Environmental Safety Consultants, Inc.
Docket: ASBCA 58343
Decision date: 2014-08-13

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of --
Environmental Safety Consultants, Inc. 
Under Contract No. N62470-95-B-2399 
APPEARANCE FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 58343 
Mr. Peter C. Nwogu 
President 
Ronald J. Borro, Esq. 
Navy Chief Trial Attorney 
Ellen M. Evans, Esq. 
Senior Trial Attorney 
OPINION BY ADMINISTRATIVE JUDGE FREEMAN ON APPELLANT'S 
MOTION FOR PARTIAL SUMMARY JUDGMENT 
Environmental Safety Consultants, Inc. (ESCI) moves for partial 
summary 
judgment on its appeal of the contracting officer's deemed denial of its termination for 
convenience settlement claim under the captioned contract. ESCI contends that there 
is no genuine issue of material fact that it is entitled to immediate payment of 
(i) $68,230.50 for "work that was completed and accepted at contract price," and 
(ii) $199,950.00 for "settled constructive changes, extensive delays and overheads" 
(mot. at 1-2). The government opposes on the grounds that there is no legal authority 
under the termination for convenience clause for recovery of "selected prices in the 
last invoice and the last modification issued before the termination" (opp'n at 1). We 
agree with the government and deny the motion. 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
1. This appeal arises out of our decision converting the government's 
termination of the captioned contract (hereinafter "Contract 2399") for default to a 
termination for the government's convenience. Environmental Safety Consultants, 
Inc., ASBCA No. 51722, 11-2 BCA i! 34,848. 1 We have also addressed, more 
recently, a jurisdictional issue with respect to the total amount ofESCI's termination 
settlement claim. Environmental Safety Consultants, Inc., ASBCA No. 58343, slip op. 
(25 July 2014). Familiarity with these decisions is assumed. 
1 All Rule 4 citations refer to the Rule 4 filed in ASBCA No. 51722. 

2. Pursuant to paragraph (c) of the FAR 52.249-10, DEFAULT (FIXED-PRICE 
CONSTRUCTION) (APR 1984) clause of the contract, and as a result of our decision 
sustaining the appeal from the default termination, "the rights and obligations of the 
parties will be the same as ifthe termination had been issued for the convenience of 
the Government" (R4, tab 1 at 69). 
3. The FAR 52.249-2, TERMINATION FOR CONVENIENCE OF THE GOVERNMENT 
(FIXED-PRICE) (APR 1984)-ALTERNATE I clause in Contract 2399 states in pertinent 
part: 
( d) After termination, the Contractor shall submit a 
final termination settlement proposal to the Contracting 
Officer in the form and with the certification prescribed by 
the Contracting Officer .... 
(e) Subject to paragraph (d) above, the Contractor 
and the Contracting Officer may agree upon the whole or 
any part of the amount to be paid because of the 
termination .... However, the agreed amount, whether 
under this paragraph (e) or paragraph (t) below, exclusive 
of costs shown in subparagraph (t)(3) below, may not 
exceed the total contract price as reduced by ( 1) the 
amount of payments previously made and (2) the contract 
price of work not terminated .... 
(t) If the Contractor and Contracting Officer fail to 
agree on the amount to be paid the Contractor because of 
the termination of work, the Contracting Officer shall pay 
the 
Contractor the amounts determined as follows, but 
without duplication of any amounts agreed upon under 
paragraph (e) above: 
( 1) For work performed before the effective date of 
termination, the total (without duplication of any items) of-
(i) The cost of this work; 
(ii) The cost of settling and paying termination 
settlement proposals under terminated subcontracts that are 
properly chargeable to the terminated portion of the 
contract, if not included in subdivision ( i) above; and 
2 

(iii) A sum, as profit on (i) above, determined by 
the Contracting Officer under 49.202 of the Federal 
Acquisition Regulation, in effect on the date of this 
contract, to be fair and reasonable; however, if it appears 
that the Contractor would have sustained a loss on the 
entire contract had it been completed, the Contracting 
Officer shall allow no profit under this subdivision (iii) and 
shall reduce the settlement to reflect the indicated rate of 
loss. 
4. On 5 July 
2012, ESCI submitted its termination settlement proposal to the 
contracting officer for a "net proposed settlement" of$1,183,366.59. On 
14 September 2012, it submitted that proposal to the contracting officer as a certified 
claim under the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109 (app. 
supp. R4, vol. I, tab 3 at 1-4, tab 5 at 1-2). The contracting officer refused to either 
negotiate a settlement or issue a final decision on the termination settlement claim 
(answer ii 8). On 29 September 2012, ESCI appealed the deemed denial of the claim. 
The appeal was docketed as ASBCA No. 58343. 
5. ESCI's motion for partial summary judgment on its termination settlement 
claim has two parts. First, it claims that: 
(Mot. at 1) 
[T]here are no genuine issues of material fact as to whether 
appellant is entitled to payment of the amount of $68,230.50. 
This amount represents the compensation for completed, 
verified and accepted work at contract price before 
government's termination on June 12, 1998. This amount 
for payment is presented in Table 1.0 - Compensation for 
completed, verified and accepted by the Government on 
June 24, 1997 .... 
6. Table 1 is a listing of the progress payment estimates in Invoice No. 7 for 
some, but not all, of the items of work, required to perform Bid Item OOOlA (mot. at 
20-23; R4, tab 14 at 3-16). 2 Bid Item OOOlA was a $358,754 lump sum fixed-price 
2 Invoice No. 7 for a total progress payment of $138,506.50 was returned to ESCI 
unpaid by the contracting officer in June 1997 on the ground that it contained 
an "invalid" certification. ESCI did not thereafter submit a timely CDA claim 
for payment of the invoice. See Environmental Safety Consultants, Inc., 
ASBCA No. 58847, 14-1BCAii35,510, and ASBCA No. 54615, 07-1 BCA 
ii 33,483 at 165,984. 
3 

item for ''the entire work, complete in accordance with the drawings and 
specifications, but excluding work described in Bid Items OOOlB, OOOlC, OOOlD, 
OOOlE and OOOlF." As of the date the contract was terminated (12 June 1998), Bid 
Item OOOlA had not been completed. The work items in Table 1 ofESCI's motion 
were part of the Bid Item OOOlA work, but none of those items were separately priced 
in the contract Schedule. (R4, tab 1 at 16, 29-30) 
7. The progress payment estimates for the work items in Invoice No. 7 and in 
Table 1 ofESCI's motion are not based on the actual incurred costs of performing the 
work item. They are based on portions of the Bid Item price assigned to the work item 
by the contractor after award of the contract pursuant to paragraph (b) of the 
FAR 52.232-5, PAYMENTS UNDER FIXED-PRICE CONSTRUCTION CONTRACTS 
(APR 1989) clause of the contract. (R4, tab 1 at 68, 70) Paragraph (b) states in 
pertinent part: 
The Government shall make progress payments monthly as 
the work proceeds, or at more frequent intervals as 
determined by the Contracting Officer, on estimates of 
work accomplished .... The Contractor shall furnish a 
breakdown of the total contract price showing the amount 
included therein for each principal category of the work, 
which shall substantiate the payment amount requested in 
order to provide a basis for determining progress 
payments. 
(R4, tab 1 at 70) 
8. Progress payments under paragraph (b) are not final payments accepting the 
work for which they are paid. The FAR 52.232-27, PROMPT PAYMENT FOR 
CONSTRUCTION CONTRACTS (MAR 1994) clause of Contract 2399 makes a clear 
distinction in this regard between progress payments and final payments as follows: 
Notwithstanding any other payment terms in this 
contract, the Government will make invoice payments and 
contract financing payments under the terms and 
conditions specified in this clause .... 
(a) Invoice Payments. (1) For purposes of this 
clause, there are several types of invoice payments which 
may occur under this contract, as follows: 
(i) Progress payments, if provided for elsewhere in 
this contract, based on Contracting Officer approval of the 
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estimated amount and value of work or services performed, 
including payments for reaching milestones in any project: 
(ii) Final payments based on completion and 
acceptance of all work and presentation of release of all 
claims against the Government arising by virtue of the 
contract, and payments for partial deliveries that have been 
accepted by the Government (e.g., each separate building, 
public work, or other division of the contract for which the 
price is stated separately in the contract) .... 
(R4, tab 1 at 79) 
9. The second part of ESCI' s motion for partial summary judgment is a claim 
that: "Appellant is entitled to payment of $199,301, arising from the settlement 
agreement of equitable adjustment through contract modification of June 23/24, 1997 
presented in Table 2" (mot. at 2). The contract modification to which ESCI refers is 
bilateral Modification No. P00006, signed by Peter Nwogu on 23 June 1997 for ESCI 
and by the contracting officer on 24 June 1997 for the government. Modification 
No. P00006 provided for various additions and deletions to the specified work. The 
additional work items included among others: 
j. Subcontract all remaining work, including supervision, 
quality control, and punchlist items. 
k. Provide additional overhead costs incurred due to 
subcontracting. 
n. Provide extended overhead for the Government delays 
under this contract. 
(R4, tab 2 at 11-12) 
10. Modification No. P00006 concluded with a summary of the agreed price 
adjustment and contract completion date for the additions and deletions of work and a 
general release as follows: 
2. TOTAL AMOUNT OF ADDITIONAL WORK 
TOTAL AMOUNT OF CREDITS 
5 
$199,301.00 
$199, 192.00 
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The total contract price is increased by $109 .00 from 
$561,764.25 to $561,873.25. 
The contract completion date is extended by 308 calendar 
days from August 26, 1996, to June 30, 1997. 
The foregoing is agreed to as constituting full and 
equitable adjustment and compensation (both time and 
money) attributable to the facts of [sic] circumstances 
giving rise to the change directed hereby, including, but 
not limited to, any changes, differing site conditions, 
suspensions, delays, rescheduling, accelerations, impact, or 
other causes as may be associated therewith. 
(R4, tab 2 at 12) 
DECISION 
ESCI' s termination settlement claim, including the two items in its motion for 
partial summary judgment, is based on its prices for the terminated work and not its 
incurred cost. As such, it is a claim for breach of contract damages (a disappointed 
expectancy in not receiving the full contract price). But there has been no breach. The 
parties agreed in Contract 2399 that if the contract was terminated for default and if 
the contractor was subsequently determined not to have been in default, "the rights and 
obligations of the parties will be the same as ifthe termination had been issued for the 
convenience of the Government" (see SOF ~ 2). 
It is not disputed that Bid Item OOOlA was not completed when the contract was 
terminated and accordingly the lump sum fixed-price for that item was not due (see 
SOF ~ 6). It is not disputed that the individual work items in Bid Item OOOlA, agreed 
to by the parties for purposes of progress payments, were not separately priced items 
in the contract Schedule, and were accordingly part of the terminated work (id.). In 
these circumstances, and since the parties did not conclude a termination settlement 
amount agreement (see SOF ~ 4), paragraph (t)(l) of the Termination for Convenience 
clause of the contract provided for the contracting officer to determine the settlement 
amount on the basis of the cost of the terminated work up to the time it was terminated 
and a reasonable profit on that cost. The clause did not provide for determination of a 
settlement amount on the basis of a portion of the contract price of the terminated 
work derived from the progress payment estimates (see SOF ~ 3). Accordingly, we 
find no basis for including ESCI's claim for $68,230.50 of progress payment estimates 
in Table 1 as actual incurred costs in the termination settlement determination. 
6 
f 

We also find no basis in the Termination for Convenience clause for including 
the agreed increased price of $199,301 in Modification No. P00006 for changes and 
delays in the 
work, as an incurred cost of the terminated work. The agreed price in 
bilateral Modification No. P00006 of $199,301 for government-responsible changes 
and delays in the work was offset in the same modification by an agreed amount of 
$199, 192 for price credits due the government for deleted items of work. The net 
increase in price agreed by the parties in Modification No. P00006 was $109 (see SOF 
ir 10). However, the increased price of $109 is no proof by itself of the amount of any 
cost incurred by ESCI. 
The motion for partial summary judgment is denied. 
Dated: 13 August 2014 
I concur 
~# 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
7 
MONROE E. FREEMAN, JR. 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I concur 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 

1 l 
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. 58343, Appeal of 
Environmental Safety Consultants, Inc., rendered in conformance with the Board's 
Charter. 
Dated: 
8 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals