Court Opinion

ID: 3155211
Source: CourtListenerOpinion
Date Created: 2015-11-17 15:00:07.479292+00
Date Added: 2024-06-11T12:01:19.962740
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                  )
                                              )
Precision Standard, Inc.                      )      ASBCA No. 59116
                                              )
Under Contract No. SPM4A7-08-M-B239           )

APPEARANCE FOR THE APPELLANT:                        Nancy M. Camardo, Esq.
                                                      Camardo Law Firm, P.C.
                                                      Auburn, NY

APPEARANCES FOR THE GOVERNMENT:                      Daniel K. Poling, Esq.
                                                      DLA Chief Trial Attorney
                                                     Edward R. Murray, Esq.
                                                     Robert E. Sebold, Esq.
                                                      Trial Attorneys
                                                      DLA Aviation
                                                      Richmond, VA

                OPINION BY ADMINISTRATIVE JUDGE HAR1MAN
               ON APPELLANT'S MOTION FOR RECONSIDERATION

        On 14 August 2015, appellant, Precision Standard, Inc. (PSI), filed a timely
motion for reconsideration of our 13 July 2015 decision denying its appeal from a
termination for default, Precision Standard, Inc., ASBCA No. 59116, 15-1 BCA
if 36,040. The government filed a response to PSI's reconsideration motion on
 10 September 2015 and PSI submitted a reply to the government's response on
7 October 2015.

        In our 13 July 2015 decision, we granted the government's motion for summary
judgment because PSI was delinquent in submitting the contract's first article and had
provided no evidence of "excusable" delay. With respect to PSI's assertion there was
a material question of fact regarding whether it was foreclosed from scheduling the
quality assurance representative (QAR) inspection necessary for first article delivery
due to problems arising from furlough of government employees, we explained that
there was no showing by PSI it ever attempted to schedule a QAR inspection. With
respect to PSI' s assertion there was another material fact question regarding whether
the parties' contract modification provided for a "no-cost" termination, we explained
that the language of the contract modification expressly provided, "ifthe First Article
re-submission is not delivered by the date [due] ... , this contract may be terminated in
its entirety at no cost to the Government" (emphasis added), not at no cost to PSI,
and that a default termination was "at no cost to the Government." Finally, while PSI
also contended that Federal Acquisition Regulation (FAR) 49.lOl(b) mandated a
no-cost settlement for its contract, instead of a default termination, we explained that
even if we were to construe the FAR as did PSI a contracting officer is to consider a
no-cost settlement only if certain factors exist and the record in this appeal does not
show those factors exist here. Precision Standard, 15-1BCA~36,040 at 176,029.

        In its reconsideration motion, PSI asserts the same legal arguments it previously
advanced and adds simply that the Board erred because PSI is not seeking recovery of
costs it incurred through a termination for convenience settlement. According to PSI,
FAR 52.209-4 provides, "[b]efore first article approval, the costs [of the first article]
shall not be allocable to this contract for ... termination settlements ifthe contract is
terminated for the convenience of the Government" so a termination for convenience
of PSI' s contract will result in a contract termination at "no cost" to the government
(app. mot. at 5).

        PSI, however, misstates the FAR. FAR 52.209-4 (ALT. 1) (JAN 1997) does not
state, as PSI asserts that, the costs of a first article shall not be allocable to the contract
for purposes of a termination for convenience settlement. Rather, the FAR expressly
states "[b]efore first article approval, the acquisition of materials or components for,
or the commencement ofproduction of, the balance of the contract quantity is at the
sole risk of the Contractor" (emphasis added) and "costs thereof shall not be allocable
to this contract for (1) progress payments, or (2) termination settlements ifthe contract
is terminated for the convenience of the Government." The FAR provision addresses
costs associated with production of the balance of a contract, not costs associated with
a contract's first article. See, e.g., Ra/con, Inc., ASBCA No. 38059 et al., 92-2
BCA ~ 24,971 at 124,440 (progress payments covered about 85% of first article cost
prior to first article approval); KAL ME.I. Mfg. & Trade, Ltd., ASB~A No. 40597,
92-1BCA~24,411at121,854-55 (costs of special tooling, testing equipment, and
testing for first article were recoverable where contract was terminated for
convenience prior to first article approval). The language of the FAR therefore does
not show any error of law in our prior decision, as PSI contends.

        We further note that PSI fails to recognize there are costs at issue other than
those incurred directly by it. A convenience termination exposes the government to
costs beyond those incurred by PSI. For example, ifthe government re-procures the
part that PSI was to produce from another contractor at a higher cost, the government's
excess re-procurement costs cannot be recovered by it if there is a contract termination
for convenience. Compare FAR 52.249-1, TERMINATION FOR THE CONVENIENCE OF
THE GOVERNMENT (FIXED-PRICE) (SHORT FORM) (APR 1984), with FAR 52.249-8(b ),
DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984). Further, a "no-cost"
convenience termination likely would deprive the government of its ability to recover
from PSI "costs related to [first article] tests," which are to be borne by the contractor.

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See FAR 52.209-4(c). Thus, the termination for convenience advocated by PSI would
not be at "no cost to the government" as the parties' contract modification requires.

       A motion for reconsideration is not intended to allow a party to re-argue issues
that were previously raised and decided. Zulco Int'!, Inc., ASBCA No. 55441, 08-1
BCA ~ 33,799. The moving party therefore must show a compelling reason why this
Board should alter its decision. ADT Construction Group, Inc., ASBCA No. 55358,
14-1BCA~35,508. In determining whether a party has made such a showing, we
look to whether there is newly discovered evidence, mistakes in our decision's
findings of fact, or errors oflaw. J.F. Taylor, Inc., ASBCA Nos. 56105, 56322,
12-2 BCA ~ 35,125; Robinson Quality Constructors, ASBCA No. 55784, 09-2
BCA ~ 34, 171. PSI has shown no compelling reason why we should alter our prior
decision.

                                    CONCLUSION

       We deny appellant's motion for reconsideration.

      Dated: 4 November 2015

                                                  TERRENCE S. HARTMAN
                                                  Administrative Judge
                                                  Armed Services Board
                                                  of Contract Appeals

 I concur                                         I concur

                                                      ~
                                                  RICHARD SHACKLEFORD
Administrative Judge                              Administrative Judge
Acting Chairman                                   Vice Chairman
Armed Services Board                              Armed Services Board
of Contract Appeals                               of Contract Appeals

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       I certify that the foregoing is a true copy of the Order of Dismissal of the
Armed Services Board of Contract Appeals in ASBCA No. 59116, Appeal of
Precision Standard, Inc., rendered in conformance with the Board's Charter.

       Dated:

                                                   JEFFREYD. GARDIN
                                                   Recorder, Armed Services
                                                   Board of Contract Appeals

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