Joint Task Force (CJTF) in Afghanistan (Bd. ex. 1, § 270102; gov't
       mot., ex. 1 at 55).
5
  See MAC International, 10-2 BCA iJ 34,591 at 170,514.

                                           5
                U) CERP and I-CERP solicitation and award documents
               shall prominently include appropriate notification
               regarding the contracts not being FAR based. Use one of
               the following statements, as applicable for
               CERP ... projects:

                      CERP: Any contract awards resulting from this
                      solicitation are NOT subject to the Federal
                      Acquisition Regulation of the United States
                      Government, and are therefore not subject to the
                      Contracts Disputes Act. 161

                      1-CERP: Any contract awards resulting from this
                                                                                       I
                      solicitation will NOT be funded with monies
                      appropriated by the Congress of the United States,
                      are not subject to the Federal Acquisition
                      Regulation of the United States Government, and
                      are therefore not subject to the Contracts Disputes
                      Act.

(Gov't mot., ex. 1 at 27-30)

       5. The contract contained the "CERP CONSTRUCTION CLAUSE" (R4, tab 1
at 18-30) and a Termination for Convenience clause (R4, tab 1 at 14). The contract
contained no Disputes clause nor any other terms specifying a disputes process.
                                                                                       I
      6. On 10 March 2011, after consideration of the contract terms, COR reports
and LSCC input, contracting officer (CO) Morris memorialized his decision to
terminate the contract for convenience:
                                                                                       I
                1. ... The contractor has been paid 70% of the total contract
                   price. The COR has estimated that the project is only
                    50% complete. The contractor claims to be at 96.6%
                   complete and has asked for the remaining 26.6% to be
                   paid.




6
    The issue of whether the CDA can apply to anon-FAR contract is not before us and
         we express no opinion on the issue.

                                             6
              2. It is the determination of the Contracting Officer that
                 this contract be terminated for convenience and that no
                 additional funds be paid to the contractor.

(R4, tab 34 at 1)

        7. On 29 March 2011 the government issued contract Modification No. P00002
which terminated the contract for convenience, stating that the work completed was
accepted "as is" and that money paid to LSCC as of that date was considered payment
in full for the work completed (R4, tabs 34, 3 8, 4 7).

        8. From 3 April 2011through6 June 2013 LSCC continued to seek payment of
an additional 26.6% of the contract price for contract work allegedly completed prior
to the termination for which it had not yet been paid (R4, tabs 39-45).

        9. On 13 June 2013 CO Wysoske responded to LSCC's requests for assistance
in getting further payment under the terminated contract (R4, tabs 43-46) by issuing a
final decision denying LSCC's 26 February 2011 termination for convenience
settlement proposal:

              6.lt was the original Contracting Officer's decision that
              this contract be terminated for convenience of the
              Government, with the following items:

                    a. The work completed be accepted as is.

                  b.The monies already paid be considered payment in
              full for the work completed.

                 c.No other money shall be paid to the contractor on this
              project.

                 d.Contract shall be modified to reflect items listed
              above.

              7 .As the current contracting officer, I see no evidence or
              supporting documentation that would cause me to overturn
              his original decision. This decision resulted in
              modification P[0]0002, signed by the contracting officer
              on 29 March 2011. This is the final decision of the
              original Contracting Officer. And this is the final decision
              of the current contract[ing] officer. You may appeal this
              decision to the agency board of contract appeals. If you


                                             7
              decide to appeal, you must, within 90 days from the date
              you receive this decision, mail or otherwise furnish written
              notice to the agency board of contract appeals and provide
              a copy to the Contracting Officer from whose decision this
              appeal is taken.

(R4, tab 47 at 1-4)

       10. On 8 September 2013 LSCC requested CO Wysoske's assistance in
submitting an appeal of her final decision. CO Wysoske provided LSCC with the
email address of this Board and further advised LSCC that "[i]fyour claim is over
$100,000 it will need to be certified." (R4, tab 48)

      11. LSCC's appeal from CO Wysoske's final decision was received by the
Board on 11 September 2013 (R4, tab 49). LSCC's notice of appeal identified three
claimed items:

              1. Final 26.6% payment which is USD 302,03 7.

              2. I would also like to claim USD 489,459 for [i]ncrement
                 [i]n the project total due to the changes in the design
                 imposed on us post contract. This [i]ncluded change in
                 the slop[e] of the road .... As can be seen from the
                 attached email Rob Lutgens promised in his email that
                 he will increase the total price due to these changes.
                 Unfortunately, despite my regular follow up I never
                 received this increase in the project total.

              3. I would also like to claim USD 96,000 for the lose [sic]
                 due to the Act of God .... I have attached a copy of my
                 original request for this lost [sic] and my reasoning for
                 it.

              The total I am claiming is 302037+489459+96000 =
              887496 US Dollars.

(Id. at 7) LSCC's notice of appeal package contained various documents, including a
"Contract Certification" dated 9 September 2013 (id. at 8).

        12. On 24 October 2014 the government filed its amended motion to dismiss
for lack of jurisdiction (AMD). The parties have fully briefed the issues raised in the
AMD.



                                            8
                                       DECISION

        The government's AMD argues that the appeal suffers from three jurisdictional
defects: ( 1) the CERP contract at issue is not a procurement contract under the CDA,
has no contract provisions requiring decision by the Board, the Secretary of Defense or
Secretary of a Military Department nor any directives which grant LSCC a right of
appeal to the Board; (2) LSCC failed to submit a CDA certified claim to a contracting
officer; and, (3) LSCC' s notice of appeal presents three claims, two of which were
never submitted to a contracting officer for a final decision as required by the CDA.

          This Board's jurisdiction typically arises under the CDA which applies to any
express or implied procurement contract made by an executive agency of the United
States Government. 41 U.S.C. §§ 7102(a). A federal government procurement
contract is one under which an executive agency acquires "property or services for the
direct benefit or use of the United States Government." 31 U.S.C. § 6303(1);
Wesleyan Co. v. Harvey, 454 F.3d 1375, 1378 (Fed. Cir. 2006) (The Board has subject
matter jurisdiction over express or implied contracts entered into by an executive
agency for the procurement of property for the direct benefit or use of the Federal
Government) (citing New Era Constr. v. United States, 890 F.2d 1152, 1157 (Fed. Cir.
1989)); Delta Steamship Lines, Inc. v. United States, 3 Cl. Ct. 559, 569 (1983) ("[l]t is
concluded from a reading of the Contract Disputes Act and its legislative history
that ... the conventional contract for the direct procurement of property, services and
construction, to be used directly by the Government ... is the type of Government
contract covered by the Act."). An agreement by the United States Government to
purchase property or services for the direct benefit of a party other than the United
States Government is not a procurement contract, but either a grant or a cooperative
agreement. 31 U.S.C. §§ 6301, 6303. The FAR is not applicable to grants or
cooperative agreements (FAR 2.101, Contract) and is expressly not applicable to
CERP contracts (SOF ~ 4). CERP contracts are express agreements with indigenous
contractors 7 to provide property or services for the benefit and use of the people of
Iraq or Afghanistan and CERP funds are expressly prohibited to be used for the direct
or indirect benefit or use of the United States Government, its military or the militaries
of Iraq and Afghanistan (SOF ~~ 3, 4). The CDA is therefore not applicable to a
CERP contract and we have no jurisdiction under the CDA to consider LSCC's appeal.
As there is no CDAjurisdiction, we need not address the government's arguments
regarding the lack of proper CDA claims submitted to a contracting officer for
decision.

       The lack of CDAjurisdiction, however, is not the end of the analysis as our
charter provides for other potential sources of jurisdiction:

7
    "[O]ne of the purposes of CERP is to employ Iraq and Afghanistan residents in local
         humanitarian and reconstruction projects" (NDAA FY06 at 799).

                                            9
             (b) [P]ursuant to the provisions of contracts requiring the
             decision by the Secretary of Defense or by a Secretary of a
             Military Department or their duly authorized
             representative, or (c) pursuant to the provisions of any
             directive whereby the Secretary of Defense or the
             Secretary of a Military Department or their authorized
             representative has granted a right of appeal not contained
             in the contract on any matter consistent with the contract
             appeals procedure.

48 C.F.R., chapter 2, appx. A, part 1 (14 May 2007).

        We find no contract provisions, nor have the parties directed us to any, which
would meet the requirements of our charter and provide us with jurisdiction over any
contract disputes between LSCC and the government under the CERP contract at issue
and the JCC-I/A Acquisition Instruction prohibits the incorporation of any clauses or
other terms by reference (SOF ~ 4(f)). Likewise, neither party has directed us to any
directive, as defined in our charter, which provides for our jurisdiction over contract
disputes between them.

        It is undisputed that CO Wysoske provided LSCC with information regarding
an appeal to this Board (SOF ~~ 9, 10), however, by doing so she did not create
jurisdiction where none otherwise exists. The CDA is a statute waiving sovereign
immunity and must be strictly construed. Winter v. FloorPro, Inc., 570 F.3d 1367,
 1370 (Fed. Cir. 2009). "[O]nly Congress can grant waivers of sovereign immunity,"
Pacrim Pizza Co. v. Pirie, 304 F.3d 1291, 1294 (Fed. Cir. 2002), and there is no
evidence in the contract or otherwise that Congress granted such a waiver of sovereign
immunity with respect to CERP contracts.

                                   CONCLUSION

     We are without jurisdiction to consider the present appeal. The government's
amended motion to dismiss for lack of jurisdiction is granted.

      Dated: 24 March 2015

                                               !~f~
                                               . DIANA S/bICKINSON
                                                 Administrative Judge
                                                 Armed Services Board
                                                 of Contract Appeals
(Signatures continued)


                                          10
I concur                                       I concur



~~~
Administrative Judge
                                               RI~HACKLEFORD
                                               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. 58872, Appeal ofLatifi
Shagiwall Construction Company, rendered in conformance with the Board's Charter.

      Dated:



                                               JEFFREY D. GARDIN
                                               Recorder, Armed Services
                                               Board of Contract Appeals




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