Court Opinion

ID: 4116289
Source: CourtListenerOpinion
Date Created: 2017-01-17 22:00:09.669767+00
Date Added: 2024-06-11T14:50:19.379306
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                        )
                                    )
Military Aircraft Parts             )               ASBCA No. 60692
                                    )
Under Contract No. SPM4A7-11-M-M395 )

APPEARANCE FOR THE APPELLANT:                       Mr. Robert E. Marin
                                                     President

APPEARANCES FOR THE GOVERNMENT:                     Daniel K. Poling, Esq.
                                                     Chief Trial Attorney
                                                    Jason D. Morgan, Esq.
                                                    Edward Murray, Esq.
                                                     Trial Attorneys
                                                     DLA Aviation
                                                     Richmond, VA

                 OPINION BY ADMINISTRATIVE JUDGE PAUL
            ON RESPONDENT'S MOTION FOR SUMMARY JUDGMENT

       This is an appeal of a contracting officer's (CO) final decision denying
appellant Military Aircraft Part's (MAP) monetary claim in a total amount of $10,673.
MAP opted to use the Board's accelerated procedures pursuant to Board Rule 12.3.
Respondent filed a motion for summary judgment, contending that MAP's appeal was
barred by the doctrines of release and accord and satisfaction. The parties submitted a
total of five briefs. We grant respondent's motion and deny the appeal.

         STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 1

        1. On 26 April 2011, the Defense Logistics Agency (DLA) awarded Contract
No. SPM4A7-11-M-M395 to MAP in a total, fixed-price amount of$18,975. Pursuant
to the contract, MAP was required to produce two first article test samples of aircraft
stringers by 22 December 2011 (R4, tab 1 at 1-4 ). MAP did not meet this requirement;
instead, it submitted the first articles on 29 June 2012, over six months late (com pl.
ii 9).

1
    We make these findings for the sole purpose of resolving the summary judgment
        motion.
       2. On 9 October 2012, Mr. Billy Trussell, a DLA engineer, wrote in a
memorandum that the first articles had been inspected and rejected. He wrote, as
follows:

              a) Stringer was made too short at outboard end. This must
              be corrected. This area is largely defined by loft
              data/datum lines.

              b) Dimensional discrepancies were found during
              dimensional test and must be corrected.

              2. It is engineering's recommendation the vendor be
              allowed to correct these discrepancies and resubmit the
              first article. The vendor should resubmit within 60 days of
              notification of rejection.

              3. One item was destroyed in testing. The engineer
              recommends the remaining be returned to the vendor.
              Please provide disposition instruction to the First Article
              Manager.

              4. The first article was inspected by 802 Maintenance
              Support Squadron, Material Flight and the actual testing
              cost was $6, 170.04.

              5. Systems' engineering spent 8.0 hours reviewing and
              evaluating the first article report. The First Article
              Manager spent 9.5 hours in support of a first article. The
              total engineering time is 17 .5 hours.

              6. Point of contract is Daniel Murphy,
              AFLCMC/WWQEB, DSN 468-3665.

(R4, tab 6 at 1 of 16)

     3. On 16 October 2012, Ms. Alicia Wolford, the CO, forwarded the following
memorandum to Mr. Robert Marin, MAP's President:

              On April 26, 2011, the government awarded the above
              contract to your firm, which included a first article test. I
              write to inform you that the first article is disapproved.
              During the review, government representatives discovered.
              the following deviations from the contract's requirements:

                                            2
              a). Stringer was made too short at outboard end. This
                  area has to be corrected. This area is largely defined
                  by loft data/datum lines.

              b ). Dimensional discrepancies were found during
                   dimensional test and must be corrected.

              Based on the disapproval of the First Article Test and the
              contract is delinquent, this contract will be terminated for
              the convenience of the Government. If you have any
              questions on this action, please contact Lisa Hardy,
              Contract Administrator ....

(R4, tab 7)

     4. On 6 February 2013, Mr. Marin replied to Ms. Lisa Hardy, the Contact
Administrator, in part, as follows:

              We believe the item length was manufactured exactly per
              the data supplied by the Government. If the length is too
              short, we respectfully request the Government supply a
              new overall length dimension to meet and allow us to
              continue work on this contract with conditional approval.

(R4, tab 9 at 1 of23)

5. On 13 February 2013, the CO forwarded a show cause notice to MAP in which she
wrote as follows:

              The First Article Letter received by your firm 14 DEC
              2012 is hereby rescinded.

              On 26 APR 2011, the government awarded the above
              contract to your firm, which included a first article test. I
              write to inform you that the first article is disapproved.
              During testing, government representatives discovered the
              following deviations from the contract's requirements:

              1. NSN 1560-01-586-5385, PIN 68Al 18103-2012,
              Aircraft Stringer, 2 each submitted by Military Aircraft
              Parts (Cage 1ZKE3) as first articles, have been inspected
              and rejected.

                                            3
             a) Stringer was made too short at outboard end. This must
             be corrected. This area is largely defined by loft
             data/datum lines.

             b) Dimensional discrepancies were found during
             dimensional test and must be corrected.

             Show Cause Notice: Because your firm failed to provide
             a first article that meets the contract's first article testing
             requirements, the government is considering terminating
             the contract for default. Pending a final decision in this
             matter, it will be necessary to determine whether your
             failure to perform arose from causes beyond your control
             and without your fault or negligence. Accordingly, you are
             given the opportunity to present, in writing, any facts
             bearing on the question to me at (address of contracting
             officer), within 10 days after receipt of this notice. Your
             failure to present any excuses within this time may be
             considered as an admission that none exist. Your attention
             is invited to the respective rights of your firm and the
             government and the liabilities that may be invoked if a
             decision is made to terminate for default.

             Any assistance given to you on this contract or any
             acceptance by the government of delinquent goods or
             services will be solely for the purpose of mitigating
             damages, and it is not the intention of the government to
             condone any delinquency or to waive any rights the
             government has under the contract. If you desire to have
             your disapproved first article returned, you must provide
             your shipping account information (e.g. FedEx or UPS
             account number), desired point of contact, phone number,
             and address within 30 days. Failure to do so will result in
             the destruction of the first article.

             Point of Contact for this letter is Lee Skim in ....

(R4, tab 10 at 1-2of3)

                                             4
      6. On 27 June 2013, the CO responded to MAP's rebuttal letter of6 February
2013. She wrote:

            In reference to your rebuttal, dated 6 FEB 2013, regarding
            subject Contract/Order SPM4A 711MM395, this letter is to
            inform you that the First Article Test submitted under
            subject contract remains disapproved.

            Engineer has reviewed MAP's FAT rebuttal. After
            reviewing the loft data, dimensional analysis, and the part.
            The part failed FA being deemed too short.

            ESA compared their loft data analysis for overall length of
            the part to the drawing provided by MAP. MAP has a
            length marked 86. 71" on their drawing and I found this
            dimension to be closer to 87.98". I found the problem area
            to be primarily outboard of XFS 287.896. The portion of
            stringer outboard of this section seems to be the cause.
            The part cannot be used in the current condition and
            conditional approval cannot be granted. A new FA will
            have to be made and tested before approval.

            Show Cause Notice: Because your firm failed to provide
            a first article that meets the contract's first article testing
            requirements, the government is considering terminating
            the contract for default. Pending a final decision in this
            matter, it will be necessary to determine whether your
            failure to perform arose from cases beyond your control
            and without your fault or negligence. Accordingly, you are
            given the opportunity to present, in writing, any facts
            bearing on the question to the contracting officer, within
            10 days after receipt of this notice. Your failure to present
            any excuses within this time may be considered as an
            admission that none exist. Your attention is invited to the
            respective rights of your firm and the government and the
            liabilities that may be invoked if a decision is made to
            terminate for default.

            Any assistance given to you on this contract or any
            acceptance by the government of delinquent goods or
            services will be solely for the purpose of mitigating
            damages, and it is not the intention of the government to
            condone any delinquency or to waive any rights the

                                          5
               government has under the contract. If you desire to have
               your disapproved first article returned, you must provide
               your shipping account information (e.g. FedEx or UPS
               account number), desired point of contact, phone number,
               and address within 30 days. Failure to do so will result in
               the destruction of the first article.

               Point of Contact for this letter is Lee Skimin ....

(R4, tab 12)

        7. In an ongoing series of emails, Mr. Marin and Mr. Lee Skimin, a DLA
purchase agent and MAT's point of contact with DLA, discussed a possible
resubmission of the first article test samples. On 26 August 2013, Mr. Marin stated
that "[w]e would like to resubmit but regrettably, we cannot shoulder the immediate
retesting costs .... " On 6 September, Mr. Skimin responded by asking Mr. Marin
"[w]ill you accept a no-cost cancellation?" Mr. Marin replied on that same day that
"[y]es, that might be the best course of action." (R4, tab 13 at 1-2 of9)

      8. Accordingly, on 13 September 2013, the CO and Mr. Marin executed
Modification No. POOOO 1 to the contract. It provided, as follows:

               The Local Administrator is changed from Lisa Hardy to
               Lee Skimin.

               Cancel the following CLIN(s) to the extent indicated
               below at no cost or liability to the Government or
               contractor.

     Supplies/                 CLIN                                      From To
CLIN Services                  Qty. U/I Unit Price Amount                Qty  Qty
0001 1560-01586-5385           5    EA $1,795.00 $8,975.00               5    0
0002 0001-S00000052            1    EA $10,000.00 $10,000.00             1    0

               CLIN 0002, formerly CLIN 9906, is deleted reducing the
               contract amount by $10,000.00.

               This modification, POOOO 1, is hereby issued to subject
               Contract/Order as follows:

               1. Delete and deobligate the First Article Test CLIN 9906
               in the amount of $10,000.00.

                                              6
2. CLIN 0002 is hereby established as a replacement
CLIN for First Article Test requirement as follows under a
new line of accounting:

Ship to DoDDAC     FD2060
QTY 1
UI     EA
Line Price   $10,000.00
CDD 12/22/2011

3. This Contract/Order is cancelled in its entirety. Due to
the resubmittal costs, it would not be economically feasible
for the Contractor to continue with the award.
Contractor's email, dated 6 SEP 2013, is hereby
incorporated by reference. There will be no cost to either
party.

4. CLIN 0002, formerly CLIN 9906, is deleted.

5. Cancellation is as follows:

(a) This supplemental agreement modifies the
contract/order to reflect a no-cost settlement agreement
with respect to Contractor's email, dated 6 SEP 2013.

(b) The parties agree as follows: The Contractor
unconditionally waives any charges against the
Government because of the cancellation of the
contract/order and releases it from all obligations under the
contract/order due to its cancellation. The Government
agrees that all obligations under the contract/order are
concluded.

Purpose of this modification is to cancel the contract as
outlined above.

BX: 97X4930 5CBX 001 2620 S33189 (1) Decrease
$8,975.00

AA: 97X4930 5CBX 1011600 001 2570 S33189 (2)
Decrease $10,000.00

                              7
               Total amount of contact/order is ()increase (x) decreased
               by $18,975.00 from $18,975.00 to $0.00.

(R4, tab 2)

        9. On 14 March 2016, fully two and one-half years after the parties executed
Modification No. POOOO 1 to the contract, MAP submitted a claim to the CO in a total
amount of$19,102. All of the events purporting to be the basis of the claim transpired
prior to the parties' execution of Modification No. POOOOl (R4, tab 14 at 1-5of32).

       10. In a final decision promulgated on 12 May 2016, the CO denied MAP's
claim in its entirety. Citing the release language contained in the modification, the CO
concluded: "You thereby unconditionally waived all claims under this contract nearly
three years ago when you agreed to the bilateral modification to the contract" (R4,
tab 15 at 1 of 2). This appeal followed.

                                      DECISION 2

       In its summary judgment motion, respondent argues that MAP's appeal should
be denied pursuant to the doctrines of release and accord and satisfaction (gov't br.
at 1). Release and accord and satisfaction are separate affirmative defenses; however,
a single document such as a contractual modification may satisfy the requirements of
both doctrines. Holland v. United States, 621 F.3d 1366, 1377 (Fed. Cir. 2010), cert.
denied, 132 S. Ct. 365 (2011). Because respondent has filed a motion for summary
judgment, we must determine, as part of our analysis, whether genuine issues of
material fact exist. Mingus Constructors, Inc. v. United States, 812 F .2d 1387, 1390
(Fed. Cir. 1987). MAP offers parol evidence to vary the terms of the modification;
however, the language of the release is clear and unambiguous. MAP
"unconditionally" waived any charges against the government because of the
cancellation of the contract and released it from all obligations under the contract.
There were no stated or implied exceptions (SOF ~ 8). Therefore, MAP's parol
evidence is inadmissible, and the release issue is amenable to summary judgment.
Colorado River Materials, Inc. d/bla NAC Construction, ASBCA No. 57751, 13 BCA
~ 35,233 at 172,990-91.

       To establish an accord and satisfaction, the government must demonstrate:
proper subject matter, competent parties, a meeting of the minds, and consideration.
Brock & Blevins Co. v. United States, 343 F.2d 951, 955 (Ct. Cl. 1965). The plain
language of the modification satisfies all of these elements. The subject matter was
appropriate, there was a meeting of the minds, and consideration existed. No question

2
    Based upon our disposition of respondent's motion for summary judgment, we deny
         appellant's motions to compel discovery and to strike as moot.

                                           8
has been raised regarding the parties' competence. Based upon the modification's
plain and unambiguous language, summary judgment on this issue is appropriate.
Dixie Construction Co., ASBCA No. 56880, 10-1 BCA iJ 34,422 at 169,918.

                                    CONCLUSION

          The Board grants respondent's motion for summary judgment and denies the
appeal.

      Dated: 5 January 2017

                                                 MICHAEL T. PAUL
                                                 Administrative Judge
                                                 Armed Services Board
                                                 of Contract Appeals

I concur

RICHARD SHACKLEFORD
Administrative Judge
Vice Chairman
Armed Services Board
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. 60692, Appeal of Military
Aircraft Parts, rendered in conformance with the Board's Charter.

      Dated:

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

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