ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of--
BAE Systems Technology Solutions 
& Services Inc. 
Under Contract No. F A2517 -09-C-8000 
APPEARANCE FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 57581 
Duane L. Brummett, Esq. 
Counsel 
Col Jennifer L. Martin, USAF 
Air Force Chief Trial Attorney 
Skye Mathieson, Esq. 
Amanda Page, Esq. 
Trial Attorneys 
OPINION BY ADMINISTRATIVE JUDGE CLARKE 
This appeal arises out of a contract between the Air Force and BAE Systems 
Technology Solutions & Services Inc. (BAE) for support services at Cavalier Air Force 
Station, North Dakota (CAFS). BAE claims $61,335.95 for costs incurred for contracted 
out labor required to repair a generator damaged during a fire. The Air Force contends 
that BAE is responsible for all labor, whether contracted out or organic to BAE, required 
to complete the 
repairs. We have jurisdiction pursuant to the Contract Disputes Act 
(CDA) of 1978, 41 U.S.C. §§ 7101-7109. The parties elected to proceed under Board 
Rule 11 Submission Without a Hearing. The record consists of the parties' Rule 4 file 
documents and briefs. Only entitlement is before the Board for decision. We sustain the 
appeal. 
FINDINGS OF FACT 
1. Contract No. F A2517 -09-C-8000 (8000) was awarded to BAE effective 
1 January 2009 for various support services for the Perimeter Acquisition Radar Attack 
Characterization Systems (PARCS) located at CAFS (R4, tab 1). The contract's. period 
of performance included a base year and eight option years (id. ). 
2. The contract included Section B- Supplies or Services and Prices that listed 
contract line item numbers (CLINs) for the 
work to be done in each of the performance 
periods (R4, tab 1 at 8-80). Details of the work requirements were stated in Section C­
Descriptions and Specifications that incorporated the Performance Work Statement 
(PWS) for the PARCS (R4, tab 1 at 81, tab 2). The PWS consisted of four sections: 

Section 1, PARCS Service Requirements; Section 2, Services Summary; Section 3, 
Government-Furnished Property (GFP), Equipment, Resources, Services and 
Information; and Section 4, Appendices (R4, tab 2 at 123-26). Section 1 included 
15 chapters relating to various areas where service was required (id. ). Section 4 included 
6 appendices including Appendix 2, Definitions (id. ). 
3. Section B- Supplies or Services and Prices contained firm fixed-price (FFP) 
CLIN 10011 as follows: 
Operations, Maintenance, & Support 
FFP 
CONTRACTOR SHALL, EXCEPT FOR ITEMS, 
EQUIPMENT, VEHICLES AND SERVICES SPECIFIED 
IN SECTION 1 OF THE PERFORMANCE WORK 
STATEMENT AS GOVERNMENT FURNISHED 
PROPERTY OR SERVICES, PROVIDE 
NON-PERSONNEL SERVICES FOR ALL PERSONNEL, 
SUPERVISION, TRANSPORTATION, ITEMS, AND 
SERVICES NECESSARY TO PERFORM SERVICES AS 
STATED IN THE PERFORMANCE WORK STATEMENT, 
AND ACTIVITIES lAW CHAPTER 1, 2, 3, 4 (4.1- 4.4), 5, 
6, 7, 8 (not 8.18, 8.19, 8.20), 9, 10, 11, 13). 
(Period ofPerformance: 1 Oct 09-30 Sep 10) 
(R4, tab 1 at 20) Section B includes CLIN 10072 that allows the Air Force to place job 
orders on either a FFP or cost reimbursable (CR) basis as appropriate: 
Individual Job Order Services 
COST 
INDIVIDUAL JOB ORDERS ARE WORK NOT 
SPECIFICALLY IDENTIFIED IN THE PWS, BUT WHICH 
IS STILL WITHIN THE GENERAL SCOPE OF THE 
CONTRACT. THE GOVERNMENT ANTICIPATES 
USING FIXED-PRICE OR COST REIMB[U]RSABLE 
INDIVIDUAL JOB ORDERS TO BE DETERMINED BY 
THE CO ON A CASE-BY-CASE BASIS. INDIVIDUAL 
JOB ORDERS WILL BE NEGOTIATED BY THE CO AS 
THE ACTION OCCURS AND lAW CHAPTER 14 (see 
Section 4, Appendix 2, Definitions) 
1 
This is the first option year CLIN number which is relevant to this appeal. 
2 /d. 
2 

(Period ofPerformance: 1 Oct 09-30 Sep 10) 
(R4, tab 1 at 23) Chapter 14 simply repeats the language in CLIN 1007 and adds 
management requirements (R4, tab 1 at 173). Section B includes CLIN 10083 as follows: 
OM&S Local Purchase 
Items/ODCs 
COST 
LOCALPURCHASE:THECONTRACTORSHALLBE 
REIMBURSED FOR WEAPON SYSTEM PARTS NOT 
OBTAINABLE THROUGH SBSS lAW SECTION 1, 
CHAPTER 6, PARA 6.3. NON-LOCAL PURCHASE 
ITEMS: THE CONTRACTOR SHALL BE REIMBURSED 
FOR SUPPLIES, MATERIALS, PURCHASED SERVICES, 
AND EQUIPMENT (Other Direct Costs) NECESSARY IN 
SUPPORT OF CA V ALlER AFS. APPROVAL OF THESE 
REIMBURSEMENTS SHALL BE lAW SECTION 1, 
CHAPTER 6, PARA 6.3.1. ANY SINGLE PURCHASE 
OVER $5,000 REQUIRES CO APPROVAL (SEE SECTION 
G, PARA G-5) 
(Period of Performance: 1 Oct 09-30 Sep 10) (emphasis 
added) 
(R4, tab 1 at 23) OM&S is defined in the PWS as "Operations, maintenance and 
support" (R4, tab 2 at 185). 
4. Section G ofthe conformed contract 4 includes clause G-5, "CONSIDERATION 
AND PAYMENT," that reads in part:5 
3 !d. 
a. Cost Reimbursables. For the basic period cost 
reimbursable (CR) CLINs, and option period CR CLINs, (if 
exercised) the Government will pay the Contractor such costs 
as are determined to be allowable, allocable, and reasonable 
in accordance with Part 31, Subpart 3 1.2 of the Federal 
Acquisition Regulation. For the purposes of this provision, 
allowable items of cost shall include costs for initial or 
4 The index identified Rule 4, tab 27 as the PWS for the "conformed contract" but the 
copy in the record is unsigned. 
5 Clause G-5 was included in the solicitation (R4, tab 74 at 909; supp. R4, tab 112 at 38), 
but is not the version of the original contract in the Rule 4 (R4, tab 1 at 96). 
3 

replenishment spare parts, operational materials/supplies, 
material handling, off-site depot level maintenance, 
packaging, freight and G&A burden (when applicable), for 
those approved purchases authorized by the PWS. Fee will 
not be allowed. All purchases will be reviewed and approved 
as specified in the PARCS PWS, Part 1, Chapter 6, para 6.3.1. 
(R4, tab 26 at 573) PWS, Part 1, Chapter 6, paragraph 6.3.1. reads: 
Local purchase support is available under the cost 
reimbursable CLINs for services, and for supplies not 
obtainable through SBSS. Obtain approval from 10SWS 
Mission Support Officer for all purchases under the 
cost-reimbursable CLINs. 
(R4, tab 27 at 632) The previous contract, also with appellant, FA2517-C-04-0002 
(0002), included clause G-3 that was substantially the same 6 as the current contract's 
clause G-5 and included "off-site depot level maintenance" (supp. R4, tab 112 at 38). 
5. The PWS for the PARCS for Contract 8000 contains the following general 
scope statement: 
1.1. SCOPE. Provide non-personal services to operate, 
maintain, and support (OM&S) the Perimeter Acquisition 
Radar Attack Characterization System (P ARCS) and site at 
Cavalier Air Force Station (CAFS), North Dakota. Services 
encompass base support including management of radar and 
mission computer maintenance, civil engineering, 
environmental functions, security, transportation, supply, 
fuels, sensitive and non-sensitive communications and 
operation of the precision measurement equipment laboratory. 
Cavalier AFS receives limited support from Grand Forks 
AFB, located approximately 90 miles south of Cavalier. 
Contractor shall provide all necessary personnel, 
administrative, and managerial resources necessary on a 
continuous, 24-hours-a-day, 7-days-a-week (24/7) basis to 
meet mission requirements as specified in this PWS. The 
Contractor shall also interface with other Contractors, and/or 
Government agencies in support of all programs and efforts 
dealing with evolution and/or operation of systems and 
6 Clause G-3 included "consultant services" not found in G-5 and different cites at the 
end ofG-3 (supp. R4, tab 112 at 38). 
4 

equipment, as well as in providing day-to-day site support 
services. 
(R4, tab 2 at 127) 
6. Chapter 4 of the PWS, "MISSION SYSTEMS MAINTENANCE" includes 
five sections: 4.1. General Maintenance; 4.2. Communications-Electronics (C-E) 
Maintenance Management; 4.3. Test, Measurement and Diagnostic Equipment (TMDE); 
4.4. Precision Measurement Equipment Laboratory (PMEL); and 4.5. Military Strategic, 
Tactical, Relay System (MILSTAR) (R4, tab 2 at 137-40). Section 4.1. includes the 
following: 
4.1. GENERAL MAINTENANCE. The contractor shall 
perform all authorized organizational, intermediate, and depot 
level maintenance. Plan, schedule, direct, organize, 
coordinate, control, document, report, and execute all actions 
necessary to maintain mission equipment operability and 
availability. Maintain logs, records, inspection forms and 
Maintenance Information Systems (MIS) reflecting 
equipment status, inspections, and maintenance performed. 
(R4, tab 2 at 137) Section 4.2. included the following: 
4.2. COMMUNICATIONS-ELECTRONICS (C-E) 
MAINTENANCE MANAGEMENT 
4.2.6. Repairs. The Contractor shall repair equipment at the 
lowest level of maintenance. The contractor shall request · 
depot level maintenance when the maintenance required is 
beyond the scope, capability, and authorization given. 
4.2.6.1.3. Request for Assistance. Submit maintenance 
assistance requests for Technical Assistance {TA), 
Engineering Assistance (EA), Emergency Depot Level 
Maintenance (EDLM) or Urgent Depot Level Maintenance 
(UDLM) (see Appendix 6, R-4.1). 
(R4, tab 2 at 137-38) 
5 

7. Chapter 8 ofthe PWS, "CIVIL ENGINEERING" includes the following: 
8.5. ELECTRICAL 
8.5.1. Power Plant. The Contractor shall operate, maintain, 
and repair the power plant generators and ancillary equipment 
to provide continuous regulated power to Cavalier AFS. 
8.5.1.2. Generators. The Civil Engineering Maintenance 
Inspection and Repair Team (CEMIRT) will perform the 
12,000 and 24,000 hour Preventative Maintenance 
Inspections (PMis ). The Contractor shall forecast and 
coordinate CEMIR T PMis with 21 CES/CECR at least one 
year prior to required completion for funds programming. 
The Contractor shall calibrate all gauges and meters during 
CEMIRT PMis. 
8.5.1.3. PCCIEIRPIE.(] The Contractor shall operate, 
maintain and repair all mission-essential PCCIE/RPIE systems 
to ensure 99.99% availability, equivalent annual downtime of 
53 minutes lAW AFSPCI 32-1010, attachment 1. 
8.5.2. Emergency Generators. The Contractor shall perform 
the following emergency generator tasks: 
8.5.2.1. Operate, maintain, repair and inventory emergency 
generators and ancillary equipment. 
8.5.2.1.1. Perform oil changes and analysis lAW AFI 
32-1062, Ch 10, Paragraph 10.1-10.2. 
8.5.2.1.2. Maintain operation and maintenance records and 
submit maintenance data and inventory. (see Appendix 6, 
R-8.10). 
7 Power Conditioning and Continuation Interface Equipment/Real Property Installed 
Equipment (R4, tab 2 at 70-71 ). 
6 

8.5.2.2. Develop, implement, and post complete starting, 
stopping, operating, load transfer, and emergency shutdown 
instructions in conspicuous locations near the auxiliary power 
unit to include single line diagrams of electrical and 
mechanical systems showing normal and emergency 
configurations IA W AFI 32-1062, paragraph 4.4 through 
4.5.3. 
(R4, tab 2 at 152, 154-55) The previous Contract 0002 contained a different version of 
the requirement to maintain the emergency generators: 
1.8.1.5. ELECTRICAL 
1.8.1.5.1. Power Plant. Provide continuous regulated power 
to Cavalier Air Force Station. 
1.8.1.5.1.3. All power plant generator depot level 
maintenance/repair and preventive maintenance outside of the 
contractor's in-house capabilities will be performed by Civil 
Engineering Maintenance Inspection And Repair Team 
(CEMIRT), to include 12,000 and 24,000 hour preventive 
maintenance inspections (PMis). Forecast and coordinate 
these PMis with 21st CES site support at least 1 year prior to 
required completion for funds programming. 
(Supp. R4, tab 113 at 43) 
8. Section 4, Appendices, Appendix 2, of the PWS for Contract 8000 includes a 
list of definitions including the following: 
DEPOT LEVEL MAINTENANCE. That maintenance 
performed on equipment requiring major overhaul. Depot 
level maintenance includes: repair, replacement, or a 
complete rebuild of parts, assemblies, subassemblies, or the 
end items. It also includes the manufacture, reclamation, and 
testing of parts, assemblies, etc., when required. 
EMERGENCY or URGENT DEPOT LEVEL 
MAINTENANCE. The replacement work required to 
restore real property facilities damaged by fire, storm, 
7 

explosion, and other disasters to preserve mission capability 
and protect and preserve government property or personal 
safety. 
IN-HOUSE WORK. These two terms(&] have the same 
contractual connotation; they refer to all capabilities and 
personnel that the contractor must provide to accomplish the 
responsibilities of this contract, but not including services 
subcontracted to another contractor. 
INTERMEDIATE LEVEL MAINTENANCE. That 
maintenance performed on equipment requiring minor 
overhaul. Intermediate maintenance includes: the periodic 
inspection and servicing of equipment; the repair or 
replacement of unserviceable parts, assemblies, 
subassemblies, and components; the local manufacture or 
reclamation of non-available parts; and the calibration of 
instrumentation and protective devices. 
MAINTENANCE. The retention of material and equipment 
in a serviceable condition or action taken to restore material 
and equipment to serviceability through repair, rebuilding, 
and reclamation. 
MISSION ESSENTIAL RPIEIRPIE SYSTEM. 
Equipment or system required for support of the mission 
sensor system. Any equipment or system that causes an 
OPSCAP 
RED, such as, but not limited to, HV AC chiller, 
computer system power, and power plant is considered 
mission essential. 
OPERATION, MAINTENANCE, AND SUPPORT. 
Includes the operation, maintenance (scheduled and 
unscheduled), support, and management necessary to satisfy 
the operational requirement. Contractor support includes 
repair, lubrication, equipment alignment, installation of 
government-approved modifications, testing, performance 
monitoring, data gathering, data processing, and corrosion 
8 In the previous contract Statement of Work (SOW) this definition was titled 
"IN SERVICE/IN-HOUSE WORK" (supp. R4, tab 113 at 107). In the 8000 
contract PWS "IN-SERVICE" was deleted but the wording of the definition was 
not changed from the previous SOW which is why it refers to "two terms." 
8 

control, and the maintenance and dissemination of logs, 
drawings, records, and forms. The contractor on-site 
maintenance support will encompass all organizational, 
intermediate, and depot level maintenance. Consultant 
technical support necessary to resolve equipment or facilities 
maintenance problems will be at contractor expense. 
ORGANIZATIONAL MAINTENANCE. The systematic, 
timely, and periodic inspection and servicing of equipment 
which results in elimination of hazard to life and property, 
induces maximum reliability of equipment, and creates the 
minimum number of major and costly repair jobs, and 
produces the optimum utilization of equipment throughout its 
serviceable life. 
POWER CONDITIONING AND CONTINUATION 
INTERFACE EQUIPMENT (PCCIE). Any ofthe 
following forms of power conditioning and continuation 
systems: power conditioning without continuation for use 
during power fluctuations, frequency changing transformers, 
surge suppressors, filters, and motor generators. 
REAL PROPERTY INSTALLED EQUIPMENT (RPIE). 
Government owned or leased equipment, apparatus, or 
fixtures which aid in the function of real property and are an 
integral part of government owned or leased real property. 
REPAIR. Restoring a failed or failing facility, system, or 
item of equipment so it may be used effectively for its 
designated purpose. Restoring or replacing components 
damaged by the elements or by fire, storm, explosions, or 
other disasters. It further consists of overhauling, 
reprocessing, or replacing deteriorated constituent parts, 
equipment, or materials. For the purpose of the CE portion of 
this statement of work, the term maintenance includes all 
repair work. 
(R4, tab 2 at 189, 191-97) 
9 

Notice of Concern 
9. On 3 August 2009 the Air Force contracting officer (CO) sent BAE a Notice of 
Concern (NOC) enumerating three areas of"noticeable developments in contract 
performance" (R4, tab 29). The first, part a, was that BAE was not meeting the 99.99% 
availability requirement whereby the mission essential equipment could not be 
unavailable for more than 53 minutes a year (id. at 712). The second, part b, was BAE's 
questioning of its responsibility for conducting depot level maintenance outside of its 
on-site capability (id. at 714). In support of the position that BAE was required to 
perform depot level maintenance, the CO provided the following rationale: 
• PWS paragraph 8.5.1. Power Plant required BAE to "operate, maintain and 
repair the power plant generators and ancillary equipment to provide 
continuous regulated power to Cavalier AFS" (R4, tab 27 at 
636). 
• PWS Section 4, Appendix 2, Definition of Operation, Maintenance, and 
Support that includes "[t]he contractor on-site maintenance support will 
encompass all organizational, intermediate, and depot level maintenance" 
(R4, tab 27 at 
677). 
• PWS paragraph 8.5.1.2. provides the only outside depot level maintenance 
support of 12,000 and 24,000 hour preventive maintenance inspections 
(PMis) by the Civil Engineering Maintenance Inspection and Repair Team 
(CEMIRT) (R4, tab 27 at 
637). 
• PWS Chapter 4, Mission Systems Maintenance, paragraph 4.1 General 
Maintenance required BAE to perform "all authorized organizational, 
intermediate, and depot level maintenance" (R4, tab 27 at 
619). 
(R4, tab 29 at 714) 
10. On 14 August 2009, BAE responded to part b of the NOC as follows: 
BAE Systems disagrees with the assertion that the 
Power Plant equipment is a Mission System. PWS Chapter 4 
defines Mission Systems as Comm-Electronics, TMDE, 
PMEL and MILSATCOM. Our understanding, based on the 
PWS and Air Force AFI 32-9005, is that the generators are 
defined as Real Property Installed Equipment (RPIE). 
AFI 32-9005, Paragraph 3.1 -Real Property Installed 
Equipment (RPIE) states: List any generator installed in a 
facility on the real property record as RP IE. A permanently 
installed generator that is an essential component of an 
electrical power system and supports mission essential or 
critical functions is considered RPIE equipment. 
10 

Additionally, BAE Systems disagrees that the PWS 
instructions found in Chapter 4 pertaining to maintenance for 
Mission Systems are applicable to the maintenance ofRPIE 
as defined in Chapter 8. We believe that PWS Chapter 8 
clearly defines the requirements for RPIE equipment 
maintenance management. 
(Supp. R4, tab 121) 
11. The CO responded to BAE's responses to the 3 August 2009 NOC on 
11 September 2009 (R4, tab 31). Concerning the depot level maintenance issue, the CO 
again provided his rationale: 
• PWS Chapter 4, Mission Systems Maintenance, Chapter 8, Civil 
Engineering, and AFI 32-9005 do not define RPIE. 
• PWS Section 4, Appendix 2, Definitions, Mission Essential RPIEIRPIE 
System 
includes, "Any equipment or system that causes an OPSCAP RED, 
such as, but not limited to, HVAC chiller, computer system power, and 
power plant is considered mission essential." 
• PWS Section 4, Appendix 2, Definitions, Operation, Maintenance and 
Support includes, "on-site maintenance support will encompass all 
organizational, intermediate, and depot level maintenance." 
• PWS Section 4, Appendix 2, Definitions, Repair includes, "[r]estoring a 
failed or failing facility, system, or item of equipment so it may be used 
effectively for its designated purpose. Restoring or replacing components 
damaged by the elements or by fire, storm, explosions, or other disasters. It 
further consists of overhauling, reprocessing, or replacing deteriorated 
constituent parts, equipment, or materials." 
(R4, tab 31 at 722-23) 
12. Option year one was exercised by Modification No. P00012, 14 September 
2009, and had a performance period of 1 October 2009 through 30 September 2010 (R4, 
tab 14). 
The Fire 
13. A fire on 25 January 2010 damaged the emergency generators (R4, tab 58 at 
809). 
14. In a 24 February 2010 email, the Air Force acknowledged that the "Mod 4" 
generator had been released to BAE for repairs and authorized BAE to begin purchasing 
11 

parts needed for the repair (R4, tab 37 at 742). BAE responded on the same day stating, 
"I understand we are responsible for repairs, however some repairs are beyond our 
capability, such as cleaning and drying the windings in the generator. This is a 
specialized function that can not be done by BAE." (!d. at 741) The Air Force 
responded stating that ifBAE did not have the expertise to perform all repairs, it was 
obligated to subcontract the work at its expense (id.). 
15. On 2 March 2010, BAE wrote the Air Force stating, "BAE Systems believes 
the 
repair/replacement of the Module #4 generator and associated systems as a result of 
the recent catastrophic fire on 25 Jan 2010 is outside the scope ofthe contract and 
therefore we are not liable for its repair costs" (R4, tab 38). 
16. The CO responded on 9 March 2010 disagreeing with BAE stating that while 
the Air Force would reimburse the costs of repair parts, pursuant to PWS paragraph 
8.5.2.1., BAE was responsible for paying for subcontract labor needed to repair the 
Module #4 generator (R4, tab 41). 
17. In a 10 March 2010 email to the CO, BAE took the position that it would not 
perform any work or repair on the Module #4 generator until it reached a "mutually 
acceptable" agreement on who was responsible for subcontract labor to complete the 
repairs (R4, tab 43). The Air Force responded on 19 March 2010 directing BAE to 
perform the repair work (R4, tab 48). BAE responded on the same day stating that it will 
perform the repair, but 
that it will collect the costs it considers outside of its scope of 
work and will submit a request for equitable adjustment (R4, tab 49). 
18. The record includes a "FY 2010 CONSTRUCTION PROJECT DATA" sheet 
(DD form 1391) containing a cost estimate for "[r]epair damage to Standby Generator #4 
from catastrophic fire." The total cost estimate was $702,797.00. The most expensive 
repair was the alternator repair ($620,860.00) that consisted of cleaning and testing stator 
and rotor poles ($46,486.14 ), rewinding rotor poles ($1 04,544.00) and rewinding stator 
($339,768.00). (R4, tab 47) 
19. · On 1 0 May 20 10 the CO issued a Performance Assessment Report (PAR) 
containing the following assessment: 
Failed to begin repairs on Mod 4 generator. After several 
communications between the Govt and BAE, the Contracting 
Officer (CO) directed BAE on 19 Mar 2010, to repair the 
emergency generator damaged by the 25 Jan 2010 fire. 
Failure to perform upon direction from CO constitutes 
"failure to perform" contract requirements that can lead to 
termination by the Government for default. Corporate 
directed "stop work" in spite of contractual requirements, 
12 

may have detrimental impact to Government and 
Management business relations. 
(R4, tab 62 at 853) BAE responded stating in part: 
BAE Systems recognizes the Contracting Officer's author 
[sic], however in this case the direction from the government 
represented a cardinal change to the contract of such 
magnitude (directing BAE Systems to pay the estimated 
$600,000 in labor cost for restoration services provided by a 
vendor) that due diligence both contractually and legally was 
required. 
(!d.) BAE stated that it had initiated the repairs and that vendors were on-site (id. ). 
20. In an 11 May 2010 letter to the CO, BAE stated that it would repair the 
Module #4 generator "under dispute," but that it considered the Air Force's direction to 
be a cardinal change to the contract for which it would submit a claim for equitable 
adjustment (R4, tab 55). 
21. The CO held a government only meeting on 2 June 2010 with "our Subject 
Matter Expert from CE" to discuss the language of the PWS as it related to the repair of 
the Module #4 generator. The meeting was documented in a 3 June 2010 email containing 
the following relevant excerpts: 
The customer stands by his initial interpretation that the 
Government expects BAE to make all repairs in accordance 
with the definition of Repair. He asserts that if for some 
reason there was a catastrophic event at the site, the 
Government would in good faith, pay to Restore the site to 
like or better than condition. But responsibility for normal 
wear and tear and other circumstances outlined in the PWS 
(Repairs) should fall to that of the successful contractor. 
I read to the group Jeremy's interpretation provided by 
Charlotte that states "It would be a situation where it was 
decided to pay to have an item fixed, paying for the service, 
rather than pay to buy the item new." I asked a couple of 
other COs what their definition or determination of that 
statement would be; while we all agree that it's rather vague. 
One CO stated that given the "intent" of IJOs to be "new 
13 

work", this statement suggests to them that it would be 
smarter for the Government to pay for repairs of an item 
(such as the generator) than to pay for a new generator, but 
first, we have to remember that the contractor was hired to 
Operate, Maintain and Support the Radar site. Hence, the 
definition of Maintenance/Repair. 
So then we moved on to the line item description which 
states, "INDIVIDUAL JOB ORDERS. Consists of new 
work, minor construction, or upgrades to real property, RPIE, 
PCCIE, EAID or ITE," wondering if it's here that we need to 
work on the definition. It was determined that this 
description is clear, again supporting the position that the 
compensation for repairs of the generator do not fall under 
this CLIN, but to that ofBAE. 
We then moved to "Purchased Services". Jeremy's email to 
BAE stated that purchased services reimbursement "will be 
rare". "The CLIN language is all encompassing but not all 
inclusive." Within the contract, CLIN 0108, it states "THE 
CONTRACTOR SHALL BE REIMBURSED FOR 
WEAPON SYSTEM PARTS NOT OBTAINABLE 
THROUGH SBSS lAW SECTION 1, CHAPTER6, PARA 
6.3." Para 6.3.1. states, "Local purchase support is available 
under the cost reimbursable CLINs for services, and for 
supplies not obtainable through SBSS." The team is unsure 
of the intent of identifying services here as this is applicable 
only to the Supply Support function and may be a pointer to 
CLIN '07 for [91 
Therefore, after several discussions regarding the definitions 
and intent of the PWS, the core team believes that the 
expectation that BAE will repair these generators under the 
contract without further compensation is valid and 
substantiated by the language found in the contract. 
(R4, tab 72 at 897, 899) 
22. On 10 June 2010, BAE sent the CO another letter further explaining its 
position on the labor costs associated with the repair of the Module #4 generator. BAE 
made two points. First, that the solicitation did not allow prospective bidders to include 
9 The word is obscured by a hole punch. 
14 

costs for outside vendor labor costs for items that could not be repaired on-site. BAE 
identified two instances where such outside repair was paid for by the Air Force. Second, 
BAE stated 
that the work needed to repair stator windings did not fall within the 
definition of the work required in PWS Chapter 8. (R4, tab 71 at 894-95) 
23. On 16 June 2010, the CO sent an internal email presenting further analysis of 
BAE' s position on the cost reimbursable CLIN: 
I have read through BAE' s initial proposal in response to 
BAE's position on the Cost Reimbursable CLIN. 
First, however, I needed to extract what the Government's 
requirements were in the solicitation. 
In accordance with the CLIN description, COST LOCAL 
PURCHASE: THECONTRACTORSHALLBE 
REIMBURSED FOR WEAPON SYSTEM PARTS NOT 
OBTAINABLE THROUGH SBSS lAW SECTION 1, 
CHAPTER 6, PARA 6.3. NON-LOCAL PURCHASE 
ITEMS: THE CONTRACTOR SHALL BE REIMBURSED 
FOR SUPPLIES, MATERIALS, PURCHASED SERVICES, 
AND EQUIPMENT (Other Direct Costs) NECESSARY IN 
SUPPORT OF CA V ALlER AFS. APPROVAL OF THESE 
REIMBURSEMENTS SHALL BE lAW SECTION 1, 
CHAPTER 6, PARA 6.3 .1. ANY SINGLE PURCHASE 
OVER $5,000 REQUIRES CO APPROVAL. (SEE 
SECTION G, PARA G-5) Para G-5 states, G-5 
CONSIDERATION AND PAYMENT a. Cost 
Reimbursables. For the basic period cost reimbursable (CR) 
CLINs, and option period CR CLINs, (if exercised) the 
Government will pay the Contractor such costs as are 
determined to be allowable, allocable, and 
F A2517 -09-C-8000 P00034 Page 125 of 152 reasonable in 
accordance with Part 31, Subpart 31.2, of the Federal 
Acquisition Regulation. For the purposes of this provision, 
allowable items of cost shall include costs for initial or 
replenishment spare parts, operational materials/supplies, 
material handling, off-site depot level maintenance, 
packaging, freight and G&A burden (when applicable), for 
those approved purchases authorized by the PWS. Fee will 
not be allowed. All purchases will be reviewed and approved 
as specified in the PARCS PWS, Part 1, Chapter 6, para 6.3.1. 
And para 6.3.1., states, Local purchase support is available 
15 

under the cost reimbursable CLINs for services, and for 
supplies not obtainable through SBSS. Obtain approval from 
10SWS Mission Support Officer for all purchases under the 
cost-reimbursable CLINs. 
I have highlighted depot level maintenance because in 
accordance with the PWS, the definition is, DEPOT LEVEL 
MAINTENANCE. That maintenance performed on 
equipment requiring major overhaul. Depot level 
maintenance includes: repair, replacement, or a complete 
rebuild of parts, assemblies, subassemblies, or the end items. 
It also includes the manufacture, reclamation, and testing of 
parts, assemblies, etc., when required. And, in accordance 
with PWS para 4.1. GENERAL MAINTENANCE. The 
contractor shall perform all authorized organizational, 
intermediate, and depot level maintenance. 
Clearly, the PWS indicates that the contractor is responsible 
for all maintenance. Now, did BAE understand that- -
(R4, tab 74 at 909) The email went on analyze BAE's proposal concluding that BAE was 
responsible all labor costs (id. at 910-12). 
24. In a 29 June 2010 email, BAE reported that the alternator rotor poles and 
stator were cleaned and dried, functioning, and that rewinding would not be required for 
the repair (R4, tab 93 at 1035). In response to this notification, the Air Force inquired if 
BAE's request for equitable adjustment was now "closed" because the rewinding by 
highly skilled craftsman was not required (id. at 1034). BAE responded stating that even 
though rewinding was not required, drying the poles was required and that the specialized 
equipment needed to perform the drying was not available on-site. BAE indicated that it 
would still request and equitable adjustment because it was not capable of performing the 
work. (!d.) 
25. On 13 July 2010, the CO responded to BAE's 10 June letter essentially 
restating the Air Force's position that it would not pay for labor to repair the Module #4 
generator (R4, tab 98). On 8 November 2010, BAE submitted a request for equitable 
adjustment (REA) claiming $61,335.95 for "purchased services" needed to complete the 
repair of the Module #4 generator (R4, tab 109). The REA identifies the generator work 
as: 
( 1) Removal, transportation, clean-up, repair, and transportation and reinstallation 
of the repaired generator by Dakota Services, Inc. (DSI); 
16 

(2) Removal of the rotor from the generator, recondition ofthe rotor, reinstalling 
the rotor into the generator by Western Engineered Solutions, Inc.; 
(3) Sprinkler system repair by Dakota Fire Protection, Inc.; and 
( 4) Mileage, expenses, and labor to tune-up and adjust the generator's diesel 
engine by Jasper Engineering & Equipment, Inc. 
(R4, tab 109 at 1 085) BAE explained that it was entitled to reimbursement under cost 
reimbursement CLIN 1008 because the work was not within the scope of fixed-price 
CLIN 1001 (id. at 1086). 
26. The CO denied the claim by a final decision dated 4 January 2011 (R4, 
tab 111). The reasoning for the denial was that CLIN 1001 required BAE to perform 
services as stated in the PWS, that PWS paragraph 8.5.2.1. requires BAE to "operate, 
maintain, repair and inventory emergency generators and ancillary equipment" and the 
definition of repair required BAE to do the work (id. at 1 092). In the decision the CO 
stated that compensation under cost reimbursement CLIN 1008 was not appropriate 
quoting, "THE CONTRACTOR SHALL BE REIMBURSED FOR WEAPON SYSTEM 
PARTS NOT OBTAINABLE THROUGH SBSS lAW SECTION 1, CHAPTER 6, 
PARA 6.3" 10 (id. at 1093). 
27. BAE appealed the final decision to the Board and the case was docketed as 
ASBCA No. 57581 on 8 April2011. 
Declarations/ Affidavits 
Mr. Jeremy Lubbert 
28. The Air Force submitted a one-page declaration from Mr. Jeremy Lubbert, 
the former CO for the PARCS contract (supp. R4, tab 123). Mr. Lubbert stated that he 
was the CO from February 2008 to December 2009 (id. ~ 2). He participated in the 
negotiations with bidders, including BAE, leading up to award of Contract 8000 (id. ~ 3). 
BAE was the incumbent contractor under the previous Contract 0002 (id. ~ 5). Contract 
0002 had a SOW that was changed to a PWS for Contract 8000 pursuant to guidance in 
FAR 37.102 (id. ~ 6). The PWS had "many updates to the requirements from the 
requirements stated in the previous SOW" (id. ). He did not recall, after reviewing 
documents, that there were any questions relating to cost reimbursement CLIN 1 007 for 
repair during the solicitation phase (id. ~ 7). 
10 The decision does not appear to recognize the second part of CLIN 1008 providing for 
payment of costs for "NON-LOCAL PURCHASE ITEMS" including materials 
and services in support of CAFS that are unrelated to weapon system parts 
(findings 2, 3). 
17 

29. The Air Force submitted a more detailed supplemental declaration from Mr. 
Lubbert (supp. R4, tab 124).11 His first point was that Contract 8000 was not simply a 
"recompete" (id. ~~ 1-11). He discussed the conversion ofthe SOW to the PWS and 
made the point that the cost history was well known and there was no longer "a high level 
of price-uncertainty as there had been a decade earlier" (id. ~ 3). He said that the Air 
Force no longer wanted to "figure out what was 'over and above' maintenance work" but 
wanted "fixed-prices for all labor, maintenance, and repair work that is specified in the 
PWS" (id. ~ 5). Mr. Lubbert stated, "CLIN 1007 was only intended to be used on 
extremely rare occasion [sic], if and when the parties encountered a situation not 
envisioned in the PWS" (id. ~ 7). He did not directly address CLIN 1008, but did discuss 
clause G-5 that is referenced in CLIN 1008. He stated that G-5 was intended to 
"reimburse the costs of materials" (id. ~ 8), and that all labor in the PWS was to be 
performed under fixed-price CLIN 1001 (id. ~ 9). Mr. Lubbert stated that the language 
obligating the Air Force to perform depot level maintenance was removed because the 
Air Force wanted all maintenance labor to be performed under fixed-price CLIN 100 1 
(id. ~ 10). He said the Air Force evaluated the staffing matrix on a pass-fail basis did not 
review it in detail (id. ~ 12-14). Mr. Lubbert said nothing about discussing any ofthe 
intent behind the changes incorporated in the PWS with the bidders on Contract 8000. 
Ms. Jeanie Schwab 
30. BAE submitted an affidavit and supplemental affidavit from Ms. Jeanie 
Schwab (R4, tab BAE-1; supp. R4, tab BAE-4). She is BAE's contracts manager and 
held that position for the previous contract, 0002, for 5 years for "the exact same work, 
with the same Air Force contracting officials, and the same Air Force site management 
officials, at the exact same location" (supp. R4, tab BAE-1, ~ 3). The solicitation leading 
to Contract 8000 required proposers to submit a staffing matrix identifying the proposed 
labor to be used for the fixed-price work, CLIN 1001 12 (id. ~ 4). She stated: 
The PWS was written with words that sounded like the 
In-House Workforce was required to do every possible piece 
of work that could ever be done on a military base .... which 
would have taken a staff of 10 times as many people, and 
would have required hundreds of millions of dollars worth of 
subcontracted off-site labor every year. However, both the 
Air Force and BAE Systems had the clear understanding that 
the FFP CLIN was not intended by the Air Force, or by BAE 
Systems, to encompass every possible repair to Cavalier Air 
Force Station. 
11 The Air Force did not designate a Rule 4 tab for the supplemental declaration so the 
Board assigns it "supp. R4, tab 124." 
12 Ms. Schwab's affidavit refers to CLIN 1001 as OX01 and CLIN 1008 as OX08. 
18 

(!d.~ 5) In her supplemental affidavit she explained that her belief that the Air Force 
understood the FFP CLIN was not all encompassing is based on her experience from 
I994 to I999 where the Air Force repeatedly agreed to work that was "over and above" 
the scope of the FFP CLIN (supp. R4, tab BAE-4 at 2-3). She explained that the 8000 
contract was 
a "recompete" of the previous contract and the scope didn't change even 
though the SOW was 
converted to a PWS (id. at 3). She also explained that it was 
obvious that BAE did not price 
the FFP CLIN to compensate for any increase in 
workload (id. at 5), and that no one from the Air Force stated that the work required of 
BAE under the FFP CLIN had increased (id. at 8). Concerning the deletion of the 
sentence "[a]ll power plant generator depot level maintenance/repair and preventive 
maintenance outside of the contractor's in-house capabilities will be performed by Civil 
Engineering Maintenance Inspection And Repair Team (CEMIRT)" (finding 7) in the 
8000 contract, Ms. Schwab testified, "[y ]es, we noticed it [during the proposal phase], but 
we did not interpret that to mean that any change would take place in regard to the work 
done by the CEMIRT team" (id. at IO). BAE did not ask the Air Force why the sentence 
was removed (id. at 13-I4 ). She explained that the 8000 contract still required the 
CEMIRT to do the I2,000 
and 24,000 PMI that required four men working seven weeks 
to perform the depot level maintenance during the PMis (id. at I2). 
3I. Ms. Schwab stated that cost reimbursement CLIN I 008 was applicable to 
civil engineering work such as repairs to the emergency generators. The Air Force could 
use CLIN I 008 for "local purchase" of "off-site" services and supplies to accomplish 
"repairs" that were outside the scope of the fixed-price CLIN IOOI. During the previous 
five years the Air Force tasked BAE to do many off-site depot level repairs through 
subcontractors under cost reimbursement CLIN I 008 for the emergency generators. 
(R4, tab BAE-1, ~~ 6, 8) CLIN 1008 referred to Section G, clause G-5, that provided that 
the cost reimbursement CLIN provided for the payment of allowable costs including 
"off-site depot level maintenance" (id. ~ 14) (emphasis omitted). 
32. Ms. Schwab described an emergency generator (diesel engine and electric 
alternator combination) as 30-feet long and I5-feet tall (supp. R4, tab BAE-4 at 10). 
There were six emergency generators in a nuclear-hardened facility with the P ARCS 
(id. ). 
33. Ms. Schwab discussed depot level maintenance. She stated that typically a 
"depot" is an off-site centralized facility that performs highly complex repairs on military 
equipment. Usually depot level maintenance 
requires that the item to be repaired be 
moved to the depot for the work. However, where the equipment is too large to send to 
the depot, such as the P ARCS emergency generators, a military depot repair team travels 
to the location of the equipment to conduct the maintenance. (Supp. R4, tab BAE-1, 
~ 23) In some instances repair was performed on the emergency generators by off-site 
subcontractors. The term "off-site depot level maintenance" as it applied to the 
I9 

emergency generators included off-site contractors conducting maintenance on the 
emergency generators at Cavalier Air Force Station. (/d. ~ 24) 
DECISION 
Contentions of the Parties 
The fundamental disagreement between the parties relates to BAE's responsibility 
to conduct all maintenance, including all "depot level maintenance," on emergency 
generators under the fixed-price CLIN 1001 of the contract. BAE argues that it is only 
obligated to conduct depot level maintenance that is within its in-house capability; when 
that capability is exceeded, the work is to be performed under cost reimbursement CLIN 
1008.1 BAE relies heavily on the initial affidavit of its contract manager, Ms. Jeanie 
Schwab, in support of its arguments (app. br. at 12-23). BAE also presents a contract 
interpretation argument citing a variety of Contract 8000 provisions (id. ). 
The Air Force contends that the predecessor 0002 contract employed a SOW that 
was changed to the PWS used in the 8000 contract and that the PWS was "significantly 
different substantively than the SOW for the previous contract" (gov't br. at 4).14 It 
therefore disagrees that BAE' s experience during the predecessor 0002 contract is 
relevant to the proper interpretation of the 8000 contract. The Air Force also presents a 
contract interpretation argument based on a variety of Contract 8000 provisions, echoing 
the rationale in the final decision (finding 25). The CO states that CLIN 1001 is a 
fixed-price CLIN that requires BAE to "repair" an emergency generator damaged by fire. 
He then relies upon the contract's definitions of"repair" which he regards as obliging 
BAE to perform the work under this fixed-price CLIN. (Gov't br. at 8-9) In its reply 
brief, the Air Force cites to the Notice of Concern (NOC), and argues its only obligation 
to conduct depot level maintenance support for the Power Plant was specified in PWS 
8.5.1.2 which provided for the CEMIRT to conduct the 12,000 and 24,000 hour 
preventive maintenance inspections (gov't reply br. at 2). 
Course ofDealing 
BAE buttresses its position by arguing that Contract 8000 was a follow-on 
contract to Contract 
0002 that 
involved the same work, same location, same Air Force 
representatives and "essentially the same PWS and terms and conditions" and that a 
13 The judge asked BAE to clarify Ms. Schwab's testimony that the Air Force 
"understood" that the FFP CLIN scope had not changed, but the explanation 
remained course of dealing in the prior 0002 contract (supp. R4, tab BAE-4 at 
1-6). 
14 The record does not contain any information relating to the government's price 
estimate for the 8000 contract. 
20 

course of dealing was established during the predecessor contract supporting BAE' s 
interpretation of its obligations under the 8000 contract (app. br. at 3-5). 
The RESTATEMENT (SECOND) OF CONTRACTS § 223 ( 1981) sets out the basic rules 
regarding course of dealing: 
§ 223 Course of Dealing 
(1) A course of dealing is a sequence of previous 
conduct between the parties to an agreement which is 
fairly to be regarded as establishing a common basis of 
understanding for interpreting their expressions and 
other conduct. 
(2) Unless otherwise agreed, a course of dealing 
between the parties gives meaning to or supplements 
or qualifies their agreement. 
b. Common basis of understanding. Course of dealing 
may become part of an agreement either by explicit provision 
or by tacit recognition, or it may guide the court in supplying 
an omitted term. Like usage of trade, it may determine the 
meaning of language or it may annex an agreed but unstated 
term. There is no requirement that an agreement be 
ambiguous before evidence of a course of dealing can be 
shown, nor is it required that the course of dealing be 
consistent with the meaning the agreement would have apart 
from the course of dealing. 
The Board has relied upon the Restatement in support of its decisions before. See C. R. 
Pittman Constr. Co., ASBCA No. 54901,08-1 BCA ~ 33,777 at 167,178. However, the 
course of dealing argument depends on "essentially" the same contract provisions. 
T&M Distributors, Inc., ASBCA No. 51405, 00-1 BCA ~ 30,677 at 151,509 ("Justifiable 
reliance on a prior course of dealing requires proof of the same contracting agency, the 
same contractor, and essentially the same contract provisions."). 
BAE's course of dealing argument is problematic in this instance because of a 
change in contract language between the SOW in the 0002 contract and the PWS in the 
8000 contract. The 0002 contract included 
the notion that BAE's obligation to repair the 
emergency generators was limited by its in-house capability, but the conversion of the 
21 

SOW in the 0002 contract to a PWS in the 8000 contract resulted in the deletion of the 
language referring to in-house capability. 
The 0002 contract clearly specified that the CEMIRT would perform depot level 
maintenance that BAE could not perform in-house. Under the 8000 contract this 
language was deleted. Under the 8000 contract the CEMIRT was only responsible for 
PMis. Since the language of the 0002 and 8000 contracts is not "essentially" the same in 
this regard, BAE cannot rely on course of dealing in support of its claim. 
The 8000 Contract 
The claim in this appeal arose during the first option year (findings 12, 13). The 
8000 contract Section B, CLINs relevant to this appeal during the first option period are 
CLIN 1001,15 Operations, Maintenance, & Support; CLIN 1007, Individual Job Order 
Services; and CLIN 1008, OM&S Local Purchase 
Items/ODCs (finding 3). The 8000 
contract's PWS consists of four sections. The sections relevant to this appeal are 
Sections 1 and 4. Section 1, PARCS Service Requirements, includes fifteen chapters 
specifying the service to be provided. The chapters most relevant to this appeal are: 
Chapter 1, General Requirements; Chapter 4, Mission Systems Maintenance; and Chapter 
8, Civil Engineering. (Findings 5, 6, 7) PWS Section 4, Appendix 2, Definitions, is 
relevant because the definitions serve to help interpret words included in PWS Chapters 
1, 4, and 8 (finding 8). 
The Fire 
On 25 January 2010 a fire damaged an emergency generator (finding 13). BAE 
notified the Air Force that although it was responsible for repair of the generator, the 
required work on the generator windings was beyond BAE's capability (findings 14, 15). 
The Air Force took the position that if BAE could not do the repair itself, it was 
responsible to subcontract for the work at its expense under FFP CLIN 1001 (findings 14, 
16). The Air Force directed BAE to do the work. BAE agreed "under dispute" and 
stated it would submit a claim for reimbursement (findings 17, 20). BAE estimated that 
if the rotor and stator poles required rewinding it would cost $702,797 (finding 18). It 
was later determined that rewinding was not required; cleaning and drying was all that 
was required resulting in a claim for $61,335.95 (findings 24, 25). BAE, however, 
remained adamant that it was not responsible for the cost of repairing the generator 
because the work was not within BAE's in-house capability. 
15 The first number represents the option year and the last number represents the CLIN 
number. Therefore, CLIN I 001 means CLIN 1 for the first option year (R4, tab 1 
at 20). 
22 

Depot Level Maintenance 
As a preliminary step in this analysis, it is necessary for the Board to decide if the 
cleaning and drying of the rotor and stator windings was depot level maintenance. There 
are three levels of maintenance identified in the PWS: organizational, intermediate, and 
depot level (findings 6, 8). Depot level maintenance is defined in PWS, Section 4, 
Appendix 2 (finding 8). However, the definition alone does not answer the question of if 
rotor/stator cleaning and drying is depot level maintenance or not. We therefore look to 
the positions of the parties. BAE consistently stated that cleaning and drying the 
windings was outside of its capabilities (findings 10, 14), and outside ofthe scope ofthe 
contract (findings 15, 17, 19, 20). The Air Force disagreed. In its NOC the Air Force 
cited to PWS Chapter 4, Mission Systems Maintenance, paragraph 4.1., General 
Maintenance, to support its position that BAE was obligated to perform "all authorized 
organizational, intermediate, and depot level maintenance" (finding 9). The CO also took 
the position that BAE was required to perform depot level maintenance based on the 
definition of"Operation, Maintenance and Support" (finding 11). Based on these facts 
we conclude that both parties considered cleaning and drying the windings to be depot 
level maintenance. Therefore, we conclude that cleaning and drying the windings was 
depot level maintenance. 
SOW Conversion to PWS 
In the 0002 contract SOW the Air Force agreed to send the CEMIRT to perform 
depot level maintenance when the work exceeded BAE's in-house capability (finding 7). 
The sentence in 0002 contract SOW paragraph 1.8.1.5.1.3. that limited BAE's obligation 
to perform depot level maintenance to its in-house capability was deleted when the SOW 
was transformed into a PWS for the 8000 contract (id. ). However, all that deletion 
accomplished was to relieve the Air Force of its obligation to send its CEMIRT to 
perform depot level maintenance. Although it eliminates the Air Force's obligation to 
perform depot level maintenance itself, it does not resolve the questions of if FFP CLIN 
1001 requires BAE to performall depot level maintenance or ifthe work could be 
performed by BAE under CLIN 1007 or cost reimbursement CLIN 1008 and paid for by 
the Air Force. 16 BAE agrees that it was responsible for the repair of the fire damaged 
emergency generator, but contends it falls under cost reimbursement CLIN 1008 (finding 
14). 
Firm Fixed-Price CLIN 1001 
The rest of our analysis involves classic contract interpretation. "When the 
contract's language is unambiguous it must be given its 'plain and ordinary' meaning and 
16 The Air Force retained the discretion to do the work itself by sending the CEMIRT 
team but was no longer obligated to do so. 
23 

the court may not look to extrinsic evidence to interpret its provisions." Teg-Paradigm 
Environmental, Inc. v. United States, 465 F.3d 1329, 1338 (Fed. Cir. 2006) (citations 
omitted). 
CLIN 100 1 is the firm fixed-price CLIN that requires BAE to provide 
non-personal services as stated in the PWS (finding 3). Services relating to BAE's 
responsibility for the emergency generators are defmed in PWS Chapter 8, Civil 
Engineering, paragraph 8.5.2. Emergency Generators 17 (finding 7). Subparagraph 
8.5.2.1. required BAE to "Operate, maintain, repair and inventory emergency generators 
and ancillary equipment" (id.). The Air Force relies upon the definition of"repair" in 
PWS Section 4, Appendix 2 in support of its interpretation: 
REP AIR. Restoring a failed or failing facility, system, or 
item of equipment so it may be used effectively for its 
designated purpose. Restoring or replacing components 
damaged by the elements or by fire, storm, explosions, or 
other disasters. It further consists of overhauling, 
reprocessing, or replacing deteriorated constituent parts, 
equipment, or materials. For the purpose of the CE portion of 
this statement of work, the term maintenance includes all 
repair work. 
(Findings 8, 11) This is indeed a broad definition of repair and is encompassed by 
"maintenance" which has its own definition: 
MAINTENANCE. The retention of material and equipment 
in a serviceable condition or action taken to restore material 
and equipment to serviceability through repair, rebuilding, 
and reclamation. 
(!d.) There is also a separate definition of depot level maintenance in this 
appendix: 18 
DEPOT LEVEL MAINTENANCE. That maintenance 
performed on equipment requiring major overhaul. Depot 
level maintenance includes: repair, replacement, or a 
complete rebuild of parts, assemblies, subassemblies, or the 
17 In Chapter 8 there are two subparagraphs dealing with generators: 8.5.1.2. Generators 
and 8.5.2. Emergency Generators. Because 8.5.1.2. deals with the CEMIRT 
12,000 and 24,000 hour PMis, we conclude that both paragraphs deal with 
emergency generators. 
18 There is no separate definition of depot level repair. 
24 

end items. It also includes the manufacture, reclamation, and 
testing of parts, assemblies, etc., when required. 
(/d.) Likewise, these are broad definitions of maintenance and both encompass repair. 
The definitions of maintenance and depot level maintenance each incorporates repair, and 
therefore, there is no distinction among these in this contract as regards this dispute. It is 
also clear that BAE is responsible for "[r]estoring or replacing components damaged by 
the elements or by fire, storm, explosions, or other disasters." The Air Force interprets 
this sentence to require all repairs and maintenance, including depot level labor necessary 
to fix the emergency generators, to be paid for by BAE. 
BAE, however, interprets this 
sentence to be limited to a firm-fixed price obligation tied to its in-house capabilities. 
This potential conflict in interpretations is resolved by looking at other language in the 
contract. 
There is no mention of "depot level" maintenance/repair in the definitions of 
repair or maintenance or in subparagraph 8.5.2.1. (findings 7, 8). In contemporaneous 
documents, the Air Force CO points to the definition of "Operation, Maintenance, and 
Support" that refers to depot level maintenance, but the language in paragraph 8.5 .2.1. is 
"[o]perate, maintain, repair" 19 so the definition of"Operation, Maintenance, and Support" 
is not instructive (findings 9, 11). This is a problem for the Air Force's interpretations 
since we must read the contract as a whole and depot level maintenance/repair is found 
elsewhere in various provisions of the contract. NVT Technologies, Inc. v. United States, 
370 F.3d 1153, 1159 (Fed. Cir. 2004) ("An interpretation that gives meaning to all parts 
of the contract is to be preferred over one that leaves a portion of the contract useless, 
inexplicable, void, or superfluous."). 
To bring depot level maintenance/repair within the scope of subparagraph 8.5.2.1., 
the Air Force CO also referred to Chapter 4, Mission Systems Maintenance, paragraph 
4.1. General Maintenance that reads in part, "[t]he contractor shall perform all authorized 
organizational, 
intermediate, and depot level 
maintenance" (findings 6, 9, 11, 23).20 BAE 
disagrees that Chapter 4 applies to the emergency generators (finding 10). We agree with 
BAE. Chapter 4 applies to the four categories of equipment listed in Chapter 4's four 
principle subparagraphs: 4.2. Communications-Electronics (C-E) Maintenance 
Management; 4.3. Test, Measurement and Diagnostic Equipment (TMDE); 4.4. Precision 
19 The Section 4, Appendix 2, definitions of"maintenance" and "repair" do not refer to 
depot level maintenance. There is no stand alone definition of"operation." 
20 ·The Air Force does not address the fact that within Chapter 4, paragraph 4.2.6. 
provides that BAE may request depot level maintenance "beyond the scope, 
capability, and authorization given." Paragraph 4.2.6.1.3. allows the contractor to 
request assistance for Urgent and Emergency Depot Level Maintenance at a fixed­
price, which lends support to BAE' s interpretation that it is only required to 
perform depot level maintenance within its in-house capability (finding 6). 
25 

Measurement Equipment Laboratory (PMEL); and 4.5. Military Strategic, Tactical, Relay 
System (MILSTAR) (finding 6). Emergency generators are not identified in Chapter 4. 
Chapter 4 and Chapter 8 serve different purposes; each has its own introductory 
paragraph and itemizes different equipment. The "areas of concern" of Chapter 4 and 
Chapter 8 are different. See Harbor Construction Co., ASBCA No. 39039, 90-1 BCA 
~ 22,343 at 112,289 ("The areas of concern of the cited paragraphs are different, and the 
instructions regarding each do not conflict."). Introductory paragraph 4.1.21 to PWS 
Chapter 4 applies to the equipment identified in Chapter 4, not Chapter 8. This is another 
fatal flaw in the CO's contemporaneous interpretation since it was another way the Air 
Force attempted to link the requirement to perform depot level maintenance/repair to 
Chapter 8. The CO's interpretation applying the language in PWS Chapter 4, paragraph 
4.1., to the emergency generators covered in Chapter 8 is not "within the zone of 
reasonableness." 22 States Roofing Corp. v. Winter, 587 F.3d 1364, 1369 (Fed. Cir. 2009) 
(A reasonable interpretation need not be the best or only interpretation, but must 
be 
within the zone of reasonableness.). 
We note further that the Air Force does not rely on the language of Chapter 4 in its 
briefs filed with the Board. In its Rule 11 brief, the Air Force quotes Chapter 4 Mission 
System Maintenance, paragraph 4.1, General Maintenance in its proposed findings (gov't 
br. at~ 11) but does not refer to it in its argument. In its reply brief the Air Force 
selectively cites to the NOC. The NOC relied upon the language of Chapter 4, paragraph 
4.1. that refers to "depot level maintenance" but the Air Force does not repeat that 
argument in its reply brief (gov't reply hr. at~ 26). In paraphrasing the NOC the Air 
Force writes, "[t]he NOC again noted the PWS' requirement at paragraph 8.5.1 in an 
attempt to clarify questions about the definition of Depot Level Maintenance; it clarified 
that 'On-site Maintenance Support will encompass all organizational, intermediate, and 
depot level maintenance' ... " (gov't reply br. at~ 26). The language relied upon by the 
Air Force in its reply brief comes from the definition of"Operation, Maintenance, and 
Support" in Chapter 4, Appendix 2 (finding 8). This is not the language in Chapter 8.5.2, 
Emergency Generators, paragraph 8.5.2.1 that requires BAE to "operate, maintain and 
repair" the emergency generators- "repair" not "support" (finding 7). While in its briefs 
the Air Force abandons the CO's reliance on Chapter 4, Mission Systems Maintenance, 
subparagraph 4.1. General Maintenance, it continues to argue the wrong definition as if it 
matched the words in paragraph 8.5.2.1, which it does not. 
21 The Scope paragraph in PWS Chapter 1, GENERAL REQUIREMENTS, which 
arguably might be applicable to all chapters, makes no reference to depot level 
maintenance (finding 5). 
22 The CO made this mistake in his 16 June 2010 analysis ofBAE's interpretation in 
which he used PWS Chapter 4, paragraph 4.1. to justify his conclusion that BAE 
was responsible for all depot level maintenance on the emergency generators 
(fmding 23). 
26 

What we are left with is FFP CLIN 100 1, which has relatively broad language as 
seen in the definitions of repair and maintenance but no requirement for the contractor to 
perform depot level maintenance/repair. Our conclusion that CLIN 1001 does not require 
BAE to perform all depot level maintenance/repair. is supported by Ms. Schwab's 
unrebutted discussion of depot level maintenance/repair. The most complex level of 
maintenance/repair usually is performed at a "depot" that is typically an "off-site 
centralized facility" (finding 33). We agree with BAE that it would not be BAE's 
responsibility to perform all of the most complex maintenance/repair on the emergency 
generators because there is no evidence that CAFS is a "depot" or that the 8000 contract 
intended to create a "depot" at CAFS for the emergency generators. 
Individual Job Orders CLIN 1007 
CLIN 1007 provides for either cost reimbursement or fixed-price job orders for 
"WORK NOT SPECIFICALLY IDENTIFIED IN THE PWS, BUT WHICH IS STILL 
WITHIN THE GENERAL SCOPE OF THE CONTRACT" (finding 3). According to 
Mr. Lubbert, CLIN 1007 was only intended to be used on extremely rare occasions 
(finding 29). Nothing in CLIN 1007 or Chapter 14 says anything about depot level 
maintenance/repair. The government could order depot level maintenance under CLIN 
0007 if it is not identified in the PWS but falls within the general scope of the contract. 
Cost Reimbursement CLIN 1008 
CLIN 1008, OM&S Local Purchase Items/ODCs is the cost CLIN that BAE 
asserts should be used to reimburse it for depot level maintenance outside ofBAE's 
in-house capacity (findings 25, 29). It reads: 
OM&S Local Purchase Items/ODCs 
COST 
LOCALPURCHASE:THECONTRACTORSHALLBE 
REIMBURSED FOR WEAPON SYSTEM PARTS NOT 
OBTAINABLE THROUGH SBSS lAW SECTION 1, 
CHAPTER 6, PARA 6.3. NON-LOCAL PURCHASE 
ITEMS: THE CONTRACTOR SHALL BE REIMBURSED 
FOR SUPPLIES, MATERIALS, PURCHASED SERVICES 
AND EQUIPMENT (Other Direct Costs) NECESSARY IN 
SUPPORT OF CA V ALlER AFS. APPROVAL OF THESE 
REIMBURSEMENTS SHALL BE lAW SECTION 1, 
CHAPTER 6, PARA 6.3 .1. ANY SINGLE PURCHASE 
OVER $5,000 REQUIRES CO APPROVAL (SEE SECTION 
G, PARA G-5) 
27 

(Finding 3) (Emphasis added) CLIN 1008 covers two types of purchases: local purchase 
ofweapon system parts23 and ODCs/non-local purchase items (id.). The non-local 
purchase items allows reimbursement for "SUPPLIES, MATERIALS, PURCHASED 
SERVICES AND EQUIPMENT (Other Direct Costs) NECESSARY IN SUPPORT OF 
CA V ALlER AFS" (id. ).24 CLIN 1008 specifically includes "PURCHASED 
SERVICES," i.e., labor. CLIN 1008 does not reference depot level maintenance/repair. 
In order to determine if depot level maintenance/repair falls within the "NON-LOCAL 
PURCHASE ITEMS" we look to the definition of OM&S and Section G, clause G-5, 
referenced in CLIN 1008. 
OM&S stands for Operation, Maintenance, and Support (finding 3). This is the 
same definition misapplied by the Air Force above. OM&S is defined in PWS Section 4, 
Appendix 2, as follows: 
OPERATION, MAINTENANCE, AND SUPPORT. 
Includes the operation, maintenance (scheduled and 
unscheduled), support, and management necessary to satisfy 
the operational requirement. Contractor support includes 
repair, lubrication, equipment alignment, installation of 
government-approved modifications, testing, performance 
monitoring, data gathering, data processing, and corrosion 
control, and the maintenance and dissemination of logs, 
drawings, records, and forms. The contractor on-site 
maintenance support will encompass all organizational, 
intermediate, and depot level maintenance. Consultant 
technical support necessary to resolve equipment or facilities 
maintenance problems will be at contractor expense. 
(Finding 8) (Emphasis added) Accordingly, CLIN 1008 applies to "PURCHASED 
SERVICES" for "contractor on-site ... depot level maintenance." CLIN 1008 also refers to 
Section G, clause G-5, that reads in part: 
G-5, CONSIDERATION AND PAYMENT 
a. Cost Reimbursables. For the basic period cost 
reimbursable (CR) CLINs, and option period CR CLINs, (if 
exercised) the Government will pay the Contractor such costs 
as are determined to be allowable, allocable, and reasonable 
23 We note that the weapon system language of this clause is limited to the purchase of 
parts, whereas the second type of local purchase is not. 
24 The Air Force internally expressed concerns about the proper interpretation of CLIN 
1008 (finding 21). 
28 

in accordance with Part 31, Subpart 31.2 of the Federal 
Acquisition Regulation. For the purposes ofthis provision, 
allowable items of cost shall include costs for initial or 
replenishment spare parts, operational materials/supplies, 
material handling, off-site depot level maintenance, 
packaging, freight and G&A burden (when applicable), for 
those approved purchases authorized by the PWS. Fee will 
not be allowed. All purchases will be reviewed and approved 
as specified in the P ARCS PWS, Part I, Chapter 6, para. 
6.3.1. 
(Finding 4) (Emphasis added) Accordingly, allowable costs to be reimbursed under 
CLIN 1008 include "PURCHASED SERVICES" for "off-site depot level maintenance." 
Although 
the definition of OM&S refers to "on-site" depot level maintenance and clause 
G-5 refers to "off-site" depot level maintenance, we are obligated to read the contract as a 
whole and interpret language "harmoniously" where possible. NVT Technologies, 370 
F .3d at 1159 ("When interpreting the contract, the document must be considered as a 
whole and interpreted so as to harmonize and give reasonable meaning to all of its 
parts."). We interpret these provisions harmoniously and conclude that BAE may 
perform either "on-site" or "off-site" depot level maintenance/repair under CLIN 1008 
and be reimbursed by the Air Force. This interpretation makes particular sense given the 
size of the emergency generators which dictates that as much work is accomplished on­
site as possible. We understand from the description of the invoices in BAE's REA that 
cleaning and drying the windings required removal and transport of the generator so the 
work could be done off-site by a subcontractor (finding 25). 
CONCLUSION 
Although not a model of clarity, the PWS sets forth a scheme that requires BAE to 
perform organizational and intermediate maintenance/repair services under fixed-price 
CLIN 1 00 1 and depot level maintenance/repair services under cost reimbursement CLIN 
1008. BAE is entitled to be reimbursed for repairing the fire damaged emergency 
generator under CLIN 1008. The appeal is sustained. The matter is returned to the 
parties for negotiation of quantum. 
Dated: 18 September 20 13 
(Signatures continued) 
29 
Administraf e Judge 
Armed Serv ces Board 
of Contract Appeals 

I concur 
/~# MARK N. STEMPLER 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
I concur 
~~ 
Administrative Judge 
Acting Vice Chairman 
Armed Services Board 
of Contract Appeals 
I certify that the foregoing is a true copy of the Opinion and Decision of the 
Armed Services Board of Contract Appeals in ASBCA No. 57581, Appeal ofBAE 
Systems Technology Solutions & Services Inc., rendered in conformance with the 
Board's Charter. 
Dated: 
30 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals