Paragon Defense Solutions, Inc.
Docket: ASBCA 64168
Decision date: 2025-09-04

ARMED SERVICES BOARD OF CONTRACT APPEALS 
 
Appeal of - )  
 )  
Paragon Defense Solutions, Inc. ) ASBCA No. 64168 
 )  
Under Contract No. SPE7M2-23-P-1048 )  
   
APPEARANCE FOR THE APPELLANT: Mr. Weiwei Jian 
  President 
 
APPEARANCES FOR THE GOVERNMENT: Gary P. Bilski, Esq. 
    DLA Chief Trial Attorney 
 John J. Pritchard, Esq. 
Julie K. Phillips, Esq. 
Adam J. Heer, Esq. 
    Trial Attorneys 
DLA Land and Maritime 
Columbus, OH 
 
OPINION BY ADMINISTRATIVE JUDGE EYESTER 
 
Paragon Defense Solutions, Inc. (Paragon) appeals the deemed denial of its 
claim, where it argued entitlement to payment for items delivered to the Defense 
Logistics Agency (DLA) pursuant to a purchase order.  In response, DLA argues that 
Paragon could only accept the unilateral purchase order by providing conforming 
items, which it did not.  DLA contends the purchase order has therefore lapsed and 
Paragon is not entitled to the requested amount. 
 
Paragon elected to pursue this appeal pursuant to the Board’s Rule 12.2, Small 
Claims (Expedited) procedure.  Accordingly, this decision shall have no precedential 
value, and in the absence of fraud shall be final and conclusive and may not be 
appealed or set aside.  41 U.S.C. § 7106(b)(4)-(5).  Paragon also pursued this appeal 
pursuant to Board Rule 11, in which the decision rests upon written evidence without 
courtroom testimony.  Based on the following, we deny Paragon’s appeal. 
 
FINDINGS OF FACT 
 
1. On December 29, 2022, DLA issued fixed-priced purchase order 
No. SPE7M2-23-P-1048 to Paragon in the amount of $12,520 (R4, tab 1 at 1, 5).  
Pursuant to the purchase order, Paragon was to provide 1,252 1/2 inch “CAP, TUBE” 
fittings (item No. 4730-00-595-1283) by May 30, 2023 (id. at 4-5).  These fittings are 
used for steam, air, oil or water piping service aboard naval vessels (R4, tab 7 at 49). 

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2. Box 16 of the purchase order included a check box stating that if it was 
“marked” the “supplier must sign Acceptance and return.”  The box was not marked 
and Paragon did not sign the purchase order; only the DLA contracting officer signed 
the order.  (R4, tab 1 at 1) 
 
3. The purchase order noted the item was a critical application item and 
incorporated by reference the following specifications:  MIL-DTL-1183K(2) 
(dated 08/20/2019) and MIL-DTL-1183/2A(1) (dated 08/20/2019).  The part/piece 
number was M1183/2-03 S.  (R4, tab 1 at 4) 
 
4. MIL-DTL-1183K(2) was the “Detail Specification” for “pipe fittings of cast 
bronze with at least one end for silver-brazing into steam, air, oil, or water piping 
systems” (R4, tab 7 at 40).  Table 1 of the specification included the following 
requirements for a 1/2 inch pipe:  minimum 3/8 inch depth of socket; minimum 0.840 
and maximum 0.843 inch diameter of socket; minimum 0.929 and maximum 0.949 
diameter of groove; minimum 0.146 inch face of fitting to groove; and minimum 0.083 
and maximum 0.093 inch width of groove (id. at 43-44).  The specification also 
included material requirements based on American Society for Testing and Materials 
standards (id. at 41). 
 
5. MIL-DTL-1183/2A(1) set forth the specifications for cap pipe fittings.  
Table 1 of the specification included the following requirements for a 1/2 inch pipe:  
minimum 0.12 inch metal thickness of top and minimum 1.17 inch band diameter.  
(R4, tab 7 at 36)  The specification explained that when the part is code letter “S,” as it 
was here (M1183/2-03 S), the part was to be grooved with the brazing ring packaged 
separately (id. at 38).  Hence, the purchase order required Paragon provide the brazing 
rings in a waterproof bag which was to have been attached to the shipping box or main 
component (R4, tab 1 at 5). 
 
6. The purchase order incorporated by reference Federal Acquisition 
Regulation (FAR) 52.246-2, INSPECTION OF SUPPLIES-FIXED-PRICE 
(AUG 1996) (R4, tab 1 at 6).  The destination point, which was the DLA distribution 
center, was also the inspection and acceptance point (id. at 5).  Pursuant to this 
inspection clause, the government “has the right to inspect and test all supplies called 
for by the contract, to the extent practicable, at all places and times, . . . and in any 
event before acceptance.”  FAR 52.246-2(c). 
 
7. The purchase order also incorporated by reference FAR 52.232-1, 
PAYMENTS (APR 1984) and 52.233-1, DISPUTES (MAY 2014) (R4, tab 1 at 7-8).  
The payments clause states the government shall pay the contractor for “supplies 
delivered and accepted.”  FAR 52.232-1.  Further, the purchase order included 
Defense Federal Acquisition Regulation Supplement 252.232-7006, WIDE AREA 
WORKFLOW [(WAWF)] PAYMENT INSTRUCTIONS (MAY 2013), which 

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required Paragon submit its payment requests and any supporting documents through 
the WAWF system (R4, tab 1 at 2). 
 
8. Paragon delivered the items on January 31, 2023 (app. supp. R4, tab 2).  
Paragon submitted an invoice for the items, dated January 26, 2023, through the 
WAWF (app. supp. R4, tab 1).  On February 15, 2023, Paragon notified DLA that it 
delivered the items but its invoice had not yet been accepted in WAWF (R4, tab 5).  
Paragon emailed DLA on March 24, 2023, requesting payment for the delivered items 
(R4, tab 3). 
 
9. On March 29, 2023, DLA’s Product Test Center completed a test report 
showing that the items Paragon delivered, and which were tested (the sample size 
was 5), failed “workmanship and dimensional testing” (R4, tab 7 at 30-31).  
Specifically, the test report stated that the items were not caps and brazing rings were 
not provided (id. at 31).  In other words, the items Paragon delivered were not the 
items required by the purchase order (compare R4, tab 7 at 34 (Photo No. 1), with id. 
at 36 (Figure 1)).  The test report further stated the items tested failed the dimensional 
and chemistry requirements identified in the military specifications set forth above.  
And the items failed the brazing ring requirements because, as noted, Paragon did not 
provide brazing rings.  (R4, tab 7 at 32-33) 
 
10. DLA placed the items in litigation status due to an active review of Paragon 
which began in February 2023 (around when Paragon delivered the parts), and which 
we do not need to discuss in detail for purposes of this decision (R4, tabs 6, 9-10).  
This review was completed on May 8, 2023 (R4, tab 8).  In July 2023, DLA noted that 
the items would remain in litigation status “pending conclusion of the case” which 
DLA believed could take several years to conclude (R4, tab 10).
1 
 
11. In October 2023, Paragon emailed DLA several times asking about the 
payment status for its delivered items (app. supp. R4, tabs 4-6).  On October 20, 2023, 
Paragon’s email to DLA stated that if the parts were unacceptable, DLA should 
specify the reason and return them to Paragon (app. supp. R4, tab 6). 
 
12. Paragon submitted a claim to the contracting officer on April 1, 2024 (R4, 
tabs 17, 22; answer ¶ 6).  In the claim, Paragon seeks $12,520 for the delivered items 
(R4, tab 22).  The contracting officer never issued a final decision. 
 
 
1 Paragon filed a motion to strike prejudicial and immaterial paragraphs from DLA’s 
answer and DLA provided a response.  Because the Board does not specifically 
address in its decision the issues Paragon raised as a concern, the motion is 
moot. 

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13. On May 18, 2025, Paragon filed a notice of appeal and complaint with the 
Board.  On June 2, 2025, DLA provided Paragon a copy of the inspection report and 
explained DLA did not accept the items because they were nonconforming, and that 
DLA would return the remaining items (one was destroyed for alloy testing) at DLA’s 
expense (app. supp. R4, tab 7 at 1-2).  DLA explained that the remaining items were in 
“new, unused condition” (id. at 2).  Paragon declined DLA’s offer as the appeal at the 
Board was pending (id. at 1). 
 
DECISION 
 
In its appeal, Paragon argues that the inspection clause required DLA to 
promptly accept or reject the supplies delivered and here, it took DLA 28 months to 
notify Paragon of the nonconforming goods which meant DLA waived its right to 
reject the items and constructively accepted them (app. br. at 1-2 (citing Standbuy 
Distribs., Inc., ASBCA No. 62721, 21-1 BCA ¶ 37,898); app. reply at 1).  Similarly, 
Paragon argues that pursuant to the relevant payments clause, DLA must pay Paragon 
as there was a de facto acceptance of the items and failing to pay when the government 
retained the items constitutes a breach of contract (app. br. at 2-3).  Further, Paragon 
challenges the test results as unreliable and inadmissible, argues the change in 
contracting officers and delay in responding to Paragon’s emails flouted the duty of 
fair and impartial treatment, and contends DLA failed to follow FAR procedures when 
assigning a new contracting officer (id. at 3-5). 
 
DLA argues that as the purchase order was unilateral, it could only be accepted 
through performance in accordance with the incorporated terms and conditions (gov’t 
br. at 1, 5-6).  DLA maintains that since Paragon did not provide conforming goods 
(i.e., failed to perform in accordance with the terms and conditions), the purchase 
order expired and there is no contract (id. at 5 (quoting Delta Indus., Inc., ASBCA 
No. 57356, 12-1 BCA ¶ 34,959 at 171,860; Comptech Corp., ASBCA No. 55526, 08-2 
BCA ¶ 33,982 at 168,082)).  DLA contends that as no contract was formed, Paragon’s 
breach of contract claim must fail (gov’t br. at 6 (citing Comptech Corp., 08-2 BCA 
¶ 33,982 at 168,083)).  In the alternative, DLA argues that if the Board finds there is 
an existing contract, since Paragon breached the contract first by delivering non-
conforming items, the doctrine of antecedent breach applies and Paragon is barred 
from any recovery (gov’t br. at 6-8). 
 
FAR part 13 addresses simplified acquisition procedures.  FAR § 13.004(a) 
explains that a quotation is not an offer and therefore cannot be accepted by the 
government to form a binding contract.  Rather, the purchase order issued to a supplier 
is an offer by the government which the supplier can accept either in writing or by 
furnishing the supplies ordered or proceeding with the work to the point there has been 
substantial performance.  FAR 13.004(a), (b).  Here, since Paragon did not sign the 

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purchase order (finding 2) the only way Paragon could accept it was by furnishing the 
supplies or engaging in substantial performance. 
 
As noted, DLA contends that Paragon did not provide the supplies it ordered 
because they were nonconforming, and therefore Paragon did not accept the purchase 
order.  Paragon argues it engaged in “substantial performance” because it delivered 
items to DLA (app. reply at 1). 
 
When a supplier substantially performs in an effort to provide the item that is 
the subject of the purchase order, an option contract is created and the government’s 
offer becomes irrevocable until the date specified for delivery.  Commwise, Inc. 
Joseph Wetzel d/b/a Avetel, ASBCA No. 56580, 09-2 BCA ¶ 34,240 at 169,230.  
However, “[i]f complete performance in accordance with the offer’s terms and 
conditions is not tendered [by the due date], the ‘offer’ lapses by its own terms.” 
Comptech Corp., 08-2 BCA ¶ 33,982 at 168,082 (citations omitted).  The offer lapses 
because the supplier (offeree) can no longer perform in accordance with the offer’s 
terms.  TTF, LLC, ASBCA Nos. 58495, 58516, 13-1 BCA ¶ 35,403 at 173,696.  To 
create a binding contract, the supplier’s (offeree’s) “actions of acceptance cannot 
deviate from the terms of the “offer.”” Comptech Corp., 08-2 BCA ¶ 33,982 
at 168,083 (citations omitted).  In other words, if the supplier provides nonconforming 
items, there has been no acceptance of the offer. 
 
An immediate right to withdraw or cancel an offer arises when the supplier 
(offeree) fails to perform by the specified date, however, the government (offeror) 
does not have to formally notify the supplier (offeree) that the offer lapsed or take any 
other specific action because, as a matter of law, the supplier (offeree) cannot bind the 
government (offeror) by subsequent acceptance.  Comptech Corp., 08-2 BCA ¶ 33,982 
at 168,083-84; see also Delta Indus., Inc., 12-1 BCA ¶ 34,959 at 171,861 (“Once its 
offer has lapsed, the offeror need take no action to cancel the offer, and the offeree 
supplier cannot thereafter bind the offeror by subsequently tendering full 
performance.”). 
 
Paragon was to supply these items to DLA by May 30, 2023 (finding 1).  While 
it did supply items (finding 8), they were not in accordance with the terms and 
conditions of the purchase order (findings 3-5, 9).  Pursuant to the inspection clause 
which was incorporated by reference into the purchase order (finding 6), the 
government “has the right to inspect and test all supplies called for by the contract, to 
the extent practicable, at all places and times, including the period of manufacture, and 
in any event before acceptance.”  FAR 52.246-2(c).  DLA tested the items and they 
failed (finding 9).  In fact, the items Paragon delivered were not even caps and did not 
include brazing rings (findings 3-5, 9). 
 

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While Paragon disputes DLA’s test results, we note that Paragon has never 
stated the items provided met the purchase order’s requirements.  In fact, pursuant to 
the inspection clause, Paragon was required to provide and maintain an inspection 
system for the items provided and “tender to the Government for acceptance only 
supplies that have been inspected in accordance with the inspection system and have 
been found by [Paragon] to be in conformity with contract requirements.”  
FAR 52.246-2(b).  As part of its inspection system, Paragon was required to have 
“records evidencing all inspections made under the system and the outcome.”  
FAR 52.246-2(b).  Despite the fact Paragon was required to maintain its own 
inspection system and records evidencing it inspected the items and they met the 
order’s requirements, Paragon provided no evidence of this. 
 
Paragon failed to provide conforming items.  While Paragon argues that mere 
delivery constitutes acceptance (app. reply at 1), it does not.  DLA never accepted 
these items (finding 13).
2  Accordingly, the purchase order lapsed. 
 
Paragon’s central argument is that DLA took too long to notify Paragon of the 
defects or reject the items and therefore there was a constructive acceptance.  In this 
regard, the pertinent FAR inspection clause required DLA to accept or reject supplies 
as promptly as practicable after delivery unless otherwise provided.  FAR 52.246-2(j).  
FAR 46.407(g) provides:   
 
Notices of rejection must include the reasons for rejection 
and be furnished promptly to the contractor. Promptness in 
giving this notice is essential because, if timely nature of 
rejection is not furnished, acceptance may in certain cases 
be implied as a matter of law. 
 
Implied acceptance, also referred to as constructive acceptance, “arises from a 
Government act inconsistent with the contractor’s ownership of such items.”  Ateron 
Corp., ASBCA No. 46867, 96-1 BCA ¶ 28,165 at 140,577 (citing John C. Kohler Co. 
v. United States, 498 F.2d 1360 (Ct. Cl. 1974) (government use and custody of a boiler 
for three months resulted in its implied acceptance), Silent Hoist & Crane Co., 
ASBCA No. 9872, 1964 BCA ¶ 4488).  Specifically, retention and use of the goods by 
the government can signify implied acceptance/constructive acceptance. 3  See id. 
 
2 Because DLA never accepted the items, Paragon’s citation to Standbuy Distributors, 
is inapplicable because that appeal concerns the revocation of acceptance.   
3 As noted, DLA placed the items in litigation status due to an active review which 
began around the time Paragon delivered the parts.  While DLA completed the 
review in May 2023, the items remained in litigation status with “the case” 
pending, which DLA believed could take several years to conclude.  (Finding 10)  
Although we do not discuss the full details of this matter, it explains to the Board 

7 
 
There was no implied acceptance prior to the lapse of the purchase order, or 
even after the purchase order lapsed.  Here, DLA offered to ship the items back to 
Paragon, noting they were in “new, unused condition” (finding 13) and therefore DLA 
has not taken ownership of them.  And, since they were nonconforming, DLA could 
not and did not use them (finding 13).  There was no implied or constructive 
acceptance here. 
 
CONCLUSION 
 
The Board concludes Paragon is not entitled to the relief requested. 
 
Dated:  September 4, 2025 
 
 
 
 
 
 
 
 
 
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. 64168,
 Appeal of Paragon 
Defense Solutions, Inc., rendered in conformance with the Board’s Charter. 
 
Dated:  September 3, 2025 
 
 
 
 
 
 
why DLA may have retained the items without intending to keep them for its own 
benefit indefinitely.  Regardless, however, DLA did not use the items and offered 
to provide them back to Paragon. 
 
 
 
LAURA EYESTER 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
 
 
 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals