ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeals of --

DODS, Inc. 

Under Contract No. W31P4Q-l l-C-0133 

APPEARANCE FOR THE APPELLANT: 

APPEARANCES FOR THE GOVERNMENT: 

) 

) 

) 

) 

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ASBCA Nos. 57746, 58252 

1"1r. David Storey 

President 

Raymond M. Saunders, Esq. 

Army Chief Trial Attorney 

LTC Mark A. Ries, JA 

Erica S. Beardsley, Esq. 

Trial Attorneys 

OPINION BY ADMINISTRATIVE JUDGE PEACOCK 

These disputes under the captioned contract, for the supply of the center wing 

sections for the government's "workhorse" aerial target system, involve an appeal from a 

termination for default for failure to make progress (ASBCA No. 57746) and related 

affirmative contractor claims for alleged delay (ASBCA No. 58252). We deny both 

appeals. 

FINDINGS OF FACT 

The Solicitation and Pre-Contract Communications 

1. The U.S. Army Contracting Command, Aviation and Missile Command (AMCOM) 

Contracting Center (the "government") issued Solicitation No. W31P4Q-l O-T-0079 (the 

"solicitation") to procure one first article and eight production units of the center wing section 

for the MQM-107 aerial target system (ATS) on behalf of the Targets Management Office 

(TMO) (R4, tab 2). The ATS is the government's workhorse and most versatile aerial target, 

used for testing and evaluating weapons systems and training military personnel. It is about 

18 feet long with a 10-foot wingspan, is self-propelled by a turbo jet engine, is capable of 

aerodynamic maneuvers sufficient to engage in air-to-air combat training with manned fighter 

jets, and is recoverable for reuse. (R4, tabs 69, 85, 86; tr. 2/192-94) The center wing section 

consists of a panel that is about 5 feet by 3 .5 feet in size and is about 2 inches thick, along with 

the leading edges, which form the curved, aerodynamic shape of the wing front (tr. 2/195-96, 

3/120). 

2. The government distributed the solicitation and its accompanying technical 

data package (TDP) directly to potential contractors on 21 July 2010. The TDP was 
provided only on a compact disc (CD) (hereinafter the "TDP CD"), and contained all 

technical data required to build the center wing section. (Tr. 1/29-30) The paper version 

was not provided to DODS or any other potential contractor (tr. 1133). 1 The TDP CD 

contained files in pdf or C4 format (hereinafter "pdf ') consisting of dozens of 

government part number drawings and also contained a "readme" file with instructions 

for accessing the information on the TDP CD and a helpdesk telephone number for 

troubleshooting assistance (tr. 3/199-200). Some of the drawings provided on the TDP 

CD are called digital data drawings, which provided instructions on how to use the 

three-dimensional computer aided design (CAD) models depicting the outer surface and 

shape of the center wing section (tr. 2/194, 202, 3/196, 199). 

3. The CAD models provided on the TDP CD were developed from, and replaced, 

the original master lines, commonly referred to as Mylars. The IMO stopped using 

Mylars and began including CAD models in the TDP provided to prospective contractors 

in the 1990s because CAD models provide greater accuracy. (Tr. 21198-99, 202) The 

CAD models were meant to be imported into computer numeric control (CNC) milling 

machines, and the CNC milling machines in turn would make molds, otherwise known as 

"tooling" or "special tooling" to make the physical parts for the end item (tr. 2/196, 

199-200). The center wing section could not have been produced without using the CAD 

files provided by the government on the TDP CD (tr. 3/198-99). The CAD files were 

provided in at least six different specific CAD programs as well as other neutral, or 

generic, file formats. The neutral formats allowed for the CAD models to be used by 

many CAD programs other than the specific program versions provided on the TDP CD. 

The digital data drawings on the TDP CD provided instructions for using the CAD files. 

(Tr. 2/205-10) 

4. Among the potential contractors sent the solicitation and TDP was a company 

called TTF, LLC (TTF) (tr. 1/31). Although the government sent the solicitation and 

accompanying TDP to TTF, Mr. David Storey acknowledged receipt of the solicitation 

and TDP on behalf ofDODS on 27 August 2010 (R4, tab 4 at 28; tr. 1/30-31). 

Mr. Storey is the president or manager of TTF (R4, tabs 78, 80; app. supp. R4, tabs 40, 

41; exs. G-2 at 1, G-5 at 1, G-12 at 1). Mr. Storey is the sole owner of both DODS and 

TTF (R4, tabs 78, 80; exs. G-2 at 1, G-5 at I, G-6 at 3). TTF is located at 1400 Mills 

Highway, Breaux Bridge, Louisiana. DODS consists of a "lean-to" against the side of 

the TTF building with an address of 1402 Mills Highway, Breaux Bridge, Louisiana. 

DODS and TTF operate out of shared office space. (R4, tabs 78, 80) 

5. DODS submitted its unqualified quote in response to the solicitation on 

29 August 2010 (R4, tabs 4, 78, 80). The government received a total of three quotes in 

response to the solicitation, and awarded a contract to the bidder with the lowest priced 

quote. Within one week of award, the awardee notified the government that it could not 

1 Tab 3 in the Rule 4 file is a physical representation of the data contained on the 

TDPCD. 
produce the center wing section and requested that its contract be cancelled. (R4, tab 5; 

tr. 1132) 

6. On 19 October 2010, while the cancellation of the initial award was processing, 

the contract specialist contacted the next lowest quote, DODS, by email to determine 

whether its quoted price was still valid and to seek assurance that DODS could produce the 

center wing section. The contract specialist informed DODS that the initial awardee was 

unable to perform the contract because it was incapable of producing the required wing 

section, and requested that DODS confirm its ability to produce or access the proper 

tooling to make "the main channels (i.e., -15, -16, etc.) or the leading edges (i.e., -3, -2, 

etc.) or the bonding for the main body." (R4, tab 5) The contract specialist questioned 

these specific capabilities because they directly related to the inability of the initial 

awardee (R4, tab 5; tr. 1/33-35). The channels are extruded parts on the right-hand and 

left-hand sides of the center wing section for interface with the outboard wing assemblies 

(R4, tab 3 at 104; tr. 2/212-13). Extruded parts, generally, are "long narrow item[s] of 

continuous cross-section ... made by forcing a material through a die, such that the material 

takes on the shape of that die" (tr. 2/213). An everyday example of an extruded part is a 

train rail (id.). The channels for the center wing section have a specific cross-section, and 

are therefore not "off-the-shelf' items (tr. 3/208-09). 

7. On 20 October 2010, DODS responded to the contract specialist's 19 October 

2010 email stating that it was "pleased to accept [her] offer" and asking several questions 

regarding the requirement: 

In an effort to expedite the First Article delivery would you 

please request clarity for the following questions: 

1. BR-127 is our preferred Adhesive Primer. Is there any 

objections [sic] as MIS-26333K does not identify a primer 

other than one compatible to the adhesive system. 

2. Hysol's 9628, FM-132-2, or AF-126-2 for the film 

adhesive or equivalents. 

3. ISO 9001-2000 until November then ISO 9001-2008 for 

our Quality System. 

4. DOD's [sic] Autoclave is rated at 50 PSI.and 350 F. 

MIS-26333K on page 3, Section 3.1.1 requires an 

Autoclave [sic] capable of pressures 10 to 100 PSI at 350 F. 

3 
(R4, tab 6) 

However, the Center Wing Structure Cure Cycle is 

at 260-280 F, 9 F max heat up rate per minute, 10 to 80 PSI, 

for 55-140 minutes. 

Well within our capabilities. Is this acceptable? 

5. A sample part. Can be from a crashed unserviceable unit 

for clarity to engineering drawings. 

8. Also on 20 October 2010, DODS responded to the contract specialist's email 

and affirmed its capability to produce the part (R4, tabs 7, 78, 80). DODS specifically 

assured the contract specialist that, "[ w ]e have the capability or access to or can acquire 

through a vendor the proper tooling to make all the main channels (i.e., -15, -16, etc.) or 

the leading edges (i.e., -3, -2, etc.) or the bonding for the main body." DODS also states 

that, "in addition DODS, Inc has a HAAS VF 9 with a bed 36 by 96 inches, [t]hree 

Hydraulic Presses with the largest bed 120 by 36 inches rated at 800 tons, one heat treat 

oven, and two Autoclaves." (R4, tab 7) However, although not yet known by the 

contracting officer (CO) TTF, not DODS, owned the hydraulic presses, heat treat oven, 

and autoclaves (R4, tab 54 at 22-25; tr. 1/96, 5/71-78). 

9. On 3 November 2010, the contract specialist provided DODS with responses to 

its questions from 20 October 2010. Of particular relevance to these appeals, DODS was 

informed on 3 November 2010 that the government agreed to DODS' use of the BR-127 

adhesive primer and that the Hysol 9628, FM-132-2, and AF-126-2 film adhesives were 

all suggested by the specification and DODS could choose one to use. (R4, tab 3 at 171, 

tabs 8, 78, 80; tr. 4/11-15) DODS did not seek any additional clarification regarding any 

of the issues raised in its 20 October 2010 email prior to contract award (tr. 1137). 

10. On 3 November 2010, DODS thanked the contract specialist for the 

information and informed her that DODS was ready to proceed with the contract (R4, 

tabs 10, 78, 80). On 29 November 2010, DODS sent an email to the contract specialist 

stating, "[ c ]an you please provide status as I have a few people already working on this 

(at my own risk)" (R4, tab 13). DODS requested updates on the status of the contract 

award several more times between 29 November 2010 and 3 January 2011 (R4, tabs 15, 

17,19,21). 

11. On 4 January 2011, the contract specialist requested that DODS inform the 

government of the date by which DODS would deliver the inspected first article so that 

the contract would reflect accurate dates (R4, tab 22). DODS responded the same day 

that the first article would be complete, including the first article inspection, within 

206 "DARO," or days after receipt of order (R4, tab 23; tr. 1/39). From 4 January 2011, 

206 days would have been 29 July 2011, but DODS' email indicated the date of 2 August 

4 
2011 (R4, tab 23). The contract as eventually awarded actually provided DODS more 

time than it requested by setting the first article delivery date as 31 August 2011, or 

217 days after contract award (R 4, tab 1 at 3). 

12. On 21 January 2011, the contract specialist requested that DODS "please 

review the attached contract for errors or changes needed on your end" (R4, tab 26). The 

"attached contract" referred to by the contract specialist and provided to DODS prior to 

contract award was identical to the document contained in the Rule 4 file at tab 1, with 

the exception of signatures and one error noted by DODS and corrected prior to award 

(tr. 1/42-43). On 24 January 2011, DODS responded indicating that DODS had reviewed 

the contract and that the "Contract looks good. I only found one correction and that 

would be the production delivery date of December 31, 2011 (CLIN OOOlAB). That is 

the date the First Article review would be due. The Production is to follow at 113 days or 

April 25, 2012." (R4, tabs 27, 78, 80; tr. 1/40-43) The production delivery date was 

adjusted to 30 April 2012 before the contract was signed, again providing DODS more 

time that it requested (R4, tab 1 at 4; tr. 1/42-44). 

13. On 26 January 2011, the government awarded Contract No. W31P4Q-11-C-0133 

(the "contract") to DODS (R4, tabs 1, 78, 80). The final signed copy was provided to 

DODS on 27 January 2011 (R4, tab 28). The contract was awarded as a firm fixed-price 

contract with one contract line item number (CLIN) 0001, for Part Number 13458239, 

NSN 1560-01-386-8205, the center wing section of an ATS. The CLIN was subdivided into 

two subCLINs OOOlAA and OOOlAB. SubCLIN OOOlAA was for the first article production 

and delivery by 31August2011 at a price of $84,900. SubCLIN OOOlAB was for the 

remaining eight production units at a unit price of $51,900 each, for a total amount for 

subCLIN OOOlAB of $415,200. The total contract price for the first article and the 

production units was $500,100. (R4, tab 1 at 1, 3-4) The contract incorporated by reference 

FAR 52.249-8, DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984) clause. The 

contract also included FAR 52.209-4, FIRST ARTICLE APPROVAL - GOVERNMENT TESTING 

(SEP 1989), ALTERNATE I (JAN 1997) clause. (R4, tab 1 at 17) 

14. The contract provided for government inspection at origin and acceptance at 

destination for both subCLINs. The destination for the first article was designated as 

Redstone Arsenal, Alabama, and the destination for the production quantity was 

designated as Fort Bliss, Texas. (R4, tab 1 at 3-4; tr. 1144) Contract administration was 

delegated to the Defense Contract Management Agency (DCMA) Dallas (R4, tab 1 at 1; 

tr. 2/8, 4/44). 

15. The contract incorporated by reference FAR 52.246-2, INSPECTION OF 

SUPPLIES-FIXED-PRICE (AUG 1996) clause. This clause stated, in relevant part: 

(b) The Contractor shall provide and maintain an 

inspection system acceptable to the Government.... As part 

of the system, the Contractor shall prepare records evidencing 

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all inspections made under the system and the outcome. 

These records shall be kept complete and made available to 

the Government during contract performance and for as long 

afterwards as the contract requires. The Government may 

perform reviews and evaluations as reasonably necessary to 

ascertain compliance with this paragraph. These reviews and 

evaluations shall be conducted in a manner that will not 

unduly delay the contract work. The right of review, whether 

exercised or not, does not relieve the contractor of the 

obligations under the contract. [Emphasis added] 

( c) The Government has the right to inspect and test 

all supplies called for by the contract, to the extent 

practicable, at all places and times, including the period of 

manufacture, and in any event before acceptance. The 

Government shall perform inspections and tests in a manner 

that will not unduly delay the work. The Government 

assumes no contractual obligation to perform any inspection 

and test for the benefit of the Contractor unless specifically 

set forth elsewhere in this contract. 

( d) If the Government performs inspection or test on 

the premises of the Contractor or a subcontractor, the 

Contractor shall furnish, and shall require subcontractors to 

furnish, at no increase in contract price, all reasonable 

facilities and assistance for the safe and convenient 

performance of these duties .... 

(i)( 1) If this contract provides for the performance of 

Government quality assurance at source, and if requested by 

the Government, the Contractor shall furnish advance 

notification of the time (i) when Contractor inspection or tests 

will be performed in accordance with the terms and 

conditions of the contract and (ii) when the supplies will be 

ready for Government inspection. 

(2) The Government's request shall specify the period 

and method of the advance notification and the Government 

representative to whom it shall be furnished. Requests shall 

not require more than 2 workdays of advance notification if 

the Government representative is in residence in the 

6 
Contractor's plant, nor more than 7 workdays in other 

instances. 

(R4, tab 1 at 6) 

16. The contract incorporated by reference FAR 52.246-11, HIGHER-LEVEL 

CONTRACT QUALITY REQUIREMENT (GOVERNMENT SPECIFICATION) (FEB 1999) clause. 

The contract filled-in the clause by specifying that, "THE CONTRACTOR SHALL 

COMPLY WITH THE HIGHER LEVEL CONTRACT QUALITY REQUIREMENT 

ANSl/AQSC Q9002 OR EQUIVALENT." (R4, tab 1at6) The higher level quality 

clause was included because of the critical nature of aircraft parts. Compliance with the 

higher level quality clause required a more structured manufacturing environment. 

(Tr. 1/45, 4/49-50) The higher level quality system requires the contractor to have a 

quality manual and other implementing documents that comply with the quality 

requirement, and requires that the contractor comply with its quality documents 

(tr. 4/142-43). 

17. The contract incorporated by reference FAR 52.242-17, GOVERNMENT DELAY 

OF WORK (APR 1984) clause. This clause stated, in relevant part: 

(a) If the performance of all or any part of the work of 

this contract is delayed or interrupted .... (2) by a failure of 

the Contracting Officer to act within the time specified in this 

contract, or within a reasonable time if not specified, an 

adjustment (excluding profit) shall be made for any increase 

in the cost of performance of this contract caused by the delay 

or interruption and the contract shall be modified in writing 

accordingly. Adjustment shall also be made in the delivery or 

performance dates and any other contractual term or 

condition affected by the delay or interruption. However, no 

adjustment shall be made under this clause for any delay or 

interruption to the extent that performance would have been 

delayed or interrupted by any other cause, including the fault 

or negligence of the Contractor, or for which an adjustment is 

provided or excluded under any other term or condition of 

this contract. 

(b) A claim under this clause shall not be allowed 

( 1) for any costs incurred more than 20 days before the 

contractor shall have notified the Contracting Officer in 

writing of the act or failure to act involved; and (2) unless the 

claim, in an amount stated, is asserted in writing as soon as 

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practicable after the termination of the delay or interruption, 

but not later than the day of final payment under the contract. 

(R4, tab 1 at 7) 

18. The contract required that DODS comply with Aerospace Material 

Specification (AMS) 2770, a process specification for the heat treatment of wrought 

aluminum alloy parts (R4, tab 3 at 16-25, tab 70 at 1; tr. 5/32-34). Although some parts 

lists notes within the TDP contained references to the military heat treatment 

specification MIL-H-6088, the technical data parts list (TDPL), incorporated into the 

TDP, dictated which specifications actually applied to the contract (R4, tab 3 at 107; 

tr. 5/31 ). The TDPL lists the drawings and specifications included in the TDP (tr. 5/31 ). 

19. AMS 2770H, paragraph 3.1.2.1, "Heating Media," provided in pertinent part 

that, "[t]he products of combustion and other materials that could contaminate parts shall 

not come into contact with parts" (R4, tab 70 at 2). 

20. AMS 2770H, paragraph 4.1, "Responsibility for Inspection," provided that: 

[T]he processor shall be responsible for the performance of 

all tests and inspections specified herein. The procuring 

activity reserves the right to perform any surveillance or tests 

or inspections of parts, and to review heat treating records and 

results of processor's tests and inspections to verify that heat 

treating conformed to the specified requirements. 

(R4, tab 70 at 8) 

21. The contract directed compliance with MIS-26333, a military process 

specification for adhesive bonding requirements for the ATS (R4, tab 3 at 16; tr. 3/8, 

4/13). MIS-26333, paragraph 3.3.4.5, "Controlled area," referenced to by the parties as 

"clean room" required that "[t]he application on primer and adhesive films shall take 

place in a clean, protected, dust-free area. The temperature shall be 75 [degrees, plus or 

minus 10 degrees] and the relative humidity shall not exceed 80 percent." (R4, tab 3 

at 155) 

22. MIS-26333K, paragraph 6.2.2, "Approved sources," provided that "[o]nly the 

following listed products are approved for use on the MQM-107 target system." 

