DENIED: March 1, 2010 
CBCA 1696 
C-SHORE INTERNATIONAL, INC., 
Appellant, 
v. 
DEPARTMENT OF AGRICULTURE, 
Respondent. 
Jacques Isaac, Executive Director of C-Shore International, Inc., Mojave, CA, 
appearing for Appellant. 
David W. Schaaf, Office of the General Counsel, Department of Agriculture, Kansas 
City, MO, counsel for Respondent. 
Before Board Judges DANIELS  (Chairman), BORWICK, and STEEL . 
DANIELS , Board Judge. 
A Department of Agriculture contracting officer terminated for default a contract the 
agency had entered into with C-Shore International, Inc. (C-Shore) for the supply of milled 
rice.  Another agency contracting officer decided that the contractor owed to the agency 
amounts representing liquidated damages and excess reprocurement costs.  C-Shore appealed 
the contracting officer’s decision. 
The agency has filed two motions, one for summary relief and another to dismiss a 
“cross-complaint” filed by C-Shore.  We grant both motions.  The contracting officer’s 
decision was justified, and we lack jurisdiction to consider the “cross-complaint.” 

  
 
   
  
 
 
  
      
  
  
       
   
    
    
     
2 CBCA 1696 
Background 
Hurricane Katrina made landfall on the Gulf Coast on August 29, 2005, and dissipated 
over the eastern Great Lakes on August 31, 2005.  Hurricane Rita made landfall on the Gulf 
Coast on September 24, 2005, and dissipated over southeastern Illinois on September 26, 
2005.  Respondent’s Statement of Uncontested Facts (RSUF)  ¶¶ 15-16. 
On October 4, 2005, the agency’s Kansas City Commodity Office (KCCO) issued a 
solicitation for bids from “8(a) firms”
1 to supply eight hundred metric tons of milled rice. 
Bids were due by October 18, 2005. Appeal File, Exhibit 2 at 8-10.  At that time, C-Shore 
was certified as an 8(a) firm by the Small Business Administration (SBA).  RSUF ¶ 3. 
The solicitation was subject to the terms and conditions of KCCO’s Master 
Solicitation for Commodity Procurements. Appeal File, Exhibit 2 at 12.  The Master 
Solicitation included three provisions which pertain to this case. 
The first, incorporated by reference, is the clause published at 48 CFR 52.249-8 
(2005), “Default (Fixed-Price Supply and Service) (Apr 1984).” This clause provides that 
the Government may terminate the contract if the contractor fails to deliver the supplies 
within the time specified in the contract.  If the Government terminates the contract under 
this authority, “it may acquire, under the terms and in the manner the Contracting Officer 
considers appropriate, supplies . . . similar to those terminated, and the Contractor will be 
liable to the Government for any excess costs for those supplies.”  The Government must 
afford the contractor at least ten days after receipt of a notice to cure the failure to perform. 
And it may not terminate the contract for default if the failure was beyond the control of the 
contractor and its subcontractor and without the fault or negligence of either.  One example 
of this sort of situation is an act of God.  Appeal File, Exhibit 2 at 43. 
The second provision which is pertinent here is entitled “Time is of the Essence.” 
This clause provides that “[p]erformance shall be strictly in accordance with the applicable 
1 An “8(a) firm” is a “firm certified by the Small Business Administration in 
accordance with the Federal Acquisition Regulation (FAR), Part 19.”  Appeal File, Exhibit 2 
at 8. Under section 8(a) of the Small Business Act, 15 U.S.C. § 637(a) (2006), and as 
referenced in FAR Subpart 19.8, 48 CFR 19.800-.812 (2005), the Small Business 
Administration administers a business development (BD) program in which “socially and 
economically disadvantaged small business concerns” may participate. “The purpose of the 
8(a) BD program is to assist eligible small disadvantaged business concerns [to] compete in 
the American economy through business development.”  13 CFR 124.1. 

     
   
     
    
 
 
 
        
 
   
       
 
    
 
  
  
 
 
   
   
3 CBCA 1696 
quantities and schedules set forth in this contract.” The contractor is obligated to inform the 
Government whenever it will deliver supplies later than required, and additional costs 
occasioned by delay “shall be borne by the contractor.  If the contractor is unable to meet the 
required performance schedules for any reason, other than a change directed by the 
Government, the Government shall have the option to cancel this contract, or fill such 
contract or any portion thereof, from sources other than the contractor.”  Appeal File, 
Exhibit 2 at 35-36. 
The third provision is entitled “Liquidated Damages.” It states that as to contracts for 
the supply of milled rice, “[i]f the contractor fails to ship/deliver the supplies . . . within the 
time specified in this contract, the contractor shall, in place of actual damages, pay to the 
Government liquidated damages” of ten cents per hundredweight per day for not to exceed 
forty-five days of delay.  Further, if the Government terminates such a contract for default, 
“the Contractor is liable for liquidated damages accruing until the Government reasonably 
obtains shipment/delivery or performance of similar supplies or services.  These liquidated 
damages are in addition to excess costs of repurchase under the Termination clause.” 
Liquidated damages cannot be assessed, according to this provision, if the delay in delivery 
was beyond the control and without the fault or negligence of the contractor, as defined in 
the Default (Fixed-Price Supply and Service) clause.  Appeal File, Exhibit 2 at 39-40. 
On October 18, 2005, the agency awarded to C-Shore a contract to supply 280 metric 
tons of milled rice at a price of $317.09 per metric ton.  Appeal File, Exhibit 2 at 74-75.  
After having been awarded this contract, C-Shore told an agency contracting officer 
for this procurement that it would use Texana Rice as its supplier of milled rice for the 
contract.  Declaration of Robert W. Buxton (undated, but filed on Dec. 22, 2009) ¶ 5.  The 
agency did not evaluate or approve Texana Rice as a supplier of the rice.  Id.  ¶ 6. 
The solicitation provided that the agency would issue a notice to deliver at least seven 
calendar days prior to the date on which delivery would be required.  Appeal File, Exhibit 
2 at 12.  On November 16, 2005, the agency issued to C-Shore a notice to deliver which 
specified that the contracted-for rice be delivered to Jacintoport, Texas, no earlier than 
December 6 and no later than December 20, 2005.  Id.  at 79.  The rice was not shipped to 
Jacintoport during the specified time period.  RSUF ¶ 8. 
On January 11, 2006, an agency representative told C-Shore that the rice had not been 
received and asked when it would arrive in Jacintoport.  C-Shore’s executive director said 
that he would ask Texana Rice for information. Appeal File, Exhibit 3.  On the same date, 
Texana Rice told the agency that its shipments had been delayed and that it was having cash 
flow problems due to Hurricane Rita.  Buxton Declaration ¶ 8. 

 
 
  
 
 
   
 
 
 
  
     
      
 
 
 
  
   
       
     
 
 
       
4 CBCA 1696 
On January 13, 2006, an agency contracting officer sent to C-Shore a notice to show 
cause why the contract should not be terminated for default.  The contracting officer 
observed that C-Shore had neither supplied the rice within the time specified nor informed 
the agency that delivery would be late.  He said that liquidated damages would be imposed 
and told the contractor that it could present facts bearing on the matter within ten days of 
receipt of the notice.  Appeal File, Exhibit 5. 
C-Shore responded on January 17, saying that “the reason we have not been able to 
deliver the 280 Mt [metric tons] on time is due to the fact, that our supplier Texana Rice was 
deeply affected by hurricane Katrina.”  The contractor asked that the agency not impose 
liquidated damages or terminate the contract.  Appeal File, Exhibit 7. 
The contracting officer replied on the next day, reserving the right to terminate the 
contract for default if the rice was not shipped by January 20.  He noted that Hurricane 
Katrina had occurred in August 2005 and Hurricane Rita in September 2005 -- both well 
before C-Shore submitted its bid. He told C-Shore that he “would expect a prudent business 
to identify and resolve problems affecting its ability to perform a contract prior to the 
submission of a bid. . . .  [Y]ou should have been sufficiently forewarned of any potential 
impact the hurricane[s] might have had on your business at the time you submitted your bid 
for this contract.”  Appeal File, Exhibit 8. 
On January 20, the contracting officer received a letter from Texana Rice. The letter 
acknowledged failure of delivery and asserted that “cash flow problems are preventing us 
from delivering against these contracts.”  Buxton Declaration ¶ 8, Exhibit B. 
On January 26, C-Shore forwarded to the contracting officer two letters it had 
received from Texana Rice.  In these letters, Texana Rice requested from C-Shore an 
advance of $115,000 to purchase rice sufficient to fulfill this contract and one other (the 
subject of our decision in CBCA 1697, which is being issued contemporaneously with this 
one). C-Shore told the contracting officer that it was reluctant to provide this advance 
because it did not know the priority Texana Rice would give C-Shore’s shipments.  Appeal 
File, Exhibit 10; RSUF ¶ 18. 
On February 2, Texana Rice told the contracting officer that it would not fulfill its 
own, separate contracts with KCCO.  Appeal File, Exhibit 11; RSUF ¶ 19. 
Later on February 2, the contracting officer terminated C-Shore’s contract for default. 
He told C-Shore that the Government “may purchase the terminated supplies against 
C-Shore’s account and you will be liable for any reprocurement costs the Government may 
incur.”  Appeal File, Exhibit 13. 

  
  
 
  
       
 
  
      
  
  
 
  
 
  
 
      
 
5 CBCA 1696 
Before terminating the contract, the contracting officer informed the Small Business 
Administration of C-Shore’s failure to deliver the rice in question, the intent to issue a show 
cause notice, the issuance of that notice, and C-Shore’s response to the notice.  The 
contracting officer also sent a copy of the termination letter to the SBA.  Appeal File, 
Exhibits 4, 5, 8, 13; RSUF ¶ 21. 
On March 29, 2006, the contracting officer sent to C-Shore a letter demanding that 
the contractor pay to the agency a debt in the amount of $40,057.47 under the contract in 
question.  The contracting officer calculated that C-Shore owed the agency $27,160.67 in 
liquidated damages  -- 6172.88 hundredweight (the equivalent of 280 metric tons) times ten 
cents per hundredweight (the rate prescribed by the contract) times forty-four days (the 
period between December 20, 2005 -- the date on which the shipment was due -- and 
February 2, 2006 -- the date on which the contract was terminated).  The contracting officer 
also calculated that C-Shore owed the agency $12,896.80 in excess reprocurement costs -­
the reprocurement cost of $101,682 (280 metric tons times the reprocurement price of 
$363.15 per metric ton) minus the contract price of $88,785.20 (280 metric tons times the 
contract price of $317.09 per metric ton).  Appeal File, Exhibit 14. 
C-Shore immediately requested an administrative review of the basis and amount of 
the agency’s claim. Appeal File, Exhibit 16 at 103.  A contracting officer (not the one who 
had been the agency’s representative in previous interchanges) responded on May 19, 2009, 
with a decision that C-Shore is indebted to the Government in the amount of $15,983.24.  In 
this decision, she reasserted the claim for excess reprocurement costs of $12,896.80 (as 
explained in the letter of March 29, 2006) and reduced the claim for liquidated damages to 
$3086.45.
2   With regard to liquidated damages, the contracting officer said that she 
understood that during the week of January 23, 2006, C-Shore and Texana Rice were still 
attempting to put themselves into a position to complete the contract, so she was considering 
January 28 to be the deadline for performance.  Because only five days passed between 
January 28 and the contract termination date of February 2, she calculated the debt by 
multiplying 6172.88 hundredweight times ten cents per hundredweight times five days. 
Appeal File, Exhibit 1.  C-Shore has appealed this decision. 
On December 10, 2009 -- while the appeal was pending -- C-Shore filed what it called 
a “cross-complaint” in this case and CBCA 1697.  In this “cross-complaint,” C-Shore 
asserted that the agency had breached the contract and that it owes the contractor 
2 These two sums actually total $15,983.25.   The contracting officer claimed a 
penny less. 

  
 
     
          
     
    
  
 
 
         
  
   
      
  
   
    
6 CBCA 1696 
$15,000,000 because of “lost [sic] of profit, concealment, harassment, discrimination, and 
abused [sic] of power.” 
Discussion 
Motion for summary relief 
Resolving a dispute on a motion for summary relief is appropriate when the moving 
party is entitled to judgment as a matter of law, based on undisputed material facts.  The 
moving party bears the burden of demonstrating the absence of genuine issues of material 
fact.  All justifiable inferences must be drawn in favor of the non-movant.  Celotex Corp. v. 
Catrett , 477 U.S. 317 (1986); Anderson v. Liberty Lobby, Inc. , 477 U.S. 242 (1986). 
Nevertheless, to defeat a motion for summary relief, the non-moving party must come 
forward with specific facts showing the existence of a genuine issue for trial. “Where the 
record taken as a whole could not lead a rational trier of fact to find for the non-moving 
party, there is no ‘genuine issue for trial.’” Matsushita Electric Industrial Co. v. Zenith 
Radio Corp., 475 U.S. 574, 587 (1986).  In this case, the contractor has contested none of 
the material facts noted by the agency. 
We address first the agency’s termination for default of C-Shore’s contract.  The 
contracting officer’s decision which C-Shore appeals did not actually terminate the contract; 
it only assessed liquidated damages and excess costs of reprocurement.  The termination 
action was taken by another contracting officer more than three years earlier. Boards of 
contract appeals have traditionally permitted contractors to challenge the propriety of 
terminations for default, however, for the purpose of avoiding liability for the excess 
reprocurement costs, when appealing contracting officer decisions which claim those costs. 
Deep Joint Venture v. General Services Administration, GSBCA 14511, 02-2 BCA 
¶ 31,914, at 157,674-75 (referencing the practice begun with Fulford Manufacturing Co. , 
ASBCA 2143, et al., 1955 WL 808 (May 20, 1955)). Although the Court of Appeals for the 
Federal Circuit, our appellate authority, has never ruled on whether this practice is 
permissible, J.C. Equipment Corp. v. England, 360 F.3d 1311, 1318-19 (Fed. Cir. 2004), 
we continue to employ it for the reasons enunciated in Deep Joint Venture. 
A termination for default is “a drastic sanction which should be imposed (or 
sustained) only for good grounds and on solid evidence.” Lisbon Contractors, Inc. v. United 
States, 828 F.2d 759, 765 (Fed. Cir. 1987) (quoting J. D. Hedin Construction Co. v. United 
States, 408 F.2d 424, 431 (Ct. Cl. 1969).  Such a termination is a government claim, and the 
Government bears the burden of proof that its action was justified.  Id.  at 764-65. 

   
 
 
   
          
      
 
 
     
 
    
      
   
 
 
 
  
   
7 CBCA 1696 
A contractor’s failure to make timely delivery of agreed-upon goods, however, 
establishes a prima facie case of default.  Once this failure is established, the burden shifts 
to the contractor to show that the failure was excusable. An excusable failure of timely 
delivery occurs when the failure is caused by an occurrence beyond the reasonable control 
of the contractor and without its fault or negligence.  General Injectables & Vaccines, Inc. 
v. Gates, 519 F.3d 1360, 1363 (Fed. Cir. 2008). 
Here, C-Shore failed to deliver contracted-for milled rice by the deadline established 
by the agency pursuant to the contract.  This fact provided good grounds for a termination 
for default, unless the contractor could show that its failure was excusable.  This C-Shore 
has not done.  It pins the blame on its subcontractor, Texana Rice.  But for C-Shore to 
prevail, this will not suffice; it must also convince us that whatever difficulties prevented 
Texana Rice from delivering the rice were excusable, for contractors are generally liable for 
the unexcused actions of their subcontractors.  General Injectables , 519 F.3d at 1365, 
opinion supplemented, 527 F.3d 1375 (Fed. Cir. 2008). 
Texana Rice’s difficulties were ascribed to the effects of Hurricanes Katrina and Rita, 
and to financial problems. Neither the impact of the storms nor the subcontractor’s financial 
predicament is a valid excuse for non-performance. The hurricanes were, of course, acts of 
God.  As the contracting officer observed, however, the storms occurred well before 
C-Shore submitted the bid, acceptance of which created this contract; the contractor could 
and should have ascertained their impacts before bidding.  Hitemp Wires Co. , ASBCA 
11638, 67-1 BCA ¶ 6252, at 28,957.  C-Shore has provided no evidence that post-bid 
repercussions of the hurricanes had any effect on the ability of it or its subcontractor to 
deliver the rice. A contractor’s or subcontractor’s financial difficulties are normally not a 
legitimate excuse for a failure to perform.  Danzig v. AEC Corp., 224 F.3d 1333, 1339 (Fed. 
Cir. 2000); Consolidated Airborne Systems, Inc. v. United States, 348 F.2d 941, 946 (Ct. Cl. 
1965).  C-Shore has given us no reason to depart from that rule in this instance.  We 
consequently hold that the agency has demonstrated the good grounds and solid evidence 
necessary to justify the termination for default.
3 
3 We briefly dispose of two additional arguments C-Shore appears to advance 
to excuse its failure to deliver the rice. First, the contractor seems to think that the agency 
bears some responsibility for the failure because it approved Texana Rice as a subcontractor. 
Although the agency knew that Texana Rice had served as a subcontractor to C-Shore under 
previous contracts, Exhibits to Appellant’s Opposition to Motion to Dismiss Cross-
Complaint, there is no evidence that the agency ever gave, or even was asked to give, 
approval for Texana Rice to serve as a subcontractor under this contract.  Second, C-Shore 
(continued...) 

 
       
 
        
   
 
   
     
 
  
  
  
 
  
  
       
  
       
8 CBCA 1696 
As stated earlier, the contracting officer’s decision which is the subject of this appeal 
claims that C-Shore is indebted to the agency for liquidated damages and excess costs of 
reprocurement.  C-Shore offers no argument whatsoever to the agency’s claims, other than 
to assert that the claims were not made in a timely fashion.  The claims were asserted for the 
first time on March 29, 2006, and re-asserted in a smaller amount (as to liquidated damages) 
on May 19, 2009.  Under the Contract Disputes Act, 41 U.S.C. § 605(a) (2006), “[e]ach 
claim by a contractor against the government relating to a contract and each claim by the 
government against a contractor relating to a contract shall be submitted within 6 years after 
the accrual of the claim.”  A claim accrues on “the date when all events, that fix the alleged 
liability of either the Government or the contractor and permit assertion of the claim, were 
known or should have been known.  For liability to be fixed, some injury must have 
occurred.  However, monetary damages need not have been incurred.” 48 CFR 33.201; see 
Greenlee Construction, Inc. v. General Services Administration, CBCA 416, 
07-1 BCA 
¶ 33,514 , at 166,063. 
The claim for liquidated damages accrued on February 2, 2006, when the contract 
was terminated.  The claim for excess reprocurement costs accrued at some time after 
February 2, 2006, and prior to March 29, 2006, when the agency acquired supplies similar 
to those which were the subject of the terminated contract. The contracting officer’s 
decision which is the subject of this appeal was issued on May 19, 2009, well within six 
years of the dates on which the claims accrued.  The assertion of the claims was therefore 
made in a timely fashion. Consequently, there is no basis for denying the agency’s claims 
for liquidated damages in the amount of $3086.45 and excess reprocurement costs in the 
amount of $12,896.80. 
We grant the agency’s motion for summary relief, upholding the termination for 
default and concluding that C-Shore is indebted to the agency in the amount claimed, 
$15,983.24 . 
3 (...continued) 
seems to maintain that the termination for default was flawed because the agency’s contract 
with this 8(a) firm was technically with the SBA, not with C-Shore. Under SBA regulations, 
however, a procuring activity’s contracting officer may terminate an 8(a) contract for default, 
as long as the contracting officer has consulted with the SBA and advised the SBA of any 
intent to terminate. 13 CFR 124.518(a). The contracting officer did consult with the SBA 
and advise it of the intent to terminate before actually terminating the contract. 

 
       
 
 
  
 
    
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9 CBCA 1696 
Motion to dismiss “cross-complaint” 
C-Shore filed what it calls a “cross-complaint” with the Board while its appeal of the 
contracting officer’s decision was pending.  The “cross-complaint” is a claim by the 
contractor for $15,000,000.  The Contract Disputes Act requires that “[a]ll claims by a 
contractor against the government shall be in writing and shall be submitted to the 
contracting officer for a decision.” 41 U.S.C. § 605(a). The Court of Appeals for the Federal 
Circuit has held that “a final decision by the contracting officer on a claim . . . is a 
‘jurisdictional prerequisite’ to further legal action thereon.”  Sharman Co. v. United States , 
2 F.3d 1564, 1568 (Fed. Cir. 1993), overruled on other grounds by Reflectone, Inc. v. Dalton, 
60 F.3d 1572 (Fed. Cir. 1995); see also England v. Swanson Group, Inc. , 353 F.3d 1375, 
1379 (Fed. Cir. 2004); Bowers Investment Co. v. Department of Transportation, CBCA 825, 
08-1 BCA ¶ 33,783, at 167,202 (implementing court’s holding).  C-Shore’s “cross­
complaint” was never submitted to the contracting officer for decision, so we have no 
jurisdiction to consider it. 
Decision 
The Department of Agriculture’s motion for summary relief is granted.  The appeal 
is DENIED .  The agency’s motion to dismiss C-Shore’s “cross-complaint” is granted.  The 
“cross-complaint” is dismissed for lack of jurisdiction. 
STEPHEN M. DANIELS 
Board Judge 
We concur: 
ANTHONY S. BORWICK CANDIDA S. STEEL 
Board Judge Board Judge