DENIED: January 31, 2012 
CBCA 2119 
TKC AEROSPACE, INC., 
Appellant, 
v. 
DEPARTMENT OF HOMELAND SECURITY, 
Respondent. 
Douglas C. Proxmire and Elizabeth M. Gill of Patton Boggs, LLP, Washington, DC, 
counsel for Appellant. 
William H. Butterfield and Julia A. Lobosco, Office of Procurement Law, United 
States Coast Guard, Department of Homeland Security, Washington, DC, counsel for
 
Respondent.
 
Before Board Judges GOODMAN , McCANN and DRUMMOND .
 
MCCANN , Board Judge.
 
Appellant, TKC Aerospace, Inc. (TKCA), seeks recovery of the cost of repairing the 
corrosion discovered on an aircraft that it was leasing to the United States Coast Guard 
(USCG). 
Findings of Fact 
1. The USCG issued solicitation number HSCG23-05-R-DAV334 on June 17, 2005. 
The purpose of the solicitation was “to obtain a lease with option to purchase agreement for 

 
              
             
               
      
           
               
                
     
              
               
          
   
           
 
         
        
       
         
      
           
            
            
           
            
            
           
           
        
           
          
     
       
2 CBCA 2119 
a commercial aircraft that can be configured to serve as a Medium Range Command and 
Control Aircraft (MRCCA) for the Commandant of the United States Coast Guard and the 
Secretary of Homeland Security.” The period of performance was one year from the date of 
award, with five one-year option periods. 
2. On September 16, 2005, the USCG awarded contract HSCG23-05-R-DAV334 to 
TKC Tech, the predecessor to TKCA. TKC Tech won the competition by proposing the use 
of a Challenger 604 aircraft made by Bombardier. On May 4, 2008, the contact was novated 
by the USCG to TKCA. 
3. During the first five years of performance, both parties executed the contract with 
few, if any, problems or disputes. However, in December of 2009, when the aircraft arrived 
at Hartford, Connecticut, for scheduled depot maintenance, extensive corrosion was found 
in the aircraft. 
4. The contract contained the following provisions pertinent to this dispute: 
5.7 MAINTENANCE 
5.7 General . Maintenance shall conform to FAA [Federal Aviation 
Administration] and Coast Guard quality standards outlined in COMDTINST 
[United States Coast Guard Commandant Instruction] M13020, Engineering 
Maintenance Management Manual. Minor and Major Phase maintenance shall 
be provided by an FAA-certified maintenance/repair station. 
5.7.1 Based on meeting the availability requirement of 95%, the contractor 
shall provide a proposal which outlines its plan for maintenance of the leased 
aircraft. Maintenance pricing shall be specified by monthly costs for the initial 
contract year and subsequent option years. These monthly costs will be 
provided based on 500 hours and additional blocks of 50 hours of use. 
5.7.1.1 A full contract maintenance plan is expected for evaluation. However, 
it is highly recommended that an alternative support plan shall be submitted 
which will provide use of Coast Guard Air Station Washington personnel to 
perform contractor-specified tasks for which the contractor has provided 
training, manuals and special tools as applicable to perform. In this 
alternative, Coast Guard Air Station Washington shall maintain the aircraft via 
contractor-provided FAA-approved computerized maintenance standards, and 
manage full logs in accordance with FAA procedures. 

 
         
           
         
         
       
       
           
          
        
          
           
           
            
      
    
       
       
          
        
       
          
            
              
            
    
           
            
            
           
          
          
         
         
          
           
        
3 CBCA 2119 
5.7.1.2 Coast Guard Air Station Washington aviation maintenance personnel 
are trained to perform ground handling and servicing of Coast Guard aircraft. 
They conduct routine and special aircraft inspections and related aviation 
administrative duties. The Avionics Electrical Technicians (AET rate) service 
and maintain all avionics systems including communications, navigation, 
collision avoidance, target acquisition and automatic flight-control functions. 
They also service and maintain aircraft batteries, AC and DC power generation 
and distribution systems as well as the electrical control and indication 
functions of all airframe systems. Aviation Maintenance Technicians (AMT 
rate) service and maintain aircraft bleed air, hydraulic and fuel systems, 
aircraft engines, auxiliary power units, and power train systems. They also 
maintain, and can conduct minor repairs on aircraft fuselage, wings and fixed 
and movable flight control surfaces. Some of the duties performed by Air 
Station Washington maintenance personnel include corrosion control, 
preflight, thru flight, postflight, and other routine inspections; organizational 
level on-equipment maintenance, servicing and routine checks, including 
removal and replacement of components and equipment maintenance 
capability, including, but not limited to: testing of selected LRUs [line 
replacement units] tire build-up, interior refurbishment, strut removal and 
replacement, and repair of water and latrine systems. 
5.7.1.3 For applicable warranty work, phase maintenance and repairs, the 
aircraft will be flown to an FAA-certified service center. The flight hours 
incurred for travel to the service center will be charged to the Coast Guard, but 
the maintenance costs are incurred by the contractor if under warranty or under 
other provisions of the contract. 
5.7.1.4 To maintain a maximum readiness posture for missions, the Coast 
Guard retains the option to perform repairs and servicing on the aircraft if 
covered under warranty or other provision of the contract. This most likely 
would involve simple removal and installation of parts not readily available at 
Coast Guard Air Station Washington, which would be shipped directly from 
the contractor to Coast Guard Air Station Washington to avoid unnecessary 
delays associated with flight to and from a repair station. 
5.7.2 Scheduled Maintenance . MRCCA scheduled maintenance periods of 
one day per week and one week per quarter are anticipated. 
5.7.3 Depot Maintenance . The contractor will provide the interval between 
scheduled depot maintenance and FAA equivalent inspections. Unless 

 
          
             
          
          
    
          
           
         
            
            
          
        
         
           
   
    
  
      
   
           
         
          
           
             
            
           
           
  
          
      
4 CBCA 2119 
approved by the Coast Guard, no new system/subsystem shall be introduced 
on the aircraft that shortens that interval. All work performed on the MRCCA 
shall comply with FAA commercial standards and shall be accomplished by 
a FAA approved repair facility or approved Coast Guard repair facility. 
. . . . 
5.17.1 Operational Availability (Ao) . Availability of the MRCCA to 
perform its operational missions is dependent on a wide range of variables. 
These include availability of mission, maintenance crews, special tools, ground 
support and launching equipment, and spare parts. The U.S. Coast Guard has 
assigned a hierarchy to the MRCCA system when the system is Fully Mission 
Capable, Partially Mission Capable or Not Mission Capable. The MRCCA 
Operational Availability (Ao) percentage is designed to maximize availability 
to Coast Guard Air Station Washington, while meeting the manufacturer’s 
FAA-approved maintenance requirements of the aircraft. The Ao is to be 
computed and verified semi-annually. 
. . . . 
5.17.5 Computing Availability .
 
Semi Annual Ao = Uptime/(Uptime + Downtime)
 
Required Ao = 95% 
Uptime represents the amount of time the system has been fully operational 
based on 8760 hours per year (365 days *24 hours/day). 
Downtime represents the sum of NMCT [Not Mission Capable Time] and 
PMCT [Partially Mission Capable Time] in hours or fraction thereof. Outside 
of any normal wear and tear, any downtime which is caused by the Coast 
Guard will not be included in computing Availability. The Coast Guard and 
the Contractor have mutually agreed that downtime will be measured from the 
time the Contractor is notified by the Coast Guard Air Station Washington 
Maintenance personnel until: 
a. Full Contract Maintenance: The affected aircraft system is 
returned to Ready for Issue (RFI) status. 

 
         
     
    
         
             
    
      
 
             
        
        
            
            
          
           
                
             
            
         
         
             
            
        
            
             
               
           
               
               
                 
          
    
5 CBCA 2119 
b. Organic Coast Guard Maintenance: The affected aircraft 
system is returned to RFI status. 
. . . . 
3052.228-91 LOSS OR DAMAGE TO LEASED AIRCRAFT (DEC 2003) 
(a) the Government assumes all risk of loss of or damage (except normal wear 
and tear) to the leased aircraft during the terms of this lease while the aircraft 
is in the possession of the Government. 
(b) In the event of damage to the aircraft, the Government, at its option, shall 
make the necessary repairs with its own facilities or by contract, or pay the 
Contractor reasonable cost of repair of the aircraft. 
5.  Pursuant to contract line item number (CLIN) 1A of the contract, the USCG paid 
TKCA the sum of $243,753 per month to lease the aircraft. 
6. The USCG chose to exercise the supplemental maintenance CLIN 00002B under 
which USCG personnel would perform the aircraft site/line maintenance functions in 
accordance with paragraph 5.7.1.2, rather than CLIN 00002A under which TKCA would 
perform all maintenance. In the first year of the contract the cost per month of the 
maintenance paid to TKCA under CLIN 00002B was $55,126.14. Had the Coast Guard 
elected CLIN 00002A the monthly cost would have been $63,501.14. The difference 
between these two options was $12,375 per month. 
7. Throughout contract performance, pursuant to paragraph 5.7.3, Bombardier 
performed the depot level maintenance for TKCA at scheduled intervals at its facility in 
Tucson, Arizona, or Hartford, Connecticut. As part of the Bombardier Challenger 604 
maintenance program, Bombardier performed periodic “structural maintenance” of the 
aircraft, which included removing the carpet, the seats, and all other interior finishes in the 
aircraft to inspect every component of the aircraft structure; this included detailed checks for, 
and the subsequent repairs of, corrosion damage found in or on the aircraft. 
8. In December of 2009, during scheduled depot maintenance by Bombardier, 
corrosion was discovered under the carpets in the forward part of the aircraft on the starboard 
side, near the galley bulkhead. The corrosion ran from the galley bulkhead along the sill 
plate and floor beam under the floor boards towards the aft of the aircraft. The USCG and 
TKCA determined that Bombardier would immediately begin the necessary corrosion repairs 
during the depot maintenance. 

 
             
            
              
              
             
                 
              
         
              
           
            
             
              
  
                 
                 
                
        
              
    
           
               
           
            
        
             
             
               
                 
                 
                  
             
               
6 CBCA 2119 
9. The initial evaluation of the problem by the TKCA MRCCA program manager, 
Steve Badolato, was that Bombardier failed to discover this corrosion damage during the 
2008 inspection of the aircraft at the Tucson depot maintenance. Mr. Badolato indicated that, 
“[i]n retrospect, the aircraft corrosive condition is a product of jets being in a fractional 
ownership situation as these jets are usually rode hard and put up wet.” 
10. The aircraft returned to service for the USCG on January 20, 2010. Up to this 
point, there was no indication from TKCA that the corrosion repair was anything other than 
depot level maintenance, which was the responsibility of TKCA. 
11. On April 2, 2010, more than two months after the corrosion repairs were 
completed and the aircraft returned to service, the contracting officer, James Ferguson, 
informed TKCA that the USCG would withhold $631,414 from TKCA invoices for its 
failure to maintain a 95% availability of the aircraft from December 19, 2009, through 
January 18, 2010. On May 6, 2010, the USCG changed the withholding amount to 
$493,988.60 . 
12. In a memo dated May 17, 2010, Steve Badolato indicated that it had come to his 
attention that there was a large amount of mold found on the padding under the carpet in the 
aircraft, that mold is an indication of the presence of moisture, and that he believed that this 
moisture was the cause of the corrosion.  Again he says that “the aircraft is being rode hard 
and put up wet . . . . literally.” 
13. By letter dated May 19, 2010, Mr. Boyle, TKCA’s chief executive officer (CEO), 
informed the contracting officer that, in his view, the corrosion was not the fault of TKCA, 
but was the responsibility of the USCG under the contract. 
14. On June 23, 2010, TKCA filed a certified claim in the amount of $629,536.18, 
seeking reimbursement of $135,547 for the corrosion repair costs and $493,988.60 in 
contract funds withheld from TKCA by the USCG. The contracting officer issued his final 
decision on November 15, 2010, denying TKCA’s claim. 
15. There are signed statements in the record from various USCG personnel stationed 
at Coast Guard Station Washington about isolated incidents of water getting on the carpet. 
Petty Officer First Class Robert Judd indicated that “over the next few years there were spills 
and incidents in the forward cabin . . . .” Petty Officer First Class Kenneth Gamson testified 
that it was common in inclement weather for the carpet to get wet when the aircraft door was 
open. He also indicated that the galley sink would spill over when flying at times. There are 
also signed statements from Petty Officer First Class Judd and other USCG personnel that 
they virtually never saw any moisture on the carpets. Petty Officer First Class Judd indicated 

 
                
               
                
                
               
             
           
           
               
              
                
            
            
            
               
             
               
                  
             
           
             
             
                
                
             
                 
              
       
              
               
              
              
           
7 CBCA 2119 
that “I do not know of 1 post flight/pre flight inspection that produced a report of water 
seeping into the underfloor avionics bay . . . .” LCDR Goldschmidt of the USCG indicated 
that he never saw wet carpet or mold or interior corrosion, other than one incident of wetness 
near the lavatory. He indicated that he inspected the aircraft prior to every flight and would 
have reported any such indications. LCDR Howell of the USCG also indicated that he never 
observed carpet wetness and would have reported it, had he seen it. 
Discussion 
Appellant contends that the corrosion that was discovered in the Bombardier 360 
aircraft in December 2009 was caused by moisture that had accumulated in the cabin of the 
aircraft. It asserts that the USCG had the responsibility under the contract to detect and 
remove this moisture so as to avoid the moisture’s corrosive effect. Accordingly, it argues 
that TKCA does not have the responsibility to pay for the repair of the corrosion because the 
contract does not place such responsibility upon the contractor. Appellant’s argument lacks 
merit. 
The corrosion that was discovered in the aircraft in December 2009 was discovered 
during scheduled depot maintenance that was being conducted by Bombardier, the maker of 
the aircraft, for TKCA, the owner of the aircraft. TKCA contends that moisture near the 
galley, along with the USCG’s failure to remove it during routine maintenance, caused the 
corrosion. There is evidence in the record that, from the beginning of the contract, moisture 
did at times get on the carpet. However, there is no evidence in the record indicating that wet 
carpet was ever noticed during any inspection. Both LCDR Goldschmidt and LCDR Howell 
indicated that they would have reported such moisture had they noticed it. 
The evidence regarding the cause of the corrosion is inconclusive. No evidence was 
presented indicating that anything that happened was unexpected or out of the ordinary for 
this aircraft during normal use. TKCA has failed to prove that any of the moisture that 
spilled from the galley area, or that any of the rain that wetted the carpet, caused the 
extensive corrosion that was found. Furthermore, there is no proof that some other 
intervening event did not put moisture in the cabin of the aircraft. Also, TKCA has not even 
proven that moisture, as opposed to some other corrosive liquid, was the cause of the 
corrosion. No analysis was ever performed. 
The Board finds that the evidence is inconclusive and that the cause of the corrosion 
is undetermined. In addition, the Board finds that the evidence does not establish that the 
maintenance conducted by the USCG changed over the course of the contract, that the USCG 
failed to follow the maintenance procedures required by the contract, or that any lack of 
maintenance on the part of the USGC contributed to the corrosion problem. 

 
           
             
              
         
         
          
               
         
                 
           
               
          
              
            
             
                
                
             
          
   
            
                
         
            
             
              
      
           
               
           
              
  
            
            
8 CBCA 2119 
When the aircraft arrived in Hartford, TKCA immediately assumed that repairing the 
corrosion was its responsibility and agreed with the USCG to proceed to have Bombardier 
do the repair during the depot level maintenance. No experts were contacted to determine 
what caused the corrosion and none testified at the hearing. No analysis of the cause of the 
corrosion was undertaken until after the USCG assessed the monetary penalty for failure to 
meet the 95% availability requirement. This assessment took place over three months after 
the aircraft arrived in Hartford and over two and one-half months after the aircraft had been 
repaired and returned to service.  At that point it was difficult, if not impossible, to conduct 
an accurate analysis of the cause of the corrosion. All that was available at that point were 
some pictures and the imperfect memories of the Hartford repair personnel. 
Without a known cause of the corrosion, where does the contract place the cost of the 
repair? The answer is, upon TKCA. As part of Bombardier’s depot maintenance program, 
Bombardier was to look for corrosion and repair it when found. See Finding 7. 
TKCA has never argued that remedying the corrosion was not a depot level 
maintenance job, and there is no dispute that depot level maintenance was the responsibility 
of TKCA. In fact, Bombardier foresaw corrosion as a potential problem in the aircraft. That 
is why its maintenance program required a search for it. For TKCA to now argue that 
corrosion repair is not its responsibility is contrary to its clear contractual obligations. 
TKCA’s argument that, since the USCG actually performed the routine maintenance 
it is therefore responsible for not performing it correctly, and thereby caused the corrosion, 
lacks merit.  Under the contract, TKCA was responsible for all maintenance of the aircraft. 
Under paragraph 5.7, the contract states: “Maintenance shall conform to FAA and Coast 
Guard quality standards . . . . Minor and Major Phase maintenance shall be provided by an 
FAA-certified maintenance/repair facility.” (The Bombardier facilities are located in 
Hartford, Connecticut; Tucson, Arizona; and other places.) “The contractor shall provide a 
proposal which outlines its plan for maintenance of the leased aircraft.” Paragraph 5.7.1. 
“A full contract maintenance plan is expected for evaluation.” Paragraph 5.7.2. “[I]t is 
highly recommended that an alternative support plan shall be submitted which will provide 
use of Coast Guard Air Station Washington Personnel to perform contractor-specified tasks 
for which the contractor has provided training, manuals and special tools . . . .” Paragraph 
5.7.1.1. 
The USCG had two options regarding routine daily maintenance. Under paragraph 
5.7.1, all maintenance could have been performed by TKCA. This would have cost the 
USCG $63,501.14 per month.   Under this paragraph, the USCG would do no maintenance, 
not even “routine” maintenance. However, under paragraphs 5.7.1.1 and 5.7.1.2 the USCG 
could have its personnel stationed at Coast Guard Air Station Washington perform the 

 
             
         
             
                
         
              
                
            
             
              
             
               
               
        
                 
            
  
   
           
     
              
    
  
             
             
          
            
              
             
       
             
    
         
                  
               
9 CBCA 2119 
“routine” maintenance. This would reduce the maintenance cost to the USCG to $55,126.14 
a month, a savings of $12,375.00 per month.   There is nothing in section 5.7, or paragraphs 
5.7.1.1 and 5.7.1.2 in particular, that indicates that TKCA was being relieved of its 
responsibility to ensure that the aircraft was being properly maintained at all times. It is just 
that the USCG was performing some of the maintenance. 
The USCG was paying TKCA $55,126.14 a month to maintain the aircraft. There is 
no merit to the argument that TKCA was not responsible to ensure that the aircraft was being 
properly maintained because the USCG had agreed that its personnel would actually perform 
“routine” maintenance. If TKCA was not responsible, the question becomes, “Just what was 
the USCG paying $55,126.14 a month for?” The idea that TKCA bargained away its 
responsibility to ensure that the aircraft was properly maintained, even on a daily routine 
basis, for a small savings of $12,375 per month is nonsense. Nothing in the contract 
language leads to such a conclusion. During the hearing Mr. Boyle, the CEO of TKCA, 
actually agreed with the Government’s interpretation. He stated: 
Q. So would it be fair to say that whatever it was that they did at Air Station 
Washington was done under the supervision, direction , and control of you, the 
prime contractor? 
A. It would not.
 
Q Then what in your opinion does that phrase (subparagraph 5.7.1.1) mean
 
that I just read to you?
 
A. I think if you read this phrase literally, it would certainly lead to that 
conclusion . . . . 
Transcript at 178. 
There has been no evidence presented that the USCG was not performing the daily 
maintenance properly. TKCA worked with the USCG to maintain the aircraft since the 
beginning of the contract in 2005. Under paragraph 5.7.1.1 of the contract, the USCG was 
to perform the maintenance following contractor specified procedures. There is no evidence 
in the record indicating that the USCG failed to perform any of the routine maintenance. 
TKCA had ample opportunity to train and observe the USCG as it conducted routine 
maintenance. To conclude that, after years of maintaining the contract properly as directed 
by TKCA, the USCG suddenly stopped doing so and caused the corrosion problem is 
unsupported by the evidence. 
When the corrosion was first discovered, TKCA assumed that it was responsible for 
the repair. It proceeded with the repair and never billed the USCG or informed it that it (the 
USCG) was responsible for the repair. Not until after the assessment of downtime was made, 

 
               
              
                
                  
            
       
           
                
               
                 
           
                 
               
  
            
             
                
            
           
           
               
                
            
              
             
            
     
              
            
           
         
         
        
           
10 CBCA 2119 
over three months after the discovery of the corrosion, did TKCA change its position. For 
months, both parties interpreted the contract as placing the responsibility for the repair of the 
corrosion on TKCA. It is well settled that the interpretation of the contract given by the 
parties prior to a dispute arising is of great if not controlling weight. Chase & Rice, Inc. v. 
United States , 354 F.2d 318, 321–22 (Ct. Cl. 1965); Centex Bateson Construction Co. , 
VABCA 4802, 97-2 BCA ¶ 29,194, at 145,245. 
TKCA also argues that contract clause 3052.228-91, Loss or Damage To Leased 
Aircraft (DEC 2003), places the risk of such a loss (corrosion) on the USGC. This clause 
does not apply to the corrosion damage in issue here. This clause pertains to accidental 
damage to the aircraft while in the possession of the USCG. It has nothing to do with 
corrosion or contract maintenance. Furthermore, TKCA has not demonstrated that the 
corrosion was not caused by simple wear and tear. In fact, it appears that is exactly what 
TKCA is arguing when it contends that sink overflow and rain caused the corrosion. Its 
argument lacks merit. 
TKCA also argues that the USCG was required under contract paragraph 5.17.1 to 
give notice to TKCA that downtime had begun before any downtime assessment could be 
made. This argument also lacks merit. TKCA has taken this provision out of context and 
applied it incorrectly. Under paragraph 5.17.1, “Ao (operational availability) is to be 
computed and verified semi-annually” taking into account “a wide range of variables.” 
Accordingly, downtime assessments are an after-the-fact analysis of what has happened in 
the past and are thus “retroactive” by their very nature. The notice requirement referred to 
in paragraph 5.17.5 refers only to situations where the aircraft is “down” while it is at the 
Coast Guard Air Station Washington, or possibly, in locations where the contractor would 
not know that the aircraft was down and the Coast Guard Air Station Washington would. 
This provision does not apply in a situation where scheduled depot level maintenance is 
being performed and the contractor is well aware that the aircraft is “down.” 
In its claim letter, TKCA states: 
In December 2009, in an effort to ensure that the aircraft could be placed back 
in service as soon as possible, TKCA and Air Station Washington agreed that 
corrosion repairs should be started immediately while the aircraft was at the 
Bombardier maintenance facility to minimize downtime and cost for repairs. 
USCG authorized TKCA to complete corrosion repairs during the planned 
maintenance then being conducted at the Bombardier maintenance facility. 
The aircraft was repaired and returned to service as expeditiously as possible. 

 
            
              
            
   
                  
             
    
             
             
                
              
           
               
   
                                                       
  
 
 
                                                                                                         
    
  
11 CBCA 2119 
Thus, TKCA was aware that when the corrosion was discovered at the Hartford 
facility in December 2009, downtime was an issue. It also realized that no notice 
communication from the Coast Guard Air Station Washington was necessary to start the 
downtime clock from running.  TKCA did not assert this argument in its complaint and did 
not address it at the hearing. Only in its brief did it belatedly posit this argument. The 
argument lacks merit and is inconsistent with the actions of the parties during the 
performance of the contract. 
TKCA does not contest the calculation of the amount of the downtime assessment of 
$493,988.60 , except to contend that the Coast Guard Station Washington did not give TKCA 
notice of the downtime as TKCA alleges the contract required it to do. We have determined 
that this notice requirement does not apply here. Accordingly, the amount of the assessment, 
$493,988.60 , stands without further challenge. Further, because responsibility for the repair 
lay with TKCA, the contractor may not recover the $135,547 it seeks as repair costs. 
Decision 
The appeal is DENIED . 
R. ANTHONY McCANN 
Board Judge 
We concur: 
ALLAN H. GOODMAN JEROME M. DRUMMOND 
Board Judge Board Judge