ASBCA 58828

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of-- ) ) Puget Sound Environmental Corp. ) ASBCA No. 58828 ) Under Contract No. N00406-10-D-1001 ) APPEARANCE FOR THE APPELLANT: Mr. Carlos Moreno President APPEARANCES FOR THE GOVERNMENT: Ronald J. Borro, Esq. Navy Chief Trial Attorney Stephanie Cates-Harman, Esq. Assistant Director Stephen L. Bacon, Esq. Trial Attorney OPINION BY ADMINISTRATIVE JUDGE O'CONNELL ON THE PARTIES' CROSS-MOTIONS FOR SUMMARY JUDGMENT This matter is before the Board on the parties' cross-motions for summary judgment. For the reasons set forth herein, we deny appellant's motion for summary judgment and grant the government's cross-motion. STATEMENT OF FACTS FOR PURPOSES OF THE MOTIONS The following facts are undisputed unless stated otherwise. Introduction This appeal arises from a certified claim that appellant, Puget Sound Environmental Corp. (PSE), submitted on two Navy contracts, Contract No. N00406-10-D-1001 (contract 1001) and Contract No. N00406-08-D-8113 (contract 8113). The claim contained two discrete issues and the Board assigned two appeal numbers. In Puget Sound Environmental Corp., ASBCA Nos. 58827, 58828, 14-1BCA~35,585 (PSE !), we dismissed ASBCA No. 58827, in which PSE sought about $2.16 million due to the government's alleged misclassification of prevailing wage rates on the two contracts (R4, tab 31 at 794, 799). In ASBCA No. 58828, PSE seeks just under $3.3 million due to the government's termination for convenience of Task Order No. 9 on contract 1001 (id. at 794-99). While we dismissed the claim relating to contract 8113 in P SE I, a brief history of both contracts is necessary to understand the issues currently before us. Contract 8113 Contract 8113 was a labor hour, indefinite-delivery, indefinite-quantity, service contract effective 30 April 2008 (R4, tab 2 at 43-44 ). The performance work statement provided that PSE would provide "qualified personnel to accomplish General Labor (includes Labor, Firewatch, Lead Work & Tank Watch) aboard vessels or at naval shore facilities under the cognizance of' Puget Sound Naval Shipyard and Intermediate Maintenance Facility (R4, tab 2 at 50). As we recounted in PSE I, the contract contained various clauses that required PSE to comply with the Service Contract Act (SCA), 41 U.S.C. §§ 6701-6707, and incorporated a Department of Labor (DOL) wage determination. PSE I, 14-1BCA~35,585 at 174,368. After a DOL investigation, PSE, through its president, Carlos Moreno, signed a "Back Wage Compliance And Payment Agreement" with DOL dated 8 September 2009 (R4, tab 55). In this agreement, PSE agreed to pay back wages in the amount of $382,178 to 220 employees by 25 September 2009. PSE did not pay the amounts due and on 7 January 2010 entered into another back wage and compliance agreement with DOL (R4, tab 57). For reasons that are not clear, this agreement stated that PSE owed 214 employees $372,103.32. The amounts at issue primarily involved unpaid health and welfare benefits (R4, tabs 50, 54, 85). PSE concedes that it did not pay all of the amounts due under the January 2010 agreement 1 (app. resp. at 5, ~ 14). According to PSE, it paid 44 of the employees but still owes $314,863.27 (R4, tab 85 at 2, tab 89 at 4). The January 2010 agreement provided for an initial payment of $100,000, which PSE by its own admission did not make, followed by monthly payments of $24,681.24 starting 7 March 2010, and ending on 7 January 2011 (R4, tab 57). Accordingly, the January 2010 agreement provided for payment in full long before DOL launched a second investigation of PSE and long before the contracting officer terminated Task Order No. 9 on contract 1001 for convenience, as detailed in the undisputed facts below. Contract 1001 The government awarded contract 1001 to PSE on 13 October 2009, or five weeks after PSE signed the initial back wage compliance and payment agreement with DOL (R4, tab 11). It is undisputed that the Navy knew about the back wage issues on contract 8113 but the contracting officer determined to award contract 1001 to PSE based upon the 1 In its response brief, PSE seems to dispute that it entered into the September 2009 agreement with DOL (app. resp. at 2, ~ 5). PSE does not explain its position even though Mr. Moreno's signature appears on both the September and January agreements.