Environmental Safety Consultants, Inc.
Docket: ASBCA 58343
Decision date: 2014-07-25

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of --
Environmental Safety Consultants, Inc. 
Under Contract No. N62470-95-B-2399 
APPEARANCE FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 58343 
Mr. Peter C. Nwogu 
President 
Ronald J. Borro, Esq. 
Navy Chief Trial Attorney 
Ellen M. Evans, Esq. 
Senior Trial Attorney 
OPINION BY ADMINISTRATIVE JUDGE FREEMAN ON THE 
GOVERNMENT'S MOTION TO DISMISS FOR LACK OF JURISDICTION 
Environmental Safety Consultants, Inc., (ESCI) appeals the deemed denial of 
its termination settlement claim under the captioned contract (hereinafter "Contract 
2399"). The Board, sua sponte, noted the possible lack of jurisdiction over a 
substantial amount of the claim and requested the parties to brief the issue. The 
government's brief concludes that: "the board lacks authority over the entire case," 
and that "the appeal should be dismissed for lack of jurisdiction." We construe this 
conclusion as in substance a motion 
to dismiss. 
ESCI opposes the motion on the grounds of (i) equitable tolling of the statute 
of limitations and (ii) that the claim for increased costs over and above the contract 
price did not accrue until 12 June 2012 when the government withdrew its appeal to 
the Federal Circuit from the Board's 28 September 2011 decision converting the 
termination for default to a termination for convenience. We grant 
the government's 
motion in part. 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
1. This appeal arises out of our decision of 28 September 2011 converting the 
government's termination for default of Contract 2399 to a termination for 
convenience of the government. See Environmental Safety Consultants, Inc., 
ASBCA No. 51722, 11-2 BCA if 34,848. Familiarity with that decision is assumed. 

2. Contract 2399 was a firm-fixed-price construction contract. At award on 
13 November 1995, the firm-fixed-price was $561,764.25 (R4, tab 1at15). 1 On 
7 April 1997, ESCI submitted to the contracting officer a comprehensive proposal for 
an increase of$205,463.60 in the contract price for the costs of additional work and 
delays allegedly caused by the government (R4, tab 12 at 9). 
3. In bilateral Modification No. P00006, effective 24 June 1997, the parties 
modified the contract deleting five items of specified work and adding nine items of 
additional work. The additional work items included among others: 
j. Subcontract all remaining work, including supervision, 
quality control, and punchlist items. 
k. Provide additional overhead costs incurred due to 
subcontracting. 
m. Provide additional labor and time for entering, 
leaving, and working in the Q-Area. 
n. Provide extended overhead for the Government delays 
under this contract. 
(R4, tab 2 at 11-12) 
4. Modification No. P00006 concluded with a summary of the agreed price 
adjustment and contract completion date for the additions and deletions of work and 
a general release as follows: 
2. TOTAL AMOUNT OF ADDITIONAL WORK 
TOTAL AMOUNT OF CREDITS 
The total contract price is increased by $109 .00 from 
$561,764.25 to $561,873.25. 
$199,301.00 
$199, 192.00 
The contract completion date is extended by 308 calendar 
days from August 26, 1996, to June 30, 1997. 
The foregoing is agreed to as constituting full and 
equitable adjustment and compensation (both time and 
1 All Rule 4 citations refer to the Rule 4 filed in ASBCA No. 51722. 
2 

money) attributable to the facts of [sic] circumstances 
giving rise to the change directed hereby, including but 
not limited to, any changes, differing site conditions, 
suspensions, delays, rescheduling, accelerations, impact, 
or other causes as may be associated therewith. 
(R4, tab 2 at 2) 
5. Modification No. P00006 was signed by Peter Nwogu on behalf ofESCI 
without reservations on 23 June 1997 (R4, tab 2 at 1 ). Also on 23 June 1997, 
Peter Nwogu signed ESCI's Invoice No. 7 which among other things stated that 
the total contract value was $561,873.25 (the amount agreed to in Modification 
No. P00006) (R4, tab 14 ). 
6. No work was performed on the contract after 16 June 1997. Environmental 
Safety Consultants, 11-2 BCA ~ 34,848 at 171,430, finding 19. On 12 June 1998, the 
contract was completely terminated for default for failure to make progress to ensure 
completion of the work and failure to perform the work within the specified time 
(R4, tab 2 at 13). There were no contract modifications increasing the contract price 
after Modification No. P00006. At termination, the contract price was the price 
agreed to by the parties in Modification No. P00006 ($561,873.25). Over the course 
of the contract, the government paid ESCI a total amount of $303,990.00 in progress 
payments (R4, tab 13 at 1, tab 14 at 1). 
7. Pursuant to paragraph (c) of the FAR 52.249-10, DEFAULT (FIXED-PRICE 
CONSTRUCTION) (APR 1984) clause of the contract, and as a result of our decision 
sustaining the appeal from the default termination, "the rights and obligations of the 
parties will be the same as if the termination had been issued for the convenience of 
the Government" (R4, tab I at 69). 
8. The 52.249-2, TERMINATION FOR CONVENIENCE OF THE GOVERNMENT 
(FIXED-PRICE) (APR 1984}-ALTERNATE I clause in Contract 2399 stated in pertinent 
part: 
( d) After termination the Contractor shall submit a 
final termination settlement proposal to the Contracting 
Officer in the form and with the certification prescribed 
by the Contracting Officer .... 
(e) Subject to paragraph (d) above, the Contractor 
and the Contracting Officer may agree upon the whole or 
any part of the amount to be paid because of the 
termination .... However, the agreed amount, whether 
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under this paragraph (e) or paragraph (t) below, exclusive 
of costs shown in subparagraph (t)(3) below, [ZJ may not 
exceed the total contract price as reduced by ( 1) the 
amount of payments previously made and (2) the contract 
price of work not terminated .... 
( t) If the Contractor and Contracting Officer fail 
to agree on the whole amount to be paid the Contractor 
because of the termination of work, the Contracting 
Officer shall pay the Contractor the amounts determined 
as follows, but without duplication of any amounts agreed 
upon under paragraph (e) above: 
( 1) For contract work performed before the 
effective date of termination, the total (without 
duplication of any item) of-
(i) The cost of this work; 
(ii) The cost of settling and paying termination 
settlement proposals under terminated subcontracts that 
are properly chargeable to the terminated portion of the 
contract if not included in subdivision (i) above; and 
(iii) A sum, as profit on (i) above, determined by 
the Contracting Officer under 49 .202 of the Federal 
Acquisition Regulation, in effect on the date of this 
contract, to be fair and reasonable, however, if it appears 
that the Contractor would have sustained a loss on the 
entire contract had it been completed, the Contracting 
Officer shall allow no profit under this subdivision (iii) 
and shall reduce the settlement to reflect the indicated 
rate of loss. 
(2) The reasonable costs of settlement of the work 
terminated, including-
2 There is no subparagraph ( t)(3) in the Alternate I clause, but the same provisions 
that are in subparagraph (t)(3) of the basic clause are in subparagraph (t)(2) of 
the Alternate I clause. 
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(i) Accounting, legal, clerical, and other expenses 
reasonably necessary for the preparation of termination 
settlement proposals and supporting data; 
(ii) The termination and settlement of subcontracts 
(excluding the amounts of such settlements); and 
(iii) Storage, transportation, and other costs 
incurred, reasonably necessary for the preservation, 
protection or disposition of the termination inventory. 
9. On 5 July 2012, ESCI submitted to the contracting officer a Standard Form 
(SF) 1436 "SETTLEMENT PROPOSAL (TOTAL COST BASIS)" for the 
termination of Contract 2399. The net proposed settlement was $1,183,366.59. 
(App. supp. R4, vol. I, tab 3 at 1-4) The contracting officer did not respond to this 
proposal. On 14 September 2012, ESCI submitted the proposal as a certified claim 
under the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109 (app. supp. 
R4, vol. I, tab 5 at 1-2). The contracting officer refused to either negotiate a 
settlement agreement or issue a final decision on the claim. In her opinion, the claim 
was "conceived in fraud and is permeated by fraud, [and] the contracting officer 
lacks authority to decide it or settle it." (Answer if 8) 
10. On 29 September 2012, ESCI appealed the deemed denial of its 
termination settlement claim. The appeal was docketed as ASBCA No. 58343. The 
monetary elements ofESCI's termination settlement claim were: 
Direct Material 
Direct Labor 
Other Costs 
General & Administrative 
Profit 
Settlement with Subcontractors 
Settlement Expenses 
Finished Product Invoiced 
Disposal & Other Credits 
Net Proposed Settlement 
(App. supp. R4, vol. I, tab 3 at 1) 
$ 0.00 
1,021,306.00 
13,000.00 
17,000.00 
155,145.90 
252,503.97 
175,248.40 
(268,326.62) 
(182,511.19) 
$1,183,366.59 
11. Pursuant to paragraph ( e) of the Termination for Convenience clause the 
termination settlement, exclusive of the termination settlement expenses, cannot 
exceed the total contract price as reduced by ( 1) the amount of payments previously 
made and (2) the contract price of work not terminated (see SOF if 8). The total 
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amount of costs and profit in ESCI's termination settlement claim, excluding the 
settlement expenses ($175,248.40), was $1,458,955.87. This claimed amount was 
$897,082.62 more than the total contract price at termination. (See SOF ~ 10) 
12. ESCI contends that the settlement amount it claims in excess of the 
contract price at termination is due to the increased cost it incurred in performing the 
work as a result of government changes and delays which require an equitable 
adjustment to the contract price. We assume for purposes of the motion that this 
contention is correct. 
13. The FAR 52.233-1, DISPUTES (MAR 1994) clause in Contract 2399 stated 
in pertinent part: 
(a) This contract is subject to the Contract 
Disputes Act of 1978, as amended (41 U.S.C. 601-613). 
(b) Except as provided in the Act, all disputes 
arising under or relating to this contract shall be resolved 
under this clause. 
( 
c) "Claim," as used in this clause, means a 
written demand or written assertion by one of the 
contracting parties seeking, as a matter of right, the 
payment of money in a sum certain, the adjustment or 
interpretation of contract terms, or other relief arising 
under or relating to this contract.... However, a written 
demand or written assertion by the Contractor seeking the 
payment of money exceeding $50,000 is not a claim 
under the Act until certified as required by subparagraph 
(d)(2) below. 
( d)( 1) A claim by the Contractor shall be made in 
writing and submitted to the Contracting Officer for a 
written decision. 
(R4, tab 1 at 68) 
14. When Contract 2399 was awarded, Section 605(a)3 of the CDA stated in 
pertinent part: "Each claim by a contractor against the Federal Government relating 
3 Now 41 U.S.C. § 7103(a)(4)(A). 
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to a contract shall be submitted to the contracting officer for a decision," and "Each 
claim by a contractor against the Federal Government relating to a contract. .. shall be 
submitted within 6 years after the accrual of the claim." When Contract 2399 was 
awarded, FAR 33.201 stated that: '"Accrual of a claim' occurs on the date when all 
events, which fix the alleged liability of either the Government or the contractor and 
permit assertion of the claim, were known or should have been known." FAC 90-32, 
October 1, 1995 at 33-7. 
15. Considering that ESCI's proposal for a price adjustment for 
government-responsible changes and delays of the work was submitted to the 
government in the amount of$205,463.60 on 7 April 1997, and that no work on the 
contract was performed after 16 June 1997, we conclude that all of the events fixing 
the liability of the government, and permitting the assertion of a claim for equitable 
adjustment of the contract price for the alleged increased incurred cost of the contract 
work, were known or should have been known by ESCI no later than the date the 
contract was terminated for default on 12 June 1998. 
16. ESCI's 7 April 1997 letter was a "proposal" for a price adjustment in the 
amount of $205,463.60. It did not request a contracting officer's final decision on 
the proposed adjustment. It did not provide the certification for a claim in that 
amount as required by the CDA. (R4, tab 12) Neither the 7 April 1997 proposal nor 
any other communication in the record before us on the motion was a CDA claim for 
an equitable adjustment in the Contract 2399 price prior to the inclusion of these 
increased costs in the 14 September 2012 termination settlement claim. 
DECISION 
Our jurisdiction over the claimed price adjustment for excess costs included in 
ESCI's 14 September 2012 termination settlement claim depends on (i) when did the 
claim or claims for price adjustment for the alleged increased costs "accrue," and (ii) 
when did ESCI submit a CDA claim to the contracting officer for a price adjustment 
for those costs. ESCI does not contest the fact that it did not submit a certified CDA 
claim for its alleged costs that exceeded the contract price until it included those costs 
in its termination settlement claim submitted on 14 September 2012. That 
submission was 14 years after the claim for equitable adjustment had accrued and 
eight years after the six-year statute of limitations had run. Citing Arctic Slope 
Native Ass'n, Ltd. v. Sebelius, 699 F.3d 1289 (Fed. Cir. 2012) (hereinafter "Arctic 
Slope II"), ESCI argues that the running of the CDA statute of limitation for its 
increased cost claim was tolled until the default termination was converted to a 
termination for convenience because: "Appellant could not have reasonably filed for 
payment of completed work and increases [sic] contract costs while it was pursuing 
government's default termination from June 30, 1997 to September 28, 2011" (app. 
br. at 7). 
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Equitable tolling of a statute of limitations applies where the litigant proves: 
"(l) that he has been pursuing his rights diligently, and (2) that some extraordinary 
circumstance stood in his way and prevented timely filing." Arctic Slope II at 1295. 
In Arctic Slope II, the court held that the plaintiff Indian tribe had diligently 
monitored a class action suit against the government, and as a putative member of the 
class reasonably believed that it was not necessary to file an individual claim on the 
same matter that the class action was prosecuting. The court also held that, as an 
extraordinary circumstance, "the federal government's 'unique and continuing 
relationship with, and responsibility to, individual Indian tribes and to the Indian 
people as a whole"' required that "we must judge the government's conduct with the 
Indian tribes by 'the most exacting fiduciary standards."' Id. at 1297-98. 
There are no such extraordinary circumstances in ESCI's case here. ESCI is 
not an Indian tribe or other entity with which the government had to conduct its 
business by "the most exacting fiduciary standards." 
ESCI contends that "the government's default termination claim had to be 
resolved before appellant could reinstate its request for equitable adjustment 
pursuant 
to [the] CDA" (app. br. at 12). We disagree. All events necessary to fix liability on 
the government for any incurred increased costs of performing the contract were 
known or should have been known no later than 12 June 1998, the date the contract 
was terminated for default (see SOF ~ 15). There were no legal or other impediments 
at that time or thereafter to ESCI submitting an affirmative claim for equitable 
adjustment of the contract price. 
A timely written notice to the contracting officer demanding as a matter of 
right a price adjustment in a sum certain for the increased costs, and certifying that 
demand as required by the CDA, was all that was necessary for ESCI to assert its 
claim for a contract price adjustment for purposes of the statute of limitations. There 
is no evidence that some ''trickery" or misleading action of the government caused 
the untimely submission of such a claim. Absent evidence otherwise, we believe that 
ESCI' s untimely submission was caused by its lack of due diligence in preserving its 
legal rights under the contract. Such "garden variety claim of excusable neglect," is 
not a basis for equitable tolling of the statute of limitations. See Bernard Cap 
Company, ASBCA No. 56679 et al., 10-1BCA~34,387 at 169,801. 
Excluding the claimed termination settlement expenses ($17 5 ,248 .40 ), the 
total amount of ESCI' s termination settlement claim for the cost and reasonable 
profit of performing the contract up to the date of termination ($1,458,955.87) 
exceeded the total contract price ($561,873.25) by $897,082.62 (see SOF ~ 11). 
Since a CDA claim for a price adjustment for those alleged increased costs was not 
timely submitted to the contracting officer, we have no jurisdiction over that claimed 
amount in this appeal and give it no further consideration. Voices R Us, Inc., 
8 

ASBCA Nos. 51565, 52307, 01-1BCAif31,328 at 154,748; Skip Kirchdorfer, Inc., 
ASBCA No. 40515 et al., 93-3 BCA if 25,899 at 128,837. 
The government argues that, without ESCI "properly segregating the costs 
associated with the time-barred claims, the entire appeal should be dismissed (gov't 
br. at 6). We disagree. The termination settlement expenses ($175,248.40) that are 
excluded from the paragraph ( e) limit, and the termination settlement amount up to 
the contract price ($561,873.25) remain within our jurisdiction. 
The motion to dismiss is granted with respect to the $897,082.62 that exceeds 
the contract price and is denied in all other respects. 
Dated: 25 July 2014 
I 
concur 
~~~ 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
I concur 
~~ ~ ~c>-~~~-_.,. 
?--
JACK-DELMAN 
Administrative Judge 
Acting Vice Chairman 
Armed Services Board 
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. 58343, Appeal of 
Environmental Safety Consultants, Inc., rendered in conformance with the Board's 
Charter. 
Dated: 
9 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals