Kellogg Brown & Root Services, Inc.
Docket: ASBCA 59385, ASBCA 59744
Decision date: 2020-05-15

ARMED SERVICES BOARD OF CONTRACT APPEALS 
 
Appeals of -- ) 
 ) 
Kellogg Brown & Root Services, Inc. ) ASBCA Nos. 59385, 59744 
 ) 
Under Contract No. N62470-13-D-3008 ) 
 
APPEARANCES FOR THE APPELLANT: Paul A. Debolt, Esq. 
Emily A. Unnasch, Esq. 
 Thomas Barrett, Esq. 
 David Newsome, Esq.  
 Michael T. Francel, Esq. 
   Venable LLP 
   Washington, DC  
 
APPEARANCES FOR THE GOVERNMENT: Craig D. Jensen, Esq. 
  Navy Chief Trial Attorney 
Anthony K. Hicks, Esq. 
 David Koman, Esq. 
  Trial Attorneys 
 
OPINION BY ADMINISTRATIVE JUDGE MELNICK PARTIALLY DISMISSING 
THE APPEALS AND GRANTING SUMMARY JUDGMENT FOR THE 
GOVERNMENT UPON THE REMAINDER   
 
These appeals are about a base support contract in the African nation of 
Djibouti.  Kellogg Brown & Root Services (KBR) seeks compensation for additional 
costs it incurred and invoice deductions applied to it while performing a military base 
support contract in that country.  The Djiboutian government backed a labor strike 
against KBR to pressure it into retaining more local national employees at higher 
wages for the contract’s performance.  Similarly, the Djiboutian government restricted 
the entry into the country of third country nationals hired by KBR to force it to retain 
even more local workers.  KBR complains that the United States Navy breached the 
support contract by not doing enough to assist it with these obstacles, breached an 
Access Agreement between the United States Government and Djibouti that KBR 
claims is for its benefit as a third party, or must compensate it under other contractual 
theories.  The third party beneficiary claim is dismissed for lack of jurisdiction and 
summary judgment is granted to the government upon the remainder of the appeals.   
 

 
2 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
 
The following facts are not the subject of genuine dispute.   
 
1.  The Republic of Djibouti is an African nation that is slightly smaller than 
New Jersey.  It is strategically located on the Horn of Africa at the intersection of the 
Red Sea and the Gulf of Aden.  Djibouti hosts several thousand American military 
personnel at Camp Lemonnier (R4, tab 2 at 174).1  Djibouti, THE WORLD FACTBOOK, 
https://www.cia.gov/library/publications/resources/the-world-factbook/geos/dj.html. 
 
2.  In 2003, the United States Government executed an international agreement 
with Djibouti (Access Agreement) in support of their defense relationship (app. supp. R4, 
tab 10).  See also Agreement Between the Government of the United States and the 
Government of the Republic of Djibouti on Access to and Use of Facilities in the 
Republic of Djibouti, Djib.-U.S., Feb. 19, 2003, T.I.A.S. No. 03-219, 
https://permanent.access.gpo.gov/gpo35805/191488.pdf.  The Access Agreement 
authorized unimpeded access to the government and its contractors to Camp Lemonnier 
(app. supp. R4, tab 10 at 627).  Accordingly, the agreement stated that government 
contractor employees would be required to obtain passports to enter the country, but not 
visas (id. at 628).   
 
3.  The Access Agreement provided that “[a]ny dispute that may arise from [its] 
application, implementation, or interpretation . . . shall be resolved by consultation 
between the Parties or their Executive Agents, including, as necessary, through 
diplomatic channels, and will not be referred to any national or international tribunal 
or any third party for settlement” (id. at 632).  It omitted any mechanism for binding 
enforcement.  
 
4.  On December 6, 2012, the Commander Naval Facilities Engineering 
Command Atlantic (NAVFAC, Navy, or government) awarded the contract identified 
above to KBR (R4, tab 1).  The majority of the contract required recurring base 
operation support services at Camp Lemonnier for a firm-fixed price (R4, tab 1 
at 132-37, 140).   
   
5.  KBR had been the Camp Lemonnier base support contractor between 2002 
and 2007 (app. supp. R4, tab 76 at 1047-48; gov’t mot., ex. 3).  Based upon this earlier 
experience, KBR’s proposal stressed its understanding of the challenges and staffing 
requirements, as well as its working relationships with local labor brokers (id. 
at 1047).  KBR described its prior partnerships with the Djiboutian government, 
leading to its award of $11,000,000 in contracts with local labor brokers that enhanced 
                                              
1 The government submitted a Rule 4 file for each of the docketed appeals.  Unless 
otherwise stated, all Rule 4 references are for ASBCA No. 59385. 

 
3 
the economy and created an effective, functional, and dependable national labor force 
(id. at 1048).  KBR acknowledged the effect of its local hiring upon the Djiboutian 
economy (id. at 1084).      
 
6.  As was its previous practice at Camp Lemonnier, KBR’s proposal identified 
three categories of contract labor.  They were directly hired U.S. “expat[s],” directly 
hired foreign nationals or third country nationals (TCNs), and subcontracted host 
nationals (or local nationals).  (App. supp. R4, tab 7 at 232, tab 9 at 620-25, tab 76 
at 1084)  As before, KBR retained a local subcontractor labor broker “for [host 
national] labor services” (app. supp. R4, tab 7 at 234, tab 76 at 1084).  KBR generated 
a staffing plan that would employ approximately 500 host country nationals (compl. 
and am. answer ¶ 13; app. prop. finding and gov’t resp. ¶ 12; R4, tab 5 at 188).2      
 
7.  Before award, KBR met with Djiboutian government representatives.  The 
officials expressed frustration that more local nationals were not working on the 
existing contract and the desire that wages remain stable or increase (gov’t mot., 
exs. 3-4).  KBR knew about the risk of strikes in the event a low bid led to wage 
reductions and the Djiboutian government’s concerns about wage rates (gov’t mot., 
ex. 95 at 41, ex. 56).  Nevertheless, KBR’s proposal reduced the number of host 
country nationals from the total used by the incumbent contractor (compl. and am. 
answer ¶¶ 13, 20).  The Navy found KBR’s staffing plan reasonable and it was 
incorporated into the contract along with the rest of the proposal (app. prop. finding 
and gov’t resp. ¶¶ 14, 17; am. answer ¶ 121; R4, tab 1 at 3).         
 
                                              
2 Unless otherwise stated, the cited complaint and amended answer are in ASBCA 
No. 59385.  KBR’s July 31, 2019, statement of undisputed facts cites to the 
government’s original answer in ASBCA No. 59385, dated October 3, 2014.  
However, on June 20, 2018, the Board granted the government’s May 18, 2018, 
request to amend the answers in both appeals.  The government explained that 
the amendments simply added affirmative defenses.  Accordingly, the Board 
will cite to the amended answer in ASBCA No. 59385, filed June 29, 2018.   
 
The government also argues that statements it has made in its answer are not 
binding upon it for purposes of this motion, claiming that Board Rule 7(c) does 
not permit KBR to rely upon “averments” in an answer as evidence that certain 
facts are undisputed (gov’t statement of gen. issue ¶ 3).  The contention is 
rejected.  The averments are binding judicial admissions.  Griffin Servs., Inc., 
ASBCA Nos. 54246, 54247, 04-2 BCA ¶ 32,710 at 161,822.                          

 
4 
8.  The first annex of the contract’s Performance Work Statement contained an 
item entitled “Technical Proposal Certification.”  It stated:   
 
The Contractor warrants that its proposal . . . including . . . 
proposed approaches, staffing, methodology, or work 
plans, will meet the performance objectives set forth in this 
contract . . . .  The Contractor is not excused from meeting 
such performance objectives in the event such proposal 
proves inadequate as conceived or executed to meet such 
performance objectives.  The Contractor understands that it 
bears all of the cost and performance risk associated with 
adopting acceptable additional (and/or alternative) means 
or methods of meeting the performance objective. 
 
(R4, tab 2 at 176)   
 
9.  The first annex also included an item entitled “Partnering Philosophy.”  It 
provided: 
 
The Navy views its contractors as partners and not just 
abstract service providers.  The Navy wants its contractors 
to succeed because partners’ success drives the Navy’s 
successful mission completion.  Within the bounds of 
acquisition policy, the Navy intends to work to find 
solutions that will be beneficial to both the Government 
and its partners.  
 
(R4, tab 2 at 175)  The second annex, pertaining to management and administration, 
contained more discussion about partnering, requiring cohesive partnering between the 
government, KBR, and subcontractors to achieve quality services (app. supp. R4, tab 3 
at 115).  KBR’s proposal also stated that partnering is a tool for developing long term 
relationships to support project success (app. supp. R4, tab 76 at 1095).  Finally, 
among other things, a partnering charter dated July 24, 2013, repeated the commitment 
to work toward success, consider the camp’s best interests, address and solve 
problems, maintain trust, open and honest communications, a “win-win” relationship, 
seek integration, and maintain a culture of understanding and collaboration (gov’t 
mot., ex. 85 at 87446).    
  
I. The Djiboutian Government Supported Labor Strike       
 
10.  In May of 2013, KBR executed a subcontract with its labor broker to 
provide host country nationals for the contract (gov’t mot., exs. 16-18).  By mid-June 
2013, KBR was aware that its broker had failed to retain the necessary workforce to 

 
5 
staff the camp (R4, tab 11; gov’t mot., ex. 32).  Between June 16 and 18, 2013, KBR’s 
labor broker informed it that host country employees who had worked under the 
previous contractor’s broker had attacked its office, demanding that they be paid their 
prior wage rates.  The broker later reported that none of the former employees signed 
their employment contracts.  (App. supp. R4, tab 21)  
 
 11.  Between June and July of 2013, and with the Navy’s knowledge, host 
country nationals engaged in a strike upon KBR (compl. and am. answer ¶ 23).  
Djiboutian government officials expressed support for the strike to KBR, noting the 
number of people who would be unemployed by KBR’s staff reductions.  Djibouti’s 
Minister of Labor stated that KBR must hire 1,037 employees at the wages paid by the 
prior contractor.  (App. supp. R4, tabs 23-24, 26, 29 at 726, 30, 38; gov’t mot., ex. 64)  
In meetings with the Navy and U.S. Embassy, Djiboutian ministers declared it 
preferable to close the camp than leave 500 people unemployed (gov’t mot., ex. 64).  
 
12.  On June 28, 2013, KBR notified the contracting officer (CO) that the 
Djiboutian government had deliberately interfered with its contract, causing the strike.  
KBR claimed the Djiboutian interference entitled it to schedule relief and compensation 
for its costs attempting to resolve the matter.  (R4, tab 11)  The CO’s July 3 response 
stated that KBR’s proposal represented that it understood the region’s challenges, 
elaborated about how it would man the work, and that it was fully versed in Djiboutian 
labor requirements.  She asserted that KBR could end the dispute at any time.  She 
reiterated that KBR was responsible for performing the contract.  (R4, tab 12)  
 
13.  In a July 9, 2013 meeting with KBR, NAVFAC acquisition officials 
repeated that KBR’s labor issues in Djibouti were for KBR to solve.  However, on 
July 10, the Commander of NAVFAC Atlantic informed KBR that the matter was 
being briefed at the level of the Secretary of the Navy and the Office of the Secretary 
of Defense (OSD).  (Gov’t mot., ex. 58)  In the June and July time frame, the African 
Affairs section of OSD held interagency meetings with the Department of State about 
the strike (gov’t mot., ex. 55).  Also, U.S. Naval Forces Europe and Africa desired to 
engage with the Department of State to resolve the matter (gov’t mot., ex. 59).  A 
July 27 attempt by a DOD official to convince Djibouti to suspend the strike failed.  
He was told that the only solution was to rehire all of the former employees at the 
camp (gov’t prop. finding ¶ 85; gov’t mot., ex. 65).  OSD’s Director of Defense 
Procurement decided to obtain funding for additional labor on the contract in the 
interest of national security, stating an intent to direct NAVFAC to hire 1,037 local 
nationals through the existing contract (gov’t mot., ex. 66).              
 
 14.  On August 1, 2013, the Chief of Staff of the United States Africa 
Command (AFRICOM, the combatant command supported by the camp) issued a 
memorandum to NAVFAC stressing the importance of Camp Lemonnier.  Declaring 
that Djibouti had established a socioeconomic policy requiring no reductions in the 

 
6 
retention of local nationals, he required the employment of 1037 Djiboutians on the 
contract.  He requested that NAVFAC take all necessary actions to ensure compliance 
with Djibouti’s policy.  (R4, tab 14; app. mot., ex. 3 at 172)   
 
 15.  On August 2, 2013, KBR and the government modified the contract to 
require a staff of 1,037 Djiboutians at the same skill level and pay rate established 
under the predecessor contract.  KBR was to use a labor broker approved by the 
Djiboutian government.  The parties agreed to $14,242,049 in additional payment.  
(R4, tabs 5-6)  Neither party suggests that the strike continued.    
  
II. The Djiboutian Restrictions Upon Third Country Nationals  
   
16.  In March of 2013, the Navy notified U.S. personnel and contractors that 
Djiboutian officials were requiring them to purchase visas for entry into the country, in 
contravention of the Access Agreement.  It provided procedures to follow for 
reimbursement in case that continued.  (App. supp. R4, tab 11)  In April, the Navy 
forwarded to Djibouti two lists of KBR employees that were entitled to entry into the 
country without visas in accordance with the Access Agreement (app. supp. R4, tab 12).  
There is no evidence it was successful.       
 
17.  On July 9, 2013, KBR notified the Navy that seven TCNs were denied 
entry into Djibouti (app. supp. R4, tab 32).  The Embassy, Navy and OSD 
acknowledged that denial of entry to TCNs or imposition of visa requirements violated 
the Access Agreement (compl. and answer ¶ 38; app. mot., ex. 2 at ex. 1, ex. 3 
at exs. 24, 29).3  The Embassy suggested that KBR draft an authorization letter for 
each worker to be signed by the Navy, but the Navy declined to do so (compl. and 
answer ¶¶ 38-39).  Subsequently, the CO informed KBR that any issues regarding 
Djibouti’s compliance with the Access Agreement were between that government and 
the Department of State.  She said KBR was responsible for meeting its performance 
requirements.  (App. supp. R4, tab 36)   
 
18.  The Djiboutian government’s restrictions continued, with TCNs barred from 
entry and then deported.  These actions forced KBR to suspend travel for new hires as 
well as the departure or return of existing employees on rest and relaxation and travel for 
family emergencies.  Djiboutian officials told KBR that the Access Agreement was void.  
At various times they required KBR to submit lists of TCNs for approval.  They also 
required the purchase of work permits and the acquisition of visas.  (Compl. and am. 
answer ¶¶ 48, 50; R4, tab 16 at 353; app. supp. R4, tabs 40-43, 46-48, 54-55, 60-61, 65, 
67-68, 72; app. mot., ex. 3 at ex. 24, ex. 4 at ex. 12, ex. 10 at ex. 17) 
 
                                              
3 These exhibits to the motion have internal exhibits. 

 
7 
19.  Though the CO disclaimed responsibility to address the TCN issue, KBR 
was free to meet with the Djiboutian government.  Other U.S. Government officials 
(including National Security staff, senior Navy personnel, OSD, and the United States 
Ambassador to Djibouti) focused upon the matter and engaged with KBR and Djibouti 
about solving it.  (App. prop. finding and gov’t resp. ¶ 70; app. mot., ex. 8; gov’t mot., 
exs. 75-76, 87; app. supp. R4, tab 44 at 773)  Thus, Djibouti’s Minister of Labor 
explained in a meeting attended by U.S. military officials and the Ambassador that his 
government required lists of TCNs because it would only permit the entry of those 
possessing skills not available among local nationals.  He also said that local nationals 
should be trained to perform the work of TCNs.  (App. mot., ex. 8)  In a meeting with 
Djibouti’s foreign minister, also attended by military personnel that included the 
Navy’s camp commander, the Ambassador discussed the stalemate arising from the 
TCN embargo, described its impairment upon camp operations, and sought the return 
to unrestricted TCN access in accordance with the Access Agreement.  The foreign 
minister rejected that appeal, saying for political reasons Djibouti would not return to 
the previous entry regime for TCNs.  He re-emphasized that under the new policy 
Djibouti would only allow in TCNs possessing skills unavailable in Djibouti.  (App. 
mot., ex. 10 at ex. 17)  Both the U.S. Embassy and the Navy chose not to participate in 
Djibouti’s process for choosing which TCNs to permit in the country because it was 
inconsistent with the Access Agreement and placed the Navy in the position of picking 
winners and losers among contractors (app. mot., ex. 2 at ex.18 at 19880).        
 
20.  As the United States Embassy, coordinating with officials of the 
Department of Defense and the Navy (through a working group), engaged with 
Djibouti to resolve its violation of the Access Agreement, it considered a possible 
grand bargain that would achieve long-term stability associated with a series of 
short-term fixes (app. mot., ex. 3 at ex. 24 at 00479).  The Navy recognized that what 
it had previously viewed as a KBR/Djibouti issue was a U.S Government/Djibouti 
matter (app. mot., ex. 4 at ex. 14 at 9260).  OSD and the Navy understood that 
continuation of the embargo was adversely affecting Navy operations and finances 
(app. mot., ex. 3 at ex. 29 at 650, ex. 4 at ex. 19).  Indeed, NAVFAC pressed 
AFRICOM (and by association the Department of State) to pursue a grand strategy 
that would lead to Djibouti’s renewed adherence to the Access Agreement (app. mot., 
ex. 9 at 31442).  
 
21.  In January of 2014, Djibouti transmitted a diplomatic note to the U.S. Embassy, 
offering to permit access by TCNs for an interim period during which Djibouti and the 
United States would discuss the reinforcement of their partnership.  However, it sought 
identifying information about the TCNs ahead of time so that they could obtain visas.  
(App. mot., ex. 2 at ex. 19)  The embassy considered the visa proposal inconsistent with the 
Access Agreement (app. mot., ex. 4 at ex. 23).  The responsive diplomatic note from the 
United States reminded Djibouti that visas were not required under the Access Agreement.  
It agreed in general to provide information about TCNs ahead of their arrival in recognition 

 
8 
of Djibouti’s interest in verifying the TCN’s identities, but stressed that visas should not be 
required and any entry verification must be free of cost to the United States.  It sought 
Djibouti’s agreement to these terms, noting that an initial list of TCNs was ready for 
delivery.  (App. mot., ex. 12)   
 
22.  By February of 2014, KBR reported to the State Department that 200 employees 
had not been able to leave on R and R, or otherwise depart the work site for fear of not being 
able to return to their jobs.  In addition, replacements for key personnel that resigned from 
the project could not enter the country.  (App. supp. R4, tab 48)   
 
23.  On May 1, 2014, the United States executed an “Arrangement in 
Implementation of the” Access Agreement with Djibouti.  This arrangement reset the 
countries’ relationship by clarifying facility access rights.  (App. supp. R4, tab 15)  It 
committed Djibouti to “ensure that all United States contractor employees have 
unimpeded access to and use of those facilities and areas to which the United States 
has authorized them access.”  It obligated the United States “to require that its 
contractors provide information on their employees thirty . . . days in advance of their 
respective arrival . . . or as practicable.”  The requirement would “not affect the 
authorization, pursuant to the Access Agreement, for . . . contractor employees . . . to 
enter Djibouti” unless Djibouti barred the person on the basis of national security.  (Id. 
at 646)  There is no evidence the TCN restrictions continued after the new 
arrangement was executed.                
 
III. Requests for Equitable Adjustment and Claims 
 
24.  On February 11, 2014, KBR resubmitted four Requests for Equitable 
Adjustment (REAs) that had been previously denied by the government, and added 
one more, packaging all of them as a new, single REA.  The new REA sought 
$2,430,226.57 in costs incurred by KBR, and invoice deductions applied to it, due to 
the local national labor strike and Djibouti’s refusal to allow TCNs into the country.  
(R4, tab 20)  The CO denied the request on February 25 (R4, tab 21).  On March 13, 
KBR submitted a certified claim to the CO for the amount sought in the REA, which 
was denied on May 27 (R4, tabs 22-23).  KBR appealed that decision and it was 
docketed as ASBCA No. 59385.   
 
25.  On August 1, 2014, KBR submitted another REA to the CO for $519,021 
in costs incurred obtaining work permits and visas required by Djibouti for its TCNs.  
That request was denied on September 24.  On October 1, KBR submitted a certified 
claim for the requested amount to the CO, which was denied on December 10 
(ASBCA No. 59744 (59744) R4, tabs 1-4).  KBR’s appeal from that decision was 
docketed as ASBCA No. 59744.   
 

 
9 
IV. The Complaints 
 
26.  The two appeals have been consolidated.  We refer to the complaint in 
ASBCA No. 59385. 
     
27.  Counts I and IV generally claim breach of contract, and more specifically 
breach of the contract’s implied duty of good faith and fair dealing.  Count III contends 
that the government’s refusal to relieve KBR of its contractual obligations, combined 
with its failure to assist KBR with the strike and embargo, constitutes a constructive 
change.  Count V argues that KBR and the government were mutually mistaken about 
whether Djibouti would honor the Access Agreement.  Count VI suggests the 
government knew that the Djiboutian government would adversely react to its plan to 
reduce staffing from the level used on the prior contract, leading to a strike and 
disregard of the Access Agreement.  The government allegedly breached its duty to 
disclose this superior knowledge, causing KBR to incur unjustified costs.  Count II 
alleges that Djibouti’s promise in the Access Agreement to permit unimpeded 
contractor access to Camp Lemonnier conferred a benefit upon KBR, making it an 
intended third-party beneficiary of the Access Agreement.  It claims the government’s 
failure to enforce the agreement for KBR’s benefit after Djibouti breached it is in turn a 
breach by the government.   
 
DECISION 
 
KBR seeks partial summary judgment on entitlement.  The government moves 
to dismiss Count II for lack of jurisdiction and also seeks summary judgment upon all 
counts.     
 
I. The Board’s Lack of Jurisdiction To Entertain Count II’s Third Party Beneficiary 
Claim 
 
Before addressing the merits of summary judgment we first consider our 
jurisdiction to entertain Count II.  As noted, KBR contends in Count II that it is a third 
party beneficiary of the Access Agreement.  It argues that Djibouti’s support for the 
strike and imposition of the embargo violated the promise it made in that agreement 
(compl. ¶ 116).  KBR contends that the U.S. Government then failed to honor the 
Access Agreement by not invoking its provision for dispute resolution through 
governmental consultation with Djibouti (compl. ¶ 118-19).  KBR claims the 
government’s failure to enforce the Access Agreement through the disputes 
mechanism interfered with KBR’s enjoyment of the benefit conferred upon it, causing 
KBR to incur costs arising from the strike and embargo (compl. ¶ 119).  
    
The Board’s jurisdiction typically arises from the Contract Disputes Act (CDA), 
41 U.S.C. §§ 7101-09.  Latifi Shagiwall Constr. Co., ASBCA No. 58872, 15-1 BCA 

 
10 
¶ 35,937 at 175,633.  The CDA is a waiver of sovereign immunity that must be strictly 
construed.  Winter v. Floorpro, Inc., 570 F.3d 1367, 1370 (Fed. Cir. 2009); see also 
Franconia Assocs. v. United States, 536 U.S. 129, 141 (2002) (observing that a waiver 
of sovereign immunity “cannot be implied but must be unequivocally expressed”) 
(quoting United States v. King, 395 U.S. 1, 4 (1969)).  It is true that the substantive law 
of contracts recognizes a right of third-party beneficiaries to sue for breach of an 
agreement to which they are not parties when they show it was for their direct benefit.  
See Pac. Gas and Elec. Co. v. United States, 838 F.3d 1341, 1361-62 (Fed. Cir. 2016), 
cert. dismissed, 138 S. Ct. 2647 (2018).  However, such actions do not fall within the 
scope of the CDA’s waiver of sovereign immunity applicable to this Board.  Here, 
only a contractor may bring an appeal on a contract.  41 U.S.C. § 7104(a).  And a 
contractor is limited to a party to a government contract other than the government.  
41 U.S.C. § 7101(7).  KBR is not a party to the Access Agreement and therefore 
cannot bring an action here premised upon its terms.  Its alleged status as an intended 
third-party beneficiary does not exempt it from this requirement.  Winter v. Floorpro, 
570 F.3d at 1369-72.      
 
In an effort to avoid the limitations upon the Board’s jurisdiction, KBR stresses 
that the claimant in Floorpro was a subcontractor seeking to enforce a government 
prime contract, while KBR is the prime contractor with the government on the support 
contract (app. mot at 20-21).  But what matters is that KBR is not a party to the Access 
Agreement.  Unlike other counts of the complaint that are premised upon KBR’s 
contract with the Navy, Count II alleges that the Access Agreement bestows third 
party benefits upon KBR that have been impaired by the government’s failure to 
enforce it.  The alleged claims of third-party beneficiaries to contracts are not 
cognizable here under the CDA.      
 
KBR’s briefs attempt to retreat from the complaint’s allegations, denying that 
Count II “is . . . seeking to enforce any contractual rights set forth in the Access 
Agreement” (app. mot. at 21).  It suggests the count merely contends that “the Navy 
breached its [c]ontract with KBR by failing to partner with KBR to address the 
violations of the Access Agreement that robbed KBR of the ‘benefit of the bargain’ of 
its Contract” (id.).  Thus, it suggests that Count II is really alleging that the prime 
contract promised KBR that the government would enforce the Access Agreement for 
its benefit.  However, KBR then inconsistently repeats that it is an intended third-party 
beneficiary of the Access Agreement (id.).  Count II does not accuse the Navy of 
“failing to partner” under its contract with the Navy.  That is essentially the allegation 
of the other counts.  Count II says the Navy’s alleged refusal to engage the Djiboutian 
government under the Access Agreement’s disputes mechanism denied KBR the 
benefit granted to it by the Access Agreement (compl. ¶ 118).  Count II is a third-party 
beneficiary claim upon the Access Agreement which KBR may not pursue in this 
forum. 
 

 
11 
Even if the Board could otherwise entertain third-party beneficiary contract 
claims, the Access Agreement is not the type of contract subject to the Board’s 
jurisdiction.  The CDA’s waiver of sovereign immunity only encompasses contracts 
made by an executive agency for the procurement of property other than real property; 
services; construction, alteration, repair, or maintenance of real property; or the 
disposal of personal property.  41 U.S.C. § 7102(a); see Lee’s Ford Dock, Inc. v. Sec. 
of the Army, 865 F.3d 1361, 1366-67 (Fed. Cir. 2017).  The Access Agreement was 
just that, an international agreement between the U.S. government and another nation 
granting the government and its contractors access to Camp Lemonnier and other 
facilities.  It was not a procurement by an executive agency or a disposal of property.  
 
For these reasons, Count II is dismissed for lack of jurisdiction.4   
 
II. The Cross Motions For Summary Judgment Upon The Remaining Counts 
 
The parties cross move for summary judgment upon each of the remaining 
counts.  Summary judgment should be granted if there are no genuine issues of 
material fact and the movant is entitled to judgment as a matter of law.  Celotex Corp. 
v. Catrett, 477 U.S. 317, 322 (1986); FED. R. CIV. P. 56(a).  In applying this standard, 
we must draw all justifiable inferences in the non-movant’s favor.  However, a 
non-movant seeking to defeat the suggestion that there are no genuine issues of 
material fact may not rest upon its pleadings, but “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 Nat. Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288 
(1968)).  Furthermore, after an opportunity for discovery, summary judgment must be 
entered upon motion against a party “who fails to make a showing sufficient to 
                                              
4 Even if KBR could pursue a third-party beneficiary claim based upon the Access 
Agreement, its claim is against the wrong party.  KBR contends that it is a 
beneficiary of Djibouti’s promise to permit it unimpeded access to 
Camp Lemonnier, which Djibouti violated by supporting the strike and 
imposing the embargo.  Under these allegations it is Djibouti that breached the 
Access Agreement, not the government.  At most under this claim, the 
government declined to enforce Djibouti’s promises in the Access Agreement.  
That is not a breach of contract by the government.  See Sullivan v. United 
States, 625 F.3d 1378, 1380-81 (Fed. Cir. 2010).   
 
Finally as observed both in the Statement of Facts and below, in fact the U.S. 
government did diplomatically consult with Djibouti about its violation of the 
Access Agreement, which was its only recourse, achieving the May 1, 2014 
arrangement that essentially eliminated Djibouti’s restrictions on TCNs 
(SOF ¶¶ 19-20, 23).  

 
12 
establish the existence of an element essential to that party’s case, and on which that 
party will bear the burden of proof at trial.”  Celotex Corp., 477 U.S. at 322.   
 
A. The Djiboutian Supported Labor Strike 
 
1. KBR’s Breach of Contract Theories  
 
First, we consider whether either of KBR’s breach theories contained in Counts I 
and IV entitle it to recover as a result of the strike.  In general, “[a] breach of contract 
claim requires two components:  (1) an obligation or duty arising out of the contract and 
(2) factual allegations sufficient to support the conclusion that there has been a breach of 
the identified contractual duty.”  Bell/Heery v. United States, 739 F.3d 1324, 1330 (Fed. 
Cir. 2014).  Among every contract’s terms is a covenant of good faith and fair dealing 
imposing a “duty not to interfere with the other party’s performance and not to act so as 
to destroy the reasonable expectations of the other party regarding the fruits of the 
contract.”  Dobyns v. United States, 915 F.3d 733, 739 (Fed. Cir. 2019) (quoting Centex 
Corp. v. United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005)), cert. denied, 140 S. Ct. 
1106 (2020).  Any non-performance of an expressed contractual duty, as well as a failure 
to fulfill the covenant of good faith and fair dealing, is a breach.  Metcalf Constr. Co. v. 
United States, 742 F.3d 984, 990 (Fed. Cir. 2014) (citing RESTATEMENT (SECOND) OF 
CONTRACTS § 235 (1981)).  
 
a.  Count IV’s General Breach Claim  
 
Count IV’s general breach claim contends that the Navy’s failure to take 
remedial action to address the strike was a breach (compl. ¶¶ 136-37; app. mot. at 28).  
However, the Navy did address the strike, funding a contract modification 
approximately one month after it started that required KBR to hire the 1,037 people 
demanded by the Djiboutian government, rather than the approximately 500 planned 
by KBR (SOF ¶ 15).  By seeking the costs it allegedly incurred before the Navy 
modified the contract, KBR complains that the Navy did not act fast enough 
(tr. 18-20).  KBR has not shown why that is so and the contract language dictates 
otherwise.  
 
The contract made KBR, not the government, responsible for furnishing the 
labor necessary for performance.  KBR’s proposal stressed to the government its 
understanding of the challenges and staffing requirements, its prior partnerships with 
the Djiboutian government, and its awareness of the impact of local hiring upon the 
Djiboutian economy.  These statements indicated that it could and would navigate the 
terrain necessary to retain its desired number of local workers through a subcontractor 
labor broker.  (SOF ¶ 5)  Inherent in that responsibility was fulfilling host nation 
governmental conditions to hiring.  Prior to award, KBR knew Djibouti officials were 
concerned about wages (SOF ¶ 7).  Nothing in the contract required the government to 

 
13 
perform any function related to the acquisition of labor, such as preventing or stopping 
Djiboutian labor strikes against KBR arising from reduced hiring and wages.  Nor did 
the government warrant that KBR’s desired number of local nationals would be 
available free of any strike, or without Djiboutian government involvement.  See 
Oman-Fischbach Int’l (JV) v. Pirie, 276 F.3d 1380, 1383-84 (2002) (explaining that a 
warranty is an assurance by one party to an agreement of the existence of a fact that 
the other party may rely upon) (citing Dale Constr. Co. v. United States, 168 Ct. Cl. 
692, 699 (1964)).  Unless the U.S. government assumed the risk of a Djiboutian 
government supported labor strike against KBR in unmistakable terms, it is not liable 
for those third party acts.  Id. at 1385; see also Zafer Taahhut Insaat ve Ticaret A.S. v. 
United States, 833 F.3d 1356, 1364 (Fed. Cir. 2016) (addressing Pakistan’s closure of 
its border with Afghanistan, delaying the appellant’s delivery of materials, and holding 
“the U.S. government is not responsible for the sovereign acts of a foreign nation”).  
There were no such risk shifting terms in this contract. 
 
Contrary to KBR’s suggestion, neither J.E. McAmis, Inc., ASBCA No. 54455 
et al., 10-2 BCA ¶ 34,607, nor Swinerton & Belvoir, ASBCA No. 24022, 81-1 BCA 
¶ 15,156, dictate a different outcome.  McAmis considered Oman-Fischbach 
distinguishable when it found the government breached an implied warranty that haul 
routes would be free from restriction by a county government.  In this case, the 
government did not unmistakably guarantee that KBR would be immunized from the 
effects of a third party labor strike.  Here, Oman-Fischbach is indistinguishable.  
Accord ECC Int’l Constructors, LLC, ASBCA No. 59138, 19-1 BCA ¶ 37,252.  
Similarly, Swinerton found the government liable when its sovereign act delayed 
clearances for the entry of aliens into Guam beyond the 90-day time period stated in 
the contract.  The Board held that the government contractually assumed the risk of its 
sovereign act.  See generally Hills Materials Co. v. Rice, 982 F.2d 514, 516 n.2 (Fed. 
Cir. 1992) (noting that the sovereign acts doctrine does not prevent the government 
from affirmatively assuming responsibility for particular sovereign acts).  Here, the 
government did not assume comparable liability for the acts of third parties.5  
 
                                              
5 KBR also cites Yates-Desbuild Joint Venture v. Dep’t of State, CBCA No. 3350 
et al., 17-1 BCA ¶ 36,870.  KBR says this non-binding decision of a sister 
board stands for the proposition that the government bears responsibility for 
costs caused by the interference of a third-party sovereign.  KBR omits a pin 
cite to the portion of this 71-page opinion that supposedly supports that 
assertion.  Without mining the ruling in detail for KBR, our review does not 
reveal support for the broad contention that the government is strictly 
responsible for the acts of other countries.  Such a conclusion would be 
inconsistent with the court of appeals decisions cited above.  We would not 
agree with it if it did hold as KBR suggests.   

 
14 
KBR primarily relies upon the contract’s “Partnering Philosophy” provision to 
support its suggestion that the government did not do enough to satisfy its promises.  
There, the contract states:  
 
The Navy views its contractors as partners and not just 
abstract service providers.  The Navy wants its contractors 
to succeed because partners’ success drives the Navy’s 
successful mission completion.  Within the bounds of 
acquisition policy, the Navy intends to work to find 
solutions that will be beneficial to both the Government 
and its partners. 
 
(SOF ¶ 9)  To a minor degree, the contract’s second annex flushed out the scope of 
partnering by requiring it to be cohesive to achieve quality services (id.).  These 
aspirational declarations of a desire or goal for the “success” of both the Navy and its 
partners, and an intent to find abstract solutions “beneficial to all” within the bounds of 
an undefined “acquisition policy,” are too amorphous to provide any basis to identify 
concrete obligations.  They fail to establish a standard for what must be accomplished 
to find beneficial solutions or dictate consequences for noncompliance.  The provision 
is not connected to any mandatory performance duties, but is merely precatory.6  See 
Muller v. Gov’t Printing Office, 809 F.3d 1375, 1380-81 (Fed. Cir. 2016) (concluding 
that contract language stating the parties will proceed expeditiously is precatory and 
not obligatory, favoring such a conclusion when the words only identify a general goal 
and trigger no consequences for noncompliance); see also Telzrow v. United States, 
127 Fed. Cl. 115, 123 (2016) (holding language expressing a government intent to 
permit a landowner the opportunity to participate in restoration and management is 
precatory not obligatory); Woodmere Acad. v. Steinberg, 363 N.E.2d 1169, 1173 (N.Y. 
1977) (finding a representation that a school will “wisely” manage its affairs is 
precatory in the absence of bad faith because its vagueness and subjective nature drains 
it of practical meaning).  It does not constitute a contractual promise subject to a claim 
of breach.   
 
 Even if the contract’s partnering language could be construed to impose some 
clear contractual requirement upon the Navy, KBR fails to tie it to an obligation to 
more timely remedy a labor strike against KBR.  It is too much of a stretch to read a 
Navy statement of desire that its partner succeed, and intention to work to find 
beneficial solutions to problems, into an affirmative responsibility to intercede with, 
prevent or end a labor strike within some unstated time period that was simply faster 
than what occurred.  KBR does not define exactly what actions the government should 
                                              
6 The July 24, 2013, partnering charter between the parties was similarly aspirational 
(SOF ¶ 9).       

 
15 
have taken to satisfy that purported obligation or how they flow from the partnering 
language (tr. 16, 18-19).  Nor is the logic of that contention otherwise apparent.   
  
b. Count I’s Good Faith and Fair Dealing Claim   
 
Count I’s invocation of the duty of good faith and fair dealing serves KBR no 
better than its express breach claim.  KBR’s contentions about the breadth of the 
government’s obligations to comply with the duty of good faith vary.  At one point it 
stridently insists that, “given the importance of the Contract, the Navy had a duty 
under the contract to do everything in its sovereign power to take the reasonable steps 
that would enable KBR to perform the Contract and to prevent another sovereign 
nation from obstructing KBR’s performance” (compl. ¶ 106; app. mot. at 18).  At other 
times its motion is less extreme, accusing the government (similar to its express breach 
claim) of doing nothing to help KBR with the strike (app. mot. at 10).  
 
The duty of good faith and fair dealing prohibits “interference with or failure to 
cooperate in the other party’s performance.”  Labatte v. United States, 899 F.3d 1373, 
1379 (Fed. Cir. 2018) (quoting RESTATEMENT (SECOND) OF CONTRACTS § 205 cmt. d 
(1981)).  Breach of the covenant of good faith and fair dealing does not require the 
violation of an express term of the contract, but the claim “cannot expand a party’s 
contractual duties beyond those in the express contract or create duties inconsistent 
with the contract’s provisions.”  Laturner v. United States, 933 F.3d 1354, 1365 n.8 
(Fed. Cir. 2019) (quoting Dobyns, 915 F.3d at 739).  “[A] specific promise must be 
undermined for the implied duty to be violated.”  Dobyns, 915 F.3d at 739.  The duty 
“must be ‘keyed to the obligations and opportunities established in the contract’ so as 
to not fundamentally alter the parties’ intended allocation of burdens and benefits 
associated with the contract.”  Id. (quoting Lakeshore Eng’g Servs., Inc. v. United 
States, 748 F.3d 1341, 1349 (Fed. Cir. 2014)).   
 
As previously observed, the Navy did indeed assist with the strike’s resolution 
by funding KBR’s retention of more labor at the previous pay rates (SOF ¶ 15).  So, as 
before, the real question presented is whether the duty of good faith and fair dealing 
required it to either prevent the strike or act more quickly to somehow remedy it.  But 
the government made no commitment from which such a duty arises.7  See Bell/Heery, 
739 F.3d at 1335 (explaining that the implied duty of good faith and fair dealing does 
                                              
7 Moreover, it would have to be quite a contract promise that would be undermined by 
the government’s failure to do everything in its sovereign power to prevent 
another nation from obstructing KBR’s preferred method of performance.  That 
the government, among many different possibilities, obligated itself to close the 
base, impose economic sanctions, sever diplomatic relations, or even launch a 
military strike to assure KBR’s access to Djiboutian labor free of a strike is, to 
say the least, pretty incredible.   

 
16 
not form new contract terms).  Instead, the contract made KBR responsible for 
procuring labor for itself through a subcontractor labor broker.  The government 
assumed no responsibility to accomplish that task, compel the Djiboutian government 
to ensure labor was available on KBR’s desired terms, or that it cease supporting the 
strike.  The duty of good faith and fair dealing did not enlarge its obligations.  Id. 
(holding that a third-party government’s interference with contract performance is not 
a reappropriation of the contract’s benefits by the U.S. government that could 
constitute breach of the duty of good faith and fair dealing); see also Olympus Corp. v. 
United States, 98 F.3d 1314, 1318 (Fed. Cir. 1996) (“While interference by the 
government with a contractor’s access to the work site may constitute a breach of the 
government’s duty to cooperate, the government is not responsible for third-party 
actions such as labor strikes that delay a contractor’s performance, absent a specific 
contractual provision”).  This fixed-price contract placed the risk upon KBR respecting 
the market prices of its inputs, including labor.  See Lakeshore Eng’g Servs., 748 F.3d 
at 1349.  
 
KBR’s emphasis upon the reasons the Navy was initially reluctant to intercede 
fails to reveal any basis for drawing a different conclusion.  KBR says the Navy 
refused to assist it because it did not wish to establish a bad precedent.  It is hardly 
surprising that the Navy disfavored signaling that a contractor such as KBR could 
expect relief from the risks it contractually assumed.  Thus, the internal report of a 
Navy admiral that KBR relies upon considered labor disputes to be between KBR and 
Djibouti.  It observed that KBR was no novice navigating Djibouti’s political and labor 
impediments and that KBR should be held to its performance obligations.  To do 
otherwise would establish an undesirable precedent.  (App. mot., ex. 2 at ex. 7)  KBR 
also contends the Navy should be faulted for its internal resistance (which eventually it 
abandoned) to the expenditure of its own funds to resolve KBR’s labor problems.  
KBR makes much of the fact that the CO neither reviewed nor authorized a KBR 
proposed solution to the dispute with Djibouti that KBR shared with the Embassy 
(am. answer ¶ 29).  But KBR does not explain why the Navy was required to provide 
that review and approval, why KBR needed the review, or how the absence of it 
impaired KBR’s outreach to the embassy or whatever efforts it might have been 
making to resolve the matter with Djibouti.  None of these observations evidences 
interference with KBR’s performance or that the Navy undermined its own promises.   
 
KBR also relies once again upon the contract’s partnering language to supply the 
express promise that it claims was undermined by the CO’s initial reaction to the strike.  
As already noted, the partnering language is precatory, not obligatory.  Even if it was 
something more, the CO’s initial refusal to affirmatively intercede with Djibouti about 
the strike did not reappropriate any of the benefits of a mere representation that the 
Navy desired its partner’s success and that it intended to work to find solutions to 
problems.  See Dobyns, 915 F.3d at 739-40 (relying upon the court’s holding in 
Precision Pine & Timber, Inc. v. United States, 596 F.3d 817, 828-29 (Fed. Cir. 2010), 

 
17 
that “interference with the plaintiff’s ability to harvest timber did not breach the implied 
duty in part because the government ‘did not reappropriate any ‘benefit’ guaranteed by 
the contracts, since the contracts contained no guarantee’ of uninterrupted 
performance”).  The partnering language did not suggest that the Navy was assuming a 
duty to alter the behavior of third parties toward KBR.  See id. at 740-41 (holding that 
to infer an implied duty “without a tether to the contract terms, would fundamentally 
alter the balance of risks and benefits associated with the . . . agreement and cannot be 
the basis of a claim for breach of the implied duty of good faith and fair dealing”).  
Moreover, though there is no basis for imposing a duty upon the Navy to resolve the 
strike, the Navy did so within approximately one month of the strike’s commencement 
by executing the contract modification that funded more local nationals.  KBR has 
simply not convinced us that these events constitute a breach of good faith and fair 
dealing.   
 
Contrary to KBR’s suggestion, North American Landscaping, Construction and 
Dredge, Co., ASBCA No. 60235 et al., 18-1 BCA ¶ 37,116 at 180,652-54, does not 
categorically hold that failure to successfully “partner” with a contractor is a breach of 
the duty of good faith.  There, only one judge concluded that the government had 
breached the duty, and he hardly relied solely upon a belief that the government failed 
to fulfill a pledge to partner.  Anyway, that one judge’s opinion that the government 
breached the duty is not the Board’s precedent because the other two participating 
members of the panel disagreed with him.  18-1 BCA ¶ 37,116 at 180,658.  Only 
pronouncements explicitly adopted by three of the Board members participating in the 
appeal are precedential.8  See King Aerospace, Inc., ASBCA No. 60933, 19-1 BCA 
¶ 37,316 at 181,500.   
 
KBR also contends that, in response to the strike, the Navy unjustifiably 
threatened it with a termination for default, implying that is also a breach of the duty of 
good faith and fair dealing.  Though the record shows the idea was raised in an internal 
Navy discussion, KBR presents no evidence that the government threatened KBR with 
termination for default (app. mot., ex. 4 at 30425).9  
                                              
8 This policy is distinct from appeals that might be decided by the Board’s Senior 
Deciding Group, which would be governed by a majority.  
9 KBR also relies upon a “White Paper” submitted to the Navy by its own counsel, 
alleging “the Navy has implied that KBR’s inability to fully staff the Contract 
could be grounds for issuing a cure notice or show cause letter” (R4, tab 13 
at 263).  Counsel’s unsworn statement does not provide or describe the alleged 
communication from which he claims to have drawn this inference, or its 
source, and does not claim it is based upon personal knowledge (tr. 54-57).  See 
Gemtron Corp. v. Saint-Gobain Corp., 572 F.3d 1371, 1380 (Fed. Cir. 2009) 
(Counsel’s unsworn statements are not evidence); see also FED. R. CIV. P. 
56(c)(4) (requiring that an affidavit or declaration used to support or oppose a 

 
18 
 
KBR additionally attempts to bolster its implied duty claim by proffering 
evidence that the Navy did not disclose prior to award that there had been an earlier 
“labor dispute” involving a Djibouti base support contract (app. prop. finding and 
gov’t resp. ¶¶ 32, 39).10  The government cannot breach the covenant of good faith and 
fair dealing before the contract is formed.  Scott Timber Co. v. United States, 692 F.3d 
1365, 1372 (Fed. Cir. 2012).   
 
In a variation of its third-party beneficiary claim, KBR also contends that the 
government was obligated under the implied duty to consult with Djibouti to remedy 
the strike under the Access Agreement’s disputes mechanism.  But the government 
made no representations in KBR’s contract about how it might administer the Access 
Agreement.  Nor did Djibouti promise in the Access Agreement that labor would be 
available for U.S. contractors on the terms they dictated, free of any strikes.  Given 
these factors, there was no basis for KBR to expect such action.  Moreover, KBR has 
not produced any evidence that consultation under the disputes mechanism would have 
resolved the strike any sooner.  In fact, the government did ask Djibouti officials to 
suspend the strike and was told that only KBR’s retention of all of the former 
employees who worked on the base would end it (SOF ¶ 13).  Thus, the government 
halted the strike within approximately one month of its beginning by providing 
additional funding to hire all the workers Djibouti demanded, not through further 
discussions.   
 
Accordingly, the government is entitled to summary judgment as a matter of 
law upon the breach claims arising from the strike as alleged in Counts I and IV.  
   
2. Count III’s Constructive Change Claim 
 
In addition to its breach claims, Count III of KBR’s complaint contends that the 
government’s expectation that KBR continue to perform the contract’s requirements 
during the strike against it, along with its failure to assist KBR with its labor problems, 
constituted a constructive change to the contract. 
 
“[T]he contracting officer may . . . constructively change the contract, ‘either due 
to an informal order from, or through the fault of, the government.’”  Zafer Taahhut 
Insaat ve Ticaret A.S, 833 F.3d at 1361 (quoting NavCom Def. Elecs., Inc. v. England, 
                                              
motion for summary judgment must be made on personal knowledge, set out 
facts that would be admissible in evidence, and show that the affiant or 
declarant is competent to testify on the matters stated).  Even if considered, 
counsel’s statement does not reflect an actual threat of default.      
10 KBR returns to this argument in support of its superior knowledge allegation in 
Count VI. 

 
19 
53 Fed. App’x 897, 900 (Fed. Cir. 2002)) (emphasis in original).  Typically, 
demonstrating a constructive change requires the contractor to “show (1) that it 
performed work beyond the contract requirements, and (2) that the additional work was 
ordered, expressly or impliedly, by the government.”  Bell/Heery, 739 F.3d at 1335.  
KBR suggests that the inclusion of its proposal’s staffing plan into the contract, with its 
mix of “expat,” TCN and host nationals, established a particular manner and method of 
performance that it could rely upon.  Expecting KBR to perform when it could not 
employ that mix of personnel was beyond the contract requirements and constituted a 
change.    
 
The contract did not promise KBR that it need only perform if it could retain 
labor on its desired terms.  KBR has not presented any evidence that the government 
expressly, impliedly, or otherwise required it to perform tasks beyond the contract’s 
requirements.  Also, the contract did not excuse KBR from meeting its performance 
objectives “in the event [its] proposal prove[d] inadequate as conceived or executed” 
(SOF ¶ 8).  The government was not responsible for Djibouti’s labor demands upon 
KBR so it is not at fault for a change to KBR’s performance costs arising from them.  
See Zafer Taahhut Insaat ve Ticaret A.S, 833 F.3d at 1364 (rejecting the suggestion that 
another country’s interference with performance could constitute a constructive 
change).  
 
The government is entitled to summary judgment upon Count III’s constructive 
change claim arising from the strike.   
 
3. KBR’s Mutual Mistake Claim 
 
Count V contends that the parties committed a mutual mistake.  If proven, a 
mutual mistake of fact might entitle a claimant to reformation of a contract.  See Atlas 
Corp. v. United States, 895 F.2d 745, 749-50 (Fed. Cir. 1990).  KBR does not explain 
how the contract should be reformed.  Presumably, it seeks reformation that would 
impose the costs of the strike upon the government.   
 
The following must be proven by clear and convincing evidence to obtain 
reformation based upon mutual mistake:  (1) the parties were mistaken in their belief 
regarding a fact; (2) the mistaken belief constituted a basic assumption underlying the 
contract; (3) the mistake had a material effect on the bargain; (4) the contract did not 
put the risk of the mistake on the party seeking reformation.  Nat’l. Austl. Bank v. 
United States, 452 F.3d 1321, 1329 (Fed. Cir. 2006).   
 
KBR summarizes its mutual mistake argument by maintaining the parties 
mistakenly believed that Djibouti would comply with the terms of the Access 
Agreement.  However, KBR’s specific contentions about the strike are vague and seem 
to focus less upon the Access Agreement, which does not protect contractors from a 

 
20 
local strike, and more upon the fact that its staffing plan was incorporated into the 
contract and the Navy was unconcerned about a strike.  From this, it claims an 
underlying assumption of the contract about which the parties were mistaken was that 
KBR would be able to use local nationals to perform.   
 
KBR has not presented evidence that it was barred outright from using local 
labor; the record only shows that Djibouti supported a strike arising from KBR’s 
decision to retain less people at less pay than were employed by the prior incumbent 
(SOF ¶ 11).  Even if KBR is suggesting that the parties mistakenly believed that it 
would be permitted to retain local workers on its desired terms, such a contention 
would still fail to qualify under the mutual mistake doctrine.  KBR is not premising its 
mistake claim upon an erroneous belief by the parties about a fact existing at the time 
of contracting, but upon their alleged prediction about the future availability of local 
labor during performance.  Assumptions about future facts cannot establish a mutual 
mistake claim.  Dairyland Power Coop. v. United States, 16 F.3d 1197, 1202-03 (Fed. 
Cir. 1994) (“A party’s prediction or judgment as to events to occur in the future, even 
if erroneous, is not a ‘mistake’ as that word is defined [under the doctrine of mutual 
mistake of fact]”) (citing RESTATEMENT (SECOND) OF CONTRACTS § 151 cmt. a 
(1981); c.f. RESTATEMENT (SECOND) OF CONTRACTS § 152 cmt. b (“[M]istakes as to 
market conditions . . . do not justify avoidance under the rules governing mistake”).  
KBR failed to explain why this precedent is not fatal to its argument (tr. 71).       
 
Additionally, the record lacks any evidence that a basic assumption underlying 
the contract was that KBR could dictate the terms of its retention of labor.  Certainly, 
Djibouti did not make such a guarantee in the Access Agreement.  Nor is there 
anything to suggest that NAVFAC awarded the contract assuming that KBR possessed 
unfettered economic power over local labor.  Furthermore, the record shows that KBR 
knew prior to award about the risk of strikes if its bid was too low (SOF ¶ 7).  KBR 
also concedes that it is a sophisticated contractor that “expect[ed] to encounter labor 
issues . . . particularly where it proposed to reduce wages or staffing levels used by the 
incumbent contractor.”  It also recognizes that it was for “KBR . . . to work with 
laborers to obtain a mutually beneficial solution.”  (App. reply at 33)  KBR’s 
awareness of the potential for labor difficulties, combined with the fact that its bargain 
with NAVFAC was not premised upon the absence of labor strife, renders reformation 
due to mutual mistake inappropriate.  McNamara Constr. of Manitoba, Ltd. v. United 
States, 509 F.2d 1166 (Ct. Cl. 1975).  Ultimately, KBR assumed responsibility for 
acquiring labor for performance and the risks associated with its price.  See Patty 
Precision Prods. Co., ASBCA No. 24458, 83-1 BCA ¶ 16,261 at 80,815-16 (finding 
no mutual mistake when the risk of having an adequate workforce remained with the 
contractor). 
 
Accordingly, the government is entitled to summary judgment upon Count V’s 
mutual mistake claim arising from the strike. 

 
21 
 
4. KBR’s Superior Knowledge Claim 
 
Count VI of the complaint seeks recovery resulting from the strike under the 
theory that the government breached a duty to disclose superior knowledge.  “The 
superior knowledge doctrine imposes upon a contracting agency an implied duty to 
disclose to a contractor otherwise unavailable information regarding some novel matter 
affecting the contract that is vital to its performance.”  Scott Timber, 692 F.3d at 1373 
(quoting Giesler v. United States, 232 F.3d 864, 876 (Fed. Cir. 2000)).  KBR complains 
that the Navy knew of the “possibility” or “risk” of a labor strike but failed to inform it 
of that prior to award.  One of the elements of a superior knowledge claim is that the 
contractor undertook performance without vital knowledge of a fact affecting 
performance cost or duration.  Id.   
 
Here, KBR does not allege that it lacked knowledge of the “fact” of a strike 
prior to award.  There was no strike at that time.  Instead, it contends the government 
failed to inform it of the “possibility” of one.  KBR has not shown that a superior 
knowledge claim can be premised upon the contractor’s alleged ignorance of a 
possibility.  Indeed, case law indicates the opposite.  See Northrup Grumman Corp. v. 
United States, 47 Fed. Cl. 20, 90 (2000) (concluding that judgments or predictions are 
not facts subject to a superior knowledge claim).   
 
Even if KBR’s superior knowledge claim could be cognizable, it neither alleges 
nor provides any evidence that it lacked knowledge of the possibility of a strike.  
Instead, the record shows that KBR knew that a strike was possible depending upon its 
bid (SOF ¶ 7).  Again, KBR admits that it is a sophisticated contractor.  It previously 
performed a similar contract in Djibouti, stressed its experience working in the local 
labor market in its proposal for this fixed-price contract, and assumed responsibility 
for obtaining labor for the work (SOF ¶ 5).  This is not a situation where the 
government failed to disclose otherwise unavailable information regarding some novel 
matter.   
 
B. The Djiboutian Restrictions Upon Third Country Nationals  
 
KBR’s claims arising from Djibouti’s TCN restrictions are based upon virtually 
the same legal theories as the strike and KBR’s breach theories are rejected for similar 
reasons.  The government made no promise or warranty in its contract with KBR that 
Djibouti would comply with the Access Agreement and freely permit TCNs into the 
country.  The parties’ inclusion of KBR’s staffing plan into the contract, which 
contemplated the use of TCNs, did not transform the plan into a government promise 
or warranty that KBR could implement it without interference by Djibouti.  The 
government’s precatory declaration that it desired both its own and KBR’s success, 
and expression of an intent to find beneficial solutions within the bounds of an 

 
22 
acquisition policy, do not evidence an obligation to make Djibouti (a sovereign nation) 
comply with the Access Agreement.   
 
KBR complains about the Navy’s decision at the outset of the embargo not to 
send authorization letters for each TCN to Djibouti (SOF ¶ 17).  But it fails to show 
why the Navy was required by the contract to perform that task and we cannot identify 
such an obligation.  Furthermore, though the embassy suggested that KBR ask the 
Navy for those letters, KBR has failed to present any evidence that such 
communications would have ended the embargo.   
 
KBR refers to some internal Navy communications reflecting unhappiness with 
a vaguely described training proposal KBR says it submitted to Djibouti.  KBR does 
not suggest those concerns led to the Navy prohibiting the submission, nor does it 
present evidence of its nature or significance.  Notably, there is no evidence the 
proposal made a difference with Djibouti.   
 
KBR’s specific complaints ignore the fact that the government did indeed act to 
address the embargo through the Access Agreement mechanism.  Although the CO 
disclaimed contractual responsibility for Djibouti’s TCN restrictions (and KBR has not 
shown that to be incorrect), the government as a whole, with the involvement of the Navy 
and through the leadership of the United States Ambassador, consulted with Djibouti and 
secured its renewed cooperation for the benefit of all its contractors, leading to the May 1, 
2014 “Arrangement in Implementation of the” Access Agreement.  There, Djibouti 
essentially recommitted to permitting contractor employees access to the country and the 
camp.  (SOF ¶¶ 19-21, 23)  There is no evidence that the embargo persisted afterward.  
KBR criticizes these negotiations, objecting to a government strategy it believes was 
designed to address both the government’s interests in its Djibouti military base and those 
of all of its contractors, instead of KBR’s affairs alone.  Logically, those concerns are 
intertwined.  Regardless, KBR fails to cite any authority demonstrating the government 
was required to conduct international relations for KBR’s sole benefit to the exclusion of 
all other matters.  See generally Zafer Taahhut Insaat ve Ticaret, 833 F.3d 1364-65 
(explaining U.S. Government negotiations with other nations are typically sovereign acts 
that are beyond claims of contractual obstruction when not specifically directed toward 
nullifying contract rights).  The totality of the government’s efforts and achievements 
belie the suggestion that the government undermined any specific contractual promise or 
failed to cooperate in breach of the contract’s implied duty of good faith and fair dealing.   
 
Similarly, Djibouti’s refusal to permit TCNs into the country does not constitute 
a constructive change by the government.  Djibouti’s TCN restrictions did not arise 
from any government acts, the contract did not promise KBR that it would be able to 
employ TCNs in the numbers it wished, and the government did not order performance 
beyond the contract’s requirements.  Again, interference by a foreign government is 
not a constructive change.  KBR’s mutual mistake claim regarding Djibouti’s refusal 

 
23 
to let in TCNs is meritless for the same reason as it is for the strike; KBR does not 
premise it upon existing facts but upon an alleged prediction about whether Djibouti 
would permit entry of TCNs in the future.  Finally, nothing in the record shows the 
government possessed superior knowledge prior to contract award that Djibouti would 
not comply with the contractor access provisions of the Access Agreement.       
 
CONCLUSION 
 
Count II of the appeals is dismissed for lack of jurisdiction.  KBR’s partial 
motion for summary judgment on the remainder of the counts is denied and the 
government’s motion for summary judgment is granted.  The appeals are denied.   
 
 Dated:  May 15, 2020 
 
 
 
 
MARK A. MELNICK 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
 
I concur  
 
 
 
 
 
 I concur 
 
 
 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
 OWEN C. WILSON 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 
 
  


 
24 
 
 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. 59385, 59744, Appeals of 
Kellogg Brown & Root Services, Inc., rendered in conformance with the Board’s 
Charter. 
 
 Dated:  May 15, 2020 
 
 
       
  
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals