throbber
Case: 19-1931 Document: 58 Page: 1 Filed: 08/07/2020
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`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`PARSONS EVERGREENE, LLC,
`Appellant
`
`v.
`
`SECRETARY OF THE AIR FORCE,
`Cross-Appellant
`______________________
`
`2019-1931, 2019-1975
`______________________
`
`Appeals from the Armed Services Board of Contract
`Appeals in Nos. 58634, 61784, Administrative Judge J.
`Reid Prouty, Administrative Judge Craig S. Clarke, Ad-
`ministrative Judge Richard Shackleford.
`______________________
`
`Decided: August 7, 2020
`______________________
`
`CAMERON HAMRICK, Miles & Stockbridge PC, Washing-
`ton, DC, argued for appellant. Also represented by
`RAYMOND MONROE.
`
` ROBERT R. KIEPURA, Commercial Litigation Branch,
`Civil Division, United States Department of Justice, Wash-
`ington, DC, argued for cross-appellant. Also represented
`by ETHAN P. DAVIS, STEVEN JOHN GILLINGHAM, ROBERT
`EDWARD KIRSCHMAN, JR.; LORI R. SHAPIRO, Office of Gen-
`eral Counsel, United States General Services Administra-
`tion, Washington, DC.
`
`

`

`Case: 19-1931 Document: 58 Page: 2 Filed: 08/07/2020
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`2
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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
`
`
` ______________________
`
`Before DYK, CLEVENGER, and HUGHES, Circuit Judges.
`DYK, Circuit Judge.
`Parsons Evergreene, LLC (“Parsons”) appeals from two
`decisions by the Armed Services Board of Contract Appeals
`(“Board”). The Board granted in part and denied in part
`Parsons’ claims for equitable adjustment on a contract for
`the design and construction of two buildings at McGuire
`Air Force Base. The government cross-appeals, contending
`that the Board lacked jurisdiction; that we lack jurisdiction
`in part; and, on the merits, that the Board erroneously re-
`quired it to disprove the reasonableness of Parsons’
`claimed costs. We affirm in part, reverse in part, dismiss
`in part, and remand.
`
`BACKGROUND
`On December 12, 2003, the government awarded Par-
`sons a $2.1 billion indefinite-delivery, indefinite-quantity
`contract (“Contract”) for planning and construction work.1
`The work was to be described in subsequent task orders.
`On July 13, 2005, the government issued a $34 million task
`order (“Task Order”) under the Contract to complete an ex-
`isting, concept-level design and construct two facilities,
`known as the Temporary Lodging Facility and the Visiting
`Quarters, at the McGuire Air Force Base in New Jersey.
`The Temporary Lodging Facility was to be a 50-unit tran-
`sitional housing facility for use by military and civilian per-
`sonnel. The Visiting Quarters was to be a 175-unit facility
`similar to a hotel with individual rooms and private bath-
`rooms. Design and construction were completed, and the
`
`
`1 The contract was originally awarded to Parsons In-
`frastructure and Technology Group Inc. The contract was
`transferred to Parsons via novation on September 7, 2004.
`
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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`3
`
`U.S. Department of the Air Force (“Air Force”) accepted the
`completed facilities for “beneficial use” on September 11,
`2008. J.A. 96.
`On June 29, 2012, Parsons submitted a claim to the Air
`Force seeking approximately $34 million in additional
`costs that Parsons allegedly incurred in the design and con-
`struction process. The contracting officer issued a final de-
`cision on March 27, 2013 almost entirely denying Parsons’
`claim, which Parsons appealed to the Board under the Con-
`tract Disputes Act (“CDA”). In separate decisions in
`ASBCA Nos. 58634 and 61784, the Board denied in part
`and sustained in part Parsons’ claim, awarding Parsons
`about $10.5 million plus interest.
`Parsons appeals. The government cross-appeals, con-
`tending that the Board lacked jurisdiction; that we lack ju-
`risdiction in ASBCA No. 61784; and that on the merits the
`Board erroneously required it to disprove the reasonable-
`ness of Parsons’ claimed costs. We review the Board’s legal
`conclusions de novo and its factfinding for substantial evi-
`dence. 41 U.S.C. § 7107(b).
`DISCUSSION
`I
`At the outset, we must resolve a jurisdictional chal-
`lenge. The government contends that the Board lacked
`CDA jurisdiction over this case. We disagree.
`The CDA provides a process for dispute resolution of
`certain contract claims against the government. As rele-
`vant here, the CDA applies to contracts “made by an exec-
`utive agency” for “the procurement of services” or “the
`procurement of construction . . . of real property.” 41
`U.S.C. § 7102(a)(1), (3). Claims by contractors are first
`submitted to a contracting officer, who issues a decision on
`the claim. 41 U.S.C. § 7103(a)(1), (d). The contractor may
`appeal the contracting officer’s decision to a Board of
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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`Contract Appeals. Id. § 7104(a). The Board’s decision may,
`in turn, be appealed to this court. Id. § 7107(a)(1).
`A
`The government first contends that the Board lacked
`jurisdiction under the so-called “NAFI doctrine.” The
`Board concluded that it had jurisdiction because the NAFI
`doctrine had been abrogated by this court’s decision in
`Slattery v. United States, 635 F.3d 1298 (Fed. Cir. 2011) (en
`banc).
`Beginning in the late 1960s, our predecessor court held
`in a line of cases that neither the Court of Federal Claims
`(“Claims Court”) nor the Boards of Contract Appeals had
`jurisdiction over contract disputes with nonappropriated
`fund instrumentalities (“NAFIs”). Kyer v. United States,
`369 F.2d 714 (Ct. Cl. 1966). “A ‘nonappropriated fund in-
`strumentality’ is one which does not receive its monies by
`congressional appropriation.” United States v. Hopkins,
`427 U.S. 123, 125 n.2 (1976). As relevant to Board juris-
`diction, these cases construed the phrase “executive
`agency” in the CDA to exclude contracts made by NAFIs.
`See, e.g., Furash & Co. v. United States, 252 F.3d 1336,
`1343 (Fed. Cir. 2001); Strand Hunt Const., Inc. v. West, 111
`F.3d 142 (Fed. Cir. 1997) (unpublished table decision). As
`to Claims Court jurisdiction, these cases construe the
`Tucker Act’s authorization of suits against “the United
`States” to exclude NAFIs. See 28 U.S.C. § 1491(a)(1); Kyer,
`369 F.2d at 719 .
`In 2011, in our en banc decision in Slattery, we held
`that the Claims Court had Tucker Act jurisdiction over a
`dispute between a contractor and the Federal Deposit In-
`surance Corporation (“FIDC”), even though the FDIC was
`a NAFI. 635 F.3d at 1310, 1314. In so holding, we abro-
`gated the NAFI doctrine for Tucker Act claims. Id. at 1321.
`We have not yet decided whether Slattery also abrogated
`the NAFI doctrine for CDA disputes appealed to a Board of
`
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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`5
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`Contract Appeals. We expressly reserved that the question
`in one later case. See Minesen Co. v. McHugh, 671 F.3d
`1332, 1337 (Fed. Cir. 2012).
`The government asserts that the Board lacked CDA ju-
`risdiction under the NAFI doctrine. It points out that the
`Board found that the Task Order was made by the Air
`Force Services Agency (“AFSVA”), a NAFI. We need not
`decide the current status of the NAFI doctrine as applied
`to the Boards of Contract Appeals because, even under pre-
`Slattery precedent, the dispute here would not be barred.
`Contrary to the Board’s finding, the contract is not a NAFI
`contract.
`The contracting documents show that the Task Order
`was made by the Air Force and not by the AFSVA. The
`Contract on which the Task Order is based was “Issued By”
`the “Air Force Materiel Command” (“AFMC”), a part of the
`Air Force that the government admits is not a NAFI, and
`was to be “Administered By” the “Department of the Air
`Force.” J.A. 733. The request for proposal (“RFP”) that led
`to the Task Order uses “Department of the Air Force” let-
`terhead and states that “[t]he USAF intends to issue a com-
`petitive [Task Order].” J.A. 4823 (emphasis added). The
`Task Order, like the Contract, was “Issued By” the “Air
`Force Materiel Command” and “Administered By” the “De-
`partment of The Air Force.” J.A. 798. The contracting of-
`ficer who signed the Task Order was from the AFMC. The
`government has not identified any mention of the AFSVA
`or any other NAFI in either the Contract or the Task Order.
`The contractual terms further support the conclusion
`that this was not a NAFI contract. Air Force Manual 64-
`302, which “provid[es] guidance and procedures for Air
`Force NAF contracting,” states that “when FAR clauses are
`used in NAFI contracts, the contracting officer will delete
`references to ‘Government’ and substitute ‘NAFI.’” Depart-
`ment of the Air Force, Manual 64-302, Nonappropriated
`
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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`Fund (NAF) Contracting Procedures, at 1, 15 (Nov. 3,
`2000), http://afpubs.hq.af.mil. Yet the Contract includes
`many FAR clauses referring to “Government” and no refer-
`ences to the contracting entity’s being a “NAFI.”
`The government contends that the Task Order is a
`NAFI contract because the Air Force did not and could not
`have lawfully funded it with appropriations. The govern-
`ment points out that the funds used for the Task Order
`were “non-appropriated funds.” Cross-Appellant’s Reply 4
`(citing J.A. 804). The government contends that “a military
`department must make a specific request to Congress for
`funding for a specified building project, and Congress must
`grant funding authority for that project, in order for a mil-
`itary department to be allowed to expend appropriated
`funds for a military construction project.” Id. at 11.2
`
`2 For this proposition, the government relies on 10
`U.S.C. § 2802(a), which provides that “the Secretaries of
`the military departments may carry out such military con-
`struction projects . . . as are authorized by law.” See also
`10 U.S.C. § 114(a) (“No funds may be appropriated . . . to
`or for the use of any armed force or obligated or expended
`for . . . military construction . . . unless funds therefor have
`been specifically authorized by law.”); G. James Herrera,
`Cong. Rsch. Serv., R44710, Military Construction: Author-
`ities, Process, and Frequently Asked Questions 2 (2019)
`(“In practical application of [sections 2802 and 114], Con-
`gress has required project-by-project authorization and ap-
`propriation for military construction projects.”).
`The government also cites to the 2005 National De-
`fense Authorization Act, Pub. L. 108–375, 118 Stat. 1811,
`2108–11 (2004) (“Authorization Act”). The Authorization
`Act listed and provided appropriations for construction at
`dozens of Air Force bases, but did not authorize construc-
`tion at McGuire Air Force Base, where the Visiting
`
`
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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`7
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`Congress did not provide the Air Force with the required
`authorization here, the government asserts, so the Task
`Order must have been a NAFI contract.
`Even assuming arguendo that the Air Force could not
`have used appropriated funds for the Task Order, the gov-
`ernment’s argument fails. The government relies on Hop-
`kins and Furash to suggest that a contract paid from
`nonappropriated funds is a NAFI contract. Despite some
`language in prior cases suggesting that the NAFI exclusion
`turns on the “activity” at issue, the exclusion did not de-
`pend on whether the contract itself was to be funded with
`appropriations. See United States v. Gen. Elec., 727 F.2d
`1567, 1570 (Fed. Cir. 1984). Instead, the nature of the con-
`tracting entity governed: namely, whether the contract was
`“made by” a NAFI. And an agency is only a NAFI where
`there is “a clear expression by Congress that it intended to
`separate the agency from general federal revenues.”
`Furash, 252 F.3d at 1339.
`Thus, our predecessor held that a contract made by the
`Agency for International Development (“AID”) did not im-
`plicate the NAFI doctrine—even though the program im-
`plemented by the contract was to be run without
`appropriated funds—because AID (as a whole) received ap-
`propriated funds. McCarthy v. United States, 670 F.2d 996,
`1002 (Ct. Cl. 1982). The court explained that “the nonap-
`propriated funds exclusion is limited to instances when, by
`law, appropriated funds not only are not used to fund the
`agency, but could not be.” Id.; see also L’Enfant Plaza
`Props., Inc. v. United States, 668 F.2d 1211, 1212 (Ct. Cl.
`1982) (explaining that, to implicate the NAFI doctrine,
`“there must be a clear expression by Congress that the
`agency was to be separated
`from general
`federal
`
`Quarters and Temporary Lodging Facility were built. See
`Authorization Act §§ 2301–02.
`
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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`revenues”). Here, there is no question that the Air Force
`“has authority to use appropriated funds if and to the ex-
`tent appropriated, and that is sufficient to avoid the non-
`appropriated funds exclusion.” See McCarthy, 670 F.2d at
`1002.3
`The Task Order was made by the Air Force, and not the
`AFSVA. The NAFI doctrine, even if it survives under the
`CDA, is inapplicable.
`
`B
`The government argues alternatively that the CDA is
`limited to contracts for “the procurement of services” or
`“the procurement of construction . . . of real property,” and
`the contract here does not qualify. Cross-Appellant’s Br.
`29–30 (citing 41 U.S.C. § 7102(a)). The contract here was
`for the design and construction of two buildings, the Tem-
`porary Lodging Facility and the Visiting Quarters. The
`Task Order falls neatly within the CDA’s “procurement”
`language.
`The government nevertheless contends that this was
`not a “procurement,” relying principally on 31 U.S.C.
`§ 6303. Section 6303 provides that:
`An executive agency shall use a procurement con-
`tract . . . when—(1) the principal purpose of the in-
`strument is to acquire . . . property or services for
`the direct benefit or use of the United States Gov-
`ernment; or (2) the agency decides in a specific
`
`
`3 Our decision in General Electric supports this con-
`clusion. There, as here, the fact that the governmental
`counterparty to the contract was the Air Force was suffi-
`cient to place the dispute outside the NAFI doctrine. 727
`F.2d at 1570.
`
`

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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`9
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`instance that the use of a procurement contract is
`appropriate.
`The government asserts that the buildings at issue here
`were built for the purpose of “support[ing] the morale, wel-
`fare, and recreation of the service member[s] or other
`guests,” which the government contends is “a distinct pur-
`pose from that of the Air Force, whose primary function is
`national defense.” Cross-Appellant’s Br. 36. Thus, to the
`government, the Task Order is not “for the direct benefit or
`use of the United States Government,” under the meaning
`of 31 U.S.C. § 6303.
`The government’s argument lacks merit. Section 6303
`is not part of a statutory definition of CDA jurisdiction. It
`is in a separate title of the United States Code. It does not
`control the interpretation of the term “procurement” as
`used in the CDA. In any event, the government’s position
`that a project supporting the morale and welfare of service-
`members is not for the “direct benefit” of the government is
`at odds with the Supreme Court’s holding in Standard Oil
`Co. of California v. Johnson, 316 U.S. 481 (1942), which
`held that military post exchanges were “essential for the
`performance of governmental functions.” Id. at 485. The
`government’s position is also inconsistent with the Secre-
`tary of the Air Force’s responsibility for “the morale and
`welfare of [Air Force] personnel.” 10 U.S.C. § 9013(b)(9).
`Finally, section 6303 does not require that procurement
`contracts be for the “direct benefit or use” of the govern-
`ment. It states that agencies “shall use” procurement con-
`tracts in certain circumstances, but does not otherwise
`foreclose their use. Section 6303 contemplates procure-
`ment contracts even when not for the government’s direct
`benefit so long as “the agency decides” that a procurement
`contract “is appropriate.” The Task Order is a “procure-
`ment” contract under the CDA.
`
`

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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`The government’s reliance on G.E. Boggs & Assocs.,
`Inc. v. Roskens, 969 F.2d 1023 (Fed. Cir. 1992), and New
`Era Construction v. United States, 890 F.2d 1152 (Fed Cir.
`1989), is similarly unavailing. In each of those cases, we
`held the contractual dispute to be not subject to the CDA.
`But G.E. Boggs and New Era, unlike this case, involved
`contracts with entities—the Syrian Arab Republic and the
`Sac and Fox Tribe of Missouri, respectively—that were not
`executive agencies. G.E. Boggs, 969 F.2d at 1024; New Era,
`890 F.2d at 1153.
`We conclude that the Board had CDA jurisdiction.
`II
`We next consider the timeliness of Parsons’ appeal
`from ASBCA No. 61784 as it relates to our own jurisdiction.
`Parsons contends that the Board erred in denying recovery
`for costs Parsons allegedly incurred as a result of delays
`caused by a payroll review by the Air Force to determine
`Parson’s compliance with the Davis-Bacon Act. The Act re-
`quires federal construction contractors to pay laborers and
`mechanics at least the prevailing wage for their work. 40
`U.S.C. § 3142(a). Under FAR § 22.406–8, the government
`was authorized to ensure Davis-Bacon Act compliance by
`“[c]onduct[ing] labor standards investigations when avail-
`able information indicates such action is warranted.” Par-
`sons asserts that it is entitled to compensation because the
`Air Force unreasonably delayed initiating and conducting
`such a review. We do not reach the merits of Parsons’ pay-
`roll claim because we lack jurisdiction to consider it.
`The procedural history of Parsons’ payroll claim is as
`follows. On June 29, 2012, Parsons submitted the claims
`at issue here to the contracting officer, including its payroll
`claim. The contracting officer denied recovery and, on
`April 22, 2013, Parsons appealed to the Board. Parsons’
`appeal was initially docketed as ASBCA No. 58634. Liti-
`gation continued and, on September 5, 2018, the Board
`
`

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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`issued its decisions on the merits of Parsons’ claims, includ-
`ing the payroll claim. For all claims except the payroll
`claim, the Board issued its decision in the original case,
`ASBCA No. 58634. For the payroll claim, “[f]or reasons of
`judicial efficiency and clarity,” the Board issued a separate
`opinion under a new appeal number, ASBCA No. 61784.
`J.A. 1 n.1. Parsons received the Board’s decisions on Sep-
`tember 10, 2018. On October 10, 2018, Parsons moved for
`reconsideration of the Board’s decision on several claims in
`ASBCA No. 58634. Parsons did not seek reconsideration of
`the payroll claim in ASBCA No. 61784. The Board issued
`its decision denying Parsons’ reconsideration request in
`ASBCA No. 58634 on January 23, 2019, which Parsons re-
`ceived on January 28, 2019. Parsons appealed the Board’s
`decisions on its claims, including the payroll claim, to this
`court on May 23, 2019.
`Parsons’ appeal of its payroll claim was not timely filed.
`The statute governing appeals from the Board to this court
`provides that “a contractor may appeal the decision [of an
`agency board] within 120 days from the date the contractor
`receives a copy of the decision.” 41 U.S.C. § 7107(a)(1)(A).
`The 120-day appeal period runs from contractor’s receipt of
`the Board’s decision on reconsideration, if reconsideration
`is sought. Although Parsons sought reconsideration of the
`Board’s decision in ASBCA No. 58634 (and its appeal in
`that case is timely), Parsons did not seek reconsideration
`in ASBCA No. 61784. Parsons’ appeal in ASBCA No. 61784
`was filed 255 days after it received a copy of the final deci-
`sion in that action. The 120-day deadline was not tolled by
`the request for reconsideration in ASBCA No. 58634.
`Therefore, we lack jurisdiction to review the Board’s deci-
`sion in ASBCA No. 61784. See Placeway Const. Corp. v.
`United States, 713 F.2d 726, 728 (Fed. Cir. 1983) (dismiss-
`ing for lack of jurisdiction an appeal from the Board filed
`after the 120-day deadline).
`We dismiss Parsons’ appeal as to its payroll claim.
`
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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`III
`We turn to the merits of Parsons’ appeal in ASBCA No.
`58634. Parsons argues that the Board erred in denying re-
`covery on Parsons’ claim that it was not required to apply
`wall coatings from Duroplex-Triarch Industries and Plex-
`ture-Triarch Industries (collectively, “Triarch”) to the Vis-
`iting Quarters. Triarch is not “paint” in the conventional
`sense, though it is a paint-like substance.
`The Board rejected Parsons’ theory that it was required
`to apply Sherwin-Williams instead of Triarch, holding that
`Parsons was required to apply Triarch. The Board found
`dispositive the terms of Request for Proposal No. FA8903-
`05-R-8234 (“RFP”), on which the Task Order was based.
`The RFP “required ‘Duroplex – Triarch Industries’ and
`‘Plexture – Triarch Industries’
`for
`interior paints.”
`J.A. 132 (quoting RFP § 09911). Parsons does not now
`challenge the determination that it was required to apply
`Triarch.
`The Board, however, introduced a new theory of liabil-
`ity, finding the government liable for Parsons’ costs in ap-
`plying Sherwin Williams paint due to the Air Force’s
`“indecision on what wall coating it wanted, causing [Par-
`sons] to start applying Sherwin Williams paint in the [Vis-
`iting Quarters].” J.A. 132. But because Parsons did not
`argue this theory before the Board and did not quantify its
`cost in using Sherwin Williams, the Board denied Parsons
`recovery. On appeal, Parsons argues that the Board erred
`in denying Parsons recovery under the Board’s theory. We
`disagree.
`A required element of a claim for equitable adjustment
`is proof of damages. The contractor has the “obligation . . .
`to provide a basis for making a reasonably correct approx-
`imation of the damages” for which the government is liable.
`Wunderlich Contracting Co. v. United States, 351 F.2d 956,
`969 (Ct. Cl. 1965). It was Parsons’ burden to prove its
`
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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`damages, i.e., the costs incurred in applying Sherwin Wil-
`liams paint. The Board did not err in concluding that Par-
`sons did not meet its burden.
`Parsons contends that the record at the time of the
`Board decision included sufficient evidence to calculate
`Parsons’ cost in using Sherwin Williams. But Parsons
`failed to include an alternative argument concerning the
`Air Force’s erroneous direction to apply Sherwin Williams
`in the Visiting Quarters, and did not identify its costs in
`doing so. Nothing in Southwest Electronics & Manufactur-
`ing Corporation v. United States, 655 F.2d 1078 (Ct. Cl.
`1981), or any other authority cited by Parsons suggests
`that the Board was required to scour the tens of thousands
`of pages of record evidence in this case, without any guid-
`ance, to determine the amount of an award.4
`Parsons also asserts that the Board erred by failing “to
`seek the parties’ input as to whether the record supported
`recovery under the Board’s new theory prior to deciding the
`issue.” Appellant’s Br. 34. “The [Administrative Procedure
`Act] does not require the Board to alert a [claimant] that it
`may find the asserted theory,” or any other theory that the
`
`
`In Southwest Electronics, the Board overturned the
`4
`contracting officer’s award, on the basis that the contractor
`did not establish the exact amount of its damages. 655
`F.2d at 1088. In reinstating the contracting officer’s
`award, our predecessor reasoned that the contractor “[did]
`supply some evidence of the damages for which [the gov-
`ernment] is liable, and the contracting officer’s award is a
`reasonable approximation of the damages which [the con-
`tractor] has proven.” Id. Here, by contrast, there is noth-
`ing to indicate that the contracting officer awarded Parsons
`the cost of using Sherwin Williams, nor did Parsons pro-
`vide the Board with evidence from which “a reasonable ap-
`proximation” of that cost could be determined. See id.
`
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`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
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`claimant could have argued, “lacking in evidence before it
`actually does so in [an opinion]. Nor is a [claimant] entitled
`to a pre-decision opportunity to disagree with the Board’s
`assessment of its arguments.” Fanduel, Inc. v. Interactive
`Games LLC, No. 2019-1393, 2020 WL 4342681 (Fed. Cir.
`July 29, 2020). While Parsons directed the Board to this
`evidence on reconsideration, this was simply too late. See
`Exxon Shipping Co. v. Baker, 554 U.S. 471, 485 n.5 (2008)
`(a motion for reconsideration “may not be used to . . . pre-
`sent evidence that could have been raised prior to the entry
`of judgment”).
`
`IV
`We next turn to Parsons’ contention that the Board
`erred in denying Parsons recovery for the added cost of us-
`ing the “Baker design” rather than the “structural-brick”
`design for the Visiting Quarters.
`The Board held that under the contract Parsons was
`entitled to use a structural-brick design to construct the
`Visiting Quarters. The Board also found that the govern-
`ment improperly denied Parsons the use of the structural
`brick design, and instead required Parsons to use what was
`called the “Baker design.” The structural-brick design
`used a single wall made of closure face brick. The Baker
`design used two walls: a first wall of concrete masonry
`units and a second wall of brick veneer. After the award,
`the government directed Parsons to use the Baker design
`and to modify the original Baker design to address prob-
`lems of progressive collapse,5 a design choice that made
`construction more expensive.
`
`
`5 Progressive collapse is a phenomenon that occurs
`when certain structural members of a building are dam-
`aged and weight is transferred to other members that
`
`
`

`

`Case: 19-1931 Document: 58 Page: 15 Filed: 08/07/2020
`
`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
`
`
`15
`
`Parsons sought an equitable adjustment for the in-
`creased design and construction costs of the Baker design
`over that of the structural-brick design. The Board
`awarded Parsons a lesser amount for added construction
`costs: “the additional cost . . . required to make the
`Baker . . . design resist progressive collapse.” J.A. 120–21.
`The Board awarded Parsons $722,176 in design costs.
`The Board erred in not also awarding the full amount
`of Parsons’ additional construction costs for using the
`Baker design over the structural-brick design. The amount
`of an award for an equitable adjustment is “the difference
`between the reasonable cost of performing without the
`change . . . and the reasonable cost of performing with the
`change.” Morrison Knudsen Corp. v. Fireman's Fund Ins.
`Co., 175 F.3d 1221, 1244 (10th Cir. 1999) (quoting Celesco
`Indus., Inc., ASBCA No. 22251, 79–1 B.C.A. (CCH) ¶
`13,604, at 66,683 (1978)). Here, the “cost of performing
`without the change” is the cost of construction using struc-
`tural brick. The “cost of performing with the change” is the
`actual cost of construction (i.e., the cost of using the modi-
`fied double-wall design). Parsons was entitled to the dif-
`ference between these two amounts.
`We reverse the Board’s denial of recovery to Parsons
`for its claim to construction costs. On remand, the Board
`must award Parsons the difference between its cost in con-
`structing the Baker design compared to the cost Parsons
`would have incurred in constructing the structural brick
`design.
`
`V
`We turn finally to the government’s cross-appeal chal-
`lenging the Board’s reasonable-costs analysis.
`
`
`cannot handle the additional weight. As a result, the build-
`ing collapses.
`
`

`

`Case: 19-1931 Document: 58 Page: 16 Filed: 08/07/2020
`
`16
`
`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
`
`
`The government contends that the Board erroneously
`shifted the burden as to reasonableness to the government,
`when the burden should have been on Parsons to prove rea-
`sonableness. The government points to Judge Clarke’s
`opinion for the Board, which concluded that Parsons’ costs
`were reasonable in part because the Air Force’s did not pro-
`vide “specific, individualized challenges to each of Parsons’
`claimed costs.” Cross-Appellant’s Br. 38. The government
`contends that this improperly saddled the government
`with the burden of proof. But Administrative Judge
`Clarke’s analysis on this issue was expressly disclaimed by
`the other two panel judges in a concurring opinion written
`by Administrative Judge Shackleford and joined by Admin-
`istrative Judge Prouty. Thus, Judge Shackleford’s opinion,
`not Judge Clarke’s opinion, is the Board’s controlling opin-
`ion on the reasonable-costs issue.
`The government does not contend that Judge Shackle-
`ford’s opinion commits the same purported burden-shifting
`error as Judge Clarke’s opinion. Instead, the government
`asserts that Judge Shackleford’s opinion is “so devoid of
`any analysis that it cannot be plausibly reviewed for legal
`sufficiency on appeal.” Cross-Appellant’s Br. 44. We disa-
`gree. Judge Shackleford clearly stated the governing law
`and its application to this case. The government has not
`shown error in the Board’s reasonable-costs analysis.
`The government’s challenge also fails because it has ar-
`ticulated no prejudice resulting from of the Board’s pur-
`ported error. “[T]he party that ‘seeks to have a judgment
`set aside because of an erroneous ruling carries the burden
`of showing that prejudice resulted.’” Shinseki v. Sanders,
`556 U.S. 396, 409 (2009) (quoting Palmer v. Hoffman, 318
`U.S. 109, 116 (1943)); see also SolarWorld Ams., Inc v.
`United States, No. 2019-1591, 2020 WL 3443470, at *4–*5
`(Fed. Cir. June 24, 2020) (rejecting an appellant’s challenge
`to a purportedly unlawful agency action because the appel-
`lant did not establish that the action was prejudicial).
`
`

`

`Case: 19-1931 Document: 58 Page: 17 Filed: 08/07/2020
`
`PARSONS EVERGREENE, LLC v. SECRETARY OF THE AIR FORCE
`
`
`17
`
`Here, the government has not explained which, if any, of
`the costs awarded to Parsons would have been affected by
`the Board’s purported error or how they would have been
`affected. We conclude that the Board’s purported errors, if
`any, were harmless.
`We affirm the Board’s conclusion that Parsons’ costs
`awarded by the Board were reasonable.
`CONCLUSION
`We conclude that the Board had CDA jurisdiction over
`ASBCA No. 58634. We dismiss Parsons’ appeal as to its
`claim for costs associated with its payroll review (ASBCA
`No. 61784) as untimely. We affirm the Board’s decision de-
`clining to award Parsons its costs in using Triarch wall
`coatings. We reverse the Board’s decision declining to
`award Parsons its full costs in constructing the Baker de-
`sign over the costs of the structural-brick design. We af-
`firm the Board’s conclusion that Parsons’ claimed costs
`were reasonable. We remand for further proceedings con-
`sistent with this opinion.
`AFFIRMED IN PART, REVERSED IN PART,
`DISMISSED IN PART, AND REMANDED
`COSTS
`
`No costs.
`
`
`

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