ARMED SERVICES BOARD OF CONTRACT APPEALS

OPINION BY ADMINISTRATIVE JUDGE D’ALESSANDRIS

Appellant, Afghan Azimi Group of Supply Construction and Technical, Inc. (ASCT), was a subcontractor to Advance Constructors International, LLC (ACI) on ACI’s prime contract with respondent, the U.S. Army Corps of Engineers (USACE or government), for construction of the Kandahar Regional Police Training Center, in Kandahar Province, Afghanistan. In February 2013, the USACE terminated ACI for default, due in part to its failure to pay ASCT and other subcontractors. When the USACE terminated ACI for default, it planned to retain another contractor to complete the project, and anticipated giving preference to a contactor that would employ ACI’s subcontractors. Accordingly, the USACE held an informational meeting with ACI’s subcontractors and subsequently sent an email “requesting” that subcontractors not remove from the job site their material that had not been paid for by ACI. The email stated that the government has “procedures that it can use to pay” for the material. ACI indicated its desire to sell its materials to the government, and followed-up with the USACE multiple times. In November 2013, the project was cancelled and the site was returned to the Government of Afghanistan.

ACI challenged the USACE’s termination decision before the Board. In 2015, the parties worked-out an unusual settlement where the USACE converted the termination for default into a no-cost termination for convenience, and used the unpaid

contract balance to fund an escrow account to reimburse ACI’s subcontractors for a portion of their unpaid invoices. In 2016, ASCT sued ACI in Delaware State Court

Appeal of

- ) ) ASCT Group, Inc. ) ASBCA No. 61955 )

Under Contract No. 000000

- 00

- 0

- 0000 )

APPEARANCE FOR THE APPELLANT: David J. Muchow, Esq.

Muchow L aw Arlington, VA

APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq. Engineer Chief Trial Attorney James D. Stephens, Esq. Rebecca L. Bockmann, Esq.

Engineer Trial Attorneys

U.S. Army Engineer District, Middle East Winchester, VA2 seeking $2.8 million. ASCT obtained a judgment against ACI but ultimately settled the dispute for a $430,000 payment from ACI, that was reimbursed by the escrow account. ASCT’s settlement with ACI contains a carveout purporting to exempt from the release ASCT’s claims against the USACE.

In 2018, ASCT filed a claim with the USACE asserting entitlement of $1,898,835.40 for its material, security and warehousing expenses, construction equipment, and attorney fees. ASCT assert ed that the contracting officer’s oral

statements in the meeting, and the email requesting that subcontractors not remove their

material , were an offer by the government to purchase ASCT’s material and equipment, and that ASCT accepted the offer by performance, creating an implied-in-fact contract. The contracting officer awarded ASCT $78,936 based on a finding that an implied-in- fact contract “might be interpreted to exist,” but that the scope of the implied-in- fact contract was only for storage of material from the February 2013 email until November 2013 when the project was cancelled. We review the appeal de novo and hold that ASCT has not demonstrated the existence of an implied-in-fact contract, and deny the appeal.

FINDINGS OF FACT

A. The Contract and Subcontract

On March 31, 2011, the government entered into Contract No. W5J9LE-11-C-0020 with ACI, for the construction of a regional police training facility in Kandahar Province, Afghanistan (R4, tab 30 at 2). Notably, the contract waived the bonding requirements normally contained in government construction projects (tr. 207-08). 1 The waiver was in response to contractors experiencing difficulty in obtaining bonding for contracts being performed in a war zone ( id. at 208). The policy permitting waiver of the bonding requirements has since been revoked ( id. ). However, absent a payment bond, there was not a surety to step-in and pay the subcontractors in the event, as was the case here, that the prime contractor failed to pay its subcontractors.

On or about January 8, 2012, ACI entered into a subcontract agreement with ASCT, a small family-owned business (R4, tab 4, tr. 19). Pursuant to the subcontract,

A SCT would be paid $5,322,065 for co nstruction of the project’s dining facility (DFAC), the DFAC’s dry storage, four classroom facilities, and a latrine facility (R4, tab 4 at 1-2). ACI was to pay ASCT according to an approved schedule of values ( id. ; tr. 91-92) , with A SCT required to submit a schedule of values with its requests for payment (R4, tab 4 at 6). ACI paid A SCT $2,607,848 prior to the project’s termination, leaving a remaining balance of $2,714,217 on the subcontract (R4, tab 44 at 1). A SCT

1 See Assist Consultants

, Inc. , ASBCA Nos. 61525, 62090, 21- 1 BCA ¶ 37,850 for an example of an Afghan contractor being unable to meet the bonding requirements.3 purchased all the materials and equipment at issue in this litigation as a part of its performance under the s ubcontract ( t r. 1 17 ).

B. USACE’s Termination of ACI f or Default

In late 2012, ACI’s subcontractors notified the g overnment that ACI was not paying them (R4, tab 30 at 2; t r. 154

- 55). ASCT alleges that ACI stopped paying it in October of 2012 ( t r. 3 8

, 92

, 154

- 55). A SCT stopped performing on the p roject on December 17, 2012 ( t r. 38

- 39

, 172

- 7 3). In the weeks that followed, the USACE investigated the allegations of ACI ’s subcontractors

, and took action after concluding that ACI was not paying i t s subcontractors ( t r. 155

- 58). The g overnment began to withhold retainage from ACI on the c ontract both due to ACI’s failure to make progress

on the p roject, and because it believed ACI had made misrepresentations on its progress payment certifications relating to subcontractor payments ( id .; R4, tab 3 0 at 1, 3,

6

- 7; and FAR 52.232

- 27, Prompt Payment for Construction Contracts (JAN 2017)).

In particular, the g overnment rejected ACI Pay Request No. 22 outright “due to

concerns regarding payment to subcontrac tors” ( R4, tab 30 at 7; t r. 1 55

- 57 )

. In total,

the g overnment withheld $2,506,615.09 fr om ACI’s progress payments over this issue (R4, tab 31 at 1). T he g overnment decided to terminate ACI for default in part due to its failure to pay its subcontractors on the c ontract (R4, tab 30 at 8

- 10; t r. 1 58

- 64).

On February 14, 201 3 , the g overnment held an informational meeting for ACI’s subcontractors at a government construction office (tr. 188, 191

- 94). The government

notified the p roject’s subcontractors of its intention to terminate ACI

, informed the subcontractors of the next steps in the rep rocurement process, and inquire d whether the subcontractors were interested in working for the replacement contractor

, or in selling their materials (tr. 90

- 91, 185

- 89). Additionally, t he g overnment instructed

A SCT not to deliver any more materials to the project site ( t r. 91).

ASCT’s Vice President, Mr. Abdul A z i m i, testified that , at the February 14,

2013 meeting, Mr. Boddie, the contracting officer, “promised that [the USACE] had procedures that they will [us e to] pay for the materials directly” (tr. 48). ASCT additionally submitted affidavits from three other individuals who attended the February 14, 2013 meeting, each with similar wording, and each dated February 25, 2021, more than eight years after the me eting. Mr. R. Mohammad, the CEO of Bilal Adil Construction Co., another subcontractor to ACI on the project, stated that

Mr. Boddie “ clearly promised the subcontractors attending, that there was a process from USACE for recovery of funds expended by the s ubcontractors to date for materials and equipment that were purchased for the subject contract; and for continuing to provide security, and that we would be paid for all the project related expenses incurred” (R4, tab 50 at 1

- 2). Mr. Ismat Ullah Samadee, the former President of Sadiq Noor Construction Company, another subcontractor to ACI on the project,

states that Mr. Boddie “ promised, in no uncertain terms, that there was a process for4 recovery of funds expended by the subcontractors to date for materia ls and equipment; and for continuing to provide security, and that we would be paid for all of that” (R4,

tab 51 at 1

- 2). Mr. Mohammad Azimi, a partner in ASCT and the project manager,

stated that Mr. Boddie “clearly promised that there was a process for recovery directly from USACE for the costs incurred by the subcontractors for materials and equipment procured for the subject contract; and for continuing to provide security” (R4, tab 52

at 1

- 2).

Conversely, Mr. Boddie testified that, at the meeting, h e stated “that there was a process where the Government could buy the material . . . [ a ] nd use it, especially the long lead items and such that were onsite . . . [and] ha n d that over to a new contractor as Government furnished material” (tr. 188

- 89). Mr. Boddie further explained that his statements at the meeting were an “explanation of potential of what we could do ” (tr. 195).

There is no transcription or recording of the meeting in the record. Mr. Azimi

testified that he and the other subcontractors w ere not permitted to bring any electronics through security, but that they were informed that the meeting was being recorded (tr. 45

- 47). Mr. Boddie testified that electronics would have been collected as a security measure and that he was aware that there was supposed to be a recording of the meeting, but that it was not done at his request (tr. 227

- 28).

On February 17, 2013, ASCT sent copi es of its unpaid invoices to the government by email 2 (R4, tab 19 at 1 ). On February 19, 2013, the g overnment terminated ACI for default (R4, tab 30 at 1 ). In its termination decision, the g overnment instructed ACI to

“ [ s ] top all work, make no further sh ipments, and p l ace no further order s ,” except for

authorized work

- in

- progress or materials it wanted for itself ( id . at 10

- 11). ACI appealed the g overnment’s termination for default decision to the ASBCA in No. 58604 (R4,

tab 31 at 1 ; t r. 166). At the ti me of the termination, A SCT claimed ACI owed it $1,246,570.09 for its October, November, and December 2012 invoices (R4, tab 26 at 1 ;

t r. 92).

C. Post

- Termination Communication with ACI’s Subcontractors

On February 25, 2013, the g overnment sent an email to ACI’s subcontractors

, including ASCT, that summarized the information provided at the February 14, 2013 meeting (R4, tab 8; t r. 194

- 96). The email stated in relevant part:

USACE has now begun the process of selecting a new prime contrac tor to complete the RPTC

2 Although the invoices are not included with the email at R4, tab 19, the invoices are in the record at R4, tab 45 (tr. 221)5 project

. 

### . . . W hen USACE selects the new prime contractor, it will give preference to potential prime contractors that promise to award subcontracts to the companies that formerly had subcontracts under ACI

. . . .

I n the me antime, USACE wants to be sure that activity continues at the construction site during the time it takes to choose the new prime contractor. USACE has decided to work with one of ACI’s former subcontractors, Areyana Group, to have it be the prime contract or for a limited

amount of work over the next 3 months.

. . . The details of

that short

- term contract will be announced to this group as

soon as it is finalized

. . . .

R egarding your own company ’ s materials that are on site but were never paid for by A CI, we request that you do not

remove them. As I explained in our meeting on 14 February, USACE has procedures that it can use to pay you for those materials so that they can be used to finish building the project. Please contact me if you are interested in selling

those materials to USACE

.

( R4, tab 8 at 1

- 2 ). Mr. Azimi testified that the email was consistent with the oral statements at the February 14, 2013 meeting (tr. 49

- 50, 95

- 96) and Mr. Boddie similarly confirmed that the email was consistent with his statements at the meeting (tr. 195

- 96).

Based on the record before us, we find that Mr. Boddie’s statements at the February 14, 2013 meeting are consistent with the February 25, 2013 email summary of the meeting, and find that Mr. Boddie’s stateme nts, did not constitute an offer to purchase ASCT’s material or equipment, or to compensate ASCT for its storage expenses. ASCT’s witness testimony at the hearing, and declarations, are not consistent with the contemporaneous email summary

.

On March 14 , 2013, A SCT responded to the contracting officer

, stating “as we owe most of the suppliers now for the procured materials, it would be of our mutual benefit to sell you our procured materials for your future plans. And it would be our pleasure to know ho w long will it take for the process, and what y ou would require us to send you ” (R4, tab 9 at 3). The government responded that same day indicating that

its Local National Quality Assurance ( LNQA ) representatives would inventory the property (R4, tab 9 at 3). On March 20, 2013, after an exchange of emails concerning the nature of the materials and questions from A SCT about how long the process would take, a g overnment representative informed Mr. A bdul Mateen Azimi, A SCT ’s6 Vice

- President, th at he did not “know how long the process will take,” that it was “for the contracting officer to take action on,” and that the g overnment would “eventually (I think) process the stored materials for payment but the Contracting Officer is running the show.” ( id . at 2). On March 25, 2013, A SCT sent an email to the g ove rnment contracting officer, Mr. Edward Boddie, stating:

As was requested from your side by email, and agreed in the meeting, it was stated that the procured material for this project that are not billed to ACI will be paid by USACE.

The lists were sent to your attention for the material we had procured for our project, that are not billed to ACI.

But neither a positive nor negative response have been clarified from your side for the procurement s payment and processing

.

So p lease let us know, if these materials will be procured by USACE and paid to us or not?

( id at 1). There is no record of the g overnment contracting officer ever replying to th is

email. A SCT ’s own witness testified that ASCT understood there were additional steps in the process toward reaching an agreement relating to the material ( t r. 106

- 11).

On June 19, 2013, the District Engineer of the Afghanistan Engineer District

- Sout h, COL Vincent V. Quarles, furnished a copy of a letter to ASCT, in which he explained to another ACI subcontractor that, although he understood the passage of time relating to the progress of reprocuring the p roject was financially problematic, “the needs of the end

- user of the facility have been changing as the conditions on the ground change” (R4, tab 10

at 2 ). On June 26, 2013, the g overnment contracting officer provided a presentation to the former ACI subcontractors, in which he stated:

A. The needs of the Afghan National Police have changed. As a result, the ANP now needs fewer buildings of each

type

.

B. Because of these changes, USACE will be re

- starting the selection of a new prime contractor for the RPTC project

.

***7 2. The old RFP has been canceled, and a new RFP

will be issued.

***

A. As explained during the February meeting, there is an opportunity for the subcontractors to have the materials they purchased for the original contract be used in the

new contract.

B. To take advantage of the o pportunity, former ACI subcontractors must provide the contracting officer

with documentation that proves that materials were purchased for the ACI prime contract, and not paid for by ACI.

1. USACE needs copies of invoices.

2. If materials are still on site, USACE also needs photographs showing the quantity of materials

and their current location.

C. If a former ACI subcontractor wants to remove the

company ’ s materials from the RPTC site, the company has to provide acceptable proof of ownership, and then

USACE will make arrangements to give the company

access to the site to remove the materials.

(R4, tab 11 at 1 ). A SCT understood that if it wanted to remove its materials from the

p roject it was free to do so as long as it could prove its ownership to the materials ( t r. 111

- 13 ).

On July 15, 2013, ASCT sent an email to the contracting officer, referencing prior contact between the parties, providing a spreadsheet detailing $907,612.51 in procured materials 3 (R4, tab 12 at 2, 4

- 5 ). At no point did the gove rnment’s contracting officer believe that he made an offer to purchase materials from ACI’s subcontractors (tr. 174

- 75). On November 23, 2013, the contracting officer sent a letter to one of ACI’s subcontractors informing the company that the g overnment h ad cancelled the solicitation relating to the p roject’s reprocurement, that the requirement was also cancelled, and would no longer be executed by the USACE (R4, tab 13 at 3). A SCT

3 Once again, the document at Rule 4, tab 12 does not contain any attachments; however, the attachments are located at Rule 4, tabs 20

- 24.8 received this letter on November 27, 2013 ( id. , at 1). A SCT sent an email to Navy

Commander Keith Jensen on November 28, 2013, acknowledg ing the reprocurement’s

cancellation , and asserting that it had not removed its materials, and had incurred security and warehousing expenses based on the government’s promise to procure the

m aterials (R4, tab 14 at 3

- 4). Commander Jensen responded on December 1, 2013

, by referring ASCT to the Government of Afghanistan ( id. at 2) . ASCT contacted

Commander Jensen on December 5, 2013, and on December 14, 2013, again asserting a USACE promise to procure ASCT’s materials ( id. at 1

- 2 ). Since taking control of the construction site, the Government of Afghanistan has not permitted ASCT to remove i t s materials from the site (tr. 62).

I n a May 1 8 , 2014 email

, ASCT’s then counsel, Sher Saeedi, contac ted Lieutenant Colonel Gary Davis, the District Chief of Contacting, seeking to “resolve this issue in an amicable way” (R4, tab 16 at 4). Mr. Saeedi’s email asserted that

ASCT had been “left in a limbo by USACE with assurances of purchase of the goods

at the site” ( id. ). That same day, LTC Davis, informed ASCT that an agreement to pay it for materials or material storage was “not allowed,” because the g overnment was not
in a contract with A SCT ( id. at 3). In a May 27, 2014 email, Mr. Saeedi asserted tha t ASCT had decided not to remove its materials, and had incurred additional security costs, based on USACE’s assurances ( id. at 2). Mr. Saeedi again contacted LTC Davi s on June 9, 2014, stating that he had not heard back from the government and requesting a response ( id. at 1).

D. ACI ’s Appeal of the USACE Termination for Default

Mr. Edward Boddie, the contracting officer involved in the decision to terminate ACI for default and ultimately to settle ASBCA No. 58604, testified that he only settled

t he appeal to ensure that the progress payments withheld by the USACE could be used to compensate subcontractors unpaid by ACI (tr. 168

- 69). The g overnment used the full amount of the termination litigation settlement ($2,206,615.09) to fund a trust

accoun t that was used exclusively to ensure ACI reimbursed its subcontractors, including ASCT, less certain legal and administrative fees it had incurred during the litigation (tr. 169

- 71; R4, tab 31 at 2

- 4). Mr. Boddie did not wish to pay ACI directly,

out of an abundance of concern regarding ACI’s prior nonpayment issues (tr. 168

- 69). In exchange for this arrangement, ACI and the g overnment agreed to a no

- cost termination for convenience ( t r. 171

- 72). ACI received no direct compensation from

the settlement

- e stablished trust account, only reimbursement after it paid other parties ( t r. 170

- 71).

E. A SCT Brings Suit Against ACI in Delaware State Court

A SCT asserts that its remaining balance on the subcontract was $2,714,217 ( R4, tab 44 at 1). Due to ACI’s defa ult on the c ontract A SCT never completed the9 s ubcontract, and at the time of the termination ASCT asserted that it was owed $1,246,570.09 by ACI (R4, tab 26 at 1 ; t r. 9 2). In 2016, A SCT sued ACI in Delaware Superior Court for $2,838,3 6 0.52 , and obtained a judgment in the amount of $2,838,610.52 (R4, tab 27 at 1 ). A SCT entered into a settlement with ACI regarding this litigation, and obtained $430,000 from ACI, an amount financed by the trust account created by the g overnment’s settlement agreement with ACI relating to their

default t ermination litigation (R4, tab 6 at 1

- 2; t r. 70, 169

- 71; R4, tab 31 at 2

- 4). As a part of its resolution of its litigation with ACI, A SCT executed a release of claims discharging its right to pursue ACI further under the s ub contract (R4, tab 6 at 1). However, the release included a purported carve

- out for ASCT’s potential claim against the USACE , authorizing ASCT to pursue “ any equitable adjustment claim(s), as well as any claim(s) based on quantum meruit, estoppel or other legal theories

. . . in

connection with

, materials purchased by ASCT in connection with the RPT Project or their diminution in value, as well as related storage, securi ty and other costs and expenses” ( id. ).

F. A SCT Offers to Sell Materials to Government a nd then Files a Claim

On April 10, 2017, A SCT ’s prior legal counsel , David Felice, sent an email to the g overnment, stating that “I am writing to gauge the Corps’ interest in purchasing

the materials A SCT maintains on the project site and to reimburse A SCT for expenses related to maintaining and securing the materials for the past several years” (R4, tab 32

at 1 ). On June 8, 2017, Mr. Felice again contacted the government, writing “[m]y client would like to know if the USACE intends to negotiate a resol ution to this matter or not” (R4, tab 17 at 1). The government did not express any interest in purchasing the materials or reimbursing ASCT for expenses ( t r. 75

- 76 ).

On June 27, 2018, A SCT filed a certified claim seeking $1,898,835.40

, comprised of $886,890.09 for material s; $463,329.45 for security and warehousing

expenses ; $200,130 for a ccommodations and a camping facility ; $277,064.24 for construction equipment ; and $71,421.62 for attorney’s fees (R4, tab 3 at 12 )

. 4 ASCT’s

claim asserts that the USACE’s request that A SCT not remove its materials created an implied

- in

- fact contract whereby the government would directly c ompensate ASCT for

its materials and, since the government never rescinded these instructions, ASCT was also entitled to be compen sated for its storage costs to present ( id. at 1 1 )

. The USACE

4 ASCT’s claim asserts that it is based on implied

- in

- fact contracts with the USACE (R4, tab 3 at 7). However, ASCT asserts that there are other legal bases which may apply, including a unilateral contract, “ quantum meruit . . .

, quantum
valebant . . . unjust enrichment, promissory estoppel, implied

- in

- law contracts, conversion, and taking of property without just compensation under the Fifth Amendment” ( id. at 9

- 10).10 contracting officer issued her final decision on October 31, 2018, finding partial merit in ASCT’s claim (R4, tab 2 at 1

- 2). The contracting officer found no evidence that the government had e xpressed an interest in purchasing ASCT’s equipment

, labor camp , or materials warehoused in Kabul and in Pakistan ( id . at 7

- 8 ). In addition, the contracting officer found that the parties had not reached a meeting of the minds regarding a

transaction with government paying ASCT for its materials ( id. ). However, the contracting officer found that “an agreement might be interpreted to exist” whereby the government, in essence told ASCT to “keep your property already at the Project, since

the Government might need it, and in exchange the Government will pay you for the costs incurred in keeping the material safe” ( id. at 8). The contracting office r found that

this was an implied

- in

- fact contract that ended on November 28, 2013, when ASCT

learned that the government had cancelled the reprocurement, and awarded ASCT $78,936 , conditioned on ASCT submitting a proper invoice for the verified costs ( id.

at 11). ASCT timely appealed to the Board (notice of docketing Feb. 1, 2018). ASCT’s complaint, dated March 4, 2019, asserts five counts, but an implied

- in

- fact contract is the only legal theory properly developed

. 5 Count IV of ASCT’s complaint, “Discussion of ASCT’s Claim” asserts that there was a Fifth Amendment taking of ASCT’s property, and that the govern ment was negligent in failing to properly investigate and supervise ACI, causing ASCT’s losses ( c ompl. at 35).

In this appeal, A SCT asserts that it is entitled to the same amounts as contained in

its claim , plus an additional $54,612.39 in warehouse and security fees ( c ompl. a t 36 ).

A SCT estimates that $366,088.23 in material and all of its equipment was on the p roject site, with the remainder of material ($5 2 0,801.86) located either in Kabul, Afghanistan or in Pakistan (R4, tab 21 at 3). A SCT assumed t hat the g overnment wanted its off

- site materials (which it warehoused), its equipment, and its camp facilities ( t r. 48

, 100

- 04,

1 23

- 24, 126).

After ASCT filed its complaint, the government filed a motion to dismiss. The

Board denied the motion to dism iss on February 27, 2020. ASCT Group

, Inc. , ASBCA No. 61955, 20

- 1 BCA ¶ 37,540. In our earlier decision, the Board noted that both

5 Rather than presenting legal theories, the “counts” in ASCT’s complaint most ly present argument regarding the proper calculation of its claimed damages. Count I of the complaint is “The Amount Already Offered in the Final Decision for Costs of Security and Staffing Should be Increased to Reflect the Actual Costs” ( c ompl. a t 15). Count II of the complaint is “ All of the Amounts Claimed Should be Paid. The Following are Point

- by

- Point Answers to the Final Decision’s Denial of Appellant’s Claims” ( id. at 17). Count III of the complaint is “Appellant is Clearly Entitled to Recovery Under the Implied

- in

Fact Contract Doctrine” ( id. at 25). Count IV of the complaint is “Discussion of ASCT’s Claim” ( id. at 32). Count V of the complaint is “Details of the Claimed Compensation” ( id. at 35).11 parties “agree that the Board does not have jurisdiction over claims sounding in tort independent of a contract, and does not have jurisdiction of Fifth Amendment taking claims” and that ASCT had confirmed that it was only asserting a contractual cause of

action. Id. at 182,289.

DECISION

ASCT asserts that it is entitled to recover based on the existence of an impliedin-fact contract between the USACE and ASCT created by the contracting officer’s statements at the February 14, 2013 meeting. The government disputes the existence of an implied-in-fact contract and additionally asserts that an implied-in-fact contract is precluded by the existence of an express contract between ACI and ASCT for the same materials, and, even if there were an implied-in-fact contract, the off-site materials, and camp facilities were not part of the contract.

I. Implied- In

- Fact Contracts

The Board possesses jurisdiction to entertain implied-in-fact contracts. In order to establish the existence of an implied-in-fact contract with the United States, ASCT must establish the same elements as for a written contract: (1) mutuality of intent to contract; ( 2) consideration; (3) unambiguous offer and acceptance; and (4) actual authority on the part of the government representative whose conduct is relied upon.

See

, e.g ., City of El Centro v. United States , 922 F.2d 816, 820 (Fed. Cir. 1990). Like an express contract, an implied-in-fact contract must be based upon a meeting of the minds; however, the meeting of the minds is “inferred, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding.” Trauma Service Group v. United States , 104 F.3d 1321, 1326 (Fed. Cir. 1997) (quoting

Hercules Inc. v. United States , 516 U.S. 417, 424 (1996)) ; United Pacific Insurance Company , ASBCA No. 53051, 03-2 BCA ¶ 32,267 at 159,624, aff’d

, 380 F.3d 1352 (Fed. Cir. 2004).

II. ASCT Has Not Demonstrated the Existence of an Implied- In -Fact Contract

ASCT asserts that the implied-in-fact contract was created by its acceptance of an offer by the contracting officer, Mr. Boddie (app. br. at 15-21). Thus, we determine that the ASCT has satisfied the authority requirement. Similarly, ASCT’s allegation that it maintained the materials on-site for use by the reprocurement contractor provides consideration (app. br. at 17-18). The government appears to concede that there was consideration for an implied-in-fact contract for the storage of ASCT’s12 materials, but not for a contract to purchase the materials (gov’t resp. br. at 31). 6 This leaves mutuality of intent to contract, and unambiguous offer and acceptance as the

contract formation elements in dispute.

As noted in the findings of fact above, we hold that Mr. Boddie did not make a contractual offer at the February 14, 2013 meeting. Faced with conflicting statements regarding the February 14, 2013 meeting, we conclude the contemporaneous statements and actions of the parties to be of greater weight than the declarations submitted eight years after the fact. See

, e.g ., Intermark Managed Servs

., Inc.

, ASBCA No s . 57654

, 57655, 12

- 2 BCA ¶ 35,091 at 172,344 (quoting Fincke v. United States , 675 F.2d 289, 295 (Ct. Cl. 1982) )

. First, we look to the February 25, 2013 meeting summary email. Both Mr. Boddie and Mr. Azimi testified that the summary was consistent with the

sta tements at the meeting ( tr. 49

- 50, 95

- 96, 195

- 96)

. 7 The email provides that “ USACE has procedures that it can use to pay you for those materials so that they can be used to finish building the project. Please contact me if you are interested in s elling t hose materials to USACE” (R4, tab 8 at 2 ) (emphasis added) . The language of the email provides that the government can use its procedures and that the subcontractors should contact Mr. Boddie if they were interested in selling the materials. We do not in terpret
the email as making a binding offer to the subcontractors, rather Mr. Boddie invited expressions of interest in selling materials. This interpretation is consistent with the other contemporaneous statements in the record, and is consistent with Mr . Azimi’s testimony that he understood that there were other steps that would need to be taken to reach an agreement with the government for the sale of the material (tr. 106

- 11). Thus, we hold that ASCT has not established the existence of an implied

- in

- fact contract for the sale or storage of its materials or equipment.

The subsequent communications between the parties are also insufficient to demonstrate the existence of an implied

- in

- fact contract. ASCT’s March 14, 2013 response to the contracting officer stated that “as we owe most of the suppliers now for the procured materials, it would be of our mutual benefit to sell you our procured materials for your future plans. And [ it ] would be our pleasure to know how long will it take for the process, and what you would require us to send you” (R4, tab 9 at 3

- 4). Even allowing for a non

- native English speaker, who might use more formal and less forceful language than a native English speaker, the email is clearly an inquiry as to whether the government would be interested in purchasing ASCT’s supplies

, rather than an email seeking to confirm the details of an existing agreement.

6 The government’s brief does not challen ge the existence of an implied

- in

- fact

contract for ASCT ’s storage costs for February through November 2013 as

found in the final decision.

7 As both witnesses testified to the accuracy of the February 25, 2013 email as a summary of the February 14, 2013 meeting, we do not find the issue of the possibly missing audio recording to be relevant.13 Similarly, ASCT’s March 25, 2013 email was an inquiry as to whether the USACE would purchase the material, rather than an ema il seeking to confirm an existing deal. Admittedly, the email starts with the statement that: “[a]s was requested from your side by email, and agreed in the meeting, it was stated that the procured material for this project that are not billed to ACI wil l be paid by USACE” ( id. at 1). However, the email continues with the statement that: “neither a positive nor negative response have been clarified from your side for the procurement s payment and processing” followed by a request that the USACE “please l et us know, if these materials will be procured by USACE and paid to us or not?” ( id. ). At best, the email can be read as saying, “ I thought we had a deal, but you haven’t responded, please let

me know. ” Unfortunately for ASCT, a statement that “I though t we had a deal” does not demonstrate a tacit understanding between the parties. Trauma Service Group

, 104 F.3d at 1326.

ASCT additionally cites to the government’s June 26, 2013 presentation to ACI’s former subcontractors as an offer by the government to purchase its materials (app. br. at 23). However, the statements at the June 26, 2013 are, if anything, more clearly conditional than the earlier statements. After informing the subcontractors of a reduction in the scope of the project the government informed the subcontractors that “there is an opportunity for the subcontractors to have the materials they purchased for the original contract be used in the new contract” and requesting information from the subcontractors (R4, tab 11 at 1 ). The presenta tion additionally informed the

subcontract or s that they could remove their material from the site after demonstrating ownership ( id. ). The government’s statement that there was an “opportunity” cannot be read as a binding offer.

In November and Decemb er 2013, ASCT emailed Navy Commander Jensen alleging that it had not removed its materials, and had incurred security and warehousing expenses based on the government’s promise to procure the materials (R4, tab 14 at 1

- 4). But here, the e

- mails read as if ASCT is alleging that the government failed to take a contemplated future action, not that that the government had agreed back in February to

enter into a contract. The same is true with regard to the communications between ASCT’s then counsel, Sher Saee di, and Lieutenant Colonel Gary Davis, the District Chief of Contacting, in May 2014, where Mr. Saeedi indicated that ASCT wanted to “resolve this issue in an amicable way” (R4, tab 16 at 4) and that ASCT had been “left in a limbo by USACE with assurances of purchase of the goods at the site” ( id. ).

In April 2017, after ASCT sued ACI in Delaware state court, and settled that action, ASCT’s then attorney contacted the government stating that “I am writing to gauge the Corps’ interest in purchasing the materials A SCT maintains on the project

site and to reimburse A SCT for expenses related to maintaining and securing the materials for the past several years” (R4, tab 32 at 1 ). In June of that year, ASCT’s counsel again contacted the government, writing “ [m]y client would like to know if the14 USACE intends to negotiate a resolution to this matter or not” (R4, tab 17 at 1). Once again, these communications, predating ASCT’s claim, can only be read as seeking a contract for the sale of the materials, and not as support for the existence of a meeting

of the minds.

Moreover, the government’s contemporaneous statements can only be read as conditional statements that something “could” happen. Statements of future intent do

not constitute an offer. See

, e.g. , Linear T e ch. Corp. v. Micrel

, Inc. , 275 F.3d 1040, 1050 (Fed. Cir. 2001) ; Frazier v. American Airlines

, Inc

., 434 F. Supp. 2d 279,

28 6

- 8 7 (D. Del. 2006), aff’d, 229 F. App ’ x 171 (3d Cir. 2007) (nonprec e dential). The March 20, 2013, email from a g overn ment representative to Mr. Abdul Mateen Azimi,

ASCT’s Vice

- President, provided that he did not “know how long th e process will take,” that it was “for the contracting officer to take action on,” and that the government would “eventually (I think) process t he stored materials for payment but the Contracting Officer is running the show.” ( R4, tab 9 at 2 ) Additionally , the June 26, 2013, presentation to the former ACI subcontractors informed them that “there is an opportunity for the subcontractors to have the materials they purchased for the original

contract be used in the new contract

. . . To take advantage of the opportunity, former ACI subcontractors must provide the contracting officer with documentation that proves that materials were purchased for the ACI prime contract, and not paid for by ACI ... USACE needs copies of invoices

. . . . If materials are still o n site, USACE also needs photographs showing the quantity of materials and their current location” (R4, tab 11 at 1 ). Once again, the presentation uses conditional language about this being an opportunity and not does not state that the government had alr eady agreed to purchase the material. T he presentation also provided that “ [i] f a former ACI subcontractor wants to remove the company’s materials from the RPTC site, the company has to provide acceptable proof of ownership, and then USACE will make

arran gements to give the company access to the site to remove the materials” ( id. ). This statement is contrary to ASCT’s assertion that it was directed to maintain its material on

site and that the direction was never revoked. ASCT understood that if it wante d to remove its materials from the project it was free to do so as long as it could prove its

own ership to the materials (tr. 113 ).

Additionally, we note that ASCT’s April 10, 2017 communication “writing to gauge the Corps’ interest in purchasing the m aterials A SCT maintains on the project

site and to reimburse A SCT for expenses related to maintaining and securing the materials for the past several years” (R4, tab 32 at 1 ) is inconsistent with ASCT’s current position that an implied

- in

- fact contract was created in 2013. ASCT attempts to downplay the communication as an attempt by its prior attorney to “nudge” the government into honoring its prior commitment (app. reply at 11). However, the communication makes no reference to an existing contract as wo uld be expected if

ASCT believe d that such a contract already existed. As we have already determined that the 2013 communications did not create an offer by the government, we interpret15 this 2017 communication as being consistent with our holding that the re was not an implied

- in

- fact contract created in 2013.

ASCT argues that offer, acceptance, and mutuality of intent to contract is demonstrated through its performance. According to ASCT, the fact that it secured its material and kept the material on si te i s evidence of acceptance by performance

. ( A pp. br. at 16

- 17). ASCT asserts that its actions evidence the existence of the contract because, without an agreement, it would have removed its materials and sold the materials to others ( id. at 18). Howev er, ASCT also makes the conflicting argument that the materials were made to specification for the police station and “would have been very difficult to sell” ( id. at 18

- 19). If the material would be “very

difficult to sell” ASCT’s decision to leave the m aterial s on site is more likely evidence of ASCT’s hope of a possible sale to the government, than evidence of performance of an implied

- in

- fact contact.

ASCT additionally speculates that the government was “under great pressure to make a binding offer” to get the subcontractors back to work (app. br. at 19). ASCT cites no evidence for this “great pressure” and we do not deem it sufficient to support a finding of mutual in tent to contract . Similarly, ASCT’s speculation that “it is reasonable to assume the Army had to offer to pay outstanding expenses” (app. reply at 15) is not evidence that scope of the purported implied

- in

- fact contract included

off

- site materials and eq uipment.

The government relies upon our holding in Intellicheck

, Inc. , ASBCA No. 61709

, 2 1

- 1 BCA ¶ 37,892 for the proposition that simply maintaining the status quo with respect to the property is not conduct consistent with the existence of an implied

- in

- fact contract (gov’t resp. br. at 30

- 31). In Intellicheck the appellant was a subcontractor on a multiple award contract with the Navy. As part of its performance, Intellicheck had possession of certain government property that was to be returned to the Navy

at completion of the task order. In September 2013, the prime contractor filed a claim related to additional labor costs. The matter was appealed to this Board in March 2014, and was settled in August 2014. However, Intellicheck had not receive d instructions for the return of the property, and did not release the last of the property to the Navy until

the end of December 2015. Intellicheck , 21

- 1 BCA ¶ 37,892 at 184,029. Intellicheck subsequently submitted a claim asserting an implied

- in

- fact c ontract for its costs of storing and maintaining the Navy property. Id. at 184,029

- 30. The Board held that no implied

- in

- fact contract had been formed because Intellicheck had not demonstrated the existence of mutuality of intent, and an unambiguous offe r and acceptance. “In order to establish mutuality of intent, appellant must show, by objective evidence, the existence of an offer and acceptance.” Id. at 184,131 (citing Guardian Safety & Supply LLC d/b/a Enviro Safety Products , ASBCA No. 61932, 19

- 1 BCA ¶ 37,333 at 181,561 (in turn citing Anderson v. United States , 344 F.3d 1343, 1353 (Fed. Cir. 2003))). “Once an16 offer is made, ‘acceptance of the offer [must] be manifested by conduct that indicates assent to the proposed barga in.’” Id. (citing Guardian Safety & Supply , 19

- 1 BCA ¶ 37,333 at 181,561 (in turn quoting Northrop Grumman Sys. Corp. Space Sys. Div.

, ASBCA No. 54774, 10

- 2 BCA ¶ 34,517 at 170,237))

.

Intellicheck differs from the appeal before us in several aspects; h owever, the holding is instructive. As explained above, we do not find the statements at the February 14, 2013 meeting, or in the February 25, 2013 email, to have constituted an offer. Thus, we reject ASCT’s argument that it accepted the offer by perform ance. Rather, we hold that ASCT’s communications with the government formed the offer. There is no evidence of conduct by the government that can objectively be seen as assenting to the implied

- in

- fact agreement. Intellicheck , 21

- 1 BCA ¶ 37,892

at 184,0 31 ; Guardian Safety & Supply , 19

- 1 BCA ¶37,333 at 181,561. Simply put, the government’s inaction is not evidence of the formation of an implied

- in

- fact contract.

ASCT additionally cites as “evidence” of an implied

- in

- fact contract statements by

the co ntracting officer in the final decision (app. reply at 8 (“ T he Government has already found that this communication was sufficient to create an implied

- in

- fact contract to pay

ASCT to secure its materials on site when ASCT accepted the offer by continuing to pay
the costs needed to store and secure the materials after February 25, 2013”)). However, the contracting officer’s final decision is reviewed by this Board de novo

. See 41 U.S.C. § 7104(b)(4) (action brought before the Board proceeds de novo ); Wilner v. United States

, 24 F.3d 1397, 1401

- 02 (Fed. Cir. 1994) (appeal to board or court from contracting

officer ’ s final decision is de novo ). Thus, the statements of the contracting officer, in this appeal

, an individual different from the contracting officer that made the February 2013 statements at issue, are not e ntitled to any deference

. That said, the government has not requested that we overturn the contracting officer’s final decision. Rathe r the government requests that the “ contracting office r’s final decision on this matter stand” (gov’t resp. br. at 41). Thus, although we do not find the existence of an implied

- in

- fact contract for ASCT’s storage costs from February through November 2013, we do not disturb the contracting officer’s final de cision.

ASCT also dismisses the lack of price discussions as irrelevant to the question of contract formation. While ASCT is correct that a failure to agree on a price does not undermine other evidence of mutual assent (app. reply at 9 (quoting Gardiner

, Kamya & Assocs

. , P.C. v. Jackson , 369 F.3d 1318

, 1322 (Fed. Cir. 2004))) here we determined that evidence of mutual assent is lacking. Once there is evidence of intent to contract, the price term can be supplied, but here there was no mutual intent to

c ontract, and the lack of pricing discussions is further evidence that an implied

- in

- fact

contract was not created.

Having determined that ASCT has not established the existence of an implied

- in

fact contract, we need not reach ASCT’s arguments regarding the inclusion of17 equipment and off-site materials in the alleged contract (app. reply at 15-19), or ASCT’s arguments interpreting its settlement agreement with ACI (app. reply at 13-15).

Having found that ASCT has not demonstrated the existence of an implied-in- fact contract, we hold that ASCT’s other asserted bases for recovery are not properly before us, are beyond our jurisdiction, or both. ASCT asserts that the government breached its duty of good faith and fair dealing (app. br. at 35-40). However, ASCT did not present a breach of the duty of good faith and fair dealing in its claim to the contracting officer (R4, tab 3). Accordingly, we lack jurisdiction to entertain this allegation. See

, e.g

. M. Maropakis Carpentry

, Inc. v. United States, 609 F.3d 1323, 1327 (Fed. Cir. 2010) (citing

James M. Ellett Constr. Co. v. United States , 93 F.3d 1537, 1543 (Fed. Cir. 1996))

. Even if we possessed jurisdiction to entertain the argument, it would fail because we held above that there was not an implied- in -fact contract between the USACE and ASCT. Without a contract, there can be no breach of the duty of good faith and fair dealing. See

, e.g ., Scott Timber Co. v. United States , 692 F.3d 1365, 1372 (Fed. Cir. 2012) (holding that the government “could not have breached the covenant of good faith and fair dealing by its pre-award conduct because the covenant did not exist until the contract was signed”); Tug Hill Constr

., Inc. , ASBCA No. 57825, 14-1 BCA ¶ 35,777

at

175,024, aff’d , 622 F. App’x 914 (Fed. Cir. 2015) (nonprecedential).

To the extent that ASCT ’s complaint can be interpreted as asserting a Fifth Amendment taking of its property, or a claim for negligence in selecting the prime contractor, ASCT disclaimed these theories in our prior decision, and they need not be

addressed here. ASCT Group , 20-1 BCA ¶ 37,540 at 182,289.

CONCLUSION

For the reasons stated above, the appeal is denied. The contracting officer’s final decision, dated October 31, 2018, and awarding appellant $78,936, subject to ASCT submitting a proper invoice, remains in effect.

Dated: April 26, 2022

(Signatures continued) DAVID D’ALESSANDRIS Administrative Judge

Armed Services Board of Contract Appeals18 I concur

RICHARD SHACKLEFORD Administrative Judge Acting Chairman

Armed Services Board of Contract Appeals I concur

OWEN C. WILSON Administrative Judge

Vice Chairman

Armed Services Board of Contract Appeals

I certify that the foregoing is a true copy of the Opinion and Decision of the Armed Services Board of Contract Appeal in ASBCA No. 61955, Appeal of ASCT Group, Inc., rendered in conformance with the Board’s Charter.

Dated: April 27, 2022

PAULLA K. GATES

- LEWIS Recorder, Armed Services

Board of Contract Appeals