ARMED SERVICES BOARD OF CONTRACTAPPEALS Appeal of

-- ) ) Capy Machine Shop, Inc. ) ) Under Contract No. SPE4A7-13-M-D099 ) APPEARANCE FORTHE APPELLANT:

APPEARANCES FORTHE GOVERNMENT: ASBCA No. 59133

Mr. Salvatore Capacchione

President Daniel K. Poling, Esq.

DLA ChiefTrial Attorney EdwardR. Murray, Esq. Adrienne D. Bolton, Esq.

Trial Attorneys DLAAviation Richmond, VA OPINION BYADMINISTRATIVE JUDGE TUNKS ONTHE GOVERNMENTS MOTION FOR SUMMARYJUDGMENT This appeal arises from the termination for default ofan orderto supply parts for the A-10 aircraftto the Defense Logistics Agency Aviation (DLA Aviation or government). DLAAviation moves for summaryjudgment, alleging that there are no material facts in dispute and that it is entitledtojudgment as a matter oflaw on the ground ofanticipatory repudiation and appellant's alleged default is unexcused. Capy Machine Shop, Inc., (Capy or appellant) opposes the motion. STATEMENT OF FACTS FORPURPOSES OF THE MOTION 1. On 9 July 2013, Mr. John Vlachos, general manager ofCapy, accepted Order No. SPE4A7-13-M-D099 to provide 27 splice fairings to DLAAviation. The order also required submission ofone first article test for a total contractprice of$52,232.85. 1 The first article delivery date was 6 January 2014. (R4, tab 9 at 1) 2. The order incorporated FAR 52.249-8, DEFAULT (FIXED-PRICE SUPPLYAND SERVICE) (APR 1984) by reference whichprovides, in part, as follows: (a)(l) The Government may, subject to paragraphs (c) and (d) ofthis clause, by written notice ofdefault to the

1The orderresulted from a Request for Quotations issued by the government on 3 June 2013 (R4, tabs 3, 4).Contractor, terminate this contract in whole or in part ifthe Contractor fails to- (i) Deliver the supplies orto perform the services within the time specified in this contract or any extension;

(c) Except for defaults ofsubcontractors at any tier, the Contractor shall notbe liable for any excess costs ifthe failure to perform the contract arises from causes beyond the control and without the fault or negligence ofthe Contractor. Examples ofsuch causes include (1) acts of God or ofthe public enemy, (2) acts ofthe Government in either its sovereign or contractual capacity, (3) fires, (4) floods, (5) epidemics, (6) quarantine restrictions, (7) strikes, (8) freight embargoes, and (9) unusually severe weather. In each instance the failure to perform mustbe beyond the control and withoutthe fault ornegligence of the Contractor. (d) Ifthe failure to perform is caused by the default ofa subcontractor at any tier, and ifthe cause ofthe default is beyondthe control ofboththe Contractor and subcontractor, and withoutthe fault or negligence ofeither, the Contractor shall not be liable for any excess costs for failure to perform, unless the subcontracted supplies or services were obtainable from other sources in sufficient time for the Contractorto meet the required delivery schedule. (R4, tab 1at18of18) 3. On 7 November 2013, Mr. Vlachos emailed Mr. Donnie W. Graves, the contracting officer (CO), as follows:

(R4, tab 6) Please cancel the above contract at no cost to Capy Machine. Our forming vendor can't locate his tooling[.]

24. On 13 November 2013, CO Graves issued a show cause notice to Capy:

(R4, tab 7) Because you have indicated in an e-mail dated 07 NOV 2013 citing an inability to locate tooling on contract SPE4A7-13-M-D099 within the time required by its terms and thereby requesting termination for convenience, the Government is consideringterminating this contract under the provisions for default. Pending a final decision in this matter, it will be necessary to determine whether your failure to perform arose from causes beyond your control and without your fault or negligence. Accordingly, you are given the opportunity to present, in writing, any facts bearing on the question to me...within 10 days after receipt ofthis notice.

Ifyou have any questions, please contact Len DuPilka, Contract Administrator

....

5. On 26 November 2013, Mr. Vlachos emailed 

### Mr. Len J. DuPilka, the contract administrator, as follows:

(R4, tab 8) The cost ofnew tooling is $26,512.00 total which wasn't included on the quote. That is the reason for asking to cancel this contract.

6. The record contains a quotation from BannerMetalcraft, Inc., dated 23 September 2013, the contracthaving been awarded on 9 July 2013, which includes a one-time tooling charge of$26,512.00 (Bd. corr., attach. to notice ofappeal). 7. On 12 December 2013, Ms. Janice Hicks, the terminating contracting officer (TCO), terminated the contract for default, stating as follows: You are hereby notified that contract SPE4A7-13-M-D099 is terminated for default effective immediately. Your right to proceed further with performance ofthis contract is terminated. The termination is based on your failure to perform in accordance with the terms and conditions ofthe

3(R4, tab 10) contract. The terminated supplies may be procured against your account and you will be held liable for excess costs.

8. On 9 January 2014, Capy appealed the TCO's final decision to this Board where it was docketed as ASBCANo. 59133. The following was attached to Capy's notice ofappeal: These parts required tooling. When we quoted the solicitation the tooling was available to us. After we were awarded this order we found out that the tooling could not be located. This meant that we would have to create new tooling at [a] cost of$26,512.00. This cost was not included in our original quote.... We could not afford to complete this order so we requested a cancellation with no cost to eitherparty. DECISION Summaryjudgmentis properly granted only where the moving party has met its burden ofprovingthe absence ofany genuine issue ofmaterial fact and that it is entitled tojudgment as a matter oflaw. Mingus Constructors, Inc. v. UnitedStates, 812 .2d 1387, 1390 (Fed. Cir. 1987). The governmentbears the burden ofprooftojustifythe default termination. When the government establishes aprima facie case that the termination wasjustified, the burden shifts to the contractorto demonstrate that the default was excusable. Hanley Industries, Inc., ASBCA No. 56584, 14-1 BCA 

### ii 35,699. The government argues that there are no material facts in dispute and that it is entitled to summaryjudgmenton the ground ofanticipatory repudiation. The record establishes thatthe first article delivery date was 6 January 2014. By email dated 7 November 2013, 

### Mr. Vlachos, Capy's general manager, requested CO Graves to cancel the contract at no cost because its forming vendor could not find the necessary tooling. On 26 November 2013, 

### Mr. Vlachos emailed 

### Mr. DuPilka, the contract administrator, again requesting thatthe government cancel the contract on the same grounds. The government has not demonstrated that Capy repudiated the contract. Anticipatory repudiation requires a "positive, definite, unconditional, and unequivocal" manifestation on thepart ofthe contractorthat he will notperformthe contract. Cascade PacificInternational v. UnitedStates, 773 F.2d 287, 293 (Fed. Cir. 1985). Capy communicated with the CO twice before the contract was terminated. On 7 November 2013, Capy requested a no cost cancellation, stating that its "forming vendor can't locate his tooling." On 26 November 2013, Capy advised that the "cost ofnew tooling is $26,512.00 total which wasn't included on the quote. That is the reason for asking to 4cancel this contract." These communications do not reflect a positive, definite, unconditional and unequivocal refusal to perform. Accordingly, the government's motion for summaryjudgment is denied. Dated: 22 October 2014

I concur

# &~-~- MARKN. STEMPLER Administrative Judge Acting Chairman Armed Services Board ofContract Appeals Administrative Judge Armed Services Board ofContract Appeals

I concur

RICHARD SHACKLEFORD Administrative Judge Vice Chairman Armed Services Board ofContract Appeals

I certify that the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContractAppeals in ASBCANo. 59133, Appeal ofCapy Machine Shop, Inc., rendered in conformance with the Board's Charter. Dated:

5 JEFFREY D. GARDIN Recorder, Armed Services Board ofContractAppeals