ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeals ofSand Point Services, LLC 

Under Contract No. NNG14WA50C 

APPEARANCES FOR THE APPELLANT: 

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APPEARANCES FOR THE ·GOVERNMENT: 

ASBCA Nos. 61819, 61820 

Traeger Machetanz, Esq. 

Nathan W. Rouse, Esq. 

· Davis Wright Tremaine LLP 

Seattle, WA 

Scott Barber, Esq. 

NASA Chief Trial Attorney 

David S~ Schuman, Esq. 

Trial Attorney 

NASA Goddard Space Flight Center 

Greenbelt, MD 

OPINION BY ADMINISTRATIVE JUDGE SWEET ON THE GOVERNMENT'S 

MOTION TO DISMISS AND/OR FOR SUMMARY JUDGMENT 

These appeals involye disputes arising out of a contract between the National 

Aeronautics & Space Administration (NASA or government) and appellant Sand Point 

Services, LLC (SPS) to repair the Wallops Flight Facility's aircraft parking apron. SPS 

alleges that it incurred extra costs and encountered delays as a result of a differing site 

condition-namely unsuitable soil. It also alleges that NASA constructively changed 

the contract when it waived minor deviations from the contract specifications, and then 

insisted upon strict compliance with those specifications. Further, SPS alleges, that 

insistence upon strict compliance with the specifications resulted in economic waste. 

NASA moves to dismiss, arguing that we lack jurisdiction because the contracting 

officer's (CO's) final decision (COFD) was based upon a suspicion of fraud. In the 

alternative, NASA moves for summary judgment, arguing that SPS admitted that its 

failure to comply with the contract was the fault of Atlantic Contracting and Material, 

Inc. (ACM)-SPS's subcontractor. Moreover, NASA argues that a bilateral modification 

released SPS's differing site condition claim. 

For the reasons discussed below, we deny the motion to dismiss because the 

COFD was not based solely upon a suspicion of fraud, and we may resolve these appeals 

without making factual determinations of fraud. We also deny NASA's motion for 

summary judgment. SPS did not admit that the failure to comply with the specifications 

was ACM' s fault, and that issue is not material to SPS' s constructive change and waste 
appeal. Further, there are genuine issues of material fact as to whether SPS signed the 

modification under duress. 

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS 

I. The 5 OC Contract 

1. On September 8, 2014, NASA entered into Contract No. NNG14WA50C 

(50C Contract) with SPS to repair the Wallops Flight Facility's aircraft parking apron 

(R4, tab 1 at 1-2, 4, tab 3 at 3). 

2. Under the 50C Contract, certain soils were ,unsatisfactory for this project (R4, 

tab 66 at 83). The 50C Contract required that SPS remove and replace unsatisfactory 

soils, as directed by the CO (id. at 84). 

3. The 50C Contract also required SPS to obtain a bond (R4, tab 1 at 4). 

JI. Performance 

4. On September 9, 2014, SPS obtained a bond from a surety (R4, tab 74, ex. 6). 

5. On June 9, 2015, SPS sent NASA a Request for Information (RFI), which 

indicated that SPS had encountered unsuitable soil. The RFI presented two options to 

address the problem, and sought NASA's guidance. (R4, tab 66 at 86) 

6. On June 11, 2015, and July 6, 2015, NASA sent SPS Requests for Proposals 

(RFPs) concerning soil removal (R4, tab 66 at 91, 140). 

7. In response, SPS submitted a proposal on July 13, 2015, and revised proposals 

on July 21, 2015, and July 27, 2015 (R4, tab 66 at 144-70). 

8. On August 12, 2015, NASA sent SPS a list of contract violations purportedly 

causing delays (R4, tab 18). 

9. On August 20, 2015, NASA sent SPS a Show Cause Notice, stating that SPS 

failed to perform the SOC Contract within the required time, and requiring SPS to 

demonstrate why the contract should not be terminat~d for cause (R4, tab 19 at 1). 

10. On August 28, 2015, SPS responded that it had failed to complete performance 

on time because NASA had not provided guidance cin how to proceed in light of the 

purported differing site condition which was the subject of an RFI submitted on June 9, 

2015 (R4, tab 22 at 2). 

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11. By letter dated September 4, 2015, NASA responded that a differing site 

condition did not cause the delays (supp. R4, tab 2 at 1). 

12. After further exchanges, NASA wrote to SPS requesting that it execute 

Modification No. 000002. The letter stated that not signing Modification No. 000002 

"will leave the Government no choice but to continue with termination for default 

proceedings." (R4, tab 25 at 1-2) 

13. On September 16, 2015, SPS signed Modification No. 000002 (R4, tab 28 

at 1). Modification No. 000002 changed the scope of the contract at no additional cost 

to NASA, and extended the completion date (id. at 2). Modification No. 000002 also 

contained the following release: 

(Id. at 2-3) 

In consideration of the modification agreed herein as 

complete equitable adjustment for the Contractor's 

proposal for adjustment dated June 19, 2015, July 27, 

2015, and August 19, 2015 in response to [the RFPs] ... and 

all claims related to this project; the Contractor hereby 

releases the Government from any and all liability under. 

this Contract for further equitable adjustments attributable 

to such facts or,circumstances giving rise to the items 

described herein. 

14. On November 4, 2015, ACM notified NASA that it had completed major 

concrete paving operations, and requested a punch list (R4, tab 67 at 35). 

15. On December 4, 2015, NASA provided a punch list. The punch list noted, 

inter alia, that the concrete texture and the mooring eyes did not meet the specifications. 

(R4, tab 67 at 40) NASA required completion of all punch list items within 45 calendar 

days. NASA also stated that final acceptance and payment were predicated upon 

successful punch list completion. (Id. at 37) 

16. SPS requested variances from the concrete texture and mooring eyes 

specifications. NASA took the request regarding the concrete texture under advisement. 

Regarding the mooring eyes, NASA stated that the request would require an aircraft 

tie-down hook inspection. NASA further stated that "[i]fthe mooring eyes are found to 

be good enough to be used in some fashion then only a credit will be needed for the 

improperly installed eyes." (R4, tab 67 at 278, supp. R4, tab 10) 

17. 'On January 21, 2016, SPS sent NASA an email indicating that the mooring 

eyes had been hook tested, and NASA had accepted those results (R4, tab 67 at 107). 

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NASA responded that "[a]ll mooring eyes can be hooked. Mooring eyes are not installed 

within tolerance per plan." (Id. at 106) · 

18. On May 12, 2016, the CO sent SPS an email inquiring about the punch list 

status. In particular~ the CO stated that "[i]t is immaterial if the mooring eyes can be used 

for tie-downs as they are tripping hazards and fail to meet the contract requirement of 

within a 1/4 [inch] to flush with the surface." (R4, tab 67 at 404, Item No. 67) Regarding 

the concrete texture, the CO indicated that SPS either had to correct the surface, or 

provide a credit (id. at 401-02, Item Nos. 2, 19). 

19. The parties exchanged multiple correspondence regarding punch list 

completion (R4, tab 67 at 411-588). SPS proposed addressing the mooring eyes with 

grinding, or the addition of plates (icl. at 460-61, 471). SPS also insisted that the concrete 

texture was functional, even though it did not strictly comply with the specifications (id. 

at 438, 470). 

III Miller Act Action 

20. On January 12, 2017, ACM filed an action in Federal District Court seeking 

compensation under the bond from SPS' s surety due to SPS' s failure to pay ACM 

pursuant to 40 U.S.C. Title 3131, et seq (Miller Act Action) (R4, tab 74, ex. 6). The 

Miller Act Action complaint alleged that "[ u ]pon information and belief, [SPS] has 

entered into an Agreement with NASA whereby [SPS] waived any right to recovery 

for the delays that were encountered by" ACM (id.; see also R4, tab 62 at2, 8). 

ACM makes no allegation as to whether that release is enforceable, or whether SPS 

executed the release under duress (id.). 

20. On February 27, 2017, SPS moved to intervene, and to dismiss or stay the 

Miller Act Action.· SPS argued that the Miller Act Action was premature because ACM 

had not "completed its subcontract work to NASA's satisfaction." (R4, tab 74, ex. 7) 

22. In support of the motion, Christopher Woodruff-SPS 's General 

Manager-submitted a declaration (R4, tab 74, ex. 8, Woodruff decl.). Mr. Woodruff 

declared that ACM had not performed to NASA's satisfaction, stating that "ACM's 

subcontract work has not yet been completed, nor has ACM's subcontract work been 

accepted by NASA. To the contrary, NASA has rejected portions of ACM's subcontract 

work as nonconforming to the contract requirements." (Id. at 2) Likewise, Mr. Woodruff 

declared that "ACM has acknowledged the nonconformity of the ACM subcontract work 

rejected by NASA, and has agreed to correct the NASA rejected work" (id.). After 

discussing how SPS had submitted a Corrective Work Plan, Mr. Woodruff declared that 

"ACM has not fully and duly performed its subcontract work under the terms of the 

ACM subcontract" (id. at 4). Mr. Woodruff did not declare that the deficiencies were 

ACM's fault (id. at 2-4). On the contrary, Mr. Woodruff-declared that there was a 

differing site condition that impacted time and costs (id. at 4). 

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IV. Procedural History 

( 

· 23. On October 27, 2017, SPS submitted a Request for Equitable Adjustment 

(REA), seeking compensation for the alleged differing site condition of unsuitable soil 

(R4, tab 66 at 1, 7-10). 

24. On January 19, 2018, SPS submitted an REA seeking compensation for an 

alleged constructive change and economic waste regarding the punch list items (R4, 

tab 67). 

25. By letters dated June 5, 2018, SPS notified the CO that it was converting its 

REAs into certified claims, and provided certifications (R4, tabs 69-70). 

. 26. On September 19, 2018, the CO issued a COFD (R4, tab 74). First, the CO 

stated that SPS released the differing site condition claim in Modification No. 000002, 

and that a differing site condition did not cause increased costs or delays (id. at 1-2). 

Second, the CO rejected SPS's constructive change and waste claim on the grounds 

that pilot safety required compliance with the specifications, and the project was not 

functional (id. at 2-3). Finally, the CO stated that the claims appeared fraudulent 

because Mr. Woodruff admitted in the Miller Act Action that ACM failed to perform 

in accordance with the specifications (id. at 3-5). 

27. There is no evidence that the CO referred the matter to the agency official 

responsible for investigating fraud. 

28. SPS filed a notice of appeal and complaint, which we docketed as ASBCA 

No. 61819 (constructive change and waste appeal). In that appeal, SPS admits that the 

concrete texture and mqoring eyes were deficient, but alleges that those deficiencies 

involved "minor issues" ( compl. , 69). Moreover, SPS alleges that NASA constructively 

changed the contract when it waived strict compliance with the specifications by accepting 

the concrete texture and the mooring eyes, but then insisted upon strict compliance with 

the specifications (id. at 57-66). SPS also alleges that insisting upon strict compliance 

with the specifications caused economic waste because the concrete texture and mooring 

eyes "did not fall within the specified tolerances under the contract but were otherwise 

fully functional" (id. at 17, 67-76). 

29. SPS also filed a separate notice of appeal and complaint, which we docketed 

as ASBCA No. 61820 (differing site condition appeal). In that appeal, SPS concedes 

that there were delays, but alleges that those delays were due to NASA's failure to 

provide directions after SPS notified it of a differing site condition (compl. ,, 34-4~). 

3 0. Discovery has not commenced yet. 

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DECISION 

I NASA's Motion to Dismiss 

We deny NASA's motion to dismiss because we possess jurisdiction over these 

appeals. A valid COFD is a prerequisite for Contract Disputes Act (CDA) jurisdiction, 

PROTEC, GmbH, ASBCA Nos. 61161, 61162, 61185, 18-1 BCA ,r 37,010 at 180,244, 

and an agency does not have the authority to settle, compromise, pay, or otherwise 

adjust any claim involving fraud. 41 U.S.C. § 7I03(c)(1). However, "[t]he Board does 

have jurisdiction under the CDA to decide the contract rights of the parties even when 

fraud has been alleged." SIA Constr., Inc., ASBCA No. 57693, 14-1 BCA ,r 35,762 

at 174,984 (quoting Pub. Warehousing Co. K.S.C., ASBCA No. 58078, 13 BCA ,r 35,460 

at 173,896). In particular, "[t]hat fraud allegedly may have been practiced in the drafting 

or submission of ... [a] claim does not deprive this Board of jurisdiction under the CDA." 

Nexus Constr. Co., ASBCA No. 51004, 98-1 BCA ,r 29,375 at 146,017 (citing Anlagen 

und-Sanierungstechnik GinbH, ASBCA No. 37,878, 91-3 BCA ,r 24,128 at 120,753). 

We possess jurisdiction when a COFD is not based so~ely upon a suspicion of fraud. 

Daff v. United States, 78 F.3d 1566, 1572 (Fed. Cir. 1996); PROTEC, 18-1 BCA ,r 37,010 

at 180,244. Moreover, we possess jurisdiction over an appeal if we do not have to make 

factual determinations of fraud. Laguna Constr. Co., Inc. v. Carter, 828 F.3d 1364, 

1368-69 (Fed. Cir. 2016); SIA Constr., 14-1 BCA ,r 35,762 at 174,985. 

Here, the CO's assertion that SPS's claims involve fraud is undermined by the 

fact that she did not refer the matter to the agency official responsible for investigating 

fraud (SOF ,r 27), which she would have been obligated to do if she concluded that there 

was evidence of fraud. PROTEC, 18-1 BCA ,r 37,010 at 180,244 (citingFAR33.209). 

Further, the COFD is not based solely upon a suspicion of fraud (SOF ,r 26). 

In addition, we do not have to make factual determinations of fraud to resolve 

these appeals, We do not have to determine whether any incorrect statements were 

made knowingly and with the intent to deceive. SIA Constr., 14-1 BCA ,r 35,762 

at 174,984 (quoting Pub. Warehousing, 13 BCA ,r 35,460 at 173,896). Indeed, we need 

not even have to make a factual determination as to whether any statement in the claims 

were incorrect. The statements in the claims that the CO found were incorrect were 

those that purportedly were inconsistent with Mr. Woodruffs declaration that ACM 

failed to perform in accordance with the specifications. (SOF ,r 26) For purposes of 

this appeal, SPS concedes that it and ACM did not perform in accordance with the 

specifications, (SOF ,r,r 28-29). In particular, ln its differing site condition appeal, SPS 

admits performance delays, but-consistent with Mr. Woodruffs declaration-asserts 

that those delays were due to a differing site condition (SOF ,r,r 22, 29). Moreover, in 

its constructive change and waste appeal, SPS concedes that the concrete texture and 

mooring eyes did not meet the specifications, but asserts that those defects were minor, 

NASA waived strict compliance with those specifications, and enforcing those 

specifications would result in economic waste (SOF ,r 28). Because we need not make 

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factual determinations of fraud to resolve those arguments, we possess jurisdiction over 

these appeals. 

II NASA's Motion for Summary Judgment 

A. Standard of Review 

Summary judgment is appropriate only if there is no genuine issue as to any 

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

Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A material fact is one 'that may affect the 

outcome of the decision. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). 

There is a "genuine" dispute as to such a fact if "the evidence is such that a reasonable 

[fact-finder] could return a verdict for the nonmoving party." Id. 

B. $PS Did Not Admit That Non-Performance Was its Fault 

NASA is not entitled to judgment as a matter of law on SPS 's claims on the 

grounds that Mr. Woodruff admitted that non-performance was ACM' s fault (gov't mot. 

at 15-16). While Mr. Woodruff concededthat ACM did not perform in accordance with 

the specifications, he did not declare that that failure was ACM' s fault (SOF ,r 22). 

Regarding the differing site condition appeal in particular, Mr. Woodruff specifically 

declared that a differing site condition caused delays and increased costs (SOF ,r 22). 

Therefore, Mr. Woodruff s declaration is consistent with the allegations in the differing 

site condition appeal. Regarding the constructive change and waste appeal, Mr. Woodruff 

did not admit that the deficient concrete texture and mooring eyes were ACM' s fault 

(SOF ,r 22). Even ifhe had, that admission would not dispose of the constructive change 

and waste appeal. That is because on appeal, SP S's argument is that, even if it was 

ACM' s fault that the concrete texture and mooring eyes did not meet the specifications, 

NASA waived strict compliance with those specifications, and strict enforcement of those 

specifications would result in economic waste (SOF ,r 28). Therefore, not only does 

Mr. Woodruff s declaration fail to establish a lack of a genuine dispute as to whether the 

concrete texture and mooring eyes defects were ACM' s fault, that issue is not material to 

this appeal. 1 

C. There Is a Genuine Issue of Material Fact as to Whether SPS Released its 

Differing Site Condition Claim 

1 NASA incorrectly argues that we should defer to the CO's fact findings (gov't mot. 

at 16; gov't reply br. at 1-2). Our ''jurisdiction is de novo and the CO's findings 

are not subject to any presumption of correctness nor are they binding on 

appeal." AeroVironment, Inc:, ASBCA Nos. 58598, 58599, 16-1 BCA ,r 36,337 

at 177,178 (citing Wilner v. United States, 24 F.3d 1397, 1401-03 (Fed. Cir. 

1994) (en bane)). 

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Nor is NASA entitled to judgment as a matter of law on the grounds that 

Modification No. 000002 released the differing site condition claim because there is a 

genuine issue of material fact as to whether SPS signed Modification No. 000002 under 

duress. A release is the product of duress-and therefore is not enforceable-when (1) a 

person compels another to as~ent to a release against his will; (2) such assent is induced by 

wrongfully threatening action the person has no legal right to take; and (3) the threatened 

action, if taken, will cause irreparable damage to the other person. Enviro. Tectonics 

Corp., ASBCA No. 23374, 86-1BCA118,649 at 93,784. "It is not duress to threaten to 

make good faith use of the remedies prescribed under the contract." Id. at 93,782 (quoting 

Johnson, Drake & Piper, Inc. v. United States, 209 Ct. Cl. 313 (1976)). However, the 

government must have a good faith belief that it is entitled to take the threatened action. 

Id. at 93,782-83; see also Urban Plumbing & Heating Co. v. United States, 408 F.2d 382, 

388-92 (Ct. Cl. 1969). Moreover, the government's actions-even if authorized by the 

contract-cannot violate ~otions of fair dealing. Enviro. Tectonics, 86-1BCA118,649 

at 93,784-85. · 

Here, it is premature to decide the factual issue of whether NASA's threat to 

terminate the contract was made in good faith, or violated notions of fair dealing.2 

Resolution of those issues involve fact-intensive inquiries. Id. at 93,785. However, 

discovery has not even commenced in these appeals (SOF 1 30). Therefore, we deny 

NASA's motion for summary judgment. See FED. R. CIV. P. 56(d).3 

CONCLUSION 

NASA's motion to dismiss and its motion for summary judgment are denied . 

. Date: August 5, 2019 

(Signatures continued) 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

2 Likewise, it is premature to decide the factual issue of whether there was economic 

waste (gov't mot. at 22-26). 

3 NASA's assertion that ACM took the position in the Miller Act Action that 

Modification 000002 was binding is inaccurate (gov't reply br. at 6). While 

acknowledging that NASA signed a release, ACM made no allegation as to 

whether that release was enforceable, or whether SPS signed it under duress 

(SOF 120). 

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I concur 

RICHARD SHACKLEFORD 

Administrative Judge 

Acting Chaimian 

Armed Servic~s Board 

of Contract Appeals 

I concur 

OWEN C. WILSON 

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 ofContractAppea1s in ASBCA Nos. 61819, 61820, Appeals of 

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

Dated: 

9 

PAULLAK. GATES-LEWIS· 

Recorder, Armed Services 

Board of Contract Appeals