ARMED SERVICES BOARD OF CONTRACT APPEALS

OPINION BY ADMINISTRATIVE JUDGE EYESTER 

PURSUANT TO BOARD RULE 12.2 

Red Bobtail Transportation (RBT) appeals a contracting officer’s final 

decision (COFD) denying its breach of contract, good faith and fair dealing, and 

prompt payment claim for $798.22.1

 According to RBT, the United States 

Transportation Command (USTRANSCOM or government) improperly deducted 

amounts from invoices for services RBT performed. USTRANSCOM argues the 

claim lacks a certification and is untimely filed, and also disputes all of RBT’s 

contentions. 

 RBT elected to pursue this appeal pursuant to the Board’s Rule 12.2, 

Small Claims (Expedited) procedure. Accordingly, this decision shall have no 

precedential value, and in the absence of fraud shall be final and conclusive and 

may not be appealed or set aside. 41 U.S.C. § 7106(b)(4)-(5). RBT also pursued 

this appeal pursuant to Board Rule 11, in which the decision rests upon written 

1

 Originally, the claim was for a total of $8,522.35 plus interest (compl. ¶ 1). 

In its brief, RBT states that after conducting discovery, it realized of the 

19 invoices it originally challenged, only two are timely (AGA0103 and 

AGB0093). RBT therefore withdrew challenges to the remaining 

17 invoices. (App. br. at 2 n.1) The total RBT argues is due is $292.88 for 

AGA0103 and $505.34 for AGB0093, plus interest (id. at 4). After 

becoming aware of the reduced claim amount, each party still submitted the 

Rule 12.2 briefs. 

Appeal of - )

)

Red Bobtail Transportation ) ASBCA No. 63771

)

Under Contract No. HTC711-14-D-R028 )

APPEARANCE FOR THE APPELLANT: Michael D. Maloney, Esq.

 Williams Mullen PC

 Tysons Corner, VA

APPEARANCES FOR THE GOVERNMENT: Caryl A. Potter, III, Esq.

 Air Force Deputy Chief Trial Attorney 

Geoffrey R. Townsend, Esq. 

Patricia W. Walter, Esq. 

 Trial Attorneys
2 

evidence without courtroom testimony. Based on the following, we grant RBT’s 

appeal in part and deny it in part. 

FINDINGS OF FACT (FOF)

1. USTRANSCOM awarded fixed-priced, multiple award indefinite quantity 

Contract No. HTC711-14-D-R028 to RBT, effective January 3, 2014, for National 

Afghan trucking services for three suites of services: bulk fuels (suite 1), dry cargo 

(suite II), and heavy cargo (suite III) (R4, tab 1 at 1, 4, 12; tab 2 at 19, 21, 24). The 

period of performance included a one-year base period, 2 one-year option periods, 

and a 6-month option to extend services period (R4, tab 1 at 4-6). The contract 

incorporated by reference RBT’s proposal and included as attachments a Schedule 

B, Unit Price Schedule (3 JAN 14) and a performance work statement (PWS) 

(15 MAR 13), none of which were included in the record (id. at 9, 55). 

2. The contract incorporated by reference Federal Acquisition Regulation 

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

ITEMS (FEB 2012) (R4, tab 1 at 9). In addition, the contract included FAR 

52.216-18, ORDERING (OCT 1995), which states that all delivery and task orders 

issued are subject to the terms and conditions of the contract (id. at 11). 

3. As relevant here, USTRANSCOM exercised a 3-month option to extend the 

contract and issue a delivery order to RBT through March 16, 2017 (app. supp. R4, 

tabs 1, 2). The parties agree that the PWS effective February 1, 2016 is applicable here 

because the disputed invoices are for deliveries in January and February 2017 (app. br. 

at 6; gov’t br. at 1-2).2

 There is nothing in the record showing the modification which 

incorporated this revised PWS and whether it was signed by RBT. 

4. The relevant PWS detailed the “common mission requirements and 

standards that apply to each suite of transportation service.” To start, the 

government would issue a transportation movement request (TMR) for a mission for 

a single asset which specified the terms and shipment data. (App. supp. R4, tab 3 

at 33) The terms included the required spot date (RSD), required load date (RLD), 

required delivery date (RDD), and adjusted RDD (ARDD). The RSD is the date the 

asset is required at the origin location and is two days prior to the RLD. The RLD is 

the date the asset is required to be ready to upload the cargo. The RDD is the 

required date of delivery by the contractor and is met when the asset is at the entry 

control point waiting area of the destination location. Finally, the ARDD is the shift 

in delivery date based on actual load date; the adjusted RDD cannot be sooner than 

2

 The parties filed only one brief each and the Board’s Order dated April 10, 2024 

explained that the briefs should be akin to reply and sur-reply briefs or used 

to expand upon specific disputed facts or legal points. 
3

the original RDD. All missions ordered were to be paid based on the number of 

mission units (MUs), which were in 25 kilometer increments, between the origin 

and destination on the TMR. (App. supp. R4, tab 3 at 34) Almost all missions 

required security support and, in some cases, RBT was required to provide the 

security using the Afghan Public Protection Force (APPF) (id. at 43-44). RBT was 

responsible for meeting all RSDs, RLDs and RDDs (id. at 36). 

5. The initial contract did not contain a section on deductions for missions 

completed a day late, which is the issue in this appeal (see R4, tab 5 at 3-10

(COFD)). Rather, it set forth performance objectives and stated the performance 

thresholds for the RLD and RDD were 90 percent on time (PWS at 30, available 

at https://sam.gov/opp/837518d0a84a30a765535dd0f3e20638/view). The 

government would use these performance objectives to assess contractor 

performance and if a contractor failed to meet the minimum performance objectives, 

it could result in less future task orders or other remedies (id. at 29-30). 

6. The February 2017 revised PWS was different. This PWS stated that a 

failed/partial pay mission included a completed mission where the contractor 

failed to meet the RSD, RLD or RDD (app. supp. R4, tab 3 at 40). The PWS set 

forth a point system to partially compensate contractors for failed/partial pay 

missions as follows:

For each mission, missing RSD, RLD, or RDD (RDD 

when not exclusively caused by APPF) constitutes as 

one point each (each point earned is a 25% full pay 

reduction) resulting in a possible maximum of 75% 

full pay deduction for missing all three (RSD, RLD, 

and RDD). However, in the event the missed RDD 

was exclusively caused by APPF, in lieu of the 25% 

full pay reduction for missing the RDD provided 

above, the reduction for missing the RDD will be 

applied in the following manner:

Cargo delivered one day beyond the RDD - the 

contractor’s rate will be reduced by AFN 3,190.00 per 

invoiced escorted mission unit. This reduction will be 

applied before any percentage reductions. 

Cargo delivered two or more days beyond the RDD –

the contractor’s rate will be reduced by AFN 6,380.00 

per escorted mission unit. This reduction will be 

applied before any percentage reductions. 
4

In the event the contractor missed the RDD for a 

combination of reasons, of which one includes APPF, 

the AFN 3,190.00 or AFN 6,380.00 stated above no 

longer applies and the contractor shall receive a one 

point reduction (25%) for missing the RDD. It is the 

contractor’s responsibility to prove to the 

Government’s satisfaction that delays were caused 

solely by APPF and that delay was directly related to 

missing the RDD. If the contractor is unable to clearly 

demonstrate with adequate documentation that APPF 

was solely at fault for missing the RDD, a one point 

reduction (25% of the full pay) applies for missing the 

RDD. 

For example: Missing RSD, but meeting RLD and 

RDD equals 1 point. Missing RSD and RDD (not 

exclusively caused by APPF), but meeting RLD equals 

2 points or a 50% full pay reduction). In the event the 

contractor misses RDD by one day exclusively caused 

by APPF and earns one point as described above, the 

AFN 3,190.00 shall first be subtracted from the total 

mission price prior to applying the percentage 

reduction.

For example: Contractor A had a mission from ING to 

KIL for six (6) MUs valued at AFN 100,000.00. The 

mission was completed and the customer received their 

equipment in proper condition. Contractor A failed to 

meet RSD, but met RLD and RDD. For missing RSD, 

this is a Failed/Partial Pay mission and the Contractor 

has one (1) point. The Contractor will be paid AFN 

75,000.00 (100,000 x 75%).

(Id. at 41) The PWS also included a section titled “Performance Requirements 

Summary,” which set forth performance objectives as designated in the quality 

assurance surveillance plan. According to the objectives, which the government 

would use to assess RBT’s performance, RBT was to meet the RLD and RDD 

90/95/98 percent based on random sampling or periodic inspection. (Id. at 46) 

The PWS explained that the first percentage was the minimum acceptable 

performance standard and the subsequent numbers represented objectives for 

which RBT would be considered for a performance award.
5

7. There are two transportation movement requests at issue here and in 

both cases, there is no dispute that RBT delivered the required fuel one day late 

(app. br. at 4; gov’t br. at 3). For the 2000 gallons of fuel delivery of AGA0103, 

which had security, we find the following:

Arrival at 

Origin

RSD RLD RDD at 

Gamberi

Arrived at 

Destination

January 8, 

2017

January 10, 

2017

January 12, 

2017

January 14, 

2017

January 15, 

2017

(App. supp. R4, tab 6a, Fuel Tab, cells A7, C7, F7, G7, H7, I7, J7, K7, L7, M7,

N7, O7) The contracting officer’s representative (COR) noted that RBT missed 

the delivery date by one day and deducted AFN 25,520 (id., cell AA7). In 

response, RBT stated that it requested a “call sign” on January 10, 2017 which was 

not issued until January 11, 2017 for January 15, 2017, a day after the RDD. RBT 

also argued the adjustment was incorrect. (Id., cell AB7) The COR responded: 

“Adjustment Made” (id., cell AC7). On February 17, 2017, RBT again asked the 

COR to remove the deduction and the COR responded: “Adjustment Made” (id., 

cells AD7, AE7). The contracting officer, however, made a note that RBT was a 

day late and it was not clear why they requested removal of the deduction, but 

agreed that the deduction was incorrect and should be “AFN 19,140” (id., cell 

AF7). USTRANSCOM deducted $292.88 (id., DFAS Deductions Tab, cell G41). 

8. For the 1,000 gallon fuel delivery of AGB0093, with no security, we 

find the following:

Arrival at 

Origin

RSD RLD RDD at Fenty Arrived at 

Destination

February 9, 

2017

February 10, 

2017

February 12, 

2017

February 14, 

2017

February 15, 

2017

(App. supp. R4, tab 6b, Fuel Tab, cells A15, F15, G15, H15, J15, K15, L15, M15, 

N15) Here, the COR stated that RBT missed the RDD by one day and RBT 

agreed (id., cells AB15, AC15). USTRANSCOM deducted $505.34 (id., DFAS 

Deductions Tab, cell G42). 

9. On January 26, 2023, RBT submitted a claim for breach of contract and 

good faith and fair dealing in the amount of $8,522.35 (R4, tab 4 at 1, 5). The 

claim states that a certification was attached, but there is nothing in the record 

showing this (id. at 8). The claim argued, as RBT does here, that these deductions 

are penalty provisions and therefore unenforceable and in conflict with FAR 

52.212-4 (id. at 5-7).
6 

10.On September 28, 2023, the contracting officer denied the claim 

contending, as the government does here, that the claim was late and there was no 

breach because the PWS allowed for these deductions and this type of negative 

performance incentive is permissible (R4, tab 5). 

 

DECISION 

 In count I of its complaint, RBT contends USTRANSCOM breached the 

contract by deducting money from invoices pursuant to an unenforceable penalty 

provision that also conflicted with the limitation of liability paragraph set forth in 

FAR 52.212-4 (compl. at 7). In count II, RBT contends USTRANSCOM 

breached the duty of good faith and fair dealing when it deducted money from the 

invoices for the missed RDD despite RBT meeting the ARDD and the money 

deducted far exceeded adequate consideration (id. at 8-9). 

 In turn, for the first time and in its Rule 12.2 brief, the government argues 

the Board lacks jurisdiction because the claim was not certified (gov’t br. at 6). 

The government argues that on the same day, RBT submitted two claims to the 

contracting officer, this one for fuel deductions in the amount of $8,522.36 and not 

certified, and another for dry goods deductions in the amount of $143,205.90 

which was certified. The government argues the two claims are “essentially 

identical” and based on the same set of facts and same contract, and therefore 

there is no justification in treating them as separate. (Id. at 7) 

If the claims involve an examination of different operative facts, then they 

should be treated as two separate claims. Placeway Constr. Corp. v. United States, 

920 F.2d 903, 907 (Fed. Cir. 1990) (for purposes of determining whether 

certification requirement is applicable, if claims arise from a common or related set 

of operative facts then a single claim exists). Here, the two claims are separate as 

they were based on different sets of invoices for different missions in different 

suites, and therefore involve an examination of different operative facts. Further, 

and most important, the claim in this appeal now involves only deductions for 

missing the RDD, while the other claim also involves deductions for issues relating 

to failure of global positioning devices “pinging” at least 80 percent of the time 

while on a mission (see R4, tab 5 at 2 (COFD)); K-Conn Bldg. Systems, Inc. v. 

United States, 778 F.3d 1000, 1005 (Fed. Cir. 2015) (stating that “for present 

purposes, we should treat requests as involving separate claims if they either

request different remedies (whether monetary or non-monetary) or assert grounds 

that are materially different from each other factually or legally.”). Thus, we have 

two separate claims. Therefore, pursuant to the Contract Disputes Act (CDA), the 

claim here, as it is less than $100,000, did not need to be certified. 41 U.S.C. 

§ 7103(b)(1). 
7 

 Next, the government argues (again for the first time in its Rule 12.2 brief) 

that RBT’s challenges relating to the two remaining invoices are time barred. 

According to the government, the crux of RBT’s claim is that the deductions set 

forth in the PWS are inconsistent with FAR 52.212-4 and are an unenforceable 

penalty (gov’t br. at 9). Since RBT entered into the contract on January 9, 2014, 

the government contends the claim accrued at that time, or on either November 11, 

2014 or February 1, 2016 when USTRANSCOM amended the PWS to include the 

deductions, or by March 24, 2015 when USTRANSCOM applied the deductions 

on an invoice for missing the RDD (id. at 9-10). In response, RBT contends that 

the proper test for claim accrual does not focus on the dates of the contract 

provisions but on the dates of receipt of the final invoices showing the improper 

deductions (app. br. at 2 n.1). 

The CDA states that a contract claim against the government “shall be 

submitted within 6 years after the accrual of the claim.” 41 U.S.C. § 7103(a)(4)(A). 

The FAR further provides that “[c]ontractor claims shall be submitted, in writing, to 

the contracting officer for a decision within 6 years after accrual of a claim, unless 

the contracting parties agreed to a shorter time period.” FAR 33.206(a). “Whether 

and when a claim has accrued is determined according to [the FAR], the language of 

the contract, and the facts of the particular case.” Electric Boat Corp. v. Sec’y of the 

Navy, 958 F.3d 1372, 1375 (Fed. Cir. 2020); see also Kellogg Brown & Root Servs., 

Inc. v. Murphy, 823 F.3d 622, 626 (Fed. Cir. 2016). The FAR defines “accrual of a 

claim” as “the date when all events, that fix the alleged liability of either the 

Government or the contractor and permit assertion of the claim, were known or 

should have been known.” FAR 33.201. In order for liability to be fixed, some 

injury must have occurred to the party making the claim; however, monetary 

damages need not have been incurred. Id.

Here, USTRANSCOM is arguing that immediately upon release of the 

PWS incorporating the basis for deductions (the first time being revision 5 dated 

November 11, 2014), RBT should have filed a claim, despite the fact the 

government had yet to make any deductions on RBT’s invoices because the 

deliveries had not even occurred. It is not clear, at that time, what the injury 

would have been to RBT. Likewise, it is not clear what the injury would have 

been at the time RBT entered into the contract since the deductions at issue here 

were not even in the initial contract. Further, while there may have been a 

deduction on an invoice in March of 2015, those deductions did not occur on the 

invoices at issue here. And finally, we note that USTRANSCOM relies on 

Electric Boat Corp. to support its arguments. In that appeal, the court held 

Electric Boat did not have to incur actual costs for each submarine before filing its 

equitable adjustment claim because the contract specifically stated the contract 

price would be adjusted if costs increased due to a change in law. Electric Boat 

Corp., 958 F.3d at 1376-77. The adjustment in price in that appeal was prompted 
8 

by the enactment of a new law, while here the calculation of the deductions was 

prompted by submission of the invoices, without which there was no basis for 

calculating the deductions. See Strategic Tech. Inst., Inc. v. Sec’y of Def., 91 F.4th 

1140, 1146 (Fed. Cir. 2024). 

According to RBT, the claim accrued as of the date of the final invoices 

here--for AGA0103 on March 3, 2017 and for AGB0093 on March 14, 2017 (app. 

br. at 2 n.1 (citing app. supp. R4, tabs 6a, Invoice Tab and 6b, Invoice Tab)). 

While those were the dates RBT signed the invoice, the date the contracting 

officer signed them was February 28, 2017 for AGA0103 and March 13, 2017 for 

AGB0093 (app. supp. R4, tabs 6a, Invoice Tab, 6b, Invoice Tab). We conclude 

those were the dates the claims accrued based on the limited briefing here and 

because the invoices included cells for RB and the COR to make comments and 

address issues and the contracting officer to make the final decision. See Afghan 

Premier Logistics, ASBCA No. 62938 et al., 22-1 BCA ¶ 38,074 at 184,905 

(claims accrued the date appellant received the returned invoices indicating the 

challenged reductions). Since RBT filed its claims on these invoices on 

January 26, 2023, they are not time barred. 

 And now we finally reach the merits. RBT argues that the deductions are a 

penalty and unenforceable. Specifically, RBT contends that while the FAR allows 

liquidated damages to compensate the government, based on a daily rate, the PWS 

section here does not compensate the government but rather punishes the 

contractor (app. br. at 5-6). As RBT explains, with both deliveries RBT was one 

day late. For the 1,000 gallon fuel delivery in AGB0903, since there was security, 

the total deduction amounted to $292.88 and for the 2,000 fuel delivery in 

AGB0903, with no security, the deduction was $505.34. (App. br. at 6-7) RBT 

argues that these are random calculations which do not compensate the 

government because, for example, the deduction for the delivery of 1,000 gallons 

of fuel was less than the deduction for 2,000 gallons of fuel (id. at 7). 

 RBT also argues that FAR 52.212-4, incorporated by reference into the 

contract, states that “[p]ayment shall be made for items accepted by the 

Government that have been delivered to the delivery destinations set forth in this 

contract” (app. br. at 8 (citing FAR 52.212-4(i)(1))). According to RBT, the same 

commercial items clause requires this payment provision take precedence over 

other documents and attachments, and the government may only seek an 

“equitable price reduction” for nonconforming services (id. (quoting FAR 52.212-

4(a))). 

 The government argues these PWS sections are negative performance 

incentives permitted by FAR 37.102 concerning performance-based acquisitions 

(gov’t br. at 1). The government further states: 
9 

The purpose of this deduction (and the others defined 

in the PWS) was to provide an incentive for the 

contractor to perform at a level appropriate to the 

needs of the Government. The deduction was not 

liquidated damages and was not intended to 

compensate the Government for losses. The PWS set 

forth objective performance standards (e.g., meeting 

the RDD) and negative incentives (e.g. a 25% 

deduction) for failing to meet those standards. This is 

exactly what the FAR requires of agencies entering 

into service contracts. 

(Id. at 2) According to the government, FAR 16.402-2(b) allows it to use positive 

and negative performance incentives in services contracts (id. at 1). The 

government also explains that the deduction for AGB0903 was less because 

although RBT missed the RDD by one day, it was due to the APFF (security) and 

the reduction was only AFN 3,190 per escorted mission. The deduction for 

AGB0903 was the “standard 25%” because the entire trip was unescorted. (Gov’t 

br. at 4) 

Finally, the government contends FAR 52.212-4 does not limit remedies to 

only equitable price reductions and adequate consideration for defective 

performance. Rather, the clause allows the government to exercise any right not 

prohibited by law. (Gov’t br. at 3) 

Because RBT challenges the deductions as liquidated damages, it has the 

burden of proving they are unenforceable. In Metro Machine DBA General 

Dynamics NASSCO-Norfolk, ASBCA No. 62221, 22-1 BCA ¶ 38,096 at 185,014, 

the Board explained that “liquidated damages clauses are perfectly allowable so 

long as they do not appear to have been designed as a punishment for late 

performance but, instead, reflect an attempt to place a value on late performance in 

circumstances where ascertaining that value would be otherwise difficult, if not 

impossible.” Accordingly, RBT’s “burden is an exacting one, because when 

damages are uncertain or hard to measure, it naturally follows that it is difficult to 

conclude that a particular liquidated damages amount or rate is an unreasonable 

projection of what those damages might be.” DJ Mfg. Corp. v. United States, 

86 F.3d 1130, 1134 (citations omitted). 

 But the government states these are not liquidated damages when it explains 

the deductions are not intended to compensate the government for losses but rather 

to serve as a “negative incentive.” And while the government explains, or 

provides some rationale, as to why the deduction for AGB0903 was less (i.e., due 

to security) than the deduction for the other invoice, this does not overcome the 
10

government’s own admission that these deductions were meant as a “negative 

incentive.”

And so we look to the government’s argument that the negative incentive 

used here was permissible. As noted, the government cites to two separate parts of 

the FAR as support--FAR subpart 37.6, Performance-Based Acquisition, and 

FAR subpart 16.4, Incentive Contracts (gov’t br. at 1). FAR subpart 37.6 

concerning performance based acquisitions discusses incentives (and does not 

specifically mention, although does not specifically prohibit, negative incentives).

See FAR subpart 37.6. According to the government, the “purpose of the 

deduction . . . was to provide an incentive for the contractor to perform at a level 

appropriate to the needs of the Government” (gov’t br. at 2). So, the negative 

incentive here was an incentive.

Performance incentives, when used, must correspond to the performance 

standards (performance level required to meet contract requirements in terms of 

quality, timeliness, quantity, etc.) in the contract. FAR 37.601(b)(2), (3); 

FAR 37.603(a). The contract included a performance requirements summary with 

performance objectives as designated in the quality assurance surveillance plan 

showing RBT was to meet the RLD and RDD 90/95/98 percent and that 90

percent was the minimum acceptable performance standard and 95 and 98 percent

represented objectives for which RBT would be considered for a performance 

award (FOF ¶ 6). If the deduction was meant to have RBT perform at a level 

appropriate to the government’s needs, then the deduction should have correlated 

somehow to the performance requirements set forth in the contract (the 90/95/98

percent performance standards). Since the deduction does not, or at least the 

government does not explain how it does, we cannot buy into the government’s 

argument the deduction was part of its performance based acquisition plan.

Further, FAR subpart 16.4, Incentive Contracts, does state that positive and 

negative performance incentives shall be considered for certain service contracts. 

FAR 16.402-2(b). However, FAR subpart 16.4 applies when “a firm-fixed-price 

contract is not appropriate.” FAR 16.401(a). The government cites to no clauses 

in the contract or any modification identifying it as a fixed-priced incentive 

contract (or any type of incentive contract) nor could we find any based on the 

record presented. Therefore, this subpart does not apply.

Because the government here has failed to provide any support for its 

negative incentive, we grant RBT’s appeal and find it is nothing more than an 
11 

unenforceable penalty.3 For these reasons, we need not address RBT’s other 

arguments relating to that issue. 

 Finally, RBT sought interest pursuant to the Prompt Payment Act (PPA) 

contending USTRANSCOM should have made full payment in March 2017 and 

failed to do so (app. br. at 10). As the government notes, the PPA does not apply 

to a matter in dispute (gov’t br. at 5). Specifically, the PPA states it “does not 

require an interest penalty on a payment that is not made because of a dispute 

between the head of an agency and a business concern over the amount of 

payment or compliance with the contract” as a claim related to a dispute and 

interest payable is subject to the CDA. 31 U.S.C. § 3907(c). Therefore, we deny 

RBT’s claim for PPA. 

CONCLUSION 

 Based on the foregoing, the appeal is granted in part and denied in part. 

 Dated: May 23, 2024 

LAURA EYESTER

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. 63771, Appeal of Red Bobtail 

Transportation, rendered in conformance with the Board’s Charter. 

 Dated: May 23, 2024 

3

 To be clear, we are not holding that the challenged provisions of the PWS would 

be unallowable in all circumstances; merely that the arguments presented 

by the government here, in this non-precedential case, did not persuade us 

that the negative incentive was permissible. 

PAULLA K. GATES-LEWIS

Recorder, Armed Services 

Board of Contract Appeals