ANHAM FZCO, LLC
Docket: ASBCA 58999
Decision date: 2018-11-13

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of --
ANHAM FZCO, LLC 
Under Contract No. SPM300-10-D-3373 
APPEARANCE FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 58999 
Eric J. Marcotte, Esq. 
Vedder Price 
Washington, DC 
Daniel K. Poling, Esq. 
DLA Chief Trial Attorney 
Michael D. McPeak, Esq. 
Corinne M. Foley-Petersen, Esq. 
Trial Attorneys 
DLA Troop Support 
Philadelphia, PA 
OPINION BY ADMINISTRATIVE JUDGE WOODROW 
This appeal involves an indefinite-delivery, indefinite-quantity contract for the 
supply and delivery of food and non-food items to military customers within Kuwait, Iraq 
and Jordan. ANHAM FZCO, LLC (ANHAM) seeks costs originating from the 
government's direction to alter its delivery operations from Kuwait to Iraq utilizing a 
commercial entry point. 
This decision addresses entitlement only for ASBCA No. 58999. We hold that the 
government changed the terms of the contract by directing ANHAM to enter Iraq through 
the commercial entry point instead of the contractually-required U.S. military controlled 
crossmg. 
The government's modification of the contract to pay the costs of private security 
escorts once in Iraq did not compensate appellant for the new and additional costs of 
switching appellant's operations to the commercial crossing location. Finally, we 
conclude that ANHAM did not assume the risk that the delivery method would change 
under the terms of its fixed-price contract. We sustain the appeal. 

FINDINGS OF FACT 
I. Solicitation and Contract 
1. On May 5, 2008, Defense Logistics Agency - Troop Support (DLA or 
government) issued Solicitation No. SPM300-08-R-0061 (solicitation) seeking proposals 
for a contractor to provide subsistence (food and non-food items) to the U.S. military and 
other authorized customers in Kuwait, Iraq and Jordan (R4, tab 1 ). 1 
2. The solicitation sought to establish an indefinite-quantity contract (C. Sol. at 4 7).2 
3. The pricing terms under the solicitation were "firm fixed price/fixed price with 
economic price adjustment" (C. Sol. at 179). 
4. The solicitation's Statement of Work stated that the work to be performed 
involved the "support of customers who are currently within a war zone" (C. Sol. at 47). 
The zone of contract performance was designated as a contingency operation in 
accordance with FAR 2.101 (id.). 
5. ANHAM submitted a proposal in response to the solicitation. ANHAM's 
proposal took no exceptions to the terms and conditions of the solicitation. (R4, tab 55; 
supp. R4, tab 2) 
6. On April 14, 2010, DLA awarded Contract No. SPM300-10-D-3373 (contract) 
to appellant in the amount of$2,I56,364,275.88, following a competition conducted 
under the solicitation (R4, tab 58). The contract incorporated the solicitation, all 
25 amendments, and ANHAM's proposal (id. at 2). 
7. The contract was an indefinite-quantity contract (C. Sol. at 47). It had a base 
period of 18 months, followed by 4 option periods (R4, tab 58). Option periods 1, 2, and 
3 were one-year periods, and the 4th (and final) option period was for 18 months (id. 
at 52). The maximum contract dollar value was $6,469,092,827.64 (id.). 
8. The contract included Federal Acquisition Regulation (FAR) 52.212-4, 
CONTRACT TERMS AND CONDITIONS - COMMERCIAL ITEMS (MAR 2009) (C. Sol. at 8). 
Several sections of the standard clause were modified as follows: Paragraph (c) 
1 Rule 4 cites are to the Rule 4 filed in ASBCA No. 58999, unless otherwise noted. 
2 The conformed solicitation incorporates the text of all 25 amendments into a complete 
version of the Solicitation (R4, tab 58 at 2). A copy of the conformed solicitation, 
which was used at the hearing, was attached to appellant's post-hearing brief. It is 
incorporated into the record and for ease of reference, will be cited to as C. Sol. 
2 

"Changes" was modified to add a provision providing the government with the right to 
uniJaterally order changes. 
( c) Changes. 
(1) The Contracting Officer, at his/her discretion, may 
unilaterally invoke any of the contingency options set forth in 
this contract. 
(2) The Contracting Officer may at any time, by 
unilateral written order, make changes within the general 
scope of this contract in any one or more of the following: 
(i) method of shipment or packing; 
(ii) place, manner, or time of delivery. 
(3) If such change causes an increase or decrease in the 
cost of, or time required for, performance for any part of the 
work under this contract, the Contracting Officer shall make 
equitable adjustment in the contract price, the delivery 
schedule, or both, and shall modify the contract. 
( 4) The Contractor must assert its right to an 
adjustment under this clause within thirty (30) days from the 
date of receipt of the written order. However, if the 
Contracting Officer decides that the facts justify it, the 
Contracting Officer may receive and act upon a proposal 
submitted before final payment of the contract. 
(C. Sol. at 12) 
9. The contract further stated: 
In addition to the changes otherwise authorized by the 
Changes clause of this contract, the Contracting Officer may, 
at any time, by written order identified as a change order, 
make changes in the place of performance or 
Government-furnished facilities, equipment, material, 
services, or site. Any change order issued in accordance with 
this paragraph (p) shall be subject to the provisions of the 
Changes clause of this contract. 
(C. Sol. at 24) 
3 

I I 
10. The solicitation, and the resultant contract, called for product to be 
delivered from ANHAM' s Kuwait warehouses into Iraq via overland shipments 
under military supervision: 
The Prime Vendor [ANHAM] will need to transport full and 
empty containers/trucks to and from Iraq under the 
supervision of a US. Army convoy. Private security is 
presently prohibited (see page 60). The vendor is responsible 
to honor the provisions of clause 252.225- 7043 
Antiterrorism/Force Protection for Defense Contractors 
Outside The United States (Mar 2006), and all clauses which 
may supplement or supersede it. Iraq convoy routes are 
established via Kuwait. A vendor(s) needs to have, at a 
minimum, operations in Kuwait to include a physical 
warehouse location and a distribution network. 
(C. Sol. at 48 ( emphasis added)) 
11. In the Statement of Work (SOW) section titled "Work to be Performed," "Iraq 
Vehicle Transportation," the estimated service volumes were counted "Per vehicle, 
purchase order, & entry into convoy" (C. Sol. at 52). In the SOW section titled "Work to 
be Performed: Iraq Command, Control, and Support Programs," the solicitation 
explained that performance included placing trucks into U.S. military convoys: 
The Prime Vendor will be required to: provide customer 
service within the SPV program; maintain regular 
communications with all concerned parties to ensure 
information flows to the right people in a timely manner; 
facilitate placement of contractor vehicles within the military 
convoy system; maintain organization and discipline of 
drivers; promote smooth throughput of contractor vehicles; 
minimize round-trip transit times; adhere to driver safety and 
security policies of the base and surrounding area; provide 
24x7 on-site points of contact for transport operations; 
expedite response to breakdowns and incidents; and facilitate 
rapid recovery of assets and personnel. 
(C. Sol. at 53 (emphasis added)) The solicitation further provided, "Delivery 
trucks/drivers fall under the military convoy system and must follow Government 
priorities of movement and adhere to all force protection requirements" (id. at I 02). With 
4 

regard to security, the solicitation also contained the following provision: 
The Prime Vendor is currently prohibited from using 
private security within Iraq. However, if private security is 
allowed in the future, and the government determines that the 
Prime Vendor may use private security, the vendor will be 
given notice of the requirement and the vendor's proposal for 
private security would be negotiated and evaluated at that 
time. 
(C. Sol. at 60) 
12. The procuring contracting officer (CO), Linda Ford, confirmed that offerors 
must perform deliveries by joining a military convoy and performing under military 
supervision (R4, tab 217 at 16-17). Moreover, both parties understood that, at the time 
the contract was awarded, no other means existed for delivering products to the military 
in Iraq (tr. 3/64). 
13. A contemporaneous Army memorandum, dated August 3, 2010, confirmed 
that all goods in Kuwait bound for U.S. personnel in Iraq had to move through the 
Khabari Crossing (K-Crossing): 
As per Kuwait Customs there is no commercial transit of U.S. 
Forces land shipments through Kuwait to Iraq. All shipments 
are imported into Kuwait and then exported from Kuwait via 
Camp Virginia and Khabari Crossing. All U.S. Forces 
shipments arriving in Kuwait with a final destination to Iraq 
are required to be transported by military convoy thru Camp 
Virgin[i]a. 
(ASBCA No. 59000, R4, tab 179 at 2) 
14. CO Timothy Dlugokecki, confirmed that the restriction on military shipments 
through Safwan had been in effect since at least the start of the predecessor contract 
(tr. 3/66). 
II. ANHAM's Proposal and Concept of Operations 
15. In the portion of its proposal titled "Transportation Flow and Standard 
Operating Procedures," ANHAM described its method of moving subsistence supplies 
from Kuwait into Iraq, which ANHAM refers to as its concept of operations. ANHAM' s 
concept of operations, and supporting pricing, was based on the solicitation's mandated 
use of U.S. military escorts to enter and return from deliveries in Iraq. (R4, tab 55 at 8-11) 
5 

