Case: 21-2305 Document: 54 Page: 1 Filed: 03/04/2024
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`
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`NOTE: This disposition is nonprecedential.
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`NAUSET CONSTRUCTION CORPORATION,
`Appellant
`
`v.
`
`SECRETARY OF THE ARMY,
`Appellee
`______________________
`
`2021-2305, 2022-1853
`______________________
`
`Appeals from the Armed Services Board of Contract
`Appeals in Nos. 61673, 61675, Administrative Judge Lis B.
`Young, Administrative Judge Owen C. Wilson, Adminis-
`trative Judge Richard Shackleford.
`______________________
`
`Decided: March 4, 2024
`______________________
`
`JOHN JOSEPH MCNAMARA, Lane McNamara LLP,
`Southborough, MA, argued for appellant. Also represented
`by ELISE M. KUEHN.
`
` WILLIAM JAMES GRIMALDI, Commercial Litigation
`Branch, Civil Division, United States Department of Jus-
`tice, Washington, DC, argued for appellee. Also repre-
`sented by BRIAN M. BOYNTON, PATRICIA M. MCCARTHY,
`FRANKLIN E. WHITE, JR.
`
`

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`Case: 21-2305 Document: 54 Page: 2 Filed: 03/04/2024
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`2
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`NAUSET CONSTRUCTION CORPORATION v.
`SECRETARY OF THE ARMY
`
`______________________
`
`Before REYNA, TARANTO, and STOLL, Circuit Judges.
`STOLL, Circuit Judge.
`Nauset Construction Corp. appeals the final decision of
`the Armed Services Board of Contract Appeals, which dis-
`missed Nauset’s appeal of a default termination of a gov-
`ernment contract as untimely under the Contract Disputes
`Act. In particular, Nauset challenges the Board’s fact find-
`ings that (1) Nauset was not prejudiced by the appeal no-
`tice provided in the government’s termination letter; and
`(2) the government’s behavior following the termination
`letter did not vitiate the finality of the termination letter.
`Because the Board’s findings are supported by substantial
`evidence, we affirm the Board’s dismissal.
`BACKGROUND
`On November 1, 2013, the National Guard Bureau
`awarded a contract to Nauset to build the Guard’s Unit
`Training Equipment Site Project in Camp Edwards, Mas-
`sachusetts. On November 17, 2017, the contracting officer
`terminated Nauset’s contract for default. The termination
`letter stated: “[T]he Government is completely Terminat-
`ing Nauset for Default . . . . This notice constitutes such de-
`cision, and Nauset has the right to appeal under the
`Disputes clause of the contract.” J.A. 348. The termination
`letter, however, did not include the specific notice of appeal
`rights language required by Federal Acquisition Regula-
`tion (FAR) 33.211(a)(4)(v). Specifically, under that appli-
`cable FAR provision, the termination notice was required
`to contain language notifying the contractor that they “may
`appeal [the] decision to the agency board of contract ap-
`peals . . . within 90 days” of receipt of the decision or, alter-
`natively, “bring an action directly in the United States
`Court of Federal Claims.” FAR 33.211(a)(4)(v).
`
`

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`Case: 21-2305 Document: 54 Page: 3 Filed: 03/04/2024
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`NAUSET CONSTRUCTION CORPORATION v.
`SECRETARY OF THE ARMY
`
`3
`
`Within 90 days of receipt of the termination letter,
`Nauset submitted two letters to the contracting officer.
`First, on January 17, 2018, Nauset submitted a letter titled
`“Response to Termination of November 17, 2017 and Cer-
`tified Termination Claim and Request for Final Decision
`under the Contract Disputes Act.” J.A. 357. In this letter,
`Nauset disputed the termination and stated that it in-
`tended to submit a claim for costs. Nauset also stated that
`it “takes exception to the government’s decision to termi-
`nation for default . . . [and that it] will continue to vehe-
`mently invest every available resource to support [its]
`Claim, [its] position and reputation.” J.A. 370. The con-
`tracting officer acknowledged receipt of this letter by email
`stating “Email received.” J.A. 411. Then, on February 12,
`2018, Nauset submitted a “Claim for Extended Time and
`Unpaid Completed Contract Work – Part 2 and Wrongful
`Termination.” J.A. 372. In the “Wrongful Termination”
`section of the letter, Nauset stated that it “intends to de-
`fend its position and prove that the government’s decision
`to terminate was based on . . . circumstances . . . beyond
`[its] control” and that it “submits this wrongful termination
`claim in accordance with the Contract Disputes Act.”
`J.A. 374–75. The contracting officer again acknowledged
`receipt via email stating “Received.” J.A. 413.
`On June 27, 2018, 222 days after the termination no-
`tice, Nauset appealed the decision to the Board. J.A. 129.
`The government filed a motion to dismiss, arguing that
`Nauset’s appeal of the termination for default was un-
`timely. Nauset replied that its appeal was not time-barred
`because, among other things, the government gave inade-
`quate notice of Nauset’s appeal rights and Nauset reason-
`ably and detrimentally relied on the lack of notice and was
`thus prejudiced by the lack of notice. In addition, Nauset
`asserted that the government’s conduct following the ter-
`mination vitiated the finality of the termination for default.
`The Board rejected each of these arguments and ultimately
`dismissed Nauset’s appeal as untimely. See Nauset
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`Case: 21-2305 Document: 54 Page: 4 Filed: 03/04/2024
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`4
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`NAUSET CONSTRUCTION CORPORATION v.
`SECRETARY OF THE ARMY
`
`Construction Corp., ASBCA Nos. 61673, 61675, 21-1 BCA
`¶ 37852, 2021 WL 2029232 (May 5, 2021) (Board Decision).
`Nauset appeals. We have jurisdiction under 28 U.S.C.
`§ 1295(a)(10).
`
`DISCUSSION
`On appeal, Nauset argues that the Board erred in find-
`ing that the termination notice did not prejudice Nauset.
`Alternatively, Nauset asserts that the Board erred in find-
`ing that the government’s conduct did not vitiate the final-
`ity of the termination. We address each argument in turn
`below.
`Our review of the Board’s decision is limited by statute.
`Under the Contract Disputes Act, we review the Board’s
`legal determinations de novo and we may only set aside the
`Board’s findings of fact if they are “(A) fraudulent, arbi-
`trary, or capricious; (B) so grossly erroneous as to neces-
`sarily imply bad faith; or (C) not supported by substantial
`evidence.” 41 U.S.C. § 7107(b)(2). Whether the termina-
`tion letter prejudiced Nauset presents a question of fact
`that we review for substantial evidence. See Bannum, Inc.
`v. United States, 404 F.3d 1346, 1353 (Fed. Cir. 2005)
`(“Prejudice is a question of fact.”); see also Godley v. United
`States, 5 F.3d 1473, 1476 (Fed. Cir. 1993) (stating that
`whether the appellant suffered prejudice was a factual
`question). Similarly, whether the government’s actions vi-
`tiated the finality of the termination letter, or in other
`words, whether Nauset could reasonably believe that the
`contracting officer was reconsidering her decision, is a
`question of fact reviewed for substantial evidence. See Ra-
`Nav Lab’ys, Inc. v. Widnall, 137 F.3d 1344, 1346, 1348
`(Fed. Cir. 1998) (determining that substantial evidence
`supports the ASBCA’s finding that the government’s con-
`duct following termination did not vitiate the termination
`of the contract); Am. Elec. Lab’ys, Inc. v. United States,
`774 F.2d 1110, 1116 (Fed. Cir. 1985) (determining whether
`substantial evidence supports the ASBCA’s finding that a
`
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`Case: 21-2305 Document: 54 Page: 5 Filed: 03/04/2024
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`NAUSET CONSTRUCTION CORPORATION v.
`SECRETARY OF THE ARMY
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`5
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`party’s reliance on the government’s conduct was unrea-
`sonable).
`
`I
`Substantial evidence supports the Board’s finding that
`there was no prejudice or detrimental reliance here. While
`the termination notice was technically deficient under FAR
`33.211(a)(4)(v), the notice stated that “Nauset has the right
`to appeal under the Disputes clause of the contract.”
`J.A. 348. It was reasonable for the Board to determine that
`this provided sufficient information to allow Nauset to look
`to the disputes clause of the contract, which would have
`ultimately led Nauset to 41 U.S.C. § 7104, stating Nauset’s
`appeal rights. In addition, while not necessary to our deci-
`sion, the record also shows that Nauset’s counsel reviewed
`the termination decision and conducted research on Nau-
`set’s appeal rights under FAR.
`Nauset argues that this finding is inconsistent with the
`Board’s finding that Nauset was confused and did not un-
`derstand that the termination notice starts the 90-day ap-
`peal clock. But, as Nauset’s counsel admitted at oral
`argument, any prejudice or detrimental reliance must be
`reasonable. See Oral Arg. at 3:06–3:45, https://oralargu-
`ments.cafc.uscourts.gov/default.aspx?fl=21-2305_1208202
`3.mp3; see also J-Way Southern, Inc. v. U.S. Army Corps of
`Engs., 34 F.4th 40, 48 (1st Cir. 2022) (finding that the
`party’s asserted detrimental reliance on a termination no-
`tice was unreasonable) (citing J-Way Southern, Inc.
`v. United States, 516 F. Supp. 3d 84, 91 (D. Mass. 2021)).
`Here, while Nauset may have been confused, substantial
`evidence supports the Board’s finding that such confusion
`would have been unreasonable given the clear path from
`the termination notice to the FAR provision that provides
`Nauset’s appeal rights. Specifically, the termination notice
`pointed Nauset to the disputes clause of the contract, which
`incorporated FAR 52.233-1 (2002). FAR 52.233-1 explains
`that the contract is subject to the Contract Disputes Act,
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`Case: 21-2305 Document: 54 Page: 6 Filed: 03/04/2024
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`6
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`NAUSET CONSTRUCTION CORPORATION v.
`SECRETARY OF THE ARMY
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`formerly at 41 U.S.C. §§ 601–13. A quick search for the
`Contract Disputes Act would lead Nauset to the current
`version found at 41 U.S.C. §§ 7101–09, with § 7104 provid-
`ing information on appeal rights. Thus, while the notice of
`appeal was technically defective, Nauset’s appeal rights
`were reasonably discernible, and substantial evidence sup-
`ports the Board’s weighing of the evidence and finding that
`it is hard to imagine that Nauset would not know of its ap-
`peal rights by exercising a little diligence. See, e.g., J-Way
`Southern, 34 F.4th at 49 (“[F]rom the adequate-notice
`standpoint, [the termination notice] provided the relevant
`regulatory and statutory breadcrumbs a reader could (and
`should) follow to find the appellate logistics.”).
`II
`For the reasons below, we also hold that substantial
`evidence supports the Board’s finding that the govern-
`ment’s conduct did not vitiate the finality of the termina-
`tion decision. Nauset argued that it reasonably believed
`that the contracting officer was reconsidering the termina-
`tion decision based on the contracting officer’s emails ac-
`knowledging receipt of Nauset’s January 17, 2018 and
`February 12, 2018 letters, as well as a letter from the con-
`tracting officer on March 26, 2018, stating that she was
`still reviewing Nauset’s February 12 claim. Nauset also
`pointed to communication between its attorney and gov-
`ernment counsel on November 28, 2017 and communica-
`tions with the government starting in April 2018 as
`support for its belief. The Board did not consider the com-
`munications after February 15, 2018—the end of the 90-
`day appeal window—stating that “[i]t is well settled that
`the government’s actions must have occurred within the
`90-day jurisdictional window in order to vitiate the finality
`of the termination.” Board Decision, 2021 WL 2029232.
`The Board ultimately found that Nauset did not provide
`sufficient evidence to demonstrate that it reasonably could
`have concluded that the contracting officer was reconsider-
`ing the termination decision.
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`Case: 21-2305 Document: 54 Page: 7 Filed: 03/04/2024
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`NAUSET CONSTRUCTION CORPORATION v.
`SECRETARY OF THE ARMY
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`7
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`At the outset, we hold that the Board erred in holding
`as a matter of law that evidence of events that occurred
`after the 90-day appeal window are per se irrelevant to this
`factual inquiry. While we recognize that such evidence
`most often will have no bearing on an appellant’s under-
`standing of the finality of the contracting officer’s decision
`during the appeal window, it cannot be said that such evi-
`dence will never have any bearing on the issue. The
`Board’s per se rule is therefore incorrect, and further, not
`supported by our precedent. The Supreme Court has cau-
`tioned against such rigid per se rules in other instances.
`See Octane Fitness, LLC v. ICON Health & Fitness, Inc.,
`572 U.S. 545, 553 (2014) (rejecting a per se framework as
`“unduly rigid”); KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398,
`415, 419–20 (2007) (rejecting a “rigid approach” and cau-
`tioning against “transform[ing] [a] general principle into a
`rigid rule”); Festo Corp. v. Shoketsu Kinzoku Kogyo Ka-
`bushiki Co., 535 U.S. 722, 738 (2002) (stating that doctrine
`is to be applied in a “flexible way, not a rigid one”). The
`Board’s error here, however, was harmless. Our review of
`the evidence, including the post-90-day appeal window ev-
`idence, confirms the Board’s view that in this case, Nauset
`could not have reasonably concluded that the contracting
`officer’s termination decision was being reconsidered prior
`to the appeal deadline.
`In other words, the Board’s finding that the contracting
`officer’s conduct did not vitiate the finality of the termina-
`tion decision is supported by substantial evidence. When
`Nauset asked the contracting officer to reconsider the ter-
`mination decision, the contracting officer’s emails stated
`“Email received” and “Received” with nothing further.
`J.A. 411, 413. Because the contracting officer merely
`acknowledged receipt, it was reasonable for the Board to
`conclude that Nauset could not have reasonably believed
`that the contracting officer was reconsidering her decision
`based on Nauset’s request for reconsideration or the of-
`ficer’s emails. Further, while the government counsel told
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`Case: 21-2305 Document: 54 Page: 8 Filed: 03/04/2024
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`8
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`NAUSET CONSTRUCTION CORPORATION v.
`SECRETARY OF THE ARMY
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`Nauset’s attorney eleven days after the termination notice
`that it was possible that the termination for default could
`be converted to a termination for convenience, the record—
`including an affidavit by Nauset’s attorney—does not indi-
`cate that the counsel had any further communication or
`that the contracting officer was involved in any such con-
`versation. As such, the evidence supports the Board’s find-
`ing that the statement by government counsel was not
`sufficient to indicate that the contracting officer was recon-
`sidering the decision.
`
`CONCLUSION
`For the foregoing reasons, we affirm the decision of the
`Board dismissing Nauset’s appeal.
`AFFIRMED
`COSTS
`
`No costs.
`
`
`