ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of--

Phoenix Management, Inc. 

Under Contract No. FA6648-12-C-0019 

APPEARANCES FOR THE APPELLANT: 

) 

) 

) 

) 

) 

APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 59273 

Johnathan M. Bailey, Esq. 

Kristin E. Zachman, Esq. 

Bailey & Bailey, P.C. 

San Antonio, TX 

Lt Col James H. Kennedy III, USAF 

Air Force Chief Trial Attorney 

Capt Amy K. Siak, USAF 

Carrie W. Fogle, Esq. 

Sarah L. Stanton, Esq. 

Trial Attorneys 

OPINION BY ADMINISTRATIVE JUDGE FREEMAN ON THE 

GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT 

This appeal arises under an Air Force base operations contract (hereinafter 

Contract 0019). The contractor, Phoenix Management, Inc. (PMI), appeals a 

contracting officer's final decision denying its claims for declaratory relief and 

equitable price adjustment for the government's failure to disclose superior knowledge 

and defective estimate of the workload requirements. The government moves for 

summary judgment on the grounds that PMI has not shown any loss from the alleged 

failure to disclose or the alleged defective estimate. We find genuine issues of 

material fact in dispute and deny the motion. 

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 

1. Contract 0019 was solicited on 10 November 2011 and awarded to PMI 

on 26 September 2012. The contract required PMI to provide specified operating 

services at Homestead Air Reserve Base, Florida, for an initial ten-month period 

from 1November2012 to 31August2013 with four consecutive one-year options 

exercisable by the government for continued performance thereafter. (R4, tab 1 at 1, 

4, 19,27-28,35,43) 
2. Contract line item number (CLIN) 0006, entitled "Operation of Real 

Property Maintenance (RPM)," was a firm-fixed-price CLIN in the amount of $39,241 

per month for the ten months of the initial term of the contract (R4, tab 1 at 6). Tab F 

of the Contract 0019 Performance Work Statement (PWS) specified the RPM work 

(R4, tab 21 at 1, 5). Section FS .18 of tab F specified the work to be performed on the 

base fire detection, protection and suppression systems (hereinafter "the fire systems") 

as follows: 

FS.18 Fire Detection, Protection, and Suppression 

Systems: The SP [Service Provider] shall maintain, 

inspect, and test all fire detection/integrated mass 

notification and fire suppression system, 

controllers, pumps, engines, and water supply tanks IA W 

UFC 3-601-02, UFC 4-021-01 and where applicable 

NFPA 72. (See F-TE-2h for quantities and locations). 

FS.18.1 The SP shall repair all defects or malfunctions as 

an emergency or urgent service call under the Labor for 

Service Call CLIN of the contract. 

FS.18.2 The SP shall perform all R WP [recurring work 

program] maintenance, inspections, tests, and repairs using 

NICET certified individuals, certified in the appropriate 

classification and proficient on fire detection, protection, 

and suppression systems. Technicians must be supervised 

by a state certified fire inspector or NICET certified 

technician. All R WP maintenance, inspections, tests, and 

repairs shall be coordinated with the Fire Department. 

Submit a written report of all inspection and test findings 

to the Fire Department and BCE within five workdays after 

monthly inspections in accordance with F-TE-3, F48. 

(R4, tab 21 at 130) 

3. Pursuant to section FS.18.1 of the PWS, the labor for repair of defects and 

malfunctions of the fire systems was not performed under the inspection, test and 

maintenance (ITM) fixed-price CLIN 0006, but under the Labor for Service Call 

CLINs at specified hourly labor rates. The direct parts and materials for the 

repairs were compensated under cost-reimbursement CLINs. (R4, tab 1 at 9, 12) 

The contract also allowed PMI to subcontract the service call repair work under 

section H- Special Contract Requirements as follows: 

2 
H-5 AFRC SERVICE CALL SUBCONTRACTS 

In the event a subcontract is contemplated for which Labor 

Categories are established under the Service Call CLIN, 

the contractor shall prepare a 'make or buy' analysis with 

prime (make) versus subcontract (buy) pricing. The prime 

(make) estimate shall be developed in the Inter[i]m Work 

Information Management System (IWIMS). The total 

allowable price shall be the lesser of the price to 

subcontract the work or the price of the IWIMS estimate 

utilizing the applicable labor rates. 

(R4, tab 1 at 62) 

4. PWS Technical Exhibit F-TE-2, "WORKLOAD ESTIMATES," specified 

the number, type and location of the various fire systems on the base. This workload 

consisted of about 79 building fire detection and alarm systems, 62 base-wide fire 

hydrants and yard monitors, 5 diesel fire pumps, 5 water supply tanks, and 49 building 

fire suppression systems of various types (36 wet, 4 foam/wet, 1 wet & pump, 

2 pumps, 2 foam/wet/pump, 1 standpipe, 1 C02, and 2 Halon). (R4, tab 21 at 143, 

160-63) The frequency, components, and tasks for the ITM of each of these fire 

systems was specified in detail in UFC 3-601-02 at pages 11-14, 25-37, 40-44. 1 PWS 

Technical Exhibit F-TE-2b provided a service call workload estimate of 2 emergency 

and 44 urgent service calls over a 12-month period for the entire Real Property 

Maintenance CLIN 0006, of which the fire systems were a part (R4, tab 21at143). 

5. PMI contends that the government failed to advise bidders that "most" of 

the fire detection/suppression systems were "proprietary systems which can only be 

serviced by firms that are authorized and licensed by the OEM" (app. resp. at 3). The 

government contends that: "It is known throughout the industry that any fire system 

contains proprietary components/information/software." The government further 

contends that "[t]he fire systems at Homestead ARB are manufactured by Digitize and 

the only proprietary portion of the system is the wireless notification portion of the 

alarm system." (R4, tab 50 at 2) 

6. From 31 August to 10 October 2012, the fire suppression systems in 37 of 

the 49 buildings listed in the PWS as having those systems were inspected by another 

previous contractor. The suppression systems in 20 of the buildings passed the 

inspection. The suppression systems in 17 of the buildings had 1 or more failures. 

(R4, tab 21 at 162-63; app. supp. R4, tab 6 at 54-56) 

1 Compliance with the UFC 3-601-02 is specified in the PWS (see SOF ~ 2) and we 

admit the entire document dated 8 September 2010 in evidence as Bd. ex. 1. 

3 
7. PMI alleges that on 28 November 2012 it "found out that the Unified 

Facilities Criteria (UFC 3-601-01) [sic] is the official document used for Fire 

Protection and Suppression Systems at Homestead ARB" and that "no inspections 

were ever done on the Fire Alarm Systems in the past 5 years, and the inspections on 

the Suppression System were started only in Aug. 2012" (R4, tab 49 at 12-13). 

8. On 19 February 2013, PMI submitted a request for "Contract Modification 

or Equitable Adjustment ... regarding the Fire Detection/Suppression System 

inspection, certification and maintenance backlog ... so that [for] these systems, all 

required inspections, testing/certifications and repairs may be brought up to industry 

standards under the UFC and NFPA, as applicable" (app. supp. R4, tab 4 at 1). On the 

present record, there is no evidence of any response by the contracting officer to this 

request. 

9. The UFC 3-601-02, Table 2-1 entitled "Fire Detection and Alarm System 

ITM Tasks," shows 18 tasks to be performed cumulatively over a 5-year period. There 

is 1 monthly task, 10 annual tasks, 6 bi-annual tasks and one 5-year task. (Bd. ex. 1) 

Thus, if as PMI alleges, and the government does not deny, that there had been no fire 

alarm tests in the past 5 years, PMI would have to perform in the initial 10-month term 

of the contract not only the required monthly tasks, but also in each of the 79 buildings 

having fire alarm systems, the other 17 tasks in the 5-year program to bring the alarm 

systems into compliance with UFC 3-601-02.2 

10. On 24 February 2014, PMI submitted a claim under the Contract Disputes 

Act of 1978, 41 U.S.C. §§ 7101-7109. The claim alleged that, (i) prior to the contract, 

the government had not properly maintained the fire systems to the industry standards, 

(ii) the solicitation did not disclose the government's estimated $300,000 of urgently 

needed inspections and repairs of the systems, (iii) the government's estimate of the 

number of emergency and urgent service calls in the PWS did not "reflect the volume 

of work it actually knew would be required," and (iv) the government failed to advise 

offerors (other than the incumbent) that "most of the fire detection/suppression 

systems are proprietary systems which can only be serviced by firms that are 

authorized and licensed by the OEM"3 (R4, tab 49 at 2-4). PMl's claim concluded 

with the following demand for relief: 

2 Table 2-1 for the alarm systems is only the first of the ITM task schedules in 

UFC 3-601-02. There are 15 other schedules similarly structured as to 

frequency, component, and tasks for each of the fire suppression system 

types commonly in use. (See SOF if 4) 

3 PMI' s concern about the fire systems being proprietary was that if it had to 

subcontract the work on the proprietary systems to the firms authorized by the 

4 
1) Declaratory relief finding that PMI is not responsible 

under its firm, fixed price for the cost of inspection, 

certification and any and all repairs of any fire 

detection, suppression and notification systems, but 

that any and all such work is to be performed by 

subcontractors under work order on a cost-reimbursement 

basis; and 

2) Declaratory relief finding that under Paragraph H-5 

where work is required on a proprietary system such 

that it is impossible for PMI to perform such work with 

its own efforts, the amount of approved work orders 

shall be the amount actually charged by qualified 

vendors under competitive quotations in a make or buy 

analysis, and not limited to the rates in PMI's contract; 

and 

3) An equitable adjustment to the contract price to make 

PMI whole for the increased costs of performing 

inspections, certifications and associated repairs where 

work orders have not been approved by the 

Government. At present that amount stands at 

$2,678.00. This is a continuing claim, and the amount 

claimed will be increased by future work for which the 

Government does not approve payment as requested by 

PMI. 

(R4, tab 49 at 33-34) 

11. PMI's specific monetary claim of $2,678.00 was for "the semi-annual halon 

system inspection and certification at [B]uilding 4055, for which the Government has 

refused to issue a work order" (R4, tab 49 at 2). However, in its response to the 

government's motion for summary judgment, PMI states that "on July 2, 2013 the 

Government approved payment for Halon Inspection at Building 4055 in the amount of 

$2,600.00 by Advanced Systems, Inc. as a certified subcontractor to PMI." PMI also 

states that the government has "approved a further work order in the amount of 

$21,300.00 for payment to Advanced Systems, Inc. to make repairs to Building 4055 

that were shown to be necessary during that inspection due to the long neglect of those 

systems." (App. resp. at 25-26) 

OEM, the government under paragraph H-5 of the contract ''would only pay for 

work ... at the labor rates provided for PMI's own efforts" (R4, tab 49 at 4). 

5 
12. On 24 April 2014, the contracting officer issued a final decision denying 

the claim entirely. The final decision answered the three requests for relief as follows: 

PMI is requesting relief finding that it is not required to 

perform the inspections and preventative maintenance and 

any and all repairs of the fire systems at Homestead ARB 

under the FFP CLIN 0006 contained in [Contract 0019]. 

PMI has never been obligated under the FFP CLIN to 

provide repairs under the FFP CLIN. . . . PMI is and will 

continue to be required to provide the inspection and 

preventative maintenance on the fire systems at Homestead 

ARB IAW the terms and conditions of the contract. If 

PMI makes the corporate decision to subcontract the 

inspections to a subcontractor that is its business decision 

but no increase in the FFP will be allowed. 

a. Additionally, PMI is requesting relief from 

Provision H-5 of the contract. As stated numerous times 

above, the entirety of the fire systems are not proprietary; 

therefore, it would be inappropriate to provide PMI with a 

blank check regarding repairs of the fire systems at 

Homestead ARB. By requiring PMI to submit an analysis 

of costs it will enable the Government to receive the best 

value for the funds expended in the repair of the fire 

systems. To date PMI has not hired the Fire Alarm 

Systems Mechanic that it proposed so it would be 

impossible for PMI to provide the repairs in house. PMI 

was awarded the Homestead ARB BOS contract in part 

because its proposal was found to be technically acceptable 

based upon the requirements in the RFP. A portion of that 

evaluation was how they proposed to maintain, inspect and 

test all fire detection/integrated mass notification and fire 

suppression systems. PMI's proposal specifically 

demonstrated that they would have both a Fire Alarm 

Systems Mechanic and Plumber on staff to perform this 

requirement. 

b. Finally, PMI is seeking an equitable adjustment 

in the amount of $2,678.00. PMI has not submitted any 

justification for this amount other than it is for a work 

order denied by the Government. PMI did not specify if 

the work order was for inspection and maintenance, or 

repair. If the claim is for inspection and maintenance then 

6 
the amount is a portion of the FFP under CLIN 0006 of the 

contract. If the amount claimed is for repair, PMI has not 

provided any information as to if the repair was to a 

proprietary portion of the system or to another potion of 

the system. Additionally, IA W the terms and conditions of 

the contract PMI is not authorized to perform any service 

calls over $500 without the approval of the BCE. If the 

amount claimed was in fact for a repair PMI has violated 

the terms and conditions of the contract. 

(R4, tab 50 at 7-8) 

13. On 24 April 2014, PMI appealed the contracting officer's final decision to 

this Board. On 4 June 2014, the government moved for summary judgment on the 

grounds that there was no genuine issue of material fact that (i) the contract required 

PMI to inspect and maintain all fire systems, (ii) the government made no 

representation as to how much inspection and maintenance was required, (iii) PMI 

made no attempt to assess how much might be required prior to submitting its bid, 

(iv) even ifthe repair work was many times more than what PMI had assumed, since it 

is paid for on a cost-reimbursable basis for both labor and materials, PMI is unable to 

establish that it will suffer any loss, and (v) "as no inspections have taken place, they 

have no grounds to assert they should be afforded relief' (mot. at 9-10). 

14. The PMI "Response" to the motion contends that there are genuine issues 

of material fact as to, among other things, (i) the government's characterization of the 

Labor for Service Call CLINs as "cost reimbursable" CLINs, (ii) the reasonableness of 

PMI's fixed-price bid for CLIN 0006 considering the government's undisclosed 

knowledge of the poor maintenance condition of the fire systems, and (iii) the extent to 

which the fire systems were proprietary with servicing limited to firms authorized by 

the OEM (app. resp. at 26-27). 

DECISION 

Summary judgment is properly granted only where there are no genuine issues 

of material fact and the moving party is entitled to judgment as a matter of law. 

Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed. Cir. 1987). On 

the record before us on the motion, we find genuine issues of material fact that 

preclude a grant of summary judgment. 

With respect to the fixed-price ITM work under CLIN 0006 of the contract, 

there is a genuine issue of material fact as to whether the government made any 

representation as to how much inspection, test and maintenance of the systems would 

be required. The government states that it did not (mot. at 9). However, in the PWS 

7 
and in the UFC 3-601-02 specified therein, the government specified the number, 

type and location of the fire systems to be serviced and the specific ITM tasks and 

frequency of performing those tasks. There is also a genuine issue of material fact as 

to whether the cost of performing the fixed-price CLIN 0006 ITM work, which did not 

include any repair work on any defects or malfunctions in the fire systems, was 

increased by the fact that the systems previously had not been inspected, tested and 

maintained to industry standards. 

With respect to the labor repair work to be performed under the Labor for 

Service Call CLINs at contractually agreed hourly rates, the government did not 

provide an estimate of the service calls specifically for the fire systems, but it did 

provide an estimate for the entire RPM CLIN 0006 of which the fire systems were a 

part. That estimate was a total of 2 "emergency" calls and 44 "urgent" calls for the 

first 12 months of the contract. (See SOF ~ 4 above) There is a genuine issue 

of material fact as to the number of "emergency" service calls and the number of 

"urgent" service calls that were actually made in the first 12 months of the contract. 

There is also a genuine issue of material fact as to how many of these calls were for 

defects and malfunctions known to the government before the solicitation of PMI' s 

contract and not included in the estimate of emergency and urgent service calls. 

The government's contention that PMI is unable to establish that it will suffer 

any loss on the repair work because it is paid for "on a cost reimbursable basis for both 

labor and materials" is incorrect (gov't mot. at 10). The material for repairs is 

reimbursed at cost but the labor is reimbursed based on fixed hourly rates in the 

contract, and if the contractor cannot make the repair at the contractually agreed hourly 

labor rates it must bear the loss. There are genuine issues of material fact as to the 

extent of the proprietary components of the fire systems, and the extent if any to which 

the hourly labor rates of the firms authorized by the OEM to make repairs exceed the 

hourly rates specified in PMI' s contract. 

The foregoing is not an exhaustive list of the genuine issues of material fact in 

dispute in this appeal but it is sufficient for purposes of the motion. 

8 
The motion for summary judgment is denied. 

Dated: 8 April 2015 

I concur 

~~~ Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

MONROE E. FREEMAN, JR. 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

'ff!£ 

RICHARD SHACKLEFORD 

Administrative Judge 

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 No. 59273, Appeal of Phoenix 

Management, Inc., rendered in conformance with the Board's Charter. 

Dated: 

9 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals