ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of -- ) 

) 

ASF A Uluslararasi Insaat Sanayi Ve ) 

Ticaret AS ) 

) 

Under Contract No. W912PB-13-P-0157 ) 

APPEARANCE FOR THE APPELLANT: 

APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 61471 

D. Lee Toedter, Esq. 

Coeur d'Alene, ID 

Raymond M. Saunders, Esq. 

Army Chief Trial Attorney 

MAJ Jason W. Allen, JA 

Trial Attorney 

OPINION BY ADMINISTRATIVE JUDGE WILSON 

ON THE GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT 

The government moves for summary judgment, arguing that appellant cannot, 

as a matter of law, prove that the government is liable for the claimed costs because 

the costs were not expressly allowable in the contract. Appellant opposes the motion, 

alleging that the government is responsible for payment of the traffic fines, penalties, 

and violations incurred by the government's personnel while using appellant's vehicles 

during performance of the contract. The Board denies the motion. 

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 

1. On March 12, 2013, the Army (hereinafter Army or government) entered into a 

fmn-fixed-price contract with ASFA Uluslararasi Insaat Sanayi Ve Ticaret AS (ASF A or 

appellant) for a six-month lease of five vans in Turkey. The original contract term was from 

March 15, 2013 to September 14, 2013. The contract included two six-month options for 

continued lease, to run from September 15, 2013 to March 14, 2014 and March 15, 2014 to 

September 14, 2014, respectively. (R4, tab 1 at 1-5) 

2. The contract contained various standard clauses, including Federal Acquisition 

Regulation (FAR) 52.212-4, CONTRACT TERMS AND CONDITIONS - COMMERCIAL ITEMS 

(FEB 2012), paragraph (c), Changes (R4, tab 1 at 11-15). 

3. The contract was silent as to which party would be responsible for traffic 

tickets, fines, and penalties incurred by government personnel while using the vehicles 

during the performance period (R4, tab 1). 
4. On April 11, 2013, bilateral Modification No. POOOOl was implemented, 

changing the initial period of performance to run from March 22, 2013 to 

September 21, 2013. As part of this modification, the periods of performance for the 

first and second options were changed to September 22, 2013 to March 21, 2014, and 

March 22, 2014 to September 21, 2014, respectively. (R4, tab 2 at 1-4) 

5. The government exercised the first option period on August 27, 2013, 

through Modification No. P00002 (R4, tab 3). 

6. By Modification No. P00003, dated March 21, 2014, the government 

exercised the second option period (R4, tab 4). 

7. On June l, 2017, ASF A submitted its claim to the government for 

$11,953.54, alleging it was entitled to reimbursement for fines, tolls, and toll-fee 

penalties incurred by government employees who drove the rented vans during the 

contract performance period (R4, tab 9). 

8. In its claim, ASF A alleged that the traffic fines, tolls, and toll-fee penalties 

were registered against the rental vehicles by local and state Turkish authorities, rather 

than against individual vehicle operators (R4, tab 10; compl. ,r,r 7, 10-11). 

9. For the purposes of this motion only, the government does not dispute that 

the charges were incurred by its employees (gov't mot. at 3-4). 

10. The contracting officer (CO) issued a final decision on October 12, 2017, 

denying some of the requested reimbursement. The CO determined a portion of the 

claim related to "HSG tolls" was allowable, and ordered reimbursement in the amount 

of $940.44. However, the CO found that $11,013.10 was unallowable because paying 

this portion, which consisted of the penalties and fees, would be "in violation of US 

fiscal policy to pay for violations of the law which a traffic or HSG toll penalties 

constitutes." (R4, tab 11 at 6) 

11. Appellant filed a timely appeal to the Board on January 4, 2018, which was 

docketed as ASBCA No. 61471. 

DECISION 

The government contends that appellant cannot satisfy its burden of proof and 

show that the claimed costs are allowable under the contract or the FAR. The 

government ai;gues two main points - that this firm-fixed-price contract does not allow 

for additional costs and allowing any additional costs may be in violation of the 

Anti-Deficiency Act (ADA). (Gov't mot. at 6-12) Appellant opposes the motion, 

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primarily arguing that that would not be in violation of the ADA, but payment by 

appellant may actually constitute an improper gift from appellant to the government 

(app. opp'n at 2-5). We agree with the government that appellant's "apparent theory 

of recovery is that the government's failure to pay these costs constitutes a breach of 

the implied duty of good faith and fair dealings." Thus we first focus on whether the 

firm-fixed-price contract precludes an implied duty of good faith and fair dealing when 

it is not explicitly stated in the contract, making summary judgment appropriate. 

Summary judgment is appropriate when there is no genuine issue of material fact 

and the movant is entitled to judgment as a matter of law. Proveris Scientific Corp. v. 

Innovasystems, Inc., 739 F.3d 1367, 1371 (Fed. Cir. 2014); Mingus Constructors, Inc. v. 

United States, 812 F.2d 1387, 1390-91 (Fed. Cir. 1987). 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). The moving party bears the burden of establishing the absence of any 

genuine issue of material fact, and all significant doubt over factual issues must be 

resolved in favor of the party opposing summary judgment. Celotex Corp. v. Catrett, 

477 U.S. 317, 322 (1986). We draw all justifiable inferences in favor of the nonmoving 

party. CI2, Inc., ASBCA Nos. 56257, 56337, 11-2 BCA ,r 34,823 at 171,353. 

The government argues it is not liable for any costs over and above the contract 

value unless a formal change is made to the contract. The government relies on the 

fact that this is a firm-fixed-price contract, and appellant should have, essentially, 

known better. (Gov't mot. at 6-8) For the purposes of this motion, the government 

admits that its employees were in sole possession and control of the vehicles at the 

time the fines and fees were incurred (SOF ,r 9). 

The government contends that because the express language of the contract 

does not establish a duty of care, none exists. The government cites to Metcalf Constr. 

Co. v. United States, 742 F.3d 984, 990 (Fed. Cir. 2014), as its authority (gov't mot. 

at 13). However, the Board has analyzed, and denied, this same argument in CiyaSoft 

Corporation, ASBCA Nos. 59519, 59913, 18-1 BCA ,r 37,084. 

There, the government argued that because the express language of the contract 

did not establish a duty of care, none existed, again citing Metcalf Construction. 

CiyaSoft, 18-1 BCA ,r 37,084 at 180,521-22. The Board rejected the government's 

argument, specifically holding: 

[C]ontracts can include implied duties, such as the duty of 

good faith and fair dealing. SIA Construction, Inc., 

ASBCA No. 57693, 14-1 BCA ,r 35,762 at 174,986 (citing 

Metcalf Construction Co. v. United States, 742 F.3d 984, 

990 (Fed. Cir. 2014)). The implied duty of good faith and 

fair dealing is limited by the circumstances involved in the 

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contract. The implied duty prohibits acts or omissions that, 

though not proscribed by the contract expressly, are 

inconsistent with the contract's purpose and deprive the 

other party of the contemplated value. See First 

Nationwide Bank v. United States, 431 F.3d 1342, 1350 

(Fed. Cir. 2005) (duty was breached by legislation that 

"changed the balance of contract consideration"). The 

Supreme Court has addressed implied duties in contracts 

stating: 

[A] contract includes not only the promises set forth 

in express words, but, in addition, all such implied 

provisions as are indispensable to effectuate the 

intention of the parties and as arise from the 

language of the contract and the circumstances 

under which it was made, 3 Williston on Contracts, 

§ 1293; Brodie v. Cardiff Corporation, [1919] A. C. 

337, 358[)]. ... 

Sacramento Navigation Co. v. Salz, 273 U.S. 326, 329 

(1927). The Board also has indicated that when 

considering implied duties that the circumstances involved 

in the contract must be considered. Free & Ben, Inc., 

ASBCA No. 56129, 09-1 BCA ,r 34,127 at 168,742 (citing 

Coastal Government Services, Inc., ASBCA No. 50283, 

99-1 BCA ,r 30,348 at 150,088). 

Id. at 180,521. The Board went further, noting that in situations where the contract 

involved leased items, the Supreme Court has held: 

[I]n every lease there is, unless excluded by the operation 

of some express covenant or agreement, an implied 

obligation on the part of the lessee to so use the property as 

not to unnecessarily injure it.... This implied obligation is 

part of the contract itself, as much so as if incorporated 

into it by express language. It results from the relation of 

landlord and tenant between the parties which the contract 

creates. 

Id. (quoting United States v. Bostwick, 94 U.S. 53, 65-66 (1876); see also A&B Ltd. 

Partnership v. GSA, GSBCA No. 15208, 04-1 BCA ,r 32,439 at 160,504-05). The 

Board found that the government could not show that the "implied duty would conflict 

with, exceed, or otherwise alter the express provisions of the contract, particularly in 

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light of the government's argument the contract imposed no duties on the 

government." Id. at 180,522. 

Here, contrary to the government's assertions, a duty of care may exist even 

when it is not expressly written into a contract. The Board has carefully considered 

the Army's arguments and the underlying contract in question, but concludes that there 

are genuine issues of material fact that preclude summary judgment. Thus, the Board 

must consider the contract as a whole, including formation and intent. There are 

genuine issues as to circumstances surrounding how the fines and penalties in question 

occurred, the capacity in which those who incurred the fines were acting, and if the 

circumstances surrounding the contract's creation establish or preclude an obligation 

by the government to be liable for fines and penalties registered against the vehicles 

while in the government's control. As such, these above-noted issues are fact 

intensive and, based on the current record, are not ripe to be resolved by summary 

judgment. Cooley Constructors, Inc., ASBCA No. 57404, 11-2 BCA ,r 34,855 

at 171,457. Because the issues of fact identified above require us to deny summary 

judgment, the Board need not address the parties' arguments related to the ADA. 

CONCLUSION 

The government's motion is denied. 

Dated: February 5, 2019 

I concur 

RICHARD SHACKLEFORD 

Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

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O~S-O_N ___ _ 

Administrative Judge 

Vice Chairman 

Armed Services Board 

of Contract Appeals 

I concur 

Administra · Judge 

Armed Services Board 

of Contract Appeals 
I 

I 

I 

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. 61471, Appeal of ASFA 

Uluslararasi Insaat Sanayi Ve Ticaret AS, rendered in conformance with the Board's 

Charter. 

Dated: 

6 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals