SKELLY AND LOY v. UNITED STATES

ON DEFENDANT'S MOTION TO DISMISS

BENNETT, Judge:

This is an action under the Contract Disputes Act of 1978 (CDA or Act), 41 U.S.C. § 609(a)(1),1 challenging a contracting officer's decision denying a claim for additional compensation under a contract entered into between plaintiff and the U. S. Department of Energy (DOE). Defendant has brought a motion to dismiss the petition, which plaintiff opposes. Since we find that plaintiff has not certified its claims as required by statute, we grant defendant's motion.

On August 16, 1979, plaintiff, a partnership, and defendant entered into DOE Contract No. DE-AC01-79ET11268, a technical support services contract relating to DOE programs in mining and preparation of solid fuels. The disputes clause of the contract contained the statement that the contract was subject to the CDA, and any claim over $50,000 had to be certified by the contractor upon submission to the contracting officer. By a letter dated December 11, 1980, plaintiff, through its attorneys, requested an upward modification in the fixed-fee provisions of the contract, citing increased costs allegedly caused by greater demands on plaintiff than originally envisioned. On April 7, 1981, the contracting officer issued a final decision denying, on the merits, plaintiff's claim for additional compensation. On January 8, 1982, plaintiff filed its petition in this court, seeking damages of $169,562 and $602,816 on alternate claims under the direct access provisions of the CDA.

In its motion to dismiss, defendant presents two grounds in support of its motion: (1) plaintiff has failed to certify its claims as required by the Act; and (2) plaintiff has failed to exhaust administrative remedies in regard to its first claim for relief. Since we find that plaintiff has not properly certified its claims, we dismiss the petition for that reason alone and do not reach the second defense.

The requirement that a claim be certified is contained in section 605(c)(1), which, in pertinent part, states:

In Paul E. Lehman, Inc. v. United States, 230 Ct.Cl. 11, 673 F.2d 352 (1982), we held that a claim over $50,000 is not a valid claim and cannot be entertained by this court unless it has been certified. See also Troup Bros. v. United States, Ct.Cl. No. 622-80C (order entered June 8, 1982). Furthermore, the fact that the contracting officer considered the claim on the merits does not vitiate this requirement, as he "had no authority to waive a requirement that Congress imposed." Lehman, 230 Ct.Cl. at ___, 673 F.2d at 356. We have also held that a contractor cannot retroactively meet this requirement — for the purpose of direct judicial review — by certifying the claim after the final decision of the contracting officer. W. H. Moseley Co. v. United States, 230 Ct.Cl. 405, 677 F.2d 850 (1982), petition for cert. filed, 50 U.S.L.W. 3998.20 (U.S. June 21, 1982) (No. 81-2323). See also Troup Bros.2

Plaintiff presents three arguments in support of its position that we should deny defendant's motion to dismiss because of failure to certify the claim: (1) lack of certification is not the proper basis for a dispositive motion; (2) certification need not be in writing, and additional facts are needed to determine whether oral certification was sufficient; and (3) certain written submissions provided by plaintiff satisfied the certification requirement.

As to plaintiff's first argument, lack of certification is indeed the proper basis for a dispositive motion, as evidenced by our decisions in Lehman, Moseley and Tri-Central, Inc. v. United States, Ct.Cl. No. 275-81C (order entered March 23, 1982). Rule 38(b), cited by plaintiff, states that every defense shall be asserted in a responsive pleading, except (among others) lack of subject matter jurisdiction, which may be raised by motion. In Moseley we stated "certification of a claim * * * is a jurisdictional prerequisite to a direct challenge in this court of a contracting officer's decision * * *." 230 Ct.Cl. at ___, 677 F.2d at 851.

Plaintiff's assertion that the certification required by the Act need not be in writing is clearly without merit. Section 605(a) states that all claims "shall be in writing," and it clearly follows that the requirement in section 605(c)(1) that the contractor certify the claim must also be in writing.3 The concept of a written claim with oral certification is antithetical to the plain meaning of section 605. Furthermore, the disputes clause of the contract stated that the contractor shall certify a claim for over $50,000, as follows:

Plaintiff argues that although the above clause "appears" to require written certification, a close reading indicates that it only states what information must be certified, not how certification is to take place. This argument is clearly specious.

Finally, plaintiff argues that certain statements contained in its reproposal (suggesting modification of the contract) satisfied the certification requirement. Specifically, plaintiff asserts that the printed statements, in the "Contract Pricing Proposal" form, that the proposal "reflects our best estimates as of this date" and that the cost summary conforms with the principles set forth in agency regulations, constitutes certification of the claim. The requirement that the claim be made in good faith, plaintiff asserts, can be satisfied by the introduction of depositions testifying to representations to that effect made by plaintiff's officers.5 This combination of written and oral statements, provided in piecemeal fashion, certainly is not what Congress meant by "certification." As we recently stated in Moseley, "Because of the significant role certification plays in the statutory scheme, we hold that to certify a claim properly a contractor must make a statement which simultaneously makes all of the assertions required by 41 U.S.C. § 605(c)(1)." 230 Ct.Cl. at ___, 677 F.2d at 852.

It is clear from a reading of the statute and prior decisions of this court that we have no jurisdiction, under the CDA, to entertain an uncertified claim for over $50,000. What is perhaps not clear from our prior decisions is the consequences of a contractor's failure to certify the claim. In our recent decisions in Lehman6 and Moseley7 we may have inadvertently given claimants the impression that after we dismiss for lack of certification, they may directly proceed to the board of contract appeals (BCA or board) as a matter of course. In many cases, however, this simply may not be a viable means of appeal of a contracting officer's decision.

Both Lehman and Moseley involved a situation where the contract in question was entered into before the effective date of the Act (March 1, 1979), and the contractor filed its uncertified claim after the effective date.8 In such a situation, we have no jurisdiction under the CDA, and any direct access suit under section 609, based upon an uncertified claim, must therefore be dismissed. Since the contracts were entered into before the effective date of the Act, however, the claimants had the option of either appealing under the Act or proceeding under the pre-Act disputes clause procedures whereby a claimant could appeal an adverse contracting officer's decision to the board.9 Prior to the enactment of the CDA, certification was not a jurisdictional prerequisite. Only in this context does the dicta in Lehman and Moseley apply.10

In the present case, however, all relevant events have occurred after the effective date of the Act. As a consequence, the CDA would control all avenues of appeal available to the plaintiff. Where, as here, the CDA alone governs a contractor's claim for compensation, the option of going before the board on an uncertified claim is simply not available.

The importance of certification to the statutory scheme of the CDA is clear, and has been enunciated by the court in Lehman and Moseley.11 But the Act also makes clear that the time for certification is upon submission of a written claim to the contracting officer. Section 605(c)(1) & (2). It is only after a decision of the contracting officer (or the failure to issue a decision within a reasonable time) that a contractor may choose one of two routes of appeal. Under section 609, a contractor may directly appeal an adverse decision of a contracting officer to this court (the "direct access" route). Alternately, a contractor may appeal to the BCA, with a right of subsequent judicial review. Sections 606, 607 (the "board" route). Since the Act specifies that certification is to take place in the first instance — on submission of a claim to the contracting officer — a contractor who did not so certify would not only be barred from the direct access route, but from the board route as well. Since the defect relates to the very foundation of the statutory scheme — the claim before the contracting officer — the board should be well within its rights to deny the claim for the same reason as this court, lack of jurisdiction because of the failure to certify the claim properly.12

A reading of our prior decisions leads to the conclusion that the failure to certify the claim submitted to the contracting officer should taint every "decision" that follows. As mentioned earlier, we have previously ruled that the fact that a contracting officer has rendered a decision on the merits of an uncertified claim is of no consequence, as he "had no authority to waive a requirement that Congress imposed." Lehman, 230 Ct.Cl. at ___, 673 F.2d at 356. We have also previously pointed out that "the linchpin for appealing claims under the Contract Disputes Act is the contracting officer's `decision.' No appeal, whether under 41 U.S.C. § 606 (Supp. II 1978) to the agency board of contract appeals or to this court under § 609, may be taken without such a `decision'." Paragon Energy Corp. v. United States, 227 Ct.Cl. ___, 645 F.2d 966, 967 (1981). In Paragon, we later went on to elaborate on this requirement, "The Act, however, denies the contracting officer the authority to issue a decision at the instance of a contractor until a contract `claim' in writing has been properly submitted to him for a decision. § 605(a). Absent this `claim,' no `decision' is possible—and, hence, no basis for jurisdiction in this court." (Emphasis added.) 227 Ct.Cl. at ___, 645 F.2d at 971. In Folk Constr. Co. we stated: "The statute thus requires that to be valid a claim must be properly certified." It would follow, then, if the "claim" to the contracting officer is not certified, it has not been "properly submitted," so the contracting officer does not have the authority to issue a decision.13

In sum, any proceedings on an uncertified claim—under the CDA —are of no legal significance. In such a case, as in this case, the review process simply has not begun. The proper course of action—for a contractor whose case is dismissed for lack of jurisdiction—is the following: (1) properly certify the claim; (2) resubmit the claim to the contracting officer; and (3) if there is then an adverse contracting officer's decision, appeal either to the board (section 606) or directly to this court (section 609).14

Upon consideration of the parties' submissions, without oral argument, we conclude that plaintiff has failed to certify its claims as required by statute. Since we lack jurisdiction to entertain the claims before us, for the reasons stated, defendant's motion is granted but the petition is dismissed without prejudice.