M.L. Energia, Inc.
Docket: ASBCA 58975
Decision date: 2019-04-04

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of --
M. L. Energia, Inc. 
Under Contract No. NAS 10-98025 
APPEARANCE FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 58975 
Bruce I. Afran, Esq. 
Princeton, NJ 
Scott Barber, Esq. 
NASA Chief Trial Attorney 
Bradley W. Smith, Esq. 
H. Joseph Batey, Esq. 
Trial Attorneys 
Kennedy Space Center, FL 
OPINION BY ADMINISTRATIVE JUDGE SHACKLEFORD 
ASBCA No. 58975 is the quantum phase of ML. Energia, Inc., ASBCA 
No. 55947, 12-2 BCA i135,110 (MLE /), recon. granted in part, 13 BCA ~ 35,284 
(MLE JI).* We have jurisdiction pursuant to the Contract Disputes Act of 1978 (CDA) 
41 U.S.C. §§ 7101-7109. A two-day hearing on quantum was held in Trenton, 
New Jersey, after which each party submitted an initial and reply brief. While 
evidence was allowed at that hearing on entitlement/causation that exceeded the 
quantum issues, the assigned judge did so in order to give appellant, by then with 
counsel, a full opportunity to prove its case, with the understanding that objectionable 
material would be handled as offered. (See discussion on the record at tr. 1/9-18) We 
are thus not relying upon evidence in the record that goes to causation because those 
issues were fully litigated and decided in the earlier proceedings. We now dismiss as 
moot the government's Motion for Preliminary Ruling on Matters/Issues Excluded 
from Further Litigation by Reason of Issue Preclusion. 
In addition to the transcript of the 2016 hearing (with limits as outlined above) 
and briefs filed thereafter, we also rely upon the record made in the entitlement 
proceedings as well as the two decisions issued following those proceedings. 
* Familiarity with our prior decisions in this matter is presumed. 

FINDINGS OF FACT 
NASA awarded a Small Business Innovation Research contract to Energia with 
respect to photo-chemical remediation of sites contaminated with hazardous solvents 
at the Kennedy Space Center, Florida. The contract was for a firm-fixed-price of 
$597,960 but contemplated that Energia would contribute $100,000 to the project such 
that the estimated cost of the project was around $697,960. MLE I at 172,395-96, 
findings 3, 9, 14. Only the fixed-price amount is at issue here. 
The research contract was not fully completed for reasons stated in our prior 
decisions, and we found the government entitled to take an equitable reduction in 
contract price under the FAR 52.246-7, INSPECTION OF RESEARCH AND DEVELOPMENT 
-FIXED-PRICE (AUG 1996), clause of the contract. See MLE I at 172,396, finding 13; 
MLE II at 173,170. The only issue remaining is whether the government is entitled to 
all or some smaller portion of the amount withheld. 
The contract clause (FAR 52.246-7) upon which the contracting officer (CO) 
based her final decision (R4, tabs 1-2); and upon which we rely for making an 
equitable reduction in the contract price, provides in relevant part as follows: 
(e) The Government has the right to reject 
nonconforming work. If the Contractor fails or is unable to 
correct or to replace nonconforming work within the 
delivery schedule ( or such later time as the Contracting 
Officer may authorize), the Contracting Officer may accept 
the work and make an equitable price reduction. Failure to 
agree on a price reduction shall be a dispute. 
MLE I at 172,396, finding 13. Appellant makes much of the government failure to 
provide a test site, basing it on evidence adduced in the quantum hearing. We found in 
our first decision that: 
The [test] sites at [Kennedy Space Center] eventually 
became unavailable because appellant failed to adhere to 
the timeline which would have made a test at the center 
possible. 
MLE I at 172,399, finding 36. 
Thus, the lack of a site was the fault of Energia, not NASA. Pursuant to the 
Inspection clause, where the contractor does not timely perform, the CO may accept 
the work and make an equitable price reduction. Appellant would have the 
government pay for performing tasks 4 and 5, which it did not perform (MLE I 
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at 172,406, findings 84-86), and task 6, which was not acceptably performed (MLE I 
at 172,407, finding 89), regardless of fault. 
In MLE /, we pointed out that Energia's contention it was entitled to be paid the 
remaining unpaid contract funds to be "without merit as appellant misconstrues the 
nature of the contract into which it entered." MLE I at 172,408. Further, we stated the 
contract was a firm-fixed-price contract, not a cost-reimbursement contract and that 
the Inspection clause allowed the government to make an equitable price reduction 
where, as here, there is a finding of nonconforming work. Id. 
Appellant adduced no credible evidence of the proper equitable price reduction 
for the nonconforming or incomplete work other than to argue that at most the 
government should retain no more than $20,000 as the cost to complete the field study 
(app. hr. at 23-24). This number is based upon the testimony of Dr. Moshe Lavid who 
testified that, in his judgment, it would cost between $15,000 and $20,000 to complete 
the field scale study (tr. 2/137-38). We find more credible the testimony of 
Karen L. Rivaud, a contract cost and price analyst for NASA, and her calculation of the 
estimated equitable price reduction in this matter (R4, tab 131 (memorandum for record 
<ltd. March 7, 2008); tr. 1/21, 28-32). We depart from her analysis in only one respect. 
We found that task 6 was partially performed but that it was not fully acceptable 
(see MLE I at 172,406-07, findings 87-89), whereas the CO had found task 6 to have not 
been performed (R4, tabs 1-2) and thus, applying a jury verdict of 40% acceptable to 
task 6, we reduce the amount of the equitable reduction by 40% of the amount 
attributable to work effort not performed in task 6 of Ms. Rivaud's calculation, as 
follows: $38,641 x 40% = $15,456. This amount is subtracted from the total reduction 
proposed in Ms. Rivaud's calculation as follows: $175,099- $15,456 = $159,643. 
Thus, the government is entitled to a reduction of a $159,643 which still 
exceeds the amount remaining obligated under the contract ($153,415). As the 
government has indicated it will not seek the difference, we find appellant is not 
entitled to payment of any additional contract amounts. 
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The appeal is denied. 
Dated: April 4, 2019 
an 
Armed Services Board 
of Contract Appeals 
DECISION 
~ RICHARD SHACKLEFORD 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 
I concur 
MICHAEL T. PAUL 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I certify that the foregoing is a true copy of the Opinion and Decision of the 
Armed Services Board of Contract Appeals in ASBCA No. 58975, Appeal of 
M. L. Energia, Inc., rendered in conformance with the Board's Charter. 
Dated: 
4 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals