ARMED SERVICES BOARD OF CONTRACTAPPEALS Appeal of

-- USAC Aerospace Group Inc. dba USAC

Aerospace Group: Ordnance Division
Under ContractNo. SPM4A6-11-C-0135
APPEARANCE FORTHE APPELLANT:

APPEARANCES FORTHE GOVERNMENT: ) ) ) ASBCA No. 59186 ) ) )
Mr. Michael Sammon President
Daniel K. Poling, Esq.

DLA ChiefTrial Attorney Jason D. Morgan, Esq. Edward R. Murray, Esq.

Trial Attorneys DLAAviation Richmond, VA
OPINION BYADMINISTRATIVE JUDGE PAGE ON THE GOVERNMENT'S MOTION TO DISMISS
The Defense Logistics Agency, Aviation Supply Chain (DLA or the government) moves to dismiss ASBCA No. 59186 for lack of jurisdiction. It alleges that the contract underlying this appeal between DLA and USAC Aerospace Group Inc. dba USAC Aerospace Group: Ordnance Division (USAC, appellant or the contractor) is a nullity. The government asserts that USAC, which represented itselfas a corporation at the time ofoffer and award, lost its corporate status before the contractwas entered into. Among other documents, the governmentrelies upon records from the California and Nevada secretaries ofstate to support its contention that appellant "was not a viable business entity and lacked the corporate capacity to enterinto the contract." (Gov'tmot. at 1)
After reviewing evidence citedby the government's motion that questioned USAC's legal capacity at the time ofcontracting, the Boardraised additional jurisdictional concerns sua sponte andpursuant to Board Rule 7, Motions,**~** 7(b), Jurisdictional Motions. These focused upon the appeal itself, and whether USAC and its representative are in compliance with Board Rule 15, Representation for a contractorthat is a corporation.STATEMENT OF FACTS FORPURPOSES OF THE MOTION AND THE BOARD'S ORDERREGARDING COMPLIANCE WITH ASBCA RULE 15(A)
1. On 16 February 2011, DLA issued Request for Proposals (RFP) SPM4A6-ll-C-O156, seeking a supply ofguided missile launchertripod mounts. On 23 May 2011, DLA accepted the offer of, and awarded the contract to, "USAC Aerospace Group: Ordnance Division." The contractor's address is listed as "Aeronautical Flight Center, 37920 Sky Canyon Drive, Murrieta CA 92563." (Gov't mot., ex. 1at 1, 4) As shown on the face ofits offer and in the contract, USAC gave its "Commercial and GovernmentEntity" or "CAGE"code as "5V5E6" (id. at 1, 2). The contractor's point ofcontact is identified as "Michael Sammon CEO, Director of Operations" (id. at 3).
2. The contract was awarded on 23 May 2011 in the amount of$611,850.00 (gov't mot., ex. 1at 1), which was later increasedto $630,525.00 (id., ex. 5 at 2). The contract required USAC to deliver a first article for testing 90 days after award (id., ex. 1at2, 11). The contract incorporated by reference FAR 52.249-8,DEFAULT (FIXED-PRICE SUPPLY AND SERVICE (APR 1984), which permitted the governmentto terminate the contract for default ifUSAC did notperform as required (id. at 21).
3. The contractor's CAGE code is among business-related information required by DLA for offerors and contractors. Tothis end, the subject contract incorporates by reference FAR52.204-7'CENTRAL CONTRACTORREGISTRATION (APR 2008). Paragraph (a) ofthat regulation, Definitions, describes the DLA'sCentral ContractorRegistration, requires a contractorto provide specific information in the "Central Contractor Registration (CCR) database" that includes the contractor's unique DataUniversal Numbering System (DUNS) number as well as its active Taxpayer IdentificationNumber (TIN). Paragraph (f) ofthis regulation states that "[t]he Contractor is responsible for the accuracy and completeness ofthe data within the CCR database," and requires the contractor to update the information on an annual basis. According toFAR2.101, Definitions, which is incorporated by reference, the TIN is "required by the IRS to be used by the offeror in reporting income tax and otherreturns. The TIN may be either a Social Security Number or an Employer Identification Number." (Gov't mot., ex. 1at 15)
4. Information about a contractor is available through the United States General Services Administration's "System for Award Management" (SAM) 1

, whichtracks consolidated data relating to government procurement. Information a contractormust enter in SAM, some ofwhich duplicates that found in DLA's CCR, includes its DUNS number, TIN, and its CAGE code, which is a five-character alpha-numeric designation

1The government advised that the instant contract "pre-dates SAM, and, instead, includes FAR 52.204-7, Central Contractor Registration (CCR)" (gov't mot. at n.l).

2

### assigned by DLA to identify a commercial or government entity. See, e.g., sam.gov, § § 1-3, 

### i!i! 1.1, 3.4. 

### 1.5.
5. Records from the California Secretary ofState show thatthe business license ofUSAC was suspended, and its corporate representative resigned, on 29 February 2008. Records obtained from the Nevada Secretary ofState showed a filing by "USAC Aerospace Group, Inc." with "Michael Sammon" named as its president. Nevada revoked the business license ofthis entity on 30 April 2011, which preceded contract award on 23 May 2011. (Gov't mot. at 3, exs. 12-13)
6. The record before the Board does not indicate, nor does appellant contend, that it advised the government ofits loss ofcorporate status in either California orNevada or sought a contract novation to reflect its now corporate status. 7. Foilowing administrative modifications and extensions to the delivery schedule (gov't mot., exs. 4-8), DLA on 6 December 2013 terminated the contract for default after USAC failed to timely deliver the first article for testing (gov't mot., exs. 9-10).
8. The contractor's notice ofappeal (NOA) was received by the Board on 28 February 2014. The NOA was signed by Michael Sammon, Director ofOperations, on behalfof"USAC Aerospace Group, CAGE Code, 5V5E6."
DECISION
A. The Government's Motion to Dismiss 1. Position of the Government On 3 April 2014, the government moved "to dismiss this appeal for lack of jurisdictionbecause the contract upon which the appeal is taken, SPM4A6-ll-C-0135, is a nullity." DLA argues that "at all times-fromthe contract's formation to the contract'stermination for default-Appellant, USAC Aerospace Group, Inc., was not a viable business entity and lacked the corporate capacity to enter into the contract." (Gov't mot. at I) In addition to the contract, the government relies upon information relating to appellant's corporate registrations in California and Nevada. Accordingto the government, appellant, which purported to enter into the contract as a corporation, has used different CAGE codes associated with USAC. Information from the California and Nevada secretaries ofstate show that USAC (in its various corporate forms) lost its business license in the former in 2008, and became a defunct corporation in the latter in 2011. (Id. 

### at 3-5)

3a. Information Providedby the Contractor in Making the Contract 

### The government contends that, according to information in SAM, CAGE code 5V5E6 "corresponds to 'USAC Aerospace Group, Inc.,' doing business as 'USAC Aerospace Group: Ordnance Division"'; the business is a Subchapter S corporation but the state ofincorporation is not given; its address is 1174 East Edna Place, Covina, CA 91724; its Employer IdentificationNumber (EIN) is 201134238; and Michael Sammon is the ChiefExecutive Officer (gov't mot. at 2, ex. 2 at 1-2). The governmentpoints out that USAC Aerospace Group, Inc., has the additional CAGE code of5RUB5. Accordingto information in SAM pertaining to 5RUB5, "USAC Aerospace Group Inc. is doing business as 'USAC Aerospace Group: Aerostructures Division."' SAM lists the company's address as 1174 East Edna Place, Covina, CA 91724 and uses the EIN of201134238,just as for "5V5E6." The business self-identifies as a "Subchapter S Corporation," but in this instance it identified its state ofincorporation as California. (Gov'tmot., ex. 3 at 2)
b. RelevantLaw andFilings with the Secretaries of State of California andNevada


### DLA states that records obtained from the California Secretary ofStateyielded filings by six corporations with the term "USAC" in the name. All ofthese corporations are defunct. (Gov'tmot. at 3, ex. 11). The government says that the records showthat "USAC Group, Incorporated" had its business license suspended by the State ofCalifornia, and its registered agent resigned, on 29 February 2008. This was priorto the time the contract underlying this appeal was entered into. The government asserts that additional records obtained from the Nevada Secretary ofState showed a filing by "USAC Aerospace Group, Inc." with "Michael Sammon" named as its president. Nevada revoked the business license ofthis entity on 30 April 2011, which preceded contract award on 23 May 2011. (Gov't mot. at 3, ex. 13)
DLA argues that "[l]ack ofcapacity to contractrequires dismissal ofan appeal for lack of jurisdiction" (gov't mot. at 3) (citing OscarNavaez Venegas, 

### ASBCA No. 49291, 98-1BCAif29,690). 

### It reasons that "[w]here, as here, the appellant purports to be a corporation, 'the capacity ofthat corporationto act is determined by reference to the law ofthe place ofincorporation"' (id.) 

### (citingDual, Inc., 

### ASBCA Nos. 53827, 53889, 06-1BCAif33,243). The government contends that "it appears that Appellant was not incorporated in any state at the time ofcontract formation, nor is it incorporated today" (gov't mot. at 4). The government further alleges that, even if"Appellant can establish that it represents some vestige ofeitherthe defunct 'USAC Aerospace Group, Inc.' incorporated in Nevada orthe defunct 'USAC Group, Incorporated' incorporated in



### 4California, it has nottaken any ofthe steps necessary to revive its corporate charter. See generally, Nev. Rev. Stat. § 78.730 (2013) [and] Cal. Rev. & TaxCode§§ 23305, 23305a (state statutes describing Nevada's and California's corporaterevival processes, respectively)." The government asserts thatthe Board should dismiss this appeal for lack of jurisdiction, because "at all times, Appellant lackedthe capacity to enter into the contract from which it appeals." (Gov'tmot. at 3-5)
Theparties' attention was specifically directed to the Board's decision in 

### Easterbrook/Ramco, ASBCANo. 42176 

### etal., 94-2 BCA

### ii 26,658, which held that a corporation suspended under relevant state law could not submit a valid CDA claim. The Board also referencedNevada Revised Statutes (NRS) § 78.175, DEFAULTING CORPORATIONS: DUTIES OF SECRETARY OF STATE; REVOCATION OF CHARTERAND FORFEITURE OFRIGHTTO TRANSACT BUSINESS DISTRIBUTION OF ASSETS, including NRS § 78.175(2); these statutes are applicable to a company incorporated in Nevada. Specific note was madeto the requirements ofBoardRule 15, Representation, particularly

### ii a. 

### 2. Position of Appellant
The Board's order of3 April 2014 required USAC to respondto the motion, and repeatedly granted appellant's requests for an extension to obtain information. On 23 September2014, the Board cautioned appellantregardingpossible effects ofits failure to furnish a responsive answer, and told USAC thatthe Boardwouldrule based uponthe existingrecord ifappellant did notrespond by 15 October2014. On 16 October 2014, the Boarddenied USAC's 10 October 2014 request for another extension for lack ofgood cause shown, and advised that the record was closed for purposes ofruling on the government's motion.
None ofUSAC's correspondence relative to the motion addressed whether USAC had corporate capacity to enter into the subject contract. In addition to its requests for an extension, appellant at times focused on the merits ofits claim challenging the termination for defaultbut did not address the issue ofits corporate status at thetime ofcontracting.


### B. The Board's Orders of 3March 2015 and 7

### April2015
Afterreviewing the record and motion submissions, the Board on 3 March 2015 issued

### sua sponte an "ORDERREQUIRING PROOF OF THE CONTRACTOR'S INCORPORATION." USAC was orderedby 18 March 2015 to "Furnish supporting documentation for all assertions ofincorporation; discontinuance ofincorporation; and any reinstatement for the periodbeginning 16 February 2011, the date the government

5

### issued the Request for Proposals in the subject contract, to [the] present." Specific information required included:
1. Jurisdictions in which appellant is orhas been legally incorporated; 2. The date(s) ofsuch incorporation; 3. Whether appellant remains now, and has been at all times since award ofthe contract, a legally-incorporated entity in thatjurisdiction; 4. Jurisdictions in which appellant's incorporation was discontinued or discontinuous; and 5. The date(s) that the contractor ceased to be a legal corporation in the statedjurisdictions and any reinstatement.
USAC was cautioned in the 3 March 2015 orderthat its "[f]ailure

...to timely comply with this Orderwill result in the Board's issuance ofan ORDERTO SHOW CAUSE to demonstrate why the Board should not draw the adverse inference that appellant was not a legally incorporated entity at the time it entered into the subject contract." Appellant on 16 March 2015 advised that "USAC Aerospace Group Inc. is Incorporated in the State ofNevada, Articles ofIncorporation, DocumentNumber: 20100276357-63, Entity Number: E0201342010-9, Filing Date: 04/12/2010, 7:53 AM." Appellant advisedthat "To ourknowledge we are incorporated in the State of Nevada. For status ofincorporation with our incorporation filing resident, Legalzoom, to be reviewed." The Board on 23 March 2015 directed USAC to clarifythis response. The Board stated that it "understands the contractorto stipulate that it was incorporated in Clark County, Nevada as of 12 April 2010 and that it is not incorporated in any other jurisdiction." USAC was directed to supplement its 16 March 2015 response, as "it is insufficient [for appellant] to state" that USAC held an uninterrupted corporate existence "To our knowledge." Appellant's reply of3 April 2015 confirmed that its Entity Number is "E0201342010-9" and that it is '"Not' filed as an entity in any other State or Jurisdiction" than Nevada. It 

### advised that "[i]fthe Corporation is in a 'Revoked' status or any other negative standing, USAC Aerospace Group Inc. will do everything in it's [sic] powerto rightthe situation."
As this reply did not adequately respond to the inquiry, the Board on 7April 2015 issued an "Orderto Show Cause." Appellant was admonished that, unless

6credible and probativeproofwas received from appellantby 30April 2015, the ASBCA would drawthe adverse inference thatUSAC was not a legally-incorporated entity in good standing in Nevada, the stated sole place ofincorporation, as ofeither 23 May 2011, the date ofcontract award, or on 28 February 2014, the date the appeal was received by the Board. Following appellant's failure to respond to the 7 April 2015 orderto show cause, the Board on 5 May 2015 ordered supplemental briefing. The contractorwas told to advise the Board, and provide supporting documentation, regarding "whether USAC has/had corporate capacity to bring andprosecute this appeal, and second, whether Michael Sammonhas/had adequate legal authority, to bring andprosecute this appeal on behalfofUSAC." The government cites to several cases for theproposition that appellant as a defaulted corporation lacks standingunderNevada Lawto bring and maintain this appeal (gov't supp. hr. at 3-4). See, e.g.,AmericanSports Radio Network, Inc. v. Krause, slip op. at 4 (C.D. Cal. 2006); In re Krause, American Sports RadioNetwork, Inc. v. Krause, 546 F.3d 1070, 1075 (9th Cir. 2008); andAA Primo Builders, LLCv. Washington, 126 Nev. 578 (2010). Onlythe governmentresponded tothe 5 May 2015 order. On 22 June 2015, the Board notified the parties thatthe time for responding tothe Orderto Show Causehad expired and the Boardregarded the record as closed for purposes ofruling on these issues.
DECISION
It is unnecessary thatwe decide the government's motion, ordeterminewhether USAC had corporate authority to enter into the instant contract. Rather, the Board's review ofthe overall record, includingthe parties' submissions, raised other concerns. The information brought into question the corporate viability ofUSAC, and Mr. Sammon's representative capacity, at all times relevant to making and sustaining this appeal.
Board Rule 15, Representation applies here. Paragraph (a) states that:
An individual appellant may represent his orherinterests beforethe Board; a corporation may be represented by one ofits officers; and a partnership orjointventure by one of its members; or any ofthese by an attorney at law duly licensed in any state, commonwealth, territory, the District ofColumbia, or in a foreign country. Anyone representing an appellant shall file a written notice ofappearance with the Board.

7Despite repeated opportunities, USAC failed to provide any evidence ofits legal capacity or that ofits representative as required by Board Rule 15. Itproduced nothing otherthan unsupported assertions that it was "To our knowledge" a viable corporate entity at all relevant times, but ifnot would "rightthe situation" (see USAC correspondence of 16 March and 3 April 2015). Nor did USAC provide evidence, as it must, that Michael Sammon is empowered to serve as the contractor's representative, in accordance with Board Rule 15. See, e.g., Smart Construction & Engineering Co., ASBCA No. 59354, 15-1BCAif36,018. Having warned USAC ofthe consequences offailing to furnish credible evidence, the Board draws the adverse inferences that: (I) as a defunct corporation, appellant lacked legal capacity to bring orprosecute this appeal; and (2) Mr. Sammon lacks authority to serve as corporate representative in bringing and prosecuting the appeal.
As USAC represented itselfas a corporation in makingthe contract, it is incumbent upon appellant to showthat its representative is authorized to act in that capacity. Ithas furnished no proofto satisfy that burden.
CONCLUSION
Since the Board is unable to proceed without a proper representative of appellant, the appeal is dismissed without prejudice.
Dated: 16 March 2017

I concur

Administrative Judge Acting Chairman Armed Services Board ofContract Appeals

8 Administrative Judge Armed Services Board ofContract Appeals

I concur

RICHARD SHACKLEFORD Administrative Judge Vice Chairman Armed Services Board ofContract AppealsI certify that the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContract Appeals in ASBCANo. 59186, Appeal ofUSAC Aerospace Group Inc. dba USAC Aerospace Group: OrdnanceDivision, rendered in conformance with the Board's Charter.
Dated:

9 JEFFREY D. GARDIN Recorder, Armed Services Board ofContract Appeals