GRANTED IN PART:  December 12,  2008 
CBCA 1331 
DREAMSCAPES, LLC, 
Appellant, 
v. 
DEPARTMENT OF THE INTERIOR, 
Respondent. 
Robert J. Wagman, Jr., of Baker Botts L.L.P., Washington, DC, counsel for 
Appellant. 
James L. Weiner, Division of General Law, Department of the Interior, Washington, 
DC, counsel for Respondent. 
WALTERS, Board Judge. 
Appellant, Dreamscapes, LLC (Dreamscapes), and respondent, the United States 
Department of the Interior (DOI or Government), had entered into a tree thinning contract. 
The contract was terminated for the Government’s convenience.  Dreamscapes submitted 
several convenience termination settlement proposals, the Government provided several 
counterproposals, and ultimately Dreamscapes filed a claim in the total amount of $59,635, 
under the Contract Disputes Act (CDA), 41 U.S.C. §§ 601-613.  The contracting officer 
issued a final decision, allowing Dreamscapes a total of $36,045.62.  The present appeal is 
from that final decision.  Dreamscapes elected the small claims procedure for small 
businesses under Board Rule 52, and the parties both elected to submit their respective cases 
on the record, pursuant to Board Rules 18 and 19. For the reasons set forth below, the 
Board finds Dreamscapes entitled to recover a total of $34,821.79.  Because this case is 
being decided under the small claims procedure, the Board’s decision is being issued by a 
single judge, and that decision is final and conclusive and shall not be set aside except for 
reasons of fraud.  41 U.S.C. § 608(d).  The decision has no value as precedent.  Rule 52(b). 

 
   
 
 
 
 
 
  
    
 
 
  
2 CBCA 1331 
Factual Background 
On April 12, 2006, Dreamscapes and the DOI Bureau of Land Management’s 
(BLM’s) Royal Gorge Field Office executed contract no. CAP065005 (the contract) for the 
provision of mechanical thinning, piling, and chipping of trees on a ninety-eight acre tract 
in the Turkey Gulch area, some fifteen miles southwest of Canon City, Colorado.  The 
contract had a unit price of $496 per acre and a total contract price of $48,608.  Appeal File 
Exhibit 1 at 100-02, 112.  The contract called for completion within ninety days.  Id. at 112. 
Among numerous other provisions in the contract were two special clauses pertaining to 
partial payment and to the Government’s right to terminate the contract for its convenience. 
The payment provision states: 
Payment: 
Partial Payment may be authorized by the COR assuming acceptable work has 
been completed in a time frame that will allow the project to be completed 
within the contract period.  No payment will be authorized while the 
contractor has only partially completed a unit. The units to be completed with 
acreages are listed below.  The contractor is responsible for bidding on the 
work to be completed based on his/her estimates of actual treatable acres 
determined from the site visit. 
Unit Number Total Acres 
Unit #1 98 
Total 98 
Appeal File, Exhibit 1 at 121. 
The convenience termination clause reads: 
Termination for the Government’s convenience.  The Government reserves 
the right to terminate this contract, or any part hereof, for its sole convenience. 
In the event of such termination, the Contractor shall immediately stop all 
work hereunder and shall immediately cause any and all of its suppliers and 
subcontractors to cease work.  Subject to the terms of this contract, the 
Contractor shall be paid a percentage of the contract price reflecting the 

   
  
     
       
 
 
 
 
    
   
     
            
     
    
 
 
3 CBCA 1331 
percentage of the work performed prior to the notice of termination, plus 
reasonable charges that the Contractor can demonstrate to the satisfaction of 
the Government, using its standard record keeping system, have resulted from 
the termination.  The Contractor shall not be required to comply with the cost 
accounting standards or contract cost principles for this purpose.  This 
paragraph does not give the Government any right to audit the Contractor’s 
records. The Contractor shall not be paid for any work performed or costs 
incurred that reasonably could have been avoided. 
Appeal File, Exhibit 1 at 127-28.  The contract also incorporated by reference the standard 
Stop-Work Order clause under Federal Acquisition Regulation (FAR) 52.242-15 (48 CFR 
52.242-15 (2005)) as well as the standard Suspension of Work clause under FAR 52.242-14. 
Id. at 123, 125. 
DOI issued Dreamscapes a notice to proceed dated August 31, 2006.  Appeal File, 
Exhibit 3.  Shortly thereafter, the parties began to quarrel over whether Dreamscapes was 
making adequate progress in contract performance. Id., Exhibits 6, 7 and 9.  At the 
contracting officer’s request, Id., Exhibit 15, the contracting officer’s representative issued 
Dreamscapes such a stop work order on November 3, 2006, indicating that the order was 
being issued for “irreconcilable differences.”  Id., Exhibit 12.  The stop work order was 
received by Dreamscapes on November 6, 2006.  Id., Exhibit 20. Dreamscapes ceased work 
at the site thereafter.  
On November 20, 2006, the contracting officer by telephone notified Dreamscapes 
that the contract was being terminated for the convenience of the Government.  Appeal File, 
Exhibits 13, 15.  The contracting officer also issued contract modification no. 2, dated 
November 20, 2006, under which the contract was “partially terminated for the convenience 
of the government.”  Id., Exhibit 14. By letter to Dreamscapes dated December 3, 2006, the 
contracting officer confirmed her telephonic instructions of November 20, 2006, that 
Dreamscapes was to submit to the contracting officer an invoice with its estimation of 
completed acreage under the contract, along with “‘reasonable’ demobilization costs.” Id., 
Exhibit 15.  Dreamscapes received that letter on December 7, 2006. Id., Exhibit 20 at 2. 
Dreamscapes, by letter of January 8, 2007, instead of complying with the contracting 
officer’s instructions, i.e., invoicing for a percentage of the contract price based on its 
estimate of completion and for its reasonable demobilization costs, submitted a “final 
invoice” for “all” “reasonable costs” incurred for the  project in the total amount of 
$48,425.47.  Appeal File, Exhibit 16. 

      
 
     
   
 
 
    
   
  
       
   
    
   
  
 
   
   
  
  
 
   
             
 
4 CBCA 1331 
The contracting officer, by letter dated April 4, 2007, determined that Dreamscapes 
was entitled to recover a total of $28,445.67 for the convenience termination. This amount, 
in part, was derived based on the percentage of contract completion reflected in an earlier 
Dreamscapes progress payment request. The contracting officer also allowed $5220.71 for 
demobilization and associated transportation, per diem (at the Government’s per diem rates) 
as well as $1837.44 for labor costs (including health and welfare benefits) for two laborers 
during the pre-termination suspension period -- which the contracting officer calculated as 
being nine working days between November 8 and 20, 2006 .  
1 See Appeal File, Exhibit 17. 
By email message dated May 31, 2007, Dreamscapes responded to and rejected the 
contracting officer’s determination, asserting that termination settlement necessarily would 
have to be calculated based on Dreamscapes’ costs, rather than on the basis of percentage 
of contract completion, and challenging the accuracy of DOI’s findings regarding that 
percentage. Appeal File, Exhibit 18. 
By letter dated June 28, 2007, Dreamscapes, notwithstanding its earlier contention 
that there was “no way” to “accurately determine” a percentage of contract completion, 
asserted that it had actually completed 39% of the contract work prior to the suspension and 
ultimate termination and, on that basis, submitted a revised termination settlement proposal 
in the total amount of $46,413.02.   That total included, among other things, the same 
$5220.71 that the contracting officer had allowed for demobilization and related costs. 
Dreamscapes’ computations relating to the pre-termination suspension of work were based 
on the same daily figures as DOI had used in its April 4, 2007, counterproposal, although 
2Dreamscapes’ totals were based on twenty-two working days , rather than the nine days DOI
had been using. In the June 28, 2007, letter, Dreamscapes also stated that, unless DOI 
accepted its proposal within thirty days, it intended to submit a certified settlement proposal, 
i.e., a certified claim under the CDA, which would include an additional $5000 of 
anticipated settlement costs (presumed to mean attorneys’ and accountants’ fees for 
settlement proposal preparation).  Appeal File, Exhibit 20. 
1 The suspension, which had begun, not on November 8, 2006, but on November 6, 
2006, the day Dreamscapes received the stop work order, and which ended on November 
20, 2006, the day it was orally notified of the termination, did contain only nine work days, 
since a federal holiday, Veterans Day, which was observed on Friday, November 10, 2006, 
is not counted as a work day. 
2 The twenty-two work days Dreamscapes was using was the period from November 
6, 2006, a Monday, when it received the stop work order, through December 7, 2006, the 
day it received the official termination letter. Another federal holiday within that period, 
Thanksgiving Day, November 23, 2006, likewise is not counted as a work day. 

    
  
   
   
     
 
 
    
  
 
      
      
 
 
 
 
  
 
 
    
 
 
5 CBCA 1331 
In a letter dated August 30, 2007, the DOI contracting officer responded to 
Dreamscapes’ June 28, 2007, proposal.  In the response, the contracting officer countered 
with an offer totaling only $24,780.23.  That amount again included the same $5220.71 total 
that both parties had included for demobilization/transportation of the equipment, truck and 
trailer back to Enid, Oklahoma, and associated labor and per diem costs.  Appeal File, 
Exhibit 21. 
Dreamscapes submitted to the contracting officer a final settlement proposal by an 
undated letter, which was received by DOI on January 28, 2008.  Id., Exhibit 24.  That letter 
sought a total of $59,635: (1) $35,095, representing 72.2% of the contract price, which 
Dreamscapes calculated based on its having spent sixty-five days of the specified ninety-day 
contract performance period prior to the Government stop work order; (2) $2703 for 
overhead on the uncompleted work -- representing 20% of the remaining 27.8% of the 
contract price; and (3) $20,000, representing an estimate of the overall anticipated cost for 
legal and accounting fees associated with Dreamscapes’ termination settlement proposal 
preparation and submission.  Dreamscapes indicated that, as of the proposal submission, it 
had already expended $16,100 for such fees.  Id. By letter to the contracting officer dated 
April 1, 2008, this proposal was again submitted as a formal claim under the CDA.  That 
letter, which was received by the contracting officer on April 7, 2008, specifically requested 
a contracting officer’s decision on the claim within sixty days, “pursuant to 41 U.S.C. § 
605(c)(1).”  Id., Exhibit 25. 
The contracting officer rendered a final decision by letter to Dreamscapes dated June 
6, 2008.  See Appeal File, Exhibit 26. The final decision allowed Dreamscapes a total of 
$36,045.62. To derive that amount, the contracting officer abandoned entirely the 
methodology DOI had earlier used.  In addition to allowing the $2703 sought by 
Dreamscapes for overhead on uncompleted/terminated work, the contracting officer, instead 
of putting forth DOI’s own estimate of percentage of the work completed prior to 
termination, decided to include in the termination settlement an amount for total costs 
expended, based on the Government’s own estimates of the actual costs expended, plus an 
allowance for legal and accounting costs of $4975. As to this latter item, the contracting 
officer had the following to say: 
This amount represents the reasonable cost of settlement and preparation fees. 
I understand that you are claiming $20,000, $17,181.87 of which you have 
allegedly incurred for preparation of this case up to this point.  However, the 
Government can only pay reasonable fees for this purpose.  By the receipts 
and invoices you provided, it appears that there are charges of upwards of 
$477 per hour of work. The Government will pay the reasonable costs of 
what it would cost the average claimant with a similar case using an attorney 

     
  
   
 
        
 
 
 
   
 
 
 
   
      
 
6 CBCA 1331 
in the locality with the skill and acumen required for this type of case. 
Therefore, the Government can only pay $4975 of the claimed settlement 
costs. 
Id. at 4. 
Dreamscapes timely appealed from this final decision.  In accordance with their joint 
request and the Board’s order, the parties submitted both initial record submissions and reply 
submissions on the record. Dreamscapes has filed a motion to strike the Government’s reply 
submission in its entirety, and DOI has opposed that motion. 
Discussion 
As a preliminary matter, we will address appellant’s motion to strike. In its motion, 
Dreamscapes seeks to strike the entirety of the Government’s reply submission, since, in 
Dreamscapes’ view, it goes beyond replying to appellant’s initial record submission. 
Nothing in Board Rules 18 and 19 restricts what may be included in record submissions, 
initial submissions, reply submissions or otherwise.  The motion has no legal basis or 
validity and is frivolous.  Accordingly, the motion is denied. 
For a proper convenience termination settlement here, the amount due Dreamscapes 
must be derived based on and be “consistent with” the language of the contract’s 
convenience termination clause.  See FAR 49.107(a).  That clause provided for two things, 
first that the contractor be paid “a percentage of the contract price reflecting the percentage 
of the work performed prior to the notice of termination,” and next any further “reasonable 
charges that . . . resulted from the termination.”  In our view, at this stage, neither party’s 
proposal adheres appropriately to the clause.  Resorting to a total cost settlement  -- as 
Dreamscapes did initially and as DOI did ultimately -- is clearly inconsistent with the clause. 
The only viable estimate of “the percentage of the work performed prior to the notice 
of termination” that appears in the record is Dreamscapes’ estimate of 39%.  The 20% figure 
DOI had earlier used was based on the Government’s estimation of the status of completion 
3of 20.5%  on or before October 25, 2006, some eleven days prior to the Dreamscapes’ receipt
3 The 20.5% Government estimate of work completion reflected in Dreamscapes’ 
letter of November 1, 2006, in conjunction with its request for a “progress payment,” is 
computed by adding 3.8 acres, 7.3 acres (14.6 acres x 50%), and 8.95 acres (17.9 acres x 
50%) and dividing that sum, 20.05 acres, by the overall contract acreage of  ninety-eight 
acres.  As the letter itself noted, Dreamscapes considered that estimate to be low. 

 
   
   
 
 
       
 
 
  
 
 
 
       
 
 
   
  
  
7 CBCA 1331 
of the stop work order.  Accordingly, we will use the 39% figure here for purposes of 
deriving the amount due Dreamscapes. On this basis, Dreamscapes is entitled to $18,957.12 
(the contract price of $48,608 x 39%) for work completed prior to termination.  The Board 
must reject out of hand the notion in Dreamscapes’ final claim submission that it is entitled 
to 72.2% of the contract price merely because it spent sixty-five days on the project, or 72.2% 
of the time scheduled for completion.  The contract’s termination for convenience clause 
provides for payment to “reflect[ ] the percentage of the work performed,” not the percentage 
of time on the job. Additionally, the 72.2% figure cannot be squared with Dreamscapes’ own 
prior completion estimate of 39%.  
In terms of “reasonable charges” that may have “resulted from the termination,” as 
DOI eventually realized, and what Dreamscapes appears to have accepted, is that, other than 
in conjunction with judgments or arbitration awards obtained against Government prime 
contractors by their subcontractors, see FAR 49.108-5, anticipatory profit on work not 
completed by reason of the termination would not be recoverable.  FAR 49.202.  What 
neither party understood was that recovery of  overhead for such unperformed work likewise 
is precluded.  See Edgar M. Williams, General Contractor, ASBCA 16058, et al., 72-2 BCA 
¶ 9734 at 45,510; Technology, Inc. , ASBCA 14083, 71-2 BCA ¶ 8956 at 41,631.  In 
Chamberlain Manufacturing Corp. , ASBCA 16877, 73-2 ¶ 10,139, the Armed Services 
Board of Contract Appeals observed that, while the Government may be liable to a contractor 
for “continuing costs,” i.e., those costs directly related to the terminated contract that might 
not be able to be shut off immediately, it has no responsibility for overhead -- costs not 
directly related to any particular contract and that will continue of necessity so long as a 
contractor remains in existence.  In this regard, the Armed Services Board stated: 
It is obvious that appellant’s overhead is a cost which will continue so long 
as appellant continues to exist as an ongoing organization and is thus not 
directly related to the terminated contract. . . .  In practical effect, if claims 
such as presented by appellant were allowed the Government would be 
guaranteeing a contractor’s overhead costs, without receiving any benefit 
therefrom, as a “penalty” for exercising its contractual rights [of terminating 
a contract for its convenience]. 
Chamberlain Manufacturing, 73-2 BCA at 47,679.  Thus, the $2703 both parties would 
include for overhead is not properly recoverable by Dreamscapes. 
On the other hand, even in the context of a convenience termination, overhead costs 
associated with pre-termination suspensions of work such as was experienced here may be 
recoverable. See Richerson Construction, Inc. v. General Services Administration, GSBCA 
11161-R, et al., 93-3 BCA ¶ 26,206 at 130,440.  The suspension that resulted from the 

  
 
 
  
  
  
     
 
 
 
     
  
     
    
 
8 CBCA 1331 
Government’s stop work order in this case caused Dreamscapes to halt its work for a period 
of fourteen calendar days, from November 6, 2006, when it received the stop work order, 
until November 20, 2006, when it was notified telephonically that the contract was being 
terminated.  Here, the parties both have based their calculations on fixed overhead costs 
representing 20% of the overall contract price -- or $9721.60 ($48,608 x 20%).  The 
fourteen calendar day suspension period would represent 14/90  of the total scheduled 
contract period.  This would translate to $1512.25 of overhead costs (14/90 x $9721.60) 
generated during the period of suspension. 
In addition, Dreamscapes would be entitled to recover for idle labor costs and idle 
equipment costs incurred during the pre-termination suspension. As to idle labor costs, we 
find the Government’s earlier allowance of $1837.44 for nine work days of direct labor 
costs and associated health and welfare expenses to be appropriate. The Board also would 
permit in connection with idle labor the recovery of nine work days
4 of per diem food and 
lodging, or $891.  As to idle equipment, Dreamscapes, by its letter and invoice of January 
8, 2007, had initially claimed as actual costs $6515.17 for “Equipment Cost,” a cost item that 
appears to relate to the fixed costs of ownership (e.g., depreciation) or rental, and another 
$6888.87 for “Fuel, Oil, Maintenance and Repair of Equipment Cost,” a cost item that 
appears to relate to equipment operation.  This latter cost item would not seem to be 
involved for the fourteen calendar day suspension period. Overall, Dreamscapes spent a total 
of sixty-five calendar days on the project prior to its termination.  The suspension period 
therefore should represent 14/65 of the $6515.17 in Equipment Cost -- or  $1403.27 in idle 
equipment costs. 
Also, at some juncture, the parties had both allowed $5220.71 for the post-
termination demobilization and transport of equipment back to Enid, Oklahoma 
(“‘reasonable’ demobilization costs” per the contracting officer’s initial instructions -- see 
Appeal File, Exhibit 15).  We find this figure appropriate and reasonable. 
Finally, there is the matter of the $20,117 now being claimed by Dreamscapes for its 
total actual legal and accounting fees associated with assembling and presenting its final 
convenience termination proposal. The Board is in agreement with DOI that entitlement to 
these generally allowable termination costs must be governed by a rule of reasonableness. 
Although the Board does not doubt that Dreamscapes’ attorneys regularly command the 
hourly rates being claimed or question that they actually spent the hours claimed, for reasons 
that should be obvious from the above discussion, we do not find the final proposal that 
4Dreamscapes presented figures for per diem food and lodging based on work days, 
rather than calendar days. 

 
 
   
   
     
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9 CBCA 1331 
Dreamscapes submitted with their assistance and that of Dreamscapes’ accounting 
consultant to have represented significant value added for Dreamscapes or the termination 
settlement process.  Moreover, in light of the relatively small amount of money involved in 
the claim, we find the expenditure on legal and accounting fees to have been excessive.  The 
total expended quadrupled the $5000 Dreamscapes itself had estimated it would expend for 
such fees, and the Board cannot justify holding the Government responsible for the overage. 
Accordingly, we limit the amount allowed for legal and accounting fees to $5000. 
We award Dreamscapes a total of $34,821.79 for the instant convenience termination. 
This total amount due consists of the following: 
Due for work completed through termination 
Due for pre-termination suspension: 
Idle labor, health and welfare costs $1837.44 
Per diem costs for idle labor     891.00 
Idle equipment costs   1403.27 
Unabsorbed overhead   1512.25 
Subtotal
Due for demobilization and 
transport of equipment to Enid, Oklahoma
Due for professional fees for proposal preparation
$18,957.12 
    5,643.96 
    5,220.71 
    5,000.00 
TOTAL DUE $34,821.79 
Decision 
The appeal is GRANTED IN PART. The Board finds appellant entitled to recover 
a total of $34,821.79. 
RICHARD C. WALTERS 
Board Judge