ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of -- ) 

) 

CKC Systems, Inc. ) 

) 

Under Contract No. SPRPA1-12-C-W059 ) 

APPEARANCE FOR THE APPELLANT: 

APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 60977 

Ms. Jenny Cheng 

President 

Daniel K. Poling, Esq. 

DLA Chief Trial Attorney 

Edward R. Murray, Esq. 

Trial Attorney 

DLA Aviation 

Richmond, VA 

SharifT. Dawson, Esq. 

Trial Attorney 

Defense Supply Center 

Philadelphia, PA 

OPINION BY ADMINISTRATIVE JUDGE OSTERHOUT 

This appeal arises from a contracting officer's (CO's) termination for default of 

a contract for storage containers for helicopter main rotor blades (blade boxes) 

between CKC Systems, Inc., (CKC or appellant) and the Defense Logistics Agency 

(DLA or government). CKC alleges that the government caused CKC's delay due to a 

change in the scope of the contract by requiring wooden skids in the container to have 

a stamp on them in a visible location when the container is used at a warehouse. CKC 

requests that the termination for default be converted to a termination for convenience 

because of this alleged excused delay. The government argues that the stamp 

markings were always required as part of the contract and that CKC failed to deliver 

on time. The parties have elected to waive a hearing and submit the case upon the 

record pursuant to Board Rule 11. We deny the appeal. 

FINDINGS OF FACT 

1. On July 12, 2012, DLA issued contract number SPRPA1-12-C-W059 (the 

contract) to CKC to produce 38 shipping and storage containers for main rotor blades for 

the UH-1 and AH-lZ helicopters, under National Stock Number (NSN) 8145-01-563-8433 
at contract line item number (CLIN) OOOlAA. The amount of the contract was 

$174,347.04. (R4, tab 1) 

2. The contract contained a requirement for a first article test at CLIN OOOlAB, 

which was not separately priced (R4, tab 1 at 2). 

3. The contract allowed for early and incremental deliveries (R4, tab 1 at 2). 

4. The contract required delivery of the first article within 60 calendar days of 

the issuance of the contract (R4, tab 1 at 6). Thus, delivery of the first article was due 

on September 10, 2012. 

5. The contract required delivery of 3 8 containers by February 5, 2014 (R4, tab 1 

at 2). 

6. The contract award document stated that the contract consisted of CKC' s 

proposal, solicitation number SPRPA1-12-R-W308 (the solicitation), and "this 

award/contract" (R4, tab 1 at 1, block 18). 

7. The first sentence of the "Scope" section of the solicitation directed offerors, 

"Should a conflict arise between the drawings the contract contact code 0771.17 and 

the contracting officer for resolution." The "Scope'' section of the solicitation also 

stated, "Articles to be furnished hereunder shall be manufactured, tested and inspected 

in accordance with <Container Research Corporation> drawing number ( <05259>) 

<775E001>, Revision <latest> and all details and specifications referenced therein." 

(R4, tab 11 at 5) 

8. Paragraph 1. 7 of the solicitation stated, "[ w ]hen discrepancies exist between 

these requirements and those on current manufacturer's drawings, these requirements 

shall prevail" (R4, tab 11 at 5). 

9. Amendment No. 0001 of the solicitation, issued May 9, 2012, directed offerors 

to the applicable drawings, which included drawing 775E002 (R4, tab 12 at 1, 3). 

Drawing 775E002 referred to the wooden skids as items 17 and 18 (R4, tab 37 at 15). 

Note 1 on the overview drawing in 775E002 stated, "Items 17 & 18 to be manufactured, 

treated, and identified in compliance with ISPM No. 15" (R4, tab 37 at 8). 

10. The solicitation included NAVSUPWSSDA07, PRESERVATION, PACKING 

AND MARKING (JAN 2012) (R4, tab 11 at 7). Paragraph 5 ofNAVSUPWSSDA07 

included directions concerning wood packaging material. It directed offerors that the 

International Standards for Phytosanitary Measures (ISPM) 15 "Guidelines for 

Regulating Wood Packaging Material in International Trade" applied. Specifically, it 

required ISPM 15 for all Wood Packaging Material (WPM) and: 

2 
WPM is defined as wood pallets, skids, load boards, pallet 

collars, wooden boxes, reels, dunnage, crates, frames, and 

cleats. Packaging materials exempt from the requirements 

are materials that have undergone a manufacturing 

process such as corrugated fiberboard, plywood, 

particleboard, veneer, and oriented strand board. All 

WPM shall be constructed from Heat Treated (HT to 56 

degrees Centigrade for 30 minutes) lumber and certified by 

an accredited agency recognized by the ALSC in 

accordance with Wood Packaging Material Policy and 

Wood Packaging Material Enforcement Regulations 

(http://www.alsc.org). All materials must include 

certification markings in accordance with ALSC standards 

and be placed in an unobstructed area that will be readily 

visible to inspectors. Pallet markings shall be applied to 

the stringer or block on diagonally opposite sides and ends 

of the pallet and be contrasting and clearly visible. All 

dunnage used in configuring and/or securing the load shall 

also comply with ISPM 15 and be marked with an ALSC 

approved DUNNAGE stamp. Failure to comply with the 

requirements of this restriction may result in refusal, 

destruction, or treatment of materials at the point of entry, 

possibly causing unacceptable delay in delivery of needed 

parts. 

(R4, tab 11 at 9) (emphasis added) 

11. ISPM 15 is entitled "Regulation of Wood Packaging Material in International 

Trade." The scope of the regulation states: 

This standard describes phytosanitary measures that reduce 

the risk of introduction and spread of quarantine pests 

associated with the movement in international trade of 

wood packaging material made from raw wood. Wood 

packaging material covered by this standard includes 

dunnage but excludes wood packaging made from wood 

processed in such a way that it is free from pests ( e.g., 

plywood). 

(R4, tab 38 at 5) 

3 
12. Paragraph 2.1 ofISPM 15 contains a list of exemptions, including "wood 

components permanently attached to freight vehicles and containers" (R4, tab 38 at 7). 

13. The contract incorporated by reference Federal Acquisition Regulation 

(FAR) 52.249-8, DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984), which 

states: 

(a)(l) The Government may, subject to paragraphs 

( c) and ( d) below, by written notice of default to the 

Contractor, terminate this contract in whole or in part if the 

Contractor fails to -

(i) Deliver the supplies or to perform the services 

within the time specified in this contract or any extension; 

(ii) Make progress, so as to endanger performance 

of this contract (but see subparagraph (a)(2) below); or 

(iii) Perform any of the other provisions of this 

contract (but see subparagraph (a)(2) below). 

(2) The Government's right to terminate this 

contract under subdivisions (l)(ii) and (l)(iii) above, may 

be exercised if the Contractor does not cure such failure 

within 10 days ( or more if authorized in writing by the 

Contracting Officer) after receipt of the notice from the 

Contracting Officer specifying the failure. 

(R4, tab 1 at 13) 

14. In January 2014, the government released the first article test report, 

concluding that the container met the requirements. While testing was conducted on 

June 6, 2013, the record does not demonstrate when CKC delivered the first article for 

testing. The report detailed dents and other potential issues with the blade boxes but 

did not include a comprehensive list of what CKC did right to comply with the 

contract. There was no mention of markings on the hardwood portion of the skids and 

no photographs demonstrated whether the hardwood was appropriately labeled or not. 

(R4, tab 16) Only one photograph showed the wooden portion of the skids, but it was 

only part of the wooden portion so markings may have been visible in the part that was 

not in the photograph (R4, tab 16 at 7). Thus, nothing in the record demonstrated 

whether the skids were marked during the first article test or not. 

4 
15. On July 23, 2015, the government issued unilateral Modification No. POOOOl. 

The modification was "to provide a revised delivery date of October 30, 2015 due to 

mutual delay." The modification stated that the first article test was "granted" in 

September 2014. The modification also included directions that earlier deliveries were 

acceptable and that "[a]ll other terms and conditions remain the same." (R4, tab 2 at 1-2) 

16. On November 19, 2015, the government appeared to issue unilateral 

Modification No. P00002. The modification in the record is unsigned. 1 This 

modification extended the delivery date to December 1, 2015. (R4, tab 3) 

17. On December 1, 2015, the contract specialist emailed CKC. The contract 

specialist inquired as to whether items had been shipped or if the contract was still 

open. The contract specialist also requested that CKC submit a final invoice if 

delivery had been made. (R4, tab 17) 

18. Also on December 1, 2015, CKC responded, "W059 is still an open contract. 

We are close to completing them and will ship them in less than 6 months." (R4, tab 17) 

19. By letter dated December 3, 2015, the CO sent CKC a show cause letter for 

the contract. The CO summarized the contract award and delivery date modifications. 

The CO stated that the government was considering terminating the contract for 

default. The CO stated: 

(R4, tab 18) 

Pending a final decision in this matter, it will be necessary 

to determine whether your failure to perform arose from 

causes beyond your control and without fault or negligence 

on your part. Accordingly, you are given the opportunity to 

present, in writing, any facts bearing on the question to 

[the contract specialist], within 10 days after receipt of this 

notice. Your failure to present any excuses within this 

time may be considered as an admission that none exist. 

20. On December 14, 2015, CKC responded to the show cause letter. CKC 

stated, "[t]he subject had [first article test] requirement and Government took an 

extended 15 months to approve the [first article] due to various reasons." CKC also 

1 CKC did not dispute that this unsigned modification and all of the other unsigned 

modifications were part of the contract. Therefore, we accept these 

modifications as part of the contract but note which ones were unsigned in each 

fact. 

5 
requested an extension until June 29, 2016, which appeared to be an administrative 

error that should have been 2017. CKC stated four reasons it was late: 

1. Contingencies that were out of our control. 

2. Delay was caused by our allocation of resources to 

fulfill other Government urgent need and so compromises 

this schedule. 

3. 80% materials are in-house and remaining is promised 

within 45 days. 

4. CKC is planning to assemble the units once completed 

fabrications. 

(R4, tab 19) CKC promised to provide a spreadsheet with revised delivery schedules 

for this contract and other contracts that had received show cause notices on 

December 16, 2015. 

21. On December 16, 2015, CKC provided a spreadsheet of when it anticipated 

completing the contracts in which it was behind schedule. CKC requested that the 

government extend the delivery date for the blade boxes to 19 delivered by 

February 2016 and 19 delivered by April 2016. (R4, tab 20) 

22. On December 22, 2015, the CO sent CKC a letter which notified CKC that 

the government would accept a delivery date of June 29, 2016, in exchange for a 

reduction of$1,748.00 in the contract price (R4, tab 21). 

23. On December 22, 2015, the government appeared to issue unilateral 

Modification No. P00003. The modification in the record is unsigned. This 

modification stated that it was issued in accordance with CKC's correspondence, dated 

December 18, 2015, to set forth a new delivery schedule with consideration of reduced 

contract pricing for CLIN OOOlAA. The new delivery date was June 29, 2016. The 

unit price was reduced by $46.00 to $4,542.08 for a reduction of $1,748.00. The total 

price changed from $174,347.00 to $172,599.04. The modification also stated, "All 

other terms and conditions will remain the same. Earlier delivery will be accepted but 

will not be considered expedited shipments." (R4, tab 4 at 1-2) 

24. On March 28, 2016, the government appeared to issue unilateral 

Modification No. P00004. The modification in the record is unsigned. This 

modification updated the delivery address for CLIN OOOlAA but did not change any 

other portions of the contract. (R4, tab 5 at 1-2) 

6 
25. On July 7, 2016, the government issued unilateral Modification No. P00005. 

This modification changed the delivery date for CLIN OOOlAA to July 29, 2016. The 

modification stated, "No consideration is required; the due date is extended due to a 

delay in the DCMA inspection." (R4, tab 6) 

26. On August 9, 2016, the contract specialist sent CKC an email asking 

whether CKC would accept a no-cost cancellation on the contract. CKC answered that 

it disagreed and attempted to "paint [] a better picture" of the status of the contract by 

explaining where each blade box was in the process. CKC asked for another extension. 

this time for 2 months, stating, "And if you and your team is open, we are willing to 

offer 1 % consideration to extend for just the additional 2 months." (R4, tab 24) 

27. On August 17, 2016, the government issued unilateral Modification 

No. P00006. This modification corrected CLIN OOOlAA referenced in Modification 

Nos. P00004 and P00005 to CLIN OOOlAC but all other terms and conditions 

remained the same. (R4, tab 7) 

28. On September 1, 2016, the government issued unilateral Modification 

No. P00007. This modification modified the delivery schedule for consideration of a 

reduction in the contract price of $1,748.00 and restructured the CLINs. According to this 

modification, CLIN OOOlAA was canceled in its entirety by Modification No. P00004. 

CLIN 0001 AB, the first article test, had already been delivered and approved. And CLIN 

OOOlAC for 38 units had been due on July 29, 2016, with a unit price of $4,542.00 each. 

The new delivery schedule reduced the number of units in CLIN OOOlAC to 10, 

established CLINs OOOlAD and OOOlAE, and reduced the unit price to $4,496.08 each. 

Therefore, the modification required 10 units be delivered by October 31, 2016, under 

CLIN OOOlAC, 2016; 14 units delivered by November 30, 2016, under CLIN OOOlAD; 

and 14 units delivered by January 2, 2016, under CLIN OOOlAE. (R4, tab 8) 

29. On September 14, 2016, after observing non-compliance with the contract 

during an inspection on September 8, 2016, the government issued Corrective Action 

Request (CAR), 4 7 days prior to the delivery date for the first ten units reference 

number 5BN8120160003, which described problems with the blade boxes and stated, 

in relevant part, "Container skids, per drawing, Base Assembly 775E002, are required 

to be hardwood, manufactured, treated and identified per ISPM No. 15." The 

non-compliance description stated, in relevant part, "Container skids not correct type 

wood per drawing and not manufactured, treated and marked per ISPM No. 15." A 

response was required by October 4, 2016. (R4, tab 26 at 1) 

30. On October 4, 2016, CKC sent the government a response to the CAR. 

7 
Concerning the skids, CKC stated: 

Drawing 77 5E002-l 7 & -18 specifies hardwood identified 

per ISPM No. 15 which exempt these skids (2.1 

Exemptions ISPM 15) from this standard. However, all 

skids are made to size by CKC from the hardwood 

(Grade# 1 Common by American Hardwood Expert 

Council, Grade 4 is identified) bearing the stamp required 

by ISPM No. 15 (indicated heat treated, etc[.]). Photo of 

stamp on wood can be provided. CKC consider[ s] 

compliance to the drawing requirement for the skids. 

(R4, tab 27 at 1, 4) 

31. On October 4, 2016, the government issued unilateral Modification No. P00008, 

which corrected the delivery date for CLIN 000 lAE in Modification No. P00007 from 

January 2, 2016 to January 2, 2017 (R4, tab 9). 

32. On October 5, 2016, the government rejected CKC's response to the CAR 

and requested a new answer by October 12, 2016 (R4, tab 27 at 1). 

33. On October 12, 2016, CKC responded to the CAR again. Regarding the 

skids, CKC stated, "CKC believes that it met the drawing requirement and is seeking 

clarification from PCO Engineer, may result with RFV. (CKC made skids from upper 

grade/type hard wood treated per ISPM 15, [(]Grade 4 is lowest grade hard wood; skid 

is exempt from ISPM No. 15))." (R4, tab 28 at 2) 

34. In its undated request for clarification from the engineers, CKC highlighted 

ISPM 15 exemption 2.1 "The following articles are of sufficiently low risk to be exempted 

from the provisions of this standard[]: [w]ood components permanently attached to 

freight vehicles and containers." CKC explained, "The skid is permanently attached to the 

container by four bolts/nuts and so no identification is required per the ISPM No. 15." 

CKC included photographs for reference. CKC asked if it met the requirements or not and 

asked for a waiver if it did not meet the requirements. (R4, tab 29) 

3 5. On October 21, 2016, CKC sent the contract specialist an email asking for 

"some clarification from Engineering Dept. in regards to a wooden skid issue on 

SPRPA1-12-C-W059." The email references an attachment but the record does not 

contain an attachment. (R4, tab 30) 

8 
36. On October 26, 2016, the contract specialist responded to CKC's email, 

stating: 

(R4, tab 30) 

I've received the following in response to your request for 

clarification: "N241 has reviewed the request. Note 1 

states Items 17 & 18 to be Treated and Identified in 

Compliance with ISPM 15. The specification cited is 

commercial and the Navy does not recognize the 

exemptions. The wood skids must have a stamp on them 

or they will be frustrated once they reach the warehouse 

(DLA and bonded)" 

37. By letter dated November 7, 2016, the CO sent CKC a show cause letter. 

The CO stated that CKC had missed the first delivery of 10 units that was due on 

October 31, 2016, and that 14 units were due on November 30, 2016, and another 14 

units were due on January 2, 2016. The CO stated that the government was 

considering terminating the contract for default. The CO stated: 

Pending a final decision in this matter, it will be necessary 

to determine whether your failure to perform arose from 

causes beyond your control and without fault or negligence 

on your part. Accordingly, you are given the opportunity 

to present, in writing, any facts bearing on the question to 

[the contract specialist], within 10 days after receipt of this 

notice. Your failure to present any excuses within this 

time may be considered as an admission that none exist. 

(R4, ta~ 31) The CO directed that a reply must be received by November 17, 2016. 

38. On November 14, 2016, CKC issued a purchase order to Bentco Pallet & 

Crate LLC (Bentco) for 100 each "heat treated hardwood (grade 4 min.) per ISPM no 

15; 3.62 x 2.62 x 38.50; stamp both ends" and 39 each "heat treat and stamp both ends 

on hardwood per ISPM no 15" (R4, tab 61). 

39. On November 17, 2016, CKC sent a reply to the show cause letter. CKC 

stated, "During the course of receiving clarification on a 'skid' issue, DLA noted that 

'the wood skids must have a stamp on them or they will be frustrated once they reach 

the warehouse (DLA and bonded)." CKC explained: 

Our wood skids had already been machined prior to this 

request, so some of the stamped skids had been partially 

9 
removed during the machining process. Unfortunately, the 

vendor who supplied the wood no longer existed, so a 

request for an additional stamp on our existing wood skids 

was not possible. As a result, CKC had to purchase from a 

new vendor in addition to the stamping where it will be 

easily visible, even after completion of the machining the 

wood. Due to the new vendor, the QAR is also requiring 

documentation, and we are in the process of satisfying the 

documentation request. 

(R4, tab 32) CKC offered to reduce the contract price by $1,000 for an additional 

extension. The additional extension would consist of CLIN OOOlAC's 10 units due 

on December 16, 2016; CLIN OOOlAD's 14 units due on January 31, 2017; and 

CLIN OOOlAE's 14 units due on February 28, 2017. Nothing in the record demonstrates 

that CKC included estimates of when the new, heat treated wood might arrive, or that it 

could meet any of the remaining delivery dates. 

40. On November 23, 2016, nine days after receipt of the purchase order, Bentco 

delivered and CKC received 39 pieces of heat treated wood, stamped US-11-577 (R4, 

tab 62 at 1) and 100 pieces of hardwood per ISPM 15 stamped US-11-577 (R4, tab 62 

at 4 ). Bentco included certification documents to demonstrate that the hardwood met 

ISPM 15 standards (R4, tab 62 at 2, 5). 

41. On December 7, 2016, the CO sent CKC a letter notifying it that it was 

terminated for default. The letter stated that this was the contracting officer's final 

decision and provided appeal rights for the Board. (R4, tab 34) 

42. Also on December 7, 2016, CKC responded to the termination letter, 

requesting that the contract not be terminated because "'it would be in the best interest 

of both parties that this contract be completed by CKC" because 10 units were 

complete already. CKC explained, "During your review of our Show Cause Response, 

we had to overcome the stamps issue for all the skids to accommodate the depot's 

requests." CKC stated that 10 units were ready and a source inspection was scheduled 

for December 7, 2016, but stopped due to the termination letter. CKC provided a new 

delivery schedule of delivering: 10 units by December 16, 2016, under CLIN 000 lAC; 

14 units by January 31, 2017, under CLIN OOOlAD; and 14 units by February 28, 

2017, underCLIN OOOlAE. (R4, tab 35 at 1) 

43. Also on December 7, 2016, the government issued unilateral Modification 

No. P00009. This modification terminated the contract for default. The modification 

included the standard statement concerning appeal rights. (R4, tab 10) 

10 
44. On December 22, 2016, CKC appealed the CO's final decision and the · 

appeal was docketed as ASBCA No. 60977. 

45. On February 13, 2018, the CO issued a new final decision, which allowed 

for payment of 10 units but maintained the termination for default for the remaining 28 

units. The CO stated that during discovery conducted as part of the appeal, it became 

apparent that CKC attempted to deliver the 10 blade boxes referenced in CLIN 000 lAC 

prior to termination of the contract. Thus, the CO decided to pay CKC for the 10 blade 

boxes for which CKC attempted delivery. The CO stated that "on December 8, 2016, I 

issued a final decision demanding a return of $100,151 in progress payments pursuant 

to another contract terminated for default, Contract SPRP A l-12-C-W008." The CO 

stated that these funds had not yet been returned to the government so the CO reduced 

the amount owed by $44,960.86, the amount owed to CKC for 10 blade boxes under 

CLIN 000 lAC. This reduced the amount CKC purportedly owed the government to 

$55,190.14 under contract SPRPA1-12-C-W008, a contract not subject to this appeal. 

(R4, tab 65 at 1-2) 

46. On March 16, 2018, CKC requested the government reconsider the 

February 2018 final decision and accept the final 28 boxes. CKC stated that it included 

photographs that demonstrated that it was close to finishing the remaining 28 boxes. 

The government indicated that it would "stand by the final decision." (R4, tab 67) 

DECISION 

The legal standards for a termination for default are well established. Under the 

default clause, here FAR 52.249-8 DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) 

(APR 1984 ), the government may terminate for default by written notice if the 

contractor fails, without excuse, to: deliver supplies within the time specified or any 

extension; make progress, as to endanger performance of the contract; or perform any 

other provisions of the contract. For the latter two categories, the government may 

exercise its right to terminate if the contractor does not cure the failure within 10 days 

after receiving notice from the contracting officer that specifies the failure. 

Termination for default "is a drastic sanction which should be imposed ( or 

sustained) only for good grounds and on solid evidence." Lisbon Contractors, Inc. v. 

United States, 828 F.2d 759, 765 (Fed. Cir. 1987) (quoting J.D. Hedin Constr. Co. v. 

United States, 408 F .2d 424, 431 (Ct. Cl. 1969) (further citations omitted). While CKC 

appealed the contracting officer's decision, "a termination for default is essentially a 

government claim." Thunderstruck Signs, ASBCA No. 61027, 17-1 BCA ,i 36,835 at 

179,504. Thus, the government maintains the burden of proving that a termination for 

default was justified, by a preponderance of the evidence. Id. (citing DayDanyon 

Corp., ASBCA No. 57681, 15-1 BCA ,i 36,073 at 176,151; Keystone Capital Services, 

ASBCA No. 56565, 09-1 BCA ,i 34,130 at 168,753 (citing Lisbon Contractors, 828 

11 
F.2d at 765). Should the government establish the prima facie case to justify the 

termination, '"the burden shifts to the contractor to prove the default was excusable." 

Truckla Services Inc., ASBCA Nos. 57564, 57752, 17-1 BCA ,r 36,638 at 178,445 

(citing ADT Constr. Grp., Inc., ASBCA No. 55358, 13 BCA i135,307 at 173,312). 

Here, the government established a prima facie case to justify the termination 

for default. After a number of modifications granting CKC extensions, the last 

delivery schedule the government agreed to was: 10 units be delivered by October 31, 

2016, under CLIN OOOlAC; 14 units delivered by November 30, 2016, under 

CLIN OOOlAD; and 14 units delivered by January 2, 2017, under CLIN OOOlAE 

(findings 28, 31). When CKC failed to deliver the first ten units by October 31, 2016, 

the government issued a show cause letter pursuant to the requirements of the FAR 

and the contract (finding 37). When CKC responded to the show cause letter, it did 

not state how it would meet the remaining delivery dates but instead provided yet 

another delayed schedule (finding 39). CKC's first attempt at delivery of the first 10 

units under CLIN OOOIAC occurred on December 7, 2017 (finding 42). CKC did not 

attempt delivery of the other units and CLINs. Thus, CKC failed to deliver the units 

on time and the government established the prima facie case to justify the termination. 

The burden then shifts to CKC to demonstrate that its failure to timely deliver 

was excusable. To establish that CKC is entitled to excusable delay, it must 

demonstrate that the delay resulted from a cause which was unforeseeable, beyond the 

control of the contractor, and without fault or negligence by the contractor. Sauer Inc. 

v. Danzig, 224 F.3d 1340, 1345 (Fed. Cir. 2000). CKC argues that its delay is 

excusable because of changed contract conditions. Specifically, CKC argues that the 

government imposed a stricter requirement than the contract required because ISPM 

15 provided an exemption for '"wood components permanently attached to freight 

vehicles and containers" and the hardwood skids were permanently attached by four 

bolts and nuts. 2 (Finding 34) 

2 In its initial brief, CKC stated, '"The first article took government one and half 

year[ s] to approve due to lack of funding and its availability at that time to do 

the testing. Finally, the first article sample was returned to CKC but badly 

damaged to a point that it could not be refurnished to become a production 

unit." (App. br. at ,r 2) None of this information was contained in CK C's 

complaint or referenced in the record. Nevertheless, the government extended 

the contract several times after the first article test was completed so this 

allegation was resolved with the issuance of further modifications and should 

not have impacted the rationale for the termination for default (findings 20-23). 

Further, even if this had impacted CKC's performance, the government 

accepted CKC's estimates on how long it would take to complete the blade 

boxes and extended the contract by that amount of time at least three times 

(findings 20-23, 27-28). 

12 
Unfortunately for CKC, the requirement for marking the hardwood was 

contained within the contract; therefore, CKC's own actions of not complying with the 

contract caused the delay. CKC is correct that the contract directed it to follow the 

requirements contained in ISPM 15. The drawings and solicitation both required 

compliance with ISPM 15. (Findings 9-10) However, even if the exemption CKC 

references in ISPM 15 applied, CKC was responsible for marking the wooden skids 

because the contract also contained other clauses and directions that require more 

stringent requirements to mark the hardwood (finding 10) 

NA VSUPWSSDA07 was included in the solicitation and provided offerors 

with directions concerning wood packaging and was incorporated in the contract 

(finding 10). It directed offerors to comply with ISPM 15 but it provided further 

details concerning what exceptions were allowed. Specifically, it stated, "Packaging 

materials exempt from the requirements are materials that have undergone 

manufacturing process such as corrugated fiberboard, plywood, particle board, veneer, 

and oriented strand board." Thus, the exceptions were narrower than the exemptions 

permitted in ISPM 15. (Finding 10) This acquisition does not meet the narrower 

exceptions contained in the contract because, by CKC' s own admission, the contract 

required hardwood, not the materials excepted by the clause (finding 30). 

NAVSUPWSSDA07 also stated, "All materials must include certification 

markings in accordance with ALSC standards and be placed in an unobstructed area 

that will be readily visible to inspectors" (finding 10) Thus, the contract required 

markings. 

Further, the solicitation also stated, "When discrepancies exist between these 

requirements and those on current manufacturer's drawings, these requirements shall 

prevail" (finding 8). Therefore, the markings on the drawings directing offerors to 

comply with ISPM 15 do not provide an avenue to rely upon the exemption listed in 

ISPM 15. 

Additionally, it was within CKC's control to fix the issue once it became aware 

of the requirement to mark the hardwood. The government's CAR concerning the lack 

of markings on the hardwood was issued on September 14, 2016, which was 4 7 days 

prior to the delivery date of the first ten units (finding 29). Instead of ordering wood in 

compliance with the contract at that time, CKC sent numerous questions to the 

government about whether the markings were actually required (findings 30, 33-35). 

CKC issued a purchase order for the new wood on November 14, 2016 (finding 38). 

That wood was delivered nine days later, on November 23, 2016 (finding 40). CKC 

had ten units ready for inspection by December 7, 2016 (finding 42), fifteen days after 

receiving the wood. If CKC had ordered the contract-compliant wood shortly after 

receiving the CAR, it could have met the October 31, 2016, and subsequent delivery 

dates. 

13 
Based on all of these portions of the specifications and drawings, the contract 

required the markings be placed in an unobstructed area that was readily visible to 

inspectors. The government did not change the contract. Further, decisions CKC 

made caused the delay in the contract, once CKC was aware of the noncompliant 

hardwood markings. Thus, appellant has failed to demonstrate that it is entitled to an 

excusable delay and the termination for default is justified. 

The appeal is denied. 

Dated: June 20, 2019 

Armed Services Board 

of Contract Appeals 

CONCLUSION 

HEIDI L STERHOUT 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

I concur 

OWEN C. WILSON 

Administrative Judge 

Vice Chairman 

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. 60977, Appeal of CKC 

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

Dated: 

14 

PAULLA K. GATES-LEWIS 

Recorder, Armed Services 

Board of Contract Appeals