THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN ITS ENTIRETY ON NOVEMBER 20, 1995 _______________________________________________ RESPONDENT'S MOTION TO DISMISS DENIED: November 2, 1995 _______________________________________________ GSBCA 13182 SPRINT COMMUNICATIONS COMPANY L.P., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Ronald L. Fouse and Anthony Cogswell of Sprint Communications Company L.P., Herndon, VA, counsel for Appellant. John C. Sawyer and Pamela J. Reiner, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges PARKER, BORWICK, and WILLIAMS. BORWICK, Board Judge. Respondent, General Services Administration (GSA), moves to dismiss the complaint of Sprint Communications Company L.P. (Sprint) for lack of jurisdiction. Sprint appeals from a letter dated January 5, 1995, from the GSA contracting officer taking a deduction of $50,000 from Sprint's monthly invoices for recurring charges due to alleged failure to provide data access or reporting services on system operations as required by Contract GS000K89AHD0009, also known as the FTS2000 contract. GSA argues that the Board lacks jurisdiction because there was neither a claim by any party to this appeal nor a final decision of the contracting officer on a claim, as required by the Contract Disputes Act of 1978 (CDA), 41 U.S.C. 601-613 (1988). We deny GSA's motion to dismiss. We conclude that the contracting officer's letter of January 5, 1995, asserted a government claim and that the letter was a valid final decision under the CDA. Findings of Facts For the purpose of deciding GSA's motion, we assume the facts pleaded in appellant's complaint to be true. We also adopt certain jurisdictional facts, which the parties do not dispute. 1. On December 7, 1989, GSA awarded the FTS2000 contract to U.S. Sprint Communications Company, Limited Partnership, the predecessor corporation to Sprint. Complaint 1. 2. The contract requires Sprint to provide six telecommunications services to the Government, including switched voice service, switched data service, switched digital integrated service and dedicated transmission service. Complaint 4. The contract requires Sprint to provide all the procedures, documentation, tools, processing and other means necessary to access any and all FTS2000-associated data necessary to properly oversee and administer FTS2000 services. Appeal File, Exhibit 72, C.3.2.6.1. Information is required to be provided on both an individual transaction and monthly summary basis for a period of three months. Id. 3. The contract gives the Government ownership of all status and performance data, as well as access to all such data for the purpose of overseeing the administration and operation of the FTS2000 services. Appeal File, Exhibit 72, C.3.2.6.2 and C.3.2.6.3. 4. There is no separate payment provision for data reporting services. According to GSA, the payment provision for "data reporting services" is bundled in the fixed price portion of the billing, as indicated in Table B.10, Service Oversight Center ("SOC") Monthly Recurring Charges for MIS Operations Staff Years 6 through 10. Appeal File, Exhibit 72 (Memorandum (Oct. 4, 1995)). According to Sprint, the contract requires "access to data," and not "data reporting services." Sprint's Response to GSA's Memorandum (Oct. 10, 1995). For the purpose of deciding respondent's motion, the distinction between "access to data" and "data reporting services" is immaterial. 5. The contract also requires Sprint to provide the SOC, which is defined as: an office facility with associated furnishing and equipment . . . with [the] principal mission of overseeing FTS2000 services to ensure contractual compliance during the day-to-day operation and administration by the contractor. The contractor shall provide the [SOC] with access to FTS2000 services, specialized procedural support and the operational and administrative information require[d] for the center to accomplish its mission. This shall include access to all information and systems associated with FTS2000 design, implementation administration, and operations. Complaint 4 (quoting paragraph C.4.1 of the Request for Proposals). 6. For operation of the SOC, Sprint bills the Government for monthly non-recurring and recurring charges. The non- recurring charges for building preparation, office furniture, conference rooms, service oversight equipment communications building wiring, office equipment and start-up cost the Government nothing for years six through ten of the contract. Sprint bills GSA monthly recurring charges for office floor space, maintenance of building and grounds, equipment maintenance, furniture maintenance and replacement, guard service, management information systems operations staff and data transmission tie-lines. Appeal File, Exhibit 72, Table B.10 (Service Oversight Center, Monthly Prices for Option 1.) 7. In response to a request for information from the Board as to payment provisions for data reporting or access services, the contracting officer states: [T]here is no separate payment provision for the above referenced data reporting services. This information is found under the fixed price portion of the billing as indicated in Table B.10 monthly recurring charge for MIS Operations Staff Years 6 through 10. Memorandum From H. Buckley Cording, Contracting Officer (Oct. 4, 1995). 8. At approximately 8:30 a.m. on December 12, 1994, a GSA employee stationed at the SOC called Sprint's internal network services help desk to report that he was having difficulty accessing the Federal and National Account System Development Quality Monitoring subsystem (FANASD system) through his personal computer workstation. Complaint 5. Early that afternoon, another GSA employee stationed at the SOC called Sprint's director of customer service and reported he was having difficulty accessing the FANASD system from all GSA workstations. Id. Between 4:30 p.m. and 5:30 p.m. access to the FANASD system from five workstations in GSA's status room was restored. Access to the FANASD system from the remaining fifty-three GSA workstations was restored the following day. Id. At no time during December 12 did Sprint's FANASD system experience an outage or go out of service. Complaint 12. 9. On or about the evening of December 17, 1994, a printer malfunction prevented Sprint's Customer Service Center from capturing that day's Trouble Hot-line On-time Answering Performance Percentage Report. The Customer Service Center began the process of retrieving and reading the back-up tapes and restored that day's data on or about January 10, 1995. Complaint 8. 10. On January 5, 1995, GSA's contracting officer sent a letter to Sprint advising Sprint that its performance for the the FANASD system data delivery was not fully acceptable. Appeal File, Exhibit 65. The contracting officer stated in his letter: Because of the shortcomings in your performance which are detailed below, it is our determination that $50,000 shall be deducted from the invoice you submit in January 1995 as consideration for the unacceptable portion of your performance for the month of December 1994 as related to the FANASD [system] data delivery. Id. The shortcomings detailed included the inability of GSA personnel to access the FANASD system from GSA's data terminals. As to that incident, the contracting officer ascribed the outage to Sprint's changing the FANASD system without Sprint's following the established contractual change control process. Id. The contracting officer stated that the lack of access affected all GSA technical office members and delayed monitoring of key performance indicators and other functions dependent upon access to the FANASD system data. Id. The contracting officer also referenced the incident of December 17--Sprint's failure to provide that day's Trouble Hot-line On-time Answering Performance Percentage Report. Again, the contracting officer blamed the trouble on Sprint's failure to follow contractual change control process. Id. 11. On February 3, 1995, Sprint informed GSA by letter that "[i]n the event GSA unilaterally takes a deduction on the January invoice, Sprint will have no choice but to construe that unilateral action as a Contracting Officer's final decision and consider filing a notice of appeal with the General Services Board of Contract Appeals." Appeal File, Exhibit 68. 12. On February 4, 1995, Sprint received a February 2, 1995 letter from GSA, showing a break down of the total $140,602.49 withheld from Sprint's January invoices. Included in that withholding was $50,000 to adjust for the data reporting services not received in the month of December 1994. Complaint 15; Appeal File, Exhibit 71, Attachment C. 13. By letter dated February 7, 1995, Sprint filed an appeal in this matter with this Board construing the "$50,000 withholding action as a Contracting Officer's final decision." Notice of Appeal. By letter dated February 8, 1995, Sprint notified GSA of its appeal to the GSBCA. Appeal File, Exhibit 69. Discussion On July 3, 1995, GSA filed a motion to dismiss for lack of jurisdiction. GSA argues that "none of the contracting officer's letters to Sprint qualifies as a final decision [of the contracting officer]." Respondent's Motion to Dismiss at 7. GSA characterizes the contracting officer's letter of January 5, 1995 as mere price adjustments for services not received. Respondent's Motion to Dismiss at 4. The Contract Disputes Act (CDA) provides in pertinent part: All claims by a contractor against the government relating to a contract shall be in writing and shall be submitted to the contracting officer for a decision. All claims by the government against a contractor relating to a contract shall be the subject of a decision by the contracting officer. . . . The decision shall state the reasons for the decision reached, and shall inform the contractor of his rights as provided in this chapter. 41 U.S.C.A. 605(a)(West Supp. 1995). The CDA also provides that: Within ninety days from the date of receipt of a contracting officer's decision under section 605 of this title, the contractor may appeal such decision to an agency board of contract appeals, as provided in section 607 of this title. 41 U.S.C. 606 (1988). For this Board to have jurisdiction, under the CDA there must exist both a claim and a contracting officer's decision on the claim. Reflectone Inc. v. Dalton, 60 F.3d 1572, 1581 (Fed. Cir. 1995) (in banc); see Cleveland Telecommunications Corp. v. General Services Administration, GSBCA 12450, 94-1 BCA 26,558,at 132,168. The United States Court of Appeals for the Federal Circuit has held that such a decision is "the very linchpin and necessary prerequisite for the board's jurisdiction." McDonnell Douglas Corp. v. United States, 754 F.2d 365, 370 (Fed. Cir. 1985) (citing Paragon Energy Corp. v. United States, 645 F.2d 966 (Ct. Cl. 1981)). Federal Acquisition Regulation (FAR) 33.201 defines "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 sum certain, the adjustment or interpretation of contract terms, or other relief arising under or related to the contract." 48 CFR 33.201 (1994) (FAR 33.201). A deduction to a fixed price contract qualifies as a government claim. Placeway Construction Corp. v. United States, 920 F.2d 903, 906 (Fed. Cir. 1990); P.A. Cavanaugh v. General Services Administration, GSBCA 12661, 94-2 BCA 26,772, at 133,161; Cleveland Telecommunications Corp., 94-1 BCA at 132,169. In Placeway, the contract price was undisputed and was due upon completion of the work. 920 F.2d at 906. In this case, GSA's letter of January 5 stating that it would take deductions from Sprint's January invoices was a "written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money" and thus a claim as defined by FAR 33.201. A contracting officer issues a decision on a government claim for deduction when the contracting officer determines both liability and damages. Placeway, 920 F.2d at 907. The decision is no less final because it fails to include "boilerplate language usually present for the protection of the contractor," i.e. notification of appeal rights. Id.; P.A. Cavanaugh, 94-2 BCA at 133,161. Even a voucher indicating amount withheld and inspection reports identifying the basis of liability qualify as a valid final decision on a Government claim for deduction, although the voucher and reports involved in one case did not bear words "final decision" or contain information regarding the contractor's right of appeal. Volmar Construction, Inc. v. United States, 32 Fed. Cl. 746, 753-54 (1995). GSA's letter of January 5, 1995, detailed Sprint's supposed deficiencies regarding the FANASD system data and the amount of deductions GSA would take. That letter was a valid and binding final decision under the CDA as construed by the case law of our appellate authority and this Board.[foot #] 1 GSA argues that it was merely adjusting the contract price for services not received. We disagree. Under the FTS2000 contract, GSA paid Sprint fixed monthly recurring charges for operation of the SOC. This portion of the FTS2000 contract was not structured so that GSA paid for only the data access or data reporting services as it received them. Rather, GSA deducted the $50,000 from the fixed price payments due monthly for the operation of the SOC because of the allegedly defective performance of those services. As in Placeway, these fixed price payments were undisputed. Decision Respondent's Motion to Dismiss for Lack of Jurisdiction is DENIED. Within ten working days from the date of this decision, the parties shall submit a proposed discovery and hearing schedule for resolving this matter. ----------- FOOTNOTE BEGINS --------- [foot #] 1 The existence of a final decision by the contracting officer distinguishes this case from Iowa Illinois _____________ Cleaning Co. v. General Services Administration, GSBCA 12595, 95- _______________________________________________ 2 BCA 27,628, cited by GSA. There, we dismissed appeals from deductions on a janitorial services contract for lack of a contracting officer's decision because the letters advising the contractor of the deductions were from the field office manager, not the contracting officer. Iowa Illinois Cleaning Co., 95-2 ___________________________ BCA at 137,743. ----------- FOOTNOTE ENDS ----------- _________________________ ANTHONY S. BORWICK Board Judge We concur: _________________________ _________________________ ROBERT W. PARKER MARY ELLEN COSTER WILLIAMS Board Judge Board Judge