ARMED SERVICES BOARD OF CONTRACTAPPEALS Appeal of

-- ) ) Ensign-BickfordAerospace & Defense )

Company ) ) Under ContractNo. DAAE30-03-C-1167 )
APPEARANCE FORTHE APPELLANT:

APPEARANCES FORTHE GOVERNMENT: ASBCANo. 58671

John C. Person, Esq.

Person & Craver, LLP Washington, DC Raymond M. Saunders, Esq.

Army ChiefTrial Attorney Robert B. Neill, Esq.

Trial Attorney
OPINION BYADMINISTRATIVEJUDGE THRASHER ONTHE GOVERNMENT'S MOTION TO DISMISS FORLACK OF JURISDICTION
The governmentmoves to dismiss this appeal for lack of jurisdiction arguing the appeal, whichpertains to a termination settlementproposal (TSP) submitted following the termination for convenience ofthe appellant's contract, is premature. Appellant contends the Boardretainsjurisdictionto decide appellant's appeal.
STATEMENT OF FACTS (SOF) FORPURPOSES OF THE MOTION
1. On 26 September 2003, appellant, Ensign-Bickford Aerospace & Defense Company (EBA&D) entered into Contract No. DAAE30-03-C-1167 (hereinafter "the contract") with the U.S. Army Tank-Automotive and Armaments Command; Armament Research, Development and Engineering Center ("T ACOM-ARDEC"), Picatinny

. Arsenal, New Jersey (hereinafterthe government) (R4, tab 1).
2. The contract is a cost-plus-fixed-fee type contract for the purchase ofa Rapid Wall Breaching Kit ("RWBK"), an Inert TrainerForRapid Wall Breaching Kit ("IRWBK"), and a Force OnForce TrainerForRapid Wall Breaching Kit ("FOFT-RWBK") (R4, tab 1 at 4, 94-132).

3. Section I ofthe awarded contract incorporated by reference clauses FAR 52.233-1, DISPUTES (JUL 2002); FAR 52.243-2, CHANGES-COST-REIMBURSEMENT (AUG 1987), ALTERNATE II (APR 1984); and FAR52.249-6, TERMINATION (COST-REIMBURSEMENT) (SEP 1996) (R4, tab 1 at 56-58).4. On 16 December 2009, the contracting officer (CO) notified EBA&D that the contract, in its entirety, was terminated under FARclause 52.249-6, TERMINATION (COST-REIMBURSEMENT), for the convenience ofthe government, effective that date (R4, tab 53).
5. Settlement responsibility for the terminated contract was assigned to a Defense Contract ManagementAgency ("DCMA") Termination Contracting Officer ("TCO") (R4, tab 54).

6. On 15 December 2010 EBA&D submitted its TSP in a letter addressed to the TCO along with an SF 1437, Settlement Proposal for Cost-ReimbursementType Contracts, seeking a total of$1,653,557 (R4, tab 59). In addition tothe SF 1437, EBA&D enclosed a second certificationpage along with the TSP purportingto certify the entire amount in the TSP pursuantto the Contract Disputes Act (CDA) and the Disputes clause in the contract as the amount due the contractor (R4, tab 59 at 23). EBA&D provided a copy ofthis correspondence by email to the Army CO in addition to the DCMATCO (R4, tab 59 at 1 ). The cover letter for the TSP states:
This document constitutes the termination settlement proposal ofEnsign-Bickford Aerospace and Defense Company (EBA&D) under Contract DAAE30-03-C-1167 (the Development Contract) with the United States Government (USG). The Contract required that EBA&D perform certain enhancements to its standard Commercial Off-The-Shelf(COTS) Rapid Wall Breaching Kit (RWBK). Portions ofthis terminated settlementproposal arguably could be characterized as being more properly the subject ofa certified claim under the Contract Disputes Act (CDA), as such costs constitute extra work underthe Development Contract. Accordingly, EBA&D attaches the CDA certification tothis submission and copies the Contracting Officer (CO) withthis document in the eventthatthe CO, in consultation withthe TCO, would ratherre-characterize this submission as a CDA certified claim. The signed certification statement is included herewith at Tab 1. (R4, tab 59 at 3) (Footnotes omitted)

7. The CO responded on 6 January 2011 stating in part, "Yourtermination settlement includes language regarding a claim under the Contract Disputes Act. Ifyou wish any portion ofyourproposal to be considered a claim, you must submitthatportion in accordance withthe Contract Disputes Act and FAR 52.233-1 Disputes." (R4, tab 60)

28. EBA&Dresponded on 25 January 2011 addressing the possibility ofseparate claims and separately submitted certification by stating:
EBA&D asserts that all costs presented in its termination settlement proposal are sufficiently connected with the USG's decision to terminate the contract for convenience as to warrant inclusion in the settlement proposal..

.. If, at the conclusion ofthe negotiatingprocess, the PCO orthe TCO determines that certain categories ofclaimed costs are unallowable with respect to the termination decision, EBA&D will then consider whether to package and present those costs in a separate certified claim. Obviously, due to the one-year time barto the recovery oftermination-related costs, it was prudent to include in the settlementproposal all pre-termination costs incurred by EBA&D. (R4, tab 62 at 1-2) EBA&D repeated the same language in a letterto the CO on 11 March 2011 statingthat its intentwas notto present any claims until resolution ofthe TSP (R4, tab 63 at 1-2).
9. Between July 2012 and May 2013 EBA&D and the TCO, Allan Grace, regularly communicated and exchanged documents regarding the TSP (mot., exs. G-1- G-5).
10. On 20 May 2013, the TCO and Mitch Boggan, EBA&D's Contract Administration Manager, discussed the TSP and the DCAA auditreport in a telephone conversation. Mr. Boggan expressed his view to the TCO that an impasse in negotiations would result ifthe TCO would not agree to a settlement approximating the contractor's request for a net payment in the amount of$1,653,557.00 and that EBA&D would file an appeal with the Board. (Mot., ex. G-7)
11. On 22 May 2013, the TCO issued a letter to EBA&D stating:

It is apparentthat negotiations will not close the gap between
ourtwopositions, accordingly, Ensign-Bickford Company shall have 15 days in whichto submit any additional information itwishes me to considerbefore I issue a final decision in this matter. Please considerthis letterthe 15-day letterrequiredby FAR49.109-7(b). Priorto COB June 6, 2013 please submit any additional written evidence you wish

3

### (R4, tab 71) me to considerthat substantiates the amount previously proposed before a final determination is issued.

12. The next day, on 23 May 2013, EBA&D filed its notice ofappeal with the Board, declaring an impasse and that it was appealing the 15 December2010 claim as included in the submittal ofits TSP (mot., ex. G-8).
13. There is no evidence in the record that EBA&D provided any additional information to the TCO in response to the TCO's 22 May 2013 "15-day letter."
14. On 18 July 2013, the TCO transmitted to EBA&D by email an offerto settle the government's termination liability for the contract in the amount of$312,269.00 (mot., ex. G-9). There is no evidence in the record EBA&Dresponded to the TCO's offer.
DECISION

Was the TSP a Cognizable CDA Claim When Submitted?
The government moves to dismiss this appeal for lack of jurisdiction on the ground that appellant's TSP was not a claim withinthe meaning ofthe CDAwhen it was submitted, and it had notripened into a claim priorto appellant's filing ofits notice of appeal (gov'tmot. at I). Appellant argues in response that its CD A-certified TSP was a "claim" within the meaning ofthe CDAbecause itwas a '"non-routine submission' by EBA&D [and] was (1) a written demand; (2) seeking as a matter ofright; (3) the payment ofmoney in a sum certain." CitingRexSystems, Inc. v. Cohen, 224 F.3d 1367, 1371-72 (Fed. Cir. 2000) (app. opp'n at 6).

In addition, appellant noted in support ofits argument, that its "CD A-certified [TSP] included a number ofactionable claim items or bases for recovering additional costs" (app. opp'n at 6). The government argues that the fact the TSP was certified at the time ofsubmittal does not convert the TSP into a CDA claim until the parties reach impasse (gov'treply at 5).
We disagree with appellant that its TSP metthe criteria ofa CDA claim when submitted. It

### is well establishedthat a TSP is not a CDA claim when submitted to the CO eventhough it otherwise meets the requirements ofthe CDA; a TSP is not submitted to the CO for a final decision but is instead submitted for purposes ofnegotiation. James M Ellett Construction Co. v. UnitedStates, 93 F.3d 1537, 1543-44 (Fed. Cir. 1996). Only afterthe negotiations reach an impasse, at a point where the contractor demands a final decision, does the TSP become a CDA claim. Ellett, 93 F.3d at 1544.

4We also disagree with appellant concerning the certification issue. The fact that the TSP includes a CDA certification at the time ofsubmittal does not change this rule. 

### See Voices R Us, Inc., ASBCA Nos. 51565, 52307, 01-1BCA,31,328 at 154,748 (citing 

### Ellett, 93 F.3d at 1543-44). Itis unclear from appellant's argument whether its reference to "separate actionable" claims is intended to propose the existence ofsuch claims might somehow convert the TSP as a whole to a CDA claim at the time ofsubmittal or that these claims survive as viable CDA claims before the Board (app. opp'n at 6). In either event, we rejectboth arguments under the facts ofthis appeal. Regarding the possibilitythat separate claims might convertthe TSP into a CDA claim attime ofsubmittal, appellant relies upon language in 

### ePlus Technology, Inc.
v. Federal Communications Commission, CBCANo. 2573, 12-2 BCA, 35,114 at 172,435: "Further, we find no applicable precedentprohibiting a contractor from presenting its termination for convenience settlementproposal and at the same time fashioning the proposal as a CDA claim" in support ofits argument (app. opp'n at 6). The government counters that appellant'sreliance upon 

### ePlus Technology is misplaced becausethe facts in 

### ePlus Technology are distinguishable from the facts ofthis appeal (gov'treply at 5-6). We agree withthe government. The 

### ePlus Technology decision involved a contract for commercial items and did not include a FARPart 49 termination for convenience clause. The Civilian Board in 

### ePlus Technology noted there was no agreement between the parties to follow the settlementprocess mandatedby FARPart 49 requiring the contractorto submit its TSP and negotiate it until impasse was reached. 

### ePlus Technology, 12-2 BCA,35,114 at 172,436. In contrast, here theparties have agreed to the FARPart 49 process and, as already discussed, appellant's TSP would not ripen into a CDA claim until theparties reach impasse (SOF, 3).

In addition, the record does not support a finding there are separate claims within the TSP that would survive as separate claims in this case. Appellant identifiedthis possibility in its TSP submittal and the CO immediately informed appellant that ifit intended any portion ofits proposal to be considered a claim it must do so in accordance with the CDA (SOF , 7). Appellantresponded that itwas not its intentto present any claims until resolution ofthe TSP (SOF, 8).

We conclude appellant's TSP was not a cognizable CDA claim when submitted.


### Was there an Impasse GivingRise to a Cognizable CDA Claim?
The determination ofwhetherthe parties have reached an impasse is an inherently factual determination. It is the point where an objective observer would conclude that resolution through continued negotiation is unwarranted orhas been abandoned by the parties and the contractor desires a final decision. 

### See CentralEnvironmental, Inc., ASBCANo. 51086, 98-2 BCA,29,912 at 148,080;

### RexSystems, 224 F.3d at 1372-73.

5

### However, impasse is not synonymous with dispute. An 

### impasse can exist without either party taking a firm position in opposition to the other; it can occur by the passage oftime without resolution when oneparty evidences a desire to begin the disputes process, refusal to further negotiate, a request to the CO to settle, a unilateral determinationby the CO, etc. See Ellett, 

### 93 F.3d at 1544; RexSystems, 

### 224 F.3d at 1372; CentralEnvironmental, 

### 98-2 BCA**~** 

### 29,912 at 148,080. Likewise, there need not be an explicitrequest for a final decision in this context ifsuch request can be implied from the context ofthe submission. RexSystems, 

### 224 F.3d at 1372 (citingEllett, 

### 93 F.3d at 1543).
The government argues the TSP did not ripen into a claim, i.e., the parties had not reached an impasse, priorto appellant's notice ofappeal (gov'tmot. at 12). Appellant argues that the TCO's email on 22 May 2013 is objective evidence that further negotiations would be fruitless and an impasse had been reached (app. opp'n at 7-10). That email stated:

(SOF**~** 

### 11) It is apparent that negotiations will not close the gap between
our two positions, accordingly, Ensign-Bickford Company shall have 15 days in which to submit any additional information itwishes me to considerbefore I issue a final decision in this matter. Please considerthis letter the 15-day letterrequiredby FAR49.109-7(b). Priorto COB June 6, 2013 please submit any additional written evidence you wish
me to considerthat'substantiates the amountpreviously proposed before a final determination is issued.

We conclude the parties did reach an impasse on 22 May 2013. By that date the parties had been in negotiations for over two and halfyears (SOF**~~** 

### 6, 9). On 20 May 2013 the parties discussed the settlementproposal and appellant told the TCO the settlement amount would have to be close to the proposed amount or there would be an impasse in the negotiations and appellant wouldpursue the disputes process (SOF**~** 

### 10). We view the email on 22 May 2013 as confirmation from the government that it consideredthe negotiations at an impasse and intended to issue an appealable settlement by determination final decision (SOF**~** 

### 11). Therefore, we conclude the parties were at an impasse on 22 May 2013 and appellant's proposal had ripened into a claim submitted for decision.

Was theAppealPremature?


### The government also contends, in the alternative, that even iftheTCO's letter of 22 May 2013 evidenced the parties had reached an impasse converting the TSP into a claim, appellant's 23 May 2013 notice ofappeal was still prematurely filed. The

6government'sposition is that ifthe TSP was converted into a claim on 22 May 2013, it
was submitted on that date for a decision by the CO. As a result, both the CDA and the FARprovide that the CO is accorded a reasonable timeto either issue a final decision or inform appellantwhen such a decision will be issued in cases such as this. (Gov'treply at 7-8) Appellant argues the record plainly demonstrates thatthe parties had reached an impasse in their negotiations over EBA&D'sTSP before EBA&D filed its notice of appeal, and 

### this impasse constituted a "deemed denial"ofthe claimthat EBA&D had submitted on 15 December 2010 citing 

### CentralEnvironmental (app. opp'n at 10).

We agree with the government that appellant's reliance on 

### Central Environmental is misplaced and the facts here do not meet the criteria ofa deemed denial. The CDA, as amended, states the law governing the deemed denial ofa contractor's claim as follows: (5) FAILURE TO ISSUE DECISION WITHIN REQUIRED TIME PERIOD. --Failure by a contracting officerto issue a decision on a claim withinthe required time period is deemed to be a decision by the contracting officerdenying the claim and authorizes an appeal or action on the claim as otherwise provided in this chapter. However, the tribunal concerned may, at its option, stay the proceedings ofthe appeal or action to obtain a decision bythe contracting officer.

41 U.S.C. 

### § 7103(f)(5).
The CDA and the FARprovidethatthe CO shall issue decisions on submitted claims within a reasonable time, taking into account the size and complexity ofthe claim, the adequacy ofthe contractor's supporting data, and any otherrelevant factors. 41 U.S.C. § 7103(1)(3); FAR33.21 l(d). In addition, both the CDA andthe FARmandate in cases such as this, involving a certified claim over $100,000, that the CO is allowed up to 60 days to issue a final decision or inform the contractor ofa reasonable date upon which a decision will be issued. 

### See 41 U.S.C. § 7103(f)(2); FAR 33.21 l(c)(2).

We conclude theparties reached an impasse and the proposal ripened into a claim submitted for decision on 22 May 2013. Atthatpoint, the TCO had 60 days to issue a decision orinform the contractor ofa reasonable date upon which a decision would be issued. Here the TCO, as directed by FAR49.109-7(b), provided appellant with notice
on 22 May 2013 thathe would issue a final decision (settlement determination) and provided appellant with 15 days to submit any written evidence for his consideration before issuing a final decision (SOF 

### ii 11). Instead ofwaiting for a final decision,

7appellant filed its "deemed denial" appeal the next day, 23 May 2013 (SOF**~** 12). We conclude the TCO's statement on 22 May 2013 was not a deemed denial and appellant's appeal was premature. Although appellant's appeal waspremature on 23 May 2013, a reasonableperiod oftime has nowpassed and the CO has yet to issue a final decision. As
we have stated under similar circumstances: "[W]hen at the time we consider a motion to dismiss, an unreasonable period oftime has elapsed, no useful purpose would be served by dismissing an appeal and requiring appellant to refile." 

### Fru-Con Construction Corp., ASBCA No. 53544,**02-1BCA~31,729** at 156,757. To dismiss this appeal now would be "inefficient and an elevation ofform over substance." 

### CessnaAircraft Co., ASBCA No. 43196, 92-1 BCA**~** 24,425 at 121,909. Therefore, we retainjurisdiction.
CONCLUSION
The government's motion to dismiss for lack of jurisdiction is denied.
Dated: 5 May 2014

I concur

# #~~ MARKiiSTEMPLER Administrative Judge Acting Chairman Armed Services Board ofContractAppeals

8 inistratlve Judge Armed Services Board ofContractAppeals

I concur

RICHARD SHACKLEFORD Administrative Judge Vice Chairman Armed Services Board ofContractAppealsI certifythat the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContractAppeals in ASBCANo. 58671, Appeal of Ensign-BickfordAerospace & Defense Company, rendered in conformance with the Board's Charter.
Dated:

9 JEFFREYD. GARDIN Recorder, Armed Services Board ofContract Appeals