ASBCA 63037

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) Dynamic Systems Technology, Inc. ) ASBCA No. 63037 ) Under Contract No. W15QKN-19-D-0046 ) Task Order No. W15QKN-20-F-0713 ) APPEARANCE FOR THE APPELLANT: James M. White, Esq. Marshall & White, PLLC Washington, D.C. APPEARANCES FOR THE GOVERNMENT: Scott N. Flesch, Esq. Army Chief Trial Attorney MAJ Michael R. Tregle, Jr., JA Trial Attorney OPINION BY ADMINISTRATIVE JUDGE STINSON ON PARTIES’ CROSS MOTIONS FOR SUMMARY JUDGMENT Appellant Dynamic Systems Technology, Inc. (DysTech), appeals from a contracting officer’s denial of its May 25, 2021, claim in the amount of $1,134,943.47, for additional costs resulting from an approved, conformed classification by the Department of Labor (DOL) of certain wage rates applicable to appellant’s task order (R4, tab 024 at 003). We have jurisdiction pursuant to the Contract Disputes Act of 1978, 41 U.S.C. §§7101-7109. The parties submitted cross-motions for summary judgment, responses, reply and (in the case of appellant) sur-reply briefs, for consideration in deciding this appeal. For the reasons stated below, the Board denies appellant’s motion for summary judgment, and grants the government’s cross-motion. SYNOPSIS This appeal presents the issue of which party bears the risk under the Service Contract Act (SCA) when the contractor errs by failing to apply the proper labor category to a position. Specifically, whether the contractor is entitled to additional SCA costs it anticipated, but did not include, in its technical and cost proposals. The solicitation required offerors to identify any non-exempt labor categories covered by the SCA and ensure that those SCA-covered labor category employees were paid the applicable prevailing wage rates. The contractor inquired from the Army pre-award (but after the closing date for such inquiries) about the exemption status of one labor category, which, as the incumbent contractor, it had knowledge suggesting that the labor category was non-exempt. The Army inquired from DOL and informed the contractor that DOL had determined that it would not be subject to the SCA. The contractor submitted its bid based upon what it believed to be an incorrect DOL determination and stating its intention to submit a request for equitable adjustment once DOL granted a conformance of that labor category, which the contractor planned to submit and was certain would be granted. The burden of determining application of the SCA fell solely on the contractor. Despite its prior knowledge, and by ignoring its own beliefs as to the exemption status of the specific labor category, the contractor submitted a lower, and therefore, more advantageous, cost proposal. STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION The parties agree that the material facts in this appeal are undisputed. 1 I. DysTech’s Experience With Wage Determinations On Another Contract Prior to Submitting a Proposal on the Task Order at Issue 1. On September 29, 2015, the United States Army Contracting Command – New Jersey (the Army) awarded DysTech Task Order 2TO2 under Contract No. W91WAW- 11-D-0030 (the Predecessor Contract), for Army Community Services Family Advocacy Program Support at Fort Bliss, Texas (R4, tab 001 at 1-2; GSUMF ¶ 1; ASUMF ¶ 3). 2. On May 7, 2018, the Army issued unilateral Modification No. 04 to Task Order 2TO2 (R4, tab 002 at 1). The purpose of the modification was “to incorporate the appropriate wage determinations into the task order” (R4, tab 002 at 2). The modification incorporated the following three wage determinations: 2005-2511 Revision 20 dated 07/08/15 for the Base Year 2015-2511 Revision 02 dated 09/01/16 for Option Year 1 2015-5229 Revision 03 dated 08/03/17 for Option Year 2 (R4, tab 002 at 2; ASUMF ¶ 4). 3. The labor category “Program Educator” was not included in any of the three wage determinations incorporated into Task Order 2TO2 by Modification No. 04 1 The government states in its opposition to appellant’s motion that it does not dispute appellant’s statement of undisputed material facts (ASUMF) (gov’t cross-mot. at 1).