Citations
- 157 F. Supp. 3d 1119
Full opinion text
AMENDED MEMORANDUM OPINION
James O. Browning, UNITED STATES DISTRICT JUDGE
THIS MATTER comes before the Court on the Plaintiffs Motion to Dismiss Counterclaim, filed August 7, 2015 (Doc. 92)(“MTD”). The Court held a hearing on November 17, 2015. The primary issues are: (i) whether the Court lacks subject-matter jurisdiction over the Defendants’ Counterclaim, see Answer to Second Amended Complaint and Counterclaim, filed July 17, 2015 (Doc. 84)(“Counter-claim”), because Defendant Frank Dayish, contracting officer ("CO”) for the Navajo Area HlS, lacked the authority to make his purported July 16, 2015, final decision because Plaintiff Navajo Health Foundation — Sage Memorial Hospital Inc.’s Contract Support Cost (“CSC”) claim was already being litigated in this Court; and (ii) whether the Court lacks subject-matter jurisdiction over the Defendants’ Counterclaim, because Dayish’s July 16, 2015, letter, see Letter from Frank Dayish, Chief Contracting Officer, to Stenson D. Waune-ka, Board Chairman, Sage Memorial Hospital, Inc; (dated July 16, 2015), filed July 17, 2015 (Doc. 84-l)(“July 16, 2015 Dayish Letter”), was not sufficiently detailed under., the Contract Disputes Act (“CDA”) in that it provided several bases for liability, yet specified only one damages figure. The Court concludes that it has. subject-matter jurisdiction over the Defendants’ Counterclaim, because: (i) Dayish retained the authority to issue a final decision on the Defendants’ claim for indirect contract support costs funding that Sage Hospital did not expend on CSC-eligible activities in fiscal years 2009-2013; and (ii) the July 16, 2015, letter was sufficiently detailed under the CDA, even though it provided several bases for liability, yet specified only one damages figure. The Court therefore denies the MTD.
FACTUAL BACKGROUND
The Court takes this factual background from the facts that it concluded were undisputed in Navajo Health Foundation— Sage Memorial Hospital, Inc. v. Burwell, 110 F.Supp.3d 1140 (D.N.M.2015)(Browning, J.)(“Sage”). The Court provides this factual background to give a summary how the case began and to tell a coherent story.
“Sage is a health care facility in Ganado, Arizona, within the exterior boundaries of the Navajo Reservation.” 110 F.Supp.3d at 1145. “Sage is a Navajo tribal organization for the purpose[ ] of contracting with IHS under the [Indian Self-Determination Education Assistance Act (“ISDEAA”) ].” 110 F.Supp.3d at 1145. “IHS is an agency within the Department of Health and Human Services and is responsible for providing federal health services to American Indians and Alaska Natives.” 110 F.Supp.3d at 1145.
“Since 2004, Sage has contracted with IHS under the ISDEAA to provide health services to a largely Navajo patient population.” 110 F.Supp.3d at 1145. “Defendant [Frank] Dayish is the Contracting Officer for the Navajo Area IHS.” 110 F.Supp.3d at 1145. “Dayish is responsible for ISDEAA contracts and funding agreements for IHS programs, functions, services and activities undertaken by IS-DEAA contractors within the Navajo Area of IHS, including Sage.” 110 F.Supp.3d at 1145. “Dayish has exercised the authority to sign ISDEAA contracts and funding agreements with Sage for such IHS programs and to award funds pursuant to those agreements.” 110 F.Supp.3d at 1145. “As Contracting Officer, Dayish has exercised the authority to decide initially disputes arising under ISDEAA contracts.” 110 F.Supp.3d at 1145.
1. The IHS’ Process for Resolving CSC Claims.
“Over 1,600 CSC CDA claims have been presented to IHS.” 110 F.Supp.3d at 1146. “Upon receipt of a [CSC] claim, the IHS CO sends a letter acknowledging the claims, requesting] additional documentation and explanation of the claims that are not available to IHS and are necessary to complete its analysis, and sets forth a date for responding to those claims.” 110 F.Supp.3d at 1147. “Due to the complexity of the CSC claims, as well as IHS’s goal to ensure consistency in the analysis of all claims, the claims are then analyzed by an IHS team that includes financial analysts and staff from the appropriate IHS Area Office, including the CO.” 110 F.Supp.3d at 1147. “IHS hired an outside financial accounting firm, Cotton & Co., additional staff in its Office of Finance and Accounting (OFA), and new attorneys in the HHS Office of the General Counsel, to assist in handling the claims.” 110 F.Supp.3d at 1147. “In addition, numerous staff in IHS’s twelve Area Offices, thirty attorneys in the HHS Office of General Counsel, as well as numerous attorneys in the U.S. Attorney’s Office, are assisting in tracking, evaluating, and resolving the CSC CDA claims.” 110 F.Supp.3d at 1148. “Extensive documentation is needed to evaluate the claims, and the analysis is complex.” 110 F.Supp.3d at 1148.
“After IHS completes its analysis of the tribal contractor’s claims, it notifies the tribal contractor of the results of the analysis or reaches out to the tribal contractor and typically its legal counsel and financial expert to discuss the claims.” 110 F.Supp.3d at 1148. “The IHS’s legal counsel, financial experts, and frequently IHS Area Office staff participate in these meetings.” 110 F.Supp.3d at 1148. “IHS is attempting to resolve the claims expeditiously and in cooperation with tribal contractors, without resorting to litigation.” 110 F.Supp.3d at 1148. “[I]nformation needed is not readily apparent from financial documents and, instead, requires in-depth conversations between the financial experts for both the tribe and IHS in order for the parties to reach an understanding.” 110 F.Supp.3d at 1148.
Most of the time, IHS and the tribal contractor are able to reach an understanding about the eligible costs actually incurred by the tribal contractor but not paid by the IHS as CSC under the tribal contractor’s ISDEAA contract and annual funding agreement, allowing the parties to quickly settle the claims at the next step of the CDA process.
110 F.Supp.3d at 1148. “[I]t is the IHS’s goal to work cooperatively with tribal contractors to exchange relevant documents and discuss the claims prior to issuing its final decision.” 110 F.Supp.3d at 1148. This process “is time consuming and resource intensive, and the time required to respond to each claim is heightened due to the complexity of each claim, the total number of claims being addressed by IHS, and the time needed to meet with and discuss the claims with tribal contractors.” 110 F.Supp.3d at 1148. “As IHS continues to make progress in resolving the claims, the majority of which have already been resolved, IHS does anticipate that the time required to reach resolution will be shortened.” 110 F.Supp.3d at 1148.
2. Sage Hospital’s CSC Claim.
“By letter dated August 25, 2014 to Defendant Dayish, Sage submitted to IHS a CSC claim for FY 2009 through FY 2013 for a total of $62,569,681.” 110 F.Supp.3d at 1148. “Sage submitted approximately 270 pages of documents with its CDA claims letter for $62,569,681, including Sage’s audited financial statements for (FYs) 2009-2013.” 110 F.Supp.3d at 1149. Sage Hospital also submitted “contracts and funding agreements between Sage and IHS in the custody of IHS, a Schedule of Attachments A and B prepared by Sage showing details of the CSC shortfalls, expectancy damages, and total claim....” 110 F.Supp.3d at 1149.
“Sage did not rely on IHS’ reports to Congress, and Sage’s claim expressly states that Sage has used the method of calculating the shortfall preferred by IHS, namely, full amount of CSC minus amount of CSC paid.” 110 F.Supp.3d at 1149. “The Claim specifies, [for fiscal years 2009-13,] the CSC shortfall based on the full amount of CSC incurred by Sage minus the amount of CSC paid by IHS, the expectancy damages from lost billings, and the total claim for each such year.” 110 F.Supp.3d at 1149. “The Claim ... explains the expectancy damages claim for lost third-party revenues and the manner of calculating them.” 110 F.Supp.3d at 1149.
3. Dayish’s Response to the Claim.
Dayish responded to the Claim with a letter “based on a template designed to ensure consistent responses to all tribes with CSC claims” that was dated October 23, 2014. 110 F.Supp.3d at 1150. The Dayish Letter states in pertinent part: •
On August 27, 2014, I received your , letter dated August 25,2014. The letter makes a claim under the Contract Disputes Act and the Tribe’s Indian Self-Determination and Education Assistance Act (ISDEAA) contract for fiscal year 2009, alleging “damages arising out of the failure of [IHS] to pay full contract support ' costs (including indirect costs and direct contract supports).”
Because your claim exceeds $100,000, the CDA requires that the • Indian Health Service (IHS) either issue a decision on the claim within 60 days of the date of receipt or notify the contractor when it will issue the decision. 41 U.S.C. § 7103(f)(2); 25 ■ C.P.R. § 900.223(a). At this time, the IHS has not had an opportunity to adequately review and make a final decision on your claim for a variety of reasons, including the size, complexity, age, and lack of specificity of your claim and the inadequacy of supporting documentation submitted with the claim. In addition, the IHS would like to work cooperatively with the Navajo Health Foundation-Sage Memorial Hospital Inc. (NHF-SMH) to exchange relevant documents and discuss the claims prior to issuing its response. In consideration of these factors and based upon the anticipated cooperation of the ÑHF-SMH, I will issue a final contracting officer’s decision by October 21,2015.
NHF-SMH can assist IHS in responding to the claim by providing additional documentation. NHF-SMH did not submit sufficient information to provide a basis for IHS to determine the validity of the NHF-SMH’s claim that it is owed additional contract support costs (CSC) funds. Although IHS will refer to the contract documents that are in the Agency’s possession to begin analyzing the claim; we have found that those documents often are insufficient to determine the amount of reasonable, allowable, and non-duplicative CSC that NHF-SMH actually incurred. At least part of your claim appears to be based on the annual IHS CSC report to Congress, but that report is merely a budget planning tool that is not based on audited figures and, therefore, does not establish the amount of allowable CSC incurred by the NHF-SMH or the amount of any deficiency in CSC funding. Accordingly, IHS requests that NHF-SMH submit information of actual CSC incurred in the years at issue. Relevant documentation may include:
1) Documents showing actual expenditures for direct costs associated with operation of the ISDEAA programs for each fiscal year at issue.
2) Documents showing the Tribe’s indirect costs for each fiscal year at issue.
3) Documents showing the Tribe’s actual capital expenditures, pass-through amounts, and other exclusions associated with the operation of the IS-DEAA programs for each fiscal year at issue.
4) Any additional documentation in the NHF-SMH’s possession that will assist IHS in determining which of NHF-SMH’s expenditures meet,the ISDEAA definition of CSC- in section 106(a)(2) and do not duplicate costs funded in the section 106(a)(i) amount.
Lastly, the IHS requests that NHF-SMH provide further explanation for the methodology ,used to • calculate the amount of additional CSC funds it claims is owed. For example, the “shortfall” claim appears .to be based directly on the annual report to Congress. That report is merely a budget planning tool, however, and does not demonstrate the amount of CSC incurred by NHF-SMH. Similarly, we have no information demonstrating your expectancy damages claims. If you have detailed information demonstrating the calculation of each of these claims, IHS can review your claim more thoroughly and respond more quickly.
The requested information should be sent electronically to Alva R. Tom atalva.tom@ihs.gov or mailed in hardco-py to the following address within forty-five (45) days from the date of this letter:
Navajo Area Indian Health Service
Office of Indian Self Determination
Attention: Alva R. Tom
P.O. Box 9020
Window Rock, AZ 86515
Should NHF-SMH need additional time to provide the requested documentation, please send notice in writing of the date by which NHF-SMH intends to respond, and a request for an additional extension of time for IHS to consider the documentation before making its decision. If IHS does not receive any response, the Agency will consider the lack of specificity and the inadequacy of supporting documentation in making its decision. IHS hopes that this will not be necessary and looks forward to work-' ing with NHF-SMH on a timely and expeditious resolution of its claim.
In an effort to treat all tribal contractors fairly, IHS made a policy decision, which has been communicated to all tribal contractors (and agreed upon by many tribal contractors whose claims were pending before the Civilian Board of Contract Appeals (CBCA)), to attempt to review and resolve the claims in the order they were received; ie., the earliest or oldest claims first, followed by the claims received more recently.
110 F.Supp.3d at 1154. “Sage’s claims are the most recently filed CSC CDA claims in the Navajo Area IHS.” 110 F.Supp.3d at 1154.
“[A]ll of the tribal contractors in the Navajo Area IHS with ISDEAA contracts have filed CSC CDA claims against the IHS, and IHS’s determination on the time required to respond to Sage’s claims was informed by the Area’s experience with resolving , those other claims.” 110 F.Supp.3d at 1154. “In general, it has taken approximately two years to resolve such claims with the Navajo Area ISDEAA contractors.” 110 F.Supp.3d at 1154. Dayish “informed Sage that he would issue a final decision by October 21, 2015, based on his good faith estimate of the amount of time that would reasonably be needed [to] evaluate and assess the claims, based on this prior experience in the Navajo Area and throughout IHS.” 110 F.Supp.3d at 1154. “In addition, Sage’s claims for ,$62 million are larger than the majority of CSC CDA claims filed against the IHS.” 110 F.Supp.3d at 1154.
The evaluation and assessment of Sage’s CSC claims likely will take longer than for other CSC claims because of the separate (but related) issue of the significant offset and counterclaims that IHS will likely need to assert against Sage due to [the IHS’s contention that Sage Hospital] significantly] misuse[d] and mismanage[d] IHS funds, as disclosed by the forensic audit conducted by an outside contractor, Moss Adams.
PROCEDURAL BACKGROUND
Sage Hospital filed this case in federal court on October 23, 2014. See Complaint, filed October 23, 2014 (Doc.,1). Sage. Hospital filed its First Amended Complaint on November 24, 2014. See Amended Complaint, filed. November 24, 2014 (Doc. 5)(“FAC”). Sage Hospital makes four claims in its FAC: (i) a request for immediate injunctive relief, because the IHS’ declination of Sage Hospital’s August 22, 2013 three-year contract proposal for FY 2014 (“FY 2014 Proposal”) violates 25 U.S.C. § 450f(b)(2), and 25 C.F.R. §§ 900.32 and 900.33, FAC ¶¶ 52-57, at 22-25; (ii) a request for immediate injunc-tive relief, because the IHS’ declination of Sage Hospital’s September 19, 2014, proposal for FY 2015 (“FY 2015 Proposal”)— to the extent that it is substantially the same as the FY 2014 Proposal — violates 25 U.S.C. § 450f(b)(2), and 25 C.F.R. §§ 900.32 and 900.33, FAC ¶ 58, at 25-27; (iii) a claim that Sage Hospital is entitled to an accounting of funds that IHS provided from October 1, 2013, to the date of the ■judgment, pursuant to 25 U.S.C. § 450m-1(a), FAC ¶¶ 63-66, at 27; and (iv) a claim that the IHS violated the CDA, 41 U.S.C. §§ 7101-7109, see FAC ¶¶ 67-72, at 27-29.
On January 27, 2015, Sage Hospital moved for summary judgment on its fourth claim for relief — that the IHS violated the CDA — seeking the Court’s judgment that Dayish’s letter, dated October 23, 2014, did not comply with his obligation to provide a reasonable date certain for issuing his decision. See Plaintiffs Motion for Summary Judgment on its Fourth Claim for Relief, with Memorandum of Supporting Points and Authorities, filed January 26, 2015 (Doc. 27). The Court granted summary judgment in favor of Sage Hospital, holding that Sage Hospital’s “claim for Contract Support Costs for Fiscal Years 2009-13 (the ‘Claim’) is deemed denied under the Contracts Disputes Act, 41 U.S.C. § [§ ] 7101-09.” Sage, 110 F.Supp.3d at 1196. On June 30, 2015, Sage Hospital filed its Second Amended Complaint, adding a fifth claim for relief, which alleges that the deemed denial of Sage Hospital’s CSC Claim for Fiscal Years 2009-2013 was unlawful and requests the full amount of its Claim, expressly including its claim for underpaid CSC in the amount of $36,258,493.00. See Second Amended Complaint, filed June 30, 2015 (Doc. 79)(“SAC”).
Shortly thereafter, on July 16, 2015, Dayish sent a letter to Sage Hospital concerning “Contract Disputes Act Claims for Excess Contract Support Costs Funding” for' “Fiscal Years 2009-2013.” July 16, 2015 Dayish Letter at 1. In the letter, Dayish “assert[s] claims against [Sage Hospital] for indirect contract support costs (CSC) funding that [Sage Hospital] did not expend on CSC-eligible activities for fiscal years (FY or FYs) 2009-2013,” demanded repayment from Sage Hospital in the amount of $4,218,357.00 for indirect CSC payments, and promised a subsequent decision devoted to the other category of CSC — direct CSC. July 16, 2015 Dayish Letter at 1. The July 16, 2015 Dayish Letter contains two sections of particular importance to the MTD: “Findings of Fact;” and “Decision.” See July 16, 2015 Dayish Letter at 5. In the Findings of Fact section, Dayish sets forth: (i) the amount of indirect CSC and other indirect cost amounts that IHS paid from 2009 to 2013; and (ii) the amounts eligible for indirect funding, as the ISDEAA authorizes, because they were reasonable, necessary, and non-duplicative costs incurred for activities taken to operate a federal program. See July 16, 2015 Dayish Letter at 5. Moreover, according to the letter, “[t]he Foundation and the IHS agreed that only the actual costs incurred by the Foundation, and not the estimated amounts, are eligible for CSC funding.” July 16, 2015 Dayish Letter at 6. After examining the actual costs that Sage Hospital identified and the actual costs determined ineligible for indirect CSC funding, Dayish concludes:
Comparing this determination to the IHS indirect funding and other indirect cost payments (Table 2), the Foundation owes $4,218,357 for indirect CSC funding paid by the IHS that the Foundation did not expend on activities eligible for CSC funding. Please refund $4,218,357 by check or money order made payable to the Department of Health and Human Services.
July 16,2015 Dayish Letter at 6.
One day later, IHS filed its Counterclaim, asserting that the July 16, 2015 Dayish Letter constituted a “Contracting Officer’s Final Decision” on Sage Hospital’s Indirect CSC funding, complaining that Sage Hospital “has not paid any of the amounts sought by the contracting officer’s final decision,” and requesting judgment in the amount of $4,218,357.00 plus interest for the allegedly overpaid indirect CSC. Answer to Second Amended Complaint and Counterclaim, filed July 17, 2015 (Doc. 84)(“Counterclaim”).
1. The Motion to Dismiss.
On August 7, 2015, Sage Hospital moved to dismiss the Counterclaim. See MTD at 1. Sage Hospital first explains that “IHS has the burden to establish this Court’s subject matter jurisdiction over its CDA counterclaim.” MTD at 4 (citing Blinderman Const. Co. v. United States, 39 Fed.Cl. 529, 557 (1997)). Sage Hospital contends that, for the Court to have subject-matter jurisdiction over the Counterclaim, there must be a valid decision by a CO and that Dayish’s decision — the basis for the Counterclaim — is not a valid decision, for two reasons. First, Sage Hospital asserts that Dayish did not have the authority to issue a final decision concerning “indirect contract support costs (CSC) funding that [Sage Hospital] did not expend on CSC-eligible activities for fiscal years (FY or FYs) 2009-2013.” Sage Hospital explains:
When Sage filed its Second Amended Complaint, the CSC claim was in litigation. The filing of suit on a claim under the CDA divests the CO of authority to issue a final decision on that claim. Sharman Co., Inc. v. United States, 2 F.3d 1564, 1571-72 (Fed.Cir.1993), overruled on other grounds, Reflectone, Inc. v. Dalton, 60. F.3d 1572 (Fed.Cir.1995)(en banc); Durable Metal Prods., Inc. v. United States, 21 Cl.Ct. 41, 46 (1990)(CO divested of authority to make decision after contractor’s claim was deemed denied and contractor filed suit). A decision reached' by a CO after the related claim is in litigation is a “nullity” and provides “no jurisdictional basis for the government’s counterclaim.” Sharman, 2 F.3d at 1572; Advanced Materials, Inc. v. United States, 34 Fed.Cl. 480, 482 n. 2 (1995)(CO’s purported decision after suit filed was “void”); Johnson Controls World Services, Inc. v. United States, 43 Fed.Cl. 506, 513-14 (1999)(sustaining jurisdictional challenge to Government’s CDA counterclaim).
MTD at 5.
Second, Sage Hospital asserts that the Court lacks subject-matter jurisdiction over the Counterclaim, because “an invalid CO decision may not serve as the basis for a CDA action,” and that, even if Dayish had authority to make his “final decision,” his letter “does not qualify as a valid CDA claim because it provides several purport^ ed bases for liability, yet specifies only one aggregate damages figure.” MTD at 5 (citing Volmar Const., Inc. v. United States, 32 Fed.Cl. 746, 758 (1995)). According to Sage Hospital, in. Volmar Const., Inc. v. United States, the United States Court of Federal Claims held that a CO’s letter did not qualify as a valid CO claim, because it provided several bases for liability yet specified only one aggregated damages figure. Sage Hospital maintains- that the Court of Claims in Volmar Const., Inc. v. United States recognized that the CDA requires that COs “set forth in any claim the specific- basis of liability and the amount corresponding to each basis.” MTD at 6 (quoting Volmar Const., Inc. v. United States, 32 Fed.Cl. at 752).
In light of theáe two challenges to the Court’s subject-matter jurisdiction over the Counterclaim, Sage Hospital concludes:
Mr, Dayish had no authority to issue his “final decision,” it is a- nullity, and it provides no jurisdictional basis for IHS’ counterclaim. Even if Dayish was authorized to make a decision, the one he made was: not a.valid one. In either event, this Court lacks subject matter jurisdiction over IHS’ counterclaim, and it should be dismissed.
MTD at 6.:
2. The Response.
The Defendants responded to the MTD on September 8, 2015. See Response to Plaintiffs Motion to Dismiss Counterclaim, filed Septembér 8, 2015 (Doc. 98)(“Re-sponse”). The Defendants contend that the Court has subject-matter jurisdiction over its Counterclaim and that the Court should deny the MTD. See Response at 1-2. In the Defendants’ view, “[t]he Court should not endorse a result that allows a contractor to litigate its claim in' federal court while precluding the government from asserting its related counterclaim.” Response at 2. The Defendants first address Sage Hospital’s ’contention that the CO in this case lacked the authority to issue a final decision. See Response at 2-5. The Defendants concede that, “once a CDA claim is in litigation, the contracting officer'is divested of his or her previous authority over the claim,” Response at 3 (citing Sharman Co., Inc. v. United States, 2 F.3d at 1571-72). The Defendants contend, however, that
their counterclaim is distinct from Sage’s claim because, although it seeks the return of monies paid as contract support costs, the claim is asserted by a different party, and basis of the entitlement is different. Accordingly, because these are different claims, authority over the defendants’ claims never shifted to the Department of Justice when Sage filed its complaint, and the Court should deny Sage’s motion.
Response at 4.
Further, the Defendants argue that, even if Sage Hospital is correct that the defendants’ counterclaim is actually the same claim that Sage is already pursuing in this litigation (albeit one pursued by the opponent of the party that first came to court), then Sage Hospital already satisfied the jurisdictional prerequisite by submitting the claim to Dayish and obtaining a ruling from this Court that the claim is deemed-denied. See Response at 4. In support of this second argument; the Defendants cite to Sharman Co., Inc. v. United States, 2 F.3d at 1564, where, according to the Defendants, the United States Court of Appeals for the Federal Circuit, recognized the “mirror-image rule.” Response at 4 n.3. The Defendants write:
The Court of Federal Claims has recognized this as the “mirror-image” rule. In Sharman, the Federal Circuit suggested that the assertion of a “mirror image” claim (one half of opposing claims held by the contracting parties) by one party satisfies the' CDA exhaustion requirement for both., See Sharman, 2 F.2d at 1566, 1570. The .Court .of Federal Claims has applied this to establish jurisdiction . over opposing claims arising out of the same facts and circumstances that seek entitlement (either in whole or in part) to the same dollars. Kit-San-Azusa, J.V. v. United States, 32 Fed.Cl. 647 (1995)(applying the mirror-image rule); but see Blinderman Constr. Co. v. United States, 39 Fed.Cl. 529, 588 (1997)(declining to apply the mirror-image rule upon the basis that there was no evidence that the contracting officer had considered the counterclaim).
Response at 4-5 n.3. The Defendants argue that, therefore, “[t]he Court should not dismiss the defendants’ counterclaim and proceed upon only half of the dispute; rather, it should allow the counterclaim to proceed and resolve the parties’ entire dispute.” Response at 4-5.
The Defendants next attack Sage Hospital’s assertion that Dayish’s letter “was not the proper form of a ‘final decision’ that will satisfy the CDA’s jurisdictional requirement.” Response at 5. The Defendants argue that Sage Hospital relies exclusively on Volmar Const., Inc. v. United States, 32 Fed.Cl. at 746, and that it “misapprehends the law.” Response at 5. Moreover, the Defendants cite to Placeway Construction Corp. v. United States, 920 F.2d 903 (Fed.Cir.1990), for the proposition that “the Federal Circuit held that form [sic] rules applicable to a contractor’s claim against the government do not necessarily apply to a government claim against the contractor.” Response at 5-6. According to the Defendants, “the focus is upon whether the surrounding facts and circumstances would inform the reasonably prudent contractor that the government is asserting a right to the funds that are the subject of the counterclaim.” Response at 6. The Defendants maintain:
As the case relied upon by Sage notes, the CDA does not specify in any detail the requirements for a government claim against a contractor; it provides only that the claim must be the subject of a decision by the contracting officer. Volmar Const., Inc. v. United States, 32 Fed.Cl. 746, 752 (1995)(citing 41 U.S.C. § 605(a)). Volmar drew from this circumstance the conclusion that the requirements for a government claim should be the “reciprocal” twin of the requirements of a claim submitted by a contractor against the government. Id. This conclusion, however, is not a necessary one, and it is inconsistent with the canon of statutory construction stipulating that,' if Congress does not address the specific requirements for one thing', but does provide specific instructions for a related but distinguishable thing, the difference is intentional. Bates v. United States, 522 U.S. 23, 29-30, 118 S.Ct. 285, 139 L.Ed.2d 215 (1997)(“Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” (alteration omitted)). This principle is also consistent with the Placeway rule, which is that the government1 need not comply with certain requirements of the Act applicable to' contractors as long as a contracting officer issues an' “effective” final decision. Placeway, ‘920 F.2d at 905-07 (excusing the failure of the CO’s letter to include “the label ‘final decision’ ” and “the notice of appeal rights”).
Response at 6.
The Defendants further- argue that, the Volmar Const., Inc. v. United States decision is neither, mandatory authority for the Court, nor persuasive on its own terms. See Response at 7. According to the Defendants, even if the requirements for the United States’ claims and contractor claims should be “reciprocal,” Volmar Const., Inc. v. United States incorrectly concludes that the CDA requires the United States to set forth the specific bases of liability in any claim. See Response at 7. The Defendants contend that, under.Federal Circuit precedent, “there is no requirement in the Disputes Act that a ‘claim’ must be submitted in any particular form or use any particular wording,” and that “[a]ll that is required is that the contractor submit in writing to the contracting officer a clear and unequivocal statement that gives the contracting officer adequate notice of the basis and amount of the claim.” Response at 7 (quoting Contract Cleaning Maint., Inc. v. United States, 811 F.2d 586, 592 (Fed.Cir.1987)). The Defendants maintain that, under the Federal Circuit’s interpretation of the requirement, “a contractor. satisfies the CDA by giving ‘clear notice of a purported breach,’ even if the contractor ends up proposing ‘slightly, different legal theories’ throughout the course of the dispute.” Response at 7 (quoting Scott Timber Co. v. United States, 333 F.3d 1358, 1366 (Fed.Cir.2003)). The Defendants argue that, combining these general principles with the statutory requirement that judicial review of a CDA claim is conducted de novo, see 41 U.S.C. § 7104(b), leads to the conclusion that the “real inquiry concerning the administrative exhaustion of a government claim is whether the, contractor — who is the only contracting party that can come to court in the first instance — should be aware of the basis of the government’s claim.” Response at 7-8 (footnote omitted). The Defendants ask the Court to deny the MTD.
3. Sage Hospital’s Reply.
Sage Hospital replied to the Defendants’ response on September 16, 2015. See Plaintiffs Reply to Defendants’ Response to Plaintiffs Motion to Dismiss Counterclaim, filed September 16, 2015 (Doc. 102)(“Reply”). Sage Hospital begins by emphasizing the two bases for its MTD. First, according to Sage Hospital, after the Court deemed denied Sage Hospital’s CSC claim for FY 2009 through FY 2013 and Sage Hospital amended its Complaint to challenge that denial, “under the Contract Disputes Act ... Dayish as Contracting Officer (‘CO’) was divested of any authority to act on.that claim.” Reply at 1-2. Sage Hospital thus argues that Dayish’s purported “final decision” dated July 16, 2015, addressing that same claim “was a nullity and Defendants’ Counterclaim (filed July 17, 2015) based on that ‘final decision’ has no jurisdictional basis.” Reply at 2 (citing Durable Metal Prods., Inc. v. United States, 21 Cl.Ct. at 46). Second, Sage Hospital contends that “Dayish’s purported decision violated CDA’s specificity requirement, as construed by the Court of Federal Claims, because it stated four separate grounds for his decision but did not inform Sage Hospital of which of those bases applied to any part of the disallowed costs.” Reply at 2 (citing Volmar Constr., Inc. v. United States, 32 Fed.Cl. at 752, 758).
Sage Hospital next attacks the Defendants’ argument that the “ ‘claim’ purportedly decided by Dayish is a different claim, because it is made by IHS and not Sage,” contending that “the cases interpreting the CDA make no such distinction.” Reply at 2-3 (citing Durable Metal Prods., Inc. v. United States, 21 Cl.Ct. at 46; Sharman Co., Inc. v. United States, 2 F.3d at 1564). Sage Hospital then counters several of the Defendants’ arguments from the Response’s footnotes. First, Sage Hospital addresses the Defendants’ argument that the United States Attorney by letter conferred authority for Dayish to issue a CO’s final decision under the CDA. Sage Hospital states:
Not even the Attorney General, much less a United States Attorney, has the power to so delegate. Although the Attorney General might delegate “authority” to an agency official to make computations in furtherance of the Government’s position in litigation, no United States Attorney can lawfully confer on an agency official , the jurisdiction to issue a final CO decision when that authority is not explicitly and clearly conferred by a federal statute, see 28 U.S.C. § 516, and when this Court has effectively divested that same official of such authority by deeming the underlying claim denied by him.
Reply at 3-4 (citing Cincinnati Electronics Corp. v. United States, 32 Fed.Cl. 496, 600 (1994)). Sage Hospital argues that the Defendants’ argument is effectively that, even after a federal court has deemed denied a CDA claim because a CO has unreasonably delayed in making a decision on that claim, “a United States Attorney may ignore the court ruling and give that same CO an indefinite period of additional time to make the decision that he had already unlawfully delayed.” Reply at 4-6.
Sage Hospital next attacks the Defendants’ argument that the “mirror image rule” supports the Defendants in this case. Reply at 5. According to Sage Hospital, the mirror image rule “supports Sage here because Dayish did not issue a written decision on Sage’s CSC claim before it was deemed denied and therefore could not have considered the Government’s counterclaim then.” Reply at 5 (citing Blinder-man Constr. Co., Inc. v. United States, 39 Fed.Cl. at 568-60). Sage Hospital also argues that, even if the Court dismisses the Counterclaim, any resulting inefficiency in terms of this matter being resolved in future litigation “will have been caused by Defendants’ attempt to circumvent this Court’s ruling granting Sage Hospital summary judgment on its Fourth Claim for Relief....” Reply at 6. Further, Sage Hospital counters the Defendants’ mention of the United States’ general right of set-off by asserting that “this right is circumscribed in the specific context of Self-Determination contracting.” Reply at 6 (citing 25 U.S.C. § 450j-l(f)). Finally, Sage Hospital argues that the “Defendants do not dispute Sage’s reading of Volmar ” and contends that Dayish’s purported July 16, 2015, “final decision” does not provide the reader with sufficient information regarding how much of the alleged overpay-ments are attributable to any of the “four distinct bases for his belated claim that IHS overpaid Sage” and “which of Sage’s expenditures were deemed improper by Dayish.” Reply at 6-7. Sage Hospital therefore asks the Court to dismiss the Counterclaim for lack of jurisdiction. See Reply at 7.
4. The Hearing.
The Court held a hearing on November 17, 2015. See Transcript of Hearing (Taken November 17, 2015), filed December 3, 2015 (Doc. 133)(“Tr.”). ■ The parties largely stuck to their briefing. Sage Hospital first discussed the general factual background of the case, leading up to the Defendants’ filing of the Counterclaim, and then reasserted that the Court has no jurisdiction over the Counterclaim, “because there was no valid contracting officer’s decision to begin with.” Tr. at 3:21-7:23 (Frye). Sage Hospital argued that, once it filed its Amended Complaint with its CSC claim in federal court, the CO was divested of any authority to issue a decision on that claim. See Tr. at 7:25-8:9 (Frye). The Court pressed Sage Hospital whether the United States can at some point come in and assert that Sage Hospital owes it money. See Tr. at 8:10-21 (Court). Sage Hospital responded that the United States may be able to contest Sage Hospital’s proof, but only as a defense to Sage Hospital’s proof that the government owes it money. See Tr. at 8:22-10:2 (Frye). Sage Hospital also pointed to the Indian Self-Determination and Education Assistance Act, 25 U.S.C. § 450j — 1(f), which Sage Hospital contends limits the United States’ ability to make any affirmative claim to money from Sage. See Tr. at 8:24-25:22 (Frye). Sage Hospital explained:
And I’ll quote it. “Any right, action, or other remedy, other than those relating to a criminal offense, relating to any disallowance of cost shall be barred unless the Secretary has given notice of any such disallowance within 365 days of receiving any required annual single agency audit report.”
And we have been submitting our single agency audit reports annually, and we’ve never gotten such a notice from the Secretary that any cost would be disallowed. And I think any other remedy or any right of action that IHS might assert would be barred by this section.
See Tr. at 8:24-25:22 (Frye). Sage Hospital conceded at least twice during the hearing, however, that its argument under 25 U.S.C. § 450j-l(f) is not related to either of its jurisdictional arguments — that Dayish lacked the authority to issue a final decision on the Defendants’ claim for indirect contract support costs funding or that the July 16, 2015 Dayish Letter was not sufficiently detailed under the CDA because it provided several bases for liability, yet specified only one damages figure— that the MTD sets forth. See Tr. at 8:24-25:22 (Frye); id. at 21:7-19 (Frye).
The Court next asked Sage Hospital about its first jurisdictional argument. See Tr. at 10:7-11 (Court). Sage Hospital asserted that the CO had no authority to do anything and “a Counterclaim based on that is without a jurisdictional basis under Sharman and other cases.” Tr. at 10:19-28 (Frye). Sage Hospital clarified that, once the Court deemed denied its CSC claim and Sage Hospital brought filed an Amended Complaint with a fifth cause of action, alleging that the denial was wrongful, the CO lacked all authority to do anything on that contracting support claim. See Tr. at 11:21-12:1 (Frye). The Court pressed Sage Hospital on why this issue is a jurisdictional one, and Sage Hospital responded that “the jurisdictional issue comes right out of the Contract Disputes Act, and the cases that construe it.” Tr. at 12:2-12 (Court, Frye). The Court asked, “What it is out of the act that you think makes this a jurisdictional issue?” Tr. at 12:17-19 (Court). Sage Hospital responded: “I would just refer the Court to the cases that we cite that deal specifically with Government counterclaims under the Contract Disputes Act.” Tr. at 12:20-23 (Frye).
The Court inquired further, asking: “How did they get there, though?” Tr. at 13:3-10 (Court). Sage Hospital responded by citing to Sharman and 28 U.S.C. §§ 516-520, for the proposition that, “once a claim is in litigation, the Department of Justice gains exclusive authority to act in the pending litigation.” Tr. at 13:11-21 (Frye). Sage Hospital argued that, in Sharman, the Federal Circuit said “that exclusive authority divests a contracting officer of his authority to issue all final decision [sic] on the claim” once a complaint is filed. See Tr. at 13:310 (Frye). The Court expressed a different possible interpretation:
You may be right.... But I could also see that statute as saying, All right, Congress is saying between these executive branch folks, once it’s in litigation, the Department of Justice controls, they’re the ones that control. Not some contracting officer out in Arizona or in the Four corners area. DOJ is in control of that.
But it’s not really of concern to me, it doesn’t affect my jurisdiction, and it also doesn’t really give me much power to start telling the other — you know, one of the parties, Well its DOJ, it’s the contracting officer, or something like that.
Tr. at 14:5-18 (Court). Sage Hospital responded by stating that its position is based on a “fairly consistent line of cases, .starting with Sharman, but going through several others we cited.” Tr. at 14:21-15:2 (Frye). The Court then asked Sage Hospital whether Sharman and the other Federal Circuit cases control the Court. See Tr. at 15:3-9 (Court).
How — Fve got a patent case right now where I’m having to sort out how much the federal circuit controls me and how much the Tenth Circuit controls met. How much does Sharman and that federal circuit case control? Do I have to give it just persuasive deference, or is it something I have to give 'Controlling deference to on this issue?
Tr. at 15:3-9 (Court). Sage Hospital responded: “On this issue, I think persuasive deference. I don’t think it controls this Court at all. Same thing, of course, with the Court of Federal Claims.” Tr. at 15:10-13 (Frye).
The Court then focused on Sage Hospital’s second jurisdictional challenge to the Counterclaim. See Tr. at 15:19-23 (Court, Frye). Sage Hospital re-asserted its argument that under the CDA, as the Court of Federal Claims interprets that Congressional act, “if the contracting officer has authority, and if the contracting officer makes a decision that’s based on a number of possible reasons for disqualifying or disallowing costs, it can’t simply lump all of that together and say, [yjou owe us $39 million.” Tr. at 16:1-6 (Frye). Sage Hospital contended that, in this case, the CO’s July 16, 2015, letter stated four separate grounds for the decision, explaining that the costs of thirty-nine plus million dollars that Sage incurred, were “unreasonable, unnecessary, not included in operation of federal program, and/or duplicative.” Tr. at 16:7-20 (Court, Frye). The Court then asked Sage Hospital: “So probably in the trial we’re going to see this information one way or another. But you’re saying it can’t be in the form of a counterclaim or set-off. It has to just be in the form of evidence they’re using to defend against your claim.” Tr. at 18:5-11 (Court). Sage Hospital agreed. See Tr. at 18:12 (Frye). Returning to Sage Hospital’s second jurisdictional argument, the Court asked Sage Hospital what the threshold for “adequate” information is under Federal Circuit or Federal Claims law.' Tr. at 19:47 (Court). Sage Hospital stated that, at a bare minimum, if there are four bases for a CO’s decision and a large amount of money is at stake, the CO needs to break down which of the costs belong in which bucket. See Tr. at 19:8-13 (Frye). Sage Hospital then cited to Volmar, contending that the Court of Claims there held that, if you are going to base your decision on four different categories of improperly incurred costs, you need to allocate the sum among four different categories, and that allocation was not done here. See Tr, at 19:14-20:2 (Frye). The Court then asked whether, as a federal court, the standard is not simply based on Iqbal and Twombly. See Tr. at 20:3-17 (Court). Sage Hospital stated in response: .
Í think as a matter of pleading standards, that’s correct. But. again it doesn’t get to jurisdiction. And these cases are talking about, federal court jurisdiction, which, if the Court adopts that reasoning, would essentially preempt any kind of argument over whether they complied with the proper pleading standards.
Tr. at 20:18-24 (Frye).. The Court then asked Sage Hospital about its assertion that there is a third ground “under the statute where you said that they couldn’t bring a claim at all now.” Tr. at 21:3-6 (Court). Sage Hospital conceded “[tjhat’s not really part of our jurisdictional motion” and that its motion is purely jurisdictional. Tr. at 21:7-19 (Frye). The Court asked whether it was "correct that it need not deal with whether the ISDEAA, 25 U.S.C. § 450j-l(f), limits the -United States’ ability to make any affirmative claim to money from Sage, in this motion and that Sage Hospital would raise the issue at another time if it-does not win-the jurisdictional issue, and Sage Hospital agreed. See Tr. at 21:3-23 (Court, Frye).
The-Defendants then took up argument on the MTD. See Tr. at 22:4-9 (Court, Grohman, Wolak). The Defendants began by discussing generally how the United States, and how a contractor can bring claims under the CDA. See Tr. at 22:10— 23:19 (Wolak). The Defendants argued that 41 U.S.C. § 7104(b) says very clearly that, for a United States claim, there has to be a written CO decision. See Tr. at 23:2-19 (Wolak). Further, the Defendants agreed that, before' the United States can sue under the CDA, it needs to have a CO decision saying that its opponent owes it money. See Tr. at 23:20-25 (Court, Wo-lak). The Court then asked the Defendants about the CO’s July 16, 2015 letter, attached to the Counterclaim. See Tr. at 26:9-23 (Court, Wolak). The Defendants explained that Sage Hospital’s claim seeks basically three things: indirect contract support costs, which are about thirty-six million dollars; direct contract support costs, which are about forty-six million dollars; and expectancy damages, which are roughly thirty million dollars. See Tr. at 28:17-22 (Wolak). The Defendants maintained that “this claim by the contracting officer on behalf of the Government, as it states, only addresses the indirect contract support costs. Conceptually, it’s a third of what Sage is here asking for relief about. Monetarily, it’s about half.” Tr. at 28:22-29:2 (Wolak). The Defendants argued:
And so the swing that you were talking about before is going to take it from their claim for 36 million on them end to our negative 4.2 million on our end. So it is really about a $40 million swing. So that’s the scope of the swing. But it does leave untouched the expectancy damages issue and then the direct contract support cost issue. That doesn’t cover that.
Another reason why this is the Government’s own independent claim. And that gets to the notion under the federal circuit law and some decisions from the Court of Federal Claims that under a given contract, each party can have a multiplicity of individual claims, each of which are independently judicially reviewable; don’t have to come with everything.
And so in this case, in determining whose claims is what, I would — the Sharman case and the Case case, which is cited, I believe, in both of our briefs, Case Company — they were making some coveralls, I believe — lays out some of the tests for determining how is one claim under the CDA distinct from another claim? And you, basically, look to the underlying facts, relief sought, legal theories, and critically, what the Government has asserted, the identity of parties.
Tr. at 29:2-30:2 (Wolak). The Defendants next provided an overview of the case law from the Federal Circuit and the Court of Federal Claims:
Let’s take Sharman; that is the fountainhead. And it really does sort of require examination and understanding of the sort of claims process that went before. Sharman & Company had been fired, terminated for default from its contract. And the Government had made a claim for, I believe, liquidated damages.... And the complaint that was filed in the Claims Court, at the time — now the Court of Claims — said We’re challenging the determination for default, which any contractor is allowed to do; we’re challenging the assessment of liquidated damages, and we also want quantum meruit; basically, we want all of our progress payments that weren’t paid to us. And the case proceeded in a manner. There was a motion to dismiss on some of those as not being ju-risdictionally ripe, because the contractor hadn’t properly — they went straight to court; they didn’t file a claim on anything. And in the course of that process — and always while the issue of the quantum meruit was in litigation, there was — the Government then finally issued its own affirmative claim for keeping the progress payments. They wanted entitlement to the progress payments. But that was done under the veil of this litigation. And what Shar-man said was, once a contractor comes into Court, consistent with 28 USC [§§ ] 516 through 520, which vests all of the litigating authority in the Department of Justice under the CDA, that contracting officer can’t make decisions on those claims. The idea is, as a practical matter, that a contracting officer won’t settle out a claim while it’s in litigation, things of that nature. So it just draws a pretty quick line right there.
But what Sharman then goes further and explains is that for purposes of not only the Government’s claim, but also the contractor’s claim with respect to those unliquidated progress payments, nothing had ever been administratively exhausted. The contractor never put in a claim for it, and never got a contracting officer’s final decision. And by the time the Government asserted its own claim for it, it was already in litigation. And that’s where the nullity language comes from. So the devil in the deep blue sea right there was that nobody had discussed this administratively before, the statute, which was a waiver of sovereign immunity, and the Government was really quite clear. And so it just wasn’t ripe for judicial review. .
It doesn’t hold, as I believe Sage is suggesting, that if one party — usually the contractor — gets to court before the Government asserts its own claim on something that’s even arguably the same — and again, in this case, it’s our position our claim is not the claim as their claim — that somehow that plaintiff, that contractor can prevent the Government from asserting a claim and litigating it in one whole fashion instead of through piecemeal litigation later. That’s not what Sharman says at all.
In fact, that’s not what any of these cases say. If you read them, there are always claims on one side or the other. The Volmar case that the plaintiff relies on, it’s a trial level case, Court of Federal Claims. And I’ll right now backup what plaintiffs counsel was saying in terms of authority of the federal circuit, and definitely the Court of Federal Claims, there is no mandatory authority over this Court on these issues. Anything here will be appealed to the Tenth Circuit. It’s just that the federal circuit and the Court of Federal Claims is where the vast majority of this litigation occurs. So that’s where it’s developed.
The Volmar case — the other issue that the Volmar case talked about was whether or not the Government could issue two contracting officers’ final decisions on what is essentially on the merits, on the substance, the same claim, but there is a difference in what kind of interest was available, and there were some issues about whether a contracting officer in one section or another one could invoke these different interest provision. And the judge in that court, the earlier claim for the lesser amount of . interest was fine, but then, when a second contracting officer tried to issue a decision to get the larger amount of interest, that happened while the claim was in litigation,. and that judge — and the Government respectfully disagrees with the outcome, but it is an outcome that’s out there — said, essentially, these two contracting officers should have coordinated better. The second one issued her decision while it was in litigation; therefore, under Sharman, it’s a nullity, and I’m not going to allow the Government to proceed on this — ask this argument on. the claim, that it would give them access to a larger amount of interest. I believe the number was roughly $23 million. That case predates some later federal circuit decisions, most notably Scott Timber, which we’ve cited in'our brief; which makes it very clear, we think, the federal circuit says, Once a claim is in litigation, the' de novo standard applying, you know, quantums change according to the evidence, legal theories can change, as long as they don’t depart materially from the underlying facts and how they would work. I think Volmar might have a different outcome, had Scott been decided at that time.
Tr. at 32:11-36:17 (Wolak). The Defendants then clarified that they believe Volmar was wrongly decided and that they disagree with Sage Hospital on its interpretation of the other cases. See Tr. at 36:24-37:4 (Wolak).
The Defendants then moved to the issue how to define claims, asserting that “there are separate claims that go into or that can arise under a contract.” Tr. at 39:5-7 (Wolak). The Defendants focused extensively on the Federal Circuit’s decision in Case, Inc. v. United States, 88 F.3d at 1004, explaining:
To give you another example — I don’t know that this one necessarily came up in Sage’s briefs — but the Case case, which is cited extensively in our brief. In that particular case, the issue was whether or not — there were opposing claims; some by the contractor, some by the Government.... The contractor had — yes, the contractor had been fired for supplying fireproof coveralls. And it had some raw material disputes with its suppliers; it couldn’t make its delivery schedule; eventually it was terminated for default. It challenged that termination for default. It 'also sought the return of liquidated progress payments.
But in the course of the challenge to its termination for default, while that first case was ongoing, it submitted another claim to the contracting officer saying, By the way, Government, you’re responsible for the delays I incurred on this project.... And that normally entitles the contractor to schedule adjustment of extension of time; sometimes money associated with it. But that type of claim, the claim for delay, it’s the Government’s responsibility, is also usually a defense to a termination for default, especially one that’s the way the Government terminates a contractor for failure to timely perform. They say, Well, no, I wasn’t on time, but.I would have been if you hadn’t interfered with me, essentially.
And the issue in that case, in the Case case was then Case brought a second litigation to deal with its own delay claim. The Government argued, You should dismiss that second case, because it is subsumed within its challenge to the termination for default,' as request for liquidated progress payments, all of those issues that were in the first litigation.
And the federal circuit finally got to it and said, No, these are distinct claims, even both on Case’s side, because a delay claim that’s the Government’s responsibility, even though it’s related factually to the circumstances under which it was terminated, it’s still a different claim. You’re asking for money. There is a different operative contract provision. There might be other things. So, for purposes of jurisdiction, we’re not going to dismiss the case. And then in the last paragraph the case says, But in the first litigation all the facts were resolved against you, contractor, so you lose because of res judicata.
Tr. at 37:5-39:4 (Wolak). The Defendants concluded that “[t]he contractor can have separate claims, can litigate them at different times. Definitely, the opposing parties can have separate claims and can litigate them at different times.” Tr. at 39:7-10 (Wolak). The Court then returned to Sage Hospital’s first jurisdictional argument, that Dayish’s July 16, 2015 decision, on which the Counterclaim is based, was a nullity. See Tr. at- 40:22-41:2 (Court). The Defendants argued that “the Government disagrees with the fundamental assertion ... that this decision by Contracting Officer Dayish is a late response to their claim. -That is not our position. That is not what this document says. This is an affirmative Government claim.” Tr. at' 41:16-22 (Walak). The Court asked how it could lose jurisdiction over the Counterclaim. Tr. at 42:2-5 (Court). The Defendants responded, “it can’t, of course.” Tr. at 42:6-7 (Walak). > The Defendants argued:
Just if you réview the cases, you’re not really — you’re not going to find any cases where opposing parties do a race to the courthouse and then preclude one from asserting claims. You will find cases where the same party comes in and then files a second claim saying, Oh, it’s the second one. And the court says, No, it’s actually the same one, and it’s already in litigation, so we’ll deal with it here.
Tr. at 42:13-21 (Walak). The Defendants asserted that, in terms of distinguishing the claims, the United States’ position is that its claim is a different claim from Sage Hospital’s, and that there are factual, legal, and party identity bases to conclude these are separate claims. See Tr. at' 45:58 (Walak). In sum, the Defendants contended that the CO was never divested of authority-under 28 U.S.C. §§ 516-520. See Tr. at 45:8-11 (Walak).
The Court then moved to Sage Hospital’s second jurisdictional challenge: that Dayish did not supply enough information when he made his decision. See Tr. at 46:23-25 (Court). The Defendants asserted that the CDA has differing requirements for a contractor’s claim and for the United States’ claim, and “it is .slightly more burdensome upon the contractor,” Tr. at 47:7-10 (Walak). The Defendants argued that when a contractor is asking for money from a CO, it .needs to identify everything so that the administrative process can be effective. See Tr. at 47:10-16 (Walak). By contrast, according to the Defendants,- when a CO is notifying a contractor of a United States’ claim, the only requirement is that the CO issue a decision in writing. See Tr. at 47:17-21 (Walak). The Defendants asserted that, beyond that requirement, Federal Circuit law has been clear that there are no requirements.
Because the question is: How is the Government — the ultimate point of the contracting officer’s decision on either a contractor claim or a Government claim, so that somebody with a warrant, who is authorized to expend the Government’s funds with a warrant, who is authorized to expend the Government’s funds has considered how the public is going to be used. So that person needs information from the contractor when they’re making demands of the Government. But when the Government is making that decision on its own, it just needs to notify the contractor that, [y]ou owe us this money.... He doesn’t have a duty to the public, basically, to delineate all of the very line items of what is there.
Tr. at 49:21-50:10 (Walak). Moreover, the Defendants agreed with the Court that delineating all of the line items of what is owed should be left for discovery and development of issues in the case. See Tr. at 50:8-15 (Court, Walak). Finally, the Defendants emphasized that, if the Court grants the jurisdictional motion, it will likely present this same evidence as a defense and later sue Sage Hospital in other forums. See Tr. at 50:16-53:8 (Court, Wa-lak). Sage Hospital then gave a rebuttal; reiterating its arguments and briefly attacking a statement that the Defendants made about Sage Hospital’s method of computing its damages under the ISDEA, but conceded that the dispute does not affect the motion addressing the Court’s jurisdiction. See Tr. at 53:1152:18 (Court, Frye). The Court concluded by stating:
I’m not impressed with the second argument about not enough information. But I am trying to get a handle on this first issue about whether this counterclaim ought to be basically brought here or brought later on down the road in a different cause of action. So I’ll give that some thought.
Tr. at 62:19-63:8 (Court). The Court then asked Sage Hospital, if it were to deny this motion, would it go ahead and bring a second motion. See Tr. at 63:10-16 (Court, Frye).
THE COURT: All right. And he also— we dipped our toe into this issue that is not jurisdictional, but might be what you’re contending is a bar to bringing a claim; it has to b