Lear Siegler Services, Inc.
Docket: ASBCA 57264
Decision date: 2012-08-01

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of--
Lear Siegler Services, Inc. 
Under Contract No. FA8108-09-D-0006 
APPEARANCES FOR THE APPELLANT: 
) 
) 
) 
) 
) 
APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 57264 
Thomas 0. Mason, Esq. 
Francis E. Purcell, Jr., Esq. 
CooleyLLP 
Washington, DC 
Alan R. Caramella, Esq. . 
Acting Air Force Chief Trial Attorney 
Maj Sandra K. Whittington, USAF 
Jared D. Minsk, Esq. 
Trial Attorneys 
OPINION BY ADMINISTRATIVE JUDGE SCOTT 
Lear Siegler Services, Inc. (LSI) 1 has appealed under the Contract Disputes Act 
(CDA), 41 U.S.C. §§ 7101-7109, from the contracting officer's (CO's) denial of its 
$1,483,631.06 certified claim under its indefinite delivery, indefinite quantity (IDIQ) 
contract with the Air Force. Appellant alleges that unilateral Modification No.2 (Mod. 
No.2) to its task order (TO) No. 13 for aircraft and depot maintenance for National 
Guard aviation facilities increased the agreed maintenance workload under the TO and 
was a compensable 
change. The Board held a hearing on entitlement only. For the 
reasons stated below, we sustain the appeal. 
FINDINGS OF FACT 
Background 
1. The Army National Guard Bureau (ANG or NGB) is responsible for certain 
aviation maintenance and limited depot repair, and maintenance of all Army National 
Guard helicopters, helicopter subsystems and ground support equipment. The 11 08th 
1 During at least part of the period at issue, LSI's parent corporation was EG&G 
Technical Services, Inc. LSI is now known as URS Federal Services. For 
convenience, we refer to appellant as LSI throughout. (See ex. A-76; tr. 115 
(counsel statement), 2/36-37) 

Aviation Classification and Repair Activity Depo4 in Gulfport, Mississippi (MS 
A VCRAD), oversees 22 facilities in 9 southeastern states, Puerto Rico and the Virgin 
Islands. (Ex. A-25 at 8245; tr. 3/155-56, 192) 
2. Like the subject contract, its predecessor was part of the Air Force's Contract 
Field Team (CFT) program, overseen by the Air Force's Air Logistics Center, Oklahoma 
City, Oklahoma, for temporary and long-term labor support for technical services needs, 
including maintenance and repair, depot services, inspections and modernization for 
contingency support for aircraft, vehicles, weapons systems and other equipment. 
Maintenance requirements were similar to those under TO No. 13 and the same types of 
aircraft were involved. Services under the predecessor contract were on a time and 
materials (T&M) basis. LSI, which was in charge ofMS AVCRAD's paint hangar, 
provided paint services, including limited depot maintenance. A different company, L-3, 
provided most of the maintenance. In addition to being one of the two incumbent 
contractors at MS A VCRAD, LSI also performed paint and maintenance services, 
combined, at AVCRAD locations in California, Connecticut and Missouri, covering 
needs similar to those ofMS AVCRAD. (Ex. A-1; compl., answer~~ 4; tr. 1/43, 77-78, 
107-09, 125, 2/7-10, 2/61-63, 141, 3/190, 200-04, 4/14, 68, 
73, 96; see R4, tab 1 at Fair. 
Opportunity Notice (FON); ex. A-6; tr. 1/38, 2/230) 
3. In 
March 2008 the Department ofDefense (DoD) discouraged T&M contracts 
unless appropriate and authorized. It reported General Accountability Office findings, 
including that DoD was using them because they could be adjusted easily when 
requirements were unclear or funding uncertain. On 5 August 2008 the Air Force issued 
a policy memorandum implementing DoD's direction and CFT began looking for 
requirements to convert to fixed-price. (Exs. A-5, -7; tr. 2/141-43) 
The Contract 
4. On about 3 October 2008, the Air Force awarded 11 multiple-award contracts 
for CFT support services, including the subject negotiated IDIQ contract awarded to LSI. 
The CO was JeffFrederick of Tinker AFB, Oklahoma. The base year was 1 October 
2008-30 September 2009. Options run 
through 30 September 2015. Contract line item 
numbers (CLINs) are on T&M, firm-fixed-price (FFP) and cost reimbursement bases. 
(Ex. A-8 at 1-25, 60; compl., answer~~ 5, 6) The contract Schedule provides that the 
contract minimum for all CLINs when combined is $40,000.00 for each 
individual 
contract issued and the maximum is $10,123,901,515.00 (ex. A-8 at 2, § B, n. 1).2 
2 The max.imum and minimum are also addressed in the contract's Federal Acquisition 
Regulation (FAR) 52.216-19, ORDER LIMITATIONS (OCT 1995) and 52.216-22, 
INDEFINITE QUANTITY (OCT 1995) clauses (ex. A-8 at 59, 60). 
2 

5. FFP CLIN 0004 covers ·modification, maintenance and repair services on-site at 
government lo~ations pursuant to individual TOs. It states in part: · 
Payment for labor shall be in accordance with the prices 
established in Attachment 1 and the hours negotiated in 
accordance with the Special Provision entitled, "FIXED PRICE 
WORK PROCEDURES FOR CLIN X004 (FIXED PRICE LABOR)" 
[Fixed Price Labor clause]. ACRN [Accounting 
Classification Reference Number] to be cited on individual 
[TOs]. 
(Ex. A-8 at 3) The contract describes "ATTACHMENT 1" as a 
5 November 2007 
13-page pricing matrix. We have not been directed to it and have not located it in the 
record. The contract describes "APPENDIX A," referred to below, as the Performance 
Work Statement (PWS) to be issued with each TO. (!d. at 79; see finding 6) 
6. The contract contains or incorporates, inter alia, the following clauses: 
FAR 52.211-11, LIQUIDATED DAMAGES-SUPPLIES, SERVICES OR RESEARCH 
AND DEVELOPMENT (SEP 2000), providing that, if the contractor fails to perform services 
within the time specified in the contract, it shall pay the government liquidated damages 
of $1 per calendar day of delay (ex. A-8 at 27). · 
PLACE OF PERFORMANCE (APR 2007) (ex. A-8 at 28), providing that services are 
to be performed at locations specified in TOs. 
PROJECTED TEAM COMPLEMENT (APR 2007) (PTC clause): 
The projected team complement (PTC} is the estimated 
number and skill classification of personnel expected to be 
required to accomplish a task. The government reserves the 
right to determine whether the PTC will be determined solely 
by the Contractor based on the number of personnel the 
Contractor believes to be necessary to accomplish the 
required task(s), or whether the Government will solely 
determine the PTC. Regardless of the contract type ... utilized 
for [TO] selection, the Contractor shall provide a breakout of 
the PTC on which their proposal is based. 
(Ex. A-8 at 33) 
3 

The Fixed Price Labor clause (finding 5) provides that, for an FFP TO, the 
Procuring CO is to issue a notice to the contractor for the work "and the details of the 
work to be performed" (ex. A-8 at 42). The contractor is to provide an FFP and is to 
break down its price to include proposed hours and proposed burdened labor rate. 
Payment for FFP items is to be at the fixed-price listed for each item. 
ORDERING PROVISIONS FIXED PRICE/FIXED PRICE INCENTIVE FIRM TARGET/COST 
PLUS INCENTIVE FEE/[T&M] (APR 2007) (Ordering Provisions clause): 
(c) All [TOs] issued hereunder are subject to the terms and 
conditions of this contract. This contract shall control in the 
event of conflict with any [TO]. 
(d) [TOs] issued under this contract shall contain the 
following: 
(1) Servicesto be furnished (by [CLIN]); 
(2) Appendix "A", [PWS]; 
(6) Appropriate data for funds obligated with the 
dollar amount chargeable thereto ... ; 
(7) Site or sites where services are to be performed; 
(10) For FFP [TOs], the contractor's proposed FFP; 
( 14} [PTCs] by numbers and skill classification. 
(Ex. A-8 at 45) 
ACCEPTANCE OF TASK ORDERS (APR 2007) (TO Acceptance clause): 
(a) [T]he contractor agrees to accept any [TO] issued in 
accordance with the terms and conditions of this contract. 
The Government reserves the unilateral right to adjust those 
provisions within the scope of the contract including ... the 
estimated quantities, requirements ... within the scope of the 
4 

[TO's] Appendices ... , site locations, and other support items 
not specified herein, at the [schedule rates], of any [TO]. 
(Ex. A-8 at 46) 
CRITERIA FOR ISSUING [TOs]/F AIR OPPORTUNITY (APR 2007), providing in part: 
The Government reserves the right to reject 
any [TO] 
proposal that is evaluated to be unrealistic in terms of 
program commitments, including contract terms and 
conditions, or unrealistically high or low in cost when 
compared to Government estimates, such that the proposal 
is deemed to reflect an inherent lack of competence or 
failure to comprehend the complexity and risks of the 
applicable task. 
(Ex. A-8 at 49) 
FAR 52.243-1, CHANGES-FIXED-PRICE (AUG 1987) --ALTERNATE II (APR 1984) 
(ex. A-8 at 75): 
(a) The [CO] may at any time, by written order ... make 
changes within the general scope of this contract in any one or 
more ofthe following: 
( 1) Description of services to be performed. 
(3) Place of performance ofthe services. 
(b) If any such change causes an increase or decrease 
in the cost of, or the time required for, performance of any 
part of the work under this contract, whether or not changed 
by the order, the [CO] shall make an equitable adjustment in 
the contract price ... and shall modifY the contract. 
5 

(e) Failure to agree to any adjustment shall be a 
dispute under the Disputes clause .... 
TONo. 13 
7. In August 2008, MS A VCRAD began developing a PWS for aircraft and depot 
maintenance at MS A VCRAD locations on a 
T &M basis. CO Frederick later advised that 
it was to be FFP. MAJ Daryl Gilbert, production control division chief and an assistant 
Project Officer (PO) at MS A VCRAD, worked with the Tinker CFT program office, 
including CO Frederick, to develop the 
PWS, under which contractor personnel would 
augment government employees performing the work. MAJ Gilbert worked from the 
prior consolidated PWS that had included paint and maintenance and developed a 
separate PWS for each function. Under the direction of LTC Richard Poole, then 
MS AVCRAD's Deputy Commander of Maintenance and the PO for TO No. 13, 
MAJ Gilbert included in the draft maintenance PWS "the footprint that we had on the 
ground" (tr. 4/81), which was 83 personnel, under the predecessor maintenance contract 
with L-3. He also included facilities supported by MS AVCRAD that had no current 
staffmg on the basis that any of them might need support during the year. In 
CO Frederick's view, the contractor might later have to staff a location where no one was 
currently located as long as the total number of personnel supplied fell within alleged 83 
minimum and 109 maximum ranges. MAJ Gilbert did not complete drafting the PWS 
because he was away. He did not include the workload created by subsequent 
deployments of government personnel from North Carolina and Tennessee (below). 
While he was away, LTC Poole and MAJ James E. Brown, another PO, worked on the 
PWS, using input from the three other A VCRADs. LTC Poole arrived at the 109 figure, 
which he deemed to be the maximum number of contractor personnel to be assigned 
under TO No. 13 and the amount for which funds were available. The 109 number was 
about 3 to 4 extra CFT teams over the 83 number, which he deemed to be the minimum. 
LTC Poole included the 109 maximum to cover unknown circumstances such as · 
unscheduled maintenance, slots vacated due to deployments, or lack of full-time manning. 
(Tr. 2/13, 62-63, 139-40, 159-61, 163, 165, 3/42, 69, 86-87, 186-87, 193, 196-98~ 202, 
210-11,219-22,224-25,231-32,243,251,4/20,25,30-31,54,64,67-68,72-76,79, 
81-82, 84, 86-87, 95-96, 110; see ex. A-iO) 
8. By memorandum to LTC Poole of21 November 2008 the Tennessee ANG 
requested personnel: 
The 1-230th ACS will mobilize beginning March 2009. A 
majority of the full time support personnel for the three flight 
facilities are assigned to the 1-230th ACS and will be deploying 
with that unit. This will cause a personnel shortage that must . 
be filled in order to continue supporting the aviation assets 
6 

remaining in the state. AASF [Army Aviation Support Facility] 
# 1 in Smyrna will have 5 HH-60 Blackhawks and 4 OH-58A/C 
helicopters. AASF # 
3 in Jackson will have 8 AH-64 Apaches. 
(Ex. A-10) The memorandum listed numbers and skill types, amounting to 21 personnel 
for Smyrna, Tennessee, and 22 for Jackson, Tennessee, as follows: 
AASF# 1 Smyrna 
10 Aircraft Mechanics 
1 Prop and Rotor Mechanic who is 
NDI qualified 
1 Sheet Metal 
1 Electrician 
1 Avionics Tech 
2 Technical Inspectors 
1 Quality Assurance Tech 
1 PC Clerk 
AASF# 3 Jackson 
1 ALSE 
1 NDI 
6 Armament/Avionics 
1 Sheet Metal 
1 GSE 
2 Supply 
10 Mechanics 
1 Computer Database J'.1anager (ULLS A) 
1 ALSE Tech 
1 Safety Tech 
The memorandum stated that if a person had multiple skills, the number of personnel 
could be reduced. CO Frederick was not aware of the memorandum prior to his award of 
TO No. 13 (below) and no one from MS AVCRAD told him there was going to be a 
deployment in March 2009 (tr. 3/41,43, 84). LTC Poole did not notify anyone at Tinker 
about the deployment. He was ultimately able to reduce the number of support staff from 
that requested. LSI serviced the equipment left behind after the deployment under TO 
No. 13, Mod. No.2. (See tr. 2/40-41, 3/162, 170, 242-43, 245, 247, 4/36, 55) 
9. On 29 January 2009 CO Frederick issued a CFT FON forMS A VCRAD to 
CFT contract awardees, attaching a PWS prepared on 25 August 2008 by MS A VCRAD. 
The FON stated that the PWS would be awarded as an FFP TO and that, as noted in the 
pricing sheets, the team complement could not be altered. The pricing sheets are attached 
to the PWS and numbered sequentially as part of it. (R4, tab 1 at FON, PWS at 1, 36-37; 
see finding 15) 
10. PWS ~ 1.1 stated that work may be accomplished at the 1108th AVCRAD's 
Gulfport, Mississippi, site "or those sites designated by the A VCRAD Commander" 
(ex. A-25 at 8245). 
7 

11. PWS ,-r 2.2 stated: "All work will be performed in facilities under the control 
of the customer or other government locations as directed by the [PO]" (ex. A-25 at 
8245). Assigned aircraft included but were "not limited td' UH-60, AH-64, UH-1, 
OH-58 and CH-47 (id. ,-r 2.3). 
12. PWS ,-r 4.2.14 stated: 
Maintenance may be performed at any [AVCRAD] or 
[AASF] under the command and control of the [NOB], at any 
other military installation designated by the NOB, or at any 
FAA approved facility as designated by the A VCRAD 
commander. Maintenance performed at any locations other 
than those defined in Section 1.1, above, will be considered 
Temporary Duty locations and will be funded separately as 
over & above, travel. 
(Ex. A-25 at 8252) 
13. PWS ,-r 8.0, ESTIMATED TEAM COMPLEMENT, stated that "[t]he first 
table listed below indicates current qtys on hand, with the specific locations broken out in 
the second table" (ex. A-25 at 8259). As follows, the first table showed 38labor skill 
categories, current quantity of personnel on hand per category (83 total), and a quantity 
limit per category (1 09 total). The quantity on hand and quantity limit numbers were the 
same for all but three skills: Supply Technician TSl (20 on hand, 23 limit); Mechanic, 
ACFT I MAl (32 on hand, 52 limit); and Mechanic, ACFT III (Inspector) MA3 (13 on 
hand, 16 limit). The potential additional personnel in those three skill categories totaled 
26. The second table showed 24locations and the number of workers at each location per 
skill category (83 total), which was a matrix of every facility in PO Poole's support area. 
(Ex. A-25 at 8259-60; tr. 2/155, 3/218) 
8 

Skill Title Skill PWS Quantity Quantity 
Code Paragraph (On Hand) (Limit) 
Reference 
General Clerk I 01111 8.1 
General Clerk I~ 01112 8.2 
General Clerk III 01113 8.3 
Production Control CTl 01270 8.4 1 1 
Supply Technician TSl 01410 8.5 20 23 
Computer Operator II 14042 8.6 
Computer Operator III 14043 8.7 
Computer Operator IV 14044 8.8 
Computer Operator V 14045 8.9 
Cpmputer Programmer II 14072 8.10 
Computer Programmer III 14073 8.11 
Computer Programmer IV 14074 8.12 
Computer Systems Analyst I 14101 8.13 
Computer Systems Analyst II 14102 8.14 
Material Coordinator 21020 8.15 
Stock Clerk 21150 8.16 
Tools and Parts Attendant 21210 8.17 
Warehouse Specialist 21410 8.18 
Aerospace Structural Welder 23010 8.19 
Mechanic, ACFT I MAl 23021 8.20 32 52 
Mechanic, ACFT II 23022 8.21 
Mechanic, ACFT III (Inspector) MA3 23023 8.22 13 16 
Aircraft MECH Helper 23040 8.23 
Aircraft Painter 23050 8.24 
Aircraft Servicer 23060 8.25 
Aircraft Worker 23080 8.26 
Aircraft Mechanic I (AH Armament) 23021 8.27 
Aircraft Mechanic I (electronics 23021 8.28 10 10 
specialty) 
Aircraft Mechanic I (OH Armament) 23021 8.29 
Aircraft Mechanic II (electronics specialty) 23022 8.30 
Aircraft Mechanic III {electronics specialty) 23023 8.31 
Aircraft Mechanic I (Machinist specialty) 23021 8.32 
Aircraft Mechanic I (Sheet-Metal specialty) 23021 8.33 7 7 
Laboratory Technician 30210 8.34 
Technical Writer I 30461 8.35 
Technical Writer II "30462 8.36 
Technical Writer III 30463 8.37 
Maintenance Test Pilot Specialty 8.38 
Total 83 109 
9 

CITY/STATE FACILITY CTl MAl MEl MSl TSl MA3 TOTAL 
Gulfport, MS AVCRADLJJ 1 3 2 3 9 4 22 
Frankfort, KY AASF# 1 6 2 1 2 1 12 
Birmingham, AL AASF#2 5 1 1 3 10 
Dobbins, GA AASF#2 2 2 
Hope Hull, AL AASF# 1 1 1 2 
Morrisville, NC AASF# 1 5 2 1 2 1 11 
Salisbury, SC L4J AASF#2 3 2 1 1 1 8 
Hammond, LA AASF# 1 2 1 1 4 
Smyrna, TN AASF# 1 1 1 2 
Ft. Rucker, AL Audio Visual BR 1 1 
Mobile, AL AASF#3 1 1 
St. Croix, VI AAOF 2 2 
Brooksville, FL AASF#2 4 1 1 6 
Jacksonville, FL AASF#1 
Savannah, GA AASF#3 
Winder, GA AASF# 1 
Pineville, LA AASF#2 
Jackson,MS AASF# 1 
Meridian, MS AASF#3 
Tupelo, MS AASF#2 
San Juan, PR AASF# 1 
Eastover, SC AASF# 1 
Jackson, TN . AASF# 3 
Louisville, TN AASF#2 
1 32 10 7 20 13 83 
Thus, despite notice of the Tennessee deployments, the PWS showed only 1 MAl 
mechanic and 1 MA3 mechanic for Smyrna. It was not amended to include the additional 
10 aircraft mechanics and 11 other skills requested for that location. The PWS did not 
show any personnel or skills for Jackson and was not amended to include the 
22 personnel and 7 skills requested. (See finding 8) 
14. Below the tables the PWS stated in part: 
The actual number of employees required on site will be 
communicated by the [PO] at the time of award. Any changes 
thereafter will be emailed by the PO to the contractor's Site 
Manager as soon as exact needs are known. Labor needs may 
3 The A VCRAD is a hub maintenance facility for higher level maintenance. The AASF 
are lower level maintenance support facilities. (Tr. 1/216) 
4 This was a typographical error. The intended location was Salisbury, NC (tr. 3/231). 
10 

vary throughout the period of performance. Not all labor may 
be needed as projected and not all labor will be needed at one 
time. However, high numbers in some categories may be 
required expeditiously. As labor needs are determined by 
each AVCRAD, the contractor will be required to respond 
and provide actual on-site labor in a compressed timeframe. 
The contractor shall also be required to reduce the team 
complement as required and within the timeframe required 
upon notification from the PO .... 
(Ex. A-25 at 8260) 
15. Attachments 1 and 2 to the PWS, the FFP Pricing Proposal forMS AVCRAD 
for the base and option years, provide: · 
Estimated Man Hours: The Government considers a Full 
Time Equivalent (FTE) to consist of 1 ,920 hours annually. 
The 
Government estimates a total of up to 1 09 FTE positions 
(83 normal load and an additional 26 surge load) are needed 
to support this requirement. While Offerors are allowed to 
utilize any amount of hours they consider to be equivalent to 
an FTE in developing their proposal and are not necessarily 
expected to provide 109 positions at exactly 1,920 hours 
annually; the number of hours utilized in developing the 
proposal must be adequate to support the overall mission and 
all Offerors will be expected to staff in a manner sufficient to 
support the 
requirement regardless of the number of hours 
they utilize in their proposal. The number and types of skills 
required for this mission are not open to alternate proposal. 
One total [FFP] should be submitted for this portion of the 
overall effort to be inclusive of all labor and any 
miscellaneous costs. 
(R4, tab 1 at PWS at 36-37) 
16. In the pricing sheets the government gave "Total Estimated Man-Hours by 
CFT" per skill, which was the same as in the "Quantity (Limit)" portion of the first chart 
above and totaled 109. The contractor was to complete "Proposed Hours per FTE": 
11 

Proposed Skills 
(PWS 8.4)- Prod Ctrl x (1) FTE 
(PWS 8.5)- Supply Tech x (23) PTE's 
(PWS 8.20)- A/C Mech I x (52) FTE's 
(PWS 8.22)- A/C Mech III x (16) FTE's 
(PWS 8.28)- AIC Mech I (Elec Spcl) x (10) FTE's 
(PWS 8.33)- A/C Mech I (Sht Mtl) x (7) FTE's 
Proposed Hours per FTE 
(R4, tab 1 at FON at 36-37) The contractor was to add any other proposed direct costs, 
then to insert a total proposed FFP for MS A VCRAD for the base year (id. ). PO Poole 
did not participate in drafting the proposal pricing sheet (tr. 4/61-62). 
17. In completing the PWS and the two tables, CO Frederick did not include any 
pending deployment and any associated additional work (tr. 3/31-32, 43). 
18. LSI's operations manager, Joshua Frankel, was responsible for preparing its bid. 
Daniel Skinnell, LSI's program manager for TO No. 13, and for the predecessor contract, 
was also involved. (Tr. 1/37, 40-41, 194-96, 199, 4/128) LSI first established a baseline 
figure by estimating its competitors' bids. Using 109 personnel it arrived at a baseline bid 
amount of$7,261,509.20. It recognized that it was to price based upon 109 personnel, but 
did not believe it actually had to use a specific number of people. It could change the 
number of hours per man, so it used a lower FTE because it believed it could do the work 
with fewer people. LSI estimated the amount of work to be done based upon its prior 
A VCRAD experience; discussions with Fred Collins, its experienced site supervisor under 
its MS AVCRAD contract at the time, who also so served under TO No. 13; discussions 
with PO Poole and customer staff at sites outside Gulfport, Mississippi where LSI had not 
worked; and its business judgment. It developed its proposal based upon using 79 personnel 
and arrived at a bid amount of$5,264,629.70. (Ex. A-25 at 8279, 8285; tr. 1/42-43, 47-52, 
62,107-09,113,115,136,200,202,209-10,215,225-26,2/8-10,59-60,63, 72-73,4/129) 
Mr. Frankel noted that LSI followed an industry Lean Six Sigma program relating to work 
efficiencies and cost reduction and that, when it had implemented those processes, it had 
experienced at least a 10 percent reduction (tr. 1/53-54). LSI est~mated that it could perform 
the TO No. 13 work with only 90 percent of the "core group of 83 folks" (tr. 4/122-23, 129; 
see also tr. 11135). It deemed that a "surge load" of26 heads would involve an unexpected, 
short-lived event, such as a weather event or backfilling positions when government 
personnel were on a mission (tr. 1/67-68, 82, 41125-26). 
19. Regarding the first PWS table, in LSI's experience, TOs listed all job classes 
then placed numbers next to the ones needed. It understood that it might have to provide 
services at the sites listed in the second table that showed no personnel currently on hand 
12 

but it believed that the additional effort would be accompanied by additional funding. It 
deemed that this was an easy way the government could lay the groundwork for more 
in-scope, additional, work without having to re-compete. LSI did not price that potential 
future work in arriving at its bid. (Tr. 1/121, 123-24, 215-16, 2/67) 
20. On 2 February 2009, LSI submitted 
its bid. Its pricing sheet included 1,355 
hours per FTE in each skill category listed in the PWS for the base and option year, at a 
proposed FFP for each year of$5,264,629.70, and grand total of$10,529,259.40. 
(Ex. A-25 at 8243, 8279-81) 
21. Messrs. Frankel and Skinnell were unaware of impending deployments in 
North Carolina and Tennessee when LSI submitted its bid. There is no evidence that 
other LSI personnel knew of the planned deployments at the time of its bid, which would 
have been higher had it known, because more work and more people would be required. 
(Tr. 1/85-86, 2/12, 38-39, 41-42) 
22. By email of2 February 2009 CO Frederick inquired of Mr. Frankel about 
LSI's proposed FTE of 1,355 hours per person. The CO stated that it equated to someone 
working about 26 hours per week or having about 4 months' leave and the government 
could not consider it an FTE. He stated that it appeared that the proposal contained a 
mistake and he requested verification of the submission and the supporting rationale. He 
concluded that, even though the effort was FFP, he could not make an award without 
·determining that the price was fair and reasonable to both parties. (Ex. A-27) The CO 
and Milo Fogle, then LSI's CFT program manager responsible for helping to assemble 
TO "capture teams" to win awards (ex;. A-25 at 8243; tr. 4/120), engaged in a telephonic 
discussion in which Mr. Fogle explained LSI's bid. The CO asked him to confirm with a 
follow-up email. After the call, the CO sent Mr. Fogle an email on 2 February 2009 
stating: "Thanks much Milo. I feel better now hearing that." (Ex. A-29) Mr. Fogle's 
follow-up email to the CO of2 February <;onfirmed that "LSI developed bid strategy 
based on approx ... 1820 hours per person for core individuals and expect the surge (26 
individuals) to last 7-8weeks" (ex. A-28; tr. 41126). LSI had advised the CO that it was 
making the surge estimate based upon its experience as an incumbent contractor. The CO 
acknowledged at the hearing that he understood LSI's approach and he had no basis to 
find it unreasonable. He determined it was fair and reasonable based upon adequate 
competition. The CO did not consider LSI's bid to be a prohibited "alternate proposal." 
(Ex. A-100 at 2;-tr. 1/141-42,2/170-73, 175-76,3/27-28,32-35,4/122-24, 127, 162) 
There is no evidence that, at the time ofLSI's bid and TO award, the government 
disputed its interpretation of "surge" (see tr. 1184-85) . 
.23. On 12 February 2009 SFC Rodney P. Shiyou, then Inventory Management 
Supervisor at MS AVCRAD 
(tr. 31147-48, 168), prepared a Military Interdepartmental 
Purchase Request (MIPR) which provided $2,000,000 in funds for use under TO No. 13 
13 

for maintenance operations in the 11 08th A VCRAD support area and $500,000 in funds 
for use under the TO for support of depot maintenance operations at the 11 08th MS 
A VCRAD by personnel located in Gulfport, Mississippi. Although the same MIPR 
number was involved, the two funding sources were separate. (Supp. R4, tab 25; 
tr. 3/142-43, 152-53, 156, 158-59) 
24. In early to mid..;February 20095, the Air Force, through CO Frederick, awarded 
TO No. 13 to LSI for the base and one option period, at $5,264,629.70 each. 
Performance began 
on 1 March 2009. (Ex. A-31 at 1, 2) FFP CLIN 0004, at 
$5,264.629.70, pertained to 
"Fixed Price Labor" forMS AVCRAD and stated: "The total 
price does not equally convert to 26 payments. As a result, there will be 25 payments of 
$202,485.76 and 1 payment of$202,485.70." (Ex. A-31 at 2) CLIN 0004 called for: 
All labor/services necessary to accomplish 
modification/maintenance/repair effort on-site at operational 
government locations as defined in Appendix A, attached, 
AFI 21-102 and AFMC 21-141. Rates shall not exceed the 
pricing 
in the basic contract, Attachment 1. The team 
complement is attached in the PWS. 
(Ex. A-31 at 2) CLIN 0004AA, covering fixed price labor for maintenance operations in 
the 1108th AVCRAD support area, was funded in the amount of$2,000,000 and 
CLIN 0004AB, covering fixed price labor for support depot maintenance at the 11 08th 
A VCRAD by personnel located in Gulfport, Mississippi, was funded in the amount of 
$500,000, both in accordance with the above MIPR (ex. A-31 at 3, 9-10).6 
25. FFP CLIN 0005, in an amount to be negotiated, covered performance of: 
[A ]ny other over and above work requirements not listed in 
the work specifications but required in support of the items 
requiring repair/overhaul/remanufacture as may be called for 
by theACO. 
5 The TO is undated (ex. A-31 at 1). The complaint and answer allege award on 
1 March and 19 February 2009, respectively ('lf'lf 26), and appellant's brief, on 
4 February 2009 (app. br. at 30, 'If 84). CO Frederick believed it issued in about 
mid-February 2009 (tr. 21177). Events surrounding the issuance of Mod. No.2 
suggest that the TO had been awarded by mid-February (see, e.g., finding 29). 
6 The accounting line for the $2,000,000 contained an apparent typographical or other 
immaterial error, corrected in Mod. No.3 (ex. A-74 at 2). 
14 

(Ex. A-31 at 4) The CLIN concluded: 
(!d.) 
In the event of a surge or within scope urgent requirement, as 
defined by the [PO] and approved by the ACO or PCO, 
overtime may be required. Overtime will not be approved for 
work defined in the PWS but for which the contractor is short 
manned. Any overtime required as a result of manning 
shortages, either temporary or permanent, shall be the 
responsibility ofthe contractor. 
26. Cost reimbursement CLIN 0006 and subCLINs, with the total estimated cost 
to be negotiated, covered certain contractor acquired property and contractor acquired 
services (ex. A-31 at 5-6). 
27. The TO contained DoD FAR Supplement 252.232-7007, LIMITATION OF 
GOVERNMENT'S OBLIGATION (MAY 2006), providing that CLIN 0004 was incrementally 
funded and $2,500,000 of the total price was presently available for payment and allotted 
to the contract. It set forth an allotment schedule, which stated that the parties 
"contemplate" funding of $2,500,000 upon contract execution and, thereafter, 
$921,543.23 on each of 1 June and 1 September 2009 and $921,543.24 on 1 December 
2009. The clause provided that 
the government could, at any time prior to termination, 
allot additional funds for CLIN 0004. (Ex. A-31 at 12-13, ~~(a), (t), G)) 
28. LSI retained L-3 's employees who had been working on the predecessor 
contract on maintenance (tr. 4114; see, e.g., ex. G-10). PO Poole and/or MAJ Gilbert 
normally communicated project requirements daily to LSI's site superintendent Collins 
through emails or personal visits. He normally then communicated with Mr. Skinnell 
and/or others at LSI, who evaluated the work to be done. Most of the time LSI provided 
the requested skill sets. However, based upon its evaluation, after prior discussion with 
MS A VCRAD, it sometimes provided a different number of personnel or skill set. The 
number did not always match that estimated in PWS Attachment 1, the pricing sheet. For 
example, LSI provided far fewer "A/C Mech III" positions than the estimated 16 
(ex. G-12; tr. 2/195-97; finding 16, see also finding 13 (PWS table one quantity limit of 
16)). PO Poole expressed to Mr. Fogle at one point that LSI was not manning the job in 
the manner he had expected. LSI's position was that the TO was based upon 
accomplishing the work, not the number of individuals in place. LSI negotiated with the 
government concerning requirements, available resources, and appropriate increases or 
decreases. Staffing levels fluctuated somewhat but remained fairly steady. There were 
personnel transfers when needed. (Tr. 1/213, 227, 2/21, 69-71, 85, 98-99,4/87-88, 
134-35) MAJ Gilbert reported to the CO on 2 December 2009: 
15 

I usually just walk over to our LSI office and tell them I need 
this. I let them work it out with corporate to fill the slot. The 
local LSI supervisor here has worked with us for over 
10 years and works hard to make sure we are supported. 
(Ex. A-122) PO Poole praised the performance of Mr. Collins, who now works for the 
follow-on contractor to LSI under a T &M contract. MAJ Gilbert found him to be 
"outstanding" (tr. 4/107). He was a good manager of personnel and requirements. 
(Tr. 4115-16, 18, 29) 
29. By email of27 February 2009 to CO Frederick, SFC Shiyou advised that he 
needed to add 20 personnel in Tennessee and 5 in North Carolina to TO No. 13, stating 
"[t]his requirement wa,s outside the scope of the original contract. What do I need to do 
in order to add them to [the TO]." (Ex. A-43) The CO responded: 
To be honest, if it's something outside the scope of what we 
competed, I can't let you add it. In the past, it was no real big 
deal; but times have changed. 
Now if we can argue what you're talking about is actually 
within scope workwise, we just need more bodies than we 
planned, I might be able to get there on that. 
(!d.) SFC Shiyou forwarded the CO's response to LSI's Mr. Collins, stating, "[h]e's right 
in the sense that all we are doing is adding more bodies to the contract. The scope of 
work being performed is exactly the same." He asked for Mr. Collins' view. (Ex. A-43) 
Mr. Collins forwarded the emails on 27 February to Mr. Fogle, who replied to Mr. Collins 
and others at LSI 
that MS A VCRAD needed to clarifY that this was add-on work within 
the TO's scope. He expressed that the work was new work that only MS AVCRAD could 
do and that it was clearly added work not called for in the original bid. (Ex. A-44 at 1) 
Mr. Fogle sought to have the work-added to TO No. 13 as "over and above." Otherwise, 
Tinker AFB had advised that it would have to be under a new TO that was competed. 
(Tr. 4/131-33) The parties disagree about who originated the concept that the work 
would be additional to that originally covered by TO No. 13.7 
30. On 3 March 2009, in response to a 2 March request by SFC Shiyou, 
LTC Robert L. Whitaker ofthe Tennessee ANG advised that a total of20 positions would 
7 Their disagreement was expressed in hearsay testimony upon which we do not rely in 
this circumstance (e.g., tr. 3/163-64, 177-78 (LSI was source (Shiyou)), 1/232, 
235, 4/130, 133, 143-44, 146 (government was source (Skinnell, Fogle)). 
16 

be required and gave the individual numbers at Smyrna and at Jackson, Tennessee, for 
various skills (exs. A-45, -46). 
31. By 4 March 2009 email to PO Poole, LTC Todd Hunt, Director of Aviation & 
Safety for the North Carolina National Guard, noted that its UH60 facility (AASF # 2) 
had over 30 of 45 personnel affected by a mobilization. The PWS had shown 3 MAl, 
2 MEl, 1 MSl, 1 TSl, and 1 MA3 at Salisbury (finding 13). LTC Hunt sought 
8 additional contract personnel in Salisbury, North Carolina, for 12-18 months, stating 
that the contract team would augment an already short staff. He acknowledged that 
funding was an issue but described the requirement as a critical need. The specific skill 
sets requested are not clear. (Ex. A-52; tr. 3/172) PO Poole inquired of SFC Shiyou 
about a funding source and "how close we are to the max CFT hire according to the 
contract" (ex. A-53). PO Poole did not want to exceed what he deemed to. be the TO's 
109 maximum (tr. 3/244). 
32. Citing an LSI Costpoint-Timesheet History, the government alleges in briefing 
that, as of 5 March 2009, throughout TO No. 13's performance period, without alleging a 
contract change, LSI provided personnel at Eastover, South Carolina, even though the 
PWS, while listing the location, did not show quantities on hand there (supp. R4, tab 46B; 
finding 13; gov't hr. at 51). It appears that the government did not raise this matter at the 
hearing. In any event, it di<;l not direct us to any testimony concerning it, which might 
have elucidated the circumstances; there is no evidence that any unilateral contract 
modific.ation such as Mod. No.2 was involved; there is a lack of supporting evidence that 
it is relevant; and we accord it little weight. 
33. At some point in February to early March 2009, CO Jeremy Messer of Tinker 
AFB took over administration of TO No. 13. CO Frederick resumed administering it in 
June 2009. He was not involved in Mod. No.2's issuance. (Tr. 21180-81, 3/108~09) 
TO Modifications and REA 
34. On 11 March 2009 CO Messer issued unilateral Mod. No. 1 to TO No. 13. Its 
stated purpose was to establish and fund CLINs 0005AA and 0005AB, for"Over and 
Above" work and per diem/travel in support of CLINs 0004AA and 0004AB, with the 
obligated amount increased from $0 to $100,000 and $150,000, respectively, and to 
establish and fund CLIN 0006AC, for contractor acquired services/medical services in 
support of CLINs 0004AA and 0004AB, with the obligated amount increased from $0 to 
$36,000. Like each subsequent modification, Mod. No. 1 was described as "Routine" and 
stated that all other terms and conditions remained unchanged. The funding 
sources and 
associated MIPR, identified as Amendment No. 1, prepared on 6 March 2009 by 
SFC Shiyou, were the same as for TO No. 13. SFC Shiyou verified that "the funds were 
provided from the exact same accounts."' (Supp. R4, tab 29; ex. A-57 at 1-4; tr. 3/159) 
17 

The newly funded CLINs were cost-reimbursable and the modification increased TO 
No. 13's value by the stated sums (tr. 2/110-12). 
35. SFC Shiyou prepared a MIPR, issued on 20 March 2009, identified as 
Amendment No. "ORG" (supp. R4, tab 30), which we infer means "original." It stated 
that the funds were for TO No. 13 and would be used to backfill positions due to the 
deployment of the l/230th ACS in Tennessee and the Ill 30th AV BN in North Carolina. 
The funds were for ten positions in Smyrna, Tennessee, ten in Jackson, Tennessee, and 
eight in Salisbury, North Carolina. The MIPR noted the establishment of a "new Labor 
[sub]CLIN same as [sub]CLIN 0004AA," 
in the estimated total price of$2,040,000, as 
well as "new" subCL~s "same as" subCLINs 0005AC and 0006AD for "over and 
above" and per diem/travel and contractor acquired services/medical services in support 
ofthe "new Labor [sub]CLIN," in the amounts of$11,200 and $65,000, respectively, for 
a grand total MIPR amount of$2,116,200. The "brand new" MIPR (tr. 31160) was 
different than the initial MIPR for TO No. 13 and had a different funding source. The 
new MIPR used Global War on Terrorism dollars because they could be used to support 
deploying or deployed units. (Supp. R4, tabs 30, 31; tr. 3/160-61, 167, 179-80) 
SFC Shiyou prepared the new MIPR in a mariner: 
[J]ust to make sure that this funding was only to pay for these 
positions, because of the deployment...the only people that 
could use this funding [were] deployed units. 
(Tr. 3/161) At the time he drafted the MIPR, SFC Shiyou thought that TO No. 13 was on 
a T &M basis, like its predecessors. He arrived at the $2,040,000 funding amount by 
using a man-hour formula he typically used for T&M contracts. (Tr. 3/166, 180, 182-83) 
36. On 5 
April2009 CO Messer issued unilateral Mod. No.2 to TO No. 13. Its 
stated purpose was to establish and fund CLINs 0004AC, 0005AC, and 0006AD. It 
established FFP CLIN 0004AC in the amount of $2,040,000 for labor for maintenance 
operations 
to backfill positions due to the deployment of the l/230th ACS in Tennessee 
and the l/130th AV BN in North Carolina, stating it would fund ten positions in Smyrna 
and ten in Jackson, Tennessee, 
and eight in Salisbury, North Carolina. The performance 
period was I March 2009 through 28 February 2010. The modification did not name any 
particular skills involved. It noted that CLIN 0004AC funding went from $0 to 
$2,040,000 and stated that ''the total dollar amount for CLIN 0004 is hereby increased" 
from $2,500,000, by $2,040,000, to $4,540,000. It increased "the total dollar amount" of 
CLIN 0005 from $250,000, by $65,000, to $315,000, and increased "the total dollar 
amount" ofCLIN 0006 from $36,000 by $11,200, to $47,200, for a total modification 
amount of$2,116,200. The 
accounting and appropriations data in Mod. No.2 reflected 
funding as obligated from $0 to $2,116,200. The funding source was as stated in the new 
MIPR .. (Ex. A-64 at 1-2, 4-5) CO Messer testified that he established CLIN 0004AC to 
18 

reflect the fact that the MIPR associated with Mod. No. 2 had a separate accounting line 
and needed a new CLIN and ACRN (tr. 3/121). He maintained that he had included 
language from the new MIPR by mistake in his description of Mod. No. 2 and that he had 
intended only incremental funding, but he acknowledged that it was his office's normal 
practice to include the MIPR description in modifications. (Tr. 3/122-23, 127-29) 
37. CO Frederick acknowledged that the positions referred to in Mod. No.2 were 
not part of the TO's staffing at the time of award (tr. 3/55).· 
38. When LSI received funded Mod. No.2, which it considered to be additional 
work changing TO No. 13, it still expected to receive the remaining originally scheduled 
incremental funding under the TO (tr. 1/86, 91-92, 159-60, 180, 234-35, 2/90, 93-94, 96). 
_In the next week or two after LSI's receipt of Mod. No.2, Mr. Frankel inquired of 
CO Frederick about the next installment ofTO No. 13's price and learned that the CO felt 
that the Mod. No.2 payment constituted the remaining amount due (tr. 1/86). 
39. Mr. Skinnell testified credibly that Mod. No.2 was "a significant amount of 
new work" for LSI (tr. 2/13). It created a separate charge code to track the work and 
capture its costs under the new CLIN 0004AC. LSI had to support additional aircraft, 
hire new people, and transfer people from other sites. However, it ultimately developed 
that the "28 full heads" (tr. 1/98) contemplated by the modification were not necessary; 
LSI was able to accomplish the mission with fewer personnel. (Tr. 1/79, 97-98, 156-57, 
233-34, 2/13-14, 16-17, 121; see R4, tab 46A at 1, tab 46B at 12; tr. 4/88) 
40. On 14 May 2009, Amendment No.2 to the MIPR issued for TO No. 13 was 
prepared to increase funds for ACRN AA by $800,000 for maintenance operations in the 
1108th AVCRAD support area and for ACRN ABby $735,000 to support depot 
maintenance operations at MS A VCRAD by personnel located in Gulfport. The funding 
sources were the same as for the original 
TO. (Supp. R4, tab 32) On 26 May 2009, 
referring to Amendment No.2, CO Messer executed an "ACCEPTANCE OF MIPR" 
form stating that funds in the amount of$810,370.30 were not required and could be 
withdrawn. (Supp. R4, tab 33; tr. 3/144) 
41. Effective 15 June 2009 CO Messer issued unilateral Mod. No. 3, which 
increased "the total· amount obligated for CLIN 0004" (specified in the referenced 
Schedule as CLIN 0004AA) from $4,540,000, by $724,629.70, to $5,264,629.70 and 
increased the total amount obligated for TO No. 13 from $4,902,200.00, by $724,629.70, 
to $5,626,829.70. The accounting and appropriations data showed funds obligated from 
$2,000,000 to $2,724,629.70. The funding source was as described in 
MIPR Amendment 
No.2, the same as for the original TO. (Ex. A-74) 
19 

42. On 26 June 2009 LSI submitted a $1,868,043.20 request for equitable 
adjustment (REA) to CO Messer to cover its alleged increased costs to provide additional 
staff in accordance with Mod. No.2 for 28 positions expected to remain filled for 12 to 
16 months, an alleged change to FFP TO No. 13. LSI alleged, inter alia, that the added 
28 people for 12 to 16 months was a change to the 83-person "Normal Load" identified in 
the PWS and was not properly considered a surge. It also noted that Mod. No.2's 
$2,116,200 in funding varied from the incremental funding established under TO No. 13 
and concluded that the government could not expect a contractor to absorb $1.9 million in 
additional costs on a TO 
currently valued at only$5,264,630. (R4, tab 2) On 24 July 
2009 CO Frederick denied the REA on the basis that the government was not bound by 
LSI's bid strategy, which had estimated a surge at 7 to 8 weeks, and because the 
government had not exceeded TO No. 13's maximum of 109 FTEs (R4, tab 3). 
43. On 19 August 2009 LSI asked for reconsideration (ex. A-93 at 2). 
CO Frederick evaluated the situation in subsequent August and September 2009 emails 
among government personnel. He noted that he had begun to "see things differently" 
(ex. A-91 at 2). He expressed that Mod. No.2 had added 28 personnel to TO No. 13, 
which was within its 109 maximum; the fact that new sites were involved was 
insignificant; but the government potentially owed LSI money if it had actually provided 
more personnel than anticipated in order to staff new skill sets that had not been part of 
the TO. On the other hand, he also considered that any amount owed would be offset by 
LSI's "shorting us on the minimum skills we asked for" (ex. A-89 at 1), which he deemed 
to be the skill categories and 83 associated personnel that formed the PWS' Estimated 
Team Complement. He stated that, at the time of Mod. No.2, LSI had provided "only 
74" personnel and the addition of28 would not exceed TO No. 13's 109 maximum 
(ex. A-100 at 1). The CO opined that the term "surge," which he had inserted into the 
PWS pricing sheet after talking toMS AVCRAD, was a sudden sharp increase in volume 
and did not equate to "short term" (ex. A-92 at 1, ex. A-100 at 1-2). He also inquired · 
whether Mod. No.2's funding was intended to be part of the original TO's incremental 
funding, or only to fund the new positions named in the Mod.' s MIPR, and concluded it 
was the former (exs. A-89 to -92, A-95 to -97, A-99 to -100). 
44. However, in response to a 20 August 2009 email from COL George Berry, 
· MS AVCRAD's commander (tr. 3/194), who opined that the government had already 
paid for a full team complement, CO Frederick stated: 
[W]e asked LSI to give us a price for 6 different skill sets that 
totaled up to a max of 109.... When we asked them to provide 
new skills they hadn't proposed to support, we changed the 
game. This has nothing to do with whether they provided all 
109 or only 5 slots in total. 
20 

I do need to work with them to figure out what we owe them 
for asking for new skills as well as work out what they owe us 
for -shorting us on the minimum skills we asked for. 
(Ex. A-90 at 2) In a subsequent email that day to government personnel, the CO 
·addressed whether the government had been "shorted" but concluded: 
(!d. at 1) 
Do keep in mind though, if they meet the requirements and 
we continue to ask for more, they are legally entitled to more 
money. So we either need to stop using those extra skills or 
plan to be able to fund them. 
45. PO Poole advised CO Frederick in a 27 August 2009 email: 
(Ex. A-98) 
In the past when we were adding personnel to our Contracts 
(which were T &M), each time we added people we had to 
plus up the $$. So when we added the people the last time we 
· sent $$ up to support the requirement because that is what we 
had done in the past. [CO Messer] sent the$$ back because 
this is a [FFP] Contract and the bid was· for 83 personnel up to 
11 0 personnel and as long as we did not exceed our maximum 
numbers there was no requirement to send more money. 
46. By 1 September 2009 email to LSI CO Frederick disputed that Mod. No.2 
was a contract change, except he conceded that "Comp Oper and Helpers" added in the 
modification were not skills 
LSI was to have 
priced in response to the FON (R4, tab 10 at 
2). By 28 September 2009 email to PO Poole, CO Frederick advised: 
I would recommend that your folks immediately 
cease using 
the skills ( Comp Oper and Helpers added to Smyrna, Jackson, 
TN and Salisbury, NC) not originally asked for as LSI is 
100% legit in asking for more money for those folks. I still 
argue they owe us more than those folks cost for the skills 
they shorted us for the first 14 weeks or so .... 
21 

(Ex. A-108) To the CO's knowledge, the government did not cease using the named skill 
sets (tr. 3/68). 
47. Bilateral Mod. No.4, signed by CO Frederick on 17 February 2010, extended 
TO No. 13 by three months, to 31 May 2010; increased the total amount obligated for 
CLIN 0004 by $1,937,000, from $5,264,629.70 to $7,201,629.70; and stated that, as a 
result, the total amount obligated for TO No. 13 was increased from $5,626,829.70 to 
$7,563,829.70. The modification was divided into two parts, CLIN 0004AD, in the 
amount of$1,491,000, with a designated funding source, and CLIN 0004AE, in the 
amount of $446,000, with a different source. The funding sources were different than for 
the initial TO No. 13 and for Mod. No.2. (Ex. A-132) CLIN 0004AD represented the 
original contract effort and CLIN 0004AE, 
the Mod. No. 2 work. LSI was paid for all of 
its work during the extension period. (Tr. 2/56, 117-18, 125) 
48. LSI's performance of the Mod. No.2 work lasted for the duration of TO 
No. 13. Its assigned personnel never exceeded 109. (Supp. R4, tab 46A at 21-22, 
tab 46B at 84-86; ex. G-12; see tr. 2/52-53, 3/58-59) MAJ Gilbert found the maintenance 
workers and maintenance provided by LSI to be very good (tr. 4/109-1 0). 
LSI's Claim and CO's Decision 
49. On 3 May 2010, by regular mail and email, LSI submitted a certified CDA 
claim to CO Frederick in the 
amount of$1,483,631.06, alleging that Mod. No.2 added 
28 positions and labor requirements that were outside TO No. 13's scope and constituted 
a compensable change (R4, tab 20). We infer that the CO received the emailed claim on 
3 May 2010. LSI did not claim the $2,040,000 amount of Mod. No.2 but only its costs 
incurred under it plus 3.5% profit (id.; tr. 2/119). LSI disputed that the 28 positions were 
within the "surge load" contemplated by the PWS. It alleged that a "surge" position 
would be temporary, as it had explained in connection with its bid proposal, without 
government objection, such that the government was bound by LSI's interpretation. LSI 
also stated that the 12 to 16 months' work period named in Mod. No.2 would extend 
beyond TO No. 13's base y~ar into the first option year; thereby reflecting full-time 
positions that clearly were not temporary. LSI asserted that the PWS had identified only 
six labor categories for which offerors were to propose hours: Production Control; 
Supply Technician; Mechanic, ACFT I; Mechanic, ACFT III; Aircraft Mechanic I 
(electronics specialty); and Aircraft Mechanic I (Sheet-Metal specialty) (see finding 16). 
LSI claimed that Mod. No.2 had added positions in four labor categories, of which only 
Mechanic I was listed in the PWS as one for which offerors were to submit proposed 
hours. An additional Mod. No.2 position, Computer Operator III, was listed in the PWS 
but offerors had not been required to submit proposed hours for it. Two other Mod. No. 2 
positions, Inspector I and Helper, were not in the PWS. The source of the skills 
mentioned by LSI is not clear, because Mod. No. 2 did not name any (finding 36). LSI 
22 

also noted that Mod. No.2 had added positions in Jackson, Tennessee, and claimed that 
TO No. 13 had not designated it as a work location. Finally, LSI contended that 
Mod. No.2's explicit funding for the 28 additional positions contradicted the 
government's position that they were merely a surge load and no compensable change had 
occurred. (R4, tab 20) 
50. On 26 May 2010 CO Frederick issued his final decision denying LSI's claim. 
He alleged that, under TO No. 13, the PWS' Estimated Team Complement made it clear 
that the government was to determine staffing levels needed, when they were needed, and 
where, in accordance with the locations and skill sets described in the PWS. Contractors 
were not allowed to revise the 
team complement. Under the pricing sheets attached to the 
FON, offerors were expected to staff to support the government's requirement regardless 
of the number of hours used in their proposals and the number and types of skills required 
were not open to alternate proposal. The 
CO also stated that, although the TO had a 
funding schedule, under the TO's Limitation of Government's Obligation clause (finding 
27), the government could allot funds as provided by the customer. Mod. No.2 was to 
provide incremental funding and to communicate the need for positions within the scope 
of and at locations contemplated in the PWS. He stated that Mod. No. 2 did not specify 
types or quantities of skills needed, which,_ under the PWS, were to be communicated by 
the PO. He alleged that A VCRAD had provided funding as available, with Mod. No. 3 
completing the TO's funding, and the close proximity of the funding actions belied LSI's 
presumption that Mod. No. 2 was to fund out of scope work. The CO disputed LSI's 
position on "surge" and stated that the government had not exceed the TO's maximum of 
109 FTEs. (R4, tab 21) LSI's timely appeal was filed with the Board on 11 June 2010. 
51. The CO testified that he felt forced to deny LSI's claim because it did not 
supply requested manning levels, payroll history, time sheets or other material in support. 
LSI had 
sent him a summary of actual costs incurred under CLIN 0004AC on 11 May 
2010, stating that it could provide whatever level of additional detail he required, but he 
found the submission inadequate. (Supp. R4, tab 20; tr. 3/76-77, 81) 
52. The government concedes that, at some point after Mod. No.2 issued, 
MS A VCRAD directed LSI to provide two positions-one Helper and one Computer 
Operator-that were listed in the PWS but not shown in either the Quantity (On Hand) or 
Quantity (Limit) columns, not listed in the PWS' proposal pricing worksheet, and for 
which LSI did not provide a bid price. The government agrees that these skill sets were 
outside the scope of requirements contemplated by the parties or the TO. However, the 
government continues to contend that, while LSI was entitled to reimbursement regarding 
those two positions, it owes the government a greater 
amount for not providing all of the 
positions upon which it bid. Thus, while there were TO changes, there was no resulting 
damage to LSI. (See ex. A-97 at 2, ex. A-1 01 at 2, ex. A-1 08; gov't hr. at 55-58) Apart 
from the fact that LSI disagrees that it was required to provide a minimum number of 
23 

personnel under the TO, the government has not assessed any liquidated damages, 
asserted a claim against LSI, or directed us to evidence of any specific manning or skill 
request by the government under the TO with which LSI allegedly did not comply 
(including after any negotiations on the matter). 
DISCUSSION 
Preliminary Matter-Appellant's Motion to Strike Government's 
Proffered Expert's Report and Testimony 
Appellant renewed its pre-hearing motion to strike the report and testimony of 
Defense Contract Audit Agency (DCAA) technical specialist David Katz, offered by the 
government as an expert in government contracts accounting. The Board ultimately 
determined to evaluate his report (ex. G-17) and testimony at the hearing and reserved 
ruling pending panel review. (Tr. 5/10, 13-14, 32, 44-48, 51-54; see Bd. orders dated 
11 and 18 July 2011) 
We conclude that Mr. Katz' report and testimony do not help to resolve the 
entitlement issues before us. See FED. R. EVID. 701, 702. His premise that appellant 
proposed to provide 109 personnel, or a maximum of 109, and his implicit assumption 
that it was required to do so under TO No. 13, which appellant strongly disputes, are in 
effectlegal conclusions that are not within an expert's province. Lockheed Corp., 
ASBCA No. 36420 et al., 91-2 BCA ~ 23,903. Further, we do not agree with the 
government that Mr. Katz' report and testimony show that appellant suffered no damage 
from Mod. 
No. 2. While appellant must show some related damage in the entitlement 
phase of proceedings, Cosmo Construction Co. v. United States, 451.F .2d 602, 605-06 
· (Ct. Cl. 1971 ), it is clear that, under its theory of entitlement, it was damaged. 
Accordingly, we grant appellant's motion to strike Mr. Katz' report and testimony. 
The Parties' Positions on Entitlement 
Appellant describes the two bases of its claim as: (1) FFP TO No. 13 covered 
aircraft and depot maintenance forMS AVCRAD and was based upon the Air Force's 
PWS requirements and LSI's proposal to perform the maintenance. The TO did not 
require LSI to provide 83 or 109 personnel but rather to perform the maintenance 
expressed in the PWS; and (2) the Air Force changed the TO's requirements through 
Mod. No. 2, which was issued in response to the deployment of ANG personnel from 
North Carolina and Tennessee, and which added maintenance load not expressed in the 
PWS. Among other things, appellant alleges that Mod. No.2 added labor categories and 
a new location that were not contained in the PWS' Estimated Team Complement and the 
modification's performance period, of at least 12 months, was not a temporary event that 
24 

could be characterized as a "surge." It greatly exceeded appellant's proposed seven to 
eight weeks surge load factor, which the government had understood at the time of its 
proposal. Appellant asserts that Mod. No.2 was not an incremental funding 
modification. It provided funding for the additional maintenance load that was outside 
the TO's funding schedule and from a different source. Appellant further asserts that 
both parties treated Mod. No; 2 as a chang~ contemporaneously, supporting the 
reasonable interpretation that it was one. 8 
The government alleges that Mod. No. 2 was not a compensable change. TO 
No. 13 required appellant to provide a maximum of 109 skill sets and positions and did 
not allow it to propose its own staffing levels. The PWS provided that the number and 
types of skills required were not open to alternate proposal and that only the PO could 
decide the 
number of employees required on site. The government contends that 
appellant is attempting to take advantage of the CO's alleged unnecessary addition of 
language to Mod. No.2 that did not change its substantive purpose, which was to provide 
incremental funding to TO No. 13. The government alleges that, unlike Mod. Nos. 3 and 
4, Mod. No. 2 did not state that it was increasing the amount obligated for TO No. 13 and 
thus it was not intended to increase the TO's value. 
The government also asserts that a focus upon the term "surge" is misplaced, 
because it allegedly is mentioned only in the FFP pricing proposal worksheet. The 
government states that the PWS identified the locations named in Mod. No. 2, regardless 
of the fact that the Jackson, Tennessee, location did not show any personnel on hand. It 
alleges that appellant provided personnel in Eastover, South Carolina, even though the 
PWS did not include any quantities on hand at that location, and 
appellant did not allege a 
contract change when it did so. The government urges that this alleged pre-dispute 
conduct should inform the Board's interpretation of TO No. 13. However, we have 
accorded the alleged Eastover issue little weight for lack of supporting evidence that it is 
relevant (finding 32). 
The government further alleges that the only change to TO No. 13 occurred when 
MS A VCRAD directed appellant to provide the one Helper and one Computer Operator 
positions not contemplated in the TO and not originally priced by appellant, but that 
appellant did not suffer any injury thereby. The government concludes that, even if 
8 In footnotes appellant also claims that the government's specificatjons were defective 
because they did not alert appellant to known deployments (app. br. at 65 n.5; app. 
reply br. at 11 n.6). In view of our decision, we need not reach this issue. 
25 

appellant were damaged, its injury is only its costs for the Helper and Computer Operator -
skill sets. 9 
Mod. No. 2 was a Compensable Contract Change 
CLIN 0004 covers FFP labor at government 
locations pursuant to individual TOs 
(finding 5). Under the contract's Place of Performance clause TOs are to specifY the 
locations where services are to be performed (finding 6). The contract's PTC clause 
provides that the PTC "is the estimated number and skill classification of personnel 
expected to be required to accomplish a task" (id.). Under the contract's Fixed Price Labor 
clause, for an FFP TO, the Procuring CO is to issue a notice to the contractor for the work 
"and the details ofthe work to be performed" (id.). The contractor is to provide its FFP, 
. including proposed hours and 
labor rate. Payment is to be at the fixed-price listed for each 
item. (!d.) Under the contract's Ordering Provisions clause all TOs are to contain services 
to be furnished "by [CLIN]", an Appendix A that is the PWS, funding data, the sites where 
services are to be performed and PTCs by numbers and skill classification (id.). 
Both parties contend that the pricing sheets are not part of the TO (tr. 1/96, 99, 
2/99-100, 176; app. br. at 56; gov't hr. at 44), although both base arguments upon them 
(e.g., app. reply br. at 18; gov't reply hr. at 4). The pricing sheets are attached to the PWS 
and numbered sequentially as part of it (findings 9, 15). Appellant's proposed base and 
option year price of$5,264,629.70, each, contained in its completed pricing sheets, was 
the TO No. 13 award amount (findings 20, 24). We conclude that the pricing sheets, 
including as completed by appellant, are part of the TO. 
The FFP pricing sheets called for the contractor to price 6 skills at specified 
numbers ofFTEs, totaling 109. They stated that the government considered an FTE to 
consist of 1 ,920 hours annually and that it estimated a total of up to 109 FTE positions 
(83 normal load and an additional26 surge load10) were needed. -Offerors could use any 
amount of hours they considered to be equivalent to an FTE in developing their proposal 
and did not have to provide 109 positions at exactly 1 ,920 hours annually but the number 
of hours used had to be adequate to support the overall mission. The number and types of 
9 In a footnote the government alleges that lack of notice prior to the REA prejudiced the 
government by depriving it of a potential termination for convenience (gov't br. at 
2 n.1 ). It did not pursue this argument and we do not reach it. 
10 The parties differ about the meaning of"surge." They also contend, erroneously, that 
the term is used only in the pricing sheet. However CLIN 0005, concerning over 
and above work, addresses a "surge" or within scope urgent requirement that 
might call for overtime payment, unless it were for work already defined in the 
PWS for which the contractor was short-manned. (Finding 25) In view of our 
resolution of this appeal, we do not address the surge issue further. 
26 

skills required for the mission were not open to alternate proposal. (Finding 15) Contrary 
to the government's contention, nothing 
in the pricing sheets, or elsewhere in the contract 
or TO, specifies a .1 09 person maximum and 83 person minimum to be supplied by the 
contractor. Indeed, the IDIQ contract includes minimum and maximum amounts of work 
to be ordered and performed in terms of dollar amounts, not personnel (finding 4). If the 
government intended contractors to supply a minimum and maximum number of 
personnel, it should have drafted the PWS to make that requirement clear. 
Moreover, under the contract's Criteria for Issuing [TOs]/Fair Opportunity clause, 
the government had the right to reject any TO proposal evaluated to be unrealistic in 
terms of contract requirements or cost (finding 6). However, after communicating with 
appellant about its proposed FTE and its interpretation of the term "surge," the CO 
accepted its bid as reflected in its pricing sheets and 
did not deem it to be a prohibited 
"alternate proposal" (finding 22). 
Section 1.1 of the PWS provides that work may be accomplished at the 11 08th 
AVCRAD's Gulfport, Mississippi, site or sites designated by the AVCRAD Commander. 
Under section 2.2 all work is to be performed in facilities under the customer's control or 
at other government locations as the PO directs. Section 4.2.14 provides that 
maintenance performed at any locations other than those defined in section 1.1 are to be 
considered Temporary Duty locations and to be funded separately as over & above, travel. 
(Findings 10-12) 
TO No. 13's workload is based upon the PTC set forth in the PWS, which was 
based upon the pending workload under the predecessor contract. It is defined in terms of 
the quantities on hand and quantity limits at various named locations where specific 
numbers of personnel are listed under specific skill categories. The total number of 
personnel on hand was 83, spread over 13 named locations. The total potential number of 
personnel is 26 more than the number currently on hand. The 26 includes 3 extra supply 
technicians TS 1, 20 extra mechanics ACFT I MAl, and 3 extra mechanics ACFT III 
(Inspector) MA3. These are skills already variously in place at the named locations 
where skills are listed. (Findings 7, 13) The PTC also lists some locations and skills for 
which there was no quantity on hand or quantity limit. They were included because the 
government might have a need for work at those locations and/or for those skills over the 
course of the TO.· (Finding 7) The PWS makes it clear that labor needs at sites could 
vary. It states that the PO will communicate the actual number of employees required on 
site at the time of award and will notify the contractor of changes thereafter as soon as 
exact needs are known. Not all projected labor might be needed, or needed at once, but 
high numbers in some categories could be required expeditiously. Also, the contractor is 
to reduce th~ team complement as required. (Finding 14) However, the PWS does not 
mention changing listed 
sites or skill categories and, under the FFP TO, it does not allow 
27 

the government to change and mix the number of specified personnel and specified 
locations at will without potential financial consequence. 
Appellant's interpretation at the time of bid that the PWS listed sites for which no 
personnel or skills were named in order to allow the government to add in scope work 
without the need tore-compete is reasonable (finding 19). In fact, the contract anticipates 
the possibility of such changes. The TO Acceptance clause provides that the government 
has the unilateral right to adjust the TO's provisions within the contract's scope including 
"the estimated quantities, requirements ... within the scope of the [TO's] Appendices ... , site 
locations, and other support items not specified herein, at the [schedule rates], of any 
[TO]" (finding 6). Moreover, 
the FAR Changes clause incorporated into the contract 
provides that, by written order~ the CO may make changes, within the contract's general 
scope, in the description of services and/or place of performance. If such a change causes 
an increase in the cost of or time required for performance of any part of the contract 
work, the CO shall make an equitable adjustment in the 
contract price. (!d.) Thus, the 
government can adjust quantities and locations listed in the FFP TO but the contract 
contemplates payment for additional quantities, requirements and site locations. 
The Limitation of Government's Obligation clause in TO No. 13 provides that 
CLIN · 0004 is incrementally funded and sets forth an allotment schedule, which states that 
the parties contemplate funding of $2,500,000 upon contract execution and, thereafter, 
$921,543.23 on each of 1 June and 1 September 2009 and $921,543.24 on 1 December 
2009. However, the government can, at any time prior to termination, allot "additional" 
funds for CLIN 0004. (Finding 27) 
Mod. No.2 was not merely for incremental funding as the government alleges. 
The contract's Ordering Provisions clause provides that TOs are to contain services to be 
furnished by CLIN (finding 6). The stated purpose of Mod. No.2, which was funded by 
a "brand new" MIPR and new funding source, in an amount that was based upon a 
man-hour formula SFC Shiyou typically used for T &M contracts (finding 3 5), was to 
establish and fund subCLINs 0004AC, 0005AC, and 0006AD. The modification 
established FFP CLIN 0004AC in the amount of $2,040,000 for labor to backfill positions 
due to 
the post- TO award Tennessee and North Carolina deployments. The accounting 
and appropriations data in Mod. No. 2 reflected funding as· obligated from $0 to 
$2,116,200 (which includes funding for the 
other new subCLINs). (Finding 36) This 
was not part of or consistent with the TO's funding schedule, under which $2,500,000, 
not "$0", had already been funded upon contract execution (findings 24, 27). Rather, 
these were "additional funds" for CLIN 0004, as contemplated by the contract. 
Mod. No.2 required "a significant amount of new work" (finding 39). It called for 
additional work under the TO due to the deployments that were not known to appellant or 
CO Frederick prior to TO award, even though LTC Poole had been notified in November 
28 

2008 that the Tennessee ANG "will mobilize" beginning in March 2009, causing a 
personnel shortage in Jackson and Smyrna, Tennessee, that "must be filled" (finding 8). 
The PWS, prepared in August 2008, showed only 1 MA 1 mechanic and 1 MA3 mechanic 
for Smyrna. It was not amended to include the additional 10 aircraft mechanics and 
10 other skills requested for that location. Also, the PWS did not show any personnel or 
skills for Jackson and was not amended to include the 22 personnel and 7 skills requested 
there. (Findings 8, 13, 17, 21) The government was not notified ofthe North Carolina 
deployment until after TO award. That deployment was to involve 8 more personnel than 
reflected in the PWS in Salisbury, North Carolina, for 12-18 months, with specific skill 
sets requested unclear. (Finding 31) Although Mod. No. 2 did not name any particular 
skills involved, CO Frederick acknowledged 
that the positions it referred to were not part 
of the TO's staffing at the time of award (findings 36, 37, 44). 
Thus, in addition to the two changes conceded by the government involving 
computer operators and helpers (findings 46, 52), the CO's unilateral Mod. No.2 to TO 
No. 13 changed the PWS' description of services and, in the case of Jackson, Tennessee, 
where no services had been listed, the place of performance. It increased the amount of 
services to be performed, at an increased cost to appellant, to be determined. 
DECISION 
We sustain the appeal and remand the matter to the parties for resolution of 
quantum. 
Dated: 1 August 2012 
I concur 
~~~ 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
29 
ministrative Judge 
Armed Services 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. 57264, Appeal of Lear Siegler 
Services, Inc., rendered in conformance with the Board's Charter. 
Dated: 
30 
CATHERINE A. STANTON 
Recorder, Armed Services 
Board of Contract Appeals