ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of -- ) 

) 

Relyant, LLC ) 

) 

Under Contract No. W91B4N-08-D-0011 ) 

APPEARANCE FOR THE APPELLANT: 

APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 59809 

James H. Price, Esq. 

Lacy, Price & Wagner, PC 

Knoxville, TN 

Raymond M. Saunders, Esq. 

Army Chief Trial Attorney 

MAJ Jason W. Allen, JA 

Trial Attorney 

OPINION BY ADMINISTRATIVE JUDGE PROUTY 

The dispute before us, 1 which was aired in a three-day hearing, is centered upon 

the government's acceptance of certain 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) at the two 

different locations had diverging views regarding whether the RLBs initially provided 

by appellant, Relyant, LLC (Relyant), should be permitted under the contract 

specifications that applied to both locations. In particular, the RLBs delivered to the 

first site passed a First Article Test (FAT) at that site, but were deemed to be out of 

compliance with the contract's statement of work (SOW) by the contracting officer 

(CO), and were not permitted at the second site. To get around the problem, Relyant 

shipped the RLB components first delivered to second site to the first site, where the 

local accepting authority (not the CO) apparently turned a blind eye to the RLBs' 

failure to comply with the SOW2

; Relyant then revamped its means of manufacturing 

the RLBs to provide RLB components that satisfied the CO (and contract) at the 

second site. Yet, despite the equities of the matter superficially weighing in favor of 

Relyant for having had some units accepted, we find that we cannot grant it the relief 

1 We granted summary judgment in favor of the government in the related appeal of 

ASBCA No. 58172. See Relyant, LLC, ASBCA No. 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 

within the contract's SOW, and the evidence does not support a finding of superior 

knowledge on the part of the government. Moreover, the doctrine of good faith and 

fair dealing does not override the express terms of the contract; however, in the 

circumstances presented here, it does impose upon the government certain obligations 

with regard to timeliness of government responses to Relyant's request to amend the 

SOW, for which Relyant is entitled to certain relief.3 

FINDINGS OF FACT 

I. The Contract 

The idea behind the RLB is rather clever: standard sized steel shipping 

containers - ubiquitous in the modem world and designed to be easily transported -

would be modified to be used as modular building blocks 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 or the government} solicited proposals 

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 of the dispute that are now before us were sown in Relyant' s4 

proposal in response to this solicitation. The SOW accompanying the solicitation for 

the contract required the installation of gypsum interior drywall to the interior of 

the shipping containers that would cover fiberglass insulation that was a minimum of 

three inches thick (R4, tab 1 at 17, 1 4.1.1.1 ). Relyant proposed a different 

configuration: this was the use of a sandwich panel, including Styrofoam5 as the 

insulator, instead of separate 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 of motions regarding the entitlement of Relyant to amend 

its complaint; the government's entitlement to amend its answer; and whether 

an adverse inference should be drawn against the government due to certain 

discovery hiccups. Our decisions on those matters - granting, in large part, the 

motions to amend the complaint and the answer and denying the motion for an 

adverse inference -will be explained herein. 

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 Chief Executive Officer (CEO), Mr. Smith, testified that the insulating 

material in the sandwich panel was polystyrene, as opposed to 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. 

2 
would manufacture the RLBs. Its single sandwich panel 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 of this 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 under the solicitation to Relyant (R4, tab 1 at 1). The contract signed 

by Relyant and the government did not adopt the change to the SOW proposed by 

Relyant relating to the substitution of the sandwich panel for the drywall and 

insulation interior walls (R4, tab 1 ), 8 although Relyant's management initially assumed 

that the proposal had been adopted (tr. 2/176). As will be seen, this assumption was 

unfortunate. 

The contract incorporated by reference a number of standard 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 or FAT clause), with the words "Shall be incorporated in every delivery order" 

immediately following its notation (R4, tab 1 at 39). One provision of this FAT clause 

that is of importance to the dispute here is paragraph (b ), which provides in part, "The 

notice of ... approval [of the test] shall not relieve the Contractor from complying with all 

requirements of the specifications and all other terms and conditions of the contract." 

Another contract provision that is important with respect to changes to the SOW 

is contained in paragraph 3.0 to the SOW portion of the contract, "Modifications," 

which provides 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)), which provides that, in the event of a conflict between a task 

order and the contract, "the contract shall control" (R4, tab 1 at 44). 

7 Relyant was not the only awardee under this multiple award task order contract 

(tr. 1/45-46). 

8 Relyant's proposal was written in such a way that the government was not required 

to accept its proposed deviation from the solicitation's SOW (tr. 2/175). 

3 
II. Delivery Order 1 

Delivery Order 1 (DO 1) was issued to Relyant on 22 September 2008 (R4, tab 4 ), 

the same day the contract was awarded. DO 1 required the 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 of the 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). 

Subsequent to the issuance of DO 1, the parties recognized that DO 1 had failed 

to make any allowance for the cost differential of delivering the RLBs to Sharana, as 

opposed to Bagram Airfield Afghanistan (Bagram) (the contract had a contract line item 

number (CLIN) for delivery to FOBs that had been inexplicably left off of the D09) (R4, 

tab 9 at 1-4). Apparently, because of funding constraints, the number ofRLBs provided 

by DO 1 needed to be reduced in order to accommodate the added delivery costs (R4, 

tab 6 at 1 (Relyant noting that, absent increased funding, the number of RLBs would 

need to be reduced)). The parties also decided to "incorporate mechanical and window 

changes into CLIN 0002 unit pricing" (R4, tab 24 at 2). Thus, on 2 and 3 April 2009, 

the parties executed bilateral Modification No. POOOOI to DOI that reduced the number 

of RLBs provided and installed by Relyant from nine to six, changed the pricing of the 

RLBs to some degree, amended the SOW, and added an unpriced CLIN (with a "not to 

exceed" amount) for transportation of the RLBs to FOB Sharana (id. at 1-3). The 

portion of the SOW that required the drywall/insulation combination remained 

unmodified by this change order (see generally R4, tab 24). This modification also 

included a "release of claims," stating that the modification constituted "a full, complete 

and final accord and satisfaction" of all claims "attributable to the changes contained 

herein or the events that give rise to them" (id. at 4). ' 

III. Delivery Order 2 and Others 

On 24 December 2008, the Army awarded to Relyant DOs 2 and 3 for the 

delivery and installation of one and two more RLBs, respectively, at Bagram (R4, 

tabs 17-18). Three days later, on 27 December 2008, the Army awarded D04 to 

Relyant for the delivery and installation of two additional RLBs at Bagram (R4, 

tab 19). The RLBs ordered by these 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 1 February 2009 for the 

9 Though this CLIN referenced transportation from Bagram to Sharana (see R4, tab 1 

at 4 ), the parties understood that transportation of RLBs to Sharana would not 

necessarily go through Bagram. They understood that what was being priced by 

this CLIN was the cost differential of shipping RLBs to Sharana from Turkey, 

versus the less expensive option of shipping them to Bagram from Turkey 

(tr. 2/106-07, 134-36). 

4 
installation of two more RLBs at Bagram each (see R4, tab 26810 at 2), but these, like 

DOs 3 and 4, have no bearing upon this appeal. In sum, the government ordered a 

total of 15 RLBs from Relyant, 6 of which came from DO 1, one from D02. 

IV. Delivery of the RLBs, Government Concerns, and the First Article Test of 

the RLB Delivered to FOB Sharana 

Manufacture of the "cans"11 in Turkey began sometime in late 2008 or early 

2009 and the first of them 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 of a 

government inspection of RLB 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.). 

DO 1, as noted above, required delivery of a first article RLB for testing at 

Sharana, consistent with the contract's requirement for first article testing. D02, 

however, required the delivery of an RLB to Bagram. Although the normal, prudent 

course of action for a contractor like Relyant might have been to complete the FAT for 

DO 1 at Sharana first and then construct the cans for subsequent RLBs, because of 

scheduling pressure for D02, Relyant felt that it could not wait to pass the FAT before 

it began shipping cans for later RLBs to Bagram (tr. 2/28). Consistent with the parties' 

desire to expedite matters, Relyant and the government came to an agreement that, 

rather than require a FAT for each DO (as required by the original contract), passing the 

FAT for the DO 1 RLB would be sufficient to meet FAT requirements for subsequent 

DOs (see tr. 1/52-53). Thus, on 21 May 2009, they executed Amendment 1 to D02 to 

make this change to that 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 of the motivation for simplifying the FAT procedures 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 container modified for use as an RLB 

component (tr. 1/195-96). 

12 There was testimony that some of the damage came from bullets during an ambush 

of the convoy that shipped the cans to Sharana (tr. 2/194-95). 

5 
passed the FAT (tr. 2/32-33). Relyant reasonably sought relief so 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 of superior knowledge. We do not read this 

email the same way that Relyant does (more about this later), but reproduce it in full 

here because of the importance Relyant now places on it: 

(R4, tab 250) 

Gentlemen, 

[Relyant] made a number of changes 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. For the most part, these 

changes made sense, but we asked them to resubmit every 

change they made so that our team could bless them off. 

They have yet to send us any documentation of the changes 

and now the cans are here. I have mentioned this before to 

everyone (my bosses, Captain Moore and I'm not sure if I 

mentioned it officially to Capt Hilliard). The answer was 

"we'll deal with it when they get here." Well, they're here 

now. How are we going to 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 paperwork to officially get them approved. In the 

process, they would be required to provide the fire ratings 

of the material. What if it'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). 

6 
This email highlights a contract administration problem that had been 

brewing for some time: unauthorized decision-making relating to the SOW. 

Both Sharana and Bagram had Field Engineering Teams (FETs) tasked with 

overseeing the implementation of the RLB construction efforts from the 

government's side (tr. 3/10). The FET in Bagram, however, can best be described 

as being senior to the Sharana FET, since it had drafted the original SOW and was 

the primary resource of technical expertise for the CO (id.), who alone had the 

authority to amend the SOW (tr. 3/11). Nevertheless, in their (understandable) 

desire to solve problems and get RLBs completed, the Sharana FET appears to have 

prematurely agreed to changes to the SOW without getting proper 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 

point was further made in an email sent by the Sharana COR to 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 coordinated through Capt Moore at Bagram (R4, tab 30 at 3-4). 

After overcoming a number of challenges, including its use of the 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 Sharana to be on hand for the FAT, the 

government personnel conducting the tests at Sharana made no objection, in his 

presence, to the use of the sandwich panel in lieu of the 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 COR at that 

location (tr. 1/39)), must have been aware that they were using the sandwich material, 

but there was no testimony that the subject was ever specifically raised to his attention 

(tr. 2/149). Ultimately, around 22 August 2009, Lt Col Herrington informed 

Mr. Smith that Relyant's RLB in Sharana had 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 of the 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 of the sandwich panel for the 

insulation/drywall earlier that same month. Relyant's efforts to obtain approval for the 

14 On 22 April 2009, administrative control of the contract on the government side 

passed from Afghanistan, where Capt Hilliard had been the CO, to the Rock 

Island Contracting Center (RICC) in Illinois where Ms. Pleasant became the 

CO, holding that role through November 2009 (R4, tab 26; tr. 1/38-39). 

7 
substitution began almost a year earlier. On 1 November 2008, Relyant submitted a 

written request to then CO, Capt Moore, to substitute the sandwich panel for the walls 

and ceilings, as opposed to the drywall/insulation requirement contained in the SOW 

(R4, tab 273 at 3-5). This request was likely discussed with Capt Moore before it was 

submitted, although he has no independent recollection of it (tr. 3/15). There is 

evidence that this initial request was lost due to a computer systems crash on the part 

of the government in November 2008 (tr. 3/59; R4, tab 273). In any event, as will be 

discussed shortly, there is no persuasive evidence that the request was ever granted by 

the CO, while there is significant evidence that it was not granted. 

Relyant claimed to have re-sent the substitution request to the government 

shortly after being informed of the computer crash (see R4, tab 257 at 483), but 

there was no evidence presented at the hearing from either Relyant or the government 

to support that assertion. Contemporary evidence (in the 21 April 2009 email from 

lLt Zorn discussed above (R4, tab 250)) supports a finding that the government 

was waiting for Relyant' s resubmittal. The first substantiated re-submission of the 

request appears in a 22 April 2009 email from Relyant to the government in which 

Relyant forwarded the 1 November 2008 substitution request to the government (R4, 

tab 257). 15 Relyant sent a follow-up email on 30 April 2009 asking for "information 

concerning the submittals" and stating that Relyant would "need documentation to 

proceed" (R4, tab 29). On 12 May 2009, Relyant again raised the issue in an email to 

lLt Zorn, stating that, "we need approval of the submittals I sent some time ago to 

prevent delays in the actual assembly .. .! have not had a reply other than that it is being 

looked into" (R4, tab 33). lLt Zorn replied to this email the next day, stating in part: 

As far as submittals are concerned, the FET has okayed all 

of them, but RICC is going about making it official. I'm 

not sure what this process includes. They thought it 

was already handled, but they were referring to the main 

3 mods that came down. I'm not sure if I can give you the 

go ahead- I wouldn't want to direct you and then 

something change. At least, so your mind is at ease, the 

FET has okayed those changes. Thanks for your continued 

aggressiveness on this project execution. 

(R4, tab 34 at 1) 

15 The author of this email made the statement that he had previously sent another 

copy of the substitution request to the government after the November 

computer crash, but, as noted above, there is no other evidence of such a 

submission. 

8 
There is no documentation in the record that the subject arose again until 

23 July 2009, when lLt Zorn informed Relyant that the material substitution request 

needed to be submitted on a different form (R4, tab 237 at 41). 

In response 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 lLt Katherine Schultz (who had just succeeded lLt Zorn 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 of the 

panel) was combustible and could bum quickly if the 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 of the government had earlier agreed to the material substitution was not 

persuasive. At the hearing, Relyant presented the testimony of Mr. Creed Williams, its 

project manager at Bagram, that "one of the first contracting officers ... before Captain 

Moote" had approved the sandwich panel 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 Capt Moore had "signed off' on the substitution 

request before issuing D02 (tr. 2/160). Mr. Williams' testimony was rather vague and 

appeared to be based upon what Mr. Mills had told him, notwithstanding his statement 

that he had "no question" that the approvals had been submitted (tr. 1/121). Mr. Mills' 

"understanding" of what Capt Moore ( as opposed to the CO before Capt Moore, whom 

Mr. Williams testified about) had agreed to had an even less firm basis than 

Mr. Williams'. It would not be inconsistent with Relyant's general corporate belief 

that, in making the contract award to Relyant, the government adopted its technical 

proposal (see id.). To the extent that "the government" at Sharana had "Okayed" the 

changes, as stated in lLt Zorn's 21 April 2009 email quoted above (see R4, tab 250), 

that email is most consistent with unauthorized personnel making such statements, 

especially in light of the email's further statements that Relyant had been directed to 

submit a formal substitution request months earlier, which had not been forthcoming at 

the time of the email (see id.). Although we do not question the sincerity of these 

witnesses, we do find their testimony on this matter to be unconvincing. 

Indeed, overwhelming evidence supports a finding contrary to this testimony. 

First, Capt Moore testified at the hearing that he did not recall approving the 

substitution request (tr. 3/16). This is consistent with 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). If there had been any written change after 

9 
POOOO 1, but before the 22 April 2009 modification, it would have received the P00002 

numeration and the 22 April modification would have received a later number. 

Further, if Capt Moore or anybody else in the government had approved the 

substitution, we would expect that Relyant could produce documents stating as much; 

it never did. 16 Moreover, if the two Relyant managers had actually seen such 

approvals, we would expect them to have made some sort of statement 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 if they 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 of its submittals, including the 

12 May 2009 statement that, "I have not had a reply other than that it is being looked 

into." (R4, tab 33) Thus, we conclude that this is what happened 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 resubmit the submittals, but would, instead, forward the cans from Bagram to 

Sharana, where they were considered to be acceptable (R4, tab 249). 17 The record 

does not reflect what, if any, response CO Pleasant made to this letter, but apparently 

she permitted noncompliant RLBs 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" of the submittals having been approved, Relyant's post-trial 

brief references pages of tab 237 to the Rule 4 file (app. br. at 5). It turns out 

that tab 237 is Relyant's claim to the CO, and the cited pages are Relyant's 

narrative assertions of what happened during contract administration. Needless 

to say, the evidentiary weight of unsubstantiated assertions contained within a 

contractor's claim is nil. 

17 Just as we would have expected Relyant to refer to any prior government approvals 

of material 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 if it had 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 Sharana were accepted 

and others, at Bagram, were not. There is anecdotal evidence, though, that 

housing shortages in Afghanistan were compelling the government to accept 

otherwise inadequate buildings made by other contractors (R4, tab 42 at 2). 

That housing shortage was a reason that Lt 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). 

10 
previously delivered to Sharana (which used the sandwich panel) were allowed to pass 

the FAT just a few weeks later. 

The cans at Bagram were, in fact, shipped to Sharana, beginning in August 2009 

and continuing through that October (R4, tab 86 at 2, tab 237 at 12, tab 247). Relyant 

then changed the process of manufacturing the cans for the remainder of the contract 

(the five RLBs to be erected at Bagram under DOs 2, 3, and 4), shipping drywall to 

Afghanistan and having much of the work finishing the cans performed there (tr. 2/151). 

VI. Subsequent Amendments to D02 

Shortly after Relyant passed the FAT, the parties agreed to change portions 

of the SOW of the 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 of several 

CLINs (R4, tab 69). On the 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 to the SOW did 

not affect the pre-existing requirement for the drywall (id.). None of these changes 

included any general releases of claims (id.). 

The delivery dates for DO 1 and D02 changed as well. Before the acceptance 

of the FAT, on 14 and 15 July 2009, the parties executed Modification 2 to DOI to 

extend the first article and production due date of the first RLB to 29 July 2009 

(R4, tab 43). Pursuant to this modification, the remainder of the RLBs required by 

DO 1 would 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 of performance for DO 1 in 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 of performance for D02 from 30 September 2009 to 

3 January 2010 (R4, tab 88 at 1-3). This modification included no general release 

of claims (id.). By Modification No. 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 of claims (id.). The RLB 

was, in fact, completed and turned over to the government on 17 March 2010 (R4, 

tab 172). 

11 
VII. 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 of Relyant's vice president, Mr. Biles 

(R4, tab 237 at 16). 19 Although Relyant's claim initially stated that it was for extra 

costs incurred on DOs20 1 and 2 (R4, tab 237 at 1), in response to a question from the 

CO, Relyant explained that all of the 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 what we would characterize as an overview of its entitlement to compensation 

(id. at 6-7). Specific legal theories justifying its entitlement to damages followed 

(id. at 7-10). 

The first legal theory expressed by Relyant in support of its 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 of contract is not explicitly clear, this "Breach" section of Relyant's claim went on 

to argue that the government failed to disclose, for approximately 23 7 days, its superior 

knowledge that it might not approve the submittals for D02 that it had for DO 1 (id. at 8). 

Earlier in the factual section ofRelyant's claim, it alleged that government staff at 

Bagram had informed Relyant that the government would accept the specifications that 

Relyant alleged had been accepted at Sharana (id. at 4). Relyant's "overview" of the 

claims included the factual allegation that lLt Zorn 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 of the 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 

under the Contract Disputes Act (CDA), regardless of its title, if it otherwise 

meets the requirements of a 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 23 7 at 1 ), which we have observed in some government 

correspondence as well. We correct that relatively trivial misnomer throughout. 

12 
Relyant then 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 elaborated that the government's failure to timely act 

upon the submittals caused it to suspend its work at Bagram until they were rejected 

(id. at 10). Other damages 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 of individuals at Bagram from April 2009 through August of the 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 of the 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 of this matter, we address three motions whose 

resolution will affect the legal theories governing our consideration of this appeal and 

the evidence that we consider in resolving it. First, we consider Relyant's motion to 

amend its complaint, which we grant in part and deny in part, and the related motion 

by the government to amend its answer, which we grant. Next we 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, after the close of discovery, 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" of its claims (see app. mot. to amend 

at 1 ), in fact, it added eight new paragraphs of facts and five new claims for relief (see 

id., attach. (redlined complaint) (amended compl.). Indeed, Relyant's initial 

complaint filed with the Board is rather Spartan with respect to elucidating the 

theories for which it asserts it is entitled to relief, alleging generally that the 

government breached its contract by wrongfully rejecting the RLBs (see complaint, 

dated 27 February 2015). The proposed new complaint includes far greater emphasis 

on the actions of the government in allegedly knowing that Relyant was going forward 

with using the sandwich panel and not raising any concerns with Relyant about it for a 

21 According to Relyant's claim, this amount can be broken down to $20,188 for the 

month of April; $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). 

13 
number of months, and misleading Relyant into thinking that it would be approved 

(amended compl. 1121-26). The additional causes of action that went significantly 

beyond those in the original complaint included a breach of the implied duty of good 

faith and fair dealing (id. 1163-67); failure to disclose superior knowledge (that the 

government would not accept the sandwich panels at Bagram) (id. 1168-73); and 

promissory estoppel on the notion that the government had led Relyant to believe that 

it would approve its use of the sandwich panels (id. 1174-77). 

The government opposed, in part, Relyant' s motion to amend, arguing that two 

of the additional causes of action (superior knowledge and promissory estoppel) were 

not based upon the same operative facts as in Relyant's claim to the CO, thus, we did 

not possess jurisdiction to consider these (gov't opp'n to app. mot. to amend). We did 

not decide the motion at the time that it was first briefed because we judged it 

unnecessary prior to the hearing and did not wish to delay this appeal by issuing a 

jurisdictional decision. The parties were instructed to present the same evidence that 

they would if the 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 of accord and 

satisfaction, release, and waiver (gov't mot. to amend answer). The justification for 

this filing was primarily that the requested amendment was permissible and that it was 

necessary as a matter of fairness after Relyant's motion to amend its complaint. The 

parties were instructed to proceed under the assumption that this motion would be 

granted. 

Subsequent to the hearing in this matter, at the direction of the presiding judge, 

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 on the 

ground that it had not conducted discovery necessary to defend itself against these new 

defenses (app. opp'n to gov't mot. to amend answer). 

Under Board Rule 6( d), we generally "permit either party to amend its pleading 

upon conditions fair to both parties." Indeed, under the Rule, we may permit the 

consideration of issues "within the proper scope of the appeal, but not raised by the 

pleadings." And, though not binding upon us, we do look to FED. R. CIV. P. 15(a)(2), 

with its liberal allowance of amendments to pleadings for guidance upon that matter. 

Beyley Constr. Group Corp., ASBCA No. 55692, 08-2 BCA 133,999 at 168,134. In 

short, we will not deny a request to amend without a good reason. 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 

amendment to include a cause of action over which we do not possess jurisdiction. 

14 
Here, the government's primary argument is that two of the additional causes of action 

named by Relyant, superior knowledge and promissory estoppel, are not within the 

ambit of our jurisdiction because they were not considered by the CO within Relyant's 

CDA claims. The government is mistaken because the factual underpinnings of the 

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. United States, 

333 F.3d 1358 (Fed. Cir. 2003). In Scott Timber, the Federal Circuit held that 

appeals of CO final decisions "do[] not require rigid adherence to the exact language 

or structure of the 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 Maersk Line, 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 of action and the relief sought was the same. First, with 

respect to the superior knowledge cause of action, the claim ( as noted in the Facts 

section, above) made just such an allegation, alleging that the government had failed to 

inform Relyant that it might refuse to allow the revised submittals. Thus, we find that 

the superior knowledge cause of action was "essentially the same as presented to the 

CO," Scott Timber, 333 F.3d at 1366, and that we have jurisdiction to consider it. 

Likewise, Relyant's new "promissory estoppel" cause of action is bottomed upon the 

factual allegation that the Bagram FET had either approved or promised to approve the 

submittals. Given the allegations made in Relyant's claim that lLt Zorn had made 

similar representations 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 claim to support the jurisdictional requirement that the facts 

underpinning the promissory estoppel cause of action were presented to the CO. 

That does not end our jurisdictional inquiry, however. Though not raised by the 

government, we cannot permit Relyant to raise the promissory estoppel cause of action 

because that theory requires a contract implied-in-law, over which we do not possess 

jurisdiction. See Protecting the Homeland Innovations, LLC, ASBCA No. 58366, 13 BCA 

135,398 (promissory estoppel is a contract implied in law); RGW Communications, Inc., 

d/b/a Watson Cable Co., ASBCA Nos. 54495, 54557, 05-2 BCA 132,972 at 163,333-34 

(no Board jurisdiction over implied-in-law contracts); see also P.J. Dick, Inc. v. GSA, 

CBCA No. 461, 07-1BCA133,534 (Boards of Contract Appeals have no jurisdiction over 

promissory estoppel claims). 

Thus, we possess jurisdiction to consider Relyant's amended complaint, except 

for the claim of promissory estoppel. Moreover, the government has identified no 

unfair prejudice to it by our consideration of the complaint nor any other reason that 

15 
we should not allow the amendment. Accordingly, under the liberal standards that 

apply to us pursuant to Board Rule 6(d), we grant Relyant's motion to amend its 

complaint, except for count VI, promissory estoppel. 

With respect to the government's motion to amend its answer, Relyant presents 

no persuasive basis to deny it, especially since we are largely granting Relyant' s 

motion to amend. At most, Relyant argues that it should have been able to take 

discovery upon the parties' intent regarding the release language, whether Relyant 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 not persuasive reasons to deny 

the government's motion because the discovery already sought and obtained by 

Relyant would embrace much of what it now claims that it would have sought to 

address these defenses, and the remainder (such as information supporting the 

economic duress claims) consists of knowledge within its own purview, 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 prior to the original trial date set in this matter, the government 

provided to Relyant several emails that had been in the personal possession of 

Capt Hilliard, but had not been provided in the Rule 4 file or earlier in discovery 

(app. adv. inf. mot. at 2-3; Bd. order <ltd. 3 November 2016). There followed a 

number of motions to delay the trial, to partially re-open discovery, and to compel 

further responses from the government. On 23 November 2016, the government 

provided approximately 90 more pages of documents 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 of Capt Moore (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 of this 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'n to app mot. for limited reopening of 

discovery and mot. to compel <ltd. 6 January 2017). 

At Relyant's request, we permitted it to file a motion for adverse inference 

against the government after the hearing for its alleged discovery failures. In particular, 

the motion sought a finding "that Capt. Moore's emails (and other electronic 

16 
documents) 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 whether there were documents 

not provided to Relyant in discovery to which it was entitled. We can readily dispose 

ofRelyant's allegations that there were missing "paper" documents. The only basis 

for this allegation is explicated in Relyant's reply brief and consists of a citation to 

testimony that a paper contract file existed in Afghanistan that might not have 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 that this paper file was not 

reproduced with the initial Rule 4 file, which, to all appearances, includes the contract 

modifications and other paperwork that we would expect to have been maintained in 

such a file. 

With respect to Capt Moore's and CO Pleasant's emails, although it appears 

very likely that there were emails that may have been responsive to discovery 

requests if they had been in the government's possession at the time that they were 

requested, a review of the declarations attached to 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 

of the government. Capt Moore's declaration explains that he did not take any 

electronic files with him when he departed Afghanistan in March 2009 (gov't opp'n 

adv. inf. mot., attach., Moore decl.), and Lt Col William Brown's declaration that the 

servers which held government emails in Afghanistan did not retain email accounts 

beyond 45 days of employees' departure from Afghanistan (see gov't opp'n adv. inf. 

mot., attach., Brown decl.), taken together, demonstrate that, after May or June 2009, 

Capt Moore's emails were likely unretrievable. CO Pleasant's declaration that she 

retired from federal service on 1 January 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 Pleasant worked) are deleted within 45 days of retirement and 

archived for only a year afterwards (gov't opp'n adv. inf. mot., attach., Crossen decl.) 

convince us that, after March or April 2011, CO Pleasant's emails were likely 

22 We refer here 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. 

17 
irretrievable. Relyant's reply to the government's opposition does not dispute the facts 

presented by these declarations, except to argue that recipients of emails from Capt 

Moore should have had their email searched (app. reply adv. inf. mot. at 1-2). These 

potential recipients were also in Afghanistan, however, and would have had their email 

accounts deleted upon their departures just as Capt Moore did. 

The first claim submitted to a CO upon this contract (which was later appealed 

in ASBCA No. 58172, 16-1BCA136,228) was submitted on 15 December 2011, 

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 of appeal and attachments). 

With these salient facts in mind, we tum to the law of spoliation, upon which 

Relyant relies to obtain the remedy it seeks. "Spoliation refers to the 'destruction or 

material alteration of evidence or the failure to preserve property for another's use as 

evidence in pending or reasonably foreseeable litigation."' ADT Constr. Group, Inc., 

ASBCA No. 55358, 13 BCA 135,307 at 173,324 (quoting Hynix Semiconductor Inc. 

v. Rambus Inc., 645 F.3d 1336, 1334 (Fed. Cir. 2011)); see also Micron Technology, 

Inc. v. Rambus Inc., 645 F.3d 1311, 1319-20 (Fed. Cir. 2011). To obtain sanctions for 

spoliation, the moving party must prove: 

( 1) [T]he party having control over the evidence had an 

obligation to preserve it when it was destroyed or altered; 

(2) the destruction or loss was accompanied by a "culpable 

state of mind;" and (3) the evidence that was destroyed or 

altered was "relevant" to the claims or defenses of the 

party that sought the discovery of the spoliated evidence, 

to the extent that a reasonable factfinder could conclude 

that the lost evidence would have supported the claims or 

defenses of the party that sought it. 

ADT, 13 BCA 135,307 at 173,324-25 ( citations omitted); see also Ensign-Bickford 

Aerospace & Defense Co., ASBCA No. 57929, 13 BCA 135,322 at 173,385. With 

respect to the first element here, whether a party has an obligation to preserve 

evidence, this is determined by whether litigation is "pending or reasonably 

foreseeable." Micron Technology, 645 F .3d at 1320. With respect to the third element 

necessary for obtaining sanctions, it is essentially a question of prejudice, and the 

moving party 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 been unfavorable to the party destroying it. Id. 

Here, it is evident to us that the destruction of any email occurred before 

litigation was reasonably foreseeable. The government argues that the key date for 

18 
determining 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 the possibility that 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 of a claim to the 

CO, that event occurred in December 2011, after the 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 if the government negligently 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 of mind" ( a legal consideration which we do not decide 

here, although we certainly see no evidentiary basis for a finding of bad faith), we 

would find that Relyant has not proved prejudice of the sort that would justify making 

the inferences that it requests. Factually, Relyant has produced no evidence, 

whatsoever, that would permit us to conclude that the missing emails might support its 

version of events. To the contrary, all of the evidence before us supports the 

conclusion (as discussed in the facts section, above) that the emails would have 

contained no evidence supporting Relyant's desired inference. When we consider the 

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 of sanctions for 

spoliation, as discussed in the cases set forth above, make clear the law of spoliation is 

not intended to provide an unmerited windfall to a party, contrary to what the actual 

facts of a dispute support. 

Last, Relyant's argument that an adverse inference is justified by Capt Moore's 

"questionable and inconsistent" testimony at the hearing (app. adv. inf. mot. at 6) is a 

non-starter. A review of Capt Moore's testimony gives us little reason to question his 

sincerity, and those points where his recollection of events diverges from that of other 

participants to the same events are nothing but the routine manifestation of flaws in 

memory typical of matters that occurred over seven years prior. They are not material 

to our decision and do not merit the (effectively) dispositive relief requested by 

Relyant here. 

DECISION ON THE MERITS 

We may have come to different conclusions regarding the advisability of using 

the sandwich panel ifwe had stood in the shoes of the CO in 2009, but we did not and 

that is not our role. The facts are that the government was within its rights to refuse 

the sandwich panel, it never actually approved its use, and the contract makes clear 

that acceptance of the FAT does not equal acceptance of the change in the SOW. 

19 
Moreover, the government's knowledge that it might reject Relyant's proposed change 

to the contract was no greater than Relyant' s, given that Relyant was also apprised of 

that possibility. We do find, however, that the government's waiting for months to 

make up its mind about the sandwich panel while Relyant was left unable to proceed 

in Bagram caused compensable injury to Relyant, for which we award the damages 

proved by Relyant. Finally, we hold that the damages that we award were not waived 

by the bilateral contract modifications referenced by the government. 

I. The Government was Within its Contractual Rights to Require Compliance 

with the SOW at Bagram 

As a straightforward matter of contract interpretation, the SOW required the use 

of the drywall/insulation combination, and the government was entitled to hold 

Relyant to it, until the contract was modified, regardless of whether it was a good or 

bad idea. See, e.g., Rixon Electronics, Inc. v. United States, 536 F .2d 1345, 1351 

(Ct. Cl. 1976) (the government "can engage a contractor to make snowmen in August, 

if [it spells] it out clearly"); see also Wagner Awning & Mfg. Co., ASBCA No. 19986, 

77-2 BCA 1 12,720 at 61,827 (government entitled to strict compliance with contract 

terms even if alternative techniques might be suitable). The question before us, then, 

is whether the contract's SOW was ever amended, either by the CO or through the 

government's approval of FAT. It was not. 

A. No Contractual Amendment Allowing Use of the Sandwich Panel was 

Ever Approved by the CO 

Under the contract, only the CO possesses authority to amend the terms of the 

SOW. Indeed, the CO reiterated this principle to Relyant on more than one occasion, 

as discussed in the "Facts" section, above. Even if a member or members of the FET 

at Sharana got ahead of themselves ( as might have been the case), their unauthorized 

approval is insufficient to change the contract. Federal Crop Ins. Corp. v. Merrill, 

3 3 2 U.S. 3 80, 3 84 ( 194 7) ( companies dealing with government take risk of ensuring 

the persons they deal with are acting within the scope of their authority); see also 

Winter v. Cath-dr/Balti Joint Venture, 497 F.3d 1339, 1345-46 (Fed. Cir. 2007) (limits 

of authority to amend contract when contract makes clear that only the CO possesses 

such authority). As we analyzed in great detail above, we are convinced that Relyant's 

allegation that the contract was amended by an unspecified CO is not supported by a 

preponderance of the evidence. Such a finding (notwithstanding the vague testimony 

ofRelyant's project managers) would be contrary to the great weight of the evidence 

before us. Accordingly, we hold that there was no amendment of the SOW to 

contractually permit the use of the sandwich panel.23 

23 Relyant also presents an undeveloped "acquiescence" argument in its opening brief, 

suggesting that, since the government knew that Relyant was using the 

20 
B. The FAT does Not Overrule Contract Specifications 

Relyant extensively argues that, by virtue of approving the FAT of RLB 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 of the FAT to 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 not need to know why the FAT was 

approved to know that the approval had no effect on the terms of the SOW. That is 

because, as noted above, the FAT clause clearly provides in paragraph (b) that, "The 

notice of ... approval [of the test] shall not relieve the Contractor from complying with 

all requirements of the specifications and all other specifications and all other terms 

and conditions of the contract." This is especially clear since the CO told Relyant that 

its changes to the SOW were rejected before it received the FAT results, and Relyant 

never acted as if the FAT results changed its understanding of what was permitted at 

Bagram. 

Thus, we conclude that the terms of the contract's SOW required use of the 

drywall/insulation combination and that the government never changed that 

requirement through a contract modification or through the approval of the FAT. 

II. The Government did Not Possess Undisclosed Superior Knowledge 

Relyant makes the argument that the government failed to inform it that it 

would not permit the use of the sandwich panel, thus breaching the contract by failing 

to disclose superior knowledge (app. br. at 18-19). This argument founders upon the 

facts. 

The doctrine of superior knowledge is premised upon the notion that where "the 

government has knowledge of vital information that 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 of the sandwich panel, and it would have been unreasonable for 

Relyant to believe the requirement to be "dead." See, e.g., Gresham & Co. 

v. United States, 470 F.2d 542, 554 (Ct. Cl. 1972) (waiver requires party to 

"reasonably believe[] the requirement to be dead"). The fact that the FAT 

approval came after the clear, formal rejection ofRelyant's request to amend 

the SOW precludes any argument that FAT approval signaled that the SOW 

requirements were inoperative. 

21 
Industries, Inc. v. United States, 312 F.2d 774 (Ct. Cl. 1963)); see also Hercules, Inc. 

v. United States, 24 F.3d 188, 196-97 (Fed. Cir. 1994). The elements of the cause of 

action, as set forth in Hercules, are that (1) the contractor undertook to perform 

without vital knowledge of a 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 specification provided 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. United States, 232 F.3d 864, 

876 (Fed. Cir. 2000). 

First, the government did not mislead Relyant as to what the SOW required 

when it awarded it the contract. To be sure, Relyant made the assumption that its 

alternate sandwich panel method was approved, but the contract stated otherwise, and 

Relyant conceded that its proposal allowed for the possibility that the government 

would choose to stick with the specifications contained within the SOW. The 

government had no reason, at the time of contract award, to believe that Relyant 

misapprehended the plain language of the contract- a matter for which Relyant bears 

sole responsibility. 

As contract performance progressed in 2008 through 2009, the government's 

multiple requests for Relyant to provide submittals with its alternate sandwich panel 

construction would have plainly disabused Relyant of any mistaken belief that the 

government had approved its sandwich panel construction. To the extent that Relyant 

is arguing that the government withheld from it knowledge that the government always 

intended to reject its sandwich panel design, we find the premise to be unsupported. 

The only evidence before us is that the government made its definitive decision 

regarding rejection of the sandwich panels in August 2009, after lLt Schultz became 

COR at Bagram. All other documents and testimony indicate that the decision was in 

flux. The 21 April 2009 email from lLt Zorn to others within the 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 that the submittal would be 

approved (see app. br. at 18), does nothing of the sort. In the email, lLt Zorn makes 

clear that Relyant was informed of the need to provide submittals (which it had not yet 

done) and that the changes might be approved, but they might not. This is hardly the 

smoking gun Relyant asserts it to be. The subsequent Zorn email to Relyant, on 

13 May 2009, in which he informs Relyant that the FET had approved the changes, 

also cautions Relyant against taking action prematurely, including the statement: "I'm 

not sure ifl can give you the go ahead- I wouldn't want to direct you and then 

something change." It may well be that lLt Zorn 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. But his clear statement that the CO had not yet approved 

22 
the changes and that he would not direct Relyant to act in case something changed, 

should have made clear to a reasonable contractor in Relyant's position that the 

government's agreement to change the SOW was not certain. Thus, the government 

possessed no knowledge superior to that of Relyant as that phrase 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, of which 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 lLt Zorn misled Relyant, and 

the evidence supports a much more nuanced view of what he told Relyant. 

III. The Government's Failure to Act upon the Request for Submittals for Four 

Months was a Breach of the Duty of Good Faith and Fair Dealing25 

Though rejecting the sandwich panel 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 

whether to allow the sandwich panel was contrary to Relyant' s reasonable 

contract-based expectations. This is actionable as a breach of the duty of good faith 

and fair dealing. 

The doctrine of good faith and fair dealing is based upon the notion that every 

contract "imposes upon each party a duty of good faith and fair dealing in its 

performance and enforcement." MetcalfConstr. Co. v. United States, 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 "include the duty not to 

interfere with the other party's performance and not to act so as to destroy the 

24 Additionally, if we were to find that the promises of an unauthorized individual that 

the CO was going to approve a change were effectively binding ( as would be 

the case if we were to grant Relyant relief here), we would short circuit the law 

cited earlier in this decision that allows the government only to incur 

contractual obligations by the actions of those authorized to make such 

obligations. Needless to say, we would be loath to do so and the facts at bar 

conclude such a determination. 

25 Relyant might have potentially argued that this inaction constituted a delay for 

which the government was liable, without seeking recourse through the doctrine 

of good 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 not requested by Relyant. 

23 
reasonable expectations of the other party regarding the fruits of the contract." 

Metcalf, 742 F.3d at 991 (quoting Centex Corp. v. United States, 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. United States, 

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 not proscribed by the contract 

expressly, are inconsistent with the contract's purpose and deprive the other party of 

the contemplated value." Metcalf, 742 F.3d at 991. 

Some of the tests set forth in the cases above, read in isolation, are not as 

precise as we would like, and may appear to leave too much room for an arbitrary 

drawing of lines to obtain results deemed "fair" by a reviewing tribunal. One seeming 

inconsistency is that, if the duties cannot be 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 of the 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 of the contract, approximating the parties' intent, as 

divined by the express terms of the contract, for addressing circumstances not 

specifically set forth by the contract. This interpretation is consistent with the Metcalf 

court's reference to "faithfulness to an agreed common purpose." 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 often boils down to 

questions of "reasonableness" of the government's actions, see Free & Ben, Inc., 

ASBCA No. 56129, 09-1 BCA ,r 34,127 at 168,742, although we do not hold here that 

every unreasonable government action necessarily constitutes a breach of the duty. 

Thus we tum to the facts of this appeal. The doctrine does not permit us to 

change the terms of the SOW or to punish the government for its failure to do so: the 

SOW is explicitly defined by the contract and thus may not be altered by the implicit 

duty of good faith and fair dealing. On the other hand, though the contract does not 

specify how long the government will spend reviewing requests to modify the SOW,26 

if the government's delays in addressing Relyant's requests unreasonably interfered 

with contract performance, we could find breach. 

At what point did government inaction on Relyant's request tum into breach? 

Later than Relyant argues. Although Relyant's first formal request for the relevant 

change to the SOW was submitted on 1 November 2008, the government's failure to 

deal with it at that time, given the computer problems it encountered, is not a breach of 

26 If it did so, those deadlines would be dispositive. 

24 
the duty of good faith and fair dealing. We have found above that the government 

informed Relyant that 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 of time 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 of time for approval or rejection of the 22 April 2009 submittal 

would have been the first of May 2009 and (in the case before us) further hold that the 

government's failure to act by then constituted a breach of the duty of good faith and 

fair dealing. 

The factors that support this conclusion overlap to some degree and include 

that: 1) the requested change to the SOW was one with which the government was 

familiar; 2) it was recognized by the government as being reasonable and potentially in 

its best interest; 3) the government was aware that Relyant was awaiting its answer for 

several months in the spring and summer of 2009, while Relyant continually prompted 

it to act; 4) the government was aware that its delay in decision-making was 

potentially to the detriment of Relyant in terms of its incurring additional costs during 

the waiting period; 5) there were no circumstances that justified an extended wait on 

the part of the government before deciding whether to permit the change in the SOW; 

and 6) the government's decision-making appears to have been able to have been 

accomplished within a matter of days once it turned its attention to the matter. Given 

all of these considerations, the government's failure to act in a more timely manner 

here was "inconsistent with the contract's purpose and deprive[d] the other party of the 

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 of approval, we 

might be less likely to find a breach of the duty if the government took an extensive 

period of time to resolve it. 

We now tum to damages for the contractual breach. "The remedy for breach of 

contract is damages sufficient to place the injured party in as good a position as it 

would have been had the breaching party fully performed." Indiana Michigan Power 

Co. v. United States, 422 F.3d 1369, 1373 (Fed. Cir. 2005) (citation omitted). Thus, 

our 1 May 2009 date has important implications for the calculation of damages due to 

Relyant. In particular, since the first D02 RLB cans had already been delivered to 

Bagram before that time, the government is not responsible 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. But those costs are limited to the costs incurred at Bagram, where 

two Relyant employees awaited the go-ahead to begin assembly operations. 

25 
According to the evidence presented by Relyant and not disputed by the government, 

that amount was $151,816 (the $172,004 in burdened labor costs for April through 

August 2009 minus the $20,188 for the month of April 2009). The delay in approval 

of the submittal appears to have had no impact upon construction at Sharana because 

the FAT there was not approved until a time in August 2009 after denial of the SOW 

submittals. Since Relyant has not alleged that the FAT was unreasonably delayed and 

has provided no evidence that it could have proceeded elsewhere prior to the FAT, we 

conclude that it is not entitled to other delay damages. See, e.g., Melka Marine, Inc. v. 

United States, 187 F.3d 1370, 1375 (Fed. Cir. 1999) (no overhead damages when 

contractor not on standby as a result of government delay); Rex Systems Inc., 

ASBCA No. 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't br. at 42-46). There are basically three arguments made by 

the government here: the first is that Relyant' s continued performance, despite the 

government's breach, constituted a waiver of Relyant's rights because Relyant's 

silence was to the disadvantage of the 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) under the theory that once the bilateral modifications are in 

place, the parties are to "let bygones be bygones" (id. at 43-44 ( quoting Environmental 

Devices, Inc., ASBCA No. 37340 et al., 93-3 BCA ,i 26,138 at 129,934)); and third- a 

theory which we need not address because we find no government liability for the 

matter - is that Relyant' s costs incurred shipping cans from Ba gram to Sharana ( once 

they were rejected in Bagram) are covered by the release language in Modification 

No. P00002 to DOI.27 The government's first theory, that continued performance of a 

contract in the face of a breach constitutes waiver, is a gross misreading of the 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 of appropriate mutual releases. 

With respect to the theory that Relyant' s continued performance of the 

contract constituted a waiver, we tum to the law cited by the government - primarily 

Ling-Temco-Vought, Inc. v. United States, 475 F.2d 630 (Ct. Cl. 1973) (see 

gov't br. at 42), and see that it is not remotely like the circumstances presented here. 

In Ling-Temco, the continued performance in the face of an alleged material breach 

( of which the government was unaware), placed the government in a significantly 

disadvantaged position, essentially invoking considerations of estoppel. 4 7 5 F .2d 

27 We note that we would have been skeptical of this argument: inter alia, the release 

was executed well before the present disputes and, at first blush, would not 

have appeared to cover them. 

26 
at 638-39. Here, the government posits no plausibly similar circumstances and was 

well aware that Relyant considered itself wronged. No injustice was done to the 

government by Relyant's timely bringing of its 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 claim relating to the government's tardiness in 

contract administration, an examination of the authority relied upon by the 

government, primarily Environmental Devices, demonstrates that the government 

overstates its reach. The basic notion in Environmental Devices 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 of new causes of delay. Thus, as stated by 

RFI Shield-Rooms, ASBCA Nos. 17374, 77-2 BCA ,r 12,714 at 61,731 (quoted by 

Environmental Devices, Inc., ASBCA No. 37430 et al., 93-3 BCA ,r 26,138 at 

129,934) "the action of the parties in agreeing upon a new delivery schedule eliminates 

from consideration the causes of delay accruing prior to such agreement." Letting 

"bygones be bygones," in this context, does not wipe the slate clean as far as the 

government's liability for the imposition of all additional costs goes; rather, it only 

deals with costs associated with the new schedule. The costs of the Relyant employees 

wasting their time in Bagram due to government inaction on the request to amend the 

SOW are not such precluded costs. Had the government wished to insulate itself from 

such potential costs, it could have negotiated a release clause as it did in the change 

order relating to delivery costs. It did not do so and must accept the consequences of 

this decision. 

28 The government also cites Brand S Roofing, ASBCA No. 24688, 82-1 BCA 

,r 15,513, as somehow supporting its position (see gov't br. at 42). Brand S 

Roofing did allow, in the circumstances there presented, that the contractor 

could be excused from continuing performance in light of a 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 of the 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. 

27 
CONCLUSION 

The government did not change the SOW to 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 of damages 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 

of Contract Appeals 

fi;/ 

J.-REH'f PROUTY 

Administrative Judge 

Vice Chairman 

Armed Services Board 

of Contract Appeals 

I concur 

/1 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

I certify that the foregoing is a true copy of the Opinion and Decision of the 

Armed Services Board of Contract Appeals in ASBCA No. 59809, Appeal of Relyant, 

LLC, rendered in conformance with the Board's Charter. 

Dated: 

28 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals