ARMED SERVICES BOARD OF CONTRACTAPPEALS Appeals of

-- ) ) ABS Development Corporation ) ) Under ContractNo. W912GB-10-C-0047 )
APPEARANCES FORTHE APPELLANT:

APPEARANCES FORTHE GOVERNMENT: ASBCA Nos. 60022, 60023

Thomas R. Krider, Esq. Howard W. Roth III, Esq. Ashley J. Sherwood, Esq.

Oles Morrison Rinker & Baker, LLP Seattle, WA
Thomas H. Gourlay, Jr., Esq.

Engineer ChiefTrial Attorney Brett R. Howard, Esq. Paul Cheverie, Esq. Nancy van Noortwijk-Sommer, Esq.

EngineerTrial Attorneys U.S. Army EngineerDistrict, Europe
OPINION BYADMINISTRATIVE JUDGE MCILMAIL ON THE GOVERNMENT'S MOTION TO AMEND ITS ANSWERS Introduction
The government seeks to amend its answers in ASBCA Nos. 60022 and 60023 to assert the defense thatthe contract referenced above is void ab initio, and, in ASBCA No. 60023, to assert the contention that it is not responsible for the sovereign acts ofthe Government ofIsrael. We allow the amendments. Voidab initio
In ASBCANos. 60022 and 60023, the government wants to amend its answers to assert allegations that the contract referenced above "was obtained by and is tainted by fraud, and hence is voidab initio and [appellant] cannot recover on its claims" (ASBCA No. 60022 (60022), amended answer at 1-3, 

### iiiI 55-61, ASBCANo. 60023 (60023), amended answer at 1-3, 

### irir 5-11 (italics in originals)). Appellant, citing 41 U.S.C. 

### § 7103(a)(5), Contract Disputes Act, and Supply & Service Team GmbH, ASBCA No. 59630, 17-1 BCA

### iI 36,678, says that we do not possessjurisdictionto entertain such a defense here because no third party has made factual determinations regarding any alleged fraud (60022, app. opp'n at 4-7; 60023, app. opp'n at 4). Wedisagree that we need any third-party determination here; wepossessjurisdictionto determine for ourselves whether a contract is void ab initio because offraud. See International Oil Trading Company, ASBCA No. 57491 etal., 13 BCA**~** 35,393 at 173,658 (bribery and fraud; discussing 41 U.S.C. § 7103); Serviciosy ObrasIsetan S.L., ASBCANo. 57584, 13 BCA**~** 35,279 at 173,162 (fraud in the inducement). Supply & Service Team does not require a contrary result, that appeal did not involve whether a contractwas void ab initio. Appellant also cites Laguna Construction Company v. Carter, 828 F.3d 1364 (Fed. Cir. 2016), butthat opinion also, does not require a contrary result here. In Laguna the court recited the rule that "[c]ertain fraud-related claims are outside ofthe Board'sjurisdiction

...[t]hese include claims relating to 41 U.S.C. 

### § 7103 (formerly 41 U.S.C. § 604), 28 U.S.C. § 2514 (Special Plea in Fraud), and 31 U.S.C. §§ 3729-31 (False Claims Act)." Id. at 1368 (emphasis added, internal citations omitted). Whether a contract is void ab initio is none ofthose. There is a big difference between whether a contract is void ab initio (in which the question is whetherthe contractor can establish that he has a contract with the government in the first place, seeAtlasInternational Trading Corp., ASBCANo. 59091,**15-1BCA~35,830** at 175,198 (contract obtained through bribery void ab initio)), andwhether (as in Laguna) the government is asserting the type offraud claim that we do not possessjurisdictionto entertain.
Forthese reasons, wepossessjurisdictionto entertain the government'sproposed void ab initio amendments; therefore, ourjurisdiction is no barto amendment. Appellant also says that, assuming wehavejurisdiction, the amendments should not be allowed because, it says, there is no fraud (60022, app. opp'n at 8; 60023, app. opp'n at 4). However, that is a merits issue for a hearing. Appellant also says that, at this point amendmentwould unduly prejudice it (60022, app. opp'n at 11-13; 60023, app. opp'n at 4-5). We permit amendment upon conditions fair to bothparties, Board Rule 6(d), and see no unfairness in allowing amendment here. We are not on the eve oftrial (scheduled for April 10, 2018), andthe proposed amendment concerns matters such as what appellant's president said at a deposition held only a few months ago regarding whether appellant "intentionally induced the US Governmentto awardthe contractto [appellant] eventhough they had no intention ofperforming the contract" (60022, amended answer at 2,**~** 58; 60023 amended answer at 2,**~** 8). Presumably, appellant is already aware ofthe facts that bearupon that issue. We allowthe proposed amendments. SovereignActs of a Foreign Government
In ASBCA No. 60023, the government wants to amend its answerto include the following contention:

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### The U.S. government is not responsible for the sovereign acts ofa foreign nation. Control overbase access on this project was the sole responsibility ofthe Government of Israel. A warranty covering the actions ofa thirdparty cannot be held to exist in a government contractunless the terms ofthe alleged warranty are unmistakable. The contract does not contain an express or implied warranty regarding the ability of[appellant] to receive approval by the Government ofIsrael for base access for Turkish workers. (60023, amended answer at 1,**~** 

### 4) Appellant's opposition is based on its view that those contentions are not (using appellant's term) "viable" (60023, app. opp'n at 5, 9). That is, appellant contends that, "[g]iven that the contract does contain the implied warranty the Government's proffered affirmative defense seeks to avoid, the Government's motion to amend should be denied" (id. 

### at 9). That, too, is a merits issue, either for a hearing, post-hearing briefing, orboth. Appellant also says that allowing the government's "foreign sovereign acts" contention would cause it undue prejudice (see 

### 60023, app. opp'n at 5). Again we are not on the eve oftrial; moreover, the government's contentions appear to consist almost entirely ofquestions oflaw. In any event, appellant points to no specific prejudice. We see no unfairness in allowing the amendment, and allow it. Conclusion · 

### The proposed amendments to the answers in these appeals are allowed. Dated: 30 August 2017

(Signatures continued)

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# ~~ Administrative Judge Armed Services Board ofContractAppealsI concur

RICHARD SHACKLEFORD Administrative Judge Acting Chairman Armed Services Board ofContract Appeals I concur

J. REiffPROUTY Administrative Judge Vice Chairman Armed Services Board ofContractAppeals

I certify that the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContract Appeals in ASBCA Nos. 60022, 60023, Appeals of ABS Development Corporation, rendered in conformance with the Board's Charter.
Dated:

4 JEFFREY D. GARDIN Recorder, Armed Services Board ofContract Appeals