Aegis Defense Services, LLC, f/k/a Aegis Defence Services Ltd.
Docket: ASBCA 59082, ASBCA 60111, ASBCA 60259
Decision date: 2017-11-15

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeals of --
Aegis Defense Services, LLC, 
f/k/a Aegis Defence Services Ltd. 
Under Contract No. W52P1J-l 1-D-0082 
APPEARANCES FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA Nos. 59082, 60111, 60259 
Armani Vadiee, Esq. 
Ashley N. Amen, Esq. 
Smith Pachter Mc Whorter, PLC 
Tysons Comer, VA 
Raymond M. Saunders, Esq. 
Army Chief Trial Attorney 
MAJ David H. Stem, JA 
Trial Attorney 
OPINION BY ADMINISTRATIVE JUDGE PROUTY 
Although the facts of these appeals are intriguing, involving, as they do, the 
Milo Minderbinderesque (see JOSEPH HELLER, CATCH-22 (Simon & Schuster 1961)) 
machinations sometimes necessary to do business in Iraq, in the end the issues 
presented are quite straightforward: what are the government's obligations to a 
contractor to which it gave a right of first refusal to purchase armored sport utility 
vehicles (SUVs), known as LA Vs (short for "light armored vehicles") at the 
completion of contract performance, so long as it had no further need for them? And 
did the government meet those obligations when it refused to sell the LA Vs to its 
contractor and, instead, gave them to the Government of Iraq, unbidden? As explained 
below, although the United States had its reasons for declining to make the sale to its 
contractor, those reasons do not excuse it from complying with its contractual 
obligations. 
FINDINGS OF FACT 
I. The Contract and Efforts of the Government to Furnish Aegis with LAV s 
On 1June2011, the Rock Island Contracting Center (the Army) awarded 
the above-captioned contract (the contract) to appellant's predecessor in interest, 
Aegis Defence Services Ltd. (Aegis), a company doing business in the 
United 
Kingdom (R4, tab 1 at 1 ). As explained at the hearing, Aegis is primarily in the 
business of providing private security services to governments and commercial 

organizations (tr. 1/14). The contract, which was a multiple-award 
indefinite-delivery/indefinite-quantity (ID/IQ) contract 1, was for the provision of 
security support services to the United States Department of Defense and Department 
of State in Iraq (R4, tab 1 at 4, 24; tr. 1117-18). 
Aegis was awarded Task Order No. 0002 (TO 2) on the contract on 2 September 
2011, and both parties executed it on 13 September 2011 (R4, tab 3 at 203). TO 2 was 
intended to provide mobile and staffing security to various sites within Iraq (tr. 1/23). 
This task order required Aegis to reach "full operational capability" by the end of the 
month, and included a period of performance for the base year to conclude at the end of 
2011 (R4, tab 3 at 206). TO 2 was priced at more than $28 million for this first period 
of performance (id. at 230), and it included the prospect of up to four additional option 
years (id. at 206). 
With respect to the LA Vs that are at the heart of this dispute, TO 2, which 
contemplated the government's providing such vehicles, took a very different approach 
than the original contract, which required the contractor to provide them and to keep 
ownership of them through the conclusion of contract performance. The original contract 
directed, in section 13 .1.5 .1, that Aegis would "provide all weapons, ammunition, LAV s 
[and other equipment]" (R4, tab 1 at 73). Section 13.1.5.2 of the contract further stated 
that "Vehicles [including LA Vs] provided by the Contractor in support of providing 
transportation services for this contract shall remain the Contractor's property. The 
Government will not own or accept ownership of any vehicles furnished to it by the 
Contractor." (Id.) The Performance Work Statement (PWS) of TO 2, by contrast, stated, 
in paragraph 11.0, that, "[t]he Government will provide 155 LA Vs for use to perform the 
required services under this task order" (R4, tab 3 at 235). The TO 2 PWS further 
elaborated, in paragraph 12.0, that, except for the LA Vs, the remainder of the equipment 
utilized by Aegis would be "Contractor furnished" (id.), consistent with the dictates of 
the original contract (see also tr. 1/23-27). 
When Aegis bid on TO 2, it took into account the fact that it would not be 
required to provide its own LA Vs, and priced its offer accordingly (tr. 1/25-26). 
Almost immediately after Aegis began performance of TO 2, though, it became clear 
that the notion of government-provided LA Vs was problematic. 
1 A multiple-award ID/IQ contract is a contractual vehicle by which the government 
awl:j.rds similar contracts to several different contractors and then (subject to any 
requirement to make minimum awards to each contractor) awards separate task 
orders on that contract to whichever contractor it chooses for the particular task 
order. Typically, contractors submit competing bids to the contracting officer to 
vie for the award of the task orders. See, e.g., Relyant, LLC, ASBCA No. 58172, 
16-1BCA~36,228 at 176,748-49. 
2 

Iraq in 2011 was a country in the midst of a significant transition, with the 
expectation that American military forces would soon leave the country as a result of 
the United States keeping its commitment to remove its military presence from that 
sovereign nation (tr. 1124-25). One of the consequences of this transition was the Iraqi 
government's greater involvement in the regulation of private security contractors 
(PSCs) 
operating within its territory- even those PSCs working on behalf of the 
United States. With respect to LAV s operating on the open road in Iraq, the Private 
Security Department of the Iraqi Ministry of the Interior required a "vehicle sticker" 
on such vehicles (tr. 1126). Before providing such a sticker, the Iraqi Ministry of the 
Interior required proof of ownership, which had to be obtained through the Iraqi 
Ministry of Transport (tr. 1/26-27). And without such a sticker, Aegis had a real 
concern that, as soon as one of its LAV s encountered a checkpoint manned by Iraqi 
troops, the LAV would be impounded and its occupants arrested (tr. 1/18-19, 28). 
The United States Government Office of Security Cooperation - Iraq (OSC-1) 
worked with Aegis to get stickers from the Iraqi government for the LAV s that the 
Army intended to provide (tr. 1128-30). These efforts were extensive, 
involved 
embassy and other personnel, and lasted through November 2011, culminating in 
OSC-I's obtaining a letter from a senior Iraqi official that, unfortunately, proved 
insufficient for 
registration purposes (id.). At some point, it was suggested that the 
matter could be resolved if Aegis purchased LAV s in its own name and then 
approached the appropriate Iraqi ministries as the actual owner ofthe LA Vs (tr. 1129). 
Ms. Melissa Burant, the contracting officer (CO), ultimately requested Aegis to submit 
a formal proposal to do just that (tr. 1131-32). 
IL Aegis and the Government Agree that Aegis will Purchase the LAV s; They 
also Agree upon Terms Regarding the Possible Procurement of the LA Vs by 
Aegis after Completion of Contract Performance 
In response to Ms. Burant' s request, Aegis investigated the commercial 
marketplace for such vehicles and found an Iraqi commercial supplier. Aegis then 
prepared a proposal that it submitted to the Army, based upon obtaining the LAV s from 
the Iraqi supplier2 (tr. 1/32). The first informal proposal, for between 50 and 80 LA Vs, 
was sent from Aegis to the Army on 11November2011 (supp. R4, tab 72). After 
some back and forth, a more formal amended proposal was sent by Aegis to the Army 
on 11 December 2011 (tr. 1133-34; app. supp. R4, tab 1). 
2 The LA Vs were "up-armored" commercial SUVs. Though Aegis proposed using the 
Toyota Land Cruiser for its lower "profile," American personnel strongly 
preferred the relatively roomier Chevrolet 
Suburban, which was what they got 
(tr. 1/34-35). 
3 

The 11 December proposal (drafted by Aegis's in-house counsel, Ms. Sylvia White 
(see tr. 1137)), was for the purchase of 54 LA Vs at $138,375 per unit (app. supp. R4, 
tab 1 at 83193) and included three provisions relevant to the dispute here. First, the 
revised proposal included a statement regarding the costs of transferring ownership from 
Aegis to the government at the end of contract performance: 
For the avoidance of doubt any costs associated with 
transferring ownership to the Government at the end of the 
Contract will be for the Government's account. 
(App. supp. R4, tab 1 at 8319) To be clear, what Aegis meant was that costs incurred 
in transferring ownership to the government would be paid by the government (tr. 1/36). 
The second material provision in the Aegis proposal states that, "the [LAV s] 
would be ~he property of the Government (as CAP), [but] Aegis would hold the 
vehicles to the Government's order, but in Aegis name" for purposes of getting them 
registered with the Iraqi government (app. supp. R4, tab 1 at 8320). Ms. White 
testified that she, herself, was not particularly well-acquainted with the term, CAP, 
which she took to mean "contractor acquired property," as utilized by the Federal 
Acquisition Regulation (FAR), but that she included it in an attempt to conform the 
proposal to the FAR (tr. 1175-76). 
The third, and final, material provision provided that: 
At the end of the Contract Aegis will be given the right of 
first refusal to purchase the vehicles in the event the 
Government has no further use for them. We propose a 
straight line amortization over a 2 year period with a 5% 
residual value. 
(App. supp. R4, tab 1 at 8320 (footnote omitted)) 
Notably, Ms. White testified that, when she drafted the proposal on behalf of 
Aegis, she envisioned the LAV s as being owned by the government, notwithstanding 
their being titled to Aegis with the Iraqi government (tr. 1176). 
3 The pages in appellant's supplemental Rule 4 file include consecutive numbers both 
at the upper right-hand comers of each page and at the bottom right-hand 
comers of the pages, which appear to be the numbers utilized when the 
government produced the documents in discovery. Because, during the trial, 
counsel and the witnesses tended to reference the consecutive number on the 
bottom right-hand comer of the document, that is the number we use herein. 
4 

On 19 December 2011, Ms. Burant sent an email to Ms. White of Aegis, 
forwarding a notice to proceed (NTP) with the purchase of 14 LAV s at the 
11 December proposal price of $138,375 each (app. supp. R4, tab 2 at 227-29; 
see also tr. 1/40). Funding issues, apparently, were the reason for the discrepancy 
in the number of LAV s proposed on 11 December and the number ordered 
through the NTP (tr. 1/40). On 20 December 2011, as requested by Ms. Burant 
(see app. supp. R4, tab 2 at 227), Aegis acknowledged acceptance of the terms of the 
NTP (which was to be formalized by a modification to the TO), but added a 
handwritten note above the signature block from Ms. White: 
Except with respect to numbers of vehicles to be 
purchased, which is limited by the value of funding in this 
NTP all other terms included in Aegis' proposal dated 
11 December 2011 apply to this purchase. 
(App. supp. R4, tab 2 at 230; tr. 1/41) 
Ms. White continued discussions with government personnel in an attempt 
to reach agreement upon the terms of the contract modification so that it could be 
completed and Aegis's invoices for the LA Vs could be paid before the New Year 
(app. supp. R4, tab 4). On 23 December 2011, the parties executed Modification 
No. 06 to TO 2 (Mod 6) (R4, tab 13 at 385). The purpose of Mod 6 was to fund the 
purchase of the 14 LAV s, and it expressly provided that, "Aegis proposal, submitted 
via e-mail, dated 19 December 2011 is incorporated to the award" (id. at 387). We are 
aware of no proposal from Aegis to the government dated 19 December 2011 as 
referenced in this modification, but Mod 6 includes the 11 December 2011 proposal as 
an attachment (id. at 390-94). 
In the meantime, the parties negotiated amendment of the terms of the TO 2 
PWS to provide for the use of the Aegis-acquired LAV s. As communicated to Aegis 
in a 19 December 2011 email, the government's view about the sentence in its 
proposal that Aegis would have the right of first refusal if the government had "no 
further use for" the LA Vs was that the condition was acceptable, inasmuch it was 
stated to be "incorporated" into the government-proposed PWS 
revision without 
further comment (R4, tab 15 at 408). The government, however, did not agree to the 
proposed straight-line depreciation for the LA Vs, and preferred language simply 
specifying that the government would negotiate with Aegis at the end of the contract if 
it were not taking the vehicles (id.). Ms. White's response to the government's draft 
did not address these particular matters (id. at 403), tacitly suggesting that Aegis was 
satisfied with the proposed revised PWS provisions 
regarding the right of first refusal 
and pricing issues. The record includes no further correspondence regarding the right 
of first refusal language prior to the conclusion of negotiations over the PWS revision. 
5 

Modification No. 07 to TO 2 (Mod 7), effecting the revision of the PWS to 
account for the purchase of the LA Vs, was executed on 9 January 2012 (app. supp. R4, 
tab 7 at 1977). The modified PWS (dated 3 January 2012) incorporated into TO 2 by 
Mod 7, provided in relevant part: 
All LAV s purchased by the contractor for use on this 
contract will be registered and licensed in contractor's 
name to facilitate [Government of Iraq] licensing. Govt 
will provide reimbursement for costs associated with 
licensing, registration, taxes, renewal fees and title transfer 
fees imposed by the Government of Iraq. At the end of 
contractor's performance period on this Task Order, USG 
will retake title to LAV s. If USG does not wish to take 
title to the vehicles, contractor will be given first right of 
refusa1£4l on negotiating and possible procurement of said 
vehicles. 
(App. supp. R4, tab 7 at 1983) Nothing in this modification referenced Mod 6 or 
addressed what was to be done in the event that its terms were inconsistent with the 
terms of Mod 6 (see app. supp. R4, tab 7). 
The government obtained more funding for LA Vs shortly thereafter, and on 
25 January 2012, presumably at the government's request, Aegis submitted an updated 
proposal to Ms. Burant for the purchase of an additional 38 LA Vs (app. supp. R4, 
tab 8 at 571-72). The terms of the proposal were similar to those in Aegis's 
11 December 2011 proposal, with a few variances not relevant to the present dispute. 
In particular, the 25 January proposal included, word-for-word, the clause providing 
for Aegis's "right of first refusal" to purchase the LA Vs at the end of performance if 
"the Government has no further use for them" (app. supp. R4, tab 8 at 573). On 
30 January 2012, Ms. Burant sent Ms. White an 
email forwarding an NTP to purchase 
the additional 38 LA Vs "in accordance 
with" the 25 January proposal (id. at 570). 
On 13 February 2012, the parties executed Modification 10 to TO 2 (Mod 10), 
to effect the purchase of the 38 LA Vs provided for in the 30 January NTP (R4, 
tab 23 at 615). Like Mod 7, it included an amendment to the TO 2 PWS using the 
same exact language stating that at the end of performance period, the government 
would retake title of the LAV, but that if the government "does not wish to take title to 
the vehicles, contractor will be given first right of refusal on negotiating and possible 
4 Here, the language departed from the "right of first refusal" used in earlier 
correspondence to become "first right of refusal." Neither party has remarked 
upon the difference, and we see no material difference in the phrases, which we 
consider to be interchangeable. 
6 

procurement of said vehicles" (R4, tab 23 at 623). The record includes no 
intermediate modification affecting the NTP for the 3 8 LAV s in the way that Mod 6 
did for the first 14 LAV s. In any event, nothing in Mod 10 referenced the NTP or 
addressed what was to be done in the event that Mod 10' s terms were inconsistent with 
the terms of the NTP (see R4, tab 23). 
Aegis purchased the 52 LA Vs embraced by Mods 6, 7, and 10, took title 
to them, and successfully registered them with the appropriate Iraqi authorities 
(tr. 1152-53). There were no disputes between the parties regarding their use. 
III. The Government Refuses to Sell the LAV s to Aegis 
As contract performance neared completion, Aegis expressed a desire to 
negotiate the purchase of the LAV s from the government. The first evidence of this 
expression in the record is an internal Army email dated 4 June 2013 in which an 
Army contracting specialist named Trisha Polfliet notified her chain of command of 
Aegis's wish to obtain the LAV s, and inquired whether the government wanted to 
keep the LA Vs for itself (R4, tab 33 at 722; see also tr. 1158 (Ms. White recalls 
making inquiries regarding keeping the LA Vs approximately July 2013)). 
In response to Ms. Polfliet' s email, the government began the process of 
deciding whether it had a use for the vehicles (R4, tab 33 at 719-21). The Defense 
Contract Management Agency (DCMA) property managers to whom this task was 
forwarded were taken by surprise, to say the least (see generally, R4, tab 34). On 
6 June 2013, Jeff Garrett, the Department of Defense (DoD) Demilitarization Program 
Manager, responded to the internal inquiry by stating that DoD was "not authorized to 
sell excess military equipment in Iraq especially Armored vehicles" and explained that 
the LA Vs needed to be "turned in to OSC-I" (id. at 724). 
By 21June2013, however, it appeared that those being consulted were in 
favor of selling the vehicles to Aegis and that any internal obstacles to the sale 
had been overcome. On that date Army L TC John Turner, in an email on behalf 
of OSC-1, responded to renewed questions about the LA Vs by stating, "If Aegis 
wants the vehicles, that is their right IA W the contract. No argument from OSC-1." 
(R4, tab 36 at 731) After a few additional email exchanges about the mechanics of the 
LAV sale to Aegis, on 25 June 2013, Ms. Polfliet asked LTC Turner for confirmation 
regarding their use before she could move forward: "Basically we need the USG 
to state they don't need them." She also expressed her desire to sell the LA Vs to 
Aegis so that the government could obtain the money to put towards the contract. 
(R4, tab 37 at 734) LTC Turner's response later the same day was, "please use this 
email to serve as official notice that the USG will not require the 52 purchased 
vehicles for operations post site closure and normalization." He then offered to 
provide a memorandum more formally stating the same if the email were insufficient. 
7 

(Id.) Ms. Polfliet forwarded this email to Mr. John Gorman, the DCMA Property 
Manager for Iraq, who responded that it satisfied him and told her to go ahead and 
"negotiate directly with Aegis on the purchase of these vehicles" (R4, tab 39 at 752). 
That was not, however, the end of the story. On 2 July 2013, in an email 
response to Ms. Pol:fliet, who was ensuring that she "cross[ ed] all of our T's" for the 
negotiation with Aegis (R4, tab 40 at 755), Mr. Garrett, the DoD Demilitarization 
Program Manager, who earlier sent the email stating that such sales were forbidden, 
again voiced his concerns. In short, Mr. Garrett explained that up-armored SUV s were 
considered to be subject to the Department of Commerce Arms Export Regulation, 
and, as such, DCMA had no authority to release them to Aegis. He did hold out the 
possibility that a purchase could be coordinated through the "LM&R" office of the 
Office of the Secretary of Defense. (Id. at 754) 
Apparently unaware of any flies in the ointment, on the 4th of July 2013, Aegis 
sent ACC-RI additional information regarding the 52 LA Vs that it wished to purchase 
(R4, tab 41 at 772). An internal government discussion followed (see, inter alia, R4, 
tab 44). In a 10 July 2013 email that was part of this discussion, an OSC-I 
representative explained that OSC-I's need to rapidly wind down sites meant that its 
:flexibility in dealing with the vehicles continually diminished, and that the "default 
position" was to "FEPP" 5 the vehicles to the Government of Iraq (id. at 806-07). In a 
further email exchange the same day, after agreeing that the export controls on the 
armored vehicles had an exception that allowed their transfer to the Government of 
Iraq, Mr. Garrett reiterated to Ms. Pol:fliet that, "[c]urrently DOD can't sell or release 
Demil Code Q/3 (sensitive) [which is the category that he earlier explained applied 
to the LA Vs] out DOD [sic] to civilians" (id. at 804-05). He further noted that the 
DoD policy on the matter was being updated, but that he expected "no major change" 
(id. at 804). Ms. Pol:fliet forwarded the material part of Mr. Garrett's email to 
Ms. White, of Aegis, the next day (R4, tab 45 at 826). 
In her email response to Ms. Polfliet sent on 12 July 2013, Ms. White 
thanked her for the information and informed her that she would have Aegis's 
American attorneys look into the issue "to see if they have any bright ideas" (R4, 
tab 45 at 825-26). In a follow-up email sent the 23rd of July, Ms. White inquired about 
why the LAV s were considered to be "Demil Code Q/3 and whether they [had] ever 
officially been classified as such by the US Government." She further shared that 
Aegis was of the opinion that the LA Vs should not be considered to be subject to 
the Department of Commerce demilitarization classifications since they were 
purchased, titled, and registered to Aegis, not the United States. (R4, tab 45 at 825) 
Responding to Ms. Polfliet's email forwarding this exchange on the 24th of July, 
5 "FEPP" stands for Foreign Excess Personal Property. "FEPPing," in this context, 
means transferring ownership of property to the Government oflraq. {Tr. 1/84) 
8 

Mr. Gorman, the DCMA Iraq Property Manager, appeared to agree that the LAV s 
were contractor-furnished equipment and thus not covered by the demilitarization rules 
(id. at 824 ). 
Nevertheless, by the next day, the 25th of July, Ms. Polfliet received new 
direction that would end up as the final government position. As she explained to 
Ms. White, since the LAV s were bought with government funds, they were considered 
to be government-furnished equipment to which the demilitarization rules applied. 
And noncombat commercial armored vehicles were apparently classified as "Q." 
(R4, tab 49 at 872) Although the record is unclear, it appears to us that Ms. Polfliet's 
position was based upon direction given to her by the new CO, Ms. Jodie Bennett 
(see tr. 11141-43). 
According to her testimony, which we find to be credible, Ms. Bennett's 
decision-making with respect to the disposition of the LAV s was driven almost 
completely by the advice she received from Mr. Garrett, the DoD demilitarization 
expert, who had communicated that the sale of the LAV s would be contrary to 
governing regulations (tr. 11143). She did not FEPP the LA Vs to the Government of 
Iraq because the United States had a particular need to give them to the Iraqis; rather, 
she did so because the vehicles needed to be disposed of at the end of the contract and 
FEPPing them to the Iraqis was preferred to simply destroying them, which was also 
an option (tr. 11143-44). Thus, we specifically find that the decision to FEPP the 
LAV s, rather than sell them to Aegis, was not made for reasons involving national 
security or foreign policy, but was simply the path taken to dispose of them once the 
government, rightly or wrongly, internally decided that it could not transfer them to 
Aegis on contract completion. 
We also find that the government had no use for the LAV s upon contract 
completion. This finding is based upon CO Bennett's earlier-discussed testimony 
regarding her motivation for disapproving the sale as well as her testimony, in 
response to the Board's questions, that nobody had actually particularly wanted to give 
the LA Vs to Iraq, except as a means of their disposal (tr. 11143-44) and OSC-l's 
earlier-noted statement that the government had no further use for the LAV s. 6 
Interestingly, in early August 2013, some government personnel explored the options 
available for exporting at least some of the LAV s to other countries in the region for 
use in security contracts so that the money already spent on them would not be wasted. 
To that end, the persons involved in this discussion affirmatively did not wish for the 
6 To the government's credit, the CO's final decision in response to Aegis's non-monetary 
claim upon this matter did not assert that there was a use for the vehicles; stating, 
instead, that the future use of the vehicles was irrelevant to the government's 
decision-making (R4, tab 63 at 1042-43). 
9 

LA Vs to be FEPP'd to the Iraqis (see R4, tabs 47-48). Unfortunately, however, the 
export of these LA Vs proved to be impracticable (see R4, tab 48). 
Through a series of emails in early to mid-August 2013 to Ms. Bennett and her 
supervisor, Ms. Christine Berry, Ms. White attempted to persuade the government to 
change its mind regarding the LA Vs prior to their transfer to the Iraqis (R4, tabs 49, 
52-53). One matter of particular concern to Ms. White was the possibility that LA Vs 
FEPP'd to the Government of Iraq might simply be handed over to a different security 
contractor by that government (R4, tab 53 at 934-35). CO Bennett agreed that such a 
thing had happened, though it should not have (app. supp. R4, tab 24 at 4428-29). In 
the end, however, the government felt that it could not budge (R4, tab 53 at 936). On 
17 September 2013, Ms. White submitted a non-monetary claim to the CO seeking a 
contractual interpretation permitting the sale of the LAV s to Aegis as part of an effort 
to get the government to reconsider and make a definitive decision 7 (see R4, tab 56; 
tr. 1/60). This claim was denied in due course in a final decision by CO Bennett dated 
25 October 2013 (R4, tab 63). That decision was appealed on 20 December 2013 and 
docketed as ASBCA No. 59082. 
In the end, the LA Vs were a118 FEPP'd to the Iraqis in April 2014 (supp. R4, 
tab 95). The FEPP paperwork included a statement by the Deputy Chief of OSCI-C 
that the FEPP transfer was "for the benefit of both the [Government of Iraq] and the 
United States (US) Government," and ''will contribute significantly to [US] efforts [to 
help] Iraqi Security Forces" (supp. R4, tab 95 at 2936). 
Aegis submitted two monetary claims to the CO in 2015. The first, in the 
amount of$3,709,843.75, was submitted on 7 May 2015 for 37 LA Vs (supp. R4, 
tab 96). It was denied by the CO on 4 June 2015 (supp. R4, tab 97), appealed by 
Aegis on 27 July 2015, and docketed as ASBCA No. 60111. The second monetary 
claim, in the amount of$1,081,187.50, for 13 LA Vs, was submitted by Aegis on 
7 The claim turned out not to be quite the last effort on Aegis's part. In early 
October 2013, Aegis's director, Brigadier James Ellery, sent an email directly 
to L TG John Bednarek, chief of OSC-I in an attempt to get the government to 
change its mind. The two engaged in what appears to have been a friendly and 
constructive colloquy about the issue, with L TG Bednarek ultimately 
explaining that the government would have liked to have sold the LAV s to 
Aegis and been paid for them, but had felt compelled to follow its interpretation 
of the regulations that precluded such a sale. (R4, tab 62) 
8 The FEPP paperwork indicates that only 50 LA Vs were FEPP'd to the Government 
of Iraq (app. supp. R4, tab 28 at 463), rather than the full 52 at issue in the 
contract. The discrepancy is likely resolved by the fact that at least 1, and 
perhaps 2 of the original 52 LA Vs had become inoperable by the time of 
contract completion (see tr. 1/61-62). 
10 

27 July 2015 (supp. R4, tab 98). The record does not include a CO's final decision 
upon this claim, and its deemed denial was appealed by Aegis on 2 October 2015 and 
docketed as ASBCA No. 60259. 
DECISION 
We do not second guess the government's motives in its apparently sincerely held 
belief that it was precluded from selling the LAV s to Aegis, as contrary to common sense 
as it may seem. The 
consequence of acting upon that belief, however, is that the 
government broke its contractual promise to Aegis to give it a right of first refusal to 
purchase the LAV s if the government had no use for them. As the government, in fact, 
had no use for the LAV s and as the contract was definite enough to pass legal muster and 
no other circumstances were proved to excuse performance, we rule in favor of Aegis on 
entitlement. 
I. The Contractual Language Required the Government to Offer to Sell the 
LAV s to Aegis if the Government had No Use for Them 
The terms of the contract material to this dispute are, at first blush, not as clear 
as we would like them to be. The government argues, consistent with the terms of the 
amended PWS, that the sole determinant of triggering Aegis's right of first refusal was 
whether the government wished to take back "title" to the LA Vs (gov't br. at 19-24). 
This would make Aegis's rights tum upon the subjective desires of the government 
and have nothing to do with whether the government had an alternate use for the 
LA Vs. The contract terms, however, are not so plainly focused upon the term, ''title," 
as the government would like and, as will be seen, ultimately support Aegis's 
preferred reading: that Aegis had the 
right of first refusal if the government had no 
further use for the LAV s. 
To resolve this issue, we begin with the law of contract interpretation. Under 
basic principles of the law, a contract is interpreted "in terms of the parties' intent, as 
revealed by language and circumstance." United States v. Winstar Corp., 518 U.S. 839, 
911 (1996) (citations omitted). Generally, this process begins and ends with the 
language of the contract. TEG-Paradigm Environmental, Inc. v. United States, 
465 F.3d 1329, 1338 (Fed. Cir. 2006). And in reviewing this language, the Board 
should read the contract "as a whole and [interpret it] to harmonize and give reasonable 
meaning to all its parts," if possible, leaving no words "useless, inexplicable, 
inoperative, insignificant, void, meaningless or superfluous." Precision Dynamics, Inc., 
ASBCA No. 50519, 05-2 BCA ~ 33,071at163,922; see also Hercules, Inc. v. 
United States, 292 F.3d 1378, 1381 (Fed. Cir. 2002) ("contract must be construed to 
effectuate its spirit and purpose giving reasonable meaning to all parts of the contract"); 
Hunkin Conkey Constr. Co. v. United States, 461F.2d1270 (Ct. Cl. 1972) (rejecting 
contract interpretation that would render a clause in the contract meaningless). 
11 

With this in mind, we tum to the terms of the contract, which are more expansive 
than admitted by the government. The government's insistence that we are limited to 
the terms of the PWS is contradicted by the parties' adoption of the terms of Aegis's 
11 December 2011 proposal into Mod 6 as well as the government's adoption of those 
terms into the NTP that preceded Mod 6 and into the NTP that preceded Mod 10. That 
proposal, of course, included the language granting the right of first refusal to Aegis if 
the government had no use for the LAV s. Because Mod 6 is part of the contract9 and 
because Mod 7 made the revised PWS part of the contract (without explicitly replacing 
or rejecting the terms of Mod 6), we are presented with a requirement to reconcile these 
contractual terms. See, e.g., Hunkin Conkey, 461F.2d1270. 
The most direct way to reconcile the seemingly different contract terms ("no 
further use" in the proposal versus the government's '\vish[ing] to take title" LtJ. the 
PWS) is to interpret the 
title language in the PWS as the equivalent of the use language 
in the earlier-drafted proposal. To understand how this can be so, we digress slightly to 
discuss the meaning of "title" in the PWS. Although the parties were both of the belief 
that, as property acquired under the contract, the LAV s were the government's 
property, both parties also recognized that the LA Vs had to be titled to Aegis so that it 
could engage with the Iraqi government to obtain the necessary sticker. At the end of 
the contract, even if the government had always equitably owned the LAV s, in order to 
use them in Iraq or elsewhere, it would need to take title to them. To the contrary, ifthe 
LAV s were only to be destroyed or handed to a different contractor (or the Government 
of Iraq), there would be no need for the government to take title for itself. Thus, taking 
title, as a practical matter, would only be done in the event that the government had use 
for the LAV s, and would not be done if it did not. We do not perceive - and the 
government does not present - an alternate interpretation of the contract that reconciles 
the two writings. Moreover, this interpretation has the great merit of being exactly 
what the parties intended10, as reflected in the government's previously-discussed 19 
December 2011 email correspondence with Aegis, in which it informed Aegis that its 
proposal, regarding a right of first refusal to purchase the LAV s if the government had 
no use for them, had been incorporated into the PWS except for the straight-line 
depreciation issue. See Blinderman Constr. Co. v. United States, 695 F.2d 552, 558 
9 The government asserts, without support, that the PWS in Mods 7 and 10 "superseded" 
the incorporation of Aegis's proposal by Mod 6 (gov't hr. at 20). Nothing in 
Mod 7 or Mod 10 supports this conclusion with respect to the terms at issue here. 
10 Aegis asks us to make an adverse inference against the government with respect to its 
intent because of its failure to produce Ms. Burant as a witness (app. br. at 25-27). 
Drawing such an inference is unnecessary here, given that the documentary 
evidence amply explains the parties' intents and there is no reason to believe 
that Ms. Burant's testimony would be materially any different than Ms. White's. 
The government's failure to call a witness that the appellant believes would be 
helpful to appellant's case, without more, does not justify an adverse inference. 
12 

(Fed. Cir. 1982) (contemporaneous construction of an agreement prior to dispute is 
entitled to great weight). 
Additionally, we reject the government's attempt to make hay of the fact that 
there was no equivalent to Mod 6, incorporating the terms of the Aegis proposal for 
the purchase of the first 14 LA Vs (which preceded Mod 7), for Mod 10, involving the 
later 38 LA Vs (see gov't br. at 22). Through reconciliation of the terms of Mods 6 and 
7, the meaning of the revised PWS was already established by the time of Mod 10; 
there is simply no need to revisit its interpretation. 
II. The Government Had No Use for the LA Vs After Contract Performance 
Althoug.li the government asserts that its handing the LAV s to the Iraqi 
government furthered a valid national security aim and thus advanced a legitimate 
government purpose (see gov't br. at 22), the overwhelming weight of the evidence is 
to the contrary. L TC Turner's emails on behalf of OSC-I certifying that the 
government had no use for the LAV s are convincing evidence that there was no 
government need for them. Ms. Bennett's candid testimony that her decision to FEPP 
the vehicles was based completely upon the advice she received forbidding their sale, 
and had nothing to do with any government need for them constitutes further 
persuasive evidence that the government had no remaining use for them. There is also 
the 
notable absence in the email correspondence of any argument, whatsoever, that 
FEPPing the LAV s to the Iraqi government would be of any use to the United States 
Government. 
To counter this evidence, the government presents the fact that the apparently 
standard government memorandum to justify the FEPPing of the LAV s included 
language 
stating that it was done in the interest of the government and for Iraqi 
security (gov't br. at 13). The government also states, in one sentence of its brief 
that, in being transferred to the Iraqi government, the LA Vs were being legitimately 
used by the United States (id. at 22). There is nothing in the FEPPing memorandum 
that gives us any reason to believe that the statement about the use of the LAV s 
was anything more than a standard incantation with little evidentiary worth. The 
contemporaneous statements of L TC Turner; the extensive email thread; and 
Ms. Bennett's sworn testimony all prove otherwise. 
Under the terms of the contract, the government had no use for the LAV s and was 
obligated to give Aegis the 
right of first refusal for their purchase, which it did not do. 
13 

III. Aegis May be Entitled to Monetary Damages 
Due to prior agreement at the pretrial stage of these appeals, we only decide 
entitlement at this stage of the proceedings. Nevertheless, the government has argued 
that the terms of the contract are such that the damages are too speculative to support a 
finding of entitlement to money damages, as sought in Aegis's second and third claims 
and appeals (gov't hr. at 27-30). In response, Aegis contends that arguments about 
damages are premature at this point in the litigation and that it is not seeking 
speculative damages; only the difference between what it paid for replacement LA Vs 
and what it would have paid for the LAV s had the government complied with the 
contract and sold them to Aegis (app. reply hr. at 11-13). Neither side's argument is 
completely correct. 
We start by noting that the theory upon which Aegis appears to be seeking 
damages is flawed. That damages theory is that, in accepting Aegis's 11 December 
2011 proposal, the government agreed to a straight-line depreciation of the price of the 
LA Vs over a two-year period with a 5% residual value. Damages, then, would be 
calculated by subtracting the depreciated price of the contractually obtained LAV s 
from the price that Aegis ultimately paid on the market for other LAV s that it bought 
to replace them for use in its post-contract Iraqi business (see supp. R4, tab 96 at 4 
(damage analysis in first monetary claim), tab 98 at 1 (second monetary claim, 
adopting analysis of first)). But the contract did not mandate that the government 
depreciate the LAV s to almost nothing as Aegis first proposed. 
To be sure, as we discussed at length above, the contract incorporated both 
Aegis's 11December2011 proposal and its revised PWS. But while the proposal was 
firm that the right of first refusal would be triggered if the government had no use for 
the vehicles, it was not so firm about the means of calculating their price. With respect 
to use, the language was: "At the end of the Contract Aegis will be given the right of 
first refusal to purchase the vehicles in the event the Government has no further use for 
them" (app. supp. R4, tab 1 at 8320 (emphasis added)). By contrast, the price 
language, which immediately followed was: "We propose a straight line amortization 
over a 
2 year period with a 5% residual value" (id.). Moreover, unlike the terms of the 
PWS that could be harmonized with the use language of the proposal, the PWS 
language on the terms of the sale specifically rejected the set price proposed by 
Aegis's proposal, and stated: "If USG does not wish to take title to the vehicles, 
contractor will be given first right of refusal on negotiating and possible procurement 
of said vehicles" (app. supp. R4, tab 7 at 1983 (emphasis added)). This was consistent 
with the government's written response to Aegis's proposal in which it specifically 
rejected the set depreciation rate and proposed negotiations, instead (R4, tab 15 at 
408). We thus interpret the contract modifications together, to provide that Aegis and 
the government agreed to negotiate a price for the LAV s if the government had no use 
for them, but not to adopt the pricing formula proposed by Aegis. 
14 

Although this interpretation might diminish Aegis's damages - and certainly 
makes them less easily quantifiable - it does not prevent us from finding a breach of 
contract or making a monetary award. What we are presented with in this contract is 
an agreement to negotiate over a matter- in other words, an "agreement to agree," 
which imposes upon the parties an obligation to negotiate in good faith. North Star 
Steel Co. v. United States, 477 F.3d 1324, 1332 (Fed. Cir. 2007). Such agreements to 
agree have been held to be sufficiently definite to support the finding of the existence 
of a contract, see, e.g., Gardiner, Kamya & Assocs., P.C. v. Jackson, 369 F.3d 1318, 
1322 (Fed. Cir. 2004) (citing cases), and we see no reason to depart from this 
precedent at this time. Of course, ifthe parties are unable to resolve the quantum of 
this appeal upon remand, Aegis will be obligated to present evidence of the value of its 
agreement that was breached by the government, but we have no need to further 
address the measure of damages here and now. 
IV. The Government Has Not Presented a Legal Impossibility Defense 
Finally, we briefly address the matter of a defense that has not been raised by 
the government, but is so implicit in the facts leading up to the contract breach that we 
feel obligated to acknowledge it: was the government legally barred from selling the 
LAV s to Aegis? If so, does this suggest that both parties were under the 
misapprehension when they agreed to Mods 6, 7 and 10, that the government could 
sell the LAV s to Aegis when, in fact, it could not, thus presenting the defense of 
mutual mistake of law? 
Mutual mistake is an affirmative defense. See, e.g, K-Con Building Systems, 
Inc. v. United States, 131 Fed. Cl. 275, 332 (2017); Ameriserv Trust v. United States, 
125 Fed. Cl. 733, 747 (2016); see also East-Wind Industries, Inc., ASBCA No. 25684, 
86-1 BCA ~ 18,698 at 93,987 (holding that mutual mistake is "not merely" an 
affirmative defense, but also, effectively, a counterclaim). As an affirmative defense, 
it must be pied and proved. See Board Rule 6(b) (requiring affirmative defenses to 
be pied in the government's answer); Northrop Worldwide Aircraft Services, Inc., 
ASBCA Nos. 45216, 45877, 96-2 BCA ~ 28,574 at 142,630-31 (failure to timely 
raise affirmative defense may waive it); Kellogg Brown & Root Services, Inc., 
ASBCA No. 58175, 15-1BCA~35,988 at 175,823 (burden of proof). The 
government did neither here. 
The defense of mutual mistake is not present in the government's answer or in 
any pre- or post-trial filing in this appeal. Moreover, even when Aegis raised a related 
matter in its opening post-trial brief (primarily arguing that, because it had not been 
raised as a defense, the government could not rest upon a DoD regulation to excuse its 
performance (see app. br. at 36)), the government never claimed that it was presenting 
such a defense. Finally, at the hearing, the government presented no evidence (such as 
proof that the regulation actually prohibited the sale versus whether it was merely 
15 

perceived to do so) to prove such a defense. 11 The defense is thus both waived and 
unproved. 
CONCLUSION 
The government agreed to give Aegis a "right of first refusal" to negotiate a 
purchase of the LAV s obtained under the contract after the contract was over, so long 
as the government had no use for them. The government, in fact, had no use for the 
LAV s, but declined to sell them to Aegis because of its belief that it was not permitted 
to do what it had agreed to do under the contract. This was a breach of the contract for 
which the government has presented and proved no defense. Accordingly, Aegis is 
entitled to those damages it can properly prove came from that breach. The appeals 
are sustained and remanded to the parties to negotiate quantum. 
Dated: 15 November 2017 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
J. REfDPROUTy 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 
I concur 
11 We do not know or speculate why the government chose this strategy, but recognize 
that there may have been very good reasons for it to do so. 
16 

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. 59082, 60111, 60259, 
Appeals of Aegis Defense Services, LLC, f/k/a/ Aegis Defence Services Ltd., rendered 
in conformance with the Board's Charter. 
Dated: 
17 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals