ARMED SERVICES BOARD OF CONTRACTAPPEALS Appeals of

-- ) ) Charles F. Day & Associates LLC ) ) Under Contract No. WlSQKN-11-C-0157 )
APPEARANCES FORTHE APPELLANT:

APPEARANCES FORTHE GOVERNMENT: ASBCA Nos. 60211, 60212, 60213

Jeffrey L. Roth, Esq. Allen L. Anderson, Esq. Ryan G. Blount, Esq.

F&B Law Firm, P.C. Huntsville, AL Raymond M. Saunders, Esq.

Army ChiefTrial Attorney MAJ Stephen P. Smith, JA CPTMeghan E. Mahaney, JA

Trial Attorneys
OPINION BYADMINISTRATIVE JUDGEPROUTY
This appeal involves employees ofappellant, Charles F. Day & Associates LLC (CFD), performing services for the United States in Iraq above and beyond the written requirements ofthe above-captioned contract (the contract) during a critical moment ofourwar effort. Forthis, CFD may be owed recognition but not additional compensation. A significantportion ofthe evidence presented by CFD was not presentedto the contracting officerwhen CFD submitted its claims and we do not possessjurisdiction over appeals resting upon such new factual bases. Moreover, we cannot compensate the company for expenses that it wouldhave incurred even had it not performed out ofscope work, and must deny it the damages it seeks in this appeal.
FINDINGS OF FACT


### I. The Award ofthe Contract and its Terms
The United States Army's Picatinny Contracting Center ofthe Picatinny Arsenal in New Jersey (the government) released the solicitation for the contract on April 7, 2011 (supp. R4, tab 564) 1• The contract which came from this solicitation was generally for providing support personnel relating to artillery

- much ofit overseas in Iraq and Afghanistan (see R4, tab 1 ). The appeal before us involves two contract line

1The solicitation numberwas WlSQKN-11-R-COOl (R4, tab 2 at 5).item numbers (CLINs) in this larger contract. The first ofthese CLINs, CLIN 0005 (CLIN 5), was for the provision ofthree field service representatives (FSRs) to do work in Iraq on M109A5 self-propelled 155mm howitzers (the self-propelled howitzers) (R4, tab 1at 8, 36). The second CLIN at issue, CLIN 0006 (CLIN 6).
was for ten FSRs to do work on M198 towed 155mm howitzers (the towed howitzers). also in Iraq (id. at 9, 36). Ofnote, the contract included two option years for the FSRs referenced in CLINs 5 and 6 (id. at 15-16 (option year 1), at 22-23 (option year 2)).
A. The Work Required ofthe FSRs
Several contract provisions described the work to be performed by these FSRs. Section 6 ofthe performance work statement (PWS) provided in part that the contractorwouldprovide the 13 FSRs set forth by CLINs 5 and 6: [W]ith primary focus on providingtechnical assistance; over-the-shouldertraining; and onsite maintenance support of24 [self-propelled howitzers] refurbished by the Maine Military Authority (MMA) and 120 [towed howitzers] refurbished by Joint Manufacturing & Technology Center (JMTC), Rock Island Arsenal. (24 [self-propelled] Howitzers are scheduledto arrive in Iraq by March 2011. [Deliveries ofthe towed howitzers]

...are scheduled to commence February 2011 with deliveries of8howitzers permonth thruApril 2012)[.] (R4, tab 1at 36)
Section 6.1.1 ofthe PWS providedthat the three FSRs working on the self-propelled howitzers would primarily be located in Taji, Iraq, in support ofthe Iraqi 9th Mechanical Division, though they would also support the howitzers during live fire exercises in Besmaya, Iraq (R4, tab I at 36). Section 6.1.2 ofthe PWS provided that the FSRs working on the towed howitzers would also have a primary location ofTaji, along with supporting theirhowitzers during live fire exercises in Besmaya (id.).
The PWS also included a section on "deprocessing" the towed howitzers (R4, tab 1at 36-37). "Deprocessing," in this context, simply means taking howitzers that
were packed for shipment to Iraq and received there and making them operational (tr. 1/19-20, 22-23, 2/60-61). It is generally not considered to be aparticularly difficultprocess (id.), and Mr. Andrews, one ofCFD's lead FSRs, testified that, nominally, the howitzers covered by the CLINs could each be deprocessed by one FSRworking one day, although it could take longer ifthey were in poorcondition (tr. 2/60-61). In any event, section 6.2 ofthe PWS provided that the FSRs would

2 

# Ideprocess 802towed howitzers at Camp Taji as they arrived from their refurbishment by the Rock Island Arsenal (R4, tab 1 at 36). This section ofthePWS repeated the anticipated schedule from paragraph 6, noted above, with 8towed howitzers to be delivered a month from February 2011 to April 2012 (id.).

The section ofthe PWS about deprocessing, section 6.2.1, entitled, "Specific FSR/Deprocessing SupportTasks," went into some detail about the actions that would be accomplished during the deprocessing and also included subparagraph g, that in full, stated: "Provide [self-propelledhowitzer] and [towedhowitzer] Technical Assistance" (R4, tab I at 36-37).

B. The Hours to be Worked by the FSRs

The hours tobeworked by the FSRs were set forth in two locations in the solicitation. CLINs 5 and 6 both included the annotation "4680 hours/year/person when deployed" (R4, tab I at 8-9). The PWS states, in section 5.1, "Hours ofDuty":

On-site FSRs shall provide support as required to support the mission, including working extrahours, after-hours, and on weekends. The Contractor shall allocate 90 hours perwork week for the FSRs deployed in

...Iraq

.... (R4, tab 1at 36)

The 90-hourworkweeks for deployed FSRs (4,680 hours peryear in the CLINs also equates to 90 hours perweekmultipliedby 52 weeks in a year) caused a potential contractor (not CFD (see tr. 1/44-45))to submit a questionto the contracting officer (CO) priorto contract award:

REF PWSparagraph 5.1 page 33

- Hours ofDuty requires FSR's [sic] to perform a 90-hourwork week. This would require working 13-hourdays seven days perweek. Sustained performance at this rate is extremely difficult. Ourexperience is that most everyone works a 72 hour week, 12 hours a day 6 days a week. Please clarify the anticipated work schedule for those deployed in Afghanistan and Iraq.

2 We cannotreconcile the PWS referring to 80 towed howitzers needing to be deprocessed, while otherportions ofthe PWS referto FSRsbeingresponsible for 120 towed howitzers and the delivery schedulereferences 15 months of deliveries at 8 towed howitzers per month, which multiplies to 120 towed howitzers. Fortunately, we need notresolve this seeming conflict.
3(App. supp. R4, tab 237 at 4) In response, the CO wrote: "Answer: The 90 hourwork week allows for FSRs to be on call toprovide supportto units as necessary" (id.). This question and responsejoined all other questions andresponses submittedby contractors as part ofthe solicitationprocess and were formally incorporated into the solicitation as a modification to the solicitation dated April 25, 2011 (app. supp. R4, tab 257 at 2, item 5). Other questions and answers incorporated into the solicitation included one that asked whatwould happen to the FSRs after they had deprocessed the howitzers and whether they would "remain on [the] groundto continue FSR support to otherM198 Howitzers." The response to this question was, "Yes. The FSRs remain
on the ground." (App. supp. R4, tab 237 at 8) The response to another question stated that the self-propelled and towed howitzer mission in the contract was "totrain Iraqi forces" (id.); and, in response to a question inquiring about "essential contractingtasks which are not clearly delineated in Para. 4.2.1.1," the CO responded that "[t]he essential tasks are 'supporting fielded L W155 howitzers in Iraq and Afghanistan'. As indicated in 4.2.1.1. There are services provided by FSRs in Iraq andAfghanistan." (Id. at 11)
Section 6.4 ofCFD'sproposal in response to the solicitation3 addressed work hours and stated in relevantpart: CFDay complies with the hours for the Iraqi based M198 and MI09A5 FSRs, while deployed. The duty hours for all tours ofduty identified in this contract will be complied with by CFDay, with the understanding that these may changeto ensurethe government's ability to continue its mission. The operational needs ofthe Combatant Commanderwill determine the duty hours for ourFSRs and may reflect the same duty hours as the military personnel they are supporting. CFDay FSRs have always worked to accomplish mission essential tasks, to ensure the government's ability to execute its mission. CFDayhas allocated 90 hours perweek for the Iraqbased FSRs which allows for themto be on call to provide supportto units as necessary. (App. supp. R4, tab 259 at 43)
On its face, CFD'sproposal also appeared to include 90-hourworkweeks for its CLINs 5 and 6 FSRs. To workthrough one example: Mr. Joseph Andrews was noted
as a CLIN 5 FSRwhosehourly rate was $27.86. At40 hours a weektimes 52 weeks a

3 The proposal was dated May 9, 2011 (app. supp. R4, tab 259 at 1).
4year (2,080 hours4) multipliedby $27.86, we generate $57,948.80, which is the same number CFDprovides for Mr. Andrews' salary. The overtime rate is listed as 90% of the basepay and is multipliedbythe 2,600 hours expected for regulartime and overtimeto sumto 90 hours a week (50 hours a weektimes 52 weeks a year) to yield $65,192.40 overtime pay peryear. (See app. supp. R4, tab 259 at 96)

Atthe hearing, CFD's chiefexecutive officerDr. Charles Day, attempted to explain away the inclusion of90-hourworkweeks in CFD'sproposal by stating that the 90% multiplier for overtimehours, rather than the 150%multiplierthat CFD supposedly used for its employees was a reflection that CFD discounted the number of hours ofovertimethat it expected to pay its FSRs since it expected to be more efficient than the contract contemplated (tr. 3/20-22). This explanation is superficially attractive, but founders upon additional examination. First, and foremost, with the exception ofits twoteam leads, CFD did not pay its FSRs any overtime premium, but, instead, paid them the rate for straighttime5 (see, e.g., app. supp. R4, tab 469 at 21-24 (payroll sheets for the FSRs)). With the 90% multiplier applied to the 50 hours per week oftime above 40 hours, we calculate 85 hours perweek ofstraighttime

- almost exactlythe 84 hours ofstraightpay that CFDpaid its non-supervisory FSRs.

Atthe hearing, and repeated in CFD'spost-trial brief, Dr. Daytestifiedthat it wouldhave been "unethical"to chargethe government for 4,680 hours peryearper FSRin its proposal because it wouldnothave needed to workthose hours toperform the contract (tr. 3/37; see app. hr. at 10). How CFDreconciles this statement with its proposal, that facially does chargethe government for 4,680 hours perFSRperyear, is not explained.

Ofnote, on June 6, 2011, Dr. Michael Santens, CFD's chiefoperating officer. sent an emailto the government statingthat CFDhad miscalculated the hours it would pay its employees for both a contract modification on a pre-existing contract and for its response to the solicitation at issue here (R4, tab 2 at 2). Two days later, on June 8, 2011, Dr. Santens withdrewthe June 6 letter, stating that, "[w]e are capable and willing to perform attheprice submitted onboth ourproposals" (id.). The CO, Mr. Albert Rinaldi, responded to Dr. Santens on June 9, asking for verification ofthe prices in the proposal (R4, tab 2 at 1). OnJune 13, 2011, Dr. Santens emailed a letter to the CO, statingthat it withdrew its email regarding miscalculation oflaborrates and "confirm[ed]" its price proposal in response to the solicitation (id. at 5).

4 Thetable als9 includes the number 2,080 overthe "salary" column. 

### It includes the number2,600 overthe "Overtime Pay" column (app. supp. R4, tab 259 at 96). 5 Civilians deployedto Iraq did not necessarily getpaid the time-and-a-halfovertime premiumthatthe casual reader might expect. See, e.g., CACIInternational, Inc. & CACITechnologies, Inc., ASBCANo. 60171, 16-1 BCA

### ii 36,442 at 177,613-14.
5C. Contract Award, Modification 1, and its (Non)Effect on FSR Hours
The contract was awarded to CFD, and on June 30, 2011, Mr. Rinaldi executed it. Dr. Santens executed it on CFD's behalfthe same day. (R4, tab I at I)
On July 12 and 19, 2011, Dr. Santens and Ms. Rachael Houle (the then-CO) executed Modification No. POOOOI (Mod I) to the contract (R4, tab 3 at I). As set forth in section A ofthis modification, the purpose ofMod I was to change certain dates of performance. With respectto the CLINs at issue here, 5 and 6, the purpose was set forth as, "[c]hange the Performance Completion Dates for CLINs 0005 and 0006 from 07 July 2011

- 07 July 2012 to 22 July 2011

- 23 July 2012" (R4, tab 3 at 2). Section A further stated that "[a]ll otherterms and conditions remain the same'' (id.).
The text that followed the portion ofMod I modifying CLINs 0005 and 0006
was similar to the text ofthe CLINs in the original solicitation except that the dates
were changed as noted above and the original line, "4680 hours/year/person when deployed" was omitted (R4, tab 3 at 8). A similar omission was found for CLINs 0002, 0003, and 0004, which also included expected hours perFSRperyear in the original contract (see R4, tab 1at 7-8), but did not include it in Mod 1(see R4, tab 3 at 7-8). Notably, CLIN 0003 was for an FSRto Australia and, in the original, noted 2,080 hours peryear (R4, tab 1at 7), which computes to 40-hourworkweeks.

Dr. Day testified at trial that the omission ofthe hours in Mod 1reflected the government's agreementwith CFD'spurported understanding that its deployed FSRs
were not really expectedto work 90-hourworkweeks for a year (e.g., tr. 1/66-68). There was no evidence presented at the hearing ofany communication between the government and CFD that demonstrated this supposed mutual understanding, although Dr. Day testified that his assumption was based on communications involving a different contract. Contraryto Dr. Day's assumption, the government provided testimony that the omission in annual hours from the modifications revising the CLINs merely reflected the fact thatthese were unchanged and that it was unnecessary to reflectthe unchanged portion ofthe CLINs in the Mod 1text (tr. 4/38-39). 6 Notably, the portion ofthe PWS thatprovided for 90-hourworkweeks for the deployed FSRs
was not affected by Mod 1(see generally R4, tab 3).
We find, factually, that the government's omission ofhours in the text of Mod l'srevision ofCLINs 5 and 6 was not intended to change the text ofthe original

6This is consistent with the way the texts ofCLINs 0002, 0003, and 0004 were treated in thatthe text in the modification omitted the hours (see R4, tab 3 at 1-8), and it was clear that the parties had not intended to modify or delete the hour requirement.

6contractwith respect to the hours that CFD FSRs were expected to work and that there
was no understanding between the parties that it did.

D. Contract Terms Regarding the FSRs' Status in Iraq
As civilian employees ofa government contractor during atime ofgreat change in Iraq (as will be discussed herein, the American military presence in Iraq

- temporarily

- formally ended during the time ofcontractperformance), the FSRs were in apotentially awkward position. Paragraph 4.1.1.1 ofthe contractprovided some guidance on the matter, though not much that was particularly definite: Depending on the Status ofForces Agreement (SOFA) or other international agreements, all Contractor employees may be subject to the customs, processingprocedures, laws, agreements and duties ofthe country in which they
are deployingto and the procedures, laws, and duties ofthe United States upon re-entry. Contractor shall verify and comply with all requirements. (R4, tab 1at 30)

II. Contract Performance and the DisputeAbout the Scope ofWork
Performance on the contract duly began in July 2011, though CFD only provided the two seniorFSR's at first, with the 11 others required by the contract coming several months later

- 10 in September 2011 (tr. 2/24; R4, tab 9 at 1-2), and the final FSR in October2011 (app. supp. R4, tab 558 at 4).
The FSRs performed some work on the trucks used to haul the howitzers that
was beyond the scope ofthe contract, but, according to one ofCFD'stwo lead FSRs, Mr. J. Andrews, such work was minor, like changing batteries to get them to start (tr. 2/50-51). They also performed significant, depot-level maintenance on the howitzers based upon the condition in which they arrived in Iraq and some damage done to them by Iraqis during training (tr. 2/53-56). In the absence ofthis heavy maintenance, Mr. Andrews estimatedthat only 8 FSRs would have been necessary to complete the work, not the 13 actually on site (tr. 2/59).

In general, the attitude ofCFD'sFSRs on the ground in Iraq was to uncomplainingly do whateverneededto be done to ensure success ofthe mission in Iraq (tr. 2/49-50, 3/85-86). To that end, they were not particularly concerned about what duties were specifically set forth in the contract (one ofthe lead FSRs neverread the contract (see tr. 2/22), and the other only did so summarily (tr. 3/71-72)), and they pitched in to help other contractors with their duties,just as other contractors' personnel

7sometimes helped the CFD FSRs perform their duties (tr. 3/102). The CFD FSRs generally expectedto work 12 hour shifts, seven days a week as one did in Iraq7

·(tr. 3/115-16). Theregular rhythm ofthe workday (up at 5:00 a.m., breakfast around 6:00, escortedtravel to the "yard" where work was performed, followed by escorted travel to and from lunch andthen work at the yard until approximately 6:00 p.m. (see tr. 2/42), was consistentwith the expected 12-hour days, and security considerations generally diminished the flexibility ofCFD employees to come and go at will from theirworksites (tr. 3/75-78, see also 3/140-41 (Iraqi military largely controlled access to worksites), 1/78 (transportation issues effectively imposed 12-hour workdays on the FSRs)). Although CFD management was generally aware ofthe type ofwork actually beingperformed by its FSRs in Iraq (see tr. 2/25, 49, 121-22), not until sometime in late December2011 did anybody from CFD ever complain8 about performing allegedly "additional" work, andthat came about in a telephone call where Army Colonel (COL) James Romero, apparently from the Office ofSecurity Cooperation

- Iraq, informed Dr. Daythat thepotential evacuation ofthe FSRs from Iraq at the end ofthat month (pursuant tothe withdrawal ofAmerican military as discussed below) couldbe disastrous to the military mission and could cause the government to terminatethe contract for default. Dr. Day, in this phone call, explained his view that the FSRs had responsibilities as limited by his interpretation ofthe contract, while COL Romero counteredthatthe duties ofthe FSRs were to do what the government told them to do. 

### It was at this pointthat Dr. Dayrecognized a disconnect between his view ofthe contract andthe government's view (tr. 1/117-20). After his discussion with COL Romero (who Dr. Day never dealt with again), he contacted Ms. Ethington, the COR, and informed herofthe divergent views ofthe contract. Ms. Ethington appeared to largely hewto COL Romero's view ofthe contract

7 Testimonythat CFD did not expect most ofits FSRstowork morethan 40 hours a week in Iraq (e.g., tr. 2/166), is not consistent with the question submittedto the CO about workhours, northe statement in CFD'sproposal indicating that the duty hours would fit withthe "operational needs ofthe combatant commander'' and "may reflect the same duty hours as the military personnel" (app. supp. R4. tab 259 at 43), northe Board's extensive experience involving contractors workinghours in Iraq. 8 As early as December 7, 2011, in an internal government email, the CO's representative (COR), Ms. Joyce Ethington, noted that CFDFSRs were performing out ofscope work, butthere was no indication in that email that CFD was complaining about extra incurred costs associated with that work or requestingto be relieved ofthe work (app. supp. R4, tab 476). At aboutthe
sametime, the government internally considered modifying the SOWto include support workbythe FSRs at Besmaya, which was seen as incurring no additional costs excepttravel (supp. R4, tab 580; tr. 4/101-03).
8(tr. 1/121-22). Immediately after this phone call, Dr. Day sent an email to Ms. Ethington stating, for the first time that, "[t]he reports I am getting lead me to believewe are performing maintenance supportthat is likely included in another companies [sic] NET scope" (R4, tab 31 at 2). In the context ofthe discussion, our view ofthe evidence was that Dr. Day raised this matter not for financial reasons, orto requestthe workbe reduced, but to defend the quality ofthe work that his employees
were providing and to argue that they should be allowedto evacuate to Kuwait for safety reasons without any negative effects on CFD's contract (see R4, tab 31).

Dr. Day testifiedthat he raised the issue with the CO, Mr. Rinaldi, sometime in October or November of2011, and that Mr. Rinaldi explained that he bought "hours." not specified work, from the FSRs (tr. 1/141-46). We believe that Dr. Day is mistaken in his timing because there is simply no documentary evidence ofit, nor corroborating evidence, and the December 22, 2011 email appears as ifthe subject werejustthen beingraised by Dr. Day, as opposed to a matter he had raised a few months earlier (see R4, tab 31). This interpretation is supported by Mr. Rinaldi'stestimony that he only spoke with Dr. Day in the presence ofothers and did not do so until December 2011 (tr. 4/107-08, 127).

III. The Temporary Evacuation ofthe FSRs from Iraq
On December 31, 2011, the SOFA between the United States and Iraq expired, and the United States withdrew all combatant military forces from Iraq before this deadline (tr. 1/114-15, 2/113-14). The government oflraq also required all civilian contractors working for the United States in Iraq to have work and travel visas (tr. 1/114-15).

Because ofconcerns regarding security and the fact that the Iraqi government had not yet providedthe work visas to the FSRs, CFD withdrew them to Kuwait from Iraq priorto the December 31 deadline (tr. 1/114-15, 2/114). There, they waited for their visas and returned to Iraq within a few weeks (tr. 2/116).

IV. Modification ofthe Contractto Descopethe Number ofFSRs
On March 12, 2012, Dr. Day sent an email to Martin Kane (a seniorbusiness manager for the Army on the contract (see tr. 4/94-95)), asking for the government to take a number ofsteps to help CFD financially. As Dr. Day's letter explained, CFD had built its cost estimate for the FSRs upon prior experience that showed that they would not need to work the entire 90 hours perweek called for in the contract and that the difference in thatprojected cost and the cost ofpaying the FSRs for the 84 hours per week that they were actually working had "put me in the red to the point the business is at risk." (R4, tab 66 at 1) He asked for a number ofremedial actions by the government, includingpaying for CFD's overtime for FSRs that worked more than

930 hours ofovertime perweek (id. at 1-2). Otherremedial requests in this letterwere to increase the payment ofDefense BaseAct insurance and to include "G&A" costs for travel as a direct cost (id.). We do not perceivethese otherremedial requests as related to the alleged "overtime" ofthe FSRs, butpart ofprevious communications that CFD had apparently hadwith the governmentrelating to underbidding the contract on those issues (see tr. 4/138).

The government did not agree to increased payments to CFD, but did agree to descope the contract by reducing the number ofFSRs by six, so long as there was a corresponding pro-rata decrease in the amountpaidto CFD (see R4, tab 71 at 2-3; tr. 1/147-48). CFD agreed to this change and the parties thus executedModification No. P00005 (Mod 5) onApril 3, 2012 for CFD and April 4, 2012 for the government (R4, tab 75 at 1). The netreduction in price was $282,876.40 (id. at 4). CFD also requested, as part ofthe modificationprocess, that the additional option years for CLINs 5 and 6 be removed (R4, tab 71 at 3, tab 73 at 2), but Mr. Rinaldi declined to make that contract change, although he did represent that the government would not exercise the options (R4, tab 73 at 1 ). In the correspondence leading to the execution ofMod 5, Dr. Day statedthat he consideredthe deletion ofthe options for CLINs 5 and 6 to be "an integral part ofourproposal," butthathe "underst[ood] your reluctance to delete them from the contract" (R4, tab 74 at 5).

CFD has argued that it did not agree to Mod 5 ofits own free will and that it succumbedto economic duress (app. br. at 38-41). The written and other evidence presented does not support such a factual finding. With respect to Dr. Day'stestimony that his company was in financial distress due to higherthan anticipated costs for the contract (see tr. 1/146 (Dr. Day statingthatthe company was facing bankruptcy), 148-49), we find it highly plausible and have no reasonto doubt this testimony. It is with respect to the threats allegedly conveyed by the CO that webelievethere is exaggeration. Dr. Daytestifiedthat Mr. Rinaldi told him that he could find CFD in default for sending its FSRs to Kuwait and that he might exercise his option to require the FSRs for following years (tr. 1/147-48, 2/142-44). Dr. Day further testified that he considered Mr. Rinaldi to be threatening his company's financial well-being

- effectively, "extortion" (tr. 2/144). Mr. Rinaldi'stestimony is that he had
no recollection ofsuch a conversation (tr. 4/108) and that in his career as a COhe had
never defaulted a contractor and would have never considered doing so in the CFD contractunless there was "noperformance" (tr. 4/119). Indeed, under questioning from the presidingjudge, Mr. Rinaldi was adamantthat he would neverhave threatened CFO with default underthe circumstances (tr. 4/140). There is no contemporaneous written documentation supportingDr. Day'sversion ofevents and a review ofthe correspondence betweenthe parties at the time ofMod 5 (e.g., R4, tabs 71, 73-74) show theparties to be engaged in a respectful and professional dialogue, somewhat inconsistentwith Dr. Day's testimony ofperceived extortion. Ms. Patricia Martel, the CFD employee who handled much ofthis correspondence on behalfofCFD,

10complained internally that a termination for conveniencewouldbe more appropriate than the descoping modification, but expressed no othercomplaints about the way the government handled it, nor did she hear ofany threats to terminate the contract for default (tr. 5/17-18). Moreover, before filing its claims more than twoyears later, CFO
never complained to the CO about Mod 5 being unfair (tr. 4/130). In sum: CFO found itselfin a very difficult financial spot and did not getthe exact reliefthat it wished for. but the government'sbehaviorwas not the "extortion" now alleged by CFO.

V. Conclusion ofCLINs 5 and 6

Afterthe execution ofMod 5, CFO sentthe six descoped FSRs home. In an email dated April 26, 2012, Mr. Rinaldi formally notified Ms. Martel that the Army would not be exercisingthe options involvingthe Iraq FSRs (R4, tab 88 at 1 ). By mid-July, 2012, the remainder ofthe FSRs on CLINs 5 and 6 had completedtheir work on the CLINs and departed Iraq (R4, tab 212 at 4). There is no allegation that CFO was not paid the complete amount for the CLINs, as amended by Mod 5.

VI. CFD's Claims to the CO

On December30, 2014, CFO submitted a document captioned as "Request for Equitable Adjustments" to the then-CO, Ms. Houle (R4, tab 212). This document delineated three separate "claims" in the aggregate amount of$1,583,827 (R4, tab 212 at 129) andwas accompaniedby three separate certifications byDr. Day, using language comportingwiththe ContractDisputes Act (CDA) (id. at 8, 10-11). We will referto the three claims in the document as CFD's "claims"herein because, despite the document's label, it essentially conveyedthree CDA claims to the C0. 10

CFD's Claim 1was for "Workonvehicles not included in [the] SOW." 11 In this claim, CFD allegedthat its FSRs putin 1,104 hours ofwork on 7 ton trailers; 156 hours ofwork on a vehicleknown as a HETT (apparently, heavy equipmenttransport, see app. br. at 17); and 1,560 hours working onMl 13 armoredpersonnel carriers

- all vehicles not set forth in the contract's PWS and summingto 2,820 hours. CFO also alleged that it put in approximately 4,320 hours ofwork on 270 othervehicles in Iraq that were not covered by the contract. This would add up to 7, 140 extrahours of work, which CFO multiplied by its $88.50 rate for its FSRs, leadingto a quantum of

9The page numberhere is not the page number ofthe Request for Equitable Adjustment document, but ofthe pages in tab 212 ofthe Rule 4 file

- two higherthan the number on the document, itself. 10 A document entitled as a request for equitable adjustment canbe considered a claim underthe CDA, regardless ofits title, ifit otherwise meets the requirements ofa claim. Reflectone, Inc. v. Dalton, 60 F.3d 1572, 1577-78 (Fed. Cir. 1995). 11 The "SOW" (statement ofwork) is used interchangeably with the PWS in CFO's claims.

11 

# , I$631,890. (R4, tab 212 at 8-9) CFD largely, but not completely, abandonedthis claim at trial (tr. 2/203, 3/34), with Dr. Day retracting earliertestimony withdrawing the claim but conceding that he realized, afterthe fact, that it "was significantly overstated" (tr. 3/34).
Claim 2 was for "Maintenance ofMotorPool." In it, CFD allegedthat it was required by the Army commanderto keep, on average, two FSRs at the motorpool waiting for work. According to CFD, this work, in part, was used to return the towed howitzers to usable status afterthey had been handed to the Iraqis and damaged. CFD estimatedthat the motorpool time was 2 employees at 12 hours a day for 10.5 months.
or 7,560 hours, which CFD multiplied times its $88.50 rate, summingto $669,060. (R4, tab 212 at 10)
CFD's third and final claim was for "Restoration offunds deleted by MOD 7.'· In this claim, CFD alleged that, since CLINs 5 and 6 were firm-fixed-price contracts and CFD had completed all the workrequired ofthem, it should not have had to suffer the decrease in price causedby the descoping ofthe six FSRs by Mod 5. 12 This amount, as noted above, was $282,877. (R4, tab 212 at 11)
Nowhere in the entire claim document submittedby CFD was there any allegation that CFD employees were requiredto perform any out ofscope work to deprocess howitzers thathad arrived in-theater in worse condition than should have been anticipated (see R4, tab 212). Dr. Day conceded as much in his testimony at the hearing (see tr. 2/226), but explainedthat the reason the information was not in his claim was that, it was not until discovery in the present appeal that there was enough clarity to press forward with that allegation, though he believed the government knew about it all along (tr. 2/226-28).
The CO denied CFD's claims in a decision emailedto CFD on June 25, 2015, re-sending it on July 10, 2015, because Dr. Day had not responded (R4, tab 225 at 1). Generally, Ms. Houle arguedthatthere had been no constructive change to the contract and CFD thus had no entitlementto compensation (id.).
On September 18, 2015, CFD appealed Ms. Houle's June 25, 2015 decision to the Board. The complaintrepeated the three claims in the December 30, 2014 claim, and we docketed the appeals as ASBCANos. 60211, 60212, and 60213 for claims 1, 2, and 3, respectively.

12 We do not know why CFD refers to contract Modification No. P00007 (dated May 24, 2012) as, to the best ofour review, that modification does not involve the descoping in question (see R4, tab 95), which was accomplished by Mod 5. In the end it does not matter: all parties know and understand the point CFD
was attempting to make.
12DECISION


### I. Preliminary Matters
Before we reach the merits ofthe dispute before us, we must address two preliminary matters raised by the government. First, in its opening brief, the government challenges ourjurisdictionto considerthe portion ofthe case presentedby CFD at the hearing relating to the condition ofthe howitzers that they were required to deprocess, alleging that the basis is so different than the claim presented to the CO (effectively, a superiorknowledge claim) that it should be dismissed (gov'tbr. at 20-25). Second, in a separate filing, the government demands that we strike two appendices to CFD's brief(gov't mot. to strike). We grant both requests.
A. We do not Possess Jurisdiction over CFD'sAssertions that the Howitzers
were in Materially Worse Condition than Represented by the PWS

We recognize that information known to the parties often changes from that known at the time that the claim was submittedto the CO as discovery and trial preparation bring facts more into focus. Tothat end, we are relatively liberal in permitting appellants to present additional evidence and arguments not presented to the CO and to alter the legal bases for claims as well as the amount ofdamages. See, e.g., Madison Lawrence, Inc., ASBCANo. 56551, 09-2 BCA 134,235 at 169,207; Newell Clothing Co., ASBCANo. 24482, 80-2 BCA 114,774 at 72,916 (changed amount ofclaim and the production ofadditional data). Onthe otherhand, a claim on one matter does not supportjurisdiction over an appeal on another, see Scott Timber Co. v. UnitedStates, 333 F.3d 1358, 1365 (Fed. Cir. 2003), and a claim must be specific enough and provide enough detail to permitthe COto enter into a dialogue with the contractor. E.g., HolkDev., Inc., ASBCA Nos. 40579, 40609, 90-3 BCA 123,086 at 115,938-39.
The seminal case governing whether a claim submittedto a CO can support a somewhat different appeal under the CDA is Scott Timber. In Scott Timber, the Federal Circuitheld that appeals ofCO final decisions "do[] not require rigid adherence to the exact language or structure ofthe original administrative CDA claim [so long as they] arise from the same operative facts, claim essentially the same relief. and merely assert differing legal theories for thatrecovery." Scott Timber, 333 F.3d at 1365; see also Relyant, LLC, ASBCANo. 59809, 18-1BCA137,085 at 180,534; MaerskLine, Ltd., ASBCANos. 59791, 59792, 16-1 BCA 136,405 at 177,512. Stated somewhat differently, the Federal Circuithas held thatthe test for "[m]aterially different claims" is whetherthey "will necessitate a focus on a different or unrelated set ofoperative facts." Lee'sFordDock, Inc. v. Secretary of theArmy, 865 F.3d 1361,

131369 (Fed. Cir. 2017) (quotingPlaceway Constr. Corp. v. UnitedStates, 920 F.3d 903, 907 (Fed. Cir. 1990)).
Here, although the government asserts that the claim at trial was for superior knowledge (see gov'tbr. at 20), we agree with CFD that it is not presenting such a cause ofaction (see app. reply br. at 1-2) and that the legal theory is the same as in its claim: CFD is seeking recovery for allegedly out ofscope work performed by its FSRs on the contract (id.). The operative facts, however, are different. CFD's (much reduced) first claim, is limited to work on non-howitzervehicles, meaning that the only claim addressing out ofscope work on howitzers is the second claim, which asserts that the governmentrequired CFD to keep two employees at the motorpool, waiting on call to perform garage work (including howitzers damaged after they were deprocessed andturned overto the Iraqi army), a duty allegedly not required by the PWS. 13 Whatthe second claim does not state is that CFD was required to do substantially more work than expected to deprocess the guns when they arrived. Does this factual difference matter, given the big picture? On the facts here, it does. CFD states in its openingbriefthat, "[p]erhaps the most significantreason for these [out of scope] repairs was the howitzers not arriving in -10/20 condition due to inadequate refurbishment at the depot," and then spends significanttime detailing all ofthe ways that the howitzers were "trashed" when they arrived in Iraq for the CFD FSRs to deprocess (see app. br. at 18). These facts are different and unrelated to the motor pool claim (which complained ofduty location and damage done to the howitzers by Iraqis after deprocessing) and, under any reading ofScott Timber, the "most significant" factual basis for a claim must be providedto the CO for his orher considerationbefore wepossessjurisdiction over it. This conclusion is buttressedby the Spartan nature ofthe motorpool claim's facts withrespectto out ofscope work

- at most, it consisted ofaparenthetical about working on howitzers damaged by the Iraqis in training, while the majority ofthe very short claim complained ofthe requirement that some FSRs be present at the motorpool (see R4, tab 212 at l0). There would be no factual basis for the CO to engage in any kind ofdiscussion with CFD about out ofscope deprocessing work, which CFD now argues is the lion's share ofits appeal. CfHolk, 90-3 BCA ,i 23,086 at 115,938-39 (requiring claim to have sufficient detail to permit a dialog with the CO). Indeed, the size ofthe appeal has blossomed since CFD submitted its claims for $1,300,950 for out ofscope work (half ofwhich was for the now-diminished vehicles claim) to $2,903,151 for out ofscope work (app. br. at 49). This provides further support for ourfinding that the most substantial factual basis for CFD's appeal was notbroughtbefore the CO in CFD's claims.

13 The "motorpool" location allegations were not raised at the hearing or in CFD's post-hearingbrief, but were, instead, subsumed by its general argument about out ofscope work.
14CFD argues that it informedthe government, outside ofthe claim, ofits out ofscope work and that our law allows us to considercorrespondence betweenthe contractor andthe government in determining the scope ofa claim (app. reply br. at 4-5). CFD is correct that we do not considerclaims in a vacuum and should considerpre-claim correspondence between the parties in determining the claim·s meaning. See, e.g., The Public Warehousing Company, ASBCA No. 56022, 11-2 BCA, 34,788 at 171,228. Butwe do notread the law to allow the use ofoutside correspondence to create additional claims not submitted to the CO; rather, the cases involve using correspondence to elaborate on a claim document or to putit into context. See, e.g., id.; Vibration andSoundSolutions Ltd., ASBCA No. 56240, 09-2 BCA, 34,257 at 169,270; General Constr. Co., aDiv. ofWright Schuchart, Inc., ASBCA No. 39983, 91-1 BCA,23,314 at 116,917. In any event, we have reviewed all ofthe citations to the recordprovided in CFD's briefto support its contentionthat pre-claim correspondenc~ would have alerted the governmentto the deprocessing component ofits claim (see app. replybr. at 4-5) and find that the correspondence and discussions failed to do so. Tobe sure, there is significant evidencethat CFD complained that it was performing out ofscope workrepairing howitzers damaged after beingturned overto the Iraqis, butnone ofits communications set forth the idea that significant out ofscope work alleged was based upon the poor condition in which the howitzers were delivered to Iraq. 14 Indeed, in a "request for statement ofwork clarification" letter attached to a March 16, 2012 email from CFD to the government (and cited by CFD in support ofthis argument), CFD wrote at length about deprocessing as somethingrequired to be done underthe contract, but never stated that the deprocessing was a problem orthat the howitzers were requiring excessive work
on deprocessing (R4, tab 67 at 6-8).

As noted above, at trial, Dr. Day indicated thathe did not discuss the deprocessing problems in the claim because he did not have sufficient detail at the time (see tr. 2/226-28). CFD does not appearto raise that argumenthere, and we would nothave found it compelling ifit had since CFD was plainly in the best position to know what its employees were working on. Moreover, the requirement that there be the denial ofa valid claim before we may exercise ourjurisdiction overan appeal, see Reflectone, 60 F.3d at 1575, makes no exceptions when an appellant did not know ofa claim.

14 The closest any ofthe cited evidence comes tothis was Ms. Ethington's testimony that some ofthe howitzers were shipped "short ofsome components or spare parts" (tr. 3/177), and a similar internal government statement in an email regarding howitzers being shipped short ofparts which were later sent to Iraq (app. supp. R4, tab 585 at 2). This is not remotely equivalentto the allegations being advanced now.
15Accordingly, we hold that we do not possessjurisdiction overthat part ofthe appeal that seeks damages for the extra work required by CFD's FSRs as a consequence ofthe condition in which the howitzers were delivered to Iraq for deprocessing. We do, however, maintainjurisdiction overthe damages caused by alleged out ofscope workby requiring FSRs to wait at the motor pool and repairing howitzers damaged by the Iraqi Army. 15 We also possessjurisdiction over claim 1, involving work on non-howitzervehicles and claim 3, seeking compensation for allegedly improper descoping ofFSRs through Mod 5.

B. We Grant the Government's Motion to Strike Appendices 1and 2 to CFD's Opening Post-Trial Brief
Attached to CFD's openingpost-trial briefare three appendices, though only the first two are at issue. The first, 96 pages long, is Department ofthe Army Pamphlet 700-142, entitled "Instructions for Materiel Release, Fielding, and Transfer,"' and is dated June 25, 2010. The second document, 75 pages long, is Army Regulation 700-142, entitled "Type Classification, Materiel Release, Fielding, and Transfer," dated June 2, 2015. The government moves that they be struck because they were not timely submitted and because they address the subject matter ofdeprocessing over which, the government argued, we do not possessjurisdiction (gov't mot. to strike). CFD opposes the motion, arguing that we possessjurisdiction over deprocessing matters and that the appendices were merely beingprovided as a courtesy to the Board since they reflect legal authority, not new evidence (app. opp'nto mot. to strike). We have addressed thejurisdictional issue above; moreover, CFD's "legal authority'' argument is not well taken underthe context in which the documents are being offered.

Because we do not possessjurisdiction over the portion ofthe appeal to which the appendices appear to be material, we may strike them as irrelevant. We also strike them for theiruntimely submission. Board Rule 13 governs the evidence that we may consider in an appeal, with Rule 13(c) providingthat, "[e]xcept as the Board may otherwise order, no evidence will be received after completion ofan oral hearing." Ratherthan request that we make an exception to the prohibition against the submission ofpost-hearing evidence (which Rule 13(c) permits and we would have considered), CFD argues that it is not providing evidence, but merely providing us with helpful legal authority (app. opp'nto mot. to strike at 2). Not so.
We do not intend to enter into a deep semantic dive here, but observe that whether a document is "evidence" orwhether it is "authority" depends upon for what

15 Fortunately, as discussed below, we need not make the almost impossible calculation ofexactly how much ofthe allegedly out ofscope work was related to the condition in which the howitzers were delivered.
16purpose it is being employed. Here, the documents are being utilized by CFD to support Dr. Day's testimony about the meaning ofthe term, "deprocessing" in the contract (see app. opp'n to mot. to strike at 2). That is, they are purportedly being used as evidentiary support for Dr. Day's interpretation ofa contract term. 16 They are not used as legal authority instructing us how to interpret contractterms nor are they being used in the same sense as a statute orregulation setting forth legal rights and obligations. Thus, the two documents are beingpresented as evidence and, as such,
are untimely. The motion to strike appendices one and two is granted.

II. CFD is NotEntitled to Damages for a Constructive Change to the Contract
CFD'stheory for why it should be entitled to relieffor performing out ofscope work upon the contract is that the government constructively changed the contract by requiring its employees to perform such out ofscope work (app. br. at 29-30). It appears to us (as it did to COREthington and others in the government) highly likely that CFD FSRs performed some duties outside ofthe scope ofthe PWS while they
were in Iraq, although perhaps not nearly as much as alleged since the terms "technical support" and "maintenance support" in the PWS are very broad, 17 as are the descriptions ofFSRresponsibilities contained in the CO's answers to contractor questions aboutthe solicitation. It also appears to us likely thatresponsible government employees knew ofsuch out ofscope work and thatthe CO had some awareness ofit, given CFD's complaints about it beginning in December2011. We need not make such firm findings, however, because we concludethat any out ofscope work did not increase CFD's costs beyond what it was requiredto incur performing the contract.
A. To be Actionable, a Constructive Change Must Increase a Contractor's Costs
The theory ofconstructive change is to compensate a contractor for work that mightproperly have been directed through the contract's changes clause, but which
was not. See Zafer TaahhutInsaat ve TicaretA.S. v. UnitedStates, 833 F.3d 1356,

16 Were they used as legal authority in Dr. Day'stestimony, ofcourse, such testimony would have been improper, for fact witnesses do not testify about legal conclusions. E.g., Sundance, Inc. v. DeMonte FabricatingLtd., 550 F.3d 1356. 1364 (Fed. Cir. 2008). 17 CFD provided testimony that "technical assistance" was limited to answering technical questions during deprocessing (see tr. 1/140-42, 2/126-27). There is no textual support for this allegation in the contract (which references "technical support" both in the section specifically about deprocessing and in the more general paragraph 6), and it is contradicted by the CO's answerto the question stating thatthe FSRs would remain in Iraq after deprocessing was complete.
171361 (Fed. Cir. 2016). To be eligible for damages under this theory, it must be proved that a contractor "performedwork beyond the contractrequirements, and

...that the additional work was ordered, expressly or impliedly, by the government." Bell/Heery
v. UnitedStates, 739 F.3d 1324, 1335 (Fed. Cir. 2014). To obtain compensation under
a contract's changes clause, the contractor must prove increased costs compared to what is otherwise required by the contract, see, e.g., Norcoast Constructors, Inc

.. ASBCA No. 12751, 72-2 BCA,9699 at 45,285 (proper equitable adjustment is "'the difference between the cost ofthe work required by the contract and the cost ofthe changed work, plus profit"), and, consistent with the paradigm that a constructive change is treated like recourse to the changes clause, we have required an increase in costs for there to be recovery. E.g., S-TRON, ASBCA Nos. 45893, 46466, 96-2 BCA

, 28,319 at 141,397.

B. CFD was Contractually Required to Provide 13 FSRs for 90 Hours per Week for at Least a Year, Potentially Three
The reason that CFD is entitled to no damages is that no reasonable reading of the contract is consistent with its theory that its deployed FSRs would work little overtime and that after completion ofdeprocessing and light assistance to the Iraqis, its FSRs could come home. To the contrary, a careful reading ofthe contract finds the
more appropriate interpretation to be that CFD was required to provide the 13 FSRs for 4,680 hours each under CLINs 5 and 6.

To decide CFD's contractual obligations, we beginwith the law ofcontract interpretation. Underbasic principles ofthe law, a contract is interpreted "interms of the parties' intent, as revealed by language and circumstance." UnitedStates v. Winstar Corp., 518 U.S. 839,911 (1996) (citations omitted). Generally, this process begins and ends with the language ofthe contract. TEG-Paradigm Environmental, Inc. v. UnitedStates, 465 F.3d 1329, 1338 (Fed. Cir. 2006). And in reviewing this language, the Board shouldread the contract "as a whole and [interpret it] to harmonize and give reasonable meaning to all its parts," ifpossible, leaving no words "useless, inexplicable, inoperative, insignificant, void, meaningless or superfluous." Precision Dynamics, Inc., ASBCANo. 50519, 05-2 BCA, 33,071 at 163,922; see also Hercules, Inc. v. UnitedStates, 292 F.3d 1378, 1381 (Fed. Cir. 2002) ("contract must be construed to effectuate its spirit andpurpose giving reasonable meaning to all parts ofthe contract"); Hunkin Conkey Constr. Co. v. UnitedStates, 461 F.2d 1270, 1272 (Ct. Cl. 1972) (rejecting contract interpretation that wouldrender a clause in the contract meaningless). Turningto the terms ofthe contract, as discussed earlier in this opinion, contrary to CFD's allegation (see app. reply br. at 11), the modifications to CLINs 5 and 6 did not, in fact, eliminate the hours required ofthe FSRs. Also, there is no textual basis or support for CFD's characterization ofthe 4,680 hours per FSR orthe

18 

# fnumber ofFSRs as mere estimates that it could ignore ifit couldperform more efficiently (see tr. 1/47, 3/37; seegenerally app. reply br. 19-23). 18

At the hearing, and to a lesser degree in its post-trial brief, CFD made much of the question and answer incorporated into the contractthat stated that the FSR's needed only be "on call" for 90 hours perweek, meaning that they would not actually work such long hours and that the government should thus be liable for any overtime they incurred working out ofscope (see, e.g., app. reply br. at 11). This argument does not hold up well under examination as this single question response cannot bear all the weightthat CFD places upon it. First, the context ofthe question was about the sustainability of90-hourworkweeks as far as personnel went, not about how much salary costs would be incurred by the contractor. Moreover, the CO's answerto the question repeated thatthe workweekwas a 90-hour one and never suggested otherwise. 19 Second, given the general work set-up in Iraq, it is not at all clearthat anything otherthan the 12-hourdays generally spent at theworksite would have been practicable even ifthe FSRs werenot fully employedperforming work strictly within the PWS. 20 Thesewerethe hours that CFD's employees expected to be workingwhen they wentto Iraq; it is what they were generally paid for; and it is what CFD promised the government it wouldprovide when it successfully bid on the contract. Indeed, it is hard to escape the conclusionthat CFD recognized these contractual obligations when Dr. Santens informed the government that it had underbid the contract in May 2011. Why CFD withdrew Dr. Santen's statementhas neverbeen satisfactorily explained.
With respect to the notion that the FSRs could have all come home afterthe last howitzerwas deprocessed (see tr. 3/56-57; app. br. at 32; app. reply br. at 11-12), this idea is contrary to the language ofthe contract. First, the contractprovidedthatthere would be up to two optionyears with the full complement ofFSRs at 4,680 hours per year perFSR. Ifthe contract were to be completed after the delivery and deprocessing ofa finite number ofhowitzers, options for tens ofthousands ofFSR-hours stretching
more than two years pastthe last delivery ofahowitzer would not have been needed

-

18 In his testimony, Mr. Rinaldi made a single statementthatthe hours set forth in the contractwere "forecasted,"but that was in the context ofhis explaining his view that the contract "boughthours" (tr. 4/64). 19 CFD also presents an underdeveloped argument that actually requiring the hours set forth in CLINs 5 and 6 would create a forbidden personal services contract (see app. reply br. at 18 n.l0, at 19 n.12). This is incorrect. A personal services contract is not created by minimum manning requirements, butby continuous government supervision ofcontractor employees. See SterlingServices, Inc., ASBCA No. 46824, 94-2 BCA 126,912 at 134,006. 20To be sure, Mr. Rinaldi agreed that the phrase, "on call," did not mean to be on site 7 days a week for 12 hours (tr. 4/25), but, for practical reasons, the duty hours appeared to bejustthat.
19at the very least they speakto a radically different understanding ofthe role ofthe FSR than that suggested by CFD here.21 Any doubt to the significance ofthe option years should have been laid to rest by the CO's response to the question about what would happen to the FSRs after conclusion ofthe deprocessing, which agreed with the questionerthatthe FSRs would "remain on the ground" and support other howitzers. It was an unreasonable interpretation ofthe contract on CFD'spart to ignore the hours set forth in CLINs 5 and 6 and to believe that it was essentially free to leave after completion ofthe deprocessing mission and the provision ofother, minimal support.22 Again, this interpretation is not what CFD promised to the government when it bid on the contract.
CFD argues that the PWS would be unnecessary ifthe 90-hour workweek language were kept in the contract (app. reply br. at 11-12), but that is not so. First, the PWS was part ofthe solicitation which included the 90-hour workweeks, so it plainly was intended to be part ofthe contract. Moreover, the PWS does have very important consequences even with a required 90-hourworkweek: CFD's FSRs could have easily refused to perform any extra-PWS work ifthey so chose with no adverse consequences to themselves orthe company, and CFD had no obligation to provide FSRs who could perform workbeyondthe PWS's dictates. Thus we do not read the contractto make the PWS redundant or unnecessary. Accordingly, we conclude thatthe terms ofthe contractrequired deployment of the FSRs to Iraq for the full one-yearterm set forth in the CLINs, regardless ofwhen the deprocessing workwas completed. We further find that the expectation that the FSRs be "oncall" for 90 hours perweek did not effectively relieve CFD ofits contractual obligation to provide the government4,680 hours ofannual work perFSR. We also find, as apractical matter, that the routine ofperformingthe contract would have imposed 12-hour days at the worksite even ifthe FSRs were performing no out of scope work.

21 Another indication ofthe radically divergent role ofthe FSR seenby CFD and the contract's terms is the number ofhours. Ifdeprocessing, as Mr. Andrews testified, took approximately one FSR day andthere were only 144 howitzers requiring deprocessing, even accounting for some problems, the contract required an order ofmagnitude more FSRhours than CFD asserts should have been required. 22 CFD has argued, or at least implied, that terms like "technical support" and "maintenance support" in the PWS indicate very little workbeyond deprocessing (app. br. at 31). As noted above, we read them otherwise and see the terms as potentially very broad, encompassing a great deal ofwork, especially given the hours contemplated by the contract andthe CO's responses to potential bidders' questions.
20 

# IBecause there is no evidence supporting a finding that extra-PWS work performed by CFD's FSRs increased CFD's costs beyond its contractual obligations.
we deny ASBCA Nos. 60211 and 60212.

III. Bilateral Modification 5 is Binding upon CFO and is Dispositive to Claim 3
ASBCA No. 60213 (claim 3) is based upon the notion that CFO fully performed CLINs 5 and 6 and should have been paid the full contractprice for them ratherthan the discounted payment it agreed to when the parties decreased the number ofFSRs through Mod 5 in early April 2012. Though Mod 5, as a bilateral modification, would normally obviate this claim,23 CFO argues that it is invalid, having been secured through duress (app. br. at 38-40). CFO also argues that it received no consideration for Mod 5, providing an additional basis to find the modification ineffective (id. at 41-42). As discussed below, CFO has not met the high threshold necessary to prove duress. and Mod 5 certainly had consideration.
A. CFO has Not Proven that it Entered Mod 5 under Duress as Legally Defined

We entertain no doubt that CFO was in acute economic distress in March 2012
as the payroll expenses for the FSRs outstrippedthe amount ofits receipts for the work. Though this might seem to be "duress" as the term is commonly used, the facts do not support a finding ofthe kind ofduress that would support setting aside Mod 5.
The leading Federal Circuit case on economic duress is Rumsfeldv. Freedom NY, Inc., 329 F.3d 1320 (Fed. Cir. 2003). In Freedom NY, the court set forth a three-parttest for setting aside an agreement for being entered under duress:

To render a contractunenforceable for duress, the party "must establish that (1) it involuntarily accepted [ the other party's] terms, (2) the circumstances permitted no other alternative, and (3) such circumstances were the result of [the otherparty's] coercive acts."
Id. at 1329 (brackets in original) (quotingDureiko v. UnitedStates, 209 F.3d 1345, 1358 (Fed. Cir. 2000) and citing other cases); see also Tacoma Boatbuilding Co., ASBCA No. 50238, 00-1 BCA

## ii 30,590 at 151,069 (similartest).

23 The government refers to Mod 5 as an accord and satisfaction in its brief (gov'tbr. at 34). Technically, that is notwhat Mod 5really is (it was not intended by the parties to effectresolution ofa legal dispute, but, rather, to relieve financial pressure on CFO), but it would, nevertheless, operate to eliminate the contractual basis for claim 3. See Supply & Service Team GmbH, ASBCA No. 59630, 17-1 BCA

## ii 36,678 at 178,600.
21Coercion, in the third component ofduress here, "requires proofofwrongful action by the government." Freedom NY, 329 F.3d at 1330. And proofofwrongful action, the Federal Circuit elaborated, [R]equires a showing that the government's action

...was (1) illegal, (2) a breach ofan express provision ofthe contract without a good faith beliefthat the action was permissible under the contract, or (3) a breach ofthe implied covenant ofgood faith and fair dealing.

Id. (citations omitted). CFD has not proved coercion as defined by the law.
CFD has made no allegation that the government engaged in any illegal act. Instead, depending on how one counts them, it alleges two orthree actions that are arguably contrary to the terms ofthe contract or abreach ofgood faith and fair dealing. First, it alleges thatMr. Rinaldi threatened to terminate the contract for default, which would have been ruinous to CFD (app. br. at 39). As we found above. Mr. Rinaldi made no such threat. At most, COL Romero conveyed this threat once in December 2011, but it should have been very clearto CFD that he was "speaking out ofschool,"had no authority to make such athreat, and that the officials who had such authority were not contemplating it. CFD also argues that Mr. Rinaldi threatened to exercise the option years on the contract, which would have been ruinous to it (id.). Since there is no contractual reason that the government should have been foreclosed from exercising this contractual right, we find that alleging this to be a coercive act is a non sequitur. Perhaps, inartfully, CFD is making the argument that, by interpreting the contract as he did, that the governmentboughthours from the FSRs, Mr. Rinaldi implicitly threatened default ifCFD packedup its FSRs and came home. This seems to be the best argument that CFD could make, but it, too, fails. To be coercive, even an incorrect contract interpretation by the government must be made "without a good faith beliefthat the action was permissible underthe contract." Freedom NY, 329 F.3d at 1330. Here, as discussed above, the CLINs set forth the hours required by the contract. the questions and answers providedthat the FSRs wouldremain in Iraq afterthe deprocessing, and CFD's own bid reflected the FSRs working 4,680 hours peryear. Dr. Day even testified that, when he spoke with 

### Mr. Rinaldi aboutthe purchase of hours, Mr. Rinaldi referred him to aportion ofthe FARwhich, according to Dr. Day, backed Mr. Rinaldi's interpretatio.n ofthe contractprovisions at issue (tr. 1/143-44). Despite CFD's argument that Mr. Rinaldi's interpretation ofthe contract was so selfevidently wrong that it must have been the product ofbad faith (see app. br. at 40), the evidence supports a very different finding. Any mistake in contract interpretation (which we do not find occurred in any event) was not in bad faith.

22A violation ofthe duty ofgood faith and fair dealing, too, can support a finding ofcoercion, see Freedom NY, 329 F.3d at 1330, but CFD does not elaborate on how the government's actions breached that duty here,24 except its general allegations of bad faith contract interpretation andthreats by the government (see app. br. at 39-40). We have found, factually, thatthere was no bad faith contract interpretation by the government and that CFD's allegations thatthere was an atmosphere ofthreats and "extortion" surrounding the execution ofMod 5 are unsupported and contradicted by the evidence, to say the least. We find that there was no violation ofthe duty ofgood faith and fair dealing as set forth by the controlling law. See, e.g., Relyant, 18-1 BCA ,-; 37,085 at 180,539 (citing, inter alia, MetcalfConstr. Co. v. UnitedStates, 742 F.3d 984,990 (Fed. Cir. 2014); Centex Corp. v. UnitedStates, 395 F.3d 1283, 1304 (Fed. Cir. 2005)).

We finally note that economic pressure caused by a company's own flawed business decision does not support a finding ofduress. See Fruhauf Southwest Garment Co. v. UnitedStates, 111 F. Supp. 945, 951 (Ct. Cl. 1953). That is what we have here. Mod 5 may have been entered by a company in economic distress but it
was not entered under duress as the law defines that term.
B. The Agreement to Descope FSRs through Mod 5 was Supported by Ample Consideration
CFD's final argument regarding Mod 5 is that it was entered without consideration, making it ineffective (see app. br. at 41-42). As CFD would have it, since it had no obligation to provide FSRs afterthe deprocessing work was completed, it gained nothing from the government's agreementto descope them (id.). This argument, ofcourse, rests upon a faulty contract interpretation: as discussed above the questions and answers incorporated into the contract clearly providedthatthe FSRs
were obligated to remain in Iraq for the period ofperformance, even after deprocessing
was complete. The descoping action in Mod 5, by allowing CFD to cease paying the salaries ofthose FSRs no longer required by the modified contract, was to CFD's benefit (CFD was certainly in favor ofMod 5 at the time it executed it). That benefit constitutes consideration. See, e.g., Supply & Service Team, 17-1 BCA ,-; 36,678 at 178,602.

Because Mod 5was effective, we deny ASBCANo. 60213 (claim 3).

24 CFD'sbriefdoes not cite any cases providing the elements ofthis duty, nor does it purport to apply them to this case.
23CONCLUSION

For these reasons,25 we deny the appeals.
Dated: November 29, 2018

I concur

RICHARD SHACKLEFORD Administrative Judge Acting Chairman Armed Services Board ofContract Appeals J. REIDPROUTY Administrative Judge Vice Chairman Armed Services Board ofContract Appeals

I concur

MICHAEL T. PAUL Administrative Judge Armed Services Board ofContract Appeals

I certify that the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContract Appeals in ASBCA Nos. 60211, 60212, 60213, Appeals ofCharles F. Day & Associates LLC, rendered in conformance with the Board's Charter.
Dated:

JEFFREYD. GARDIN Recorder, Armed Services Board ofContract Appeals

25 CFD made allegations in its complaintregarding alleged breach involving the government's alleged failure to provide security afterthe expiration ofthe SOFA (amended and restated compl. 

### ,i,i 45-46). Since these were not presented in its claims, in the evidence at trial, or in its post-trial brief, we deem them waived.
24