16. Describing the movement of its trucks between its own warehouse and the Iraqi 
border, ANHAM proposed that once its trucks were loaded, they would "proceed to the 
border where they group and assemble at the US Military staging yard awaiting instructions 
on military convoy escort" (R4, tab 55 at 8). After that, "Border Facilitator/ Border 
Clearing Agents will facilitate entry of trucks into US Military convoys by communicating 
and coordinating with the Logistic and Movement Control Center (LMCC) Liaison" (id. 
at 9). "Upon completion of formalities, the drivers with their trucks are staged at the US 
Military assembly yard where they are briefed before they depart" (id.). Once across the 
border, ANHAM proposed that its "trucks continue with the US Military escort convoy on 
all the routes until the convoy reaches final destination, at no time will our trucks separate 
from the escort unless handed over to another US military escort team during grid changes" 
(id. at 10). In Iraq, ANHAM promised that"[ d]eliveries to sites are performed as requested 
by the US Military and flexibly accommodate and comply with all security requirements at 
delivery points" (id. at 11 ). 
17. ANHAM did not propose to use the Safwan commercial border crossing 
(tr. 1/140-41, 3/106-07). ANHAM's proposal did not specify any particular point at 
which its trucks would join with the U.S. military convoys, or where its trucks would 
cross the border (tr. 1/137). 
18. ANHAM's proposal was based on using its Kuwaiti trucking fleet and 
Kuwaiti drivers to perform missions into Iraq, and it priced its proposal in accordance 
with that assumption (tr. 1/136-37). 
19. CO Dlugokecki, also understood that ANHAM proposed to use the same 
trucks for all missions (R4, tab 216 at 270). 
20. Regarding ANHAM's proposal, the solicitation provided that "[t]he Prime 
Vendor's [PV] technical proposal will be incorporated by reference into the contract" and 
further provided that, "[i]f there is any conflict between the solicitation language and the 
[PV's] technical proposal, the solicitation language governs" (C. Sol. at 110). 
21. The contract incorporated the solicitation, amendments, and ANHAM's 
proposal "including all enhancements and revisions, and the final proposal revision dated 
13 March 2010" (R4, tab 58 at 2). 
22. ANHAM's proposal recognized the possibility that U.S. Troops could be 
withdrawn from Iraq during contract performance, and that it recognized the risks 
associated with such a withdrawal: 
One of the main political risks to the Prime Vendor 
project lies not in Iraq, but in the US. A major withdrawal of 
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US troops beyond the planned draw downs during the initial 
contract period could jeopardize adequate cost recovery for a 
prime vendor who has invested heavily specifically on the 
Prime Vendor contract. ANHAM recognized this risk early 
in the process and developed a comprehensive plan 
incorporating the Prime Vendor project with other projects 
ANHAM is performing in Iraq food supply. These other 
projects, which are of a more commercial nature, are not 
dependent on a US presence, and major assets such as -
warehouses and trucks can easily be repurposed for 
commercial supply use. 
(App. supp. R4, tab 2 at 5) 
23. The conformed solicitation states that the estimated sales volume for the 
contract "was developed using current contract data adjusted by troop:-strength . 
projections as a result of the [Status of Forces Agreement] SOFA" and that the estimated 
sales volume "may be increased or decreased based on the actual conditions on the 
ground" (C. Sol. at 48). 
24. The contract contained similar provisions linking troop strength projections 
under the SOFA to estimates of storage required for government-furnished material 
(C. Sol. at 51 ), the number of trucks necessary (id. at 52), and the estimated requirements 
for customer service (id. at 53). 
25. The contract price was based on the formula of "Contract Unit Price= Product 
Price+ Distribution Price (Normal and/or Premium)" (C. Sol. at 71) ... 
26. The Product Price is the price that the vendor has paid for an item. It does not 
include any of the costs that are covered by either the normal or premium distribution 
price. (C. Sol. at 71) Under the term of the fixed-price contract, the Product Price was 
the only element of contract price that could be adjusted during contract performance (id. 
at 73). 
27. The Distribution Price, including both the normal and premium aspects of the 
Distribution Price, is defined as "the firm fixed price portion of the Contract Unit Price, 
offered as a dollar amount per unit of issue, rounded up or down to the nearest cent," 
which is the "only method for the Contractor to bill the Government for all costs of 
contract performance other than Product Price" (C. Sol. at 32). 
28. Several Premium Distribution categories were also included in contract 
pricing. These categories were designed to compensate the Prime Vendor for costs 
beyond those covered by the Normal Distribution Price (C. Sol. at 72). 
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29. The Premium Distribution Price was defined as "a firm fixed price offered as 
a dollar amount" (C. Sol. at 72). One of the Premium Distribution categories was for Iraq 
Vehicle Transportation: 
(Id.) 
d. Iraq Vehicle Transportation (Limited to risk, elevated 
insurance, in-transit visibility, recovery, demurrage, and other 
reasonable and allowable costs that the prime vendor finds 
necessary to include that are unique to the expense of 
operating a vehicle in Iraq (see page 52). 
30. ANHAM's Premium Distribution Price included cost of Iraq Vehicle 
Transportation (C. Sol. at 72; tr. 3/30). 
III. ANHAM's Performance under the Contract 
31. ANHAM followed the concept of operations set forth in its proposal, with a 
few minor differences. Initially, ANHAM staged its trucks at its logistical warehouse. 
Later, ANHAM moved its staging area to a larger facility in the Doha region, closer to 
the K-Crossing. And from there, its trucks were call-forwarded to the military staging 
area. (Tr. 1/48) ANHAM's Kuwait-based trucks and drivers met with U.S. military 
convoys at Camp Virginia, crossed the border into Iraq under U.S. military supervision 
by way of the K-Crossing, made their deliveries in Iraq, and then returned under U.S. 
military supervision across the border at the K-Crossing (tr. 1/48-49, 153-57). 
IV. The Closing of the K-Crossing 
32. The United States and Iraq entered into a SOFA on November 17, 2008, that 
became effective January 1, 2009. The SOFA, which contained 30 Articles, was titled 
"Agreement Between the United States of America and the Republic of Iraq on the 
Withdrawal of United States Forces from Iraq and the Organization of Their Activities 
During Their Temporary Presence in Iraq." (Supp. R4, tab 1) Article 1 stated that the 
agreement determined the requirements "that regulate the temporary presence, activities, 
and withdrawal of the United States Forces from Iraq." The SOFA included provisions 
dealing with "United States Contractors" (such as ANHAM) which were defined in 
Article 2. (Id. at 1-2) 
33. Article 9 of the SOFA concerned movement ofvehicles, vessels, and aircraft. 
Paragraph 1 of Article 9 noted that "vehicles operated by or at the time exclusively for 
the United States Forces may enter, exit, and move within the territory oflraq for the 
purposes of implementing this Agreement." (Supp. R4, tab 1 at 7) 
8 

34. Article 15 of the SOFA concerned "Import and Export" and provided that: 
For the exclusive purposes of implementing this Agreement, 
the United States Forces and United States contractors may 
import, export ( items bought in Iraq), re-export, transport, and 
use in Iraq any equipment, supplies, materials, and 
technology, provided that the materials imported or brought 
in by them are not banned in Iraq as of the date this 
Agreement enters into force. The importation, re-exportation, 
transportation, and use of such items shall not be subject to 
any inspections, licenses, or other restrictions, taxes, customs 
duties, or any other charges imposed in Iraq, as defined in 
Article 2, paragraph 10. 
(Supp. R4, tab 1 at 13) 
35. Article 24 of the SOFA provided that "[a]ll the United States Forces Shall 
withdraw from all Iraqi territory no later than December 31, 2011" (supp. R4, tab 1 
at 20). Article 30 of the SOFA provided that the duration of the SOFA would be three 
years, beginning January 1, 2009 (id. at 24). Three years from January 1, 2009, would be 
December 31, 2011, the same date that Article 24 required all U.S. forces to be out of 
Iraq. The SOFA was a public document and was repeatedly mentioned in the solicitation. 
(C. Sol. at 48, 51-53, 57-59, 64-65, 70) 
36. Consistent with the SOFA provisions, in June or July of 2011, the Army 
informed DLA and CO Dlugokecki that it intended to transition out of Iraq. This 
withdrawal of U.S. Troops would lead to the end of military or "Green" security and a 
closure of the military K-Crossing. (Tr. 3/47-48) 
A. DLA Directed ANHAM to Alter its Operations to Utilize the Safwan 
Commercial Crossing 
37. On August 19, 2011, the CO directed ANHAM to develop a point paper 
describing how the transition to using a commercial crossing would affect its operations. 
The CO stated: 
I need a point paper on how the transition to Safwan will 
affect ANHAM's operations. Please include elements of 
driver requirements, customs processing, truck coordination, 
9 

45 day dipnote order processing, truck numbers, LMR and 
FF & V etc. Please produce as soon as possible. 
(R4, tab 126 at 42, tab 138 at 2) 
38. At the time when the government informed ANHAM that it would no longer 
be able to use the military supervised crossing, the Safwan commercial crossing was the 
only commercial crossing border available (tr. 3/64). 
39. In order to use the Safwan commercial crossing, ANHAM explained that it 
would need to establish an entirely new trucking operation in Iraq, including new trucks, 
new drivers, and a new staging yard in Kuwait. The most significant operational change 
was that Kuwaiti trucks would no longer be able to enter Iraq. (Tr. 1/50) 
40. The new operational procedures required Kuwaiti trucks to transload their 
contents into Iraqi trucks. Specifically, all Kuwaiti trucks would drop their cargo in 
Safwan Custom's yard and transload their cargo into an Iraqi truck. (R4, tab 178 at 4) 
Transloading is the process of unloading the contents of a trailer (reefer or refrigerated 
container) and moving them into another reefer, which requires two tractors (bobtails) 
and two reefers (tr. 1/51 ). 
41. The government recognized that the new procedures were "quite different 
from the concept of operations that ANHAM was currently performing" (tr. 3/67). 
42. Both the government and ANHAM agreed that transloading perishable food 
cargo was not a viable option, given the need to preserve the integrity and temperature of 
perishable foods (tr. 1/52, 168-69). Moreover, transloading would also require the 
presence of U.S. Army Veterinary Command personnel at the time and place the reefers 
were opened (tr. 1/169). 
43. ANHAM proposed a solution that involved swapping the Kuwaiti-registered 
bobtail with an Iraqi-registered bobtail at the Safwan commercial crossing (R4, tab 178 
at 4-6). An Iraqi driver could then complete the delivery without the need to fully unload 
and reload the cargo at the Safwan customs yard (id.; tr. 1/51-52). Empty reefers brought 
to the border by the Iraqi trucks would be returned to Kuwait by the Kuwaiti bobtails. 
This process was known as a "bobtail swap." (Tr. 1/163) 
44. To support the Iraqi trucks and drivers, ANHAM would also have to set up a 
secure staging yard in Iraq (R4, tab 61 at 5). 
45. The U.S. Embassy in Baghdad later confirmed that a bobtail swap was 
necessary to move perishable goods across the Kuwait-Iraq border. The U.S. Embassy 
10 

also confirmed that the ban on Kuwaiti drivers in Iraq was, and had been, in place. (R4, 
tab l 98) 
B. ANHAM and DLA Negotiate to Modify Contract to Accommodate the 
New Delivery Method 
46. ANHAM and DLA continued to communicate regarding the procedures 
necessary to accommodate the new border crossing location (tr. 1/52-53, 3/68). ANHAM 
submitted revised versions of its proposal on August 23, August 25, and August 31, 2011 
(R4, tabs 61, 179-80). Each version provided new information that DLA requested (id.; 
tr. 1/49-54). 
4 7. The government recognized that the cost would be affected by changing to a 
commercial crossing (R4, tab 61). The CO distributed ANHAM's proposal to DLA 
senior officials with a note: "Gentlemen, Please see attached. Huge cost to do this; 
$IM to $2.5M per month." (R4, tab 141 at 2) 
48. The government also prepared its own internal assessment of the new border 
crossing procedures. The government's summary page, entitled BLUF, an acronym for 
"bottom line up front" (tr. 3/74), indicates that continuing to use the K-Crossing was the 
"[l]owest cost solution" "to pitfalls of commercial traffic congestion/frustration at Safwan 
Border" (R4, tab 62 at 5). DLA recognized that using the Safwan crossing would require 
more than a dozen unique new processes, including Iraqi trucks and drivers (id. at 9), 
initiating the bobtail swap process (id. at 13, 16), and the need for an additional staging 
yard in Iraq (id. at 15). 
49. The government was involved in approving the operational changes 
associated with using the commercial crossing (tr. 1/59-64). 
50. DLA recognized the likely cost impacts associated with the change in its own 
internal assessment (R4, tab 62 at 22). Those costs included an increase in fleet size, a 
secure staging yard, an increase in labor costs at the border, private security for the new 
facility, and life support for employees at the staging yard (id.). The CO testified that he 
believed the costs identified in DLA's internal analysis represented "an accurate 
representation of what the situation was at the time" (tr. 3/75). 
51. In summarizing the parties' meeting discussing the operational changes, the 
CO addressed modifying the contract: "bilateral modification-if any-will be developed 
based on a mutually agreed-to CON OPS [ concept of operations], F &R Pricing, and 
schedule for implementation" (R4, tab 63 at 1 ). At the hearing, the CO testified that he 
believed that it was premature to promise that a modification would be forthcoming and, 
for that reason, added the three above-quoted caveats (tr. 3/82). 
11 

52. On October 4, 2011, ANHAM representatives met with the CO to discuss the 
transition to the Safwan crossing (R4, tab 186; tr. 1/59). DLA produced an internal "Fact 
Sheet" describing the purpose of the meeting to be discussions concerning the "transition 
from the current [ military Class] 1 support of Contingency Operations to an Overseas 
Commercial model in Iraq" (R4, tab 187 at 1 ). 
53. The fact sheet stated: "Upon approval DLA Troop Support will initiate and 
complete the necessary contract modifications to support the new requirements" (R4, 
tab 187 at 2). 
54. ANHAM took contemporaneous notes of the October 4, 2011 meeting (R4, 
tab 186; tr. 1/60, 3/80-81 ). During the meeting, the parties discussed the January 1, 2012 
deadline for the transition, as well as test runs and test diplomatic notes (R4, tab 186; 
tr. 1/59-60). The parties also discussed ANHAM's new trucking operations in Iraq, the 
new facilities that would be required to support the Iraqi trucks, and the bobtail swap that 
ANHAM had described in previous submissions. The parties also discussed a contract 
modification to cover the change in requirements. (R4, tab 186; tr. 1/60) 
55. The government participated in extensive negotiations with ANHAM on the 
terms and conditions of a contract modification to support the use of the commercial 
crossing (tr. 1/63-64). 
56. On October 13, 2011, CAPT Hansen scheduled a meeting for the following 
month and requested the attendance of more than two dozen people from DLA, 
Department of State, DLA counsel, and other commands within the military (R4, tab 144 
at 2). In the invitation, CAPT Hansen described the purpose of the meeting: 
The objective of this event will be working level approval that 
will support higher level approval, and expedite any contract 
modification necessary to support plan implementation/operations. 
(Id. (emphasis added)) 
57. At the hearing, the CO confirmed that the purpose of the meeting was to 
obtain "working-level approval that will support higher-level approval, and expedite any 
contract modification necessary to support planned implementation and operations" 
(tr. 3/84-85). 
58. On November 9, 2011, DLA held a meeting of the stakeholders to discuss 
ANHAM's new operational plans. Mr. Beau Lendman, ANHAM's senior vice president, 
presented the operational plan that it developed in collaboration with DLA. (R4, tab 147; 
tr. 1/63) 
12 

59. After the November 9, 2011 meeting, DLA requested that ANHAM provide 
"rough order of magnitude" cost proposals describing the costs associated with changing 
to a commercial method of delivery (tr. 1/66). DLA requested rough cost estimates, 
instead of more refined cost proposals, due to the shortness of time (R4, tab 211 at 161). 
60. Over the following weeks, ANHAM provided DLA with three cost proposals, 
addressing the costs of establishing new facilities near the Safwan crossing (R4, tab 70), 
the costs of operating the facilities (R4, tab 149), and the costs related to Iraqi 
transportation of equipment and drivers (R4, tab 150). 
61. In response to ANHAM's cost proposals, CAPT Hansen sent an email to 
Ray Miller, DLA deputy director of subsistence, and Thomas Daley, DLA director of 
subsistence supplier operations, forwarding the cost proposals and explaining how 
ANHAM would be compensated for its additional costs: 
ANHAM wishes to be compensated for the additional 
operating cost due to the loss of the military border crossing, 
and the need to hire Iraqi's [sic] to support Iraq operations 
due to the loss of the MT A. Attached is a one-time cost for 
the Safwan transfer yard. The[re] will be an adjusted 
distribution fee once those costs are precisely calculated, 
negotiated, and agreed to. 
We need to discuss early Monday, there is some 
trepidation on their part because of the unknowns. If there is 
a way to mitigate those concerns we need to facilitate. 
(R4, tab 71 at 1 ( emphasis added), tab 211 at 165) 
C. ANHAM Complies with the Government's Direction and Begins Using the 
Safwan Commercial Crossing 
62. On November 22, 2011, the CO approved ANHAM's proposed concept of 
operations for the new commercial method of delivery, but stated that DLA would need 
more time to review ANHAM's cost proposal (R4, tab 151 at 2; tr. 3/54). The CO 
explained that DLA had approved ANHAM's operational proposal, but would still need for 
ANHAM to support its request for costs with a formal proposal (R4, tab 216 at 255-56; 
tr. 3/94). 
63. On December 19, 2011, the CO and CAPT Hansen met ANHAM's 
Mr. Lendman in ANHAM's offices to assess the status of the transition to the Safwan 
crossing (R4, tab 156). Topics of the meeting included the status of the K-Crossing and 
the Safwan crossing, customs paperwork, driver visas, ANHAM's new Safwan facilities, 
13 

and convoy security (tr. 1/72). Mr. Lendman and the CO both recall discussing a contract 
modification and accounting for costs (tr. 1/72, 3/95). 
64. ANHAM began using the Safwan commercial crossing on December 24, 
2011. ANHAM established a facility near the Safwan crossing. (R4, tab 197) 
65. By mid-January 2012, ANHAM was running regular missions into Iraq 
through the commercial border crossing (tr. 3/96). 
66. Once ANHAM's trucks began using the Safwan commercial crossing, 
ANHAM' s trucks had no security escort from the time the trucks left ANHAM' s Kuwaiti 
warehouses until they reached ANHAM's Safwan, Iraq, staging yard (tr. 1/164). 
67. Mr. Lendman testified that ANHAM incurred significant costs setting up a 
new transfer facility at the Safwan border crossing location, including the rental of a 
temporary yard, setting up temporary housing facilities, and civil constructions costs 
(tr. 3/81-83). 
68. Using a summary exhibit, Mr. Lendman explained each element of the direct 
costs set forth in ANHAM' s transportation claim and explained the documentary basis for 
each (R4, tab 99 at 208). Mr. Lendman explained the documentation supporting these 
costs, including vendor contracts, vendor invoices, and proofs of payment (tr. 1/83 ). 
Mr. Lendman also testified about the costs of providing security at the Safwan location 
and the cost of leasing Iraqi trucks that were used on the Iraq side of the border for food 
deliveries (tr. 1/91-92). 
69. Mr. Lendman testified that ANHAM's claim for additional costs was based on 
the difference between its previous use of Kuwaiti trucks and the new costs associated 
with the Iraqi transportation subcontracts (tr. 3/23-25). 
D. Negotiations over Contract Modification Break Down over Pricing 
70. Although the parties continued to discuss a modification, the discussions were 
unproductive (tr. 3/97). 
71. Negotiations over the contract modification ultimately broke down over price. 
The CO admitted that pricing was the only barrier to agreeing to a modification and that, 
had the parties agreed on price, the government would have issued a modification. At his 
deposition, CO Dlugokecki stated: 
Q. Assuming adequate documentation was provided to 
support the cost that was verifiable and thought to be 
14 

authentic and the price was fair and reasonable, then DLA 
would be prepared to negotiate a modification? 
A. Yes. 
(R4, tab 200 at 274-75) 
72. At the hearing, Mr. Dlugokecki similarly testified: 
(Tr. 3/110) 
Q. If ANHAM provided a cost proposal that was 
viewed as fair reasonable by DLA and DCAA, and it 
provided adequate documentation to support the costs that 
were claimed, then DLA was prepared to try to negotiate a 
modification, correct? 
A. That is correct. 
73. The CO also testified at the hearing that he did not intend to issue a contract 
modification for ANHAM's use of the Safwan border crossing: 
(Tr. 3/55-56) 
Q. As the contracting officer, did you intend on issuing 
a contract modification for ANHAM' s use of the Safwan 
border crossing? 
A.No. 
Q. Why not? 
A. Because it was part of their technical proposal. 
74. The CO further testified that "technical proposal" refers to ANHAM's 
"concept of operations" (tr. 3/56). Earlier in his testimony, he stated that he had asked 
ANHAM to submit a plan because he "just needed to know how their concept of 
operation would work" (tr. 3/53). He continued, acknowledging that he would need this 
information, because: 
Well, there's a lot of moving pieces. It's a different crossing. 
They have to do a customs documentation that they did not do 
before.... They had to do the Kuwait side piece. They had to 
15 

(Tr. 3/53-54) 
do the Iraq side piece. They had to do an AK-302 to get their 
equipment and merchandise out of the country, and they had 
to line up their drivers. 
E. The Government and ANHAM Modify the Contract to Pay for Private 
Security for Convoys within Iraq 
75. On April 12, 2012, David Braus, ANHAM's managing director, and 
CO Dlugokecki, signed Modification No. 28. Modification No. 28 briefly suspended 
U.S. Army-contracted security to permit ANHAM to conduct a test on 
ANHAM-contracted private security for supply convoys within the borders of Iraq. (R4, 
tab 29) 
76. On May 9, 2012, the CO issued contract Modification No. 30 which requested 
that ANHAM submit a proposal for private security for convoys "within the sovereign 
borders of Iraq" (R4, tab 31 at 2). Modification No. 30 provided in part that "US 
Government-provided armed security escort will cease effective 6/30/2012. In order to 
have uninterrupted Class 1 service to our customers in Iraq, ANHAM is tasked to provide 
its own private armed security services." (Id. at 2) 
77. On May 11, 2012, the Agency CO, Virginia E. Barnwell, signed Modification 
No. 31, which revised Modification No. 30. As in Modification No. 30, Modification 
No. 31 states that "US Government-provided armed security escort will cease effective 
6/30/2012. In order to have uninterrupted Class 1 service to our customers in Iraq, 
ANHAM is tasked to provide its own private armed security services." (R4, tab 32 at 2) 
Modification No. 31 requested that ANHAM submit a price proposal within seven 
calendar days of the modification (id.). 
78. On June 14, 2012, DLA and ANHAM entered into bilateral Modification 
No. 33 to allow ANHAM to provide its own private security under the contract (R4, 
tab 33). Pursuant to this modification, DLA compensated ANHAM for costs related to 
maintaining this private security for supply convoys within the borders of Iraq (tr. 3/50). 
On June 30, 2012, ANHAM began providing its own security under Modification No. 33 
(R4, tab 33). 
79. By its terms, Modification No. 33 compensated appellant only for the 
provision of security "within the borders of Iraq." It did not include payment for any of 
ANHAM' s costs associated with having to change the location of the border crossing. 
(R4, tab 33 at 5) 
16 

80. CO Dlugokecki testified that DLA ultimately modified ANHAM's contract to 
require the use of private security in Iraq: 
(Tr. 3/49-50) 
Q. And did DLA enter into a modification with 
ANHAM to provide for private security? 
A. Yes. 
Q. And what modification was that? 
A. P00033. 
Q. I'm going to direct your attention to Modification 33 
at Government Rule 4, Tab 33. And Mr. Dlugokecki, did you 
sign this modification? 
A. Yes. I did. 
81. That modification did not include any costs that are included in ANHAM' s 
claim: 
(Tr. 3/51) 
Q. And did this modification include any of the new 
costs associated with ANHAM' s claim for transportation, for 
using the Safwan border crossing? 
A.No. 
V. DLA Denies ANHAM's Request for Equitable Adjustment 
82. On July 10, 2012, during a meeting between DLA and ANHAM, ANHAM 
made an oral request for equitable adjustment regarding the "Safwan Border Crossing" 
(59283, R4, tab 57 at 1; tr. 1/76). Although this oral conversation did not constitute an 
official request for an equitable adjustment to the contract, the CO stated that he "would 
issue a position on all of these issues NL T COB 07/31/2012" (59283, R4, tab 1 at 46, 
tab 57 at 1). 
83. On July 26, 2012, DLA issued an "Official Response to [ANHAM's] Seven 
Individual Requests for Equitable Adjustments" (R4, tab 124). One of the topics covered 
in this letter was the move to the Safwan border crossing. 
17 

84. With regard to the Safwan border crossing, DLA denied the request stating: 
DLA Troop Support denies the request as [ANHAM's] 
September 1, 2009 proposal clearly provides for use of the 
Safwan/Kuwait-Iraq Border Crossing to deliver material from 
Kuwait into Iraq. [ANHAM] voluntarily chose this course of 
action in response to the solicitation requirements. As such, 
costs associated with using this route are, or should have 
been, incorporated into ANHAM' s proposal. The fact that 
[ ANHAM] had been using the Khabari Crossing Route 
("K Crossing"), at no cost to them, in lieu of its proposed 
Safwan Route underscores the appropriateness of the 
Agency's instant position. 
(R4, tab 124 at 4) 
85. DLA cited as support "Pages D-7 through D-10 of [ ANHAM' s] proposal 
[which] discuss use of the Safwan/Kuwait-Iraq Border Crossing Route in performance of 
the contract" (R4, tab 124 at 5). CO Dlugokecki reiterated this position during the 
hearing (R4, tab 55; tr. 3/56). 
86. In addition, DLA rejected a related request for an increase in the premium 
transportation allowance, stating: 
DLA Troop Support denies the request as this issue is 
intertwined with the Safwan Border Crossing issue above. 
The requirements of an Iraqi-citizen and Iraqi-owned truck to 
ensure passage through the Safwan Border Crossing into Iraq 
have not changed since the contract's inception. Therefore, 
as [ ANHAM] proposed use of the Safwan Border Crossing in 
its proposal, so too should the costs associated with these 
requirements been incorporated in said proposal. Failure to 
have done so falls on [ ANHAM], not the Government. 
(R4, tab 124 at 5) 
87. The record reflects that ANHAM's proposal stated that border crossing will 
be done as part of a military convoy (R4, tab 55; tr. 3/104; C. Sol. at 48, ,i F). 
18 

VI. ANHAM's Certified Claim and Subsequent Appeal 
88. On December 12, 2012, ANHAM submitted a certified claim seeking to 
recover the additional costs of transporting subsistence goods through the Safwan border 
crossing (R4, tab 126). 
89. On February 12, 2013, DLA notified ANHAM that it was requesting a 
Defense Contract Audit Agency (DCAA) audit to assist with the CO's final 
determination and therefore expected to "issue a final decision on your claim on or before 
Friday, July 25, 2013" (R4, tab 127 at 1). 
90. On July 25, 2013, DLA notified ANHAM that because of the ongoing DCAA 
audit, DLA was unable to issue a final decision, but expected to issue a decision on 
October 15, 2013 (R4, tab 132). 
91. On September 12, 2013, DCAA provided DLA its audit report regarding 
ANHAM's "Equitable Adjustment Claim for Added Costs of Iraq Premium 
Transportation Costs Related to Safwan Crossing for Contract No. SPM300-10-D-3373," 
Audit Report No. 2131-2013Fl 7200001 (hereafter DCAA Safwan Audit) (R4, tab 133). 
92. DCAA's Safwan Audit found that "examination of the price adjustment claim 
disclosed a significant amount of questioned costs" such that "the claim [was] not 
acceptable as a basis for settlement" due to three significant issues (R4, tab 133 at 4). 
93. DCAA first noted that the Safwan Audit "was limited due to the contractor's 
failure to: a) Provide adequate supporting documentation to substantiate its claimed cost 
savings [ and] b) Provide explanations for its claimed facilities, security and vehicles costs 
that describe the connection between the costs claimed and the increased costs incurred 
under the contract as direct result of the alleged changed condition" (R4, tab 133 at 4). 
94. Second, DCAA found that: 
Claimed "additional" costs [were] overstated as follows: 
a. Leased trucks and trucks fuel are unallowable 
duplications of the incremental transportation costs the 
contractor computed in its cost savings calculation. 
b. Labor and driver lease costs do not represent increased 
costs on the contract. 
c. Transportation costs are not allowable per the terms of 
the contract. 
19 

d. A portion of the security and vehicle costs were 
incurred prior to the award of the PV Contract. 
e. A portion of the facilities costs were incurred after the 
claim period. 
(R4, tab 133 at 4) 
95. Third, DCAA questioned "Indirect costs associated with the questioned base 
costs" (R4, tab 133 at 4). 
96. On October 15, 2013, DLA issued a CO's final decision (COFD) denying the 
claim (R4, tab 134). DLA based its denial on the premise that ANHAM had proposed to 
use the Safwan commercial crossing: 
ANHAM's proposal, dated September 1, 2009, which was 
submitted in response to Solicitation SPM300-08-R-0061, 
stated that ANHAM would use the Safwan commercial 
border crossing route in making deliveries of subsistence 
items from Kuwait into Iraq. By voluntarily selecting this 
location from the outset, any costs associated with using this 
route are, or should have been, anticipated and incorporated 
into ANHAM's original proposal. Therefore, the claimed 
costs associated with ANHAM' s Safwan facility and Iraq 
trucking operations are not "new," as ANHAM should have 
been and/or was aware of those costs at the time it proposed 
on the Contract. Thus, the costs associated with using the 
Safwan border crossing were built into the firm fixed price of 
the contract. 
(R4, tab 134 at 2-3; second amended answer 1 50) 
97. In his final decision, the CO first determined that ANHAM proposed to "use 
the Safwan commercial border crossing route in making deliveries of subsistence items 
from Kuwait into Iraq" in response to the solicitation (R4, tab 134 at 2, tab 55 at 8-10). 
Because ANHAM "select[ed] this location from the outset," the CO determined that "any 
costs associated with using this route [were], or should have been anticipated and 
incorporated into ANHAM's original proposal" and therefore "were built into the firm 
fixed price of the contract" (R4, tab 134 at 2-3). 
98. Second, the CO determined ANHAM's claim "confused the concepts of 
escort support with location of a supply route" and that based on "decisions made by the 
20 

U.S. Government regarding the status and operation of the military ... [the] U.S. military 
escort was no longer available once the U.S. Government determined that it would 
withdrawal [sic] its troops from Iraq in December 2011." The CO determined that 
decisions, such as withdrawing troops and eliminating military escorts, represented 
Sovereign Acts of the United States Government for which DLA cannot be held liable. 
(R4, tab 134 at 3) The CO also found that ANHAM's "use of the [K-Crossing,] at little 
or no cost to [ANHAM], in lieu of its proposed Safwan route" indicated that "ANHAM 
was making an additional, unanticipated profit under its firm-fixed price Contract" and 
that "[t]he fact that ANHAM [was] no longer making that additional unanticipated profit 
is not compensable" (id.). 
99. Third, the CO determined that "even if [he] were inclined to find any liability 
for the additional claimed costs on the part of the Agency, which [he did] not, ANHAM's 
claim must be denied in its entirety as the DCAA [Safwan Audit] concluded that none of 
ANHAM's cost elements are supportable." Further, the CO found that "[f]rom the time 
[ANHAM] submitted its REA, to date, ANHAM has consistently been unable and/or 
refused to provide evidentiary support to justify any portion of the millions of dollars in 
claimed costs." (R4, tab 134 at 3) 
100. On August 2, 2013, prior to the issuance of the October 15, 2013 COFD, 
ANHAM filed a notice of appeal on the basis that the claim had been deemed denied by 
DLA's failure to issue a decision. The appeal was docketed as ASBCA No. 58807. DLA 
filed a motion to dismiss for lack of jurisdiction on the basis that it had not yet issued a 
final decision. When DLA issued its COFD on October 15, 2013, the Board found the 
motion to be moot. On November 15, 2013, ANHAM filed two notices of appeal3, and 
the matter that is the subject of this decision was docketed as ASBCA No. 58999. 
101. Beginning on November 12, 2015, the Board held a four-day hearing at its 
offices in Falls Church, Virginia, on entitlement and quantum. At the close of the 
hearing, the parties jointly proposed that the decision only cover entitlement and the 
Board agreed (tr. 4/4). 
3 ANHAM also filed a notice of appeal from an October 30, 2015 COFD, which was 
docketed as ASBCA No. 59000 and consolidated with the subject appeal. The 
parties subsequently resolved ASBCA No. 59000, and it was dismissed on 
January 11, 2016. (Bd. corr. file) 
21 

DISCUSSION 
I. DLA's Direction to Discontinue Military Supervised Border Crossing 
Constituted a Constructive Change to the Contract 
To recover for a constructive change, a contractor must prove (1) that it performed 
work beyond the contract requirements; and (2) that the additional work was ordered, 
expressly or impliedly, by the government. Bell/Heery, a Joint Venture v. United States, 
739 F.3d 1324, 1335 (Fed. Cir. 2014); AMEC Environment & Infrastructure, Inc., 
ASBCA No. 58948, 15-1BCA135,924 at 175,593. 
As we discuss below, we conclude that the government's direction to discontinue 
military supervised crossings and transition to the use of the Safwan commercial crossing 
constituted a constructive change to the contract. 
A. The Contract Expressly Required ANHAM to Transport Goods to and 
From Iraq under Military Supervision 
The contract contains several express requirements that dictate how ANHAM was 
to accomplish the delivery of perishable food items to locations in Iraq. For example, the 
contract required ANHAM to "transport full and empty containers/trucks to and from 
Iraq under the supervision of a U.S. Army convoy" (finding 10). In addition, the contract 
required ANHAM to "facilitate placement of contractor vehicles within the military 
convoy system" (finding 11 ). The contract further required that"[ d]elivery trucks/drivers 
fall under the military convoy system and must follow Government priorities of 
movement and adhere to all force protection requirements" (id.). Each of these 
provisions pertain to the method of delivery under the contract and constrain how 
ANHAM was to accomplish the provision of food to locations within Iraq. 
The contract's express language was confirmed by the procuring CO, Ms. Ford, 
who testified that offerors (including ANHAM) only could perform such missions by 
joining a military convoy and performing under military supervision. Moreover, both 
parties understood that, at the time the contract was awarded, no other means existed of 
delivering products to the military in Iraq. (Finding 12) This understanding further was 
confirmed in a contemporaneous Army memorandum (finding 13), as well as by the CO, 
Timothy Dlugokecki (finding 14). 
ANHAM' s proposal, which was incorporated into the contract, described 
procedures that complied with the contract's requirements (findings 15-16). Specifically, 
the proposal stated that ANHAM would load trucks at its warehouse in Kuwait, drive to a 
U.S. military staging area in Kuwait near the Iraqi border, and cross the border under 
military supervision into Iraq. The trucks would continue with the U.S. military convoy, 
deliver their product, and return to Kuwait under military escort. (Finding 16) 
22 

Significantly, ANHAM proposed using the same trucks and drivers for the entire mission 
(id.), and priced its proposal accordingly (finding 18). 
Contrary to the CO's final decision denying ANHAM's claim, ANHAM's 
proposal did not state that ANHAM would use the Safwan commercial border crossing 
route when making deliveries (finding 17). Indeed, using the commercial crossing would 
have been inconsistent with the terms of the solicitation (findings 11-12). This is because 
the contract required military supervision (finding 11), and, at the time of the solicitation, 
the only border crossing available was the K-Crossing ( findings 12-13 ). This is 
corroborated by the Army's August 3, 2010 memorandum, which confirmed that all 
goods in Kuwait bound for U.S. personnel in Iraq had to move through the K-Crossing 
(finding 13). 
DLA makes much of the fact that the solicitation did not identify the location of 
the border crossing (gov't br. at 9, 34). However, this argument misses the mark. 
Indeed, ANHAM does not dispute the fact (app. br. at 21). The contract unequivocally 
required deliveries to be made into and out of Iraq only under the supervision of a U.S. 
Army escort (finding 11 ). When the government eliminated military supervised 
crossings, ANHAM was forced to develop a new - and more expensive - means of 
transporting goods into Iraq. The dispute here is about the costs associated with the 
change in the method of delivery of goods into Iraq; not about the specific location of the 
border crossing point. 
B. DLA's Direction to Discontinue Military Supervised Crossings and 
Transition to the Safwan Commercial Crossing Constituted a Change to 
the Contract 
In June or July 2011, the Army informed DLA that the Army would be withdrawing 
U.S. Troops from Iraq and would, as a result, close the military K-Crossing (finding 36). 
Shortly thereafter, in August 2011, DLA directed ANHAM to "produce as soon as 
possible" a "point paper on how the transition to Safwan [border crossing] will affect 
ANHAM's operations" (finding 37). ANHAM complied, and worked extensively with the 
CO to develop a plan to implement the changes necessary to accommodate the new 
commercial crossing location (findings 46-52). These operational changes included: 
( 1) establishing transportation network in Iraq; (2) building a new secure facility 
supporting Iraq operations; and (3) implementing a bobtail swap operation in order to 
preserve perishable food when switching from a Kuwaiti-registered vehicle to an 
Iraqi-registered vehicle at the Safwan crossing (findings 48-52). 
This direction, when juxtaposed against the contract's requirements, is a material 
change to the scope of work under the contract. Not only did DLA's direction change the 
location of the border crossing, it changed ANHAM's entire method of fulfilling the 
terms of the contract. The contract expressly is for the delivery of perishable goods by a 
23 

I 
certain method, i.e., into and out of Iraq under military escort (finding 11 ). Directing that 
goods be delivered by a different method - in the context of a delivery contract - is 
necessarily a change to the contract requirements. 
The government contends that the change only affected how ANHAM would 
perform the contract and did not change the contract's requirements (gov't br. at 37). 
This argument would require us to accept that the contract required nothing more than the 
provision of food items at particular locations in Iraq and was completely silent about 
how the contractor would accomplish the delivery. That is not what the contract requires. 
We conclude that a change in how ANHAM would meet its contract requirements 
constitutes a "change" pursuant to the Changes clause and, therefore, would require the 
government to make an equitable adjustment to account for the extra costs resulting from 
the change. Indeed, DLA acknowledges in its post-hearing brief that ANHAM's changes 
"were, of course, a change in how ANHAM would meet contract requirements" (gov't br. 
at 36). Pursuant to the Changes clause, the government may unilaterally make changes to 
the "method of shipment or packing," including changes to the "place, manner, or time of 
delivery" of goods into Iraq (finding 8). That is precisely what the government did here. 
In addition, "[i]f [the] change causes an increase or decrease in the cost of, or time 
required for, performance for any part of the work under this contract, the Contracting 
Officer shall make equitable adjustment in the contract price, the delivery schedule, or 
both, and shall modify the contract." (Id. (emphasis added)); Info. Sys. & Networks 
Corp., ASBCA No. 46119, 02-2 BCA ,-i 31,952 at 157,873 (holding that contract price 
must be equitably adjusted when a change under the Changes clause results in an increase 
or decrease in the cost of performance of work). This language in the Changes clause is 
unambiguous and unequivocal. 
This appeal is similar to Alley-Cassetty Coal Co., which involved a contract that 
mandated the delivery of coal via barge and truck to the Rock Island Arsenal in Illinois. 
ASBCA No. 33315, 89-3 BCA ,-i 21,964 at 110,484. When severe cold weather made 
barge delivery impossible, the contractor sought an equitable adjustment for the extra 
cost of delivering the coal by truck. Although the government agreed to additional time, 
it refused to pay for the additional costs of overland delivery. Instead, the government 
ordered the contractor to complete the delivery under threat of a termination for default. 
Id. at 110,489. On appeal, we held that requiring delivery via a different method was a 
change pursuant to the Changes clause and required an equitable adjustment. We 
specifically held that the contractor's extra costs were not caused by the weather, but 
from the insistence that contractor proceed with delivery by a different method than that 
set forth in the contract. Id. at 110,490. 
In this appeal, the contract mandates a particular method of delivery of goods into 
Iraq. By changing the method of delivery, the government instituted a change pursuant to 
24 

the contract's Changes clause and triggered a mandatory obligation to make an equitable 
adjustment for any increase or decrease in the contract price. 
1. Government's Reliance on Zafer Taahhut and Advanced 
Engineering is Unavailing 
The government cites Zafer Taahhut and Advanced Engineering to support its 
argument that ANHAM is not entitled to an equitable adjustment for acts not caused by 
the government (gov't br. at 31, 38). In Zafer Taahhut lnsaat ve Ticaret, A.S. v. United 
States, 120 Fed. Cl. 604 (2015), which involved a firm-fixed-price construction contract, 
the government of Pakistan closed the border between Pakistan and Afghanistan, causing 
Zafer to incur additional costs to transport construction materials to its work site in 
Afghanistan. The United States Court of Federal Claims held that the government was 
not responsible for transportation delays occasioned by the Pakistani government's 
closure of the border route, when Zafer had entered into a fixed-price contract including 
an agreement to transport construction materials to its work site "FOB: Destination." 4 
120 Fed. Cl. at 610. 
The government's reliance on these cases is unavailing. Zafer is distinct from this 
appeal in that Zafer involved a firm-fixed-price construction contract and an FOB clause, 
which explicitly required the contractor to deliver the materials and supplies to the 
specified project site at no charge to the government. In contrast, the contract in this 
appeal is a delivery contract and contains specific requirements for how the deliveries 
must be made. 
This appeal also differs significantly from Zafer in that the CO in Zafer did not 
direct the contractor to change its method of delivery or otherwise alter any of its 
contractual obligations. 120 Fed. Cl. at 608. In this appeal, the CO directed ANHAM to 
change its entire method of fulfilling the terms of the contract. 
Advanced Engineering & Planning Corp., ASBCA No. 53366, 05-1 BCA 
il 32,806, which DLA also cites in support of its position, is equally unhelpful to the 
government (gov't hr. at 38). Advanced Engineering involved a contract to overhaul a 
Navy ship. The Navy initially made available a staging area alongside the vessel, but the 
area became unavailable when the Navy used the area for piling snow. 05-1 BCA 
il 32,806 at 162,291. Appellant sought an equitable adjustment for the loss of the staging 
area. We held that the loss of the staging area was not a constructive change to the 
contract, because the Navy was not contractually required to provide the staging area in 
the first place. Id. Because the contractor did not perform "beyond the requirements of 
4 "FOB: Destination" is explained in FAR 47.303-6 and requires the contractor to 
deliver the materials and supplies to the specified project site at no charge to the 
government. 
25 

the pertinent specifications or drawings" when it performed work without a staging area, 
it was not entitled to an equitable adjustment. Id. (quoting Ets-Hokin Corp. v. United 
States, 420 F.2d 716, 720 (Ct. Cl. 1970)). 
This appeal, in contrast, involves a change to an express contractual requirement. 
The contract unequivocally required deliveries to be made into and out of Iraq only under 
the supervision of a U.S. Army escort (finding 10). As the parties discussed from the 
outset, changing the border crossing procedures would involve a contract modification 
(finding 53). This conclusion was consistent with the language of the contract. 
2. Modification No. 33 Does Not Compensate ANHAM for Change in 
Border Crossing 
The government states, incorrectly, that Modification No. 33 "provides for and 
compensates Appellant for the elimination of military supervised convoys into and out of 
Iraq" (gov't br. at 34). Modification No. 33 does not compensate ANHAM for changes 
in the delivery method (finding 79). Modification No. 33 is limited in scope, in that it 
compensates appellant only for the provision of private security within the borders of Iraq 
(findings 78-79). In fact, Modification No. 33 expressly provides only for private 
security within the borders of Iraq, not "into and out of Iraq." It does not compensate 
appellant for the change of the location of the border crossing or for any other costs 
associated with the change in delivery method. (Finding 79) In fact, the CO testified that 
the modification did not include any of the new costs associated with ANHAM' s claim 
(finding 81). We take the CO at his word. 
In our view, the issue of private security somewhat obfuscates the issue. The 
question is not whether the solicitation contemplated a switch to private security, but 
whether the contract contemplated the changes associated with changing the delivery 
method. ANHAM does not dispute that the contract might allow for private security and 
that the parties would negotiate the details (app. hr. at 33). However, the delivery method 
or concept of operations transporting the supplies under the supervision of a U.S. Army 
convoy, was expressly stated in the contract (finding 10). The change in operations was 
dramatic and "quite different" from what ANHAM had previously done (findings 39-40, 
67-68). Once the government changed the method of delivery, it equated to a 
constructive change under the contract. Thus, ANHAM' s distribution system was 
impacted, not just the need for private security. 
3. DLA, Not the Iraqi Government, Directed the Change in Delivery 
Method 
Finally, the government contends that there was no constructive change, 
because the new delivery procedures were "not required by the government," but, were 
instead caused by the government of Iraq (gov't br. at 31). This is just a variation of 
26 

the government's third-party act defense (see section III, below). The relevant change 
in this case is the government's unilateral direction to change the method of delivery, 
including the location of the border crossing and the discontinuance of 
military-supervised convoys. The Iraqi government's commercial shipping 
requirements pre-dated the closure of the K-Crossing and were applicable to all 
commercial shipments, not just ANHAM. (Findings 45, 74) 
II. The Sovereign Act Defense does Not Insulate the Government from Liability 
The government contends that it acted in its sovereign capacity when it 
withdrew troops from Iraq in 2011. It further contends that the closing of the 
K-Crossing was a sovereign act that applied universally to all contractors and was not 
directed solely towards ANHAM. Finally, the government contends that its decision 
to end military convoy security in Iraq constituted a sovereign act. (Gov't br. at 42-50) 
In the government's view, these three actions were sovereign acts and did not 
constitute constructive changes under the contract. 
For its part, ANHAM concedes that the decision to withdraw troops from Iraq 
and the closure of the K-Crossing were sovereign acts, but argues that the 
government's decision to impose new and additional contractual requirements prevents 
the government from relying on the sovereign act defense to insulate it from liability 
for the costs of complying with the new requirements (app. br. at 25). 
A. The Sovereign Act Defense 
The sovereign acts defense is simply that the government, when sued as a 
contractor, cannot be held liable for its general and public acts as a sovereign. Horowitz v. 
United States, 267 U.S. 458,461 (1925); Conner Bros. Construction Co. v. Geren, 550 
F.3d 1368 (Fed. Cir. 2008). A sovereign act is one taken in the national interest and is 
public and general in application. Altanmia Commercial Marketing Company, ASBCA 
No. 55393, 09-1 BCA 134,095. The "sovereign act" defense is an affirmative defense, 
see Orlando Helicopter Airways, Inc. v. Widnall, 51 F.3d 258,261 (Fed. Cir. 1995), for 
which the defending party bears the burden of proof. DynCorp, ASBCA No. 49714, 97-2 
BCA 129,233 at 145,430. 
1. The Closing of the Khabari Border Crossing was a Sovereign Act 
In this appeal, both parties agree that the withdrawal of troops pursuant to the 
SOFA and the concomitant closing of the Khabari border crossing (K-Crossing) was a 
sovereign act (gov't br. at 42-46; app. br. at 23-25). The withdrawal of troops and 
closing of the K-Crossing addressed the broad social need of protecting convoy 
movements and protecting national security and was not for the purpose to specifically 
and intentionally nullify government contractor rights. 
27 

2. Exceptions to the Sovereign Acts Defense 
The Board has recognized two key limitations to the sovereign act defense 
preventing the government from avoiding liability when: ( 1) the CO issues instructions 
or orders to implement the sovereign act which exceed contract requirements, e.g., which 
constitute a constructive change; or (2) the government expressly or impliedly agrees to 
pay the contractor's losses due to the sovereign acts. Under the first of these two 
limitations, an act ceases to be a sovereign act when it takes the form of a direction for 
implementation under the contract and when it requires a constructive change to the 
contract. Nero and Assocs., Inc., ASBCA No. 30369, 86-1 BCA, 18,579 at 93,297; see 
also Home Entertainment, Inc., ASBCA No. 50791, 99-2 BCA, 30,550 at 150,860; 
Empire Gas Engineering Co., ASBCA No. 7190, 1962 BCA, 3323 at 17,128 (holding 
that CO's order caused a compensable suspension). 
The Board's decision in Altanmia Commercial, 09-1 BCA, 34,095, is an example 
of the latter limitation to the sovereign acts defense. In Altanmia, appellant contended 
that the government constructively changed the contract when it destroyed vehicles that 
became disabled during transport and deprived appellant of the use of the vehicles to 
perform the contract. The Board held that the military's order to destroy the disabled 
vehicles was a sovereign act. However, the Board also held that the contractual 
requirement to "provide security escort to [contractor] convoys" extended to convoys 
sent to recover abandoned vehicles and that this contractual language "included the 
implied promise that [the government] DESC would pay for any increased costs resulting 
from a breach of its obligation to provide security escorts for Altanmia's recovery 
convoys." 09-1 BCA, 34,095 at 168,582. The Board's conclusion inAltanmia is 
consistent with the settled exception to the sovereign acts defense that the government 
may contractually agree to compensate contractors for losses due to its sovereign acts, 
either by an implied or an express agreement. Id. ( citing D&L Construction Co. & 
Associates v. United States, 402 F.2d 990,999 (Ct. Cl. 1968)); also International Oil 
Trade Center, ASBCA No. 55377, 08-2 BCA, 33,916 at 167,832.5 
We conclude that both of these exceptions to the sovereign act defense apply in 
this appeal. First, as we previously concluded, the CO's orders to ANHAM to develop a 
transition plan to accommodate the new delivery method were constructive contractual 
changes made in response to the government's sovereign act. Second, we conclude that 
5 Oddly, the government relies on Altanmia for the opposite conclusion (gov't br. at 32). 
In fact, in that appeal, appellant did not prevail on a constructive change argument, 
but rather on the fact that the government's order to destroy vehicles violated the 
implied promise that the government would pay for any increased costs due to its 
sovereign acts. 09-1 BCA, 34,095 at 168,582. 
28 

the government expressly agreed to compensate ANHAM for the additional costs 
associated with the change in delivery method. 
B. The Government Acknowledged that Changing the Border Crossing 
Location Would Require a Contract Modification 
The facts demonstrate that the government was aware of the costs associated with 
changing the border crossing location and was willing to both modify the contract and 
pay some portion of the additional costs associated with the new procedures. 
On August 19, 2011, CO Dlugokecki directed ANHAM to develop a point paper 
describing how the transition to using a commercial crossing would affect its operations 
(finding 37). The government recognized that the new procedures were "quite different 
from the concept of operations that ANHAM was currently performing" ( finding 41 ). In 
so doing, the government also recognized that ANHAM's costs would be affected by 
changing to a commercial crossing. Indeed, in the CO's communications with his 
superiors, the CO made note of the fact that the new border crossing procedures would 
significantly increase ANHAM's costs, in the range of $1 million to $2.5 million per 
month. (Finding 4 7) 
In light of the increased costs of changing to commercial delivery methods, the 
CO expressly agreed that the parties would negotiate a modification to support the new 
requirement associated with using the commercial crossing (finding 51 ). This 
acknowledgement is memorialized in a contemporaneous fact sheet produced by the 
government in support of a meeting with ANHAM on October 4, 2011 ( finding 52). The 
fact sheet stated: "Upon approval DLA Troop Support will initiate and complete the 
necessary contract modifications to support the new requirements" (finding 53). 
These facts demonstrate that the CO was aware at the time that the new border 
crossing location would significantly change ANHAM' s concept of operations and would 
require the contract to be modified. CO Dlugokecki' s subsequent testimony at the 
hearing-that he did not intend to modify the contract because the new procedures were 
part of the concept of operations in ANHAM's original proposal-is inconsistent with this 
contemporaneous awareness and is not credible. (Finding 51) 
After directing ANHAM to develop new procedures for shipments through the 
commercial crossing, the government continued to be involved directly in approving the 
operational changes associated with using the commercial crossing. The government 
participated in extensive negotiations with ANHAM on the terms and conditions of a 
contract modification to support the use of commercial crossing. (Finding 55) These 
negotiations ultimately broke down over price (finding 71). The CO admitted that 
pricing was the only barrier to agreeing to a modification and that, had the parties agreed 
on price, the government would have issued a modification ( findings 71-72). 
29 

We draw two conclusions from the government's efforts to reach agreement with 
ANHAM on a bilateral modification to accommodate the new border crossing. First, we 
conclude that the government contemporaneously concluded that a contract modification 
was necessary to accommodate the new border crossing method. Second, we conclude 
that the government was aware that changing the border crossing would cost the 
contractor additional money and that the government was willing to pay some amount for 
those additional costs. Accordingly, the government's arguments to the contrary must 
fail. 
C. The Government Expressly Agreed to Compensate ANHAM for 
Additional Costs Associated with New Border Crossing 
The facts further demonstrate that the government was aware that changing the 
border crossing would cost the contractor additional money and that the government was 
willing to pay some amount for those additional costs. Indeed, both parties anticipated a 
bilateral modification and spent months negotiating the terms of such a modification. 
(Findings 43-61) 
Although the parties were able to reach agreement on a new concept of operations to 
accommodate the new delivery method, they we unable to agree on pricing. The CO 
admitted that pricing was the only barrier to agreeing to a modification and that, had the 
parties agreed on price, the government would have issued a modification. (Findings 60-61) 
That the government and ANHAM ultimately were unable to agree on price does 
not change the fact that the government contemporaneously acknowledged that the new 
border crossing was a compensable change to the contract and that it was willing to 
compensate ANHAM for the additional costs ANHAM incurred. These facts satisfy the 
second exception to the sovereign acts defense, whereby the government expressly or 
impliedly agrees to pay the contractor's losses due to the sovereign acts. Altanmia, 
09-1 BCA ,r 34,095 at 168,582. 
We conclude that the sovereign acts defense does not insulate the government 
from liability in this situation. 
III. DLA Has Waived Third-Party Affirmative Defense 
In its post-trial brief, the government contends for the first time that the switch to 
the Safwan border crossing was not a contractual change, but was "necessitated by Iraqi 
requirements and/or the expiration of the SOFA" (gov't br. at 38). In particular, DLA 
contends that the requirements imposed by the Iraqi government following the expiration 
of the SOFA were acts by a third party, not the acts of the United States, and therefore 
DLA is not contractually liable for those actions (id. at 50). According to the 
30 

government, the "expiration of the SOFA was both a sovereign act of the United States 
and an act of a third party (Iraq)" (id. at 52). 
In response, ANHAM contends, inter alia, that DLA has waived the right to raise 
the affirmative defense of third-party action, because DLA did not raise the defense in its 
answer or at the hearing (app. reply hr. at 28). By failing to plead the affirmative defense 
in its answer, and further by failing to raise it during the hearing, the government failed to 
put ANHAM on notice that the government intended to argue that the costs incurred by 
ANHAM were primarily caused by the actions of Iraq. 
Board Rule 6(b ), requires that affirmative defenses must be set forth in the 
pleadings. The defense of third-party action is similar to other avoidance defenses, such 
as the sovereign acts doctrine or the political question doctrine, and should be pleaded as 
an affirmative defense. See Girardeau Contractors, Inc., ENG BCA No. 5034, 88-1 BCA 
~ 20,391 (holding that defenses of acts of third parties, sovereign acts, and acts of natural 
forces are all affirmative defenses to breach of warranty claim). The failure to timely raise 
an affirmative defense may waive it. Eagle Contracting, Inc., AGBCA No. 88-225-1, 
92-3 BCA ~ 25,018, recon. denied, 93-1 BCA ~ 25,320; Michael, Inc., ASBCA 
No. 35653, 92-1 BCA ~ 24,412 (holding that government waived affirmative defense of 
. lack of notice by failing to raise it until its post-hearing brief). 
In this appeal, DLA failed to plead the defense of third-party causation in its 
answer, although DLA specifically included the affirmative defenses of the sovereign 
acts doctrine and the political question doctrine (second amended answer at 75-77). 
Moreover, the parties' arguments and evidence adduced at the hearing were directed at 
the government's sovereign acts defense, not at the actions of the Iraqi government. 
According to ANHAM, it was prepared for and did defend against the government's 
sovereign act defense, but it did not take discovery or elicit testimony concerning the 
actions of the Iraqi government (app. reply hr. at 28). 
Even if the government had not waived its third-party defense, we conclude that 
the extra costs incurred by ANHAM were not primarily or solely caused by the actions of 
Iraq, but were caused by the government's direction to change the border crossing 
location. 
The government relies on TEKKON Engineering Co., ASBCA No. 56831, 
11-2 BCA ~ 34,872, to support its argument that the extra costs incurred by ANHAM 
were primarily or solely caused by the actions of Iraq, not by the United States. 
TEKKON, unlike this appeal, involved a firm-fixed-price contract requiring delivery on 
an f.o.b. destination basis pursuant to FAR clause 52.247-34, F.O.B. DESTINATION 
(Nov 1991 ), which expressly shifted the risk of delivery costs onto the contractor. 
Moreover, the excess costs in TEKKON involved a unilateral embargo on incoming 
31 

shipments imposed by Iraq, not the routine regulations governing commercial shipments 
at issue in this appeal. 
As we have found, the contract in this case expressly required ANHAM's vehicles 
to become part of the military convoy system (finding 10). As a result, ANHAM was not 
subject to the rules for commercial travel into and within Iraq. ANHAM only became 
subject to these rules as a result of DLA's decision to discontinue military supervised 
crossings (findings 38-39). In our view, the root cause of ANHAM's additional costs 
was DLA's change to the express requirements of the contract, not the rules applicable to 
commercial shipments within Iraq. Indeed, the Iraqi rules regarding commercial 
shipments, such as the prohibition on Kuwaiti trucks and drivers from entering Iraq, were 
in place before the SOFA and before DLA instructed ANHAM to change its method of 
delivery (finding 45). 
IV. ANHAM did Not Assume the Risk that Border Crossing Procedures would 
Change under the Terms of its Fixed-Price Contract 
DLA next contends that ANHAM assumed the risk of unexpected costs when it 
entered into a firm-fixed-price contract (gov't br. at 53). The contract price was based on 
the formula of "Contract Unit Price = Product Price + Distribution Price (Normal and/or 
Premium)" (finding 25). According to DLA, pricing under the contract included an 
economic price adjustment mechanism that pertained only to the product price, not to the 
distribution price, which was defined as a firm-fixed-price element in the solicitation 
(gov't br. at 54). DLA contends that ANHAM was aware of the risks it was assuming 
when it submitted its pricing proposal, and knew it would be responsible for unexpected 
costs related to changes to the procedures for transporting food between Iraq and Kuwait 
(id. at 55). 
In response, ANHAM contends that a firm-fixed-price contract does not immunize 
the government from liability for constructive changes (app. reply br. at 31). ANHAM 
argues that it had no reason to assume the risk of using the Safwan border crossing when 
it submitted its proposal, because the solicitation prohibited using the commercial 
crossing and it was against Army policy and Kuwaiti law (id. at 32). 
DLA's assumption of the risk defense fails for the same reasons as its sovereign 
act defense. We previously concluded that DLA's direction to ANHAM to begin using 
the commercial border crossing was a constructive change to the contract. We agree with 
ANHAM that a firm-fixed-price contract does not relieve the government of liability for 
constructive changes. Precision Dynamics, Inc., ASBCA No. 50519, 05-2 BCA 133,071 
( compensating contractor under firm-fixed-price contract for constructive change 
requiring additional work beyond contract requirements). Indeed, if a firm-fixed-price 
contract precluded making equitable adjustments to compensate for constructive changes, 
there would be no reason for equitable adjustment and Changes clauses in the contract. 
32 

See AAA Eng'g & Drafting Co., ASBCA No. 21326, 77-1 BCA, 12,454 (holding that 
Changes clause requires equitable adjustment even in a fixed-price contract). 
The government's assumption of the risk defense also fails because it incorrectly 
describes the risk that ANHAM assumed in its pricing structure. The government asserts 
that ANHAM's proposal recognized the risk of troop withdrawal and that ANHAM "was 
accepting the risks associated with such a withdraw[al]" (gov't br. at 14). It is true that 
ANHAM knew and accepted the risk of troop withdrawal-and its concomitant effect on 
the quantities of food to be stored, transported, and delivered. However, in this appeal, 
the relevant risk is that DLA would require ANHAM to adopt an entirely different 
method of delivering food into Iraq-not that the government would withdraw its troops. 
See, e.g., ANHAM FZCO, LLC, ASBCA No. 59283, 17-1 BCA, 36,817 (holding that 
acceptance of risk of major troop withdrawal is distinct from acceptance of risk of 
government misinformation). 
Under the contract's pricing structure, ANHAM's Premium Distribution Price 
included cost of Iraq Vehicle Transportation. By its terms, Premium Distribution Price 
was limited to "allowable costs that the prime vendor finds necessary to include that are 
unique to the expense of operating a vehicle in Iraq." (Findings 28-29) Contrary to 
DLA's contention, this did not "price in" the risk of changing border crossing locations 
or converting to commercial delivery operations. In our view, this language demonstrates 
that changing border crossing locations and transitioning to a commercial mode of 
operation was not part of the original pricing structure which would include Premium 
Distribution Price. Based on the anticipated concept of operations, ANHAM would be 
entering into and traveling within Iraq inside the "bubble" of a military convoy. This 
mode of operating is inherently non-commercial. 
It is true that the contract contained language putting ANHAM on notice that 
troops could be withdrawn from Iraq (findings 23-28). A risk that ANHAM 
acknowledged in its proposal (finding 22). This risk is distinct, however, from the 
possibility that DLA would order ANHAM to change its method of delivering goods into 
Iraq. 
The fact that ANHAM was aware of the SOFA and considered it in developing the 
concept of operations does not mean that ANHAM assumed the risk of costs associated 
with changing the crossing location and complying with commercial shipping 
requirements. Indeed, ANHAM' s statement in its proposal about the SOFA speaks to the 
business risk associated with a reduction in business volume resulting from "[a] major 
withdrawal of US troops beyond the planned draw downs during the initial contract 
period," not the risks associated with a change in the concept of operations (finding 22). 
We conclude that ANHAM did not assume the risk of the unexpected costs of a 
new method of delivering. goods into Iraq when it entered into the contract. 
33 

V. ANHAM Proved Governmental Liabilities 
DLA contends that "ANHAM is not entitled to an equitable adjustment because 
ANHAM has not shown that any change resulted in an increase in the cost of 
performance of work" (gov't br. at 40). Specifically, DLA argues that, although the 
parties mutually agreed to remand the quantum portion of this appeal back to the CO, 
ANHAM has not yet submitted a quantum claim for DLA's review (id. at 41). 
According to the government, ANHAM' s failure to prove some increase in costs is fatal 
to its constructive change theory (id.). 
In response, ANHAM contends that, in a hearing on entitlement only, the 
contractor must only put on some evidence of damage to support a finding of liability 
(app. reply br. at 21). ANHAM argues that it presented extensive testimony during the 
hearing concerning additional costs it incurred as a result of the changes to the delivery 
method, including increases in Safwan security costs and Iraqi truck costs. ANHAM 
further contends that the Rule 4 file contains extensive documentation of additional costs, 
including a preliminary DCAA audit report that itemized specific costs ANHAM 
incurred as a result of the change. (Id.) 
In an entitlement hearing, it is necessary to prove the fact of injury resulting from 
the constructive change. See Scott Timber Co. v. United States, 692 F.3d 1365, 1376 
(Fed. Cir. 2012) (citing Cosmo Constr. Co. v. United States, 451 F.2d 602, 605-06 
( Ct. Cl. 1971) ("[T]here must be some evidence of damage ... sufficient to demonstrate 
that the issue of liability is not purely academic; that some damage has been incurred.")); 
see also Puritan Assocs. v. United States, 566 F.2d 1191 (Ct. Cl. 1977) (table) ("Even 
if...the assessment of damages is reserved for the quantum phase of the case, the plaintiff 
as part of its proof of entitlement, must show it was damaged to some extent, by 
defendant's derelictions."). Proving that damage has been incurred, however, does not 
require the same precision as necessary to support a judgment in a precise sum. Cosmo, 
451 F.2d at 606. Indeed, unrebutted evidence of damages is sufficient to prove that 
injury occurred. 
In this appeal, there is sufficient testimonial and record evidence to demonstrate 
that the constructive change to the contract caused ANHAM to incur significant 
additional costs. For example, ANHAM's senior vice president, Mr. Lendman, testified 
regarding the types of costs ANHAM incurred in setting up a new transfer facility at the 
Safwan border crossing location, including the rental of a temporary yard, setting up 
temporary housing facilities, and civil constructions costs (finding 67). In his testimony, 
Mr. Lendman used a summary exhibit to discuss each element of the direct costs set forth 
in ANHAM's transportation claim (docketed as ASBCA No. 58999), and explained the 
documentary basis for each. Mr. Lendman testified that these costs were supported by 
documentation, including vendor contracts, vendor invoices, and proofs of payment. 
34 

(Finding 68) Mr. Lendman also testified about the costs of providing security at the 
Safwan location and the cost of leasing Iraqi trucks that were used on the Iraq side of the 
border for food deliveries (id.). Although government counsel questioned Mr. Lendman 
about ANHAM's decision to lease trucks from Iraqi subcontractors, Mr. Lendman 
explained that its Iraqi subcontracts included the cost of trucks, drivers, insurance, and 
fuel. Mr. Lendman further explained that ANHAM's claim for additional costs was 
based on the difference between its previous use of Kuwaiti trucks and the new costs 
associated with the Iraqi transportation subcontracts. (Finding 69) The government did 
not question Mr. Lendman about any of the other costs in ANHAM's claim. This 
unrebutted testimony of ANHAM's additional costs is sufficient to prove that an injury 
occurred as a result of the constructive change to the contract. CATH-dr/Balti Joint 
Venture, ASBCA Nos. 53581, 54239, 05-2 BCA ,r 33,046 (unrebutted testimony of 
individual costs sufficient to demonstrate injury resulting from constructive change). 
Finally, the parties agreed to bifurcate the hearing, having the Board "consider the 
entitlement portion of the case which has been now fully submitted" (tr. 4/4). The Board's 
normal practice is to decide entitlement first, then, if applicable, return the quantum 
determination back to the parties for resolution. In the event that the parties are unable to 
reach or agree on quantum, they may come back to the Board for a separate hearing and 
ruling. At the hearing, the parties had prepared to present both entitlement and quantum, 
but subsequently agreed to request a decision on entitlement only (finding 101). 
CONCLUSION 
Based upon the foregoing the appeal is sustained and is returned to the parties to 
resolve quantum. 
Dated: November 13, 2018 
(Signatures continued) 
35 
Administrative Judge 
Armed Services Board 
of Contract Appeals 

I concur 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
I concur 
OWEN C. WILSON 
Administrative Judge 
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. 58999, Appeal of ANHAM 
FZCO, LLC rendered in conformance with the Board's Charter. 
Dated: 
36 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals