Board of Contract Appeals
General Services Administration
Washington, D.C. 20405

DISMISSED FOR LACK OF JURISDICTION: March 20, 2006

GSBCA 16817-EPA

DOUG WIGGS d/b/a SLOAN WELDING & CONSTRUCTION COMPANY,

Appellant,

ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

David L. Reinschmidt and Colby M Lessmann of Munger, Reinschmidt & Denne,
L.L.P., Sioux City, IA, counsel for Appellant.

Kenneth R. Pakula, Office of General Counsel, Environmental Protection Agency,
Washington, DC, counsel for Respondent.

Before Board Judges DANIELS (Chairman), NEILL, and DeGRAFF.

DANIELS, Board Judge.

The Environmental Protection Agency (EPA), respondent, moves the Board to dismiss
for lack of jurisdiction an appeal filed by Doug Wiggs, doing business as Sloan Welding &
Construction Company (Wiggs), from a decision issued by an EPA contracting officer. After
considering Wiggs' opposition (labeled a "resistance"), we grant the motion and dismiss the
appeal.

Background

The events relevant to this case occurred on a privately-owned parcel of land in
Woodbury County, Iowa, which had previously been the Mid-America Tanning Site. The
site was a former National Priorities List (NPL) Superfund site. It had been deleted from the
NPL in 2004, but thereafter, the State of Iowa continued to monitor it. Motion to Dismiss
(Motion) at 1; Appellant's Resistance to Motion to Dismiss (Resistance) at 1.

Wiggs was hired by Chad Gill, acting on behalf of the property owners, to move earth
on the property in preparation for construction. Motion at 1-2; Resistance at 2. On Saturday,
July 9, 2005, while working on the site, Wiggs discovered a discharge from a pipe of
possibly hazardous chemicals. Wiggs operated his earth-moving equipment in an effort to
contain the discharge. He and Mr. Gill also contacted governmental authorities, and on that
same day, representatives of first the Iowa Department of Natural Resources (DNR) and later
the EPA appeared at the site. Motion at 2; Resistance at 2. Wiggs considered that after the
DNR representative arrived, he was working for the DNR, "with permission and authority
by [the EPA representative] and the EPA." Resistance at 2.

The EPA representative returned to the site on Sunday, July 10, accompanied by an
employee of an EPA Emergency Rapid Response Services contractor, Environmental
Restoration, L.L.C. (ER). Wiggs inquired whether these individuals wanted him to remain
on the site and continue performing earth-moving work to contain the discharge. They
assented. Motion at 2-3; Resistance at 2-3. According to the EPA, the EPA representative
advised [Wiggs] that EPA could not directly hire [Wiggs] and that [Wiggs] would have to
speak directly to [ER], the prime contractor." Motion at 3. According to Wiggs, "As of 2:00
p.m. on July 10, 2005, Wiggs was working for ER with the EPA's agreement." Resistance
at 3; see also Complaint, Attachment at 005 (Wiggs' log of his activities: "Then at 2:00 pm
on 7-10-05 Sunday Doug went to work for Environmental Restoration.").

After completing his work, Wiggs submitted invoices for payment to both the DNR
and ER. Motion at 3; Resistance at 3; Complaint, Attachment, passim. The Administrator
of the DNR's Environmental Services Division responded that his agency "has no legal
obligation to reimburse [Wiggs] for these expenses" because "the Department never
contracted with [Wiggs] for any work conducted at the site." Motion, Attachment 2. ER and
Wiggs conducted negotiations as to the value of Wiggs' services, but do not appear to have
reached agreement on the amount of money ER would pay to Wiggs. Complaint, Attachment
at 072-75, 078-82.

Wiggs also submitted invoices to the EPA. Motion at 4; Complaint at 11-12. On
November 7, 2005, an EPA contracting officer responded, in a letter he characterized as his
final decision:

I have determined that the EPA has no liability for payment of these charges.
. . . [Y]ou stated this repair was authorized by [an employee of the] Iowa
Department of Natural Resources. If you were doing this under her direction,
you probably need to talk with her.

. . . .

It is my further understanding that you performed work as a subcontractor for
EPA's prime contractor, Environmental Restoration[,] beginning on July 10th.
Based on information I have, you have received or will receive compensation
for all work performed at their direction.

Unless you can provide me with additional information or documentation
which would demonstrate that you have a valid claim with the EPA, I am
forced to deny this claim.

Complaint, Attachment at 076-77.

On February 3, 2006, Wiggs appealed this decision to the Board.

Discussion

Under the Contract Disputes Act of 1978, a board of contract appeals has "jurisdiction
to decide any appeal from a decision of a contracting officer (1) relative to a contract made
by its agency, and (2) relative to a contract made by any other agency when such agency . . .
has designated the agency board to decide the appeal." 41 U.S.C. 607(d) (2000). The EPA
has designated this Board to decide appeals from decisions of its contracting officers.

The term "contract," as used in this statute, means "any express or implied contract
. . . entered into by an executive agency" for any of four categories of items, one of which
is "the procurement of services." 41 U.S.C. 602(a). The term "executive agency" includes
"an independent establishment" such as the EPA. Id. 601(2) (referencing 5 U.S.C. 104).
There is nothing in the record to indicate, and Wiggs does not contend, that Wiggs performed
the work in question under an express contract with the EPA. To place its appeal before the
Board, therefore, Wiggs must convince us that the work was performed under an implied-in-
fact contract with the agency. See Hanlin v. United States, 316 F.3d 1325, 1328, 1330 (Fed.
Cir. 2003) ("Plaintiff has the burden to prove the existence of an implied-in-fact contract";
"[Plaintiff] has the burden to show unambiguously each of the elements of an implied-in-fact
contract").

"An implied-in-fact contract is one 'founded upon a meeting of minds, which,
although not embodied in an express contract, is inferred, as a fact, from conduct of the
parties showing, in the light of the surrounding circumstances, their tacit understanding.'"
Lewis v. United States, 70 F.3d 597, 600 (Fed. Cir. 1995) (quoting Baltimore & Ohio
Railroad Co. v. United States, 261 U.S. 592, 597 (1923)). "A binding implied-in-fact
contract arises between a private party and the government upon proof by the person of: (1)
mutuality of intent to contract; (2) consideration; (3) an unambiguous offer and acceptance[;]
and (4) 'actual authority' on the part of the government's representative to bind the
government." Schism v. United States, 316 F.3d 1259, 1278 (Fed. Cir. 2002) (en banc), cert.
denied, 539 U.S. 910 (2003); see also Flexfab, L.L.C. v. United States, 424 F.3d 1254, 1265
(Fed. Cir. 2005).

Wiggs' own characterization of the work he performed at the former Mid-America
Tanning Site defeats any effort to establish an implied-in-fact contract between Wiggs and
the EPA. Wiggs says that in addition to whatever he did for the property owner, he was first
working for the DNR, an Iowa state agency, "with permission and authority by [the EPA
representative] and the EPA," and was later "working for ER" a contractor to EPA "with
the EPA's agreement." In neither of these instances, according to Wiggs, was he actually
working directly for the EPA.

The most that can be said for Wiggs' relationship to the EPA is that while he was
working for ER, he was a subcontractor. There is a "well-entrenched rule" of long standing,
however, that with few exceptions, "a subcontractor cannot bring a direct appeal against the
government" because it is not in privity with the Government. United States v. Johnson
Controls, Inc., 713 F.2d 1541, 1550 (Fed. Cir. 1983); see also Erickson Air Crane Co. of
Washington, Inc. v. United States, 731 F.2d 810, 813 (Fed. Cir. 1984) (describing this
principle as "a hornbook rule"). The three prominent exceptions to this rule are that a
subcontractor may prosecute a claim (a) in the prime contractor's name, with the prime
contractor's consent and cooperation (Erickson Air Crane, 731 F.2d at 813); (b) where the
prime contractor was clearly acting as a purchasing agent for the Government and the
contract stated that the Government would be directly liable to the vendors for the purchase
price (Johnson Controls, 713 F.2d at 1551); and (c) where the contract reflects an intention
to make the subcontractor a direct third-party beneficiary and the contracting officer was put
on notice of the relationship between the prime contractor and the third-party beneficiary
subcontractor (Flexfab, 424 F.3d at 1259, 1263). These exceptions are applied narrowly
because the United States as a sovereign may not be sued without its consent and waivers of
sovereign immunity are strictly construed. Flexfab, 424 F.3d at 1263; Erickson Air Crane,
731 F.2d at 813; Johnson Controls, 713 F.2d at 1557. Wiggs does not attempt to squeeze
within any of the exceptions.

Even if Wiggs could prove that he was working "with permission and authority by
[the EPA representative] and the EPA," or "with the EPA's agreement," that would not
establish a contractual relationship between him and the EPA. In the principal decision
enunciating the requirement for privity, Johnson Controls, the Court of Appeals for the
Federal Circuit held that the facts that a subcontract was executed subject to Government
approval, and that the Government retained a great deal of control over the actions of the
prime contractor in its dealings with its subcontractors, did not make the subcontract a
contract with the Government. 713 F.2d at 1543-44, 1552. There must be a "direct
contractual relationship," the court said, for a contract to exist. Id. at 1552-53. Similarly, the
same court has held, a grant of benefits and subsequent oversight by an agency "is
insufficient to establish a contractual obligation" between an entity and the agency. Katz v.
Cisneros, 16 F.3d 1204, 1210 (Fed. Cir. 1994). "An agency's performance of its regulatory
or sovereign functions does not create contractual obligations. Something more is
necessary." Cain v. United States, 350 F.3d 1309, 1315 (Fed. Cir. 2003) (quoting D & N
Bank v. United States, 331 F.3d 1374, 1378-79 (Fed. Cir. 2003)).

Decision

The EPA's motion is granted. The appeal is DISMISSED FOR LACK OF
JURISDICTION.

_________________________
STEPHEN M. DANIELS
Board Judge

We concur:

_________________________ _________________________
EDWIN B. NEILL MARTHA H. DeGRAFF
Board Judge Board Judge