Court Opinion

ID: 2786640
Source: CourtListenerOpinion
Date Created: 2015-03-17 14:00:04.871491+00
Date Added: 2024-06-11T12:17:53.595217
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of --                                  )
                                              )
Seven Seas Shipchandlers, LLC                 )       ASBCA Nos. 57875, 57876, 57877
                                              )                  57878,57879
Under Contract Nos. W91B4L-09-P-0518          )
                    W91B4L-09-P-0318          )
                    W91B4L-09-P-0436          )
                    W91B4L-09-P-0465          )
                    W91B4L-09-P-0585          )

APPEARANCE FOR THE APPELLANT:                         Joseph E. Schmitz, Esq.
                                                       Schmitz & Socarras LLP
                                                       McLean, VA

APPEARANCES FOR THE GOVERNMENT:                       Raymond M. Saunders, Esq.
                                                       Army Chief Trial Attorney
                                                      Brian E. Bentley, Esq.
                                                       Trial Attorney

                 OPINION BY ADMINISTRATIVE JUDGE NEWSOM

        In this appeal, we consider the question of which party bears the risk of theft of
a cash payment intended for a contractor. The government tendered $240,549.90 in
Afghan cash to Muhummad Qahir (Mr. Qahir), intended as payment on five of
appellant's contracts. Mr. Qahir disappeared with the cash. The government argues
that its payment obligation was fulfilled because Mr. Qahir possessed apparent
authority to collect cash payments for the contractor. It contends that the contractor
manifested assent to Mr. Qahir's apparent authority when it failed to object after
Mr. Qahir twice collected cash payments. The contractor contends that Mr. Qahir had
no authority to accept payment, and it brought claims seeking payment. We
previously denied appellant's Motion for Partial Summary Judgment asserting that the
government had not proved its affirmative defense that appellant was paid for its
performance. 13 BCA ,-i 35,193, recon. denied, 13 BCA ,-i 35,288.

       The parties waived hearing and submitted the case upon the record pursuant to
Board Rule 11. Pursuant to the Board's 17 January 2012 Order, only entitlement is
before the Board.

       Having considered the briefs and record evidence, the Board holds that the
government has not carried its burden to prove that it paid appellant. In the circumstances
presented here, we conclude that apparent authority is not an issue for decision in this
appeal. Appellant is entitled to payment from the government, plus applicable interest.
                                FINDINGS OFF ACT

       1. These appeals arise out of five separate firm-fixed-price contracts awarded
by the Kandahar Regional Contracting Center to Seven Seas between January and May
2009. The contracts required Seven Seas to deliver various supplies to Kandahar Air
Field (KAF) in Afghanistan in 2009.

The Five Contracts at Issue

       2. Contract No. W91B4L-09-P-03 l 8 (Contract 318), was awarded on 28 January
2009 and required Seven Seas to supply five generators at a total price of $96,429.65
(R4, tab 10). Contract No. W91B4L-09-P-0436 (Contract 436), awarded on or about
12 March 2009, required Seven Seas to supply information systems hardware at a total
price of$14,442.45 (R4, tab 19). Contract No. W91B4L-09-P-0465 (Contract 465),
awarded 28 March 2009, required Seven Seas to supply refrigerant line sets and
thermostat wire at a total price of $2,483.30 (R4, tab 28). None of the first three
contracts - neither Contract 318, Contract 436, nor Contract 465 - specified a method of
payment (R4, tabs 10, 19, 28).

       3. The last two contracts at issue did specify payment methods. On 23 April
2009, Contract No. W91B4L-09-P-0518 (Contract 518) was awarded, requiring Seven
Seas to supply generators at a total price of$125,885.76 (R4, tab 1). Contract 518
contained two clauses addressing method of payment: ( 1) FAR 52.232-34, PAYMENT
BY ELECTRONIC FUNDS TRANSFER - OTHER THAN CENTRAL CONTRACTOR
REGISTRATION (MA y 1999); and (2) 952.232-0002, PAYMENT IN LOCAL CURRENCY
(AFGHANISTAN) (MAR 2009) (id. at 7, 18).

       4. FAR 52.232-34, PAYMENT BY ELECTRONIC FUNDS TRANSFER - OTHER
THAN CENTRAL CONTRACTOR REGISTRATION (MA y 1999), required that "[a]ll
payments by the Government under this contract shall be made by electronic funds
transfer (EFT) except as provided in paragraph (a)(2) of this clause." If EFT did not
work, Paragraph (a)(2) provided that the contractor agreed in advance to "[a]ccept
payment by check or some other mutually agreeable method of payment." (R4, tab 1
at 7)

      5. Clause 952.232-0002, p AYMENT IN LOCAL CURRENCY (AFGHANISTAN)
(MAR 2009), granted the government discretion to pay the contractor by cash in
Afghanistan currency; by check; or by various forms of electronic funds transfer. It
provided, however, that if cash payment was made, the cash must be "dispersed in a
manner prescribed by the U.S. Military Local Finance Office." (R4, tab 1at18-19)

      6. Finally, on 3 May 2009, Contract No. W91B4L-09-P-0585 (Contract 585)
was awarded, requiring Seven Seas to supply hardware at a total price of$1,338.74

                                           2
(R4, tab 36). Contract 585 lacked FAR 52.232-34, but contained the same
clause 952.232-0002, PAYMENT IN LOCAL CURRENCY (AFGHANISTAN) (MAR 2009),
included in Contract 518 (id. at 8).

Arrangement to Pay Seven Seas in Cash

        7. The facts concerning how cash payments came to be made to Seven Seas are
critical to both parties' arguments, so we describe them in some detail. The
government's KAF Commercial Vendor Services section (CVS) was the payment
office that paid contractors such as Seven Seas (R4, tab 7 at 123). CVS cashiers
dispensed money, and a Noncommissioned Officer-in-Charge (NCOIC) supervised the
CVS and the cashiers (app. supp. R4, tab L, Leomiti (Leomiti dep.) at 59-60, 62, 101).

      8. Initially during the relevant period, the CVS NCOIC was Sergeant
(SGT) James P. Velasquez (R4, tab 7 at 123).

        9. Seven Seas had been paid through EFT on other contracts, and it received at
least nine EFT payments on unrelated contracts between January and 1 June 2009
(app. supp. R4, tab A). On 7 February 2009, however, SGT Velasquez offered to pay
Seven Seas in cash, so that Seven Seas could avoid EFT transaction fees (R4, tab 7
at 123). SGT Velasquez's 7 February 2009 email stated: "[w]hen we EFT your
payments you occur [sic] a fee because your bank is out of Afghanistan. If you can
come into our office we can pay you in US Cash." (Id.)

        10. SGT Velasquez did not identify a specific contract to which his 7 February
2009 offer to pay in cash would apply. However, he described the CVS as "the office
that pays the contracts for Kandahar" (R4, tab 7 at 123), and as both parties assume
that he meant it to apply to all contracts payments made by the KAF CVS, (gov't br.
at 9; app. reply br. at 8), the Board finds that this cash payment arrangement was
intended to apply to any contract paid through the KAF CVS during the relevant
period.

        11. Seven Seas operations executive, Sadiq Maruf (Mr. Maruf), accepted the
offer to receive payments in cash. Significantly, he identified three individuals who
were authorized to receive cash on behalf of Seven Seas. His 8 February 2009 email
stated: "[a]s per your telecon with Mr. Andy, please note we will accept cash in US$.
Kindly note the following personnel are authorized to collect cash from you." The
three persons "authorized to collect cash" for Seven Seas were Raja Khan,
Saeed Khan, and Shabbeer Bajwa. (R4, tab 7 at 122)

       12. Mr. Maruf did not expressly authorize Mr. Qahir to accept payment for Seven
Seas (R4, tab 7 at 122). Mr. Qahir was not a Seven Seas employee, although he was
known to Seven Seas personnel (id. at 125, Declaration of Raja Khan (Khan decl.) ~ 3).

                                          3
First Cash Payment Dispensed to Mr. Qahir, Without Incident

       13. Thereafter, despite that Seven Seas did not authorize Mr. Qahir to receive
cash payments, on two occasions, the government dispensed cash payments to
Mr. Qahir without incident. Both occurred on contracts not at issue in these appeals.

        14. The first occasion occurred on or about 25 March 2009. Seven Seas
contract administrator Raja Khan (Mr. Khan) asked Mr. Qahir to deliver an invoice to
the contracting officer, Senior Airman Austin DeRose. (Khan decl. ~ 4) Mr. Khan did
not direct Mr. Qahir to go to the CVS nor obtain payment (id.).

       15. Mr. Qahir exceeded those instructions and went to the CVS, where the
government cashier gave him 4,693,973 in Afghan currency (approximately $90,000)
intended as payment for Seven Seas (Khan decl. ~ 4; R4, tab 7 at 135, Supplemental
Declaration of Raja Khan (Khan supp. decl.) ~ 4).

       16. No immediate harm was done, as Mr. Qahir delivered this cash to Seven
Seas (Khan decl. ~ 4; Khan supp. decl. ~ 4).

        17. The parties expend considerable effort disputing whether or not Seven Seas
complained to the government about this 25 March 2009 cash payment. Seven Seas
contends that its executive telephoned the contracting officer and expressed concerns
(R4, tab 7 at 132-33, Declaration of Sadiq Maruf(Maruf decl.) ~ 4). The contracting
officer denies receiving that call (supp. R4, tab 2 at 1, Declaration of Austin DeRose
(DeRose decl.) ~ 2).

       18. Despite their differences, both parties' versions converge in agreement that
Seven Seas did not complain to the government about the tendering ofpayment to
Mr. Qahir, nor did it complain about having been paid in cash. Rather, at most,
Mr. Maruf complained about being paid in Afghan currency. He invited payment by
"US Dollars cash" and mentions no complaint about the fact that payment was
dispensed to Mr. Qahir. (Maruf decl. ~ 4)

New CVS Staff Takes Over and New NCO IC is Informed of the Individuals
Authorized to Collect for Seven Seas

        19. Meanwhile, in April 2009, a new payment team transitioned into the CVS.
A new NCOIC, SFC Christina Leomiti (SFC Leomiti) (also known as Staff
Sergeant Wilson), replaced SGT Velasquez. About a month later, either in late April
or early May 2009, Private First Class (PFC) Jason Yost (PFC Yost) joined the CVS
staff as a cashier. (Leomiti dep. at 241)

      20. Significantly, when SFC Leomiti took over as NCOIC, her predecessor
gave her the names of the three individuals authorized to collect cash for Seven Seas,

                                           4
none of whom was Mr. Qahir. SFC Leomiti testified that she understood that there
was "a list of personnel that was authorized to pick up" money for Seven Seas and that
only "Mr. Raja Kahn, Mr. Saeed Khan, and Mr. Sagir Bhujwa" were its "trusted
agents" for collection of cash payments. (Leomiti dep. at 117, 122-23, 131-32)

Second Cash Payment Dispensed to Mr. Qahir, Without Incident

        21. On 2 7 May 2009, the CVS again tendered a cash payment to Mr. Qahir on
unrelated contracts (Khan supp. decl. ,-i 4; Maruf decl. ,-i 7). As on the previous occasion,
Mr. Khan requested Mr. Qahir to deliver invoices to the contracting officer, and again
Mr. Khan exceeded those instructions, went to the CVS and collected money, this time
totaling approximately 807,160 in Afghan currency (about $13,000) (id.).

      22. As before, no immediate harm occurred; Mr. Qahir turned this cash over to
Seven Seas (Maruf decl. ,-i 7).

Again, Seven Seas Does Not Complain

       23. After receiving the cash from Mr. Qahir on 27 May 2009, Mr. Khan
notified Mr. Maruf, who instructed Mr. Khan to remind the contracting officer that
Seven Seas did not wish to be paid in Afghan cash (Maruf decl. ,-i 7). Again,
Mr. Maruf did not complain about payments to Mr. Qahir, nor did he complain about
cash payment so long as the cash was in U.S. currency.

       24. Mr. Khan did not pass that instruction along to the contracting officer. On
6 June 2009, the contracting officer notified Mr. Khan that the command had
determined to stop making cash payments to vendors and instead make all contract
payments through EFT (Khan supp. decl. ,-i 5; DeRose decl. ,-i 4). As a result,
Mr. Khan believed that "no further instructions to [the government] were necessary in
order to avoid any repeat of the two [prior] incidentts]" (Khan supp. decl. ,-i 5).

       25. Thereafter, the parties began to arrange payments through EFT (R4, tab 7
at 127-28, 138; Maruf decl. ,-i,-i 7, 8; DeRose decl. ,-i 4).

Conflicting Theories About How Cash Was Tendered to Mr. Qahir

       26. Neither party presented convincing evidence as to how or why the cashiers
dispensed cash to Mr. Qahir on 25 March or 27 May 2009, in contravention of
Mr. Marufs 8 February 2009 email limiting those authorized to accept cash for Seven
Seas. Seven Seas theorizes that when Mr. Qahir collected cash from the CVS, each
time he was accompanied by the contracting officer (app. reply br. at 6, 8). The
evidence does not support this contention. Seven Seas' support consists of statements

                                             5
                                                                   1
from individuals without personal knowledge of the transactions. The contracting
officer - who has personal knowledge - denied accompanying Mr. Qahir to the CVS
to collect payments (app. supp. R4, tab J at 2, admission 2). The Board finds that the
contracting officer did not accompany Mr. Qahir to the CVS on either occasion.

         27. Similarly, a finding in a Defense Criminal Investigative Service (DCIS)
investigative report states that Mr. Qahir accompanied other Seven Seas employees to
the CVS when those other employees collected payments (app. supp. R4, tab Sat A-2,
ii 4), creating the impression that Mr. Qahir also had authority to collect payments. 2
The Board does not credit this DCIS report finding, because its source, SFC Leomiti,
disputed the finding during her deposition. SFC Leomiti testified that she observed
Mr. Qahir in the CVS on only one occasion prior to the theft, and on that occasion, no
money was collected (Leomiti dep. at 175-76, 222-23). Accordingly, the Board finds
that Mr. Qahir did not accompany Seven Seas personnel to the CVS on previous
occasions when they collected cash payments. The Board finds that the only two
occasions in which Mr. Qahir collected cash payments from the CVS for Seven Seas,
aside from the theft on 9 June 2009, occurred on (or about) 25 March 2009 and on
27 May 2009, and that he was unaccompanied on both occasions.

Seven Seas Performed the Contracts

       28. Seven Seas delivered the supplies required by all five contracts (R4, tabs 4,
11, 21, 31, 3 7, DD Form 250 - Material Inspection and Receiving Reports). The
government does not dispute that Seven Seas was entitled to payment on the contracts.

1
  Mr. Khan's initial declaration stated that the contracting officer accompanied
       Mr. Qahir to the CVS, but clearly Mr. Khan did not personally observe the
       transactions. He later clarified that he had "assumed" the contracting officer
       was present (Khan supp. decl. ii 4). Another Seven Seas employee stated "to
       the best of my recollection" Mr. Qahir told him that the contracting officer was
       present (app. supp. R4, tab C, Declaration of Shabbeer Saeed Bajwa ii 6(b)).
       The Board finds the contracting officer more reliable than statements by those
       who did not personally observe the transactions.
2
  The DCIS report was admitted under the Board's rules, as neither party objected to it,
       but the Board accords little or no weight to its findings. Several of its findings
       appear to be overstatements or errors. The report attributes statements
       to SFC Leomiti that she denied making (Leomiti dep. at 187, 223-24, 228-29).
       The report also does not acknowledge or reconcile its findings with contrary
       evidence. For example, its finding that Seven Seas did not notify the
       government "that Qahir was not authorized to pick up payments" (app. supp.
       R4, tab 5 at A-2, ii 4) conflicts with Mr. Marufs 8 February 2009 email
       identifying persons who had that authority (R4, tab 7 at 122).
                                           6
The Theft on 10 June 2009

      29. On 10 June 2009, the theft occurred. This time, there is some evidence of
what happened.

        30. In contrast to the prior occasions, this time Mr. Khan did not ask Mr. Qahir
to deliver invoices (Khan supp. decl. ii 8). Mr. Qahir went to the facility on his own
initiative.

       31. SFC Leomiti was on duty at the CVS on 10 June 2009 (Leomiti dep.
at 173). Her duties included supervising the cashiers who disbursed cash (id. at 59-60,
62, 101).

        32. SFC Leomiti described the payment process then in effect. Prior to paying
a contractor, the NCOIC reviewed and signed a payment voucher, SF 1034 (Leomiti
dep. at 99-100). The NCOIC's signature indicated that the payment was "correct in
our system" (id. at 100). The NCO IC then gave the SF 1034 to the cashier who "deals
with the customer and disburse the cash" (id. at 99-100).

       33. The payee on the voucher was required to be the person listed on the
contract (Leomiti dep. at 92). To collect cash, a person was required to present a
picture identification to the cashier (id. at 96-98). The cashier was required to review
the person's identification to verify his identity before dispensing cash (id. at 98, 101 ).

     34. SFC Leomiti saw Mr. Qahir at the CVS on 10 June 2009, but at the time,
SFC Leomiti "didn't know who he was" (Leomiti dep. at 174, 189-90).

        35. PFC Yost was the cashier who dispensed cash to Mr. Qahir on 10 June
2009 (Leomiti dep. at 184-85). SFC Leomiti generally did not stand behind the
cashiers to observe what they did with customers, and she did not do so 10 June 2009
(id. at 101, 210-11). She did, however, see Mr. Qahir receive cash from PFC Yost (id.
at 188-90).

       36. SFC Leomiti did not know if PFC Yost checked Mr. Qahir's identification
before dispensing cash to him (Leomiti dep. at 190). There is no direct evidence as to
whether or not PFC Yost checked Mr. Qahir's identification, and the record contains
no statement from PFC Yost.

       37. PFC Yost dispensed to Mr. Qahir $240,549.90 in Afghan cash as payment
on the following five Seven Seas' contracts in the following amounts:

                                             7
               a.   Contract 585:     $1,338.74;
               b.   Contract 518:   $125,855.76; 3
               c.   Contract 318:    $96,429.66;
               d.   Contract 436:    $14,442.45;
               e.   Contract 465:     $2,483.30.

(R4, tab 7 at 158, tabs 2, 14, 22, 32, 40, SF 1034s)

      38. After the transaction, SFC Leomiti received the SF 1034s from the cashier
(Leomiti dep. at 191 ).

       39. Mr. Qahir disappeared with the cash and was not seen again (R4, tab 7
at 141, Declaration of Anarbol "Andy" Pefia (Pefia decl.), 8).

        40. By mid-August 2009, Seven Seas noticed that payment for Contract 318
was overdue, and Mr. Khan contacted SFC Leomiti (R4, tab 7 at 155). SFC Leomiti
initially responded that she believed payment had been made to a Seven Seas
employee (Leomiti dep. at 207-08).

       41. Mr. Khan followed with an email attaching a picture of Mr. Qahir, asking if
he was the individual to whom the government delivered the payment. SFC Leomiti
responded, "That is correct! That is the individual who picked up money for Seven
Seas." (R4, tab 7 at 155, 160; Leomiti dep. at 201) Further email exchanges over the
subsequent days confirmed that Mr. Qahir had collected payments for all five Seven
Seas contracts (R4, tab 7 at 158-59). SFC Leomiti said that PFC Yost also recognized
Mr. Qahir as the person who collected payment (Leomiti dep. at 202-03).

       42. Seven Seas reported the theft to government investigative authorities
(Pefia decl., 12). When the vouchers were reviewed after the theft, they showed that
Mr. Qahir signed the name "Raja"- apparently referring to Mr. Khan, a Seven Seas
contract administrator (R4, tab 2 at 2, tab 14 at 2, tab 22 at 2, tab 32 at 2, tab 40 at 2,
SF 1034s ). Mr. Khan was one of the three individuals authorized to collect cash for
Seven Seas (R4, tab 7 at 122). Accordingly, the Board finds Mr. Qahir forged
Mr. Khan's signature on the vouchers.

        43. Because of the forgery, the Board finds it more likely than not that PFC Yost
failed to verify the identification of Mr. Qahir before dispensing cash to him.

3
    Minor discrepancies totaling $30.01 exist between the contract values and amounts
        paid out on Contracts 518 and 318. Contract 518 was awarded in the amount of
        $125,885.76 (R4, tab 1), but the public voucher shows that $125,855.76 was
        paid out (R4, tab 2), a $30 discrepancy. Contract 318 was awarded in the
        amount of $96,429.65 (R4, tab 10), but the public voucher shows that
        $96,429.66 was paid out (R4, tab 14), a $0.01 discrepancy.
                                             8
        44. The contracting officer did not state in his declaration whether or not he
was aware, prior to the theft, that Mr. Qahir had collected money for Seven Seas, nor
does it state whether or not he believed Mr. Qahir to have authority to accept payments
for Seven Seas (DeRose decl.).

       45. DCIS conducted an investigation and concluded that the matter should be
handled by local Afghan authorities, because the government viewed the loss as Seven
Seas', not the government's (supp. R4, tab 1 at A-2).

        46. Seven Seas submitted five certified claims to the contracting officer, each
dated 1September2011, seeking payment for Contracts 318, 436, 465, 518, and 585
(R4, tabs 7, 8, 17, 26, 34, 42). We infer from the contractor's seal that the claims were
sent on 5 September 2011 (id.). Allowing three days for transmission by mail, we
conclude that the contracting officer received them on 8 September 2011. The value
of the claims totaled $240,579.90, broken out as follows:

                       Contract                    Claim Amount
                       318                         $ 96,429.65
                       436                         $ 14,442.45
                       465                         $ 2,483.30
                       518                         $125,885.76
                       585                         $ 1 338.74
                       Total                       $240,579.90

(Id.) The contracting officer issued final decisions, dated 8 October 2011, denying
each of the claims (R4, tabs 9, 18, 27, 35, 43). Appellant timely appealed to this
Board.

                                        DECISION

       These appeals tum on whether the government fulfilled its payment obligation to
appellant when it tendered $240,549.90 4 in Afghan cash to Mr. Qahir on 10 June 2009. As
the government concedes (gov't br. at 8), the government bears the burden to prove that it
paid appellant. S.A.S. Bianchi Ugo fu Gabbriello, ASBCA No. 53800, 05-2 BCA ii 33,089.

       The government argues based on common law agency principles that by
dispensing cash to Mr. Qahir, it fulfilled its payment obligation to Seven Seas. The
government acknowledges that Seven Seas' operations executive, Mr. Maruf, did not
expressly authorize Mr. Qahir to collect cash for Seven Seas, and there is no dispute
that Mr. Qahir lacked actual authority to collect payment for Seven Seas (gov't reply

4
    It appears that the government may have tendered approximately $30 less than the
         total combined contract values (see findings 37, 46).
                                             9
br. at 6-7).

       Rather, the government contends that Mr. Qahir had apparent authority to accept
cash for Seven Seas. Apparent authority is established when a third party reasonably
believes the actor to possess authority to act for the principal. RESTATEMENT (THIRD)
OF AGENCY § 2.03 (2006) (hereinafter Restatement); United States v. Great American
Insurance Company of New York, 738 F.3d 1320, 1334 (Fed. Cir. 2013) (hereinafter
Great American). The Restatement defines apparent authority as:

                [T]he power held by an agent or other actor to affect a
                principal's legal relations with third parties when a third
                party reasonably believes the actor has authority to act on
                behalf of the principal and that belief is traceable to the
                principal' s manifestations.

Restatement § 2.03. Because its pay office twice dispensed cash to Mr. Qahir without
objection from Seven Seas, the government argues that it was reasonable for
government payors to believe that Mr. Qahir had become an authorized recipient of
cash on behalf of Seven Seas. 5

        While it is troubling that Seven Seas did not alert the government to concerns
about Mr. Qahir, we find the government's theory of apparent authority inapposite.
First, there is no evidence that anyone in the government actually formed a beliefthat
Mr. Qahir possessed authority to collect cash for Seven Seas. The government
provided no testimony or declaration from PFC Yost, the cashier who dispensed cash
to Mr. Qahir, and the contracting officer was silent about his perception of Mr. Qahir's
authority. (Findings 36, 44) The only government employee to offer testimony on this
subject - CVS NCO IC SFC Leomiti - testified that she knew that Mr. Qahir was not
among those authorized to accept cash for Seven Seas (finding 20).

         Second, the service members staffing the CVS on 10 June 2009 likely were
unaware of the prior occasions when Mr. Qahir picked up cash for Seven Seas. The
CVS NCOIC testified that she saw Mr. Qahir on 10 June 2009 but did not know who
he was, and that the one prior occasion when she had seen Mr. Qahir, he did not pick
up any money. (Findings 27, 34) Again, no testimony or statement was provided
from the cashier, PFC Yost, who entered service in the CVS in late April or May 2009
(findings 19, 36). There is no evidence that he was aware of either prior payment, and
it is a fair inference that he was unaware of at least the March 2009 transaction, which
predated his deployment. Again, the contracting officer was silent (finding 44).

         The evidence instead supports the conclusion that the government paid

5
    Seven Seas contends that it objected to the payments to Mr. Qahir, but the Board
         finds that Seven Seas did not object (findings 18, 23, 24).
                                             10
Mr. Qahir because Mr. Qahir forged Mr. Khan's signature on the SF 1034 payment
vouchers (findings 42-43). The CVS cashier was required to review the payee's
identification before dispensing cash (findings 32-33), but we find it more likely than
not that he failed to do so (findings 35-43). Stated differently, the cashier paid
Mr. Qahir not because he recognized Mr. Qahir and believed him to have authority,
but because Mr. Qahir pretended to be someone else who was authorized to receive
payment. 6

        This conclusion is reinforced by language in two of the contracts. Both
Contracts 518 and 585 contained local clause 952.232-0002, PAYMENT IN LOCAL
CURRENCY (AFGHANISTAN) (MAR 2009), which gave the government discretion to
pay by Afghan cash. While the clause did not specify to whom cash may be dispersed,
it provided that cash must be "dispersed in a manner prescribed by the U.S. Military
Local Finance Office" (finding 5). We conclude the government did not follow its
own processes by confirming the identity of the person to whom it dispensed cash.

                                      CONCLUSION

        In summary, the government failed to sustain its burden to prove that it paid
Seven Seas. Because Seven Seas has performed the contracts (finding 28) and has not
been paid, the Board holds that Seven Seas is entitled to payment of $240,579.90 on
the contracts plus applicable interest from 8 September 2011, the date the contracting
officer received the claims (finding 46).

         Dated: 4 March 2015

                                                   Administrati e Judge
                                                   Armed Services Board
                                                   of Contract Appeals

(Signatures continued)

6
    These findings distinguish this case from Great American, 738 F.3d at 1335, wherein
         the Federal Circuit held that a surety conferred apparent authority by repeatedly
         failing to object when its agent issued bonds for values exceeding his
         authorized limit. Here, unlike in Great American, a forgery and the
         government's failure to follow its payment procedures - not a belief about
         Mr. Qahir's authority- is what led the government to dispense cash to
         Mr. Qahir.
                                             11
I concur                                         I concur

  ~#~
MARK N. STEMPLER                                RICHARD SHACKLEFORD
Administrative Judge                            Administrative Judge
Acting Chairman                                 Vice Chairman
Armed Services Board                            Armed Services Board
of Contract Appeals                             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 Nos. 57875, 57876, 57877,
57878, 57879, Appeals of Seven Seas Shipchandlers, LLC, rendered in conformance
with the Board's Charter.

      Dated:

                                                JEFFREY D. GARDIN
                                                Recorder, Armed Services
                                                Board of Contract Appeals

                                          12