Court Opinion

ID: 4321255
Source: CourtListenerOpinion
Date Created: 2018-10-16 16:00:04.953728+00
Date Added: 2024-06-11T14:46:02.451112
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of--                                  )
                                             )
SKE Base Services GmbH                       )      ASBCA No. 60101
                                             )
Under Contract No. FA5613-10-C-0011          )

APPEARANCE FOR THE APPELLANT:                       Mr. Edward Hayes
                                                     Director

APPEARANCES FOR THE GOVERNMENT:                     Jeffrey P. Hildebrant, Esq.
                                                     Air Force Deputy Chief Trial Attorney
                                                    Jason R. Smith, Esq.
                                                     Trial Attorney

    OPINION BY ADMINISTRATIVE JUDGE MCILMAIL ON THE PARTIES'
             CROSS-MOTIONS FOR SUMMARY JUDGMENT

        The parties contracted for appellant to perform housing maintenance services at
several base loc~.tions in Germany (see R4, tab 52 at 4). Appellant seeks additional
compensation for that work. The parties cross-move for summary judgment upon the
interpretation of the contract's Variable Monthly Workload Calculation (VMWLC).
Summary judgment shall be granted if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law. Avant Assessment, LLC, ASBCA No. 58867, 15-1 BCA ,r 36,067 at 176,127
(citing FED. R. CIV. P. 56(a)). Appellant represents that "since the dispute involves
matters of contract interpretation for which no material facts were in dispute, the
parties have agreed to postpone [a hearing] in favor of attempting to have the issue of
entitlement decided by submitting cross motions for summary judgment," and that
"[t]he parties will seek to re-schedule the hearing should the Board determine
summary judgment is not appropriate" (app. mot. at 4; see app. sur-reply at 7). The
government also agrees that the crux of the matter relates to contract interpretation
(gov't br. at 29; gov't reply at 1). From that we understand that if we agree with the
government's interpretation of the contract, (1) no hearing is required, and (2) the
appeal is to be denied for lack of entitlement.

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    Contract Interpretation

I          The VMWLC provides:

                  1.1 VARIABLE MONTHLY WORKLOAD
                  CALCULATION (VMWLC)
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                  There are several future projects in the five-year
                  construction program to renovate, demolish or build new
                  facilities and eliminate entire neighborhoods in the KMC.
                  These projects will drastically change the number of units
                  presently in the contract and the footprint of the KMC
                  neighborhoods serviced in this PWS. The Family Housing
                  Maintenance Service Provider shall be responsible for the
                  maintenance and upkeep of all changes/updates in the
                  housing areas as they become available to the government
                  for use. The Contracting Officer (CO) shall add new
                  systems to this program as they become known and these
                  items will thereafter be maintained as part of the contract.
                  Likewise, items no longer required shall be removed from
                  this program. Service Provider maintenance of items such
                  as any different type of equipment installed will be at no
                  additional cost to the government but an adjustment, if
                  accepted by the CO, will be allowed. In order to
                  compensate for these workload changes, a calculation for
                  adjusting the price of Exhibit Line Item Number (ELIN)
                  X009A is included in Appendix 2 VMWLC as an example.

                  1.2    Change in Contract Workload: If the quantities
                  of housing facilities or units to be maintained by the
                  Service Provider change, either by increasing or decreasing
                  the estimated quantity shown in ELIN X009 an adjustment
                  will be made to the ELIN X009A payment for the next
                  month. The Housing Quality Assurance Person (QAP)
                  shall provide the service provider a minimum of thirty days
                  notice prior to adding or deleting facilities or units for
                  maintenance. The adjustment will be effective on the first
                  calendar day of the month following the minimum 30 day
                  notice. This adjustment will be in the form of a VMWLC
                  as shown in Appendix 2 VMWLC.

    (R4, tab 52 at 60)

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            Appellant says that the only reasonable interpretation of the VMWLC is that the
    contract price "be equitably adjusted to reflect changes in actual workload (service
    calls), not just quantity of housing (inventory)," asserting that while "housing inventory
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i   decreased, the number of... service calls Appellant was required to field increased" (app.
    mot. at 2, 9, 11). The government says that the VMWLC "allow[s] contract price
    adjustments only for changes in the 'quantities of housing facilities or units"' (gov't
    br. at 16). We agree with the government. The plain language of the VMWLC
    provides that "[i]f the quantities of housing facilities or units to be maintained by the
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    Service Provider change, either by increasing or decreasing the estimated quantity
    shown in ELIN X009 an adjustment will be made to the ELIN X009A payment for the
    next month" (emphasis added). There is nothing ambiguous about that language: it
    triggers a payment adjustment only when the quantities of housing facilities or units to
    be maintained changes. Appellant focuses on VMWLC's use of the term "workload
    changes," but the VMWLC specifically provides that "[i]n order to compensate for
    these workload changes, a calculation for adjusting the price of Exhibit Line Item
    Number (ELIN) X009A is included in Appendix 2 VMWLC as an example" (R4,
    tab 52 at 60). That calculation makes price adjustment a function of changes to the
    number of facilities, not the number of service calls (see R4, tab 2 at 1-3).

    Contract Reformation

           Alternatively, appellant says that the Board should reform the contract on the
    ground of mutual mistake to permit appellant an upward adjustment in its price for
    service calls (app. mot. at 2, 12-13). Reformation of a written agreement on the
    ground of mutual mistake is an extraordinary remedy, and is available only upon
    presentation of satisfactory proof of four elements:

                  ( 1) the parties to the contract were mistaken in their belief
                       regarding a fact;
                  (2) that mistaken belief constituted a basic assumption
                       underlying the contract;
                  (3) the mistake had a material effect on the bargain; and
                  (4) the contract did not put the risk of the mistake on the
                       party seeking reformation.

    National Australia Bankv. United States, 452 F.3d 1321, 1329 (Fed. Cir. 2006). The
    mistake here, appellant says, is "the belief that workload would vary proportionately
    with variations in the housing inventory" (app. mot. at 13). However, a party's
    prediction or judgment as to events to occur in the future, even if erroneous, is not a
    "mistake" as that word is defined under the doctrine of mutual mistake of fact.
    Dairyland Power Coop. v. United States, 16 F.3d 1197, 1203 (Fed. Cir. 1994).

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           Appellant also says that the VMWLC violates the contract's Changes clause,
    analogizing to Beta Systems, Inc. v. United States, 838 F .2d 1179, 1185 (Fed. Cir. 1988),
    in which the Court of Appeals reformed a contract that violated an acquisition
    regulation, but appellant invokes FAR 52.243-2(b), CHANGES-COST-REIMBURSEMENT
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l   (AUG 1987), without pointing to where in the contract that clause appears, and seems to
    agree with the government that FAR 52.243-2 does not appear in the contract at all (app.
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    reply at 7-8; gov't reply at 5; app. sur-reply at 4).* Appellant nevertheless seems also to
    argue that FAR 52.243-2(b) must be read into the contract (app. sur-reply at 5), but does
    not even recite any particular provision of that clause, much less demonstrate how any
    provision of that clause requires reformation of the contract. We won't do appellant's
    work for it. Cf Orlosky Inc. v. United States, 68 Fed. Cl. 296, 318 (2005) (refusing to
    "undertake to prepare evidence" or grant damages where contractor failed to establish
    overhead amount incurred due to government delays).

            Finally, appellant says that the VMWLC as written violates "the FAR mandate
    for fair and reasonable prices," citing FAR 15.402(a), 15.404-l(a), and 15.405(b) (app.
    br. at 10). Having reviewed the cited regulations, we see nothing there that forbids a
    firm-fixed-price housing maintenance contract from limiting price adjustments to
    changes in "the quantities of housing facilities or units." Cf Kleen-Rite Corp., ASBCA
    No. 23707, 81-2 BCA ,r 15A50 at 76,530 (enforcing meal adjustment clause). For all
    these reasons, we reject appellant's reformation argument.

                                        CONCLUSION

           For these reasons, appellant's motion for summary judgment is denied, and, to
    the extent that the government requests an interpretation that the VMWLC limits price
    adjustments to changes in the quantities of housing facilities or units maintained, its
    motion is granted. We find no genuine dispute as to any material fact, and that the
    government is entitled to judgment as a matter of law. Given our conclusion that
    summary judgment in favor of the government is appropriate, we find no reason for a
    hearing, and deny the appeal.

    • In any event, this was a commercial items contract that incorporated by reference
           FAR 52.212-4 (R4, tab 52 at 1), paragraph (c) of which states "Changes in the
           terms and conditions of this contract may be made only by written agreement of
           the parties."

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           The appeal is denied.

           Dated: October 4, 2018

                                                      TlMOTHYPMCIL         IL
                                                      Administrative Judge
                                                      Armed Services Board
                                                      of Contract Appeals

     I concur

       -M
     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. 60101, Appeal of SKE
    Base Services GmbH, rendered in conformance with the Board's Charter.

           Dated:

                                                      JEFFREY D. GARDIN
                                                      R..ecorder,Armed Services
                                                      Board of Contract Appeals

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