ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of --

Environmental Safety Consultants, Inc. 

Under Contract No. N62470-95-B-2399 

APPEARANCE FOR THE APPELLANT: 

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APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 58343 

Mr. Peter C. Nwogu 

President 

Ronald J. Borro, Esq. 

Navy Chief Trial Attorney 

Ellen M. Evans, Esq. 

Senior Trial Attorney 

OPINION BY ADMINISTRATIVE JUDGE FREEMAN ON THE 

GOVERNMENT'S MOTION TO DISMISS FOR LACK OF JURISDICTION 

Environmental Safety Consultants, Inc., (ESCI) appeals the deemed denial of 

its termination settlement claim under the captioned contract (hereinafter "Contract 

2399"). The Board, sua sponte, noted the possible lack of jurisdiction over a 

substantial amount of the claim and requested the parties to brief the issue. The 

government's brief concludes that: "the board lacks authority over the entire case," 

and that "the appeal should be dismissed for lack of jurisdiction." We construe this 

conclusion as in substance a motion to dismiss. 

ESCI opposes the motion on the grounds of (i) equitable tolling of the statute 

of limitations and (ii) that the claim for increased costs over and above the contract 

price did not accrue until 12 June 2012 when the government withdrew its appeal to 

the Federal Circuit from the Board's 28 September 2011 decision converting the 

termination for default to a termination for convenience. We grant the government's 

motion in part. 

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 

1. This appeal arises out of our decision of 28 September 2011 converting the 

government's termination for default of Contract 2399 to a termination for 

convenience of the government. See Environmental Safety Consultants, Inc., 

ASBCA No. 51722, 11-2 BCA if 34,848. Familiarity with that decision is assumed. 
2. Contract 2399 was a firm-fixed-price construction contract. At award on 

13 November 1995, the firm-fixed-price was $561,764.25 (R4, tab 1at15). 1 On 

7 April 1997, ESCI submitted to the contracting officer a comprehensive proposal for 

an increase of$205,463.60 in the contract price for the costs of additional work and 

delays allegedly caused by the government (R4, tab 12 at 9). 

3. In bilateral Modification No. P00006, effective 24 June 1997, the parties 

modified the contract deleting five items of specified work and adding nine items of 

additional work. The additional work items included among others: 

j. Subcontract all remaining work, including supervision, 

quality control, and punchlist items. 

k. Provide additional overhead costs incurred due to 

subcontracting. 

m. Provide additional labor and time for entering, 

leaving, and working in the Q-Area. 

n. Provide extended overhead for the Government delays 

under this contract. 

(R4, tab 2 at 11-12) 

4. Modification No. P00006 concluded with a summary of the agreed price 

adjustment and contract completion date for the additions and deletions of work and 

a general release as follows: 

2. TOTAL AMOUNT OF ADDITIONAL WORK 

TOTAL AMOUNT OF CREDITS 

The total contract price is increased by $109 .00 from 

$561,764.25 to $561,873.25. 

$199,301.00 

$199, 192.00 

The contract completion date is extended by 308 calendar 

days from August 26, 1996, to June 30, 1997. 

The foregoing is agreed to as constituting full and 

equitable adjustment and compensation (both time and 

1 All Rule 4 citations refer to the Rule 4 filed in ASBCA No. 51722. 

2 
money) attributable to the facts of [sic] circumstances 

giving rise to the change directed hereby, including but 

not limited to, any changes, differing site conditions, 

suspensions, delays, rescheduling, accelerations, impact, 

or other causes as may be associated therewith. 

(R4, tab 2 at 2) 

5. Modification No. P00006 was signed by Peter Nwogu on behalf ofESCI 

without reservations on 23 June 1997 (R4, tab 2 at 1 ). Also on 23 June 1997, 

Peter Nwogu signed ESCI's Invoice No. 7 which among other things stated that 

the total contract value was $561,873.25 (the amount agreed to in Modification 

No. P00006) (R4, tab 14 ). 

6. No work was performed on the contract after 16 June 1997. Environmental 

Safety Consultants, 11-2 BCA ~ 34,848 at 171,430, finding 19. On 12 June 1998, the 

contract was completely terminated for default for failure to make progress to ensure 

completion of the work and failure to perform the work within the specified time 

(R4, tab 2 at 13). There were no contract modifications increasing the contract price 

after Modification No. P00006. At termination, the contract price was the price 

agreed to by the parties in Modification No. P00006 ($561,873.25). Over the course 

of the contract, the government paid ESCI a total amount of $303,990.00 in progress 

payments (R4, tab 13 at 1, tab 14 at 1). 

7. Pursuant to paragraph (c) of the FAR 52.249-10, DEFAULT (FIXED-PRICE 

CONSTRUCTION) (APR 1984) clause of the contract, and as a result of our decision 

sustaining the appeal from the default termination, "the rights and obligations of the 

parties will be the same as if the termination had been issued for the convenience of 

the Government" (R4, tab I at 69). 

8. The 52.249-2, TERMINATION FOR CONVENIENCE OF THE GOVERNMENT 

(FIXED-PRICE) (APR 1984}-ALTERNATE I clause in Contract 2399 stated in pertinent 

part: 

( d) After termination the Contractor shall submit a 

final termination settlement proposal to the Contracting 

Officer in the form and with the certification prescribed 

by the Contracting Officer .... 

(e) Subject to paragraph (d) above, the Contractor 

and the Contracting Officer may agree upon the whole or 

any part of the amount to be paid because of the 

termination .... However, the agreed amount, whether 

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under this paragraph (e) or paragraph (t) below, exclusive 

of costs shown in subparagraph (t)(3) below, [ZJ may not 

exceed the total contract price as reduced by ( 1) the 

amount of payments previously made and (2) the contract 

price of work not terminated .... 

( t) If the Contractor and Contracting Officer fail 

to agree on the whole amount to be paid the Contractor 

because of the termination of work, the Contracting 

Officer shall pay the Contractor the amounts determined 

as follows, but without duplication of any amounts agreed 

upon under paragraph (e) above: 

( 1) For contract work performed before the 

effective date of termination, the total (without 

duplication of any item) of-

(i) The cost of this work; 

(ii) The cost of settling and paying termination 

settlement proposals under terminated subcontracts that 

are properly chargeable to the terminated portion of the 

contract if not included in subdivision (i) above; and 

(iii) A sum, as profit on (i) above, determined by 

the Contracting Officer under 49 .202 of the Federal 

Acquisition Regulation, in effect on the date of this 

contract, to be fair and reasonable, however, if it appears 

that the Contractor would have sustained a loss on the 

entire contract had it been completed, the Contracting 

Officer shall allow no profit under this subdivision (iii) 

and shall reduce the settlement to reflect the indicated 

rate of loss. 

(2) The reasonable costs of settlement of the work 

terminated, including2 There is no subparagraph ( t)(3) in the Alternate I clause, but the same provisions 

that are in subparagraph (t)(3) of the basic clause are in subparagraph (t)(2) of 

the Alternate I clause. 

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(i) Accounting, legal, clerical, and other expenses 

reasonably necessary for the preparation of termination 

settlement proposals and supporting data; 

(ii) The termination and settlement of subcontracts 

(excluding the amounts of such settlements); and 

(iii) Storage, transportation, and other costs 

incurred, reasonably necessary for the preservation, 

protection or disposition of the termination inventory. 

9. On 5 July 2012, ESCI submitted to the contracting officer a Standard Form 

(SF) 1436 "SETTLEMENT PROPOSAL (TOTAL COST BASIS)" for the 

termination of Contract 2399. The net proposed settlement was $1,183,366.59. 

(App. supp. R4, vol. I, tab 3 at 1-4) The contracting officer did not respond to this 

proposal. On 14 September 2012, ESCI submitted the proposal as a certified claim 

under the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109 (app. supp. 

R4, vol. I, tab 5 at 1-2). The contracting officer refused to either negotiate a 

settlement agreement or issue a final decision on the claim. In her opinion, the claim 

was "conceived in fraud and is permeated by fraud, [and] the contracting officer 

lacks authority to decide it or settle it." (Answer if 8) 

10. On 29 September 2012, ESCI appealed the deemed denial of its 

termination settlement claim. The appeal was docketed as ASBCA No. 58343. The 

monetary elements ofESCI's termination settlement claim were: 

Direct Material 

Direct Labor 

Other Costs 

General & Administrative 

Profit 

Settlement with Subcontractors 

Settlement Expenses 

Finished Product Invoiced 

Disposal & Other Credits 

Net Proposed Settlement 

(App. supp. R4, vol. I, tab 3 at 1) 

