Free Motion to Amend Pleadings - Rule 15 - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

SARANG CORPORATION Plaintiff v. THE UNITED STATES Defendant

) ) ) ) ) ) )

No. 06-506 C

MOTION TO FILE AMENDED COMPLAINT Plaintiff filed the original complaint in this case on July 7, 2006. This motion to file an amended complaint is hereby submitted in accordance with RCFC 15(a). The purpose of the amended complaint is to address developments that have occurred between the parties since the date of the original complaint. In the original complaint, Plaintiff requested this Court's assistance in the collection of final payment from the U.S. Department of Agriculture Forest Service (Forest Service) for construction work performed and completed under Contract No. 503434-1-1524. The specific amount of plaintiff's claim for the work performed was $75,886.00. This amount was claimed under two separate causes of action, the first for $25,000.00 and the second for $50,886.00. Plaintiff also included a demand for late payment interest in the original complaint, but did not specify an amount for this claim. After receiving notice of the complaint, the Forest Service acknowledged Plaintiff's claims and proceeded to remit full payment of the contractual amount owed. The Forest sent payments of $25,000.00 and $50,886.00 to Plaintiff in two installments received on July 21 and August 15, 2006, respectively. However, the Forest Service failed to remit additional amounts owed to Plaintiff for late payment interest in

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accordance with the requirements of the Prompt Payment Act (PPA), 31 USC § 3901 et seq., and Federal Acquisition Regulation (FAR) § 33.208. The only matter remaining to be addressed in this case, therefore, is the Forest Service's liability to Plaintiff for late payment interest that should have been remitted along with final payment of the 75,886.00 that it owed. The purpose of the amended complaint to present plaintiff's claims in regard to the late payment interest owed. Plaintiff has also withdrawn its original demand for attorney's fees in this amended complaint since the question of whether such fees are owed will not arise until adjudication of this case is completed. Plaintiff intends to file appropriate claims for attorney's fees upon the successful adjudication of this case.

Respectfully submitted,

s/ J. Cobbie de Graft J. Cobbie de Graft, Esq. Counsel for the Plaintiff Phone (703) 726-0197 Fax (703) 726-0198

Date: October 13, 2006

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

SARANG CORPORATION Plaintiff v. THE UNITED STATES Defendant

) ) ) ) ) ) )

No. 06-506 C

AMENDED COMPLAINT This amended complaint is filed in accordance with RCFC 15(a). The reason for this filing is because of new events having occurred since Sarang Corporation (Sarang) filed its original complaint on July 7, 2006.

I. PRELIMINARY STATEMENT 1. Sarang entered into a contract (Contract No. 50-3434-1-1524) with the US

Department of Agriculture Forest Service (Forest Service) for the performance of certain construction services on May 11, 2001. Sarang completed the work under the contract on November 19, 2003. After several months of negotiations, the parties reached agreement regarding final payment for the work performed on October 14, 2005. However, the Forest Service failed to remit final payment on the work performed until after Sarang filed its original complaint on July 7, 2006. Sarang is therefore filing this amended complaint for the purposes of obtaining a declaratory judgment regarding the late status of the payments made by the Forest Service for the work performed. In addition, Sarang hereby demands late payment interest penalties on its original claims in accordance with the Prompt Payment Act (31 USC § 3901 et seq.),

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II. JURISDICTION 2. The jurisdiction of this Court is invoked pursuant to the Contract Disputes Act, 41

USC § 609(a).

III. PARTIES 3. The plaintiff, Sarang Corporation, is a corporation organized under the laws of the

State of Illinois, with its headquarters located at 409 Busse Road, Elk Grove Village, Illinois 60007. 4. The defendant is the U.S. Department of Agriculture (USDA) Forest Service, with

its relevant program office located at 1400 Independence Avenue, SW, Washington, DC 20250. The current address of the Contracting Officer responsible for administration of the subject contract is 1621 North Kent Street, RPE, 701, Arlington, Virginia 22209.

IV. FACTUAL ALLEGATIONS 5. Plaintiff entered into a contract with the USDA Forest Service for the

performance of certain construction-related services on May 11, 2001. The work was to be performed at the Midewin National Tallgrass Prairie Administrative Site in Will County, Illinois. 6. Sarang satisfactorily performed the work under the contract and the final

punchlist process was successfully completed on November 19, 2003. On December 2, 2003, the Forest Service signed a Certificate for Payment entitling Sarang to payment in the amount of $258,993.00. (Attachment #1). Acknowledging that the contract was 100% complete, the Forest Service nevertheless withheld $25,000.00 pending resolution

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of a prior claim that had been filed by Sarang via letter dated June 25, 2003 regarding extra work performed on the contract (discussed further under paragraph 7, below). The $25,000.00 withheld by the Forest Service was never actually in dispute. However, this amount was not remitted to Sarang until July 21, 2006, after the filing of Sarang's original complaint in this Court. (Attachment #3). 7.
As mentioned in paragraph 6, Sarang filed a claim via letter dated June 25, 2003 for

$198,263.00 based on extra work performed as a result of changes directed by the Forest Service on the project. (Attachment #2). On July 19, 2005 the Forest Service issued a settlement offer on this claim in the amount of $50,886.00. This offer was accepted by Sarang through a signed Settlement Agreement and Contract Release dated October 14, 2005. This settlement amount was not remitted until August 15, 2006, after the filing of Sarang's original complaint in this Court. (Attachment #3).

V. FIRST CAUSE OF ACTION 8. The Forest Service's failure to remit timely payment in the amount of $25,000.00

to Sarang for work successfully completed and accepted amounts to a violation of terms of the contract as executed between the parties. The Forest Service is therefore liable to Sarang in the amount of $2,683.00 for late payment penalty interest due in accordance with Federal Acquisition Regulation (FAR) § 33.208. 9. Sarang's calculation of the late payment interest due by the Forest Service under

this cause of action is based on the monthly compounding interest formula mandated under 5 CFR Section 1315.17(c) using the following information:

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Amount of Principal (see Attachment #1) Date of invoice acceptance by Forest Service (see Attachment #1) Date payment became due (calculated per 5 CFR §1315.10(a)(1)) Prompt Payment interest rate as of January 2, 2004 (calculated per 5 CFR §1315.10(a)(1)) Date of actual payment (see Attachment #3) Number of months / days late (actual) Number of months / days late (adjusted per 5 CFR §1315.10(a)(5)) Amount Due (calculated per 5 CFR §1315.17(c))**

$25,000.00 December 2, 2003 January 1, 2004 4.0 % July 21, 2006 30 months / 19 days 12 months / 0 days $2,683.00

**Note: Calculations were conducted using U.S. Treasury Department's online Prompt Payment Calculator, available at http://www.fms.treas.gov/prompt/ppcalc2.html

VI. SECOND CAUSE OF ACTION 10. The Forest Service's failure to remit payment in the amount of $50,886.00 to

Sarang per the terms of the parties' Settlement Agreement amounts to a violation of the government's obligation to issue payment as arising by application of FAR § 33.210. The Forest Service is therefore liable to Sarang in the amount of $1,756.55 for late payment interest penalty due in accordance with FAR § 33.208.

11.

Sarang's calculation of the late payment penalty interest due by the Forest Service

under this Cause of Action is based on the monthly compounding interest formula mandated under 5 CFR Section 1315.17(c) using the following information:

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Amount of Principal (see Attachment #2) Date of invoice acceptance by Forest Service (see Attachment #2) Date payment became due (calculated per 5 CFR §1315.10(a)(1)) Prompt Payment interest rate as of November 14, 2005 (calculated per 5 CFR §1315.10(a)(1)) Date of actual payment (see Attachment #3) Number of months / days late (actual) Number of months / days late (adjusted per 5 CFR §1315.10(a)(5)) Amount Due (calculated per 5 CFR §1315.17(c))**

$50,886.00 October 14, 2005 November 13, 2005 4.5 % August 15, 2006 9 months / 2 days 9 months / 2 days $1,756.55

**Note: Calculations were conducted using U.S. Treasury Department's online Prompt Payment Calculator, available at http://www.fms.treas.gov/prompt/ppcalc2.html

VI. PRAYER FOR RELIEF WHEREFORE, plaintiff Sarang respectfully prays that this Court: a) b) Assume jurisdiction of this case; Issue a declaratory judgment acknowledging that the payments issued by

the Forest Service on July 21st and August 15th, 2006, respectively, were indeed "late payments" as defined by the Prompt Payment Act (PPA), 31 USC § 3901 et seq., even though remitted during the intervening period since Sarang filed its original complaint. c) Award late payment interest damages in the amount of $2,683.00 under

the first cause of action as required by the PPA and Federal Acquisition Regulation (FAR) § 33.208;

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d)

Award late payment interest damages in the amount of $1,756.55 under

the second cause of action as required by the PPA and FAR § 33.208; and e) Award such other relief as the Court deems appropriate.

Dated this 13th day of October, 2006

s/ J. Cobbie de Graft J. Cobbie de Graft, Esq. Counsel for the Plaintiff Phone (703) 726-0197 Fax (703) 726-0198

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ATTACHMENT A

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ATTACHMENT B

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ATTACHMENT C

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