ASBCA 60663

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of-- ) ) Parsons Government Services, Inc. ) ASBCA No. 60663 ) Under Contract No. M67854-09-D-8000 ) APPEARANCES FOR THE APPELLANT: Michael R. Rizzo, Esq. Mary E. Buxton, Esq. Pillsbury Winthrop Shaw Pittman LLP Los Angeles, CA APPEARANCES FOR THE GOVERNMENT: Ronald J. Borro, Esq. Navy Chief Trial Attorney Anthony K. Hicks, Esq. David B. Stinson, Esq. Trial Attorneys OPINION BY ADMINISTRATIVE JUDGE O'SULLIVAN ON THE GOVERNMENT'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM Parsons Government Services, Inc. (Parsons) appeals from a deemed denial of a $20,899,704 claim asserting that the government incorrectly expended operation and maintenance (O&M) funds instead of military construction (MILCON) funds and thus the contract should be considered void ab initio, allowing Parsons to recover in quantum meruit. The government moves to dismiss for failure to state a claim upon which relief can be granted. We grant the motion and dismiss the appeal. 1 STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 1. On 18 March 2009, the government awarded Contract No. M67854-09-D-8000 (contract) to Parsons Infrastructure & Technology Group 2 for Military Operations in Urban Terrain (MOUT) training systems for the United States Marine Corps (R4, tab 1). 1 ASBCA No. 60663 is consolidated with ASBCA No. 60662. The motion pertains to ASBCA No. 60663 only. 2 By contract Modification No. P00006 dated 10 June 2009, the contractor name was changed from "Parsons Infrastructure & Technology Group" to "Parsons Government Services, Inc." (R4, tab 7). The contract was a requirements contract and included a five-year ordering period (id. at 1043, 1126-27). 2. By letter dated 16 October 2015, Parsons submitted a certified claim of $20,899,704 to the contracting officer alleging that the government should have awarded the contract as a construction contract appropriating MILCON funds instead ofa supply and services contract using O&M funds (app. supp. R4, tab 2 at 39, 41). Parsons alleges that because of this, "the contract should be rescinded as a matter of law and Parsons is entitled to quantum meruit on its fixed-price work - i.e., the actual cost of the work Parsons performed on firm-fixed price tasks plus a reasonable profit on that actual cost" (id.). 3. By letter dated 19 October 2015, Parsons submitted a second certified claim for $16,478,454 to the contracting officer alleging that the government materially breached the requirements provisions of the contract by awarding work to other companies, constructively changing the contract by awarding out of scope work, refusing to pay for concrete, and delaying and interfering with Parsons' performance (app. supp. R4, tab 3). 4. On 6 July 2016, Parsons filed its appeals from deemed denials of its claims dated 16 and 19 October 2015. The appeal from the deemed denial of the claim dated 19 October 2015 was docketed as ASBCA No. 60662. The appeal of the deemed denial of the claim dated 16 October 2015 was docketed as ASBCA No. 60663. ASBCA Nos. 60662 and 60663 were subsequently consolidated. The government's motion to dismiss for failure to state a claim upon which relief can be granted only encompasses ASBCA No. 60663. DISCUSSION The government moves to dismiss this appeal for failure to state a claim upon which relief can be granted. The government argues that Parsons failed to put forth facts and allegations which would entitle it to a legal remedy, that the federal statute which was allegedly violated provides no private cause of action, and that judicial invalidation of a fully performed contract is generally disfavored. Parsons disputes the government's arguments and states that both of its causes of action, that the contract was illegal and is void ab initio and that the government breached the duty of good faith and fair dealing, state a claim upon which relief can be granted. Parsons requests an opportunity to amend its complaint should we agree with the government that Parsons fails in its claim to state a ground upon which relief can be granted. Parsons' claim states that the predecessor to the contract at issue in this appeal was funded with MILCON funds (app. supp. R4, tab 2 at 44).