ASBCA 58292

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of— ) ) Laguna Construction Company, Inc. ) ASBCA No. 58292 ) Under Contract No. FA8903-04-D-8690 ) APPEARANCE FOR THE APPELLANT: Carolyn Callaway, Esq. Carolyn Callaway, P.C. Albuquerque, NM APPEARANCES FOR THE GOVERNMENT: Alan R. Caramella, Esq. Air Force Chief Trial Attorney Skye Mathieson, Esq. Trial Attorney OPINION BY ADMINISTRATIVE JUDGE DELMAN ON GOVERNMENT'S MOTION TO STAY PROCEEDINGS The Department of the Air Force (government) has moved to stay proceedings in this appeal pending conclusion of criminal proceedings against three principal officers of Laguna Construction Company, Inc. (appellant or Laguna) and four subcontractor principals indicted for fraud under this contract. Appellant opposes any stay. We have jurisdiction under the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109. STATEMENT OF FACTS FOR PURPOSES OF THE MOTION 1. On 21 November 2003, the government awarded to appellant Contract No. FA8903-04-D-8690, an Indefinite Delivery/Indefinite Quantity (IDIQ) contract for Worldwide Environmental Remediation and Construction (WERC) services, which were to be ordered by the government through the issuance of task orders (compl. ^} 3-5). 2. On 25 June 2004, the government awarded to Laguna a cost-plus-fixed-fee task order (TO) 0006 under this contract for field construction work for An Numaniyah Military Training Base (Phase II) and An Numaniyah Bridge in Iraq (compl. fflf 6-7). 3. Effective 6 December 2004, Laguna awarded a subcontract to the Yacoub & Ramzi Snobar Company (Snobar) under TO 0006 for electrical related work (gov't mot., ex. 2). The award amount was $1,860,000.00 (id. at 2). Over the next six months, to 12 June 2005, Laguna issued change orders to Snobar that more than doubled Snobar's subcontract price to $4,315,175.00 (gov't mot., ex. 3, next to last page).  4. From 25 June 2004 to 15 December 2006, Laguna performed work on TO 0006 and submitted vouchers for payment (compl. f 14; R4, tab 12). The government paid Laguna's first 24 vouchers in the amount of $41,186,902 (compl. ^ 15). According to the government these were provisional payments, and appellant's submitted costs were subject to audit (answer ^ 15). 5. Voucher No. 25 was dated 29 June 2006. It sought payment of $457,717, of which $379,839 was subcontractor cost. The subcontractor was not identified on the voucher. (R4, tab 20) Voucher No. 26 was dated 9 August 2006, and sought payment in the amount of $45,450, of which $17,138 was subcontractor cost. The subcontractors under this voucher were identified as Kellogg Brown & Root Services, Inc. and Brad Christiansen (R4, tab 21 at 1, 2, 4). Voucher No. 27 was dated 13 October 2006 and sought payment in the amount of $717,450. Appellant listed subcontractor cost as $793,959 and listed a credit for "SUPPLIES & SERVICES" in the amount of $193,715. (R4, tab 23 at 1, 2) The subcontractor was not identified on the voucher. Voucher No. 28 was dated 21 November 2006, and sought payment of $51,276 and did not include any subcontractor cost (R4, tab 24 at 1, 2). Voucher No. 29 was dated 15 December 2006 and sought payment of $54,441, of which $13,810 was subcontractor cost. The subcontractor was not identified on the voucher. (R4, tab 25 at 1, 2) 6. The government did not pay Voucher Nos. 25 through 29. 7. In February 2008, the FBI and the Defense Criminal Investigative Service launched an investigation into Laguna and its employees related to reports that Laguna's upper management was involved in a subcontract bid-rigging scheme on work performed on Iraq contracts, including allegations that kickbacks from subcontractors were received in exchange for awarding contracts to those subcontractors (gov't mot., ex. 10 at 3, Tf 6). 8. On 29 December 2008, Laguna submitted a certified claim to the contracting officer (CO) in the amount of $1,326,334, plus interest, for the payment of Voucher Nos. 25-29 (compl. If 27). 9. On 12 May 2009, the CO informed Laguna that he was postponing the final decision due to the ongoing fraud investigation under the contract (gov't mot., ex. 9). 10. On 28 February 2012, a federal grand jury indicted three principal officers of Laguna and four principal officers of Laguna's subcontractors in the U.S. District Court for New Mexico. The indictment listed 91 counts of fraud and unlawful conduct.