ARMED SERVICES BOARD OF CONTRACTAPPEALS Appeals of

-- ) ) Maersk Line, Limited ) ) Under ContractNos. N00033-06-C-3305 ) N00033-06-C-3306 )
APPEARANCES FORTHE APPELLANT:

APPEARANCES FORTHE 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 ChiefTrial Attorney Tricia A. Nicewicz, Esq. Allison M. McDade, Esq. Gordon D. Ivins, Esq.

Trial Attorneys Military Sealift Command Norfolk, VA
OPINION BYADMINISTRATIVE JUDGE YOUNGER ON THE GOVERNMENT'S MOTION AND APPELLANT'S CROSS-MOTION FOR SUMMARYJUDGMENT AND OTHERMOTIONS
The parties have filed cross-motions for summaryjudgment, 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 ofthe MNLTCJohn UD. Page (MNPage). Under ContractNo. N00033-06-C-3306, MSC chartered the services of the MN SSG EdwardA. Carter, Jr. (MN Carter). Both contracts were follow-on contracts. MSC terminated both contracts for convenience. We deny the cross-motions for summaryjudgment, as well as the three other motions.STATEMENT OF FACTS FORPURPOSES OF THE MOTIONS

A. 

### The 2001 Contracts

1. Effective 22 May 2000, MSC awarded ContractNo. N00033-00-C-3201, to Maersk for the dry cargotime charter for the 

### MNPage (ASBCANo. 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 ownerremains responsible for maintenance and crewing ofthe vessel," 

### Bos 'n Towing andSalvage 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 ofthe Army's Prepositioning Program (59791, R4, tab B-42 at 142).
3. Itis undisputed that, in the interval between contract award and delivery ofthe vessels underthe 2001 contracts, Maersk incurred costs to modify both the 

### MN Page and the

### MN Carter. In orderto meet the requirements ofthe 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 ofammunition. (59791, R4, tab D-66 at 525; 59792, R4, tab D-60 at 529)

B. 

### The 2006 Contracts
4. Following completion ofthe 2001 contracts, MSC awarded the follow-on contracts at issue here. Effective 1February 2006, MSC awarded Contract No. N00033-06-C-3305 to Maersk for the dry time charter ofthe 

### MNPage, 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:

2The contractor and Government agree the purpose ofthis clause is to induce the contractor to offertoprovide and to provide therequired services when the contractor otherwise would not offerto provide them because ofthe contractor's inability to recover its out-of-pocket costs in the event the Government does not exercise an option to extend the term ofthe contract orterminates the contract for the convenience ofthe Government.

In the event the Government does not exercise an option to extend the term ofthe contract...for convenience, the contractor shall be entitledto not-to-exceed cancellation costs subjectto the following conditions

.... "Cancellation costs" means, and only means, costs specifically identified by the contractor in its proposal and actually incurred by the contractorbetween contract award and vessel delivery tothe Government including, and limitedto, the following categories ofcosts: costs incurred by the contractor for vessel acquisition, reflagging costs and modification, or conversion costs, and only tothe extent such modification, orconversion costs were incurred in order for the vessel to meet contract requirements

....

The cancellation costs mustbe reasonable, allowable, and allocable to the contract. The Government will notbe obligated in any eventtoreimburse the contractor for the specified categories ofcancellation costs

...regardless of anything tothe contrary in the clause entitled "Termination for Convenience ofthe Government." The contractor agrees thatpayment ofthe specified cancellation costs accordingto the schedule above for any contractperiod fully compensates the contractor for the specified categories ofcancellation costs. The contractorwaives any right it may have to claim any additional costs for the specified categories ofcancellation costs

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

37. MSC redelivered the 

### MNPage to Maersk on 22 June 2010, which was before expiration ofthe 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. Afternegotiations regarding Maersk's termination settlementproposal (TSP), the parties reached agreement on outstanding issues, otherthan hull depreciation costs undereach contract, as to which they reached an impasse (59791, supp. R4, tab 65G at 604; 59792, R4, tab 58 at 506).
10. By date of24 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 ofthe 

### MN PAGE to comply with applicable contractrequirements (hereinafterthe "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 ofthe 

### MN CARTERto comply with applicable contract requirements.
Maersk explained that:
The claim

...with respectto reimbursement ofHull Depreciation Costs for the 

### MNPAGE is equally applicable to unrecovered vessel modification costs for the 

### MN CARTER, as the vessels are similarly situated with respectto the incurred modification costs, the depreciation schedule

...as well as to the application and effect ofthe relevant contract clauses

.... (59791, R4, tab D-66 at 524, 532-33) Maersk employed the term "Hull Depreciation Costs" on all but one page ofits claim to refer to the costs that it sought (id. at 524-32).
11. By date of 17 October 2014, the contracting officerrendered 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 ofappeal in each ofthese appeals. By order dated 26 May 2015, we granted the parties'joint motion to consolidate both appeals.

4

### 12. In its first amended complaint in ASBCA No. 59791, Maersk alleges in Count Ithat its "unrecoveredhull depreciation is a cost that has resulted from the termination [ofthe contract for the 

### MNPage], which [Maersk] is entitled to recover from MSC" as abreach ofthe 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 "unrecoveredhull depreciation" costs as those made regarding the 

### MNPage (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'sAlternativeMotion to Dismiss theAmendedComplaintsfor Lackof Jurisdiction
We first address MSC's alternative motion to dismiss Maersk's amended complaints in each appeal because it is potentially dispositive ofthe 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, Orin the Alternative, to Dismiss Appellant's Amended Complaint for Lack ofJurisdiction (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 ofcranes, 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 lacksjurisdiction overclaims not presented to the contracting officer, but asserts that, its claims defined the term "Hull Depreciation Costs" as "unrecovered costs incurred for the modification ofthe 

### MN PAGE and the 

### MN CARTER" 

### (id.). In its amended complaints, Maersk states, it clarifies "the distinction betweenthe cost of modifying or converting the vessels for service and the cost ofacquiring the vessel[s]" (id. 

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

5andthat its legal positionregarding the Cancellation Fee clauses remains the same, as does its invocation ofthe early termination ofthe 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 ofthe statute oflimitations is notjurisdictional and is properly raised as an affirmative defense subjectto a determination in a merits proceeding (id.).
We conclude thatMSC's alternative motion to dismiss the amended complaints must be denied. In Scott Timber Co. v. UnitedStates, 333 F.3d 1358, 1365 (Fed. Cir. 2003), the court ofappeals held that the same claim decided bythe contracting officer must be presentedtothe court; claims do "notrequire rigid adherence to the exact language or structure ofthe original...claim [when they] arise from the same operative facts, claim essentially the same relief, and merely assert differing legal theories for thatrecovery." We held inAmerican 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

...ifthe action continues to arise from the
same operative facts that were relied upon in the [claim], and essentially seeks the
samerelief." Applyingthese 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 ofthe contracts as the precipitating event for its loss ofthe unrecovered "Hull Depreciation Costs" that it seeks to recover (statements 9, 11, 12). In addition, Maersk seeks the
same relief-recovery of$480,000 underthe MNPage contract, and $242,500 under the MN Carter contract-inboth the claim and the first amended complaints (id.). Finally, withrespect to MSC's assertions thatthere 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 ofthe claim (statement 9). Whether or not "hull depreciation" is "simply a naming convention coinedbyAppellant" (gov'tmot. at 9), Maersk so characterized the costs that it sought on all but onepage ofthe claim (statement 9). In any event, "assert[ing] differing legal theories for

...recovery" does not defeat ourjurisdiction. Scott Timber, 333 F.3d at 1365.

2. MSC 's Motion for SummaryJudgment
In moving for summaryjudgment, MSC focuses on the nature ofMaersk's claim and urges that it is barred by the Cancellation Fee clause in each ofthe 2006 contracts (see statement 6). MSC stresses that "the costs at issue are those associated with the vessels' modification to comply with the 2001 Contractrequirements. There
are no facts in the record that supportthe disputed costs being 'depreciation ofvessel

6

### acquisition."' (Gov't mot. at 10) MSC insists that Maersk incurred conversion coststhat is, for the costs ofconverting 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 ofany additional costs (gov't mot. at 8). Consistent with its position that Maersk's claims "arise from its admitted costs ofmodifying [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 entitledto "its depreciation ofthe costs ofits acquisition ofthe vessels that was notrecovered because ofMSC's early redelivery and termination ofthe 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 "squarelypresented" in its amended complaints in both appeals (id.).


### Our evaluation ofthe parties' summaryjudgmentmotions is guided by the familiar canon that summaryjudgment is properly granted only where there is no genuine issue ofmaterial fact and the movant is entitledtojudgment as a matter of law. Mingus Constructors, Inc. v. UnitedStates, 812 F.2d 1387, 1390 (Fed. Cir. 1987). "Ourtask is not to resolve factual disputes, butto ascertain whether material disputes offact-triable issues-arepresent." ConnerBros. Construction Co., ASBCA No. 54109, 04-2 BCA

### if 32,784 at 162,143, ajf'd, ConnerBros. Construction Co. v. Geren, 550 F.3d 1368 (Fed. Cir. 2008) (quotingJohn C. 

### Grimberg Co., ASBCA No. 51693, 99-2 BCA

### if 30,572 at 150,969). In evaluating a summaryjudgment motion, we drawjustifiable inferences in favor ofthe party opposing the motion. However, once the movant meets its burden ofshowing the lack ofany genuine issue ofmaterial fact, the non-moving party must set out specific facts showing the existence ofa genuine issue ofmaterial fact; conclusory statements orbare assertions
are insufficient. Mingus Constructors, 812 F.2d at 1390-91.
With respect to cross-motions, such as those before us, "The fact thatboth parties have moved for summaryjudgment does not mean that [we] must grant judgment as a matter oflaw for one side orthe other; summaryjudgment in favor of eitherparty is not proper ifdisputes 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., ASBCANo. 38172, 93-2 BCA

### if 25,704 at 127,868.

7We conclude that MSC's motion should be denied. We reach this conclusion for two principal reasons. First, there are disputed issues ofmaterial fact surrounding the characterization ofthe costs at issue. Thus, Maersktells us that the costs that it seeks to recover are "depreciation ofthe costs ofits acquisition ofthe vessels that was not recovered because ofMSC's early redelivery and termination ofthe 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'tmot. at 10). We cannotresolve the parties' dueling characterizations ofthese costs on summaryjudgment. These arguments present a triable issue. See ConnerBros., 04-2 BCA

### iJ 32,784 at 162,143, ajf'd, ConnerBros., 550 F.3d 1368. Second, resolution ofbroader issues in these appeals would be aided by extrinsic evidence. We have elsewhere denied summaryjudgmentwhen the parties contestthe meaning ofcontractterms, recognizing that "material disputes offact...may arise concerningthe meaning intended by the parties." AegisDefence Services Ltd., ASBCA No. 59082, 15-1BCAii35,811at175,138. Stated otherwise, "Whenthe meaning ofa contract and the parties' intentions are both relevant and in dispute, there
are mixed questions offact and lawthat 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/orSummaryJudgment
The syllogism underlying Maersk's cross-motion is as follows. First, both FAR 12.403 and FAR49.20l(a), read together, set forth the principle offairness for convenience termination settlements. Second, Maersk is entitledto recover under the Termination for Convenience clause "reasonable charges" thathave resulted from the termination, which includes charges incurred in anticipation ofcontractperformance. 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'treply at 1-3)).
As indicated, we evaluate Maersk's cross-motion on its own merits. BMY, 93-2 BCAii 25,704 at 127,868. We deny it for the same reasons that we denied MSC's motion for summaryjudgment.
4. Maersk's Motion to DismissMSC's Motionfor SummaryJudgment
Maersk labelled its initial opposition to MSC's motion for summaryjudgment
as a motion to dismiss the latter motion. Maersk argues that MSC's motion for

8summaryjudgment should be denied for MSC's alleged "abuse ofthe process" of litigation (app. opp'n at 5). Maersk's point is that it is abusive for MSC to move for summaryjudgmentwhen it has "deliberately and calculatedlyproduced 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 summaryjudgment motion is procedurally inappropriate. In any event, in both its opposition to MSC's motion for summaryjudgment, and in its cross-motion for summaryjudgment, Maersk has demonstrated that it has not suffered any discemable prejudice from MSC's motion practice.


### 5. Maersk's Motion to CompelDiscovery
Maersk also moves to compel discovery regarding various interrogatories and documentproduction requests. After Maersk filed its motion, however, we stayed further discovery pending disposition ofthe cross-motions for summaryjudgment.
With its cross-motion, Maersk has informed us that it "withdraws its Motion to Compel" (app. reply at 1n. 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 summaryjudgmentis denied. Maersk's cross-motion for summaryjudgment is denied. Maersk's motion to dismiss MSC's motion for summaryjudgmentis denied. Maersk's motion to compel discovery is dismissed as moot.
Dated: 13 June 2016

(Signatures continued)

9 Administrative Judge Armed Services Board ofContract AppealsI concur

Administrative Judge Acting Chairman Armed Services Board ofContract Appeals I concur

# RIC~KLEFORD Administrative Judge Vice Chairman Armed Services Board ofContract Appeals

I certify that the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContractAppeals in ASBCA Nos. 59791, 59792, Appeals of MaerskLine Limited, rendered in conformance withthe Board's Charter.

Dated:

10 JEFFREYD. GARDIN Recorder, Armed Services Board ofContract Appeals