ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of --
Chugach Federal Solutions, Inc. 
Under Contract No. N44255-14-D-9000 
APPEARANCES FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 61320 
Richard B. O'Keeffe, Jr., Esq. 
William A. Roberts III, Esq. 
Gary S. Ward, Esq. 
Wiley Rein LLP 
Washington, DC 
Craig D. Jensen, Esq. 
Navy Chief Trial Attorney 
David M. Marquez, Esq. 
Jonathan M. Warren, Esq. 
Trial Attorneys 
OPINION BY ADMINISTRATIVE JUDGED' ALESSANDRIS ON 
RESPONDENT'S MOTION FOR LEA VE TO AMEND ITS ANSWER 
Pending before the Board is respondent, the Department of the Navy's (Navy's) 
motion for leave to amend its answer to assert the affirmative defenses of estoppel and 
waiver. The Navy asserts that appellant, Chugach Federal Solutions, Inc. (Chugach) 
took positions in a post-award bid protest before the Government Accountability 
Office (GAO) that are inconsistent with its positions asserted in this appeal. The Navy 
does not identify the statements it contends are inconsistent with Chugach' s current 
litigating position (gov't mot. at 1). Chugach opposes the Navy's motion as futile, but 
does not allege prejudice. Specifically, Chugach asserts that "no set of facts could 
support the Navy's proposed affirmative defenses" (app. resp. at 9). The Navy 
contends in its reply brief that Chugach's opposition is premised on a "straw-man" 
argument that it presumes the Navy will assert. However, the Navy does not identify 
any facts that would establish valid affirmative defenses. The Navy also represents 
that Chugach has served discovery upon the Navy seeking information and documents 
relating to the proposed affirmative defenses. (Gov't reply at 1-2) 
Pursuant to Board Rule 6( d) we may "permit either party to amend its pleading upon 
conditions fair to both parties." Although not binding upon us, the Board also looks to 
FED. R. CIV. P. 15(a)(2), with its liberal standard for amendment, for guidance. See, e.g., 
Relyant, LLC, ASBCA No. 59809, 2018 WL 3387700 (June 27, 2018) (citing Beyley 
Constr. Group Corp., ASBCA No. 55692, 08-2 BCA ,r 33,999 at 168,134). Thus, we will 
not deny a request to amend absent a good reason. Id. Here, Chugach does not assert that 
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it would be prejudiced by the Navy's addition of affirmative defenses. Accordingly, we 
find that it would not be unfair to grant the Navy's motion. 
Next, we tum to Chugach's assertion that it would be futile to allow the Navy to 
amend its answer. Futility of amendment is a recognized basis for denying a motion for 
leave to amend a pleading. See, e.g., Foman v. Davis, 371 U.S. 178, 182 (1962). 
Chugach's futility argument that "no set of facts could support the Navy's proposed 
affirmative defenses" essentially argues that the proposed affirmative defenses would be 
subject to a motion to dismiss for failure to state a defense upon which relief could be 
granted.* However, to present this argument, Chugach relies upon numerous facts not 
contained in the pleadings (app. resp. at 2-9). In reviewing a motion to dismiss for 
failure to state a claim upon which relief may be granted we do not consider facts 
outside the pleadings. See, e.g., L-3 Communications Integrated Systems, L.P., ASBCA 
Nos. 60713, 60716, 17-1BCA136,865; FED. R. CIV. P. 12(d) ("If, on a motion under 
Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded 
by the court, the motion must be treated as one for summary judgment under Rule 56."). 
As it would be inappropriate to consider such facts in reviewing a motion to dismiss, we 
do not consider these facts in considering Chugach's futility argument. 
As noted above, the Navy does not identify the statements that it contends are 
inconsistent with Chugach's current position. Board Rule 6(b) requires only 
affirmative defenses be "set forth [in] simple, concise, and direct statements." Thus, 
for there to be no set of facts that could support the Navy's claim, we would need to 
assume that the Navy is essentially asserting a defense with no basis in law. Federal 
courts are divided on the question of whether affirmative defenses need to satisfy the 
standard of Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007) and Ashcroft v. 
Iqbal, 556 U.S. 662, 678 (2009), that a complaint must "state a claim to relief that is 
plausible on its face." Our reviewing court, the Court of Appeals for the Federal 
Circuit, has only addressed this question in a non-precedential opinion applying sixth 
circuit law to a patent case. Quality Edge, Inc. v. Ro/lex Corp., 709 F. App'x 1000 
(Fed. Cir. 2017); Robert A. Matthews, Jr., Applicability of Iqbal and Twombly to 
Affirmative Defenses, 6 Annotated Patent Digest§ 39: 11.75 (July 2018). Thus, we 
rely upon our own precedent in Supreme Foodservice GmbH, ASBCA No. 57884 
et al., 16-1BCA136,426 at 177,581-82 (denying motion to strike affirmative 
defenses for failure to satisfy Iqbal pleading requirements) in determining that 
affirmative defenses are not required to state "plausible grounds" for relief. 
* Alternatively, Chugach could move to strike the affirmative defenses. Pursuant to FED. 
R. CIV. P. 12(f) a "court may strike from a pleading an insufficient defense or any 
redundant, immaterial, impertinent, or scandalous matter." As a failure to state a 
defense upon which relief could be granted would also be an "insufficient defense," 
we do not see a distinction for the purpose of this motion. 
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With the Navy asserting no supporting facts, and without the context provided 
by the facts asserted in Chugach's response, we are left to determine whether the Navy 
could establish the affirmative defenses of waiver or estoppel under any possible set of 
facts. Obviously, Chugach's counsel could have made statements, however 
implausible, that would constitute waiver. Additionally, Chugach's estoppel argument 
presumes that the Navy will argue collateral estoppel, rather than other forms of 
estoppel, because of facts it asserts regarding the GAO proceedings (app. resp. at 12). 
As we do not consider the facts outside the pleadings, we cannot find that no set of 
facts could support an affirmative defense of estoppel. On this basis, we find that the 
Navy can assert valid affirmative defenses of waiver and estoppel, and grant the 
Navy's motion to amend its answer. 
Dated: July 16, 2018 
I concur 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
DAVID D' ALESSANDRIS 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I concur 
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o~'fu? 
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. 61320, Appeal ofChugach 
Federal Solutions, Inc., rendered in conformance with the Board's Charter. 
Dated: 
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JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals