CBCA 7402

DENIED: February 23, 2023 CBCA 7402 RICE SOLUTIONS, LLC, Appellant, v. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent. Daniel Rice, Chief Operating Officer of Rice Solutions, LLC, Plymouth, NH, appearing for Appellant. Anastasia M. Hautanen and Tami Hagberg, Office of the General Counsel, Department of Health and Human Services, Washington, DC, counsel for Respondent. Before Board Judges VERGILIO, SHERIDAN, and O’ROURKE. SHERIDAN, Board Judge. Appellant, Rice Solutions LLC (Rice), seeks $21,406.25 from the Department of Health and Human Services (agency or HHS) for failure to pay for work performed under a contract to provide certified registered nursing anesthetist (CRNA) services. Because we find that the contested “on-call” hours were already accounted for in the contract’s described and previously-used rates, we deny the claim. The parties elected to have a decision on this matter issued on the record pursuant to Board Rule 19 (48 CFR 6101.19 (2021)). CBCA 7402 2 Findings of Fact On February 6, 2019, HHS awarded Rice a contract to provide CRNA services at the Pine Ridge Indian Hospital in South Dakota. The contract was an indefinite-delivery, indefinite-quantity (IDIQ) contract with a period of performance consisting of a one-year base and four option years. The base year ended on February 11, 2020. HHS exercised two of the option years, and the contract expired in February 2022. The contract’s task orders were awarded for consecutive periods of performance of similar lengths (approximately two weeks) and requirements (regular, weekend, and holiday hours (including on-call hours)). Each contract year was funded using the following structure: $1,168,500 in regular hours (eight hours per day, five days per week), $641,696.64 in weekend hours (six hours per day, two weekend days), and $61,701.60 in holiday hours (six hours per day, ten holidays per year). Almost all of Rice’s invoices to the agency were for $55,968.81, which covered the usual two-week increments at the specified rates.1 This amount was based on a consistent two-week schedule of 230.77 regular hours at a rate of $193.93 per hour, 48 weekend hours at a rate of $208.60 per hour, and 4.61 holiday hours at a rate of $254.52 per hour. Rice’s claim involves task order 75H70622F03027 (task order 3027) for work performed from January 28 through February 11, 2022, the final two weeks of the contract. On February 11, 2022, Rice submitted an invoice in the amount of $77,375.15—$20,000 more than its previous invoices. The agency approved a portion of this invoice, paying Rice the usual amount of $55,968.81. The agency denied the remaining amount because Rice failed to substantiate the additional hours claimed in the invoice.2 Rice filed a claim with the agency, which the contracting officer denied in its entirety. Rice timely appealed the decision to the Board. In its appeal, Rice seeks $21,406.34, the unpaid amount of the invoice. Rice maintains that it provided the services for the additional hours claimed. Rice also contends that the agency’s failure to pay it for the additional hours violates the implied duty of good faith and fair dealing and is inconsistent with the parties’ prior course of dealing because the agency requested invoicing on a pro rata basis, where the firm-fixed-price amount of the task order was divided by the number of hours worked, rather than an hourly rate multiplied by 1 Some payments were for lower amounts for separate, staffing-related reasons. Rice’s contract required it to provide two CRNAs to the hospital, but for several invoice periods, Rice only provided one CRNA. This resulted in the agency issuing at least two cure notices to Rice and authorizing a lower payment than invoiced for the relevant periods. 2 For task order 3027, Rice invoiced for 309.27 regular hours, 72 weekend hours, and 9.36 holiday hours. CBCA 7402 3 the hours worked. Rice claimed that there “was more money in the IDIQ contract” and that it “should have been allowed to bill for the entire final price amount,” including all of the hours that its employees worked. When questioned about the additional amount billed for task order 3027, Rice provided an employee time sheet showing distinct on-call hours in addition to the typical regular, weekend, and holiday hours.