ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of--

Alutiiq Commercial Enterprises, LLC 

Under Contract No. F A8 l O l-16-C-0006 

APPEARANCES FOR THE APPELLANT: 

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) 

) 

) 

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APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 61503 

Stowell B. Holcomb, Esq. 

Mark G. Jackson, Esq. 

Jackson Rosenfield, LLP 

Seattle, WA 

Jeffrey P. Hildebrant, Esq. 

Air Force Deputy Chief Trial Attorney 

Colby L. Sullins, Esq. 

Jason R. Smith, Esq. 

Trial Attorneys 

OPINION BY ADMINISTRATIVE JUDGE CATES-HARMAN 

ON CROSS-MOTIONS FOR SUMMARY JUDGMENT 

This appeal involves Alutiiq Commercial Enterprises, LLC's (ACE's) claim for 

$1 ,744.330.37 to compensate it for increased costs incurred during the first option period 

resulting from a revised Collective Bargaining Agreement. The parties filed 

cross-motions for summary judgment. We have jurisdiction pursuant to the Contract 

Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109. For the reasons stated below, we 

grant summary judgment in favor of ACE and sustain the appeal. 

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS1 

The TSS Contract 

1. On November 19, 2007, the Department of the Air Force (Air Force) awarded 

to Tinker Support Services, JN (TSS) the base civil engineering (CE) support services 

contract, No. FA8101-08-D-0006 (TSS Contract), for Tinker Air Force Base (AFB), OK 

(R4, tab 1 at 1). The contract had six options running through January 31, 2016 (id. at 4). 

1 By Air Force letter, on behalf of both parties, dated January 25, 2018, the parties agreed 

that they did not dispute each other's material facts. We therefore use many of the 

parties' statements of undisputed material facts (SUMF). 
The TSS Contract incorporated by reference Federal Acquisition Regulation (FAR) 

52.217-8, OPTION TO EXTEND SERVICES (NOV 1999) (id. at 411), which allowed 

for the contract services to be extended up to an additional six months. 

2. On August 26, 2013, TSS entered into a collective bargaining agreement 

(CBA) with the International Association of Machinists and Aerospace Workers, 

(IAM&A W or Union) (R4, tab 17 at 650-707). The CBA between TSS and the 

IAM&A W was effective from August 26, 2013 to August 21 , 2016 (id. ). 

Solicitation No. FA8101-l 5-R-0007 

3. On October 29, 2013, the Air Force posted a synopsis for the Tinker AFB CE 

Services Operations Management procurement to https://www.fbo.gov (FBO) (R4, 

tab 3). The Air Force also posted a draft performance work statement (PWS); a draft 

Request for Proposal (RFP), Solicitation No. FA8101-14-R-0002; pertinent Oklahoma 

wage determinations; Department of Labor (DOL) Wage Determination No. 2005-2431 ; 

and the newly-consummated CBA between TSS and the IAM&A W (R4, tab 3 at 4-5). 

4. The CBA between TSS and the IAM&A W was incorporated into the Option V 

period of performance of the TSS Contract (R4, tab 45). 

5. A pre-solicitation conference was held on April 16, 2015. Questions and 

answers were documented. One question relating to the transition period read as follows: 

Q. Does the incumbent have transition out? What 

responsibilities does the new contractor have transitioning in? 

A. The incumbent contractor will be responsible for full 

performance during the transition out period. The incoming 

contractor shall perform during the transition IA W PWS para 

1.6.1 , which includes becoming familiar with the work, 

obtaining security clearances, vehicle registration, training 

etc. 

(R4, tab 12 at 2) Contracting Officer (CO) DeLong recalled that prospective offerors 

"were repeatedly advised that the CBA between TSS and the IAM&A W would apply to 

the contract, but that renegotiation of some terms was necessary. "2 (DeLong decl. at 2 

, 7) 

2 The Board asked the parties to comment on this statement in CO DeLong's declaration. 

Both parties agreed that the statement was correct in their response to the Board. 

(See the parties' February 5, 2019 letters including CO DeLong's supplemental 

declaration listing the questions and answers she relied upon) 

2 
6. On July 8, 2015, the Air Force posted the RFP, Solicitation No. FA8101-15-R-0007, 

to FBO (R4, tab 16 at 3, 6; tab 17). Also posted to FBO, and incorporated into the RFP, 

were Wage Determination No. 2005-2431 (R4, tab 17 at 640-49) and the CBA between 

TSS and the IAM&A W (id. at 650-707). 

7. On July 14, 2015, the Air Force notified TSS of its intent to exercise its option 

to extend the services required by the TSS Contract by up to six months - from 

February 1, 2016, until July 31 , 2016 -pursuant to FAR 52.217-8 (R4, tab 47). On 

January 29, 2016, the Air Force and TSS bilaterally executed Modification No. P00083 

to the TSS Contract extending the contract beginning February 1, 2016 through July 31, 

2016 (R4, tab 49 at 1, 5). 

FAR Part 22 Provisions 

8. FAR 22.1010, Notification to interested parties under collective bargaining 

agreements, requires notice of option exercise dates: 

(a) The contracting officer should determine whether the 

incumbent prime contractor's or its subcontractors' service 

employees performing on the current contract are represented 

by a collective bargaining agent. If there is a collective 

bargaining agent, the contracting officer shall give both the 

incumbent contractor and its employees' collective 

bargaining agent written notification of-

(2) The forthcoming contract modification and applicable 

acquisition dates (exercise of option, extension of contract, change 

in scope, or start of performance, as the case may be) 

(b) This written notification must be given at least 30 days in 

advance of the earliest applicable acquisition date or the 

applicable annual or biennial anniversary date in order for the 

time-of-receipt limitations in paragraphs 22.1012-2(a) and (b) 

to apply. The contracting officer shall retain a copy of the 

notification in the contract file. 

(Emphasis added) 

3 
9. FAR 22.1012-2, Wage Determinations Based on Collective Bargaining 

Agreements, provides: 

(b) For contractual actions other than sealed bidding, a new or changed collective 

bargaining agreement shall not be effective under 41 U.S.C. 6707(c) if notice of the 

terms of the new or changed collective bargaining agreement is received by the 

contracting agency after award of a successor contract or a modification as specified in 

22.1007(b), provided that the contract start of performance is within 30 days of the award 

of the contract or of the specified modification. If the contract does not specify a start of 

performance date which is within 30 days of the award of the contract or of the specified 

modification, or if contract performance does not commence within 30 days of the award 

of the contract or of the specified modification, any notice of the terms of a new or 

changed collective bargaining agreement received by the agency not less than 10 days 

before commencement of the work shall be effective for purposes of the successor 

contract under 41 U.S.C. 6707(c). 

(c) The limitations in paragraphs (a) and (b) of this 

subsection shall apply only if timely notification required in 

22.1010 has been given. 

(Emphasis added) 

Contract No. FA8101-16-C-0006 

10. On May 31 , 2016, the Air Force awarded Contract No. FA8101-16-C-0006 

("Contract 0006") to ACE's, in the amount of $229,807.00, to provide base civil 

engineering services and operations management at Tinker Air Force Base, Oklahoma 

(R4, tab 32 at 1). The Contract contained a two-month transition period from June 1, 

2016 through July 31 , 2016 ("Transition Period") and five one-year option periods (R4, 

tab 2 at 548). Option Year I ran from August 1, 2016 to July 31, 2017 (id. at 2-4). 

11. The Contract contained the following FAR clause: 52.217-9, OPTION TO 

EXTEND THE TERM OF THE CONTRACT (MAR 2000); which reads in pertinent 

part: 

(a) The government may extend the term of this contract by 

written notice to the contractor within 15 calendar days prior 

to contract expiration; provided that the government gives the 

contractor a preliminary written notice of its intent to extend 

at least 60 days before the contract expires ... . 

(R4, tab 32 at 190, 194) 

4 
12. The contract also incorporated by reference FAR 52.222-41 , SERVICE 

CONTRACT LABOR STANDARDS (MAY 2014) which provides in pertinent part: 

(f) Successor contracts. If this contract succeeds a contract 

subject to the Service Contract Labor Standards statute under 

which substantially the same services were furnished in the 

same locality and service employees were paid wages and 

fringe benefits provided for in a collective bargaining 

agreement, in the absence of the minimum wage attachment 

for this contract setting forth such collectively bargained 

wage rates and fringe benefits, neither the Contractor nor any 

subcontractor under this contract shall pay any service 

employee performing any of the contract work ... less than 

the wages and fringe benefits provided for in such collective 

bargaining agreement, to which such employee would have 

been entitled if employed under the predecessor contract . . .. 

No Contractor or subcontractor under this contract may be 

relieved of the foregoing obligation unless the limitations of 

29 CFR 4.lb(b) apply . ... 

(R4, tab 32 at 190) 

13 . Additionally, the contract incorporated FAR 52.222-43, FAIR LABOR 

STANDARDSACTANDSERVICECONTRACTLABORSTANDARDS - PRICE 

ADJUSTMENT (MULTIPLE YEAR AND OPTION CONTRACTS) (MAY 2014 ), 

which provides the following in relevant part: 

(a) This clause applies to both contracts subject to area 

prevailing wage determinations and contracts subject to ... 

collective bargaining agreements. 

( c) The wage determination ... current on the anniversary 

date of a multiple year contract or [at] the beginning of each 

renewal option period, shall apply to this contract. .. . 

( d) The contract price, contract unit price labor rates, or fixed 

hourly labor rates will be adjusted to reflect the Contractor's 

actual increase or decrease in applicable wages and fringe benefits 

to the extent that the increase is made to comply with . . . : 

5 
(Id.) 

(1) The Department of Labor wage determination applicable 

.. . at the beginning of the renewal option period. 

14. ACE Contract 0006 incorporated DoL Wage Determination 2005-2431 

(Revision 21) and the CBA between TSS and the IAM&AW (R4, tab 32 at 213). 

15. During the transition period, TSS continued to be responsible for full contract 

performance under the TSS Contract (R4, tab 12 at 2; tab 14 at 18; DeLong decl. ,r,r 8-9; 

See also app. mot. at 4, ASUMF ,r 9). During the transition period, June 1, 2016 through 

July 31 , 2016, ACE performed the duties set forth under the Performance Work 

Statement (PWS): 

1.6.1 Transition-In. To ensure a smooth transition phase 

between incumbent and incoming Contractors, the incoming 

Contractor shall begin a transition-in work period prior to the 

end of the incumbent Contractor's performance period. 

Contractor shall submit a Transition-In Plan and phase-in 

schedule to the CO with the initial proposal. Government 

will have opportunity to review and comment on the plan. 

Final Transition-In Plan must be approved by the CO at least 

seven (7) calendar days before start of transition period. The 

transition period shall not exceed 60 calendar days. The 

Contractor shall assume responsibility for all functions 

identified in the PWS on the full contract performance date 

agreed on the contract. The incoming Contractor shall 

become familiar with work during the transition-in period. 

The tasks during the transition-in period shall include but is 

not limited to items such as obtaining security clearances, 

processing vehicle registrations, completing training 

requirements, developing work plans and procedures and 

finalizing quality control plans and procedures. The 

incumbent Contractor is responsible for contract performance 

during the transition-in period. 

(R4, tab 17 at 548-49 ,r 1.6.1; Chandler supp. decl. at 2 ,r 10) During this transition 

period Ms. Chandler sent out letters to TSS employees offering them jobs with ACE 

starting on August 1, 2016 (Chandler supp. decl. at 2 ,r 9 & Exhibit A). Nearly all of the 

employees hired by ACE were the same employees that had worked for TSS under the 

previous contract (Chandler supp. decl. at 2 ,r 8). 

6 
16. Throughout the transition period, CO DeLong was aware that ACE and the 

IAM&A W were negotiating over the terms of a new, successor CBA to replace the CBA 

between TSS and the IAM&A W that was incorporated into Contract No. 0006 (DeLong 

decl. ,r,r 12, 17, 20-21 ; see also R4, tab 64). 

17. CO Delohg was aware that the TSS service employees covered by the CBA 

between TSS and the IAM&A W, and represented by the IAM&A W, would not become 

ACE employees until Monday, August 1, 2016 since TSS was responsible for full 

contract performance (R4, tab 64). (See also compl. ,r 11 ; DeLong decl. 115) 

18. By email dated June 24, 2016, 37 days before the end of the 60-day contract 

transition period, the Air Force transmitted a letter, also dated June 24, 2016, providing 

ACE the non-binding preliminary notice under FAR 52.217-9 of its intent to exercise 

Option I of the Contract. The transmittal email stated, "You can expect the option 

modification, with funding for this FY, in the next week or so. If you have any 

questions, let me know! " (R4, tab 33 at 1). The letter stated: 

1. Pursuant to contract clause 52.217-9, Option to Extend the 

Term of the Contract, the Government hereby gives notice 

that Option I will be exercised by modification extending the 

performance period commencing 1 August 2016 through 

31 July 2017. 

2. This memorandum is a preliminary notice of the 

Government's intent and is not to be construed as exercising 

the option. Official exercise of the option will be 

accomplished by contract modification, Standard Form 30, 

signed by the Contracting Officer. 

(R4, tab 33 at 2) CO DeLong did not send such notice to the IAM&AW (DeLong decl. 

at 3 ,r 18). CO DeLong believed at that time that neither ACE nor any of its 

subcontractors had service employees that were covered by the CBA between TSS and 

the IAM&A W or were represented by the IAM&A W (see SUMF ,r 16) (DeLong decl. 

,r,r 15-16). We find that, under the Contract, ACE was the "incumbent prime contractor" 

for purposes of FAR 22.1010. 

19. On July 1, 2016 - one week after CO DeLong notified ACE of her intent to 

exercise Option I and 31 days before full performance would commence on August 1, 

2016 -the Air Force and ACE bilaterally executed Modification No. POOOOl to the 

Contract, exercising Option 1. Modification No. POOOOl stated it was entered into 

7 
pursuant to the authority of FAR 52.217-9 and DFARS 252.232-70073• Block E was 

checked "Contractor is required to sign this document. ... " The purpose of the 

modification was: "[T]o exercise option 1 and provide incremental funding." The 

Option 1 period of performance was from August 1, 2016 through July 31 , 2017. 

CO DeLong signed for the government and Sandra Chandler signed for ACE. (R4, 

tab 34 at 1, 63 ; DeLong decl. , 19) The 91 page modification makes no mention of 

wages, the Service Contract Act (SCA) 41 U.S.C. §§ 6701 et seq.4, the CBA and contains 

no release language. 

20. We find that the CO did not provide the 30-day definitive written notification 

required by FAR 22.101 O(b) to the IAM&A W collective bargaining agent (R4, tab 41 

at 14, 7; DeLong decl. at 3, 18). 

21. As of Friday, July 22, 2016 - the tenth day before commencement of the work 

under Option I - ACE and the IAM&A W had not yet agreed upon the terms of a new 

successor CBA to replace the CBA between TSS and the IAM&AW (DeLong decl., 20). 

22. As of Friday, July 29, 2016 - the last business day before the beginning of the 

first option period - ACE and the IAM&A W had not yet agreed upon the terms of a 

successor CBA to replace the CBA between TSS and the IAM&AW (R4, tab 64; 

DeLong decl., 21). 

23. On Monday, August 1, 2016, the Option I period began, requiring full 

contract performance by ACE, and the IAM&A W member employees went on strike. 

No service employees covered by the CBA between TSS and the IAM&A W or 

represented by the IAM&AW reported for work on that day (DeLong decl., 22). 

(See also app. mot. at 6, ASUMF, 16; compl., 19) 

24. By email on January 19, 2017, ACE provided the Air Force with an unsigned 

copy of a CBA between ACE and the IAM&A W. Another email in the email chain, 

from earlier that same day, indicates that subsequent to ACE and the IAM&AW having 

reached an agreement, they "update[d] article 9.2," requiring a new signature page (R4, 

tab 37). 

25. On January 24, 2017, ACE submitted a request for equitable adjustment 

(REA) to the government, requesting, among other things, that the government 

incorporate the increased costs payable under the new CBA for the current year (i.e., 

Option Year 1 ), as well as for all remaining option years covered by the new CBA. 

Specifically, ACE's REA requested that the government incorporate into the Contract the 

3 DFARS 252.232-7007 Limitation of Government's obligation has to do with 

incremental funding and is not relevant to our decision. 

4 Previously cited as 41 U.S.C. §§ 351 et seq. 

8 
$1,744,330.37 in increased H&W benefits for the seven months of Option Year I (i.e., 

January 1, 2017 to July 31 , 2017) provided for in the new CBA. (R4, tab 65) 

26. By email on January 27, 2017, ACE provided the Air Force with a signed 

copy of the fully-consummated successor CBA between ACE and the IAM&AW, 

effective from November 20, 2016 until July 31, 2019 (R4, tabs 38-39). Despite the 

parties' "update" to article 9 .2 of the CBA, discussed in the January 19, 2017 email from 

the IAM&A W to ACE (see SUMF 1 26), the signature page of the CBA states that it was 

signed on November 20, 2016 (R4, tab 39 at 32-33). 

27. Although the effective date of the new CBA between ACE and the union was 

November 20, 2016, the increased H& W benefits for the Union contained therein did not 

go into effect, by the terms of the CBA, until January 1, 2017, after five full months of 

Option Year I had been performed. (R4, tab 39 at 27). 

28. By letter dated March 30, 2017, the government denied ACE's REA request 

for the Option Year I H& W benefits, stating: 

The CBA was not considered timely IA W FAR 22.1002-3(b ), 

and will be incorporated for the Option Year II period of 

performance effective 01 Aug 17 IA W FAR 52.222-43(c). 

Until that date the new CBA terms are not a part of this 

contract, therefore the Government denies the value that 

addresses this period -- $1 ,744,330.37. 

(R4, tab 69 at 4) 

29. On July 24, 2017, the Air Force unilaterally executed Modification 

No. P00026 to the Contract, exercising Option II and incorporating the CBA between 

ACE and the IAM&A W into the Contract effective August 1, 2017 (R4, tab 40). 

30. On August 21, 2017, in response to the denial of its REA, ACE submitted a 

certified claim to the CO seeking $1 ,744.330.37 and requesting a final decision. ACE 

argued that the time limitations in FAR 22.1012-2(b) did not apply because the Air Force 

failed to provide the notification required by FAR 22.1010 to either ACE or the Union 

(R4, tab 41 at 1, 8-12, 14). · 

31. -On January 22, 2018, the CO issued a final decision (COFD) denying ACE's 

claim on the grounds that the Preliminary Notice provided to ACE on June 24, 2016 

satisfied the requirements of FAR 22.1010. Additionally, the CO noted: 

Though the notice did not meet the contract's 52.217-9 

requirement for 60 days advance notice of intent to exercise 

9 
(R4, tab 44) 

an option, this merely meant the option could not be 

exercised unilaterally. The contracting officer recognized 

this and executed Option I as a bilateral modification, further 

evidencing Alutiiq's understanding of, and consent to, a 

delayed incorporation of any new CBA terms. 

32. On January 23, 2018, ACE timely filed a notice of appeal with the Board. 

The Board docketed the appeal as ASBCA No. 61503 on January 24, 2018. 

DECISION 

Legal Standard for Summary Judgment 

We evaluate the cross-motions for summary judgment under the well-settled 

standard: 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. The moving party 

bears the burden of establishing the absence of any genuine issue of material fact and all 

significant doubt over factual issues must be resolved in favor of the party opposing 

summary judgment. Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 

(Fed. Cir. 1987) (citations omitted). In the course of the Board's evaluation of a motion 

for summary judgment, our role is not '"to weigh the evidence and determine the truth of 

the matter,' but rather to ascertain whether material facts are disputed and whether there 

exists any genuine issue for trial." Holmes & Narver Constructors, Inc., ASBCA 

Nos. 52429, 52551 , 02-1BCA131 ,849 at 157,393 (quoting Anderson v. Liberty Lobby, 

Inc., 477 U.S. 242, 249 (1986)). A material fact is one which may make a difference in 

the outcome of the case. Liberty Lobby, 477 U.S. at 248. The opposing party must assert 

facts sufficient to show a dispute as to a material fact of an element of the argument for 

reformation or breach. New Iraq Ahd Co. , ASBCA No. 59304, 15-1BCA135,849 

at 17 5 ,291-92 ( citing Mingus, 812 F .2dat 13 90-91) ("To ward off summary judgment, the 

non-moving party must do more than make mere allegations; it must assert facts 

sufficient to show a dispute of material fact. "); see Lee 's Ford Dock. Inc. , ASBCA 

No. 59041 , 16-1BCA136,298 at 177,010. 

Positions of the Parties 

ACE, relying on Tecom, Inc., ASBCA No. 51591, 01BCA131 ,156 and Raytheon 

Service Co., ASBCA Nos. 28721 , 29668, 86-3 BCA 119,094, contends that even though 

its CBA was not finalized until after Option I was exercised, because the Air Force failed 

to give the notice required by FAR 22.1010, ACE is entitled to a price adjustment under 

FAR 52.222-43 for the first option year (app. mot. at 1-2, 10-13). ACE argues that it was 

10 
the "incumbent contractor" because it was operating "under the base year"5 and as such it 

was entitled to 30 days advance notice of the exercise of Option Year I. ACE also argues 

that the Air Force ignores Tecom and Raytheon. ACE contends that the cases the Air 

Force relies upon, COSTAR /IL LLC, ASBCA No. 56479, 11-2 BCA 134,830 and 

Guardian Moving & Storage Co. v. Hayden, 421 F.3d 1268 (Fed. Cir 2005), do not 

involve the notice issue and are therefore distinguishable. ( app. reply at 1, 6-11) 

The Air Force argues that ACE "consummated" its CBA several months after the 

first option period began which was too late for it to be incorporated in the first option 

period (gov't mot. at 1, 10-12). The Air Force relies upon COSTAR /IL LLC, ASBCA 

No. 56479, 11-2 BCA 134,830 and Guardian Moving & Storage Co. v. Hayden, 

421 F.3d 1268 (Fed. Cir 2005) for the proposition that since the CBA was 

"consummated" well into the first option period it could not be effective until the second 

option period (gov't mot. at 10-12). The Air Force argues that the notice provisions cited 

by ACE "concern the prospective application of a CBA consummated during a 

predecessor contract to a successor contract, not the retroactive application of a CBA." 

(Gov't mot. at 12-13) The Air Force also argues that ACE was the "incumbent prime 

contractor" by virtue of the two month transition but since it did not employ "service 

employees" during that period of time, the notice requirements did not apply. (Gov't 

mot. at 16-17) The Air Force contends that it does not "shy away" from the Board's 

decisions in Tecom and Raytheon because in Guardian the Federal Circuit held that 

''wage determinations are not retrospective, regardless of the effective date of the 

underlying CBA." (Gov't surreply at 6) 

No Material Disputed Facts 

The Air Force contends that there are material disputed facts6 defeating ACE's 

motion. The Air Force argues that whether ACE was the "incumbent contractor" or 

whether it employed "service employees" are material disputed facts. (Gov't surreply 

at 3-5) We disagree. We found that, for purposes of FAR 22.1010, ACE was indeed the 

incumbent contractor with regard to the exercise of the option under its own contract. 

(SOF 1 18) Likewise it is undisputed that TSS continued to employ all of its employees 

in its performance during the transition period (SOFs 1115, 17). Therefore, that ACE 

did not employ TSS' workforce during the transition period cannot be disputed. 

Therefore, for the purpose of the FAR 22.1010 notice requirement, we hold ACE is the 

incumbent contractor even though it was only performing transition-in tasks and did not 

employ TSS' service employees until August 1, 2016. 

5 ACE was actually operating under a two month transition-in period before performance 

of Option 1 (SOF 110). 

6 This is at odds with the Air Force's letter, on behalf of both parties, dated January 25, 

2018 (see supra footnote 1 ). 

11 
The Air Force 's Arguments 

The Air Force argues that the notice requirements only apply if the CBA was 

"consummated" during a predecessor contract. The argument is summed up in the Air 

Force's motion as: "The DOL regulations, and their reflections in the FAR, clearly 

establish that the notice requirements discussed in FAR 22.1010 and FAR 22.1012-2 

concern the prospective application of a new or changed CBA, consummated during a 

predecessor contract, to a successor contract when the incumbent contractor fails to 

timely notify the CO of the new or changed CBA." (Gov't mot. at 13) The problem is, 

as ACE points out (app. reply at 1, 6-9), our decision in Tecom conflicts with the Air 

Force's argument. In Tecom the government issued unilateral Modification No. P00031 

exercising the first option on September 30, 1997 for the period of October 1, 1997 

through September 30, 1998. Tecom, 01-1 BCA, 31,156 at 153,896. Tecom was both 

the "predecessor (incumbent) contractor and successor contractor." Id. at 153,897. The 

contracting officer did not provide Tecom with the 60-day preliminary written notice 

required by FAR 52.217-9(a) or the 30-day written definitive notice to either Tecom or 

the collective bargaining agent as required by FAR 22.lOlO(a). Id. (SOF ,, 8, 18, 20) 

A new CBA was negotiated on September 18 and 19, 1997, but was not completed and 

signed until November 17, 1997 (id.). Thus, the CBA was not "consummated" during 

the predecessor contract. In Tecom this Board held that absent the mandatory written 

30-day notice, Tecom was "entitled to seek a revised wage determination based on its 

new CBA for the first option year of the contract and that a contract price adjustment is 

appropriate under FAR 52.222-43" (id. at 153,902-03). Therefore, Tecom obtained relief 

even though its new CBA was not "consummated" during a predecessor contract but 

rather "consummated" during the first option period. The same was true in Raytheon, 

86-3 BCA, 19,094 at 96,524. In this case, the Air Force's interpretation of FAR 

conflicts with our decisions in Tecom and Raytheon and we find it is unreasonable. The 

Air Force's reliance on Guardian Moving & Storage Co., ASBCA Nos. 54248, 54479, 

04-2 BCA, 32,753 and COSTAR IIL LLC, ASBCA No. 56479, 11-2 BCA, 34,830 

(gov't mot. at 11-12) is misplaced because, as the parties recognize, the notice 

requirements were not raised and discussed by either party or the Board in these two 

cases. 

Next the Air Force argues that since TSS, not ACE, was performing the 

substantive contract duties and ACE did not employ service employees during the 

transition-in period, the notice requirements did not apply (gov't mot. at 16-17). To the 

contrary, and as we explain in more detail below, the FAR22.1010 notice requirements 

do apply to this very unusual situation even though ACE had no service employees. 

While TSS was performing the contract duties during the transition period, it was not the 

incumbent contractor with respect to the ACE contract. As a result, any attempt by the 

CO to provide the FAR 22.1010 notice to TSS would have been a futile exercise. The 

CBA between TSS and the union was incorporated into ACE Contract No. 0006 

(SOF ,,14, 16). As we found, for the purpose of FAR 22.1010 notice, ACE is the 

12 
incumbent contractor. (SOF ,r 18) During the transition period, the Air Force 

CO DeLong, knew that ACE and TSS' employees were negotiating employment and that 

ACE and the union were negotiating terms of a new CBA. (SOF ,r ,r 2, 15-18) The 

knowledge required by FAR 22.1010 to trigger the notice requirement is: 

(a) The contracting officer should determine whether the 

incumbent prime contractor's or its subcontractors' service 

employees performing on the current contract are represented 

by a collective bargaining agent. If there is a collective 

bargaining agent, the contracting officer shall give both the 

incumbent contractor and its employees' collective 

bargaining agent written notification of 

(2) The forthcoming contract modification and applicable 

acquisition dates ( exercise of option, extension of contract, 

change in scope, or start of performance, as the case may be) 

(SOF ,r 8) It is true, as the Air Force points out, that ACE did not employ service 

employees performing the contract because those employees were still employed by TSS 

and were performing the contract during transition. However, that circumstance was 

caused by the unusual transition period arrangement peculiar to this contract. 

Significantly, the notice is to the union not the individual employees so we do not see 

how the absence of employees matters. We consider the government's knowledge to be 

the essence of FAR 22.lOlO(a), not whether ACE employed service employees 

performing the contract. The duties placed upon the contracting officer are substantial 

and will not be dismissed hastily. 

As set forth in Tecom: 

FAR 22.1010 not only provides for the same 3 0 days 

notification to the contractor and collective bargaining agent, 

but it also places an affirmative duty on the contracting 

officer to determine whether the service contract employees 

are represented by a union before giving the notification 

(finding 13). FAR 22.1008-3(a) further provides that the 

contracting officer (shall) determine whether Section 4(c) of 

the SCA applies to the option period and (shall) determine 

13 
whether there is a predecessor contract and, if so, whether 

there is an existing CBA (finding 20). 

Tecom 01 BCA, 31 ,156 at 153,900-901. CO DeLong knew TSS employees were 

covered by a CBA and would be covered by a new CBA when employed by ACE 

(SOF ,,14 - 17, 20). We hold that CO DeLong had the requisite knowledge required by 

the notice requirement of FAR 22.1010 and we will not ignore that fact simply because 

TSS' employees were not yet employed by ACE. To agree with the Air Force's 

arguments would be inconsistent with the SCA protections built into FAR Part 22. 

Accordingly, we decline to adopt the Air Force's argument. 

Bilateral Modification No. POOOO 1 

Before deciding which party prevails in this appeal, we must analyze the impact, if 

any, of bilateral Modification No. POOOOl. On June 24, 2016, the Air Force forwarded 

ACE a preliminary notice of the option exercise, and stated that ACE could expect the 

modification exercising Option 1, with funding for this fiscal year, "in the next week or 

so" (SOF, 18). No other notice was provided by the Air Force. The record reflects that 

the CO issued the modification exercising Option I bilaterally because the 60-day 

preliminary notice requirement of the contract (FAR 52.217-9) had not been meet. 

(SOF, 31). We recognize that once the Air Force failed to provide timely preliminary 

notification to ACE, it lost its ability to exercise the option unilaterally, and could only 

exercise the option by agreement of the parties. See generally Arko Executive Services, 

Inc. v. US., 553 F.3d 1375 (Fed. Cir. 2009); Griffin Services, Inc., ASBCA Nos. 52280, 

52281 , 02-2 BCA, 31,943; USD Technologies, Inc., ASBCA No. 31 ,305, 87-2 BCA 

, 19,680, aff'd, 845 F.2d 1033 (Fed. Cir. 1988) (Government has the burden to prove that 

it timely exercised an option); Star Contracting Co. , ASBCA No. 27848 et al.,89-2 BCA 

, 21 ,587 at 108,700 (Government failed to establish timely exercise). It was the 

government's recognition of its failure to provide notice as required by FAR 52.217-9(a), 

that dictated the contracting officer's request for a bilateral modification. (SOF, 31) 

While the parties recognize that Modification No. POOOO 1 was bilateral, neither 

party appears to have considered whether that fact is of any significance to the question 

before us. As a result, the Board asked the parties to comment. In the letter to the Board 

dated March 4, 2019, the Air Force simply acknowledged that the bilateral exercise 

"constitutes an additional distinction between the facts in the current appeal and those 

material to the decisions in" Tecom and Ray theon. ACE provided a more detailed 

response. ACE contended, in its letter to the Board dated March 15, 2019, that the 

bilateral exercise is not (material) arguing "neither Raytheon nor Tecom rested on the 

unilateral exercise of option years but rather on the Air Force's failure to comply with the 

30-day notification requirement, which is 'strictly enforced. "' ACE correctly notes that 

"Modification POOOO 1 had to be issued bilaterally because the Air Force failed to provide 

timely preliminary notice under FAR 52.217-9." (ACE's March 15, 2019 resp.) 

14 
Although both Tecom and Raytheon involved unilateral option exercises extending the 

contract, we hold that the manner of exercising the option is an immaterial distinction. 

See Tecom, 01-1 BCA ,r 31 ,156 at 153,896; Raytheon, 86-3 BCA ,r 19,094 at 96,524. 

ACE notes further that "By signing the modification, ACE agreed to the option year, not 

to relinquish rights sub silento. No authority holds that noncompliance with notice 

requirements with respect to options is excused by a bilateral modification; on the 

contrary, such requirements 'are strictly enforced."' (ACE's March 15, 2019 resp.) Our 

cases resolutely demand strict enforcement of notice provisions with respect to options. 

See generally Tecom, Inc., ASBCA No. 51591, 01 BCA ,r 31 ,156; Raytheon Service Co. , 

ASBCA Nos. 28721, 29668, 86-3 BCA ,r 19,094. 

In the simplest terms, Modification No. POOOOl provided for the exercise of 

Option Period I and the incremental funding of $39,640,220.00. In the 91 pages that 

make up Modification No. POOOOl , the contracting officer set forth in excruciating detail 

the various CLINs, acceptance/inspection schedules, funding, and revisions of contract 

clauses. While the modification includes a reference to FAR 52.217-9 in Block 13-C, 

there is no reference to FAR 22.1010. The modification is also silent as to the 

incorporation of the CBA and lacks any release language. (SOF ,r 19) In analyzing the 

reach of this modification, common sense must dictate. 

As we have observed, "[i]n the realm of Government contracts, absent mistake or 

duress not present here, few things signify knowing and intentional conduct more than 

does the execution of a bilateral modification." USD Technologies, Inc., ASBCA 

No. 31305, 87-2 BCA if 19,680 at 99,620. In Bell BC! Co. v. United States, 570 F.3d 

1337, 1340 - 41 (Fed. Cir. 2009), the Court explained the familiar law of accord and 

satisfaction occurs "when some performance is different from that which was claimed as 

due is rendered and such substituted performance is accepted by the claimant as full 

satisfaction of his claim" (quoting Cmty. Heating & Plumbing Co. v. Kelso, 987 F.2d 

1575, 1581 (Fed. Cir. 1993)). To prove accord and satisfaction, the government must 

show "(1) proper subject matter; (2) competent parties; (3) a meeting of the minds of the 

parties; and (4) consideration." O 'Connor v. United States, 308 F.3d 1233, 1240 (Fed. 

Cir. 2002). In this opinion we only need to address element three. Critical to the 

existence of accord and satisfaction is the intention of the parties. What happens and is 

discussed during negotiations of a settlement and payment will operate as an accord and 

satisfaction only as to the claims considered. Tri-0, Inc. v. United States, 28 Fed. Cl. 

463, 470-72 (1993). 

We look to the modification as the primary source of the parties' intentions. 

Recognizing that the exercise of an option must be unconditional and set forth terms that 

are in accord with the option, any attempt by the government to alter the terms of the 

contractor's obligation under an option will render ineffective the purported exercise of 

the option. See generally Lear Siegler, Inc. , Mgmt. Servs. Div., 86-3 BCA ,r 19,155 

at 96,795 (insertion of Availability of Funds clause); Chem. Tech. , Inc. , ASBCA 

15 
No. 21863, 80-2 BCA ,r 14,728 (altering period of performance); General Dynamics 

Corp. , ASBCA No. 20882, 77-1 BCA ,r 12,504 (altering delivery schedule). In this case, 

an attempt by the government to exercise the option by issuing a unilateral modification 

without satisfying the notice requirements of FAR 52.217-9, would have varied the terms 

of the option. The purported exercise of Option 1 by unilateral modification would have 

been ineffective. Recognizing this, the contracting officer proposed that the exercise take 

place by agreement of the parties. Subsumed in that agreement is the acknowledgement 

that ACE would waive the preliminary notice requirements set forth in FAR 52.217-9, 

that was preventing the government from exercising what would have been an ineffectual 

option. By signing Modification No. POOOOl , ACE accepted the exercise of the option 

and relinquished its rights to escape performance because of the untimely notice. In that 

respect the modification is clear and unambiguous and we give it its plain meaning. 

Hughes Commc 'ns Galaxy, Inc. v. United States, 998 F.2d 953 , 958 (Fed. Cir. 1993). 

The question remaining is whether the bilateral modification also resulted in an 

unwitting relinquishment of ACE's rights to a second and distinctly separate notification 

requirement set forth in FAR 22.lOlO(a). In other words, does the bilateral modification 

exercising the option, without more, prevent ACE from receiving a price adjustment for 

increased labor costs incurred under the new CBA during the first option year? The 

effect of the bilateral exercise is a question of law that does not preclude summary 

judgment. We will not extend the consequences of the bilateral modification to include a 

waiver of a distinctly separate notice requirement which, if not given, allows for a price 

adjustment under FAR 22.1012-2, without a clear and unequivocal intention to do so in 

the document. In the appeal before us, ACE maintains that there was an intention to 

agree to the option year, nothing more, and nothing less. ACE maintains, and we agree, 

that the failure to issue timely preliminary notice under FAR 52.217-9, which 

necessitated a bilateral modification, does not absolve the Air Force of its failure to 

provide the mandatory 30-days notice under FAR 22.1010. The Air Force cannot use 

one failure to excuse another. Moreover, the June 24, 2016 preliminary notice provided 

under FAR 52.217-9 cannot be used to meet the notice requirement of FAR 22.1010. 

The notices requirements of FAR 52.217-9 and FAR 22.1010 are separate and distinct 

notices. 

Waiver is "an intentional relinquishment or abandonment of a known right or 

privilege." Johnson v. Zerbst, 304 U.S. 458, 464 (1938); Alvarez & Assocs. Constr. Co. , 

ASBCA No. 49341, 98-1 BCA ,r 29,559 at 146,536. "An intent to waive a contractual 

right must be manifest in a party's failure to object." United Technologies Corp. , Pratt & 

Whitney Grp., ASBCA No. 46880 et al. , 95-1 BCA ,r 27,592 at 137,482 (citations 

omitted). In answering the question whether the bilateral modification extended to the 

mandatory notice requirement of FAR 22.1010, we must give the modification its plain 

meaning. In doing that, we find that the clear and unambiguous language of the bilateral 

modification does not manifest an unequivocal intention by ACE to relinquish its rights 

and/or the rights of the collective bargaining agent to the 30-day definitive notice under 

16 
FAR 22.1010. We find that the plain language of the modification does not purport to 

resolve anything other than the exercise of the option and was never intended to do 

anything other than exercise Option I. 

Even if this bilateral modification can be interpreted to include a waiver of the 

notice requirements pursuant to FAR 22.101 O(b ), the contracting officer does not have 

the authority to waive requirements imposed by statute. Shawview Cleaners, LLC, 

ASBCA No. 56938, 10-2 BCA ,r 34,550 at 170,394 (Government employees, including 

contracting officers, have no authority to waive compliance with the SCA, 

notwithstanding allegation that agency personnel fraudulently induced the contractor to 

enter a contract by misrepresenting the wage determination as non-mandatory); 

Inter-Continental Equip., Inc. ASBCA No. 36807, 94-2 BCA ,r 26,708 at 132,862-63 (the 

contracting officer, by action or inaction, cannot waive the requirements of the Cargo 

Preference Act of 1904, 10 U.S.C. § 2631); LaCoste Builders, Inc. ASBCA No. 29884 et 

al., 88-1 BCA ,r 20,360 at 102,981-82 (contracting officer had no authority to waive Buy 

American Act, exceptions not shown). Similarly, in M-R-S Mfg Co. v. United States, 

492 F.2d 835, 841 (Ct. Cl. 1974), the plaintiff argued that since the government ignored 

the data developed between March 23 and August 17, the contracting officer waived the 

contractor's obligation to furnish accurate, complete, and current data. The Court stated 

that " [t]he most basic flaw in this argument is the assumption that the obligation to 

furnish proper data can be waived by a government agent. The duty to furnish accurate, 

complete, and current data is a duty imposed on Government contractors by a statute, 

and, therefore, that duty cannot be waived by a Government agent." Id. (citations 

omitted). 

The Service Contract Act (SCA), 41 U.S.C. §§ 6701 et seq., and implementing 

regulations promulgated by the DOL at 29 C.F.R. Part 4 (1993 ed.) and also published in 

the FAR at 48 C.F.R. Subpart 22.10 (1990 ed.) is remedial labor legislation which must be 

liberally construed.7 Midwest Maint. & Constr. Co. v. Vela, 621 F.2d 1046, 1050 

(10th Cir. 1980). The implementing regulations and contract clauses should be similarly 

so construed to effect the purposes of the Act. The SCA was designed to protect wages 

7 SCA provisions will apply to a government contract even where they were left out of 

the solicitation or the contract. Miller's Moving Co., ASBCA No. 43114, 92-1 

BCA ,r 24,707 at 123,325-26. "It is well settled that if a statute requires inclusion 

of a contract provision, such provision will be read into the contract by operation 

of law, and is binding on the parties even if omitted from the contract terms. G.L. 

Christian and Associates v. United States, 312 F.2d 418 (Ct. Cl. 1963) on 

rehearing, 320 F.2d 345, cert. denied, 375 U.S. 954 (1963). Obligatory 

congressional enactments cannot be abrogated by failure of Government officials 

to include necessary provisions in the contract." G .L. Christian, on rehearing, 

supra. 

17 
and fringe benefits of service workers employed on U.S. Government contracts. 41 U.S.C. 

§§ 6703, 6707. The DOL issues "wage determinations" applicable to fixed-price services 

contracts and through a series of contract clauses, contractors are forbidden from paying 

less than the wages and fringe benefits contained in a wage determination. See 41 U.S.C. 

§§ 6701 et seq. In this way, the SCA prevents contractors from underbidding competitors 

by cutting wages or fringe benefits to its service workers and thereby winning government 

contracts. See Lear Siegler Servs. , Inc. v. Rumsfeld, 457 F.3d 1262, 1266 (Fed. Cir. 

2006); Gov 't. Contracting Res., Inc., ASBCA No. 59162, 15-1 BCA ,r 35,916 at 175,575. 

There is a direct statutory obligation imposed by the SCA that the contracting officer 

could not waive by bilateral modification or by other means. 

In accordance with FAR 22.101 O(b ), the contracting officer was required to 

provide written definitive notice of the exercise of the option to both the incumbent 

contractor and the collective bargaining agent. In this case, the written notification was 

required to be given "at least 30 days in advance of the earliest applicable acquisition 

date8 in order for the time-of-receipt limitations in paragraphs 22.1012( a) and (b) to 

apply." That notification is mandatory to both the incumbent contractor and the union; 

providing notice to one will not suffice. See Tecom, 01-1 BCA ,r 31 ,156 at 153,902; 

Raytheon, 86-3 BCA,r 19,094 at 96,527. As in Tecom, it is uncontested that the 

contracting officer did not comply with these regulatory duties. (SOF ,r 18, 20); See 

Tecom 01-1 BCA ,r 31 ,156 at 153,903. FAR 22.101 2-2(c) very clearly sets out that the 

"limitations in paragraphs (a) and (b) of this subsection shall apply only if timely 

notification required in 22.1010 has been given" ( emphasis added). (SOF ,r 9) Tecom, 

01-1 BCA ,r 31,156 at 153,902; Raytheon, 86-3 BCA ,r 19,094 at 96,528. Accordingly, 

the contracting officer cannot reject a price adjustment resulting from a new CBA 

executed during the option period when it fails to provide the mandatory notice under 

FAR 22.1010. See Tecom, Inc. , 01-1 BCA ,r 31 ,156 at 153,902-3 . We agree with 

appellant that there is no material distinction between this case, Raytheon and Tecom. 

We held in Tecom where timely notification is not given to both the contractor and 

the collective bargaining agent, the deadlines set forth in FAR 22.1012-2(b) do not apply 

and there is "no restriction against incorporation of a new or changed CBA received after 

contract award." Tecom, 01-1 BCA ,r 31 ,156 at 153,902. We will not depart from the 

results reached in Raytheon and Tecom. 

8 Even though FAR 22.101 O(b) provides that the 3 0 days advance notice is triggered by 

either the "earliest applicable acquisition date or the applicable annual or biennial 

anniversary date", because of the unusual nature of the ACE contract, there could 

not be an annual anniversary date for the first option. The base contact began 

June 1, 2016 and ended July 31, 2016. The first of five options, if exercised, was 

August 1, 2016 which would then establish an annual anniversary date for options 

2 through 5. 

18 
Having failed to provide the 30-day notice required by FAR 22.lOlO(b) to ACE 

and the collective bargaining agent (SOF ,r,r 18, 20), the time-of-receipt limitations set 

forth in FAR 22.1012-2 do not apply. Accordingly, we conclude that ACE is entitled to a 

price adjustment under FAR 52.222-43 for the increased labor costs associated with the 

new CBA executed after the option was exercised. 

CONCLUSION 

For the reasons stated, the government's motion for summary judgment is denied. 

Appellant's cross-motion for summary judgment is granted. The appeal is returned to the 

parties for a determination of quantum consistent with this decision. 

Dated: January 9, 2020 

I concur 

Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

I concur 

~ "woon1ow 

=trative Judge 

Armed Services Board 

of Contract Appeals 

19 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

Administrative Judge 

Vice Chairman 

Armed Services Board 

of Contract Appeals 
DISSENTING OPINION BY ADMINISTRATIVE JUDGE CLARKE 

I was the judge originally assigned to this case and wrote the original decision. 

While my colleagues adopted the majority of my facts and some of my analysis, they 

disagree with my conclusion. I respectfully dissent, because I do not believe that the 

notice requirements that my colleagues rely upon apply to the bilateral option exercise in 

this case. 

Option 1 was Exercised Bilaterally 

In a June 24, 2016 email to ACE transmitting preliminary notice of option 

exercise, the Air Force stated that ACE could expect the modification exercising 

Option 1 "next week or so" (SOF ,r 18). No other notice was provided by the Air Force. 

When ACE received Modification No. POOOOl , Block E was checked "Contractor is 

required to sign this document . ... " (SOF ,r 19). In the majority decision, my colleagues 

speculate about the contracting officer's (CO) motivation in requiring a bilateral exercise: 

It was the government's recognition of its failure to provide 

notice as required by FAR 52.217-9(a), that dictated the 

contracting officer's request for a bilateral modification. 

The purported exercise of Option 1 by unilateral modification 

would have been ineffective. Recognizing this, the 

contracting officer proposed that the exercise take place by 

agreement of the parties. Subsumed in that agreement is the 

acknowledgement that ACE would waive the preliminary 

notice requirements set forth in FAR 52.217-9, that was 

preventing the government from exercising what would have 

been an ineffectual option. 

ACE maintains, and we agree, that the failure to issue timely 

preliminary notice under FAR 52.217-9, which necessitated a 

bilateral modification, does not absolve the Air Force of its 

failure to provide the mandatory 30-days notice under FAR 

22.1010. 

(Emphasis in original) This speculation is unsupported by evidence. 

20 
On July 1, 2016, ACE, Ms. Chandler, and the Air Force, CO DeLong, signed 

Modification No. POOOOl bilaterally exercising Option 1 (SOF 119). The effect of the 

bilateral exercise is a question of law that does not preclude summary judgment. 

The Notice Requirements Apply to Options Exercised Unilaterally 

FAR 2.101 defines option as: 

Option means a unilateral right in a contract by which, for a 

specified time, the Government may elect to purchase 

additional supplies or services called for by the contract, or 

may elect to extend the term of the contract. 

(Emphasis added) Based on the FAR definition of option as a unilateral right to extend a 

contract, I conclude that the term "option" as used in FAR 22.10 I 0, FAR 52.222-43 and 

FAR 52.217-9 means an option exercised unilaterally. Therefore, the notice requirement 

in FAR 22.lOlO(b) only applies when the option is exercised unilaterally. To hold 

otherwise, as my colleagues do, requires the Board to ignore the definition of "option" in 

FAR 2.101. My colleagues simply hold "that the manner of exercising the option is an 

immaterial distinction." This is the fundamental disagreement we have that necessitates 

my dissent. 

This Board relied on the FAR 2.101 definition of option in Glasgow Investigative 

Solutions, Inc., ASBCA No. 58111 , 13 BCA 135,286 where we held: 

Turning to the merits ofGIS's assertion, FAR 52.217-8 

provides: "The option provision may be exercised more than 

once, but the total extension of performance hereunder shall 

not exceed 6 months" (SOF 14). GIS ignores the fact that 

the FAR 52.217-8 clause expressly gives the government the 

unilateral right to extend contract performance. FAR 2.101 

defines "Option" as "a unilateral right in a contract by which, 

for a specified time, the Government may elect to ... extend 

the term of the contract." Mod. P00003 bilaterally amended 

the contract to restructure its base contract and option 

performance periods. Because it was a bilateral restructuring 

of the contract, it did not rely on FAR 52.217-8 and modified 

the contract in respects that do not rely on the authority 

provided in FAR 52.217-8 (SOF 15). We hold that 

Mod. P00003 did not exhaust, or use up any of the 

government's FAR 52.217-8 extension rights. The 

government retained the ability to extend performance for six 

months when it did so 

21 
through Mods. P00007 through POOO 11 . Hence, they were 

valid. 

(Id. at 173,176) As seen in the quote above, because FAR2.101 defines "Option" as a 

unilateral option, we interpreted the word "option" in FAR 52.217-8 as a unilateral 

option exercise. We held that because Modification No. P00003 was bilateral, it did not 

rely on the authority provided by FAR 52.217-8. FAR 52.217-8 is in ACE's Contract 

No. 0006. (R4, tab 32 at 194) If the "option" in FAR 52.217-8 is interpreted by this 

Board as only a unilateral option based on FAR 2.101, so too should the term "option" in 

FAR 22.1010, FAR 52.222-43 and FAR 52.217-9. I believe the language in Glasgow I 

rely upon and quoted above is not dicta and is Board precedent that we are obligated to 

follow. Advanced Eng 'g & Planning Corp., ASBCA Nos. 54044, 53366, 05-1 BCA 

,r 32,935 at 163,127 ("We are bound by our precedent."); PCA Health Plans of Tex., Inc., 

ASBCA No. 48711, 98-2 BCA ,r 29,900 at 148,014 ("A decision by the Board is deemed 

binding precedent in another appeal unless the decision is reversed or otherwise modified 

by the Board's Senior Deciding Group or the court of appeals.") 

Notice Requirement Waiver 

My colleagues rely heavily on an argument that nothing in bilateral Modification 

No. POOOOl exercising Option 1 waived the 30-day notice requirement in FAR 22.1010. 

I guess this means the Air Force was required to provide the FAR 22.lOlO(b) 30-day 

notice no later than June 1, 2016 which is 30 days before Option 1 was exercised but 

60 days before the Option 1 performance period began on August 1, 2016. This assumes 

that the term "option" in FAR 22.1010(a)(2) can be interpreted to include a bilateral 

option exercise. As shown above, that is not how this Board defined "option" in 

Glasgow. If the notice provisions only apply to unilateral option exercises, as I argue, 

there is nothing to waive. 

This Board has Recognized the Reciprocal Benefits in FAR Provisions 

Tecom, Inc. , ASBCA No. 51591 , 01-01 BCA ,r 31 ,156 and Raytheon Service Co. , 

ASBCA Nos. 28721 , 29668, 86-3 BCA ,r 19,094, are cases that explain the reasoning 

behind the notice requirements. Raytheon teaches us two important lessons. First, that 

the FAR provisions providing a cut-off date for the applicability of a new or revised CBA 

benefits the government, and provisions requiring mandatory written notice benefit the 

contractor: "Like the cut-off date for revised wage determinations benefits the 

Government, the 30-day notice benefits the contractor." Raytheon, 86-3 BCA ,r 19,094 

at 96,527. Our decision in Tecom recognizes what we held in Raytheon: 

Further, as our decision in Raytheon makes clear, the 

30-days notification requirement is intended to benefit the 

contractor: "Since the [Government] did not provide the 

22 
notice, which would have been for [Tecom's] benefit, the 

[Government] cannot at the same time benefit from its failure 

to abide by the regulations by denying [Tecom] the 

opportunity to obtain a revised waged determination based 

upon the new CBA. 

Tecom, 01-1 BCA ,r 31 ,156 at 153,902. 

In Raytheon the Board considered the fundamental fairness of the situation: 

But here, because the Air Force was aware that appellant was 

conducting labor negotiations, DAR 12 - 1005.2(b)(2) 

required the Air Force to give notice at least 30 days prior to 

the start of the option period. The need for the 30 - day 

notice is understandable when we consider the precarious 

position of all interested parties when a collective bargaining 

agreement is being negotiated and the Air Force has given 

only preliminary notice that the underlying contract will be 

extended through an option. The contractor and the labor 

representatives are not assured of a continued contract with 

the Government, and the Government cannot determine the 

actual labor costs that will be incurred during the option 

period. Here, the notice should have warned the negotiating 

parties of a deadline. Instead the appellant was lulled into 

complacency. 

Raytheon, 86-3 BCA ,r 19,094 at 96,527. ACE and its union could not be "lulled into 

complacency" because ACE participated in the exercise of the option 30 days before the 

start of the first option year. There was no uncertainty over the fact that the contract 

would continue into the first option year. There was no unknown deadline. ACE and its 

union knew on July 1, 2016 that they had 30 days to complete negotiation of the new 

CBA. For whatever reason, they did not finalize the CBA before ACE started 

performing during the first option year (SOF ,r,r 21-23). The new CBA was eventually 

agreed to and signed on November 20, 2016. ACE then claimed $1 ,744,330.37 for the 

increased costs resulting from the new CBA for January 1, 2017 through the end of the 

first option year. (SOF ,r,r 25-27) Under these circumstances, I would not hold the Air 

Force liable for ACE's failure to finalize and sign the new CBA before the start of 

performance of the first option year. 

ACE Failed to Protect Itself 

When the Air Force asked ACE to sign Modification No. POOOOl bilaterally 

exercising Option 1, ACE was in control of the transaction. The preliminary notice was 

23 
only seven days before Modification No. POOOOl was signed and 37 days before 

expiration of the transition period and start of the first option year. (SOF 11 18-19) ACE 

knew it was negotiating a new CBA with the union. ACE knew that the costs to the Air 

Force would increase under the new CBA. ACE knew it would seek the higher costs 

embodied in the new CBA during Option Year 1. ACE could have refused to sign 

Modification No. POOOOl until the matter of the new CBA was resolved with the union 

and the Air Force. Faced with ACE's refusal, had the Air Force unilaterally exercised 

the option and had ACE accepted the contract extension, ACE was protected by Tecom 

and Ray theon because the Air Force clearly failed to provide the notice required by 

FAR 22.1010. Since the modification was exercised bilaterally, our decisions in Tecom 

and Ray theon simply do not apply. The situation is now closer to COSTAR III, LLC, 

ASBCA No. 56479, 11-2 BCA 134,830 and Guardian Moving & Storage Co. v. Hayden, 

421 F.3d 1268 (Fed. Cir. 2005), where the CBA was finalized during the current option 

year and we held that it was not effective until the next option year. The same is true in 

this case. The CBA was finalized on November 20, 2016, during the first option year. I 

would not compel the Air Force to increase its payments to cover the new CBA until the 

second option year. This is a reasonable result in this case that balances the reciprocal 

benefits in the FAR provisions recognized by this Board. 

For the reasons stated above, I would grant the Air Force's motion, deny ACE's 

motion and deny ACE's appeal. 

Dated: January 9, 2020 

Administra ive 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. 61503, Appeal of Alutiiq 

Commercial Enterprises, LLC, rendered in conformance with the Board's Charter. 

Dated: 

24 

PAULLA K. GATES-LEWIS 

Recorder, Armed Services 

Board of Contract Appeals