ASFA International Construction Industry and Trade, Inc.

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
ASF A International Construction Industry ) ASBCA No. 57880and Trade, Inc. )
)
Under Contract No. FA5685-05-C-0004 )
APPEARANCE FOR THE APPELLANT: D. Lee Toedter, Esq.
Attorney at Law & Contract Consultant
Orange Beach, AL
APPEARANCES FOR THE GOVERNMENT: Col Robert J. Preston II, USAF
Acting Air Force Chief Trial Attorney
W. Michael Rose, Esq.
Senior Trial Attorney
Gregory A. Harding, Esq.
Trial Attorney
OPINION BY ADMINISTRATIVE JUDGE MELNICK ON BOARD
JURISDICTION AND APPELLANT'S MOTION FOR SUMMARY JUDGMENT
This appeal arises from ASF A International Construction Industry and Trade,
Inc.'s (ASFA's or appellant's) timely appeal of a contracting officer's (CO's) final
decision (COFD) assessing liquidated damages for late completion of the construction
of three environmental facilities at Incirlik Air Base, a Turkish Air Force installation,
in Adana, Turkey. ASF A now moves for summary judgment asserting that the
government improperly assessed liquidated damages because the government waived
the scheduled completion dates for each facility. The Board raised the issue of its
jurisdiction, sua sponte.
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION
1. The 39th Air Base Wing of the Department of the Air Force (Air Force or
government) awarded Contract No. FA5685-05-C-0004 (contract) to ASFA 1 on
11 May 2005 to complete construction of three partially constructed environmental
facilities - a hazardous materials storage (HAZMAT) facility, a hazardous waste
1
The contract was originally awarded to ASF A Insaat Pazarlama (1st R4, tabs 4, 6);
however, by novation under Modification No. A00002, the contractor's name
was changed to ASFA International Construction Industry & Trade (1st R4,
tab 6).
f
storage facility (storage), and a pesticide management facility (pesticide)- at Incirlik
Air Base in Adana, Turkey (1st R4, 2 tab 4 at 2-5, 15-19 of 31 3). Contract line item
number (CLIN) 0001 was for the construction of the pesticide facility, CLIN 0002 was
for the construction of the storage facility, and CLIN 0003 was for the construction of
the HAZMAT facility (1st R4, tab 4 at 4-5of31).
2. The contract included the following pertinent Federal Acquisition
Regulation (FAR) clauses by reference: 52.233-1, DISPUTES (JUL 2002); 52.232-5,
PAYMENTS UNDER FIXED-PRICE CONSTRUCTION CONTRACTS (SEPT 2002); and
52.249-10, DEFAULT (FIXED-PRICE CONSTRUCTION) (APR 1984) (1st R4, tab 4 at
12-13 of 31 ). The contract also included the following pertinent FAR clauses in full
text: 52.211-10, COMMENCEMENT, PROSECUTION, AND COMPLETION OF WORK
(APR 1984); and 52.211-12, LIQUIDATED DAMAGES -CONSTRUCTION (SEPT 2000)
(1st R4, tab 4 at 13-14 of 31 ).
3. FAR clause 52.232-5, PAYMENTS UNDER FIXED-PRICE CONSTRUCTION
CONTRACTS (SEPT 2002) provides the following, in part:
(b) Progress payments. The Government shall
make progress payments monthly as the work proceeds, or
at more frequent intervals as determined by the
Contracting Officer, on estimates of work accomplished
which meets the standards of quality established under the
contract, as approved by the Contracting Officer.
4. Under contract clause FAR 52.211-10, COMMENCEMENT, PROSECUTION,
AND COMPLETION OF WORK (APR 1984), the storage facility was to be completed no
later than 131 calendar days from the date of the notice to proceed (NTP); the pesticide
facility was to be completed no later than 152 calendar days from the date of the NTP;
2
The government submitted its Rule 4 files in six separate hard copy submittals. The
first submittal was for ASBCA No. 57773, which is ASFA's related appeal.
The second submittal was for this appeal. ASBCA No. 57773 and this appeal
were consolidated (ASBCA No. 57880, Bd. notice of docketing
ASBCA No. 57880. Citations to documents in the Rule 4 files in
this Opinion will be identified by the following: the first submittal will be
identified as "1st R4," the second submittal as "2nd R4," and so forth.
3
The government also submitted copies of its six Rule 4 file submittals with "Bates
numbered" pages on compact discs. The Rule 4 file documents submitted in
paper copies are not "Bates numbered." For the purposes of this Opinion, page
number citations in the Rule 4 file are to the "Bates numbered" pages.
2
and the HAZMAT facility was to be completed no later than 218 calendar days from
the date of the NTP (1st R4, tab 4 at 13-14 of 31; gov't opp'n at 11, ~ 15; app. reply at
7,~15).
5. The Liquidated Damages clause states the following, in part:
(a) If the Contractor fails to complete the work within the
time specified in the contract, the Contractor shall pay
liquidated damages to the Government in the amount of
$276.87 for the first day and $255. 72 for each calendar day
of delay until the work is completed or accepted. The
above amounts will be assessed separately for each project
in which the work is delayed until the work is completed or
accepted (i.e., CLIN 0001, CLIN 0002, CLIN 0003).
(1st R4, tab 4 at 14 of 31)
6. By memorandum dated 28 June 2005, the government issued a NTP to
ASF A to begin performance under the contract stating the following, in part:
1. Pursuant to the terms and conditions of Contract
Number F A5685-05-C-0004, you are hereby notified to
proceed with the work. Performance shall commence
within 10 calendar days after receipt of this notice. This is
your Notice to Proceed to start actual performance on the
contract. Entire work required by the contract shall be
completed not later than 218 calendar days after receipt of
this Notice to Proceed.
ASFA acknowledged receipt of the NTP on the same day. (1st R4, tab 14)
7. After issuance of the NTP, the contract's scheduled completion dates for the
three facilities were the following:
3
Facility Contract
Completion Date
Pesticide 27 November 2005 4
Storage 6 November 2005
HAZMAT 1 February 2006
(Gov't opp'n at 11, ~ 15; app. reply at 7, ~ 15)
8. ASFA failed to complete construction of the storage and pesticide facilities
by the contract completion dates (gov't opp'n at 11, ~ 16; app. reply at 7, ~ 16). The
storage facility was 12 percent complete by the contract completion date. The
pesticide facility was 21 percent complete by the contract completion date. (Gov't
opp'n at 15-16, `` 30, 31; app. reply at 11, `` 30, 31)
9. By email dated 9 March 2006, CO Cummins, following up on an earlier
meeting between the parties, stated that "it is at the [CO's] discretion whether or not to
assess liquidated damages. At this time, I have not made a CO decision whether to
assess or not assess liquidated damages .... " (Gov't opp'n, CO Cummins decl.,
attach. 1 at 1 of 10) In addition, CO Cummins also attached a spreadsheet for
informational purposes "so [ASFA is] fully aware of the liquidated damages (LD)
figures I have calculated for each of the above projects at this time as well as my
methodology for arriving at these LD figures" (id.). The spreadsheet purported to
project liquidated damages through 31 May 2006 for each facility (id. at 3-9of10).
10. CO Cummins' 9 March 2006 email also requested letters from ASFA
communicating the planned end dates for each facility, the number of additional days
requested to complete construction for each facility, and justification for the requested
additional days (gov't opp 'n, CO Cummins decl., attach. 1 at 3-9 of 10).
CO Cummins stated that he would consider the additional days requested by ASF A
and they may or may not be included in the modification that the parties were
discussing (id. at 1 of 10).
11. Between 2006 and 2007, the parties entered into discussions and
negotiations concerning time extensions, schedules, and other work items during
ASFA's continued performance (1st R4, tab 21passim;2nd R4, tab 2 passim).
4
In their briefs, the parties stipulated that the contract completion date for the pesticide
facility was 26 November 2005. The Board finds that the contract completion
date for the pesticide facility was 27 November 2005, 152 calendar days from
the date of the NTP.
4
12. By email dated 10 August 2006 with the subject line "RE: DURATION
CALCULATION REGARDING ALL THREE PROJECTS," CO Moss stated the
following, in pertinent part:
It is unfortunate that you haven't produced the required
information in time for today's meeting. I have to [sic]
choice but to assume the calculations provided to me by
CE are correct, as of this point you have no
counter-information. According to my calculations, the
total liquidated damages for these projects is now at
approximately $130,000 (as of 10 Aug 06)[.]
Because you haven't provided your
information/documentation, we cannot proceed with
negotiations. Without the negotiations, the subsequent
modification can not take place. Also, this will show as a
continued delay by ASF A, which in tum adds to the
already accumulating liquidated damages.
It is in your best interested [sic] to expedite your "delayed
days" calculation and documentation as soon as possible.
(App. mot., attach. 2 at 16 of 41) Further correspondence between the parties in
August and September 2006 included government requests for meetings to discuss
modification items and liquidated damages (id. at 22-28, 30, 32 of 41 ). By email dated
28 September 2006, the government stated the following, in pertinent part: "[W]e are
waiting for the contractor's decision in regards to the modification and [liquidated
damages]" (1st R4, tab 21at163 of269; gov't opp'n at 12, ii 19; app. reply at 8, ii 19).
13. By letter dated 16 October 2006, 5 ASFA informed the government that it
would not agree to the modification package and liquidated damages discussed during
negotiations stating the following, in pertinent part:
We hereby would like to inform you that ASF A is not
accepting your proposal which had been done during ref
a) which is: To perform all the work items included in the
MOD packages discussed during several meetings up
today against the [liquidated damages] calculated as per ref
b) since ASF A is not accepting [liquidated damages] and is
5
The letter references a 20 September 2006 meeting and a 21 October 2006 email.
Since the letter is dated 16 October 2006, we conclude that the latter is a typo,
and the letter is most likely referencing a 21 September 2006 email.
5
asking for review of our files and the evaluation of the
causation of delayed performance and possible equitable
adjustment for correction of errors and omissions inherited
with the project from the prior performance effort and
compensation of additionally [sic] not in original contract
included work items.
(1st R4, tab 21, encl. 6 at 169of269)
14. The parties eventually executed Modification No. P00002, effective
20 April 2007. The modification added CLIN 0005, funding changes to the
specifications, removing certain work items for the HAZMAT facility, and authorizing
payment to ASF A for missing government furnished property purchased by ASF A.
(1st R4, tab 9 at 1-2of7)
15. Modification No. P00003, effective 17 May 2007, was bilaterally executed
to extend the period of performance for the HAZMAT facility by 84 calendar days,
accommodating changes incorporated under Modification No. P00002. The
modification also included ASFA's reservation of rights language contained in
Modification No. P00002. (1st R4, tab 10) As a result of this modification, the
contract completion date for the HAZMAT facility was revised to 26 April 2006. The
facility was 75 percent complete as of the revised completion date. (Gov't opp'n
at 16, ~ 32; app. reply at 11, ~ 32)
16. By memorandum dated 23 November 2011, the CO issued a final decision
asserting a government claim for liquidated damages in the total amount of
$279,309.69 for ASFA's late completion of the construction of the three facilities
under the contract. In his COFD, the CO accepted, as substantially complete, the
pesticide facility on 30 June 2006, the storage facility on 18 April 2007, and the
HAZMAT facility on 27 April 2007. Liquidated damages for each facility was
computed based upon the following: 215 days of liquidated damages for late
completion of the pesticide facility; 511 days of liquidated damages for the late
completion of the storage facility; and 366 days of liquidated damages for late
completion of the HAZMAT facility. Liquidated damages for the storage facility were
assessed from 23 November 2005 through 18 April 2007. (2nd R4, tab 1)
17. ASF A timely appealed the 23 November 2011 COFD.
6
DECISION
I. Jurisdiction
Sua sponte, we directed the parties to address whether the Board has
jurisdiction to adjudicate this appeal (Bd. corr. ltr. dtd. 6 March 2014). First, we
sought briefing on whether the government's claim for liquidated damages for late
completion of the storage facility was untimely under 41 U.S.C. § 7103(a)(4)(A) of the
Contract Disputes Act (CDA) for being submitted more than six years after claim
accrual. Second, we sought commentary about whether ASF A met the jurisdictional
prerequisites of the CDA in asserting a waiver defense to the government's claim for
liquidated damages in light of M Maropakis Carpentry, Inc. v. United States, 609 F.3d
1323 (Fed. Cir. 2010).
A. Whether the Government's Claim for Liquidated Damages for Late
Completion of the Storage Facility is Time-Barred under the CDA
For the government's claim to be timely and cognizable under the CDA, the
claim "shall be submitted within 6 years after the accrual of the claim." 41 U.S.C.
§ 7103(a)(4)(A). Timely submission of a claim is a prerequisite for the Board to
exercise jurisdiction under the CDA. Arctic Slope Native Ass 'n v. Sebelius, 583 F.3d
785, 793 (Fed. Cir. 2009); The Boeing Co., ASBCA No. 57490, 12-1BCAif34,916
at 171,676. FAR 33.201 defines "Accrual ofa claim," in pertinent part, as "the date
when all events, that fix the alleged liability of either the Government or the contractor
and permit assertion of the claim, were known or should have been known."
As the proponent of its claim for liquidated damages for late completion of the
storage facility, the government bears the burden of proving the Board's jurisdiction.
The R.R. Gregory Corp., ASBCA No. 58517, 14-1BCAif35,524 at 174,111. The
23 November 2011 COFD assessed liquidated damages in the amount corresponding
to 511 days for the storage facility, from 23 November 2005 to the government's
alleged substantial completion date of 18 April 2007 (SOF if 16), although the contract
completion date for the storage facility was 6 November 2005 (SOF ifif 7, 8). The final
decision did not explain a rationale behind the assessment based upon the
23 November 2005 date.
The government admits that its storage facility claim accrued on 7 November
2005, and we agree (gov't br. on statute of limitations at 2, 8). That is the date when
the alleged liability for late completion was known or should have been known. As
such, the government's 23 November 2011 claim for liquidated damages was asserted
more than six years after the claim accrued. Nevertheless, the government argues that
the "continuing claim" doctrine permits it to assert its claim from 23 November 2005,
which falls within the six-year limitation period (id. at 2, 7-8). The government argues
7
that each day of delay created a separate and distinct event or wrong with its own
associated damages. The government cites to our decisions in Gray Personnel, Inc.,
ASBCA No. 54652, 06-2 BCA ~ 33,378; DynCorp International LLC, ASBCA
No. 56078, 09-2 BCA ~ 34,290; and Fluor Corp., ASBCA No. 57852, 14-1 BCA
~ 35,472, as support. ASFA counters that the liability became fixed by the single
event of ASFA's failure to complete performance by the scheduled completion date,
and any subsequent late days were continuing ill effects (app. resp. to gov't br. on
statute of limitations at 5-6).
Under the "continuing claim" doctrine, portions of the claim within the
statutory limitation period can survive although the statute of limitations has lapsed for
earlier events. Ariadne Financial Servs. Pty. Ltd. v. United States, 133 F.3d 874, 879
(Fed. Cir. 1998). For the government's claim to be a continuing claim, the claim
"must be inherently susceptible to being broken down into a series of independent and
distinct events or wrongs, each having its own associated damages." Furthermore, "a
claim based upon a single distinct event, which may have continued ill effects later on,
is not a continuing claim." Gray Personnel, 06-2 BCA ~ 33,378 at 165,476-77 (citing
Brown Park Estates-Fairfield Development Co. v. United States, 127 F.3d 1449, 1456
(Fed. Cir. 1997)).
Gray Personnel involved a personal services requirements contract in which the
government's potential liability for making constructive changes to the performance
requirement was not fixed until the issuance of delivery orders. Gray Personnel, 06-2
BCA ~ 33,378 at 165,476. In DynCorp, the contractor's equitable adjustment claim as
to the option periods was a continuing claim because the option periods were
separately awarded by the government, and if the government exercised no additional
option periods, there would be no claim for those years. DynCorp, 09-2 BCA ~ 34,290
at 169,407. In Fluor, we denied appellant's motion to dismiss the government's
claims over CAS non-compliance cost accounting practices as untimely because "the
government. .. could not know at that time, much less submit a CDA claim for, the
increased cost of those practices to the government work over the next seven years
until that work was performed, billed, and paid." Fluor, 14-1 BCA ~ 35,4 72
at 173,929. In each of these decisions, we found the underlying claims to be
continuing.
The government fails to establish how each late day here is an independent,
distinct event having its own associated damages. ASF A was required to complete
performance of the construction of the storage facility by 6 November 2005. ASFA's
failure to deliver by the scheduled date fixed ASFA's liability. The claim accrual date
was 7 November 2005. On that date, the government incurred "some injury" and
ASF A was liable for liquidated damages under the clause. Gray Personnel, 06-2 BCA
~ 33,378 at 165,476. Unlike our previous decisions in Gray Personnel, DynCorp, and
Fluor, no other performance or contingency was necessary to fix liability. Once
8
ASF A failed to meet its obligations, the government had the right to assess liquidated
damages under the contract. Subsequent days until substantial completion of the
storage facility were damages accumulating and, therefore, continuing ill effects. See
Ariadne, 133 F.3d at 879 (no continuing claim where each denial of the use of an asset
did not rise to a separate cause of action and flowed from the original repudiation by
the government); Hart v. United States, 910 F.2d 815, 818 (Fed. Cir. 1990) (death of
widow's husband was single event necessary to fix liability of the government for
husband's military annuity benefits paid in monthly installments after his death and
therefore not a continuing claim). It is not necessary for the total costs of the liability
to be incurred; rather once a party is on notice that it has a potential claim, the statute
of limitations can start to run. Gray Personnel, 06-2 BCA il 33,378 at 165,476.
For the reasons discussed above, the government's claim is not a continuing
claim. Since the claim accrual date was 7 November 2005, and the government
asserted its claim more than six years after the accrual date, the government's storage
facility claim is untimely under the CDA, and we lack jurisdiction to adjudicate that
portion of this appeal.
B. Whether the Board has Jurisdiction to Entertain ASFA's Affirmative
Defense of Waiver
We next determine whether, under Maropakis, ASF A has met the jurisdictional
prerequisites under the CDA to assert the affirmative defense of waiver. In
Maropakis, the government counterclaimed for liquidated damages against the
contractor for late performance. The contractor's defense to the government's
assessment was based on a letter it sent to the CO requesting time extensions.
Maropakis, 609 F.3d at 1326-27. After determining that the letter was not a valid
CDA claim, the court also held that the contractor could not defend against the
government's claim based on its request for contract modification because "a
contractor seeking an adjustment of contract terms must meet the jurisdictional
requirements and procedural prerequisites of the CDA, whether asserting the claim
against the government as an affirmative claim or as a defense to a government
action." Id. at 1330-31 (emphasis added).
ASF A asserts that the government waived the scheduled completion dates for
the late completion of the pesticide and HAZMAT facilities. ASF A argues that we
have jurisdiction because the government submitted a CDA claim against ASF A, and
ASFA timely appealed to the Board within the CDA's appeal period (app. br. on
Maropakis at 6). Likewise, the government also agrees that we have jurisdiction to
hear both the government's claim and ASFA's affirmative defense, because ASFA
asserted defenses of excusable delay when it submitted a November 2007 equitable
adjustment claim to the CO which was denied in a 1 July 2011 COFD (gov't resp. to
app. br. on Maropakis at 7-8). ASF A has appealed the 1 July 2011 COFD which is
9
currently docketed before the Board as ASBCA No. 57773 (Bd. notice of docketing
dtd. 12 September 2011 ), and consolidated with this appeal (Bd. notice of docketing
dtd. 13 December 2011).
We agree that Maropakis did not require ASF A to submit a CDA claim
contending the government waived its right to liquidated damages before it could
pursue that defense here. Maropakis requires contractors to submit CDA claims to the
CO as a prerequisite to their "seeking an adjustment of contract terms," regardless of
whether the claim is asserted "as an affirmative claim or as a defense to a government
action." Maropakis, 609 F .3d at 1331; see also ERKA Construction Co., ASBCA
No. 57618, 12-2 BCA if 35,129 at 172,474 (limiting Maropakis' claim mandate to
defenses seeking contract modifications). Liquidated damages are simply the damages
the parties fix to be paid in case of a breach, saving the time and expense of litigation.
DJ Manufacturing Corp. v. United States, 86 F.3d 1130, 1133 (Fed. Cir. 1996).
ASFA's defense that the government waived both the completion dates and its right to
collect liquidated damages does not seek an adjustment or modification of the contract
terms; it simply maintains the government waived rights already granted by the
contract. Nothing in Maropakis requires the submittal of a CDA claim before such a
defense can be advanced. Thus, we may entertain ASFA's defense of waiver.
II. Disposition of ASFA's Motion
A. Legal Standard
Summary judgment is properly granted if it is shown that there are no genuine
issues of material fact and the movant is entitled to judgment as a matter of law.
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A material fact is one which may
make a difference in the outcome of the case. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). All reasonable inferences are drawn in favor of the party
opposing the motion. Scott v. Harris, 550 U.S. 372, 378 (2007).
B. Contentions of the Parties
In its motion, ASF A contends that there are no material facts in dispute and
ASF A should be entitled to judgment as a matter of law because unusual
circumstances are present and the government waived the scheduled completion dates
for each facility under the doctrine enumerated in Devito v. United States, 413 F.2d
1147 (Ct. Cl. 1969) (app. mot. at 21). To support its contention ofwaiver, ASFA
asserts that the government failed to mention that ASF A would be subject to a default
termination or assessment of liquidated damages after the original contract completion
dates had passed, and the government was required to reestablish new completion
dates pursuant to the Default clause in the contract. The "substituted" completion
dates for all three facilities were the dates upon which ASF A completed performance.
10
ASF A argues that it incurred additional costs resulting from continued performance
with the government's knowledge. Lastly, ASFA argues that the assessment of
liquidated damages was arbitrary and capricious because the government's assessment
occurred approximately 4Yi years after the government's acceptance of the last
completed facility. (Id. at 19-22)
The government opposes the motion, contending that there are material facts in
dispute, and ASF A has failed to show that the government waived its right to assess
liquidated damages (gov't opp'n at 20). The government argues that both parties were
aware of the potential assessment of liquidated damages and points to the
9 March 2006 email from CO Cummins and subsequent discussions between the
parties (id. at 23).
In its reply, ASF A contends that discussions subsequent to the 9 March 2006
email did not bring closure on the liquidated damages issue and there was no
indication by the government that it was intending to assess liquidated damages (app.
reply at 17, 22-23).
C. Discussion
ASF A contends that the "waiver" doctrine in Devito is controlling. In Devito,
the elements required for establishing waiver of the government's right to terminate
the contract for default are the government's: "(l) failure to terminate within a
reasonable time after the default under circumstances indicating forbearance, and
(2) reliance by the contractor on the failure to terminate and continued performance by
him under the contract, with the Government's knowledge and implied or express
consent." 413 F.2d at 1154. With fixed delivery dates in the contract which have
passed, "the inference is created that time is no longer of the essence so long as the
constructive election not to terminate continues and the contractor proceeds with
performance." Id. Time does not become of the essence again until establishment of a
new completion date. Olson Plumbing and Heating Co., ASBCA Nos. 17965, 18411,
75-1BCAif11,203 at 53,336, ajf'd, 602 F.2d 950 (Ct. Cl. 1979); Brent L. Sellick,
ASBCA No. 21869, 78-2 BCA if 13,510 at 66,194.
Both parties acknowledge that Devito, which involved a supply contract, is
rarely applicable in construction contracts because the contractor will receive payment
for work completed past the specified completion date, and the government can seek
liquidated damages for late completion under the relevant clauses. Thus, detrimental
reliance would be difficult to prove merely from a period of government forbearance
and continued contractor performance. Olson, 75-1 BCA if 11,203 at 55,336; Sellick,
78-2 BCA if 13,510 at 66,194-95; Corway, Inc., ASBCA No. 20683, 77-1 BCA
if 12,357. To the extent Devito has been applied to waive the scheduled completion
dates for assessing liquidated damages or the right to terminate for default in
11
construction cases, its usage is generally limited where "unusual circumstances" were
found to exist. See Technocratica, ASBCA No. 47992 et al., 06-2 BCA ~ 33,316.
It is undisputed that ASF A missed the scheduled completion dates, continued
performance past the scheduled completion dates, and completed construction of all
three facilities (SOF ~ 16). However, with construction contracts, "[g]overnment
encouragement to expedite completion during a forbearance period should not be
interpreted as a disestablishment of the contractually-prescribed completion date
absent further manifestation by the [g]overnment that it no longer considered that date
to be enforceable." Sellick, 78-2 BCA ~ 13,510 at 66,195. In determining whether
"unusual circumstances" exist, the government's failure to mention or assess
liquidated damages was an indicator that time was no longer of the essence in the
contract, and the scheduled completion dates were no longer enforceable for assessing
liquidated damages. See Technocratica, 06-2 BCA ~ 33,316 at 165,188; Corway, 77-1
BCA ~ 12,357 at 59,804 (government never mentioned or assessed liquidated damages
and showed no urgency in resolving problems); Overhead Electric Co., ASBCA
No. 25656, 85-2 BCA ~ 18,026 at 90,473; JEM Development Corp., ASBCA
No. 42872, 92-1BCA~24,709 at 123,339 (during two-week period where contractor
left the work site, the government did not communicate any intention it was going to
assess liquidated damages if work was not completed by completion date); D&S
Roofing Co., ASBCA Nos. 28130, 29109, 85-2 BCA ~ 18,114 at 90,947 (government
approved substituted schedule without manifesting intent to maintain original
schedule).
The record shows at least three instances that suggest the government made
ASF A aware of the potential assessment of liquidated damages. The 9 March 2006
email from CO Cummins (SOF `` 9, 10), the 10 August 2006 email from CO Moss
(SOF ~ 12), and other correspondence from the government between August and
September of 2006 (SOF ~ 12) specifically mention, at a minimum, the possible
assessment of liquidated damages. Additionally, ASFA's 16 October 2006 letter
indicates that ASF A was aware of the government's position regarding liquidated
damages as it informed the government that it would not be accepting liquidated
damages (SOF ~ 13). This evidence contradicts ASFA's assertion that the government
did not issue any notices or communications regarding the assessment of liquidated
damages, and establishes a genuine issue precluding summary judgment.
Lastly, ASF A argues that the assessment of liquidated damages was arbitrary
and capricious because the assessment was approximately 4Yi years after the last
facility was accepted, and after ASFA had filed its appeal under ASBCA No. 57773.
The burden is on ASFA to prove the CO's assessment was arbitrary and capricious. It
is presumed the CO acts in good faith. Am-Pro Protective Agency, Inc. v. United
States, 281 F.3d 1234, 1239 (Fed. Cir. 2002). ASFA's bald accusations that the
liquidated damages assessment was later than it thinks it should have been do not
12
overcome the presumption of good faith. Therefore, we deny ASF A's motion to the
extent it claims the assessment was arbitrary and capricious.
CONCLUSION
The government's claim for liquidated damages for late completion of the
storage facility is time-barred under the CDA. ASFA's motion for summary judgment
as to the government's claim for liquidated damages for late completion of the
pesticide and HAZMAT facilities is denied.
Dated: 2 September 2014
``
MARK A. MELNICK
Administrative Judge
Armed Services Board
of Contract Appeals
I concur
``Et1$'
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. 57880, Appeal of ASF A
International Construction Industry and Trade, Inc., rendered in conformance with the
Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
13