USAC Aerospace Group Inc. dba USAC Aerospace Group: Aerostructures ( 2014 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of -- )
)
USAC Aerospace Group Inc. dba ) ASBCA Nos. 59114, 59115, 59121
USAC Aerospace Group: Aerostructures ) 59122,59123
)
Under Contract No. SPM4A6-10-D-0188 )
APPEARANCE FOR THE APPELLANT: Mr. Michael Sammon
President
APPEARANCES FOR THE GOVERNMENT: Daniel K. Poling, Esq.
DLA Chief Trial Attorney
Jason D. Morgan, Esq.
Edward R. Murray, Esq.
Trial Attorneys
DLA Aviation
Richmond, VA
OPINION BY ADMINISTRATIVE JUDGE PAGE ON THE
GOVERNMENT'S MOTION TO DISMISS
The Defense Logistics Agency, Aviation Supply Chain (DLA or the
government), moves to dismiss as untimely these appeals by USAC Aerospace Group
Inc. dba USAC Aerospace Group: Aerostructures (USAC, appellant or the
contractor). The government asserts that USAC filed these appeals more than 90 days
after it received the final decisions (COFDs) of the contracting officer (CO), which
terminated the subject contract and previously-issued delivery orders (DOs). The
government further contends that the Board lacks jurisdiction over ASBCA
Nos. 59114 and 59115, alleging that USAC's notices of appeal concerning these
reflect an inchoate intent to appeal to the United States Court of Federal Claims and
not to the ASBCA. DLA suggests as an alternative basis for dismissal of DO 0001,
docketed as ASBCA No. 59114, that the DO does not survive termination for default
of the underlying contract. We grant the motion in part.
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION
The Parties' Contract and Contract Administration
1. On 3 May 2010, DLA awarded to USAC indefinite quantity Contract
No. SPM4A6-10-D-0188 for a base year of performance plus four optional years of
performance. The contract called for USAC to furnish the government with "CAM,
LATCH, HOLDBACK" (latches), identified by National Stock Number (NSN)
1440-01-127-2424, at the price of $44.50 each. The contract estimated that DLA would
require 650 latches per year, and established a maximum annual order of 1,301 latches.
The maximum price for the base year was $57 ,894.50. The contract called for a First
Article Test (FAT) within 90 days of contract award. (Gov't mot., ex. 1)
2. Also on 3 May 2010, DLA issued DO 0001 for 1,082 latches (gov't mot.,
ex. 2). The government modified that order to add a contract line item in the amount
of $3,250 for the delivery of a sample latch within 90 days of contract award to
provide a first article for testing in accordance with the basic contract (id., ex. 3).
DLA on 16 June 2011 issued DO 0002 to purchase 163 latches from USAC (id.,
ex. 4). The government issued DO 0003 on 12 August 2011 to acquire 231 latches
(id., ex. 5), and DO 0004 on 15 September 2011 for an additional 60 latches (id.,
ex. 6).
3. On 10 December 2010, 20 January 2011, and 12 April 2013, DLA issued a
series of contract modifications to DO 0001. The last of these modifications
established 11 July 2013 for delivery to the government of the sample latch for the
FAT. (Gov't mot., exs. 7-9)
4. The CO on 30 July 2013 issued a "SHOW CAUSE NOTICE" to USAC,
warning that DLA "is considering terminating your contract for default" because the
contractor failed to timely submit a sample latch for the FAT as required. Appellant
was given 10 days after receipt of this notice to respond with information regarding
proposed remedial action. (Gov't mot., ex. 10)
5. In its 2 August 2013 reply to the government's show cause notice, USAC
attributed its failure to timely furnish a sample latch for the FAT to its subcontractor,
Robinson Manufacturing. USAC requested another 60-90 days for performance and
an additional $1,500 "in consideration for Modifications executed as a result of'
actions proposed in its response to the show cause notice. (Gov't mot., ex. 11)
6. On 16 September 2013, the CO prepared a memorandum for record (MFR)
which detailed the reasons the CO had determined to terminate USAC's contract in
accordance with Federal Acquisition Regulation (FAR) 52.249-8, DEFAULT
(FIXED-PRICE SUPPLY AND SERVICE) (APR 1984), which the co stated "is included in
the contract." 1 The MFR noted that the contractually-required latches are "a critical
application item that is used on a Guided Missile Launcher." The CO stated that
1
The seven-page contract in the record does not contain FAR 52.249-8, DEFAULT
(FIXED-PRICE SUPPLY AND SERVICE) (APR 1984) (see gov't mot., ex. 1,
passim).
2
"[t]here is an urgency of need as we have serious backorders on this item[,]" the
latches are "available from another source," and USAC has not identified excusable
delays for nonperformance. (Gov't mot., ex. 13)
Termination for Default of the Underlying Contract and DOs
7. On 19 September 2013, the CO issued five COFDs which respectively
notified USAC that the base contract and four DOs were "terminated for default
effective immediately" due to the contractor's "failure to deliver the supplies in
accordance with the established delivery schedule." USAC was advised in each
COFD that it had the right to appeal the decision to the ASBCA within 90 days of
receiving the decision. USAC was further advised that, in the alternative, it had the
right to appeal the COFDs to the United States Court of Federal Claims within
12 months. (Gov't mot., exs. 14-18)
8. The government sent the COFDs terminating for default the underlying
contract and DOs to USAC by means of the United States Postal Service (USPS),
certified mail (gov't mot., ex. 19). According to USPS's "Product & Tracking
Information," all five of the COFDs notifying the contractor of the terminations were
delivered to USAC on 25 September 2013 (id., ex. 20).
9. In addition to the five COFDs, DLA on 20 September 2013 issued separate
unilateral contract modifications that terminated the underlying contract and DOs
0002, 0003, and 0004. 2 Each of the corresponding modifications reiterated the
language of the COFD of 19 September 2013, including notice to USAC of its appeal
rights to either the Board or the Court. (Gov't mot., exs. 21, 23-25)
10. The contract modification terminating DO 0001, which also contained the
COFD and informed the contractor of its appeal rights, was issued by DLA to USAC
on 3 October 2013 (gov't mot., ex. 22).
11. By emails of 20 September 2013 sent to USAC's registered email address,
DLA furnished a copy of the contract modifications terminating the base contract and
DOs 0002, 0003, and 0004 to USAC (gov't mot., exs. 31-34). By email dated
3 October 2013, DLA provided USAC with a copy of the contract modification
terminating DO 0001 (id., ex. 35).
2
The government's motion explains that "DLA was required to issue a separate
modification for the basic contract and each of the [DOs] in order to terminate
each of the procurement documents in its automated procurement system.
Because of this administrative quirk, and out of an abundance of caution, DLA
also sent five notices of termination to USAC." (Gov't mot. at 3 n.3)
3
12. DLA publicly posted the contract modifications terminating the underlying
contract and DOs 0002, 0003, and 0004 on DLA's Internet Bid Board System
(DIBBS) website on 20 September 2013 (gov't mot., exs. 26, 28-30). The
government publicly posted the contract modification terminating DO 0001 on
DIBBS on 3 October 2013 (id., ex. 27).
USAC's Notices ofAppeal to the Armed Services Board of Contract Appeals
13. USAC on 31December2013 sent six emails to the CO, each carrying the
salutation "Good Morning Janice Hicks and Armed Services Board of Contract
Appeals" (gov't mot., exs. 36-41 ). In each email, the contractor advised that "USAC
Aerospace Group (5RUB5), is Appealing the U.S. Government decision of
Termination by Default" pursuant to "the referenced Show Cause Letter Response and
referenced emails from Mr. Anthony Gray, PCO, regarding a Subcontractor's letter
dated September 27, 2013." USAC attached to these separate emails copies of the
government's five contract modifications terminating the underlying contract and
DOs. (Id., exs. 36-41) The DLA CO did not forward these emails to the Board.
14. USAC also mailed notices of its appeal of "DLA Aviation['s] decision of
Termination by Default" to the Board. The envelope was properly addressed to the
Board, and each notice of appeal directed to the attention of the ASBCA and DLA
officials including the CO. However, according to the USPS "Priority Mail Express"
receipt, the single envelope containing these notices of appeal was mailed on 2 January
2014. The Board's date stamp shows that this envelope was received on 3 January
2014.
15. Enclosed by USAC with one of the two notices of appeal mailed to the
Board was a copy of the contract modification terminating DO 0001. This appeal was
docketed as ASBCA No. 59114; the notice was dated by USAC as "January 01, 2014."
The contractor's notice stated that "The reasoning for our Appeal will be described in
full within the action presented to the U.S. Court of Federal Claims."
16. USAC enclosed with the second of the two notices of appeal mailed
together to the Board a copy of the modification terminating the underlying contract
for default. In this appeal, which was docketed as ASBCA No. 59115, USAC again
stated that "The reasoning for our Appeal will be described in full within the action
presented to the U.S. Court of Federal Claims." The contractor self-dated the notice of
appeal in ASBCA No. 59115 as "18 December 2013."
17. USAC filed three additional, separate notices with the ASBCA, appealing
from the COFDs terminating the remaining DOs. DO 0002, DO 0004, and DO 0003
were docketed as ASBCA Nos. 59121, 59122, and 59123, respectively. The notices in
these appeals were self-dated by the contractor as "18 December 2013." According to
4
the USPS postmarks on the corresponding envelopes, each of these notices was mailed
on 6 January 2014; ASBCA records show that these notices of appeal were received
by the Board on 9 January 2014.
DECISION
The government on 3 February 2014 filed a motion to dismiss the subject
appeals as untimely.
1. The Government's Contention that the Appeals are Untimely
The government argues that USAC failed to comply with the Contract Disputes
Act (CDA), 41 U.S.C. §§ 7101-7109, specifically the 90-day filing requirement for
filing an appeal with an agency board of contract appeals found in 41 U.S. C. § 7104.
DLA contends that "USAC received the [COFDs] and notification of its appeal rights
when DLA sent the termination for default contract modifications (with the exception
of the modification for [DO] 0001) via e-mail on September 20, 2013, to USAC's
registered e-mail address." The government dismisses the "system error [which]
precluded DLA from posting and e-mailing the termination modification under [DO]
0001 until October 3, 2013 [as] of no moment" because "DLA unquestionably
terminated the basic contract for default on September 20, 2013, which terminated the
entire contract and all of the outstanding [DOs] thereunder." (Gov't mot. at 6)
DLA alleges that USPS records show that USAC also received copies of the
COFDs terminating the underlying contract and four DOs by certified mail on
25 September 2013. The government "assum[es] the notices of termination served as
the initial notice," and that the period for USAC to appeal to the Board, even for DO
0001, "began to run on September 25, 2013, and ended 90 days later on December 24,
2013" (id. at 6-7).
USAC on 26 June 2014 replied to the government's motion. As in its 2 August
2013 response to the government's show cause notice, appellant alleged that it was
unable to timely provide the government with compliant latches for reasons beyond its
control. The contractor once more faulted its subcontractor Robinson Manufacturing
for failing to perform, and criticized the government for not participating in additional
meetings to discuss supplier problems. Although appellant explained that it had spent
additional time trying to resolve its supply difficulties, USAC did not address the issue
of whether it timely filed the captioned appeals.
5
a. The Contractor's Receipt of the COFDs Terminating the Underlying
Contract and DOs 0001, 0002, 0003, and 0004.
The time allowed to appeal a COFD is set by statute, and is not a matter over
which the Board has discretion. The CDA requires at 41 U.S.C. § 7104(a) APPEAL TO
AGENCY BOARD, that "A contractor, within 90 days from the date of receipt of a
contracting officer's decision under section 7103 of this title, may appeal the decision
to an agency board as provided in section 7105 of this title." The "90-day filing period
is statutory and cannot be waived by the Board." Frasson Lodovico S.r.1., ASBCA
No. 58645, 14-1BCA,35,525 at 174,114 (citing Cosmic Construction Co. v. United
States, 697 F.2d 1389 (Fed. Cir. 1982)). To calculate whether USAC timely made
these appeals, we determine both the date the COFD was received by the contractor
and the 90-day period for making an appeal commenced, and the effective date USAC
filed its notices of appeal.
The government bears the burden of proving the date the COFD was received
by the contractor. Singleton Enterprises, ASBCA No. 58235, 14-1 BCA, 35,554 at
174,227. Consistent with this requirement, FAR 33.211, CONTRACTING OFFICER'S
DECISION calls for the CO to furnish the contractor with a copy of the COFD "by
certified mail, return receipt requested, or by any other method that provides evidence
of receipt." Where the government furnishes the contractor with multiple copies of the
COFD, "the latest received decision begins the 90-day period for appeal." Frasson
Lodovico, 14-1 BCA, 35,525 at 174,114 (citing AST Anlagen-und Sanierungstechnik
GmbH, ASBCA No. 51854, 04-2 BCA, 32,712).
Here, DLA provided USAC with multiple copies of the COFD terminating the
underlying contract and DOs, both as stand-alone decisions and as contained in contract
modifications that reiterated the corresponding COFD including the contractor's appeal
rights (see, e.g., SOF ,, 8-12). In accordance with established practice for documents
sent by government mail (see, e.g., Singleton Enterprises, 14-1 BCA, 35,554 at
174,227), we accept the USPS "Product & Tracking Information" as proof that
25 September 2013 was the last date that USAC received a copy of the COFDs
terminating the underlying contract and DOs 0002, 0003, and 0004 (SOF, 8). These
COFDs and contract modifications were specifically furnished by the CO to the
contractor in accordance with FAR 33 .211 and began the appeal period for these final
decisions, which are docketed as ASBCA No. 59115 (the underlying contract),
No. 59121(DO0002), No. 59122 (DO 0004), and No. 59123 (DO 0003) (SOF ,, 15-17).
USAC was last furnished an emailed copy of the contract modification and COFD
terminating DO 0001 (ASBCA No. 59114) by DLA on 3 October 2013 (SOF , 11 ); we
accept this as the final date that USAC was provided with a copy of this COFD.
6
b. The Effective Dates of USA C's Appeals to the ASBCA.
Having established the operative dates when USAC received the COFDs upon
which these appeals are based, we ascertain the last dates on which USAC could
timely appeal those decisions. Board Rule 5. Time, Computation, and Extensions
provides in relevant part:
(b) In computing any period of time, the day of the
event from which the designated period of time begins to
run will not be included, but the last day of the period will
be included unless it is a Saturday, Sunday, or a Federal
holiday, in which event the period will run to the next
business day.
Under this rubric, USAC had until 24 December 2013 to timely file an appeal
in ASBCA Nos. 59115, 59121, 59122 and 59123. Under Rule 5(b), the 90-day appeal
period began on Thursday, 26 September 2013, the day after USAC received the
pertinent COFDs by USPS and ended on 24 December 2013, the last day for USAC to
timely file an appeal to this Board in ASBCA Nos. 59115, 59121, 59122 and 59123.
USAC was last furnished with a copy of the COFD terminating DO 0001 on Thursday,
3 October 2013. Consistent with Board Rule 5(b), the period for filing ASBCA
No. 59114, the appeal from this COFD, began on 4 October 2013 and expired on
Wednesday, 1 January 2014. As this is New Year's Day and a Federal legal public
holiday, the last day for USAC to appeal in ASBCA No. 59114 is Thursday, 2 January
2014.
Our next inquiry into the timeliness of these appeals is the date when each
appeal was made to the ASBCA. The contractor first sent a notice of appeal for each
COFD to the CO by email, then mailed by means of USPS a different notice of each
appeal to the ASBCA. As to the first submission, USAC sent emails to DLA (only)
that carried a salutation to both the CO and the ASBCA on 3 1 December 2013 which
clearly expressed the contractor's intention of appealing the COFDs terminating the
underlying contract and DOs 0001, 0002, 0003, and 0004 (SOF ~ 13).
The Board was not made aware of these emails to the DLA CO until 4 February
2014, when printed copies of the emailed messages were provided by DLA as exhibits
in support of the government's motion to dismiss (see gov't mot., exs. 36-41). In
docketing these appeals, the Board had relied upon notices of appeal mailed to it by
USAC. According to the USPS "Priority Mail Express" receipt, the single envelope
containing ASBCA Nos. 59114 and 59115, appealing from the COFDs terminating
DO 0001 and the underlying contract respectively, was mailed on 2 January 2014;
these appeals were received by the Board on 3 January 2014. (SOF `` 14-16)
According to the USPS postmarks, USAC on 6 January 2014 separately mailed notices
7
of appeal in ASBCA Nos. 59121, 59122, and 59123 appealing the termination ofDOs
0002, 0004, and 0003 respectively. These were received by the Board on 9 January
2014. (SOF ii 17) For a document transmitted to the Board by official government
mail, we rely upon the USPS postmark or postal receipt to fix the date an appeal was
made, Premier Group, 13 BCA ii 35,349, and not the typed date affixed to the
correspondence by the contractor, unless record evidence compels a different finding.
Although the Board administratively assigned docket numbers based upon the
notices of appeal it received via USPS from the contractor, we accept the earlier date
of 31 December 2013 as the date these appeals were effectively filed. This was the
date that USAC sent emails to the CO, each carrying the salutation "Good Morning
Janice Hicks and Armed Services Board of Contract Appeals." Even though Board
Rule 1. Appeals requires in relevant at paragraph (a) that "notice of an appeal shall be
in writing and mailed or otherwise furnished to the Board within 90 days from the date
of receipt of a contracting officer's decision," appeals on occasion have been sent by
the contractor to the CO instead of the Board. Under such circumstances, we have
accepted such misdirected fillings as effective notices of appeal to the Board. "[I]t is
well settled that filing an appeal with the contracting officer is tantamount to filing
with the Board." Ft. McCoy Shipping & Services, ASBCA No. 58673, 13 BCA ii
35,429 at 173,794-95 (citing ESA Environmental Specialists, Inc., ASBCA No. 55620,
07-1 BCA ii 33,573 at 166,312; Thompson Aerospace, Inc., ASBCA Nos. 51548,
51904, 99-1BCAii30,232 at 149,570; Massachusetts Microwave Tube & Device
Corp., ASBCA No. 52020, 99-1 BCA ii 30,350 at 150,100). However, despite our
acceptance of USAC' s 31 December 2013 emails to the CO as the first effective
notices of appeal to the Board in Nos. 59115, 59121, 59122 and 59123, these filings,
made prior to mailed notices to the ASBCA, are still untimely because the appeal
period expired on 24 December 2013.
As the statutory period for appealing a COFD was not met, we are without
jurisdiction in ASBCA Nos. 59115, 59121, 59122 and 59123. These appeals are
dismissed for lack of jurisdiction as untimely.
We examine separately USAC's appeal of the termination of DO 0001, which
is docketed as ASBCA No. 59114. The contractor received the last notice of the
COFD for this DO on 3 October 2013, a later date than for the other four COFDs
associated with this contract and the DOs; the 90-day appeal period here expired on
2 January 2014. As USAC's effective notice of appeal emailed to the CO was
received on 31December2013, the appeal is timely. We deny the government's
motion to dismiss with respect to ASBCA No. 59114.
8
2. The Government's Alternate Basis for Dismissal ofASBCA Nos. 59114
and 59115 as Inchoate Appeals to the United States Court ofFederal Claims.
The government asserts an alternate basis for summary judgment in ASBCA
Nos. 59114 and 59115 that these are, at most, inchoate appeals intended to be made to
the United States Court of Federal Claims. DLA alleges:
[I]t is unclear whether USAC intended to file appeals
59114 and 59115, at all. In its filings USAC simply states
that DLA Aviation's decision to terminate the contract for
default is "being appealed" and that "[t]he reasoning for
[USAC 's] [a]ppeal will be described in full within the
action presented to the U.S. Court of Federal Claims." The
fairest reading of these filings is that they are a misdirected
effort to provide notice of USA C's intent to file an action
at the United States Courts of Federal Claims, where its
appeals would be-at least, for now-timely. See Oconto
Elec[.] Inc., ASBCA No. 36789, 88-3 BCA ~ 21,188
(dismissing appeal where "[a]t best, the record show[ ed] an
inchoate intent to appeal to the United States Claims
Court").
(Gov't mot. at 1 n.I)
As noted in§ l(b) of this decision (above), the CDA provides at 41 U.S.C.
§ 7104( a) that a contractor may appeal to an agency board of contract appeals within
90 days of receiving the COFD. In the alternative, 41 U.S.C. § 7104(b) allows a
contractor 12 months to "bring an action directly on the claim in the United States
Court of Federal Claims .... " This provides a contractor with a choice of forum in
making its appeals.
USAC's 31December2013 effective notices of appeal in ASBCA Nos. 59114
and 59115 were emailed to DLA's CO and, as noted earlier, carry the salutation "Good
Morning Janice Hicks and Armed Services Board of Contract Appeals. " 3 The
contractor does not mention the Court of Federal Claims anywhere in the email. The
subsequent notices of appeal in ASBCA Nos. 59114 and 59115 mailed to the ASBCA
were directed to the Board's correct address; the enclosed correspondence showed the
ASBCA as the addressee; and the salutation twice specified that the notice was
brought to the Board's "Attention."
3
USAC makes no mention of the United States Court of Federal Claims in its notices
of appeal in ASBCA Nos. 59121, 59122, and 59123.
9
The language to which the government refers appears in the body of the
notices: following the paragraph noting that the pertinent COFD "is being Appealed,"
USAC states that "The reasoning for our Appeal will be described in full within the
action presented to the U.S. Court of Federal Claims." The ASBCA on 17 June 2014
wrote the parties, noting that the CDA makes both Board and the Court available as
alternative forums, quoting the contractor's reference to the Court in the mailed
notices of appeal, and requesting that USAC "clarify whether it intended to appeal
ASBCA Nos. 59114 and 59115" to the ASBCA or the Court. USAC's 20 June 2014
response to the Board did not mention the Court, but commented on the merits of its
position and expressed appreciation for the opportunity to explain its position with
respect to termination of the contract.
We find that the prose appellant's sole reference to the Court does not override
its repeated statements of intent to appeal to the Board. Further, we interpret USAC's
statement that the appropriate COFD in ASBCA Nos. 59114 and 59115 "is being
Appealed" to express a current intent to lodge an appeal. We deny this portion of the
government's motion.
3. Should ASBCA No. 59114 for DO 0001 be Dismissed Because the
Underlying Contract Was Previously Terminated?
The government posits that:
The fact that a system error precluded DLA from
posting and e-mailing the termination modification under
[DO] 0001 until October 3, 2013, is of no moment. As
recounted above, DLA unquestionably terminated the basic
contract for default on September 20, 2013, which
terminated the entire contract and all of the outstanding
[DOs] thereunder.
(Gov't mot. at 6) We understand DLA to suggest that because USAC did not timely
appeal the termination of the underlying contract in ASBCA No. 59115, it has no right
to appeal the termination of DO 0001 in ASBCA No. 59114. However, other than
making the brief, quoted statement above, the government provides no legal analysis
of statute, regulation or caselaw to support its position. As we find this argument is
not adequately developed and are unable to ascertain whether there are disputed
material facts, it is premature to rule upon this argument.
10
CONCLUSION
We grant the government's motion to dismiss in part. We grant the motion in
ASBCA Nos. 59115, 59121, 59122, and 59123, and dismiss these appeals as untimely
made to the Board. We deny the government's motion on the basis that ASBCA
No. 59114 should be dismissed as an inchoate appeal to the United States Court of
Federal Claims. We decline to rule upon the government's suggestion that ASBCA
No. 59114 appealing the termination of DO 0001 cannot survive the government's
termination of the underlying contract.
Dated: 4 December 2014
Administrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
RICHARD SHACKLEFORD
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA Nos. 59114, 59115, 59121,
59122, 59123, Appeals of USAC Aerospace Group, Inc. dba USAC Aerospace Group:
Aerostructures, rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
11