ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeals of -- ) 

) 

Maersk Line, Limited ) 

) 

Under Contract Nos. N00033-06-C-3305 ) 

N00033-06-C-3306 ) 

APPEARANCES FOR THE APPELLANT: 

APPEARANCES FOR THE GOVERNMENT: 

ASBCA Nos. 59791, 59792 

Robert E. Korroch, Esq. 

Cameron M. Rountree, Esq. 

William A. Wozniak, Esq. 

Williams Mullen 

Newport News, VA 

Ronald J. Borro, Esq. 

Navy Chief Trial Attorney 

Tricia A. Nicewicz, Esq. 

Allison M. McDade, Esq. 

Gordon D. Ivins, Esq. 

Trial Attorneys 

Military Sealift Command 

Norfolk, VA 

OPINION BY ADMINISTRATIVE JUDGE YOUNGER 

ON THE GOVERNMENT'S MOTION AND APPELLANT'S CROSS-MOTION 

FOR SUMMARY JUDGMENT AND OTHER MOTIONS 

The parties have filed cross-motions for summary judgment, as well as three 

other motions, in these consolidated appeals. Appellant Maersk Line, Limited (Maersk) 

seeks vessel conversion costs said to result from the convenience terminations of 

two dry cargo time charters. Under Contract No. N00033-06-C-3305, the Military 

Sealift Command (MSC) chartered the services of the MN LTC John UD. Page 

(MN Page). Under Contract No. N00033-06-C-3306, MSC chartered the services of 

the MN SSG Edward A. Carter, Jr. (MN Carter). Both contracts were follow-on 

contracts. MSC terminated both contracts for convenience. We deny the cross-motions 

for summary judgment, as well as the three other motions. 
STATEMENT OF FACTS FOR PURPOSES OF THE MOTIONS 

A. The 2001 Contracts 

1. Effective 22 May 2000, MSC awarded Contract No. N00033-00-C-3201, to 

Maersk for the dry cargo time charter for the MN Page (ASBCA No. 59791 (59791), 

R4, tab A-1 at 1-2). In addition, effective 22 May 2000, MSC awarded Maersk 

Contract No. N00033-00-C-3202 for the dry cargo time charter for the MN Carter 

(ASBCA No. 59792 (59792), R4, tab A-1at1-2) (the 2001 contracts). "Under a time 

charter, the owner remains responsible for maintenance and crewing of the vessel," 

Bos 'n Towing and Salvage Company, ASBCA No. 41357, 92-2 BCA ii 24,864 

at 124,026, while the charterer may employ the vessel for specified purposes. 

2. The 2001 contracts were both for terms of 1,795 days (59791, R4, tab A-1at2; 

59792, R4, tab A-1 at 2). Both contracts were for the transportation and storage of 

ammunition in support of the Army's Prepositioning Program (59791, R4, tab B-42 at 142). 

3. It is undisputed that, in the interval between contract award and delivery of the 

vessels under the 2001 contracts, Maersk incurred costs to modify both the MN Page 

and the MN Carter. In order to meet the requirements of the 2001 contracts, Maersk 

installed specialized cranes, air conditioning and dehumidifier systems for the cargo 

holds, and cargo hold sprinkler systems to make both vessels suitable for the 

transportation and storage of ammunition. (59791, R4, tab D-66 at 525; 59792, R4, 

tab D-60 at 529) 

B. The 2006 Contracts 

4. Following completion of the 2001 contracts, MSC awarded the follow-on 

contracts at issue here. Effective 1 February 2006, MSC awarded Contract 

No. N00033-06-C-3305 to Maersk for the dry time charter of the MN Page, and, 

effective 8 December 2005, for the MN Carter (collectively, the 2006 contracts) 

(59791, R4, tab C-44 at 343; 59792, R4, tab C-29 at 300). 

5. The 2006 contracts contained various standard clauses, including Federal 

Acquisition Regulation (FAR) 52.212-4, CONTRACT TERMS AND CONDITIONS-COMMERCIAL 

ITEMS (OCT 2003). Each contract's Termination for the Government's Convenience clause 

was separately set out and was identical to that appearing in FAR 52.212-4(1) (59791, R4, 

tab C-44 at 372; 59792, R4, tab C-29 at 333). 

6. The 2006 contracts contained identical Cancellation Fee clauses, which 

provided: 

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The contractor and Government agree the purpose of this 

clause is to induce the contractor to offer to provide and to 

provide the required services when the contractor 

otherwise would not offer to provide them because of the 

contractor's inability to recover its out-of-pocket costs in 

the event the Government does not exercise an option to 

extend the term of the contract or terminates the contract 

for the convenience of the Government. 

In the event the Government does not exercise an option to 

extend the term of the contract...for convenience, the 

contractor shall be entitled to not-to-exceed cancellation 

costs subject to the following conditions .... 

"Cancellation costs" means, and only means, costs 

specifically identified by the contractor in its proposal and 

actually incurred by the contractor between contract award 

and vessel delivery to the Government including, and 

limited to, the following categories of costs: costs incurred 

by the contractor for vessel acquisition, reflagging costs 

and modification, or conversion costs, and only to the 

extent such modification, or conversion costs were 

incurred in order for the vessel to meet contract 

requirements .... 

The cancellation costs must be reasonable, allowable, and 

allocable to the contract. The Government will not be 

obligated in any event to reimburse the contractor for the 

specified categories of cancellation costs ... regardless of 

anything to the contrary in the clause entitled "Termination 

for Convenience of the Government." The contractor 

agrees that payment of the specified cancellation costs 

according to the schedule above for any contract period 

fully compensates the contractor for the specified 

categories of cancellation costs. The contractor waives any 

right it may have to claim any additional costs for the 

specified categories of cancellation costs .... 

(59791, R4, tab B-43 at 167; 59792, R4, tab C-29 at 326-27) 

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7. MSC redelivered the MN Page to Maersk on 22 June 2010, which was 

before expiration of the contract (59791, R4, tab C-62 at 500-01). 

8. MSC also redelivered the MN Carter to Maersk early (59792, R4, tab C-57 

at 497-98). 

9. After negotiations regarding Maersk's termination settlement proposal 

(TSP), the parties reached agreement on outstanding issues, other than hull 

depreciation costs under each contract, as to which they reached an impasse (59791, 

supp. R4, tab 65G at 604; 59792, R4, tab 58 at 506). 

10. By date of 24 September 2013, Maersk submitted its certified claim to the 

contracting officer regarding both contracts. Maersk asserted that the claim was for 

(i) [U]nrecovered costs, resulting from the early 

termination of [the contract], in the amount of $480,000 

incurred for the modification of the MN PAGE to comply 

with applicable contract requirements (hereinafter the 

"Hull Depreciation Costs"), and (ii) unrecovered costs, 

resulting from the early termination of [the contract], in the 

amount of$242,500 incurred for the modification of the 

MN CARTER to comply with applicable contract 

requirements. 

Maersk explained that: 

The claim ... with respect to reimbursement of Hull 

Depreciation Costs for the MN PAGE is equally 

applicable to unrecovered vessel modification costs for the 

MN CARTER, as the vessels are similarly situated with 

respect to the incurred modification costs, the depreciation 

schedule ... as well as to the application and effect of the 

relevant contract clauses .... 

(59791, R4, tab D-66 at 524, 532-33) Maersk employed the term "Hull Depreciation 

Costs" on all but one page of its claim to refer to the costs that it sought (id. at 524-32). 

11. By date of 17 October 2014, the contracting officer rendered separate final 

decisions denying Maersk's claims for reimbursement (59791, R4, tab D-70; 59792, R4, 

tab E-64). Thereafter, by date of 13 January 2015, Maersk filed a timely notice of appeal 

in each of these appeals. By order dated 26 May 2015, we granted the parties' joint motion 

to consolidate both appeals. 

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12. In its first amended complaint in ASBCA No. 59791, Maersk alleges in 

Count I that its "unrecovered hull depreciation is a cost that has resulted from the 

termination [of the contract for the MN Page], which [Maersk] is entitled to recover 

from MSC" as a breach of the Termination for Convenience clause (compl. iiii 33, 35). 

Maersk alleges that "[b ]ased on 192 days remaining on the Contract..., the actual 'hull ' 

depreciation' amount reflects the amortized cost of $2,500 per day for 192 days 

($480,000)" (id. ii 25). 

13. In its first amended complaint in ASBCA No. 59792, Maersk makes 

substantially identical allegations in Count I regarding entitlement to "unrecovered hull 

depreciation" costs as those made regarding the MN Page (compl. iiii 33, 35). Maersk 

alleges that "[b]ased on 97 days remaining on the Contract, the actual 'hull depreciation' 

amount reflects the amortized cost of $2,500 per day for 97 days ($242,500)" (id. ii 25). 

DECISION 

I. MSC's Alternative Motion to Dismiss the Amended Complaints for Lack of 

Jurisdiction 

We first address MSC's alternative motion to dismiss Maersk's amended 

complaints in each appeal because it is potentially dispositive of the remaining 

motions. In its motion to dismiss, MSC asserts that Maersk failed to submit its claim 

for vessel depreciation costs to the contracting officer (Government's Motions for 

Summary Judgment, Or in the Alternative, to Dismiss Appellant's Amended 

Complaint for Lack of Jurisdiction (gov't mot. at 13-15)). MSC stresses that the 

claims before the contracting officer were for the "'conversion costs incurred from the 

first ammo contract of [these] vessel[s], including installation of cranes, AC/DH 

systems, [c]argo [h]old sprinkler systems, etc."' (id. at 14). By contrast, MSC 

emphasizes, the claims asserted in the first amended complaints are for depreciation of 

vessel acquisition costs (id. at 14-15). 

In opposition, Maersk insists that the claims asserted in the amended complaints 

are based on the same operative facts as those presented to the contracting officer 

(Appellant's Motion to Dismiss Respondent's Motion for Summary Judgment, Deny 

Respondent's Motion for Dismissal, and Compel Respondent to Respond to 

Appellant's Discovery Requests (app. opp'n at 6)). Maersk acknowledges that the 

Board lacks jurisdiction over claims not presented to the contracting officer, but 

asserts that, its claims defined the term "Hull Depreciation Costs" as "unrecovered 

costs incurred for the modification of the MN PAGE and the MN CARTER" (id.). In 

its amended complaints, Maersk states, it clarifies "the distinction between the cost of 

modifying or converting the vessels for service and the cost of acquiring the vessel[ s ]" 

(id. at 6-7). Maersk explains that the amounts sought in both complaints are identical, 

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and that its legal position regarding the Cancellation Fee clauses remains the same, as 

does its invocation of the early termination of the contracts as the causal event for cost 

incurrence (id. at 7). In addition, Maersk insists that MSC's contention that claims 

stemming from the 2001 contracts should be dismissed because the time bar of the 

statute of limitations is not jurisdictional and is properly raised as an affirmative 

defense subject to a determination in a merits proceeding (id.). 

We conclude that MSC's alternative motion to dismiss the amended complaints 

must be denied. In Scott Timber Co. v. United States, 333 F.3d 1358, 1365 (Fed. Cir. 

2003), the court of appeals held that the same claim decided by the contracting officer 

must be presented to the court; claims do "not require rigid adherence to the exact 

language or structure of the original.. .claim [when they] arise from the same operative 

facts, claim essentially the same relief, and merely assert differing legal theories for 

that recovery." We held in American General Trading & Contracting, WLL, ASBCA 

No. 56758, 12-1 BCA iJ 34,905 at 171,639 that a claimant "is free to change the legal 

theory ... from what was described in the claim .. .if the action continues to arise from the 

same operative facts that were relied upon in the [claim], and essentially seeks the 

same relief." 

Applying these standards to the present motion, MSC fails to demonstrate a 

decisive difference in the operative facts between the claim as asserted to the 

contracting officer and in the first amended complaints. Both in the claim and in its 

amended pleadings, Maersk points to the early convenience terminations of the 

contracts as the precipitating event for its loss of the unrecovered "Hull Depreciation 

Costs" that it seeks to recover (statements 9, 11, 12). In addition, Maersk seeks the 

same relief-recovery of $480,000 under the MN Page contract, and $242,500 under 

the MN Carter contract-in both the claim and the first amended complaints (id.). 

Finally, with respect to MSC's assertions that there are qualitative differences between 

the claim submitted to the contracting officer and that alleged in the first amended 

complaints, it is to be noted that Maersk characterizes the costs that it seeks as "Hull 

Depreciation Costs" on almost every page of the claim (statement 9). Whether or not 

"hull depreciation" is "simply a naming convention coined by Appellant" (gov't mot. 

at 9), Maersk so characterized the costs that it sought on all but one page of the claim 

(statement 9). In any event, "assert[ing] differing legal theories for ... recovery" does 

not defeat our jurisdiction. Scott Timber, 333 F.3d at 1365. 

2. MSC 's Motion for Summary Judgment 

In moving for summary judgment, MSC focuses on the nature ofMaersk's 

claim and urges that it is barred by the Cancellation Fee clause in each of the 2006 

contracts (see statement 6). MSC stresses that "the costs at issue are those associated 

with the vessels' modification to comply with the 2001 Contract requirements. There 

are no facts in the record that support the disputed costs being 'depreciation of vessel 

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acquisition."' (Gov't mot. at 10) MSC insists that Maersk incurred conversion coststhat is, for the costs of converting the vessels to ammunition ships by installing items 

such as specialized cranes, air conditioning and dehumidifier systems for the cargo 

holds, and cargo hold sprinkler systems, under the 2001 contracts (id. at 8, 10). MSC 

further argues that the 2006 contracts, however, did not include conversion costs, and 

the Cancellation Fee clauses in those contracts (see statement 6) provide that the 

cancellation fees themselves cover conversion costs and preclude recovery of any 

additional costs (gov't mot. at 8). Consistent with its position that Maersk's claims 

"arise from its admitted costs of modifying [the vessels] to meet 2001 Contracts['] 

requirement specifications" (id. at 8), MSC therefore urges that the contracting officer 

properly denied Maersk's claim under the 2006 contracts. 

In opposition to the motion, Maersk asserts that MSC has wrongly framed the 

issue. Maersk argues that the issue is whether it is entitled to "its depreciation of the 

costs of its acquisition of the vessels that was not recovered because ofMSC's early 

redelivery and termination of the 2006 Contracts for its convenience" (Appellant's 

Response to Government's Motions for Summary Judgment and Appellant's 

Cross-Motion for Summary Judgment (app. reply at 7)). Maersk emphasizes that the 

issue is "squarely presented" in its amended complaints in both appeals (id.). 

Our evaluation of the parties' summary judgment motions is guided by the 

familiar canon that summary judgment is properly granted only where there is no 

genuine issue of material fact and the movant is entitled to judgment as a matter of 

law. Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed. Cir. 

1987). "Our task is not to resolve factual disputes, but to ascertain whether material 

disputes of fact-triable issues-are present." Conner Bros. Construction Co., ASBCA 

No. 54109, 04-2 BCA if 32,784 at 162,143, ajf'd, Conner Bros. Construction Co. v. 

Geren, 550 F.3d 1368 (Fed. Cir. 2008) (quoting John C. Grimberg Co., ASBCA 

No. 51693, 99-2 BCA if 30,572 at 150,969). In evaluating a summary judgment 

motion, we draw justifiable inferences in favor of the party opposing the motion. 

However, once the movant meets its burden of showing the lack of any genuine issue 

of material fact, the non-moving party must set out specific facts showing the 

existence of a genuine issue of material fact; conclusory statements or bare assertions 

are insufficient. Mingus Constructors, 812 F.2d at 1390-91. 

With respect to cross-motions, such as those before us, "The fact that both 

parties have moved for summary judgment does not mean that [we] must grant 

judgment as a matter of law for one side or the other; summary judgment in favor of 

either party is not proper if disputes remain as to material facts." Mingus 

Constructors, 812 F.2d at 1391. With cross-motions, we "must evaluate each party's 

motion on its own merits." BMY, A Division of Harsco Corp., ASBCA No. 38172, 

93-2 BCA if 25,704 at 127,868. 

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We conclude that MSC's motion should be denied. We reach this conclusion 

for two principal reasons. First, there are disputed issues of material fact surrounding 

the characterization of the costs at issue. Thus, Maersk tells us that the costs that it 

seeks to recover are "depreciation of the costs of its acquisition of the vessels that was 

not recovered because of MSC's early redelivery and termination of the 2006 

Contracts" (app. reply at 7). By contrast, MSC asserts that the costs constitute "those 

associated with the vessels' modification to comply with the 2001 Contract 

requirements" (gov't mot. at 10). We cannot resolve the parties' dueling 

characterizations of these costs on summary judgment. These arguments present a 

triable issue. See Conner Bros., 04-2 BCA iJ 32,784 at 162,143, ajf'd, Conner Bros., 

550 F.3d 1368. 

Second, resolution of broader issues in these appeals would be aided by 

extrinsic evidence. We have elsewhere denied summary judgment when the parties 

contest the meaning of contract terms, recognizing that "material disputes of fact.. .may 

arise concerning the meaning intended by the parties." Aegis Defence Services Ltd., 

ASBCA No. 59082, 15-1BCAii35,811at175,138. Stated otherwise, "When the 

meaning of a contract and the parties' intentions are both relevant and in dispute, there 

are mixed questions of fact and law that pose triable issues precluding summary 

judgment." AshBritt, Inc., ASBCA Nos. 56145, 56250, 09-2 BCA iJ 34,300 

at 169,434. 

3. Maersk's Cross-Motion/or Summary Judgment 

The syllogism underlying Maersk's cross-motion is as follows. First, both 

FAR 12.403 and FAR 49.20l(a), read together, set forth the principle of fairness for 

convenience termination settlements. Second, Maersk is entitled to recover under the 

Termination for Convenience clause "reasonable charges" that have resulted from the 

termination, which includes charges incurred in anticipation of contract performance. 

Third, these charges include vessel depreciation, which Maersk has demonstrated with 

records submitted with its cross-motion. (App. reply at 15) In opposition, MSC 

substantially reiterates the arguments it advances in its own motion for summary 

judgment (Government's Response to Appellant's Motion for Summary Judgment 

(gov't reply at 1-3)). 

As indicated, we evaluate Maersk's cross-motion on its own merits. BMY, 93-2 

BCA ii 25,704 at 127,868. We deny it for the same reasons that we denied MSC's 

motion for summary judgment. 

4. Maersk's Motion to Dismiss MSC's Motion for Summary Judgment 

Maersk labelled its initial opposition to MSC's motion for summary judgment 

as a motion to dismiss the latter motion. Maersk argues that MSC's motion for 

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summary judgment should be denied for MSC's alleged "abuse of the process" of 

litigation (app. opp'n at 5). Maersk's point is that it is abusive for MSC to move for 

summary judgment when it has "deliberately and calculatedly produced nothing in 

response to [Maersk's] discovery requests" (id.). 

We deny Maersk's motion to dismiss MSC's motion. Maersk has not filed a 

motion to compel discovery responses and a motion to dismiss a summary judgment 

motion is procedurally inappropriate. In any event, in both its opposition to MSC's 

motion for summary judgment, and in its cross-motion for summary judgment, 

Maersk has demonstrated that it has not suffered any discemable prejudice from 

MSC's motion practice. 

5. Maersk's Motion to Compel Discovery 

Maersk also moves to compel discovery regarding various interrogatories and 

document production requests. After Maersk filed its motion, however, we stayed 

further discovery pending disposition of the cross-motions for summary judgment. 

With its cross-motion, Maersk has informed us that it "withdraws its Motion to 

Compel" (app. reply at 1 n. l). Given Maersk's withdrawal, we dismiss Maersk's 

motion to compel as moot. 

CONCLUSION 

MSC's alternative motion to dismiss Maersk's first amended complaints for 

lack of jurisdiction is denied. MSC's motion for summary judgment is denied. 

Maersk's cross-motion for summary judgment is denied. Maersk's motion to dismiss 

MSC's motion for summary judgment is denied. Maersk's motion to compel 

discovery is dismissed as moot. 

Dated: 13 June 2016 

(Signatures continued) 

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Administrative Judge 

Armed Services Board 

of Contract Appeals 
I concur 

Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

I concur 

RIC~KLEFORD 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 Appeals in ASBCA Nos. 59791, 59792, Appeals of 

Maersk Line Limited, rendered in conformance with the Board's Charter. 

Dated: 

10 

JEFFREYD. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals