Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 1 of 37. No C (Judge Charles F. Lettow) IN THE UNITED STATES COURT OF FEDERAL CLAIMS

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1 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 1 of 37 No C (Judge Charles F. Lettow) IN THE UNITED STATES COURT OF FEDERAL CLAIMS COUNCIL FOR TRIBAL EMPLOYMENT RIGHTS, Plaintiff, v. THE UNITED STATES, Defendant. DEFENDANT S RESPONSE TO PLAINTIFF S MOTION FOR PARTIAL SUMMARY JUDGMENT STUART F. DELERY Acting Assistant Attorney General OF COUNSEL CHARLES WALLACE Attorney-Advisor WILLIAM B. BLAKE Attorney-Advisor Trial Attorney Branch of Acquisitions and Intellectual Property Solicitor s Office Division of Washington, General Law DC U.S. Department of the Interior May 17, 2013 JEANNE E. DAVIDSON Director DONALD E. KINNER Assistant Director JOSEPH E. ASHMAN Commercial Litigation Branch Civil Division Department of Justice P.O. Box 480 Ben Franklin Station Washington, DC (202) (telephone) (202) (facsimile) Attorneys for Defendant

2 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 2 of 37 TABLE OF CONTENTS PAGES DEFENDANT S RESPONSE TO PLAINTIFF S MOTION FOR PARTIAL SUMMARY JUDGMENT...1 STATEMENT OF THE ISSUES...1 STATEMENT OF FACTS...2 I. Statutory And Legal Framework...2 A. Indian Self-Determination And Education Assistance Act Of B. Indian Employment, Training And Related Services Demonstration Act of II. The Agreements Between IEED And Spirit Lake Tribe...5 A. Spirit Lake Tribe s 477 Program...5 B. The American Recovery And Reinvestment Act And Spirit Lake Tribe s 638 Contract Amendment 2 To SLT s ARRA 638-Contract Amendment 6 To SLT s ARRA 638 Contract...8 a. Interagency Agreement Between IEED And FHWA...8 b. Amendment CTER s Identification As A Subgrantee...10 III. Lynn Forcia s Authority...11 SUMMARY OF ARGUMENT...13 ARGUMENT...14 I. Standard Of Review...14 ii

3 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 3 of 37 II. III. Amendments 2 And 6 Are Not Valid Because The Parties Did Not Obtain Tribal Resolutions From Each Tribe To Which The Vocational Job Training Would Be Afforded Prior To The Letting Or Making Of The Agreements; CTER Cannot Be A Third Party Beneficiary To Invalid Agreements...15 The Undisputed Facts Show That CTER Is Not A Third Party Beneficiary To Any Agreement To Which The Government Is A Party...18 A. A Government Official Cannot Accomplish Indirectly Through The Guise Of A Third Party Beneficiary That Which The Official Cannot Accomplish Directly Ms. Forcia Could Not Confer Contract Rights Directly Upon CTER; She Therefore Could Not Confer Contract Rights Indirectly Indirectly Upon CTER Whether Ms. Forcia Was On Notice Of The Alleged Beneficiary Rights Being Conferred To CTER In Its Agreements With SLT Is Irrelevant Because She Lacked Authority To Confer Those Rights To CTER...23 B. CTER s Recitation Of The Facts And Circumstances Leading To The Issuance Of Amendments 2 And 6 to SLT s ARRA 638 Contract Ends With The Parties Choosing An Arrangement In Which SLT Was The Prime-Grantee And CTER Was The Sub-grantee Under The Two Grant Programs; There Was No Subsequent Alteration To That Arrangement...20 CONCLUSION...24 iii

4 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 4 of 37 TABLE OF AUTHORITIES CASES PAGE(S) Ables v. United States, 2 Cl. Ct. 494 (1983)...16, 18 AEY, Inc. v. United States, 99 Fed. Cl. 300 (2011)...14 Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)...14 Carter v. United States, 98 Fed. Cl. 632 (2011)...21 Demontiney v. United States ex rel Dept. of Interior, Bureau of Indian Affairs, 255 F.3d 801 (9th Cir. 2001)...2 Flexfab, L.L.C. v. United States, 424 F.3d 1254 (Fed. Cir. 2005)...21 Glass v. United States, 258 F.3d 1349 (Fed. Cir. 2001)...21 Guardsman Elevator Co., Inc. v. United States, 50 Fed. Cl. 577 (2001)...20 H.F. Allen Orchards v. United States, 4 Cl. Ct. 601 (1984), affirmed by, 749 F.2d 1571 (Fed. Cir. 1984)...18, 19, 20 Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986)...14 Neslon Constr. Co. v. United States, 79 Fed. Cl. 81 (2007)...23 Northwest Bank Arizona, N.A. v. United States, 37 Fed. Cl. 605 (1997)...22 O.Ahlborg & Sons, Inc. v. United States, 74 Fed. Cl. 178 (2006)...20 iv

5 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 5 of 37 OPM v. Richmond, 496 U.S. 414 (1990)...18 Schuerman v. United States, 30 Fed. Cl. 420 Pl.'s MSJ at Thompson v. Cherokee Nation of Oklahoma, 334 F.3d 1075 (Fed. Cir. 2003)...4 U.S. Ecology, Inc. v. United States, 245 F.3d 1352 (Fed. Cir. 2001)...21 FEDERAL STATUTES 25 U.S.C U.S.C. 450a(a) U.S.C. 450a(1) U.S.C. 450b...6, 7, 9 25 U.S.C. 450b(l)... passim 25 U.S.C.A. 450b(j) U.S.C.A. 450b(m) U.S.C. 450f(a)(1) U.S.C U.S.C U.S.C U.S.C. 3410(a) U.S.C. 4501(a) U.S.C. 4501(a)(1) U.S.C. 4501(c) U.S.C. 450l(f)(1)...1, 15, 16 v

6 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 6 of U.S.C. 423e (1976)...19 RULES Rule 56(c) (1) of the United States Court of Federal Claims...14 Rule 56(e) (2) of the United States Court of Federal Claims...14 STATE STATUTES Indian Employment, Training and Related Services Demonstration Act of 1992, Pub. L , 12, 20 Indian Self-Determination And Education Assistance Act of 1975 (ISDA), Pub. L , 5 Pub. L , 123 Stat S. Rep. No at , 15 vi

7 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 7 of 37 IN THE UNITED STATES COURT OF FEDERAL CLAIMS COUNCIL FOR TRIBAL ) EMPLOYMENT RIGHTS, ) ) Plaintiff, ) ) v. ) No C ) (Judge Charles F. Lettow) THE UNITED STATES, ) ) Defendant. ) DEFENDANT S RESPONSE TO PLAINTIFF S MOTION FOR PARTIAL SUMMARY JUDGMENT Pursuant to Rule 7.2(b) of the Rules of the United States Court of Federal Claims (RCFC), defendant, the United States, respectfully submits this response in opposition to plaintiff, Council for Tribal Employment Rights (CTER), motion for partial summary judgment. As we explain below, CTER s motion fails to establish that plaintiff is a third party beneficiary to any agreement to which the Government is a party in this case. Accordingly, the Court should deny CTER s motion. STATEMENT OF THE ISSUES (1) Whether CTER was a third party beneficiary to an invalid agreement, when the agreements at issue were not validly issued because the parties did not obtain the required tribal resolutions from the tribes to be benefitted by the job training programs prior to the letting or making of the agreements. (2) Whether the agency had the authority under the governing statutory scheme to contract directly with CTER, and if not may the Government accomplish indirectly through the guise of a third party beneficiary that which the Government cannot accomplish directly.

8 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 8 of 37 (3) Whether the Government expressed its intent not to afford contractual rights upon CTER because CTER was a sub-grantee. STATEMENT OF FACTS I. Statutory And Legal Framework A. Indian Self-Determination And Education Assistance Act Of 1975 On January 4, 1975, Congress passed the Indian Self-Determination And Education Assistance Act of 1975 (ISDA), Pub. L , codified at 25 U.S.C. 450, et seq. The passage of the ISDA was based in-part upon Congress finding that [t]he prolonged Federal domination of Indian service programs has served to retard rather than enhance the progress of Indian people and their communities by depriving Indians of the full opportunity to develop leadership skills crucial to the realization of self-government U.S.C. 450(a)(1). Through the ISDA, Congress recognized the obligation of the United States to respond to the strong expression of the Indian people for self-determination by assuring maximum Indian participation in the direction of... Federal services to Indian communities so as to render such services more responsive to the needs and desires of those communities. 25 U.S.C. 450a(a); see also Demontiney v. United States ex rel Dept. of Interior, Bureau of Indian Affairs, 255 F.3d 801, 806 (9th Cir. 2001) ( Congress enacted [the ISDA] to encourage Indian self-determination and tribal control over administration of federal programs for the benefit of Indians.... ). Through the ISDA, Congress conferred upon the Secretary of the Interior the authority to enter into a self-determination contract or contracts with a tribal organization to plan, conduct, and administer programs or portions thereof for the benefit of Indians. 25 U.S.C. 450f(a)(1). The ISDA defines the term tribal organization to mean: 2

9 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 9 of 37 [T]he recognized governing body of any Indian tribe; any legally established organization of Indians which is controlled, sanctioned, or chartered by such governing body or which is democratically elected by the adult members of the Indian community to be served by such organization and which includes the maximum participation of Indians in all phases of its activities. Provided, That in any case where a contract is let or grant made to an organization to perform services benefiting more than one Indian tribe, the approval of each such Indian tribe shall be a prerequisite to the letting or making of such contract or grant. 25 U.S.C. 450b(l). The manner in which a tribe expresses its approval to allow an organization to perform services on its behalf is through a tribal resolution. 25 U.S.C. 450l(f)(1). In passing amendments to the ISDA in 1988, the Senate Committee on Indian Affairs explained that the purpose of requiring an organization to obtain a tribal resolution from the tribes to be benefitted under a self-determination agreement prior to the letting or making of the agreement was to maintain tribal control over the contracting process: The Committee does wish to clarify its understanding, however, of the intent of the requirement to obtain tribal resolutions. Clearly, the law envisions maintaining tribal government control of the contracting process. These amendments strengthen the requirement for a tribal resolution in Section 102(a) as amended. Sections 102 and 103 in the original Act contain provisions for community support for the contract which the Secretary has correctly interpreted to mean a tribal resolution. S. Rep. No at * The ISDA sets forth a model agreement, commonly referred to as a self-determination contract or 638-contract, to be followed by the Secretary of the Interior in the formation of a self-determination agreement with a tribal organization. 25 U.S.C. 450l(c). The law mandates that [e]ach self-determination contract entered into under this subchapter shall... contain, or incorporate by reference, the provisions of the model agreement U.S.C. 450l(a); Thompson v. Cherokee Nation of Oklahoma, 334 F.3d 1075, 1082 (Fed. Cir. 2003) ( The ISDA 3

10 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 10 of 37 requires that every self-determination contract incorporate the terms of a model agreement, which is provided by 25 U.S.C. 450l(c). ). B. Indian Employment, Training And Related Services Demonstration Act of 1992 On October 23, 1992, Congress enacted the Indian Employment, Training and Related Services Demonstration Act of 1992, Pub. L , codified at 25 U.S.C. 3401, et seq. Congress stated purpose in passing Pub. L was to demonstrate how Indian tribal governments can integrate the employment, training and related services they provide in order to improve the effectiveness of those services, reduce joblessness in Indian communities and serve tribally-determined goals consistent with the policy of self-determination. 25 U.S.C The law mandates that the Secretary of the Interior: [S]hall, upon receipt of a plan acceptable to the Secretary... submitted by an Indian tribal government, authorize the tribal government to coordinate, in accordance with such plan, its federally funded employment, training, and related services programs in a manner that integrates the program services involved into a single, coordinated, comprehensive program and reduces administrative costs by consolidating administrative functions. 25 U.S.C The programs authorized under the law are commonly referred to as 477 programs. Attach. (Decl. of Terry Parks 3). The types of training and related services that may be included within a tribe s 477 program include: [A]ny program under which an Indian tribe is eligible for receipt of funds under a statutory or administrative formula for the purposes of assisting Indian youth and adults to succeed in the workforce, encouraging self-sufficiency, familiarizing Indian Youth and adults with the world of work, facilitating the creation of job opportunities and any services related to these activities. 25 U.S.C The law states that the lead agency for a demonstration program under this chapter shall be the Bureau of Indian Affairs, Department of the Interior. 25 U.S.C. 3410(a). 4

11 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 11 of 37 Through a 477 program, Federally-recognized Tribes and Alaska Native entities combine Federal grants funds related to employment and training activities into a single plan with a single budget and a single reporting system. Attach. (Decl. of Terry Parks 3). The Department of the Interior (DOI), Office of Indian Energy and Economic Development (IEED), serves as the lead agency for the 477 demonstration project. Id. No separate funding or contracting authority is associated with a 477 program. Id. The funds distributed through a tribe s 477 program are those which a tribe would otherwise receive under the authority of the individual programs it chooses to consolidate into its 477 program. Id. Having no separate funding authority available, all 477 program funds are distributed through Self-Determination Act agreements. Id. II. The Agreements Between IEED And Spirit Lake Tribe A. Spirit Lake Tribe s 477 Program In December 2008, IEED issued Contract No. GTK00T10908 to Spirit Lake Tribe (SLT), SA 1, 1 a Federally recognized Indian tribe whose reservation is located in east-central North Dakota. 2 The purpose of the contract was to implement SLT s 477 program. SA 3. The contract incorporated the 638 model agreement format. SA 5. The agreement stated that SLT would perform the program in accordance with all applicable laws and regulations and the terms, provisions, conditions, program standards of this contract. SA 20. B. The American Recovery And Reinvestment Act And Spirit Lake Tribe s 638 Contract On February 17, 2009, Congress enacted the American Recovery and Reinvestment Act of 2009 (ARRA). Pub. L , 123 Stat In Title VII of the ARRA, Congress allocated $40 million to BIA for the Operation of Indian Programs related to workforce training 1 SA refers to the supplemental appendix that the Government is filing with its response. 2 See 5

12 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 12 of 37 programs and the housing improvement program. Id. at 168; Compl. 10. In Title XII of the ARRA, Congress allocated $550 million to the Federal Highway Administration for investments in transportation at Indian reservations and Federal lands. Id. at 207; Compl. 27. On June 1, 2009, the Secretary of the Interior, acting through IEED, issued ISDA 638- contract No. GTK00T109AR to SLT. The stated purpose of the 638-contract was to provide Indian Employment, Training, and Related Services in accordance with the terms, provisions and conditions of this contract and funding agreement; and provisions of the [ARRA] (hereinafter referred to as the ARRA 638-contract). A The agreement stated that the programs provided by SLT under the ARRA 638-contract would be administered as part of SLT s 477 program. A 44. SLT s ARRA 638-contract contained the statutorily prescribed model agreement for 638- contracts, A 42, and identifies the Recipient and Contractor to be [SLT], a federallyrecognized Indian Tribe or Tribal Organization, as defined at 25 U.S.C. 450b. A 75. The contract s statement of work (SOW) states that IEED shall transfer to the Contractor all such funds and other resources made available for the benefit of the Tribe through this contract in the most expeditious manner authorized by law, and shall provide technical support and assistance at the request of the Contractor and as provided herein. A 59. The SOW further states that SLT shall exercise full discretion over the funds made available subject only to the provisions of this contract, Federal law and provisions. Id. Tracking the ISDA s definition of Tribal Organization, the ARRA 638-contract stated that in any case where a contract is let or grant made to an organization to perform services 3 A refers to the appendix to the Government s Motion to Dismiss filed on December 11,

13 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 13 of 37 benefitting more than one Indian tribe, the approval of each such Indian tribe shall be a prerequisite to the letting or making of such contract or grant. A 57. The ARRA 638-contract defined Tribal Resolution to mean the formal manner in which the tribal organization expresses its legislative will in accordance with its organic documents. In the absence of such organic document, a written expression adopted pursuant to tribal practices will be acceptable. Id. The agreement contemplated that SLT would enter into subcontracts to carry out the agreement s purpose, A 59, and that the parties could issue future amendments to the agreements. A Amendment 2 To SLT s ARRA 638-Contract On August 5, 2009, IEED issued an amendment to SLT s ARRA 638-contract (hereinafter Amendment 2). A 83. The purpose of Amendment 2 was to allocate ARRA grant funds to support (1) a Solar Heat Panel Training and Installation Project; and (2) the Native Construction Careers Initiative Project (NCCI). A 81-82, 94. Amendment 2 identified the parties to the agreement as being IEED and SLT, A 83, and defined Contractor, Recipient, Tribe (ARRA related) to mean [SLT], a federally-recognized Indian Tribe or Tribal Organization, as defined at 25 U.S.C. 450b. A 88. Amendment 2 s SOW stated that SLT shall exercise full discretion over the funds made available subject only to the provision of this contract, Federal law, and provisions. A 93. Amendment 2 anticipated that SLT would enter into subcontracts to execute the two grant programs, A 89-90, and defined First-tier Subcontract to mean a subcontract awarded directly by a Federal Government prime contractor whose contract is funded by ARRA. A 88. The amendment contained the same definitions for Tribal Organization and Tribal Resolution as appearing in the ARRA 638-contract. A 90. 7

14 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 14 of 37 The NCCI training program agreement, A , referenced in Amendment 2 s SOW, A 94, involved CTER providing hands-on commercial construction training to tribes nationwide. A 114. The NCCI SOW stated that [SLT] proposes to enter into a contract with CTER to conduct [NCCI training]. Id. The NCCI training program agreement identified eight Indian tribes and one Alaska Native Village to which CTER would afford the NCCI training. A The amount of ARRA grant funds to be afforded the NCCI training program was $1,019,000. A 125. Amendment 2 was signed by representatives of IEED and SLT. A 83. The performance period for Amendment 2 was from June 1, 2009, through September 30, Id. The NCCI training program agreement was signed by representatives of IEED, SLT and CTER. A 124. The NCCI training program agreement s performance period also expired on September 30, A 122. Neither SLT, IEED nor CTER has obtained tribal resolutions from all nine tribes and Alaska Native Village to whom CTER was to provide NCCI training under Amendment Amendment 6 To SLT s ARRA 638 Contract a. Interagency Agreement Between IEED And FHWA On September 16, 2009, IEED and the Federal Highway Administration (FHWA) entered into an interagency agreement, A 126, to allow IEED to secure a portion of FHWA s ARRA grant funds for On-the-Job training and Supportive Services (OJT/SS) to increase job opportunities for federally recognized tribes and disadvantaged American Indians in the Federalaid highway construction industry. A 130. Through the agreement, FHWA provided IEED with $1.5 million to support the training program. A 126. Of that amount, the agreement stated that $500,000 would be allocated for CTER s NCCI training that will be conducting on-site apprenticeship training programs to at least 6 tribes at the cost of $50,000 per tribe this is 6 x 8

15 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 15 of 37 $50,000 = $300,000 + $200,000 for related expenses stated above. A 143. In the Budget and Financial Requirements section, the agreement stated that the activities cited in this proposal strengthen and expand the goals and objectives of the 477 program and [IEED]. The activities address the weakness of the 477 program which are a lack of economic development and jobs on Indian reservations. A 142. b. Amendment 6 On June 11, 2010, IEED issued a sixth amendment to SLT s ARRA 638-contract (hereinafter Amendment 6). A The purpose of Amendment 6 was to allocate ARRA grant funds through SLT s ARRA 638-contract to support Department of Transportation- Federal Highway Administration s approved training projects.... A 161. Amendment 6 stated that the parties to the agreement were IEED and SLT, A 150, and defined Contractor, Recipient, Tribe (ARRA related) to mean [SLT], a federally-recognized Indian Tribe or Tribal Organization, as defined at 25 U.S.C. 450b. A 155. Amendment 6 s SOW stated that SLT shall exercise full discretion over the funds made available subject only to the provision of this contract, Federal law, and provisions. A 160. Amendment 6 anticipated that SLT would enter into subcontracts to execute the purpose of the amendement. A The amendment contained the same definitions for Tribal Organization and Tribal Resolution as appearing in the ARRA 638-contract. A 157. The FHWA training program agreement, referenced in Amendment 6 s SOW, A 161, stated that SLT proposes to enter into a contract with CTER and the National Indian Ironworkers [(NII)] Training Program to administer the [FHWA/IEED] Training Initiative. A 188. The FHWA training program agreement stated that the purpose of this [agreement] is a modification to the current ARRA contract between [SLT], [CTER] and adding the [NII] training 9

16 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 16 of 37 center that is an ARRA project under an interagency agreement that is between [FHWA] and The Department of the Interior/Indian Affairs. A 187. The FHWA training program agreement explained that CTER would provide training to develop Indian preference certification programs for road construction activity. Id. CTER was to provide this training to six as yet to be identified Indian tribes. A 188; Compl. 31. The amount of ARRA grant funds to be afforded for the FHWA training program performed by CTER stated in Amendment 6 was $500,000. A 190. Amendment 6 was signed by representatives of IEED and SLT. A 150. The performance period for Amendment 6 was from June 1, 2009, through September 30, Id. The FHWA training program agreement was signed by representatives of IEED, A , SLT, A 192, and CTER. A 193. The FHWA training program agreement would terminate on September 30, A 191. Neither SLT, IEED nor CTER has obtained tribal resolutions from all six tribes to whom CTER was to provide NCCI training under Amendment CTER s Identification As A Subgrantee After the issuance of Amendments 2 and 6, SLT began receiving performance program reports from CTER. SA 36. In those reports, CTER identified itself as the sub-recipient of grant funds from IEED through SLT: [t]his report is submitted by [CTER] Sub-recipient to [SLT] Prime Recipient as required under [ARRA].... Id. In a 2011 letter to the Assistant Secretary-Indian Affairs, CTER acknowledged its status as the sub-grantee under Amendments 2 and 6 to SLT s ARRA 638 contract: IEED granted the funds to [SLT] which in turn contracted with CTER to deliver the NCCI program according to a scope of work developed by IEED. A

17 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 17 of 37 III. Lynn Forcia s Authority Amendments 2 and 6, as well as the associated agreements between SLT and CTER are signed by the IEED s Chief of the Division of Workforce Development, Lynn Forcia. Attach. (Decl. of Terry Parks 4); A 83, 124, 150, In her position, Ms. Forcia was responsible for managing tribes 477 programs. Attach. (Decl. of Terry Parks 4). At the time she signed the agreements at issue here, Ms. Forcia was a Level I Awarding Official. A 1-2. The BIA s Indian Self-Determination Awarding Official Certification System (AOCS) Handbook in effect at the time Ms. Forcia signed the agreements, A 3-38, defined Awarding Official to mean an agency representative with the authority to issue self-determination contracts and grants under the ISDA: Awarding Official means Contracting Officer and shall be any person in the self-determination career field, who has been certified under the Awarding Official Certification System as an Awarding Official, other than an Approving Official, who has the delegated authority to award, modify, and administer all selfdetermination contracts as defined in the 25 U.S.C.A. Section 450b(j), including where applicable construction contracts as defined in 25 U.S.C.A. Section 450b(m), as amended, and shall make decisions and issue findings and determinations with respect thereto. The awarding official shall also have the authority to award, modify and administer self-determination grants. A 8. The AOCS Handbook further defines Level I Awarding Official to mean: [t]he Awarding Official is certified. Awarding Official authority covers all self-determination nonconstruction contracts, and grants. A 11. In addition to the specific limitations BIA placed upon the scope of authority of a Level I Awarding Official in the AOCS Handbook to issuing conforming self-determination contracts or grants, BIA placed further restrictions upon Ms. Forcia s scope of authority to issue selfdetermination agreements. Attach. (Decl. of Terry Parks 4, 5). Specifically, in the December 11

18 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 18 of 37 14, 2006, letter to IEED accompanying Ms. Forcia s warrant certificate, BIA stated that we have conditionally approved Ms. Forcia as a Level I Awarding Official to award only Pub. L grants. A 1. Accordingly, Ms. Forcia s awarding certificate states that she is delegated the authority to award only P.L grants, and is hereby certified as an Awarding Official Level I. A 2. It is BIA s policy that awarding officials are only delegated authority commensurate with their duties, and typically this is accomplished through certain established authority levels. Attach. (Decl. of Terry Parks 4). Ms. Forcia did not require general contracting authority or general self-determination agreement authority because the 477 demonstration project did not encompass these areas. Id. However, the BIA policy predated the 477 program and the limits needed to be placed upon Ms. Forcia s awarding certificate could not be accomplished with the traditionally established authority levels. Id. Therefore, her authority was specifically limited to grant agreements under the 477 demonstration project whereby the funding would be distributed through a Self Determination Act agreement. Id. The limitation placed upon Ms. Forcia s authority meant that she could only enter into agreements with a Tribal Government, and agreements that are specifically related to a tribe s 477 program. As Terry Parks, Division Chief for Self Determination, Office of Indian Services for BIA explains: 12

19 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 19 of 37 In practice, limiting Ms. Forcia s authority meant that she could only award funds within the 477 demonstration project. For instance, law enforcement services are proper to include in a typical Indian Self-Determination Act agreement, but are not encompassed by the 477 demonstration project and, therefore, Ms. Forcia had no delegated authority to award funds for a law enforcement program. Another important limitation is that Ms. Forcia could only make awards to Tribes to carry out an approved 477 plan. While the Indian Self-Determination Act contemplates awards to Tribes and tribal organizations, Public Law only authorizes agreements with Tribal Governments with a preapproved 477 plan. Attach. (Decl. of Terry Parks 5). 4 SUMMARY OF ARGUMENT The undisputed facts of this case show that CTER is not a third party beneficiary to any agreement to which the Government is a party. First, Amendments 2 And 6 to SLT s ARRA 638 contract were not validly issued because neither SLT, IEED obtained the required tribal resolutions from each tribe to which CTER was to afford vocational job training prior to the letting or making of the agreements, as required by the ISDA. It is undisputed that this requirement was never met. Accordingly, CTER cannot be a third party beneficiary to agreements which are not valid. Second, the law is clear that a Government official cannot accomplish indirectly through the guise of a third party beneficiary that which the official has no authority to accomplish 4 In our motion to dismiss that is currently pending, we assert that Ms. Forcia lacked the requisite authority to bind the United States in contract of any kind. Def. s MTD at This position was based upon Ms. Forcia s awarding certificate and accompanying documents, A 1-2, BIA s AOCS, A 3-38, and consultations with agency program officials. Subsequent to the filing of our reply in support of our motion to dismiss, on May 15, 2013, counsel for the Government was advised by agency officials that the agency is currently reviewing its position on whether, under the ISDA, there is a substantive distinction between a self-determination contract and a self-determination grant. The Government is therefore withdrawing its argument that Ms. Forica lacked the authority to bind the United States in contract of any kind. This change of position affects section II.B.1.b (pp 23-24) of our motion to dismiss and sections I (pp. 3-4) and II.B (pp. 7-8) of our reply in support of our motion to dismiss. 13

20 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 20 of 37 directly. CTER acknowledges in its motion that under the statutory and programmatic scheme governing the grant programs at issue IEED could not contract directly with CTER. Indeed, a principal point CTER relies upon is that IEED had to contract with SLT rather than plaintiff in order to put the job training programs into place. Ms. Forcia only possessed the authority to enter into agreements with a Tribal Government that are related to the tribe s 477 program. CTER is not a Tribal Government and cannot carry out a 477 program. As such, Ms. Forcia could not contract directly with CTER. The law is clear that Government officials cannot sidestep limitations on their ability to contract directly with a party by conferring binding contractual rights upon that party as a third party beneficiary. Finally, CTER s recitation of the facts and circumstances leading to the issuance of the agreements at issue end with the parties choosing an arrangement in which SLT was the primegrantee and CTER was the sub-grantee under the two grant programs. Thus, following plaintiff s facts from start to finish leads to IEED expressly denying privity of contract with CTER. There was no subsequent alteration to that relationship of the parties. It would therefore be illogical to conclude that at the same time IEED denied conferring contractual rights directly upon CTER, the agency intended to confer contractual rights indirectly upon CTER. For these reasons, which will be discussed more fully below, the Court should deny plaintiff s motion. ARGUMENT I. Standard Of Review A grant of summary judgment is warranted when the pleadings, affidavits, and evidentiary materials filed in a case reveal that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. AEY, Inc. v. United States, 99 14

21 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 21 of 37 Fed. Cl. 300, 303 (2011) (quoting RCFC 56(c)(1)). A material fact is one that might affect the outcome of the suit under the governing law. Id. at (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A genuine dispute is one that may reasonably be resolved in favor of either party. Id. at 304 (quoting Liberty Lobby, 477 U.S. at 250). The party moving for summary judgment bears the burden of demonstrating the absence of any genuine issue of material fact. Id. Consequently, the inferences to be drawn from the underlying facts... must be viewed in the light most favorable to the party opposing the motion. Id. (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, (1986)). If the moving party establishes that there is no genuine issue of material fact, the non-moving party may not rely merely on allegations or denials in its own pleading; rather, its response must... set out specific facts showing a genuine issue for trial. Id. (quoting RCFC 56(e)(2)). Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial, and summary judgment is appropriate. Id. (quoting Matsushita, 475 U.S. at 587). II. Amendments 2 And 6 Are Not Valid Because The Parties Did Not Obtain Tribal Resolutions From Each Tribe To Which The Vocational Job Training Would Be Afforded Prior To The Letting Or Making Of The Agreements; CTER Cannot Be A Third Party Beneficiary To Invalid Agreements The Court should conclude that Amendments 2 and 6 were not validly issued by IEED and, therefore, CTER could not be a third party beneficiary to an invalid agreement. As set forth above, pursuant to 25 U.S.C. 450b(l) and 450l(f)(1), for IEED to enter into a self-determination agreement with an organization that will provide services to benefit more than one tribe, a prerequisite to the letting or making of such an agreement is for the organization to obtain tribal resolutions from each tribe authorizing that tribe s participation in the program or service. The purpose of requiring a tribal resolution as a prerequisite to the 15

22 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 22 of 37 formation of a self-determination agreement is to maintain tribal control over the contracting process. S. Rep. No at * The 1988 amendments to ISDA strengthened the tribal resolution requirement. Id. As CTER correctly pointed out in its response to our motion to dismiss, Pl. s MTD Resp. at 35, this statutory prerequisite applies to Amendments 2 and 6 to SLT s self-determination agreement because SLT is an organization, and the amendments would provide services benefiting more than one Indian tribe i.e., nine tribes under Amendment 2, A 114, and six tribes under Amendment 6. A 179. It is not disputed that the requisite tribal resolutions were not obtained from each affected tribe for either Amendment 2 or Amendment 6 prior to the letting or making of those amendments. Accordingly, Amendments 2 and 6 were not validly issued, and therefore the amendments could not be enforceable by either SLT or IEED. It is a fundamental legal principal that [a] promise creates no duty to a beneficiary unless a contract is formed between the promisor and the promisee; and if a contract is voidable or unenforceable at the time of its formation the right of any beneficiary is subject to the infirmity. Restatement (Second) Contracts 309 (1981). Amendments 2 and 6 were invalid at the time of their issuance because neither SLT nor IEED obtained the necessary tribal resolutions from each tribe prior to the letting or making of those amendments. See 25 U.S.C. 450b(l), 450l(f)(1). Because Amendments 2 and 6 are not enforceable by IEED or SLT, CTER cannot be a third party beneficiary to those agreements. See Ables v. United States, 2 Cl. Ct. 494, 501 (1983) ( This lack of capacity to bind the Air Force on the part of the Air Force signatories to the 16

23 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 23 of 37 agreement precludes plaintiff from having any enforceable third party beneficiary right against the Air Force under said agreement. ). 5 In its sur-reply to our motion to dismiss, CTER does not dispute our reading of 25 U.S.C. 450b(l). Pl. s Sur-Reply at Rather, CTER s principal argument is that the Government should be estopped from applying the tribal resolution statutory requirement to Amendments 2 and 6 because DOI has allegedly not consistently applied this requirement in the past to all selfdetermination agreements and, indeed, may have applied policies that were inconsistent with this statutory requirement. Id. at 6 ( [I]t appears that Defendant failed to consult with its own employees and the policies of its client before making this argument. ). CTER asserts that the Court should reject this new claim in order to estop Defendant from engaging in this selective and discriminatory application of the Government s contract responsibilities. Id. at 3. CTER s argument is without merit. Whether DOI s policies may have allegedly waived the tribal resolution requirement in 25 U.S.C. 450b(l) is irrelevant. It is a fundamental principal of Government procurement law that the Government may not be estopped from denying the unauthorized acts of its employees. 5 In its sur-reply to our motion to dismiss, CTER asserts that the Court must join SLT to this action as a necessary party pursuant to Rule 19 because the Government has taken the position in this case that Amendments 2 and 6 to SLT s ARRA 638 contract were not validly issued. Pl. s Sur-Reply at 2-4. CTER is wrong. Under Rule 19, a party is necessary to the action where that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person s absence may:... as a practical matter impair or impede the person s ability to protect the interest.... Here, we are aware of no ongoing legal or administrative action involving SLT and the amendments at issue in this case. Nor are we aware of any potential legal dispute that may arise between SLT and IEED concerning the agreements at issue. The effective periods of the ARRA 638 contract and amendments have expired. See A 41, 83, A 150. Most importantly, should some dispute arise in the future between IEED and SLT relating to Amendments 2 and 6, we are aware of no reason why any ruling on the tribal resolution issue in this case would bar SLT from bringing an action in this Court based upon Amendments 2 or 6, or preclude SLT from having a full and fair opportunity to address the tribal resolutions issue in any future legal action in this Court. Accordingly, joinder of SLT is in no way necessary to protect SLT s interests. 17

24 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 24 of 37 OPM v. Richmond, 496 U.S. 414, (1990). The statutory language of 25 U.S.C. 450b(l) is clear: obtaining a tribal resolution shall be a prerequisite to the letting or making of a contract with an organization that would provide services to more than one Indian tribe. Whether DOI s policies were inconsistent with this statutory mandate is not relevant here. Finally, CTER argues that the tribal resolution requirement should not apply to Amendment 6 because the SOW for that agreement did not identify any tribes by names. Pl. s Sur-Reply at 6. This argument is non-sensical. The point of the agreement was for an organization to provide services to more than one Indian tribe. Once CTER identified the tribe and, presumably, obtained a tribal resolution from that tribe, the parties were not going to execute a new agreement at that point. The law is clear that the parties were required to have the requisite tribal resolutions in place before the letting or making of Amendment 6. CTER s argument is simply a circular attempt to avoid the clear impact of the statute. III. The Undisputed Facts Show That CTER Is Not A Third Party Beneficiary To Any Agreement To Which The Government Is A Party CTER s theory for why it is a third-party beneficiary is essentially that, had the statutory framework governing the grant programs at issue been different, IEED would have entered into the agreements directly with CTER, and SLT would not have been involved in either agreement in any way. See, e.g. Pl. s Proposed Findings of Uncontroverted Facts (PFUF) 11 ( IEED repeatedly acknowledged that it was partnering with CTER on the NCCI project. ); Pl. s MSJ at 15 ( IEED contracted with the Tribe only because IEED s ability to enter into sole-source contracts with tribes provided an expedited contracting mechanism to get the committed funding to CTER. ). CTER spends the majority of its brief detailing the facts and circumstances that led to the issuance of Amendments 2 and 6, and argues that the intent of the resulting agreements 18

25 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 25 of 37 was to benefit CTER directly because CTER was the essential party to providing the vocational job training programs to the tribes. Yet, CTER s recitation of the background facts misses two key points: (1) the reason IEED utilized SLT s 477 program and ARRA 638 contract vehicle to implement the job training programs is because IEED could not contract directly with CTER a condition that CTER acknowledges in its motion; and (2) the final relationship that the parties agreed upon placed CTER in the position of a sub-grantee to SLT and not the prime-grantee to IEED i.e., IEED expressly chose not to enter into privity with CTER. Both of these points are dispositive to CTER s third party beneficiary claim. First, as explained above, because IEED could not contract directly with CTER, IEED could not confer indirectly enforceable beneficiary rights upon CTER. Second, because CTER was the sub-grantee under the grant programs, IEED specifically chose a relationship with CTER in which the Government was not in privity of contract with plaintiff, and IEED therefore did not confer enforceable contract rights directly upon CTER through those agreements. This initial relationship was not altered in any way after the issuance of the agreements at issue. As such, a conclusion that, although IEED chose not to confer direct enforceable contract rights upon CTER, IEED at the same time intended to confer enforceable beneficiary rights indirectly upon CTER is simply non-sensical. 19

26 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 26 of 37 A. A Government Official Cannot Accomplish Indirectly Through The Guise Of A Third Party Beneficiary That Which The Official Cannot Accomplish Directly 1. Ms. Forcia Could Not Confer Contract Rights Directly Upon CTER; She Therefore Could Not Confer Contract Rights Indirectly Upon CTER In its motion, CTER s principal theory for why it is a third party beneficiary is based upon its contention that IEED wished to enter into the agreements directly with CTER, but that IEED was required to issue the grant funds directly to SLT due to the statutory scheme governing the grant programs. In making this argument, however, CTER acknowledges that IEED did not possess the authority to enter into a contract directly with CTER: The ISDA permits IEED to enter into sole-source contracts or contracts amendments with tribes. When desiring to get funds to a non-tribal entity with which IEED did not have sole-source contracting authority, IEED had a long history of amending an existing contract with a tribe to transfer funds to it, with directions in the contract that the tribe in turn subcontract with the entity, effectively using the tribe as a pass-through, though often assigning the tribe responsibility for serving as contract administrator of the subcontract. Pl. s PFUF 41 (emphasis added). While we do not agree with CTER s sweeping and unsupported characterization of IEED s practices, the operative point is that plaintiff acknowledges that IEED could not enter into a sole-source contract directly with CTER under the governing statutory scheme i.e., the ISDA. As explained above, Ms. Forcia s authority was limited to issuing self-determination grants to a Tribal Government that are related to the tribe s 477 program. A 1-2; Attach. (Decl. of Terry Parks 5). As Terry Parks, BIA s Deputy Directory for Tribal Services explains, Ms. Forcia could not issue any agreements with entities other than a Tribal Government and agreements that are related to the tribe s 477 program: 20

27 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 27 of 37 In practice, limiting Ms. Forcia s authority meant that she could only award funds within the 477 demonstration project. For instance, law enforcement services are proper to include in a typical Indian Self-Determination Act agreement, but are not encompassed by the 477 demonstration project and, therefore, Ms. Forcia had no delegated authority to award funds for a law enforcement program. Another important limitation is that Ms. Forcia could only make awards to Tribes to carry out an approved 477 plan. While the Indian Self-Determination Act contemplates awards to Tribes and tribal organizations, Public Law only authorizes agreements with Tribal Governments with a pre-approved 477 plan. Attach. (Decl. of Terry Parks 5) (emphasis added). CTER is not a Federally-recognized Indian tribe and cannot conduct a 477 program. See 25 U.S.C (authorizing DOI to establish 477 programs with an Indian tribal government. ). Accordingly, Ms. Forcia possessed no authority to enter into an agreement directly with CTER. It is a fundamental legal principal that [w]hat [Government officials] could not do directly they certainly should not be allowed to do indirectly under the guise of an intended third party beneficiary. Ables v. United States, 2 Cl. Ct. 494, 501 (1983), affirmed by, 732 F.2d 166 (Fed. Cir. 1984); see also H.F. Allen Orchards v. United States, 4 Cl. Ct. 601, 612 (1984) ( What the federal officers have not been authorized to do directly they may not be deemed to have been authorized to accomplish indirectly by making district members third-party beneficiaries entitled to enforce the contracts on their own behalf. ), affirmed by, 749 F.2d 1571 (Fed. Cir. 1984), certiori denied by, 474 U.S. 818 (1985). In Ables, plaintiff, an arbitrator who served on an arbitration panel addressing a dispute between the Air Force and an employees union, brought a breach of contract action against the Government claiming to be a third party beneficiary to the arbitration agreement between the Air Force and the union. 2 Cl. Ct. at 494. The Court concluded that plaintiff was not a third party 21

28 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 28 of 37 beneficiary because the Air Force officials who signed the arbitration agreement possessed no authority to bind the United States in contract. Id. at 501. The Court explained that: The uncontested affidavits from Air Force signatories to the agreement at bar show clearly that they had no authority to grant plaintiff third party beneficiary status. These signatories had no authority to contract on behalf of the Air Force for plaintiff s services. What they could not do directly they certainly should not be allowed to do indirectly under the guise of an intended third party beneficiary. Id. (emphasis added). The Court concluded that [t]his lack of capacity to bind the Air Force on the part of the Air Force signatories to the agreement precludes plaintiff from having any enforceable third party beneficiary right against the Air Force under said agreement. Id. (citing Restatement (Second) Contracts, 309 (1979)). In H.F. Allen Orchards, plaintiffs, individual members of a Washington state irrigation district, brought a breach of contract action against the Bureau of Reclamation alleging that the Bureau breached its obligation to make accurate forecasts about the amount of water that would be available to the irrigation district from the Yakima Project. 4 Cl. Ct. at 604. Plaintiffs alleged that they were third party beneficiaries to the contract between the Bureau and the irrigation district. Id. at 609. The Court ruled that plaintiffs were not third party beneficiaries, in part because the Government officials who signed the contract with the irrigation district possessed no authority to contract directly with individual members of the district. Id. at The Court explained that: U.S.C. 423e (1976) provides that every federal contract for the delivery of water must be made with an irrigation district organized under state law. Thus no officer had authority on behalf of the United States to contract with an individual member of such a district. What the federal officers have not been authorized to do directly they may not be deemed to have been authorized to accomplish indirectly by making district members third-party beneficiaries entitled to enforce the contracts on their own behalf. 22

29 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 29 of 37 Id. at 612 (emphasis added). The facts of this case are consistent with Ables and H.F. Allen Orchards. IEED was not authorized under the ISDA, Pub. L , or Ms. Forcia s delegated authority to contract directly with CTER. Attach. (Decl. 4-5). What IEED could not accomplish directly, it therefore may not be deemed to have accomplished indirectly by making CTER a third-party beneficiary to the agreements at issue. 2. Whether Ms. Forcia Was On Notice Of The Alleged Beneficiary Rights Being Conferred To CTER In Its Agreements With SLT Is Irrelevant Because She Lacked The Authority To Confer Those Rights To CTER In its sur-reply to our motion to dismiss, CTER asserts that the applicable principle is that the contracting officer only had to be on notice of the benefits to the third party. Pl. s Sur- Reply at 13. CTER relies upon the Federal Circuit s decision in Flexfab, L.L.C. v. United States, 424 F.3d 1254 (Fed. Cir. 1984), to assert that it is not a requirement that the contracting officer must have had the authority to make an award to the party seeking third-party beneficiary status.... Pl. s Sur-Reply at 14. CTER is wrong, as its argument misses the entire point of what a contracting officer is i.e., the Government official with the requisite authority to waive the Government s sovereign immunity and bind the United States in contract with another entity it is precisely that waiver of immunity which CTER seeks as an alleged third party beneficiary. A contracting officer is defined as a person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings. 48 C.F.R (emphasis added). Thus, the entire point of the requirement that the contracting officer the person with authority to bind the United States in contract be on notice of the relationship between the prime contractor and the third party subcontractor, Flexfab, 424 F.3d at 1263, is 23

30 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 30 of 37 premised on the underlying requirement that only an official with the authority to contract can waive the Government s sovereign immunity and consent to be sued by a party. To find that a party is a third party beneficiary to a Government contract is a finding that the Government, through its actions, has consented to be sued by that party. If the Government official does not have the authority to waive the Government s immunity, and consent to be sued by a party directly, then the official can have no authority to waive the Government s sovereign immunity indirectly, and consent to be sued by that party by conferring enforceable beneficiary rights upon the party. See Ables v. United States, 2 Cl. Ct. at 501 (1983); H.F. Allen Orchards, 4 Cl. Ct. at 612; accord Flexfab L.L.C. v. United States, 62 Fed. Cl. 139, 154 (2004)( In conclusion, [plaintiff s] third-party beneficiary claim here falls short because [plaintiff] has failed to present any evidence that a government employee with actual authority intended to benefit [plaintiff] through... the contract (emphasis added).). That Federal Circuit case law only requires the contracting officer to be on notice of the right being conferred to the third party for beneficiary status to be established does not change the essential requirement that an official with the requisite authority to waive the Government s immunity and consent to be sued by that third party be involved with the transaction. As the Federal Circuit explained in Flexfab: But the government does not lightly consent to suit. Surely the assurances from a government agent, having no authority to give them, cannot expose the government to risk of suit for the nonperformance of an obligation that it did not intentionally accept. We thus are careful not to open the courthouse doors to those falling victim to the statements of unauthorized government agents, lest we broaden improperly the government s waiver of immunity from suit in these cases. Flexfab, 424 at 1263 (emphasis original). If a contracting officer, by way of limits on his or her delegated authority, could not confer contract rights directly upon a party, then that officer 24

31 Case 1:12-cv CFL Document 53 Filed 05/17/13 Page 31 of 37 cannot expose the government to risk of suit by indirectly conferring rights upon the party as a beneficiary. Accord Ables v. United States, 2 Cl. Ct. at 501 (1983); H.F. Allen Orchards, 4 Cl. Ct. at 612. This principal is founded upon basic logic: Here, by way of the statutory scheme governing the grant programs and the limitations placed upon Ms. Forcia s authority, Ms. Forcia had no authority to bind the United States in contract with CTER. It is therefore irrelevant whether Ms. Forcia was on notice of any alleged beneficiary rights being conferred to CTER in its agreements with SLT she could not confer 25