In the United States Court of Federal Claims

No. 16-1556

Filed: September 26, 2017

AVANT ASSESSMENT, LLC, 

 Plaintiff,

v.

THE UNITED STATES,

Defendant.

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Jurisdiction; 

Election Doctrine; 

Transfer to Agency Board

Dirk D. Haire, Washington, DC, for plaintiff.

Andrew W. Lamb, U.S. Department of Justice – Civil Division, Washington, DC, 

for defendant.

OPINION

This case is before the Court on defendant’s motion to dismiss plaintiff’s 

complaint, which was filed on November 21, 2016, pursuant to rules 12(b)(1) and 

12(b)(6) of the Rules of the Court of Federal Claims (“RCFC”). Defendant filed its 

motion filed on February 21, 2017. Plaintiff filed its response on March 24, 2017, and 

defendant its reply on April 17, 2017.
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Plaintiff seeks costs related to the termination for convenience of a contract, which 

plaintiff alleges it over-performed on due to the Government’s arbitrary and unreasonable 

application of the ambiguous acceptance criteria for items. In its motion to dismiss, 

defendant contends that the Election Doctrine precludes the Court’s subject matter 

jurisdiction over Count I because it is substantially similar to a claim previously filed at 

the Armed Services Board of Contract Appeals (“ASBCA”). Defendant further argues 

that plaintiff fails to state a claim for which relief may be granted. Alternatively, 

defendant argues that the case should be transferred to the ASBCA for further 

proceedings.

The Court held oral argument on these matters on June 9, 2017. The matter is now 

ripe for disposition.

I. BACKGROUND

a. Factual Background

Plaintiff entered into two separate contracts with the Department of the Army

(“the Army” or “the Government”). On September 29, 2010, plaintiff and the Army 

executed Contract W9124N-10-C-0109 (“Contract 0109”) for the development and 

delivery of 3,300 foreign language test items. Almost a year later, on September 16, 

2011, plaintiff and the Army executed Contract W9124N-11-C-0033 (“Contract 0033”) 

for the development and delivery of 1,300 foreign language test items. Pl.’s Resp. at 3. 

Both contracts’ test items were for use at the Defense Language Institute Foreign 

Language Center (“DLI”) to assess students’ fluency in foreign languages and their 
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progress in learning those languages. Def.’s Mot. at 4. Only Contract 0033 is at issue in 

the instant case.

Contract 0033 had an original total award amount of $1,400,844.32, consisting of 

$1,358,344.32 for the test items and $42,500.00 for travel and delivery. Regarding review 

and rejection, Contract 0033 contained the following provision:

The Government will review all passages and items submitted by the 

contractor. Those that do not meet standards will be rejected. It is expected

that a certain proportion of passages and/or items submitted by the 

Contractor will be rejected during the review process. Historically, rejection 

rates have varied considerably from contract to contract and throughout the 

period of performance.

Contract 0033, Section C.5.2.2.1. Contract 0033 also noted that the delivery schedule was 

based on a historical rejection rate of 45%, but that the Government retained the ability to 

change that schedule due to higher or lower rejection rates. Section C.6.10.1. The 

contract further noted that “DLIFLC will work closely with the Contractor to improve the 

quality of items (including extensive discussion sessions focusing on specific items), but 

it is likely that successful completion of the contract will entail the initial development of 

more items than listed in the above charts, to account for loss during review.” Contract 

0033, Section C.5.2.2.2.

On September 28, 2012, the parties executed Modification No. PO0003 to 

Contract 0033; the modification provided that “any items that are still required by the 

contract but not accepted by the Government shall automatically be descoped from the 

contract.” Pl.’s Resp. at 3. 
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On June 26, 2013, the Army terminated Contract 0109 and Contract 0033 for 

cause. Compl. ¶ 45. The stated reason for termination was plaintiff’s alleged failure to 

provide the requisite number of test items required by each contract. Plaintiff alleges that 

it delivered 2,802 test items under contract 0033, but that the majority of the items were 

rejected, preventing plaintiff from fulfilling the delivery amount required by the 

contracts. Compl. ¶ 10.

b. Procedural Background

On September 9, 2013, plaintiff filed two separate appeals before the ASBCA.

The first appeal, docketed as ASBCA No. 58867, appealed the contracting officer’s 

decision to terminate Contract 0109 for cause. The second appeal, docketed as ASBCA 

No. 58866, appealed the contracting officer’s decision to terminate Contract 0033 for 

cause. Both appeals sought to have the termination for cause converted into a termination 

for convenience. Neither appeal sought money damages.

Over a year later, on December 2, 2014, plaintiff filed its appeal of the contracting 

officer’s deemed denial of plaintiff’s claim for breach of Contract 0109, docketed as 

ASBCA No. 59713. In this appeal, plaintiff sought damages related to an alleged breach 

of contract when the Army terminated Contract 0109 for cause. Plaintiff followed up by 

filing another appeal on August 27, 2015, this time appealing the contracting officer’s

deemed denial of plaintiff’s claim of breach of Contract 0033, docketed as ASBCA No. 

60143. As before, plaintiff sought damages related to an alleged breach that occurred 

when the Army terminated Contract 0033 for cause.
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On September 28, 2015, the ASBCA granted summary judgment in Avant’s favor 

in ASBCA No. 58866. The ASBCA held that because Modification PO0003 resulted in 

the Government’s agreement to accept less than 1,300 test items, the Government was 

precluded from terminating Contract 0033 for cause for any alleged failure to provide 

1,300 acceptable test items. Accordingly, the ASBCA held that the termination must be 

converted from termination for cause to a termination for convenience.

On September 22, 2016, the ASBCA dismissed Appeal No. 59713, concerning 

plaintiff’s claim for breach of contract damages for Contract 0109, as moot by granting 

plaintiff’s motion to dismiss. Plaintiff had moved to dismiss its breach of contract claim 

after the ASBCA converted the termination for cause in Contract 0109 into a termination 

for convenience because, in its belief, it could no longer seek breach of contract damages 

once the termination had been determined to be one for convenience. Of particular 

importance is that plaintiff’s appeal ASBCA No. 60143 remains pending before the board 

awaiting final decision.

Following the ASBCA’s decision to convert the termination for cause into a 

termination for convenience in Contract 0033, on August 9, 2016, plaintiff submitted to 

the contracting officer a termination for convenience settlement proposal, which sought 

$1,517,404.98 for test items not accepted by the Army and $3,133.00 for settlement 

expenses, and requested a final decision from the contracting officer by September 8, 

2016. Plaintiff alleges that the agency never participated in negotiations or discussions 

with Avant concerning its termination settlement proposal or expressed any definitive 

intention to do so. Plaintiff also alleges that the contracting officer failed to render a final 
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decision on the settlement proposals by the required deadline. Accordingly, on November 

17, 2016, plaintiff contacted the Government, stating that it viewed the lack of 

discussions and lack of final decision on the settlement proposal as constituting an 

impasse, and therefore a deemed denial by the contracting officer. Plaintiff then filed the 

instant cases before the Court of Federal Claims on November 21, 2016.

On January 20, 2017, plaintiff avers that it did receive a response from the 

contracting officer regarding the settlement proposals. Pl.’s Resp. at 12. At that time, the 

Government disputed the existence of an impasse and stated that plaintiff could expect an 

update no later than February 3, 2017. Id. On February 2, 2017, plaintiff was notified that 

no update from the Government would be forthcoming due to the ongoing litigation. Id.

c. Procedural History Before the Court of Federal Claims

On November 21, 2016, plaintiff filed two cases before the Court – the instant 

case, and a companion case, No. 16-1557, which concerned Contract 0109. Because the 

two cases presented, at that time, materially identical legal issues, the Court and parties 

agreed that in the interest of judicial efficiency, the two cases should be consolidated. On 

June 14, 2017, plaintiff voluntarily dismissed its complaint in Case No. 16-1557, because 

it acknowledged that the termination settlement proposal as provided in that case lacked 

proper certification as defined by 41 U.S.C.S. § 7103. Plaintiff then transmitted a new, 

properly certified settlement proposal to the contracting officer and promptly refiled the 

matter before the Court (Case No. 17-823).

Because the new complaint did not raise any new claims, after discussion with the

parties, the Court once again consolidated the two cases. On August 18, 2017, defendant 
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filed a motion to dismiss plaintiff’s complaint filed in Case No. 17-823 which contained 

new legal arguments about the Court’s jurisdiction. After full briefing of the matter, the 

Court determined that judicial efficiency was no longer served by the cases being 

consolidated. To that end, on September 21, 2017, the Court unconsolidated the cases. 

The other case, No. 17-823, remains before the Court at this time. 

II. DISCUSSION

Defendant advances two arguments as to why it believes plaintiff’s complaint 

must be dismissed. First, defendant contends that the Election Doctrine precludes the 

Court’s subject-matter jurisdiction because plaintiff’s previously filed ASBCA claims for 

breach of contract are the same for jurisdictional purposes. Second, defendant argues that 

the complaint fails to state a claim upon which relief may be granted because plaintiff has 

been paid the full contract price for work performed under the two contracts, and that the 

award of any additional damages relating to unaccepted items would constitute a 

windfall. Alternatively, defendant argues that the case should be transferred to the 

ASBCA because the six factors announced in Morse Diesel Int’l, Inc. v. United States, 66 

Fed. Cl. 801, 804 (Fed. Cl. 2005) weigh in favor of transfer.

Plaintiff argues that the Election Doctrine is inapplicable to the instant case 

because a claim for breach of contract is materially different from the claim it currently 

advances in this Court for costs related to a termination for convenience. More 

specifically, plaintiff argues that it was originally precluded from asserting its claims 

relating to the termination for convenience because at the time it filed its appeal for 

breach of contract, it was operating under the assumption that the Government viewed the 
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contracts as having been terminated for cause. Only when the termination for cause had 

been converted to termination for convenience, and plaintiff submitted its termination 

settlement proposal, and impasse had been reached, could plaintiff then assert a claim for 

damages relating to the termination for convenience.

Plaintiff further argues that its cause of action will not result in a windfall because 

FAR 52.212-4(l), which governs the termination of contracts for the Government’s 

convenience, allows for a contractor to be paid “a percentage of the contract price 

reflecting the percentage of the work performed prior to the notice of termination, plus 

reasonable charges” resulting from the termination. Plaintiff believes that the Army 

improperly rejected an unnecessarily large amount of the test items prepared under the 

contracts, resulting in an over-performance of approximately 115% of Contract 0033.

Finally, plaintiff opposes transfer of the matter to the ASBCA because it contends that its 

current claims for termination for convenience costs were never before the ASBCA, and 

that its choice of forum at the Court of Federal Claims is proper.

a. Legal Standard

Defendant moves to dismiss pursuant to RCFC 12(b)(1) for lack of subject matter 

jurisdiction or RCFC 12(b)(6) for failure to state a claim upon which relief may be 

granted. Before reaching the merits of a case, “a court must satisfy itself that it has 

jurisdiction to hear and decide” the case. Hardie v. United States, 367 F.3d 1288, 1290 

(Fed. Cir. 2004). On a party’s motion to dismiss for lack of subject matter jurisdiction, a 

court generally accepts “the facts alleged in the complaint to be true and correct.”

Reynolds v. United States, 846 F.2d 746, 747 (Fed. Cir. 1988). When the Court's subject 
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matter jurisdiction is challenged pursuant to RCFC 12(b)(1), the plaintiff bears the 

burden of establishing subject matter jurisdiction by a preponderance of the evidence. 

Taylor v. United States, 303 F.3d 1357, 1359 (Fed. Cir. 2002). 

In order to survive a motion to dismiss for failure to state a claim, “a complaint 

must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is 

plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 

2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 

1955, 167 L. Ed. 2d 929 (2007)). Dismissal under RCFC 12(b)(6) is proper “when the 

facts asserted by claimant do not entitle him to a legal remedy.” Lindsay v. United States, 

295 F.3d 1252, 1257 (Fed. Cir. 2002). In considering such a motion, the Court accepts 

“all well-pleaded factual allegations as true and draws all reasonable inferences in the 

claimant's favor.” Id. at 1257.

b. The Election Doctrine Does Not Divest This Court of Jurisdiction

The first issue for the Court to resolve is whether the Court has jurisdiction to hear 

plaintiff’s claims, or if, as the defendant argues, plaintiff is barred by the election doctrine 

from presenting its claim for termination for convenience damages here because it elected 

to file its breach of contract claims before the ASBCA.

The Contract Disputes Act (“CDA”) provides alternative forums for appealing a 

claim submitted to a contracting officer. 41 U.S.C. § 609(a)(1). “It is well established 

that, pursuant to the contract Disputes Act, a contractor wishing to contest an adverse 

final decision by the contracting officer either may appeal the contracting officer’s 

adverse decision to the appropriate board of contract appeals or may contest the 
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contracting officer’s decision directly to the Claims Court.” Nat’l Neighbors Inc. v. 

United States, 839 F.2d 1539, 1541 (Fed. Cir. 1988). This has led to the creation of a rule 

known as the “Election Doctrine” which states that “[o]nce a contractor makes a binding 

election under the Election Doctrine to appeal the contracting officer’s adverse decision 

to the appropriate board of contract appeals, that election must stand and the contractor 

can no longer pursue its claim in the alternative forum.” Id. at 1542. “Thus, if a contractor 

makes an informed, knowing, and voluntary decision to pursue its appeal in another 

forum with jurisdiction over the appeal, the Court of Federal Claims is required to 

dismiss a subsequently filed appeal concerning the same claim for lack of jurisdiction.” 

Bowers Inv. Co. v. United States, 104 Fed. Cl. 246, 254 (Fed. Cl. 2011).

Defendant argues that the Election Doctrine bars plaintiff’s claim because the 

breach of contract claim that Avant filed at the ASBCA is essentially the same as the 

claim for termination for convenience costs that plaintiff seeks here because it relies on 

the same set of operative facts and seeks essentially the same measure of relief (the costs 

associated with producing rejected test items). Def.’s Mot. at 16. Plaintiff, on the other 

hand, argues that its claim for termination for convenience costs is a separate and distinct 

claim from the breach of contract because other courts have found that the two claims are 

separate causes of action, the termination for convenience claim accrued well after the 

breach of contract claim, and it seeks drastically different amounts as compensation 

before this Court than it did for breach of contract before the ASBCA. Pl.’s Resp. at 13-

20.
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Defendant’s argument that the two claims are similar enough to invoke the 

Election Doctrine has some moment. When determining whether there is a single claim 

or a separate claim, the Federal Circuit has held that “the court must assess the operative 

facts.” Kinetic Builder’s Inc. v. Peters, 226 F.3d 1307, 1312 (Fed. Cir. 2000). See also 

Placeway Constr. Corp. v. United States, 920 F.2d 903, 907 (claims are the same if they 

are “based on a common or related set of operative facts.”). Defendant also contends that 

“differences in amounts sought as relief do not of themselves entail distinct claims, unless 

the differences reflect distinct factual bases or ‘different types of remedy, such as 

expectation damages versus consequential damages,’ where one distinct remedy would 

require ‘additional compensation beyond’ what the other would allow.” Def.’s Mot. at 17 

(citing K-Con Bldg. Sys., Inc. v. United States, 778 F.3d 1000, 1006 (Fed. Cir. 2015)).

There can be no doubt that the set of operative facts before the Court presently and 

the set of operative facts which formed the basis of plaintiff’s breach claim before the 

ASBCA are largely similar. Both causes of action concern the same two contracts and the 

same general nexus of events: that plaintiff produced items under the contract which were 

rejected by the Army, that plaintiff believed that at least some of these items were 

rejected due to an arbitrary application of the testing standard, that the contracts were 

amended to change the total number of items due, and that the contracts were eventually 

unilaterally terminated by the government. 

There are also factual differences, however, which the Court believes are 

important. First, the timing of the termination for convenience claim in the instant case is 

drastically different from the breach of contract claim. At the time the Army initially 
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terminated the contracts, it did so under a theory of termination for cause. At this time, 

plaintiff pursued the only course of action available to it: it sought to have the termination 

for cause changed into a termination for convenience, and brought a claim before the 

ASBCA for breach of contract, appealing the contracting officer’s deemed denial of its 

submitted claim for breach of contract. Plaintiff could not have brought a claim for 

termination for convenience damages because at that time there was no termination for 

convenience. It was not until over three years later for Contract 0033 (Avant filed its 

ASBCA appeal of the termination for cause on September 9, 2013 and the board 

converted the termination on September 28, 2016), that the board converted the 

termination for cause into a termination for convenience. At that point, more actions 

needed to occur before plaintiff’s claim accrued, namely plaintiff needed to submit a 

settlement proposal for termination for convenience costs, and the negotiations needed to 

reach an impasse. Thus, although plaintiff’s original claim for breach of contract has a 

large factual overlap relating to the creation and the termination of the contract, the 

validity of plaintiff’s termination for convenience claim requires a significant number of 

facts that were not in existence at the time the breach claim was filed. Accordingly, the 

Court believes there is enough of a factual distinction to maintain the two claims as 

separate.

Other cases support the determination that a breach of contract claim should be 

treated as a separate claim from a claim for termination for convenience costs. In E&E 

Enters. Global v. United States, the plaintiff contractor submitted to the contracting 

officer two separate and distinct claims: the first for termination for convenience costs, 
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and the second for wrongful, bad faith termination of the contract (i.e., breach). 120 Fed. 

Cl. 165, 170. The Court noted that “the certified claim contains two separate claims, 

supported by fundamentally different legal theories and requesting different amounts of 

money.” Id. at 177. The Court once again found a claim for breach of contract to be 

separate from a claim for termination for convenience damages in J. Cooper & 

Associates, Inc. v. United States, 47. Fed. Cl. 280 (2000). In that case, plaintiff contractor 

argued that the court possessed jurisdiction to decide its claim for breach damages even 

though it had failed to submit that claim to a contracting officer because the contractor 

had previously submitted a claim for termination for convenience damages, which should 

suffice to cover both claims because they involved the same set of operative facts and the 

same legal theory of recovery. Id. at 286. The Court disagreed with plaintiff’s argument, 

noting that the “two legal theories presented in the record in this case cannot be viewed as 

part and parcel of the same claim.” Id. at 287.

The Federal Circuit has considered the issue of whether two separate contractor 

decisions on the same contract can lead to two cases which may exist simultaneously 

before a board and the Court of Federal Claims. In Glenn v. United States, the contracting 

officer issued an initial decision finding the plaintiff contractor to be liable to the 

government for the cost of completing the contract. 858 F.2d 1577, 1580 (Fed. Cir. 

1988). The contracting officer went on to say that the issue of quantum would be 

determined in a subsequent decision. Id. The contractor appealed the initial liability 

decision to the board, and when the second quantum decision was issued, the contractor 

appealed that to the Court of Federal Claims. In deciding whether the election doctrine 
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barred plaintiff’s case before the Court of Federal Claims, the Federal Circuit articulated 

the following rule:

If the quantum decision did not raise any new claims distinguishable from 

the claim decided by the liability decision and therefore did not raise any 

separately appealable claims . . . there is but one claim and one decision. . . 

. If the quantum decision was entirely distinct, or raised some 

independently appealable claims, those claims would normally be heard by 

the Claims Court, or be transferred to the board, at the Claims Court’s 

election, pursuant to [41 U.S.C. § 609(d)].

Id. Applied to this case, if the contracting officer’s denial of plaintiff’s claim for 

termination for convenience damages did not raise any new, appealable claims to set it 

apart from the previous denied claim for breach of contract damages, there would be only 

one claim. That is not the case presently. There can be no doubt that the contracting 

officer’s denial of termination for convenience costs arose from a separate submitted 

claim, and thus would be separately appealable. The two claims concern compensation as 

a result of different actions of the government. They cannot be viewed as the claims at 

issue in Glenn were, where the court found that the quantum decision merely added to the 

original liability decision. 

The Court also believes that the different in quantum between the plaintiff’s 

termination for convenience claim and breach of contract claim helps set the former apart 

from the latter for election doctrine purposes. Before this Court, plaintiff seeks 

$1,513,726.71 plus interest and legal fees for Contract 0033. By contrast, plaintiff 

claimed breach damages of $493,730.73 for Contract 0033 before the ASBCA. Whether 

plaintiff will be able to recover the full amount sought is a matter for another day, but 

there can be no question that there is a wide difference in the quantum sought by plaintiff 
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for breach damages and the amount plaintiff now claims for termination for convenience 

costs.

Overall, the Court believes that there is enough of a difference to separate the 

instant claim for termination for convenience costs from plaintiff’s previous claim for 

breach of contract. Although there is an undoubted overlapping of facts (as is to be 

expected with two claims arising under the same contract), there are enough significant 

differences as to render the two claims separate. Furthermore, the claims request a 

different quantum under a different theory of recovery.

c. Plaintiff has stated a claim upon which relief can be granted.

Having decided that the Election Doctrine does not deprive the Court of 

jurisdiction in this case, the Court now turns to defendant’s remaining jurisdictional 

arguments. Specifically, defendant argues plaintiff has been paid in full under the 

contract for the work performed, and that any additional payment sought by plaintiff 

would result in an impermissible windfall. Def.’s Mot. at 22-24. Defendant believes that 

due to the modification of the contracts executed by both parties which reduced the total 

number of items to be delivered, plaintiff has been paid in full for all work to be 

performed under the contract and cannot be allowed any further amount. Id. at 23.

Defendant furthermore argues that plaintiff is not entitled to be paid for items produced 

but not accepted by the Army because the contracts contemplated a historical rejection 

rate of between 30-60%, which would account for plaintiff’s alleged overproduction. Id.

at 24.
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Plaintiff, on the other hand, argues that because FAR 52.212-4(l) is the controlling 

provision for the contract, it is entitled to compensation for the percentage of work 

performed prior to termination, which plaintiff alleges is approximately 215% of Contract 

0033. Pl.’s Resp. at 25. FAR 52.212-4(l) provides, in pertinent part, that:

Subject to the terms of this contract, the Contractor shall be paid a 

percentage of the contract price reflecting the percentage of the work 

performed prior to the notice of termination, plus reasonable charges the 

Contractor can demonstrate to the Satisfaction of the Government using its 

standard record keeping system, have resulted from the termination.

Thus, plaintiff avers that any potential recovery is not capped at the maximum contract 

price and that it is entitled to recover for the excess items it produced that were not 

accepted by defendant. Pl.’s Resp. at 25. 

In order to survive a motion to dismiss for failure to state a claim, “a complaint 

must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is 

plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 

2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 

1955, 167 L. Ed. 2d 929 (2007)). Dismissal under RCFC 12(b)(6) is proper “when the 

facts asserted by claimant do not entitle him to a legal remedy.” Lindsay v. United States, 

295 F.3d 1252, 1257 (Fed. Cir. 2002). In considering such a motion, the Court accepts 

“all well-pleaded factual allegations as true and draws all reasonable inferences in the 

claimant's favor.” Id. at 1257.

In the instant case, the Court finds that plaintiff’s complaint succeeds in presenting 

facts which, if true, would give rise to a legal remedy before this Court. Plaintiff has 

alleged that it produced an amount of items under the contract well in excess of the stated 
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amount, even after modification. While it is true and uncontested that the contract 

contemplated for some percentage of items produced to be rejected, that percentage is 

quite variable, with the contract calling for a delivery schedule based on a historical 45% 

rejection rate, while acknowledging that the actual rejection rate will vary from contract 

to contract.

1 While it is possible, as defendant argues, that plaintiff’s excess production is 

within the prescribed rejection rate, Def.’s Mot. at 24, plaintiff goes one step further and 

alleges that the reason so many items were rejected was due to the arbitrary and 

capricious manner in which the Army applied its testing standards for the items. 

Accepting plaintiff’s allegations as true, as the Court must at this stage in litigation, there 

is no doubt that plaintiff could be entitled to compensation for items produced under the

contracts which were improperly rejected, based upon an arbitrary or capricious 

application of the testing standards. The Court cannot say that in that instance, recovery 

for the costs associated with that item would result in a windfall, even if plaintiff has 

been compensated for meeting 100% of the contract delivery amount, as contemplated by 

the mutual amendment to the contract. The Court knows of no case which would limit a 

plaintiff seeking to recover termination for convenience costs under FAR 52.212-4(l) to 

the maximum value prescribed by the contract, and defendant has not cited to any case 

for that proposition.

 

1 Contract 0109, at issue in Case No. 17-823, notes that the rejection rate is historically 

between 30% and 60%.
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Accordingly, the Court finds that plaintiff has stated a plausible claim for 

termination for convenience damages with the facts alleged by the complaint and the 

evidence provided in the briefings. Defendant’s motion to dismiss, inasmuch as it argues 

that plaintiff has failed to state a claim upon which relief can be granted, must be denied. 

d. The balance of factors weighs in favor of the Court transferring the instant 

matter to the ASBCA.

The final issue for the Court to consider is whether transfer of the instant matter to 

the ASBCA is appropriate. Defendant has argued that transfer is appropriate under the six 

factors announced by this Court in Morse Diesel Int’l, Inc. v. United States, 66 Fed. Cl. 

801 (Fed. Cl. 2005), while plaintiff argues that these same factors weigh in favor of the 

instant matter remaining before the Court.

The Contract Disputes Act, 41 U.S.C. § 609(d) provides the following:

If two or more suits arising from one contract are filed in the United States 

Claims Court and one or more agency boards, for the convenience of 

parties or witnesses or in the interest of justice, the United States Claims 

Court may order the consolidation of such suits in that court or transfer any 

suits to or among the agency boards involved.

The Court of Appeals for the Federal Circuit has expanded on this provision, noting that 

the Court of Federal Claims has “broad discretion” in deciding whether to retain 

jurisdiction of a case or transfer it to an agency board. See Joseph Morton Co. v. United 

States, 757 F.2d 1273, 1280 (Fed. Cir. 1985). When weighing the decision on whether to 

transfer a case, among the factors for the Court to consider are:

(1) Whether the dispute before the board and the court concern the same 

contract; (2) whether the claims before the court and the board duplicate 

claims or have overlapping and related issues; (3) whether plaintiff initially 
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chose to appeal its claims before a court or a board; (4) whether one forum 

or the other has already made significant progress on the claims; (5) 

whether concurrent resolution would result in an inefficient allocation of 

the court’s, board’s, or party’s resources; (6) whether separate forums 

would reach inconsistent results.

Morse Diesel, 66 Fed. Cl. at 804 (citing Giuliani Contracting Co. v. United States, 21 Cl. 

Ct. 81, 83 (1990)). The Court shall examine these factors in order.

The first factor to consider is whether the dispute before the ASBCA and the Court 

concern the same contract. In this case, plaintiff’s claim before this court concerns the 

same contract, Contract 0033, which is at issue in the breach of contract case brought 

before the ASBCA. Plaintiff unsurprisingly does not dispute or argue against this point in 

its response brief. Accordingly, the Court finds that this factor weighs in favor of transfer.

The second factor to be considered is whether the claims before the Court and the 

ASBCA either duplicate each other or have overlapping and related issues. Having 

previously found that the claim for breach of contract and the claim for termination for 

convenience costs to be separate claims, it cannot be said that they are duplicative for 

purposes of this factor. The Court finds, however, that both claims have some 

overlapping and related issues. This issue will be discussed in greater detail infra when 

the Court discusses the fourth Morse Diesel factor.

The third factor is whether plaintiff initially chose to appeal its claims before the 

board or the Court. It is undisputed that plaintiff first filed its breach of contract claims 

before the ASBCA well before it brought its current action for termination for 

convenience costs before the Court of Federal Claims. As stated in Rockwell Automation, 

Inc. v. United States, “[f]or this court to have authority to transfer and consolidate an 
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action pending before an agency board, suits arising from one contract must be pending 

in this court and concurrently pending before an agency board.” 70 Fed. Cl. 114, 126 

(Fed. Cl. 2006). For Contract 0033, plaintiff has an ongoing case for breach of contract 

which has yet to be ruled upon by the ASBCA, as well as the instant case before the 

Court of Federal Claims. Thus, consolidation of the cases at the ASBCA would be 

appropriate – there can be no doubt that plaintiff has pending suits in both forums, and 

both suits arise from Contract 0033.

The fourth factor is whether one forum or the other has made significant progress 

on the claims. It is clear from the record provided by both parties that the ASBCA has 

done a significant amount of work aimed towards resolving Avant’s breach of contract 

claim. Regarding Contract 0033, the ASBCA has completed merits hearings on the 

breach of contract claim, and post hearing briefs have been submitted (in this instance, 

the parties submitted these briefs after plaintiff filed the instant litigation before the 

Court). Def.’s Mot. at 12-13. 

Where the parties disagree is as to how much these prior proceedings would help 

the ASBCA in the event that the instant termination for convenience claims are 

transferred to the board. Defendant’s position is that the instant termination for 

convenience claim is very similar to the breach of contract claim brought before the 

ASBCA, because Avant, in essence, seeks the same remedy: compensation for items 

produced but not accepted by the Army because Avant contends the Army judged the 

items acceptability in an arbitrary and capricious manner. Id. at 27. Plaintiff believes that 

the two issues are entirely separate, and appears to be operating under the notion that 
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under a theory of termination for convenience costs, the only showing that plaintiff has to 

make is that it did, in fact, produce an excessive amount of items and incurred financial 

costs in doing so (as opposed to a breach of contract action, in which plaintiff would have 

to prove that the rejection of these items was done contrary to the stated testing standards 

for the items). Pl.’s Resp. at 18-19, 21.2

Plaintiff relies on Best Foam Fabricators v. United States, 38 Fed. Cl. 627 (Fed. 

Cl. 1997) to advance this argument. In Best Foam, a plaintiff contractor sued the 

government for breach of contract, claiming that the defendant had failed to perform 

under the contract and had also repudiated a valid contract without good cause. Id. at 

635-36. The Court found that while there was a valid contract, the presence of a 

termination for convenience clause made this an appropriate case for constructively 

invoking that clause in order to limit the government’s damages in order to avoid placing 

the government in breach. Id. at 638. On the issue of quantum, the defendant argued that 

the plaintiff’s recovery should be limited because some of the items it produced, and now 

sought costs for, did not conform to the contract requirements. Id. at 639-40. The Court 

determined that the longstanding rule before the ASBCA was that “where a contract is 

 

2 See also Oral Argument Transcript (“Tr.”), with plaintiff’s counsel stating “[O]ur 

calculation of damages for this action is based on the termination for convenience clause 

which gives the contractor recovery for the percentage of work performed. So in that 

calculation, and there’s case law to support this, that you can claim for allegedly 

rejectable items as well as things that under the contract – strict terms of the contract was 

fully performed and was not terminated would be unallowable costs. So once there is a 

termination in effect, the calculation of damages changes completely and justifies a 

different measure of recovery.” Tr. at 48:15-25, 49:1. 
22

terminated for convenience of the Government, the contractor is entitled to recover its 

reasonable, allocable, and allowable costs incurred with respect to termination inventory 

even if such inventory did not comply in all respects with specification requirements.” Id.

at 640 (citing New York Shipbuilding Co., 1972 ASBCA LEXIS 111, 73-1 B.C.A. (CCH) 

P9852 at 46,018-19, ASBCA No. 15443.) Although the Best Foam court noted that this 

rule had yet to be explicitly endorsed by the Federal Circuit or by the Court of Federal 

Claims, the Court found the ASBCA’s rationale persuasive and thus there was no reason 

to depart from the rule when considering the plaintiff’s claim. Id. Accordingly, the Court 

held that “Best Foam is entitled to recover the costs of producing the foam fuel cells, 

even if some were shown not to be in strict compliance with all of the contract 

specifications, unless the government established that any defects resulted from Best 

Foam’s gross disregard of its contractual obligations or that any defects are so extensive 

as to render Best Foam’s costs unreasonable.” Id. at 641.

Plaintiff’s argument that this rule should be applied to the instant case to allow for 

recovery of all items produced under the contract, regardless of whether they were 

rejected by the Army as defective or otherwise not in compliance with the terms of the 

contract, stretches Best Foam to its breaking point. As the language in Best Foam makes 

clear, the right of a contractor for compensation for defective items under a termination 

for convenience action is not iron-clad. For example, any gross disregard of contractual 

obligations would limit recovery, as would a showing that defects are so extensive as to 

render plaintiff’s costs unreasonable. Best Foam, 38 Fed. Cl. at 641. Additionally, the 

court in Best Foam went on to analyze defendant’s argument that plaintiff’s produced 
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foam fuel cells did not meet contract specifications and found this argument to be 

unavailing. To the contrary, the Court found that all allegedly deficient actions taken by 

plaintiff were actually reasonable under the specifications written into the contract, id. at 

642-43, and that “most of defendant’s allegations of nonconformity are unfounded and 

none provides any basis for disallowing Best Foam’s costs.” Id. at 644.

The instant case provides a widely differing situation compared to Best Foam. 

Notably, the contract in this case expressly considers and expects that at least some 

percentage of the test items called for by the contract will be rejected by the Army. 

Specifically, Contract 0033 noted that the delivery schedule was based on a historical 

rejection rate of 45%, but that the actual rate of rejection may be higher or lower in 

individual cases. Thus, plaintiff was on notice from the commencement of the contract 

that it would be a near certainty that it would have to produce items in excess of what was 

required to be delivered under the contract, in order to accommodate for the likely 

rejection of some items. Simply put, the Court cannot at this juncture accept plaintiff’s

assertion that it is entitled to the cost of all items produced, even when the contract 

expressly contemplated that some items would be rejected as part of the normal course of 

the contract, and that Best Foam stands for the proposition that these costs should not be 

questioned. To the contrary, Best Foam requires that the costs for defective material not 

be unreasonable.

Notably, in Best Foam, the court conducted a trial on plaintiff’s breach of contract 

claim (converted into a termination for convenience action) and was able to hear 

testimony and receive evidence which allowed the court to reach its conclusion that the 
24

foam cells produced by plaintiff, which defendant argued were defective under the 

contract, actually met the contract specifications such that plaintiff was entitled to costs 

associated with their production. Thus, the Court was able to conclude that those costs 

were reasonable. This is not to say that recovery for all rejected test items is necessarily 

unreasonable – it is far too early for the Court to make such a broad proclamation. Rather, 

Best Foam shows a situation whereby plaintiff sought costs for allegedly defective items, 

defendant argued that the items were, in fact, defective, and plaintiff was able to 

successfully refute that argument and prove to the court that the items were not defective 

under the terms of the contract. What Best Foam does not stand for is a proposition that 

plaintiff may recover costs for allegedly defective items without further inquiry merely 

because the cause of action proceeds as a termination for convenience as opposed to a 

breach of contract.

Plaintiff, at some level, seems to understand this, as the complaint is replete with 

references to how it believes DLI arbitrarily and unreasonably rejected test items. See 

Compl. 16-1556 at ¶ 55 (plaintiff’s only count asking the court to “determine a fair and 

equitable price adjustment to the Contract to compensate Avant for the items it provided 

to DLI in an attempt to meet DLI’s arbitrary and ambiguous acceptance criteria and as a 

result of DLI’s breach of its contractual duty to ‘work closely with the contractor to 

improve items.’”). At the end of the day, whether or not plaintiff’s test items were 

unreasonable rejected will be a question of fact that will need to be resolved in order to 

set the quantum for a potential recovery. This makes transfer of the instant matter 

appropriate. It is uncontested that plaintiff has already presented evidence and testimony 
25

before the ASBCA that DLI acted arbitrarily and capriciously when it rejected certain test 

items. Such evidence would be useful and necessary in resolving the quantum in the

instant case. The Court is completely uninformed on this particular aspect of the case. 

The ASBCA, on the other hand, and Judge McIlmail, the ASBCA judge presiding over 

Avant’s board level appeals, in particular, has seen this evidence and heard this 

testimony. Thus, the Court believes that the significant progress made by the board in 

adjudicating plaintiff’s breach of contract proceedings would aid the board in resolving 

this claim for termination for convenience damages. Accordingly, the fourth factor 

weighs in favor of transfer.

The fifth factor to be considered is whether concurrent resolution would result in 

an inefficient allocation of the court’s, board’s, or party’s resources. Defendant argues 

that it would be inefficient for the Court to consider the instant litigation given the 

extensive breach of contract proceedings that have been conducted at the ASBCA, 

leading to the ASBCA’s familiarity with the parties and the facts of the case. Def.’s Mot. 

at 27. Plaintiff, on the other hand, argues that no efficiency would be gained from 

consolidation, and that consolidation may result in significant delay in the resolution of 

plaintiff’s outstanding breach of contract claim for Contract 0033 before the board. Pl.’s 

Resp. at 31. The Court finds that this factor weighs in favor of transfer to the ASBCA. 

Plaintiff’s argument that such a transfer would unduly lengthen its pending breach 

of contract proceedings is unpersuasive. The record is clear that with regard to the breach 

of contract claim pending before the ASBCA, the parties and the board have already 

completed the lion’s share of the work to be done. Merits hearings have been held and 
26

post-trial briefing has been filed. To the Court’s knowledge, all that remains is for the 

board to issue a final decision on the matter. Furthermore, plaintiff admits in its brief that 

“the ASBCA’s final decision will be purely advisory because Avant’s recovery must be 

determined under the termination for convenience clause and not under a breach of 

contract theory of damages.” Id. at 31, n. 6. Given plaintiff’s view that any outcome 

reached in its breach of contract case before the ASBCA would be essentially 

meaningless, it is hard to believe that plaintiff would be severely inconvenienced if that 

decision were to be delayed by consolidation of that case with its instant termination for 

convenience costs case. Nevertheless, given the holding that plaintiff is not necessarily 

entitled to recover for each and every item it produced in relation to the contracts, 

plaintiff would need to make a similar showing to recover before the Court. Because the 

ASBCA has already allegedly heard testimony concerning the reasonableness of the 

Army’s action in rejecting certain testing materials, the Court believes that the board is in 

a better position to hear new evidence relating to termination for convenience costs. The 

Court, on the other hand, has yet to hear any such testimony, and the process of getting 

the Court up to speed would likely be a more costly and inefficient process than doing so 

before the board. Should plaintiff be required to present new evidence to support its 

termination for convenience costs for the first time at the board, it would be no less 

efficient to present that evidence in that forum than it would be before the Court.

The final factor to be considered is whether separate forums would reach 

inconsistent results. Given that termination for convenience costs are not presently before 

the ASBCA, it is an impossibility for the Court to reach a result contrary to anything the 
27

board could decide. Given the entwinement between the two claims and the overall 

similarity that recovery would yield, it is possible that the ASBCA’s outstanding decision 

regarding the breach of Contract 0033 might create some confusion with the parties and 

impact how they view the instant case before the Court. In the event that the ASBCA 

issues a decision regarding this breach of contract, the board would be the best forum to 

reconcile any issues or concerns the parties may have regarding that decision impacting 

any claim under a termination for convenience theory.

After careful consideration of the Morse Diesel factors, the Court concludes that 

transfer of plaintiff’s claim for termination for convenience damages to the ASBCA 

would be in the interest of justice. The claims concern a contract with which the ASBCA 

is already intimately familiar with, and the theories of recovery, while inherently different 

from a legal standpoint, project to yield a similar result when it comes to damages 

recoverable. Therefore, transfer of the instant matter to the ASBCA would be in the 

interest of justice.

III. CONCLUSION

For the above stated reasons, the following is hereby ordered:

1. Defendant’s motion to dismiss is DENIED because the Election Doctrine 

does not serve to limit the Court’s jurisdiction in the instant case. 

2. Defendant’s motion to dismiss is DENIED because plaintiff has plead a 

claim for relief upon which relief may be granted. 

3. In the interest of justice, this matter shall be transferred to the ASBCA for 

further proceedings. Defendant’s motion to transfer is GRANTED.
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The Clerk shall enter judgment accordingly.

IT IS SO ORDERED.

s/ Bohdan A. Futey 

BOHDAN A. FUTEY

Senior Judge