Garco Construction, Inc.
Docket: ASBCA 57796, ASBCA 57888
Decision date: 2014-01-14

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeals of-- ) 
) 
Garco Construction, Inc. ) 
) 
Under Contract No. W912DW -06-C-00 19 ) 
APPEARANCES FOR THE APPELLANT: 
APPEARANCES FOR THE GOVERNMENT: 
ASBCA Nos. 57796, 57888 
Steven D. Meacham, Esq. 
John V. Leary, Esq. 
Peel Brimley, LLP 
Seattle, WA 
Thomas H. Gourlay, Jr., Esq. 
Engineer Chief Trial Attorney 
Francis X. Eugenio, Esq. 
Engineer Trial Attorney 
U.S. Army Engineer District, Seattle 
OPINION BY ADMINISTRATIVE JUDGE CLARKE ON THE GOVERNMENT'S 
MOTION FOR PARTIAL SUMMARY JUDGMENT 
The government moves for partial summary judgment 1 based on what it contends 
is a sovereign act limiting access of contractor convict employees to the jobsite on 
Malmstrom Air Force Base (MAFB). We have jurisdiction pursuant to the Contract 
Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109. We grant the government's 
motion for partial summary judgment in part and deny it in part. 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
1. On 3 August 2006 the U.S. Army Corps of Engineers (COE) awarded Contract 
No. W912DW-06-C-0019 (0019) to Garco to replace family housing, phase VI, at MAFB 
(R4, tab D at 10-2, -3). MAFB supports the 341st Missile Wing, one ofthree U.S. Air 
Force Bases that maintains and operates Minuteman III intercontinental ballistic missiles 
(gov't mot., ex. C, BG Finan decl. ~ 2). MAFB is designated a Protection Level 1 (PLI) 
installation, the highest security level in the Air Force (id. ). 
1 ASBCA No. 57796 is the original convict labor appeal. ASBCA No. 57888 is a 
"protective appeal" for 57796. The motion is styled "partial" because the issue of 
a time extension remains. 

2. The contract included the following FAR clause: 
52.204-9 PERSONAL IDENTITY VERIFICATION OF 
CONTRACTOR PERSONNEL (JAN 2006) 
(a) The Contractor shall comply with agency personal 
identity verification procedures identified in the contract that 
implement Homeland Security Presidential Directive-12 
(HSPD-12), Office of Management and Budget (OMB) 
guidance M-05-24, and Federal Information Processing 
Standards Publication (FIPS PUB) Number 201. 
(b) The Contractor shall insert this clause in all subcontracts 
when the subcontractor is required to have physical access to 
a federally-controlled facility or access to a Federal 
information system. 
(R4, ex. D at 30) 
3. The contract included Section 01001, "SUPPLEMENTARY REQUIREMENTS," 
that included: 
1.6 IDENTIFICATION OF EMPLOYEES AND 
MILITARY REGULATIONS: 
(a) The Contractor shall be responsible for compliance 
with all regulations and orders of the Commanding Officer of 
the Military Installation, respecting identification of 
employees, movements on installation, parking, truck entry, 
and all other military regulations which may affect the work. 
(b) The work under this Contract is to be performed at an 
operating Military Installation with consequent restrictions on 
entry and movement of nonmilitary personnel and equipment. 
(R4, ex. D at 01001-2) 
2 

4. The contract included Section 01005, "SITE SPECIFIC SUPPLEMENTARY 
REQUIREMENTS," which included the following: 
1.3 GENERAL AREA REQUIREMENTS 
Security requirements and procedures shall be coordinated with 
the 341 Security Forces Squadron, Resource Protection 
(telephone 406-731-4344), Malmstrom AFB. Activities of the 
Contractor and Contractor's employees and subcontractors and 
their employees while on the base, will be conducted in 
accordance with base regulations, including those of the fire 
marshal, as well as security directives. This includes, but is not 
limited to, obtaining a Work Clearance Request (AF Form 103) 
before any digging and yielding to alert vehicles during alerts if 
located on a marked alert route. Security directives include 
Antiterrorism Force Protection (paragraph 1.3.4 below) and the 
GENERAL CONTRACTING ENTRY AUTHORITY LIST 
attached [at] the end ofthis Section. This list shall include all 
Contractor personnel working on the base. 
(R4, ex. D at 01005-1) 
5. At time of award, MAFB, 34lst Space Wing Pamphlet 31-103,21 July 2005, 
Local Security Policy and Security Procedures for Contractors, established "policy for 
contractors who require[] entry to the installation" (R4, tab F, subtab 1 02). Paragraph 5 
of the pamphlet deals with entry to the base: 
5. Obtaining Entry Credentials/Passes. Contractors will 
be permitted to enter MAFB by following the procedures set 
forth in this pamphlet.. .. 
5.2 Upon award of a contract, the contractor will be issued an 
Entry Authority List (EAL) (Attachment 5) by the contract 
administrator in 341 CONS. The contractor will need to 
submit the required information for the EAL, to the contract 
administrator in 341 CONS prior to coming to MAFB. Once 
the letter is received from 341 CONS, the Visitor Control 
Center will forward the EAL to the 911 Dispatch Center. A 
911 Dispatcher will run the employees name through the 
National Criminal Information Center system for a wants and 
warrants check. Unfavorable results will be scrutinized and 
3 

eligibility will be determined on a case-by-case basis by the 
341 SFG/CC. 
(R4, tab F, subtab 102 at 2-3) 
6. The Notice to Proceed was issued to Garco on 21 August 2006 (gov't mot., ex. G). 
7. A pre-construction conference was held on 12 September 2006 that was 
documented in a 27 September 2006 set of minutes sent to Garco (R4, tab E, subtab 
101).2 Representatives ofGarco and its subcontractor James Talcott Construction, Inc., 
(JTC) attended (gov't mot., ex. H). The minutes 
included, "[n]o one with outstanding 
warrants, felony convictions, or on probation will be allowed on base" (R4, tab E, 
subtab 101 at 2). 
8. On 9 May 2007 Garco forwarded a letter, dated 8 May 2007, from JTC that 
stated in part: 
PerF AR 52.222-3 Convict Labor, this clause allows for the 
employment of persons on parole or probation. However, 
JTC does not understand why these individuals are 
continually being denied base access/passes. The 
unemployment rate in Montana is at a historical low. The 
construction industry is in need of qualified employees and 
these individuals should not be denied access to our jobsites. 
This issue is impacting and delaying JTC's performance of 
this contract. 
(R4, tab E, subtab 102) 
9. On 17 May 2007, JTC emailed COL Geofrey A. Frazier, MAFB, asking if JTC 
could chauffer pre-release convict employees on post and take other precautions in order 
to gain access to the jobsite (app. opp'n, ex. 6 at 3). COL Frazier responded stating, 
"[ o ]ur contracting, legal and security experts are meeting early next week to discuss this 
issue" and brief COL Finan (id. at 2). 
10. Between 17 May and 10 September 2007, there were a number of meetings 
and communications both internal to the Air Force and between the Air Force and 
Garco/JTC relating to the pre-release convict employee access issue (app. opp'n, exs. 7, 
8,10,11). 
2 The copy in the record is unsigned, however, Garco did not contest the accuracy of the 
minutes in its opposition. 
4 

11. In a 10 September 2007 email from Mr. Brad A. Bradley, Administrative 
Contracting Officer (ACO Bradley), to JTC concerning the parolee labor access to 
MAFB, he wrote: 
I've received an email from Nancy Sinclair of the JAG office. 
A new policy is being worked on. The Wing Commander has 
been briefed on the issue. Until the new policy is finalized, 
the Base has no further news to offer regarding the issue. 
Wish I could offer more insight on this. I can tell you that I 
was at a meeting in the June timeframe with COL Finan 
regarding this issue, and I tried to stress to her just how tight 
the labor pool is right now. She was willing to readjust her 
policy, but she is concerned how the change would be 
implemented so that it is applied fairly to all Base contractors. 
(Gov't mot., ex. K) 
12. On 30 October 2007 ACO Bradley, forwarded to Garco an "updated" MAFB 
policy memorandum on contractor personnel access to MAFB signed by the base 
commander COL Finan, but undated (R4, tab E, subtab 103). The memorandum read in 
part: 
MEMORANDUMFORALLCONTRACTORSAND 
CONTRACTOR PERSONNEL 
SUBJECT: Malmstrom AFB Installation Access for 
Contractor Personnel 
1. In order to preserve good order and discipline and 
safeguard personnel, resources and facilities by the authority 
granted to me by the Internal Security Act of 1950, this policy 
is effective immediately for all contractors and contractor 
personnel. 
c. The 911 Dispatch Center will input a listed employees' 
name and data into the National Criminal Information Center 
(NCIC) database for a background check in accordance with 
Air Force directives. Unfavorable results from the 
background check will result in individuals being denied 
5 

access to the installation, including, but not limited to, 
individuals that are determined to fall into one or more of the 
following categories: those having outstanding wants or 
warrants, sex offenders, violent offenders, those who are on 
probation, and those who are in a pre-release program. The 
definition of sex offender and violent offender can be found 
at Montana Code Annotated § 46-23-502. 
(R4, tab E, subtab 103) Garco does not dispute that COL Finan, as MAFB's Base 
Commander, had the authority to issue the policy memorandum nor does Garco dispute 
that the policy memorandum, by its terms, applied to "all 
contractors and contractor 
personnel" effective immediately. 
13. By letter dated 13 November 2007, Garco submitted to the ACO a request for 
equitable adjustment from JTC, dated 25 October 2007, in the amount of $454,266.44 
(R4, tab E, subtab 104). JTC explained: 
(!d. at 2) 
FAR 52.222-3 CONVICT LABOR (JUN 2003) specifically 
states that we are allowed to hire and employ individuals 
convicted of an offense for this contract. This FAR has been 
in previous contracts, and we planned on and used these 
individuals for other contracts. Because it is also in this 
contract, we based our cost estimates for Phase VI on our 
ability to use these same individuals or pool of individuals. 
There is a nationwide shortage of experienced construction 
workers. It is well documented that the problem is even more 
acute in Montana with our very low unemployment rate. 
14. On 18 December 2007, CO Nancy A. Gary determined that JTC's REA "has 
no merit" and suggested 
that if Garco/JTC disagreed they should "pursue resolution per 
the requirements ofFAR 52.233-1, DISPUTES" (R4, tab E, subtab 106). 
15. By letter dated 21 February 2008 to the ACO, Garco requested 
reconsideration of JTC's REA (R4, tab E, subtab 107). The ACO responded on 1 April 
2008 reiterating that it found no merit in the REA and again referring Garco/JTC to the 
disputes process (R4, tab E, subtab 1 09). 
16. By letter dated 12 June 2008 to Garco, JTC again explained its position: 
When our employees were first denied access to MAFB in 
early 2007, we asked for an explanation. A response from 
6 

MAFB Contracting Officer Arlene Stem dated May 21, 2007, 
informed us that "The Wing Commander makes all 
decisions to grant or deny on a case-by-case basis. 
However, individuals who have been convicted as violent 
offenders or any sexual crime in nature will be denied 
entry to the base." 
However, JTC employees denied access were not violent or 
sexual offenders. 
(R4, tab E, subtab 111 at 3) (Emphasis in original) On 25 June 2008, Garco forwarded 
JTC's letter to the ACO and requested a 
contracting officer's final decision (id. at 1). 
17. In an undated letter3 by Mr. Roger Lesofski, Job Developer/System Analyst 
of Great Falls Pre-Release Center, to JTC, Mr. Lesofski wrote: 
Per our discussion last week the 19th of May, I went back 
and checked my employer records at the Pre-Release Center. 
I can confirm to you that we had many residents working on 
Malmstrom AFB during the new construction period starting 
in 2001 thru 2005 and most of2006. As you are aware we 
had residents working 
for you, Atherton Construction and 
other sub contractors. Which was working exceptionally well 
for us, as well as the contractors. We were able to insure to 
the contractors that these individuals were tested on a weekly 
basics [sic] for drugs, which provides a better work force. 
During the period that Colonel Finan became the base 
commander approximately 2 years ago, [a] Memorandum for 
all contractors was released from her office. The 
Memorandum stated that Pre 
Release residents would be 
denied access to work on the base. Thus in effect eliminating 
the opportunity for your company and other contractors the 
use of our trained and qualified workers. 
(Gov't mot., ex. L) 
18. By letter dated 12 September 2008 to Garco, the alternate ACO, 
Allen R. Gallagher, stated that it had no record ofGarco's 25 June 2008 request for a 
3 The copy in the record has a partial fax date at the top reading "y 28, 2008." In 
addition, the reference to "2 years ago" in the letter implies that this letter was 
written in 2008. 
7 

final decision and suggested that if Garco/JTC desired a final decision that they should 
submit a certified claim (R4, tab E, subtab 113). 
19. On 24 May 2011, Garco submitted a certified "Pass Through" claim in the 
amount of$1,415,718.40 (R4, tab E, subtab 115). On 28 September 2011, Garco 
appealed, on a deemed denial basis, the CO's failure to issue a final decision (R4, tab E, 
subtab 118). On 29 September 2011 the Board docketed Garco' s appeal as ASBCA 
No. 57796 that was later consolidated with ASBCA No. 57888. 
DECISION 
Moving for summary judgment the government argues that COL Finan's policy of 
excluding pre-release convicts from MAFB was a sovereign act and as such appellant 
cannot recover money damages even if the policy caused its costs of performance to 
increase (gov't mot. at 14-16). The government relies in large part on Conner Bros. 
Construction Co. v. Geren, 550 F.3d 1368 (Fed. Cir. 2008) wherein the Federal Circuit 
affirmed the Board's decision in Conner Bros. Construction Co., ASBCA No. 54109, 
07-2 BCA ~ 33,703. The government argues that FAR 52.222-3, CONVICT LABOR {JUN 
2003) (Convict Labor clause) does not guarantee access to military installations. 
Appellant 
counters that it has a "long history" of over 20 years performing 
construction projects on MAFB and that during this time it was allowed to employ workers 
with criminal records and they were allowed on MAFB {app. opp'n at 6-7). It complains 
that in early 2007 under COL Finan, workers that were previously allowed on base were 
excluded and the change in policy increased its costs of performance (app. opp'n at 7-8). 
Appellant argues that the new policy was established in an arbitrary, unpredictable or 
discriminatory manner (app. opp'n at 25). Appellant complains that there was no pre-award 
notice of the policy change (app. opp'n at 30), that the "unwritten" policy was implemented 
without notice (app. opp'n at 29), that the COE was "Intimately Involved in Developing and 
Promulgating the New Policy" (app. opp'n at 34), and that questions of material fact exist 
relating to each of its allegations. Alternatively, it argues that the motion should be denied 
because it has not had a full opportunity to conduct discovery in defense of the 
government's motion (app. opp'n at 39). 
Summary judgment is appropriate only where there is no genuine of material fact 
and the moving party is entitled to judgment as a matter of law. Any significant doubt 
over factual issues, and all reasonable inferences, must be resolved in favor of the party 
opposing summary judgment. Mingus Constructors, Inc. v. United States, 812 F.2d 
1387, 1390 (Fed. Cir. 1987); Dixie Construction Co., ASBCA No. 56880, 10-1 BCA 
~ 34,422 at 169,918. "[S]ubstantive law will identify which facts are material. Only 
disputes over facts that might affect the outcome of the suit under the governing law will 
properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 
477 U.S. 242,248 (1986); Colbertv. Potter, 471 F.3d 158, 164 (D.C. Cir. 2006). 
8 

FAR 52.222-3, CONVICT LABOR (JUN 2003) provides, in part, that "(a) Except as 
provided in paragraph (b) of this clause, the Contractor shall not employ in the 
performance of this contract any person undergoing a sentence of imprisonment imposed 
by any court of a State .... " Paragraph (b) of the clause provides, however, that the 
contractor "is not prohibited from employing person" meeting certain criteria. We agree 
with the government that this Convict Labor clause does not mandate that convict labor 
hired will be granted access to military installations. 
The facts of this case can be divided into two distinct time frames: before and 
after COL Finan issued the October 2007 memorandum setting forth MAFB's policy on 
contractor employee access to MAFB. We have reviewed the reasons Garco advances 
for denying the government's motion for summary judgment pending further discovery 
(app. opp'n at 39-42). As explained below, we are not persuaded that any of the reasons 
Garco articulated are material to the legal elements of the sovereign act issue that arises 
as a consequence of COL Finan's October 2007 policy memorandum. Further discovery, 
however, may yield material facts in dispute relating to the exclusion of pre-release 
convicts from MAFB prior to the issuance of the October 2007 policy memorandum. 
COL Finan was commander of MAFB between July 2006 and May 2008 (gov't 
mot., ex. C). Contract 0019 was awarded to Garco on 3 August 2006 (SOF ~ 1). The 
contract included clauses that required Garco to comply with agency personal identity 
verification procedures (SOF ~ 2), with all regulations and orders of the Commanding 
Officer of the Military Installation affecting the work (SOF ~ 3), and with base security 
requirements and procedures (SOF ~ 4). In August 2006 MAFB's policy concerning 
contractor employee access to MAFB provided that an employee's name would be run 
through the National Criminal Information Center system and 
any "unfavorable results" 
would be "scrutinized" and eligibility for access to MAFB would be determined on a 
"case-by-case basis" (SOF ~ 5). During a 12 September 2006 pre-construction 
conference attended by Garco and JTC, it was explained that "[n]o one with outstanding 
wan-ants, felony convictions, or on probation will be allowed on base" (SOF ,!7). 
GarcoiJTC's claim arises from the fact that JTC hired pre-release convicts with 
construction 
experience to work on contract 0019, but MAFB denied 
these employees 
access to the base (SOF ,-;,-; 8, 16). JTC asserts that this policy was not consistent with its 
prior experience with MAFB or the Convict Labor clause, and it "impact[ ed] and 
delay[ed] JTC's performance" (SOF ~~ 8, 13, 17). It was not until October 2007 that the 
policy of denying base access to pre-release convicts was put in writing in a 
memorandum for "ALL CONTRACTORS AND CONTRACTOR PERSONNEL" issued 
by the base commander. COL Finan (SOF ,[ 12). 
\\11ile the parties focus on Conner Bros. Construction, 550 F.3d 1368, in their 
briefs, we rely both on Conner as well as a more recent case that is factually similar to 
9 

this appeal, ME.S., Inc., ASBCA No. 56149 eta!., 12-1 BCA ~ 34,958, aff'd, 502 
F. Appx. 934 (Fed. Cir. 2013). In ME.S. (ASBCA No. 56350) the contractor claimed 
costs associated with a change in the base access policy that caused its employees to 
spend an hour each day gaining access to the installation. Citing clauses similar to those 
in contract 0019, the Board decided that the change in the base access policy was a 
sovereign act. The Board applied the following criteria: 
With respect to the claimed price adjustment for the delay, 
we have found above that the changed entry procedures were 
required by the installation Security Forces Squadron and 
Air Force Instructions. They were of a public and general 
nature applicable to all contractors at the installation. They 
were intended to improve the physical security of the 
installation, were not intended specifically to nullify contract 
rights, and they provided no economic advantage to the 
government. (Finding 37) We conclude that the changed 
entry procedures were a sovereign act of the government for 
which no monetary compensation is due. See Conner Bros. 
Construction Co. v. Geren, 550 F.3d 1368 (Fed. Cir. 2008). 
!d. at 171,856. 
As in ME.S., we deal with a change in base access policy and we apply the same 
standards to arrive at our decision. In her declaration, Brigadier General 
(BG) Sandra E. Finan, former commander ofMAFB during the relevant time period, 
explained that she issued the October 2007 Memorandum for all Contractors and 
Contractor Personnel, Subject: Malmstrom AFB Installation Access for Contractor 
Personnel, pursuant to authority granted to her by the Internal Security Act of 1950. She 
stated that she "clarified the requirements ofHSPD-12, OMB implementing guidance for 
HPSD-12, AFI 10-245, AFSPC Sup 1 and 341 st Space Wing Pamphlet 31-103" (gov't 
mot., ex. C, BG Finan dec I. ~ 4 ). She clarified what constituted "unfavorable" 
information in the 341 st Space Wing Pamphlet 31-103 (id.; SOF ~ 5). The clarification 
indentified the following individuals that would be denied access to MAFB: "those 
[individuals] having outstanding wants or warrants, sex offenders, violent offenders, 
those who are on probation, and those who are in a pre-release program" (Finan decl. ~ 4; 
SOF ~ 12). BG Finan stated, "[t]he purpose of my policy was to ensure the safety of 
personnel on the installation and preserve the good order and discipline on the 
installation" (Finan dec I. ~ 4 ). The policy memorandum on its face applies to all 
contractors and contractor personnel, therefore, it is public and general in nature and 
applies to all contractors at the installation. There is no evidence that the policy was 
intended to nullify contract rights or that it provided to the government an economic 
advantage. Appellant presents no evidence contradicting BG Finan's declaration. All of 
the criteria in ME.S. are satisfied by the written memorandum of October 2007. The 
10 

implementation of the base access policy by the October 2007 memorandum was a 
sovereign act and the government is not liable in damages that may have been caused 
from October 2007 forward. 
For the time period before the October 2007 memorandum the 
record is less clear. 
In its opposition, appellant presents an analysis of contemporaneous documents detailing 
the process leading up to COL Finan's execution of her October 2007 memorandum. 
This analysis paints a picture of inconsistent explanations of the policy. However, it 
appears that the Air Force was consistent about not allowing pre-release convicts on 
MAFB from early 2007 (SOF '!! 8). The record is not sufficiently developed to allow the 
Board to grant the motion for the period between contract award in August 2006 and 
issuance of the October 2007 memorandum. 
CONCLUSION 
The government's motion for partial summary judgment is granted as to the period 
after COL Finan signed the October 2007 base access policy memorandum. The 
government's motion for partial summary judgment is denied as to the time period before 
COL Finan signed the October 2007 base access policy memorandum. 
Dated: 14 January 2014 
I concur 
4tu:~ 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
11 
CRAIG S. ARKE 
Administrat ve Judge 
Armed Services Board 
of Contract Appeals 
I concur 
Administrative Judge 
Acting Vice Chairman 
Armed Services Board 
of Contract Appeals 
'1. , 
uS 

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. 57796, 57888, Appeals of 
Garco Construction, Inc., rendered in conformance with the Board's Charter. 
Dated: 
12 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals