Court Opinion

ID: 4580867
Source: CourtListenerOpinion
Date Created: 2020-10-27 15:00:06.869126+00
Date Added: 2024-06-11T09:25:03.497217
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                   )
                                               )
Aspen Consulting, LLC                          )      ASBCA No. 61122
                                               )
Under Contract No. W9127S-13-C-6003            )

APPEARANCES FOR THE APPELLANT:                        Gerald H. Werfel, Esq.
                                                      Ian A. Cronogue, Esq.
                                                       Baker, Cronogue, Tolle & Werfel, LLP
                                                       McLean, VA

APPEARANCES FOR THE GOVERNMENT:                       Michael P. Goodman, Esq.
                                                       Engineer Chief Trial Attorney
                                                      Allen S. Black, Esq.
                                                      Siobhan Fabio, Esq.
                                                       Engineer Trial Attorneys
                                                       U.S. Army Engineer District, Little Rock

                 OPINION BY ADMINISTRATIVE JUDGE MCILMAIL

       Appellant, Aspen Consulting, LLC, seeks $264,470.70 that it says represents
two contract payments that the government misdirected to a German bank account
(app. br. at 2, 4-5).

                                  FINDINGS OF FACT 1

        On September 25, 2013, the parties contracted for Aspen “to outfit the U.S.
Army Health and Dental Clinics in Rose Barracks, Vilseck, Germany” (R4, tab C-1
at 19, 30). The contract includes Federal Acquisition Regulation (FAR) 52.232-33,
PAYMENT BY ELECTRONIC FUNDS TRANSFER—CENTRAL CONTRACTOR
REGISTRATION (OCT 2003) (R4, tab C-2 at 191), which provides, at paragraph b:

                   Contractor’s EFT information. The Government shall
                   make payment to the Contractor using the EFT
                   [electronic funds transfer] information contained in the
                   Central Contractor Registration (CCR) database. In the
                   event that the EFT information changes, the Contractor

1   Some of these recitations are, or are also, admissions. See generally Raytheon Co.,
        ASBCA No. 57743 et al., 16-1 BCA ¶ 36,335 at 177,147 (explaining judicial
        and evidentiary admissions).
                  shall be responsible for providing the updated
                  information to the CCR database.

(R4, tab C-2 at 191) (bracketed material added).

        In 2015, the government paid two Aspen invoices, Nos. 201501-1 and 201501-2,
to an account at Commerzbank, a German bank (app. br. at 2; gov’t br. at 6 ¶ 8). The
government says that it did so at the request of a Mr. Benjamin French, and admits that
at the time of that request, Aspen’s “EFT information listed the Bank of America as
being authorized to receive payments” under the contract (answer at 9; see also R4,
tab J-6 at 88). Mr. French confirms that he made that request, and Aspen concurs (app.
br. at 6 ¶ 8; R4, tab J-4 at 106-10). Mr. French did not discuss his request that the
government direct the payments to Commerzbank with either Aspen’s president,
Gaye Toppert, or Aspen’s chief financial officer, Kent Toppert, before making that
request (R4, tab J-6, at 64-66).

       Both of the invoices are signed by Mr. French, and both list a Commerzbank
account as the recipient (R4, tab C-3 at 224, 226). That account – account
no 202863700 – was assigned to Aspen, and Aspen employees were paid from that
account (R4, tab C-29A; tab J-6 at 56). At the time of the two 2015 payments at issue,
Mr. French was Aspen’s vice-president, its chief operating officer, its Vilseck project
manager responsible for day-to-day management of the contract, and its
Aspen-designated point of contact for the government on the Vilseck project;
Mr. French had signed at least one Vilseck contract modification on behalf of Aspen,
and although he left Aspen in late 2015, in 2008, he had opened the Commerzbank
account in the name of Aspen (albeit with direct access granted initially only to him
until he added his wife, who was not an Aspen employee), with the knowledge of
Aspen and Mr. Toppert, who wired the funds to Commerzbank to open the account
(see app. br. at 4; R4, tabs C-3, C-29A, C-32, C-33, C-34, I-3 at 9, J-4 at 40-46, 50-55,
60, 70, 100, 111-18, 121-24, 147, ex. R7; tab J-6 at 24, 45-48, 53, 77, 82, 87, 113-16).

      At least at one point, Mr. French had authority to sign contracts and contract
modifications on behalf of Aspen:

              Q                Did [Mr. French] have authority to enter
                               into contracts?

              [Mr. Toppert]    Not on his own.

               Q               Did [Mr. French] have the authority to
                               investigate and propose change orders
                               and execute modifications?

                                            2
              [Mr. Toppert]    Not without review by the company’s
                               president.

(R4, tab J-6 at 106) Indeed, on at least several occasions regarding other contracts,
Mr. French signed contractual documents on behalf of Aspen (R4, tabs C-42, C-44 to -47).
And at least prior to the payments in question, Aspen never communicated to third parties
that Mr. French’s contractual authority was in any way limited (see R4, tab J-6 at 88).

                                      DECISION

        Aspen says that Mr. French acted without authority in requesting that the
government direct contract payments to Commerzbank (rather than to Bank of
America), and that the government breached the contract by honoring that request.
We disagree. FAR 52.232-33(b), provides that “[t]he Government shall make
payment to the Contractor using the EFT information contained in the Central
Contractor Registration (CCR) database. In the event that the EFT information
changes, the Contractor shall be responsible for providing the updated information to
the CCR database.” Thus, the provision contemplates that a contractor could change
its EFT information (for example, by requesting that payments be made to a “new”
bank account) before updating that information in CCR. Here, the EFT information
did change: Mr. French changed the EFT information to Commerzbank, and we
conclude that he had at least apparent authority to do so. Apparent authority is
determined by looking at the conduct of the principal to assess whether the principal
created a reasonable belief that the actor was authorized by the principal in the manner
relied on. Seven Seas Shipchandlers, ASBCA No. 57875 et al., 13 BCA ¶ 35,193
at 172,678 (internal emphasis omitted). Aspen not only designated Mr. French (its
vice-president, chief operating officer, and day-to-day manager of the Vilseck project)
to the government as its point of contact on the Vilseck project (without
communicating to the government any limitations upon his authority), Mr. French
signed at least one modification to the contract, all creating a reasonable belief that
Aspen had authorized Mr. French to change Aspen’s EFT information by directing
that payments be made to Commerzbank. To the extent that the updated information
(that is, the substitution of Commerzbank for Bank of America) was not provided to
the CCR database by the time the payments were made, causing a discrepancy
between CCF and Mr. French’s request, that is the fault of Aspen.

        Aspen cites S.A.S. Bianchi Ugo Fu Gabbriello, ASBCA No. 53800, 05-2 BCA
¶ 33,089, but that opinion does not help its case. First, Bianchi did not involve
FAR 52.232-33. Id. at 164,025 n.6. Second, in Bianchi, no corporate representative
requested that the government direct the disputed payments to the bank at issue there.
Id. at 164,018-19. Here, Mr. French, with at least apparent authority to do so,
requested that the government direct the disputed payments to Commerzbank.

                                           3
                                   CONCLUSION

      The appeal is denied.

      Dated: October 14, 2020

                                                 TIMOTHY P. MCILMAIL
                                                 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. 61122, Appeal of Aspen
Consulting, LLC, rendered in conformance with the Board’s Charter.

      Dated: October 14, 2020

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

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