ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of --

Martin Edwards & Associates, Inc. 

Under Contract No. W91247-11-D-0004 

APPEARANCES FOR THE APPELLANT: 

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APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 57718 

H. Addison Winters, Esq. 

J. Thomas Neville, Esq. 

Yarborough, Winters & Neville, P.A. 

Fayetteville, NC 

Raymond M. Saunders, Esq. 

Army Chief Trial Attorney 

Erica S. Beardsley, Esq. 

Trial Attorney 

OPINION BY ADMINISTRATIVE JUDGE MCILMAIL 

The U.S. Army contracted with appellant, Martin Edwards & Associates, Inc. 

(MEA), for the installation and service of clothes washers and dryers at military installations 

in North Carolina. The Army terminated the contract for cause, then entered into a bilateral 

modification with MEA to convert the termination to a "no-cost" termination for the 

convenience of the Army that included mutual releases of all claims arising from the 

contract. 1 MEA contends that the modification was induced by misrepresentation and, 

therefore, is voidable. MEA also contends that the termination of the contract was 

improper, and that the Army breached the contract. While the Board heard eight days of 

testimony and the parties filed extensive briefs on the merits, we need not discuss many of 

the arguments because, as discussed below, we deny the appeal based upon the 

modification's release language.2 

1 We earlier denied a government motion for summary judgment with respect to the release 

in that modification, finding sufficient evidence to raise a triable issue of fact 

whether alleged government misrepresentation induced MEA's agreement to the 

release. Martin Edwards & Associates, Inc., ASBCA No. 57718, 12-2 BCA 

~ 35,058 at 172,210. 

2 Judge Grant, who presided over the hearing in this appeal, has since retired. 
FINDINGS OF FACT 

1. On 31 March 2011, the United States Army awarded to MEA Contract 

No. W91247-11-D-0004, for the delivery, installation, and 12-month lease of (an estimated) 

3,970 washers and dryers at Fort Bragg, Simmons Army Airfield, and Camp Mackall, 

North Carolina, for $489,351.48 (R4, tab 8 at 1, 4-6, tab 38 at 4). 

2. Also on 31 March 2011, the Army issued Task Order No. 0001, requiring MEA to 

deliver and install the appliances by 15 May 2011 (R4, tab 9 at 3), the end of the contract's 

45-day "phase-in" period (R4, tab 7 at 3, ~ 2.6.1.1 ). 

3. The contract's performance work statement provides: 

HOURS OF OPERATION. The Contractor shall perform 

services during the following hours: Monday through Friday, 

7:30 a.m. through 4:00 p.m. except Federal Holidays, unless 

otherwise authorized by the Contracting Officer or the 

Contracting Officers [sic] representative. 

(R4, tab 7 at 3, ~ 2.4) 

4. On 4 April 2011, representatives ofMEA and the Army attended a contract 

post-award meeting (tr. 1150). Among the attendees was Mr. Rickie Day, MEA's president 

(R4, tab 49). Mr. Day informed the Army that MEA would not have any appliances to 

install for three weeks, until approximately 25 April 2015 (tr. 1154-55; R4, tab 49 at 4). 

According to Mr. Day, he asked that MEA be allowed to work on weekends or "after 

hours," and the Army informed him that MEA would not be allowed to do so (tr. 1157-58). 

That account is generally corroborated by two other attendees, one an MEA employee and 

the other the owner of the company whose appliances MEA had been contracted to replace 

(tr. 11169, 11248). However, according to the contracting officer who awarded the contract, 

Mr. Day rejected any suggestion that MEA work on weekends or after hours (tr. 2/86), an 

account that three other Army representatives who attended the meeting generally 

corroborate (tr. 51113, 6171, 7/24). A fifth Army representative who attended the meeting 

does not recall any discussion of weekend or after-hours work (tr. 4/42-43). 

5. During the post-award 4 April 2011 meeting, MEA and the Army discussed the 

possibility of extending the phase-in period, perhaps to 30 June 2011 (tr. 1/55-56, 58), but 

before the meeting ended the Army decided that it would not extend the phase-in period 

(tr. 1/63). MEA then informed the Army that it "would probably be impossible to get all 

that equipment in, in just 21 days"; that is, the 21 days remaining during the expected 

25 April 2011 arrival of the appliances and the 15 May 2011 end of the phase-in period 

2 
(tr. 1/63). However, by the end of the meeting, Mr. Day informed the Army that he would 

"do everything that [he] had to do to make sure [the Army's] equipment was installed in 

that 24 days that [he] had"; that is, that MEA would install the appliances by 15 May 2011 

(tr. 1/72). 

6. Later on 4 April 2011, the contracting officer contacted other vendors, including 

Inventory Accounting Service, Inc. (IAS), regarding their ability to provide and service 

washers and dryers (see tr. 2/89-90). IAS represented that it "would require to work on the 

weekends as well as after hours in order to be able to complete the installation" within a 

45-day phase-in period (tr. 2190, 225). 

7. The next day, 5 April 2011, the contracting officer requested that MEA "confirm 

whether you can and will comply with the contract's phase-in period of performance ending 

May 15, 2011" (R4, tab 15). MEA responded the same day, stating that "[i]t is MEA's 

intent to meet and fulfill all terms and conditions of the contract" (R4, tab 16). Despite that 

response, the Army, on 5 April 2011, terminated the contract for cause, finding that "the 

contractor failed to provide adequate assurance of performance, specifically in reference to 

the completion of the Phase-in period" (R4, tab 17 at 1). Also on 5 April 2011, the Army 

entered into a contract with IAS for washers and dryers at Fort Bragg, Simmons Army 

Airfield, and Camp Mackall, with a phase-in period to be completed by 20 May 2011 

(R4, tab 72 at 4, tab 73). 

8. On 6 April 2011, MEA, through Mr. Day, requested that the contracting officer 

rescind the termination of the contract with MEA, or, in the alternative "convert the 

termination for cause into a no-cost convenience termination" (R4, tab 98 at 1; tr. 1/95-96; 

see tab 153 at 10, ~ 28, tab 153 at 17-18, ~~ 11, 15). The written request did not mention 

weekend or after-hours work (R4, tab 98). On 8 April 2011, MEA and the Army entered 

into bilateral Modification No. P00002 (Modification No. 2) (R4, tab 18). The modification 

recites that its purpose is to convert the termination for cause "to a no-cost Termination for 

the Government's Convenience," and that "(i]n consideration of the promises set forth 

herein and for good and valuable consideration, the parties agree as follows:" 

a. This supplemental settlement agreement modifies the 

contract to reflect a no-cost settlement agreement of $0.00 

and Contract Number W91247-11-D-0004 is Terminated in 

its entirety for the Government's Convenience. 

b. The Contractor agrees that any and all claims which the 

Contractor, and its assigns, officers, directors, employees, 

agents and subcontractors may have or acquire against the 

Government or its present and former agents, employees, or 

agencies, arising under or relating to this Contract, and are 

3 
[sic] hereby fully and irrevocably releases and forever 

discharges the Government and anyone claiming by, through 

or under it, from any and all claims, actions, causes of action, 

obligations, costs, expenses, damages, losses and liabilities, 

of any kind or nature, whether known, unknown or 

unforeseen, vested or contingent, either encompassed by or 

which hereafter can arise out of or result from the 

performance or termination of the Contract. 

c. The Government, in consideration for the Contractor 

providing the release set forth in paragraph b, above, on behalf 

of itself, and anyone claiming by, through or under it, does 

hereby fully and irrevocably release and forever discharge the 

Contractor, its members, officers, employees and related 

entities, and anyone claiming by, through or under them, from 

any and all claims, actions, causes of actions, obligations, 

costs, expenses, damages, losses and liabilities, of any kind or 

nature, whether known, unknown or unforeseen, vested or 

contingent, either encompassed by or which hereafter can arise 

out of or result from the performance, termination, or 

non-performance of the Contract. 

(R4, tab 18 at 1-2 (emphasis added)) 

9. Modification No. 2 was negotiated by attorneys for MEA and the Army 

(tr. 1/96-97, 5/33). The attorneys did not testify at the hearing, and no first-hand account of 

their negotiations - except the modification itself (R4, tab 18) - appears in the record. The 

modification does not mention weekend or after-hours work (id.). 

10. Mr. Day signed the modification for MEA (R4, tab 18 at 1 ), and testified that 

with respect to the negotiations that produced the modification, "whatever [the attorneys] 

talked about I really don't recall"; however, he testified that a condition of the agreement 

was that Mr. Day persuade the contractor whose appliances were to be replaced "to leave 

her machines in place until all the other machines were installed" (tr. 1/97). Mr. Day and 

MEA learned on 30 April 2011, that IAS would be permitted to work on weekends (R4, 

tab 153 at 11, ~ 30; tr. 1/99-100). Mr. Day testified that he would not have signed the 

release if he had known that IAS was going to be allowed to work weekends and after 

hours, because, as he understood it, IAS was "being treated different than [MEA] was" 

(tr. 11100). 

11. On 4 May 2011, MEA filed a certified claim with the contracting officer for 

$850,000 (R4, tab 20). MEA stated that: 

4 
This improper [termination for convenience] claim, and breach 

of contract claim, as noted above, is based on: 

1. Bad faith by the Army (as shown by an intent to injure 

MEA by clear and convincing evidence) 

11. Clear abuse of discretion by the Army in terminating 

the contract 

m. The Army's award of the Contract with no intention of 

fulfilling its promises, and subsequent improper 

convenience termination. 

(R4, tab 20 at 9) MEA claimed that it had requested permission to work on Saturdays, but 

that the contracting officer had refused (id. at 4, 9). 

12. On 29 June 2011, the contracting officer issued a final decision denying the 

claim, finding that during the post-award conference MEA had "rejected the idea of 

working on weekends" (R4, tab 21 ). 

13. On 27 July 2011, MEA timely appealed to this Board. 

DECISION 

In Modification No. 2, MEA released all claims against the Army arising from the 

contract (finding 8). 3 Martin Edwards, 12-2 BCA ~ 35,058 at 172,209, 172,210 n.l. 

Although MEA asserts that the release is voidable because, MEA contends, the Army 

induced its assent by misrepresenting that weekend and after-hours work would not be 

allowed, that assertion fails. If a party's manifestation of assent is induced by either a 

fraudulent or a material misrepresentation by the other party upon which the recipient is 

justified in relying, the contract is voidable by the recipient. RESTATEMENT (SECOND) OF 

CONTRACTS § 164( 1) ( 1981 ). Here, the contract that MEA asserts is voidable is 

Modification No. 2, which includes the release of claims against the Army (finding 8). 

3 The Army challenges whether we possess jurisdiction to entertain MEA' s breach claims 

and challenge to the termination of the contract for cause, contending that MEA did 

not present those claims to the contracting officer (gov't hr. at 64). We disagree: 

MEA's claim to the contracting officer specifically alleges that the Army breached 

the contract, and chall.enges both the Army's exercise of discretion "in terminating 

the contract," as well as, in MEA' s view, the "subsequent improper convenience 

termination" (finding 11). 

5 
MEA asserts that its manifestation of assent to the modification was induced by fraudulent 

and material misrepresentations by Army representatives who, MEA asserts, stated that 

MEA would not be allowed to work on weekends or "after hours." In Martin Edwards, 

12-2 BCA ii 35,058 at 17,209, we stated that "[i]f the government denied MEA the 

opportunity to work weekends knowing it would allow weekend work in a later contract, 

then this could constitute a material misrepresentation" (emphasis added). However, upon 

consideration of the entire record, including the testimony elicited during the hearing, we 

determine that MEA fails to demonstrate that any misrepresentation regarding weekend or 

after-hours work was fraudulent or material. 4 

As an initial matter, we find it unnecessary to decide whether the Army actually 

represented that it would not permit MEA to work on weekends or after hours. Assuming 

without deciding that the Army misrepresented that weekend work would not be allowed, 

MEA does not demonstrate that the misrepresentation was fraudulent. For a 

misrepresentation to be fraudulent, the maker must intend his assertion to induce a party to 

manifest his assent. RESTATEMENT (SECOND) OF CONTRACTS§ 162(1). MEA contends that 

the Army made the misrepresentation on 4 April 2011 (finding 4), but the Army did not 

even terminate the contract until 5 April 2011 (finding 7). MEA does not demonstrate that 

the Army intended, before even terminating the contract, to induce MEA into an agreement 

to convert the termination from one for cause to a no-cost, no-claims, termination for 

convenience. Indeed, it would require a substantial stretch of the imagination for us to 

arrive at such a conclusion. 

Nor does MEA demonstrate that such a misrepresentation was material. A 

misrepresentation is material if it would be likely to induce a reasonable person to manifest 

his assent, or ifthe maker knows that it would be likely to induce the recipient to do so. 

RESTATEMENT (SECOND) OF CONTRACTS§ 162(2). The materiality of a misrepresentation is 

determined from the viewpoint of the maker. Id. cmt. c. First, MEA fails to demonstrate that 

the Army knew it would be likely that a prohibition on weekend and after-hours work would 

induce MEA to agree to Modification No. 2; MEA points to no evidence, for example, that it 

communicated in any way to the Army before signing the modification that a factor in its 

decision to sign was that the Army would not allow work on weekends or after hours. For 

example, MEA's request to the contracting officer that the termination be converted to a 

no-cost convenience termination does not mention weekend and after-hours work (finding 8). 

Second, MEA does not demonstrate that such a prohibition would be likely to induce a 

reasonable person to manifest his assent to Modification No. 2. Indeed, we find no objectively 

reasonable connection between an Army statement that it would not allow weekend or after4 At page 25 of its opening brief, MEA contends that the Army also misrepresented 

whether it would allow an extension of the phase-in period, but points to no evidence 

that such a representation induced it to sign Modification No. 2. 

6 
hours work, and a contractor's later decision after the termination of its contract for cause to 

agree to a no-cost, no-claims conversion of the termination to one for the convenience of the 

Army. To begin with, Modification No. 2 does not mention weekend or after-hours work, nor 

does the record, except for the modification itself, contain any first-hand evidence (that is, 

from the attorneys who negotiated the modification) of the content of the negotiations that 

produced the modification (finding 8). 5 In addition, MEA left the 4 April 2011 meeting 

assuring the Army that the appliances would be installed by 15 May 2011, even (according to 

Mr. Day's account of the meeting) knowing that weekend and after-hours work would not be 

allowed (findings 4, 5). We do not find it likely that a reasonable contractor that had 

determined that it could meet an installation date without working weekends or after hours 

would be induced later to assent to Modification No. 2 by a prohibition on weekend and afterhours work that had been announced before the contractor determined that the appliances 

could be timely installed. That is, we do not see how such a statement, made when and in the 

context it is alleged to have been made, would matter to a reasonable contractor deciding 

whether to sign Modification No. 2. In other words, because, according to MEA, it could have 

timely installed the appliances during only regular, weekday hours (finding 5), whether 

weekend and after-hours work would be allowed would have been immaterial to a reasonable 

contractor, in MEA's position, deciding whether to assent to Modification No. 2. 

Indeed, Mr. Day's explanation of the significance to him of the issue of weekend and 

after-hours work indicates not that a statement prohibiting such work induced him to sign 

the modification, but that had he known that the Army was going to allow IAS to work on 

weekends and after hours, he would not have signed it, because, as he understood it, IAS 

was "being treated different than [MEA] was" (finding 10). That is, having learned after 

signing Modification No. 2 that the Army was allowing IAS to do what, according to him, 

MEA was not allowed to do (work on weekends and after hours), Mr. Day felt unfairly 

treated by comparison. However, the evidence does not demonstrate that the Army made 

any representations to MEA regarding how it would administer a follow-on contract. Citing 

RESTATEMENT (SECOND) OF CONTRACTS§ 161, MEA contends that the Army 

misrepresented the facts by failing to disclose to MEA that IAS would be allowed to work 

on weekends and after hours (app. reply at 161), but the contracting officer and IAS only 

discussed such work after the Army had met with MEA on 4 April 2011, and did so before 

the contract was terminated and MEA requested a conversion (findings 6, 8). Therefore, 

there was nothing about IAS's possible work schedule for the Army to disclose to MEA 

during the 4 April 2011 meeting, and no conversion request for the Army even to consider 

until more than a day later. As for what the Army did not disclose between the 4 April 2011 

meeting and the 7 April 2011 conversion, MEA failed to establish what, if anything, the 

5 Mr. Day's testimony evinces that the Army conditioned agreement to a conversion on 

MEA persuading the previous contractor to allow existing appliances to remain in 

place during the phase in of new appliances (finding 10). 

7 
Army held back in the lead up to Mr. Day signing Modification No. 2, by failing to present 

any testimony by the attorneys whose negotiations resulted in that modification. 

Because MEA failed to demonstrate that the Army induced MEA's assent to 

Modification No. 2 by a fraudulent or material misrepresentation, that modification is not 

voidable; consequently, the modification releases MEA's claims against the Army arising 

from the washer and dryer contract. For these reasons, the appeal is denied. 

Dated: 10 March 2015 

I concur 

/,,,-~---/-7- /__ / / / A ,· /. / ·" // </ ~--- / 

/ ,// /'// _// /-:/'.,· .i/ J .. )4 /' :::/ ~ r / t/ '/';;( __ / .:_/')'l>(o 

MARK N. STEMPLER / 

Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

I concur 

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. 57718, Appeal of Martin Edwards & 

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

Dated: 

8 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals