Frazier Investments, Inc. d/b/a Optimum Construction
Docket: ASBCA 63001
Decision date: 2023-03-13

ARMED SERVICES BOARD OF CONTRACT APPEALS 
 
OPINION BY ADMINISTRATIVE JUDGE HERZFELD 
 
Frazier Investments, Inc., which does business as Optimum Construction 
(Optimum), seeks an equitable adjustment for alleged constructive changes made by the 
Department of the Air Force (Air Force) during contract performance.  The parties have 
elected to waive a hearing and submit the appeal on the record pursuant to Board Rule 11.  
For the reasons discussed below, we deny Optimum’s appeal. 
 
FINDINGS OF FACT 
On September 30, 2016, the Air Force awarded contract No. FA2823-16-C-4036 
(Contract), to Optimum for $1,946,339.52 to replace the fire alarm control panel and fire 
suppression system in a building on Eglin Air Force Base (R4, tab 1 at 1-3).   
 
On November 1, 2016, the Air Force issued a notice to proceed and the parties 
held a pre-construction conference (R4, tab 3, tab 16 at 1).  At the pre-construction 
conference, however, the Air Force’s construction team informed Optimum that the 
building’s tenants anticipated that the work would take place during the night and 
weekends, not during normal business hours as originally anticipated (R4, tab 16 at 1).  
Prior to submitting its final proposal revision, Optimum had informed the Air Force that 
Optimum based its proposal “on being given free access to one floor at a time to install 
the systems, and offices will have to be unoccupied during the construction” (R4, tab 16 
at 4).  Given the changed assumptions, the Air Force stopped Optimum from performing 
(R4, tab 16 at 1).  Between November 1, 2016 and April 28, 2017, the parties held 
“[m]ultiple discussions” to change “all work on the project over to night work to better 
accommodate the customer[’]s mission” (R4, tab 17 at 1).   
Appeal of - )  
 )  
Frazier Investments, Inc. d/b/a/  
  Optimum Construction 
) 
) 
ASBCA No. 63001 
 )  
Under Contract No. FA2823-16-C-4036 )  
   
APPEARANCE FOR THE APPELLANT: Mr. John Frazier 
    President 
 
APPEARANCES FOR THE GOVERNMENT: Caryl A. Potter III, Esq. 
    Deputy Chief Trial Attorney 
 Nicholas T. Iliff, Jr., Esq. 
    Trial Attorney 

2 
 
 
On April 28, 2017, the Air Force proposed a new statement of work “regarding the 
upcoming modification” and stated Optimum should “[d]isregard the previous” statement 
of work (R4, tab 4 at 1).  The proposed new statement of work directly addressed 
working hours:  “Regular working hours shall consist of a period between 7 a.m[.] and 
6 p.m[.] Monday thru Friday unless otherwise directed by the Contracting Officer and 
two 12 hours shifts Saturday and Sunday excluding 3 day holidays” (R4, tab 5 at 1). 
Also, “[a]fter hour work during the week Monday thru Friday shall consist of a period 
between 6 p.m[.] and 7 a.m[.] the following day” (R4, tab 5 at 1).  The proposed new 
statement of work also provided a new phased sequence of work with some work 
“recommended” for “day work” and other work recommended for “nights” (R4, tab 5 
at 2, tab 6).  The revised statement of work also required Optimum to “submit a schedule 
room by room as to when work will be executed” per the phased sequence of work (R4, 
tab 5 at 2).  Instead of three phases by each floor, the revised statement of work broke the 
work into significantly more phases (R4, tab 16 at 2).   
 
In response to the revised statement of work, the parties negotiated a modification 
to pay Optimum additional money based on the proposed changes.  On May 12, 2017, 
Optimum proposed to do the work for an additional $884,130.65, including $243,257.25 
for “fire suppression” by its subcontractor, L. Pugh & Associates, Inc. (Pugh) (R4, tab 7 
at 1, 3).  On August 4, 2017, the Air Force counteroffered $522,945.91 (R4, tab 8 at 1).  
On August 10, 2017, Pugh wrote Optimum regarding the Air Force’s counteroffer, 
advocating that it should be paid more for design work, but agreeing to lower its 
proposed number of hours to meet the new requirements (app. supp. R4, tab 1 at 1).  On 
August 11, 2017, Optimum counteroffered $771,333.33, including $165,578.15 for Pugh 
(R4, tab 9 at 1, 3).  On August 25, 2017, the Air Force responded that it would not move 
from its $522,945.91 counteroffer (app. supp. R4, tab 3).  On September 14, 2017, 
Optimum countered with $441,312.06, including $137,516.96 for Pugh (R4, tab 10 
at 1, 3).   
 
After this counteroffer, Optimum alleges that the Air Force asked Optimum to 
lower its offer below $200,000 or the Air Force would cancel the project (app. br. at 4).  
Optimum has not offered any direct evidence to support that accusation, just an allegation 
in its brief. 
 
On September 20, 2017, Optimum provided a new counteroffer for $199,536.84, 
including only $13,361.50 for Pugh (R4, tab 11 at 1, 3).  In that proposal, Optimum stated 
it based its pricing “on performing the interior work in occupied areas, with only night 
shifts, working Monday-Friday on a 40 hour schedule” (R4, tab 11 at 2).  Optimum also 
acknowledged that to “salvage the project” it would not be able to perform construction 
“with one unoccupied floor at a time as it was originally bid” (R4, tab 11 at 1).  Optimum 
acknowledged that “the daily remobilization and demobilization drastically reduces our 
daily production” (R4, tab 11 at 1).  Optimum recognized: 

3 
 
 
[N]ight work productivity on a military reservation is much 
less than the efficiency of working days, and the productivity 
is further reduced by the building being occupied during the 
day and our crews having to set up and breakdown, tools, 
scaffolds, equipment, materials and protective covers, at the 
beginning and end of each night. 
 
(R4, tab 11 at 1)   
 
Optimum admits it submitted the September 20, 2017 proposal without Pugh’s 
approval (app. br. at 4).  Only after Optimum submitted the September 27, 2017 proposal, 
did Pugh learn the “Modification would only include 948 hours for installation labor and 
no additional design dollars, no shift premium [for late night work], no allowance for 
labor price increases in the previous two years, no additional materials, no material price 
increases” (R4, tab 14 at 3).  On January 25, 2018, Pugh complained to Optimum 
regarding the working conditions that the Air Force demanded (app. supp. R4, tab 4).  
Pugh acknowledged that the Air Force rejected the prior request “for an overtime rate for 
the guys having to work nights” and “for additional design time/money to be able to go 
into occupied areas and figure out the best way to install the systems, since we were no 
longer going to have a whole floor at a time” (app. supp. R4, tab 4).   
 
On March 21, 2018, despite Pugh’s misgivings, representatives for Optimum and 
the Air Force signed Modification No. P00001 (Modification) to the Contract (R4, 
tab 12).  The Modification stated it was based on “Mutual Agreement of the Parties” and 
the Contract’s Changes clause, FAR 52.243-4 (R4, tab 12 at 1 (Modification), tab 1 at 10 
(Contract)).  The Modification added a new contract line item number, stating that 
Optimum would “provide all plant, labor, materials, equipment, transportation and 
supervision to accomplish after hours and night work as agreed to for the proposal dated 
20 Sep 2017” for a firm-fixed price of $199,536.84 (R4, tab 12 at 3).  Additionally, the 
Modification stated: 
 
SUPPLEMENTAL AGREEMENT:  The parties agree that 
this supplemental agreement establishes the consideration for 
modifications effected herein.  The parties specifically 
acknowledge and agree that this supplemental agreement 
constitutes full satisfaction of the parties’ rights to equitable 
adjustment, under any clause of this contract, relating to the 
modifications effected herein. 
 
(R4, tab 12 at 2)   
 

4 
 
After completing performance, Pugh submitted to Optimum a request for a 
“comprehensive equitable adjustment” of $91,254 and a contracting officer’s final 
decision under the Contract Disputes Act (CDA) (R4, tab 14 at 2, 4).  Pugh complained 
that it had informed Optimum and the Air Force that the proposals did not include 
sufficient money to pay for the changes (R4, tab 14 at 2-3).  For example, Pugh 
complained that “[n]o money was allowed to be added to the contract for the additional 
design” that would result from an inability to work on an entire floor at one time (R4, 
tab 14 at 3).  Pugh learned “that the Modification would only include 948 hours for 
additional labor and no additional design dollars, no shift premium,[ ] no allowance for 
labor price increases in the previous two years, no additional materials, no material price 
increases, and that the time for the actual project duration was decreased” (R4, tab 14 
at 2).  Pugh acknowledged, “We can’t exactly say all the problems were unforeseen as 
[Pugh] had priced many of them into the proposals, however, the Owner refused to 
believe they were there and would not include the funds in the Modification as requested” 
(R4, tab 14 at 3). 
 
On November 25, 2019, Optimum forwarded the claim to the Air Force stating 
that its “subcontractor” Pugh was “requesting the Final Decision” (R4, tab 14 at 1).  In an 
email transmitting the request, Optimum stated, “we feel their claim is not valid or 
warranted and we surely do no[t] stand behind it.  The contract modification that was 
issued for the night work was negotiated for months and understood by all including 
Optimum and all key subcontractors” (R4, tab 13).  Optimum acknowledged that Pugh’s 
request had “really caught us off-guard” and that “this claim is by no way supported by 
the Optimum management team” (R4, tab 13). 
 
On March 23, 2020, the Air Force responded that the Modification “clearly stated 
that the added days and consideration constituted full satisfaction of both parties right to 
equitable adjustment via the supplemental agreement” (R4, tab 15).  However, the 
Air Force refused to issue a contracting officer’s final decision in response to Pugh’s 
unsponsored claim:  “Subcontractors . . . do not have the right to seek and collect contract 
damages from the Government pursuant to the CDA because they are not in contractual 
privity with the Government” (R4, tab 15).   
 
On February 16, 2021, Optimum submitted a claim to the Air Force seeking 
$98,695, including Pugh’s costs of $90,621 and Optimum’s $8,074 for overhead, profit, 
and subcontractor bonding costs (R4, tab 16 at 30).  Optimum stated its “bid proposal for 
the modification initially included additional design services to perform the work in 
phases, but the government removed that cost because it was deemed unnecessary” (R4, 
tab 16 at 2).  The “proposal also included additional cost and inefficiencies to work 
nights, but this was also removed” by the Air Force project manager (R4, tab 16 at 2).  
However, as Optimum explained, “Once the modification was issued, we were required 
to work 100% of the interior work at night and we were required to design and construct 
the project in (16) separate phases.  This caused major cost overruns in labor, design and 

5 
 
equipment” (R4, tab 16 at 2).  Optimum claimed increased labor, design, and material 
costs based on the requirement to work nights and divide the project into 16 phases 
instead of just three phases of working one floor at a time during the day (R4, tab 16 at 2, 
32-33). 
 
On May 4, 2021, the contracting officer issued a final decision denying 
Optimum’s claim (R4, tab 17).  The Air Force concluded that the Modification covered 
all the claimed costs because the Modification “clearly references Optimum’s proposal 
dated 20 Sept 2017,” which “clearly states Optimum[’]s understanding that all interior 
work shall be preformed [sic] at night and that the original agreed upon plan of one floor 
at a time would not be feasible and a phased approach would be the only option” (R4, 
tab 17 at 2).  The Air Force determined that Optimum had “waived” any rights to 
compensation for subsequent costs covered by the Modification (R4, tab 17 at 2).   
 
On July 29, 2021, Optimum timely appealed the contracting officer’s final 
decision.  Initially, Optimum elected to use the accelerated procedures in Board 
Rule 12.3.  The Board set the hearing date for January 26, 2022, as requested by the 
parties.  On December 30, 2021, appellant requested postponement of the hearing and 
later requested that this appeal be removed from the accelerated procedures track.  The 
parties then opted to present this appeal under Board Rule 11, submitting briefs for 
decision without a hearing. 
 
DECISION 
 
 I.  Standard of Review 
 
Board Rule 11 permits parties to waive a hearing and submit their appeal on the 
record.  ASBCA Rule 11(a).  “Unlike a motion for summary judgment, which must be 
adjudicated on the basis of a set of undisputed facts, pursuant to Board Rule 11, the 
Board ‘may make findings of fact on disputed facts.’”  U.S. Coating Specialties & 
Supplies, LLC, ASBCA No. 58245, 20-1 BCA ¶ 37,702 at 183,031 (quoting Grumman 
Aerospace Corp., ASBCA No. 35185, 92-3 BCA ¶ 25,059 at 124,886 n.13).  As the 
proponent of the claim, Optimum bears the burden of proof.  FlightSafety Int’l, Inc., 
ASBCA No. 62659, 23-1 BCA ¶ 38,245 at 185,709.  As the proponent of any affirmative 
defense, the Air Force bears the burden of proof.  Alion Science & Tech. Corp., ASBCA 
No. 58992, 15-1 BCA ¶ 36,168 at 176,489. 
 
 II.  Optimum Has Failed to Prove Entitlement to an Equitable Adjustment 
 
Optimum asserts entitlement to an equitable adjustment based on increased costs 
encountered for constructive changes under the Contract, but we hold that there were no 
changes beyond the requirements of the Modification.  Indeed, Optimum’s subcontractor 
– Pugh – foresaw that the Modification was insufficient to pay for the changes but 

6 
 
Optimum agreed to the Modification anyway.  On the flip side of Optimum’s claim for 
constructive changes, the Air Force also asserts that the Modification resulted in an 
accord and satisfaction.  We agree.   
 
Optimum also asserts it faced duress from the Air Force to sign the Modification, 
but we conclude that the Air Force acted appropriately.  Finally, Optimum essentially 
asserts that the Modification was unconscionable because the Air Force should have 
realized that Optimum had submitted a below-cost offer to do the night work.  We hold 
that Optimum has failed to demonstrate unconscionability.   
 
A. Optimum Has Failed to Prove It Incurred Increased Costs Based on a 
 Constructive Change 
 
“A constructive change occurs where a contractor performs work beyond the 
contract requirements without a formal order, either by an informal order or due to the 
fault of the Government.”  Int’l Data Prods. Corps. v. United States, 492 F.3d 1317, 1325 
(Fed. Cir. 2007) (citing Miller Elevator Co. v. United States, 30 Fed. Cl. 662, 678 
(1994)).  “If a contractor performs work that cannot be characterized as additional work 
under the contract, it does not constitute a change.”  South Bay Boiler Repair, Inc., 
ASBCA No. 59281, 17-1 BCA ¶ 36,634 at 178,426 (citing Int'I Data, 492 F.3d at 1325).  
Like a formal change under the Changes clause, “the contractor must prove increased 
costs compared to what is otherwise required by the contract” to recover for a 
constructive change.  Charles F. Day & Assocs. LLC, ASBCA No. 60211, 19-1 BCA 
¶ 37,215 at 181,175; see also Bell/Heery v. United States, 739 F.3d 1324, 1335 (Fed. 
Cir. 2014) (“To demonstrate a constructive change, a plaintiff must show (1) that it 
performed work beyond the contract requirements, and (2) that the additional work was 
ordered, expressly or impliedly, by the government.”). 
 
The Air Force did not require Optimum to perform work beyond the Contract’s 
requirements.  The Modification provided consideration for the changes for which 
Optimum now seeks recovery – costs primarily incurred by its subcontractor, Pugh.  
Optimum’s claim seeks increased costs that were not only foreseeable during 
negotiations, but Pugh foresaw them and begged Optimum to make sure they were 
incorporated into the Modification.  Optimum ignored Pugh’s warnings. 
 
In particular, Optimum seeks costs that were covered by the Modification, which 
incorporated by reference Optimum’s September 20, 2017 proposal (R4, tab 12 at 2-3).  
Optimum’s claim seeks reimbursement for the labor, design, and material costs based on 
the requirement to work nights and divide the project into 16 phases instead of just 
three phases of working one floor at a time during the day (R4, tab 16 at 2, 32-33).  Yet, 
the Modification stated that Optimum “will provide all plant, labor, materials, equipment, 
transportation and supervision to accomplish after hours and night work as agreed to for 
the proposal” (R4, tab 12 at 3).  The Modification incorporated Optimum’s proposal, 

7 
 
which acknowledged that Optimum would not be able to perform “with one unoccupied 
floor at a time” as it originally bid (R4, tab 11 at 1).  Optimum’s proposal acknowledged 
that working nights would be less efficient and less productive because the crews would 
have “to set up and breakdown, tools, scaffolds, equipment, materials and protective 
covers, at the beginning and end of each night” (R4, tab 11 at 1).  Thus, the Modification 
required the precise work Optimum now claims was changed after the Modification. 
 
Moreover, the parties agreed to the Modification with the additional costs added as 
a firm-fixed price contract line item (R4, tab 12 at 3).  “The essence of a firm fixed-price 
contract is that the contractor, not the government, assumes the risk of unexpected costs.”  
Lakeshore Eng’g Serv., Inc. v. United States, 748 F.3d 1341, 1347 (Fed. Cir. 2014); see 
also Zafer Taahhut Insaat ve Ticaret A.S. v. United States, 833 F.3d 1356, 1361 (Fed. 
Cir. 2016) (“‘A firm-fixed price contract provides for a price that is not subject to any 
adjustment on the basis of the contractor’s cost experience in performing,’ 48 C.F.R. 
§ 16.202–1, and generally sets forth a fixed scope of work.”); FAR 16.202-1 (“This 
contract type places upon the contractor maximum risk and full responsibility for all costs 
and resulting profit or loss.”).  Optimum agreed to take on the risk of failing to perform 
the changes in the Modification for the proposed firm-fixed price of $199,536.84.   
 
Optimum and Pugh understood that they were agreeing to a fixed price that would 
not pay for all its costs.  Indeed, Optimum admits that it submitted the September 20 
proposal without Pugh’s approval (app. br. at 4).  Before signing the Modification, Pugh 
apprised Optimum of its concerns with the September 20 proposal because the proposed 
price would not fully pay for Pugh’s work covered by the Modification’s changed 
requirements (app. supp. R4, tab 4).  Pugh complained that the Air Force included no 
additional money for design costs, overtime work, labor price increases, additional 
materials, or material price increases (R4, tab 14 at 3; app. supp. R4, tab 4).  Pugh noted 
that these additional costs mainly were driven by the inability to perform on an 
unoccupied floor – one floor at a time, in three phases – and the Modification’s 
requirement that Pugh and Optimum break up the work into significantly more phases 
(that resulted in a 16-phase project) (app. supp. R4, tab 4; R4, tab 16 at 2).  Nevertheless, 
Optimum ignored its subcontractor Pugh during the negotiations and executed the 
Modification without including all the costs Pugh had sought. 
 
When performance concluded, Optimum was caught “off-guard” by Pugh’s 
attempt to recover costs and told the Air Force that Pugh’s “claim is not valid or 
warranted” and initially would not “stand behind it” (R4, tab 13).  Optimum stated, “The 
contract modification that was issued for the night work was negotiated for months and 
understood by all including Optimum and all key subcontractors” (R4, tab 13).  Optimum 
now asserts that its official made this statement to “protect their reputation” and because 
the individual more familiar with the contract negotiations had died (app. br. at 5).  
Regardless, the facts support Optimum’s original assessment (before it agreed to sponsor 
Pugh’s claim).  The claim is not warranted.  Ultimately, we conclude that Optimum has 

8 
 
failed to prove any constructive changes that resulted in work beyond that required by the 
Modification. 
 
B. Accord and Satisfaction Also Bars Optimum’s Claim 
 
The Air Force asserts that the Modification added these requirements and paid 
Optimum additional money for these changes (gov’t br. mot. at 8-9).  In particular, the 
Air Force asserts that the Modification “satisfied” any obligation owed to Optimum (R4, 
tabs 15, 17 (contracting officer’s final decision and initial response to Pugh’s 
unsponsored claim)).  In effect, the Air Force invokes the defense of accord and 
satisfaction based on the language of the Modification.   
 
The Air Force did not specifically plead this defense in its answer.  However, the 
evidence in the record and the parties’ arguments implicate this defense.  The Board may 
permit amendment of the “pleadings to conform to the proof” presented during a hearing 
or Rule 11 briefing if within the “proper scope of the appeal.”  ASBCA Rule 6(d).  
Moreover, accord and satisfaction is a common-law affirmative defense, which is not 
subject to a contracting officer’s final decision because the defense neither seeks the 
payment of money nor the adjustment of contract terms.  See Securiforce Int’l Am., LLC 
v. United States, 879 F.3d 1354, 1362-63 (Fed. Cir. 2018) (“[I]f a party raises an 
affirmative defense under the contract as written—for example, common-law defenses of 
fraud or prior material breach—it need not first be presented to the CO for a final 
decision, since a defense is not a claim for money, and the CO has no necessary role in 
assessing the defense.”); Laguna Constr. Co. v. Carter, 828 F.3d 1364, 1368 (Fed. 
Cir. 2016) (concluding that affirmative defense of fraud was not a CDA “claim” because 
“the government’s defense plainly does not seek the payment of money or the adjustment 
or interpretation of contract terms”); Sikorsky Aircraft Corp. v. United States, 102 Fed. 
Cl. 38, 44 & n.14 (2011) (noting that plaintiff’s “affirmative defenses” of accord and 
satisfaction, waiver, laches, and statute of limitations constituted “traditional common 
law defenses that are independent of the means by which a party seeks equitable 
adjustment to a government contract” and, thus, could be raised without a contracting 
officer’s final decision). 
 
“Accord and satisfaction denotes ‘one of the recognized methods of discharging 
and terminating an existing right’ and constitutes ‘a perfect defense in an action for the 
enforcement of a previous claim, whether that claim was well founded or not.’”  
Chesapeake & Potomac Tel. Co. v. United States, 654 F.2d 711, 716 (Ct. Cl. 1981) 
(quoting 6 C
ORBIN ON CONTRACTS § 1276 (1962)).  As we would for any other 
contractual document, we look to the plain language of an accord and satisfaction.  
Pyrotechnic Specialties, Inc., ASBCA No. 57890, 17-1 BCA ¶ 36,696 at 178,703, aff’d, 
835 F. App’x 607 (Fed. Cir. 2021), cert. denied, 142 S. Ct. 344 (2021).   
 

9 
 
The Modification included the following language:  
 
SUPPLEMENTAL AGREEMENT:  The parties agree that 
this supplemental agreement establishes the consideration for 
modifications effected herein.  The parties specifically 
acknowledge and agree that this supplemental agreement 
constitutes full satisfaction of the parties’ rights to equitable 
adjustment, under any clause of this contract, relating to the 
modifications effected herein. 
 
(R4, tab 12 at 2)   
 
The Modification demonstrates an accord and satisfaction.  Consolidated Indus., 
Inc. v. United States, 195 F.3d 1341, 1344-45 (Fed. Cir. 1999) (concluding that a 
modification resulted in an accord and satisfaction barring contractor’s excusable delays 
claims).  “To prove accord and satisfaction, the government must show (1) proper subject 
matter; (2) competent parties; (3) a meeting of the minds of the parties; and 
(4) consideration.”  Bell BCI Co. v. United States, 570 F.3d 1337, 1341 (Fed. Cir. 2009) 
(internal quotation and citation omitted).  Here, the subject matter was proper – changing 
some of the terms of performance to require night work and increasing the number of 
phases to perform the work (R4, tab 11 at 1, tab 12, tab 16 at 2).  Optimum has presented 
no evidence that the parties were not competent to make this agreement.   
 
“A meeting of the minds occurs where there are ‘accompanying expressions 
sufficient to make the [claimant] understand, or to make it unreasonable for him not to 
understand, that the performance is offered to him as full satisfaction of his claim and not 
otherwise.’”  Holland v. United States, 621 F.3d 1366, 1382 (Fed. Cir. 2010) (quoting 
Chesapeake & Potomac Tel., 654 F.2d at 716).  Here, the parties had a meeting of the 
minds regarding the coverage of the Modification.  Optimum would “provide all plant, 
labor, materials, equipment, transportation and supervision to accomplish after hours and 
night work as agreed to” in Optimum’s incorporated proposal (R4, tab 12 at 3).  
Optimum expressed its understanding in the incorporated proposal that any modification 
would cover the costs of not being able to work on one unoccupied floor at a time (i.e., in 
three phases) (R4, tab 11 at 1).   
 
Finally, the Modification’s accord and satisfaction language acknowledged that 
the Modification “constitutes full satisfaction of the parties’ rights to equitable 
adjustment, under any clause of this contract” and “establishes the consideration” for the 
changes (R4, tab 12 at 2).  The Modification included the Air Force’s consideration of 
$199,536.84 to pay for Optimum’s performance of the changed work (R4, tab 12 at 3).  
Thus, the Modification constituted an accord and satisfaction, which bars Optimum’s 
claims here. 
 

10 
 
C. No Duress or Unconscionability 
 
Optimum asserts that the Air Force used duress to coerce Optimum into signing 
the Modification by threatening to cancel the contract (app. br. at 8; app. reply at 2).  
Optimum also asserts that the Air Force violated FAR 36.214 by agreeing to sign the 
below-cost Modification – essentially an unconscionability argument (app. br. at 4-5; 
app. reply at 1).  The Air Force asserts that the Board lacks jurisdiction to hear the duress 
legal theory (and presumably FAR 36.214, which the Air Force does not mention) 
because they constitute new claims that Optimum failed to raise before the contracting 
officer (gov’t br. at 15 n.1).  And, even if we have jurisdiction, the Air Force asserts 
Optimum has failed to prove any basis for recovery (gov’t br. at 15 n.1).  We conclude 
that we have jurisdiction, but deny Optimum any recovery based on these legal theories. 
 
  1.  The Duress and Unconscionability Theories Are Not New Claims 
 
Before reaching the merits, we must address the Air Force’s assertion that the new 
legal theories constitute new claims that were not presented to the contracting officer.  
We hold that they are not new claims. 
 
“[O]btaining a final decision on a claim is a jurisdictional prerequisite to 
adjudication of that claim” under the CDA.  Tolliver Grp., Inc. v. United States, 20 F.4th 
771, 776 (Fed. Cir. 2021); 41 U.S.C. §§ 7103(a)(3), 7104(a).  We do not possess 
jurisdiction over any “new” claim that was not presented to the contracting officer.  
Anthony & Gordon Constr. Co., ASBCA No. 61916, 21-1 BCA ¶ 37,887 at 184,000.  
“[W]e examine whether that claim is the ‘same claim’ as the one presented to the 
contracting officer” and “consider the remedies sought and the elements of the claims in 
assessing whether the sameness requirement is met.”  Tolliver, 20 F.4th at 776 (internal 
citations and quotations omitted).  We assess whether the new legal theories derive from 
“a different or unrelated set of operative facts.”  Lee’s Ford Dock, Inc. v. Sec’y of the 
Army, 865 F.3d 1361, 1369 (Fed. Cir. 2017) (internal quotation omitted).  In assessing the 
scope of a claim “we are not limited to the claim document but can examine the totality 
of the circumstances.”  Dawson-Alamol JV, LLC, ASBCA No. 60590, 19-1 BCA 
¶ 37,357 at 181,645 (internal quotation and citation omitted). 
 
Here, Optimum seeks the identical remedy for each of its legal theories – payment 
of $98,695.  Additionally, Optimum relies on evidence (to the extent it can adduce any) 
for these theories that derives directly from Optimum’s (or Pugh’s) pursuit of a claim 
before the contracting officer (R4, tabs 14, 16) or the proposal incorporated by reference 
into the Modification (R4, tab 11).  In fact, Optimum attached the Modification to its 
claim to the contracting officer (R4, tab 16 at 11-15).  Thus, these new legal theories rely 
on the same operative facts before the contracting officer and do not constitute new 
claims.   
 

11 
 
2.  Optimum Did not Sign the Modification Under Duress 
 
To render the Modification unenforceable for duress, Optimum must establish that 
(1) the contractor involuntarily accepted the government’s terms, (2) circumstances 
permitted no other alternative, and (3) the government’s coercive acts caused the 
contractor to involuntarily accept the government’s terms and offered no alternative.  
Rumsfeld v. Freedom NY, Inc., 329 F.3d 1320, 1329-30 (Fed. Cir. 2003) (internal 
citations omitted).  To demonstrate coerciveness, “requires proof of wrongful action by 
the government” – an action that was “(1) illegal, (2) a breach of an express provision of 
the contract without a good-faith belief that the action was permissible under the contract, 
or (3) a breach of the implied covenant of good faith and fair dealing.”  Id. at 1330.   
 
Here, Optimum appears to be asserting that the Air Force’s coercive actions 
breached the implied covenant of good faith and fair dealing by threatening to cancel the 
contract unless Optimum reduced its price for the Modification under $200,000 (app. br. 
at 4; R4, tab 16 at 1-2 (Claim)).  Notably, there is no allegation of illegality or breach of 
an express provision of the Contract, so we understand the duress allegation to relate to a 
breach of the implied covenant of good faith and fair dealing.   
 
In making this allegation in its brief, Optimum notes that the threat was “verbal” 
(app. br. at 4), but provides no direct evidence to support its assertion.  Instead, Optimum 
relies on two pieces of circumstantial evidence presented with its certified claim:  (1) the 
September 20, 2017 proposal, which noted that Optimum presented the proposal “to 
salvage the project that we are told cannot be constructed with one unoccupied floor at a 
time as it was originally bid,” and (2) Optimum’s reduction of its price below $200,000 
(R4, tab 11 at 1; app. br. at 4).  This circumstantial evidence is thin.  Indeed, Optimum 
neither says which Air Force official made this alleged threat nor which Optimum official 
heard this “verbal” threat.  Perhaps Optimum means to rely on the now-deceased 
individual who negotiated the Modification for Optimum.  However, Optimum can only 
speculate about why the individual lowered the price, but then acknowledges that 
Optimum (and this individual presumably) previously lowered its price “[f]or no known 
or written reason” during negotiations of the Modification (app. br. at 4).  Thus, based on 
the scant evidence presented, we conclude that Optimum has failed to prove that the 
Air Force issued such a threat.  Al Maweed Marine Servs. PTE, Ltd., ASBCA No. 48124, 
98-1 BCA ¶ 29,455 at 146,222 (concluding that a “bare allegation does not suffice” to 
prove duress). 
 
Even assuming for the sake of argument that the Air Force made such a threat (and 
there is insufficient evidence to prove such a threat), the Air Force’s actions do not rise to 
the level of duress.  “A threat by a party to a contract not to perform a contract duty is 
not, of itself, improper, and an agreement of modification or rescission induced by such a 
threat may be binding on both parties.”  1 E.
 ALLAN FARNSWORTH & ZACHARY WOLFE, 
FARNSWORTH ON CONTRACTS § 4.17 (4th ed. 2019 Supp. 2023). 

12 
 
 
Optimum asserts that the Contract guaranteed it would be able to work on one 
floor at a time, but bases the claim on an assumption in its final proposal revision (R4, 
tab 16 at 1-2, 4).  However, the parties did not include that clarification as part of the 
terms of the Contract, which was silent regarding this issue (R4, tab 1 at 25 (attaching 
only the statement of work and the wage/rate determination to the Contract); R4, tab 2 
(statement of work includes no reference to phasing of project)).  As noted above, it was 
only at the pre-construction conference that the Air Force realized that performance could 
not go forward as Optimum hoped (R4, tab 16 at 1).  After the pre-construction 
conference, the Air Force would not have abused its discretion or acted in bad faith by 
terminating the Contract for convenience, given that the Contract did not address this 
requirement and the Contract included a termination for convenience clause.  Krygoski 
Constr. Co. v. United States, 94 F.3d 1537, 1541 (Fed. Cir. 1996) (“When tainted by bad 
faith or an abuse of contracting discretion, a termination for convenience causes a 
contract breach.”); (R4, tab 1 at 10 (incorporating by reference FAR 52.249-2 Alt I – 
TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (FIXED-PRICE) 
(APR 2012) – Alternate I (SEPT 1996)).  Thus, based on the facts here, the alleged threat 
to terminate for convenience (or “cancel” as alleged by Optimum), constituted a 
legitimate contractual remedy if the parties could not reach agreement on a modification.  
See David Nassif Assocs. v. United States, 644 F.2d 4, 12 (Ct. Cl. 1981) (concluding there 
was no duress where the government properly invoked contract remedies as basis to 
induce contractor to sign modification).   
 
Instead of pursuing termination, the Air Force worked with Optimum to modify 
the Contract to provide additional funds to pay Optimum for the costs of working nights 
without working one floor at a time (R4, tabs 4-12).  After Optimum’s September 20, 
2017 proposal lowered the price for the change order to less than $200,000 (without 
Pugh’s approval), Pugh later complained to Optimum that any modification subject to 
those terms would not fully pay Pugh for the costs of performance (app. supp. R4, tab 4).  
Pugh registered these concerns to Optimum on January 25, 2018, and requested that any 
modification incorporate its concerns (app. supp. R4, tab 4).  Optimum nevertheless 
opted to execute the Modification two months later without incorporating any language to 
allay Pugh’s concerns that the proposal did not fully pay for all changes (R4, tab 12).  
Optimum cannot now shift the blame to the Air Force for Optimum’s decision to ignore 
its subcontractor’s concerns.  “[E]conomic pressure caused by a company’s own flawed 
business decision does not support a finding of duress.”  Charles F. Day & Assocs., 19-1 
BCA ¶ 37,215 at 181,177.  Thus, Optimum has failed to prove duress. 
  

13 
 
 
  3.  The Modification was not Unconscionable 
 
Optimum complains that the Air Force acted inappropriately by failing to follow 
the FAR’s procedures for price negotiation in construction contracting, which states:  
“When a proposed price is significantly lower than the Government estimate, the 
contracting officer shall make sure both the offeror and the Government estimator 
completely understand the scope of the work.”  FAR 36.214(b)(2).  Optimum presses that 
the Air Force’s counteroffer of $522,945.91 (which it later withdrew for a reduced offer 
during negotiations), constituted an “estimate” of the price of the work (R4, tab 8 at 1), 
that the Air Force was somehow bound by this amount, and that this was evidence that 
the parties did not understand the scope of the work required by the Modification (app. 
br. at 7-8).  Optimum essentially asserts that the Air Force acted unconscionably by 
accepting Optimum’s below-cost proposal to perform the work covered by the 
Modification (app. br. at 4; app. reply br. at 1).  We disagree. 
 
An unconscionable contract “shocks the conscience” and we associate it with 
“such concepts as ‘overreaching,’ ‘taking undue advantage,’ ‘bad faith,’ ‘unfairness,’ and 
‘unjust enrichment’ and have stated that it is ‘indistinguishable from the other party’s 
knowledge or reason to know of a mistake.’”  Macro-Z Tech., ASBCA No. 56711, 12-1 
BCA ¶ 35,000 at 172,006 (citation omitted).  An unconscionable contract provision is 
“one which no man in his senses, not under a delusion, would make, on the one hand, and 
which no fair and honest man would accept on the other.”  Glopak Corp. v. United States, 
851 F.2d 334, 337 (Fed. Cir. 1988) (internal citations and quotations omitted).  We find a 
contract or modification unconscionable “only in exceptional circumstances.”  Macro-Z 
Tech., 12-1 BCA ¶ 35,000 at 172,006-07 (internal citation and quotation omitted).   
  
Optimum has failed to prove that the Air Force acted unconscionably by somehow 
violating FAR 36.214(b)(2).   
 
First, it is unclear whether the counteroffer constituted a formal “estimate” under 
FAR 36.214 or was simply a negotiated counteroffer based on Optimum’s initial offer.  
 
Second, even if the counteroffer constituted an estimate, any disparity between 
that original counteroffer and the final proposal of $199,536.84 (R4, tab 11 at 1, 3) is not 
alone proof that the Air Force was “getting something for nothing.”  Macro-Z Tech., 12-1 
BCA ¶ 35,000 at 172,008 (“Disparity in bid prices alone, or disparity in bid prices in 
connection with a Government estimate alone does not establish that the contracting 
officer knew or should have known that the Government was getting something for 
nothing.” (internal quotation and citation omitted)).  Optimum must show overreaching 
or bad faith by the Air Force beyond any price disparity.  Id.  Optimum has failed to point 
to any evidence establishing overreach or bad faith.  Indeed, if anything, Optimum’s 
negotiating position significantly overestimated its likely costs.  Optimum originally 

14 
 
priced the changes as $884,130.65 (R4, tab 7 at 3), which was significantly higher than 
the ultimate cost Optimum now asserts it incurred to perform – approximately $300,000 
(which adds together the Modification’s $199,536.84 firm-fixed price that the Air Force 
paid (R4, tab 12 at 3) and Optimum’s $98,695 claim amount (R4, tab 16 at 3)).   
 
Third, as noted above, the parties entered a firm-fixed price Modification (R4, 
tab 12).  Because the contractor bears the risk, the government may accept below-cost 
offers for firm-fixed price contracts and modifications.  See CC Distributors, Inc. v. 
United States, 69 Fed. Cl. 277, 283 (2006) (“[I]n fixed-price contracting, below-cost 
pricing is not prohibited and the government cannot withhold an award from a 
responsible offeror merely because its low offer is below cost.” (internal citation and 
quotation omitted)).  Thus, the Air Force acted permissibly in accepting Optimum’s 
proposal even if it was below-cost.  Optimum has failed to demonstrate 
unconscionability. 
 
 CONCLUSION 
 
 For the reasons discussed above, we deny Optimum’s appeal. 
 
 Dated:  March 13, 2023 
 
 
 
 
 
 
 
 
 
DANIEL S. HERZFELD 
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 
 
  


15 
 
 
 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. 63001, Appeal of Frazier 
Investments, Inc. d/b/a Optimum Construction, rendered in conformance with the 
Board’s Charter. 
 
 Dated:  March 13, 2023 
 
 
 
 
 
 
 
 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals