CBCA 5698

DENIED: September 10, 2019 CBCA 5698 STOBIL ENTERPRISE, Appellant, v. DEPARTMENT OF VETERANS AFFAIRS, Respondent. Billie O. Stone, Chief Executive Officer of Stobil Enterprise, San Antonio, TX, appearing for Appellant. Mary A. Mitchell, Office of General Counsel, Department of Veterans Affairs, Houston, TX, counsel for Respondent. Before Board Judges KULLBERG, SULLIVAN, and RUSSELL. RUSSELL, Board Judge. Pending before the Board are appellant’s motion for summary judgment and respondent’s motion for summary relief.1 In this appeal, Stobil Enterprise (Stobil) seeks a price adjustment for increased labor costs under Federal Acquisition Regulation (FAR) clauses implementing provisions of the Service Contract Act (SCA), 41 U.S.C. §§ 6701-6707 1 Both parties are moving for the same relief, with appellant characterizing its motion as one for summary judgment and respondent characterizing its motion as one for summary relief. Since these appeals were filed, a revision in the Board’s rules renamed motions for summary relief as motions for summary judgment. 48 CFR 6101.8(f) (2018) (Rule 8(f)). CBCA 5698 2 (2012), and the Fair Labor Standards Act (FLSA), 29 U.S.C. § 206.2 Stobil additionally seeks costs for equipment and supplies lost or damaged during contract performance, and administrative costs (associated with both its claim for increased labor costs and its claim for lost or damaged equipment and supplies). Stobil also seeks relief based on the Department of Veterans Affairs’ (VA) alleged failure to conduct a contractor performance evaluation. For reasons stated below, the appeal is denied. Statement of Facts The Contract In January 2009, the VA awarded a firm-fixed-price contract to Stobil to provide dietary and housekeeping services (the housekeeping services contract) at a VA facility in San Antonio, Texas. The contract included a base year, from January 1 to December 31, 2009, and four option years. In June 2014, the VA awarded a second firm-fixed-price contract to Stobil to extend the housekeeping services contract for a six-month period, from July 1 to December 31, 2014. By modification, this second contract was extended to January 2015. Both contracts incorporated FAR 52.222-41, requiring Stobil to comply with the SCA, and FAR 52.222-43, allowing for price adjustments to the contract pursuant to the SCA and the FLSA. 48 CFR 52.222-41, -43 (2008). Both the SCA and FLSA establish minimum wages and other benefits that must be paid to private employees. In August 2014, Stobil submitted three invoices and a quote to the VA that are relevant to this appeal. Invoice 2231 covered Stobil’s request for $110,000 in wage rate increases and associated administrative costs. Invoice 334456 covered Stobil’s request for $425 for food loss due to inoperative government equipment and associated administrative costs. Invoice 773990 covered Stobil’s request for $840 to replace damaged soap dispensers and associated administrative costs. The quote covered Stobil’s request for $569.31 for compensation for two items of equipment – a worktable and rack. 2 The SCA was located at 41 U.S.C. §§ 351-357 (2006) when the parties entered the contract at issue in this appeal. CBCA 5698 3 Department of Labor (DOL) Investigation In May 2015, after the contract closed, DOL sent a letter to the VA contracting officer stating that DOL, through an investigation, found that Stobil had “failed to pay the required SCA prevailing wage and fringe benefits, and the required [Contract Work Hours and Safety Standards Act] overtime.” DOL stated that the “alleged violations resulted in $104,510.57 due . . . [to Stobil] employees in unpaid wages.” Also in its letter, DOL requested that the VA withhold amounts otherwise due to Stobil under the housekeeping services contract until the full amount due to Stobil employees in back wages was paid.