ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of -- ) 

) 

Snowdon, Inc. ) 

) 

Under Contract No. HDTRAl-10-C-0065 ) 

APPEARANCE FOR THE APPELLANT: 

APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 59705 

Mr. William J. Welsh 

Owner 

E. Michael Chiaparas, Esq. 

DCMA Chief Trial Attorney 

Gregory T. Allen, Esq. 

Trial Attorney 

Defense Contract Management Agency 

Chantilly, VA 

OPINION BY ADMINISTRATIVE JUDGE MCILMAIL 

INTRODUCTION 

Appellant, Snowdon, Inc. (Snowdon), appeals from a contracting officer's final 

decision demanding payment to the government of $47,500, the amount that Snowdon 

received from a third party to which it sold government property used to perform a 

contract that Snowdon had with the Defense Threat Reduction Agency (government). 

We deny the appeal, and award to the government $47,500, plus interest. Appellant 

has elected to proceed pursuant to Board Rule 12.3. 

FINDINGS OF FACT 

In July 2010, Snowdon entered into a research and development contract with 

the government (R4, tab 1). The contract incorporated by reference Federal 

Acquisition Regulation (FAR) clause 52.245-1, GOVERNMENT PROPERTY (JUN 2007) 

and FAR clause 52.232-17, INTEREST (OCT 2008) (R4, tab 1 at G-17). The contract's 

performance period ended in August 2011 (R4, tab 4 ). In the course of and for the 

purpose of contract performance, Snowdon purchased two pieces of equipment for 

which the government reimbursed Snowdon, vesting title in the equipment to the 

government (see compl. at 2; R4, tab 7 at 76, 81, tab 16 at 1-2). 

In 2012, Snowdon and the government engaged in a series of communications 

regarding the disposition of the government-owned equipment (R4, tab 7 at G-77-81). 

On 17 May 2012, the government informed Snowdon by email that "[i]f none of the 
equipment is deemed good for use here or transferred to another project then it will be 

left to Snowdon," ending the email with the postscript "More to follow .... " (id. at 

G-78-79). Later the same day, in response to Snowdon asking when the government 

might make its decision, the government's representative stated "I think 2 weeks at the 

most" (id. at G-78). On 20 June 2012, Snowdon followed up, requesting that the 

government provide equipment disposition instructions because, Snowdon advised, it 

was vacating its facility at the end of the month (id. at G-73). 

On 30 July 2012, Snowdon sold the equipment to TAXIS Pharmaceuticals 

(TAXIS) for $47,500 (compl. at 4; R4, tab 7 at G-85). There is no evidence that upon 

sale of the equipment, Snowdon offered to remit the proceeds to the government. In 

June 2014, the government inquired of Snowdon regarding the equipment (id. at 

G-81). Snowdon informed the government that "no instructions [regarding the 

equipment] were ever provided to Snowden" (id. at G-77), and that "[a]bsent guidance 

from the [contracting officer], the company was forced to take responsibility for the 

equipment and sold it" (id. at G-73). On 27 August 2014, the contracting officer 

issued a final decision demanding payment to the government of $4 7 ,500, finding that 

Snowdon had sold the equipment, for that amount, without government approval (R4, 

tab 11). 

DECISION 

Snowdon owes the government $47,500, plus interest. FAR clause 52.245-1, 

GOVERNMENT PROPERTY (JUN 2007) provides, at paragraph 0)(9), that "[a]s directed 

by the Contracting Officer, the Contractor shall credit the net proceeds from the 

disposal of Contractor inventory to the contract, or to the Treasury of the United States 

as miscellaneous receipts." The same clause defines, at paragraph (a), "Contractor 

inventory" as including "[a ]ny property acquired by and in the possession of a 

Contractor ... under a contract for which title is vested in the Government and which 

exceeds the amounts needed to complete full performance under the entire contract." 

There is no dispute, and we so find, that the equipment that Snowdon sold to 

TAXIS was "Contractor inventory," and that the net proceeds that Snowdon realized 

from the disposal of that equipment is $47,500. Consequently, pursuant to FAR clause 

52.245-10)(9), Snowdon owes the government $47,500. Snowdon contends that the 

government abandoned the equipment, but we disagree. FAR clause 52.245-l(k)(2) 

provides that "[t]he Government, upon notice to the Contractor, may abandon any 

nonsensitive Government property in place," but Snowdon received no such notice. 

At most, the communications between Snowdon and the government establish that the 

government was considering its options for disposing of the equipment, including 

abandonment, but did not communicate any disposal decision to Snowdon. Indeed, 

without any instructions or guidance from the government, Snowdon took matters into 

its own hands and sold the equipment to a third party. 

2 
In view of our decision, we find it unnecessary to address the parties' other 

arguments. 

CONCLUSION 

For the reasons stated, the appeal is denied, and the government is awarded 

$47,500, plus interest pursuant to FAR clause 52.232-17, INTEREST (OCT 2008), from 

27 August 2014, the date of the contracting officer's final decision demanding 

payment, until the date of payment. 

Dated: 20 May 2015 

I concur 

RICHARD SHACKLEFORD 

Administrative Judge 

Vice Chairman 

Armed Services Board 

of Contract Appeals 

~~ ·~ffiL Administrative Judge 

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. 59705, Appeal of 

Snowdon, Inc., rendered in conformance with the Board's Charter. 

Dated: 

3 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals