HECO Pacific Manufacturing, Inc.
Docket: ASBCA 63217
Decision date: 2025-09-04

1 
 ARMED SERVICES BOARD OF CONTRACT APPEALS 
 
OPINION BY ADMINISTRATIVE JUDGE MELNICK 
DENYING THE GOVERNMENT’S MOTION FOR SUMMARY JUDGMENT 
 
 HECO Pacific Manufacturing, Inc. (HECO) contracted with the government to 
provide new cranes.  It alleges that government delays pushed its performance into the 
period of the COVID-19 pandemic, subjecting HECO to COVID mitigation requirements 
that caused it to incur extra costs.  The government moves for summary judgment.  For 
the reasons given below we deny the motion. 
 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
 
1.  In 2016, the government issued a fixed price delivery order under an existing 
contract to HECO for three new cranes at Naval Base Kitsap, Bangor, Washington (R4, 
tab 1 at 10, tab 7 at 47, tab 12).  On March 21, 2019, about a month prior to the  
April 19 extended delivery date, the government expressed concerns by letter respecting 
the painting of the cranes.  Work was then suspended.  (Gov’t. mot., ex. C at 1-2; 
government statement of undisputed material facts (gov’t statement) ¶¶ 16, 21; statement 
of genuine issues (app. statement) ¶ 9)1  About eight months later, on November 17, 
2019, HECO submitted a Request for Equitable Adjustment (REA) seeking $506,997.75 
for delays and impacts resulting from the dispute about painting and the government’s 
prevention of completion.  It recited a plan of action for completion once a modification 
 
1 The government concedes HECO’s statement for purposes of the motion (gov’t reply 
at 2).   
Appeal of - )  
 )  
HECO Pacific Manufacturing, Inc. ) ASBCA No. 63217 
 )  
Under Contract No. N62470-13-D-4018 )  
   
APPEARANCE FOR THE APPELLANT: Casey J. McKinnon, Esq. 
    Cohen Seglias Pallas Greenhall & Furman PC 
    Washington, DC 
 
APPEARANCES FOR THE GOVERNMENT: Allison M. McDade, Esq. 
    Navy Chief Trial Attorney 
 David M. Ruddy, Esq. 
Ryan C. Kujawski, Esq. 
    Trial Attorneys 

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was issued.  (Gov’t mot., ex. D at 1-4)  HECO responded to government questions and 
revised the REA on December 23, 2019 (gov’t mot., ex. E at 1-5). 
 
2.  On March 13, 2020, COVID-19 was declared a national emergency (gov’t. 
mot., ex. F).  The record does not reveal anything more happening until six months later 
when on September 3, 2020, HECO sent another REA to the government complaining 
about continuing delays arising from the paint issue, proposing the same plan of action as 
before, and seeking $559,589.35.  This new REA clearly stated that “[t]he costing does 
not include any Covid related costs.”  (R4, tab 26 at 240)  Two weeks later, on September 
17, the parties completed Modification No. 07 to the delivery order, settling the 
November 17, 2019, REA and “revised REA dated 27 December 2019.”
2  The 
modification “incorporate[d] the scope of work and corrective actions” of HECO’s 
September 3, 2020, REA, increased the contract price by the amount sought in that letter, 
$559,589.35, and extended the period of performance to April 30, 2021.  It stated that 
“[a]cceptance of this modification by the contractor constitutes an accord and satisfaction 
and represents payment in full for both time and money and for any and all costs, impact 
effect and for any delays and disruptions arising out of, or incidental to, the work as 
herein revised.”  (R4, tab 22 at 192-96) 
 
3.  Three months after Modification No. 07 was executed, on December 16, 2020, 
the government project manager forwarded to HECO “COVID related restrictions and 
requirements necessary for . . . [the] project.”  They had been provided to the project 
manager by the “Crane Mechanical Engineer, SPB 243, Strategic Weapons Facility 
Pacific.”  Generally, they entailed movement restrictions, trip questionnaires, COVID 
checklists, face covering and social distancing, and that HECO personnel were required to 
obtain permission to access the base.  (R4, tab 26 at 274-76) 
 
4.  Around nine months later, on September 13, 2021, HECO submitted another 
REA for $322,886 for the impacts of the COVID rules that were imposed on it.  It 
addressed the burdens and delays generated by complying with the trip questionnaires as 
well as the government’s delays responding to them and their frequent rejections.  HECO 
also complained about completing forms, time spent hand washing, as well as addressing 
mask requirements.  It added costs associated with losing the labor of ill employees, and 
increased shipping expenses it said were associated with COVID lockdowns.  (R4, tab 24 
at 205)  After the government denied the REA on October 21, saying it was not liable for 
COVID costs, HECO sought reconsideration on November 1 (R4, tabs 25; 26 at 238).  
Among other things, it argued that government delays had pushed the work into the 
pandemic period, subjecting HECO to changed site conditions.  It added that conditions 
required additional employee breaks.  HECO included the claim certification required by 
41 U.S.C. § 7103(b).  (R4, tab 26 at 239)  The government treated the November 1 
submission as a claim and denied it on December 9, 2021 (R4, tab 27). 
 
2 We suspect that it intended to refer to the December 23 revision (gov’t mot., ex. E).   

3 
 
5.  HECO has appealed.  After generally alleging facts, the complaint maintains 
government delays prevented HECO from completing the work prior to the onset of 
COVID, subjecting it to COVID related costs.   
 
DECISION 
 
 The government moves for summary judgment.  It argues (1) the appeal is barred 
by the doctrines of release or accord and satisfaction, (2) that HECO cannot recover for 
the impact of COVID restrictions because COVID was not foreseeable when the 
government first delayed performance, and (3) recovery is barred by the sovereign acts 
doctrine.  We reject the first two theories and rule the government has not established the 
third.   
 
I. Release/Accord & Satisfaction 
 
 The effect of a modification is often analyzed under both the doctrines of accord 
and satisfaction and release.  See Haskell Co., ASBCA No. 63291, 24-1 BCA  
¶ 38,537 at 187,332.  “A release is a contractual defense where a party abandons a claim 
or relinquishes a right that could be asserted against another.”  Id.  It is interpreted like 
any other contract.  We review its plain language.  If clear and unambiguous it is given its 
plain and ordinary meaning.  Bell BCI Co. v. United States, 570 F.3d 1337, 1341 (Fed. 
Cir. 2009).  An accord and satisfaction occurs “when some performance different from 
that which was claimed as due . . . is accepted by the claimant as full satisfaction of his 
claim.”  Id. at 1340-1341 (quoting Cmty. Heating & Plumbing Co. v. Kelso, 987 F.2d 
1575, 1581 (Fed. Cir. 1993)).  Among the elements of an accord and satisfaction is a 
meeting of the minds of the parties.  Id. at 1341.  That inquiry is fact specific and can 
entail review of a wide range of evidence.  See Meridian Eng’g Co. v. United States, 
885 F.3d 1351, 1365 (Fed. Cir. 2018).   
 
 The government says Modification No. 07 bars HECO’s claim for the costs it 
incurred complying with COVID related requirements.  Modification No. 07 says it 
settles HECO’s November 17, 2019 REA, as revised in December, and incorporates the 
scope of work and corrective actions contained in HECO’s September 3, 2020, REA 
(SOF ¶ 2).  The plain language therefore designates the contents of those documents for 
the description of what claims are being settled.  The November 17, 2019, REA concerns 
government delays in 2019 associated with painting issues (SOF ¶ 1).  It entirely predates 
COVID and cannot pertain to its effects or requirements imposed because of it.  The 
September 3, 2020, REA, whose scope of work and corrective action are incorporated by 
the modification, essentially asserts the same grounds for delay compensation as the prior 
REA.  Though it was submitted months after COVID was declared a national emergency, 
it expressly excludes from its scope COVID related costs.  (SOF ¶ 2)  This appeal is for 
costs incurred complying with COVID requirements imposed by the government in 

4 
December 2020, after Modification No. 07 was executed.  We see no basis to conclude 
Modification No. 07 settled costs arising from requirements imposed for the first time 
after the modification was executed. 
 
The government focuses on the modification’s release language.  The release 
provides that HECO’s acceptance of the modification “constitutes an accord and 
satisfaction and represents payment in full . . . for any and all costs, impact effect and for 
any delays and disruptions arising out of, or incidental to, the work as herein revised” 
(id.).  The release essentially encompasses the costs of the revised work required by the 
modification, meaning the work described by the September 3, 2020, REA.  Again, 
HECO seeks the costs of COVID work required in December 2020.  That is not the 
revised work required by the modification; it is additional work beyond its scope.  
Considering the entirety of Modification No. 07, we decline to conclude it settles or 
releases any claims for costs associated with the COVID requirements imposed after the 
modification, and that were unrelated to its revisions to the work.  Its plain language 
neither releases that claim nor shows a meeting of the minds accepting an alternative 
performance in satisfaction of it. 
 
II. Foreseeability  
 
Next, the government argues that HECO’s argument that the government’s delays 
subjected it to the COVID restrictions are not a valid basis upon which to premise its 
claim because COVID was not foreseeable.  HECO’s contentions about this are 
potentially confusing and require some description.  According to HECO, it “does not 
claim that the . . . governmental actions related to COVID are the main driver of HECO’s 
costs.”  It says it is complaining about the government “delay[ing] HECO’s completion 
of the project by forcing it to work during the COVID 19 pandemic, subjecting HECO to 
onerous base access restrictions that then unexpectedly increased HECO’s overall costs.”  
(App. opp’n at 6-7)   
 
 HECO’s arguments appear to flow from its effort to avoid the fatal effects of the 
sovereign acts doctrine, which we address in more detail below.  At this juncture it 
suffices to note that if the COVID restrictions obstructing HECO’s performance 
constitute sovereign acts by the government, then it is not directly liable for them in its 
contractual capacity.  See Horowitz v. United States, 267 U.S. 458, 461 (1925).  So, 
instead of complaining directly about the restrictions, HECO evidently is focusing on 
alleged government delays that pushed its performance to the period it was subjected to 
the restrictions, which it claims entitles it to be compensated for them regardless of 
whether they might be sovereign acts.  It suggests its case is like those that recognize 
government responsibility for the effects of adverse weather experienced after the 
government delayed performance.  See Nassar Grp. Int’l, ASBCA No. 58451 et al.,  
19-1 BCA ¶ 37,405 at 181,833-34.  Through its motion, the government responds that 
under BCI Construction USA, Inc., ASBCA No. 62657 et al., 24-1 BCA ¶ 38,522 

5 
at 187,262-63, HECO’s theory is dependent upon the foreseeability of COVID when the 
government allegedly began delaying the project, which it says HECO cannot establish.  
 
 BCI involved a contractor seeking COVID related increased material and labor 
costs alleged to arise because a government stop work order issued and cancelled in 2019 
pushed the schedule into 2020’s period of COVID’s impact.  The Board rejected the 
claim because COVID was not foreseeable when the order was issued.  Id. at 187,243-44, 
187,262-63.  The government says the same conclusion applies here because COVID was 
not foreseeable when it commenced delays over paint issues in March 2019.  But the 
government’s actions causing the delay in BCI began and ended prior to COVID.  Here, 
the record shows HECO complaining about continued delays in September 2020, long 
after the March COVID emergency declaration (SOF ¶ 2).  BCI does not support the 
government’s suggestion that our inquiry into the foreseeable impact of a government 
delay that may have started before COVID but lasted until after the effects of the 
emergency were known is strictly contained to what might have been anticipated on the 
delay’s first day.  We cannot conceive of a reason why the government should be 
categorically absolved from responsibility for the potential consequences of a delay that it 
continued into a period when COVID’s effects would have become foreseeable to it. 
 
III. Sovereign Acts Doctrine 
 
 Finally, the government argues it is entitled to summary judgment because its 
COVID requirements are sovereign acts.  So, as promised, we elaborate more about the 
sovereign acts doctrine.  When the government contracts it is usually subject to the same 
rules as anyone else.  But as a sovereign, “it stands apart.”  Stockton E. Water Dist. v. 
United States, 583 F.3d 1344, 1366 (Fed. Cir. 2009).  When sued as a contractor, the 
government cannot be held liable for obstructions to performance resulting from its 
public and general acts as a sovereign.  Casitas Mun. Water Dist. v. United States, 
543 F.3d 1276, 1287 (Fed. Cir. 2008).
3  The separate characters of sovereign and 
contractor cannot be fused.  Id.  Invocation of the sovereign acts doctrine is a government 
affirmative defense.  Connor Bros. Constr. Co. v. Geren, 550 F.3d 1368, 1371 (Fed. Cir. 
2008).  “The defense does not shield the government from liability for an act ‘designed to 
relieve the Government of its contract duties,’ but does for ‘a genuinely public and 
general act that only incidentally’ affects the contract.”  Am. Gen. Trading & 
Contracting, WLL, ASBCA No. 56758, 12-1 BCA ¶ 34,905 at 171,636 (quoting Stockton, 
583 F.3d at 1366).  The government’s obstruction of a contract is more likely to be 
regarded as incidental when its scope is sufficiently broad to affect parties having no 
connection to the government.  Connor Bros., 550 F.3d at 1375.  However, an act 
 
3 A second element necessary for the government to avoid liability is that the sovereign 
act render performance impossible.  See Casitas, 543 F.3d at 1287.  We need not 
address that factor in this decision.    

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affecting one contractor can be a sovereign act so long as the effect on contract rights is 
incidental to a broader governmental objective.  Id. at 1376. 
 
 The government contends that the COVID requirements imposed upon HECO 
were sovereign acts and so it cannot recover.  As noted previously, HECO denies that its 
claim is premised upon imposition of the COVID requirements themselves, basing it 
instead upon the government delaying its performance into the period they were imposed.  
As we understand HECO’s theory, the government’s lack of contractual responsibility for 
the COVID requirements is no more relevant than the fact the government is not 
contractually responsible for seasonably adverse weather after the government delays 
performance into it.  There can still be government liability for the delay.  Notably, the 
government does not contend that its delays here were generated by sovereign acts.  We 
need not decide if we agree with HECO’s argument now, because even if we do not, the 
government has not made a sufficient showing that the COVID requirements stem from a 
sovereign act. 
 
 The government can only receive summary judgment if it demonstrates the absence 
of any genuine dispute of material fact and it is entitled to judgment as a matter of law.  See 
F
ED. R. CIV. P. 56(a).  The government must support an assertion that a fact cannot be 
genuinely disputed by “citing to particular parts of materials in the record . . . .”  FED. R. 
CIV. P. 56(c)(1)(A); see also Board Rule 7(c)(2) (requiring a party to “support by specific 
evidence all facts and legal arguments necessary to sustain a party’s position” by citing to 
the record or additional attached evidence).  The only evidence offered by the government 
about the character of the COVID requirements is its origin email from the Crane 
Mechanical Engineer containing them (SOF ¶ 3).  The government fails to provide 
anything to establish that the requirements constituted genuinely public and general acts of 
the government or were imposed for a broader governmental objective.  We have no 
indication that the requirements were imposed upon anyone other than HECO, or if they 
were only for HECO how and why they served a broader governmental objective instead of 
simply increasing its costs.  Given that the requirements are not inconsistent with others 
generally imposed during COVID, it might be reasonable to infer they serve sovereign 
objectives.  But, as the summary judgment movant, the government is not entitled to any 
inferences in its favor.  See Dairyland Power Coop. v. United States, 16 F.3d 1197, 1202 
(Fed. Cir. 1994). 
 
Furthermore, the government has also failed to offer any evidence of the authority 
of the Crane Mechanical Engineer to dictate the requirements.  We have no basis to 
conclude this individual is clothed with the kind of executive power and authority to 
impose genuinely public and general requirements for the government of a sovereign 
character.  Compare Nero and Assocs., ASBCA No. 30369, 86-1 BCA ¶ 18,579 at 93,296 
(denying summary judgment because the government failed to demonstrate official 
purporting to perform the sovereign act exercised powers within the parameters of the 
authority granted to him), with APTIM Fed. Servs., LLC, ASBCA No. 62982, 22-1 BCA 

7 
¶ 38,127 at 185,219 (recognizing the authority of a base commander, using his executive 
authority, to act in a sovereign capacity to close the base to mitigate the outbreak of 
COVID).  As it stands the record is inadequate to rule the imposition of the COVID 
requirements was a sovereign act. 
 
CONCLUSION 
 
The government’s motion for summary judgment is denied.   
 
 Dated:  September 4, 2025 
 
 
 
 
 
 
 
I concur 
 
 
 
OWEN C. WILSON 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
 I concur 
 
 
 
 J. REID PROUTY 
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. 63217, Appeal of HECO 
Pacific Manufacturing, Inc., rendered in conformance with the Board’s Charter. 
 
 Dated:  September 4, 2025 
 
 
 
 
 
 
 
 
MARK A. MELNICK 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
 
 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals