Falmouth Scientific, Inc.
Docket: ASBCA 60776
Decision date: 2019-07-03

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of--
Falmouth Scientific, Inc. 
Under Contract No. N00039-06-C-0060 
APPEARANCE FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 60776 
Bernice A. Pasternak, Esq. 
Innovation 140 Consulting, LLC 
Wakefield, MA 
Arthur M. Taylor, Esq. 
DCMA Chief Trial Attorney 
Peter M. Casey, Esq. 
Trial Attorney 
Defense Contract Management Agency 
Boston, MA 
MAJORITY OPINION BY ADMINISTRATIVE JUDGE PROUTY 
In this matter, appellant, Falmouth Scientific, Inc. (Falmouth) challenges the 
application of indirect cost rates to which it and the government bilaterally agreed. 
We consider a series of motions for summary judgment. We grant summary judgment 
to the government upon the bilateral contract modification, as it requests, 1 and deny 
Falmouth's cross-motion,2 which is largely based upon a fundamentally flawed 
understanding of the government's claim accrual, which is relatively straightforward. 
Somewhat more problematic is a different government motion for suinmary- . 
judgment ( which was filed before the motion which we grant, thus we refer to it as the 
government's first motion for summary judgment 3) which is premised upon a 
promissory note that Falmouth signed after initiating this litigation. To the 
government and Judges Kinner and Mcllmail, the promissory note, which was 
executed as part of a standard agreement between Falmouth and the government to 
1 The government's motion for summary judgment based upon the bilateral rate 
agreements is referred herein as the government's "second motion for summary 
judgment," or "gov't second mot." because it was the second motion for 
summary judgment submitted by the government in this appeal. This filing also 
includes its opposition to appellant's cross-motion for summary judgment. 
2 "App. compl. and mot." refers to appellant's cross-motion for surrim.ary judgment, 
which is confusingly combined with its complaint. 
3 Also referenced as "gov't first mot." 

permit the government to recoup the overpayment of indirect costs through an 
installment plan, constitutes a settlement of the dispute, mooting the appeal before us 
(see gov't first mot.). It was, however, intended as no such thing by either party.· 
Moreover, execution of the promissory note while pursuing the appeal is consistent 
with longstanding law that allows contractors to challenge government contracting 
directions with which they have already complied. Thus, we deny the government's 
first motion for summary judgment, which permits us to consider and grant its second. 
STATEMENT OF FACTS FOR PURPOSES OF THE MOTIONS 
I. The Contract 
The United States Navy Space and Naval Warfare Systems Command (the 
government) awarded the above-captioned contract (the contract) to Falmouth, 
pursuant to the Small Business Innovation Research program on August 31, 2006 (R4, 
tab 1 at 1-2). The contract included the standard Disputes Clause, found in Federal 
Acquisition Regulation (FAR) 52.233-1 (JUL 2002) (R4, tab 1 at 15). The Defense 
Contract Management Agency (DCMA) managed the contract on behalf of the 
government. Falmouth and its subcontractors apparently successfully conducted the 
research and technical work of the contract from 2007 until completion in 2011 
(Vander Schel aff. 112, 74; app. compl. and mot. 1 14). 
The contract was primarily a cost-reimbursement contract, and included the . 
standard clause from the FAR, which governed payment for incurred costs (see R4, 
tab 1 at 10, 15 (incorporating FAR clause 52.216-7, ALLOWABLE COST AND PAYMENT 
(DEC 2002), into the contract). As a consequence of its being a cost-reimbursement 
contract, the government essentially agreed to pay Falmouth based upon both the 
direct and indirect costs that it incurred in performance. As we have described at 
length in prior decisions, in cost contracts, the contractor invoices an estimated amount 
for indirect costs (whatwould generally be understood to be overhead) and gets paid 
that amount (with some exceptions) by the government as it performs the contract, so 
long as the contracting officer (CO) is generally satisfied that the estimates appear 
appropriate. The contractor subsequently submits an incurred cost proposal {ICP) to 
the government after the conclusion of each contract year to document its actual 
indirect costs for the year and to establish final indirect cost rates. Upon agreement by 
the parties upon the proper indirect cost rates, the parties reconcile the final rates with 
the estimate that was paid, and the parties make payment adjustments, as appropriate. 
See, e.g., Technology Systems, Inc., ASBCA No. 59577, 17-1BCA136,631 
at 178,379; FAR 52.216-7. If the parties do not come to agreement on the final 
4 "Vander Schel aff." refers to a paragraph of the affidavit of Jay Reed Vander Schel 
attached to the government's second motion for summary judgment. 
"Vander Schel aff., ex." refers to an exhibit attached to that affidavit. 
2 

indirect cost rates, the government may determine and impose an incurred cost rate 
upon the contractor, subject to appeal. Id. 
II. Problems With Falmouth's Indirect Cost Rates 
In its proposal for the contract, Falmouth had not included general and 
administrative (G&A) costs for its three subcontractors (app. compl. and mot. 'ti 20). In 
2007, the Defense Contract Audit Agency (DCAA), which was involved in the review 
ofFalmouth's proposed indirect cost rates, informed the company that it was required 
to apply G&A to its subcontractors and it would have to redo the invoices it had 
submitted on the contract to that point (id. 'ti 23). Falmouth worked with DCAA to· 
revise its prior payment requests (id. IJ'tl 24-30). 
The parties executed contract Modification No. P00004 (Mod. 4) on 
September 24, 2009 which, among other things, approved the retroactive change by 
Falmouth of its accounting methodology, including exclusion of subcontract costs in 
the G&A base (Vander Schel aff. 'ti 8; Vander Schel aff., ex. 4 at 147; see also Vander 
Schel aff., ex. 3 at 131 (Falmouth correspondence stating that it had received Mod. 4)). 
Mod. 4 also capped Falmouth's G&A rate at 36.56 percent (Vander Schel aff. 'ti 8; 
Vander Schel aff., ex. 4 at 147). 
III. Negotiations Between the Government and Falmouth Over The ICPs 
Falmouth submitted five final ICPs to DCMA. The first two, for fiscal years 
2007 and 2008, were both submitted on June 25, 2009, about three months prior to 
execution of Mod. 4 (R4, tab 9 at 112, 114). The ICP for fiscal year2009 was 
submitted on September 15, 2010 (id. at 123); the ICP for fiscal year 2010 was 
submitted on July 31, 2011 (id. at 120); and the one for fiscal year 2011 (the last for 
the contract) was submitted on May 29, 2012 (id. at 122). 
Beginning September 30, 2013, Mr. Jay Reed Vander Schei was assigned as the 
administrative contracting officer (ACO) for Falmouth's contract (Vander Schel aff. 'ti 2). 
In that capacity, he negotiated the settlement of the ICPs that Falmouth had submitted to 
DCMA (id. 'ti 7). DCAA reviewed Falmouth's ICPs and provided its evaluation to 
Mr. Vander Schel in January 2014 (id. 'ti 4). 
\ 
DCAA's evaluation, again, identified numerous problems with Falmouth's 
financial management of its G&A and subcontract costs (Vander Schel aff. 'ti 10-11; 
app. compl. and mot. 'ti 94). After a second iteration, DCAA's analysis concluded that 
Falmouth received overpayment of $118,810 for its indirect costs for the contract 
(Vander Schel aff. 'ti 12; app. compl. and mot. 'ti 105). Mr. Vander Schel provided 
DCAA's memorandum to Falmouth for comment in March 2014, and Mr. John Baker, 
3 

president of Falmouth, provided Mr. Vander Schei a response to DCAA's evaluation 
on April 25, 2014 (Vander Schei aff. ,, 5-6). 
Further DCAA analysis of the allowable cost limits in Falmouth's contract 
reduced its allegation of overpayment to $100,611.88 (Vander Schei aff., 13). 
· Mr. Vander Schei conducted extensive negotiations of the final indirect cost rates for 
2007-2011 with representatives of Falmouth beginning in June 2015 (id., 9). In one 
email, he noted to Ms. Janet Zaffini, Falmouth's accounting manager, that Falmouth 
would not have to reimburse the government in one payment: "Bear in mind, that you 
can make payment terms and arrangements for the money with the DF AS [Defense 
Finance and Accounting Service]. It is not an all or nothing type of situation for the 
repayment." (Vander Schel' aff., 14; Vander Schei aff., ex. 5 at 151) 
On June 19, 2015, Mr. Baker sent Mr. Vander Schei Falmouth's proposal to 
compromise the final rates with a payment to the government of $77, 772 
(Vander Schei aff., 21; Vander Schei aff., ex. 11). Mr. Vander Schei responded the 
same day by email with a counterproposal that he characterized as the best he could do 
for Falmouth and as his final position: payment to the government of $83,294.88 
(Vander Schei aff. ,, 22-25; Vander Schei aff., ex. 13 at 181; app. compl. and mot. 
, 113). This figure was created by applying a newly calculated G&A rate to contract 
costs to yield allowable costs of$1,417,121, which were reduced to $1,295,361 in 
accordance with authorized funding limitations on the contract (Vander Schei aff. 
, 24). Since the proper fee for Falmouth's work was $39,521, the total properly owed· 
by the government to Falmouth was set at $1,334,882. The government having 
already paid Falmouth $1,418,176.88, the difference owed to the government summed 
to the $83,294.88 noted above. (Vander Schei aff., 25; Vander Schei aff., ex. 13 
at 180-81) 
On June 22, 2015, Mr. Baker communicated to Mr. Vander Schei that Falmouth 
would agree to the government's June 19 offer (Vander Schei aff., 27; Vander Schei 
aff., ex. 15). :t-v'lr. Vander Schel then forwarded indirect cost rate agreements for each 
of the five years of the contract to Mr. Baker with an instruction to execute them and 
return them to Mr. Vander Schei (Vander Schei aff., 26; Vander Schei aff., ex. 14). 
These agreements included the exact same newly calculated G&A rates that yielded 
the $83,294.88 obligation to the government that was explained in Mr. Vander Schel's 
June 19, 2015 email (compare Vander Schei aff., ex. 13 at 181 to Vander Schei aff., 
ex. 14 at 188, 192, 196, 200, 204). Mr. Baker executed the agreements and forwarded 
them to Mr. Vander Schei before the end of the day (Vander Schei aff., 27; 
Vander Schei aff., ex. 15). Mr.·Vander Schei sent an email to Mr. Baker less than an 
hour after receiving the agreements, informing him that he would execute them and 
return them to Mr. Baker the next morning (Vander Schei aff., ex. 17). 
Mr. Vander Schei, in fact, executed the agreements that same day (June 22, 2015) 
(Yander Schei aff., 30; Vander Schei aff., ex. 16 at 231, 235, 239, 243, 247), although 
4 

he neglected to immediately forward copies of the fully signed agreements to 
Falmouth (Vander Schei aff., 32). 
The agreements make no reference, whatsoever, to the results of the DCAA 
audits (see Vander Schei aff., ex. 16). They are premised upon the authority of the 
FAR's final indirect cost rates/contracting officer determination procedure 
(FAR 52.216- 7) and other provisions of the FAR (Vander Schei aff., ex. 16 at 230, 
234,238,242,246). FAR 52.216-7(d)(3) (which is incorporated into the contract as 
noted above) provides in relevant part that, "a written understanding setting forth the 
final indirect cost rates .. .is incorporated into this contract upon execution." It does not 
require that the agreed-upon final indirect cost rates set forth the monetary 
consequences of applying the rates, nor does it require provision of copies of the 
executed agreement to the contractor to be effective. 
IV. Actions Taken After the Parties Agreed to the Incurred Cost Rates 
On July 8, 2015, Mr. Baker wrote to Mr. Vander Schei to inquire ifhe had 
missed any emails or inadvertently missed any payments since the June 22, 2015 
communications (app. opp'n/reply, ex. A-40 5). Mr. Vander Schei assured Mr. Baker 
that he had not missed any deadlines or emails, explaining that his (Mr. Vander Schel's) 
"actions are currently under review by management to ensure I've not unduly damaged 
the government through my concessions through our efforts." (Id.) 
The next communication between the parties in the record came on April 28, 
2016, when Mr. Vander Schei sent Mr. Baker a request for payment of the $83,294.88 
agreed upon in the rate agreements (Vander Schei aff., ex. 19). The request took the 
form of a standard form 1034 public voucher sent by email (id.). In his erriail, 
Mr. Vander Schei explained that instructions could be provided "to amortize this 
through DFAS" if Falmouth could not pay the agreed amount in a single payment (id.). 
Mr. Baker responded by email on May 3, 2016: 
[Falmouth] is not able to pay this settlement in one 
payment and we request a payment plan that has minimal 
5 Appellant attached extensive exhibits to its original complaint and motion for 
summary judgment, its opposition to the government's first motion for 
summary judgment, and its combined opposition to the government's motion 
for summary judgment and reply in support of its original motion. We will 
refer to exhibits from appellant's opening motion as "app. compl. and mot. 
ex.=," exhibits from its opposition to the govenµnent's first motion as "app. 
opp'n ex._," and those attached to its final responsive filing as "app. 
opp'n/reply ex._". 
5 

impact on our operations. As you know FSI is a small 
company and cash flow is a significant issue for us. In 
previous discussion [sic] between you and I when I agreed 
to accept the rate settlement you indicated that a long term 
penalty and interest free payment plan was possible in this 
kind of situation. This was one of the main reasons I 
agreed to accept the settlement and not contest it further. 
[Falmouth] requests that the payment be amortized over 5 
years. Please call me to discuss or let me know what we 
need to do. 
(Vander Schel aff., ex. 20 at 2) 
Mr. Vander Schel testified in his affidavit that, contrary to Mr. Baker's email, 
he did not make any representations to Mr. Baker regarding a long term interest-free 
payment plan (Vander Schel aff. 'ti 3 7), and there is no evidence before us supporting a 
finding that he did. In one of his own affidavits, executed on December 7, 2018, to 
oppose the government's motions, Mr. Baker wrote: 
On ... June 19, 2015, ACO Vander Schel and I had one 
more conversation. During the call, I recollect telling the 
ACO that FSI would have difficulty paying any amount 
and that the only hope would be to have the ability to pay 
any penalty over a long period of time. My understanding 
from our conversation was that DF AS can negotiate 
· payment terms and the payments can be stretched out to 5 . 
or more years m some cases. 
(App. opp'n/reply, ex. L 'ti 29) What is notable about this statement in the affidavit is 
what it does not say. It states nothing about an interest-free payment plan; it states 
nothing about how W.ir. Vander Schel responded to Mr. Baker's statement that his hope 
was to pay the penalty over a "long period of time." And Mr. Baker does not specify 
what Mr. Vander Schel said that led to his "understanding" about what "DFAS can 
negotiate." Moreover, nothing in this statement provides that Mr. Baker was made any 
promises about what DF AS would negotiate. 6 . 
On May 24, 2016, Mr. Vander Schel issued a demand for payment of debt and 
final decision to Falmouth via certified mail (Vander Schei aff., ex. 1). It was received 
by Falmouth on June 2, 2016 (notice of appeal, att. 1-2). The demand sought $83,294.88 
6 In any event, Falmouth does not press the matter in the body ·of its motion, and it 
presents no argument that it should be subject to different terms for its deferment 
request as a result of anything allegedly promised by Mr. Vander Schel. 
6 

premised upon "the final negotiated rates as executed on 22 June 2015" (Vander Schel 
aff., ex. 1 at 97). Mr. Baker contacted Mr. Vander Schel on June 22, 2016 to inform him 
that he was seeking deferment of the debt and to ensure that he was filing the proper 
paperwork to do so (app. opp'n/reply, ex. A-44 at 285). Mr. Vander Schel informed 
Mr. Baker that he should deal with OF.AS on his deferment request (id. at 284). That was 
confirmed on June 24, by Ms. Gina Brown from DCMA, who handled communications 
with Falmouth in Mr. Vander S~hel's absence. She elaborated that Mr. Baker should 
follow the instructions in the most recent letter from Mr. Vander Schel regarding 
. submission of a request for an installment plan.7 (Id. at 282-83) On June 29, Ms. Brown 
confirmed to Mr. Baker that the government had received his deferment request, but 
noted that it required several levels of review. She encouraged him to continue with his 
request for an installment payment plan, noting that the debt was still valid while the 
decision was being made regarding the deferment. (Id. at 279) On July 1, among other 
things, Mr. Baker informed Ms. Brown that he was considering filing an appeal with the 
Board (id. at 278-79). 
Although Mr. Baker followed DCMA's directions by reaching out to DFAS in an 
email on July 5, 2016, DFAS responded to him on Jµly 25 telling him to deal with 
Mr. Vander Schel (app. opp'n/reply, ex. A-45 at 287-88). Apparently straightening out 
the confusion at some point, on August 19, 2016, Mr. Baker sent a request to DFAS for 
an installment payment plan over a five to seven year period (app. opp'n/reply, ex. A-46). 
On August 30, 2016, Falmouth filed its notice of appeal with this Board. The 
notice of appeal states that it is appealing the May 24, 2016 demand for payment and 
final decision by the DCMA ACO. Falmouth's notice states its.dispute arises from the 
allegation that it was employing an inadequate accounting system from FY 2007-2011, 
but the ACO's decision is based upon faulty assumptions and calculations. 
[Falmouth] believes much of the confusion and errors in 
the contract costing and billing was caused by untimely, 
inconsistent and erroneous guidance from DC.A.A auditors 
during the contract performance periods. 
Without better information as to why the ACO applied the 
G&A rates to certain costs and not others, as well as 
applying what DCAA d.escribed in its Incurred Cost Audit 
Report as a 'DCAA-wide decrement factor of20 percent 
for application to claimed contract costs,' the government 
7 An installment plan is different than a deferment. 
7 

claim is unclear as to its basis and seems to be somewhat 
arbitrary in application. 
(Notice of appeal at 2) 
Mr. Baker continued to engage with DFAS officials regarding Falmouth's 
request for a payment plan. On August 31, 2016, Mr. Emmanuel S. Leigh, an 
accountant in the DAFS debt management offices, provided Mr. Baker an amortization 
schedule for a 36 month installment payment agreement (IP A), an IP A letter, and a 
promissory note for his signature (R4, tab 25 at 237-38). He was informed of the strict 
terms of an IP A and that DF AS would refer the debt for collection by the Department 
of the Treasury if Falmouth did not execute the IPA (id. at 238). Mr. Baker sent an 
email to his new DCMA contact, Ms. Gwendolyn Perry, the same day, noting that 
Falmouth "intends to sign the IPA with DF AS," and _requested further information 
about the status of the deferment request "[i]n light of this and the pending appeal" 
(app. compl. and mot., ex. A-47 at 292). 
The promissory note that Mr. Baker received from Mr. Leigh states that 
Falmouth "will pay" DFAS $83,294.88 plus interest at 1.875% 8 and a penalty on its 
"indebtedness under" the contract (R4, tab 26 at 241-43). It further provides that 
"[t]he indebtedness is the-result of Post Payment Price Adjustment" (id.). The note 
provides for an initial payment by Falmouth on September 30, 2016, and payments on 
the 15th of each succeeding month for 35 months (id.). The note describes the interest 
accumulated on the principal and the government's remedies if Falmouth fails to make 
the promised payments (id.). The note is utterly silent on the litigation before us, 
neither explicitly reserving Falmouth's rights to challenge the CO's decision nor 
waiving any rights of Falmouth to pursue its appeal (id. at 241-42). It includes no 
release of any sort (id.). 
Mr. Baker signed the promissory note with DFAS on September 9, 2016 (R4, 
tab 25 at 236,240). In his email conveying the executed promissory note to 
Mr. Leigh, Mr. Baker stated that the promissory note contains the "installment plan 
agreement" (id. at 236). He reminded Mr. Leigh that Falmouth was waiting for a 
decision on its request for a deferment of payment pursuant to a deferment package 
submitted in July (id. at 236-37). Mr. Baker also noted that Falmouth's appeal to the 
8 The language of the promissory note sloppily provides that interest would be paid at 
".01875 percent" annually (R4, tab 26 at 241), while the attached amortization 
schedule reflects a 1.875 percent annual interest rate (id. at 243). It is plain to 
us that the hundred fold difference in interest rate reflects a misapplication of 
the word "percent" in the text of the note and that the parties intended the 
annual percentage rate to be 1.875 %, rather than a commercially insignificant 
.01875 %. 
8 

Board had been given a case number and that government counsel had been assigned 
(id. at 237). · 
V. Additional Allegations Made in Falmouth's Affidavits 
In support of its motion for summary judgment and in opposition to the 
government's, Falmouth submitted to the Board two affidavits each from Mr. Baker 
(app. opp'n, ex. G; app: opp'n/reply, ex. L) and from Mr. William Vendt, a former 
DCAA auditor hired to assist Falmouth (app. compl. and mot, ex. F; app. opp'n/reply, 
ex. N). Falmouth also submitted an affidavit by Ms. Zaffini, Falmouth's accounting 
manager during the time relevant to the dispute (app. opp'n/reply, ex. M). As 
described later in this opinion, they provide no basis for material disputes of fact 
precluding summary judgment. Nevertheless, we note their primary allegations here 
so that we may address them below. 
Mr. Baker's first affidavit explained the facts and circumstances beginning with 
the demand for payment by the government on June 2, 2016, leading to execution of 
the promissory note (app. opp'n, ex. G). He noted that he expected that his signing of 
the promissory note during the pendency of his appeal would allow payments to the 
government to be put on hold pending the decision (id. tj[ 19). He further explained in 
general terms that facing a forced collection of the money by the government if he did 
not sign the promissory note would have imposed a "considerable financial hardship" 
on Falmouth (id. tj[ 21). 
In addition to the section quoted above, in which Mr. Baker discussed his desire 
to have an extended payment agreement, Mr. Baker's second affidavit delves deeply 
into the weeds of the negotiations between the parties relating to the indirect cost rates 
(app. opp'n/reply, ex. L). For reasons discussed in the "Decision" section below, we 
find this immaterial and will not tax the reader by going into detail in describing it 
here. We note, however, that Mr. Baker appears to be particularly upset by the fact 
that he did not have a face-to-face meeting with MJ. Vander Schel to discuss the audit 
(see, e.g., app. opp'n/reply, ex. L tj[tj[ 6-8, 17, 20-24). Moreover, Mr. Baker also 
explained that he felt the need to come to an agreement because he could not afford the 
cost of bringing an appeal to the Board (id. tj[tj[ 28-29). 
Mr. Vendt's two affidavits (app. compl. and mot., ex. F; app. opp'n/reply, 
ex. N), were largely about the merits ofDCAA's audits. The first affidavit explained 
Mr. Vendt's role in responding to DCAA's critiques ofFalmouth's accounting system 
· and DCAA's (wrongful, in Mr. Vendt's opinion) use of agency-wide decrements (see 
generally app. GOmpl. and mot., ex. F). The second of Mr. Vendt's affidavits added 
little to the first. In addition to repeating much of what was in his first affidavit, 
Mr. Vendt opined that the negotiations between the gov.emment and Falmouth were 
not "meaningful" and that the government "adopted a one sided 'Take it' or 'Leave it' 
9 

strategy." (App. opp'n/reply ex. N ,r 5) He also opined that Mr. Baker signed the 
agreement with the government on June 22, 2015 "under extreme pressure to either 
accept the offer or face a much higher adjustment" (id. 1 8). 
Ms. Zaffini's affidavit is complementary to Mr. Vendt's two affidavits in the sense 
that it discusses Falmouth's interactions with DCAA and generally takes issue with the 
DCAA's challenges to Falmouth's accounting system (app. opp'n/reply, ex. M). 
DECISION 
I. The Standards for Summary Judgment 
The standards for summary judgment are well established and need little 
elaboration here. Summary judgment should be granted if it has been shown that there are 
no genuine issues of material fact and the moving party is entitled to judgment as a matter 
of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A non-movant seeking to 
defeat summary judgment by suggesting conflicting facts "must set forth specific facts 
showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 
242,248 (1986) (quoting First National Bank of Arizona v. Cities Service Co., 391 U.S. 
253, 288-89 (1968)). 
II. We Deny the Government's First Motion for Summary Judgment Because 
the Promissory Note Did Not Moot This Action 
A longstanding tenet of government contracting is that when the government 
orders the contractor to take certain actions on the contract, the contractor is generally 
obliged to comply with the government's direction or the. contracting officer's final· 
decision, pending the results of procedures contained within the contract's Disputes 
clause if it feels it was wronged. Cf Alliant Techsystems, Inc. v. United States, 178 
F.3d 1260, 1265-66 (Fed. Cir. 1999); see also FAR 52.233-1, which is a part of the 
contract. 
To that end, it has long been. the practice of the courts and boards of contract 
appeals to allow challenges of government claims even after they have been paid irt 
full by the contractor. E.g. Ruhnau-Evans-Ruhnau Associates v. United States, 3 CL· 
Ct. 217 (1983); Lockheed Martin Corp., ASBCA Nos. 50566, 51351, 51784, 02-2 
BCA ,r 31,907 ("Lockheed Martin IF'); Roy E. Buhl, Leonard E. Fagan, John G. Fiala, 
Eugene P. O'Neil, Jr., William V Tompson, ASBCA No. 45818 et al., 94-2 BCA 
,r 26,805 at 133,293 (rejecting government defense that payment of money by 
contractor mooted appeal). We have also done so in appeals in which the appellant 
paid the government claim by promissory note, just as in the circumstances presented 
here. See, e.g., MDG Contractors, ASBCA No. 21166, 1976 WL 2036; Lockheed 
J 
Martin Corporation dlb/a Sanders, ASBCA Nos. 50464, 51350, 02-1 BCA ,r 31,784 
10 

("Lockheed Martin I"). Neither the government nor the dissent point to any contrary 
decision in which we or any tribunal whose decisions are binding upon us have ruled 
that payment of a government demand, either directly or through promissory note, 
without more, moots an appeal. Thus, following Lockheed Martin 1, we could deny 
the government's motion as a simple matter of stare decisis. 
Nevertheless, we do recognize that there are some differences between that case 
and the circumstances in the appeal here- notably, the promissory note in Lockheed 
Martin 1 was plainly drafted by the contractor's attorneys and included language 
stating that the contractor would be repaid if it prevailed on appeal, and, in that appeal, 
the government challenged not the promissory note, but the contractor's paying off the 
note. Lockheed Martin 1, 02-1BCA131,784 at 156,934, 156,942. Neither difference 
changes the analytic calculus. 
First and foremost, the fact that the Disputes Clause requires payment by Falmouth 
until that demand is either stayed by the governmen~ or overturned by an appeal, 
means that Falmouth's compliance with the CO's demand constitutes no waiver: the 
terms of the contract gave it no choice. The fact that, to avoid financial hardship, 
Falmouth complied with the demand by agreeing to an installment plan with a 
promissory note likewise constitutes no waiver ofFalmouth's appeal rights, especially 
since the promissory note was silent on such rights. The government and dissent 
appear to argue that the promissory note constitutes an independent obligation to pay 
the government mooting the appeal. It does not. The promissory note would never 
have been executed but for the installment payment plan which only came about 
because of the government's claim. To put a finer point to it: ifwe can order the 
return of money paid by appellant to the government in satisfaction of the government 
claim because we determine the claim to have been unfounded, we may order the 
setting aside of a promissory note executed in satisfaction of such an unfounded clai:i;n 
when we review the claim pursuant to the Disputes clause. Cf MDG Contractors, 
ASBCA No. 21166, 1976 WL 2036. 
Perhaps for these self-evident reasons, the government has not made such 
arguments in the past and has previously confined itself to arguing that agreeing to 
payments constituted a waiver. 9 In Lockheed Martin 11, we explained that we were not 
impressed by such arguments: 
9 Indeed, the government generally "gets" this as an institution. The Department of 
Defense (DoD) Financial Management Regulation, DOD 7000.14-R, (attached 
to the government'ls reply brief for its first motion for summary judgment as 
ex. A), discusses collections undertaken when a matter is in dispute and, in 
1050601, notes that appeals to the Board do not suspend collection actions, 
though money collected when there is such an appeal are accounted for 
differently so that they are not considered "settlement" of a debt. See 1 050602. 
11 

Appellant appealed the final decision of the contracting 
officer ... to this Board. It requested deferment of collection 
of monies to pay that claim both before and after its appeal 
was taken and until the appeal was decided by this Board. 
The government denied the deferment request and 
threatened appellant with various collection actions unless 
immediate payment was made either in cash or by 
promissory note with installment payments. 
Appellant paid the Government's claim by permitting 
offset against other contract payments. 
We are forced to reject the Government's estoppel and 
waiver arguments. The surrounding circumstances 
including the fact that the final decision asserting the claim 
had been appealed to this Board and appellant had made 
numerous protests about being forced to pay the claim 
before the appeal was concluded make it impossible for us 
to conclude that appellant admitted liability in making the 
payment. Thus, we reject the Government's contention 
that appellant admitted liability. 
02-2 BCA ,-r 31,907 at 157,631-32 (citations to record omitted). Here, Falmouth filed 
its notice of appeal to the Board shortly before signing the promissory note. The 
promissory note included no release and nothing in any of the communications 
between the parties gives us any reason to believe that a final settlement was expected 
or intended by anyone. In the email forwarding the executed promissory note, 
Falmouth made clear that it was continuing to pursue its request for deferment and 
reminded the recipient of the note of the pending appeal before the Board. To us, it is 
evident that, even as Falmouth was executing the prom1ssory note to minimize the 
damage of government collection actions, it was making clear that it intended to 
maintain its appeal, even if it did not say so quite as explicitly as the contractor in 
Lockheed Martin I. 
The government's first motion for summary judgment is denied. 
This suggests a recognition by DoD that it may collect on debts without the 
contractor agreeing that it owes the money. 
12 

III. We Grant the Government's Second Motion for Summary Judgment and 
Deny Falmouth's Cross Motion for Summary Judgment Because the Parties 
Bilaterally Agreed What the Contract Rates Would Be and Did so Less 
Than Six Years Before the Government's Claim 
Falmouth's motion for summary judgment is somewhat scattered and has 
evolved between the filing of its opening motion and the combined opposition to the 
government's second motion for summary judgment and reply in support of Its 
motion. ·Falmouth's original motion made three arguments: first, that the 
government's claim was time-barred by the Contract Disputes Act's (CDA's) statute 
oflimitations, 41 U.S.C. §§ 7103 (a)(4)(A) (app. compl. and mot. at 51); second,-that 
the "dispute aiises ... as a result of the erroneous calculations made by DCAA auditors, 
DCMA ACOs, and Falmouth" (id. at 61); and third, that DCAA's use of a decrement 
factor was unsupported by evidence of its reasonableness (id. at 66). 
The government's second motion for summary judgment rested upon the simple 
notion that the government claim appealed here rested upon the bilateral agreement 
which effectively established an agreed-upon figure owed to the government - a 
contractual agreement that the government sought to enforce long before the statute of 
limitations would have precluded it (gov't second mot.). Falmouth's combined 
opposition to the government's motion and reply in support of its motion (app. 
opp'n/reply) presents a number of new arguments that, as will be explained below, we 
do not find persuasive. First, Falmouth contends that the government's alleged 
untimeliness in determining final indirect cost rates was harmful to it during the 2015 
negotiations (app. opp'n/reply at 27). This, Falmouth argues, prejudiced it because the 
cancellation of government funds was imminent (id.), and the government delay was a 
breach of the duty of g(?od faith and fair dealing (id. at 31). Second, Falmouth alleges 
that there was no meeting of the minds between the parties when executing the 
bilateral modification because the government failed to "close the deal" by forwarding 
the countersigned agreements and summarie~ to Falmouth at the time they were 
executed (id. at 36); and because the figures agreed to were allegedly imprecise (id. 
at 43). Third, Falmouth argues, the government's alleged mischaracterization of a 
January 2, 2014 document as a "memorandum" as opposed to an "audit report" poses 
problems with respect to the timeliness of the government's claim (id. at 47). 
A. The Bases of the Government's Claim That Falmouth Is Appealing Are the 
Parties' June 22. 2015 Bilateral Agreements on the Indirect Cost Rates 
A great deal of the confusion sown by Falmouth's filings may be cleared up by 
explicating what is before us today. As noted above, Falmouth's appeal is of the 
May 24, 2016 final decision of CO Vander Schei. That final decision, in tum was 
premised upon the parties' "final negotiated rates." Though the negotiations began 
because of the DCAA audits and were informed by them, the agreements do not rest 
13 

upon them. Instead, they are a product of the negotiations of the parties as 
contemplated by FAR 52.216-7, which is incorporated into. the contract. 10 
B. The Bilateral Agreements Are Valid 
Falmouth makes two primary arguments attacking the validity of the bilateral 
pricing agreements: first, that the government's delays in negotiations placed it at a 
disadvantage; and second, that the government failed to "close the deal" by timely 
forwarding the signed contract modifications to it and because the agreements did not 
explicitly specify exactly how much money would be owed by it to the government. 
Neither is persuasive. 
In its brief, Falmouth touts the alleged expiration of the funds on the contract as 
the government's "Achilles heel" (app. opp'n/reply at 3).- This is not consistent with 
the evidence regarding the negotiations. First, despite submitting two affidavits by 
Mr. Baker, two by Mr. Vendt, and one by Ms. Zaffini, Falmouth has presented no 
evidence that the alleged expiration of the funds entered into the negotiations at all. 
This is exactly as we would expect because the net result of the neg.otiations was that 
Falinouth owed money to.the government (which is what is being appealed). Put 
another way, the undisputed facts are that any delay in the negotiations effectively 
delayed the time that Falmouth would be required to pay money to the government, 
not when it would get money from the government. Thus, Falmouth has not shown 
any conceivable way that the alleged expiration of funds could have been to its 
detriment when it negotiated with the government, nor did its negotiators allege that it 
was so detrimental - either contemporaneously or in their affidavits submitted with 
Falmouth's filings. Accordingly, Falmouth's argument that the government's alleged 
delays constituted a breach of the duty of good faith and fair dealing is a non 
sequitur. 11 
10 By contrast, nothing in the promissory note that is the subject of the government's 
first motion for summary judgment rests upon a contractual mechanism for 
final resolution of the contract's cost rates, nor were the terms of the promissory 
note incorporated into the contract as these rate agreements were by operation 
of FAR 52.216-7(d)(3). 
11 Falmouth makes another argument about timing that we find difficult to follow, 
which appears to be that the government's payment of $22,451.07 to Falmouth 
in April 2015 before seeking the $83,294.88 from Falmouth in June 2015 was a 
breach of the duty of good faith and fair dealing (app. opp'n/reply at 32-33). 
Without more, this argument makes no sense, and we fail to see how such a 
brief period of overpayment by the government could have been to the 
detriment of Falmouth much less, a breach of the duty of good faith and fair 
dealing. For a government delay to constitute a breach of the duty of good faith 
14 

\ 
' 
' 
To the extent that Falmouth complains that the government presented it with a 
"take it or leave it" proposition, we note that nothing in the contract precludes "hard· 
nosed" negotiations on the part of the CO, and Falmouth has presented no law stating 
as much. Moreover, the evidence was that there was give and take in the negotiations. 
The government's final offer (which Falmouth accepted) was less than $6,000 higher 
than Falmouth's last offer of $77,772. We do not see any evidence supporting a 
finding that the negotiations were a breach of the duty of good faith and fair dealing, 
as alleged by Falmouth. See Metcalf Const. Co. v. United States, 742 F.3d 984, 
990-91 (Fed. Cir. 2014); see also Relyant, 18-1 BCA ,r 37,085 at 180,539. Nor do we 
see any other legal basis to set aside the agreements based upon the government's 
conduct of the negotiations. 
With respect to Falmouth's argument that the agreements are_ invalid because 
the government-did not "close the deal" by mailing copies of the executed agreements 
to it or provide final cost figures within the executed agreements, these arguments lack 
support and misunderstand the FAR. 
Though it would have been the better practice for Mr. Vander Schei to have 
mailed copies of the rate agreements to Falmouth after he executed them, that mailing 
was not a prerequisite to their being effective. FAR 52.216-7(d)(3) provides that they 
were effective upon their execution and includes no provision requiring their receipt 
by the contractor to be effective. Falmouth argues that the government failed to 
comply with FAR 42.706, Distribution of Documents, because the government did not 
promptly distribute executed copie_s of the final indirect cost rate agreements to 
Falmouth as required by that FAR provision (see app. opp'n/reply at 41; 
FAR42.706(a)), but nothing in this provision makes the final distribution of the 
executed documents a prerequisite to their effectiveness. Cf Parsons Evergreen LLC, 
ASBCA No. 61784, 18-1 BCA ,r 37,135 at 180,726 (discussing, in part, 
"housekeeping regulations"); MPR Associates, Inc., ASBCA No. 54689, 05-2 BCA 
,r 33,115 at 164,111 (form does not triumph over substance for rate settlement 
agreements). 
Falmouth's generalized argument that there was no meeting of the minds 
between the parties because the rate agreements did not include the bottom-line 
number of the amount owed (see app. opp'n/reply at 38-44) fails because the 
agreements specified what was required (the rates) and Falmouth well knew what the 
exact consequences of agreeing to those rates would be. 
and fair dealing, the delay must have been to the detrim'ent of the contractor. 
E.g., Relyant, LLC, ASBCA No. 59809, 18-1 BCA ,r 37,085 at 180,540. 
15 

First, as to the meeting of the minds required for the rate agreements: the 
agreements specified in plain language, what the final indirect cost rates would be for 
each of the five years of the contract. That is what both parties agreed to by executing 
the agreements and they contain no ambiguity. They thus tracked the requirements of 
FAR 52.216-7(d)(3) and needed nothing more to be effective. To the extent that 
Falmouth is arguing that it did not know the ultimate consequences of its agreements, 
that contention is belied by the June 19, 2015 email sent by Mr. Vander Schel to 
Mr. Baker which not only included the $83,294.88 figure, but also the G&A rates that 
would be in the final·agreements (which were those that :Vere executed) and 
explanation of how the $83,294.88 figure derived from the modified G&A rates. To 
put it directly: the undisputed material facts demonstrate that Falmouth knew exactly 
what it was getting into when it executed the final rate agreements. 
We need not in,corporate parol evidence for interpreting the contracts to rule, as 
we do, that Falmouth ~ffectively agreed to pay the government $83,294.88. The terms 
of the agreements are unambiguous: Falmouth and the government established final 
indirect cost rates. The factual consequences of those agreements (for whicli no rule 
of law prohibits consideration of parol evidence) are that applying the agreed-upon 
rates to the undisputed i:nonetary figures associated with the contract (e.g., direct costs 
claimed, money already paid to Falmouth, etc.) yields the $83,294.88 figure which 
Mr. Vander Schel explained in the June 19, 2015 email and in the affidavit 
accompanying the government's motion, as discussed above. 12 Notably, Falmouth 
makes no effort to dispute the math. 
We note that, though Falmouth somewhat obliquely raises the issue of 
Mr. Vander Schel's authority to enter the agreements, based upon his email stating that 
his actions were under review by his superiors to ensure that he had not "unduly 
damaged" the government through his concessions to Falmouth (app. opp'n/reply 
at 39-40), it presents no evidence calling into question Mr. Vander Schel's authority to 
enter into the rate setting agreements. Whatever he meant in that email, by itself, it 
does not call into question the authority of Mr. Vander Schel, as ACO, to·agree to final 
rates, as set forth in the contract and consistent with his statement in his affidavit. 
Indeed, had Mr. Vander Schel attempted to disavow his agreements with Falmouth, we 
would have no basis for permitting such an action based upon lack of authority. 
C. The Government's Claim Upon the Agreements Is Timely 
Falmouth argues extensively that the government's claims were brought outside 
of the CDA's 6-year statute of limitations (app. compl. and mot. at 51). This argument 
12 Given the information provided to Falmouth in the June 19, 2015 email, its 
complaints about the "spreadsheets" not provided by the government in June 
2015 (e.g., app. opp'n/reply at 39) are simply immaterial. 
16 

misconceives the basis of the government's claim. It is not that the government is 
challenging the ICPs for the first two years of contract performance that Falmouth 
submitted on June 25, 2009 and arguing that we should re-evaluate them; rather, the 
basis of the government's claim is the differential between what Falmouth received for 
indirect costs and what the indirect costs were under the final indirect cost rates that 
the parties agreed to on June 22, 2015. The CDA's statute oflimitations begins 
running from when the claims accrue, and a claim accrues "when all events, that fix 
the alleged liability of...the contractor and permit assertion of the claim, were known 
or should have been known." DRS Global Enterprise Solutions, Inc., ASBCA 
No. 61368, 18-1 BCA ,r 37,131 at 180,696 (quoting FAR 33.201). Thus, June 22, 
2015 is the date that the government's entitlement to the $83,294.88 was fixed and 
from whence the statute of limitations should run. 13 The government made its claim 
less than one year later, on May 24, 2016, well within the 6-year statutory period. 
D. Falmouth's Defenses on the Merits of the DCAA Audits Are Inapplicable to 
the Claim Before Us 
Falmouth makes a number of attacks upon the conduct of the DCAA audits 
which are simply irrelevant to the appeal before us. As we have explained above, the 
bases for the government's entitlement in this appeal are the bilateral agreements 
executed by the parties, not the conclusions -right or wrong- of the DCAA's audits. 
Thus, the portions of the affidavits submitted by Falmouth about the difficulties 
encountered during the audits, the allegations in Falmouth's filings that DCAA acted 
unfairly, as well as the allegations that the decrement imposed by DCAA was 
unsupported, are all immaterial to the motion before us. · 
CONCLUSION 
Having held that the execution of the promissory note by Falmouth does not· 
deprive us of jurisdiction to consider the merits of this appeal, we find that the 
undisputed material facts demonstrate that Falmouth agreed with the government to 
the indirect cost rates included in the five agreements executed by both parties on 
June 22, 2015. These undisputed facts also demonstrate that these agreed-upon rates 
13 The June 22, 2015 date, in tum, was less than 6 years after the parties' agreement to 
Mod 4 on September 24, 2009, which changed the calculations in its ICPs. 
Thus, there is no argument to be made that Falmouth's agreements with the 
government in 2015 were over already-time-barred ICPs. 
17 

led to the debt owed to the government that was set forth in the government's May 24, 
2016 claim. We thus grant summary judgment in favor of the government upon the 
' grounds of its second motion and deny Falmouth's cross-motion. This appeal is 
denied. 
Dated: July 3, 2019 
I concur 
$ 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
1 dissent (see separate opinion) 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
18 
~~ J. REID ()UTY 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 
I concur 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I dissent and join in Judge Kinner's opinion 
~-p\~ 
T~CILMAIL 
Administrative Judge 
Armed Services Board 
of Contract Appeals 

DISSENT BY ADMINISTRATIVE JUDGE KINNER 
The DCMA administrative contracting officer's final decision demanded 
.Falmouth make payment of $83,294.88 to the government, based upon the final 
indirect rate agreement executed by Mr. Baker and the ACO (R4, tab 15} 
Mr. Emmanuel S. Leigh, an accountant in the Defense Finance and Accounting 
Service (DF AS) debt management office, provided Mr. Baker an amortization 
schedule for a 36 month installment payment agreement (IPA), an IP A letter and a 
promissory note for his signature (R4, tab 25; app. compl. and mot. ,I 132). Mr. Baker 
executed all three documents. He could have chosen not to execute the promissory 
note. Bu(Mr. Baker instead chose to commit Falmouth to pay the amount of the 
government's claim "to avoid any further adverse financial consequences or worse 
brought on by the Government, as indicated in both the ACO's Demand Letter, and 
Mr. Leigh's E-mail of August 31, 2016." (App. opp'n at 6) Where a party concedes 
all of the relief requested in the claim on appeal, the appeal has been rendered moot 
and the Board should dismiss it with prejudice since there is no longer a dispute 
between the parties on the appealed claim. Lasmer Industries, Inc., ASBCA 
Nos. 56946, 56966, 11-1 BCA ,I 34,671 at 170,801. 
Falmouth satisfied all of the government's demand by promissory note. 
Falmouth's binding commitment to pay the DCMA demand for $83,294.88 forecloses 
the Board's consideration of any remaining concerns Falmouth may have with that 
contracting officer's final decision. By executing.the promissory note, Falmouth 
effectively aligns itself with the government's position. Accordingly, the appeal must 
be dismissed as moot. See Avant Assessment, LLC, ASBCA Nos. 58986, 59713, 16-1 
BCA ,I 36,505 at 177,863 ("If the parties no longer advocate opposing positions, a case 
is moot and must be dismissed.") · · 
Dismissal is also appropriate because there is no further relief this Board can 
provide to Falmquth. Its commitment by promissory note to satisfy the government's 
claim is an accord arid satisfaction that now defines the parties' relationship. If 
Falmouth could achieve complete success in this appeal, the result would not alter that 
relationship. A decision by this Board that the ACO final decision is somehow invalid 
would not abrogate Falmouth's unconditional promise in the promissory note that it 
will pay the contracting officer's demand. 
Moreover, this Board does not possess jurisdiction to undo Falmouth's binding 
commitment in the promissory note. Contrary to the majority's discussion regarding 
the disputes clause, the promissory note is not part of this, or any other CDA contract 
that the Board may adjudicate. Moreover, Falmouth's claim does not contain a request 
for damages or any basis for payment to it from the government. Accordingly, 
Falmouth's unequivocal binding commitment to pay all of the government's demand 
by promissory note has eliminated the dispute in Falmouth's appeal. 
19 

The majority nonetheless concludes that "nothing in any of the communications 
between the parties gives us any reason to believe that a final settlement was expected 
or intended by anyone." The majority's basis for overlooking the "final settlement" 
created by the explicit binding language of the promissory note is that "even as 
Falmouth was executing the promissory note to minimize the damage of government 
collection actions, it was making clear that it intended to maintain its appeal.. .. " By 
the majority's logic, if Mr. Baker intended to only pay $50,000 when executing the 
promissory note that would have reduced Falmouth's liability below the $83,294.88 it 
is bound to pay by the terms of that note. The majority does not offer authority to 
support its theory that Mr. Baker's subjective intent may nullify the promissory note. 
In fact, the majority fails to confront the binding nature of the Falmouth 
promissory note. Instead, it argues the unremarkable, and undisputed point that a party 
can pay a debt while pursuing litigation to challenge that debt. Thus, the majority cites 
Ruhnau-Evans-Ruhnau Associates v. United States, 3 Cl. Ct. 217, 218 (1983), because · 
that case proceeded after the plaintiff had paid the government's claim under protest. 
These citations do not address whether this case is moot because they do not consider 
a debtor who has executed a document binding it to pay the entire government claim. 
The other cases cited by the majority are similarly inapposite. 
In MDG Constructors, ASBCA No. 21166, 1976 WL 2036, the parties reached 
a settlement in which the government waived the balance of its claim and agreed not to 
pursue payments under a promissory note. The available description of the case does 
not contain any explanation or specifics of the promissory note involved. Without any 
indication of the nature of that document that case cite is of little value beyond the 
notion, that I do not dispute, that a party may litigate against a debt upon which ·it has 
made payment. _J 
In Roy E. Buhl, Leonard E. Fagan, John G. Fiala, Eugene P. 0 'Neil, Jr., 
William V. Tompson, ASBCA No. 45818 et al., 94-2 BCA, 26,805, after the Board's 
deriial of their prior appeals, appellants paid government claims related to the 
overpayment of monies allocated for the payment of social security taxes. 
Mr. Tompson paid the amount requested by the contracting officer plus interest saying 
he retained the "rights to any monies." Id. at 133,291. Mr. Fiala paid the requested 
amount but later claimed he did so under coercion. Id. at 133,292. The individuals 
appealed the contracting officer's determination of interest due and the Board found it . 
could consider the subsequent appeal of the calculation of interest because the 
payments had not been an accord and satisfaction. Id. at 133,292-93. That decision 
does not support Falmouth's position. First, it was not the payments in that case that 
were challenged, rather the interest determination which, in part, resulted from a court 
decision issued after the Board's prior decision and filing of the new appeal. Second, 
the payments in that case could not be construed as a binding commitment to satisfy 
20 

the government's claims as Falmouth made here. Quite the opposite of the case cited, 
Falmouth's promissory note is a separate agreement ensuring its payments to the 
government. That agreement has established an accord and satisfaction of the 
government's clairri. 
The majority relies upon Lockheed Martin Corporation d/b/a Sanders, ASBCA 
No. 50566 et al., 02-2 BCA ~ 31,907 (Lockheed II). Yet that appeal proceeded after 
the government collected the amount of its claim by offset against other payments due 
to the contractor. Id. at 157,623-24. There is nothing in the facts of that case to 
support the characterization that the appellant permitted the government to recoup that 
payment. To the contrary, the government executed its collection action without the 
contractor's agreement. Id. at 157,63 L Indeed, the contractor did not agree, yet the 
government collected the funds ("appellant advised Government counsel that the 
payment by offset was made after coercion and under protest"). Of course the 
appellant's "payment" in that case did not render the matter moot. This case, like the 
other cases cited by the majority, fails to address the issue presented by Falmouth's 
promissory note. 
Alternatively, the majority asserts it could deny the government's motion as a 
simple matter of stare decisis. It makes that assertion on the basis of authority it finds 
in Lockheed Martin Corporation d/b/a Sanders, ASBCA Nos. 50464, 51350, 02-1 
BCA ~ 31,784 (Lockheed Martin I). That case, however, provides no firmer support 
for the majority than the other cases it cites. In that case, the appellant paid the 
government's claim with a promissory note, but that instrument required the 
government to repay appellant if appellant succeeded in its appeal before· this Board. 
Id. at 156,934. On those facts, the Board found that the appellant had paid the 
Government claim under protest. Id. at 156,941-42. However, the payment was 
essentially contingent on the results of appellant's appeal. Id. at 156,942. Of course, 
· the promissory note in that case did not eliminate the dispute or render the case moot. 
Falmouth's promissory note has no such limitations. 
Unfortunately, the majority's basis for its reliance upon stare decisis reflects 
Justice Brandeis' description of the doctrine that it is usually "more important that the 
applicable rule of law be settled than that it be settled right." Kimble v. Marvel 
Entertainment, LLC, 135 S.Ct. 2401, 2409 (2015) (quoting Burnet v. Coronado Oil & 
Gas Co., 285 U.S. 393, 406 (1932) (dissenting opinion)). As the Supreme Court 
21 

explained in Kimble, stare decisis has consequence only to the extent it sustains 
incorrect decisions; correct judgments have no need for that principle to prop them up. 
Id. In this case it is easy for the Board to avoid that consequence. 
Dated: July 3, 2019 
I concur 
~--?4r~ 
TIMOTHY P/MCILMAI~ 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
DONALD E. KINNER 
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. 60776, Appeal of 
Falmouth Scientific, Inc., rendered in conformance with the Board's Charter. 
Dated: 
22 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals 

) 
SEP ARA TE OPI;NION BY ADMINISTRATIVE mDGE MCILMAIL 
I dissent from the majority's opinion, and join Judge Kinner's opinion. From 
the moment appellant signed the promissory note, promising to pay the amount that 
the government demanded, this appeal was moot, and it became impossible for us to 
grant any effectual relief whatever to appellant. See generally Campbell-Ewald Co. v. 
Gomez, 136 S. Ct. 663, 669-71 (2016) (explaining mootness). We've had other cases 
like this. E.g., Combat Support Associates, ASBCA No. 58945, 16-1 BCA, 36,288 
at 176,974 (contracting officer withdrew payment demand, mooting appeal). What 
gives us the jurisdiction to "set aside" the promissory note, as the majority seems to 
say it has done? Given that the promissory note includes two, multi-section 
paragraphs containing government reservations, isn't it even more telling that the 
promissory note includes no appellant's reservations? And why is the majority willing 
to hold appellant to the final rate agreements ("Falmouth knew. exactly what it was 
getting into") but not the promissory note? Finally, would the majority find the appeal 
moot if the promissory note had preceded the notice of appeal? 
Dated: July 8, 2019 
f~CILMAI 
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. 60776, Appeal of 
Falmouth Scientific, Inc., rendered in conformance with the Board's Charter. 
Dated: 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals