BOARD OF CONTRACT APPEALS U.S. GOVERNMENT PRINTING OFFICE WASHINGTON, DC 20401 In the Matter of ) ) the Appeal of ) ) GRAPHICDATA, INC. ) Docket No. GPO BCA 35-94 Program D306-S ) Purchase Order 94586 ) DECISION AND ORDER SCHEDULING A HEARING By Notice of Appeal dated October 21, 1994, GraphicData, Inc. (Appellant or Contractor), alleging that Contracting Officer Richard Weiss has failed to issue a final decision on an equitable adjustment claim it filed with the U.S. Government Printing Office (Respondent or GPO or Government) within a reasonable time, asks the Board to assert jurisdiction over the matter.1 GPO Instruction 110.12, Subject: Board of Contract Appeals Rules of Practice and Procedure, dated September 17, 1984, Rule 1(c) (Board Rules).2 The Appellant attached its Complaint to its Notice of Appeal. Board Rules, Rules 2 and 6. The Notice of Appeal and accompanying Complaint were assigned docket number GPO BCA 35-95 by the Clerk of the Board on October 27, 1994, and copies were sent to the Respondent the same day.3 Board Rules, Rule 3. However, on November 4, 1994, before the Board could prepare and serve its official docketing letter on the Contractor, the Respondent filed a document entitled, "Motion to Dismiss" (Motion) asking the Board to dismiss the appeal on the ground that it is premature because the Contracting Officer has not had a reasonable amount of time to dispose of the claim. See, Motion, pp. 1, 2-3. In that regard, Counsel for GPO stated that consistent with the Board's preference for audited claims, see, Motion, p. 2 (citing, Banta Company, GPO BCA 03-91 (November 15, 1993), Sl. op. at 57; R.C. Swanson Printing and Typesetting Company, GPO BCA 15-90, Decision on Motion for Reconsideration and Order (December 20, 1993), Sl. op. at 14), the Contracting Officer had referred the matter to GPO's Office of the Inspector General (OIG) for an audit, and until that investigation was finished, there was no basis for an appeal to the Board, see, Motion, pp. 2-3 (citing, Cosmo Construction Company, IBCA No. 412, 64 BCA ¶ 4,059). Since the Contracting Officer was entitled to a reasonable amount of time under Rule 1(c) of the Board Rules to issue a final decision on a claim of this magnitude,4 the Respondent asked the Board to dismiss the appeal.5 See, Motion, p. 3. Thereafter, on November 8, 1994, Counsel for the Appellant filed the Contractor's "Opposition to Government's Motion to Dismiss and Request for Telephonic Conference" (Opposition). In its Opposition, the Appellant argued, inter alia, that: (1) the appeal fully complied with Rule 1(b) of the Board Rules, which allows a contractor to seek Board redress from the failure of a contracting officer to issue a final decision once the claim has been in the contracting officer's hands for 60 days or a reasonable time (the Appellant says that should have been less than 60 days under the circumstances here) (citing, EPCo Associates, GPO BCA 26-93 (November 18, 1993); (2) the Contracting Officer waited an unreasonable length of time to order an audit of the claim, and in any event an audit, timely or not, does not offset the Contracting Officer's failure to issue a final decision (citing, Dewey Electronics Corporation, DOTCAB No. 1224, 82-2 BCA ¶ 15,828; Inter-con Security Systems, Inc., ASBCA No. 45749, 93-3 BCA ¶ 26,061); (3) by analogy to the Contract Disputes Act of 1978 (CDA), 41 U.S.C. § 601 et seq., in this case the Contracting Officer not only failed to make a timely final decision, but he also refused to establish a date certain for ruling on the claim, see 41 U.S.C. § 605(c)(2)(A),(B); (4) on the other hand, even if the Board finds that the appeal is premature, it should continue the appeal but stay further proceedings pending issuance of a final decision by the Contracting Officer, see Board Rules, Rule 1(d); and (5) a telephone conference between the parties and the Board would be appropriate in order to discuss the date by which the Contracting Officer would issue a final decision. See, Opposition, pp. 2, 5-8. On November 25, 1994, Counsel for GPO submitted a document entitled "Respondent's Reply to Appellant's Response to Motion to Dismiss" (Reply) to the Board. The Reply served two purposes, namely, it placed on the record: (1) the Respondent's disagreement with the Appellant's version of the date on which the claim was forwarded to the OIG for an audit;6 and (2) GPO's position not only with respect to the meaning of the Board's opinion in EPCo Associates, supra, but also why that decision did not apply to the facts here. See, Reply, pp. 1-2. Accordingly, the Respondent renewed its contention that the appeal was premature and should be dismissed in order to give the Contracting Officer time to render a reasoned decision based on the results of the OIG audit.7 See, Reply, p. 3. The Board has carefully weighed the procedural arguments of the parties against the requirements of the Board Rules, and has concluded that the Appellant's request for a conference is appropriate under the circumstances presented here. Board Rules, Rule 5. As a rule, an appeal is initiated with the Board when a contractor notes a disagreement with a contracting officer's final decision. EPCo Associates, supra, Sl. op. at 3. See, Board Rules, Rule 1(a). Indeed, in most cases the Board's jurisdiction is predicated on a contractor first submitting its claim to the contracting officer for a decision. See, Shepard Printing, GPO BCA 37-92 (January 28, 1994), Sl. op. 32. Accord, Associated Contract Specialties Corporation, ASBCA No. 37437, 90-3 BCA ¶ 23,258; Spruill Realty/Construction Company, ASBCA No. 40477, 90-3 BCA ¶ 23,255. Thus, the underlying precepts of the Board Rules are essentially the same as those of the CDA, which places great emphasis on the role of a contracting officer in resolving contract claims, makes his/her decision an indispensable precondition to the assertion of a contract appeal, and characterizes that final decision as "the linchpin" for the contract appeal process. Paragon Energy Corporation v. United States, 645 F.2d 966, 967 (Ct.Cl. 1981). See also, Continental Products, Inc., ASBCA No. 45193, 93-2 BCA ¶ 25,879, at 128,740; John C. Grimberg Company, Inc., ASBCA No. 42695, 91-3 BCA ¶ 24,074, at 120,521 (The [CDA] does not authorize an impatient contractor to jump-start the litigation process); DHR, Incorporated, EBCA No. 401-12-87, 88-1 BCA ¶ 20,451, at 103,430. To the extent that the Rule 1 allows a contracting officer 60 days to issue a final decision for claims of $50,000 or less, or a "reasonable time" for claims in excess of $50,000, the Board Rules are no different than the requirements of the CDA.8 Compare, Board Rules, Rules 1(b) and 1(c) with 41 U.S.C. §§ 605(c)(1),(3). See also, Robert Augustine & Sons, Inc., VABCA No. 3079, 90-1 BCA ¶ 22,506 (claims of $50,000 or less); Executive Elevator Service, Inc., VABCA No. 2741, 88-3 BCA ¶ 20,964 (claims in excess of $50,000). A "reasonable time" is determined under the CDA by taking into account such factors as the size and complexity of the claim and the adequacy in support of the claim provided by the contractor. 41 U.S.C. § 605(c)(3). See, Roebbelen Engineering, Inc., DOT BCA No. 1814, 87-1 BCA ¶ 98,628; Universal Contracting, DOT CAB Nos. 1565, 1600, 1601, 85-3 BCA ¶ 18,326. There is no comparable definition of "reasonable time" in the Board Rules, although the similarity between those regulations and the CDA with respect to other relevant language, as well as their shared procedural philosophy, allows the conclusion that the CDA's definition is implied in the Board Rules. Simply put, the procedural issue presented here is does the Board have jurisdiction to decide the Appellant's claim because the Contracting Officer has exceeded the time allowed to issue a final decision, or has otherwise unduly delayed his decision?9 See, DHR, Incorporated, supra, 88-1 BCA ¶ 20,451; Computer Systems & Resources, Inc., GSBCA No. 8434-TD, 86-3 BCA ¶ 19,017. Stated otherwise, the question is should the appeal be dismissed without prejudice at this time on the ground that it is premature,10 because the Contracting Officer has not had a "reasonable time" to issue his final decision on the Contractor's claim?11 See, John C. Grimberg Company, Inc., supra, 91-3 BCA ¶ 24,074; Executive Elevator Service, Inc., supra, 88-3 BCA ¶ 20,964; Roebbelen Engineering, Inc., supra, 87-1 BCA ¶ 98,628. A review of the Board's previous decisions discloses that it has never been faced with precisely this question before.12 It has been said that jurisdiction and prematurity are distinguishable concepts, primarily because the former depends on the mere passage of time,13 while the latter invests a great deal of discretion in the deciding official to determine how much time is reasonable under the particular circumstances of the case, a matter on which reasonable jurists may, and probably will, differ. See, Roebbelen Engineering, Inc., supra, 87-1 BCA at 98,630. Regardless, the only procedure available under the Board Rules to decide the prematurity issue presented here is the one established to dispose of jurisdictional challenges. That procedure provides, in pertinent part: Any motion addressed to the jurisdiction of the Board shall be promptly filed. Hearing on motion shall be afforded on application of either party. However, the Board may defer its decision on the motion pending hearing on both the merits and the motion. . . . Board Rules, Rule 5. [Emphasis added.] The Appellant's request in this case for a conference to discuss the date by which the Contracting Officer would issue a final decision, see, Opposition, p. 8, is tantamount to a request for a hearing on the Respondent's Motion. In the Board's opinion, the Respondent's Motion and the Appellant's Opposition have raised a threshold jurisdictional issue, and it believes that a sound administration of the rules in this appeal requires a hearing on that question alone. See, Graphic Image, Inc., GPO BCA 05-94, Order Scheduling Hearing (April 19, 1994), Sl. op. at 4. ACCORDINGLY, a hearing has been scheduled for 10:00 a.m. (EST), on Tuesday, January 3, 1995, in the Board's Conference Room (Room A-651), at the U.S. Government Printing Office, 732 North Capitol Street, NW., Washington, DC 20401. It is so Ordered. December 21, 1994 STUART M. FOSS Administrative Judge _______________ 1 From the sparse documentation in the appeal file, the Board understands that the Appellant's claim amounts to $532,092.74. See, Appellant's Complaint, dated October 21, 1994, ¶ 5. 2 Rule 1(c) of the Board Rules provides: "Where the contractor has submitted a claim in excess of $50,000 and has requested a final decision from the contracting officer and the contracting officer has failed to issue a decision within a reasonable time, the contractor may file a notice of appeal as provided in subparagraph (a) above, citing the failure to issue such decision." 3 On October 27, 1994, and October 28, 1994, respectively, Counsel for the Appellant telephoned the Board and was given the docket number of the appeal, and was told that the documents had been served on the Respondent by the Board. At the same time, Counsel for the Appellant was informed that his request to have this procedural matter processed under the optional Small Claims (Expedited) procedure for claims of $10,000.00 or less, on the ground that no dollar amount was involved, see Notice of Appeal, would not be considered. Board Rules, Rules 12.1(a) and 12.2. Simply stated, while the Board admired Counsel's creative interpretation of the rules, the Small Claims (Expedited) procedure does not apply to this preliminary stage of the appeals process or to the procedural issue raised. 4 Rule 1(b) allows a GPO contracting officer 60 days to issue a final decision on claims of $50,000.00 or less. Board Rules, Rule 1(b). Since the claim in this case is more than 10 times that amount, and is governed by Rule 1(c) which speaks in terms of a contracting officer's decision being issued within a "reasonable time", the Respondent believes that it was unrealistic for the Appellant to expect such a decision within 60 days, and hence the appeal itself was unreasonable. 5 Alternatively, since the OIG anticipated completion of its audit by the end of January 1995, see, Motion, p. 3, fn. 2, Counsel for GPO suggested that the appeal should be dismissed in accordance with the policy announced by the Board in Universal Printing Company until the audit is completed. Motion, p. 3 (citing, Universal Printing Company, GPO BCA 9-90 (June 22, 1994)). In Universal Printing Company, the Board was faced with a contractor's claim which was "practically undecipherable", and while the age of the case militated in favor of deciding the dispute on the record as it existed, the Board stated that: ". . . in the future, if in the judgment of the Board the clarification of a claim on appeal is necessary in order to resolve a dispute, it will remand the matter to the Contracting Officer, through Government Counsel, with instructions to have the claim audited, and will dismiss the appeal without prejudice until the audit is complete. [Footnote omitted.] See, National Council of Negro Women, LBCA No. 84-BCA-18, 84-2 BCA ¶ 17,436, at 86,827. The Board is confident that, in the long run, this new policy will buttress a major purpose of the Board's preliminary procedures, namely, obtaining fully disclosure of relevant and material facts." See, Universal Printing Company, supra, Sl. op. at 30. The situation in Universal Printing Company is clearly distinguishable from the instant appeal; hence, the announced policy is inapplicable here. In Universal Printing Company, although the Board was not happy with the record before it, nonetheless it had extensive documentation from the contractor concerning the claim, a final decision from the contracting officer, and it was well aware of the respective positions of the parties on the claim from the discussions at the prehearing conference and the briefs they subsequently filed. Here, by contrast, the parties have barely stepped across the Board's threshold in developing a record. In short, this appeal is not what the Board had in mind when it announced its policy in Universal Printing Company. 6 The Appellant claims that an audit was not requested by the Contracting Officer until October 11, 1994. See, Opposition, p. 5, ¶ 8. The Government, on the other hand, contends it asked the OIG to audit the claim on September 21, 1994, see, Reply, p. 1 (citing, Declaration of Richard Weiss, dated November 23, 1994). The auditor assigned to the claim, Edwin L. Hawse, states that he received the Contracting Officer's audit request on or about September 27, 1994. See, Reply, p. 1 (citing, Declaration of Edwin Hawse, dated November 23, 1994). 7 In that regard, Counsel for GPO advises the Board that: (a) the OIG forecasts that its audit will be completed by the end of January 1995, see, Motion, p. 3, fn. 2; and (b) the Contracting Officer will provide a final decision on the claim within two weeks of his receipt of the final audit report, see, Reply, p. 3, fn. 1. 8 There are, however, two significant procedural differences between the Board Rules and the CDA in this area which the Board cannot ignore. First, under the CDA a contracting officer's final decision which may be appealed pursuant to 41 U.S.C. § 606, may be an actual decision or a "deemed denial" decision; i.e., one imputed from the failure of the contracting officer to issue a decision with the "period required", see, 41 U.S.C. § 605(c)(5). See, e.g., Winston Corporation, ASBCA No. 40591, 92-3 BCA ¶ 25,213; Melvin R. Kessler, PSBCA No. 2820, 91-1 BCA ¶ 23,511; Central Manufacturing Corporation, ASBCA No. 39324, 90-2 BCA ¶ 22,885; CBI Na-Con, Inc., ASBCA No. 37972, 89-2 BCA ¶ 21,728. The Board Rules do not provide for "deemed denial" decisions as the basis for jurisdiction. See, EPCo Associates, supra, Sl. op. at 3, fn. 4. Second, within the 60-day decision period the CDA allows a contracting officer to either: (a) issue a decision; or (b) notify the contractor of the time within which a decision will be issued. See, Cessna Aircraft Co., ASBCA No. 43196, 92-1 BCA ¶ 24,425, at 121,909; John C. Grimberg Company, Inc., supra, 91-3 BCA at 120,520; Robert Augustine & Sons, Inc., supra, 90-1 BCA at 112,972 (the contracting officer's notification must be based on a "good faith" estimate of the time within which a decision will be issued). See, 41 U.S.C. § 605(c)(2)(A),(B). There is nothing in Rule 1 of the Board Rules, or in Chapter X of GPO's Printing Procurement Regulation, GPO Publication 305.3 (Rev. 10-90), which applies to the processing of claims, comparable to the "notification" provision of the CDA (41 U.S.C. § 605(c)(2)(B)). 9 It should be noted that even where jurisdiction is asserted, the Board has the same authority as its counterparts under the CDA to still direct the contracting officer to issue a decision and, at its option, stay further proceedings until that it accomplished. Compare, Board Rules, Rule 1(d) with 41 U.S.C. §§ 605(c)(4),(5). See, EPCo Associates, supra, Sl. op. at 3-4. Accord, DHR, Incorporated, supra, 88-1 BCA ¶ 20,451; Emerson Electric Company, ASBCA No. 31184, 86-2 BCA ¶ 18,979; Feinstein Construction Company, Inc., ASBCA No. 30519, 86-1 BCA ¶ 18,660; A.D. Roe Company, Inc., ASBCA No. 26078, 81-2 BCA ¶ 15,231. Similarly, it is also well-settled that a contracting officer is not relieved from the obligation of issuing a final decision merely because the contractor has filed a premature appeal. See, Rice King, ASBCA No. 43352, 92-2 BCA ¶ 24,805; Atherton Construction, Inc., ASBCA No. 41414, 91-1 BCA ¶ 23,635; ACS Construction Company, ASBCA No. 36535, 89-1 BCA ¶ 21,406. 10 Generally, contract appeals boards tend to see premature appeals as "unwise", see, Sierra Blanca, Inc., ASBCA No. 30910, 85-3 BCA ¶ 18,440, at 92,653, and not an inconsequential matter to be regarded lightly, see, Emerson Electric Company, supra, 86-2 BCA at 95,856. However, it is also the case that prematurity is not always fatal to the justiciability of an appeal. See, Briggs Engineering and Testing Company, Inc. v. United States, 230 Ct.Cl. 828 (1982); Monaco Enterprises, Inc., ASBCA No. 27423, 86-2 BCA ¶ 18,922; The Boeing Company, ASBCA No. 27396, 83-1 BCA ¶ 16,256; R.G. Robbins, Co., Inc., ASBCA No. 26521, 82-1 BCA ¶ 15,643. See also, John C. Grimberg Company, Inc., supra, 91-3 BCA at 120,520. This is particularly true where despite the lack of a final decision, the facts indicate that no useful purpose would be served by suspending or dismissing the appeal and directing the contracting officer to issue a formal decision, especially if the record already contains the Government's expression of an opinion on the claim so that the matter has clearly crystallized into a dispute ripe for adjudication. See, Emerson Electric Company, supra, 86-2 BCA at 95,857; Fuel Storage Corporation, ASBCA No. 26994, 83-1 BCA ¶ 16,418. 11 If the Board in this appeal was faced with a claim of $50,000 or less, the issue could be decided by simple reference to the calendar and a brief arithmetical computation to see if more than 60 days had passed without a final decision by the Contracting Officer. Board Rules, Rule 1(b). However, because the claim is for a greater amount, a more complex legal determination of what is a reasonable time under all the circumstances is required of the Board. 12 Although instructive, the situation in EPCo Associates can be distinguished from this proceeding. In that case, the parties came to the Board after the Federal Claims Court had dismissed the contractor's direct action suit because it had not exhausted its administrative remedies. See, EPCo Associates v. United States, No. 93-309C (August 17, 1993). The appeal record showed: (a) the disputed claim was virtually identical to allegations in the complaint considered by the Court; (b) the contracting officer had been substantially involved in that civil matter and had throughout the case opposed the contractor's right to any recovery; and (c) the contracting officer was familiar with the substance of the claim. Under these circumstances, the contractor believed that 30 days was more than sufficient time for the contracting officer to issue a final decision, particularly since the claim and the court complaint were substantially the same. EPCo Associates, supra, Sl. op. at 2. In essence, because everyone involved in that proceeding knew the contracting officer's views, and it was clear to the Board that his decision would be a mere formality, it asserted jurisdiction over the appeal. As the Board pointed out, while a final decision from the contracting officer is normally a prerequisite to an appeal, that "does not mean, however, that a contracting offcer can frustrate the appeals process by refusing to issue a final decision." Id., at 3. On the other hand, for the sake of the record, the Board exercised its option under its rules and asked the contracting officer to provide it with a final decision, giving him 60 days to do so, and stayed further proceedings pending its receipt. Id., at 3-4. Board Rules, Rule 1(d). Accord, Emerson Electric Company, supra, 86-2 BCA ¶ 18,979 (although the contractor's appeal was technically premature, the board took jurisdiction because the government had already expressed its position on the claim so that the matter was clearly ripe for adjudication). 13 The Board's rules allow a contractor 90 days from the date of receipt of a contracting officer's final decision to file an appeal. Board Rules, Rule 1(a). This time limit is jurisdictional; i.e., an appeal filed more than 90 days after receipt of the contracting officer's final decision is generally not considered by the Board. See, Ace Duplicating Company, GPO BCA 44-92 (February 1, 1993). However, there is a critical distinction between the Board's practice and the 90-day rule followed by Executive Branch boards under the CDA. See, 41 U.S.C. § 606. In that regard, under the CDA the 90-day time limit is strictly construed because the right to appeal a contracting officer's decision is a waiver of sovereign immunity by the United States. See, Elden-Rider, Inc., GSBCA No. 8643, 90-2 BCA ¶ 22,878; Avon C. Brown, Inc., DOT CAB 1082, 80-1 BCA ¶ 14,399. The Board normally applies its 90-day filing rule strictly as well. See, Ace Duplicating Company, supra. See also, Moore Business Forms & Systems Division, GPO BCA 3-86 (February 25, 1987). But, the Board sees nothing in the legislative history of 44 U.S.C. § 502 to indicate that by authorizing the Public Printer to contract out printing, binding, and blank-book work, Congress thereby also intended to waive the Government's sovereign immunity with respect to his settlement of contract claims against the United States. See, The Wessel Company, Inc., GPO BCA 8-90 (February 28, 1992), Sl. op. at 44. Accordingly, the Board believes there is a measure of flexibility in its 90-day rule, and it will exercise its discretion to allow an otherwise late appeal if good cause is shown for the delay. See, e.g., McDonald & Eudy Printers, Inc., GPO BCA 06-91 (May 6, 1994) Sl. op. at 2, fn. 2.