Job Options, Inc.
Docket: ASBCA 59314
Decision date: 2014-11-05

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of -- ) 
) 
Job Options, Inc. ) 
) 
Under Contract No. HDEC08- l 3-C-0003 ) 
APPEARANCE FOR THE APPELLANT: 
APPEARANCE FOR THE GOVERNMENT: 
ASBCA No. 59314 
:rvtr.JeffreyJohnson 
CEO 
Ronald S. Hom, Esq. 
Assistant General Counsel 
Defense Commissary Agency 
Fort Lee, VA 
OPINION BY ADMINISTRATIVE JUDGE THRASHER 
PURSUANT TO RULE 12.3 
Job Options, Inc. (JOI), seeks an equitable adjustment for increased labor costs 
associated with the storage of additional goods under a contract with the Defense 
Commissary Agency (DeCA) to provide inventory management, shelf stocking, and 
janitorial services for the Camp Pendleton Commissary. The parties agreed to submit 
the appeal on the record pursuant to Board Rule 11. JOI elected the Board Rule 12.3 
accelerated procedure on 14 May 2014. The government concedes entitlement and this 
decision only addresses quantum. We have jurisdiction pursuant to the Contract 
Disputes Act of 1978, 41 U.S.C. §§ 7101-7109. 
FINDINGS OF FACT 
The Contract 
1. JOI was awarded Contract No. HDEC08-13-C-0003 on 30 October 2012 to 
provide shelf stocking, receiving/storage/holding area operations (RSHA), and custodial 
tasks for the Camp Pendleton Marine Corps Base (MCB) Commissary, Camp Pendleton 
MCB, California (R4, tab 1at1, 61). 1 The contract was awarded as a firm-fixed-price 
1 The award was sole source to JOI because the services required, shelf stocking, 
RSHA, and custodial tasks, are listed on the procurement list established 
by the Committee for Purchase From People Who Are Blind or Severely 
Disabled pursuant to the provisions of the Javits-Wagner-O'Day Act, 41 U.S.C. 
§§ 8501-8506. This required the government to obtain the services from a 
qualified non-profit work center and JOI was chosen to provide 
the service. 
(R4, tab 32) 

(FFP) contract with a base year and four option years (R4, tab 1 at 3-25). This appeal 
only relates to the base year, 1November2012 through 31 October 2013, and only three 
of the nine areas of performance, Shelf Stocking Operations, Overwrites, and Storing 
Items under RSHA Operations. 
Shelf Stocking Operations & Overwrites 
2. The number of cases JOI stocks every month is based upon orders from the 
Frequent Delivery System (FDS) algorithm. The FDS algorithm provides an estimate 
of how much product is necessary to fill the shelves. Because the FDS algorithm is not 
100% accurate, occasionally some stock cannot be shelved and must be stored. This 
extra stock, that is delivered but has to be temporarily stored, is referred to as an 
Overwrite. The Performance Work Statement (PWS), § 4.3.3.2.1.2., defines Overwrite 
cases as: 
[C]ases that the Government has ordered from FDS 
distributors for replenishment stocking, and that the 
Contractor has moved to the sales floor to stock; but which 
the Contractor cannot stock in shelf space available in item 
allocations. 
(R4, tab 1 at 79) 
3. The contract recognizes there is a cost incurred with removing (pulling) cases 
from the floor to be temporarily stored and provides a mechanism to compensate the 
contractor if the number of monthly overwrites exceeds an estimated monthly overwrite 
percentage. PWS § 4.3.3.8. provides a measure of estimated overwrite cases per month, 
stating: 
The estimated percentage of overwrite cases per month is 
7% percent of the total monthly cases available for stocking 
by the Contractor. In accordance with Schedule B of the 
contract, the Contractor shall be entitled to invoice the 
Government for the number of cases exceeding the 
estimated monthly overwrite percentage. Any case(s) that 
the Government specifically directs the Contractor to stock 
shall be included in the number of total cases available for 
stocking. 
(R4, tab 1 at 81) Computation for payment for excess overwrites is found in 
Technical Exhibit 1 , 5.1.3., which states in pertinent part: 
The Contractor shall be entitled to invoice the Government 
for the number of cases exceeding the estimated monthly 
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overwrite percentage. The price per case for invoiced 
overwrites shall be a percent of the current per-case stocking 
price, as indicated on Schedule B of this contract. There 
shall be no claims against the Government when overwrites 
are at or below the estimated percentage for any month. 
(R4, tab 1 at 114) 
4. Shelf stocking operations are performed on a fixed-price basis: JOI is paid a 
set price for each case it actually stocks. JOI invoiced for payment using "SHELF 
STOCKING CASES STOCKED" (Form 70-114) (R4, tab 22 at 8). The price per case, 
as bid by JOI, was based upon an annual estimated quantity of cases provided in the 
solicitation (R4, tab 1 at 3, contract line item no. (CLIN) OOOlAA). JOI's bid price 
included the cost of overwrites, i.e., pulling the excess cases and temporarily storing 
them, up to 7% each month. CLIN OOOlAA states that JOI will, "[P]erform Shelf 
Stocking Operations that include overwrites 
between 0% and 7% in accordance with 
paragraph 4.3.3.8. of the PWS, Attachment I." (Id.) 
5. There is no basis in the contract for modifying the stocking unit price during 
the same contract performance period if the actual cases stocked exceed the estimated 
quantities. However, the contract does provide for adjusting the stocking unit price in a 
follow-on year under certain limited circumstances. Clause 52.217-4506(a), PRICE 
ADJUSTMENT FOR FOLLOW-ON YEAR REPRICING (JUL 2009), states in pertinent part: 
a. This is a firm, fixed-price contract with provisions for 
unit prices that are not subject to adjustments on the basis of 
the contractor's cost experience or cost growth in performing 
the contract. The only factors subject to adjustment due to 
follow-on year repricing will be wage rates/fringes, federal 
or state mandated changes to payroll expenses, and other 
payroll expense changes deemed appropriate for payment by 
the contracting officer that may be outside the contractor's 
control such as Worker's Compensation premiums. Scope 
and workload changes shall be handled in a separate 
proposal from renewal proposals. 
e. On a case-by-case basis, the Contracting Officer shall 
review the estimated shelf stocking workload in the contract 
to ensure it adequately reflects the actual cases stocked. The 
contractor may request that the Contracting Officer review 
the estimated shelf stocking workload if there is a 10% or 
greater variance in workload for cases stocked which occurs 
3 

over a six-month period. Workload/price changes are not 
mandatory/automatic when reviews occur, and are dependent 
upon reasons for and/ or circumstances surrounding the 
variance. If the Contracting Officer determines an 
adjustment is warranted, the price should be negotiated and 
the contract modified accordingly. 
(R4, tab 1 at 38-39) 
Storing Items under RSHA Operations 
6. The process of storing and pulling items is a RSHA function (R4, tab 1 at 85, 
§§ 4.4.2.7., 4.4.2.8.). The stored items only include operating supply items, residual 
stock from displays and semi-perishable items identified by the store director (id. § 
4.4.2. 7. ). Unlike shelf stocking operations, RSHA operations are priced, and the 
contractor is paid, a fixed monthly amount to provide the service. Although specific 
products stored have an associated estimate of cases per month to be stored, there is no 
basis in the contract for reimbursing the contractor for the actual number of cases above 
the estimated amounts. PWS § 4.4.2. 7. provided an estimated number of cases to be 
stored each month, as follows: 
Estimated number of line items and cases per month to STORE: 
Line Items Cases 
Semi-nerishables. (a): 265 8.000 
Oneratim1 Sunn lies (b ): 55 600 
[OTAL TO STORE (a+b): 320 8,600 
(Id.) 
7. On 20 November 2013, JOI submitted a request for equitable adjustment 
(REA) to the contracting officer (CO) requesting a CO's final decision (COFD) granting 
a contract adjustment of $48,006.42 for additional labor incurred as a result of storing 
more semi-perishable cases in the warehouse than estimated in the RSHA section of 
the PWS during the period 1 November 2012 through 31October2013. JOI explained 
its basis for the request and calculation 
methodology as follows: 
This occurred as the result of significantly smaller 
percentage of the total cases stocked from the nightly FDS 
load than was contemplated in the contract coupled 
with a 
much higher percentage of cases stocked from the residual 
sections of the warehouse. Special buys and promotional 
purchases accounted for a much greater percentage of total 
orders than was estimated in the PWS of the contract. The 
extra labor incurred from warehousing and storing more 
4 

cases in the crowded warehouse and then working the 
residual stock onto the shelves on the sales floor is the 
justification for this request for equitable adjustment. 
We are unable to use the monthly RSHA report to provide 
an accurate number for cases JOI stored over the time 
period involved because DECA is failing to produce and 
record the required daily and monthly data for cases stored. 
The PWS for this contract however, calls for 96,000 cases 
annually to be stored in the warehouse. The actual figure 
that we derived during the twelve months (Nov 2012 
through Oct 2013) is 193,194 additional cases that had to 
be warehoused and stored. Eventually these stored cases 
were moved from the warehouse to their place on the shelf. 
We calculate additional labor in the following manner: the 
additional 193, 194 cases stored divided by 86 cases per 
hour (which is the productivity factor in storing 
merchandise) for a total of 2,246.44 hours. At a fully 
burdened wage rate of $21.37 dollars for a material 
handling position this yields a total REA of $48,006.42. 
(R4, tab 11) JOI removed all actual FDS overwrites from the calculations, stating, 
"Although overwrites are not a part of the number of estimated cases to store in accordance 
with 4.4.2.7, we have removed them so we can narrow down the cases and show the actual 
additional cases Stored and Stocked from the backroom" (id. at 2). The claim requested a 
final decision from the CO within 60 days (id. at 1 ). 
8. The CO responded with a final decision on 25 April 2014 granting JOI 
$40,524.95 of the $48,006.42 claimed. The decision accepted JOI's general 
methodology for calculating the amount due but disagreed with some areas of JOI's 
calculations, stating: 
In reviewing the documentation submitted, as well 
as case count sheets for the period of time referenced 
above, the following determinations were made: 
1. New FDS cases totaled 688,548 vs. 688,835. 
2. Overwrite cases totaled 50,266 vs. 50,276. 
3. New FDS cases stocked totaled 638,282 vs. 638,559. 
4. Actual cases stocked totaled 991,281 vs. 991,340. 
5 

5. The difference between the total cases stocked and 
the new FDS cases stocked was 352,999 vs. 352, 781. 
6. Removing the percentage of overwrite cases 
specified within the PWS (7% of 1,048,644 estimated 
annual cases or 73,405 cases) and stored cases (103,200 per 
the PWS), results in 176,394. This methodology provided 
consideration for the overwrite cases 
that were less than the 
specified percentage, or 23,139 less cases. 
7. In addition to the removal of the cases associated 
with overwrites and stored cases, it was determined 
appropriate to also remove the cases associated with Day 
Vendor and Day FDS. Day Vendor cases are issued by the 
government to the contractor 
to stock, to remedy not in 
stock (NIS) situations at the merchandise shelf location. 
Day FDS cases do not require the level of warehousing that 
is required for other types of cases, such as overwrites and 
stored cases. The removal of these cases (Day Vendor@ 0 
cases and Day FDS @ 13,308 vs. 13,311 cases) results in a 
balance of residual cases for the specified period of 
performance of 163 ,086 vs. 193, 194. 
8. Loaded wage rate for Material Handler of $21.37[.] 
As a result, the CO denied the claim in part stating: 
[It] has been determined that the contractor warehoused an 
additional 163,086 cases of merchandise during the 
specified period of performance. Using the productivity 
rate referenced within the claim, the effort associated with 
the handling of the additional cases results in a total of 
1,896.35 additional labor hours. As such, the monies due 
the contractor total $40,524.95." 
(R4, tab 22 at 1-2) 
9. JOI appealed the COFD to the Board on 14 May 2014 electing the Board's 
accelerated procedures under Board Rule 12.3 (Bd. corr.). In its appeal, JOI alleged that 
the CO "inappropriately applied a flawed and inconsistent methodology" ( compl. at 1 ). 
10. In its answer, the government recognized that a segment of the CO's original 
determination was incorrect; that the correct number of stored cases should be 103,200, 
6 

which combined the storage amount for semi-perishables and operating supplies, and 
conceded the appropriate number of total stored cases should be 96,000. Consequently, 
the government conceded credit to JOI for the 7,200 case difference entitling JOI to an 
additional $1,789.12. (Answer at 3) 
11. The parties elected to submit their cases on the record pursuant to Board 
Rule 11 (Bd. corr. fax dtd. 24 July 2014). 
DECISION 
The government concedes appellant is entitled to an equitable adjustment for 
labor costs incurred in storing additional cases of semi-perishable goods that exceed the 
number of cases estimated in the contract (finding 8). At this point, the dispute is only 
about the methodology for calculating appellant's recovery. Specifically, the parties 
only disagree regarding the correct methodology for calculating overwrites and the 
number values within the various categories stocked and stored items. The following is 
a summary of the calculation methodology employed by the parties: 
JOI DeCA 
Calculation Calculation 
Difference 
1 Night FDS Cases Received 688,835 688,548 (287) 
2 Less FDS Night Overwrites -50,276 -50,266 (10) 
3 Actual FDS Cases Stocked 638,559 638,282 (277) 
at Night (row 1minus2) 
4 Total Cases Stocked 991,340 991,281 (59) 
5 Total Cases Warehoused 352,781 352,999 218 
(row 4 minus 3) 
6 Subtract Overwrites -50,276 -73,405 23, 129 
7 Subtract: Number of Stored -96,000 -96,000 0 
Cases Estimated in Contract 
8 Sub-Total (row 5 minus 206,505 183,594 (22,911) 
rows 6 & 7) 
9 Subtract: Day vendor cases -0 -0 0 
10 Subtract: Day FDS Cases -13,311 -13,308 (3) 
11 Additional Cases stored 193,194 170,286 (22,908) 
(row 8 minus rows 9 & 10) 
We conclude that the government's numbers for stocking 
and storing are more 
accurate and should be used in our calculation. These numbers are derived from the 
monthly totals on the "SHELF STOCKING CASES STOCKED" form used by 
appellant to invoice and receive payment (finding 4). Therefore, the fundamental 
remaining difference between the parties is what number should be used in the 
calculating overwrites (line 6 above). Appellant argues the actual number of 
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overwrites it stored should be applied in the calculation while the government 
argues the correct number should be the total estimated number appellant bid on, 
which was the basis for determining the price. 
Appellant's argument focuses upon the overwrites associated with the specific 
items that resulted in excess storage costs. The parties agree the specific items 
associated with the claimed excess storage had an estimated storage of 96,000 store 
merchandise cases annually with 7% of those cases being overwrites. Appellant 
actually stored 193, 194 extra cases of store merchandise, of which 50,27 6 were 
overwrite cases. Appellant argues the actual number of overwrites should be 
subtracted, without regard to the amount of total overwrite services performed. 
(App. hr. at 5-6) 
The government agrees appellant is entitled to recover for amounts stored 
above the estimates in the contract but argues that appellant's methodology does not 
recognize the fact that the contract price already accounts for 73,405 overwrite cases 
for which appellant has already been paid; the government's position is that to allow 
an additional 23,129 cases to be included in the calculation would result in the 
government paying twice for these items (gov't hr. at 3-5). 
We agree with the government; if the actual number of overwrites are 
subtracted, as appellant argues, appellant will be paid twice for the labor associated 
with storing 23,129 cases. Despite appellant's arguments to the contrary, both the 
stocking and storage (RSHA) service areas are priced on a FFP basis (findings 4, 6; 
app. reply hr. at 1, 3-5). However, appellant may invoice for the costs of overwrites 
that exceed 7% in a given month (finding 3). Appellant's bid price presumably 
included labor costs in both service areas, including the labor costs of temporarily 
storing overwrites up to 7% of the cases stored. So the price for stocking cases 
already includes 
the cost of labor for temporarily storing overwrite cases up to 7% of 
the estimated total. As a result, appellant has been paid for any overwrites up to 7% 
of the cases stored. The calculation used here by the parties calculates the total 
number of items stocked and warehoused subtracting out the number of cases 
estimated in the specific area that appellant claims excess storage labor costs. If the 
number of overwrites subtracted are limited to the actual number associated with the 
specific service area, as appellant argues, it will undercount the number of 
overwrites. We conclude the government's proposed method of calculating 
overwrites is more accurate, i.e., 7% of the total annual estimated stocking service 
requirement (day, night and display stocking estimates). 
8 

CONCLUSION 
Subtracting the anticipated total number of overwrites, 73,405, results in 
170,286 additional total cases stored. Applying the labor productivity factor of 86 
cases per hour yields 1,980 additional hours and when multiplied by the wage rate 
of$2l.37 equates to a total due of$42,312.60. The COFD granted appellant 
$40,524.95 (finding 8). Therefore, this appeal is sustained in the amount of 
$1,787.65 with CDA interest thereon starting 27 April 2014. The balance of the 
costs claimed are denied. 
Dated: 5 November 2014 
I concur 
RICHARD SHACKLEFORD 
Administrative Judge 
Vice Chairman 
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. 59314, Appeal of Job 
Options, Inc., rendered in conformance with the Board's Charter. 
Dated: 
9 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals