Court Opinion

ID: 6319941
Source: CourtListenerOpinion
Date Created: 2022-03-03 21:00:08.619833+00
Date Added: 2024-06-11T09:18:50.171887
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

 Appeal of -                                   )
                                               )
 Vectrus Systems Corporation                   )    ASBCA No. 61651
                                               )
 Under Contract No. FA3002-17-C-0009           )

 APPEARANCE FOR THE APPELLANT:                      Joseph G. Martinez, Esq.
                                                     Dentons US LLP
                                                     Denver, CO

 APPEARANCES FOR THE GOVERNMENT:                    Jeffrey P. Hildebrandt, Esq.
                                                     Air Force Deputy Chief Trial Attorney
                                                    Christopher M. Judge-Hilborn, Esq.
                                                    Jason R. Smith, Esq.
                                                    Rebecca Tatum, Esq.
                                                     Trial Attorneys

             OPINION BY ADMINISTRATIVE JUDGE YOUNG
      ON THE PARTIES’ CROSS-MOTIONS FOR SUMMARY JUDGMENT

       This appeal involves a contract awarded to Vectrus Systems Corporation
(Vectrus) to provide base operations support services at Maxwell Air Force Base in
Alabama. The Air Force moves for summary judgment, asserting that the requirement
to provide certain property disposition services fell within the scope of Vectrus’
contractual duties. Vectrus cross-moves for summary judgment, alleging that the Air
Force changed the contract by directing it to provide property disposition services that
were outside the scope of the contract’s requirements, and seeks an equitable
adjustment in the amount of $3,098,177. For the reasons stated below, we deny the
motions.

      STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS

       1. On May 15, 2015, the Air Force awarded Vectrus contract FA3002-15-C-0008
(the bridge contract), allowing for the continuation of base operation services at Maxwell
Air Force Base until a new contract could be awarded (R4, tabs 3-4).

      2. Vectrus had been providing base operation services (BOS) at Maxwell Air
Force Base since at least 2009 under a series of four prior contracts with the Air Force.
These services included a variety of logistical services, such as facility maintenance,
human resources, and providing weather information to support flight operations.
(App. mot. at 1)
        3. On March 17, 2017, appellant was awarded contract FA3002-17-C-0009
(the BOS contract) to provide services pursuant to solicitation FA3002-13-R-0012 (the
solicitation) (R4, tab 12; gov’t mot. at 14). Performance under the BOS contract
began on or about May 15, 2017 (R4, tab 12 at 264).

      4. The Federal Property Management Regulations require that all Department of
Defense-generated excess, surplus, foreign excess personal property, scrap, and other
personal property be transferred to the Defense Logistics Agency Disposition Services
(DLADS) for final disposition (gov’t mot. at 4 (citing 32 CFR § 273.7(b)(1))).

        5. The Bridge Contract included the following paragraph:

              23.1.2.1.11. Receive and process supplies, equipment,
              furniture items, and hazardous materials processed for
              in-place sale or redistribution to Defense Reutilization and
              Marketing Office (DRMO], to include movement of
              property to DRMO as the Defense Reutilization and
              Marketing Service (DRMS) determines.

(The DLADS function) (R4, tab 4 at 2). The parties refer to this requirement as
“the DLADS 1 requirement” or “the DLADS function.” For simplicity, we adopt
that nomenclature here. The other previous contracts between Vectrus and the Air
Force also explicitly included this requirement (app. mot. at 14).

      6. The solicitation did not include the DLADS function paragraph. Likewise,
the BOS contract did not include the DLADS function paragraph.

       7. Aside from this discrepancy, the relevant language under the BOS contract’s
performance work statement (PWS) sections 23, 25, and 28 is virtually identical to that
of the bridge contract, including estimated workload data (compare R4, tab 2 at 1247,
1296, 1361 with R4, tab 4 at 1, 66, 127).

      8. The BOS contract’s PWS paragraph 25.1.1 outlines “Transportation Service
Requirements”:

              25.1.1. DESCRIPTION OF SERVICES: Provide
              Maxwell-Gunter vehicle operations, maintenance
              management, and cargo (real world,

1
    The Defense Reutilization and Marketing Service (DRMS) and the Defense
        Reutilization and Marketing Office (DRMO) were previously responsible for
        disposing of DoD excess and surplus property. DRMS and DRMO have been
        renamed and are now referred to as Defense Logistics Agency Disposition
        Services (DLADS).
                                           2
               contingency/deployment, and exercises) transportation
               services, giving passengers and cargo, safe and timely
               local ground and military air transportation within the
               timeline directed by the operations order. Services include
               moving passengers and cargo (pickup and delivery
               services) via surface vehicles as well as preparing, loading
               and unloading cargo to and from a mix of government and
               commercial aircraft (excluding personal baggage
               handling).

(R4, tab 2 at 1296)

         9. The BOS contract’s PWS paragraph 28.1.2.4.1 requires Vectrus to:

               [a]dminister all aspects of property management
               throughout the Services organization. Ensure property
               control and disposal processes are consistent throughout
               the organization. Maintain a single point accountability for
               excess and surplus property. Provide logistic guidance,
               training and assistance for Services activities receiving
               Appropriated, Nonappropriated and [DLADS] support.
               Provide ongoing guidance, training and technical
               assistance to Services activities on property management
               regulations, policies and procedures, to include newly
               assigned managers. Manage all aspects of Logistics
               Support in accordance with applicable directives as listed
               in Appendix 28A.

(R4, tab 2 at 1361)

       10. On May 18, 2017, the Air Force issued a corrective action report (CAR)
noting that the contractor disagreed with the government’s interpretation 2 of the
DLADS function and that the contractor “will not resume DLADS function until
contract modification.” The CAR also required the contractor to “respond with a
written action plan that details corrective action of the [] deficiency” by May 23, 2017
(R4, tab 13).

       11. On May 23, 2017, Vectrus responded to the CAR. Vectrus stated that PWS
Section 23 of the contract did not incorporate “the verbiage and workload data for
non-supply line item materials to be transported to [DLADS] as re-use or scrap” (R4,
tab 14 (emphasis in original)). Vectrus stated that for calendar year 2016 it had

2
    The record does not contain a document showing the language of the government’s
         interpretation that Vectrus disagreed with.
                                            3
prepared for transport 675 tons of non-supply items, mostly furniture, and 12 tons of
scrap steel. Vectrus pointed out that in previous contracts the personnel dedicated to
this task were four supply technicians, while due to the exclusion of the non-supply
items, only .335 full time equivalent positions were dedicated to this function in the
BOS contract. Vectrus stated that it had advised the Air Force on numerous occasions
over the prior two years that this language had been removed from the PWS, and that
the Air Force had agreed that it had been removed and would be added back in on each
occasion. In its response to the CAR, Vectrus requested that the “Required PWS
Verbiage/Workload” be added back into the contract, quoting it as follows, “Receive
and process supplies, equipment, furniture items, and hazardous materials processed
for in-place sale or redistribution to appropriate Defense reutilization and Marketing
Office (DRMO), to include movement of property to DRMO as the Defense
Reutilization and Marketing Service (DRMS) determines....” (id.) We note this
language is identical to paragraph 23.1.2.1.11 of the bridge contract (SOF ¶ 5).

       12. The contract does not include the term “non-supply line item materials.”
Vectrus’ claim does not explicitly define the term “non-supply line item materials,”
although Vectrus implies that it includes scrap metal and furniture (R4, tab 16).

       13. On June 1, 2017, the Air Force issued a letter of concern directing Vectrus
to perform the DLADS requirement. The letter advised Vectrus to submit a request
for an equitable adjustment if it believed that this direction constituted a contract
change. (R4, tab 15)

       14. On January 26, 2018, Vectrus submitted a certified 3 request for an
equitable adjustment (REA) in the amount of $3,098,177, asserting that the contract
did not require it to receive, process, or transport “non-supply line item materials” to
DLADS and that the Air Force’s direction to do so constituted a change to the contract
(R4, tab 16 (emphasis in original)).

       15. On March 19, 2018, the Air Force’s contracting officer (CO) treated the
REA as a claim and issued a final decision (COFD) denying Vectrus’ request in full
and included appeal language. The CO found that “Vectrus’ assertion that the PWS,
Section 23, omitted the technical description and workload data for non-supply line
item materials to be transported to DRMS (DLADS) as re-use or scrap is without
merit.” (R4, tab 19)

       16. On June 14, 2018, Vectrus timely appealed the COFD to the Board and
included a proper CDA claim certification.

3
    The certification language found in the submittal corresponded to the DFARS
         252.243-7002 REA certification language.
                                            4
       17. The Air Force initially moved to dismiss the appeal for lack of jurisdiction,
contending that Vectrus’ submittal was not a proper claim, and as such the Board
lacked jurisdiction to consider the appeal. However, the Air Force later withdrew its
motion to dismiss, citing recent case developments at the United States Court of
Appeals for the Federal Circuit and the Board. (Bd corr. ltr. dtd. December 14, 2020).

                                      DECISION

       The Parties’ Contentions

       Vectrus argues that the contract’s PWS only required it to provide disposition
services for property that it was responsible for managing under the contract—not all
surplus property—and that the Air Force changed the contract by directing it to
perform additional services. Specifically, Vectrus asserts that the contract’s language
only requires limited management of surplus property incidental to its management of
materials under the contract. (App. mot. at 6) Vectrus argues that this contract
requirement does not include what it refers to as “non-supply line item materials” (id.
at 7-13; SOF ¶ 11). Vectrus also contends that its course of dealing under previous
contracts with the Air Force supports that the Air Force intentionally removed the
DLADS requirement from the contract (id. at 13-15).

        The Air Force argues that the contract requires Vectrus to “receive, process, and
transport” all surplus property—including scrap—to DLADS “for final disposition”
(gov’t mot. at 20). The Air Force contends that the language contained in the Bridge
contract’s PWS section 23.1.2.1.11 setting forth the DLADS function is superfluous,
and its absence from the contract does not absolve Vectrus of its obligation to perform
the DLADS requirement (id. at 23). Thus, according to the Air Force, there is no
exception for “non-supply line item materials” and its direction to Vectrus to perform
the DLADS requirement was not a change to the contract (id. at 20).

       Standard of Review

       Summary judgment is proper when there are no genuine issues of material fact
and the movant is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986); Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390
(Fed. Cir. 1987). A fact is material if it may affect the outcome of the decision.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). The movant bears the
burden of establishing the absence of any genuine issue of material fact. Celotex,
477 U.S. at 322. Regardless of the type of claim being raised, the applicable substantive
law determines which facts are material and thus preclude an entry of summary
judgment. Liberty Lobby, 477 U.S. at 248. Such facts must be viewed in the light most
favorable to the non-moving party. Id. at 255; C. Sanchez and Son, Inc. v. United States,
6 F.3d 1539, 1541 (Fed. Cir. 1993). However, the non-movant must set forth specific
facts demonstrating the existence of a genuine issue of material fact; mere conclusory

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statements and bare assertions are inadequate. Mingus, 812 F.2d at 1390-91; Liberty
Lobby, 477 U.S. at 252 (“The mere existence of a scintilla of evidence in support of the
[non-movant]’s position will be insufficient . . . .”). Our responsibility is not “‘to weigh
the evidence and determine the truth of the matter,’ but rather to ascertain whether
material facts are disputed and whether there exists any genuine issue for trial.” Holmes
& Narver Constructors, Inc., ASBCA Nos. 52429, 52551, 02-1 BCA ¶ 31,849
at 157,393 (quoting Liberty Lobby, 477 U.S. at 249). “Contract interpretation is a
question of law generally amenable to summary judgment.” Varilease Tech. Grp., Inc.
v. United States, 289 F.3d 795, 798 (Fed. Cir. 2002) (citing Textron Def. Sys. v. Widnall,
143 F.3d 1465, 1468 (Fed. Cir. 1998)). However, if the Board determines that it cannot
resolve the dispute without reviewing extrinsic evidence, it should not grant summary
judgment and instead allow the parties to conduct discovery. See Korte-Fusco Joint
Venture, ASBCA No. 59767, 15-1 BCA ¶ 36,158 at 176,456.

       Summary Judgment is not appropriate because the ambiguity created by the
       omission of the DLADS function may not be resolved as a pure question of law.

         A contract is ambiguous if it is reasonably susceptible to more than one
interpretation. Edward R. Marden Corp. v. United States, 803 F.2d 701, 705 (Fed. Cir.
1986). The Board must look to the contract’s plain language to determine whether an
ambiguity exists. American Int’l Contractors, Inc., ASBCA No. 60948, 18-1 BCA
¶ 37,061 at 180,411. If the contract’s terms “are clear and unambiguous, they must be
given their plain and ordinary meaning.” Alaska Lumber & Pulp Co. v. Madigan,
2 F.3d 389, 392 (Fed. Cir. 1993). The Board may not use extrinsic evidence to
“introduce an ambiguity where none exists.” Interwest Constr. v. Brown, 29 F.3d 611,
615 (Fed. Cir. 1994); see also Am. Int’l Contractors, 18-1 BCA ¶ 37,061 at 180,411.
Contract terms must be interpreted and read as a whole, giving reasonable meaning to
all of its parts, and without leaving “a portion of the contract useless, inexplicable,
void, or superfluous.” NVT Technologies, Inc. v. United States, 370 F.3d 1153, 1159
(Fed. Cir. 2004) (citing Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir.
1991)). It is not enough that the parties differ in their respective interpretations of the
contract’s terms for an ambiguity to exist. Metric Constructors, Inc. v. Nat’l
Aeronautics and Space Admin., 169 F.3d 747, 751 (Fed. Cir. 1999). Rather, both
parties’ interpretations must fall within a “zone of reasonableness.” Id.; see also WPC
Enters, Inc. v. United States, 323 F.3d 874, 876 (Ct. Cl. 1963).

        Ambiguities fall under two categories—latent and patent. Certified Constr. Co.
of Ky., ASBCA No. 57872, 15-1 BCA ¶36,068 at 176,133. The general rule is to
construe ambiguous contract language against the drafter. Metric Constructors,
169 F.3d at 751. However, in the case of a patent ambiguity—one “sufficiently
glaring to trigger” a reasonable contractor to inquire before submitting a bid—the
ambiguity is construed against the contractor. Certified Constr. Co., 15-1 BCA
¶36,068 at 176,133 (quoting HPI/GSA 3C, LLC v. Perry, 364 F.3d 1327, 1334 (Fed.
Cir. 2004)). A patent ambiguity imposes upon the contractor an “affirmative

                                            6
obligation to inquire to the government.” Parsons Evergreene, ASBCA No. 58634,
18-1 BCA ¶ 37,137 at 180,803. If the government’s response does not clear up the
ambiguity, the contractor’s duty to inquire further continues. Id. (citing Phoenix
Management, Inc., ASBCA No. 57234, 11-1 BCA ¶34,734 at 171,005). In the case of
a latent ambiguity—one that is not patent—the Board enforces the general rule.
Metric Constructors, 169 F.3d at 751; see also Fort Vancouver Plywood Co. v. United
States, 860 F.2d 409, 414 (Fed. Cir. 1988).

       Here, although included in the Bridge Contract as well as each of the previous
contracts between Vectrus and the Air Force (SOF ¶ 5), PWS section 23.1.2.1.11
establishing the DLADS function is absent from the contract (SOF ¶ 6). The parties
disagree as to the reasons leading to this omission. Vectrus alleges that at the time it
submitted its proposal, it believed that the Air Force left this language out of the
contract because it chose to reduce the scope of work required under the Contract (app.
mot. at 17) and that the Air Force’s direction to dispose of “non-supply line item
materials” constituted a change to the contract (SOF ¶ 14). Vectrus also argues that it
advised the Air Force that the language had been omitted from the BOS contract and
the Air Force agreed it would be added back in (app mot. at 18, SOF ¶ 1). The Air
Force argues that this paragraph was superfluous, and its removal did not reduce the
scope of Vectrus’ duties (gov’t mot. at 1). Without supplementing the record to
include further information on the facts leading to the omission of the DLADS
function, the Board cannot determine whether either party’s interpretation of the
contact falls within a “zone of reasonableness” which would then invite the
examination of whether the omission created an ambiguity, latent or patent, which in
turn would guide how the ambiguous language should be construed. Metric
Constructors, 169 F.3d at 751. As discovery is necessary to supply this information,
we cannot resolve this matter within the confines of summary judgment. Korte-Fusco
Joint Venture, 15-1 BCA at 176,456.

       Summary Judgment is Inappropriate Because the Facts in Dispute May Affect
       the Outcome of the Appeal

        As we found above, the Bridge and previous contracts included PWS section
23.1.2.1.11, but the BOS contract omitted that language (SOF ¶¶ 5-6). Vectrus asserts
that the term “non-supply line item materials,” which was omitted from the contract,
includes furniture and scrap metal, and that Vectrus repeatedly brought the omission of
the DLADS function to the government’s attention (SOF ¶¶ 11-12). The government
asserts that Vectrus is required to dispose of all property for which it is responsible
(gov’t mot. at 19-20). The parties’ course of dealing and facts related to the absence of
this clause in the contract would shed light on whether the DLADS function was
deliberately omitted from the contract. These are genuine issue of material fact as they
may affect the outcome of the appeal. Liberty Lobby, 477 U.S. at 248-49. The
existence of unresolved issues of fact require further development of the record, and
makes the issues before us more than a mere question of contract interpretation.

                                           7
Accordingly, this appeal is not ripe for summary judgment. See Celotex, 477 U.S.
at 322; Korte-Fusco, 15-1 BCA ¶ 36,158 at 176,456.

                                   CONCLUSION

       Because there are disputes of material fact requiring further development of the
record, summary judgment is not appropriate. Accordingly, the motions are denied.

      Dated: February 14, 2022

                                                  LIS B. YOUNG
                                                  Administrative Judge
                                                  Armed Services Board
                                                  of Contract Appeals

 I concur                                         I concur

 RICHARD SHACKLEFORD                              OWEN C. WILSON
 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 No. 61651, Appeal of Vectrus
Systems Corporation, rendered in conformance with the Board’s Charter.

      Dated: February 15, 2022

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

                                           8