ARMED SERVICES BOARD OF CONTRACTAPPEALS Appeal of

-- ) ) CKC Systems, Inc. ) ) Under ContractNo. SPRPA1-12-C-W059 )
APPEARANCE FORTHE APPELLANT:

APPEARANCES FORTHE GOVERNMENT: ASBCANo. 60977

Ms. Jenny Cheng

President
Daniel K. Poling, Esq.

DLA ChiefTrial Attorney Edward R. Murray, Esq.

Trial Attorney DLAAviation Richmond, VA SharifT. Dawson, Esq.

Trial Attorney Defense Supply Center Philadelphia, PA
OPINION BYADMINISTRATIVE JUDGE OSTERHOUT
This appeal arises from a contracting officer's (CO's)termination for default of a contract for storage containers for helicoptermain rotor blades (blade boxes) between CKC Systems, Inc., (CKC or appellant) and the Defense Logistics Agency (DLA orgovernment). CKC alleges thatthe government caused CKC's delay due to a change in the scope ofthe contract byrequiring wooden skids in the containerto have a stamp on them in a visible location whenthe container is used at a warehouse. CKC requests thatthe termination for defaultbe convertedto a termination for convenience because ofthis alleged excused delay. The government argues thatthe stamp markings were always required as part ofthe contract and that CKC failed to deliver ontime. The parties have elected to waive a hearing and submit the case upon the record pursuantto BoardRule 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 toproduce 38 shipping and storage containers for main rotor blades for the UH-1 andAH-lZ helicopters, underNational Stock Number (NSN) 8145-01-563-8433at contract line item number (CLIN) OOOlAA. The amount ofthe 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 contractrequired delivery ofthe first article within 60 calendar days of the issuance ofthe contract (R4, tab 1 at 6). Thus, delivery ofthe first article was due on September 10, 2012.
5. The contractrequired delivery of3 8 containers by February 5, 2014 (R4, tab 1 at 2).
6. The contract award document statedthat the contract consisted ofCKC'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 ofthe "Scope" section ofthe solicitation directed offerors, "Should a conflict arise betweenthe drawings the contract contact code 0771.17 and the contracting officer for resolution." The "Scope'' section ofthe solicitation also stated, "Articlesto be furnished hereunder shall be manufactured, tested and inspected in accordance with <ContainerResearch Corporation> drawing number (<05259>) <775E001>, Revision <latest> and all details and specifications referencedtherein." (R4, tab 11 at 5)
8. Paragraph 1.7 ofthe 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. AmendmentNo. 0001 ofthe 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 1onthe overview drawingin 775E002 stated, "Items 17 & 18 tobemanufactured, treated, and identified in compliance withISPMNo. 15" (R4, tab 37 at 8).
10. The solicitation includedNAVSUPWSSDA07, PRESERVATION, PACKING AND MARKING (JAN 2012) (R4, tab 11 at 7). Paragraph 5 ofNAVSUPWSSDA07 included directions concerning woodpackagingmaterial. It directed offerors that the International Standards for Phytosanitary Measures (ISPM) 15 "Guidelines for Regulating WoodPackagingMaterial in International Trade" applied. Specifically, it required ISPM 15 for all WoodPackaging Material (WPM) and: 2 

# l 

# f

### WPM is defined as wood pallets, skids, load boards, pallet collars, wooden boxes, reels, dunnage, crates, frames, and cleats. Packagingmaterials exempt from the requirements are materials that have undergone a manufacturing process such as corrugated fiberboard, plywood, particleboard, veneer, andorientedstrandboard. 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). Allmaterials must include certification markings in accordance withALSCstandards andbeplacedin an unobstructedarea thatwill be readily visible to inspectors. Pallet markings shall be applied to the stringer orblock on diagonally opposite sides and ends ofthe pallet andbe contrasting and clearly visible. All dunnage used in configuring and/or securingthe load shall also comply with ISPM 15 and be marked with an ALSC approved DUNNAGE stamp. Failure to comply withthe requirements ofthis restriction may result in refusal, destruction, or treatment ofmaterials at the point ofentry, possibly causing unacceptable delay in delivery ofneeded parts. (R4, tab 11 at 9) (emphasis added)
11. 

### ISPM 15 is entitled "Regulation ofWood Packaging Material in International Trade." The scope ofthe regulation states: This standard describes phytosanitary measures thatreduce the risk ofintroduction and spread ofquarantine pests associated withthe movement in international trade of wood packaging material made from raw wood. Wood packaging material coveredby this standard includes dunnage but excludes woodpackaging made from wood processed in such a way that it is free from pests (e.g., plywood). (R4, tab 38 at 5)

312. Paragraph 2.1 ofISPM 15 contains a list ofexemptions, including "wood components permanently attachedto 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, subjectto paragraphs (c) and (d) below, by written notice ofdefault to the Contractor, terminate this contract in whole or in part ifthe Contractor fails to

- (i) Deliver the supplies orto perform the services within the time specified in this contract or any extension; (ii) Make progress, so as to endangerperformance ofthis contract (but see subparagraph (a)(2) below); or (iii) Perform any ofthe otherprovisions ofthis contract (but see subparagraph (a)(2) below). (2) The Government's right to terminate this contractunder subdivisions (l)(ii) and (l)(iii) above, may be exercised ifthe Contractor does not cure such failure within 10 days (ormore ifauthorized in writing by the Contracting Officer) after receipt ofthe notice from the Contracting Officer specifying the failure. (R4, tab 1at 13)
14. 

### In January 2014, the government releasedthe first article test report, concluding thatthe containermetthe requirements. While testing was conducted on June 6, 2013, the record does not demonstrate when CKC deliveredthe first article for testing. The report detailed dents and otherpotential issues with the blade boxes but did not include a comprehensive list ofwhat CKC did rightto comply with the contract. There was no mention ofmarkings onthe hardwoodportion ofthe skids and no photographs demonstrated whetherthe hardwood was appropriately labeled ornot. (R4, tab 16) Only one photograph showedthe woodenportion ofthe skids, butit was only partofthe woodenportion so markings may have beenvisible in the partthat was not in the photograph (R4, tab 16 at 7). Thus, nothing in the record demonstrated whetherthe skids were marked during the first article test ornot.

4

### 15. On July 23, 2015, the government issued unilateral Modification No. POOOOl. The modification was "toprovide a revised delivery date ofOctober 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 ifthe 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 CKCa show cause letter for the contract. The CO summarized the contract award and delivery date modifications. The CO statedthat the governmentwas considering terminatingthe contract for default. The CO stated:

(R4, tab 18) Pending a final decision in this matter, it will be necessary to determine whetheryour failure to perform arose from causes beyond your control and without fault ornegligence onyourpart. Accordingly, you are given the opportunity to present, in writing, any facts bearing on the question to [the contract specialist], within 10 days afterreceipt ofthis notice. Your failure to present any excuses withinthis time may be considered as an admission that none exist.

20. OnDecember 14, 2015, CKC responded to the show cause letter. CKC stated, "[t]he subject had [first article test] requirement and Governmenttook 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 ofthe other unsigned modifications were part ofthe contract. Therefore, we accept these modifications as part ofthe 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 ofour control. 2. Delay was caused by our allocation ofresources 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 ofwhen 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 deliveredby February 2016 and 19 delivered by April 2016. (R4, tab 20) 22. On December22, 2015, the CO sent CKC a letterwhich notified CKC that the government would accept a delivery date ofJune 29, 2016, in exchange for a reduction of$1,748.00 in the contractprice (R4, tab 21). 23. On December22, 2015, the government appeared to issue unilateral ModificationNo. 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 ofreduced contractpricing for CLIN OOOlAA. 

### The new delivery date was June 29, 2016. The unit price was reduced by $46.00 to $4,542.08 for areduction of$1,748.00. The total price changed from $174,347.00 to $172,599.04. The modification also stated, "All otherterms and conditions will remainthe 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 ModificationNo. P00004. The modification inthe record is unsigned. This modification updated the delivery address for CLIN OOOlAA 

### but did not change any otherportions ofthe contract. (R4, tab 5 at 1-2)

625. OnJuly 7, 2016, the government issued unilateral Modification No. P00005. This modification changedthe 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. OnAugust 9, 2016, the contract specialist sent CKC an email asking whether CKC would accept a no-cost cancellation onthe contract. CKC answeredthat it disagreed and attempted to "paint [] a betterpicture" ofthe status ofthe contract by explaining where each blade box was in the process. CKC asked for another extension. this time for 2 months, stating, "And ifyou and yourteam is open, we are willing to offer 1 % considerationto extend forjustthe additional 2 months." (R4, tab 24)
27. OnAugust 17, 2016, the governmentissued unilateral Modification No. P00006. This modification corrected CLIN OOOlAA referenced in Modification Nos. P00004 and P00005 to CLIN OOOlAC but all otherterms 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 ofa reduction in the contractprice of$1,748.00 andrestructuredthe CLINs. According to this modification, CLIN OOOlAA was canceled in its entirety by ModificationNo. 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 unitprice of$4,542.00 each. The new delivery schedule reduced the number ofunits in CLIN OOOlAC to 10, established CLINs OOOlAD and OOOlAE, and reduced the unitprice 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 withthe contract during an inspection on September 8, 2016, the government issued Corrective Action Request (CAR), 4 7 days priorto the delivery date for the first ten units reference number 5BN8120160003, which describedproblems with the blade boxes and stated, in relevantpart, "Container skids, per drawing, BaseAssembly 775E002, are required to be hardwood, manufactured, treated and identifiedperISPMNo. 15." The non-compliance description stated, in relevantpart, "Container skids not correcttype woodper drawing and not manufactured, treated and markedperISPMNo. 15." A response was required by October4, 2016. (R4, tab 26 at 1)
30. On October4, 2016, CKC sentthe government a response to the CAR.

7Concerning the skids, CKC stated: Drawing 775E002-l 7 & -18 specifies hardwood identified per

### ISPM No. 15 which exemptthese 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) bearingthe stamp required by 

### ISPM No. 15 (indicatedheat treated, etc[.]). Photo of stamp on wood canbe provided. CKC consider[s] compliance to the drawing requirement for the skids. (R4, tab 27 at 1, 4)
31. On October4, 2016, the government issued unilateral ModificationNo. P00008, which corrected the delivery date for CLIN 000lAE in Modification No. P00007 from January 2, 2016 to January 2, 2017 (R4, tab 9).
32. On October 5, 2016, the governmentrejected CKC'sresponse to the CAR and requested a new answerby 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 woodtreatedperISPM 15, [(]Grade 4 is lowest grade hard wood; skid is exempt from ISPMNo. 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 ofsufficiently lowrisk to be exempted from the provisions ofthis standard[]: [w]ood components permanently attachedto freight vehicles and containers." CKC explained, "The skid is permanently attached to the containerby four bolts/nuts and so no identification is requiredperthe ISPMNo. 15." CKC includedphotographs for reference. CKC asked ifit metthe requirements ornot and asked for a waiver ifit did not meetthe requirements. (R4, tab 29)
35. On October21, 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 attachmentbutthe record does not contain an attachment. (R4, tab 30)

836. On October 26, 2016, the contract specialistresponded to CKC's email, stating:

(R4, tab 30) I'vereceived 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 orthey will be frustrated oncethey reach the warehouse (DLA and bonded)"

37. By letter dated November 7, 2016, the CO sent CKC a show cause letter. The CO statedthat CKC hadmissedthe first delivery of 10 units that was due on October 31, 2016, andthat 14 units were due onNovember 30, 2016, and another 14 units were due on January 2, 2016. The CO stated that the governmentwas considering terminating the contract for default. The CO stated: Pending a final decision in this matter, it will be necessary to determine whetheryour failure to perform arose from causes beyond your control and without fault ornegligence on yourpart. Accordingly, you are giventhe opportunity to present, in writing, any facts bearing on the question to [the contract specialist], within 10 days after receipt ofthis 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 mustbe received by November 17, 2016.
38. OnNovember 14, 2016, CKC issued a purchase order to Bentco Pallet & Crate LLC (Bentco) for 100 each "heattreated hardwood (grade 4 min.) per ISPM no 15; 3.62 x 2.62 x 38.50; stamp both ends" and 39 each "heattreat and stamp both ends on hardwoodperISPM no 15" (R4, tab 61). 39. OnNovember 17, 2016, CKC sent a reply to the show cause letter. CKC stated, "Duringthe course ofreceiving clarification on a 'skid' issue, DLA noted that 'thewood skids must have a stamp on them orthey will be frustrated once they reach the warehouse (DLA and bonded)." CKC explained:
Ourwood skids had already been machined priorto this request, so some ofthe stamped skids had beenpartially 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 hadto purchase from a new vendor in addition to the stampingwhere it will be easily visible, even after completion ofthe machining the wood. Due to the new vendor, the QARis also requiring documentation, and we are in the process ofsatisfying 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 ofCLIN 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 ofwhen the new, heat treated wood might arrive, or that it could meet any ofthe remaining delivery dates.
40. OnNovember 23, 2016, nine days after receipt ofthe purchase order, Bentco delivered and CKC received 39 pieces ofheat treated wood, stamped US-11-577 (R4, tab 62 at 1) and 100 pieces ofhardwoodperISPM 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. OnDecember 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 thatthe contractnot be terminated because "'it would be in the best interest ofbothparties that this contract be completedby CKC" because 10 units were complete already. CKC explained, "Duringyour review ofour 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 ofdelivering: 10 units by December 16, 2016, under CLIN 000lAC; 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 onDecember 7, 2016, the government issued unilateral Modification No. P00009. This modification terminated the contract for default. The modification includedthe standard statement concerning appeal rights. (R4, tab 10)

1044. On December 22, 2016, CKC appealedthe CO's final decision andthe · appeal was docketed as ASBCA No. 60977.
45. OnFebruary 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 ofthe appeal, it became apparentthat CKC attempted to deliverthe 10 blade boxes referenced in CLIN 000lAC priorto termination ofthe 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 contractterminated for default, Contract SPRP Al-12-C-W008." The CO statedthatthese funds had not yet beenreturnedto the government so the COreduced the amount owedby $44,960.86, the amount owedto CKC for 10 blade boxes under CLIN 000lAC. This reduced the amount CKC purportedly owedthe governmentto $55,190.14 under contract SPRPA1-12-C-W008, a contract not subjectto this appeal. (R4, tab 65 at 1-2)
46. OnMarch 16, 2018, CKC requestedthe governmentreconsiderthe February 2018 final decision and acceptthe final 28 boxes. CKC statedthat it included photographs that demonstratedthat itwas closeto finishing the remaining 28 boxes. The government indicatedthat it would "standby the final decision." (R4, tab 67)
DECISION
The legal standards for a termination for default are well established. Underthe default clause, here FAR52.249-8 DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984), the government mayterminate for default by written notice ifthe contractor fails, without excuse, to: deliver supplies withinthe time specified or any extension; makeprogress, as to endangerperformance ofthe contract; orperform any otherprovisions ofthe contract. Forthe latter two categories, the government may exercise its rightto terminate ifthe contractor does not cure the failure within 10 days afterreceiving notice from the contracting officerthat specifies the failure.
Termination for default "is a drastic sanction which shouldbe imposed (or sustained) only for good grounds and on solid evidence." 

### Lisbon Contractors, Inc. v. UnitedStates, 828 F.2d 759, 765 (Fed. Cir. 1987) (quoting

### J.D. Hedin Constr. Co. v. UnitedStates, 408 F.2d 424, 431 (Ct. Cl. 1969) (further citations omitted). While CKC appealedthe contracting officer's decision, "atermination for default is essentially a government claim." 

### ThunderstruckSigns, ASBCANo. 61027, 17-1 BCA 

### ,i 36,835 at 179,504. Thus, the government maintains the burden ofproving that a termination for default wasjustified, by a preponderance ofthe evidence. 

### Id. (citing

### DayDanyon Corp., ASBCANo. 57681, 15-1 BCA 

### ,i 36,073 at 176,151;

### Keystone Capital Services, ASBCANo. 56565, 09-1 BCA

### ,i 34,130 at 168,753 (citing

### Lisbon Contractors, 828 11 

# I

### F.2d at 765). Should the government establish theprima facie case tojustifythe termination, '"the burden shifts to the contractorto prove the default was excusable." Truckla Services Inc., ASBCA Nos. 57564, 57752, 17-1 BCA

## ,r 36,638 at 178,445 (citingADTConstr. Grp., Inc., ASBCANo. 55358, 13 BCAi135,307 at 173,312). Here, the government established a prima facie case tojustify the termination for default. After a number ofmodifications granting CKC extensions, the last delivery schedulethe government agreed to was: 10 units be delivered by October 31, 2016, under CLIN OOOlAC; 14 units delivered byNovember 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 letterpursuant to the requirements ofthe FAR and the contract (finding 37). When CKC responded to the show cause letter, it did not state how it would meetthe remaining delivery dates but instead provided yet another delayed schedule (finding 39). CKC's first attempt at delivery ofthe first 10 units under CLIN OOOIAC occurred on December7, 2017 (finding 42). CKC did not attempt delivery ofthe other units and CLINs. Thus, CKC failed to deliver the units on time and the government established the prima facie case tojustifythe termination. The burden then shifts to CKC to demonstrate that its failure to timely deliver was excusable. To establishthat CKC is entitled to excusable delay, it must demonstrate that the delay resulted from a cause which was unforeseeable, beyondthe control ofthe 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 ofchanged contract conditions. Specifically, CKC argues thatthe government imposed a stricter requirementthan the contract required because ISPM 15 provided an exemption for '"wood components permanently attached to freight vehicles and containers" and the hardwood skids werepermanently 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 offunding 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 ofthis information was contained in CKC's complaint orreferenced in the record. Nevertheless, the government extended the contract several times after the first article test was completed so this allegation was resolved withthe issuance offurther modifications and should nothave impactedthe rationale for the termination for default (findings 20-23). Further, even ifthis had impacted CKC'sperformance, the government accepted CKC's estimates onhow long it wouldtake to complete the blade boxes and extended the contract by that amount oftime 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 ofnot 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 ifthe 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) NAVSUPWSSDA07 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 manufacturingprocess such as corrugated fiberboard, plywood, particleboard, veneer, and oriented strand board." Thus, the exceptions were narrowerthanthe exemptions permitted in ISPM 15. (Finding 10) This acquisition does not meetthe narrower exceptions contained in the contract because, by CKC's own admission, the contract required hardwood, notthe materials excepted by the clause (finding 30). NAVSUPWSSDA07 also stated, "All materials must include certification markings in accordance withALSC 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 notprovide an avenue to rely uponthe exemption listed in 

### ISPM 15. Additionally, it was within CKC's control to fix the issue once it became aware ofthe requirement to mark the hardwood. The government's CARconcerning the lack ofmarkings on the hardwood was issued on September 14, 2016, which was 4 7 days priorto the delivery date ofthe first ten units (finding 29). Instead ofordering wood in compliance with the contract at that time, CKC sent numerous questions to the government about whetherthe markings were actually required (findings 30, 33-35). CKC issued a purchase order for the new wood onNovember 14, 2016 (finding 38). That wood was delivered nine days later, onNovember 23, 2016 (finding 40). CKC had tenunits ready for inspection by December7, 2016 (finding 42), fifteen days after receiving the wood. IfCKC had orderedthe contract-compliant wood shortly after receiving the CAR, it couldhave met the October 31, 2016, and subsequent delivery dates. 13Based on all oftheseportions ofthe 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 ofthe noncompliant hardwood markings. Thus, appellant has failed to demonstrate that it is entitled to an excusable delay and thetermination for default isjustified.

The appeal is denied. Dated: June 20, 2019

Armed Services Board ofContractAppeals CONCLUSION

HEIDI 

### L STERHOUT Administrative Judge Armed Services Board ofContract Appeals
I concur

OWEN C. WILSON Administrative Judge Vice Chairman Armed Services Board ofContract Appeals
I certify that the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContractAppeals in ASBCANo. 60977, Appeal ofCKC Systems, Inc., rendered in conformance withthe Board's Charter.
Dated:

14 PAULLA K. GATES-LEWIS Recorder, Armed Services Board ofContract Appeals