___________________________________________ DISMISSED IN PART FOR LACK OF JURISDICTION: November 15, 1993 ___________________________________________ GSBCA 12540 CLEVELAND TELECOMMUNICATIONS CORPORATION, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Carl E. Anderson of Arter & Hadden, Cleveland, OH, counsel for Appellant. Julia C. Allen, Assistant Regional Counsel, General Services Administration, Chicago, IL, counsel for Respondent. Before Board Judges DANIELS (Chairman), DeGRAFF, and GOODMAN. DeGRAFF, Board Judge. Cleveland Telecommunications Corporation (CTC) contracted with the General Services Administration (GSA) to provide a variety of services at a federal building. During the course of the contract, GSA made several deductions from CTC's monthly payments. In this appeal, CTC complains that the deductions were improper, that GSA is discriminating against CTC, and that GSA improperly suggested that the contract should be terminated. GSA filed a motion to dismiss this appeal for lack of jurisdiction. As explained below, we grant GSA's motion in part. Findings of Fact On December 18, 1992, GSA awarded contract GS05P92GAC0085 to CTC for janitorial and related services at the federal building in Cleveland, Ohio. The term of the contract was one year, beginning January 1, 1993, with two one-year options. In exchange for its performance, CTC was to be paid a fixed price of $19,544.53 each month. Appeal File, Exhibit 1. GSA was supposed to inspect CTC's work and, if GSA determined that CTC's performance was unsatisfactory, GSA was entitled to make deductions to CTC's monthly payments. The contract contains clause 552.232-78, which establishes a procedure for making such deductions: No later than the tenth work day of the month following the performance period for which GSA wished to make a deduction, a GSA representative was to send CTC a written notice of the type and amount of deduction that GSA proposed to make. CTC was permitted to respond to the notice within ten work days after receipt. CTC's response was to be provided to the contracting officer and was to contain "specific reasons why any or all of the proposed deductions are not justified." No response from CTC within the ten-day period "will be interpreted to mean that the Contractor accepts the deductions proposed." If the contracting officer determined that any or all of the proposed deductions were warranted, the contracting officer was to notify CTC and adjust CTC's monthly payment accordingly. Appeal File, Exhibit 1 at I-E-2, I-G-1, I-G-2. GSA made deductions from CTC's monthly contract price, as described below. Deductions for February 1993: On March 8, 1993, GSA sent CTC a notice proposing to deduct $327.10 from the monthly payment due for February 1993.[foot #] 1 Appeal File, Exhibit 4. There is nothing in the appeal file to establish when this notice was received by CTC, although CTC does not contest that it received the notice. There is no evidence that CTC responded to the notice. GSA deducted $327.10 from the monthly payment due for February 1993. Id., Exhibit 5. Deductions for March 1993: On April 5, 1993, GSA sent CTC a notice proposing to deduct $375.92 from the monthly payment due for March 1993. Appeal File, Exhibit 6. This notice was received by CTC on April 7, 1993, and there is no evidence that CTC responded to the notice. Id., Exhibit 32. GSA deducted $375.92 from the monthly payment due for March 1993. Id., Exhibit 7. Deductions for April 1993: On May 7, 1993, GSA sent CTC a notice proposing to deduct $654.38 from the monthly payment due for April 1993, due to deficiencies in general office cleaning, ----------- FOOTNOTE BEGINS --------- [foot #] 1 This notice, like the notices discussed in the following paragraphs, was addressed to CTC Technologies, Inc. The party with whom GSA has a contract is CTC, not CTC Technologies, Inc. The addresses for each company are the same and it appears that there are common personnel. Neither party has suggested that the jurisdictional issue currently presented is affected by the fact that the letters were addressed to CTC Technologies, Inc. ----------- FOOTNOTE ENDS ----------- court space cleaning, and restroom cleaning. Appeal File, Exhibit 8. This notice was received by CTC on May 8, 1993. Id., Exhibit 32. In a July 26, 1993 letter to the contracting officer, CTC asserts that it contested this deduction within the ten-day period permitted by the contract, in letters dated May 18 and 21, 1993. Id., Exhibit 15. Although the May 18, 1993 letter does not refer to GSA's May 7, 1993 notice, it does mention cleaning restroom fixtures. Instead of contesting the amount deducted, CTC acknowledged that there was a "problem" and stated that it intended to remedy the problem by assigning additional personnel and by directing its staff to "focus on the problem." Id. In its May 21, 1993 letter, which is addressed to the contracting officer's representative with a copy to the contracting officer, CTC explains that the "problem" with the restroom fixtures was due to metal corrosion and not due to improper cleaning. CTC requested in the May 21 letter that it be credited for all deductions that had been made as a result of this item. CTC did not contest the deductions for general office cleaning and court space cleaning. Id., Exhibit 18. Sometime after June 3, 1993, GSA deducted $654.38 from the monthly payment due for April 1993. Id., Exhibit 9. Deductions for May 1993: On June 3, 1993, GSA sent CTC a notice proposing to deduct $327.05 from the monthly payment due for May 1993, due to deficiencies in general office cleaning, court space cleaning, and restroom cleaning. Appeal File, Exhibit 10. This notice was received by CTC on June 7, 1993. Id., Exhibit 32. On June 23, 1993, CTC sent a letter to the contracting officer which discusses the restroom fixture issue and notes that CTC expected that the remaining deficiencies would be corrected as a result of CTC's new quality control program.[foot #] 2 CTC's letter requests a refund of amounts which had been deducted. Id., Exhibit 18. Sometime after July 8, 1993, GSA deducted $327.05 from the monthly payment due for May 1993. Id., Exhibit 11. Deductions for June 1993: On July 6, 1993, GSA sent CTC a notice proposing to deduct $359.20 from the monthly payment due for June 1993, due to deficiencies in general office cleaning, court space cleaning, restroom cleaning, carpet spotting, and elevator cleaning. Appeal File, Exhibit 12. This notice was received by CTC on July 8, 1993. Id., Exhibit 32. On July 22, 1993, CTC responded to GSA's July 6, 1993 notice by sending a letter to the contracting officer's representative with a copy to the contracting officer. CTC stated it was "in total disagreement with the deductions" proposed in GSA's notice and requested payment for all past deductions. Id., Exhibit 16 ----------- FOOTNOTE BEGINS --------- [foot #] 2 This letter was sent on CTC Technologies, Inc. letterhead. As we state in the preceding footnote, neither party has suggested that this affects the resolution of the motion to dismiss. ----------- FOOTNOTE ENDS ----------- (first letter).[foot #] 3 Sometime after July 22, 1993, GSA deducted $359.20 from the monthly payment due for June 1993. Id., Exhibit 13. Deductions for July 1993: On August 12, 1993, GSA sent CTC a notice proposing to deduct $1,891.93 from the monthly payment due for July 1993, due to eight deficiencies, including unsatisfactory restroom cleaning. There is a memorandum to the file that states that this notice was hand delivered to CTC's site supervisor on August 13, 1993. Appeal File, Exhibit 14. It was also received by CTC at its offices on August 17, 1993. Id., Exhibit 32. On August 19, 1993, CTC sent a response to the notice to the contracting officer, suggesting that no deduction should be made because the August 12, 1993 notice was not timely. CTC's response also discusses the restroom fixture issue and asserts that the cause of the problem is not deficient cleaning. CTC did not contest the deductions for the other seven deficiencies. Id., Exhibit 33. On September 30, 1993, the contracting officer informed CTC that, in her view, the notice was timely and the proposed deduction was being "upheld." Id., Exhibit 34. GSA states that it has made this deduction. Respondent's Supplemental Motion to Dismiss at 1 n.1. CTC filed its notice of appeal with the Board on August 17, 1993. The notice contains seven numbered paragraphs which CTC has labeled "Issues." In Issues One, Two, and Seven, CTC alleges that GSA assessed unwarranted deductions, failed to notify CTC of deductions within the time permitted by the contract, failed to respond to CTC's letters protesting the deductions, and conducted inspections that were inconsistent with the contract's requirements. In Issues Three, Four, and Six, CTC alleges that GSA is discriminating against CTC due to CTC's business practices and due to CTC's status as an 8(a) contractor. In Issue Five, CTC alleges that GSA improperly considered terminating CTC's right to perform this contract. GSA's contracting officer states that she has never received a claim from CTC and has never issued a decision upon any matter raised in CTC's notice of appeal to the Board. Appeal File, Exhibit 20. The contract defines a "claim" as a "written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a certain sum, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract." The contract provides that a demand for payment which is not in dispute when it is submitted to the contracting officer does not amount to a claim. The contract also explains that a claim by the Government ----------- FOOTNOTE BEGINS --------- [foot #] 3 Exhibit 16 contains two letters dated July 22, 1993. When referring to this exhibit, we will identify which of the two letters supports our factual finding. Both letters are written on CTC Technologies, Inc. letterhead. ----------- FOOTNOTE ENDS ----------- against the contractor "shall be subject to a written decision by the Contracting Officer." Id., Exhibit 1 at II-I-23. GSA filed a motion to dismiss this appeal for lack of jurisdiction. GSA asserts that CTC never submitted a claim to the contracting officer and that the contracting officer never issued a decision concerning the issues raised in CTC's notice of appeal. GSA also contends that the deductions do not constitute government claims and have not been the subject of a decision by the contracting officer because the contracting officer never sent CTC a written notice which described GSA's claim, referred to pertinent contract terms, contained a statement of facts and a statement of the decision, and informed CTC of its appeal rights. GSA alleges that the contracting officer never issued a written decision addressing any of the deductions that it made to CTC's monthly payments, even though contract clause 552-232-78 provides a deduction could be made after the contracting officer made a "final decision" concerning the deduction and provided a notice to CTC. In response to GSA's motion, CTC identifies five letters from CTC to GSA which, according to CTC, constitute a claim. Four of the letters -- dated May 21, June 23, July 22, and July 26, 1993 -- are discussed above. The fifth letter is also dated July 22, 1993. The letter, which was sent to the contracting officer, sets out a number of questions that suggest that CTC had several complaints about GSA. Id., Exhibit 16 (second letter). According to CTC, these five letters establish "CTC's intent to obtain relief from the proposed deductions and to have the contracting officer render a final decision on the matter." Appellant's Response at 6. CTC asserts that the amounts deducted were in dispute and that its letters requested a sum certain, explained the basis for CTC's request, and made it clear that CTC wanted a decision from the contracting officer. CTC contends that the lack of a written response from the contracting officer constitutes a deemed denial of CTC's claim. CTC does not contend that the contracting officer ever issued a written decision concerning a government claim. Discussion In their briefs, the parties recognize that our jurisdiction is defined by the Contract Disputes Act, 41 U.S.C. 601-613 (1988). The statute provides us with jurisdiction to entertain this appeal provided that one of the parties has asserted a claim and provided that the contracting officer has issued a decision upon that claim. 41 U.S.C. 607. A contracting officer's decision upon a contractor's claim can be either written or, in some circumstances, implied. 41 U.S.C. 605(a), (c)(5). A contracting officer's decision upon a Government claim must be written. 41 U.S.C. 605(a). In order to analyze GSA's motion to dismiss, we must determine what issues CTC wishes to present to us for decision, and whether these issues have been the subject of a claim and a contracting officer's decision. The issues stated in CTC's notice of appeal fall into three categories: 1. Deduction issue: CTC alleges that GSA assessed unwarranted deductions, failed to notify CTC of deductions within the time permitted by the contract, failed to respond to CTC's letters protesting the deductions, and conducted inspections that were inconsistent with the contract's requirements. 2. Discrimination issue: CTC alleges that GSA is discriminating against CTC due to CTC's business practices and due to its status as an 8(a) contractor. 3. Termination issue: CTC alleges that GSA considered terminating CTC's right to perform this contract. Deduction Issue Government Claims Deductions to fixed price contracts constitute government claims. Placeway Construction Corp. v. United States, 920 F.2d 903 (Fed. Cir. 1990); Kleen Master, Inc., GSBCA 7657, 89-2 BCA 21,880. Therefore, we may entertain so much of this appeal as concerns deductions, if the contracting officer issued a written decision concerning these Government claims. There is no evidence that the contracting officer issued a written decision concerning GSA's claim for deductions for February through June, 1993. Perhaps the contracting officer should have issued a written decision before GSA made its deductions. The fact is, however, that no written decision was issued, and it is this fact that determines the jurisdictional issue. In the absence of a contracting officer's written decision upon these Government claims, we lack jurisdiction.[foot #] 4 There is a letter from the contracting officer to CTC concerning the deduction for July 1993. In the letter, the contracting officer states that she has determined that the deduction will be "upheld." GSA states in its motion to dismiss that it has made the deduction. The contracting officer's letter constitutes a decision upon GSA's claim for the July 1993 ----------- FOOTNOTE BEGINS --------- [foot #] 4 CTC has not requested that we suspend proceedings until the contracting officer issues a decision upon these claims. Even if it had made such a request, we would not have suspended proceedings. Jurisdiction is determined by the facts as they exist at the time the appeal was filed and, at that time, there was no contracting officer's decision. Keene Corp. ___________ v. United States, 113 S. Ct. 2035, 2040 (1993). The Contract ________________ Disputes Act provides a narrow exception to this general rule when it permits us to stay proceedings if a contracting officer has failed to issue a written decision within the time permitted for consideration of contractor claims. 41 U.S.C. 605(c)(5). This exception does not apply to government claims. ----------- FOOTNOTE ENDS ----------- deduction and it is immaterial that the letter does not notify CTC of its appeal rights. Placeway Construction Corp., 902 F.2d at 907. We possess jurisdiction to entertain an appeal concerning the July 1993 deduction because the deduction constitutes a government claim and the contracting officer has issued a decision concerning that claim. GSA's motion to dismiss is denied, insofar as the deduction for July 1993 is concerned. Contractor Claims Even though the February through June 1993 deductions are government claims, CTC could have submitted its own claims concerning the deductions and could have filed an appeal after the contracting officer issued a decision concerning those claims. In its response to GSA's motion to dismiss, CTC contends that it did indeed submit a claim or claims to GSA. There is no evidence that CTC ever responded to GSA's notice of proposed deductions for February and March 1993, much less any evidence that CTC ever submitted a claim to the contracting officer concerning these deductions. For this reason, we lack jurisdiction to entertain an appeal concerning the deductions for February and March 1993. GSA's motion to dismiss is granted in so far as the deductions for February and March 1993 are concerned. We also lack jurisdiction to consider an appeal concerning the deductions for April, May, and June 1993. CTC's May 21, June 23, and July 22, 1993 letters take issue with GSA's proposed deductions for April, May, and June 1993, respectively. But, it appears that CTC's letters were sent to GSA in response to GSA's notice of proposed deductions and the purpose of the letters was to notify GSA that CTC contested the proposed deductions. There was no dispute between the parties at the time CTC sent the May 21, June 23, and July 22, 1993 letters to GSA, therefore these letters do not constitute claims and we lack jurisdiction to entertain an appeal concerning the April, May, or June 1993 deductions. GSA's motion to dismiss is granted in so far as the deductions for April, May, and June 1993 are concerned. We reject CTC's argument that its claim consists of a combination of five letters that it sent to GSA. We discuss the May 21, June 23, and one of the July 22, 1993 letters above and explain why they do not constitute claims. The July 26, 1993 letter contains absolutely no demand or request for anything. It simply notifies GSA that, in CTC's view, CTC responded to GSA's notices of deduction within the time permitted by the contract. Although the second July 22, 1993 letter contains several complaints concerning GSA, the letter consists of a series of questions and concludes by stating that CTC intends to "file a brief with the GSA Board of Contract Appeals, the Inspector General, and the General Accounting Office . . . ." The letter does not make any demand or request for relief, and does not seek the payment of money in a sum certain or the adjustment or interpretation of contract terms. None of these five letters by itself is sufficient to constitute a claim, and viewing the letters collectively, as CTC suggests we do, does not cure their deficiencies. Discrimination and Termination Issues CTC never presented a claim to the contracting officer concerning either the discrimination or the termination issue.[foot #] 5 We have examined the five letters that CTC identifies as containing its claim. None of those letters contains a demand for the payment of money in a certain sum, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract, concerning either the discrimination or the termination issue. Therefore, we lack jurisdiction to consider these issues. GSA's motion to dismiss is granted insofar as the discrimination and termination issues are concerned. Decision We possess jurisdiction to entertain an appeal from the contracting officer's decision concerning the July 1993 deduction. We lack jurisdiction to consider any of the remaining issues that CTC wishes to present in this appeal. The appeal is DISMISSED IN PART FOR LACK OF JURISDICTION. ____________________________ MARTHA H. DeGRAFF Board Judge We concur: _____________________________ _____________________________ STEPHEN M. DANIELS ALLAN H. GOODMAN Board Judge Board Judge ----------- FOOTNOTE BEGINS --------- [foot #] 5 In its response to GSA's motion to dismiss, CTC does not assert that it presented claims concerning these issues. Even so, we have an obligation to examine the facts in order to determine whether jurisdiction exists.