ARMED SERVICES BOARD OF CONTRACT APPEALS 
 
 
OPINION BY ADMINISTRATIVE JUDGE MCILMAIL 
 
 Appellant, Paragon Defense Solutions, Inc. (Paragon), requests that the Board 
award $3,682.78, and convert to a termination for convenience what Paragon says was 
the improper termination of its contract.1  Paragon elected to proceed under the 
Board’s Small Claims (Expedited) procedures, pursuant to Board Rule 12.2.  The 
Contract Disputes Act, 41 U.S.C. §§ 7106(b)(4)-(5), as implemented by Board 
Rule 12.2, provides that this decision shall have no precedential value, and that in the 
absence of fraud the decision shall be final and conclusive and may not be appealed or 
set aside.  In addition, the parties agreed to proceed under Board Rule 11; that is, on 
the written record, without an in-person hearing. 
 
FINDINGS OF FACT 
 
 On June 14, 2022, the government issued a unilateral purchase order to Paragon 
pursuant to Federal Acquisition Regulation (FAR) Part 13, for 118 propeller shafts for 
$212,400, to be delivered within 210 days; that is, by January 10, 2023.
2  On 
January 17, 2023, the government unilaterally issued Modification No. 1, extending 
the delivery date to April 10, 2023.
3  By April 10, 2023, Paragon had not delivered any 
 
1 App. br. at 3-4. 
2 See R4, tab 1 at 1-2, 5.  
3 R4, tab 13 at 149-50. 
Appeal of - )  
 )  
Paragon Defense Solutions, Inc. ) ASBCA No. 64312 
 )  
Under Contract No. SPE7L3-22-P-6059 )  
   
APPEARANCE FOR THE APPELLANT: Mr. Weiwei Jian 
    President 
 
APPEARANCES FOR THE GOVERNMENT: Gary P. Bilski, Esq. 
    DLA Chief Trial Attorney 
 John J. Pritchard, Esq. 
Adam J. Heer, Esq. 
Julie K. Phillips, Esq. 
    Trial Attorneys 
    DLA Land and Maritime 
    Columbus, OH 

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of the propeller shafts.4  On April 14, 2023, the contracting officer cancelled the 
purchase order.5  On May 27, 2025, Paragon submitted to the contracting officer a 
claim for $3,682.78.6  The contracting officer has not issued a decision upon that 
claim.7 
 
DECISION 
  
 A unilateral purchase order is an offer to create an option contract.  DODS, Inc., 
ASBCA No. 57816, 12-2 BCA ¶ 35,082 at 172,287.  Purchase orders have three distinct 
phases — (1) the offer, (2) the option contract, and (3) the completed purchase and sale 
contract.  Id.  In the offer phase there is no contract and the government is free to revoke 
the offer at any time before an option contract arises.  Id.  If the contractor engages in 
“substantial performance” in attempting to supply the item, an option contract is created 
wherein the offer becomes irrevocable.  Id.  If the contractor successfully performs the 
contract by delivering conforming services or supplies on time, a completed purchase 
and sale contract comes into existence.  Id.  However, if complete performance in 
accordance with the offer’s terms and conditions is not tendered, the option contract and 
purchase order lapse without the need for any action on the part of the government.  See 
id.; Warfighter Def. Inc., ASBCA No. 63924, 25-1 BCA ¶ 38,863 at 189,136; Comptech 
Corp., ASBCA No. 55526, 08-2 BCA ¶ 33,982 at 168,082; see also Coiltron, Inc., 
ASBCA No. 50664, 97-2 BCA ¶ 29,179 at 145,112. 
 
 The government concedes that Paragon engaged in substantial performance of 
the purchase order, creating an option contract wherein the government’s offer became 
irrevocable.
8  However, because Paragon did not deliver the propeller shafts on time—
that is, by April 10, 2023 (or at all)—the option contract and the purchase order lapsed 
without the need for any action on the part of the government.  Because Paragon never 
delivered the propeller shafts, no completed purchase and sale contract came into 
existence. 
   
 The parties’ other contentions have been considered and found unnecessary  
to address.  For all these reasons, the appeal is denied. 
 
 
 
 
 
 
4 See compl. at 2 ¶¶ 8-10; app. br. at 2 ¶ 5, 3-4; gov’t br. at 1; app. reply at 2-3.  
5 See R4, tab 18. 
6 R4, tab 20 at 1-2. 
7 Compl. at 2 ¶ 12; answer at 4 ¶ 12. 
8 See gov’t brief at 4. 

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CONCLUSION 
 
 The appeal is denied. 
 
 Dated:  November 25, 2025 
 
 
 
 
 
 
 
 
 
 
 
TIMOTHY P. MCILMAIL 
Administrative Judge 
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. 64312,
 Appeal of Paragon 
Defense Solutions, Inc., rendered in conformance with the Board’s Charter. 
 
 Dated:  November 25, 2025 
 
 
 
 
 
 
 
 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals