ARMED SERVICES BOARD OF CONTRACT APPEALS 
 
Appeal of -- ) 
 ) 
Aerospace Facilities Group, Inc. ) ASBCA No. 61026 
 ) 
Under Contract No. W912NW-12-C-0035 ) 
 
 
APPEARANCES FOR THE APPELLANT: Theodore P. Watson, Esq. 
   Watson and Associates LLC 
  Washington, DC  
 
Wojciech Z. Kornacki, Esq. 
  Watson & Associates LLC 
  Denver, CO  
 
APPEARANCES FOR THE GOVERNMENT: Scott N. Flesch, Esq. 
  Army Chief Trial Attorney 
Robert B. Neill, Esq. 
 MAJ Mark T. Robinson, JA 
   Trial Attorneys 
 
OPINION BY ADMINISTRATIVE JUDGE MCILMAIL 
 
Appellant, Aerospace Facilities Group, Inc. (AFG), appeals from the 
termination of its contract to deliver “paint booth equipment” (for the painting of 
helicopters) to the Corpus Christi Army Depot; AFG also seeks breach damages 
(app. br. at 1, 32).  Only entitlement is before us (tr. 1/7). 
 
STATEMENT OF FACTS  
 
In Aerospace Facilities Grp., Inc., ASBCA No. 61026, 18-1 BCA ¶ 37,105 
at 180,602-03, we recited facts that we incorporate here by reference.  Familiarity with 
that opinion is presumed.  In addition, the contract incorporates by reference Federal 
Acquisition Regulation (FAR) 52.249-1, TERMINATION FOR CONVENIENCE OF 
THE GOVERNMENT (FIXED PRICE) (SHORT FORM) (APR 1984), and 
FAR  52.249-8, DEFAULT (FIXED-PRICE SUPPLY & SERVICE) (APR 1984) 
(R4, tab 1 at 68).  AFG contracted with Global Finishing Solutions (GFS) to obtain the 
paint booth equipment required by the contract (see app. br. 1, 6 ¶ 14).  On 
November 9, 2015, Contracting Officer June Gowen issued the following unilateral 
modification, withholding payment of $342,600 under the contract at issue here until 

 
2 
AFG provided four pieces of equipment called “ergo test stands” due under a different 
contract between AFG and the government (Contract No. W912NW-12-C-0031), 
which were also meant for the Corpus Christi Army Depot: 
 
1.  BACKGROUND:  Aerospace Facilities Group has 
failed to deliver and install four ergo test stands called for 
in the specifications of Contract No. W912NW-12-C-0031. 
 
2.  ACTIONS TAKEN:  Because of this, funding will be 
withheld from another Aerospace Facilities Group contract, 
W912NW-12-C-0035 until such time as Aerospace 
Facilities Group delivers and installs the four ergo test 
stands at the Corpus Christi Army Depot.  The amount of 
$342,600.00 has been moved out of CLIN 0001AA into 
new CLIN 0002.  This amount will be withheld from 
payments in contract W912NW-12-C-0035 until such time 
as Aerospace Facilities Group delivers and installs the four 
ergo test stands at the Corpus Christi Amount Depot [under 
Contract No. W912NW-12-C-0031]. 
 
R4, tab 35 at 1 (alteration added) 
 
On January 28, 2016, Ms. Gowen issued a unilateral modification that purports 
to incorporate into the contract FAR 52.212-4, CONTRACT TERMS AND 
CONDITIONS – COMMERCIAL ITEMS (MAY 2015) (R4, tab 49 at 1).  On 
March 30, 2016, the parties modified the contract to extend the period of performance 
through June 28, 2016 (see R4, tab 92 at 1-3).  That modification also provides: 
 
Installation payments were erroneously paid to contractor 
prior to installation efforts being performed.  All funding 
prematurely and erroneously paid on CLINS 0001AF in 
the amount of $772,550.48 and 0001AS in the amount of 
$837,298.93, totaling $1,609,849.41, shall be returned to 
the Government by AFG via credits to all future invoices 
until paid in full. 
 
(Id. at 3) 
 
AFG did not deliver the paint booth equipment to the government by the 
contract’s June 28, 2016 deadline; indeed, AFG never delivered any of the paint booth 
equipment required by the contract (see app. br. at 1; tr. 1/31, 193).  On July 8, 2016, 
Contracting Officer Peggy Echols issued to AFG an Order to Show Cause, informing 
AFG that the government was considering terminating the contract for default (R4, 

 
3 
tab 133).  On July 27, 2016, AFG responded, admitting that it did not deliver the paint 
booth equipment on time--even though, according to AFG, the paint booth equipment 
had been manufactured and was in AFG’s storage--because, AFG said, the 
government had not made a $342,600 payment to AFG: 
 
All of the equipment for contract (W912NW-12-C-0035) 
has been manufactured and in our storage since June 2015 
awaiting the government to complete the ACCF building 
where the equipment is going to be installed. . . .  The 
equipment delivery date (June 2016) given to AFG by the 
government could not be met by [sic] due to the fact that 
the government held up the contractual agreed payments of 
$304,406.32, so in turn AFG could not fulfill our 
contractual agreements with our suppliers. 
 
(R4, tab 157 at 4)  AFG admitted to its “failure to perform on this contact [sic],” and 
explained that, in its view, that failure was “due to the government issui[ng a h]old on 
our contractual payment schedule set up for this contract” (id. at 3-4 (referencing 
“AFG failure to perform on this contract”)).  Through counsel, AFG reaffirms that 
admission, stating that “the cause of the non-delivery” was AFG’s “subcontractor not 
getting paid” (app. br. at 14), and that AFG “did not pay their subcontractors” 
(tr. 1/79).  Indeed, in its post-hearing brief, AFG states: 
 
[AFG] also explained [to the government] that it could not 
meet the delivery date imposed by [the government] 
because [the government] did not make contractual 
payments to [AFG] which prevented [AFG] from making 
payments to the sub-contractor. 
 
(App. br. at 11 ¶ 53) (alterations added) 
 
However, AFG could have paid GSF for the paint booth equipment, from 
corporate funds.  During the hearing of this appeal, AFG’s owner, Dennis Robinson, 
read the following from his deposition: 
 
Question:  “But you could have paid Global Finishing 
Solutions with the money you had in the corporate 
account.  Correct?”  Answer:  “Yes.” 
 
(Tr. 2/135, 171)  AFG simply decided not to pay GFS because, in AFG’s view, the 
government owed AFG money: 
 

 
4 
Question:  Is the reason why you didn’t pay Global 
Finishing Solutions because you believed that the 
Government owed you money on those additional invoices 
you submitted? 
 
[Mr. Robinson] Yes. 
 
. . . 
 
Question:  So [the Order to Show Cause is] dated July 8, 
2016.  And so by that date, the final delivery date 
established in modification 6 had passed.  Did you still not 
intend to deliver the paint booths until you received the 
payments that you believed were owed under the contract 
to you in order to pay Global Finishing Solutions? 
 
[Mr. Robinson] That is correct. 
 
(Id. at 171, 193)  Additionally, Mr. Robinson testified that AFG could have paid its 
supplier from corporate funds, but chose not to do so because “[AFG] wasn’t going to 
be the bank for the government” (id. at 172, 216). 
 
Finally, the government was ready to receive the paint booth equipment when it 
was due:  on this point, on May 31, 2016, Ms. Echols wrote to AFG that “the 
government has identified storage space for the remaining paint booth equipment” 
(R4, tab 114).  In addition, the judge who presided over the hearing elicited the 
following answer to the following question: 
 
JUDGE YOUNG:  So does this mean that, even though 
there was a concern about storage costs, the Government 
was ready to receive equipment? 
 
[Ms. Gowen]:  Yes. 
 
(Tr. 1/212) 
 
On August 4, 2016, Ms. Echols issued a modification terminating the contract 
for default (using the term “Termination for Cause”), citing FAR 52.212-4(m) and 
stating that AFG had “failed to deliver in accordance with the terms of the contract” 
(R4, tab 158 at 1-2; see also tab 159 (cover letter to AFG)). 
 

 
5 
DECISION 
 
Termination for default 
 
The government says that FAR 52.212-4 is incorporated into the contract by the 
Christian doctrine (gov’t br. at 29).  We need not address that issue, nor whether 
Ms. Gowen’s unilateral modification, purporting to incorporate that clause into the 
contract, is a nullity.  The contract incorporates FAR 52.249-8, Default, which 
provides, at paragraph (a)(1): 
 
The Government may . . . by written notice of default to 
the Contractor, terminate this contract in whole or in part if 
the Contractor fails to— 
 
(i)  Deliver the supplies or to perform the services 
within the time specified in this contract or any 
extension. 
 
FAR 52.249-8, itself, provides the contractual authority to terminate the contract under 
the circumstances of this case.  See CKC Sys., Inc., ASBCA No. 61025, 19-1 BCA 
¶ 37,385 at 181,749-50. 
 
The government says that the termination is justified because AFG failed to 
deliver the paint booth equipment by the contract delivery date (gov’t br. at 1).  We 
agree.  Because AFG did not deliver the paint booth equipment by the contract 
completion date, AFG defaulted; consequently, the termination for default is justified.  
See Truckla Services, Inc., ASBCA Nos. 57564, 57752, 17-1 BCA ¶ 36,638 
at 178,445. 
 
Now it’s up to AFG to demonstrate that its default is excused.  HK&S Constr. 
Holding Corp., ASBCA No. 60164, 19-1 BCA ¶ 37,268 at 181,352.  AFG says that 
the government caused the default (including in bad faith) by withholding a $342,600 
payment to AFG that AFG says it needed to pay GFS for the paint booth equipment 
(app. br. at 1, 12-17, 23-27).  We conclude otherwise:  AFG is responsible for the 
default by not paying GFS for the paint booth equipment, even though it could have 
done so out of its corporate funds.∗  Cf. Puma Energy Honduras, S.A. De C.V., 
ASBCA No. 61966, 20-1 BCA ¶ 37,507 (granting summary judgment; finding no 
                                              
∗ In view of this conclusion, we need not decide whether, as AFG’s July 27, 2016 
letter ostensibly indicates, AFG actually had the paint booth equipment in its 
storage, available for AFG to deliver to the government notwithstanding any 
payment owed by the government to AFG (R4, tab 157 at 4 (“All of the 
equipment . . . has been manufactured and in our storage since June 2015”)). 

 
6 
dispute that contractor’s internal business practices, as well as its own invoicing errors, 
were the reason it failed to perform).  In addition, the parties modified the contract to 
provide for the return to the government of up to $1,609,849.41 paid to AFG “via 
credits to all future invoices until paid in full,” expressly providing the government a 
contractual right to set off money owed to AFG against money that AFG owed to the 
government.  Moreover, the government always had the same, common-law right 
“which belongs to every creditor, to apply the unappropriated moneys of his debtor, in 
his hands, in extinguishment of the debts due to him.”  United States v. Munsey Tr. Co. 
of Washington, D.C., 332 U.S. 234, 239 (1947); accord Johnson v. All-State Constr., 
Inc., 329 F.3d 848, 852 (Fed. Cir. 2003) (“The set-off right applies to government 
claims both under other contracts . . . and under the same contract.”); Raytheon Co., 
Space & Airborne Sys., ASBCA No. 57801, 15-1 BCA ¶ 36,024 at 175,952 (“the 
government could use Contract II to offset debts that arose on other contracts”). 
 
AFG also says that it directed GFS to deliver the paint booth equipment, but 
that GFS refused (app. br. at 16-17, 31); but, if that is so, AFG is still responsible for 
the failure to deliver the paint booth equipment, because a contractor is responsible for 
the unexplained failures of its subcontractors.  See Williamsburg Drapery Co. v. 
United States, 369 F.2d 729, 742 (Ct. Cl. 1966); United Schools of America, Inc., 
ASBCA No. 38628, 90-3 BCA ¶ 23,199 at 116,426.  AFG also appears to blame 
government communications with GFS for AFG’s failure to deliver the paint booth 
equipment (app. br. at 16-17); but we find AFG’s admissions that the default was the 
result of non-payment to GFS conclusive on this point.  In addition, AFG appears to 
say that the government acted in bad faith to remove AFG so that it could contract 
with GFS (app. br. at 23-27), but we find none of the clear and convincing evidence 
that government officials acted from personal animus with the specific intent to injure 
AFG that would be necessary for AFG to overcome the presumption that the 
government officials who administered the paint booth equipment contract acted in 
good faith.  See Watts Constructors, 19 BCA ¶ 37,382 at 181,728; Road and Highway 
Builders, LLC v. United States, 702 F.3d 1365, 1368 (Fed. Cir. 2012); Am-Pro 
Protective Agency, Inc. v. United States, 281 F.3d 1234, 1240 (Fed. Cir. 2002); Grow 
Life Gen. Trading, LLC, ASBCA No. 60938 et al., 19-1 BCA ¶ 37,361 at 181,676; 
Puget Sound Envtl. Corp., ASBCA No. 58828, 16-1 BCA ¶ 36,435 at 177,597-98. 
 
Finally, AFG says that had it delivered the paint booth equipment on time, the 
government would have had no place to store it (app. br. at 17).  We reject this 
argument, for two reasons.  First, AFG does not demonstrate that its obligation to 
deliver the paint booth equipment was contingent upon the government identifying a 
place to store it.  Second, we have found that the government was ready to receive the 
paint booth equipment when it was due. 
 
AFG says that we should convert the default termination to one for the 
convenience of the government because, it says, Ms. Echols did not follow the 

 
7 
termination consideration factors listed at FAR 49.402-3(f) (app. br. at 17-21).  We 
disagree.  In McDonnell Douglas Corp. v. United States, 35 Fed. Cl. 358, 371-72 
(1996), the court found that the contracting officer had not considered the 
FAR 49.402-3(f) termination factors and had not exercised discretion in terminating 
the contract for default, holding that the termination was prompted not by the 
contractor’s default, but by the decision of the Secretary of Defense to withdraw 
funding for the A-12 program.  The United States Court of Appeals for the Federal 
Circuit reversed, holding that the contracting officer terminated the contract for 
reasons related to contract performance:  “the government denied additional funding 
for the A-12 program and terminated the contract for default because of concerns 
about contract specifications, contract schedule, and price—factors [all of which] are  
fundamental elements of contract performance.”  McDonnell Douglas Corp. v. United 
States, 182 F.3d 1319, 1329 (Fed. Cir. 1999). 
 
Here, even if Ms. Echols did not address each of the factors in FAR 49.402-3(f), 
timely delivery of the paint booth equipment was a fundamental element of contract 
performance, and AFG’s failure to satisfy that fundamental element constitutes default.  
However Ms. Echols arrived at her termination decision, the government may rely upon 
AFG’s failure to do its job to justify the termination.  HK&S, 19-1 BCA ¶ 37,268 
at 181,352; see Watts Constructors, LLC, ASBCA No. 61518, 19-1 BCA ¶ 37,382 
at 181,728 (citing and parenthetically quoting HK&S with approval).  To paraphrase the 
Federal Circuit, if the government can establish that a contractor was in default, then 
the termination of the contract for default is valid. 
 
AFG says that the government waived the default termination by engaging in 
post-termination discussions with AFG in an attempt to obtain the paint booth 
equipment (app. br. at 27).  In Aerospace Facilities, 18-1 BCA ¶ 37,105 at 180,605, 
for purposes of determining whether the notice of appeal was untimely, we held that 
“[t]he [government’s] willingness to engage AFG, discuss the facts surrounding the 
termination on three separate occasions and discuss whether AFG would deliver the 
paint-booth equipment served to keep the matter open and destroyed the finality of the 
termination notice.”  However, we do not agree that the government “waived” its 
termination of the contract for default by engaging in post-termination discussions in 
an effort to obtain the paint booth equipment.   
 
AFG says that Ms. Echols did not exercise independent discretion in 
terminating the contract, but was directed to do so by her superiors (see tr. 1/184-85; 
app. br. at 36-37).  We need not decide that issue.  The contract incorporates 
FAR 52.249-8(a)(1), which provides (emphasis added) that “[t]he Government may 
. . . terminate this contract” for default; consequently, it does not matter whether 
Ms. Echols was directed by her superiors to terminate the contract.  See Schlesinger v. 
United States, 390 F.2d 702, 709 & n.9 (Ct. Cl. 1968).  
 

 
8 
Breach of contract 
 
 Finally, the government says that the Board does not possess jurisdiction to 
entertain claims for money damages for alleged government breaches of contract 
because AFG has not presented a claim for those damages to a contracting officer 
(gov’t br. at 41).  The Board’s jurisdiction to entertain a contractor’s claim depends 
upon the contractor first submitting that claim to a contracting officer for a final 
decision.  CDM Constructors, Inc., ASBCA No. 59524, 15-1 BCA ¶ 36,097 
at 176,238.  Moreover, AFG must prove by a preponderance of the evidence that the 
Board possesses jurisdiction to entertain its monetary claims.  See Parsons Gov’t 
Servs., Inc., ASBCA No. 62113, 20-1 BCA ¶ 37,586 at 182,508.  AFG does not point 
to any money claim (or any claim at all) that it presented to the contracting officer; 
indeed, AFG seems to argue that it is not necessary for it to have done so (see app. br. 
at 32 (“To somehow suggest that [] there should be a concise [Contract Disputes Act] 
claim submitted to the contracting officer is unreasonable.”)).  Because AFG has not 
proven that the Board possesses jurisdiction to entertain its money claims, those claims 
are dismissed. 
 
CONCLUSION 
 
 AFG’s money claims are dismissed for lack of jurisdiction.  Otherwise, the 
appeal is denied. 
 
 Dated:  August 11, 2020   
 
 
TIMOTHY P. MCILMAIL 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
 
 
 
 
 
 
 
 
 
 
 
(Signatures continued) 
I concur 
 
 
 
LIS B. YOUNG 
Administrative Judge 
Armed Services Board 
of Contract Appeals 


 
9 
 
I concur 
 
 
 
 I concur 
 
 
 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
 OWEN C. WILSON 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 
 
 
 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. 61026, Appeal of 
Aerospace Facilities Group, Inc., rendered in conformance with the Board’s Charter. 
 
Dated:  August 11, 2020 
 
 
 
 
 
 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals