ASFA Construction Industry and Trade, Inc.

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
ASF A Construction Industry and Trade, Inc. ) ASBCA No. 57269)
Under Contract No. 000000-00-0-0000 )
APPEARANCE FOR THE APPELLANT: D. Lee Toedter, Esq.
Orange Beach, AL
APPEARANCES FOR THE GOVERNMENT: Raymond M. Saunders, Esq.
Army Chief Trial Attorney
MAJ John R. Longley, JA
CPT Tyler L. Davidson, JA
CPT Edward Ahn, JA
Trial Attorneys
OPINION BY ADMINISTRATIVE JUDGE PAGE
ASFA Construction Industry and Trade, Inc. (ASF A), appeals from a deemed
denial of its claim seeking a $478,476.02 equitable adjustment or, alternatively, a
termination for convenience settlement based upon an alleged implied-in-fact contract
with the Joint Contracting Command-Iraq/Afghanistan (JCC-1/A) Regional Contracting
Center-Balad (RCC-Balad) to repair an asphalt plant and rock crusher at Logistics
Support Area (LSA) Anaconda in Balad, Iraq. Our jurisdiction arises from the Contract
Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109. In a previous decision, ASFA
Construction Industry & Trade, Inc., ASBCA No. 57269, 11-2 BCA ~ 34,791, we denied
the government's motion to dismiss this appeal for lack of jurisdiction on the basis that
the alleged contract did not exist, holding that triable issues remained regarding the
parties' respective conduct which precluded dismissal. 11-2 BCA ~ 34,791 at 171,249.
The parties have elected to submit the appeal on the written record pursuant to Board
Rule 11. We decide entitlement only. We sustain the appeal.
FINDINGS OF FACT
1. On 23 August 2007, the JCC-1/A RCC-Balad issued a request for information
(RFI) to companies "interested in constructing a concrete batch plant on LSA Anaconda."
Potential contractors were asked to respond by 25 August 2007 regarding their planned
approach for the construction and operation of the concrete batch plant. Among other
questions, the RFI asked potential contractors if they could "bring a batch plant onto LSA
Anaconda at your own cost and the possibility of no work to start with." (R4, tab 1) At
the time, only one concrete contractor was on Balad Air Base and the government did not
want to bring in concrete from outside the base due to security concerns regarding the
potential for explosives to be hidden within the concrete. Through the RFI, the
government was attempting to increase contracting capability operating inside the base to
meet its concrete requirements and also to secure more competitive prices. (R4, tab 50
(Berg dep.) at 16-18)
2. ASF A responded to the RFI by letter dated 25 August 2007 (R4, tab 2).
3. By memorandum dated 5 September 2007, contracting officer (CO) Chad D.
Miller notified potential contractors that they would "be given the opportunity to present
their plan of constructing a [concrete] batch plant" during a one-hour oral presentation on
19 September 2007. Topics to be addressed included equipment, set-up, barrier material,
raw materials, labor, delivery and security, quality of concrete work, and financial
resources. Potential contractors were directed to submit a "read ahead packet" to the
government by 14 September 2007. (R4, tab 3)
4. ASF A provided the required read ahead packet to the government prior to its
oral presentation (R4, tab 22). ASF A outlined by brand name, model designation, and
(where appropriate) capacity of the concrete batch plant, stone crusher plant, mixer truck,
and other pieces of equipment and vehicles that ASF A intended to provide (id. at 5).
ASFA stated that "[a]ll equipment is ready to be shipped to Anaconda at the ASFA
warehouse in Turkey," and that "delivery to Anaconda can be completed within 45 days."
ASF A further stated that installation "can be compl[ e]ted within 30 days upon arrival of
all the equipment in Anaconda." (Id. at 7)
5. By memorandum dated 31 October 2007, Lt Col Todd M. Burkhardt, USAF,
Chief, RCC-Balad, notified ASF A that it had been selected to build a concrete batch plant
on Balad Air Base, stating:
1. Congratulations! ASFA Group has been selected as the
contractor to build a batch plant on Balad Air Base, Iraq.
This award is based on your verbal presentation for the
construction of a concrete batch plant on Balad Air Base,
Iraq.
2. We are currently working with Terrain Management to get
the land for the batch plant and rock crushing area. The land
space we had was determined to be unsuitable and we are
diligently working to get a new area. We will let you know
as soon as the land is available.
2
3. Please acknowledge receipt of this letter in the space
provided below and promptly return a signed copy of this
letter to the addressed [sic] noted above.
4. We look forward to your company joining our contract
support team and anticipate a prosperous working
relationship.
5. Refer any questions to [Kimberly Burt].
(R4, tab 4) ASFA acknowledged receipt of the memorandum on 2 November 2007 (id.).
6. An asphalt plant and a rock crusher had been abandoned on the land to be given
to ASFA to erect its concrete batch plant. It was the government's practice to use this
leftover or "stay-behind" equipment for its own purposes. (Berg dep. at 31-36).
Following the concrete batch plant award notice, CO MAJ Robert J. Berg conducted a
terrain walk with Mr. Orcan Fikirdanis, an ASF A site representative. During the terrain
walk, CO Berg instructed ASFA to push the abandoned, government-owned asphalt and
rock crushing equipment aside. (Id. at 27-28, 30-32)
7. An 18 November 2007 email entitled "Batchplant Update" from
Capt Karsten E. Lipiec of the Terrain Management Office, The Mayor's Cell, LSA
Anaconda, to L TC Joseph Tyron, CO Berg and others provided:
Gentlemen, I went out and did a survey of your asphalt
plant/crusher. See attached slide. [IJ [CO] Berg from
contracting has offered the [ASF A] company to clean this up
as part of their contract to start a new concrete batch plant
here ....
My plan would be for your equipment to be stored near the
perimeter, in a fenced-in, locked location not too far from
here.... As you mentioned, your equipment does not run but
you plan to fund an expert to troubleshoot it for you NET
Jan 08.
[CO] Berg,
Sir, given this new information, how feasible is it to have
[ASF A] perform this work? Once clear, the land could
1
The email included an attached document entitled "20 BDE Asphalt Plant.ppt" (R4,
tab 6). That document, however, is not included in the record.
3
support set-up of [ASF A's] equipment. [ASF A's] plant
requires 11,300 square meters. It could easily fit into the
28,467 SM measured here.
(R4, tab 6)
8. A 10 December 2007 email from CO Kristopher J. Pondo, Capt, USAF,
advised ASF A:
You are allowed to open an asphalt plant on Anaconda. The
lot of land will no longer be divided but will be ASF A's for
both an asphalt and concrete plant. A letter will soon follow
signed by [CO] Berg and [LTC] Tyron. For now I am
authorizing you to proceed.
(R4, tab 7)
9. By a 10 December 2007 memorandum from LTC Tyron and CO Berg, the
government notified ASF A that it had been selected to build an asphalt plant in addition
to the concrete batch plant, stating:
1. Congratulations! ASF A Group has been selected for as
[sic] the contractor to build another batch plant on Balad Air
Base, Iraq. This award is based on your verbal presentation
for the construction of an asphalt batch plant on Balad Air
Base, Iraq.
2. We are currently working with Terrain Management to get
the land for the batch plant and rock crushing area. The land
space we had was determined to be unsuitable and we are
diligently working to get a new area. We will let you know
as soon as the land is available.
ASFA was asked to acknowledge receipt of the "Notice of Award," and told to direct any
questions to CO Pondo. (R4, tab 8)
10. In authorizing ASF A to establish an asphalt plant, the parties intended that
ASF A use the abandoned government-owned asphalt equipment present on Balad
(Berg dep. at 47-48). CO Berg testified that the government-owned asphalt plant was
non-operational and in poor condition because "somebody had cannibalized a lot of the
components of all this equipment" (id. at 40-41 ). However, when asked during a
deposition whether the government was aware that the asphalt plant was in disrepair at
the time the notices of award to establish the concrete and asphalt plants were issued to
4
ASFA, CO Pondo testified "No." (R4, tab 53 (Pondo dep.) at 141). ASFA's CEO,
Mr. Faruk Cercer, testified at a deposition, on behalf of ASFA pursuant to Federal Rule
of Civil Procedure 30(b)(6), that although ASFA knew that the asphalt equipment "might
not be 100 percent operational" as of 10 December 2007, ASFA was not fully aware of
the state of disrepair until an inspection "[i]mmediately after the award" (R4, tab 4 7
(Cercer dep.) at 86-88). We find, consistent with Mr. Cercer's testimony and
Capt Lipiec's 18 November 2007 email, that ASFA and the government were aware that
the asphalt plant was not operational prior to 10 December 2007, but were unaware of the
extent of disrepair until after that date.
11. CO Berg testified to the following:
Q So if you needed aggregate for concrete, and
that was your primary emphasis, why did you award the
Notice to Proceed and Award for the development of the
asphalt plant?
A First of all, let's go back to the beginning. We
were doing a terrain walk. In the terrain walk with ASF A, in
looking at -- when we saw the piece of equipment, we noticed
there was an asphalt -- an asphalt -- leftovers of an asphalt
plant from the government, from some engineering unit.
And at that point in time I remember the guy
asked me, do we buy asphalt. And I said, occasionally we
do ....
So he said, if we have the asphalt plant, can we
compete for that business? And I said sure, no reason you
can't compete for the business. So they came back with a
proposal, a plan to fix the asphalt and to compete for that. So
that's how the asphalt came in.
And when word came around that they were
going to put an asphalt in, there was a lot of folks that liked
that idea. The Air Force liked that idea. Obviously the
engineers liked the idea. So there was some government
folks that said, that's a good idea. We can use that asphalt
plant here in Iraq.
So it was based on the fact that ASF A said they
can get an asphalt plant up using that piece of equipment that
was left behind.
5
(Berg dep. at 85-86) We find, based on CO Berg's testimony, that ASFA offered to
repair the non-operational asphalt plant and rock crusher in exchange for use of the
repaired equipment in future asphalt competitions and that the government agreed.
12. By 18 January 2008, the parties had discovered that the government-owned
rock crusher and asphalt plant were missing necessary parts. CO Pondo' s email of that
date to other government "addressees" noted that "someone has been taking essentially
stealing parts off of the machine," including "computer parts from the asphalt plant,
engines, and conveyor belts." CO Pondo made clear that he would ensure that anyone
discovered having taken these things would "not do business on this base, in all of Iraq or
with the U.S. Government anywere [sic]." (R4, tab 21at23)
13. In a 21January2008 email to CO Pondo and CO Berg entitled "ASFA-Rock
Crusher & Asphalt Plant," Mr. Fikirdanis stated that he ''would like to [take over] the
equipment at the yard in 'as is' condition" before returning to Turkey for medical
treatment two days later. CO Berg replied the same day stating that the "20th Engineer
[Brigade] are [sic] ready to sign over the equipment to your company," and asked who
could sign for ASFA. Mr. Fikirdanis's 21January2008 reply stated that he would "like
to sign the necessary documentation." In response, CO Berg asked: "[CO] Pondo can
you arrange this?" (R4, tab 24)
14. According to a 28 January 2008 email from CO Pondo to Mr. Fikirdanis:
The 20th Engineers have said that the program office
who owns the rock crusher and asphalt machine will pay for
the parts. If we buy the parts we would like you to install
them. We are just waiting for the guy to come out to do the
assessment to tell us what is needed. It is told to me that the
guy will be out here mid February or early March. I will get
you in contact with him as soon as I learn more information.
As far as the transfer of property goes, I want to wait
till the machine is fully restored after we install the parts.
Then we can transfer the rock crusher and asphalt machine
over as a solid piece of usable equipment. This transfer will
not take place till April timeframe. Please let me know if you
have any questions.
(R4, tab 9) CO Pondo testified that it was his understanding, as of 28 January 2008, that
ASFA would be repairing the asphalt plant and rock crusher based on "[t]he 20th
Engineering telling me at that point that they would buy the parts and that they
would-they would buy the parts and that ASF A would repair the machine" (Pondo dep.
at 32-33). CO Pondo's deposition testimony included the following exchange:
6
Q How did you intend to communicate your
thought that ASF A will be repairing the asphalt plant and
rock crusher? How did you intend to communicate that to
ASFA?
A That they will be making repairs? They offered
to make the repairs.
Q Did you accept their offer?
A No.
Q Did you reject their offer?
A I said there was no contract. I mean, there was
no contract. However, they agreed to -- they said if you
would give us the parts, we' 11 make the repairs on that.
Q Did you concur with their offer at any point in
time?
A To repair them? Yes.
(Id. at 37) CO Pondo further testified that ASFA would recover the costs of repairing the
asphalt plant and rock crusher through a follow-on Blanket Purchase Agreement (BPA)
for asphalt (id. at 33-34). Mr. Cercer likewise testified that ASFA was promised a BPA
in return for installing parts on the asphalt plant and rock crusher (Cercer dep. at 28, 50).
We find, based upon verbal exchanges and supported by written correspondence, that by
28 January 2008 the parties had reached a tacit agreement under which the government
would purchase necessary parts for the asphalt plant and rock crusher, ASF A would
install those parts and make the necessary repairs, and the government would allow
ASF A to use the government's repaired asphalt and rock crushing equipment and award
ASF A an asphalt BPA in return.
15. A chain of emails began on 28 January 2008, as CO Pondo wrote
Mr. David S. Schwartz, Assistant Product Manager, Team Leader Construction
Equipment, SF AE-CSS-FP-C, to introduce Mr. Fikirdanis:
I would like you to meet Mr. Fikirdanis. He is one of
our contractors out here, who will be repairing the [a]sphalt
plant and rock crusher. I told him I would get him in contact
with someone who knew a bit about the machines. Any
7
assistance to Mr. Fikirdanis would be helpful to us here at
Balad.
(R4, tab 10 at 4-5)
16. Mr. Schwartz's email reply of 29 January 2008 advised CO Pondo:
I am working on sending two FSRs [field service
representatives] to Balad to inspect the crusher and work with
unit personal [sic] to order parts to get it fixed. Once parts
arrive in country, the FSRs will return and repair the crusher,
provide training, and then leave. Where does Mr. Fikirdanis
fit into all this and what does he need from me?
(R4, tab 10 at 4)
17. In response to Mr. Schwartz's query, CO Pondo stated, by email dated
31 January 2008:
The company ASF A group has stated that if we give them the
parts necessary for the repairs that they would make the
repairs themselves. After the machines are fully operable, we
are planning to tum them over to the contractor as GFE
[government-furnished equipment] so they may use them to
produce [a]sphalt and concrete out here on Balad. We would
then cut a BPA with ASF A at a cheaper price to buy the
materials from them.
(R4, tab 10 at 3)
18. Mr. Schwartz responded on 31 January 2008, telling CO Pondo that "[m]y
contract does not cover anything to do with giving parts to the ASFA group." He noted
that his organization was "only working on the crushing plant," and stated that the FSRs
would "return to install [parts] with help from the unit, or ASF A if the 20th wishes, get
the crushing plant operational, and provide training." Mr. Schwartz further stated:
I am aware that the 20th wishes to tum the plant over to a
contractor and we will provide the necessary training so they
can operate and maintain the crushing plant.
8
I believe that we can help with providing what you need to
support your BPA with ASFA after the FSRs leave.
(R4, tab 10 at 2-3)
19. On 4 February 2008, Mr. Fikirdanis inquired by email of CO Pondo regarding
the "[c]urrent status of [a]sphalt tanks which [have] been taken by PMA [another
contractor]." Mr. Fikirdanis also asked for "[s]ome form of an agreement for utilization
of the [a]sphalt plant." CO Pondo replied that he would "get an update from PMA"
regarding the tanks, and advised Mr. Fikirdanis that "the agreement will be worked out
with [CO] Berg as he will be taking over the details of this project." (R4, tab 25)
20. By 5 May 2008, Mr. Doug Schmidt, a field service representative, completed
his inspection of the rock crusher. By email dated 5 May 2008, CW4 Raymond P. Hursh
provided ASFA with a copy of a list of repair parts prepared by Mr. Schmidt.
CW4 Hursh' s 5 May 2008 email to ASF A also forwarded an email from the rock crusher
manufacturer that stated: "Per Doug's request, here is the information on the authorized
Terex I Cedarapids, Inc. dealer in Turkey. Any parts that the Turkish company
overseeing the CSWP in Anaconda wants to buy will need to go through these people."
(R4, tab 26)
21. In a 16 June 2008 email, CO Thomas E. Tortorella, Capt, USAF, asked ASFA
to "provide a cost estimate on how much you think it would cost to replace the parts on
the asphalt plant (not the rockcrusher)." Mr. Aytekin Aydemir, contract manager for
ASF A, replied the next morning that it would take time for ASF A to provide an estimate.
CO Tortorella's 17 June 2008 email response reminded Mr. Aydemir that the estimate
should only pertain to the asphalt plant. (R4, tab 27) CO Tortorella testified that he
could not recall why he asked ASFA to provide a cost estimate. CO Tortorella further
denied directing ASFA to purchase parts for the asphalt plant. (R4, tab 57 (Tortorella
dep.) at 66, 73-74) We find, however, that CO Tortorella's 16 June 2008 email indicated
the government was considering having ASF A provide parts for the asphalt plant.
22. By July 2008, responsibility for purchasing parts for the rock crusher had
shifted to ASFA (R4, tab 11; see also Tortorella dep. at 78-79; finding 20). On 7 July
2008, CO Tortorella inquired of Mr. Aydemir: "What is the status of the Rockcrusher?
Are you planning to purchase parts for the Rockcrusher[?]" Mr. Aydemir responded to
CO Tortorella's inquiry, "Some parts have been provided from Turkey and some have
been ordered from USA. All the materials will be loaded at one time when we receive
the rest of materials from USA and send it here [t]o Balad." (R4, tab 11)
23. On 6 September 2008, Mr. Mehmet Z. Senler, an ASFA site manager in
Balad, emailed Mr. Cercer describing a conversation between Mr. Senler and
CO MAJ Jason R. Conde regarding the asphalt plant. According to Mr. Senler's email,
9
Mr. Senler informed CO Conde that the parts for the rock crusher had arrived at Balad
and were being installed. Mr. Senler also requested a letter from CO Conde stating that
ASFA is authorized to operate the asphalt plant. 2 CO Conde stated, according to
Mr. Senler's email, that he could not provide such a letter, noted that the matter has taken
too much time, and stated that if ASFA wanted to retain possession of the asphalt plant it
should provide a letter ''with the information on when you can start operating, what
would be the daily amount of production, [and the] possible unit price of approximate
production." (R4, tab 28 at 1)
24. CO Conde was unfamiliar with the asphalt plant matter when first contacted
by ASFA (R4, tab 56 (Conde dep.) at 66-67). By letter dated 12 September 2008, ASFA
provided CO Conde with a history of the rock crusher and asphalt plant repair effort.
According to ASFA's letter, in or about June 2008 the government told ASFA that the
government providing the missing parts for the asphalt plant and rock crusher would take
too long, except for the parts at PMA's jobsite, and that "if those parts are provided by
[ASFA], it would be easier." ASFA advised CO Conde that "[r]ight after [the]
government's decision we started to work" and consequently ordered parts for the rock
crusher and asphalt plant. ASFA's letter also told the CO that it had to get back the parts
from the PMA site, that the capacity of the asphalt plant would be approximately
1500 tons/day, and that the sales price would be approximately $140-$150 per ton. (R4,
tab 12)
25. In a 17 September 2008 email to Mr. Senler, CO Conde stated:
I have thoroughly discussed your issues and concerns to the
individuals that determine the final disposition of the GFE
(Government Furnished Equipment) that you have in your
possession. Additionally, I gave them all of the supporting
documentation that you have provided me and they are in the
process of determining what to do with this equipment based
on all the facts.
As I have stated in our several meetings, the equipment in
question is not owned by my organization [n ]or was it
provided to you in a contractual agreement, because of this
fact I am no longer in a position to further address your
2
The letter was needed to facilitate discussions between ASF A and the asphalt plant
manufacturer (R4, tab 28 at 1-2).
10
concerns. This is clearly not a contract issue, but a Mayor
Cell I Terrain [m]anagement and [e]quipment owner issue.
They are fully aware of the situation and from this point on I
cannot proceed any further with this issue.
(R4, tab 30 at 2)
26. On 18 September 2008, ASF A emailed CO Pondo, who was no longer in
Balad, and requested that he contact the "Mayor cell or [CO] Jason R. Conde" regarding
the asphalt plant and the rock crusher (R4, tab 29 at 1-2). CO Pondo replied to ASFA on
23 September 2008:
I sent an e-mail to the Major. I am waiting for a reply from
him.
Please do not discuss the offering of a job or anything to the
Major. My reason for helping is not bec[au]se of the job
offer, but bee[au]se I would like to straighten out any error on
the govemment[']s part.
As far as a job goes I would have to put it on hold for now. I
will definately [sic] keep you in mind though.
(R4, tab 30 at 1) CO Pondo emailed ASF A again on 25 September 2008, stating that he
had "heard nothing from the Major" (R4, tab 44, ex. 32). Although CO Pondo testified
that he actually sent an email to CO Conde (Pondo dep. at 82), CO Conde testified that he
did not remember receiving an email from, or talking to, CO Pondo (Conde dep. at 83).
27. The record contains a memorandum for record by lLT James M. Sering
entitled "REMOVAL OF ASPHALT EQUIPMENT FROM ASFA AREA." The
memorandum suggests the government removed the asphalt equipment from ASFA's
control on or about 17 September 2008. 3 (R4, tab 29 at 3) However, CO Conde testified
that he did not think that the asphalt equipment was actually removed (Conde dep. at
79-80). A 20 February 2009 invoice for 385,836.40 TL (Turkish Lira) indicates that
ASFA continued to buy repair parts after September 2008 (R4, tab 44, ex. 47 at 4-5,
tab 49, ex. 49 at 1-2). We find that the government allowed ASFA to retain possession of
the asphalt plant and rock crushing equipment beyond September 2008 (see R4, tabs 47,
49 at 2).
3
Although the memorandum is dated 18 August 2008, it refers to events on 16 and
17 September 2008.
11
28. In late August 2009, the government was preparing to dismantle the asphalt
plant and rock crusher (R4, tab 60 (Allen dep.) at 98). After being told by an ASFA
representative that ASFA had purchased over $300,000 in missing parts (id. at 97),
CO LT Kevin W. Allen sent a 24 August 2009 email to Mr. Ibrahim H. Cigerli, an ASF A
site manager, asking: "What are the contract numbers associated with the attached two
notices of award[?]" (R4, tab 33 at 3). CO Allen explained that "[t]his is needed in order
for us to determine exactly what ASF A was required to do by the government" and stated
that "[n]o further action will be taken until the requested information is received" (id.).
On 29 August 2009, CO Allen emailed Maj Jack L. Nemceffll, USAF, Commander
RCC-Balad, Maj Donald A. Jones, 557 ERHS (Expeditionary Red Horse Squadron),
USAF, and others stating that he "cannot authorize any action be taken" pending ASFA's
response to his inquiry. Maj Jones replied to CO Allen on 29 August 2009 stating:
"Well, we aren't throwing anything away but we will start taking it down nicely and
putting [it] in a safe place (RPAT yard). If they have a valid claim we will bring it right
back to them good as new!" CO Allen responded, with copy to Mr. Cigerli, that "it
would be in the government's best interest to do nothing" pending a response from
ASF A. (Id. at 1-2)
29. ASF A responded to CO Allen's 24 August 2009 email on 3 September 2009.
ASF A referred CO Allen to CO Pondo as a government official familiar with events that
had taken place regarding the asphalt plant and rock crusher. ASF A noted that it repaired
those items at the government's request, and advised that ASF A would seek
compensation for repairs it had made:
ASPHALT PLANT AND ROCK CRUSHER:
After [the government-supplied technical representative]
prepar[ed] the list of the missing parts of the rock crusher,
expected parts had not arrived [at] Anaconda until June 2008.
Several verbal communications took place and the
government determined that providing these parts would take
a long time and ASF A accepted to provide these parts in
order to make at least the rock crusher operational. Thus,
ASF A provided all necessary parts to repair the crusher and
spent approximately $1 OOK to include purchasing of missing
parts, transportation, installation costs and other site
expenses. Necessary paperwork regarding to these expenses
may be submitted to your office if requested.. . . The rock
crusher was fully repaired by December 2008.
12
... [A]dditionally, ASF A made several investments, purchased
some of the missing parts ... but never could produce asphalt
due to missing parts of the GFE equipment.. . . We were also
told by the contracting office that a BPA asphalt contract
would be followed after correction of the plant which had
never been happened. On the other hand, it is understood by
ASFA that now, the rock crusher is intended to be removed
from our site even though it was given us as a GFE under a
mutual agreement.
If the GFE equipment will be required to be returned to the
government, we will be in a position to request you to
compensate all our losses raised from the rock crusher and
asphalt plant repairs and other losses by not providing
missing parts of the asphalt plant.
(R4, tab 13)
30. On 8 September 2009, ASFA emailed CO Allen stating: "We could not find a
documentation authorizing us to purchase missing parts for the GFE in writing.... This
repair was definitely based on the discussions between [CO Pondo] and our site
representative at that time." (R4, tab 34) CO Allen replied:
We are in the process of attempting to contact [CO] Pondo for
his side of the story. I really need documentation from a
government representative giving ASF A the authority to
purchase the missing parts on behalf of the government.
Without such documentation I can only assume ASF A acted
at its own risk.
(R4, tab 44, ex. 35) CO Allen was unable to contact CO Pondo (Allen dep. at 81 ).
31. In or about October or November 2009, SFC Kevin L. Miller, 194th Engineer
Brigade, conducted a technical inspection of the rock crusher and asphalt plant (R4,
tab 59 (Miller dep.) at 43, 153). SFC Miller determined that the rock crusher and asphalt
plant were missing numerous parts, that the asphalt tanker and dedrummer required
structural repair, and that the rock crusher was not fully operational (id. at 43-67,
153-55).
32. On 17 November 2009, ASF A wrote TS gt Robert E. Powell at RCC-Balad to
relate that appellant's site office had been informed that the government was removing
13
the asphalt plant and rock crusher from Balad and that "ASF A will be soon be subject to
a demobilization request from the base." Appellant told TSgt Powell:
. As it was discussed in multiple occasions with your office in
the past, ASF A has been invited by your office and thereafter
awarded the rights of the following by separate award letters;
1. To install and operate a company owned concrete
batch plant and operate
2. To install and operate existing GFE asphalt plant
and rock crusher
(R4, tab 14 at 1) ASF A referred TS gt Powell to its prior "discussions with [CO] Pondo,
the former contracting officer in RCC Balad," and told TSgt Powell that:
It was also discussed with [CO Pondo] separately that they
would select a company to award the asphalt plant operating
right based on their technical capabilities and the Government
would provide fully functional asphalt batch plant equipment
completed with a rock crusher to be installed and operated by
the successful contractor. The award would again be
followed by an IDIQ type asphalt supply contract. After an
evaluation period of the contractors' capabilities, ASF A again
has been selected for the award.
(Id. at 1-2) ASF A reminded TS gt Powell that it was discovered during an inspection that
the government's asphalt plant and rock crusher were not operational, due to missing
major parts (id. at 2). ASFA urged TSgt Powell to verify with CO Pondo that the
government had promised to provide parts for the asphalt plant and rock crusher but
failed to do so, resulting in ASF A purchasing required parts (id.). ASF A alleged that it
was damaged by the government's: failing to provide a functioning rock crusher and
asphalt plant and award concrete and asphalt IDIQ contracts to ASF A as promised;
ordering ASF A to demobilize the concrete and asphalt batch plants within a short period
and without compensation; and depriving ASFA of the opportunity to supply the
government and third parties with asphalt, rock and concrete (id. at 2-3). ASFA asked
TSgt Powell to reconsider the government's decision requiring ASFA to demobilize.
ASF A told him that while ASF A would "certainly obey all orders" from the government,
it would seek compensation for its losses if the government persisted with removal of the
asphalt plant and rock crusher. (Id. at 3)
3 3. Upon receiving ASF A's 17 November 2009 letter, TS gt Powell passed it on to
Mr. Richard E. Early and took no other action (R4, tab 55 (Powell dep.) at 79-80).
14
34. By memorandum dated 20 November 2009, CO MSgt Marvin C. Frazier
informed ASFA that he was authorizing the government to disassemble and remove the
rock crusher and asphalt plant:
1. The purpose of this memorandum is to authorize the 557
ERRS to disassemble and relocate the Government Furnished
Property (GFP) located on Joint Base Balad (northend area)
as provided to ASF A Group under a partnering agreement in
2007. All equipment associated with the respective rock
crusher and asphalt plant is Government property and is
hereby authorized [for] disassembly and relocation to the US.
All efforts are deemed in the best interests of the US
Government in support of drawdown efforts associated with
Operation Iraqi Freedom.
(R4, tab 15)
35. On 27 November 2009, Maj Nemceff, Commander RCC-Balad, issued a
memorandum to the Real Property Management Office entitled "Notice of Termination
of Services (ASF A Group)." The memorandum stated that "no pending contracts
(construction and services) remain outstanding and under the purview of the Regional
Contracting Center for subject vendor." The memorandum further stated that "any
forthcoming warranty work associated with any construction contracts with subject
vendor has been waived ... to facilitate action(s) required by the Real Property
Management Office to notify subject vendor to vacate all land assignments and terminate
all lease agreements with Joint Base Balad, Iraq." (R4, tab 16)
36. CO Frazier wrote ASF A on 30 November 2009 regarding its "Claim: Asphalt
Batch Plant, Joint Base Balad," and stated that although the government had received
ASF A's "claim for materials and equipment purchased in support of [the] subject
requirement," the government was "unable to proceed with processing your claim" in
accordance with Federal Acquisition Regulation (FAR) Part 33 and the Contract Disputes
Act. He stated that the following were required before the government could evaluate
ASFA's claim: the contract number; a total amount; a request for a final decision of the
contracting officer; and ASFA's certification of a claim exceeding $100,000. CO Frazier
directed ASFA to provide this information no later than 10 December 2009. (R4, tab 17
at 1)
37. Email exchanges between the parties dated 10 December 2009 show that
ASFA reminded the government that "no contract number was formally assigned to this
award." ASF A told the government that its 17 November 2009 letter was not a claim, but
rather a "heads-up notification of a future claim if the government intends to remove [the]
15
asphalt plant." (R4, tab 17 at 2) The government declined to extend its stated deadline
for ASFA's claim beyond 11December2009 unless ASFA provided the requested
information (id. at 3-4).
38. On 5 December 2009, Col David F. Demartino, USAF, Commander 332d
EMSG, provided ASFA with a written "Notice to Leave Joint Base Balad." ASFA was
told that while the government "appreciate[ d] the services your company provided to help
improve the facilities and infrastructure at Joint Base Balad and the 332d Air
Expeditionary Wing," the base was "undergoing a responsible drawdown that positions
the installation for transfer to the government of Iraq." Drawdown activities included "a
reduction of the overall contractor presence," and as a "substantial decrease in new
projects is anticipated ... now is the time for contractors to depart the installation as their
existing contracts expire and their services are no longer needed." Col Demartino
advised ASFA that "[b]ased upon your company's pending contract expiration and our
responsibility to reduce personnel" at Balad, the government asked that ASF A "make
preparations to vacate the base within thirty days of receiving this notification." ASF A
was instructed to leave the work site "cleared and cleaned up in accordance with local
real estate policies"; otherwise, any remaining items would "become government
property" and expose ASFA to fines for failure to comply. (R4, tab 18)
39. By email dated 9 December 2009, ASFA provided CO Frazier with a
proposed demobilization schedule, with demobilization activities starting 10 December
2009 and concluding 31 May 2010 (R4, tab 19). CO Frazier forwarded the proposed
schedule to Lt Col John E. Tryon, USAF, 332d ECES (R4, tab 38 at 2). Lt Col Tryon
emailed ASF A on 9 December 2009 stating, "Thank you for this information, but six
months seems too long to simply dismantle a batch plant and clean up the camp areas ....
CE agrees to sponsor ASFA for a 60-day demobilization period." (Id. at 1) On
10 December 2009, ASFA replied that it "has one of the most equipped camps in
Anaconda" and that the "period of 60 days will not be sufficient for demobilization" (id.).
40. ASFA prepared a "Certified Claim for Equitable Adjustment" dated 8 March
2010 in response to the government's 30 November 2009 letter (R4, tab 21). ASFA
categorized its request as one for an "Equitable Adjustment" or, in the alternative,
seeking a "Termination for Convenience settlement" and sought $478,476.02 for work
done to repair the asphalt plant and rock crusher (id. at 1-2). ASFA's "SUMMARY OF
EVENTS" explained that the "US Government awarded a contract to ASF A ... to install
and operate [an] existing GFE asphalt plant and rock crusher" (id. at 1). After the
government discovered that these items were missing significant parts and were not in
working order, ASF A said it ''was requested to bring these equipments operational" and
told by the government that it "would be issued a base-wide IDIQ asphalt contract."
ASF A contended that, as a result of its efforts, the "GFE Rock Crusher was repaired in
full and maintained operational," and that ASFA had also provided missing parts needed
to make the asphalt plant operational. ASF A said that it had complied with the
16
government's 20 November 20[09] direction to disassemble the rock crusher and asphalt
plant. (Id. at 2) ASFA sought a contracting officer's final decision (id. at 3), and
Caner Dokuzoglu, Deputy General Manager for ASF A, certified the claim (id. at 4 ).
ASF A attached several enclosures including certain correspondence between the parties
and supporting documentation for the claim (id. at 5-31).
41. ASF A appealed the deemed denial of its claim by notice of appeal dated
15 June 2010.
DECISION
The Parties' Positions
ASF A contends that the dispositive issue in this appeal turns on the existence of an
implied-in-fact contract for the repair of the government-owned asphalt plant and rock
crusher (app. br. at 22). Appellant argues that it has met all the elements to establish such
an implied-in-fact contract. ASFA asserts that there was a mutuality of intent between it
and the government for ASF A to repair the inoperable government-owned asphalt plant
and rock crusher. (Id. at 23) It contends that the government wished to repair the asphalt
plant and rock crusher, but lacked the financial resources to order the repair parts and
complete the repair effort itself (id. at 20-21 ). ASFA maintains that it offered to repair
the government-owned asphalt plant and rock crusher and to use them for the production
of asphalt at LSA Anaconda/Joint Base Balad (id. at 23). ASFA asserts that it provided
consideration as demonstrated by its expenditure of funds for materials, repair parts, and
labor as part of the repair effort (id. at 22-23). Appellant argues that the government
accepted its offer as evidenced by the 10 December 2007 notice of award and notice to
proceed and the government's promise "to issue the Appellant an express contract for the
production output [of the asphalt plant and rock crusher] when the repairs were
completed," and that this acceptance was accomplished by an authorized contracting
officer (id. at 23). ASFA notes that the government provided it with technical expertise,
through the field service representatives, to assist ASF A in determining the deficiencies
with the government's inoperable equipment (app. br. at 21, 25).
ASF A argues that it purchased materials and supplies from Turkey and the
United States with knowledge and encouragement of the government. It asserts that it
performed repair work on both the asphalt plant and the rock crusher, but that the repair
effort was incomplete when the government ordered the demobilization of the equipment.
(App. br. at 25) ASFA contends that the government's position that ASFA was allowed
to possess and alter government-owned equipment in the absence of an agreement
between ASFA and the government strains credulity (app. reply br. at 2-3). ASFA
maintains that the government benefitted from its repair efforts to the asphalt plant and
the rock crusher and that it is entitled to compensation for that work (id. at 3).
17
The government denies that an implied-in-fact contract between it and ASFA ever
existed (gov't br. at 36). The government argues that there was no mutual intent to
contract for the repair of the asphalt plant and rock crusher; rather, the parties understood
that ASFA would use the government-owned equipment "as is" (id. at 38). The
government contends that ASF A's deficient repair work evidences that ASF A "was
attempting to convert this equipment [the asphalt plant and rock crusher] to its own use"
and that ASF A "did not believe it was under any obligation to repair or maintain this
equipment for the benefit of the government" (id. at 40-42). The government argues that
ASFA's "belief that it was not under any contractual duty" is further evidenced by
ASFA's "persist[ence] with its non-standard repairs after being told by [CO] Conde on
17 September 2008 that it did not have a contract with the government relating to the
equipment" (id. at 42). The government further asserts that neither CO Tortorella's nor
CO Pondo's communications evidence an intent to contract (id. at 43-45). The
government argues that any alleged contract lacked sufficient definiteness to be
enforceable (id. at 45-46). The government argues that ASF A has failed to establish offer
and acceptance, and that the 10 December 2007 notice of award does not constitute
acceptance of any offer (id. at 46-48; gov't reply br. at 2-3). The government asserts that
"(h]ad an actual agreement been reached between the parties under this scenario [where
the appellant would repair the government's equipment using government provided repair
parts], the government would have provided parts," and contends that the fact that "the
government never provided any repair parts" demonstrates that no such agreement was
reached (gov't br. at 48-49). The government argues that ASFA's expenditure of funds is
insufficient to establish consideration and that no benefit was conferred upon the
government (id. at 39-40, 50-55).
Discussion
The Existence of an Enforceable Implied-in-Fact Contract
The parties vigorously debate whether a valid and enforceable contract exists
between ASFA and the government for the repair of the asphalt plant and rock crusher.
The Board's jurisdiction under the CDA is predicated upon an "express or implied
contract" between a contractor and the government. 41 U.S.C. § 7102(a). The term
"implied contract" in the CDA refers only to implied-in-fact contracts; the Board has no
jurisdiction with respect to contracts implied-in-law. Beyley Constr. Grp. Corp., ASBCA
No. 55692, 08-2 BCA ,-i 33,999 at 168,141; P&C Placement Servs., Inc., ASBCA
No. 54124, 06-2 BCA ,-i 33,373 at 165,446. We have found that, by 28 January 2008, the
parties had reached an understanding by which ASF A would install
government-purchased parts on the asphalt plant and rock crusher, and in return the
government would allow ASF A use of the repaired equipment and award ASF A an
asphalt BPA to provide ASF A an opportunity to recoup the costs of making the repairs
(finding 14), and to compete for future work on the base (finding 11). In support of that
effort, the government provided expertise, in the form of the field service representative,
in identifying the parts missing from the rock crusher (findings 16, 20). The primary
18
question before the Board is whether the parties' tacit agreement constitutes an
enforceable implied-in-fact contract for repair of the government-owned asphalt plant and
rock crusher. We hold that it does.
ASFA bears the burden of proving the existence of an implied-in-fact contract.
Altanmia Commercial Mktg. Co., ASBCA No. 55393, 09-1 BCA ~ 34,095 at 168,584.
An implied-in-fact contract is founded upon a meeting of the minds and '"is inferred, as a
fact, from the conduct of the parties showing, in the light of the surrounding
circumstances, their tacit understanding."' Kam-Almaz v. United States, 682 F.3d 1364,
1368 (Fed. Cir. 2012) (quoting Hanlin v. United States, 316 F.3d 1325, 1328 (Fed. Cir.
2003)); see also Prudential Ins. Co. ofAm. v. United States, 801F.2d1295, 1297
(Fed. Cir. 1986) ("A contract implied in fact is not created or evidenced by explicit
agreement of the parties, but is inferred as a matter of reason or justice from the acts or
conduct of the parties."). The requirements for an implied-in-fact contract with the
United States Government "are the same as for an express contract; only the nature of the
evidence differs." Hanlin, 316 F.3d at 1328; see also Trauma Serv. Grp. v. United States,
104 F.3d 1321, 1325 (Fed. Cir. 1997). The elements of proof to establish a valid contract
with the government are: (1) mutuality of intent to contract; (2) lack of ambiguity in
offer and acceptance; (3) consideration; and (4) actual authority on the part of the
government representative to bind the government in contract. Anderson v. United
States, 344 F.3d 1343, 1353 (Fed. Cir. 2003); City ofEl Centro v. United States, 922 F.2d
816, 820 (Fed. Cir. 1990). In this appeal, the government does not dispute the authority
of its contracting officers to bind the government in contract (gov't br., passim; gov't
reply br., passim). We note that a number of contracting officers were involved over the
course of events, thereby contributing to a discontinuity of the government's knowledge
and actions.
Mutuality of intent is essential to the formation of a contract with the government.
Walsh Constr. Co. ofIll., ASBCA No. 52952, 02-2 BCA ~ 32,024 at 158,279, aff'd, 80 F.
App'x 679 (Fed. Cir. 2003). To satisfy its burden to prove mutuality of intent, ASFA
must show, by objective evidence, the existence of an offer and reciprocal acceptance.
Anderson, 344 F.3d at 1353; Yonir Technologies Inc., ASBCA No. 56736, 10-1 BCA
~ 34,417 at 169,897. We have found that ASF A offered to repair the non-operational
asphalt plant and rock crusher in exchange for use of the repaired equipment in future
on-base asphalt competitions (finding 11), an unambiguous offer. Once an offer is made,
for a contract to be formed there must be an acceptance of the offer. Anderson, 344 F.3d
at 1355. "It is essential that 'acceptance of the offer be manifested by conduct that
indicates assent to the proposed bargain."' Northrop Grumman Sys. Corp. Space Sys.
Div., ASBCA No. 54774, 10-2 BCA ~ 34,517 at 170,237 (quoting Russell Corp. v.
United States, 537 F.2d 474,482 (Ct. Cl. 1976)). We find such acceptance here.
CO Pondo testified at his deposition, albeit reluctantly, that he "concurred" in ASFA's
offer to repair the asphalt plant and rock crusher using government-provided parts.
CO Pondo's acceptance is further manifested by his 28 January 2008 email to
19
Mr. Fikirdanis, in which he states that the 20th Engineer Brigade would pay for parts for
ASF A to install in the rock crusher and asphalt plant, followed by a transfer of the
equipment to ASFA "as a solid piece of usable equipment." (Finding 14) On the same
day, CO Pondo sent an email to Mr. Schwartz describing Mr. Fikirdanis of ASF A as the
contractor "who will be repairing the [a]sphalt plant and rock crusher" (finding 15).
Accordingly, the elements of mutuality of intent to contract, and offer and acceptance are
met.
The relationship between the parties was not static, but evolved over time. The
parties originally contemplated the government providing the necessary parts to repair the
asphalt plant and rock crusher (findings 14, 17). While the government provided a field
service representative to inspect the rock crusher and develop a parts list (finding 20), the
responsibility to purchase the repair parts ultimately shifted to ASFA (findings 21-22,
24). As relayed by ASFA to CO Conde in its 12 September 2008 letter, the government
determined that it would take too long for it to provide the repair parts and that "it would
be easier" for ASFA to do so (finding 24). ASFA's account is supported by
CO Tortorella's 16 June 2008 and 7 July 2008 emails, asking ASFA to provide a cost
estimate to "replace the parts on the asphalt plant" and inquiring whether ASF A was
going to purchase parts for the rock crusher (findings 21-22). Although CO Tortorella
denied directing ASFA to purchase parts for the asphalt plant (finding 21 ), neither
CO Tortorella nor CO Conde removed the asphalt or rock crushing equipment from
ASFA's control or otherwise directed ASFA to cease its repair effort. The government
manifested its assent to appellant's position that ASFA was to purchase the parts
necessary to complete the repair effort by allowing the company to continue possessing
the asphalt plant and rock crusher knowing, particularly after ASFA's 12 September 2008
letter to CO Conde, that ASF A was purchasing parts to complete the repairs of this
equipment. The record indicates that ASF A did not begin to dismantle the asphalt plant
and rock crusher until after November 2009 (see, e.g., findings 39-40).
Additionally, the parties' agreement is supported by consideration. To be valid
and enforceable, a contract must be supported by consideration to ensure mutuality of
obligation. Gardiner, Kamya & Assocs., P.C. v. Jackson, 369 F.3d 1318, 1322 (Fed. Cir.
2004); Ace-Federal Reporters, Inc. v. Barram, 226 F.3d 1329, 1332 (Fed. Cir. 2000).
ASF A provided consideration by agreeing to install the government-purchased parts and
undertake the actual repair effort, a role which expanded over time to include providing
parts with government knowledge. 4 In addition to providing expert guidance and parts to
assist ASF A in the repair effort, the government promised to provide the repaired
equipment to ASF A to use in competing for future on-base asphalt requirements, which
4
The government, relying on SFC Miller's deposition testimony, contends that the
allegedly poor nature of the repairs made by ASF A demonstrate a lack of
consideration (gov't br. at 52-53). The government's argument conflates
consideration with adequacy of performance.
20
the parties anticipated would be accomplished through an asphalt BPA, in return for
ASFA's repair work (finding 14). We are cognizant that, generally, BPAs are themselves
not contracts, until an order is placed, due to lack of consideration. See Production
Packaging, ASBCA No. 53662, 03-2 BCA if 32,338 at 159,972; Julian Freeman,
ASBCA No. 46675, 94-3 BCA if 27,280 at 135,906-07. The Federal Circuit has
characterized BPAs as "reflect[ing] illusory promises that do not impose obligations on
either party." Crewzers Fire Crew Transport., Inc. v. United States, 741F.3d1380,
1382-83 (Fed. Cir. 2014). Accordingly, we are skeptical that the promise of a BPA
would, in itself, provide consideration to support a valid contract. We are also not
required in this appeal, to discuss whether a promise by a contracting officer to award a
BPA, or even a future contract, would contravene regulations or statutes such that the
promise could not be considered valid consideration. However, the government did not
simply offer to award ASF A a single asphalt BPA; the government agreed to allow
ASF A to use the restored asphalt plant and rock crusher in competing for future asphalt
procurements in exchange for effectuating repair of the government-owned equipment.
CO Pondo's 31 January 2008 email to Mr. Schwartz indicates that the parties anticipated
that this arrangement would provide ASF A with a pricing advantage (see finding 17).
The government's encouragement to use the repaired equipment for anticipated
procurements thus had substantial business value and provided consideration, particularly
where the government was restricting base access to vendors (finding 1). See
Ace-Federal, 226 F.3d at 1332 (government's promise to limit competition to schedule
contractors provided consideration for Federal Supply Schedule contract); Total Med.
Mgmt., Inc. v. United States, 104 F.3d 1314, 1320 (Fed. Cir. 1997) (government's
promise to provide support staff and free space in a hospital sufficient consideration for
contractor's promise to provide discounted health care services); see also Enrique (Hank)
Hernandez, ASBCA No. 53011, 01-1BCAif31,220 at 154,103 ("The mutuality of
consideration was the Government's obligation in consenting to appellant's performance
of bagging services to furnish space for appellant's operations and encourage patrons to
tip or, at a minimum, notify patrons that baggers work only for tips.").
The government contends that the parties' agreement is insufficiently definite to
be enforceable. A contract is unenforceable unless it is sufficiently definite so as to
provide a basis for determining the existence of a breach and formulating an appropriate
remedy. Crewzers, 741 F.3d at 1382; Aviation Contractor Employees, Inc. v. United
States, 945 F.2d 1568, 1572 (Fed. Cir. 1991). The government argues that "there are no
clearly defined terms-no agreement over what repairs were to be performed; no
agreement over what standards of repairs would be expected; no agreement over how the
government would inspect the equipment ... ; and no agreement over what date the repairs
would be completed by" (gov't br. at 45-46). With regard to the government's first two
objections, we find the parties' agreement sufficiently definite; under the repair effort
initially contemplated by the parties, ASFA's primary task was to install parts, purchased
by the government, necessary to make the asphalt plant and rock crusher operational.
The government, through the field service representative, was to provide the list of the
21
specific parts required. That the relationship between the parties evolved and ASF A took
on a greater role does not defeat the definiteness of the parties' agreement. Respecting
the government's latter two objections, we do not view the lack of inspection and time
terms as rendering the parties' agreement insufficiently definite or ambiguous. Rather,
the lack of these terms is governed by the Restatement, which provides that "[w ]hen the
parties to a bargain sufficiently defined to be a contract have not agreed with respect to a
term which is essential to a determination of their rights and duties, a term which is
reasonable in the circumstances is supplied by the court." RESTATEMENT (SECOND) OF
CONTRACTS§ 204 (1981). The government also argues that there was no contract
because CO Pondo's 31 January 2008 email to Mr. Schwartz demonstrates a mutual
understanding that future negotiations would occur regarding ASF A's price for asphalt
(gov't br. at 44-45). However, it is well settled that "an indefinite price term will not
destroy the underlying mutuality of obligation when a contract indicates a clear intention
by both parties to be bound." Gardiner, 369 F.3d at 1322.
The government's remaining arguments for finding that there is no enforceable
contract are unpersuasive. The government first relies on Mr. Schwartz's 31 January
2008 email in arguing that there was no intent to contract (gov't br. at 44). The
government's reliance is misplaced. Mr. Schwartz's 31 January 2008 email was in
response to CO Pondo's 31January2008 email (finding 18), in which CO Pondo
explained the terms of the parties' agreement to Mr. Schwartz (finding 17). The
government fails to explain how Mr. Schwartz, a non-contracting official, could override
the intent of a contracting officer. The government also relies on CO Tortorella's 7 July
2008 email inquiring whether ASF A was planning on purchasing parts for the rock
crusher and CO Conde's 17 September 2008 email stating that there was no contract
(gov't br. at 42-43). The government's subsequent repudiation of its obligations,
however, does not negate the existence of an enforceable contract. Lastly, relying on
ASFA's 21 January 2008 email, the government suggests that any agreement was simply
to allow ASFA use of the asphalt plant and rock crusher "as is" (gov't br. at 38). But the
government agreed that ASF A should restore the equipment to working order and
facilitated that effort. We find nothing inconsistent between ASFA's desire to take
custody of equipment "as is," expressed in the 21 January 2008 email (finding 13),
particularly at a time when the government believed the equipment to be in better shape
than it turned out to be (finding 10), and the parties' agreement for the repair of the
asphalt plant and rock crusher in exchange for ASFA's use of the repaired equipment.
The contracting officers were actively involved in encouraging and enabling ASF A to
repair the government's equipment: the government cannot claim to have been a mere
bystander to ASFA's efforts.
The Alleged Constructive Termination of the Implied-in-Fact Contract
Having determined that the parties entered into an implied-in-fact contract for the
repair of the asphalt plant and rock crusher, we must decide whether ASFA is entitled to
22
recover on its claim. ASFA's 8 March 2010 claim seeks $478,476.02 for its efforts to
repair the asphalt plant and rock crusher as either an equitable adjustment or in the nature
of a termination for convenience settlement (finding 40). Under the Christian Doctrine,
we incorporate the standard termination for convenience clause, FAR 52.249-2,
TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (FIXED-PRICE) (MA y 2004 ), into
the parties' implied-in-fact repair contract. G.L. Christian & Assocs. v. United States,
312 F.2d 418, 426 (Ct. Cl. 1963); Vee-Tor, Inc., ASBCA Nos. 25807, 26128, 84-1
BCA if 17,145 at 85,439-40 (incorporating termination for convenience clause into an
implied-in-fact contract pursuant to the Christian Doctrine), recon. denied, 85-1 BCA
if 17,755; accord Advanced Team Concepts, Inc. v. United States, 68 Fed. Cl. 147, 152
(2005) ("As with any government contract, express or implied, the government enjoys the
ability to terminate a contract for its convenience, absent bad faith on the part of the
government."). FAR 52.249-2(a) provides that the government "may terminate
performance of work under this contract. . .if the Contracting Officer determines that a
termination is in the Government's interest."
Under the parties' implied-in-fact contract, the government was to purchase parts
necessary for the repair effort for both the asphalt plant and the rock crusher, which
ASFA was to install (finding 14). By July 2008, the government no longer intended to
provide parts for either the asphalt plant or rock crusher and shifted that responsibility to
ASFA (findings 21, 22). Prior to the completion of the repair effort, the government
began considering demobilizing the asphalt plant and rock crusher in August 2009
(finding 28). In a 20 November 2009 memorandum to ASFA, CO Frazier stated that he
was authorizing the disassembly of the equipment for relocation to the United States,
which he deemed to be "in the best interests of the US Government in support of
drawdown efforts associated with Operation Iraqi Freedom" (finding 34).
Col Demartino' s 5 December 2009 notice to ASF A also explained that ASF A was to
leave Joint Base Balad as part of the government's drawdown of the base (finding 38).
These communications constructively terminated the implied-in-fact repair contract for
the government's convenience as part of its drawdown of Joint Base Balad. Accordingly,
ASF A is entitled to a termination for convenience settlement as provided in FAR
52.249-2.
23
CONCLUSION
The government constructively terminated for its convenience an implied-in-fact
contract with ASFA for the repair of an asphalt plant and rock crusher. The appeal is
sustained. We remand the appeal to the parties for processing of any termination for
convenience settlement proposal pursuant to FAR 52.249-2 that ASF A may submit to the
contracting officer.
Dated: 8 July 2015
REBA PAGE
Administrative Judge
Armed Services Board
of Contract Appeals
I concur
~~~
Administrative Judge
RICHARD SHACKLEFORD
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 No. 57269, Appeal of ASFA
Construction Industry and Trade, Inc., rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
24