ASBCA 59020

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) Public Warehousing Company K.S.C. ) ASBCA No. 59020 ) Under Contract Nos. SP0300-03-D-306 l ) SPM300-05-D-3 l l 9 ) SPM300-05-D-3128 ) APPEARANCES FOR THE APPELLANT: Michael R. Charness, Esq. Jamie F. Tabb, Esq. Ralph C. Mayrell, Esq. Vinson & Elkins LLP Washington, DC Richard Marmara, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Los Angeles, CA Kristin N. Tahler, Esq. Quinn Emanuel Urquhart & Sullivan, LLP Los Angeles, CA APPEARANCES FOR THE GOVERNMENT: Daniel K. Poling, Esq. DLA Chief Trial Attorney Steven C. Herrera, Esq. Keith J. Feigenbaum, Esq. Kari L. Scheck, Esq. Trial Attorneys DLA Troop Support Philadelphia, PA OPINION BY ADMINISTRATIVE JUDGE THRASHER ON THE GOVERNMENT'S MOTION TO DISMISS OR ALTERNATIVELY STAY THIS APPEAL This appeal arises from three Prime Vendor contracts between appellant, Public Warehousing Company, K.S.C. (PWC), and the Defense Supply Center Philadelphia, since renamed DLA Troop Support, a component of the Defense Logistics Agency (DLA). PWC appeals from the denial of its 28 November 2011 certified claim, as revised by its 26 February 2013 letter, seeking $4,605,594.53 in interest penalties allegedly due pursuant to the Prompt Payment Act, as amended, 31 U.S.C. §§ 3901-3907, and the terms of the captioned contracts. The DLA moves to dismiss this appeal without prejudice under Armed Services Board of Contract Appeals (ASBCA) Rule 18 pending resolution of the ongoing criminal proceedings involving PWC, in the U.S. District Court for the Northern District of Georgia (District Court). In the alternative, DLA requests a stay of this appeal. DLA asserts the affirmative defenses of fraud in the inducement and first material breach based on the same conduct at issue in PWC's criminal proceeding currently being litigated in the District Court. STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 1. DLA awarded Contract No. SP0300-03-D-306 l (PVI) to PWC on 30 May 2003 (R4, tab 20). DLA also awarded Contract Nos. SPM300-05-D-3119 (Bridge) and SPM300-05-D-3128 (PVII) to PWC on 17 February 2005 and 7 July 2005, respectively. The contracts were Prime Vendor subsistence contracts to provide food to U.S. military personnel and other authorized customers in Iraq and Kuwait. (R4, tabs 30, 41) 2. PWC was paid under the contract by submitting invoices to DLA either through the Electronic Data Interchange (EDI) system or manually "offline". 1 The contracts (and the solicitations incorporated by reference into the contracts) included terms stating that payment would be made in accordance with the Prompt Payment Act (PPA) (R4, tab 20 at 16, tab 36 at 79). 3. PWC filed a certified claim on 28 November 2011, asserting entitlement to $5,381,777.62 for late payment interest penalties due under the PPA related to invoices submitted under the three contracts (R4, tab 1). The claim included two spreadsheets detailing the interest penalties alleged due on thousands 2 of invoices submitted for payment (app. supp. R4, tab 49). The amount claimed was later revised downward on 26 February 2013 to $4,605,594.53 (R4, tab 7A at 1-4). The contracting officer issued her final decision on 1November2013, denying the claim (R4, tab 13). PWC filed its complaint with the Board dn 20 December 2013, and DLA filed its answer on 21 March 2014. The government moved to partially dismiss this appeal for lack of jurisdiction on 30 June 2014, but later moved for summary judgment on 4 March 2015.