ARMED SERVICES BOARD OF CONTRACT APPEALS 
 
Appeal of - )  
 )  
Paragon Defense Solutions, Inc. ) ASBCA No. 64308 
 )  
Under Contract No. SPE7M4-22-P-3476 )  
   
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. 
Andrew Demosthenous 
    Trial Attorneys 
    DLA Land and Maritime 
  Columbus, OH 
 
OPINION BY ADMINISTRATIVE JUDGE EYESTER 
 
Paragon Defense Solutions, Inc. (Paragon) appeals a deemed denial of its claim 
concerning a purchase order issued by the Defense Logistics Agency (DLA).  Paragon 
seeks $59,140 in lost profits and contract administration costs for supplies it never 
delivered, arguing essentially that it substantially performed.  DLA argues that the 
unilateral purchase order lapsed because Paragon failed to provide the supplies by the 
required delivery date and Paragon is not entitled to the requested amount. 
 
Paragon elected to pursue this appeal pursuant to the Board’s Rule 12.2, Small 
Claims (Expedited) procedure.  Accordingly, this decision shall have no precedential 
value, and in the absence of fraud shall be final and conclusive and may not be 
appealed or set aside.  41 U.S.C. § 7106(b)(4)-(5).  Paragon also pursued this appeal 
pursuant to Board Rule 11, in which the decision rests upon written evidence without 
courtroom testimony.  Based on the following, we deny Paragon’s appeal. 
 
FINDINGS OF FACT 
 
1. On June 16, 2022, DLA issued Paragon a purchase order for 644 nozzle 
distribution kits, for a total of $379,960 (R4, tab 1 at 1, 6).  Paragon was to deliver the 
supplies by February 13, 2023 (id. at 6).  DLA issued the purchase order using special 
emergency procurement authority (id. at 2). 

2 
 
2. Box 16 of the purchase order included a check box stating that if it was 
“marked” the “supplier must sign Acceptance and return.”  The box was not marked 
and Paragon did not sign the purchase order; only the DLA contracting officer signed 
the order.  (R4, tab 1 at 1) 
 
3. The purchase order incorporated by reference applicable clauses as set forth 
in the DLA Master Solicitation for Automated Simplified Acquisitions (R4, tab 1 at 2).  
Accordingly, Federal Acquisition Regulation (FAR) 52.213-4, TERMS AND 
CONDITIONS-SIMPLIFIED ACQUISITIONS (OTHER THAN COMMERCIAL 
PRODUCTS AND COMMERCIAL SERVICES) (JAN 2022) was incorporated by 
reference (R4, tab 1c at 104). 
 
4. On June 16, 2022, Paragon issued a purchase order to the manufacturer for 
644 nozzle distribution kits.  Paragon sought a delivery date of December 14, 2023.  
(App. supp. R4, tab 1)  This delivery date is ten months after Paragon was to have 
delivered the supplies to DLA.  Paragon’s purchase order was initialed on June 23, 
2022, and included a handwritten notation that the terms were that 30 percent was 
required as downpayment with the order, and the balance would be collected prior to 
shipping “per quote 4/5/22” (app. supp. R4, tab 2).  Paragon paid the manufacturer 
30 percent of the order on June 24, 2022 (app. supp. R4, tab 3).  There is nothing in the 
record showing that Paragon received any supplies. 
 
5. On December 21, 2022, Paragon requested a 180-day extension because the 
manufacturer was experiencing a delay in delivering the parts (R4, tab 3 at 119).  On 
February 1, 2023, DLA emailed Paragon requesting copies of the correspondence with 
the manufacturer which “advised Paragon of the delay and requested the 180-day 
extension” as well as any additional documents to support the extension request (R4, 
tab 5 at 124-25).  DLA asked Paragon to provide the documents no later than 
February 2, 2023 (id. at 125).  On February 1, 2023, Paragon responded, stating it 
asked the manufacturer for a formal letter (id. at 124).  Paragon did not provide any 
correspondence or a formal letter to DLA. 
 
6. By February 6, 2023, as DLA had not heard from Paragon, the contracting 
officer emailed and stated DLA could not issue a modification to extend the delivery 
schedule without adequate consideration, as required by Defense Logistics Acquisition 
Directive (DLAD) 43.102(b)(S-91).  DLA stated that pursuant to the directive, 
adequate monetary consideration for granting the extension was $23,047.60.  (R4, 
tab 5 at 123)  DLA further stated:   
 
If a modification to extend delivery is desired, reply to this 
email with an offer of monetary or non-monetary 
consideration and a firm delivery schedule.  If no reply is 

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received offering adequate consideration within 5 days 
from the date of this email, the material may be accepted 
as a late shipment and recorded on the contractor’s history 
file; additionally, in the event the original delivery date has 
lapsed, the Government reserves the right to unilaterally 
withdraw[] its offer to purchase, and no deliveries will be 
accepted under the order.  The history file may be used for 
making future awards. 
 
(Id. at 123-24) (emphasis added) 
 
7. Paragon responded on February 6, 2023, stating it had been communicating 
with the manufacturer on a confirmed delivery date and would provide one in the next 
couple of days.  Paragon confirmed that once it knew the delivery date, it “would 
present our offer of consideration in exchange for the request delivery extension” of 
the order.  (R4, tab 5 at 123)  Paragon never provided DLA with copies of any of this 
correspondence. 
 
8. The delivery date of February 13, 2023, passed and Paragon had not 
delivered any supplies.  On February 14, 2023, Paragon stated its attorney contacted 
the manufacturer’s attorney regarding their “intent and capability of delivering the 
requested parts.”  (R4, tab 5 at 122)  According to Paragon, the manufacturer was 
“non-committal” and proposed a 280-day extension, and did not offer Paragon any 
consideration.  Paragon then asked if it could find a different manufacturer despite 
stating it “already spent [a] substantial amount of time and money on this contract and 
on” the manufacturer.  Paragon believed it had been misled by the manufacturer.  (Id.) 
 
9. On February 16, 2023, the contracting officer notified Paragon that due to 
the delinquency and unaccepted counteroffers of both the 280-day delivery extension 
and alternative source of supply, he would issue a modification withdrawing the 
purchase order (R4, tab 5 at 122).  DLA issued the modification that same day (R4, 
tab 6 at 126).  The modification stated that since Paragon failed to provide the supplies 
by the delivery date, the purchase order lapsed and was canceled (id. at 127).  DLA’s 
internal system, the post award request (PAR) system, states the reason for 
cancellation is “Planning Overprocurement” (R4, tab 7). 
 
10. On February 17, 2023, Paragon emailed the contracting officer expressing 
concern about the withdrawal, stating it should have been allowed to cure the issue 
(R4, tab 8 at 129).  On February 24, 2023, DLA emailed Paragon stating that a PAR 
had been created based on this email (app. supp. R4, tab 4).  On May 26, 2025, 
Paragon filed its claim with DLA arguing that DLA failed to provide a cure notice or 
recognize the excusable delay, and demanded an excessive consideration for the 
delivery date extension (R4, tab 12 at 149). 

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DECISION 
 
Paragon argues that DLA could not withdraw the unilateral purchase order 
because Paragon had begun performance thereby forming a binding, irrevocable 
option contract (app. br. at 3; app. reply br. at 2).  Paragon contends that DLA’s 
actions of corresponding with Paragon and negotiating the terms of the delivery date, 
further confirm the existence of a contract and not an offer (app. br. at 3; app. reply br. 
at 3).  At that point, Paragon argues that DLA’s only path to terminate for failure to 
deliver was through the procedures of FAR Part 49, which would have required a cure 
notice (app. br. at 3-4).  Paragon also contends that DLA waived the delivery date by 
waiting 42 days to respond to Paragon’s request for an extension and then engaging in 
negotiations before and after the delivery date (id. at 4).  Paragon also argues the 
contracting officer made no attempt to investigate and consider the supplier delays 
before terminating (id.).  Finally, Paragon argues the termination was a pretext because 
one of the PAR entries shows there was a planning overprocurement cancellation (app. 
br. at 5; app. reply br. at 5). 
 
DLA argues the purchase order lapsed when Paragon failed to make the 
delivery per the terms of the order and that it never waived that delivery date (gov’t br. 
at 4-5).  DLA further argues that Paragon’s issuance of a purchase order to the 
manufacture at most, created an option contract which lapsed when Paragon failed to 
meet the delivery date (id. at 6).  DLA also argues Paragon failed to provide 
supporting documents evidencing the quantum, i.e., the $1,900 in “internal contract 
administrative costs” and the $57,240 in lost profits (id. at 7). 
 
There does not seem to be a dispute that the purchase order was issued pursuant 
to FAR Part 13 (app. br. at 1, 3; gov’t br. at 5; see also finding 3).  FAR § 13.004(a) 
explains that a quotation is not an offer and therefore cannot be accepted by the 
government to form a binding contract.  Rather, the purchase order issued to a supplier 
is an offer by the government which the supplier can accept either in writing or by 
furnishing the supplies ordered or proceeding with the work to the point there has been 
substantial performance.  FAR 13.004(a)-(b).  Here, since Paragon did not sign the 
purchase order (finding 2) the only way Paragon could accept it was by furnishing the 
supplies or engaging in substantial performance. 
 
There is no dispute that Paragon never delivered the supplies by the delivery 
date (finding 8
).  As such, DLA had the right to cancel its offer.  FAR § 13.004(c).  
The issues therefore are whether Paragon substantially performed or DLA waived the 
delivery date.  When a supplier substantially performs “in an effort to provide the item 
that is the subject of the purchase order, an option contract is created and the 
government’s offer becomes irrevocable until the date specified for delivery.”  
Warfighter Def. Inc., ASBCA No. 63924, 25-1 BCA ¶ 38,863 at 189,136 (citing 
Commwise, Inc. Joseph Wetzel d/b/a Avetel, ASBCA No. 56580, 09-2 BCA ¶ 34,240 

5 
at 169,230 (emphasis added)).  However, “[i]f complete performance in accordance 
with the offer’s terms and conditions is not tendered [by the due date], the ‘offer’ 
lapses by its own terms.”  Comptech Corp., ASBCA No. 55526, 08-2 BCA ¶ 33,982 
at 168,082 (citations omitted)).  The offer lapses because the supplier can no longer 
perform in accordance with the offer’s terms.  TTF, LLC, ASBCA Nos. 58495, 58516, 
13 BCA ¶ 35,403 at 173,696. 
 
There was no substantial performance here.  Paragon may have issued an order 
for the kits to its manufacturer, and paid a downpayment, but Paragon sought delivery 
from the manufacturer well after DLA’s due date for the delivery (finding 4).  
Likewise, there is no evidence the manufacturer delivered any of the kits (id.).  In fact, 
we know that as of the purchase order delivery date, Paragon had not delivered any 
kits from the manufacturer to DLA (finding 8).  There is nothing in the record that 
evidences substantial performance. 
 
In addition, we note that even if there had been substantial performance, DLA 
was bound to honor the purchase order only until the delivery date, which Paragon 
failed to meet.  Syracuse Int’l Tech., ASBCA No. 55607, 08-1 BCA ¶ 33742 
at 167,043.  At that point, the offer lapsed because Paragon could no longer perform in 
accordance with the offer’s terms.  TTF, LLC, 13-1 BCA ¶ 35,403 at 173,696. 
 
There is also no indication the DLA contracting officer waived the delivery 
date.  Prior to the delivery date, the contracting officer sought evidence that the 
manufacturer needed the extra 180 days and never received it from Paragon 
(finding 5).  Next, the contracting officer explained it would not issue a modification 
without adequate consideration (as set forth in DLAD 43.102, including a formula) or 
a firm delivery date (finding 6).  Again, Paragon responded with no delivery dates 
(finding 7).  In fact, prior to the delivery date, the contracting officer specifically told 
Paragon that if the delivery date lapsed without Paragon providing the supplies, DLA 
could withdraw the offer (finding 6).  And after the delivery date passed, the 
contracting officer informed Paragon he was withdrawing the offer for failure to 
deliver, and did actually withdraw it that same day (finding 9).  At no point did the 
contracting officer extend the delivery date for Paragon. 
 
When Paragon failed to deliver, the offer lapsed by its own terms and Paragon 
was responsible for the costs of non-performance.  See Comptech Corp., 08-2 BCA 
¶ 33,982 at 168,082 (citation omitted).  We note that we have considered all of 
Paragon’s other arguments and find them to be without merit, as well. 
  

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CONCLUSION 
 
The appeal is denied. 
 
Dated:  November 19, 2025 
 
 
 
 
 
 
 
 
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. 64308, Appeal of Paragon 
Defense Solutions, Inc., rendered in conformance with the Board’s Charter. 
 
Dated:  November 20, 2025 
 
 
 
 
 
 
 
 
LAURA EYESTER 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
 
 
 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals