ARMED SERVICES BOARD OF CONTRACTAPPEALS Appeal of-- Podrez Enterprise, LLC ) ) ) ) ) ASBCANo. 61971 Under ContractNo. W911S2-18-P-1546 APPEARANCE FOR THE APPELLANT:

APPEARANCES FORTHE GOVERNMENT: Ms. Tara J. Powell Executive Administrator Raymond M. Saunders, Esq.

Army ChiefTrial Attorney MAJ Wayne T. Branom III, JA

Trial Attorney OPINIONBYADMINISTRATIVE JUDGE SHACKLEFORD This is an appeal from a contracting officer's final decision terminatingthe captioned contract for cause. Appellanthas elected Rule 12.2, Expedited Procedure, and the parties have electedto submitthe appeal onthe record without a hearing, pursuantto BoardRule 11. A decision under BoardRule 12.2 shall have no value as precedent, and in the absence offraud, shall be final and conclusive and may notbe appealed or set aside. The government filed a Rule 11 briefand no further briefing was made by eitherparty. In addition to the government's Rule 11 brief, the record consists ofthe government's Rule 4 file as supplemented andthe pleadings, including documents attachedto appellant's complaint. Forthe reasons stated below, the appeal is denied. SUMMARYFINDINGS OF FACT 1. In early August 2018, Request for Quotations (RFQ) No. H00DLRCFR003l was issued byFort Hood for 220 Railcar Spanners described as follows: Part# RS 20 24 084 18 STUB Q8372, Rail Spannerwith 2"high Stub Toe 24" wide/ 84" long/4"thick Rated: 20,000lbs per single spanner (40,000lbs perpair) Improved "kicker plate" utilizing tubes instead ofangles Stub Toe increases lifespan Items must meetthe requirements listed above no variations will be accepted! (Compl., attach. A) Moreover, the RFQ providedthat any award would be subjectto certain commercial item terms and conditions, including, among others, FAR 52.211-6, 

# IBRAND NAME OREQUAL and FAR 52.212-4, CONTRACT TERMS AND CONDITIONSCOMMERCIAL ITEMS. (Id.) 2. On or about August 22, 2018 appellant, Podrez Enterprise, LLC (Podrez or appellant) responded to the RFQ, specifically referencing that the procurementwas brand name or equal, and thatno variations were acceptable (R4, tab 2 at 1, 3). The quote was for a quantity of220 at $566.50 each for a total quote of$124,630.00 (id. at 2). 3. The quote further iteratedthe description ofthe product upon which it was quoting, as follows: SellerLine Item Details: Manufacturer: Podrez Enterprise PartNumber: CSTMRS Description: Spanner

- MANUFACTURED FROM HIGH-STRENGTH, LIGHTWEIGHT ALUMINUM

- Non-skid 2" wide traction cleat self-cleaning surface with 5 serratedteeth

- Extra large beam spacing for heavy chain and tie-downs-2" HIGH STUB TOE-24" W x 84" L x 4" thick-RATED 20,000 LBS PER SPANNER/40,000 LBS PERPAIR-KICKERPLATE UTILIZES TUBES INSTEAD OF ANGLE

- STUB TOE INCREASES LIFESPAN 100%MADE IN USA SMALL BUSINEES THE BERRYAMENDMENT ACT COMPLAINT [sic] BUYAMERICAN ACT COMPLIANT SHIPPING=FOB DESTINATION CONUS

- Said description was substantially similarto the language contained in the RFQ (R4, tab 2 at 3). 4. On August 24, 2018, the government awarded to Podrez Contract No. W911S2-18-P-1546 (R4, tab 6 at 1). The contract incorporated by reference FAR52.212-4, CONTRACT TERMS AND CONDITIONS -COMMERCIAL ITEMS (JAN 2017) which stated in pertinentpart: (m) Termination/or cause. The Government may terminate this contract, or any part hereof, for cause in the event ofany default by the Contractor, or ifthe Contractor fails to comply with any contract terms and conditions, or fails to provide the Government, uponrequest, with adequate assurances offuture performance. Inthe event of termination for cause, the Government shall notbe liable to the Contractor for any amount for supplies or services

2not accepted, and the Contractor shall be liable to the Government for any and all rights and remedies provided by law. Ifit is determined that the Government improperly terminated this contract for default, such termination shall be deemed a termination for convenience. (R4, tab 6 at 4) The description ofthe items in the contract was the same as the specifications returned with appellant's quote (R4, tab 6 at 3). The contract required appellant to deliver the rail spanners to FortHood, TXby September 24, 2018 (R4, tab 6 at 3-4). 5. Appellant failed to meet the September 24, 2018 due date and on October 22, 2018, the contracting officer (CO) threatened to terminate the contract for cause due to non-delivery (R4, tab 7 at 4). Thereafterthe CO granted appellant's request to extendthe due date to December 3, 2018 (R4, tab 8 at 1). 6. The 220 rail spanners were delivered to FortHood in two partial shipments on December 3 (165 units) and 6 (55 units), 2018 (R4, tab 23 at 4). David Slaughter, Plans and Operations Chiefofthe Logistics Readiness Center at Fort Hood, and aprior maintenance technician and manager oftechnicians, stated in a sworn declaration: 3. [In early December 2018] we examined the first pallet load ofspanners....Our initial impression was of disappointment, due to the apparent poor quality of workmanship. Welds were not smooth and pure and the thickness ofbracing materials seemed shy of specifications. Our Quality Control team and certified welders were called

...to make apreliminary assessment. 4. While waiting for the maintenance personnel, we removed one spanner from the pallet and placed it on the ground: I stepped on the middle ifthe spanner and moved up and down withoutjumping andthe spanner flexed significantly, convincing all ofus, that ifit flexed that much with 200 pounds, it would not support 2,000 pounds. 5. [The maintenance personnel] confirmed the poor welding craftsmanship and further pointed out the many areas ofinferiorwelding. (R4, tab 57, Slaughter decl. 

## ,r,r 3-5)

37. Rex Wheeler, a maintenance supervisor at Fort Hood, set forth in a sworn declaration his significant experience in the field and was tasked, along with his senior welder, to complete an inspection ofthe spanners on December 4, 2018. They submitted a report on December 6, 2018, which concludedthatthe spanners did not meet the contract specifications. More specifically, they found:

a. There were several instances where the measurements did not meetthe specifications required. b. Some ofthe metal products used did not meet the specifications. For example square tubing should have beenused for the main supportbeams and kickerplate. However, the vendor fabricated the main supportbeams from flat sheet folded into channel and then welded flat sheetto boxthe channel in. The kicker plate was fabricated from aluminum angle instead ofsquare tubing. These two instances ofnoncompliance dramatically affect the structural integrity ofthe spanner and affect the spanners' ability to safely supportthe load requested.

c. Duringthe inspection it was noted that there were several instances where the welding work was not in compliance with current industry standards. The welding used inthe assembly process was not standardized on each spanner. Some did not have enough welding applied to make the product structurally sound. There were welds that lackedpenetration which affects structural integrity. There were welds that hadtoo muchpenetrationthat causedholes to be burnt into the structure or caused a thinning ofmaterial, both ofwhich can affect the structural integrity ofthe spanner. d. Overall the spanners did not meetthe specifications outlined and therefore were deemed unsafe to use. Because ofthe concern for safety we did not attempt to put the spanners under any load. (R4, tab 58, Wheeler decl. 

## ,r,r 3.a-d) 8. The Army completed an inspection report consisting ofnumerous detailed photographs with a key to demonstrate how the items delivered did not conform to the specifications and drawings in the contract (R4, tab 10; see also gov'tbr. proposed finding offact 16).

4 

# I I 

# I9. On December 17, 2018, the government rejected the shipment ofspanners for the reasons set forth as follows: The 220 rail spanners did not meet the dimensions called for [in] the solicitation; the spanners were only 23 9/16 inches wide butthe solicitation called for 24 inches. The aluminum tubing was not 4 inche[s] high but only 3 1/2 inches high. The material was not properly assembled in accordance with the solicitation, welds were poorly struck, incomplete welds, and missing welds were prevalent throughout all spanners. (R4, tab 11 at 2) The full inspectionreport including photographs andkeys were providedto Podrez on December 19, 2018 (R4, tab 12 at 2). We find that the items were not in conformance with the contract specifications. 10. On January 7, 2019, the CO issued a show causeto appellant why the contract should not be terminated for cause due to appellant's failure to deliver spanners that conformedto the contract. Podrezwas given 10 days to explain why its failure to deliverwas without fault, or else the contractwould be terminated for cause. (R4, tab 27 at 1) 11. Appellantrespondedto the show cause on January 10, 2019 claiming it was unaware ofa drawing upon whichthe rejection ofthe goods was based in part, when in fact appellant had referred to said drawing in its own quote responding to the RFQ (R4, tab 33 at 5). 12. Nevertheless, onJanuary 15, 2019, the CO attempted to rectify the situationby allowing appellant to retrieve the nonconforming items and bring them into conformance, granting an additional 30 days from retrieval to effect conformance (R4, tab 37 at 1; tab 59, Brown decl. 

### ,-i 7). 13. ByFebruary 4, 2019, the items had notbeenpickedup from Fort Hood and the CO gave appellant until 1400 on February 7, 2019 to provide a timeline for retrieval or else the contractwould be terminated for cause (R4, tab 41 at 1 ). Rather than provide said timeline, appellant advised that ifthe contract were terminated they would "dispute it and have it reversed and then file a claim for TERMINATION FOR CONVENIENCE" (R4, tab 42 at 1). 14. Thereafterthe CO, onFebruary 8, 2019, issued a final decision terminating the contract for cause and on February 11, 2019 modifiedthe contract accordingly (R4, tabs 43-45, 47).

515. Appellant timely appealed the termination for cause to the Board which we docketed as ASBCA No. 61971. Only the termination for cause is at issue here. DECISION A termination for default is a drastic sanction which should be imposed (or sustained) only for good grounds and on solid evidence. 

### Lisbon Contractors, Inc. v. UnitedStates, 828 F.2d 759, 765 (Fed. Cir. 1987) (quoting

### JD. Hedin Constr. Co. v. UnitedStates, 408 F.2d 424, 431 (Ct. Cl. 1969)). Though this is an appeal broughtby Podrez, because a termination for default is essentially a government claim, the governmentbears the initial burden ofproving "by a preponderance ofthe evidence that atermination for default wasjustified." 

### Keystone Capital Services, ASBCA No. 56565, 09-1 BCA,34,130 at 168,753 (citing

### Lisbon Contractors, 828 F.2d at 765). "Ifthe government establishes a prima facie casejustifyingthe termination, the burden shifts to the contractorto prove the default was excusable." 

### Truck/a Services, Inc., ASBCA Nos. 57564, 57752, 17-1 BCA, 36,638 at 178,445 

### (citingADTConstr. Grp., Inc., ASBCANo. 55358, 13 BCA, 35,307 at 173,312). Based uponthe evidence ofrecordwe find that the spanners did not comply with the contract, that appellant failed to take corrective action when given the opportunity to do so andthat it has provided no reason for its failure to perform in accordance with the contract (findings 9, 13). Appellant has presentedno evidence that the spanners were in compliance with the contract. Appellant filed a document entitled "Affirmative Statement ofDisputedFacts" on April 8, 2019. This document does not include any additional evidence in support ofits case. It merely makes conclusory statements about the government's case and states that it disputes said statements and wants documents in support ofthem. Those documents in support ofthe government's decision to terminate for cause are in the Rule 4 file submittedby the government and clearly support the termination action. The "Conclusion" ofthe appellant's affirmative statement is quoted in full as follows because that is the most cogent argument it makes in this record: The goods delivered by appellant conformedto the specifications ofthe contract. No intended use was provided by the Government. Appellant did not agree to the corrective action plan offeredby the Government and believes the actions to be an abuse ofdiscretion. The appellant advised the Governmentthat the specifications providedby the governmentwere defective, improper, and invalid. The appellant completedthe contract underthe terms ofthe contract. Appellantbelievedthe actions taken

6by the Government were coercive; the Government refused to consider any corrective action plans proposed by appellant. Appellant believes the actions taken by the contracting officer violatedthe Government's implied duty ofgood faith and fair dealing, as a result, terminated the contact improperly. Unfortunately for appellant, there is no evidence in this record to supportthose conclusions. Accordingly the termination for cause was proper and fully supported by the record.

The appeal is denied. Dated: July 2, 2019 CONCLUSION

RICHARD SHACKLEFORD Administrative Judge Vice Chairman Armed Services Board ofContractAppeals I certify that the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContractAppeals in ASBCA No. 61971, Appeal ofPodrez Enterprise, LLC, rendered in conformance withthe Board's Charter. Dated:

7 PAULLA K. GATES-LEWIS Recorder, Armed Services Board ofContract Appeals