CBCA 7822

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM DENIED; MOTION TO DISMISS FOR LACK OF JURISDICTION DISMISSED AS MOOT: May 10, 2024 CBCA 7822 PARSONS GOVERNMENT SERVICES, INC., Appellant, v. DEPARTMENT OF ENERGY, Respondent. Stephen J. McBrady, Robert J. Sneckenberg, Tyler A. O’Connor, Michelle D. Coleman, and Eric K. Herendeen of Crowell & Moring LLP, Washington, DC, counsel for Appellant. Lucy M. Knowles, John J. Murphy III, Thomas F. England, and Bernice M. Jenkins, Office of Chief Counsel, Department of Energy, Aiken, SC, counsel for Respondent. Before Board Judges BEARDSLEY (Chair), RUSSELL, and ZISCHKAU. ZISCHKAU, Board Judge. This appeal involves claims by appellant, Parsons Government Services, Inc. (Parsons), seeking from respondent, the Department of Energy (DOE), a $6 million incentive fee and an upward adjustment of its contractor performance assessment report (CPARS) rating. The claims arise out of a contract between Parsons and EPA to design, construct, commission, and operate a salt waste processing facility. DOE has moved to dismiss the portion of the appeal relating to the incentive fee for failure to state a claim upon which relief can be granted, arguing that Parsons has failed to allege facts that would entitle it to a legal CBCA 7822 2 remedy. DOE separately moves to dismiss for lack of jurisdiction the portion of the appeal seeking the upward adjustment of the CPARS ratings. We deny DOE’s motion to dismiss for failure to state a claim because Parsons has alleged sufficient facts in its complaint to provide a legal basis for DOE liability if proven. The motion regarding the CPARS ratings is now moot because we have granted Parsons’ request to amend its complaint and remove the language asking the Board to adjust the ratings. Our review of the record indicates that we have jurisdiction over these disputes under the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101–7109 (2018). Background According to the complaint, Parsons was awarded a contract by DOE to design, construct, commission, and operate a first-of-its-kind salt waste processing facility (SWPF) at DOE’s Savannah River Site. The SWPF was to be designed to treat and reduce liquid radioactivity in nuclear waste from existing storage facilities. The contract required Parsons to perform in four major stages, spread across two contract phases: phase I, consisting of design and construction, and phase II, consisting of hot and cold commissioning (commissioning) and one year of operations (OYO). Parsons performed the phase II tasks under cost-plus-incentive-fee terms. Phase II had no fixed fee. If Parsons did not receive an incentive fee payment, it made no profit. Parsons states that, in accordance with the operative schedule, it completed the phase I facility design by December 2008 and the construction phase in April 2016. Parsons then proceeded to phase II commissioning. Once Parsons completed commissioning and entered the OYO period of phase II, the parties negotiated to reduce to terms, among other things, provisions regarding incentive fees that Parsons could earn during OYO based on the volume of waste that Parsons processed. Contract modification 02461 memorialized the applicable fee provisions for OYO. This dispute involves Parsons’ request for compensation related to alleged constructive changes that impeded the quantity of waste that Parsons was able to process during OYO. In addition, Parsons claims that DOE’s contracting officer gave Parsons erroneous CPARS ratings for OYO. On March 1, 2023, Parsons submitted to the contracting officer a certified claim demanding $6 million—the amount that Parsons claims it should have earned had the simulant (the testing material manufactured to simulate the actual radioactive waste) used during cold commissioning not differed materially from the actual waste that it processed during OYO or, in the alternative, the amount that Parsons should have earned had DOE accepted an engineering change proposal which, according to Parsons, would have allowed it to process sufficient waste to earn the $6 million fee in OYO. In its claim, Parsons also demanded an upward adjustment to the quality, schedule, and management ratings of Parsons’ CPARS report for the period July 1, 2021, through March 27, 2022. On June 28, CBCA 7822 3 2023, the contracting officer issued a final decision denying the incentive fee and CPARS claims in their entirety.