CBCA 7724

DISMISSED FOR FAILURE TO STATE A CLAIM: September 21, 2023 CBCA 7724 COBRA ACQUISITIONS, LLC, Appellant, v. DEPARTMENT OF HOMELAND SECURITY, Respondent. Christopher D. Man, Bryant Gardner, Kyllan Gilmore, and Abbe David Lowell of Winston & Strawn LLC, Washington, DC, counsel for Appellant. Matthew Lane, Federal Emergency Management Agency, Department of Homeland Security, Washington, DC, counsel for Respondent. Before Board Judges VERGILIO, SHERIDAN, and ZISCHKAU. Opinion for the Board by Board Judge ZISCHKAU. Board Judge VERGILIO concurs. ZISCHKAU, Board Judge. This appeal involves claims by appellant, Cobra Acquisitions, LLC (Cobra or appellant), seeking $379,099,508.71 from respondent, the Department of Homeland Security, Federal Emergency Management Agency (FEMA). The claims arise out of an alleged contract between FEMA and Cobra to pay for work Cobra performed to repair Puerto Rico’s electrical grid in the aftermath of Hurricane Maria. FEMA has moved to dismiss the appeal for failure to state a claim upon which relief can be granted on the basis that there is no contract between Cobra and FEMA. We conclude that Cobra has failed to allege a federal CBCA 7724 2 procurement contract over which we would have jurisdiction under the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101–7109 (2018). Accordingly, we dismiss the appeal. Background In September 2017, Hurricane Maria made landfall in Puerto Rico cutting off all electricity on the island. In response, President Trump declared a regional disaster (FEMA- 4339-DR) under the Stafford Act, 42 U.S.C. §§ 5121 et seq., which authorized FEMA to provide public assistance to the affected regions through disaster grants. Pursuant to the disaster declaration, FEMA and Puerto Rico entered into an agreement for disaster assistance. 44 CFR 206.44 (2022). Under the agreement, FEMA agreed to provide federal assistance, and Puerto Rico agreed to be grantee for all assistance provided under the Stafford Act. Michael Byrne was designated by the President to be FEMA’s Federal Coordinating Officer (FCO) in charge of coordinating all Federal activities in support of the territory.1 Following the execution of the FEMA-Puerto Rico agreement, the Puerto Rico Electric Power Authority (PREPA), the sole electric utility in Puerto Rico, submitted an official request for public assistance to fund the work to restore power to the island. On October 19, 2017, PREPA entered into a contract with Cobra to provide power restoration services. Cobra alleges that FEMA helped facilitate the PREPA-Cobra agreement. Complaint ¶¶ 11-14. The PREPA-Cobra agreement stated that “FEMA funds will be used to cover this contract” and “FEMA has reviewed and approved of this contract.” Id. ¶ 14. Cobra alleges that by December 2017, PREPA had breached the PREPA-Cobra agreement by failing to make over $174 million in payments. Id. ¶ 15. Cobra further alleges that its chief executive officer, Arty Straehla, met in December 2017 with FEMA’s FCO to raise the issue of PREPA’s payment failures and that if Cobra did not get paid, Cobra would have to stop work. Id. According to Mr. Straehla, Mr. Byrne guaranteed that if Cobra were to complete the work, FEMA would pay. Id. ¶ 16. Cobra states that based on that agreement, Cobra continued its work. Following this meeting, Mr. Byrne sent a letter dated December 23, 2017, to Jose Marrero, the Puerto Rico Governor’s Authorized Representative, informing him that project worksheet 251 would soon be completed and the necessary funding would be obligated. Mr. Byrne raised Cobra’s concerns about payment and stated that “Puerto Rico must provide an SF-270 draw down request to FEMA with validated, 1 The FCO is the president’s representative at the site of a disaster. The FCO’s authority is set out in 42 U.S.C. § 5143. CBCA 7724 3 supporting documentation within 1 day of the obligation of PW #251.” Appellant’s Notice of Appeal, Exhibit 1, Exhibit B. SF-270 here refers to the paperwork required for Puerto Rico to access the public assistance grant funding after it is set aside, indicating that Mr. Byrne was seeking to expedite Puerto Rico’s drawing down of grant funds so that PREPA could pay Cobra and address the concerns raised by Mr. Straehla. Cobra alleges that Mr. Byrne and FEMA’s Deputy Regional Administrator for FEMA Region II, Dr.