Court Opinion

ID: 9384471
Source: CourtListenerOpinion
Date Created: 2023-04-03 22:00:08.216077+00
Date Added: 2024-06-11T17:17:53.704852
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS
    Appeals of -                                      )
                                                      )
    Triple Canopy, Inc.                               ) ASBCA Nos. 61415, 61416, 61417
                                                      )            61418 61419, 61420
                                                      )
    Under Contract No. H92237-10-C-0593 et al.        )
                                                      )

    APPEARANCES FOR THE APPELLANT:                       Armani Vadiee, Esq.
                                                         Todd M. Garland, Esq.
                                                          Smith Pachter McWhorter PLC
                                                          Tysons Corner, VA

    APPEARANCES FOR THE GOVERNMENT:                      Caryl A. Potter, III, Esq.
                                                          Air Force Deputy Chief Trial Attorney
                                                         Michael J. Farr, Esq.
                                                          Trial Attorney

                   OPINION BY ADMINISTRATIVE JUDGE WOODROW

       Triple Canopy Inc. (Triple Canopy) appeals the contracting officer’s (CO)
deemed denial of six certified claims, totaling $382,843.24, derived by fees imposed
by the Government of the Islamic Republic of Afghanistan (GIRA) on private security
companies (PSC) operating in Afghanistan with more than 500 employees. On May 7,
2020, the Board issued a decision denying the appeals based upon a finding that Triple
Canopy’s claims were time-barred. 1 Triple Canopy, Inc., ASBCA Nos. 61415, 61416,
61417, 61418, 61419, 61420, 20-1 BCA ¶ 37,675. The United States Court of
Appeals for the Federal Circuit (Federal Circuit) has reversed and remanded that
decision on the ground that Triple Canopy’s claim submission to the CO was within
the six-year CDA limitations period. Triple Canopy, Inc. v. Sec’y of Air Force,
14 F.4th 1332, 1342 (Fed. Cir. 2021). In addition, the Federal Circuit noted that:

                   [T]he government urges us to hold that Triple Canopy did
                   not establish that GIRA’s assessment constituted a “tax”
                   for purposes of the Foreign Tax Clause, which the
                   government argues is the prerequisite for an adjustment
                   under FAR 52.229-6(d). The contractor argues that the
                   Foreign Tax Clause embraces more than “taxes.” . . . . As

1
    The Board assumes familiarity with its May 7, 2020 decision. We restate the facts
         only to the extent necessary in this opinion.
              Triple Canopy notes . . . the Board made no findings on the
              scope of the clause or the factual question regarding the
              nature of the GIRA assessment. This question of fact is
              not for us to decide in the first instance on appeal. We
              therefore do not address it. It is for the Board to consider
              on remand.

Id. at 1342 n.7.

       For the reasons set forth below, we conclude that (1) the government breached
each contract at issue by failing to compensate Triple Canopy for the fees imposed by
the GIRA, and (2) Triple Canopy is entitled to an equitable price adjustment for the
GIRA’s assessment of fees. We sustain the appeals.

                                FINDINGS OF FACT

      1. In February 2008, the GIRA issued a directive entitled “Procedure for
Regulating Activities of Private Security Companies in Afghanistan” (PSC
Regulation) (R4, tab 33 at 17-71).

       2. Article 7 of the PSC Regulation required all PSCs to observe Afghanistan
law, including the PSC Regulation. Specifically, Article 7 stated “[a] Security
Company is obliged to observe the provisions of the valid laws of the country and this
procedure[.]” (R4, tab 33 at 22)

       3. Article 10 of the PSC Regulation provided: “The number of staff of each
Security Company shall not be more [than] 500 people, unless the Council of
Ministers agrees [to] an increased number of staff” (R4, tab 33 at 23).

       4. Although the PSC Regulation limited the number of PSC personnel to 500,
the regulation did not provide for the imposition of fees or penalties on PSCs operating
in Afghanistan that exceeded the limit (see generally R4, tab 33).

       5. Triple Canopy, Inc. is a licensed private security company in Afghanistan
(R4, tab 26 at 6). Triple Canopy provided private security services to military bases in
Afghanistan in accordance with six fixed-priced contracts that were awarded between
March 15, 2009 and September 10, 2010 (R4, tabs 1-2, 27, 34, 39, 45, 51). The
contracts were awarded by the Department of Defense, and many of them were issued
through the Combined Joint Special Operations Task Force-Afghanistan (CJSOTF-A
or government) (id.). Each contract required Triple Canopy to comply with local law
(R4, tabs 1 at 11, 27 at 9, 34 at 9, 39 at 8, 45 at 8, 51 at 8).

                                           2
       6. In addition, each contract incorporated by reference Federal Acquisition
Regulation (FAR) 52.229-6, TAXES--FOREIGN FIXED PRICE CONTRACTS
(June 2003) (R4, tabs l at 7, 27 at 9, 34 at 9, 39 at 8, 45 at 7, 51 at 7). FAR 52.229-6
provides, in relevant part:

              The contract price shall be increased by the amount of any
              after-imposed tax or of any tax or duty specifically
              excluded from the contract price by a provision of this
              contract that the Contractor is required to pay or bear,
              including any interest or penalty, if the Contractor states in
              writing that the contract price does not include any
              contingency for such tax and if liability for such tax,
              interest, or penalty was not incurred through the
              Contractor’s fault, negligence, or failure to follow
              instructions of the Contracting Officer or to comply with
              the provisions of paragraph (i) below.

FAR 52.229-6(d) (emphasis added)

         7. On August 13, 2010, the Contracting Officer (CO) sent a letter to
Afghanistan’s Ministry of Interior (MOI) on behalf of the Department of Defense (R4,
tabs 33 at 258-59, 38 at 258-59, 44 at 258-59, 50 at 258-59, 54 at 258-59). In the
letter, the CO informed the MOI that “Triple Canopy’s manning requirement in
support of US Military contracts will exceed 500 personnel” (R4, tabs 33 at 259, 38 at
259, 44 at 259, 50 at 259, 54 at 259). In the August 13, 2010 letter, the CO stated:

              In order to ensure there is no disruption to
              Afghanistan’s reconstruction process, the CJSOTF-A . . .
              respectfully requests an exemption excepting from the
              500 allowable security staff, for the above referenced
              contracts. It is understood and expected that Triple
              Canopy will still be required to abide by all other relevant
              laws and regulations as a licensed Private Security
              Company.

(R4, tabs 33 at 259, 38 at 259, 44 at 259, 50 at 259, 54 at 259)

       8. The CO further stated that: “This exemption shall be considered
immediately valid by both . . . CJSOTF-A and Triple Canopy” (R4, tabs 33 at 259, 38
at 259, 44 at 259, 50 at 259, 54 at 259).

                                            3
       9. On August 17, 2010, the President of Afghanistan, Hamid Karzai, issued
Presidential Decree 62 on the dissolution of PSCs by December 2010 (“PD62”) (R4,
tabs 33 at 386, 38 at 386, 44 at 386, 50 at 386, 54 at 386). Specifically, PD62
contemplated the seizure of vehicles and weapons belonging to noncompliant PSCs to
“fight corruption, to increase security for all citizens, to avoid public disorder and
misuse of weapons, uniforms, and military equipment by private security companies,
and to reduce tragic incidents in Afghanistan” (R4, tabs 33 at 392, 38 at 392, 44 at
392, 50 at 392, 54 at 392; see also R4, tabs 33 at 386, 38 at 386, 44 at 386, 50 at 386,
54 at 386).

       10. On March 15, 2011, the GIRA issued Presidential Directive No. 7339
(PD7339) (R4, tabs 33 at 396-98, 38 at 396-98, 44 at 396-98, 50 at 396-98, 54 at 396-
98). PD7339 required that all PSCs operating in Afghanistan pay a fee of 100,000
Afghan Afghani (AFN) for each person over the 500-employee cap and 250,000 AFN
for each foreign national working without an Afghan visa (R4, tabs 33 at 397, 38 at
397, 44 at 397, 50 at 397, 54 at 397).

       11. On March 24, 2011, the GIRA implemented PD7339 by assessing
“penalties” for each individual that Triple Canopy employed over the 500-person limit
(R4, tab 33 at 400). Specifically, the GIRA assessed a fee for 174 unregistered Afghan
citizens and 30 unregistered foreign citizens (id.). The penalties were assessed against
Triple Canopy’s total number of personnel across all of its contracts (id.). The
assessment totaled 37,860,000 AFN (id.).

       12. The GIRA directed Triple Canopy to pay this assessment within 15 days
(R4, tab 33 at 400). The GIRA notified Triple Canopy, however, that if it objected to
the assessment, it could provide its “reasoning in writing” within two weeks (id.).

       13. On March 27 and 28, 2011, representatives of the Department of Defense
again issued memoranda to the GIRA requesting that Triple Canopy be exempted from
the 500-person limit “to ensure there is no disruption to Afghanistan’s reconstruction
process” (R4 tabs 33 at 402-03, 405-07, 38 at 402-03, 405-07, 44 at 402-03, 405-07,
50 at 402-03, 405-07; 54 at 402-03, 405-07).

       14. The memoranda further stated: “This exemption shall be considered
immediately valid by both the United States Department of Defense Regional
Contracting Centers and Triple Canopy” (R4, tabs 33 at 403, 407,38 at 403, 407, 44 at
403, 407, 50 at 403, 407, 54 at 403, 407).

       15. On April 8, 2011, Triple Canopy appealed the assessment to the GIRA (R4,
tabs 33 at 409-19, 38 at 409-19, 44 at 409-19, 50 at 409-19, 54 at 409-19).
       16. In its appeals, Triple Canopy indicated it had first sought an exemption
from the 500-person limit in August 2010 and that it was awaiting approval from the

                                           4
MOI’s High Coordination Board and Council of Ministers so that it could maintain up
to 1,000 employees in Afghanistan (R4, tab 33 at 409, 412).

       17.On April 21, 2011, Triple Canopy informed the CO that it would submit a
request for equitable adjustment (REA) if its appeals were denied (R4, tab 38 at 12).

       18. On July 6, 2011, the GIRA sent a revised letter to Triple Canopy reducing
the original fees assessed in the GIRA’s March 24, 2011 letter (R4, tabs 33 at 421-22,
38 at 421-22, 44 at 421-22, 50 at 421-22, and 54 at 421-22).

       19. The revised letter restructured the GIRA’s March 24, 2011 assessment by
applying a fee of 100,000 AFN per individual for 174 Afghan nationals and four
foreign nationals, and 250,000 AFN per individual for three additional foreign
nationals (R4, tabs 33 at 421-22, 38 at 421-22, 44 at 421-22, 50 at 421-22, 54 at 421-
22). The total fee assessed against Triple Canopy was 18,550,000 AFN ($398,924.73)
(R4, tabs 33 at 427, 38 at 427, tab 44 at 427, tab 50 at 427, tab 54 at 427).

      20. On July 18 and 20, 2011, Triple Canopy paid the GIRA a total of
18,550,000 AFN ($398,924.73) in satisfaction of the assessed fees (R4, tab 54 at 424-
25).

      I. Procedural History

       21. On June 6, 2017, Triple Canopy submitted a claim to the CO for
reimbursement under each contract (R4, tabs 26, 33, 38, 44, 50, 54). To date, the
government has not issued any contracting officer final decisions (COFDs). Triple
Canopy appealed to the Board on November 20, 2017, on the basis of deemed denials.
On May 7, 2020, the Board issued a decision denying Triple Canopy’s appeals
because its claims were time-barred. Triple Canopy, Inc., ASBCA Nos. 61415, 61416,
61417, 61418, 61419, 61420, 20-1 BCA ¶ 37,675 at 182,893. On September 29, 2021,
the Federal Circuit reversed and remanded the Board’s May 7, 2020 decision. Triple
Canopy, Inc. v. Sec’y of Air Force, 14 F.4th 1332, 1334 (Fed. Cir. 2021).

                                      DECISION

      I. Standard of Review

       Board Rule 11 permits parties “to waive a hearing and to submit [their] case
upon the record.” The standards of review and burdens of proof of a motion for
summary judgment and a decision on the merits under Board Rule 11 vary
substantially. See DG21, LLC, ASBCA No. 57980, 15 BCA ¶ 36,016 at 175,909 n.1.
Unlike a motion for summary judgment, which must be adjudicated on the basis of a

                                           5
set of undisputed facts, pursuant to Board Rule 11, the Board “may make findings of
fact on disputed facts.” U.S. Coating Specialties & Supplies, LLC, ASBCA No.
58245, 20-1 BCA ¶ 37,702 at 183,031 (quoting Grumman Aerospace Corp., ASBCA
No. 35185, 92-3 BCA ¶ 25,059 at 124,886 n.13).

       II. Whether the Foreign Tax Clause Imposes a Tax

        Triple Canopy contends that it is entitled to be reimbursed for the assessment it
paid to the GIRA for exceeding the 500-person cap specified in PD73398 (app. br.
at 14-16). Specifically, Triple Canopy argues that the fees that it paid to the GIRA are
“after-imposed taxes” under FAR 52.229-6(b), and that the government breached the
six contracts at issue in these appeals by failing to repay Triple Canopy for the
18,550,000 AFN ($398,924.73) that it paid to the GIRA in satisfaction of the assessed
fees (id.; finding 19).

       In contrast, the government argues that appellant is not entitled to relief under
FAR 52.229-6 because appellant has not provided any evidence to prove its theory that
the assessment is a tax (gov’t br. at 11; gov’t reply at 5). In the absence of such proof,
the government argues that the assessment is “above and beyond the normal taxes and
duties required for doing business” in Afghanistan because the assessment is a penalty
that was expressly intended to deter PSCs with over 500 employees from forming new
contracts by threatening them with fees and the seizure of property (gov’t reply at 7;
see finding 9; see also gov’t br. at 9, 12). Alternatively, the government argues that,
even if the assessment were a tax, appellant is similarly ineligible for reimbursement
because appellant failed to provide the CO with a written warranty stating that
no amount of the assessment was included in the contract price, as required by FAR
52.229-6(c) and (d) (gov’t br. at 12-13; gov’t reply at 5-6). In addition, the
government argues that: (1) the assessment imposed by the GIRA is not a
compensable change under FAR 52.212-4 because changes can only be made by
written agreement by the parties; (2) appellant made a business decision to engage in
contracts that would put it in violation of Afghani law; (3) appellant cannot credibly
claim that it relied to its detriment on the government’s attempts to secure an
exemption for appellant to work legally in Afghanistan; and (4) appellant has not
shown that the government breached its implied duty of good faith and fair dealing
(gov’t br. at 13-17; gov’t reply at 8-11).

              A. The Legal Basis for Triple Canopy’s Claim

       Contract interpretation begins with the plain language of the contract’s
provisions. LAI Servs., Inc. v. Gates, 573 F.3d 1306, 1314 (Fed. Cir. 2009). In
reviewing contractual language, the Board should read the contract “as a whole and
[interpret it] to harmonize and give reasonable meaning to all its parts,” leaving

                                            6
no words “useless, inexplicable, inoperative, insignificant, void, meaningless or
superfluous.” Walsh Grp. Ventures, ASBCA No. 61222, 20-1 BCA ¶ 37,615
at 182,584 (citations omitted); see also Hercules, Inc. v. United States, 292 F.3d 1378,
1381 (Fed. Cir. 2002) (a “contract must be construed to effectuate its spirit and
purpose giving reasonable meaning to all parts of the contract”).

        Contract language is clear and unambiguous when there is only one reasonable
interpretation consistent with the plain meaning. LAI Servs., 573 F.3d at 1314. If a
contract provision is ambiguous because it is susceptible to more than one reasonable
interpretation, the Board may consider extrinsic evidence to determine the parties’
intent at the time of contract formation. TEG-Paradigm Envtl., Inc. v. United States,
465 F.3d 1329, 1338 (Fed. Cir. 2006).

      Our analysis of the legal basis for Triple Canopy’s claim begins with FAR
52.229-6, which is incorporated into each of Triple Canopy’s contracts with the
government (finding 5). Paragraph (d)(1) of FAR 52.229-6 provides:

                [T]he contract price shall be increased by the amount of
                any after-imposed tax or of any tax or duty specifically
                excluded from the contract price by a provision of this
                contract that the Contractor is required to pay or bear,
                including any interest or penalty, if the Contractor states in
                writing that the contract price does not include any
                contingency for such tax and if liability for such tax,
                interest, or penalty was not incurred through the
                Contractor’s fault, negligence, or failure to follow
                instructions of the Contracting Officer or to comply with
                the provisions of paragraph (i) of this clause. 2

FAR 52.229-6(d)(1).

        Paragraph (b) of FAR 52.229-6 defines “tax” to “include fees and charges for
doing business that are levied by the government of the country concerned or by
its political subdivisions.” FAR 52.229-6(b). The clause also defines “after-imposed
tax” as:

2
    Paragraph (i) of the clause requires the contractor to “take all reasonable action to
         obtain exemption from . . . any taxes or duties, including interest or penalty,
         from which the United States Government, the Contractor, any subcontractor,
         or the transactions or property covered by this contract are exempt under the
         laws of the country concerned . . . .” FAR 52.229-6(i).

                                              7
              any new or increased tax or duty, or tax that was exempted
              or excluded on the contract date but whose exemption was
              later revoked or reduced during the contract period, other
              than excepted tax, on the transactions or property covered
              by this contract that the Contractor is required to pay or
              bear as the result of legislative, judicial, or administrative
              action taking effect after the contract date.
Id.

       We hold that the assessment at issue in these appeals is a tax under
FAR 52.229-6. FAR 52.229-6(b) defines the term “tax” broadly to include “fees and
charges for doing business that are levied by the government of the country
concerned.” FAR 52.229-6(b). The assessment at issue here fits squarely within the
term “tax” because it was a fee levied by the Afghan government for Triple Canopy to
do business within Afghanistan. Therefore, it is a “tax” as defined by FAR 52.229-
6(b).

         The government argues that the assessment is a penalty, rather than a tax,
because it is intended to deter certain conduct and its exaction is contingent upon the
occurrence of that conduct (gov’t br. at 10). Specifically, the government argues that
it is a penalty because “the exaction is not for doing business as a private security
organization, but for exceeding the manpower cap while doing so” (id. at 12). The
government cites several cases in support of this argument. Id. at 10-11 (citing Nat’l
Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 564-74 (2012); Dep’t of Revenue v.
Kurth Ranch, 511 U.S. 767, 780-84 (1994); Bailey v. Drexel Furniture Co. (U.S. Reps.
Title: Child Lab. Tax Case), 259 U.S. 20, 36-37 (1922); United States v. Reorganized
CF&I Fabricators of Utah, Inc., 518 U.S. 213, 224 (1996); United States v.
Constantine, 296 U.S. 287, 295 (1935)).

        As an initial matter, it is well-established that taxes have always been
instruments of policy meant to influence behavior in their application. See, e.g.,
Sebelius, 567 U.S. at 567 (“[T]axes that seek to influence conduct are nothing new.
Some of our earliest federal taxes sought to deter the purchase of imported
manufactured goods in order to foster the growth of domestic industry”); United States
v. Int’l Bus. Machines Corp., 517 U.S. 843, 874 (1996) (Kennedy, A., dissenting) (“As
the Convention records indicate, depriving the Federal Government of the power to tax
. . . was a contentious issue, given the concern that it would . . . disable Congress from
using . . . taxes as an instrument of policy); Clinton v. City of New York, 524 U.S. 417,
451 (1998) (Kennedy, A., concurring) (“[I]f a citizen who is taxed has the measure of
the tax . . . determined by the Executive alone, without adequate control by the
citizen’s Representatives in Congress, liberty is threatened. Money is the instrument
of policy and policy affects the lives of citizens.”).

                                            8
        Taxes attempt to influence behavior in a variety of ways. Some taxes punish
unlawful conduct, others have a revenue-raising purpose, and still others have a
“mixed-motive” of deterring certain activities while raising money. Kurth Ranch,
511 U.S. at 781-82. The government’s cited caselaw 3 focuses primarily on punishing
unlawful conduct. In Kurth Ranch, the Supreme Court considered a state tax that was
conditioned on the commission and arrest of the crime of possessing and storing
dangerous drugs. Id. at 781-82. In that case, the Supreme Court determined that the
tax in question “departs so far from normal revenue laws as to become a form of
punishment.” Id. at 783. Similarly, in the Child Labor Tax Case, the Supreme Court
considered a state tax limiting the working hours of children. Child Lab. Tax Case,
259 U.S. 20 at 36-37. Although the employment of children was not illegal at the
time, the Supreme Court noted:

                [T]here comes a time in the extension of the penalizing
                features of the so-called tax when it loses its character as
                such and becomes a mere penalty, with the characteristics
                of regulation and punishment. Such is the case in the law
                before us. Although Congress does not invalidate the
                contract of employment or expressly declare that the
                employment within the mentioned ages is illegal, it does
                exhibit its intent practically to achieve the latter result . . .

Id. at 38. In Reorganized CF&I Fabricators, the Court used even simpler terms to
describe a tax on deficiencies in certain pension plans: “if the concept of penalty
means anything, it means punishment for an unlawful act or omission, and a
punishment for an unlawful omission is what this exaction is.” Reorganized CF&I
Fabricators, 518 U.S. at 214. Finally, in Constantine, the Supreme Court concluded
that a tax conditioned upon the violation of certain state liquor laws had a “penal and
probatory intent rather than the gathering of revenue.” Constantine, 296 U.S. at 295.

       Unlike the unlawful conduct discussed in these cases, exceeding the manpower
cap in the instant appeals is not unlawful per se—just more expensive. In this way, it
is most similar to the tax discussed in the Sebelius case cited by the government. In
Sebelius, the Supreme Court determined that the Affordable Care Act’s mandate
requiring most Americans to maintain minimum health insurance coverage was a tax
and not a penalty. Sebelius, 567 U.S. at 566. Specifically, the Court noted:

3
    One of the most relevant cases cited by the government is Arkel Int’l, Inc., but unlike
         the facts at issue here, the dues at issue in that case existed and were known
         before contract award and the Army informed Arkel that those dues would be
         the responsibility of the contractor. Arkel Int’l, Inc., ASBCA No. 37469,
         89- 3 BCA ¶ 21,965 at 110,493. Given this, we are unpersuaded by the
         government’s reliance upon this decision.

                                                9
              “While the individual mandate clearly aims to induce the
              purchase of health insurance, it need not be read to declare
              that failing to do so is unlawful. Neither the Act nor any
              other law attaches negative legal consequences to not
              buying health insurance, beyond requiring a payment to the
              IRS . . . . [I]f someone chooses to pay rather than obtain
              health insurance, they have fully complied with the law.”

Id. at 567-68. Like the facts in Sebelius, the PSC Regulation, Presidential Decree 62,
and Presidential Directive No. 7339 all clearly aim to limit the number of individuals
employed by PSCs working in Afghanistan, but none of them render the employment
of more than 500 employees unlawful. No law, decree, regulation, or directive cited
by the parties attaches negative legal consequences for a PSC with more than
500 employees beyond the payment of an assessment to the GIRA. In this way, as in
Sebelius, if a PSC chooses to pay the assessment rather than comply with the
manpower cap, the PSC has fully complied with the law. Given this, we find that the
government’s cited caselaw supports the conclusion that the assessment at issue is a
tax under FAR 52.229-6(b).

        In addition, the government relies upon Article I of Presidential Directive 62 to
support its position that the assessment at issue is a penalty. Article I of Presidential
Directive 62 contemplates the dissolution of noncompliant PSCs to “fight corruption,
to increase security for all citizens, to avoid public disorder and misuse of weapons,
uniforms, and military equipment by private security companies, and to reduce tragic
incidents in Afghanistan” (finding 8). The government’s reliance on Presidential
Directive 62 is plausible, but ultimately unavailing. Although the GIRA makes bold
threats to dissolve noncompliant PSCs operating in Afghanistan in Presidential
Directive 62, the execution of the Directive on Triple Canopy was relatively mild.
Specifically, the GIRA originally sought to assess a fee of 37,860,000 AFN for
appellant’s noncompliance with the Directive, but the GIRA also immediately
informed appellant of its right to appeal the assessment (findings 10-11). Once
appellant did appeal the assessment, the GIRA cut the assessment in half, only
requiring appellant to pay a fee of 18,550,000 AFN ($398,924.73), which appellant
paid without difficulty (findings 18-19). We can imagine a scenario in which a tax
was so onerous that it became a penalty to noncompliant PSCs, possibly even
threatening the continued viability of their businesses. See, e.g., Child Lab. Tax Case,
259 U.S. 20 at 36 (“If an employer departs from this described course of business,
he is to pay to the government one-tenth of his entire net income in the business for a
full year.”). But that is not what happened here. The GIRA required Triple Canopy to
pay a fee for doing business within Afghanistan, and we cannot see how such a fee is
anything other than a tax. And so, we find the government’s penalty argument
unavailing.

                                           10
       We are equally unpersuaded by the government’s alternative argument that
appellant is not entitled to relief because appellant failed to provide the CO with a
written warranty (gov’t br. at 12-13; gov’t reply at 5-6). The government relies
heavily on the Board’s decision in H.Z. & Co., Ltd., ASBCA No. 29590, 85-2 BCA
¶ 18,062, to argue that under FAR 52.229-6(c) and (d), appellant was required to
submit a written warranty to the CO stating that no amount of the assessment at issue
here was included in the contract price (gov’t br. at 12-13; gov’t reply at 5-6). The
Board’s ruling in HZ was based on two holdings. First, the Board held that the
contractor failed to follow the CO’s instructions regarding the use of vendors who
could supply products exempt of duty taxes. Second, the Board held that the
contractor failed to include a written warranty that its contract price did not include the
duty taxes it seeks to recover. Id. at 90,659.

       In these appeals, there is no indication that the CO ever instructed Triple
Canopy to not pay the taxes or that Triple Canopy disregarded any direction from the
CO regarding the taxes. To the contrary, the government did everything it could to
seek an exemption from the taxes on behalf of Triple Canopy (findings 7-8, 13-14). It
was only after the government’s efforts failed that Triple Canopy went ahead and paid
the taxes.

       Moreover, in these appeals there is no expectation that a written warranty
would be necessary, given the government’s efforts to seek an exemption on Triple
Canopy’s behalf. As Triple Canopy stated in its claim, the fees did not exist at all until
March 2011, and were not assessed against Triple Canopy until its appeals were
denied in June 2011 (findings 15-20). Although the MOI limited the number of PSC
personnel in 2008, there were no fees associated with the limit until March 2011
(finding 10). Moreover, even if the initial law establishing the personnel limit were
accompanied by fees at the time the contracts were issued, the Government and Triple
Canopy were operating under the assumption that TC was exempt from that law.

      On the facts presented here, we hold that, although Triple Canopy did not
expressly state in its claim that the taxes were not included in the contract price, such a
statement was unnecessary given the circumstances.

       Finally, we do not need to address the government’s other alternative
arguments. Specifically, the government argues that: (1) the assessment imposed by
the GIRA is not a compensable change under FAR 52.212-4 because changes can only
be made by written agreement by the parties; (2) appellant made a business decision to
engage in contracts that would put it in violation of Afghani law; (3) appellant cannot
credibly claim that it relied to its detriment on the government’s attempts to secure an
exemption for appellant to work legally in Afghanistan; and (4) appellant has not
shown that the government breached its implied duty of good faith and fair dealing
(gov’t br. at 13-17; gov’t reply at 8-11). These arguments address Triple Canopy’s

                                            11
arguments in the alternative, but because we have decided that the assessment at issue
here is a recoverable tax, we need not entertain these arguments in any detail here.

                                   CONCLUSION

        We find that the assessment at issue here is a tax under FAR 52.229-6. Given
this, we conclude that the government was required to compensate Triple Canopy for
the taxes imposed by the GIRA. Accordingly, the appeals are sustained. We remand
to the parties for the determination of quantum.

      Dated: March 23, 2023

                                                 KENNETH D. WOODROW
                                                 Administrative Judge
                                                 Armed Services Board
                                                 of Contract Appeals

 I concur                                         I concur

 RICHARD SHACKLEFORD                              J. REID PROUTY
 Administrative Judge                             Administrative Judge
 Acting Chairman                                  Vice Chairman
 Armed Services Board                             Armed Services Board
 of Contract Appeals                              of Contract Appeals

                                          12
      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. 61415, 61416, 61417,
61418, 61419, 61420, Appeals of Triple Canopy, Inc., rendered in conformance with
the Board’s Charter.

      Dated: March 23, 2023

                                              PAULLA K. GATES-LEWIS
                                              Recorder, Armed Services
                                              Board of Contract Appeals

                                         13