Alutiiq Commercial Enterprises, LLC
Docket: ASBCA 61503
Decision date: 2020-01-09

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of--
Alutiiq Commercial Enterprises, LLC 
Under Contract No. F A8 l O l-16-C-0006 
APPEARANCES FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 61503 
Stowell B. Holcomb , Esq. 
Mark G. Jackson, Esq. 
Jackson Rosenfield , LLP 
Seattle, WA 
Jeffrey P. Hildebrant , Esq. 
Air Force Deputy Chief Trial Attorney 
Colby L. Sullins, Esq. 
Jason R. Smith, Esq. 
Trial Attorneys 
OPINION BY ADMINISTRATIVE JUDGE CATES-HARMAN 
ON CROSS-MOTIONS FOR SUMMARY JUDGMENT 
This appeal involves Alutiiq Commercial Enterprises, LLC 's (ACE's) claim for 
$1,744.330.37 to compensate it for increased costs incurred during the first option period 
resulting from a revised Collective Bargaining Agreement. The parties filed 
cross-motions for summary judgment. We have jurisdiction pursuant to the Contract 
Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109. For the reasons stated below, we 
grant summary judgment in favor of ACE and sustain the appeal. 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS 1 
The TSS Contract 
1. On November 19, 2007, the Department of the Air Force (Air Force) awarded 
to Tinker Support Services, JN (TSS) the base civil engineering (CE) support services 
contract, No. FA8101-08-D-0006 (TSS Contract), for Tinker Air Force Base (AFB), OK 
(R4, tab 1 at 1). The contract had six options running through January 31, 2016 (id. at 4). 
1 By Air Force letter, on behalf of both parties , dated January 25, 2018, the parties agreed 
that they did not dispute each other's material facts. We therefore use many of the 
parties' statements of undisputed material facts (SUMF). 

The TSS Contract incorporated by reference Federal Acquisition Regulation (FAR) 
52.217-8, OPTION TO EXTEND SERVICES (NOV 1999) (id. at 411), which allowed 
for the contract services to be extended up to an additional six months . 
2. On August 26, 2013, TSS entered into a collective bargaining agreement 
(CBA) with the International Association of Machinists and Aerospace Workers, 
(IAM&A W or Union) (R4, tab 17 at 650-707). The CBA between TSS and the 
IAM&A W was effective from August 26, 2013 to August 21, 2016 (id.). 
Solicitation No. FA8101 -l 5-R-000 7 
3. On October 29, 2013, the Air Force posted a synopsis for the Tinker AFB CE 
Services Operations Management procurement to https://www.fbo .gov (FBO) (R4, 
tab 3). The Air Force also posted a draft performance work statement (PWS); a draft 
Request for Proposal (RFP), Solicitation No. FA8101-14-R-0002 ; pertinent Oklahoma 
wage determinations ; Department of Labor (DOL) Wage Determination No. 2005-2431 ; 
and the newly-consummated CBA between TSS and the IAM&A W (R4, tab 3 at 4-5). 
4. The CBA between TSS and the IAM&A W was incorporated into the Option V 
period of performance of the TSS Contract (R4, tab 45). 
5. A pre-solicitation conference was held on April 16, 2015. Questions and 
answers were documented. One question relating to the transition period read as follows: 
Q. Does the incumbent have transition out? What 
responsibilities does the new contractor have transitioning in? 
A. The incumbent contractor will be responsible for full 
performance during the transition out period. The incoming 
contractor shall perform during the transition IA W PWS para 
1.6.1, which includes becoming familiar with the work , 
obtaining security clearances , vehicle registration , training 
etc. 
(R4, tab 12 at 2) Contracting Officer (CO) DeLong recalled that prospective offerors 
"were repeatedly advised that the CBA between TSS and the IAM&A W would apply to 
the contract, but that renegotiation of some terms was necessary. "2 (DeLong decl. at 2 
, 7) 
2 The Board asked the parties to comment on this statement in CO DeLong's declaration. 
Both parties agreed that the statement was correct in their response to the Board. 
(See the parties ' February 5, 2019 letters including CO DeLong 's supplemental 
declaration listing the questions and answers she relied upon) 
2 

6. On July 8, 2015 , the Air Force posted the RFP , Solicitation No. FA8101-15-R-0007, 
to FBO (R4 , tab 16 at 3, 6; tab 17). Also posted to FBO , and incorporated into the RFP, 
were Wage Determination No. 2005-2431 (R4, tab 17 at 640-49) and the CBA between 
TSS and the IAM&A W (id. at 650- 707). 
7. On July 14, 2015, the Air Force notified TSS of its intent to exercise its option 
to extend the services required by the TSS Contract by up to six months - from 
February 1, 2016, until July 31, 2016 -pursuant to FAR 52.217-8 (R4, tab 47). On 
January 29, 2016, the Air Force and TSS bilaterally executed Modification No. P00083 
to the TSS Contract extending the contract beginning February 1, 2016 through July 31, 
2016 (R4 , tab 49 at 1, 5). 
FAR Part 22 Provisions 
8. FAR 22.1010, Notification to interested parties under collective bargaining 
agreements , requires notice of option exercise dates: 
(a) The contracting officer should determine whether the 
incumbent prime contractor's or its subcontractors' service 
employees performing on the current contract are represented 
by a collective bargaining agent. If there is a collective 
bargaining agent , the contracting officer shall give both the 
incumbent contractor and its employees ' collective 
bargaining agent written notification of-
(2) The forthcoming contract modification and applicable 
acquisition dates (exercise of option, extension of contract , change 
in scope, or start of performance , as the case may be) 
(b) This written notification must be given at least 30 days in 
advance of the earliest applicable acquisition date or the 
applicable annual or biennial anniversary date in order for the 
time-of-receipt limitations in paragraphs 22 .1012-2(a) and (b) 
to apply. The contracting officer shall retain a copy of the 
notification in the contract file. 
(Emphasis added) 
3 

9. FAR 22.1012-2 , Wage Determinations Based on Collective Bargaining 
Agreements , provides: 
(b) For contractual actions other than sealed bidding , a new or changed collective 
bargaining agreement shall not be effective under 41 U.S .C. 6707(c) if notice of the 
terms of the new or changed collective bargaining agreement is received by the 
contracting agency after award of a successor contract or a modification as specified in 
22.1007(b), provided that the contract start of performance is within 30 days of the award 
of the contract or of the specified modification. If the contract does not specify a start of 
performance date which is within 30 days of the award of the contract or of the specified 
modification, or if contract performance does not commence within 30 days of the award 
of the contract or of the specified modification , any notice of the terms of a new or 
changed collective bargaining agreement received by the agency not less than 10 days 
before commencement of the work shall be effective for purposes of the successor 
contract under 41 U.S.C. 6707(c) . 
(c) The limitations in paragraphs (a) and (b) of this 
subsection shall apply only if timely notification required in 
22.1010 has been given . 
(Emphasis added) 
Contract No. FA8101-16-C-0006 
10. On May 31, 2016, the Air Force awarded Contract No. FA8101-16-C-0006 
("Contract 0006") to ACE ' s, in the amount of $229,807 .00, to provide base civil 
engineering services and operations management at Tinker Air Force Base , Oklahoma 
(R4, tab 32 at 1). The Contract contained a two-month transition period from June 1, 
2016 through July 31, 2016 ("Transition Period" ) and five one-year option periods (R4 , 
tab 2 at 548). Option Year I ran from August 1, 2016 to July 31, 2017 (id. at 2-4) . 
11. The Contract contained the following FAR clause : 52.217-9 , OPTION TO 
EXTEND THE TERM OF THE CONTRACT (MAR 2000); which reads in pertinent 
part: 
(a) The government may extend the term of this contract by 
written notice to the contractor within 15 calendar days prior 
to contract expiration ; provided that the government gives the 
contractor a preliminary written notice of its intent to extend 
at least 60 days before the contract expires ... . 
(R4 , tab 32 at 190, 194) 
4 

12. The contract also incorporated by reference FAR 52.222-41, SERVICE 
CONTRACT LABOR STANDARDS (MAY 2014) which provides in pertinent part: 
(f) Successor contracts. If this contract succeeds a contract 
subject to the Service Contract Labor Standards statute under 
which substantially the same services were furnished in the 
same locality and service employees were paid wages and 
fringe benefits provided for in a collective bargaining 
agreement , in the absence of the minimum wage attachment 
for this contract setting forth such collectively bargained 
wage rates and fringe benefits, neither the Contractor nor any 
subcontractor under this contract shall pay any service 
employee performing any of the contract work ... less than 
the wages and fringe benefits provided for in such collective 
bargaining agreement, to which such employee would have 
been entitled if employed under the predecessor contract . . .. 
No Contractor or subcontractor under this contract may be 
relieved of the foregoing obligation unless the limitations of 
29 CFR 4.lb(b) apply . ... 
(R4, tab 32 at 190) 
13. Additionally , the contract incorporated FAR 52.222-43, FAIR LABOR 
STANDARDSACTANDSERVICECONTRACTLABORSTANDARDS - PRICE 
ADJUSTMENT (MULTIPLE YEAR AND OPTION CONTRACTS) (MAY 2014 ), 
which provides the following in relevant part: 
(a) This clause applies to both contracts subject to area 
prevailing wage determinations and contracts subject to ... 
collective bargaining agreements . 
( c) The wage determination ... current on the anniversary 
date of a multiple year contract or [at] the beginning of each 
renewal option period, shall apply to this contract. .. . 
( d) The contract price, contract unit price labor rates, or fixed 
hourly labor rates will be adjusted to reflect the Contractor 's 
actual increase or decrease in applicable wages and fringe benefits 
to the extent that the increase is made to comply with . . . : 
5 

(Id.) 
(1) The Department of Labor wage determination applicable 
.. . at the beginning of the renewal option period. 
14. ACE Contract 0006 incorporated DoL Wage Determination 2005-2431 
(Revision 21) and the CBA between TSS and the IAM&AW (R4, tab 32 at 213). 
15. During the transition period, TSS continued to be responsible for full contract 
performance under the TSS Contract (R4, tab 12 at 2; tab 14 at 18; DeLong decl. ,r,r 8-9; 
See also app. mot. at 4, ASUMF ,r 9). During the transition period, June 1, 2016 through 
July 31, 2016, ACE performed the duties set forth under the Performan ce Work 
Statement (PWS) : 
1.6.1 Transition-In. To ensure a smooth transition phase 
between incumbent and incoming Contractors , the incoming 
Contractor shall begin a transition-in work period prior to the 
end of the incumbent Contractor 's performance period . 
Contractor shall submit a Transition-In Plan and phase-in 
schedule to the CO with the initial proposal. Government 
will have opportunity to review and comment on the plan . 
Final Transition-In Plan must be approved by the CO at least 
seven (7) calendar days before start of transition period. The 
transition period shall not exceed 60 calendar days. The 
Contractor shall assume responsibility for all functions 
identified in the PWS on the full contract performance date 
agreed on the contract. The incoming Contractor shall 
become familiar with work during the transition-in period . 
The tasks during the transition-in period shall include but is 
not limited to items such as obtaining security clearances, 
processing vehicle registrations , completing training 
requirements , developing work plans and procedures and 
finalizing quality control plans and procedures . The 
incumbent Contractor is responsible for contract performance 
during the transition-in period. 
(R4, tab 17 at 548-49 ,r 1.6.1; Chandler supp. decl. at 2 ,r 10) During this transition 
period Ms. Chandler sent out letters to TSS employees offering them jobs with ACE 
starting on August 1, 2016 (Chandler supp. decl . at 2 ,r 9 & Exhibit A). Nearly all of the 
employees hired by ACE were the same employees that had worked for TSS under the 
previous contract (Chandler supp. decl. at 2 ,r 8). 
6 

16. Throughout the transition period , CO DeLong was aware that ACE and the 
IAM&A W were negotiating over the terms of a new, successor CBA to replace the CBA 
between TSS and the IAM&A W that was incorporated into Contract No. 0006 (DeLong 
decl. ,r,r 12, 17, 20-21 ; see also R4, tab 64). 
17. CO Delohg was aware that the TSS service employees covered by the CBA 
between TSS and the IAM&A W, and represented by the IAM&A W, would not become 
ACE employees until Monday , August 1, 2016 since TSS was responsible for full 
contract performance (R4, tab 64). (See also compl. ,r 11 ; DeLong decl. 115) 
18. By email dated June 24, 2016 , 37 days before the end of the 60-day contract 
transition period , the Air Force transmitted a letter, also dated June 24, 2016 , providing 
ACE the non-binding preliminary notice under FAR 52.217-9 of its intent to exercise 
Option I of the Contract. The transmittal email stated, "You can expect the option 
modification , with funding for this FY, in the next week or so. If you have any 
questions , let me know! " (R4, tab 33 at 1). The letter stated: 
1. Pursuant to contract clause 52.217-9, Option to Extend the 
Term of the Contract, the Government hereby gives notice 
that Option I will be exercised by modification extending the 
performance period commencing 1 August 2016 through 
31 July 2017 . 
2. This memorandum is a preliminary notice of the 
Government 's intent and is not to be construed as exercising 
the option. Official exercise of the option will be 
accomplished by contract modification , Standard Form 30, 
signed by the Contracting Officer . 
(R4, tab 33 at 2) CO DeLong did not send such notice to the IAM&AW (DeLong decl. 
at 3 ,r 18). CO DeLong believed at that time that neither ACE nor any of its 
subcontractors had service employees that were covered by the CBA between TSS and 
the IAM&A W or were represented by the IAM&A W (see SUMF ,r 16) (DeLong decl. 
,r,r 15-16). We find that , under the Contract , ACE was the "incumbent prime contractor " 
for purposes of FAR 22.1010 . 
19. On July 1, 2016 - one week after CO DeLong notified ACE of her intent to 
exercise Option I and 31 days before full performance would commence on August 1, 
2016 -the Air Force and ACE bilaterally executed Modification No. POOOOl to the 
Contract , exercising Option 1. Modification No. POOOOl stated it was entered into 
7 

pursuant to the authority of FAR 52.217-9 and DFARS 252.232-7007 3• Block E was 
checked "Contractor is required to sign this document. ... " The purpose of the 
modification was: "[T]o exercise option 1 and provide incremental funding ." The 
Option 1 period of performance was from August 1, 2016 through July 31, 2017. 
CO DeLong signed for the government and Sandra Chandler signed for ACE. (R4, 
tab 34 at 1, 63; DeLong decl. , 19) The 91 page modification makes no mention of 
wages, the Service Contract Act (SCA) 41 U.S.C. §§ 6701 et seq.4, the CBA and contains 
no release language. 
20. We find that the CO did not provide the 30-day definitive written notification 
required by FAR 22.101 O(b) to the IAM&A W collective bargaining agent (R4, tab 41 
at 14, 7; DeLong decl. at 3, 18). 
21. As of Friday, July 22, 2016 - the tenth day before commencement of the work 
under Option I - ACE and the IAM&A W had not yet agreed upon the terms of a new 
successor CBA to replace the CBA between TSS and the IAM&AW (DeLong decl., 20). 
22. As of Friday, July 29, 2016 - the last business day before the beginning of the 
first option period - ACE and the IAM&A W had not yet agreed upon the terms of a 
successor CBA to replace the CBA between TSS and the IAM&AW (R4, tab 64; 
DeLong decl., 21). 
23. On Monday , August 1, 2016, the Option I period began , requiring full 
contract performance by ACE, and the IAM&A W member employees went on strike . 
No service employees covered by the CBA between TSS and the IAM&A W or 
represented by the IAM&AW reported for work on that day (DeLong decl., 22). 
(See also app. mot. at 6, ASUMF, 16; compl., 19) 
24. By email on January 19, 2017 , ACE provided the Air Force with an unsigned 
copy of a CBA between ACE and the IAM&A W. Another email in the email chain, 
from earlier that same day, indicates that subsequent to ACE and the IAM&AW having 
reached an agreement, they "update[d] article 9.2," requiring a new signature page (R4, 
tab 37). 
25. On January 24, 2017, ACE submitted a request for equitable adjustment 
(REA) to the government , requesting , among other things, that the government 
incorporate the increased costs payable under the new CBA for the current year (i.e., 
Option Year 1 ), as well as for all remaining option years covered by the new CBA. 
Specifically , ACE's REA requested that the government incorporate into the Contract the 
3 DFARS 252.232-7007 Limitation of Government's obligation has to do with 
incremental funding and is not relevant to our decision. 
4 Previously cited as 41 U.S.C. §§ 351 et seq. 
8 

$1,744,330.37 in increased H&W benefits for the seven months of Option Year I (i.e., 
January 1, 2017 to July 31, 2017) provided for in the new CBA. (R4, tab 65) 
26. By email on January 27, 2017, ACE provided the Air Force with a signed 
copy of the fully-consummated successor CBA between ACE and the IAM&AW, 
effective from November 20, 2016 until July 31, 2019 (R4, tabs 38-39). Despite the 
parties' "update" to article 9 .2 of the CBA, discussed in the January 19, 2017 email from 
the IAM&A W to ACE (see SUMF 1 26), the signature page of the CBA states that it was 
signed on November 20, 2016 (R4, tab 39 at 32-33). 
27. Although the effective date of the new CBA between ACE and the union was 
November 20, 2016, the increased H& W benefits for the Union contained therein did not 
go into effect, by the terms of the CBA, until January 1, 2017, after five full months of 
Option Year I had been performed. (R4, tab 39 at 27). 
28. By letter dated March 30, 2017, the government denied ACE 's REA request 
for the Option Year I H& W benefits , stating: 
The CBA was not considered timely IA W FAR 22.1002-3(b ), 
and will be incorporated for the Option Year II period of 
performance effective 01 Aug 17 IA W FAR 52.222-43(c) . 
Until that date the new CBA terms are not a part of this 
contract, therefore the Government denies the value that 
addresses this period -- $1,744,330.37. 
(R4, tab 69 at 4) 
29. On July 24, 2017, the Air Force unilaterally executed Modification 
No. P00026 to the Contract, exercising Option II and incorporating the CBA between 
ACE and the IAM&A W into the Contract effective August 1, 2017 (R4, tab 40). 
30. On August 21, 2017, in response to the denial of its REA, ACE submitted a 
certified claim to the CO seeking $1,744.330.37 and requesting a final decision. ACE 
argued that the time limitations in FAR 22.1012-2(b) did not apply because the Air Force 
failed to provide the notification required by FAR 22.1010 to either ACE or the Union 
(R4, tab 41 at 1, 8-12, 14). · 
31. -On January 22, 2018, the CO issued a final decision (COFD) denying ACE's 
claim on the grounds that the Preliminary Notice provided to ACE on June 24, 2016 
satisfied the requirements of FAR 22.1010 . Additionally , the CO noted: 
Though the notice did not meet the contract's 52.217-9 
requirement for 60 days advance notice of intent to exercise 
9 

(R4, tab 44) 
an option, this merely meant the option could not be 
exercised unilaterall y. The contracting officer recognized 
this and executed Option I as a bilateral modification , further 
evidencing Alutiiq 's understanding of, and consent to, a 
delayed incorporation of any new CBA terms. 
32. On January 23, 2018, ACE timely filed a notice of appeal with the Board. 
The Board docketed the appeal as ASBCA No. 61503 on January 24, 2018. 
DECISION 
Legal Standard for Summary Judgment 
We evaluate the cross-motions for summary judgment under the well-settled 
standard : Summary judgment is properly granted only where there is no genuine issue of 
material fact and the movant is entitled to judgment as a matter of law. The moving party 
bears the burden of establishing the absence of any genuine issue of material fact and all 
significant doubt over factual issues must be resolved in favor of the party opposing 
summary judgment. Mingus Constructors, Inc. v. United States , 812 F.2d 1387, 1390 
(Fed. Cir. 1987) (citations omitted). In the course of the Board 's evaluation of a motion 
for summary judgment , our role is not '"to weigh the evidence and determine the truth of 
the matter,' but rather to ascertain whether material facts are disputed and whether there 
exists any genuine issue for trial." Holmes & Narver Constructors, Inc., ASBCA 
Nos. 52429, 52551, 02-1BCA131 ,849 at 157,393 (quoting Anderson v. Liberty Lobby, 
Inc., 477 U.S. 242, 249 (1986)) . A material fact is one which may make a difference in 
the outcome of the case. Liberty Lobby, 477 U.S. at 248. The opposing party must assert 
facts sufficient to show a dispute as to a material fact of an element of the argument for 
reformation or breach. New Iraq Ahd Co., ASBCA No. 59304, 15-1BCA135 ,849 
at 17 5 ,291-92 ( citing Mingus , 812 F .2dat 13 90-91) ("To ward off summary judgment , the 
non-moving party must do more than make mere allegations ; it must assert facts 
sufficient to show a dispute of material fact."); see Lee 's Ford Dock. Inc., ASBCA 
No. 59041, 16-1BCA136 ,298 at 177,010. 
Positions of the Parties 
ACE, relying on Tecom, Inc., ASBCA No. 51591, 01BCA131 ,156 and Raytheon 
Service Co., ASBCA Nos. 28721 , 29668, 86-3 BCA 119 ,094, contends that even though 
its CBA was not finalized until after Option I was exercised, because the Air Force failed 
to give the notice required by FAR 22.1010, ACE is entitled to a price adjustment under 
FAR 52.222-43 for the first option year (app. mot. at 1-2, 10-13). ACE argues that it was 
10 

the "incumbent contractor" because it was operating "under the base year"5 and as such it 
was entitled to 30 days advance notice of the exercise of Option Year I. ACE also argues 
that the Air Force ignores Tecom and Raytheon. ACE contends that the cases the Air 
Force relies upon, COSTAR /IL LLC, ASBCA No. 56479, 11-2 BCA 134 ,830 and 
Guardian Moving & Storage Co. v. Hayden , 421 F.3d 1268 (Fed. Cir 2005), do not 
involve the notice issue and are therefore distinguishable. ( app. reply at 1, 6-11) 
The Air Force argues that ACE "consummated " its CBA several months after the 
first option period began which was too late for it to be incorporated in the first option 
period (gov't mot. at 1, 10-12). The Air Force relies upon COSTAR /IL LLC, ASBCA 
No. 56479, 11-2 BCA 134,830 and Guardian Moving & Storage Co. v. Hayden , 
421 F.3d 1268 (Fed. Cir 2005) for the proposition that since the CBA was 
"consummated" well into the first option period it could not be effective until the second 
option period (gov't mot. at 10-12). The Air Force argues that the notice provisions cited 
by ACE "concern the prospective application of a CBA consummated during a 
predecessor contract to a successor contract, not the retroactive application of a CBA." 
(Gov't mot. at 12-13) The Air Force also argues that ACE was the "incumbent prime 
contractor" by virtue of the two month transition but since it did not employ "service 
employees" during that period of time, the notice requirements did not apply. (Gov't 
mot. at 16-17) The Air Force contends that it does not "shy away" from the Board 's 
decisions in Tecom and Raytheon because in Guardian the Federal Circuit held that 
''wage determinations are not retrospective, regardless of the effective date of the 
underlying CBA." (Gov't surreply at 6) 
No Material Disputed Facts 
The Air Force contends that there are material disputed facts6 defeating ACE's 
motion. The Air Force argues that whether ACE was the "incumbent contractor" or 
whether it employed "service employees" are material disputed facts. (Gov't surreply 
at 3-5) We disagree. We found that, for purposes of FAR 22.1010, ACE was indeed the 
incumbent contractor with regard to the exercise of the option under its own contract. 
(SOF 1 18) Likewise it is undisputed that TSS continued to employ all of its employees 
in its performance during the transition period (SOFs 1115, 17). Therefore, that ACE 
did not employ TSS ' workforce during the transition period cannot be disputed. 
Therefore, for the purpose of the FAR 22.1010 notice requirement, we hold ACE is the 
incumbent contractor even though it was only performing transition-in tasks and did not 
employ TSS' service employees until August 1, 2016. 
5 ACE was actually operating under a two month transition-in period before performance 
of Option 1 (SOF 110). 
6 This is at odds with the Air Force's letter, on behalf of both parties, dated January 25, 
2018 (see supra footnote 1 ). 
11 

The Air Force 's Arguments 
The Air Force argues that the notice requirements only apply if the CBA was 
"consummated" during a predecessor contract. The argument is summed up in the Air 
Force's motion as: "The DOL regulations, and their reflections in the FAR, clearly 
establish that the notice requirements discussed in FAR 22.1010 and FAR 22.1012-2 
concern the prospective application of a new or changed CBA, consummated during a 
predecessor contract, to a successor contract when the incumbent contractor fails to 
timely notify the CO of the new or changed CBA." (Gov't mot. at 13) The problem is, 
as ACE points out (app. reply at 1, 6-9), our decision in Tecom conflicts with the Air 
Force's argument. In Tecom the government issued unilateral Modification No. P00031 
exercising the first option on September 30, 1997 for the period of October 1, 1997 
through September 30, 1998. Tecom, 01-1 BCA, 31,156 at 153,896. Tecom was both 
the "predecessor (incumbent) contractor and successor contractor." Id. at 153,897. The 
contracting officer did not provide Tecom with the 60-day prelimina ry written notice 
required by FAR 52.217-9(a) or the 30-day written definitive notice to either Tecom or 
the collective bargaining agent as required by FAR 22.lOlO(a). Id. (SOF ,, 8, 18, 20) 
A new CBA was negotiated on September 18 and 19, 1997, but was not completed and 
signed until November 17, 1997 (id.). Thus, the CBA was not "consummated " during 
the predecessor contract. In Tecom this Board held that absent the mandatory written 
30-day notice, Tecom was "entitled to seek a revised wage determination based on its 
new CBA for the first option year of the contract and that a contract price adjustment is 
appropriate under FAR 52.222-43" (id. at 153,902-03) . Therefore, Tecom obtained relief 
even though its new CBA was not "consummated " during a predecessor contract but 
rather "consummated " during the first option period . The same was true in Raytheon, 
86-3 BCA, 19,094 at 96,524. In this case, the Air Force's interpretation of FAR 
conflicts with our decisions in Tecom and Raytheon and we find it is unreasonable. The 
Air Force's reliance on Guardian Moving & Storage Co., ASBCA Nos. 54248, 54479, 
04-2 BCA, 32,753 and COSTAR IIL LLC, ASBCA No. 56479, 11-2 BCA, 34,830 
(gov't mot. at 11-12) is misplaced because, as the parties recognize, the notice 
requirements were not raised and discussed by either party or the Board in these two 
cases. 
Next the Air Force argues that since TSS, not ACE, was performing the 
substantive contract duties and ACE did not employ service employees during the 
transition-in period, the notice requirements did not apply (gov't mot. at 16-17). To the 
contrary, and as we explain in more detail below , the FAR22.1010 notice requirements 
do apply to this very unusual situation even though ACE had no service employees. 
While TSS was performing the contract duties during the transition period, it was not the 
incumbent contractor with respect to the ACE contract. As a result, any attempt by the 
CO to provide the FAR 22.1010 notice to TSS would have been a futile exercise. The 
CBA between TSS and the union was incorporated into ACE Contract No. 0006 
(SOF ,,14 , 16). As we found, for the purpose of FAR 22.1010 notice, ACE is the 
12 

incumbent contractor. (SOF ,r 18) During the transition period, the Air Force 
CO DeLong, knew that ACE and TSS' employees were negotiating employment and that 
ACE and the union were negotiating terms of a new CBA. (SOF ,r ,r 2, 15-18) The 
knowledge required by FAR 22.1010 to trigger the notice requirement is: 
(a) The contracting officer should determine whether the 
incumbent prime contractor's or its subcontractors ' service 
employees performing on the current contract are represented 
by a collective bargaining agent. If there is a collective 
bargaining agent, the contracting officer shall give both the 
incumbent contractor and its employees ' collective 
bargaining agent written notification of 
(2) The forthcoming contract modification and applicable 
acquisition dates ( exercise of option, extension of contract, 
change in scope, or start of performance , as the case may be) 
(SOF ,r 8) It is true, as the Air Force points out, that ACE did not employ service 
employees performing the contract because those employees were still employed by TSS 
and were performing the contract during transition. However, that circumstance was 
caused by the unusual transition period arrangement peculiar to this contract. 
Significantly, the notice is to the union not the individual employees so we do not see 
how the absence of employees matters. We consider the government's knowledge to be 
the essence of FAR 22.lOlO(a), not whether ACE employed service employees 
performing the contract. The duties placed upon the contracting officer are substantial 
and will not be dismissed hastily. 
As set forth in Tecom: 
FAR 22.1010 not only provides for the same 3 0 days 
notification to the contractor and collective bargaining agent, 
but it also places an affirmative duty on the contracting 
officer to determine whether the service contract employees 
are represented by a union before giving the notification 
(finding 13). FAR 22.1008-3(a) further provides that the 
contracting officer (shall) determine whether Section 4(c) of 
the SCA applies to the option period and (shall) determine 
13 

whether there is a predecessor contract and, if so, whether 
there is an existing CBA (finding 20). 
Tecom 01 BCA, 31,156 at 153,900-901. CO DeLong knew TSS employees were 
covered by a CBA and would be covered by a new CBA when employed by ACE 
(SOF ,,14 - 17, 20). We hold that CO DeLong had the requisite knowledge required by 
the notice requirement of FAR 22.1010 and we will not ignore that fact simply because 
TSS ' employees were not yet employed by ACE . To agree with the Air Force ' s 
arguments would be inconsistent with the SCA protections built into FAR Part 22. 
Accordingl y, we decline to adopt the Air Force 's argument. 
Bilateral Modification No. POOOO 1 
Before deciding which party prevails in this appeal, we must analyze the impact, if 
any, of bilateral Modification No. POOOOl. On June 24, 2016 , the Air Force forwarded 
ACE a preliminary notice of the option exercise , and stated that ACE could expect the 
modification exercising Option 1, with funding for this fiscal year, "in the next week or 
so" (SOF, 18). No other notice was provided by the Air Force. The record reflects that 
the CO issued the modification exercising Option I bilaterall y because the 60-day 
preliminary notice requirement of the contract (FAR 52.217-9) had not been meet. 
(SOF, 31). We recognize that once the Air Force failed to provide timely preliminary 
notification to ACE , it lost its ability to exercise the option unilaterally , and could only 
exercise the option by agreement of the parties . See generally Arko Executive Services , 
Inc. v. US., 553 F.3d 1375 (Fed. Cir. 2009) ; Griffin Services , Inc., ASBCA Nos. 52280, 
52281, 02-2 BCA, 31,943; USD Technologies , Inc., ASBCA No. 31,305, 87-2 BCA 
, 19,680, aff'd , 845 F.2d 1033 (Fed. Cir. 1988) (Government has the burden to prove that 
it timely exercised an option) ; Star Contracting Co., ASBCA No. 27848 et al.,89-2 BCA 
, 21,587 at 108,700 (Government failed to establish timely exercise) . It was the 
government's recognition of its failure to provide notice as required by FAR 52.217-9(a) , 
that dictated the contracting officer ' s request for a bilateral modification . (SOF, 31) 
While the parties recognize that Modification No. POOOO 1 was bilateral , neither 
party appears to have considered whether that fact is of any significance to the question 
before us. As a result , the Board asked the parties to comment. In the letter to the Board 
dated March 4, 2019 , the Air Force simply acknowledged that the bilateral exercise 
"constitutes an additional distinction between the facts in the current appeal and those 
material to the decisions in" Tecom and Raytheon. ACE provided a more detailed 
response. ACE contended , in its letter to the Board dated March 15, 2019, that the 
bilateral exercise is not (material) arguing "neither Raytheon nor Tecom rested on the 
unilateral exercise of option years but rather on the Air Force ' s failure to comply with the 
30-day notification requirement , which is ' strictly enforced. "' ACE correctly notes that 
"Modification POOOO 1 had to be issued bilaterall y because the Air Force failed to provide 
timely preliminary notice under FAR 52.217-9. " (ACE 's March 15, 2019 resp.) 
14 

Although both Tecom and Raytheon involved unilateral option exercises extending the 
contract, we hold that the manner of exercising the option is an immaterial distinction. 
See Tecom, 01-1 BCA ,r 31,156 at 153,896; Raytheon , 86-3 BCA ,r 19,094 at 96,524. 
ACE notes further that "By signing the modification, ACE agreed to the option year, not 
to relinquish rights sub silento. No authority holds that noncompliance with notice 
requirements with respect to options is excused by a bilateral modification; on the 
contrary, such requirements 'are strictly enforced."' (ACE's March 15, 2019 resp.) Our 
cases resolutely demand strict enforcement of notice provisions with respect to options. 
See generall y Tecom, Inc., ASBCA No. 51591, 01 BCA ,r 31,156; Raytheon Service Co., 
ASBCA Nos. 28721, 29668, 86-3 BCA ,r 19,094. 
In the simplest terms, Modification No. POOOOl provided for the exercise of 
Option Period I and the incremental funding of $39,640,220.00. In the 91 pages that 
make up Modification No. POOOOl, the contracting officer set forth in excruciating detail 
the various CLINs, acceptance/inspection schedules, funding, and revisions of contract 
clauses. While the modification includes a reference to FAR 52.217-9 in Block 13-C, 
there is no reference to FAR 22.1010 . The modification is also silent as to the 
incorporation of the CBA and lacks any release language. (SOF ,r 19) In analyzing the 
reach of this modification , common sense must dictate. 
As we have observed, "[i]n the realm of Government contracts , absent mistake or 
duress not present here, few things signify knowing and intentional conduct more than 
does the execution of a bilateral modification ." USD Technologies , Inc ., ASBCA 
No. 31305, 87-2 BCA if 19,680 at 99,620. In Bell BC! Co. v. United States , 570 F.3d 
1337, 1340 - 41 (Fed. Cir. 2009), the Court explained the familiar law of accord and 
satisfaction occurs "when some performance is different from that which was claimed as 
due is rendered and such substituted performance is accepted by the claimant as full 
satisfaction of his claim" (quoting Cmty. Heating & Plumbing Co. v. Kelso, 987 F.2d 
1575, 1581 (Fed. Cir. 1993)). 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." O 'Connor v. United States , 308 F.3d 1233, 1240 (Fed. 
Cir. 2002). In this opinion we only need to address element three. Critical to the 
existence of accord and satisfaction is the intention of the parties. What happens and is 
discussed during negotiations of a settlement and payment will operate as an accord and 
satisfaction only as to the claims considered. Tri-0 , Inc. v. United States , 28 Fed. Cl. 
463, 470-72 (1993). 
We look to the modification as the primary source of the parties ' intentions. 
Recognizing that the exercise of an option must be unconditional and set forth terms that 
are in accord with the option, any attempt by the government to alter the terms of the 
contractor's obligation under an option will render ineffective the purported exercise of 
the option. See generally Lear Siegler , Inc., Mgmt. Servs. Div., 86-3 BCA ,r 19,155 
at 96,795 (insertion of Availability of Funds clause); Chem. Tech., Inc. , ASBCA 
15 

No. 21863 , 80-2 BCA ,r 14,728 (altering period of performance) ; General Dynamics 
Corp. , ASBCA No. 20882, 77-1 BCA ,r 12,504 (altering delivery schedule). In this case, 
an attempt by the government to exercise the option by issuing a unilateral modification 
without satisfying the notice requirements of FAR 52.217-9 , would have varied the terms 
of the option. The purported exercise of Option 1 by unilateral modification would have 
been ineffective. Recognizing this , the contracting officer proposed that the exercise take 
place by agreement of the parties . Subsumed in that agreement is the acknowledgement 
that ACE would waive the preliminary notice requirements set forth in FAR 52.217-9 , 
that was preventing the government from exercising what would have been an ineffectual 
option. By signing Modification No. POOOOl, ACE accepted the exercise of the option 
and relinquished its rights to escape performance because of the untimely notice . In that 
respect the modification is clear and unambiguous and we give it its plain meaning. 
Hughes Commc 'ns Galaxy, Inc. v. United States, 998 F.2d 953, 958 (Fed. Cir. 1993). 
The question remaining is whether the bilateral modification also resulted in an 
unwitting relinquishment of ACE ' s rights to a second and distinctl y separate notification 
requirement set forth in FAR 22.lOlO(a) . In other words , does the bilateral modification 
exercising the option, without more , prevent ACE from receiving a price adjustment for 
increased labor costs incurred under the new CBA during the first option year? The 
effect of the bilateral exercise is a question of law that does not preclude summary 
judgment. We will not extend the consequences of the bilateral modification to include a 
waiver of a distinctly separate notice requirement which , if not given, allows for a price 
adjustment under FAR 22.1012-2 , without a clear and unequivocal intention to do so in 
the document. In the appeal before us, ACE maintains that there was an intention to 
agree to the option year, nothing more , and nothing less . ACE maintains , and we agree, 
that the failure to issue timely preliminary notice under FAR 52.217-9 , which 
necessitated a bilateral modification , does not absolve the Air Force of its failure to 
provide the mandatory 30-days notice under FAR 22.1010. The Air Force cannot use 
one failure to excuse another . Moreover , the June 24, 2016 preliminary notice provided 
under FAR 52.217-9 cannot be used to meet the notice requirement of FAR 22.1010. 
The notices requirements of FAR 52.217-9 and FAR 22.1010 are separate and distinct 
notices . 
Waiver is "an intentional relinquishment or abandonment of a known right or 
privilege. " Johnson v. Zerbst, 304 U.S. 458, 464 (1938) ; Alvare z & Assocs . Constr . Co. , 
ASBCA No. 49341, 98-1 BCA ,r 29,559 at 146,536. "An intent to waive a contractual 
right must be manifest in a party ' s failure to object." United Technologies Corp. , Pratt & 
Whitney Grp., ASBCA No. 46880 et al. , 95-1 BCA ,r 27,592 at 137,482 (citations 
omitted) . In answering the question whether the bilateral modification extended to the 
mandatory notice requirement of FAR 22.1010 , we must give the modification its plain 
meaning . In doing that, we find that the clear and unambiguous language of the bilateral 
modification does not manifest an unequivocal intention by ACE to relinquish its rights 
and/or the rights of the collective bargaining agent to the 30-day definitive notice under 
16 

FAR 22.1010. We find that the plain language of the modification does not purport to 
resolve anything other than the exercise of the option and was never intended to do 
anything other than exercise Option I. 
Even if this bilateral modification can be interpreted to include a waiver of the 
notice requirements pursuant to FAR 22.101 O(b ), the contracting officer does not have 
the authority to waive requirements imposed by statute. Shawview Cleaners , LLC, 
ASBCA No. 56938, 10-2 BCA ,r 34,550 at 170,394 (Government employees , including 
contracting officers , have no authority to waive compliance with the SCA, 
notwithstanding allegation that agency personnel fraudulently induced the contractor to 
enter a contract by misrepresenting the wage determination as non-mandatory); 
Inter-Continental Equip ., Inc. ASBCA No. 36807 , 94-2 BCA ,r 26,708 at 132,862-63 (the 
contracting officer, by action or inaction , cannot waive the requirements of the Cargo 
Preference Act of 1904, 10 U.S.C. § 2631); LaCoste Builders , Inc. ASBCA No. 29884 et 
al., 88-1 BCA ,r 20,360 at 102,981-82 (contracting officer had no authority to waive Buy 
American Act, exceptions not shown) . Similarly , in M-R-S Mfg Co. v. United States , 
492 F.2d 835, 841 (Ct. Cl. 1974) , the plaintiff argued that since the government ignored 
the data developed between March 23 and August 17, the contracting officer waived the 
contractor 's obligation to furnish accurate , complete , and current data. The Court stated 
that "[t]he most basic flaw in this argument is the assumption that the obligation to 
furnish proper data can be waived by a government agent. The duty to furnish accurate, 
complete, and current data is a duty imposed on Government contractors by a statute , 
and , therefore , that duty cannot be waived by a Government agent. " Id. (citations 
omitted). 
The Service Contract Act (SCA) , 41 U.S.C. §§ 6701 et seq. , and implementing 
regulations promulgated by the DOL at 29 C.F.R. Part 4 (1993 ed.) and also published in 
the FAR at 48 C.F.R. Subpart 22.10 (1990 ed.) is remedial labor legislation which must be 
liberally construed. 7 Midwest Maint . & Constr. Co. v. Vela, 621 F.2d 1046, 1050 
(10th Cir. 1980). The implementing regulations and contract clauses should be similarly 
so construed to effect the purposes of the Act. The SCA was designed to protect wages 
7 SCA provisions will apply to a government contract even where they were left out of 
the solicitation or the contract. Miller's Moving Co., ASBCA No. 43114, 92-1 
BCA ,r 24,707 at 123,325-26. "It is well settled that if a statute requires inclusion 
of a contract provision , such provision will be read into the contract by operation 
of law, and is binding on the parties even if omitted from the contract terms. G.L. 
Christian and Associates v. United States, 312 F.2d 418 (Ct. Cl. 1963) on 
rehearing, 320 F.2d 345 , cert. denied , 375 U.S. 954 (1963). Obligatory 
congressional enactments cannot be abrogated by failure of Government officials 
to include necessary provisions in the contract." G .L. Christian , on rehearing , 
supra. 
17 

and fringe benefits of service workers employed on U.S. Government contracts. 41 U.S .C. 
§§ 6703, 6707. The DOL issues "wage determination s" applicable to fixed-price services 
contracts and through a series of contract clauses , contractors are forbidden from paying 
less than the wages and fringe benefits contained in a wage determination . See 41 U.S.C. 
§§ 6701 et seq. In this way, the SCA prevents contractors from underbidding competitors 
by cutting wages or fringe benefit s to its service workers and thereby winning government 
contracts. See Lear Siegler Servs., Inc. v. Rumsfeld , 457 F.3d 1262, 1266 (Fed. Cir. 
2006) ; Gov 't. Contracting Res., Inc., ASBCA No. 59162 , 15-1 BCA ,r 35,916 at 175,575. 
There is a direct statutory obligation imposed by the SCA that the contracting officer 
could not waive by bilateral modification or by other means. 
In accordance with FAR 22.101 O(b ), the contracting officer was required to 
provide written definitive notice of the exercise of the option to both the incumbent 
contractor and the collective bargaining agent. In this case, the written notification was 
required to be given "at least 30 days in advance of the earliest applicable acquisition 
date8 in order for the time -of-receipt limitations in paragraphs 22.1012( a) and (b) to 
apply." That notification is mandatory to both the incumbent contractor and the union ; 
providing notice to one will not suffice. See Tecom, 01-1 BCA ,r 31,156 at 153,902; 
Raytheon , 86-3 BCA,r 19,094 at 96,527. As in Tecom, it is uncontested that the 
contracting officer did not comply with these regulatory duties. (SOF ,r 18, 20); See 
Tecom 01-1 BCA ,r 31,156 at 153,903. FAR 22.1012-2(c) very clearly sets out that the 
"limitations in paragraphs (a) and (b) of this subsection shall apply only if timely 
notification required in 22.1010 has been given" ( emphasi s added) . (SOF ,r 9) Tecom, 
01-1 BCA ,r 31,156 at 153,902; Raytheon, 86-3 BCA ,r 19,094 at 96,528. Accordingly , 
the contracting officer cannot reject a price adjustment resulting from a new CBA 
executed during the option period when it fails to provide the mandatory notice under 
FAR 22.1010. See Tecom, Inc., 01-1 BCA ,r 31,156 at 153,902-3 . We agree with 
appellant that there is no material distinction between this case, Raytheon and Tecom. 
We held in Tecom where timely notification is not given to both the contractor and 
the collective bargaining agent, the deadlines set forth in FAR 22.1012-2(b) do not apply 
and there is "no restriction against incorporation of a new or changed CBA received after 
contract award." Tecom, 01-1 BCA ,r 31 ,156 at 153,902. We will not depart from the 
results reached in Raytheon and Tecom. 
8 Even though FAR 22.101 O(b) provides that the 3 0 days advance notice is triggered by 
either the "earliest applicable acquisition date or the applicable annual or biennial 
anniversary date", because of the unusual nature of the ACE contract , there could 
not be an annual anniversary date for the first option . The base contact began 
June 1, 2016 and ended July 31, 2016. The first of five options, if exercised , was 
August 1, 2016 which would then establish an annual anniversary date for options 
2 through 5. 
18 

Having failed to provide the 30-day notice required by FAR 22.lOlO(b) to ACE 
and the collective bargaining agent (SOF ,r,r 18, 20), the time-of-receipt limitations set 
forth in FAR 22.1012-2 do not apply. Accordingly , we conclude that ACE is entitled to a 
price adjustment under FAR 52.222-43 for the increased labor costs associated with the 
new CBA executed after the option was exercised. 
CONCLUSION 
For the reasons stated, the government's motion for summary judgment is denied. 
Appellant's cross-motion for summary judgment is granted. The appeal is returned to the 
parties for a determination of quantum consistent with this decision. 
Dated: January 9, 2020 
I concur 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
I concur 
~ "woon1ow 
=trative Judge 
Armed Services Board 
of Contract Appeals 
19 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 

DISSENTING OPINION BY ADMINISTRATIVE JUDGE CLARKE 
I was the judge originally assigned to this case and wrote the original decision. 
While my colleagues adopted the majority of my facts and some of my analysis, they 
disagree with my conclusion. I respectfully dissent, because I do not believe that the 
notice requirements that my colleagues rely upon apply to the bilateral option exercise in 
this case. 
Option 1 was Exercised Bilaterally 
In a June 24, 2016 email to ACE transmitting preliminary notice of option 
exercise, the Air Force stated that ACE could expect the modification exercising 
Option 1 "next week or so" (SOF ,r 18). No other notice was provided by the Air Force. 
When ACE received Modification No. POOOOl, Block E was checked "Contractor is 
required to sign this document . ... " (SOF ,r 19). In the majority decision , my colleagues 
speculate about the contracting officer 's (CO) motivation in requiring a bilateral exercise: 
It was the government ' s recognition of its failure to provide 
notice as required by FAR 52.217-9(a), that dictated the 
contracting officer's request for a bilateral modification. 
The purported exercise of Option 1 by unilateral modification 
would have been ineffective . Recognizing this, the 
contracting officer proposed that the exercise take place by 
agreement of the parties. Subsumed in that agreement is the 
acknowledgement that ACE would waive the preliminary 
notice requirements set forth in FAR 52.217-9, that was 
preventing the government from exercising what would have 
been an ineffectual option. 
ACE maintains, and we agree, that the failure to issue timely 
preliminary notice under FAR 52.217-9, which necessitated a 
bilateral modification, does not absolve the Air Force of its 
failure to provide the mandatory 30-days notice under FAR 
22.1010. 
(Emphasis in original) This speculation is unsupported by evidence. 
20 

On July 1, 2016, ACE, Ms. Chandler , and the Air Force, CO DeLong, signed 
Modification No. POOOOl bilaterally exercising Option 1 (SOF 119). The effect of the 
bilateral exercise is a question of law that does not preclude summary judgment. 
The Notice Requirements Apply to Options Exercised Unilaterally 
FAR 2.101 defines option as: 
Option means a unilateral right in a contract by which, for a 
specified time, the Government may elect to purchase 
additional supplies or services called for by the contract, or 
may elect to extend the term of the contract. 
(Emphasis added) Based on the FAR definition of option as a unilateral right to extend a 
contract, I conclude that the term "option" as used in FAR 22.10 I 0, FAR 52.222-43 and 
FAR 52.217-9 means an option exercised unilaterally . Therefore, the notice requirement 
in FAR 22.lOlO(b) only applies when the option is exercised unilaterally. To hold 
otherwise, as my colleagues do, requires the Board to ignore the definition of "option" in 
FAR 2.101. My colleagues simply hold "that the manner of exercising the option is an 
immaterial distinction ." This is the fundamental disagreement we have that necessitates 
my dissent. 
This Board relied on the FAR 2.101 definition of option in Glasgow Investigative 
Solutions , Inc., ASBCA No. 58111, 13 BCA 135 ,286 where we held: 
Turning to the merits ofGIS 's assertion, FAR 52.217-8 
provides: "The option provision may be exercised more than 
once, but the total extension of performance hereunder shall 
not exceed 6 months" (SOF 14) . GIS ignores the fact that 
the FAR 52.217-8 clause expressly gives the government the 
unilateral right to extend contract performance. FAR 2.101 
defines "Option" as "a unilateral right in a contract by which, 
for a specified time, the Government may elect to ... extend 
the term of the contract." Mod. P00003 bilaterally amended 
the contract to restructure its base contract and option 
performance periods. Because it was a bilateral restructuring 
of the contract, it did not rely on FAR 52.217-8 and modified 
the contract in respects that do not rely on the authority 
provided in FAR 52.217-8 (SOF 15). We hold that 
Mod. P00003 did not exhaust, or use up any of the 
government 's FAR 52.217-8 extension rights. The 
government retained the ability to extend performance for six 
months when it did so 
21 

through Mods. P00007 through POOO 11. Hence, they were 
valid. 
(Id. at 173,176) As seen in the quote above, because FAR2.101 defines "Option" as a 
unilateral option, we interpreted the word "option" in FAR 52.217-8 as a unilateral 
option exercise. We held that because Modification No. P00003 was bilateral, it did not 
rely on the authority provided by FAR 52.217-8. FAR 52.217-8 is in ACE's Contract 
No. 0006. (R4, tab 32 at 194) If the "option" in FAR 52.217-8 is interpreted by this 
Board as only a unilateral option based on FAR 2.101, so too should the term "option" in 
FAR 22.1010, FAR 52.222-43 and FAR 52.217-9. I believe the language in Glasgow I 
rely upon and quoted above is not dicta and is Board precedent that we are obligated to 
follow. Advanced Eng 'g & Planning Corp., ASBCA Nos. 54044, 53366, 05-1 BCA 
,r 32,935 at 163,127 ("We are bound by our precedent."); PCA Health Plans of Tex., Inc., 
ASBCA No. 48711, 98-2 BCA ,r 29,900 at 148,014 ("A decision by the Board is deemed 
binding precedent in another appeal unless the decision is reversed or otherwise modified 
by the Board 's Senior Deciding Group or the court of appeals. ") 
Notice Requirement Waiver 
My colleagues rely heavily on an argument that nothing in bilateral Modification 
No. POOOOl exercising Option 1 waived the 30-day notice requirement in FAR 22.1010. 
I guess this means the Air Force was required to provide the FAR 22.lOlO(b) 30-day 
notice no later than June 1, 2016 which is 30 days before Option 1 was exercised but 
60 days before the Option 1 performance period began on August 1, 2016. This assumes 
that the term "option" in FAR 22.1010(a)(2) can be interpreted to include a bilateral 
option exercise. As shown above, that is not how this Board defined "option" in 
Glasgow. If the notice provisions only apply to unilateral option exercises, as I argue, 
there is nothing to waive. 
This Board has Recogni zed the Reciprocal Benefits in FAR Provisions 
Tecom, Inc. , ASBCA No. 51591, 01-01 BCA ,r 31,156 and Raytheon Service Co., 
ASBCA Nos. 28721, 29668, 86-3 BCA ,r 19,094, are cases that explain the reasoning 
behind the notice requirements. Raytheon teaches us two important lessons. First, that 
the FAR provisions providing a cut-off date for the applicability of a new or revised CBA 
benefits the government, and provisions requiring mandatory written notice benefit the 
contractor: "Like the cut-off date for revised wage determinations benefits the 
Government, the 30-day notice benefits the contractor." Raytheon , 86-3 BCA ,r 19,094 
at 96,527. Our decision in Tecom recognizes what we held in Raytheon: 
Further, as our decision in Raytheon makes clear, the 
30-days notification requirement is intended to benefit the 
contractor: "Since the [Government] did not provide the 
22 

notice, which would have been for [Tecom's] benefit, the 
[Government] cannot at the same time benefit from its failure 
to abide by the regulations by denying [Tecom] the 
opportunity to obtain a revised waged determination based 
upon the new CBA. 
Tecom, 01-1 BCA ,r 31,156 at 153,902. 
In Raytheon the Board considered the fundamental fairness of the situation : 
But here, because the Air Force was aware that appellant was 
conducting labor negotiations , DAR 12 - 1005.2(b)(2) 
required the Air Force to give notice at least 30 days prior to 
the start of the option period. The need for the 30 - day 
notice is understandable when we consider the precarious 
position of all interested parties when a collective bargaining 
agreement is being negotiated and the Air Force has given 
only preliminary notice that the underlying contract will be 
extended through an option. The contractor and the labor 
representatives are not assured of a continued contract with 
the Government , and the Government cannot determine the 
actual labor costs that will be incurred during the option 
period. Here, the notice should have warned the negotiating 
parties of a deadline . Instead the appellant was lulled into 
complacenc y. 
Raytheon, 86-3 BCA ,r 19,094 at 96,527. ACE and its union could not be "lulled into 
complacenc y" because ACE participated in the exercise of the option 30 days before the 
start of the first option year . There was no uncertainty over the fact that the contract 
would continue into the first option year. There was no unknown deadline. ACE and its 
union knew on July 1, 2016 that they had 30 days to complete negotiation of the new 
CBA. For whatever reason, they did not finalize the CBA before ACE started 
performing during the first option year (SOF ,r,r 21-23). The new CBA was eventually 
agreed to and signed on November 20, 2016. ACE then claimed $1 ,744,330.37 for the 
increased costs resulting from the new CBA for January 1, 2017 through the end of the 
first option year. (SOF ,r,r 25-27) Under these circumstances , I would not hold the Air 
Force liable for ACE 's failure to finalize and sign the new CBA before the start of 
performance of the first option year. 
ACE Failed to Protect Itself 
When the Air Force asked ACE to sign Modification No. POOOOl bilaterally 
exercising Option 1, ACE was in control of the transaction. The preliminary notice was 
23 

only seven days before Modification No. POOOOl was signed and 37 days before 
expiration of the transition period and start of the first option year. (SOF 11 18-19) ACE 
knew it was negotiating a new CBA with the union . ACE knew that the costs to the Air 
Force would increase under the new CBA. ACE knew it would seek the higher costs 
embodied in the new CBA during Option Year 1. ACE could have refused to sign 
Modification No. POOOOl until the matter of the new CBA was resolved with the union 
and the Air Force. Faced with ACE's refusal, had the Air Force unilaterally exercised 
the option and had ACE accepted the contract extension , ACE was protected by Tecom 
and Raytheon because the Air Force clearly failed to provide the notice required by 
FAR 22.1010. Since the modification was exercised bilaterally, our decisions in Tecom 
and Raytheon simply do not apply. The situation is now closer to COSTAR III, LLC, 
ASBCA No. 56479, 11-2 BCA 134,830 and Guardian Moving & Storage Co. v. Hayden, 
421 F.3d 1268 (Fed. Cir. 2005), where the CBA was finalized during the current option 
year and we held that it was not effective until the next option year. The same is true in 
this case. The CBA was finalized on November 20, 2016, during the first option year. I 
would not compel the Air Force to increase its payments to cover the new CBA until the 
second option year. This is a reasonable result in this case that balances the reciprocal 
benefits in the FAR provisions recognized by this Board . 
For the reasons stated above, I would grant the Air Force's motion, deny ACE 's 
motion and deny ACE 's appeal. 
Dated: January 9, 2020 
Administra ive Judge 
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. 61503, Appeal of Alutiiq 
Commercial Enterprises , LLC, rendered in conformance with the Board 's Charter . 
Dated: 
24 
PAULLA K. GATES-LEWIS 
Recorder , Armed Services 
Board of Contract Appeals