### ARMED SERVICES BOARD OF CONTRACTAPPEALS Appeal of

-- ) ) 

### Capy Machine Shop, Inc. ) ) 

### Under Contract No. SPE4A6-13-M-S227 ) APPEARANCE FORTHE APPELLANT:
APPEARANCES FORTHE GOVERNMENT: ASBCA No. 59085

Mr. Salvatore Capacchione

President Daniel K. Poling, Esq.

DLA ChiefTrial Attorney Edward R. Murray, Esq. Adrienne D. Bolton, Esq.

Trial Attorneys DLAAviation Richmond, VA OPINION BYADMINISTRATIVE JUDGE TUNKS ON THE GOVERNMENT'S MOTION FOR SUMMARYJUDGMENT The government moves for summaryjudgment, alleging that there are no material facts in dispute and appellant's alleged default is unexcused. As a result, the government asserts that it is entitled to summaryjudgment as a matter oflaw. STATEMENT OF FACTS FORPURPOSES OF THE MOTION 

### 1. On 25 September 2013, Mr. John Vlachos, general manager ofCapy, accepted OrderNo. SPE4A6-13-M-S227 in the amount of$37,431.60. 1 

### The order required Capy to supply 27 splice fairings and a first article to the Defense Logistics Agency Aviation (DLA Aviation), a field activity ofthe Defense Logistics Agency. (R4, tab 1at l(A), 2of24) The delivery date for the production quantity was 18 February 2015 (R4, tab 2 at 2of2). 2

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### The orderresulted from a Request for Quotations issued bythe government on 16 August 2013 (R4, tabs 3, 4). 2 

### The orderrequired the delivery ofa FirstArticle Unit, 30 days after the production quantity. This obvious mistake is not alleged to be relevant to this appeal.2. The order incorporated FAR 52.249-8, DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984) by reference (R4, tab 1 at 23of24). The clause provides, in part, as follows: (a)(l) The Government may, subjectto paragraphs (c) and (d) ofthis clause, by written notice ofdefault to the Contractor, terminate this contract in whole or in part ifthe Contractor fails to-- (i) Deliverthe supplies orto perform the services within the time specified in this contract or any extension;

(c) Except for defaults ofsubcontractors at any tier, tqe Contractor shall not be liable for any excess costs ifthe failure to performthe contract arises from causes beyond the control and without the fault or negligence ofthe Contractor. Examples ofsuch causes include 

### (1) acts of God or ofthe public enemy, (2) acts ofthe Government in either its sovereign or contractual capacity, (3) fires, (4) floods, (5) epidemics, (6) quarantine restrictions, (7) strikes, (8) freight embargoes, and (9) unusually severe weather. In each instance the failure to perform mustbe beyondthe control and withoutthe fault or negligence of the Contractor. (d) 

### Ifthe failure to perform is caused by the default ofa subcontractor at any tier, and ifthe cause ofthe default is beyondthe control ofboth the Contractor and subcontractor, and withoutthe fault ornegligence ofeither, the Contractor shall not be liable for any excess costs for failure to perform, unless the subcontracted supplies or services were obtainable from other sources in sufficient time for the Contractorto meetthe required delivery schedule. 3. On 7 November 2013, Mr. Vlachos emailed Mr. Donnie W. Graves, the contracting officer (CO), as follows: Please cancel the above contract at no cost to Capy Machine.

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### Our forming vendor can't locate his tooling[.] (R4, tab 6) 4. On 13 November 2013, CO Graves issued a show cause notice to Capy:

(R4, tab 7) Because you have indicated in an e-mail dated 07 NOV 2013 citing an inability to locate tooling on contract SPE4A7-13-M-S227 within the time required by its terms and thereby requesting termination for convenience, the Government is considering terminating this contract under the provisions for default. Pending a final decision in this matter, it will be necessary to determine whether your failure toperform arose from causes beyond your control and without your fault or negligence. Accordingly, you are given the opportunity to present, in writing, any facts bearing on the question to me...within 10 days afterreceipt ofthis notice
....

If

### you have any questions, please contact Len DuPilka, Contract Administrator
....

5. On 26 November 2013, Mr. Vlachos emailed Mr. Len J. DuPilka, the contract administrator, as follows:

(R4, tab 8) The cost ofnewtooling is $19,647.00 total which wasn't included on the quote. That is the reason for asking to cancel this contract.

6. The record contains a quotation from BannerMetalcraft, Inc., dated 18 October 2013,3 

### which includes a one-time tooling charge of$19,647.00 (compl., attach.). 7. On 12 December 2013, Ms. Janice Hicks, the terminating contracting officer (TCO), terminated the contract for default, stating as follows:

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### The contract having been awarded on 25 September 2013. 3(R4, tab 10) You are hereby notified that contract SPE4A6-13-M-S227 is terminated for default effective immediately. Your right to proceed further with performance ofthis contract is terminated. The termination is based on your failure to perform in accordance withthe terms and conditions ofthe contract. The terminated supplies may beprocured against your account and you will beheld liable for excess costs.

8. On 19 December 2013, Capy appealedthe TCO's final decision to this Boardwhere it was docketed as ASBCA No. 59085. DECISION Summaryjudgment is properly granted only where the moving party has met its burden ofproving the absence ofany genuine issue ofmaterial fact and proventhat it is entitled tojudgment as a matter oflaw. 

### Mingus Constructors, Inc. v. UnitedStates, 812 F.2d 1387, 1390 (Fed. Cir. 1987). In this appeal, the government bears the burden ofprooftojustifythe default termination. Ifthe government establishes a

### prima facie case that the termination wasjustified, the burden shifts to the contractorto demonstrate that the default was excusable. 

### Hanley Industries, Inc., ASBCA No. 56584, 14-1 BCA

## if 35,699. The government argues that there are no material facts in dispute and that it is entitled to summaryjudgment on the ground ofanticipatory repudiation. By email dated 7 November 2013, Mr. Vlachos, Capy's general manager, requested CO Graves to cancel the contract at no cost because its forming vendor could not find its tooling. On 26 November 2013, Mr. Vlachos emailed Mr. DuPilka, the contract administrator, again requesting that the government cancel the contract. Capy stated that the reason for its request was that the cost ofnew tooling was $19,647 and that it could not afford to perform the contract. The government has not demonstrated that Capy repudiated the contract. Anticipatory repudiation requires a "positive, definite, unconditional, and unequivocal" manifestation on the part ofthe contractorthathe will not perform the contract. 

### Cascade Pacific International v. UnitedStates, 773 F.2d 287, 293 (Fed. Cir. 1985). Capy communicated with the CO twice before the contract was terminated. On 7 November 2013, Capy requested a no cost cancellation, stating that its "forming vendorcan't locate his tooling." On 26 November 2013, Capy advised that the "cost ofnewtooling is $19,647.00 total which wasn't included on the quote. That is the

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### reason for asking to cancel this contract." These communications do not reflect a positive, definite, unconditional and unequivocal refusal to perform. Accordingly, the government's motion for summaryjudgment is denied. Dated: 22 October 2014

I concur (}/, r/

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_**-·,_~- ELIZ~ETH**  

### A. TUNKS Administrative Judge Armed Services Board ofContract Appeals

I concur

I certify that the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContract Appeals in ASBCA No. 59085, Appeal ofCapy Machine Shop, Inc., rendered in conformance with the Board's Charter. Dated:

5 JEFFREYD. GARDIN Recorder, Armed Services Board ofContract Appeals