ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of

-- ) ) Relyant, LLC ) ) Under ContractNo. W91B4N-08-D-0011 )

APPEARANCE FORTHEAPPELLANT:

APPEARANCES FORTHE GOVERNMENT: ASBCA No. 59809

James H. Price, Esq.

Lacy, Price & Wagner, PC Knoxville, TN
Raymond M. Saunders, Esq.

Army ChiefTrial Attorney MAJ Jason W. Allen, JA

Trial Attorney

OPINION BYADMINISTRATIVE JUDGE PROUTY

The dispute before us, 1 whichwas aired in a three-day hearing, is centered upon the government's acceptance ofcertain pre-fabricated relocatable buildings (RLBs) for
use at two different sites in Afghanistan. As will be described in far greater detail below, different government contracting officer representatives (CORs) atthe two different locations had diverging views regarding whether the RLBs initially provided by appellant, Relyant, LLC (Relyant), should be permittedunder the contract specifications that appliedto both locations. Inparticular, the RLBs delivered to the first sitepassed a First Article Test (FAT) at that site, butwere deemed to be out of compliance withthe contract's statement ofwork (SOW) bythe contracting officer (CO), and were notpermitted atthe second site. To get aroundthe problem, Relyant shipped the RLB components first deliveredto second site to the first site, where the local accepting authority (notthe CO) apparently turned a blind eye to the RLBs' failure to comply with the SOW2; Relyantthenrevamped its means ofmanufacturing the RLBs toprovide RLB components that satisfied the CO (and contract) at the second site. Yet, despite the equities ofthe matter superficiallyweighing in favor of Relyant for having had some units accepted, we find that we cannot grant it the relief

1 We granted summaryjudgment in favor ofthe government in the related appeal of ASBCA No. 58172. 

### See Relyant, LLC, ASBCANo. 58172, 16-1 BCA

## ,r 36,228, 

### aff'd, 683 F. App'x 960 (Fed. Cir. 2017). Citations to the Rule 4 file herein refer to a single Rule 4 file that was originally submitted for that first appeal and later supplemented for this one. 2 To be clear, there was only one CO at a time on the contract. As noted, though, there
was more than one COR.sought. The CO was within her rights to hold Relyant to the specifications contained withinthe contract's SOW, and the evidence does not support a finding ofsuperior knowledge onthe part ofthe government. Moreover, the doctrine ofgood faith and fair dealing does not override the express terms ofthe contract; however, in the circumstances presentedhere, it does impose upon the government certain obligations with regard to timeliness ofgovernment responses to Relyant's requestto amend the SOW, for which Relyant is entitled to certain relief. 3

FINDINGS OF FACT

I. The Contract
The idea behindthe RLB is rather clever: standard sized steel shipping containers

- ubiquitous in the modemworld and designedto be easily transported

- would be modified to be used as modular buildingblocks to make larger buildings for use in contingency operations (tr. 1/195-96, 201-04). On 15 May 2008, the Bagram Regional Contracting Center in Afghanistan (the Army orthe government} solicitedproposals for the above-captioned contract (the contract), which was a multiple award, indefinite-delivery/indefinite-quantity (IDIQ) contract for the manufacture, delivery, and installation ofRLBs in Afghanistan (R4, tab 1).

The seeds ofthe dispute that are nowbefore us were sown in Relyant's4 proposal in response to this solicitation. The SOW accompanying the solicitation for the contractrequired the installation ofgypsum interior drywall to the interior of the shipping containers that would cover fiberglass insulation that was a minimum of three inches thick (R4, tab 1at 17, 

## 14.1.1.1). Relyantproposed a different configuration: this was the use ofa sandwich panel, including Styrofoam5 as the insulator, instead ofseparate insulation and drywall (R4, tab 243 at 11-126; see also tr. 2/124-26). This configuration made all the difference in the world to how Relyant

3 We also resolve a number ofmotions regarding the entitlement ofRelyant to amend its complaint; the government's entitlementto amend its answer; and whether
an adverse inference shouldbe drawn against the government due to certain discovery hiccups. Our decisions onthose matters

- granting, in large part, the motions to amendthe complaint andthe answer and denying the motion for an adverse inference -willbe explainedherein. 4 Critical Mission Support Services was Relyant's predecessor in interest for this contract and, in fact, was the company that bid on and obtained this award (tr. 1/44). We, nevertheless, generally refer to it as Relyant, herein, for simplicity. 5 Relyant's ChiefExecutive Officer (CEO), Mr. Smith, testifiedthatthe insulating material in the sandwichpanel was polystyrene, as opposedto Styrofoam (tr. 2/127). For our purposes, this is not a material difference. 6 These pages are numbered 8 and 9 in Rule 4, tab 248. 2would manufacture the RLBs. Its single sandwichpanel would be less likely to be damaged during shipping than the drywall/insulation combination (tr. 2/155), thus Relyant could install the sandwich panel at its factory in Turkey prior to shipping it to Afghanistan, rather than shipping the items separately and installing the drywall in Afghanistan (id., tr. 2/207). Indeed, the advantages ofthis method were key to Relyant's operations plan 

### (see generally tr. 2/196, 206-07).

On 22 September 2008, the Army awarded the above-captioned contract (the contract)7 underthe solicitationto Relyant (R4, tab 1 at 1). The contract signed by Relyant and the government did not adoptthe change to the SOWproposed by Relyant relating to the substitution ofthe sandwichpanel for the drywall and insulation interior walls (R4, tab 1 ),8 although Relyant's management initially assumed that the proposal hadbeen adopted (tr. 2/176). As will be seen, this assumption was unfortunate.

The contract incorporated by reference a number ofstandard clauses under the Federal Acquisition Regulation (FAR), including FAR 52.209-4, FIRST ARTICLE APPROVAL

- GOVERNMENT TESTING (SEP 1989) (hereinafter, the first article test clause orFAT clause), with the words "Shall be incorporated in every delivery order" immediately following its notation (R4, tab 1at 39). One provision ofthis FAT clause that is ofimportance to the dispute here is paragraph (b), which provides in part, "The notice of

...approval [ofthe test] shall not relieve the Contractor from complying with all requirements ofthe specifications and all other terms and conditions ofthe contract."

Another contractprovision that is importantwithrespect to changes to the SOW is contained in paragraph 3.0 to the SOWportion ofthe contract, "Modifications," whichprovides that "[a]ll

...modifications to requirements specified in this SOW must be directed by the Contracting Officer (CO)" (R4, tab 1 at 15).

The contract also included the FAR's Ordering clause (FAR 52.216-18, ORDERING (OCT 1997)), whichprovides that, in the event ofa conflict between a task order and the contract, "the contract shall control" (R4, tab 1 at 44).

7 Relyant was not the only awardee underthis multiple award task order contract (tr. 1/45-46). 8 Relyant's proposal was written in such a way that the governmentwas notrequired to accept its proposed deviation from the solicitation's SOW (tr. 2/175). 3

### II. Delivery Order 1
Delivery Order 1 (DO1) was issued to Relyant on 22 September 2008 (R4, tab 4), the same day the contract was awarded. DO1requiredthe delivery and installation of nine two-story RLBs to Forward Operating Base (FOB) Sharana, Afghanistan (Sharana) (id. at 1-2). DOI also included a requirement to submit one ofthe nine RLBs delivered to Sharana for first article testing within 180 days (i.e., by 21 March 2009), and included the previously-discussed FAT clause (id. at 2-3).
Subsequentto the issuance ofDO1, the parties recognized that DO1had failed to make any allowance for the cost differential ofdelivering the RLBs to Sharana, as opposed to BagramAirfieldAfghanistan (Bagram) (the contracthad a contract line item number (CLIN) for delivery to FOBs that had been inexplicably left offofthe D09) (R4, tab 9 at 1-4). Apparently, because offunding constraints, the number ofRLBsprovided by DO1neededto be reduced in orderto accommodate the added delivery costs (R4, tab 6 at 1 (Relyant noting that, absent increased funding, the number ofRLBs would need to bereduced)). Theparties also decided to "incorporate mechanical and window changes into CLIN 0002 unitpricing" (R4, tab 24 at 2). Thus, on 2 and 3 April 2009, theparties executedbilateral ModificationNo. POOOOI to DOI thatreducedthe number ofRLBs provided and installedbyRelyant from nine to six, changedthepricing ofthe RLBs to some degree, amended the SOW, and added an unpriced CLIN (with a "notto exceed" amount) for transportation ofthe RLBs to FOB Sharana (id. at 1-3). The portion ofthe SOWthat required the drywall/insulation combination remained unmodified bythis change order (see generally R4, tab 24). This modification also included a "release ofclaims," stating that the modification constituted "a full, complete and final accord and satisfaction" ofall claims "attributable to the changes contained herein orthe events that give rise to them" (id. at 4). '

III. Delivery Order 2 and Others

On24 December2008, the Army awarded to RelyantDOs 2 and 3 for the delivery and installation ofone and two more RLBs, respectively, at Bagram (R4, tabs 17-18). Three days later, on 27 December2008, the Army awarded D04to Relyant for the delivery and installation oftwo additional RLBs at Bagram (R4, tab 19). The RLBs orderedbythese DOs were all two stories tall (R4, tab 17 at 1-2, tab 18 at 1-2). Two additional DOs (5 and 6) were issued on 1February 2009 for the

9 Though this CLINreferenced transportation from Bagram to Sharana (see R4, tab 1 at 4), the parties understood that transportation ofRLBs to Sharanawould not necessarily go through Bagram. They understood that what was beingpriced by this CLIN was the cost differential ofshipping RLBs to Sharana from Turkey,
versus the less expensive option ofshipping themto Bagram from Turkey (tr. 2/106-07, 134-36). 4installation oftwo more RLBs at Bagram each (see R4, tab 268 10 at 2), butthese, like DOs 3 and 4, have no bearing upon this appeal. In sum, the government ordered a total of 15 RLBs from Relyant, 6 ofwhich came from DO1, one from D02.

IV. Delivery ofthe RLBs, Government Concerns, and the FirstArticle Test of the RLB Delivered to FOB Sharana

Manufacture ofthe "cans" 11 in Turkey began sometime in late 2008 or early 2009 and the first ofthem were delivered to Sharana sometime in early April 2009, with their first mention in the record being found in an internal Army email, dated 7 April 2009 (see R4, tab 255 at 330). This email discussed the planning ofa government inspection ofRLB cans delivered to Sharana. Although government officials believed these were non-compliant with the contract for several reasons, including their being damaged during shipping, 12 Relyant believed it could repair these (see id.).

DO1, as noted above, required delivery ofa first article RLB for testing at Sharana, consistent withthe contract's requirement for first article testing. D02, however, required the delivery ofan RLB to Bagram. Although the normal, prudent
course ofaction for a contractor like Relyant mighthave been to complete the FAT for DO1 at Sharana first andthen constructthe cans for subsequent RLBs, because of scheduling pressure for D02, Relyant felt that it could notwait to pass the FAT before it began shipping cans for later RLBs to Bagram (tr. 2/28). Consistentwiththe parties' desire to expedite matters, Relyant and the government came to an agreementthat, rather than require a FAT for each DO (as requiredbythe original contract), passing the FAT for the DO1RLB would be sufficientto meet FATrequirements for subsequent DOs (see tr. 1/52-53). Thus, on 21 May 2009, they executedAmendment 1to D02to make this change tothat delivery order (this change also explicitly adopted the FAT clause into the delivery order as required by the contract) (R4, tab 36), and effected the change contract-wide through change Modification No. P00004 to the contract, executed on 18 June 2009 (R4, tab 246).

Part ofthe motivation for simplifying the FATprocedures was the issue of progress payments under the contract. Under the FAT clause, the CO believed that no partial payments could be made to Relyant on a DO until after an RLB for that DO

10 The government's 12 hearing exhibits are renumbered and referenced herein as Rule 4, tabs 265 through 276. 11 A "can," as used here, refers to a shipping containermodified for use as an RLB component (tr. 1/195-96). 12 There was testimonythat some ofthe damage came from bullets during an ambush ofthe convoy that shipped the cans to Sharana (tr. 2/194-95).
5

### passed the FAT (tr. 2/32-33). Relyant reasonably sought reliefso that it could obtain cash flow to support its work on the project (see, e.g., 

### R4, tab 41 at 2).
According to Relyant, the first cans were delivered to Bagram (at the "wounded warrior" site 13) 

### on 20 April 2009 (R4, tab 249). This is consistent with a 21 April 2009 email from Air Force First Lieutenant (lLt) Aaron Zorn, the COR at Bagram to Captain (Capt) Ron Hilliard (the CO at the time) and others in the government which Relyant now asserts supports its claim ofsuperiorknowledge. We do not read this email the same way that Relyant does (more about this later), but reproduce it in full here because ofthe importance Relyant now places on it:

(R4, tab 250) Gentlemen,
[Relyant] made a number ofchanges to the IDIQ design for the buildings in Sharana. The "government"there okayed these changes. From that point, they began construction on our containers with the new mods. They discussed these mods with us 2 months ago. Forthe mostpart, these changes made sense, butwe asked themto resubmit every change they made so that our team could bless them off. They have yet to send us any documentation ofthe changes and now the cans are here. I have mentioned this before to everyone (my bosses, CaptainMoore and I'mnot sure ifI mentioned it officially to CaptHilliard). The answer was "we'll deal with it when they get here." Well, they're here
now. How are we goingto go about accepting them? For example, the walls are not drywall. They even brought us a sample to a meeting. We said we agreed that the material had some advantageous qualities, but asked that they provide paperworkto officially get them approved. In

### the process, they would be required to provide the fire ratings ofthe material. What ifit's no good now? Are we going to make them rip out the walls? We need to discuss how we're going to tackle this.

13 

### The "wounded warrior" site was the location for the D02 RLB at Bagram (tr. 2/137, 144). 6This email highlights a contract administration problemthathad been brewing for some time: unauthorized decision-making relating to the SOW. Both Sharana and Bagram had FieldEngineering Teams (FETs) tasked with overseeing the implementation ofthe RLB construction efforts from the government's side (tr. 3/10). The FET in Bagram, however, can bestbe described
as being seniorto the SharanaFET, since it had draftedthe original SOW and was the primary resource oftechnical expertise for the CO (id.), who alone hadthe authority to amend the SOW (tr. 3/11). Nevertheless, in their (understandable) desire to solve problems and get RLBs completed, the SharanaFET appears to have prematurely agreed to changes to the SOWwithout gettingproper approval from the CO (tr. 3/19-20). Captain (Capt) Timothy Moore, the CO who was stationed at Bagram, took action to rein this in once it came to his attention and raised it in a meeting with Relyant there (tr. 3/20-21) and on other occasions (tr. 3/23-24). The pointwas further made in an email sent by the Sharana CORto Relyant on 6 October 2008, where it was underscored that responses to requests for information that could potentially affect future DOs and could also affect requirements for all contractors would be coordinatedthrough Capt Moore at Bagram (R4, tab 30 at 3-4).

After overcoming a number ofchallenges, including its use ofthe wrong standard for electrical wiring (R4, tab 55 at 1-2), Relyant passed the FAT at Sharana
on 25 August 2009 (R4, tab 62). According to testimony by

### Mr. Smith, Relyant's CEO, who spent approximately three weeks at Sharanato be onhand for the FAT, the governmentpersonnel conducting the tests at Sharanamade no objection, in his presence, to the use ofthe sandwichpanel in lieu ofthe drywall/insulation combination (tr. 2/148-49). 

### Mr. Smith noted that the government official overseeing the FAT at Sharana, Lieutenant Colonel (Lt Col) Herrington (who was the CORat that location (tr. 1/39)), musthave been aware that they were usingthe sandwich material, but there was no testimony that the subject was ever specificallyraised to his attention (tr. 2/149). Ultimately, around 22 August 2009, Lt Col Herrington informed 

### Mr. Smith that Relyant's RLB in Sharanahad passed the FAT (tr. 2/148-49; R4, tab 62). Upon Lt Col Herrington's recommendation, the CO, Ms. Pleasant, 14 formally accepted the results ofthe FAT on 25 August 2009 (R4, tabs 62, 63).

V. Relyant's Request to Use the Sandwich Panel in Deviation from the SOW Despite allowing Relyant to pass the FAT at Sharana in late August 2009, the CO had rejected the material substitution ofthe sandwichpanel for the insulation/drywall earlier that same month. Relyant's efforts to obtain approval for the

14 On 22 April 2009, administrative control ofthe contract onthe government side passed from Afghanistan, where CaptHilliard hadbeenthe CO, to the Rock Island Contracting Center (RICC) in Illinois whereMs. Pleasantbecame the CO, holdingthatrole through November 2009 (R4, tab 26; tr. 1/38-39).
7substitution began almost a year earlier. On 1November 2008, Relyant submitted a writtenrequestto then CO, Capt Moore, to substitute the sandwichpanel for the walls and ceilings, as opposed tothe drywall/insulationrequirement contained inthe SOW (R4, tab 273 at 3-5). This request was likely discussed with CaptMoore before it was submitted, although he has no independentrecollection ofit (tr. 3/15). There is evidence thatthis initial request was lost due to a computer systems crash on the part ofthe government in November 2008 (tr. 3/59; R4, tab 273). In any event, as will be discussed shortly, there is nopersuasive evidence thatthe request was ever granted by the CO, while there is significant evidence that it was not granted.
Relyant claimedto have re-sent the substitution request to the government shortly after being informed ofthe computer crash (see R4, tab 257 at 483), but there was no evidencepresented at the hearing from either Relyant orthe government to support that assertion. Contemporary evidence (in the 21 April 2009 email from lLt Zorn discussed above (R4, tab 250)) supports a finding thatthe government
was waiting for Relyant's resubmittal. The first substantiatedre-submission ofthe request appears in a 22 April 2009 email from Relyantto the governmentinwhich Relyant forwarded the 1November2008 substitution requestto the government (R4, tab 257). 15 Relyant sent a follow-up email on 30 April 2009 asking for "information concerningthe submittals" and statingthat Relyantwould "need documentation to proceed" (R4, tab 29). On 12 May 2009, Relyant again raised the issue in an email to lLtZorn, statingthat, "we need approval ofthe submittals I sent some time ago to prevent delays in the actual assembly

..

### .! have nothad a reply otherthanthat it is being looked into" (R4, tab 33). lLtZorn replied to this email the next day, stating in part:

As far as submittals are concerned, the FET has okayed all ofthem, but RICC is going about making it official. I'm not sure whatthis process includes. They thought it

was already handled, butthey were referring to the main 3 mods that came down. I'm not sure ifI can give youthe go ahead- I wouldn't wantto direct you and then something change. At least, so your mind is at ease, the FET has okayedthose changes. Thanks for your continued aggressiveness onthis projectexecution.
(R4, tab 34 at 1)

15 The author ofthis email madethe statementthathe hadpreviously sent another copy ofthe substitution request to the government afterthe November computer crash, but, as noted above, there is no other evidence ofsuch a submission. 8There is no documentation in the record thatthe subject arose again until 23 July 2009, when lLtZorn informed Relyantthat the material substitution request needed to be submitted on a different form (R4, tab 237 at 41).

Inresponse to this request from the government, on 30 July 2009, Relyant forwarded to the CO an "AF IMT 3000" Material Submittal form, seeking approval to utilize the sandwich panel (R4, tab 248). Consistent with the recommendation made by lLtKatherine Schultz (who hadjust succeeded lLtZorn as COR at Bagram (see R4, tab 245 at 2)), it was rejected by the CO, Ms. Pleasant, on 5 August 2009 (R4, tab 248). lLt Schultz had noted that Styrofoam (which she believed to be part ofthe panel) was combustible and could bum quickly ifthe fire retardant additive to the material were overcome by a larger fire, and that the sandwich panels would not meet the one-hour firewall requirement in the contract (id. at 3).

The evidence presented by Relyant to support its allegation that an authorized representative ofthe government had earlier agreed to the material substitution was not persuasive. Atthe hearing, Relyantpresented the testimony ofMr. Creed Williams, its project manager at Bagram, that "one ofthe first contracting officers

...before Captain Moote" had approved the sandwichpanel substitution relatively early on in contract performance (tr. 1/120-22). Mr. Mills, Relyant's project manager at Sharana, also testified to his "understanding" that CaptMoore had "signed off' onthe substitution request before issuing D02 (tr. 2/160). Mr. Williams' testimony was rather vague and appeared to be based upon what Mr. Mills hadtold him, notwithstanding his statement that he had "no question" thatthe approvals had been submitted (tr. 1/121). Mr. Mills' "understanding" ofwhat CaptMoore (as opposed to the CO before CaptMoore, whom Mr. Williams testified about) had agreed to had an even less firm basis than Mr. Williams'. It would notbe inconsistent with Relyant's general corporate belief that, in making the contract award to Relyant, the government adopted its technical proposal (see id.). Tothe extentthat "the government" at Sharana had "Okayed" the changes, as stated in lLtZorn's 21 April 2009 email quoted above (see R4, tab 250), that email is most consistentwith unauthorized personnel making such statements, especially in light ofthe email's further statements that Relyant had been directed to submit a formal substitutionrequest months earlier, which had not been forthcoming at the time ofthe email (see id.). Although we do not questionthe sincerity ofthese witnesses, we do find theirtestimony onthis matterto be unconvincing.
Indeed, overwhelming evidence supports a finding contrary to this testimony. First, Capt Moore testified at the hearing that he did notrecall approving the substitution request (tr. 3/16). This is consistentwith the contract documents reflected in the Rule 4 submission, which includes Modification No. POOOOl to the contract (by numbering convention, the first modification), dated 23 December 2008 (R4, tab 15), followed next by Modification No. P00002 to the contract, dated 22 April 2009, which changed the contracting office (R4, tab 26). Ifthere had been any written change after

9POOOO 1, butbefore the 22 April 2009 modification, it would have received the P00002 numeration and the 22 April modification would have received a later number. Further, ifCapt Moore or anybody else in the government had approved the substitution, we would expect that Relyant couldproduce documents stating as much; it never did. 16 Moreover, ifthe two Relyant managers had actually seen such approvals, we would expect them to have made some sort ofstatement to the government, when they resubmitted their substitution requests in April and July 2009, that Capt Moore or somebody from the government had already approved them. Instead, they were submitted as ifthey had already been provided to the government but not acted upon (see R4, tab 257). Indeed, the notion that the submittals had been previously submitted, but not acted upon, is inherent in the correspondence from Relyant in April through June 2009, discussed at length above. This indicated that Relyant was waiting for the government's approval ofits submittals, including the 12 May 2009 statement that, "Ihave not had a reply other than that it is being looked into." (R4, tab 33) Thus, we conclude that this is whathappened here, and the government did not approve the deviation.

On 10 August 2009, Relyant sent a letter to the CO informing her that it would not resubmitthe submittals, butwould, instead, forward the cans from Bagramto Sharana, where they were considered to be acceptable (R4, tab 249). 17 The record does not reflect what, ifany, response CO Pleasant made to this letter, but apparently she permitted noncompliantRLBs to be accepted at Sharana, 18 and all six RLBs built at Sharana used the sandwich material (tr. 2/147). Indeed, as noted above, the cans

16 As written "evidence" ofthe submittals having been approved, Relyant's post-trial briefreferences pages oftab 237 to the Rule 4 file (app. br. at 5). Itturns out that tab 237 is Relyant's claim to the CO, and the citedpages are Relyant's narrative assertions ofwhat happened during contract administration. Needless to say, the evidentiary weight ofunsubstantiated assertions contained within a contractor's claim is nil. 17 Just as we would have expected Relyant to refer to any prior government approvals ofmaterial substitutions when it resubmitted its requests in April and July 2009,
we would also expect that there would be some reference to this key fact in this letter ifithad actually happened. Instead, the letter makes no such assertion, lending further support to our conclusion that it never did. 18 There is no evidence explaining why noncompliant RLBs at Sharanawere accepted and others, at Bagram, were not. There is anecdotal evidence, though, that housing shortages in Afghanistan were compelling the governmentto accept otherwise inadequate buildings made by other contractors (R4, tab 42 at 2). That housing shortage was a reason thatLt Col Herrington (who was the COR at Sharana) did not recommend terminating Relyant's contract in April 2009, at
a time he believed they were delinquent in providing the RLBs (R4, tab 260 at 650-51). 10previously delivered to Sharana (which used the sandwich panel) were allowed to pass the FATjust a few weeks later.

The cans at Bagram were, in fact, shipped to Sharana, beginning in August 2009 and continuing throughthat October (R4, tab 86 at 2, tab 237 at 12, tab 247). Relyant then changed the process ofmanufacturing the cans for the remainder ofthe contract (the five RLBs to be erected at Bagram under DOs 2, 3, and 4), shipping drywall to Afghanistan and having much ofthe work finishing the cans performed there (tr. 2/151).

VI. SubsequentAmendments to D02 Shortly after Relyantpassed the FAT, the parties agreed to change portions ofthe SOW ofthe contract going forward and to apply those changes to D02 and other, later delivery orders. On 11 September 2009, the parties executed Modification No. P00007, a bilateral modification to the original contract which incorporated changes into the SOW for the original contract and to amend the prices ofseveral CLINs (R4, tab 69). Onthe same day, they executed related bilateral modifications to DOs 2, 3, and 4 applying the changes in the SOW and in the price reflected in P00007 to these DOs (R4, tabs 70-72). DOI was unchanged, and the changes tothe SOW did not affectthe pre-existing requirement for the drywall (id.). None ofthese changes included any general releases ofclaims (id.).

The delivery dates for DO1 and D02 changed as well. Beforethe acceptance ofthe FAT, on 14 and 15 July 2009, the parties executed Modification 2 to DOI to extend the first article andproduction due date ofthe first RLB to 29 July 2009 (R4, tab 43). Pursuant to this modification, the remainder ofthe RLBs required by DO1would be delivered in approximately two-week increments starting on 28 August 2009, to be completed by 22 October 2009 (id. at 2). Although there are no further contract modifications extending the period ofperformance for DO1in the evidence before us, the final RLBs under that DO (the fifth and sixth ones) were not completed and accepted by the government until 19 July 2010 (R4, tab 212 at 5, 7).

On 13 and 19 October 2009 the parties executed Modification No. P00004 to D02, which extended the period ofperformance for D02 from 30 September 2009 to 3 January 2010 (R4, tab 88 at 1-3). This modification included no general release ofclaims (id.). By ModificationNo. P00005 to D02, dated 3 February 2010, the CO granted Relyant an additional 45 days (until 21 February 2010) to complete the DO (R4, tab 140). Again, this modification included no release ofclaims (id.). The RLB was, in fact, completed and turned overto the government on 17 March 2010 (R4, tab 172).

11VII. Relyant's Claim to the Contracting Officer

On 23 January 2015, Relyant submitted a document captioned, "request for equitable adjustment" to the CO (R4, tab 237 at 1). We refer to this as "Relyant's claim," because it included a "total claim" amount of$1,005,051 and included certification language along with the signature ofRelyant's vice president, 

### Mr. Biles (R4, tab 237 at 16). 19 Although Relyant's claim initially statedthat it was for extra costs incurred on DOs20 1and 2 (R4, tab 237 at 1), in response to a question from the CO, Relyant explained that all ofthe additional costs should be ascribed to D02 (R4, tab 239).
Relyant's claim included extended factual recitations 

### (see R4, tab 237 at 1-5) and whatwe would characterize as an overview ofits entitlement to compensation (id. at 6-7). Specific legal theoriesjustifying its entitlement to damages followed (id. at 7-10).

The first legal theory expressed by Relyant in support ofits claim was contained in
a section labeled, "Breach," and was that the government wrongly rejected the D02 material submittals, which it alleged had been approved for DOI (R4, tab 237 at 7-8). Although Relyant's particular theory about why this alleged inconsistency constituted a breach ofcontract is not explicitly clear, this "Breach" section ofRelyant's claim went on to argue that the government failed to disclose, for approximately 237 days, its superior knowledge that it might not approve the submittals for D02 that ithad for DO1 (id. at 8). Earlier inthe factual section ofRelyant's claim, it alleged that government staffat Bagram had informed Relyantthat the governmentwould accept the specifications that Relyant alleged had been accepted at Sharana (id. at 4). Relyant's "overview" ofthe claims included the factual allegation that lLtZorn had informed Relyant, on 13 May 2009, that the submittals "looked good and would be approved" (id. at 7).

The second section ofRelyant's claim, labeled "Change," argued that the rejection ofthe D02 submittals constituted a material change to the contract since they had previously been accepted for DOI (R4, tab 237 at 8-9).

19 A document entitled as a request for equitable adjustment can be considered a claim underthe Contract Disputes Act (CDA), regardless ofits title, ifit otherwise meets the requirements ofa claim. 

### Reflectone, Inc. v. Dalton, 60 F.3d 1572, 1577-78 (Fed. Cir. 1995). The government has not alleged that Relyant's claim failed to meet the CDA's requirements and we perceive no basis to question our jurisdiction. 20 Relyant's claim and associated correspondence consistently refer to the DOs as Task Orders (e.g., R4, tab 237 at 1 ), which we have observed in some government correspondence as well. We correctthatrelatively trivial misnomerthroughout. 12Relyantthen asserted that the government was responsible for delay damages coming from its failure to act in a reasonable time to approve the D02 submittals and for failing to have the "lay down areas" at Bagram adequately prepared for the cans sent there (R4, tab 237 at 9). Relyant elaboratedthat the government's failure to timely act upon the submittals caused itto suspend its work at Bagram until they were rejected (id. at 10). Otherdamages argued to be due were the $381,875 in burdened costs of shipping the D02 cans to Sharana from Bagram (id. at 12); the $172,004 in burdened labor costs ofindividuals at Bagram from April 2009 through August ofthe same year (id. at 13)21 ; and $417,064.22 in damages from unabsorbed overhead (id. at 15). Combined with $34,108.50 interest at the time ofthe claim and $34,715.89 profit on the shipping costs, Relyant calculated damages of$1,005,051 (id. at 15).

The CO denied Relyant's claim on 13 November 2014 (R4, tab 240) and this timely appeal, docketed on 30 January 2015, followed.

PRELIMINARY MATTERS

Before we can reach the merits ofthis matter, we address three motions whose resolution will affectthe legal theories governing our consideration ofthis appeal and the evidence thatwe consider in resolving it. First, we considerRelyant's motionto amend its complaint, which we grant in part and deny in part, andthe related motion by the government to amend its answer, which we grant. Nextwe consider Relyant's motion to impose an adverse inference upon the government for its inability to find and produce certain documents in discovery. We deny this motion.

I. The Parties' Motions to Amend

On 20 October 2016, afterthe close ofdiscovery, Relyant filed a motion to amend its complaint (app. mot. to amend). Although the amendment purported to be only for purposes of"clarifying certain aspects" ofits claims (see app. mot. to amend at 1 ), in fact, it added eight new paragraphs offacts and five new claims for relief(see id., attach. (redlinedcomplaint) (amended compl.). Indeed, Relyant's initial complaint filed with the Board is rather Spartan withrespect to elucidating the theories for which it asserts it is entitled to relief, alleging generally thatthe government breached its contractby wrongfully rejecting the RLBs (see complaint, dated 27 February 2015). Theproposed new complaint includes far greater emphasis
on the actions ofthe government in allegedly knowing that Relyant was going forward with using the sandwichpanel and notraising any concerns with Relyant about it for a

21 According to Relyant's claim, this amount canbe broken down to $20,188 for the month ofApril; $49,126 for May; $33,925 for June; $43,153 for July; and $25,612 for August (R4, tab 237 at 13). These figures were supported with uncontroverted testimony during trial (tr. 1/178-81). 13number ofmonths, and misleading Relyant into thinking that it would be approved (amended compl. 

### 1121-26). The additional causes ofaction that went significantly beyond those in the original complaint included a breach ofthe implied duty ofgood faith and fair dealing (id. 

### 1163-67); failure to disclose superior knowledge (thatthe government would not acceptthe sandwich panels at Bagram) (id. 

### 1168-73); and promissory estoppel onthe notion that the governmenthad led Relyant to believe that it would approve its use ofthe sandwichpanels (id. 1174-77).

The government opposed, in part, Relyant's motion to amend, arguingthattwo ofthe additional causes ofaction (superiorknowledge and promissory estoppel) were notbaseduponthe same operative facts as in Relyant's claim to the CO, thus, we did notpossessjurisdictionto consider these (gov't opp'nto app. mot. to amend). We did not decide the motion at the time that it was first briefed because wejudged it unnecessary priorto the hearing and did not wishto delay this appeal by issuing a jurisdictional decision. Theparties were instructed to presentthe same evidence that they would ifthe motion to amend were granted.

On 31 October 2016, 11 days after Relyant's motion to amend, the government filed a motion to amend its answer to add the affirmative defenses ofaccord and satisfaction, release, and waiver (gov't mot. to amend answer). Thejustification for this filing was primarily that the requested amendment was permissible and that it was necessary as a matter offairness after Relyant's motion to amend its complaint. The parties were instructed to proceedunderthe assumption that this motion would be granted.
Subsequentto the hearing in this matter, at the direction ofthe presidingjudge, Relyant filed a renewed motion to amend its complaint, which (along with the government's response) was materially the same as the first motion. The government also submitted a renewed motion to amend its answer, which Relyant opposed onthe ground that it hadnot conducted discovery necessary to defend itselfagainstthese new defenses (app. opp'nto gov'tmot. to amend answer).

UnderBoardRule 6(d), we generally "permit eitherparty to amend its pleading upon conditions fair to bothparties." Indeed, under the Rule, we maypermitthe consideration ofissues "withinthe proper scope ofthe appeal, butnotraised bythe pleadings." And, though notbinding upon us, we do lookto FED. R. CIV. P. 15(a)(2), with its liberal allowance ofamendments to pleadings for guidance uponthat matter. Beyley Constr. Group Corp., ASBCANo. 55692, 08-2 BCA 133,999 at 168,134. In short, we will not deny a request to amend without a goodreason. Id.
Futility, however, is a good reason to deny a motion to amend a pleading, see, e.g., Foman v. Davis, 371 U.S. 178, 182 (1962), and there is no point in permitting an amendmentto include a cause ofaction over which we do notpossessjurisdiction.

14Here, the government'sprimary argument is thattwo ofthe additional causes ofaction named by Relyant, superior knowledge andpromissory estoppel, are not within the ambit ofourjurisdictionbecause they were not considered by the CO within Relyant's CDA claims. The government is mistaken because the factual underpinnings ofthe arguments were, in fact, presented to the CO.

The seminal case delineating whether a claim submitted to a CO can support
a somewhat different appeal under the CDA is Scott Timber Co. v. UnitedStates, 333 F.3d 1358 (Fed. Cir. 2003). In Scott Timber, the Federal Circuit held that appeals ofCO final decisions "do[] not require rigid adherence to the exact language
or structure ofthe original administrative CDA claim [so long as they] arise from the same operative facts, claim essentially the same relief, and merely assert differing legal theories for that recovery." Id. at 1365; see also MaerskLine, Ltd., ASBCA Nos. 59791, 59792, 16-1BCA136,405 at 177,512.
Here, the operative facts in Relyant's claim fairly covered the operative facts in the two additional causes ofaction and the reliefsought was the same. First, with respect to the superior knowledge cause ofaction, the claim (as noted in the Facts section, above) madejust such an allegation, alleging thatthe government had failed to inform Relyant that it mightrefuse to allow the revised submittals. Thus, we find that the superior knowledge cause ofaction was "essentiallythe same as presented to the CO," Scott Timber, 333 F.3d at 1366, and that we havejurisdictionto consider it. Likewise, Relyant's new "promissory estoppel" cause ofaction is bottomed upon the factual allegation that the Bagram FEThad either approved orpromised to approve the submittals. Given the allegations made in Relyant's claim that lLtZornhad made similarrepresentations to Relyant and that CORs at Bagram informed Relyant that its sandwich panel would be acceptable, we find the CO was presented similar enough facts in Relyant's claimto support thejurisdictionalrequirement thatthe facts underpinning the promissory estoppel cause ofaction were presented to the CO.

That does not end ourjurisdictional inquiry, however. Though not raised by the government, we cannotpermit Relyantto raise the promissory estoppel cause ofaction because that theory requires a contract implied-in-law, overwhich we do notpossess jurisdiction. See Protecting the HomelandInnovations, LLC, ASBCA No. 58366, 13 BCA 135,398 (promissory estoppel is a contract implied in law); RGWCommunications, Inc., d/b/a Watson Cable Co., ASBCANos. 54495, 54557, 05-2 BCA 132,972 at 163,333-34 (no Boardjurisdiction over implied-in-law contracts); see also P.J. Dick, Inc. v. GSA, CBCANo. 461, 07-1BCA133,534 (Boards ofContractAppeals have nojurisdiction over promissory estoppel claims).
Thus, we possessjurisdictionto consider Relyant's amended complaint, except for the claim ofpromissory estoppel. Moreover, the government has identified no unfairprejudice to it by our consideration ofthe complaint nor any other reason that
15we should not allow the amendment. Accordingly, under the liberal standards that apply to us pursuantto BoardRule 6(d), we grant Relyant's motion to amend its complaint, except for count VI, promissory estoppel.

With respect to the government's motionto amend its answer, Relyantpresents
no persuasive basis to deny it, especially since we are largely granting Relyant's motionto amend. Atmost, Relyant argues that it should have been able to take discovery upon the parties' intent regarding the release language, whetherRelyant was under economic duress when it agreed to the modifications with the release terms within them, and why the parties moved forward with performance after the delays (app. opp'n to gov't mot. to amend answer). These are notpersuasive reasons to deny the government's motion because the discovery already sought and obtained by Relyant would embrace much ofwhat it now claims that it would have sought to address these defenses, and the remainder (such as information supporting the economic duress claims) consists ofknowledge within its ownpurview, not the government's. Thus, with respect to fairness to both parties and under the time honored legal maxim that what is good for the goose is good for the gander, we allow the government to amend its answer.

II. Relyant's Motion Seeking an Adverse Inference

A few days priorto the original trial date set inthis matter, the government providedto Relyant several emails that had been in the personalpossession of Capt Hilliard, but had notbeen provided inthe Rule 4 file or earlier in discovery (app. adv. inf. mot. at 2-3; Bd. order <ltd. 3 November 2016). There followed a number ofmotions to delay the trial, to partiallyre-open discovery, and to compel further responses from the government. On 23 November 2016, the government provided approximately 90 more pages ofdocuments to Relyant (app. status report <ltd. 2 December 2016). In the end, we extended the trial date, allowed a deposition of Capt Hilliard, and directed the government to further search for missing emails. We denied Relyant's request for additional deposition ofCaptMoore (about whom, no new material evidence was disclosed by the new emails) and denied Relyant's motion to compel government actions beyond those already being undertaken (see Bd. orders <ltd. 3 November 2016, 15 December 2016, 12 January 2017). The government ultimately represented, in the pre-hearing phase ofthis appeal, that it had been unable to find any retained emails from Capt Moore or CO Pleasant that were material to the appeal, likely because their email accounts for the relevant time periods were not preserved by the government (gov't opp'nto app mot. for limited reopening of discovery and mot. to compel <ltd. 6 January 2017).

AtRelyant's request, wepermitted it to file a motion for adverse inference against the government afterthe hearing for its alleged discovery failures. Inparticular, the motion sought a finding "that Capt. Moore's emails (and other electronic
16documents) and the information in the paper contract files would support Relyant's claims, including a finding that Relyant's substitution requests dated November 1, 2008, were approved by the contracting officer." (App. adv. inf. mot. at 6) Relyant further argues that an adverse inference is merited due to Capt Moore's "questionable and inconsistent" testimony at the hearing. In addition to the adverse inference, Relyant seeks attorney fees in this motion. (Id.) The government opposed the motion (gov't opp'n adv. inf. mot.) and Relyant filed a reply to this opposition (app. reply adv. inf. mot.).

To evaluate the motion, we must first determine whetherthere were documents notprovided to Relyant in discovery to which it was entitled. We can readily dispose ofRelyant's allegations thatthere were missing "paper" documents. The only basis for this allegation is explicated in Relyant's reply briefand consists ofa citation to testimony that a paper contract file existed in Afghanistanthat might nothave been maintained as well as one kept in the United States (app. reply adv. inf. mot. at 2 (citing tr. 2/51-52, 3/39-41)). Relyant has cited no evidence thatthis paper file was not reproduced with the initial Rule 4 file, which, to all appearances, includes the contract modifications and otherpaperwork that we would expect to have been maintained in such a file.

With respect to CaptMoore's and CO Pleasant's emails, although it appears very likely that there were emails that may have been responsive to discovery requests ifthey had been in the government's possession at the time that they were requested, a review ofthe declarations attachedto the government's opposition to Relyant's motion leads us to conclude that, by late 2009 for Capt Moore, and sometime in early 2011 for CO Pleasant, the emails were no longer in the possession ofthe government. CaptMoore's declaration explains that he did nottake any electronic files withhim whenhe departed Afghanistan inMarch 2009 (gov't opp'n adv. inf. mot., attach., Moore decl.), and Lt Col William Brown's declaration thatthe
servers which held government emails in Afghanistan did notretain email accounts beyond45 days ofemployees' departure from Afghanistan (see gov't opp'n adv. inf. mot., attach., Brown decl.), taken together, demonstrate that, after May or June 2009, CaptMoore's emails were likely unretrievable. CO Pleasant's declarationthat she retired from federal service on 1January 2010 after which she had no access to her government email (gov't opp'n adv. inf. mot., attach., Pleasant decl.),22 combined with Mr. Anthony Crossen's declaration that retirees' email accounts at the Rock Island Arsenal (where CO Pleasantworked) are deleted within 45 days ofretirement and archived for only a year afterwards (gov't opp'n adv. inf. mot., attach., Crossen decl.) convince us that, after March orApril 2011, CO Pleasant's emails were likely

22 We referhere to CO Pleasant's access to the government email account she used as a CO, and not any subsequent email account she may have used as a rehired annuitant in a non-CO related capacity. 17irretrievable. Relyant's replyto the government's opposition does not dispute the facts presentedbythese declarations, exceptto argue thatrecipients ofemails from Capt Moore shouldhave had their email searched (app. reply adv. inf. mot. at 1-2). These potential recipients were also in Afghanistan, however, andwould have hadtheir email accounts deleted upon their departuresjust as CaptMoore did.

The first claim submitted to a CO upon this contract (which was later appealed in ASBCANo. 58172, 16-1BCA136,228)was submitted on 15 December2011, denied by the government on 20 March 2012, and appealed to the Board on 13 June 2012 (see Bd. corr. file, ASBCA No. 58172, notice ofappeal and attachments).

With these salient facts in mind, we tum to the law ofspoliation, upon which Relyantrelies to obtain the remedy it seeks. "Spoliation refers to the 'destruction or material alteration ofevidence orthe failure to preserveproperty for another's use as evidence in pending orreasonably foreseeable litigation."' ADTConstr. Group, Inc., ASBCA No. 55358, 13 BCA 135,307 at 173,324 (quotingHynix SemiconductorInc.

v. RambusInc., 645 F.3d 1336, 1334 (Fed. Cir. 2011)); see also Micron Technology, Inc. v. RambusInc., 645 F.3d 1311, 1319-20 (Fed. Cir. 2011). To obtain sanctions for spoliation, the movingparty mustprove:
(1) [T]hepartyhaving control overthe evidencehad an obligation to preserve itwhen it was destroyed or altered; (2) the destruction or loss was accompanied by a "culpable state ofmind;" and (3) the evidence thatwas destroyed or altered was "relevant" to the claims or defenses ofthe party that sought the discovery ofthe spoliated evidence, to the extent that a reasonable factfinder could conclude that the lost evidence would have supported the claims or defenses ofthe party that sought it.
ADT, 13 BCA 135,307 at 173,324-25 (citations omitted); see also Ensign-Bickford Aerospace & Defense Co., ASBCANo. 57929, 13 BCA 135,322 at 173,385. With respect to the first elementhere, whether a party has an obligation to preserve evidence, this is determined by whether litigation is "pending orreasonably foreseeable." Micron Technology, 645 F.3d at 1320. With respectto the third element necessary for obtaining sanctions, it is essentially a question ofprejudice, and the movingparty has the burden of"com[ing] forward with plausible, concrete suggestions as to what [the destroyed] evidence might have been." Id. at 1328 (citations omitted). When bad faith is proved, however, there is a strong inference that the destroyed evidence would have beenunfavorable to the party destroying it. Id.
Here, it is evident to us that the destruction ofany email occurredbefore litigation was reasonably foreseeable. The government argues that the key date for
18determining foreseeability is when the appeal was filed before the Board (gov't opp'n adv. inf. mot. at 9). We are not so certain, and entertain thepossibilitythat the better date could have been when the claim was submitted to the CO or when the claim was denied. In any event, we need not decide that issue today, because even ifwe assume that the duty to preserve evidence was triggered by the submission ofa claim to the CO, that event occurred in December 2011, afterthe emails had likely been permanently deleted under standard protocol. Thus, there is no spoliation here and we could deny Relyant's motion without further analysis.

We do note, however, that even ifthe governmentnegligently allowed the email to be destroyed at a time that it had a duty to preserve it and that such negligence constituted a "culpable state ofmind" ( a legal consideration which we do not decide here, although we certainly see no evidentiary basis for a finding ofbad faith), we would find that Relyant has notprovedprejudice ofthe sortthat wouldjustify making the inferences that it requests. Factually, Relyanthas produced no evidence, whatsoever, that wouldpermitus to conclude that the missing emails might support its version ofevents. To the contrary, all ofthe evidence before us supports the conclusion (as discussed in the facts section, above) thatthe emails would have contained no evidence supporting Relyant's desired inference. When we considerthe fact that Relyant, itself, has produced no emails or other documents that should have been in its own possession supporting its allegation that the CO "approved" its proposed changes to the SOW, we are even less inclined to believe that Relyant was wronged: the careful limits placed upon the proper application ofsanctions for spoliation, as discussed in the cases set forth above, make clear the law ofspoliation is not intended to provide an unmerited windfall to a party, contrary to whatthe actual facts ofa dispute support.
Last, Relyant's argument that an adverse inference isjustifiedby Capt Moore's "questionable and inconsistent" testimony at the hearing (app. adv. inf. mot. at 6) is a non-starter. A review ofCaptMoore'stestimony gives us little reason to questionhis sincerity, and those points where his recollection ofevents diverges from that ofother participants to the same events are nothing butthe routine manifestation offlaws in memory typical ofmatters that occurred over seven years prior. They are not material to our decision and do not meritthe (effectively) dispositive reliefrequested by Relyanthere.

DECISION ONTHE MERITS

We may have come to different conclusions regarding the advisability ofusing the sandwich panel ifwehad stood in the shoes ofthe CO in 2009, butwe did not and that is not our role. The facts are thatthe governmentwas within its rights to refuse the sandwich panel, it never actually approved its use, and the contract makes clear that acceptance ofthe FAT does not equal acceptance ofthe change in the SOW.
19Moreover, the government's knowledge that itmightreject Relyant's proposed change tothe contract was no greaterthanRelyant's, giventhat Relyant was also apprised of thatpossibility. We do find, however, thatthe government's waiting for months to make up its mind about the sandwichpanel while Relyantwas left unable to proceed in Bagram caused compensable injury to Relyant, for whichwe award the damages proved by Relyant. Finally, we holdthat the damages that we award were not waived by the bilateral contract modifications referenced by the government.

I. The Governmentwas Within its Contractual Rights to Require Compliance with the SOW at Bagram

As a straightforward matter ofcontract interpretation, the SOWrequired the use ofthe drywall/insulation combination, and the government was entitled to hold Relyantto it, until the contractwas modified, regardless ofwhether it was a good or bad idea. See, e.g., RixonElectronics, Inc. v. UnitedStates, 536 F.2d 1345, 1351 (Ct. Cl. 1976) (the government "canengage a contractorto make snowmen in August, if[it spells] it out clearly"); see also WagnerAwning & Mfg. Co., ASBCANo. 19986, 77-2 BCA

## 1 12,720 at 61,827 (government entitledto strict compliance with contract terms even ifalternative techniques mightbe suitable). The question before us, then, is whetherthe contract's SOWwas ever amended, eitherby the CO orthroughthe government's approval ofFAT. Itwas not.

A. No Contractual AmendmentAllowing Use ofthe SandwichPanel was EverApproved by the CO

Underthe contract, only the CO possesses authority to amend the terms ofthe SOW. Indeed, the CO reiterated this principle to Relyant on more than one occasion,
as discussed in the "Facts" section, above. Even ifa member ormembers ofthe FET at Sharana got ahead ofthemselves (as might have beenthe case), their unauthorized approval is insufficientto change the contract. Federal Crop Ins. Corp. v. Merrill, 3 3 2 U.S. 380, 384 (1947) (companies dealing with governmenttake risk ofensuring the persons they deal with are acting within the scope oftheir authority); see also Winter v. Cath-dr/BaltiJoint Venture, 497 F.3d 1339, 1345-46 (Fed. Cir. 2007) (limits ofauthority to amend contractwhen contract makes clearthat only the COpossesses such authority). As we analyzed in great detail above, we are convincedthat Relyant's allegationthat the contractwas amendedby anunspecified CO is not supported by a preponderance ofthe evidence. Such a finding (notwithstandingthe vague testimony ofRelyant'sproject managers) wouldbe contrary to the greatweight ofthe evidence before us. Accordingly, we holdthatthere was no amendment ofthe SOWto contractuallypermitthe use ofthe sandwichpanel.23

23 Relyant also presents an undeveloped "acquiescence" argument in its opening brief, suggesting that, sincethe governmentknewthat Relyant was using the 20B. The FAT does Not Overrule Contract Specifications
Relyant extensively argues that, by virtue ofapproving the FAT ofRLB cans that utilized the sandwich panel, the government effectively approved an amended SOW (app. br. at 15-16). Not so. To be sure, on the record before us, we find the approval ofthe FATto be inexplicable, and can only speculate as to why it happened. Just as we may only speculate about why the nonconforming cans were apparently accepted at Sharana. Nevertheless, we do notneedto know why the FATwas approved to knowthat the approval had no effect on the terms ofthe SOW. That is because, as noted above, the FAT clause clearly provides in paragraph (b) that, "The notice of

...approval [ofthe test] shall not relieve the Contractor from complying with all requirements ofthe specifications and all other specifications and all otherterms and conditions ofthe contract." This is especially clear since the CO told Relyant that its changes to the SOWwere rejected before it received the FAT results, and Relyant
never acted as ifthe FATresults changed its understanding ofwhat was permitted at Bagram.
Thus, we conclude that the terms ofthe contract's SOWrequired use ofthe drywall/insulation combination and that the governmentnever changed that requirement through a contract modification orthrough the approval ofthe FAT.

II. The Government did NotPossess Undisclosed Superior Knowledge Relyant makes the argumentthat the government failed to inform it that it would notpermitthe use ofthe sandwichpanel, thus breaching the contractby failing to disclose superior knowledge (app. br. at 18-19). This argument founders upon the facts.

The doctrine ofsuperior knowledge is premisedupon the notion that where "the government has knowledge ofvital informationthat will affect a contractor's performance, the government is obligated to share that information." Am. Ordnance LLC, ASBCA No. 54718, 10-1BCA134,386 at 169,787 (citing Helene Curtis

sandwich panel and did not stop it, it tacitly agreed to the contract change (see app. br. at 15). The evidence discussed later in this opinion, regarding superior knowledge, demonstrates that the government never did completely agree to allow the use ofthe sandwichpanel, and it would have beenunreasonable for Relyant to believe the requirement to be "dead." See, e.g., Gresham & Co.
v. UnitedStates, 470 F.2d 542, 554 (Ct. Cl. 1972) (waiver requires party to "reasonably believe[] therequirement to be dead"). The fact that the FAT approval came after the clear, formal rejection ofRelyant's requestto amend the SOWprecludes any argument that FAT approval signaled thatthe SOW requirements were inoperative. 21

### Industries, Inc. v. UnitedStates, 312 F.2d 774 (Ct. Cl. 1963)); 

### see also Hercules, Inc.
v. UnitedStates, 24 F.3d 188, 196-97 (Fed. Cir. 1994). The elements ofthe cause of action, as set forth in 

### Hercules, are that (1) the contractor undertookto perform without vital knowledge ofa fact that affects performance costs or duration; (2) the government was aware that the contractor lacked the knowledge and would not have

· reason to obtain it; (3) any contract specificationprovided either misled the contractor

or did not put it on notice to inquire; and (4) the government failed to provide the relevant information. 24 F.3d at 196; 

### see also Giesler v. UnitedStates, 232 F.3d 864, 876 (Fed. Cir. 2000).
First, the government did not mislead Relyant as to what the SOWrequired when it awarded itthe contract. To be sure, Relyant made the assumption that its alternate sandwichpanel method was approved, butthe contract stated otherwise, and Relyant concededthat its proposal allowed for the possibility thatthe government would choose to stick with the specifications containedwithin the SOW. The government had no reason, atthe time ofcontract award, to believe that Relyant misapprehended the plain language ofthe contract- a matter for which Relyant bears sole responsibility.

As contract performanceprogressed in 2008 through 2009, the government's multiple requests for Relyantto provide submittals with its alternate sandwich panel constructionwouldhave plainly disabused Relyant ofany mistaken beliefthatthe government had approved its sandwichpanel construction. To the extent that Relyant is arguing thatthe governmentwithheld from itknowledge that the government always intended to reject its sandwichpanel design, we find the premise to be unsupported. The only evidence before us is that the government made its definitive decision regarding rejection ofthe sandwichpanels in August 2009, after lLt Schultz became CORat Bagram. All other documents and testimony indicate that the decision was in flux. The 21 April 2009 email from lLtZorn to others withinthe government which Relyant hails as proving that the government was hiding information from it and that the government knew Relyant was mistaken in its beliefs thatthe submittal would be approved 

### (see app. br. at 18), does nothing ofthe sort. Inthe email, lLtZorn makes clearthat Relyant was informed ofthe needto provide submittals (which it had not yet done) and thatthe changes might be approved, but they might not. This is hardly the smoking gun Relyant asserts itto be. The subsequentZorn email to Relyant, on 13 May 2009, in which he informs Relyantthatthe FET had approved the changes, also cautions Relyant againsttaking action prematurely, including the statement: "I'm not sure ifl can give youthe go ahead- I wouldn'twant to direct you and then something change." It may well be that lLtZorn was overoptimistic or simply wrong regarding the FET's approvals; based upon his statement in the same email that he believed the change had already been approved, we surmise that he may have confused other agreed-upon changes to the SOW with the broader notion that all changes had been approved by the FET. Buthis clear statementthatthe CO had not yet approved
22the changes and that he would not direct Relyant to act in case something changed, should have made clearto a reasonable contractor in Relyant'sposition that the government's agreementto change the SOW was not certain. Thus, the government possessed no knowledge superiorto that ofRelyant as thatphrase is interpreted by the law. 24

We note here that although we did not consider Relyant's promissory estoppel claim because it is based upon a contract implied-in-law, ofwhich we possess no jurisdiction, we would have rejected such a claim in any event for the reasons discussed above: it is bottomed upon the notion that lLtZorn misled Relyant, and the evidence supports a much more nuanced view ofwhat he told Relyant.

III. The Government's Failure to Act upon the Request for Submittals for Four Months was a Breach ofthe Duty ofGood Faith and Fair Dealing25
Though rejecting the sandwichpanel was permissible, and we do not find that the government misled Relyant, we do find that allowing Relyant to, figuratively, "twist in the wind" from late April to early August 2009 as the government mulled whetherto allow the sandwich panel was contrary to Relyant's reasonable contract-based expectations. This is actionable as a breach ofthe duty ofgood faith and fair dealing.

The doctrine ofgood faith and fair dealing is based upon the notion that every contract "imposes upon each party a duty ofgood faith and fair dealing in its performance and enforcement." 

### MetcalfConstr. Co. v. UnitedStates, 742 F.3d 984, 990 (Fed. Cir. 2014) (quoting RESTATEMENT (SECOND) OF CONTRACTS§ 205 (1981));


### see also Kelly-Ryan, Inc., ASBCA No. 57168, 18-1 BCA

## ,r 36,944 at 180,030. Pursuant to this implicit duty, each party's obligations "includethe duty not to interfere with the other party'sperformance and not to act so as to destroy the

24 Additionally, ifwe were to find that the promises ofan unauthorized individual that the CO was going to approve a change were effectively binding (as wouldbe the case ifwe were to grant Relyant reliefhere), we would short circuitthe law cited earlier in this decision that allows the government only to incur contractual obligations by the actions ofthose authorized to make such obligations. Needless to say, we would be loathto do so and the facts at bar conclude such a determination. 25 Relyant might have potentially argued that this inaction constituted a delay for whichthe government was liable, without seekingrecourse through the doctrine ofgood faith and fair dealing. 

### See, e.g., Rivera Construction Co., ASBCA Nos. 29391, 30207, 88-2 BCA

## ,r 20,750 at 104,854. Relyant did not make this argument, however, and, given concurrent delays in FAT approval,
we decline to take this approach notrequested by Relyant. 23reasonable expectations ofthe other party regarding the fruits ofthe contract." Metcalf, 742 F.3d at 991 (quoting Centex Corp. v. UnitedStates, 395 F.3d 1283, 1304 (Fed. Cir. 2005)).
Yet, this implicit duty "cannot expand a party's contractual duties beyond those in the express contract or create duties inconsistent with the contract's provisions." Metcalf, 742 F.3d at 991 (quoting Precision Pine & Timber, Inc. v. UnitedStates, 596 F.3d 817,831 (Fed. Cir. 2010)). Thus, the duty "is limited by the original bargain: it prevents a party's acts or omissions that, though notproscribed bythe contract expressly, are inconsistent with the contract's purpose and deprive the otherparty of the contemplated value." Metcalf, 742 F.3d at 991.

Some ofthe tests set forth in the cases above, read in isolation, are not as precise as wewould like, and may appearto leave too much room for an arbitrary drawing oflines to obtainresults deemed "fair"by a reviewing tribunal. One seeming inconsistency is that, ifthe duties cannotbe expanded beyond those set forth in the express contract, how can there be any new duties imposed by good faith and fair dealing? Yet, plainly the point ofthe doctrine is that such duties exist. We resolve this by concluding that the doctrine imposes duties that fall within the broad outlines set forth by the express terms ofthe contract, approximating the parties' intent, as divined by the express terms ofthe contract, for addressing circumstances not specifically set forth by the contract. This interpretation is consistent with theMetcalf court's reference to "faithfulness to an agreed commonpurpose." 742 F.3d at 991 (quoting RESTATEMENT (SECOND) OF CONTRACTS§ 205 cmt. a). As we noted in a pre-Metcalf opinion, the proper inquiry regarding the duty oftenboils down to questions of"reasonableness" ofthe government's actions, see Free &Ben, Inc., ASBCA No. 56129, 09-1 BCA

## ,r 34,127 at 168,742, although we do not holdhere that every unreasonable government action necessarily constitutes a breach ofthe duty.

Thus we tum to the facts ofthis appeal. The doctrine does notpermit us to change the terms ofthe SOW orto punishthe government for its failure to do so: the SOWis explicitly defined by the contract and thus may not be altered bythe implicit duty ofgood faith and fair dealing. Onthe otherhand, though the contract does not specify how long the government will spend reviewing requests to modify the SOW,26 ifthe government's delays in addressing Relyant's requests unreasonably interfered with contract performance, we could find breach.

Atwhatpoint did government inaction on Relyant's requesttum into breach? Laterthan Relyant argues. Although Relyant's first formal request for the relevant change to the SOWwas submitted on 1November 2008, the government's failure to deal with it at that time, given the computerproblems it encountered, is not a breach of

26 Ifit did so, those deadlines would be dispositive. 24the duty ofgood faith and fair dealing. We have found above that the government informed Relyantthat the request needed to be resubmitted and that Relyant did not, in fact, resubmit it until 22 April 2009 (notwithstanding Relyant's assertion otherwise in that 22 April email). Thus, we find that any delay by the government should run from the time that the 22 April 2009 submittal was provided by Relyant, and not earlier. Of course, some period oftime would have been necessary for the government to consider and act upon the submittal. Since lLt Schultz was able to make her recommendation and obtain the CO's concurrence in less than a week in August 2009, we hold that a reasonable amount oftime for approval orrejection ofthe 22 April 2009 submittal would have been the first ofMay 2009 and (in the case before us) further hold that the government's failure to act by then constituted a breach ofthe duty ofgood faith and fair dealing.

The factors that supportthis conclusion overlap to some degree and include that: 1) the requested change to the SOWwas one with which the government was familiar; 2) it was recognized by the government as being reasonable andpotentially in its best interest; 3) the government was aware that Relyant was awaiting its answer for several months in the spring and summer of2009, while Relyant continually prompted it to act; 4) the governmentwas aware that its delay in decision-making was potentially to the detriment ofRelyant in terms ofits incurring additional costs during the waiting period; 5) there were no circumstances thatjustified an extended wait on the part ofthe governmentbefore deciding whetherto permitthe change in the SOW; and 6) the government's decision-making appears to have been able to have been accomplished within a matter ofdays once it turned its attention to the matter. Given all ofthese considerations, the government's failure to act in a more timely manner here was "inconsistentwith the contract's purpose and deprive[d] the otherparty ofthe contemplated value." Metcalf, 742 F.3d at 991. These factors should make clear that
our decision today is very fact-specific. For example, in the event that a contractor requested a change to the SOW for which it had no realistic chance ofapproval, we might be less likely to find a breach ofthe duty ifthe government took an extensive period oftime to resolve it.

We now tumto damages for the contractual breach. "Theremedy for breach of contract is damages sufficientto place the injuredparty in as good a position as it would have beenhad the breaching party fully performed." Indiana Michigan Power Co. v. UnitedStates, 422 F.3d 1369, 1373 (Fed. Cir. 2005) (citation omitted). Thus,
our 1May 2009 date has important implications for the calculation ofdamages due to Relyant. In particular, since the first D02 RLB cans had already been delivered to Bagram before that time, the government is notresponsible for Relyant's costs for transshipping the cans to Sharana after their rejection in August. It also defines the time that the government should be held responsible for extra costs: May through early August 2009. Butthose costs are limited to the costs incurred at Bagram, where two Relyant employees awaited the go-ahead to begin assembly operations.
25Accordingto the evidence presentedby Relyant and not disputed bythe government, that amountwas $151,816 (the $172,004 in burdened labor costs for April through August 2009 minus the $20,188 for the month ofApril 2009). The delay in approval ofthe submittal appears to have hadno impactupon construction at Sharana because the FATthere was not approved until a time in August 2009 after denial ofthe SOW submittals. Since Relyant has not alleged that the FAT was unreasonably delayed and has provided no evidence that it could have proceeded elsewhere priorto the FAT, we conclude that it is not entitled to other delay damages. See, e.g., Melka Marine, Inc. v. UnitedStates, 187 F.3d 1370, 1375 (Fed. Cir. 1999) (no overhead damages when contractor not on standby as a result ofgovernment delay); RexSystems Inc., ASBCANo. 59624, 16-1 BCA 

### ,i 36,350.

IV. Relyant did Not Waive its Rights to Challenge the CO's Actions Here

The government has asserted, through its affirmative defense, that Relyant has waived its claims (gov'tbr. at 42-46). There are basically three arguments made by the governmenthere: the first is that Relyant's continuedperformance, despite the government's breach, constituted a waiver ofRelyant's rights because Relyant's silence was to the disadvantage ofthe government (id. at 42-43); second, that bilateral modifications to contract due dates acted to eliminate the government's liability for damages (id. at 43-44) underthe theory that once the bilateral modifications are in place, the parties are to "letbygones be bygones" (id. at 43-44 (quotingEnvironmental Devices, Inc., ASBCANo. 37340 etal., 93-3 BCA

### ,i 26,138 at 129,934)); and third- a theory whichwe need not address because we find no government liability for the matter

- is thatRelyant's costs incurred shipping cans from Ba gram to Sharana (once they were rejected in Bagram) are covered by the release language inModification No. P00002 to DOI. 27 The government's first theory, that continuedperformance ofa contract in the face ofa breach constitutes waiver, is a gross misreading ofthe relevant law. Likewise, the bilateral modification theory does not, in fact, protect the government from the liability that we have found above, especially given the glaring lack ofappropriate mutual releases.

With respect to the theory that Relyant's continuedperformance ofthe contract constituted a waiver, we tum to the law cited by the government

- primarily Ling-Temco-Vought, Inc. 

### v. UnitedStates, 475 F.2d 630 (Ct. Cl. 1973) (see gov'tbr. at 42), and seethat it is notremotely like the circumstances presented here. In Ling-Temco, the continuedperformance in the face ofan alleged material breach (ofwhich the government was unaware), placedthe government in a significantly disadvantagedposition, essentially invoking considerations ofestoppel. 4 7 5 F.2d

27 We note thatwewouldhave been skeptical ofthis argument: inter alia, the release
was executed well before the presentdisputes and, at first blush, would not have appeared to cover them. 26at 638-39. Here, the government posits no plausibly similar circumstances and was well aware that Relyant considered itselfwronged. No injustice was done to the government by Relyant's timely bringing ofits routine claims in this matter pursuant to the contract's Disputes clause. 28
Turning to the government's argument that a bilateral contract modification
on scheduling acts to eliminate any claimrelating to the government's tardiness in contract administration, an examination ofthe authority relied upon by the government, primarilyEnvironmentalDevices, demonstrates that the government overstates its reach. The basic notion in EnvironmentalDevices is that, when the parties agree to a new completion date for a contract, that is the date that the contractor is representing it will meet in the absence ofnew causes ofdelay. Thus, as statedby RFIShield-Rooms, ASBCANos. 17374, 77-2 BCA

## ,r 12,714 at 61,731 (quoted by EnvironmentalDevices, Inc., ASBCANo. 37430 etal., 93-3 BCA

## ,r 26,138 at 129,934) "the action ofthe parties in agreeing upon a new delivery schedule eliminates from considerationthe causes ofdelay accruing priorto such agreement." Letting "bygones bebygones," in this context, does not wipe the slate clean as far as the government's liability for the imposition ofall additional costs goes; rather, it only deals with costs associated with the new schedule. The costs ofthe Relyant employees wasting theirtime in Bagram due to government inaction on the request to amend the SOW are not such precluded costs. Had the government wished to insulate itselffrom such potential costs, it could have negotiated a release clause as it did in the change orderrelating to delivery costs. It did not do so and must accept the consequences of this decision.

28 The government also cites BrandSRoofing, ASBCA No. 24688, 82-1 BCA 

## ,r 15,513, as somehow supporting its position (see gov'tbr. at 42). BrandS Roofingdid allow, in the circumstances there presented, that the contractor could be excused from continuing performance in light ofa government material breach. See 82-1 BCA

## ,r 15,513 at 76,958-59. But we made clear that under "normal circumstances," compliance with the dictates ofthe Disputes clause was to be expected by the contractor. Id. at 76,958. The government cannot convincingly explain why the dispute here is not a "normal" situation. 27CONCLUSION

The government did not change the SOWto meet Relyant's desires and was under no obligation to do so. Nevertheless, under the circumstances presented here, its inexcusable delay in deciding the request left Relyant in an untenable position for
more than two months. Accordingly, the government is liable to Relyant in the amount ofdamages proved, $151,816, with CDA interest starting from the time it filed its claim, 23 January 2015.

Dated: June 27, 2018

I concur

RICHARD SHACKLEFORD Administrative Judge Acting Chairman Armed Services Board ofContractAppeals 

# fi;/

J.-REH'f

## PROUTY Administrative Judge Vice Chairman Armed Services Board ofContract Appeals

I concur

/1

Administrative Judge Armed Services Board ofContract Appeals

I certifythat the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContractAppeals in ASBCA No. 59809, Appeal ofRelyant, LLC, rendered in conformance with the Board's Charter.

Dated:

28 JEFFREY D. GARDIN Recorder, Armed Services Board ofContract Appeals