MOTION
TO DISMISS FOR LACK
OF
JURISDICTION DENIED: September 24, 2007
CBCA
692-ISDA
CONFEDERATED
SALISH AND KOOTENAI TRIBES
OF
THE FLATHEAD NATION,
Appellant,
v.
DEPARTMENT
OF THE INTERIOR,
Respondent.
Brain
Upton and Rhonda Swaney of the Confederated Salish and Kootenai Tribes of the
Flathead Nation Legal Department, Pablo, MT, counsel for Appellant.
Colleen
M. Dulin, Office of the Solicitor, Department of the Interior, Lakewood, CO,
counsel for Respondent.
Before Board Judges
VERGILIO, STEEL, and WALTERS.
VERGILIO, Board Judge.
On
March 30, 2007, this Board received a notice of appeal from the Confederated
Salish and Kootenai Tribes of the Flathead Nation (CSKT). CSKT maintains that its annual funding
agreement (AFA) with the United States Fish and Wildlife Service (FWS), an
agency of the Department of the Interior (Government), was extended pursuant to
its terms for the period that the parties were attempting to negotiate a
successor agreement. CSKT contends that
when the Government took over performing an activity (bison feeding), the
Government breached the agreement by failing to provide CSKT with (1) written
notice of allegedly inadequate performance and (2) an opportunity to respond to
the allegations before the Government reassumed the activity. This appeal is based upon a deemed denial of
the claim. CSKT brings this matter here
pursuant to the terms of a statute, 25 U.S.C. '' 450m-1,
458cc, and the agreement, which make applicable the Contract Disputes Act, as
amended, 41 U.S.C.A. '' 601-613 (2006) (CDA).
The
Government filed a motion to dismiss for lack of jurisdiction, as well as a
subsequent clarification. CSKT submitted
a response in opposition to the motion.
The Government premises the motion on its conclusion that there was no
binding contract at the time of the performance in question. The Government also suggests that the matter
may be dismissed because the contractor failed to submit a claim to the
contracting officer.
The
Board concludes that the agreement was a valid contract, extended for the
period of performance covering the time of the alleged breach. The agreement expressly states that it may be
extended for a period while the parties are attempting to negotiate an
agreement for the subsequent fiscal year.
The terms and conditions of the agreement expressly are made applicable
during the extension period, including the period of the alleged breach by the
Government.
CSKT=s submission of a written claim to an awarding
official complied with the requirements of the contract and applicable
regulations. The regulations that make
that determination final and conclusive, unless timely appealed, do not
indicate that a claim must then be submitted to a contracting officer before an
appeal is submitted to this Board. This
action does not arise directly under the CDA.
CSKT properly submitted a claim under the agreement to the awarding
official. As permitted under the
agreement, CSKT brought its dispute here based upon a deemed denial of the
claim because the official did not issue a decision within sixty days of
receipt of the claim. The Board
concludes that it has jurisdiction over this dispute.
The
Board denies the Government=s motion to dismiss for lack of jurisdiction.
Findings
of Fact
The
Agreement/Contract
1.
The FWS and CSKT entered into an agreement, the
AFA. Exhibit 1 (all exhibits are in the
appeal file). The agreement specifies
the statutes and regulations under which it is authorized; it contains
direction regarding interpretation and CSKT compliance. Exhibit 1 at 2 ('' 3.A,
B).
2.
The Chairman of the CSKT Tribal Council signed
the agreement on behalf of CSKT. Two
individuals signed the agreement on behalf of the FWS, a Regional Director,
Mountain and Prairie Region (defined as ARegional
Director@), and a
contracting officer, Mountain and Prairie Region. Exhibit 1 at 6, 30.
3.
The agreement both specifies that it is
effective through September 30, 2006, inclusive, and addresses an extension:
As provided by the Tribal Self-Governance
Regulations at 25 C.F.R. ' 1000.146,
and subject to applicable laws and regulations, the FWS and the CSKT may agree
in writing to extend to a date after September 30, 2005, [sic] the term for
performing any Activity covered by this AFA.
All of the terms and conditions of this AFA will apply during any
extension of the term of this AFA. The
FWS and the CSKT may modify the Activities covered by this AFA or the
consideration paid by the FWS to the CSKT for performing an Activity only by
amending the AFA as provided in section 20.A of this AFA.
Exhibit 1 at 29 (' 23.C). The agreement defines Activity: Awhen capitalized, means a program,
service, function, or activity, or portion thereof, at the National Bison Range
Complex (NBRC), which the FWS agrees to fund and the CSKT agrees to perform
under this AFA.@ Exhibit 1 at 3 (' 4). Within the categories of Activities CSKT is
to perform is the activity to husband Asurplus
bison in a humane manner, with appropriate feed and water, to maintain sound,
healthy animals.@ Exhibit 2 at 12 (' 2.D.7.g). The agreement specifies the consideration
exchanged by the parties--in exchange for CSKT=s
performance of activities, the FWS will provide consideration specified in the
agreement. Exhibit 1 at 18 (' 12, Consideration).
4.
Regarding the expiration of the AFA, the
agreement dictates:
In accordance with the Tribal
Self-Governance Regulations at 25 C.F.R. ' 1000.148,
where the FWS and CSKT are negotiating a Subsequent AFA covering an Activity
with the prior written approval of the FWS and subject to any terms the FWS and
the CSKT previously agree to in writing, the CSKT may continue to perform the
Activity pending negotiation of a Subsequent AFA. To the extent the CSKT and the FWS are not
negotiating a Subsequent AFA covering an Activity:
1. Transition.
In the last month of the term of this AFA, the CSKT will work with the
FWS to ensure an orderly transition in returning to the FWS responsibility for
performing the Activity; and
2. Available
Property. On the last day of the term of this AFA, the CSKT will
return to the FWS all Available Property provided by the FWS to the CSKT, and
not needed by the CSKT to perform an Activity for which the FWS and the CSKT
are negotiating or have executed a Subsequent AFA for the next fiscal year.
Exhibit 1 at 26-27 (' 16.D).
5.
Over the signature of the Deputy Regional
Director, the FWS provided CSKT a letter dated September 5, 2006:
As you are aware, the current negotiations between
the Confederated Salish and Kootenai Tribes (CSKT) and the U.S. Fish and
Wildlife Service (Service) for a Fiscal Year 2007 Annual Funding Agreement
(AFA) at the National Bison Range will not be completed in time to execute the
FY 2007 AFA at the start of the new fiscal year on October 1, 2006.
It is the Service=s
understanding that the CSKT are willing to continue performing the activities
of the FY 2005-06 AFA in FY 2007, pending completion of the negotiations. As outlined in Section 16.D of the FY 2005-06
AFA (Expiration), the Service hereby authorizes CSKT to extend
performance of the current AFA in FY 2007, beginning on October 1, 2006.
Pursuant to 25 C.F.R. ' 1000.148,
during this extension period, the current AFA will remain in effect, including
coverage of the CSKT under the Federal Tort Claims Act (FTCA), 28 U.S.C.
2671-2680. The CSKT, under that
regulation, may use any funds remaining from the FY 2005-06 AFA, savings from
other programs, or Tribal funds for that purpose. No additional funds from the Service will be
provided to the CSKT until a FY 2007 AFA is executed.
Exhibit 19.
6.
A letter dated December 7, 2006, over the
signature of the Deputy Regional Director, informed CSKT:
The U.S. Fish and Wildlife Service (Service)
entered into an Annual Funding Agreement (AFA) with the Confederated Salish and
Kootenai Tribes (CSKT) to perform certain Activities at the National Bison
Range (NBR). This AFA commenced on March
15, 2005, and expired on September 30, 2006.
The Service authorized an extension of this agreement on September 5,
2006, for an undetermined length of time while negotiations for a subsequent
AFA are in progress.
One of the Activities identified in Attachment A
of the AFA is:
2.D.7.g.
AHusband
surplus bison in a humane manner, with appropriate feed and water, to maintain
sound, healthy animals.@
Effective immediately, the Service is withdrawing
authorization granted to CSKT to perform this Activity.
Exhibit 44.
The letter contains a discussion of the reasons why the Government is
withdrawing authorization to perform the activity; at this stage in the
proceedings, it is relevant that CSKT disagrees with some of the factual
statements contained therein. Exhibit
53.
7.
By letter dated December 11, 2006, the Regional
Director notified CSKT that, as of that date, the FWS is terminating
negotiations concerning an AFA for fiscal year 2007 for activities at the NBRC,
is withdrawing CSKT=s
authority to extend performance under the expired fiscal year 2006 AFA, and is
reassuming all responsibilities for performing all activities covered by that
AFA. Exhibit 62.
8.
The agreement contains a section captioned AAppeals@:
AThe Tribal Self-Governance Regulations
at 25 C.F.R Part 1000, Subpart R--Appeals, and section 450m-1 of the Act,
Contract disputes and claims, 25 USC ' 450m-1,
govern the resolution of disputes arising under this AFA.@
Exhibit 1 at 27 (' 18).
9.
In a letter dated January 10, 2006 [sic 2007],
to the Regional Director, with a caption AContract
Dispute Claim,@ CSKT
specifies that the letter is filed pursuant to the dispute provisions: AAs
the awarding official, this is being filed with you per 25 C.F.R. ' 900.219(a).@
Exhibit 65 at 2. CSKT disputes
the factual assertions and decision made in and actions taken pursuant to the
letter of December 7, 2006, Finding 6.
CSKT maintains that the Service cannot take back any of the contracted
activities except through the reassumption provisions of the agreement. CSKT contends that the Government factually
misstates what occurred, and contends that the Government utilized improper
procedures and failed to provide notice and an opportunity to respond, thereby
breaching the agreement by taking back the bison feeding activity. The letter concludes with the following
pertinent sentences:
This claim involves less than $100,000. In accordance with the provisions of 25
C.F.R. ' 900.223(b),
CSKT is requesting a decision in response to this claim within sixty days.
Please forward this to the relevant contracting
official, if it is anyone other than yourself, for decision in accordance with
25 C.F.R. ' 900.222.
10.
The Regional Director did not respond to the letter. In a notice of appeal dated March 28, 2007,
the contractor indicates that the appeal is being filed based upon the deemed
denial. CSKT alleges that the Government
breached the agreement by failing to provide the CSKT with (1) written notice
of allegedly inadequate performance and (2) an opportunity to respond to the
allegations before the Government reassumed the activity.
Discussion
In its motion to dismiss for lack
of jurisdiction, the Government maintains that there was no contract for the extension
period; that is, it states that the extension was not a contract because CSKT
was not obligated to continue performance, and the Government could opt to not
pay for work. Further, the Government
asserts that there was no signed agreement for the extension period, such that
there was no binding contract. Although the Government does not contend that
the Regional Director was other than an awarding official under the AFA, the
Government maintains that the CSKT failed to submit its claim to the
contracting officer, as required under the CDA as a prerequisite to Board
jurisdiction.
CSKT opposes the motion. It maintains that the fiscal year agreement
was extended by the parties and remained a binding contract. CSKT contends that it followed the terms of
the agreement, statute, and regulation in pursuing this claim.
A binding contract
Although the agreement through
fiscal year 2006 was not a procurement contract, 25 U.S.C. ' 450b(j), the agreement was a
contract, with each side providing consideration, Findings 1, 3. Cherokee Nation of Oklahoma v. Leavitt,
543 U.S. 631 (2005). Before the contract
expired, the parties were engaged in negotiating an agreement for fiscal year
2007. Pursuant to the terms of the
contract, a Deputy Regional Director provided written notice that, given the
on-going negotiations, and understanding that CSKT was willing to continue
performance, the FWS authorized CSKT to extend performance under the current
contract pending completion of the negotiations. Finding 5.
The contract permitted such an extension, and explicitly stated, AAll of the terms and conditions of this
AFA will apply during any extension of the term of this AFA.@
Findings 3, 4. (Pre-dispute
correspondence from the FWS supports the notion of a binding extension. Finding 6.)
The Board concludes that the written notification and performance by
CSKT thereafter established a valid contract extension with the terms and
conditions of the contract in effect during the extension period. With the extension, the contract did not
expire as of October 1, 2006.
Claim
The Board=s
jurisdiction and authority arise pursuant to the Indian Self-Determination and
Education Assistance Act, as amended, 25 U.S.C. ' 458cc(c),
and regulations, 25 CFR pt. 1000 (2006), not directly under the CDA (a statute
that does not define the term Aclaim@).
25 U.S.C. ' 450m-1(d). The agreement, through regulations applicable
thereunder, instructs CSKT to submit a claim as a written demand to the
awarding official. 25 CFR 900.218, .219, 1000.429. The awarding official is to issue a decision,
in this instance, within sixty days of receipt of the claim. 25 CFR 900.223. The decision is to indicate that CSKT may
take an appeal from the decision directly to the Board. 25 CFR 900.222. Absent an appeal or suit, the decision is
final and conclusive. 25 CFR
900.227. CSKT may treat a failure to
issue a decision within the sixty-day period as a denial of the claim. 25 CFR 900.224. Particularly given the regulation that
specifies that a decision of the awarding official is to indicate that an
appeal may be taken directly to the Board, without a requirement for a separate
claim or decision to a contracting officer, the Board deems the requirement of
the CDA to submit a claim to a contracting officer to be satisfied by a written
claim submitted to an awarding official.
The agreement treats the awarding official as the equivalent of a
contracting officer for purposes of resolving a dispute under the agreement and
the CDA.
The Government recognizes that
two individuals signed the agreement on behalf of the FWS--a regional director
and a contracting officer. The
Government does not contend that the regional director lacked authority as an
awarding official. In light of the
signature, and the failure by the Government to suggest or substantiate an
alternate position, the Board concludes that the regional director was an awarding
official. CSKT submitted a claim to the
appropriate official, in accordance with the terms and conditions of the
agreement and the applicable regulations.
Given the passage of time, CSKT timely filed an appeal with the Board
based upon a deemed denial of its claim.
Conclusion
The Board has jurisdiction over
this timely-filed dispute. In developing
the record on the merits, the parties should focus upon regulations and the
language of the contract that extends the contract while the parties negotiate
an agreement for fiscal year 2007. The
contract recognized that the parties may cease to negotiate an agreement for
the following fiscal year. Finding
4. With the letter of December 7, 2006,
it appears that the Government concluded that it would exclude the given
activity of bison feeding from negotiations for an agreement for fiscal year
2007. Finding 6. (With the subsequent letter dated December
11, 2006, the Government ceased negotiations for a follow-on agreement. Finding 7.)
CSKT bears the burden of proof in this dispute. It contends that, regarding the reassumption
of the activity, the Government was required, but failed, to follow procedures
of the agreement, Exhibit 1 at 14 ('' 10.A.3,
16), and regulation, 25 CFR 1000, subpt. M.
What has yet to be explored is whether the Government was obligated to
continue with the whole of the extended agreement, or, similar to an option
under a contract, could opt to let the agreement
expire in whole or in part. It may be that, without a Government
obligation, there could not be a material breach.
Decision
The Board DENIES the
Government=s motion
to dismiss for lack of jurisdiction.
_________________________
JOSEPH A. VERGILIO
Board Judge
We concur:
____________________________ ____________________________
CANDIDA S. STEEL RICHARD
C. WALTERS
Board Judge Board
Judge
As
directed by statute, with the termination of the Department of the Interior
Board of Contract Appeals (IBCA) and the creation of this Civilian Board of
Contract Appeals (CBCA), references in statute and regulation to the IBCA are
now to be treated as referring to the CBCA.
National Defense Authorization Act for Fiscal Year 2006, Pub. L. No.
109-163, ' 847(e), 119 Stat. 3394 (2006). As appropriate, this opinion substitutes the
CBCA for the IBCA.
It is
difficult to reconcile the position of the Government asserted in the motion,
that there was no binding contract between the parties at the time in question,
with its position that CSKT was not performing adequately under the terms of
the agreement.
CSKT
pursues relief elsewhere regarding the Government=s
failure to enter into an AFA with CSKT for fiscal year 2007. However, that action does not impact upon or
diminish the claim of breach here raised by CSKT. The Board views the two disputes (pursued in
different forums) by CSKT to be discrete.
Of relevance here, CSKT maintains that its AFA was extended and during
the extension the Government breached the agreement.
Regulation,
25 CFR 900.6, defines the phrase Aawarding
official@ to mean:
any person who by appointment or delegation in
accordance with applicable regulations has the authority to enter into and
administer contracts on behalf of the United States of America and make
determinations and findings with respect thereto. Pursuant to the Act, this person can be any
Federal official, including but not limited to, contracting officers.
