John Douglas Burke v. Secretary of Health and Human Services

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
JOHN DOUGLAS BURKE,
Appellant
v.
SECRETARY OF HEALTH AND HUMAN
SERVICES,
Appellee
______________________
2024-1019
______________________
Appeal from the Civilian Board of Contract Appeals in
No. 7492, Administrative Judge Erica S. Beardsley,
Administrative Judge Harold D. Lester, Jr, Administrative
Judge Kathleen J. O'Rourke.
______________________
Decided: October 25, 2024
______________________
JOHN DOUGLAS BURKE, Rockville, MD, pro se.
BRYAN MICHAEL BYRD, Commercial Litigation Branch,
Civil Division, United States Department of Justice,
Washington, DC, for appellee. Also represented by BRIAN
M. BOYNTON, WILLIAM JAMES GRIMALDI, PATRICIA M.
MCCARTHY.
______________________
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BURKE v. HHS 2
Before MOORE, Chief Judge, STOLL and CUNNINGHAM,
Circuit Judges.
PER CURIAM.
John Douglas Burke appeals the Civilian Board of
Contract Appeals’ (Board) grant of the Department of
Health and Human Services (HHS) National Institutes of
Health’s (NIH) motion to dismiss for failure to state a
claim. For the reasons set forth below, we affirm.
BACKGROUND
Around September 2014, Mr. Burke began working
with NIH under a series of purchase orders. S. Appx. 53.1
All purchase orders were written on a two-page Optional
Form 347 (OF-137) that identified Mr. Burke as the
contractor and the National Human Genome Research
Institute (NHGRI) as the administrative office. S. Appx.
2–3. Mr. Burke alleged that, after the first purchase order
expired, NIH issued a series of follow-on purchase orders,
the last of which expired on September 30, 2021. S. Appx.
53–54; see also S. Appx. 44–45.
On June 6, 2022, Mr. Burke submitted a certified claim
to the NIH contracting officer for $414,493, seeking the
difference between his actual pay and what he believes he
should have been paid from 2018 through 2021. S. Appx.
35–38. Mr. Burke argued he actually worked as a personal
services contractor, and thus should have been paid like a
federal employee rather than an independent contractor.
Id. at 35–36. He also argued the provisions in his purchase
orders were “so minimal . . . as to render the contracts void
or voidable” and, without an enforceable express contract,
he should be allowed to recover the pay difference under an
1 “S. Appx.” refers to the Supplemental Appendix
attached to Respondent’s Informal Brief.
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BURKE v. HHS 3
implied-in-fact contract to preclude unjust enrichment by
NIH. S. Appx. 7 (quoting S. Appx. 37).
The NIH contracting officer denied Mr. Burke’s claim
and Mr. Burke appealed to the Board. S. Appx. 39–41.
NIH moved to dismiss the appeal for failure to state a
claim. The Board granted NIH’s motion to dismiss because
Mr. Burke did not plausibly allege his purchase orders
were personal services contracts. S. Appx. 1–19. The
Board denied reconsideration, concluding that Mr. Burke
merely repeated arguments the Board had rejected. S.
Appx. 20–24. Mr. Burke appeals. We have jurisdiction
pursuant to 28 U.S.C. § 1295(a)(10) and 41 U.S.C.
§ 7107(a)(1)(A).
DISCUSSION
We review the grant of a motion to dismiss for failure
to state a claim de novo. Prairie Cnty. v. United States, 782
F.3d 685, 688 (Fed. Cir. 2015). “We take all factual
allegations in the complaint as true and construe the facts
in the light most favorable to the non-moving party.” Jones
v. United States, 846 F.3d 1343, 1351 (Fed. Cir. 2017). A
complaint must be dismissed when it fails to state a “claim
for relief that is plausible on its face.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)); see also 48 C.F.R.
§ 6101.8(e).
Federal Acquisition Regulation (FAR) provides that
“[a] personal services contract is characterized by the
employer-employee relationship it creates between the
Government and the contractor’s personnel.” 48 C.F.R.
§ 37.104(a). “An employer-employee relationship under a
service contract occurs when, as a result of (i) the contract’s
terms or (ii) the manner of its administration during
performance, contractor personnel are subject to the
relatively continuous supervision and control of a
Government officer or employee.” 48 C.F.R. § 37.104(c)(1).
In other words, “the principal ground on which a contract
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BURKE v. HHS 4
will be found to be a personal services contract . . . is the
degree of supervision to which the contracting employees
were subject under the contract.” Seh Ahn Lee v. United
States, 895 F.3d 1363, 1371 (Fed. Cir. 2018) (citing FAR
37.104(c)(2)).
We see no error in the Board’s decision that Mr. Burke
failed to plausibly allege the purchase orders were personal
services contracts. S. Appx. 13–16. As the Board
explained, the purchase orders did not subject Mr. Burke
to the level of “direct government supervision” Lee
indicated would be necessary to render them personal
services contracts. S. Appx. 14 (quoting Lee, 895 F.3d at
1371). Purchase orders for the 2018 to 2021 timeframe, for
which Mr. Burke seeks damages, reference a Federal
Procurement Data System Product/Service Code “R408,”
which only applies to “Situations Where The Contractor Is
Solely Responsible for Program Management As Well As
Situations Where The Contract Provides Program
Management Support to A Government Program
Manager.” Id. Although Mr. Burke alleged his work
conditions support his characterization of the purchase
orders as personal services contracts, his allegations—that
he worked at the NIH site, his address was identified in
research publications as the NHGRI campus, his tools and
equipment were furnished by the government, his services
were integral to NHGRI’s efforts to develop a gene therapy,
he attended meetings with NHGRI employees to report on
his work, and he was fully integrated into and worked with
NHGRI staff—do not indicate direct government
supervision of his work. S. Appx. 15.
On appeal, Mr. Burke makes four arguments.
Appellant’s Informal Br. at 1–5. First, Mr. Burke argues
the Board incorrectly “focused its analysis on the
supervision issue” and largely ignored other requirements
for classification as a personal services contractor. Id. at 4.
The Board did not err by focusing on the supervision issue.
Lee teaches the most important factor in determining
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BURKE v. HHS 5
whether purchase orders are personal services contracts is
the degree of supervision which Mr. Burke was subject to
under the purchase orders. 895 F.3d at 1371. Thus, the
Board correctly focused its analysis on whether Mr. Burke
plausibly alleged he was subject to direct and relatively
continuous government supervision under the terms of his
purchase orders. S. Appx. 13–14.2
Second, Mr. Burke makes several arguments that the
Statement of Work (SOW) shows he was subject to
supervision by NHGRI staff. Appellant’s Informal Br. at 4–
5 (citing S. Appx. 85). The Board did not consider the SOW
when adjudicating the motion to dismiss because the SOW
was neither attached to the complaint nor incorporated
into the purchase orders. S. Appx. 10.3 To the extent NIH
wanted the SOW to be incorporated into the purchase
2 Mr. Burke also makes a conclusory allegation that
the Board “largely ignore[ed] the other elements of the
economic realities test and requirements for classification
as a personal services contractor.” Appellant’s Informal Br.
at 4. He does not identify which “other elements” and
“requirements” were argued to the Board and not
considered. Moreover, he does not explain how any such
elements or requirements could “convert a contract into
one for personal services absent a clear contractual
requirement for direct government supervision.” S. Appx.
15 (citing Lee, 895 F.3d at 1371–72) (emphasis in original).
3 The parties only agreed the OF-137s were part of
the purchase order. S. Appx. 10. The Board recognized it
could not resolve what documents, beyond the OF-137s,
were part of the purchase orders without looking to
additional evidence, which it could not do when considering
a motion to dismiss for failure to state a claim. Id. Thus,
the Board properly considered only Mr. Burke’s allegations
and the OF-137s when adjudicating the motion.
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BURKE v. HHS 6
orders and considered by the Board, Mr. Burke specifically
argued to the Board that the SOW should not be
“incorporated with or into the purchase orders” because he
had not even seen the SOW or any of the other documents
provided as exhibits by the government. S. Appx. 69; see
also S. Appx. 10. Under these circumstances, the Board
did not err in failing to consider the SOW.
Third, Mr. Burke argues the Board overlooked the
issue of whether NIH was authorized to issue personal
services contracts. Appellant’s Informal Br. at 5. The
Board actually agreed “NIH cites no statute that would
have allowed it to award a personal services contract to Mr.
Burke.” S. Appx. 13. The Board, however, found the
purchase orders were not illegal personal services
contracts because Mr. Burke was not subject to direct
government supervision. Id. at 13–16.
Fourth, Mr. Burke challenges the Board’s
consideration of the absence of FAR clauses in his purchase
orders, arguing they are “facially illegal and therefore
invalid” for not incorporating any FAR clauses. Appellant’s
Informal Br. at 5. Although the Board noted “it is odd that
his purchase orders identify no FAR clauses,” S. Appx. 17,
the purchase orders were not too indefinite to enforce
because such invalidation is disfavored when performance
has been completed and mandatory FAR clauses could be
read into the contracts. Lee, 895 F.3d at 1372 (“invalidation
of a contract after it has been fully performed is not
favored”); G. L. Christian & Assocs. v. United States, 320
F.2d 345, 350 (Ct. Cl. 1963) (“if a statute requires the
inclusion of a termination clause, such a provision would
be read into the agreement, whether the negotiators put it
there or not”).
Mr. Burke also raises several arguments for the first
time on appeal. For example, he argues the purchase
orders do not mention FAR 13.104, which mandates
competition when awarding contracts. Appellant’s
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BURKE v. HHS 7
Informal Br. at 5. He also argues the Board overlooked the
lack of competition in awarding his purchase orders. Id.
But he did not make either argument before the Board. See
S. Appx. 54. We decline to consider arguments not raised
before the Board. Wallace v. Dep’t of the Air Force, 879 F.2d
829, 832 (Fed. Cir. 1989).
CONCLUSION
We have considered Mr. Burke’s remaining arguments
and find them unpersuasive. For the reasons stated above,
we affirm the Board’s grant of the motion to dismiss for
failure to state a claim.
AFFIRMED
COSTS
No costs.
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