$ 0.00 

1,021,306.00 

13,000.00 

17,000.00 

155,145.90 

252,503.97 

175,248.40 

(268,326.62) 

(182,511.19) 

$1,183,366.59 

11. Pursuant to paragraph ( e) of the Termination for Convenience clause the 

termination settlement, exclusive of the termination settlement expenses, cannot 

exceed the total contract price as reduced by ( 1) the amount of payments previously 

made and (2) the contract price of work not terminated (see SOF if 8). The total 

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amount of costs and profit in ESCI's termination settlement claim, excluding the 

settlement expenses ($175,248.40), was $1,458,955.87. This claimed amount was 

$897,082.62 more than the total contract price at termination. (See SOF ~ 10) 

12. ESCI contends that the settlement amount it claims in excess of the 

contract price at termination is due to the increased cost it incurred in performing the 

work as a result of government changes and delays which require an equitable 

adjustment to the contract price. We assume for purposes of the motion that this 

contention is correct. 

13. The FAR 52.233-1, DISPUTES (MAR 1994) clause in Contract 2399 stated 

in pertinent part: 

(a) This contract is subject to the Contract 

Disputes Act of 1978, as amended (41 U.S.C. 601-613). 

(b) Except as provided in the Act, all disputes 

arising under or relating to this contract shall be resolved 

under this clause. 

( c) "Claim," as used in this clause, means a 

written demand or written assertion by one of the 

contracting parties seeking, as a matter of right, the 

payment of money in a sum certain, the adjustment or 

interpretation of contract terms, or other relief arising 

under or relating to this contract.... However, a written 

demand or written assertion by the Contractor seeking the 

payment of money exceeding $50,000 is not a claim 

under the Act until certified as required by subparagraph 

(d)(2) below. 

( d)( 1) A claim by the Contractor shall be made in 

writing and submitted to the Contracting Officer for a 

written decision. 

(R4, tab 1 at 68) 

14. When Contract 2399 was awarded, Section 605(a)3 of the CDA stated in 

pertinent part: "Each claim by a contractor against the Federal Government relating 

3 Now 41 U.S.C. § 7103(a)(4)(A). 

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to a contract shall be submitted to the contracting officer for a decision," and "Each 

claim by a contractor against the Federal Government relating to a contract. .. shall be 

submitted within 6 years after the accrual of the claim." When Contract 2399 was 

awarded, FAR 33.201 stated that: '"Accrual of a claim' occurs on the date when all 

events, which fix the alleged liability of either the Government or the contractor and 

permit assertion of the claim, were known or should have been known." FAC 90-32, 

October 1, 1995 at 33-7. 

15. Considering that ESCI's proposal for a price adjustment for 

government-responsible changes and delays of the work was submitted to the 

government in the amount of$205,463.60 on 7 April 1997, and that no work on the 

contract was performed after 16 June 1997, we conclude that all of the events fixing 

the liability of the government, and permitting the assertion of a claim for equitable 

adjustment of the contract price for the alleged increased incurred cost of the contract 

work, were known or should have been known by ESCI no later than the date the 

contract was terminated for default on 12 June 1998. 

16. ESCI's 7 April 1997 letter was a "proposal" for a price adjustment in the 

amount of $205,463.60. It did not request a contracting officer's final decision on 

the proposed adjustment. It did not provide the certification for a claim in that 

amount as required by the CDA. (R4, tab 12) Neither the 7 April 1997 proposal nor 

any other communication in the record before us on the motion was a CDA claim for 

an equitable adjustment in the Contract 2399 price prior to the inclusion of these 

increased costs in the 14 September 2012 termination settlement claim. 

DECISION 

Our jurisdiction over the claimed price adjustment for excess costs included in 

ESCI's 14 September 2012 termination settlement claim depends on (i) when did the 

claim or claims for price adjustment for the alleged increased costs "accrue," and (ii) 

when did ESCI submit a CDA claim to the contracting officer for a price adjustment 

for those costs. ESCI does not contest the fact that it did not submit a certified CDA 

claim for its alleged costs that exceeded the contract price until it included those costs 

in its termination settlement claim submitted on 14 September 2012. That 

submission was 14 years after the claim for equitable adjustment had accrued and 

eight years after the six-year statute of limitations had run. Citing Arctic Slope 

Native Ass'n, Ltd. v. Sebelius, 699 F.3d 1289 (Fed. Cir. 2012) (hereinafter "Arctic 

Slope II"), ESCI argues that the running of the CDA statute of limitation for its 

increased cost claim was tolled until the default termination was converted to a 

termination for convenience because: "Appellant could not have reasonably filed for 

payment of completed work and increases [sic] contract costs while it was pursuing 

government's default termination from June 30, 1997 to September 28, 2011" (app. 

br. at 7). 

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Equitable tolling of a statute of limitations applies where the litigant proves: 

"(l) that he has been pursuing his rights diligently, and (2) that some extraordinary 

circumstance stood in his way and prevented timely filing." Arctic Slope II at 1295. 

In Arctic Slope II, the court held that the plaintiff Indian tribe had diligently 

monitored a class action suit against the government, and as a putative member of the 

class reasonably believed that it was not necessary to file an individual claim on the 

same matter that the class action was prosecuting. The court also held that, as an 

extraordinary circumstance, "the federal government's 'unique and continuing 

relationship with, and responsibility to, individual Indian tribes and to the Indian 

people as a whole"' required that "we must judge the government's conduct with the 

Indian tribes by 'the most exacting fiduciary standards."' Id. at 1297-98. 

There are no such extraordinary circumstances in ESCI's case here. ESCI is 

not an Indian tribe or other entity with which the government had to conduct its 

business by "the most exacting fiduciary standards." 

ESCI contends that "the government's default termination claim had to be 

resolved before appellant could reinstate its request for equitable adjustment pursuant 

to [the] CDA" (app. br. at 12). We disagree. All events necessary to fix liability on 

the government for any incurred increased costs of performing the contract were 

known or should have been known no later than 12 June 1998, the date the contract 

was terminated for default (see SOF ~ 15). There were no legal or other impediments 

at that time or thereafter to ESCI submitting an affirmative claim for equitable 

adjustment of the contract price. 

A timely written notice to the contracting officer demanding as a matter of 

right a price adjustment in a sum certain for the increased costs, and certifying that 

demand as required by the CDA, was all that was necessary for ESCI to assert its 

claim for a contract price adjustment for purposes of the statute of limitations. There 

is no evidence that some ''trickery" or misleading action of the government caused 

the untimely submission of such a claim. Absent evidence otherwise, we believe that 

ESCI' s untimely submission was caused by its lack of due diligence in preserving its 

legal rights under the contract. Such "garden variety claim of excusable neglect," is 

not a basis for equitable tolling of the statute of limitations. See Bernard Cap 

Company, ASBCA No. 56679 et al., 10-1BCA~34,387 at 169,801. 

Excluding the claimed termination settlement expenses ($17 5 ,248 .40 ), the 

total amount of ESCI' s termination settlement claim for the cost and reasonable 

profit of performing the contract up to the date of termination ($1,458,955.87) 

exceeded the total contract price ($561,873.25) by $897,082.62 (see SOF ~ 11). 

Since a CDA claim for a price adjustment for those alleged increased costs was not 

timely submitted to the contracting officer, we have no jurisdiction over that claimed 

amount in this appeal and give it no further consideration. Voices R Us, Inc., 

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ASBCA Nos. 51565, 52307, 01-1BCAif31,328 at 154,748; Skip Kirchdorfer, Inc., 

ASBCA No. 40515 et al., 93-3 BCA if 25,899 at 128,837. 

The government argues that, without ESCI "properly segregating the costs 

associated with the time-barred claims, the entire appeal should be dismissed (gov't 

br. at 6). We disagree. The termination settlement expenses ($175,248.40) that are 

excluded from the paragraph ( e) limit, and the termination settlement amount up to 

the contract price ($561,873.25) remain within our jurisdiction. 

The motion to dismiss is granted with respect to the $897,082.62 that exceeds 

the contract price and is denied in all other respects. 

Dated: 25 July 2014 

I concur 

~~~ Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

I concur 

~~ ~ ~c>-~~~-_.,. 

?--

JACK-DELMAN 

Administrative Judge 

Acting Vice Chairman 

Armed Services Board 

of Contract Appeals 

I certify that the foregoing is a true copy of the Opinion and Decision of the 

Armed Services Board of Contract Appeals in ASBCA No. 58343, Appeal of 

Environmental Safety Consultants, Inc., rendered in conformance with the Board's 

Charter. 

Dated: 

9 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals