Trinity Source Logistics LLC

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of - )
)
Trinity Source Logistics LLC 1 ) ASBCA No. 62435)
Under Contract No. H92277-18-P-0014 )
APPEARANCE FOR THE APPELLANT: Ary Atrushi, Esq.
Germantown, MD
APPEARANCES FOR THE GOVERNMENT: Jeffrey P. Hildebrant, Esq.
Deputy Chief Trial Attorney
Lawrence M. Anderson, Esq.
Trial Attorney
OPINION BY ADMINISTRATIVE JUDGE HERZFELD ON THE
GOVERNMENT’S MOTION TO DISMISS AND APPELLANT’S
CROSS-MOTION FOR SUMMARY JUDGMENT
The appellant seeks payment from the Department of the Air Force (Air Force)
for work successfully performed on a contract to provide school and teaching supplies
for children in Syria. The Air Force moves to dismiss this appeal, asserting that the
government entered a contract with a United States-based company with the same
name, appellant did not have a contract with the United States government, and, thus,
this Board lacks jurisdiction to hear this appeal. Appellant cross-moves for summary
judgment contending that the Air Force contracted with appellant, which partially
performed the contract, and not the United States-based company. For the reasons
discussed below, we grant the Air Force’s motion to dismiss and deny appellant’s
cross-motion.
STATEMENT OF FACTS FOR PURPOSES OF THE MOTION
On October 4, 2017, Nasrin Yamolky registered “Trinity Logistics Source” in
the Joint Contingency Contracting System (JCCS) using her yahoo email address (R4,
tabs 1, 6).
On October 7, 2017, Ms. Yamolky filed articles of incorporation for Trinity
Logistics Source Inc. (Trinity-US) with the State of Washington’s Secretary of
1
Although our caption states that “Trinity Source Logistics” is the appellant, appellant
actually is “Trinity Logistics Source.” The parties agree that the government
awarded a contract to a company named “Trinity Logistics Source.”
State’s office (gov’t mot., attach. 1). Ms. Yamolky listed herself as the contact, the
company’s contact address in Lynnwood, Washington, and a Gmail address (id.).
On January 21, 2018, Mala Amin Mala Amin Haji and Nasrin Kamal Amin
(each 50% shareholders) incorporated Trinity Logistics Source Company
(Trinity- Iraq) in Erbil, Iraq (app. supp. R4, tab 1 at 1, 4). Trinity-Iraq’s board meeting
minutes appointed Mr. Mala as “executive manager” and granted him exclusive
authority to sign contracts, open bank accounts, and act as power of attorney for the
company (id. at 1). Appellant is Trinity-Iraq.
Trinity-Iraq asserts that Nasrin Kamal Amin – the 50% owner of Trinity- Iraq –
is the same person as the owner of Trinity-US, Ms. Nasrin Yamolky (app. opp’n &
cross-mot. at 2 n.1). The Air Force disputes whether Ms. Yamolky is Nasrin Kamal
Amin, but asserts that it is not relevant for purposes of the cross-motions (gov’t opp’n
& reply at 6-7). Thus, for purposes of the cross-motions, we will treat Ms. Yamolky as
the same person as Nasrin Kamal Amin.
On March 30, 2018, the government released a draft of request for quotations
No. H92277-18-T-0004 (the Solicitation) and notified Ms. Yamolky (R4, tab 2). On
April 5, 2018, the government issued the Solicitation requesting quotations to “provide
prepacked backpacks, prepacked teacher kits and classroom furniture for children and
teachers in Syria” (R4, tab 5 at 1, 6); Najmaa Alshimal Co., ASBCA No. 62701,
21-1 BCA ¶ 37,872 at 183,898.
On April 11, 2018, Ms. Yamolky submitted a quotation on behalf of “Trinity
Logistics Source” (R4, tab 3). Ms. Yamolky listed herself as “CEO,” listed the same
yahoo email address she used to register with the JCCS, an additional email address
at trinity-source.com, and listed the company’s address as 100m Road, Erbil, Iraq
(id. at 2). 2 Trinity Logistics Source submitted a best and final offer on May 3, 2022
(R4, tab 4).
2
Trinity-Iraq repeatedly asserts that the proposal was submitted on September 30,
2017, but it only cites the quotation submitted on April 11, 2018 (app. opp’n &
cross-mot. at 3; app. reply at 4-5). Yet, the government did not issue the
Solicitation until April 5, 2018 (R4, tab 5). Thus, we find no support for
Trinity-Iraq’s assertion.
2
The government awarded Contract No. H92277-18-P-0014 (Contract) for these
services to:
Trinity Logistics Source
Nasrin Yamolky
100M Road
Erbil
(R4, tab 7 at 2, 3). On May 18, 2018, Ms. Yamolky signed the Contract as the CEO of
the awardee (id. at 2).
On June 1, 2018, Ms. Yamolky wrote the government’s contract specialist,
requesting that the government change the DUNS number/cage code and company
address in the Contract to the Washington state address of Trinity-US because “the
headquarter is in the USA” (R4, tab 8 at 2-4). On June 4, 2018, Ms. Yamolky
explained why she requested the change, “[T]here is an issue that a company here in
Erbil is claiming that this contract is belong to them it’s also called trinity logistic, and
now they trying to steel that contract and its is now in Erbil court, that’s why I want
you to make this adjustment and show it to the judge” (id. at 2).
On June 22, 2018, Mr. Mala and Ms. Yamolky (referred to as “Nasrin Kamal
Amin”) entered a “Contract Agreement and Finalizing Sharing” agreement, in which
Mr. Mala purchased Ms. Yamolky’s share of Trinity-Iraq for $100,000 to be paid on
September 15, 2018 (app. supp. R4, tab 3 at 1, 3). The agreement stated that Mr. Mala
would “carry out and owning the project” (id. at 1). The settlement agreement
identified the project as the Contract (id.). The agreement also required Ms. Yamolky
to provide the domain and website of the company to Mr. Mala, require the use of a
Kurdistan bank account for payments under the Contract, and provide Mr. Mala with
all prior emails and contact information regarding the Contract (id. at 2).
On June 23, 2018, Ms. Yamolky communicated with a government
representative regarding logistics for the delivery of supplies under the Contract (app.
opp’n & cross-mot., ex. B).
On June 25, 2018, Mr. Mala entered several subcontract agreements for the
supplies to provide under the Contract (app. supp. R4, tab 4). On July 31, 2018,
Mr. Mala – identifying himself as CEO – signed the first modification to the Contract,
which added a contract line item number to pay for transportation services (R4, tab 9
at 1). Also on July 31, 2018, Trinity Logistics Source delivered the supplies under the
Contract and submitted an invoice for $1,690,680 to the government for the supplies,
listing Mr. Mala as the “CEO” of the company and Mohsen Jawar as the “COO” (R4,
tab 10). The invoice used the 100m Road, Erbil, Iraq address, sometimes referring to it
as “100m st” (id. at 1). Ms. Yamolky’s name does not appear on the invoice.
3
On September 4, 2018, the government issued its Material Inspection and
Receiving Report (DD250), formally accepting the supplies delivered on July 31, 2018
(R4, tab 11).
On October 13, 2018, Ms. Yamolky contacted the government’s contracting
officer to inquire regarding payment under the Contract (R4, tab 14 at 3). In response
to the government’s request for a bank account, Ms. Yamolky provided Trinity-US’s
Washington-based bank account information (id. at 2).
On October 17, 2018, a government representative responded to Ms. Yamolky:
The invoice that was provided has a[] different Bank Name
and information. Are there two different companies and if
so how are they related and which bank is the correct bank
account to send the payment to? Please resend a[] new
invoice with the bank that you want payment sent to. We
just want to make sure that it goes to the correct location.
(Id.). Internally on October 22, 2018, the government acknowledged, “We are having
a hard time identifying who is the current owner and has the signing authority of
Trinity Logistics to receive payment. We are trying to get them paid but there is a[]
conflict between the old owner and the new one” (R4, tab 13 at 33). On the same day,
the government also informed Mr. Mohsen of Trinity-Iraq that “apparently there’s an
issue with the previous owner and the current owner of Trinity Logistics, that’s why
the payment has not been made” (id. at 16).
On November 6, 2018, the government informed Mr. Mohsen of Trinity-Iraq
that the Inspector General, Federal Bureau of Investigation, and Iraqi Criminal
Investigation Division were investigating because there were “other people trying to
collect payment” (id. at 4-5). On November 7, 2018, the government recommended
Mr. Mohsen “file a claim against the US Government for services render/items
delivered” (id. at 1).
On March 3, 2019, the Washington Secretary of State dissolved Trinity-US as
inactive based on failing to file its annual report (gov’t mot., attach. 3).
On April 21, 2019, Ms. Yamolky informed the government that she and
Mr. Mala “have settled our issues and no longer have any problem” (app. supp. R4,
tab 7). Ms. Yamolky requested that the government pay Mr. Mala for the performance
of the Contract (id.).
On October 25, 2019, Trinity-Iraq submitted a certified claim to the government
for $1,690,680 (R4, tab 17).
4
On October 31, 2019, the Judicial Council, Court of First Instance, in Erbil,
Iraq, issued a decision that dismissed the Iraqi lawsuit brought by Mr. Mala against
Ms. Yamolky based on the June 22, 2018 agreement (discussed above) (app. opp’n
& cross-mot., ex. J).
On December 23, 2019, the government issued a contracting officer’s final
decision, which denied Trinity-Iraq’s claim “on the grounds that the claimant has
provided insufficient evidence to establish that it is the contractor to whom the
government awarded the contract at issue” (R4, tab 21 at 2).
On March 9, 2020, Trinity-Iraq appealed the contracting officer’s final decision
to this Board.
On August 16, 2021, counsel for Mr. Mala contacted Ms. Yamolky and
suggested, “A possible solution to the case could be assignment. It is detailed in FAR
32.805” (gov’t opp’n & reply, Declaration of Ian Somerville, ex.). Ms. Yamolky
forwarded this email to Air Force counsel and asked to let her “know what is the
solution in regard [to] this contract” (id.). And, after a response from the Air Force
disclaiming any ability to give legal advice, she clarified that she just sought “an
update regarding this contract and payment” and why “payment has not issued yet”
(id.). Finally, as part of briefing the cross-motions, Trinity-Iraq submitted an affidavit
from Ms. Yamolky stating Trinity-US was withdrawing “any and all claims made or
purported to have been made for payment” under the Contract and that the government
should pay Trinity-Iraq (app. reply, ex. 3, Nasrin Yamolky aff.).
DECISION
The government contracted with Trinity-US to perform the Contract.
Trinity-Iraq completed performance for Trinity-US and now seeks payment based on
the assignment of the Contract or the claim for the Contract price. However,
Trinity-US and Trinity-Iraq have failed to follow the required procedures for assigning
any money due under the Contract and the subsequent claim. Thus, because Trinity-
Iraq had no privity of contract with the government, we do not possess jurisdiction of
Trinity-Iraq’s appeal.
I. Standards of Review
Trinity-Iraq, as the proponent of the Board’s jurisdiction, bears the burden of
establishing jurisdiction by a preponderance of the evidence. Najmaa Alshimal,
21-1 BCA ¶ 37,872 at 183,899; see also K-Con Bldg. Sys., Inc. v. United States,
778 F.3d 1000, 1004 (Fed. Cir. 2015). “The facts supporting jurisdiction are subject to
our fact-finding upon a review of the record.” CCIE & Co., ASBCA Nos. 58355,
59008, 14-1 BCA ¶ 35,700 at 174,816.
5
Board Rule 7(c) permits summary judgment motions and “looks to Rule 56 of
the Federal Rules of Civil Procedure for guidance.” ASBCA Rule 7(c)(2). FED. R.
CIV. P. 56 requires granting “summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” FED. R. CIV. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317,
322-23 (1986).
II. The Government Originally Contracted with Trinity-US, not Trinity-Iraq
This Board’s jurisdiction emanates from the Contract Disputes Act (CDA).
41 U.S.C. § 7105(e)(1)(A) (“The Armed Services Board has jurisdiction to decide any
appeal from a decision of a contracting officer of the Department of Defense, the
Department of the Army, the Department of the Navy, the Department of the
Air Force, or the National Aeronautics and Space Administration relative to a contract
made by that department or agency.”). The CDA applies “only to ‘contractors,’ i.e.,
‘part[ies] to a Government contract other than the Government . . . .’” Winter v.
FloorPro, Inc., 570 F.3d 1367, 1370 (Fed. Cir. 2009) (citing 41 U.S.C. § 601(4),
recodified at, 41 U.S.C. § 7101(7)). Generally, “those who are not in privity of
contract with the government cannot avail themselves of the CDA’s appeal
provisions.” Id. at 1371.
Here, looking at the evidence presented by the parties, we conclude that the
government contracted with Trinity-US, owned by Ms. Yamolky, not Trinity-Iraq,
owned by Mr. Mala (but once partially owned by Ms. Yamolky). In any express or
implied-in-fact contract, we look to the mutuality of intent of the parties, among other
things, to demonstrate the formation of a contract between a contractor and the Federal
government. Am. Bankers Ass’n. v. United States, 932 F.3d 1375, 1380 (Fed. Cir.
2019); ASFA Constr. Indus. & Trade, Inc., ASBCA No. 57269, 15-1 BCA ¶ 36,034at 176,004.
The evidence demonstrates that Ms. Yamolky, as owner of Trinity-US, and the
government formed a contract. From March 30, 2018, at the formation stage and until
Ms. Yamolky entered her agreement with Mr. Mala in June 2018, the government only
interacted with Ms. Yamolky. On March 30, 2018, the government notified
Ms. Yamolky about the contract opportunity prior to the issuance of the Solicitation
(R4, tab 2). On April 11, 2018, Ms. Yamolky submitted a quotation on behalf of
“Trinity Logistics Source,” listed herself as the CEO, and used the same yahoo email
address she had used to correspond with the government and register the company in
the JCCS (R4, tab 3 at 1-2). Ms. Yamolky signed the Contract as the CEO of “Trinity
Logistics Source, Nasrin Yamolky” (R4, tab 7 at 2). In June 2018, Ms. Yamolky also
communicated with the government regarding logistics for delivering the supplies
under the Contract (app. opp’n & cross-mot., ex. B). The only hint the government
had that another contractor might be involved was when Ms. Yamolky claimed an
6
Erbil, Iraq contractor had sued her in Iraq in an effort to steal the contract from
Ms. Yamolky’s Trinity-US company in June 2018 (R4, tab 8 at 1-2). The government
heard nothing further regarding this litigation and continued to believe it was
contracting with Ms. Yamolky’s Trinity-US company until Trinity-Iraq claimed it was
the contractor when it sought payment after delivery of the supplies under the Contract
(R4, tab 13 at 33; tab 14 at 2). Thus, the mutual intent of the parties resulted in
forming a contract between Trinity-US as the “contractor” and the government.
Trinity-Iraq asserts this is incorrect, and the government should have
understood that Trinity-Iraq was the contractor (app. opp’n & cross-mot. at 10-14).
Trinity-Iraq points to the Erbil, Iraq address on the Contract (instead of Trinity-US’s
Washington state address) and Mr. Mala’s signature on a contract modification as
evidence of the parties’ intent. Trinity-Iraq looks for support to a decision from the
U.S. Court of Federal Claims, General Dynamics Corp. v. United States, 47 Fed. Cl.
514 (2000). Although we may find the reasoning of that court’s decisions persuasive,
we are not bound by them. Northrop Grumman Corp., ASBCA No. 62165, 21-1 BCA
¶ 37,922 at 184,176 n.8 (“[P]ublished decisions of the Court of Federal Claims are
likewise neither binding upon this tribunal, nor are they even binding in other matters
pending before the Court of Federal Claims.”).
In any event, General Dynamics does not support Trinity-Iraq’s position.
There, the government was in the shoes of Trinity-Iraq, asserting that the government
had intended to contract with Electric Boat, a division and then subsidiary of General
Dynamics, because the contract used Electric Boat’s address in the contract and
Electric Boat had signed contract modifications on behalf of General Dynamics.
47 Fed. Cl. at 527-31. The court rejected those contentions, concluding that “[t]he
significance of the address that followed in the box [on the contract form] was in
identifying the Electric Boat design yard in Groton, Connecticut, as the GDC facility
where the contract was to be performed.” Id. at 530. And, even though
representatives of Electric Boat negotiated modifications of the contract on behalf of
General Dynamics, the contract modifications continued to reference General
Dynamics as the contractor. Id. at 530-31. Here, as in General Dynamics, the parties
(and particularly the government) understood that the address used in the Contract
constituted the place of performance and understood it was contracting with
Ms. Yamolky’s Trinity-US (R4, tab 3 at 1-3 (quotation); tabs 1, 6 (JCCS registration
to Ms. Yamolky); tab 7 at 2 (Contract), tabs 13-14). And, the modification continued
to refer to the contractor as “Trinity Logistics Source, Nasrin Yamolky” (R4, tab 9
at 1). Indeed, the government sent the modification to Ms. Yamolky, not Mr. Mala
(app. opp’n & cross-mot., ex. D). Just as in General Dynamics, where the government
continued negotiating with Electric Boat personnel despite General Dynamics
continuing as the contracting party, the government did not take note that Mr. Mala
(rather than Ms. Yamolky) signed the modification, which occurred on the same day
the supplies were delivered under the Contract (R4, tabs 9-10).
7
Trinity-Iraq asserts that Ms. Yamolky was acting on behalf of Trinity-Iraq in
her actions in bidding on and executing the Contract (app. opp’n & cross-mot. at 3-4).
However, Ms. Yamolky signed the Contract as the CEO – a position she held with
Trinity-US, but not with Trinity-Iraq (gov’t mot., attach. 2 at 2). Mr. Mala was the
CEO of Trinity-Iraq. And, Ms. Yamolky could not have signed documents on behalf
of Trinity-Iraq, because Trinity-Iraq’s incorporation documents establish that only
Mr. Mala could legally bind the company (app. supp. R4, tab 1 at 1). In this same
vein, Trinity-Iraq also attaches several invoices signed by Ms. Yamolky in October
and November 2017 as proof that she was signing those documents on behalf of
Trinity-Iraq, and not Trinity-US (app. opp’n & cross-mot., ex. M). However,
Trinity- Iraq was not incorporated until January 2018 (app. supp. R4, tab 1), while
Trinity-US was incorporated in October 2017 (gov’t mot., attach. 1-3). Thus,
Ms. Yamolky appears to have signed all these documents as the CEO of Trinity-US,
not Trinity-Iraq.
Trinity-Iraq also asserts that the government should have realized that
Trinity- US (1) was not the proper company based on registering as a U.S. company in
the JCCS, which Trinity-Iraq asserts was only required of non-U.S. companies; and
(2) even if proper, the Solicitation did not require registration (app. opp’n & cross-mot.
at 15). First, JCCS “is an internet-based information technology platform used by the
government to provide centralized vendor registration, post solicitations and proposals,
and provide other support to contingency and expeditionary programs that rapidly
deploy for humanitarian, peacetime, and wartime missions . . . .” Elizabeth Constr.
Co., ASBCA No. 60723, 17-1 BCA ¶ 36,839 at 179,519. Contrary to
Trinity-Iraq’s assertion, the system also requires some U.S.-based companies to register
if they will perform in a contingency area. JCCS NG Contract Office, Vendor Vetting,
Slide 3 (“All Vendors and subcontractors seeking contracts and performing or delivering
in the USCENTCOM AOR shall be vetted prior to receiving a contract with an
estimated contract value above $50,000.”); id. (exempting “U.S. publically traded
companies” and Federal Supply Schedule vendors, but not all U.S. companies). 3 Indeed,
the JCCS registration website permitted Trinity-US to enter the United States as the
country address for the company (R4, tab 6 at 2). Second, even though the Solicitation
did not include a specific clause requiring registration, the government required either
JCCS or System for Award Management registration for this Solicitation, including
specifically requiring contractors to provide that information during negotiations.
Najmaa Alshimal, 21-1 BCA ¶ 37,872 at 183,898. Trinity-Iraq had no JCCS registration
from contract formation through completion of performance, only Trinity-US did (R4,
https://www.jccs.gov/jccsng/upload/documentTemplates/JCCS%20CENTCOM%20C
3
ontract%20Office%20User%20Guide%2003%20%20Vendor%20Vetting%20B
ackground.pdf (visited June 6, 2022).
8
tabs 6, 16). Thus, Trinity-US’s JCCS registration does not assist Trinity-Iraq in proving
that Trinity-Iraq had a contract with the government.
Trinity-Iraq contends that the June 22, 2018 “Contract Agreement and Finalizing
Sharing” agreement between Mr. Mala and Ms. Yamolky proves that Trinity-Iraq was
always the contractor, not Trinity-US (app. supp. R4, tab 3 at 1, 3). Trinity-Iraq asserts
that the agreement purchased Ms. Yamolky’s 50% interest in Trinity-Iraq and, because
Trinity-Iraq was always the contractor, had no need to assign the Contract from
Trinity-US to Trinity-Iraq (app. reply at 4). On the other hand, the Air Force asserts
that the June 22 agreement was not simply a stock purchase agreement, but also acted
as an agreement to improperly assign the Contract from Trinity-US to Trinity-Iraq
(gov’t opp’n & reply at 7-8, 18-19).
We think the June 22 agreement, while ambiguous, seems to support the
government’s position. The agreement identifies Ms. Yamolky as the “owner of
American company foreign (Trinity Logistics Source)” and identifies Trinity-Iraq as
the “local company” (app. supp. R4, tab 3 at 1) (emphasis in original). The June 22
agreement, as translated into English, further states: “[Mr. Mala] is going to buy all the
other remaining share of local company (Trinity Logistics Source) from [Ms. Yamolky]
and the same time [Mr. Mala] will carry out and owning the project,” citing the
Contract (id.). This language establishes that Mr. Mala purchased Ms. Yamolky’s
remaining shares in Trinity-Iraq and that Mr. Mala would now “carry out and own” the
Contract, which appears to recognize that Trinity-Iraq did not previously own the
Contract. Elsewhere, the agreement sets forth the transfer of various things to allow
Mr. Mala’s Trinity-Iraq to perform the Contract, including “providing (the domain and
the website) of the company” (id. at 2). This reference is to the “company,” which
appears to be to Trinity-US, and not Trinity-Iraq, which the agreement usually
(although not always) identifies as the “local company” such as later in this same clause
of the agreement (id.) (stating that Ms. Yamolky “is not allowed to use th[is] above
information after signing this contract except by request[] from [Mr. Mala] as an
assistance because [Ms. Yamolky] does not have any right to this project and the local
company” (emphasis added)). Moreover, the agreement requires Ms. Yamolky to
provide all emails “added for the period of (15) days on the original days of carrying
out the project” and “[p]roviding all the emails and the contact information which are
specific for the project,” which again implies the need to transfer the Contract beyond a
stock purchase agreement (id.) (emphasis in original). Thus, we believe the agreement
does not support Trinity-Iraq’s contention that it always was the “contractor.”
Finally, Trinity-Iraq asserts that, even if there was no express contract between
Trinity-Iraq and the government, Trinity-Iraq had an implied-in-fact contract with the
government (app. opp’n & cross-mot. at 16-17). “An agreement implied in fact is
founded upon a meeting of minds, which, although not embodied in an express
contract, is inferred, as a fact, from conduct of the parties showing, in the light of the
9
surrounding circumstances, their tacit understanding.” Hercules Inc. v. United States,
516 U.S. 417, 424 (1996) (internal citation and quotation omitted). However, “[i]t is
well settled that the existence of an express contract precludes the existence of an
implied-in-fact contract dealing with the same subject matter, unless the implied
contract is entirely unrelated to the express contract.” Lee v. United States, 895 F.3d
1363, 1370 (Fed. Cir. 2018) (internal citations and quotations omitted). Here,
Trinity-Iraq asserts there is a document expressing the mutuality of intent to contract
(without citing which document it means) and that its Contract performance created an
implicit contractual relationship (app. opp’n & cross-mot. at 16-17). To the extent that
Trinity-Iraq relies on the modification signed by Mr. Mala, we have already addressed
why that document does not express mutuality of intent by the government. Also,
because both the modification and Trinity-Iraq’s apparent completion of performance
related to the express Contract between Trinity-US and the government, neither can
serve as a basis for a separate implied-in-fact contract. Lee, 895 F.3d at 1370.
III. Trinity-US Failed to Effectively Assign any Money Due Under the
Contract or Claims to Trinity-Iraq
Although we have concluded that the government entered the Contract with
Trinity-US and not Trinity-Iraq, Trinity-Iraq could also demonstrate it was the
“contractor” for purposes of our jurisdiction if it could show that Trinity-US properly
assigned the Contract and its claims to Trinity-Iraq or that the government has
recognized the assignment. Here, however, Trinity-Iraq has failed to demonstrate that
Trinity-US properly assigned the contract and the resulting claims to Trinity-Iraq.
Any assignment of claims or contracts must comport with the two
anti-assignment statutes: (1) the Assignment of Claims Act, 31 U.S.C. § 3727; and (2)
the Assignment of Contracts Act, 41 U.S.C. § 6305. CBI Servs., Inc., ASBCA
No. 34983, 88-1 BCA ¶ 20,430 at 103,337. “These two provisions together broadly
prohibit . . . transfers of contracts involving the United States or interests therein, and
assignment of claims against the United States.” Delmarva Power & Light Co. v.
United States, 542 F.3d 889, 892 (Fed. Cir. 2008) (quoting Fireman’s Fund Ins. Co. v.
England, 313 F.3d 1344, 1349 (Fed. Cir. 2002)). The statutes serve two purposes:
(1) to prevent a person or entity from “buying up claims against the United States,
which might then be improperly urged upon officers of the Government;” and (2) “to
enable the United States ‘to deal exclusively with the original claimant instead of
several parties,’ thereby eliminating the confusion of conflicting demands for payment
and the chances of multiple liability.” Tuftco Corp. v. United States, 614 F.2d 740,
744 (Ct. Cl. 1980) (quoting Spofford v. Kirk, 97 U.S. 484, 490 (1878) and Patterson v.
United States, 354 F.2d 327, 329 (Ct. Cl. 1965)).
The Federal Acquisition Regulation (FAR) permits the assignment of a Federal
government contract through novation, which requires the assignor, assignee, and the
10
government to enter a novation agreement. FAR 42.1204. “[A] successor in interest
under a novation agreement, pursuant to which it is ‘entitled to all the rights’ of
its predecessor as if it were ‘the original party’ to the contract, is recognized by the
government as the successor in interest for all purposes, including the right to pursue
any claims its predecessor could have pursued.” Cooper/Ports Am., LLC, ASBCA
No. 61461, 18-1 BCA ¶ 37,045 at 180,331. Trinity-Iraq asserts that a novation
agreement was unnecessary because it always was the contractor, and the June 22
agreement only related to Mr. Mala’s stock purchase of the remaining shares of
Trinity-Iraq from Ms. Yamolky (app. reply at 4). Indeed, the FAR does not require
novation if an ownership change occurs by stock purchase and the same entity
continues performing the contract. FAR 42.1204(b) (“A novation agreement is
unnecessary when there is a change in the ownership of a contractor as a result of a
stock purchase, with no legal change in the contracting party, and when that
contracting party remains in control of the assets and is the party performing the
contract.”). However, as discussed above, we believe the June 22 agreement was not
simply a stock purchase agreement but also assigned the Contract and its proceeds
from Ms. Yamolky’s Trinity-US to Mr. Mala’s Trinity-Iraq to perform. It did not
qualify as a novation of the Contract, as the government was not a party to that
agreement.
In its reply, Trinity-Iraq includes an affidavit from Ms. Yamolky “withdrawing
any and all claims” to payment under the Contract and directing the government to pay
Trinity-Iraq (app. reply, ex. 3). However, this falls short of the FAR’s novation
requirements. FAR 42.1204.4 Also, Ms. Yamolky’s withdrawal of claims did not
serve to assign the claims. The Contract requires, among other things, that any
assignment of claims must be “[a]pproved in writing by the Contracting Officer” and
“[m]ade in accordance with the laws and regulations of the United States of America”
(R4, tab 7 at 14) (incorporating by reference DFARS 252.232-7008(a)(1)-(2),
ASSIGNMENT OF CLAIMS (OVERSEAS) (JUN 1997)). The FAR sets forth
requirements for a contractor to provide notice and receive government
acknowledgement and approval for an assignment of claims. FAR 32.805. Here, it
appears that Trinity-Iraq’s counsel and Ms. Yamolky communicated about potentially
assigning the claims to resolve this dispute consistent with the FAR: “A possible
solution to the case could be assignment. It is detailed in FAR 32.805” (gov’t opp’n
& reply, ex. attached to Declaration of Ian Saville). However, to date, apparently
Mr. Mala’s Trinity-Iraq and Ms. Yamolky have not attempted to assign the claim and
4
Mr. Mala’s signature on one modification also is insufficient to demonstrate a
recognition of an assignment. Morrison-Smith, Inc., ASBCA No. 38028,
90-1 BCA ¶ 22,308 at 112,027 (rejecting asserted assignment by alleged
assignee where appellant “failed to prove that the contracting officer had notice,
or was aware, that anyone other than an authorized representative of [original
contractor] would sign the modification”).
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seek the contracting officer’s approval consistent with the Contract and the FAR. As a
result, the contracting officer still does not know which person or company the
government should pay (gov’t opp’n & reply, Declaration of Ian Somerville ¶ 7). 5
Thus, the Federal government risks double payment or multiple liability, precisely the
concerns Congress intended the anti-assignment statutes to prevent. Tuftco, 614 F.2d
at 744.
Finally, Trinity-Iraq asserts that its partial contract performance effectively
negated the necessity for a novation agreement or constructively novated the Contract
(app. reply at 4 n.1). Trinity-Iraq quotes one of our decisions, which states that
“partial performance of a Government contract by an agent pursuant to a power of
attorney does not connote or create an assignment and would not contravene the
anti-assignment statute.” Mancon Liquidating Corp., ASBCA No. 18304, 74-1 BCA ¶
10,470 at 49,515. However, as we stated in that decision’s prior sentence: “To the
extent that such actions may be construed to have been a partial performance of the
two subject contracts, such actions were not tantamount to recognition of an
assignment or novation of the contracts.” Id. (internal citations omitted). We
concluded that the partial performance by a company acting as the power of attorney
did not result in any change in privity. Id. As here, the assignor, not the assignee,
remained the “contractor” for purposes of our jurisdiction. Id. “As we have held
previously, an assignment of proceeds arising from a government contract cannot
establish or create a contractual relationship between the government and the
assignee” (here, Trinity-Iraq). Ham Investments, LLC, ASBCA No. 55070, 06-2 BCA
¶ 33,406 at 165,631, recon. denied, 07-1 BCA ¶ 33,552. Thus, because Trinity-Iraq
cannot demonstrate a proper novation occurred, it cannot show that it ever became the
“contractor” for our jurisdictional purposes.
5
Moreover, under the Assignment of Claims Act, the assignment “of money due or to
become due,” 31 U.S.C. § 3727(c), must be made “to a bank, trust company, or
other financing institution, including any Federal lending agency.”
FAR 32.802(b); Tiger Enters., Inc., ASBCA No. 57733, 13 BCA ¶ 35,265at 173,125-126. The record does not contain any evidence that Trinity-Iraq
meets this requirement.
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CONCLUSION
For the foregoing reasons, we dismiss Trinity-Iraq’s appeal for lack of
jurisdiction. Accordingly, we do not have jurisdiction to decide appellant’s
cross-motion for summary judgment.
Dated: August 11, 2022
DANIEL S. HERZFELD
Administrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
RICHARD SHACKLEFORD OWEN C. WILSON
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 No. 62435, Appeal of Trinity
Source Logistics LLC, rendered in conformance with the Board’s Charter.
Dated: August 12, 2022
PAULLA K. GATES-LEWIS
Recorder, Armed Services
Board of Contract Appeals
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