CBCA 6477-R

RECONSIDERATION DENIED: October 20, 2022 CBCA 6477-R MISSION SUPPORT ALLIANCE, LLC, Appellant, v. DEPARTMENT OF ENERGY, Respondent. Marisa M. Bavand and Allison L. Murphy of Groff Murphy PLLC, Seattle, WA, counsel for Appellant. Paul R. Davis and Andrew J. Unsicker, Office of Chief Counsel, Department of Energy, Richland, WA, counsel for Respondent. Before Board Judges GOODMAN, DRUMMOND, and CHADWICK. CHADWICK, Board Judge. Mission Support Alliance, LLC (MSA) timely sought reconsideration under Board Rule 26 (48 CFR 6101.26 (2021)) of our August 2022 decision denying MSA’s appeal of a government claim under a cost-type contract. We found that MSA did not meet its burden to prove the reasonableness of $333,895 it paid to three subcontractors. MSA argues that, in fact, it “presented hard evidence via exhibits, testimony and briefing that the costs were allowable and reasonable.” We deny reconsideration but clarify our decision in part. Grounds to reconsider a Board decision may include, among other things, “clear error,” which is what we understand MSA to assert here. See, e.g., Walker Development & Trading Group Inc. v. Department of Veterans Affairs, CBCA 5907-R, 19-1 BCA ¶ 37,465, CBCA 6477-R 2 at 182,010. MSA argues that we overlooked record evidence that “the disputed costs are reasonable because [MSA followed] its Purchasing System procedures . . . , which had been reviewed and approved by DOE [the respondent, Department of Energy,] and its auditor . . . , for reviewing and approving subcontractor work and costs.” We disagree that we improperly neglected to address such evidence. As we wrote, “We know of no authority . . . suggesting that evidence of mere ‘review’ and ‘approval’ by contractor personnel suffices to show that subcontractor charges are reasonable.” Mission Support Alliance, LLC v. Department of Energy, CBCA 6477, slip op. at 6 (Aug. 17, 2022) (citing 48 CFR 31.201-3(a) (2018) (“No presumption of reasonableness shall be attached to the incurrence of costs.”)). We did not consider MSA’s arguments that it followed its own procedures to be material. Rather, “[a] cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of competitive business.” 48 CFR 31.201-3(a) (emphasis added). Proof of reasonableness should entail some “independent evidence of the reasonableness” of the dollars spent—not merely evidence of the contractor’s own behavior. See Kellogg Brown & Root Services, Inc. v. United States, 728 F.3d 1348, 1363 (Fed. Cir. 2013); see also Kellogg, Brown & Root Services, Inc. v. Secretary of the Army, 973 F.3d 1366, 1373 (Fed. Cir. 2020) (noting, inter alia, that a sophisticated defense contractor “only offered conclusory testimony, unsupported by any data or evidence in the record, that [a] daily rate of $300 was . . . reasonable”). We find, therefore, that by reemphasizing the evidence relating to its internal purchasing procedures, MSA raises only “[a]rguments and evidence previously presented” and addressed, which “are not grounds for reconsideration.” Rule 26(a). We also conclude, however, that some language in our decision warrants amplification. We repeatedly stated that MSA cited “no” evidence of cost reasonableness. Mission Support Alliance, slip op. at 5–7. The context of those statements was that MSA denied bearing any burden of proof. See id. at 4 n.4. MSA argued at pages 41–42 of its post-hearing brief, “To MSA’s knowledge, DOE is not challenging the reasonableness or allocability of the costs. . . . [I]t is up to the government to show that costs incurred by a contractor are unallowable . . . . The Government bears the burden of proof when the government is not disputing the reasonableness or allocability of costs incurred under a particular contract.” (Emphasis added.) We explained that MSA was mistaken and that it needed to prove reasonableness to defeat DOE’s claim. Id. (“It is true that an unreasonable cost is also unallowable . . . , but this case is at bottom about reasonableness, and MSA bears the burden of proof per 48 CFR 31.201-3(a).”). In this context, we understood MSA to be arguing only that DOE failed to satisfy a burden of proof that, we held, DOE did not actually bear. MSA repeatedly argued at pages 75–92 of its post-hearing brief that its costs were “supported and allowable” because they were internally “reviewed and approved” and that DOE could not prove otherwise.