DODS, Inc.
Docket: ASBCA 57816
Decision date: 2012-06-18

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of -­ ) 
) 
DODS, Inc. ) ASBCA No. 57816 
) 
Under Contract No. SPM4A7-11-M-E280 ) 
APPEARANCE FOR THE APPELLANT: ~. David Storey 
President 
APPEARANCES FOR THE GOVERNMENT: Daniel K. Poling, Esq. 
DLA ChiefTtial Attorney 
Edward R. Murray, Esq. 
Trial Attorney 
DLA Aviation 
Richmond, VA 
OPINION BY ADMINISTRATIVE JUDGE CLARKE 
PURSUANT TO Rl.JLE 12.3 
DODS, Inc. (DODS) appeals the "termination" of a unilateral purchase order 
contending that the government delayed its performance causing it to fail to deliver in 
accordance with the order. The government contends that when DODS failed to deliver 
on time the unilateral purchase order lapsed. We have jurisdiction pursuant to the 
Contract Disputes Act (CDA), 41.U.S.C. §§ 7101-7109. DODS elected to have t~is 
appeal decided on the record pursuant to Rules 11 and 12.3.1 We deny the appeal. 
FINDINGS OF FACT 
1. Op. 27 October 2010, Defense Logistics Agency Aviation (DLA) issued 
request for quotations No. SPM4A7-11-Q-1233 (R4, tab 7). The solicitation was for 
three aircraft fairings (R4, tab 7 at 4, 13, 15). 
2. On 3 November 2010 DODS submitted its bid "without exception" in the 
amount of$38,730.00 promising to deliver three aircraft fairings within 180 days in 
accordance with all specifications, standards and drawings cited in the solicitation 
(R4, tab 8). 
1 Both parties incorrectly refer to Rule 12.2 in their briefs. On 19 December 2011 
DODS, Inc. elected to proceed under Rule 12.3. 

3. On 9 December 20.10. Purchase Order No. SPM4A7-11-M-E28o. (PO E28o.) 
was issued to DODS for the three aircraft fairings (R4, tab 1). PO E28o. was signed by 
the government's contracting officer but did not require a signature from and was not 
signed by DODS (id.). Delivery was required by 7 June 20.11 (id. at 1, 13, 14). 
4. The record includes a document referred to by the govemmentas a "Contract 
Report" provided by DODS that records the direct hours worked on P'O E28o. 
(R4, tab 25). The Contract Report indicates that the first day worked· on PO E28o. was 
17 February 20.11, some 70. days after award, when Ms. LeBlanc worked 3.75 hours on 
the bill of materials (id. at 2). Prior to 7 June 20.11, the Contract Report documents that 
Ms. LeBlanc was the only person working on PO E280 (R4, tab 25). She worked a total 
of 17 days (76.25 hours) between 17 .February 20.11 and 7 Apri12o.ll mainly on 
draWings/prints, "autocad," and the bill of materials (id.).2 
5. On 7 April 20.11 Mr. Webber conducted a post-award c~nference with 
Mr. Storey and Ms. Janneke Beniest at DODS (R4, tab 9). Mr. Webber documented the 
meeting on a DD Form 1484 Post-Award Conference Record (id.).' Mr. Webber made 
the following entries: 
Contractor states Fiberglass, Aluminum, and Hardware will 
be purchased. Contractor states he is preparing RFQs 
(Request for Quotes) .... 
The FDD (Final Delivery Date) for this contract is 
June 7, .20. 11. Contractor states he can meet the delivery date. 
Note: as of the date of the conference, contractor states he 
was preparing RFQs. However, without knowing how long it 
will take for his vendors to manufacture or produce the 
material necessary for him to enter production, the 
contractor's delivery statement is somewhat ambitious and 
could prove to be unrealistic. There was no production or 
production employees in his facility as of the date of the 
. conference. 
(R4, tab 9 at 1-2) Mr. Webber also noted that DODS' heat treatment equipment must be 
"validated and certified" and adhesive must be tested before production could commence 
(id. at 4). Mr. Storey stated he needed clarification concerning a "hidden line" on a 
drawing and Mr. Webber told him to contact the "ESA" at the buying command (id.). 
2 The Contract Report also records five days (18.75 hours) of work in July 20.11 and one 
day (4 hours) in December 20.11 (R4, tab 25 at 3). 
2 

6. As part of the Rule 4 the government included its interrogatories and DODS' 
responses. Interrogatory 4 read: 
All documents evidencing, describing, or related to any costs, . 
expenses, or obligations you incurred during Contract 
performance, including but not limited to invoices, purchase 
orders, quotations, receipts, cancelled checks, payroll 
information, salaries and benefits information, travel 
expenses, and all indirect costs such as overhead and general 
and administrative costs. 
(R4, tab 26 at 2) DODS' response to interrogatory 4 was "See Tab 4, none" (id. at 3). 
7. On 19 April 2011 DODS sent a request to Ms. Gloria Williams, Contracting 
Officer (CO), listing eight drawings, two of which it did not have and six that had the 
wrong date (R4, tab 28). However, the govennnent included evidence in the record that 
DODS downloaded the drawings it alleged it did not have on. 9 December 2010 (R4, tab 
17 at 2, 4, 7). The government also presented evidence that DODS had the correct 
versions of all but one of the documents listed as to which there was a minor discrepancy 
(R4, tabs 29-33). DODS did not rebut t~e government's evidence. We find that the 
issues with drawings listed in DODS' 19 April 2011 request did not delay its 
performance. 
8. On 7 June 2011 Ms. LeBlanc emailed 3 CO Williams aletter 4 dated 6 June 2011 
stating tbat "the .engineering department has been working on the contract and has come 
across discrepancies in dates on a contract document provided to DODS INC." 
(R4, tab 11). The letter listed seven drawings and the "discrepanci~s,,5 (id.). . 
9. DODS did not deliver the aircraft fairings on 7 June 2011 as required by 
PO E280. On 10 June 2011 the government issued Modification No. POOOOI cancelling 
PO E280: 
The above cited purchase order was an offer to purchase the 
supplies described therein provided that delivery was made 
3 The email referenced PO E280 but has a date of 7 Jll;ne 2006. It appears Ms. LeBlanc's 
email is set for 5 years prior to the actual date. . 
4 This letter was one of 17 virtually identical letters sent to CO .Williams between 6 and 
8 June 2011 clainling data discrepancies (R4, tab 12). 
5 In its brief the government presents evidence that the discrepancies either did n6t exist 
or were insignificant (gov't br. ~~ 19-22). Because 'ofthe legal position we take in 
this decision we need not analyze the government's proof. 
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by 06/07/11. Since that date was not met, the Government's 
offer to purchase has lapsed. No deliveries will be accepted 
by the Government under this order for [the 3 aircraft 
fairings]. 
(R4, tab 2) 
10. On 9 August 2011 DODS submitted a claim to the C·O requesting that PO 
E280 be terminated for convenience (R4, tab 15). CO Janice Hicks denied DODS' claim 
on 13 October 2011 (R4, tab 16). DODS appealed the denial of its claim on 21 October 
2011 and the appeal was docketed as ASBCA No. 57816 on 24 October 2011. 
DECISION 
We have jurisdiction to determine if a unilateral purchase order "ripened" into a 
binding contract as a result ofDODS' actions. Friedman Enterprises, Inc., ASBCA 
No. 54886, 05-2 BCA , 32,991 at 163,520 (The Board has jurisdiction to determine 
whether a unilateral purchase order "ripened into an obligation binding" on the 
government. ). 
DODS contends that it was entitled to excusable delays caused by the 
government's alleged defective drawings among other things and requests a termination 
for convenience. The government contends that the unilateral purchase order lapsed 
when DODS failed to deliver on time. DODS' position assumes the existence of an 
. option contract. For the reasons stated below, we conclude that DODS' meager 
performance was insufficient to create an option contract and its associated irrevocable 
offer. 
PO E280 was a unilateral purchase order (finding 3). A unilateral purchase order 
is an offer to create an option contract. Comptech Corp., ASBCA No. 55526, 08-2 BCA 
, 33,982 at 168,082 (Purchase orders are not accompanied by a promissory acceptance 
and comprise simply an offer to enter into a unilateral contract.). Purchase orders have 
three distinct phases - (1) the offer, (2) the option contract, and (3) the completed 
purchase and sale contract. In the offer phase there is no contract and the government is 
free to revoke the offer at any tinle before an option contract arises. Comptech, 08-2 
BCA, 33,982 at 168,082 ("Ordinarily, an offer is revocable prior to acceptance, and its 
revocation precludes the acceptance of that offer."). If the contractor engages in 
"substantial performance" in attempting to supply the item an option contract is created 
wherein the offer becomes irrevocable. Commwise, Inc. Joseph Wetzel d/b/a Avetel, 
ASBCA No. 56580, 09-2 BCA ,34,240 at 169,230 ('.'Commwise's substantial 
performance in attempting to supply the items created an 'option contract', and obliged 
the government to keep the offer open until the date specified for delivery, or in the 
absence of such a date, for a reasonable time."); Comptech, 08-2 BCA , 33,982 at 
4 


168,083 ("Today, however, courts generally hold that an option contract will arise where 
an offeree takes 'substantial and definite action' in reliance on the offer, if that action is 
reasonable and such as the offeror had reason to foresee."). If the contractor successfully 
performs the contract by delivering conforming services or supplies on time a "completed 
purchase and sale contract" ,comes into existence. Comptech, 08-2 BCA Ijf 33,982 at 
168,083 (An optionor's binding promise not to revoke its offer is a contract but not yet a 
contract of purchase and 'sale. There is no completed contract for purchase and sale until 
the a~ceptance of the offer by performance.). If the contractor fails to successfully 
perform, the option contract and purchase order lapse without the need for any action on 
the part of the government. Id. at 168,083-84. 
The "substantial performance" standard is embodied in FAR 13.004(b): 
(b) When appropriate, the contracting officer may ask 
the supplier to indicate acceptance of an order by notification 
to the Government, preferably in writing, as defined at 2.101. 
In other circumstances, the supplier may indicate acceptance 
by furnishing the supplies or services ordered or by 
proceeding with the work to the point where substantial 
performance has occurred. 
The Board recognizes the "substantial performance" standard. Comptech, 
08-2 BCA , 33,982 at 168,083 ("Comptech's initiation of performance here was 
'substantial' enough under the standard of FAR 13.004(b) to create 'option contracts,' 
binding DSCC to keep both offers open until the dates set forth in those offers."). 
DODS' performance cannot be characterized as "substantial" or even serious for 
that matter. DODS did nothing for the first 70 days after the date of PO E280 (finding 4). 
,The only performance under the contract was by Ms. LeBlanc who worked a total of 
76.25 hours during 17 days between 17 February 4011 and 7 Apri12011 primarily with 
drawings (finding 4). On 7 April 2011, 117 days from the date of PO E280, there was no 
production at DODS' facility (finding 5). There is no evidence in the record that DODS 
ordered material needed for production (findings 5, 6). The alleged drawing 
, discrepancies did not delay it (finding 7). 	 Since there was no "substantial performance," 
no option contract 'was formed. The government had the right to revoke the offer at any 
tinle. The revocab,le offer then lapsed when the delivery date arrived without delivery of 
the three aircraft fairings. 
DODS' request that the Board convert the "termination" to a termination for 
convenience depends upon the existence of an option contract. Premature cancellation of 
a purchase order when an option contract is in effect is considered to be a termination for 
convenience. Michigan Hardware Co., ASBCA No. 24419,80-2 BCA, 14,670 at 
72,349 (termination of a purchase order when 85 percent of performance completed was 
5 

" " 
a termination for convenience); Klass Engineering, Inc., ASBCA No. 22052, 78-2 
BCA'if 13,236 at 64,719, recon. denied, 78-2 BCA 'if 13,463 (Because a purchase order 
was withdrawn at the time appellant had an enforceable unilateral contract the Board held 
that the contract was terminated for convenience.). Since we have held that no option 
contract came into existence, DODS has no basis for a termination for convenience. 
CONCLUSION 
For the reasons stated above DODS'.appeal is denied. 
Dated: 18 June 2012 
Administra ive Judge 
Armed Se ices Board 
of Contract Appeals 
I concur 
EUNICE W. THOMAS 
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. 57816, Appeal ofDODS, Inc., 
rendered in conformance with the Board's Charter. 
. . 
Dated: 
CATHERINEA. STANTON 
Recorder, Armed Services 
Board of Contract Appeals 
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