ABS Development Corporation
Docket: ASBCA 60022, ASBCA 60023
Decision date: 2017-08-30

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeals of -- ) 
) 
ABS Development Corporation ) 
) 
Under Contract No. W912GB-10-C-0047 ) 
APPEARANCES FOR THE APPELLANT: 
APPEARANCES FOR THE GOVERNMENT: 
ASBCA Nos. 60022, 60023 
Thomas R. Krider, Esq. 
Howard W. Roth 
III, Esq. 
Ashley J. Sherwood, Esq. 
Oles Morrison Rinker & Baker, LLP 
Seattle, WA 
Thomas H. Gourlay, Jr., Esq. 
Engineer Chief Trial Attorney 
Brett R. Howard, Esq. 
Paul Cheverie, Esq. 
Nancy van Noortwijk-Sommer, Esq. 
Engineer Trial Attorneys 
U.S. Army Engineer District, Europe 
OPINION BY ADMINISTRATIVE JUDGE MCILMAIL ON THE 
GOVERNMENT'S MOTION TO AMEND ITS ANSWERS 
Introduction 
The government seeks to amend its answers in ASBCA Nos. 60022 and 60023 
to assert the defense that the contract referenced above is void ab initio, and, in 
ASBCA No. 60023, to assert the contention that it is not responsible for the sovereign 
acts of the Government of Israel. We allow the amendments. 
Void ab initio 
In ASBCA Nos. 60022 and 60023, the government wants to amend its answers 
to assert allegations that the contract referenced above "was obtained by and is tainted 
by fraud, and hence is void ab initio and [appellant] cannot recover on its claims" 
(ASBCA No. 60022 (60022), amended answer at 1-3, iiiI 55-61, ASBCA No. 60023 
(60023), amended answer at 1-3, irir 5-11 (italics in originals)). Appellant, citing 
41 U.S.C. § 7103(a)(5), Contract Disputes Act, and Supply & Service Team GmbH, 
ASBCA No. 59630, 17-1 BCA iI 36,678, says that we do not possess jurisdiction to 
entertain such a defense here because no third party has made factual determinations 
regarding any alleged fraud (60022, app. opp'n at 4-7; 60023, app. opp'n at 4). We 

disagree that we need any third-party determination here; we possess jurisdiction to 
determine for ourselves whether a contract is void ab initio because of fraud. See 
International Oil Trading 
Company, ASBCA No. 57491 et al., 13 BCA ~ 35,393 at 
173,658 (bribery and fraud; discussing 41 U.S.C. § 7103); Servicios y Obras Isetan 
S.L., ASBCA No. 57584, 13 BCA ~ 35,279 at 173,162 (fraud in the inducement). 
Supply & Service Team does not require a contrary result, that appeal did not involve 
whether a contract was void ab initio. 
Appellant also cites Laguna Construction Company v. Carter, 828 F.3d 1364 
(Fed. Cir. 2016), but that opinion also, does not require a contrary result here. In 
Laguna the court recited the rule that "[ c ]ertain fraud-related claims are outside of the 
Board'sjurisdiction ... [t]hese include claims relating to 41 U.S.C. § 7103 (formerly 
41 U.S.C. § 604), 28 U.S.C. § 2514 (Special Plea in Fraud), and 31 U.S.C. §§ 3729-31 
(False Claims Act)." Id. at 1368 (emphasis added, internal citations omitted). Whether 
a contract is void ab initio is none of those. There is a big difference between whether a 
contract is void ab initio (in which the question is whether the contractor can establish 
that he has a contract with the government in the first place, see Atlas International 
Trading Corp., ASBCA No. 59091, 15-1BCA~35,830 at 175,198 (contract obtained 
through bribery void ab initio)), and whether (as in Laguna) the government is asserting 
the type of fraud claim that we do not possess jurisdiction to entertain. 
For these reasons, we possess jurisdiction to entertain the government's proposed 
void ab initio amendments; therefore, our jurisdiction is no bar to amendment. Appellant 
also says that, assuming we have jurisdiction, the amendments should not be allowed 
because, it says, there is no fraud (60022, app. opp'n at 8; 60023, app. opp'n at 4). 
However, that is a merits issue for a hearing. 
Appellant also says that, at this point amendment would unduly prejudice it 
(60022, app. opp'n at 11-13; 60023, app. opp'n at 4-5). We permit amendment upon 
conditions fair to both parties, Board Rule 6( d), and see no unfairness in allowing 
amendment here. We are not on the eve of trial (scheduled for April 10, 2018), and the 
proposed amendment concerns matters such as 
what appellant's president said at a 
deposition held only a few months ago regarding whether appellant "intentionally 
induced the US Government to award the contract to [appellant] even though they had no 
intention of performing the contract" (60022, amended answer at 2, ~ 58; 60023 amended 
answer at 2, ~ 8). Presumably, appellant is already aware of the facts that bear upon that 
issue. We allow the proposed amendments. 
Sovereign Acts of a Foreign Government 
In ASBCA No. 60023, the government wants to amend its answer to include 
the following contention: 
2 

The U.S. government is not responsible for the sovereign 
acts of a foreign nation. Control over base access on this 
project was the sole responsibility of the Government of 
Israel. A warranty covering the actions of a third party 
cannot be held to exist in a government contract unless the 
terms of the alleged warranty are unmistakable. The 
contract does not contain an express or implied warranty 
regarding the ability of [appellant] to receive approval by 
the Government of Israel for base access for Turkish 
workers. 
(60023, amended answer at 1, ~ 4) Appellant's opposition is based on its view that 
those contentions are not (using appellant's term) "viable" (60023, app. opp'n at 5, 9). 
That is, appellant contends that, "[g]iven that the contract does contain the implied 
warranty the Government's proffered affirmative defense seeks to avoid, the 
Government's motion to amend should be denied" (id. at 9). That, too, is a merits 
issue, either for a hearing, post-hearing briefing, or both. 
Appellant also says that allowing the government's "foreign sovereign acts" 
contention would cause it undue prejudice (see 60023, app. opp'n at 5). Again we are 
not on the eve of trial; moreover, the government's contentions appear to consist 
almost entirely of questions of law. In any event, appellant points to no specific 
prejudice. We see no unfairness in allowing the amendment, and allow it. 
Conclusion · 
The proposed amendments to the answers in these appeals are allowed. 
Dated: 30 August 2017 
(Signatures continued) 
3 
~~ 
Administrative Judge 
Armed Services Board 
of Contract Appeals 

I concur 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
I concur 
J. REiffPROUTY 
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 Nos. 60022, 60023, Appeals of 
ABS Development Corporation, rendered in conformance with the Board's Charter. 
Dated: 
4 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals