from the Armed Services Board of Contract Appeals in Nos.
60462, 60463, 60464, 60465, 60466, 61102, Administrative
Judge James R. Sweet.
Patrick Michael Pike, Pike & Gilliss LLC, Towson, MD,
argued for appellant.
William Atkins Scott, Pederson & Scott, P.C., Charleston,
SC, argued for appellee.
Dyk, Wallach, and Hughes, Circuit Judges.
HUGHES, CIRCUIT JUDGE.
case involves a government contract dispute. After a
contracting officer determined that Ikhana, LLC defaulted on
a construction contract with the Army Corps of Engineers,
Ikhana filed an appeal to the Armed Services Board of
Contract Appeals. Guarantee Company of North America (GCNA),
a surety that indemnified Ikhana, moved to intervene because
the indemnity agreement authorized it to assume all
contractual rights in the event of default. The Board denied
GCNA's motion, finding that GCNA lacked standing.
Appeals of Ikhana, LLC, ASBCA No. 60462, 17-1 BCA
¶ 36, 871 (Oct. 18, 2017). Because GCNA executed its
settlement agreement with the Corps after the claims at issue
arose, we affirm.
September 2013, the United States Army Corps of Engineers
awarded Ikhana a construction contract to build a secured
access lane and remote screening facility at the Pentagon by
October 12, 2015. The contract required Ikhana to furnish
performance and payment bonds. Ikhana procured these bonds
condition for issuing the bonds, GCNA required Ikhana to
execute a general indemnity agreement. The indemnity
agreement included a provision that assigned GCNA all rights
under the contract if Ikhana defaulted or if GCNA made
payment on any bond.
did not go as planned. As Ikhana began working on the
project, it encountered multiple problems with the work site
that were not in the contract's specification. Each time
Ikhana discovered a new problem, it had to halt work until
the Corps issued a unilateral change to the contract. These
stoppages and contract modifications caused significant
delays and cost overruns. One modification required the Corps
to schedule a power outage at the Pentagon for the project to
continue, but the Corps never scheduled the outage, and by
mid-October 2015, construction had stopped.
October 13-27, 2015, Ikhana submitted four claims to the
contracting officer seeking additional compensation and an
extension of the project deadline. Ikhana argued that the
unforeseen site conditions and unilateral changes to the
contract significantly altered the scope of the contract. The
Corps never issued a final decision on Ikhana's claims.
November 2015 and June 2016, seven of Ikhana's
sub-contractors filed claims against GCNA's payment bond.
Corps terminated Ikhana for defaulting on the contract and
made a claim on the performance bond. On February 25, 2016,
Ikhana appealed the termination decision and its four claims
for additional compensation to the Armed Services Board of
sent Ikhana a letter demanding collateral under the indemnity
agreement. The letter stated that if Ikhana did not deliver
over four million dollars in collateral, "GCNA [would]
take all appropriate steps to protect its rights" under
the indemnity agreement. J.A. 292. Ikhana responded that the
demand for collateral was premature and unreasonably high.
and the Corps began to negotiate for GCNA to tender a
completion contractor. During the negotiations, Ikhana
informed GCNA that it would "not [forgo] its claim
against the Corps under any circumstances." J.A. 444.
GCNA invoked its powers under the indemnity agreement and
entered into a settlement agreement with the Corps on
September 30, 2016. As part of the settlement agreement, GCNA
agreed to "cause the dismissal, with prejudice, of the
current pending appeals before the [Board]." J.A. 365.
sued Ikhana for declaratory judgment in the United States
District Court for the Eastern District of Virginia. GCNA
sought a declaration that the indemnity agreement authorized
it to "settle [Ikhana's] dispute with the [Corps]
and dismiss the [Board] appeal." Guarantee Co. of N.
Am. USA v. Ikhana, LLC, No. 1:16-CV-1484, 2017
WL 1821106, at *2 (E.D. Va. May 4, 2017). The district court
stayed GCNA's action pending resolution of Ikhana's
Board appeal. Id. at *4.
moved to intervene and withdraw Ikhana's appeal before
the Board on the grounds that Ikhana had assigned all
contractual claims to GCNA. Ikhana opposed the motion. ...