TMS Envirocon, Inc.
Docket: ASBCA 57286
Decision date: 2012-06-19

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of-- ) 
) 
TMS Envirocon, Inc. ) ASBCA No. 57286 
) 
Under Contract No. F44600-01-C-0029 ) 
APPEARANCE FOR THE APPELLANT: Neil S. Lowenstein, Esq. 
Vandeventer Black LLP 
Norfolk, VA 
APPEARANCES FOR THE GOVERNMENT: Alan R. Caramella, Esq. 
Acting AirF orce Chief Trial Attorney 
Maj Sean Elameto, USAF 
Jeffrey M. Lowry, Esq. 
Trial Attorneys 
OPINION BY ADMINISTRATIVE JUDGE PARK-CONROY 
ON GOVERNlVIENT'S MOTION FOR SUMMARY JUDGMENT 
At issue is the government's motion for summary judgment asserting that the 
above-captioned appeal is barred because appellant, TMS Envirocon, Inc. (TMS), 
executed a final release. TMS filed an opposition. For the reasons that follow, we deny 
the government's motion. 
STATEMENT OF FACTS FOR PURPOSES OF THE MOTION 
Contract No. F44600-01-C-0029 was awarded to TMS in the amount of 
$3,229,283 on 28 September 2001 for the replacement of all drinking water piping at 
specified locations on Langley Air Force Base (AFB), Virginia (R4, tab 1). TMS 
subcontracted the work to International Technology Corporation (ITC), but shortly 
thereafter, ITC filed for bankruptcy and the subcontract was assigned to Shaw 
Environnlental, Inc. (Shaw) (decl. of Mehul S. Shah, TMS president, ~~ 1-2, 5-8). 
There were numerous changes, differing site conditions, a work stoppage, delays 
and disruptions throughout contract performance (R4, tab 243 at 2474,2476). A total of 
18 modifications were issued to the contract, increasing the price to $4,262,938 and 
extending the completion date to 8 September 2004 (R4, tabs 2-18). 
On 9 September 2004, TMS submitted to the contracting officer a request for 
equitable adjustment (REA) on behalf of Shaw seeking $2,403,325, to which it had added 
its markups, bringing the total amount requested to $3,197,210 (app. supp. R4, tab 561). 

- The REA was denied on 17 February 2005 for lack of the REA certification required by 
DFARS 252.243-7002(b) (app. supp. R4, tab 564). After TMS provided the DFARS 
certification on 14 March 2005, the REA was denied in its entirety on 15 November 2005 
by a letter that stated it was a contracting officer's final decision (R4, tab 249 at 62). 
On 22 November 2005, TMS submitted Invoice No. 2025-51 in the amount of 
$4,262.63 for the remaining contract balance, accompanied by a standard form payment 
affidavit signed by Ms. Anne S. Ray, controller, and notarized by Mr. Terry Penn 
(Ray decl. ~~ 4, 7). The invoice did not contain a release. (R4, tab 249 at 1075) Ms. Ray 
states that she signed a Contractor Release Form at that time, but there is no copy of any 
such release in the record (Ray decl. ~ 7). Ms. Ray further states that, at the time, she was 
aware that TMS had submitted the Shaw REA to the contracting officer, that TMS 
intended to file claims on its own behalf and that she had neither the intent nor the 
authority to release any TMS claims (Ray decl. ~~ 5, 6, 10). 
According to Ms. Ray, nearly a year later, in October 2006, she was contacted by 
Mr. Jim Doswell from Langley AFB who advised her that there was a ten cent error on 
Invoice No. 2025-51 and directed her to submit a new invoice and a Contractor Release 
Form (Ray decl. ~~ 13-16). Ms. Ray complied with this direction and on 6 October 2006, 
she signed a pre-printed standard "CONTRACTOR'S RELEASE FORM" for fmal 
payment of $4,262.73 as the TMS controller. The release form stated: 
[T]he undersigned Contractor does, and by the receipt of said 
sum shall for itself, its successors and assigns, remise, release 
and forever discharge the Government, its officers, agents, 
and employees of and from all liabilities, obligations and 
claims whatsoever in law and in equity under or arising out of 
said contract. 
Mr. Penn, identified as the TMS business development manager, completed the 
"CERTIFICATE" required for corporations, certifying with his signature and the 
corporate seal that Ms. Ray was the corporate controller and that the release "was duly 
signed for and in behalf of said corporation by authority of its governing body and is 
within the scope of its corporate powers.". (R4, tab 244) 
Ms. Ray states that, in executing the "CONTRACTOR'S RELEASE FORM," it 
was her "intent to only revise the previously submitted invoice ... and to only release TMS 
claims to the remaining $4,262.73 that was not disputed as due TMS in return for 
payment of that amount to TMS" (Ray decl. ~ 18). She further states that she considered 
this invoice, like the November 2005 invoice, to be a routine request for payment (id. 
~ 20). At the time, she was aware that TMS was planning to submit claims for additional 
costs incurred on the contract and to file an action in the U.S. Court of Federal Claims. 
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She avers that she "had no intent and no authority to release TMS claims under the REA 
or any other future claims." (Id. ~~ 21, 22) 
Mr. Shah similarly states that Ms. Ray did not have authority to waive or release 
the TMS claims (Shah decl. ~~ 39 and 39(g)). He also state~ that Mr. Penn was "not an 
officer or director of TMS, nor was he ... authorized to make any representations about 
.TMS's governing body or scopes [sic] of its corporate powers." According to Mr. Shah, 
Mr. Penn's position was essentially a marketing position. (Id. ~ 40) 
On 12 November 2006, TMS filed a protective law suit in the U.S. Court of 
Federal Claims based on the contracting officer's 15 November 2005 denial of the Shaw 
REA (app. supp. R4, tab 574). 
Final contract payment was made on 10 January 2007 (app. supp. R4, tab 569). 
Thereafter, by a letter dated 2 August 2007, TMS advised the contracting officer that it 
was retracting the release, asserting that Ms. Ray "did not intend to release the pending 
adjustments or potential related claims arising under the contract," that she was not 
authorized to do so, and that the government had to be aware that' the release had been 
inadvertently submitted.by Ms. Ray because of the pending REA and protective law suit. 
TMS enclosed its check for $500 as a "REFUND OF MONIES PAID ON 2025." 
(R4, tab 245) On 6 August 2007, the contracting officer returned the check, advising 
TMS that it could not retract its final release of claims on the contract arid that the 
government had rendered final payment more than seven months earlier (R4, tab 246). 
A second protective lawsuit was filed in the U.S. Court of Federal Claims in 
August 2008 challenging the government's refusal to retract the contractor's release form 
and to rescind the final payment (app. supp. R4, tab 585; Shah decl. ~ 38). Mr. Shah 
asserts that the government was aware that TMS intended to pursue adjustments on 
behalf of both Shaw and itself at the time it made final payment (id. ~ 39(k)). The lawsuit 
was dismissed without prejudice on 16 July 2009 (app. supp. R4~ tab 586). 
On 8 March 2010, TMS submitted a revised REA to the contracting officer 
seeking $2,439,512 (R4, tab 249 at 1). The REA was converted into a Contract Disputes 
Act (CDA) claim by a letter dated 30 March 2010 (id. at 1073-74). The contracting 
officer denied the claim on 20 Apri12010 (compl. ~ 8), and this appeal was filed with the 
Board on 16 July 2010. In a decision issued 18 June 2012, except as to eight claim items 
valued at $23,987 that accrued between 19 Apri12004 and 17 September 2004, we 
granted the governnlent's motion to dismiss for lack ofjurisdiction because the 
underlying claims accrued more than six years before .TMS converted the 2010 REA into 
aCDA claim. 
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" " 
DISCUSSION 
The government contends that it is entitled to summary judgment because TMS 
unambiguously released all clainls under the contract. In order to prevail upon its 
motion, the government must demonstrate that there is no genuine issue of material fact 
relating to the validity of the release and that it is entitled to judgment as a matter of law. 
Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed. Cir. 1987). To 
survive the motion, TMS must come forward with specific facts showing there is a 
genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 547, 
586-87 (1986). The substantive law identifi,es which facts are material and we are to 
draw all inferences in favor of TMS, the nonmoving party. Anderson v. Liberty Lobby, 
Inc., 477 U.S. 242, 249-50, 255 (1986). 
The government asserts that the language of the release here is unambiguous and 
that we should interpret it according to the plain meaning of its terms, without looking to 
extrinsic evidence. Bell BCI Co. v. United States, 570 F.3d 1337, 1341 (Fed. Cir. 2009). 
TMS does not identify any ambiguity in the terms or provisions of the release; 
rather, it responds that there are circumstances which preclude the release from barring its 
claim. It first asserts that there is evidence that the contracting officer knew, or is 
properly chargeable with knowledge, that at the time of fmal payment it was asserting a 
right to additional compensation. It cites JT Constr. Co., ASBCA No. 54352, 06-1 BCA 
~ 33,182. In that case, the contracting officer's knowledge of claims and the mutuality of 
intent regarding the final payment release were at issue. We denied the government's 
motion for partial summary judgment finding there were triable issues regarding the 
contracting officer's notice of certain of the contractor's claims and the mutuality of the 
final paytnent release executed by the contractor at the govenlffient's direction. Id at 
164,464-65. 
In this case, ,TMS has come forward with sufficient evidence from which we draw 
inferences in its favor that establish issues of material fact relating to whether the , 
contracting officer knew, or should have known, that TMS was asserting entitlement to 
additional compensation. The record shows that TMS submitted an REA to the 
contracting officer on 9 . September 2004, and that it was denied twice. The first denial 
was for lack ofa DFAR~ 252.243-7002(b) REA certification on 17 February 2005 and 
the second denied the REA in its entirety on 15 November 2005. The record does not 
establish conclusively whether Ms. Ray signed a Contractor Release Form in October 
2005 when the REA was still before the contracting officer. The only Contractor Release 
Form in the record is dated 6 October 2006, which Ms. Ray states she signed after being 
contacted by the govenlffient and at the government's direction. On 12 November 2006, 
TMS filed suit in the U.S. Court of Federal Claims challenging the contractipg officer's 
15 November 2005 decision. We are satisfied that, having denied the REA twice, the 
contracting officer was aware that TMS was seeking additional compensation and should 
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have been aware that a law suit had been filed at the Court of Federal Claims when final 
payment was made two months later on 10 January 2007. See J. G. Watts Construction 
.Co. v. United States, 161 Ct. Cl. 801, 807 (1963) (release will not be held to bar the 
prosecution of a claim, where' it is obvious that the inclusion of a claim in a release is 
attributable to mistake or oversight). 
Moreover, TMS came forward with uncontroverted evidence that Ms. Ray did not 
have authority to release the claims and that Mr. Penn was not authorized to make any 
representations on behalf of the company. See Peter Bauwens Bauunternehmung GmbH 
& Co. KG, ASBCA No. 44.679, 98-1 BCA ~ 29,551 at 146,497 (government did not 
provide evidence that contractor representative had apparent authority to resolve its 
claims). 
CONCLUSION 
F or the reasons stated, the Government's motion for summary judgment is denied 
as to the eight remaining items. 
Dated: 19 June 2012 
CAROL N. PARK-CONROY 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I concur I concur 
,/~4:rI¥:MARK N. STEMPLE EUNICE W. THOMAS 
Administrative Judge' Administrative Judge 
Acting Chairman Vice Chairman 
Amled Services Board Armed Services Board 
of Contract Appeals of Contract Appeals 
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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. 57286, Appeal ofTMS 
Envirocon, Inc., rendered in conformance with the Board's Charter. 
Dated: 
CATHERINE A. STANTON 
Recorder, Armed Services 
Board of Contract Appeals 
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