Paragraph 6.2.2.1, "Adhesive System A," provided in relevant part: American 

Cyanamid Co., Part Number "FM-123-2, or equal"; Hysol Division, The Dexter Corp., 

Part Number "EA9601, or equal[;] EA9602, or equal"; and Minnesota Mining & Mfg. 

Co., Part Number "AF-126-2, or equal." (R4, tab 3 at 171) The inclusion of "or equal" 

after listing the specific manufacturer and product allowed the contractor to use any of 

8 
the listed products or the updated versions then available from the manufacturer (tr. 2114, 

162, 31105-06, 161, 4/14-15, 5/8-9, 23). 

23. Shortly after award of the contract, the contract specialist queried DODS 

regarding its capability to produce the center wing section (R4, tab 30; tr. 1/49). On 

8 February 2011, DODS sent an email to the contract specialist in response to questions 

about DODS' capability to perform the contract work and produce the center wing 

section as required by the contract. In the email, DODS affirmed that "DODS has the 

capability to manufacture this item in-house. DODS is in the process of quoting details 

and materials, designing the tooling .... Will probably outsource Skin Cleaning and 

Adhesive Primer application." (R4, tabs 30, 78, 80) 

24. Unknown at that time to the contract specialist or the CO, or anyone else at 

the buying command, DODS actually consisted only of a "lean-to" against the side of the 

building owned by TTF (R4, tabs 78, 80; tr. 1/96, 5/57-58). DODS had insufficient 

manufacturing space, facilities, or equipment of its own to manufacture the center wing 

section (R4, tab 54 at 22-25; tr. 5171-78). 

25. On 7 April 2011, a DCMA Quality Assurance Representative (QAR), held a 

"QA Only Post-Award Conference" with DODS (R4, tab 32; tr. 5/138). A QA only 

post-award conference is one of the DCMA's surveillance mechanisms to ensure the 

quality of a product, and is held only pursuant to and consistent with internal DCMA 

policy. 

26. Among the matters discussed at the post-award conference and recorded on 

the Post-Award Conference Record were the following: Mr. Storey stated that DODS 

was preparing requests for quotes (RFQs) and the QAR reminded DODS to provide 

copies of all released purchase orders (POs) to the QAR for review and delegation 

determination; Mr. Storey twice stated, without qualification, that DODS would meet the 

31 August 2011 First Article delivery date; the QAR noted that as of the date of the 

conference, there was no production and no production employees in DODS plant; 

Mr. Storey stated that no "special tooling" would be necessary to manufacture the subject 

item; the QAR reminded DODS that its heat treating process and equipment must be 

validated and certified before being placed in the production flow; the QAR discussed the 

contract's higher level quality requirement, and DODS stated it understood; DODS 

expressed the need for clarification concerning a drawing, and the QAR advised DODS 

to contact engineering support for the buying command for clarification (R4, tabs 32, 78, 

80; app. supp. R4, tab 7; tr. 51139-58). 

27. DODS was required to forward POs to the QAR so that the QAR could verify 

that the contract requirements were actually included in the PO and to determine whether 

the item or service that DODS was purchasing required a DCMA QAR to visit and 

inspect that vendor (R4, tab 1 at 6, tab 32 at 1; tr. 41103-06). The contract required 

9 
DODS to flow down the quality and inspection requirements to any vendor or 

subcontractor. 

28. At no time prior to 7 April 2011 did DODS inform the government or DCMA 

that DODS' work on the contract was delayed while waiting for the post-award 

conference (R4, tabs 78, 80; tr. 1/85-86, 2/138-40, 5/155-58). On 7 April 2011, during 

the post-award conference, DODS twice specifically stated, without qualification, that it 

would meet the first article delivery date of 31 August 2011 and made no reference 

regarding any alleged government delay (R4, tabs 32, 78, 80; app. supp. R4, tab 7; 

tr. 5/155-58). In fact, the first time that DODS raised the timing of the post-award 

conference as an alleged government delay was in a letter to the government on 6 July 

2011 (R4, tabs 42, 78, 80; tr. 1/85-86, 2/138-40, 51155-58). The timing of the post-award 

conference did not delay DODS performance (tr. 5/155-58). No contract clause or other 

direction from the CO required that a post-award conference be held. 

29. Following receipt of a contractor's production plan, the DCMA QAR 

establishes "GMIPs" or government mandatory inspection points, by noting those points 

or processes during production for which the QAR requires advance notice and the 

opportunity to witness. These GMIPs do not hold up production. The DCMA QAR 

cannot notify the contractor regarding those inspection points without knowing the 

contractor's production plan. Once the DCMA QAR receives the production plan, the 

DCMA QAR can notify the contractor of the inspection points, or GMIPs, and then the 

contractor must notify the DCMA QAR at least seven days in advance of performing one 

of the GMIP processes. The notification allows but does not require, the DCMA QAR to 

be present to witness the process, but does not hold up the contractor's production. There 

is no evidence that DODS provided DCMA with any production plan prior to its 20 July 

2011 response to the cure notice, as discussed below. (Tr. 4/94-97, 51108-09) 

DODS' Request for Assistance - Hidden Line 

30. On 16 May 2011, DODS emailed a letter to the former contract specialist and 

raised for the first time with the CO its request for assistance regarding the drawing that 

the QAR told DODS to take to the engineering support for the buying command for 

clarification at the post-award conference on 7 April 2011 (R4, tab 32 at 4, tab 37; 

tr. 5/152-53). The complete text of the question in the letter was: "Regarding Contract 

W31P4Q-11-C-0133, we at DODS request engineering assistance. On the left and right 

hand end of the attach bracket is a hidden line (long rectangle) that is unidentifiable. Is 

this part of the next higher assembly? Please advise." (R4, tab 37) There were no 

drawings, explanations or other attachments to the letter (id.; app. supp. R4, tab 1; 

tr. 4/15). The letter did not indicate that the request for assistance was urgent or delaying 

production (R4, tab 37; app. supp. R4, tab l; tr. 1186, 88-89). 

31. The TMO engineer responsible for responding to the CO regarding technical 

questions for the MQM-107 was away on temporary duty (TDY) until 23 May 2011. 

10 
Upon his return, he researched the question and developed a response. (Tr. 1/65-66) To 

determine the answer, the engineer went to the TDP and located the top part drawing, and 

worked his way through the drawings to deduce the basis ofDODS' question (R4, tab 3 

at 112; tr. 4/16). On the top part drawing, the engineer located several "hidden lines," 

which are depicted as dashed lines on drawings and represent something underneath the 

current drawing's perspective. The drawing contains directions to find another drawing 

from a different view point, a cut-away view, to determine what the hidden line 

represents (tr. 2/214-15, 4/16, 18). 

32. The TMO engineer then proceeded through several steps to read the drawings 

and determine that he thought the answer to DODS' question was that the hidden line 

represented a nut assembly, a part included in the parts list for the center wing section 

(tr. 4116-26). The process to determine this answer took the TMO engineer, who had 

worked at the TMO for less than a year and had never reviewed the MQM-107 drawings 

prior to determining the answer to DODS' hidden line question, about one hour 

(tr. 3/232, 4/32-33, 5/12-13). Although the specific hidden lines examined by the 

engineer could only have represented the nut assembly (tr. 3/135-37, 211, 4/25-32), as a 

result of the vagueness ofDODS' question, the engineer still was not certain that DODS' 

question pertained to these particular hidden lines until the hearing in these appeals 

(tr. 4/34). 

33. Once the engineer had determined his answer to DODS' hidden line question, 

the response had to be approved by a senior government TMO representative, but that 

person was on TDY until the following week (tr. 1/65-66). 

34. On 21 June 2011, DODS submitted a request for assistance, reiterating its 

"hidden line" query and asking seven additional questions. Although DODS' letter is 

dated 16 June 2011, DODS did not email the letter until 21June2011 (hereinafter, 

"DODS' 21June2011 letter"). (R4, tab 38; tr. 1175) The text ofDODS' request was as 

follows: 

This is a follow-up to our previous request for engineering 

assistance sent May 16, 2011. DODS requests engineering 

assistance for the following: 

1. On the left and right hand end of the attach bracket is a 

hidden line (long rectangle) that is unidentifiable. Is 

this part of the next higher assembly? Please advise. 

2. Request to use Hysol EA9628.06 ILO EA9601 or 

EA9602 as the equal alternative. 

3. Request to use BR-127 Adhesive Primer. 

11 
4. Request to use MA-562 BMS 5-90 Core Splice 

Foaming Adhesive ILO FM-37 as the equal 

alternative. 

5. Request to use EA960F ILO EA960 as the equal 

alternative. 

6. Request to use BAC 5555 Phosphoric Acid Anodize 

ILO ASTM-3933 as the equal alternative. 

7. Part Number PL13458219-4 is not listed in the Parts 

List but is shown on the corresponding drawing, Sheet 

4, D7. Please advise material and thickness. 

8. Request to use AMS 2770 ILO MIL-H-6088. 

Please advise. 

(R4, tab 38) DODS' 21June2011 letter included two attached pages with what appears 

to be copied drawings. The first document had handwriting circling portions of the 

drawing and referencing "Question #7." The second document matches the drawing 

description in DODS' 21June2011 letter request number 7. (R4, tab 3 at 105, tab 38) 

Nothing in DODS' 21 June 2011 letter informed the CO that DODS' issues were 

impacting production or indicated urgency in any way (R4, tab 38). 

35. The CO answered DODS' "hidden line" request in a letter dated and emailed 

22 June 2011, stating: 

We assume the long hidden line rectangle mentioned by the 

vendor is the one by the Find No. 1 callout in section D 1 of 

drawing 13458239. If you follow Find No. 1 to drawing 

13458219 sheet 3 Section N-N, you will see Find No. 37 (-19 

channel, 11557862) and Find No. 19 (-20 nut assembly, 

NAS689Pl6-8. The hidden lines indicate the nut assembly. 

(R4, tab 39) The "We assume" language was included because DODS failed to 

adequately explain or describe its question to ensure that the TMO engineers would 

review the specific uncertainty (R4, tab 39; tr. 1/66, 4/35). The CO's email with her 

22 June 2011 letter attached was incorrectly addressed, omitting the "c" in "com." The 

CO however, did not realize the error because she received an automated delivery 

confirmation notice. (R4, tabs 39, 40; tr. 1166-68, 73-74) 

12 
36. On 6 July 2011, DODS sent an email to the government and requested a 

120-day extension citing materials unavailability, government delay in responding to 

requests to use alternate products, and the time between contract award and the 

post-award conference with DCMA (R4, tab 42). DODS' 6 July 2011 letter was the first 

instance in which DODS informed the government of any alleged government delay for 

any cause, including the hidden line issue (R4, tabs 42, 78, 80; tr. 1185-86, 2/138-40, 

5/155-58). 

37. On 8 July 2011, the CO notified DODS in a letter attached to an email that the 

CO had answered DODS' hidden line question in her 22 June 2011 letter (R4, tab 44; 

tr. 1/69-70). This email message was missing the "c" in "com" for Ms. Beniest's 

(Mr. Storey's personal assistant) email address, but it was correctly addressed to 

Mr. Storey's email address. 

38. On 11 July 2011, DODS sent an email acknowledging receipt of the CO's 

8 July 2011 letter, and requested that the CO send DODS a copy of the letter dated 

22 June 2011 (R4, tab 46; tr. 1/93). On the same day, 11 July 2011, the CO emailed to 

DODS another copy of her 22 June 2011 response to DODS regarding its "hidden line" 

request (R4, tab 47; tr. 1/73-74). Appellant presented no evidence detailing to what 

extent, if any, the timing of the government's response to its question impacted DODS' 

performance under the contract. 

39. Resolution of DODS' "hidden line" request was not required to proceed with 

assembly. DODS should have been able to determine what the hidden line represented 

on its own (tr. 4/12-13). The answer was readily apparent from reading the drawings 

(tr. 3/223, 4/32-33). DODS could also have easily worked backwards from the parts list 

to cross-check what the hidden line represented (tr. 4/29). DODS could also have 

ordered the parts required for assembly and determined through assembly that the only 

possibility was that the hidden line represented the nut assembly (tr. 5/12-15). There is 

no evidence establishing how the hidden line request prevented DODS from ordering the 

parts and beginning assembly. DODS could have assembled the center wing section 

without knowing what the hidden line represented and still have been able to add the nut 

assembly because it sits in a channel easily accessible after assembly. (Tr. 5/15) 

40. Requests 2 and 3 in DODS' 21 June 2011 letter repeated questions that DODS 

posed in its email of 20 October 2010 and that the government answered on 3 November 

2010 (R4, tabs, 6, 8, 38). Both DODS' requests were unnecessary (tr. 5/8-9). With respect 

to request 2, the TDP in MIS-26333K listed several alternative products and provided the 

contractor with the authority to use an "equal" (R4, tab 3 at 171; tr. 2114, 162, 3/105-06, 

161, 4/14-15, 5/8-9, 23). DODS could have chosen one of the other products listed in 

MIS-26333K or it could have simply used the Hysol EA9628.06 as an equal alternative to 

the Hysol EA9601or9602 (tr. 2/14, 162, 3/105-06, 161, 4/14-15, 5/8-9, 23). Even if 

DODS wanted government approval, it did not need to hold up its production while 

13 
waiting for the response to either request 2 or 3. DODS could have ordered materials, cut 

materials, developed the tooling needed to create the leading edges, among other 

production steps, while it waited for the government approval. (Tr. 5/12, 17-18, 34-35) 

41. Requests 4 and 5 in DODS' 21 June 2011 letter presented a new request 

regarding use of specific adhesives but again lacked any explanation or indication of 

production impact or urgency. With respect to request 4, the TDP did not require the use 

of one specific adhesive; rather, the contractor was provided with suggested sources of 

supply, including three vendors and five different adhesives. DODS could have used any 

of those listed, or could have used other adhesives because the ones listed in this instance 

were merely suggested. (R4, tab 3 at 73; tr. 5/20-22, 34-35) With respect to request 5, 

the TDP in MIS-26333K listed a product and provided the contractor the authority to use 

an "equal" (R4, tab 3 at 172; tr. 2/14, 162, 31105-06, 161, 4/14-15, 5/8-9, 23). According 

to the TMO engineer, the adhesive DODS requested to use was very clearly the same 

adhesive as the listed product except that the manufacturer had denoted F to indicate that 

it was a faster curing adhesive (tr. 5/23). Even ifDODS wanted government approval, it 

did not need to hold up its process waiting for the government's response to either 

request 4 or 5. DODS could have ordered materials, cut materials, developed the tooling 

needed to create the leading edges, among other production steps, while waiting for the 

government's response. (R4, tab 3 at 73; tr. 5/20-24, 34-35) 

42. Request number 6 in DODS' 21June2011 letter presented a new request but 

again lacked any explanation or indication of production impact or urgency (R4, tab 38; 

tr. 2/162-63, 3/164, 5/14, 39). This request dealt with phosphoric acid anodizing 

specifications, and DODS requested to use the Boeing specification BAC-5555 instead of 

the industry standard specification included in the TDP, ASTM-3933. In this instance, 

the TDP did not provide the contractor with the choice of an "or equal" replacement. The 

government denied DODS' request unless DODS provided a detailed explanation as to 

why the Boeing specification was equal or better than the TDP specification because the 

government did not have access to the Boeing specification. Even if DODS had some 

legitimate reason for desiring to adhere to the BAC-5555 specification rather than the 

ASTM-3933 specification, it did not need to hold up its process waiting for the 

government's response. DODS could have ordered materials, cut materials, developed 

the tooling needed to create the leading edges, among other production steps, while 

waiting for the government's response. (R4, tab 3 at 148, tab 50; tr. 1/90, 5/24-27, 34-35) 

43. Request 7 in DODS' 21 June 2011 letter requested clarification of a drawing, 

and provided some explanation and two attached drawing sheets (R4, tab 38). DODS 

stated that: "Part Number PL 1345 8219-4 is not listed in the Parts List but is shown on 

the corresponding drawing, Sheet 4, D7. Please advise material and thickness." (R4, 

tab 38; tr. 5/27) The answer to Request 7 was readily determinable from the drawings 

(tr. 5/27-30). Part numbers are called "dash" numbers and are contained in the parts list 

portion of the drawings (tr. 5/27, 30). The Sheet 4, D7, however, does not indicate a part 

or a "dash 4" but points the reader to a Find Number 4, indicated on the drawing as 

14 
"(FN 4)" (R4, tab 3 at 105; tr. 5/27-30). Following the Find Number 4 to the parts list 

leads to the Dash Number 7 part, a doubler, and the parts list provides the material and 

thickness (R4, tab 3 at 109; tr. 5/30-31 ). DODS did not need to hold up its process 

waiting for the government's response. DODS could have ordered materials, cut 

materials, developed the tooling needed to create the leading edges, among other 

production steps, while waiting for assistance in reading the drawings. (Tr. 5/31, 34-35) 

44. Request 8 in DODS' 21 June 2011 letter presented a new request but again 

lacked any explanation or indication of production impact or urgency (R4, tab 38). 

This request dealt with the heat treating specification, and DODS' request to use the 

AMS 2770 instead of the Military Specification H-6088 (MIL-H-6088) (R4, tab 38; 

tr. 5/31-32). This request was unnecessary because the TDP already required the use of 

the AMS 2770 specification (tr. 5/32). The TDPL includes a list of every drawing and 

specification included in the TDP (tr. 5/31). Several drawing notes in the TDP reference 

the MIL-H-6088 specification. The TDPL shows that MIL-H-6088 was replaced by 

AMS-H-6088, and shows that AMS-H-6088 was replaced by AMS 2770, 2771, and 

2772. (R4, tab 3 at 22, 25, 27; tr. 5/31-33) In other words, the TDP already indicated 

that DODS should use AMS 2770 instead of MIL-H-6088. Even if DODS wanted 

government verification, it did not need to hold up its process waiting for the 

government's response. DODS could have ordered materials, cut materials, developed 

the tooling needed to create the leading edges, among other production steps, while 

waiting for the government's verification (tr. 5/34-35). 

45. In its 6 July 2011 letter, DODS' first mention of an alleged government delay, 

DODS stated that the extension request was "due to unavailability of materials as stated 

in letters dated May 16, 2011 and June 20, 2011 [sic] requests for alternate products have 

gone unanswered for 2 months, causing a delay" (R4, tab 42). However, neither DODS' 

16 May 2011 letter, nor its 21 June 2011 letter, indicated that its requests were based on 

unavailability of materials (R4, tabs 37, 38; tr. 1/85-86, 88-89). In fact, DODS' 16 May 

2011 letter included only DODS' "hidden line" issue (R4, tab 37; tr. 1188-89). Apart 

from not having raised the material availability issue until its 6 July 2011 letter, DODS 

provided no support for its assertion that materials were unavailable. The materials and 

specifications questioned in DODS' 21 June 2011 letter were actually still available. 

(R4, tabs 81-84; tr. 3/99-102) 

46. On 8 July 2011, the CO denied DODS' 6 July 2011 request for an extension 

in the contract delivery date. In her letter, the CO informed DODS that she did not 

understand DODS' reference to DCMA delay. She also corrected DODS' assertions in 

its 6 July 2011 letter in which DODS stated that it had raised material unavailability in its 

16 May 2011 letter. The CO informed DODS that she had answered its first question 

("hidden line") in a letter dated 22 June 2011, its second and third questions in an email 

dated 3 November 2010, and that the answers to DODS' questions 4-8 (received on 

21 June 2011) were awaiting engineering responses. The CO also requested that DODS 

provide the reasons and justifications for each of its questions or requests. (R4, tab 44; 

15 
tr. 1187-90) DODS never provided the requested reasons and justifications (tr. 1190). 

The CO's 8 July 2011 letter was received by DODS on 8 July 2011 (R4, tabs 44-46; 

tr. 1192). 

47. On 13 July 2011, the CO sent an email to DODS with her letter responding to 

the remaining five requests for assistance from DODS' 21June2011 letter. The CO's 

letter reminded DODS that questions 1 through 3 had been previously answered via email 

on 3 November 2010 and by letter dated 22 June 2011; approved DODS' request 

numbers 4, 5, and 8; denied DODS' request number 6 unless DODS provided a detailed 

explanation as to why its request was equal or better; and provided an explanation for 

DODS' request number 7. (R4, tab 50) 

The Cure Notice and Response 

48. The government received other information regarding DODS and the potential 

for performance problems beginning in late April 2011 (R4, tabs 33-36, 43, 58, 73, 74; 

tr. 1152, 2/45-46). At that time, the CO received two Delay Notice - Review documents (the 

"Delay Notices") regarding the contract, dated 13 and 20 April 2011 respectively, and 

issued by the DCMA Industrial Specialist (IS). The IS is responsible for monitoring 

contractor performance and evaluating whether the contractor will meet the delivery date 

required under the contract. If the IS considers that the contractor may miss the delivery 

date, DCMA policy directs the IS to input a Delay Notice that alerts the buying command to 

the potential delivery delay. Delay Notices do not impact the contractor's production; do 

not cause production delays; do not stop production; and do not require any action on the 

part of the buying command. Rather, Delay Notices provide information from the IS, who 

is located in the general vicinity of the contractor, to the buying command, which is 

generally located a significant distance away. (R4, tabs 33, 34; tr. 2/43-50, 166-67, 4/72-75, 

5/208, 211-12, 215-16) Prior to issuing the first Delay Notice on 13 April the IS contacted 

DODS, and DODS stated that it would meet the August 2011 first article delivery date (R4, 

tab 33; tr. 5/215). The Delay Notices did not directly lead to any overt action by the CO 

(tr. 2/49-50, 166-67). There is no evidence in the record that DODS was aware of the Delay 

Notices prior to receipt of the Rule 4 file in these appeals. 

49. On 8 June 2011, in response to her request, the CO received additional documents 

and information from DCMA regarding DODS and TTF (R4, tab 58 at 3; tr. 11195-96). 

Among the information that the CO received were 18 additional Delay Notices on other 

DODS' contracts (R4, tab 73), a report showing nine unacceptable pre-award surveys covering 

both DODS and TTF (R4, tab 74), and a level III Corrective Action Request response rejection 

letter indicating that TTF had serious quality problems and that its system was unacceptable to 

the government (R4, tab 31). Like the Delay Notices above, the CO was cognizant of the 

information received, considered the information as a "heads up" that DODS may have delay 

issues, and that she needed to look more closely at the situation (tr. 1/94-105). As of early 

June 2011, however, the CO had not yet been informed that DODS intended to subcontract 

work to TTF; and therefore, she did not give any weight to the TTF information (tr. 1196-97). 

16 
50. On 27 June 2011, the CO met with the TMO engineers to discuss the contract, as 

well as other TMO managed items. The TMO engineers explained to the CO the 

importance of the center wing section and the critical processes that were required for its 

manufacture. The TMO engineers explained that the center wing section manufacturing 

required about 12 weeks to complete after receipt of materials. (R4, tabs 41, 58; tr. 1/80-85) 

51. On 8 July 2011, the CO received an email from the DCMA IS regarding his 

visit to DODS on 7 July 2011. The email informed the CO that DODS had received 

some quotes for materials from vendors but had not yet ordered any material for the 

contract, and that DODS represented that it would take three weeks to produce the first 

article once all materials were received. The email also informed the CO that, relevant to 

another contract, Mr. Storey failed to properly conduct a heat treating test, introduced 

materials that could contaminate parts in the heat treating process, and the clean room 

was not ready for production. (R4, tabs 43, 58 at 4) 

52. On 13 July 2011, the CO issued a Cure Notice to DODS. The cure notice 

explained that the government considered DODS had failed to make satisfactory progress 

endangering contract performance and that appellant's failure to cure its deficiencies 

within 10 days of receipt of the notice would provide the government the right to 

terminate the contract for default. The cure notice requested that DODS provide adequate 

assurances to the government that DODS could deliver the first article and other contract 

requirements on time. The CO outlined seven specific failures, including: ( 1) failure to 

meet performance standards in the contract and reiterated the 7 April 2011 post-award 

conference; (2) failure to provide a Clean Room; (3) failure to acknowledge the tooling 

requirement; (4) failure to obtain materials, parts, and supplies; (5) failure to put in place 

procedures, mechanisms, and requirements to implement the required ANSI/AQSC Q9002 

quality assurance standards; ( 6) failure to validate and certify the heat treating process and 

artificial aging process; and (7) failure to obtain necessary materials. The CO also 

provided a general description of required actions by DODS to assure the government that 

DODS would meet the contract requirements, and she listed five specific documents to be 

provided: ( 1) certification of a fully implemented Quality Control Plan compliant with the 

higher quality level required by the contract; (2) a detailed Manufacturing Plan; (3) a 

comprehensive Production Plan listing all tooling and equipment; ( 4) documentation to 

support receipt of materials; and ( 5) a specific timeline to meet the 31 August 2011 

delivery of the First Article. (R4, tab 52; tr. 1/106-08) 

17 
53. On 20 July 2011, DODS responded to the cure notice, substantially as 

follows: 

1. DODS, INC's Quality System is acceptable to the 

Government. DODS, INC will be outsourcing portions of 

production to TTF, LLC with flow down requirements. 

Please see DODS's QCP attached (Exhibit A). 

2. Attached please find the Manufacturing Plan (Exhibit B). 

3. Attached please find the Production Plan, with equipment 

list (Exhibit C). 

4. Requests for quotes have been sent out, and purchase 

orders were prepared pending confirmation for the use of 

alternate products. On July 13, 2011, a letter was received 

answering questions DODS, INC had on alternate material 

use and engineering clarity. Waiting for a response has 

delayed the purchasing of materials. Purchase Orders 

were faxed to vendors on July 15, 2011 (Exhibit D). 

As mentioned in a letter dated, July 06, 2011, DODS 

requested an extension for an additional two months as 

requests for engineering assistant [sic] were being researched. 

Now that responses have been received, DODS has been able 

to release the purchase orders. Some products purchase [sic] 

have a lead time of 10 weeks. This would not have created a 

problem if the requests were answered timely. [I]n addition, 

the Post Award was held April 06, 2011, 2 months after being 

awarded this contract, and as this has a First Article, DCMA 

has advised that participation is 100%, that all work 

performed without affording him the opportunity to plan and 

insert GMIP's during Post Awards would be rejected and a 

Corrective Action Report issued (Exhibit E). Waiting on 

DCMA is [sic] perform the Post Award and advise of GMIPs 

has delayed production by 2 months. 

DODS's objective is to deliver this product per the 

Production Plan, and we believes [sic] we are in good shape 

to successfully complete and deliver the First Article with a 

shipment date of October 24, 2011. 

DODS requests a modification extending the First 

Article delivery date to October 24, 2011, allowing 120 days 

18 
(R4, tab 54) 

for FAA [first article approval], with a new delivery date of 

June 29, 2012 for the production articles. 

54. DODS' cure notice response letter alerted the CO, for the first time, that 

DODS would "out source portions [of production] to TTF, LLC with flow down 

requirements" (R4, tab 54 at 2; tr. 1/109). DODS' Manufacturing Plan, provided in 

response to the CO's direction in the cure notice and included in the cure notice response 

as exhibit B, stated that parts are "sent to TTF, LLC to be bonded. The skins are brought 

into the clean room ... where adhesive is applied ... and parts are placed together." (R4, 

tab 54 at 18) Coupled with DODS' cure notice response letter, it became clear to the CO 

that DODS planned to subcontract bonding to TTF (tr. 11109). The CO already knew that 

TTF had been found to have inadequate documentation of internal procedures for the 

bonding process because she received notice of such prior to issuing the cure notice (R4, 

tab 31; tr. 11109-11, 123). The CO also received notice from DCMA during its cure 

notice response review that TTF's bonding methods and facilities were incapable of 

complying with contract requirements (R4, tabs 57, 72 at 5; tr. 11141-43). 

55. In response to the CO's direction to provide "a comprehensive Production 

Plan listing all tooling and equipment," DODS provided exhibit C to its cure notice 

response (R4, tabs 52, 54 at 2, 21; tr. 1/123). The "Production Plan" provided by DODS 

was a one-page document dated 30 June 2011, began with a date of 4 July 2011 and 

showed a first article shipment date of 24 October 2011, two months after the contract 

delivery date of 31 August 2011. The Production Plan was unsigned, and lacked a 

detailed description of actual production dates and processes. (R4, tab 54 at 21; tr. 1/116, 

124, 3/108, 117, 4/120-38, 5/172) In fact, other than "Paint Part" listed as planned for the 

weeks of 5 and 12 September 2011, no other production processes appeared on DODS' 

production plan (R4, tab 54 at 21; tr. 4/132-33). No tooling or equipment were listed on 

the Production Plan (R4, tab 54 at 21 ), but DODS did include a separate generic 

equipment list in exhibit C (R4, tab 54 at 22-25). The equipment list identified three 

pieces of equipment owned by DODS and sixteen owned by TTF; all of the bonding and 

heat treating equipment belonged to TTF (R4, tab 54 at 22-25; tr. 11125-26, 571-75). 

56. In response to the CO's direction to provide "a detailed Manufacturing Plan," 

DODS provided exhibit B to its cure notice response (R4, tabs 52, 54 at 2, 16; 

tr. 11117-18). The first sentence of the Manufacturing Plan referenced using Mylars, a 

medium the TMO had not used in more than a decade, rather than the CAD data provided 

by the government on the TDP CD (R4, tab 54 at 16; tr. 1/119). It was impossible to 

build the center wing section without using the CAD data provided on the TDP CD (R4, 

tab 58 at 8; tr. 11119, 3/88, 198), DODS' cure notice response made no mention of using 

the CAD data provided by the government (R4, tab 54 at 16; tr. 1130-31, 3/195-96). 

19 
57. Regarding the RFQs, none were provided for the subcontracting work to TTF or 

Dynamic Paint Solutions as indicated in its cure notice response letter and Manufacturing 

Plan (R4, tab 54 at 2, 17-18, 27-43). On at least two RFQs, DODS sought quotes simply by 

referencing Army drawing numbers out of the TDP from which the vendors would have had 

no way of providing a quote. In each instance, the vendor responded by indicating that it 

could not provide a quote. (R4, tab 54 at 28, 31; tr. 3/96-97) Several necessary parts and 

bulk material were not reflected anywhere in the RFQs or the POs, including nut assemblies, 

primer, label stock, adhesive, trailing edge, other small hardware items, and, notably, the 

channels (R4, tab 54 at 27-43, tab 3 at 107-11; tr. 3/92-96, 208-09). The channels are the 

extruded parts, bonded into the center wing section assembly for interface with the 

outboard wing assemblies and the left and right leading edges (R4, tab 3 at 104; tr. 2/212-13, 

3/208-09). The channels are not off-the-shelf items readily available to DODS (tr. 3/208-09). 

DODS confirmed its ability to provide these channels prior to contract award, but did not 

explain how it would obtain the channels in its cure notice response (R4, tabs 7, 54 ). 

58. Although appellant submitted documents purporting to be POs with its cure 

notice response, uncontradicted testimony established that appellant did not issue several 

of the POs (tr. 4/115). The one PO that could be verified as having been placed, was the 

PO for honeycomb material with a ten-week lead time. The honeycomb material is the 

roughly two-inch thick core of the wing structure that will have aluminum skins bonded 

on its top and bottom to create the wing (tr. 3/86). Although nothing prevented DODS 

from ordering the honeycomb material earlier (tr. 5/35), DODS allegedly waited until 

13 July 2011 to place the PO with Plascore despite the fact that it had a ten-week lead 

time for delivery (R4, tab 54 at 3, 38-39). Compounding the issue, DODS did not 

actually place the Plascore PO for the honeycomb material on 13 July 2011 as the PO 

indicates; DODS placed that PO three weeks later, on or about 3 August 2011 (tr. 4/116). 

59. Bonding was a critical process requirement for production of the center wing 

section (R4, tab 41; tr. 1194, 3/112, 5/83). In August 2010, the DCMA QAR and a 

DCMA engineer had conducted an in-depth process review of the TTF bonding process, 

which resulted in a determination that TTF methods and facilities were incapable of 

complying with the imposed contract requirements at that time. Further, "[the] Clean 

Room and Autoclaves (which were 'not operational' at the time) must be repaired, 

returned to full functionality and certified before being placed back into production. 

Additionally, his bonding procedures must undergo process validation (his internal 

validation) before being used in production." (R4, tabs 31, 57, 72; tr. 11142, 51118-21) 

TTF remained incapable of performing bonding through the performance of the contract 

(tr. 51121, 181). 

60. The TMO engineers identified the clean room as critical to the manufacture of 

the center wing section in the 27 June 2011 meeting with the CO (R4, tab 41; tr. 1184, 

94). DODS' clean room was not ready for production (R4, tab 43; tr. 1194-95). 

Therefore, the CO identified DODS' failure to provide a clean room specifically in her 

cure notice (R4, tab 52). DODS did not address the clean room issue in its cure notice 

20 
response, but it did state its plan to outsource bonding to TTF and thus made relevant any 

issues involving TTF's clean room (R4, tab 54 at 2; tr. 11141). The clean room is used 

for adhesive application, and it is vitally important that no contaminants are present to 

compromise the adhesive seal (tr. 3/112-13, 5/120-21). The TTF "clean room" was not 

clean - it had a popcorn ceiling that generated thick dust, peeling paint and mildew on the 

walls, three doors that open directly into other areas including one directly into a sanding 

area. Neither DODS nor TTF had an acceptable clean room (tr. 5/181). 

61. TTF was likewise incapable of properly conducting the required heat treating 

process (R4, tabs 31-34, 43; tr. 1194-95, 5/197-98, 200-01, 203-06). On 7 July 2011, TTF 

failed to properly test its heat treatment process and conducted its heat treatment in 

violation of the AMS 2770 specification (R4, tabs 43, 70 at 2; tr. 5/197-206). Neither 

DODS nor TTF had a conforming heat treatment process (tr. 5/181). 

The Termination 

62. On 27 July 2011, the CO issued a final decision terminating the contract for 

default. After considering DODS' performance, DODS' cure notice response, input from 

government technical experts, and the factors in the FAR, the CO determined that DODS 

had "failed to make satisfactory progress and has failed to provide adequate assurance 

that DODS would be able to deliver the First Article item that would successfully pass 

performance testing by 31 August 2011, and that said failures did not arise out of causes 

beyond DODS' control." (R4, tab 58 at 9; tr. 11144-46) 

63. On 3 August 2011, the DCMA QAR handed Mr. Storey a copy of the 

modification terminating the contract (R4, tab 62). On 17 August 2011, DODS appealed 

the termination. 

64. On 14 July 2011, the government posted a synopsis on FedBizOps for a 

requirement for additional spare center wing structure assemblies. This synopsis was not 

a replacement procurement action for the items covered by appellant's contract, but was 

rather to fill a need for an additional quantity of the same items. After the termination of 

the instant contract, the CO added nine additional items when the solicitation was posted 

on 3 August 2011. The contract was competed on a full and open competition basis, and 

the solicitation did not close until September 2011. The resulting contract price was 

unknown to anyone prior to the termination of appellant's contract for default. 

(R4, tab 76; app. supp. R4, tab 68; tr. 2/140-45) 

65. By letter dated 9 April 2012, appellant submitted a certified "Delay Claim" in 

the amount of $2,057,477.40 to the CO. The CO denied the claim in its entirety in her 

final decision dated 13 June 2012. DODS' appeal of the final decision by letter of 

31August2012 was docketed as ASBCA No. 58252. DODS failed to briefthe issues 

associated with the affirmative claims except as they pertain to the excusability of the 

21 
default. No evidence was admitted at trial concerning the affirmative claims except as 

they concern appellant's defenses to that termination. 

DECISION 

These appeals involve the propriety of the government's termination of the 

contract for default (ASBCA No. 57746) and appellant's allegations2 that it was 

excusably delayed in the performance of the contract as a defense regarding the 

termination as well as a separate affirmative claim for monetary compensation 

(ASBCA No. 58252). 

Termination for default is a "drastic sanction" that may be imposed only when 

there are "good grounds and on solid evidence." Matrix Research, Inc., ASBCA 

Nos. 56430, 56431, 11-2 BCA ~ 34,789 at 171,239 (citing ABS Baumaschinenvertrieb 

GmbH, ASBCA No. 48207, 00-2 BCA ~ 31,090). The government bears the initial 

burden of showing that the termination was reasonable and justified. Lisbon Contractors, 

Inc. v. United States, 828 F.2d 759, 765 (Fed. Cir. 1987). To support a termination for 

default for a contractor's failure to make progress so as to endanger performance of the 

contract, the CO must have a reasonable belief that there is no reasonable likelihood that 

the contractor can perform the entire contract effort within the time remaining for 

contract performance. Lisbon Contractors, 828 F.2d at 765. After the government 

makes that showing, the burden then shifts to the contractor to provide evidence of 

excuse for its default. DCX, Inc. v. Perry, 79 F.3d 132, 135 (Fed. Cir. 1996); Matrix 

Research, 11-2 BCA ~ 34,789 at 171,239 (citing Centurion Electronics Service, ASBCA 

No. 48750, 00-1BCA~30,642). 

We find that the contract was properly terminated for default, that appellant failed 

to provide adequate assurances that it could timely perform in its response to the cure 

notice of 12 July 2011 and that DODS was not excusably delayed in the performance of 

the contract. 

2 It must be emphasized at the outset that appellant's briefs are replete with allegations 

that are not supported by trial testimony and other evidence in the record. 

Appellant elected not to appear for the final two days of the five-day hearing and 

submitted its case for decision on the existing record, including the transcript of 

the initial three days of the hearing. Appellant expressly recognized and 

acknowledged that the remainder of the hearing would proceed in appellant's 

absence. Consequently, appellant did not present a case-in-chief. In particular, 

Mr. Storey, appellant's principal did not appear to offer testimony under oath and 

subject himself to cross-examination. The briefs in substantial part consist of 

Mr. Storey's unsworn views that the government had no opportunity to rebut at 

trial. To the limited extent that appellant does cite to the record, the citations are 

often inaccurate and/or do not persuasively corroborate the allegations made. 

22 
A. Propriety of the Termination for Default for Failure to Make Progress 

1. No Reasonable Likelihood of Timely Performance 

The CO's assessment of appellant's poor progress was justified and supported the 

reasonableness of her conclusion that there was no reasonable possibility that appellant 

could have timely performed the contract. Appellant was awarded the contract on 

26 January 2011. The first article delivery date was 31 August 2011, 217 days after 

award. The contract included the First Article Approval-Government Testing clause, 

providing that contractor failure to deliver the first article on time would be treated as a 

failure to deliver under the Default clause. At the time of issuance of the cure notice, 

75% of the performance period had expired. As of the date of the termination, 182 (84%) 

of the 217 days allotted for delivery had elapsed. There was no reasonable likelihood that 

appellant could have timely performed. 

DODS implicitly conceded as much. Its "Production Plan," submitted to the CO 

in response to the cure notice, called for shipment of the first article on 24 October 2011. 

Cf Smart Power Systems, Inc., ASBCA No. 56743, 11-1BCA~34,615 (granting 

summary judgment in favor of government where appellant admitted that it needed an 

additional 12 weeks to complete the first article requirement). Not only did DODS admit 

that it could not deliver by the contract date, there is no persuasive evidence that it was 

capable of performing by the date proposed in its cure notice response regardless of the 

excusability of the alleged delays discussed below. Particularly problematic for appellant 

was the failure to timely purchase materials. Ordering of the critical "honeycomb" 

material was not impacted by any delay associated with appellant's requests for 

assistance and should have been procured promptly. In fact, the purchase order for the 

"honeycomb" material was issued at an indeterminate time on the same day as the CO 

issued her final decision terminating the contract for default. Appellant's unsupported 

assertions in its briefs notwithstanding, the only evidence in the record indicates that the 

material required a ten-week lead time for delivery to DODS. Consequently, appellant 

would not have received the material until 12 October 2011. Production time, assuming 

the honeycomb materials and all other all requisite materials were on hand, would have 

required approximately an additional three months. Thus, the dates in the production 

plan were obviously not feasible. Not only did the plan provide for delivery of the first 

article approximately nine weeks after the contractually-specified date of 31 August 

2011, delivery would not have occurred until about mid-January 2012. Even ifthe CO 

had extended the delivery date as requested by appellant, DODS could not have delivered 

by its proposed extended date. Cf ABC Knitwear Corp., ASBCA No. 22575, 81-1 BCA 

~ 14,826 at 73,169 (default termination proper prior to first article delivery date where 

contractor failed to order necessary yarn). 

23 
2. Lack of Purchasing Activity and Materials 

The record contains a few RFQs purportedly issued by appellant to gather quotes 

for certain materials. However, there is no evidence RFQs were prepared by DODS for 

other necessary parts and materials, including the channels which the evidence indicates 

likely would not be readily available to DODS. Although DODS confirmed its ability 

prior to award to provide the channels, there is no persuasive explanation of how it would 

obtain the channels in its cure notice response. With minor exceptions, the materials 

generally could have been ordered before responses to the technical clarifications were 

provided. At least two of the RFQs contained insufficient information for potential 

vendors to base a quote. 

No "Purchase Orders" were purported by DODS to have been placed prior to 

15 July 2011. With the exception of the "honeycomb" material discussed above, 

however, there is no proof that DODS actually placed these "Purchase Orders" even 

though they were supplied to the CO in response to the cure notice. In addition, contracts 

with subcontractors, most importantly TTF, were not provided. We conclude that the 

lack of necessary materials was a significant factor justifying the termination. Cf 

Universal Fiberglass Corp. v. United States, 537 F.2d 393, 398 (Ct. Cl. 1976); Smart 

Power Systems, 11-1BCAii34,615. 

3. Lack of Acceptable Facilities 

The termination is also supported by appellant's deficient manufacturing facility 

and that of its proposed subcontractor TTF, a firm also owned by Mr. Storey that was 

located at the same address and with whom DODS shared facilities. In particular, 

bonding and heat treatment were critical requirements for production of the center wing 

section. TTF, which was to fulfill bonding and heat treating requirements, was incapable 

of properly performing the requisite operations during the performance period of the 

contract. In addition, we have found that the proposed clean room was deficient and 

equipment required significant repairs and certification before being returned to full 

functionality and placed back in operation. DODS in its brief challenges these 

conclusions, minimizes their significance and attributes them to DCMA malice and 

maladministration. However, appellant fails to cite to record evidence that impugns the 

government's evidence and our findings based thereon. · 

B. Failure to Give Adequate Assurances in Response to Cure Notice 

In accordance with the contract's Default clause, DODS was required to give 

adequate assurances of timely performance in response to the CO's cure notice. E.g., 

Danzig v. AEC Corp., 224 F.3d 1333, 1338 (Fed. Cir. 2000), cert. denied, 532 U.S. 995 

(2001); National Union Fire Insurance Co., ASBCA No. 34744, 90-1BCAii22,266 

at 111,855. Here, the termination was further justified by appellant's failure to give 

sufficient assurances of its capability of timely performing in a specification-compliant 

24 
manner. Its response in general was vague and largely unsubstantiated by persuasive 

evidence that it was taking adequate steps to perform. First, as detailed above, DODS 

had not yet ordered requisite materials even as late as the date of termination. 

Moreover, both appellant's production and quality assurance plans, submitted to 

the CO in response to the cure notice, were deficient. Cf L&M Thomas Concrete Co., 

ASBCA No. 49198, 03-1BCAi!32,194. The perfunctory, unsigned, one-page 

"Production Plan," dated approximately two weeks prior to issuance of the cure notice, 

was particularly flawed and unacceptable. Among other things, it began with a date of 

4 July 2011 (more than six months after award) and proposed a first article delivery date 

of 24 October 2011. The principal assumption underlying the plan was that appellant 

was entitled to time extensions of approximately two months. As explained herein, 

appellant was not entitled to any time extension. 

The production plan also failed to identify basic production milestones and 

inspection points for critical manufacturing assembly operations. In this regard, it lacked 

fundamental understanding of the interrelation of the production and government quality 

assurance process. A primary purpose of the plan was to approximate dates during 

performance, sometimes referred to as government mandatory inspection points 

(GMIPs), to permit DCMA to plan its involvement and any site visits to fulfill its quality 

assurance role. Without advance notice and scheduling of GMIPs, this primary purpose 

of the plan was defeated. 

We also consider that appellant's cure notice responses to the CO regarding its 

facilities, equipment and quality considerations generally did not meaningfully nor 

satisfactorily address known and documented deficiencies with its equipment and 

facilities discussed above. The equipment list generically identified three pieces of 

equipment owned by DODS and 16 pieces owned by TTF. All of the bonding and heat 

treating equipment was owned by TTF. Without subcontracting, DODS did not have the 

requisite equipment to complete the contract. To the extent that DODS intended to 

subcontract out the heat treating operations to a firm other than TTF as it alleges in its 

brief, it also failed to so inform the CO. 

C. Excusable Delay Allegations 

Appellant contends that it was excusably delayed and entitled to time extensions 

as a consequence of government-caused delays associated with the DCMA conduct of a 

post-award conference and late government responses to its technical inquiries. In 

addition, appellant generally cites government maladministration and actions tantamount 

to bad faith in support of its arguments that it was excusably delayed. These alleged 

delays attributable to the government also underlie appellant's claims for monetary 

adjustments comprising the subject matter of ASBCA No. 58252. 

25 
1. Post-Award Conference 

The timing of the post-award conference with DCMA also did not delay appellant. 

In short, the record in this case does not justify appellant's allegations that DCMA 

prevented appellant from proceeding prior to the conduct of the conference. 

First, the conference is for DCMA's benefit not the contractors. Although the 

conference is called for in DCMA internal regulations, it is not a contract requirement 

and there are no specific timing requirements for its conduct. As discussed below, 

appellant's cursory written production plan is dated well after the conference. Since an 

obvious purpose of the conference is to facilitate coordination with DCMA, productive 

discussion and scheduling of DCMA involvement could not occur without appellant 

approximating critical production/inspection milestones in its manufacturing/assembly 

operations. A plan, establishing critical manufacturing points to facilitate coordination 

with DCMA inspection needs, was one of the primary requisites for a meaningful 

meeting. Appellant has not established that it was ready for a productive meeting. In any 

event, conducting the conference was not a prerequisite to performance. As a minimum, 

the contractor could proceed with the ordering of materials and accomplish other 

preliminary tasks prior to the start of actual assembly/manufacturing. There is no 

evidence here that appellant placed any purchase orders until the approximate time of 

termination, if at all. 

In addition, the post-award conference was rescheduled to accommodate 

appellant's schedule. Even the actual meeting date in early April was not unreasonably 

late. This is particularly true here given appellant's state of preparedness and since 

DODS expressly stated at the conference it would timely complete the first article with 

no mention of delay. Appellant first notified the government that it had been delayed 

three months after the conference. 

2. Responses to Technical Inquiries 

DODS alleges that the information contained in the TPD was "defective, outdated, 

obsolete and incorrect." Consequently, appellant alleges that it was necessary to ask 

three series of technical questions to clarify and resolve perceived deficiencies. The 

initial questions were posed to the government in October 2010 after receipt of the RFQ 

and prior to submission of its quotation. Approximately 3 Y2 to five months following 

award, appellant sent further inquiries on 16 May and 21 June 2011. The first article was 

due on 31 August 2011. Appellant claims it was excusably delayed the entire period 

from the dates of its 16 May and 21 June 2011 inquiries until it was furnished with 

government responses. 

We need not dwell at length on the various subjective factors to be considered in 

assessing the reasonableness of the time taken by the government to reply to the inquiries 

and/or dissect precisely when appellant and/or Mr. Storey were furnished the government 

26 
responses. To establish excusable delay, DODS not only must prove that the 

government's response time was unreasonable, but must also establish that it was actually 

delayed for a specific period while awaiting the government's response. 3 See, e.g., 

Rivera Construction Co., ASBCA Nos. 29391, 30207, 88-2 BCA ~ 20,750; Elter S.A., 

ASBCA No. 52832 et al., 02-1BCA~31,672; Sonora Manufacturing, Inc., ASBCA 

No. 31587 et al., 91-1 BCA ~ 23,444. Here, regardless of whether the government's 

response time was reasonable, the evidence wholly fails to establish that appellant was 

actually delayed pending receipt of the government's responses. 

First, neither appellant's 16 May nor 21June2011 letters advised that its 

production could not proceed without the answers. Contemporaneously, no urgency was 

expressed by appellant. It was not until 6 July 2011, that appellant provided notice that 

the government's delay in responding to the "hidden line" question was allegedly 

impacting production. After learning that its 22 June response to that question had been 

emailed to the incorrect address, the government provided the response to appellant, 

Mr. Storey, on 11 July 2011. 

In addition, the record affirmatively demonstrates that production was not 

impacted. There was no need to await a response before basic ordering of essential 

materials and extensive manufacturing and assembly commenced. The testimony of 

government technical personnel is the only detailed evidence in the record regarding the 

impact of the questions/replies, or lack thereof, on appellant's ability to make progress. 

Not only is that testimony unrefuted, we have no reason to doubt its credibility. In short, 

the government persuasively demonstrated that extensive ordering, manufacturing and 

assembly operations could have been accomplished pending receipt of the answers and 

that they were unaffected by those answers. Unaffected critical activities in significant 

part did not occur. Unsupported and conclusory assertions in appellant's briefs are 

insufficient to overcome this record evidence. 

Appellant's inquiries primarily involved requests to use alternate, "equal" 

binders/adhesives and products that allegedly were new and/or improved versions of 

superseded versions of older adhesives. The TDP listing of these products generally also 

provided listings of multiple alternatives that appellant also could have used without 

inquiry. There is no suggestion that the alternatives already listed were also obsolete. 

The government emphasizes that appellant provided no manufacturer literature or 

technical descriptive data establishing their equivalence which affected the time that the 

government required to research and approve use of the substitutes. Again, we need not 

dig deep into the details to conclude that appellant was not excusably delayed by lack of a 

government answer. The overarching problem for appellant was that it has not 

demonstrated that it was ever approaching a stage in the production process where it 

would actually use the products in question. Regardless of whether the government's 

3 We need not address the government's contentions regarding whether appellant gave 

sufficient notice of the alleged delaying events. 

27 
response time was unreasonable, any delay had no impact on performance. Most 

obviously, even ifthe government had responded to the appellant's belated 21 June 2011 

inquiries on the same date, the "honeycomb" material could not have been ordered and 

delivered to appellant until the end of August 2011, a few days before the first article was 

due. With all necessary materials on hand, actual production required approximately an 

additional 11 weeks assuming performance proceeded without further delays. 

3. Government Maladministration and Allegations Tantamount to Bad Faith 

Generally 

Persuasive proof is most lacking in appellant's allegations of government 

"confusion" and maladministration generally of the contract. The record fails to support 

allegations of lack of good faith by the government. Perhaps most significantly, even if 

vague allegations bore some seeds of truth, there is simply no convincing evidence that 

government actions actually delayed appellant's performance. Moreover on this record, 

ifthere was any "confusion," it was not attributable to the government but to appellant's 

lack of understanding of its own obligations under the contract. 

The "confusion" and maladministration arguments are largely based on appellant's 

misinterpretation and misanalysis of our decision in another appeal, DODS, Inc., ASBCA 

No. 57667, 12-2 BCA ii 35,078, recon. denied, 13 BCA ii 35,203 (hereinafter ASBCA 

No. 57667). Our decision in ASBCA No. 57667 is inapposite. That case involved a 

different government party and a different, unrelated contract and end item. The primary 

issue in ASBCA No. 57667 involved a fact-specific waiver of the termination date, not a 

failure to make progress as in the present case. No trial was conducted in ASBCA 

No. 57667 and the case was submitted by the parties for decision on the record pursuant 

to Board Rule 11. That record, the factual circumstances and bases for the decision are 

not in evidence in this appeal. The Army has rebutted in particular appellant's 

allegations ofDCMA misconduct and maladministration. The primary DCMA 

individuals in question and involved in administering the contract testified under oath, 

explained the communications at issue and were subject to cross-examination in the 

instant appeal, unlike Mr. Storey. We also note that the alleged problems with DCMA 

surfaced in the spring of 2010, long before DODS submitted its quote and was awarded 

the contract in late January 2011. Consequently, the schedule proposed by appellant in 

mid-January 2011 and adopted by the government presumably took into consideration 

perceived difficulties and instructions allegedly issued by DCMA. 

Appellant's emphasis on the perceived accuracy of routinely-prepared and 

required "Delay Notices" also diverts the focus from the primary issue in this appeal, 

i.e., whether there was any reasonable possibility that appellant could have produced the 

instant contract's end items on time. The notices involve unique facts and assessments 

regarding performance under other contracts and other end items. To examine their 

accuracy and how assessments and conclusions were reached in the context of litigating 

performance problems under the present contract, is a highly questionable excursion into 

28 
the outer fringes of relevance. In short, the CO was fully justified in reaching her 

termination decision without the reports based on the totality of the information available 

to her. 4 There is no evidence that the notices had a disproportionate or unreasonable 

influence on the termination decision. Other more significant factors concerning the 

details of the performance of this specific contract made that decision reasonable. We 

also do not consider that appellant has proved that these reports were prepared 

maliciously or in bad faith. 

Appellant alleges that subsequent procurement of the end items also calls into 

question the propriety of the termination suggesting that the CO "had already made up 

her mind." Apparently appellant is referencing the 14 July 2011 posting of a synopsis on 

the FedBizOps website and subsequent 3 August 2011 solicitation for the items. The 

later procurement had no proven bearing on the CO's decision. There is no evidence 

tending to indicate that the synopsis was anything more that a routine notice to potential 

offerors of the government's recurring future needs. Only after appellant's default were 

an additional nine end items added to the solicitation. The CO could not have known at 

the time of her decision that the items would be procured post-termination in September 

2011 at a substantially reduced cost, a cost savings which effectively benefitted appellant 

inasmuch as no excess cost assessment was made by the government as a consequence of 

the reprocurement. 

D. ASBCA No. 58252 

Appellant's briefs do not address its claims comprising the subject matter of 

ASBCA No. 58252 for compensable delay. We need not decide whether the claims were 

effectively abandoned as argued by the government. The claims lack merit and are 

unproven in any event. As we have detailed above, appellant has not shown that it was 

excusably delayed as a defense to the termination for default. For the same reasons, 

appellant has failed to establish that it is entitled to a monetary adjustment for the alleged 

causes of delay in dispute. Appellant has not proved that it is entitled to a time extension 

for any government-caused delay. Accordingly, it is unnecessary to discuss additional 

issues relating to whether DODS concurrently caused such delays or its failure to detail 

its methodology in computing the delay period and the amount claimed. 

4 It warrants emphasis that appellant inexplicably argues that the CO was negligent in not 

promptly taking termination action sooner given the purported seriousness of the 

delay information contained in the notices. Apparently DODS considers that her 

alleged failure to take prompt action constituted a waiver of the government's 

right to terminate. The "waiver" doctrine of course, inter alia, requires the actual 

passage of the delivery date which had not occurred here. 

29 
The appeals are denied. 

Dated: 22 July 2014 

I concur 

~~(fA= Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

I concur 

PETER D. TING 

Administrative Judge 

Acting Vice Chairman 

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 Nos. 57746, 58252, Appeals ofDODS, Inc., 

rendered in conformance with the Board's Charter. 

Dated: 

30 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals