Court Opinion

ID: 4512293
Source: CourtListenerOpinion
Date Created: 2020-03-03 20:00:10.826281+00
Date Added: 2024-06-11T07:52:40.414089
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                  )
                                              )
Molly Jessie Company                          )      ASBCA No. 62140
                                              )
Under Contract No. W912WJ-19-P-0023           )

APPEARANCE FOR THE APPELLANT:                        Mr. Greg Ryan
                                                      Principal/Partner

APPEARANCES FOR THE GOVERNMENT:                      Michael P. Goodman, Esq.
                                                      Engineer Chief Trial Attorney
                                                     Jenna N. Gustafson, Esq.
                                                      Engineer Trial Attorney
                                                      U.S. Army Engineer District, New England
                                                      Concord, MA

            OPINION BY ADMINISTRATIVE JUDGE SHACKLEFORD

        This is an appeal from a termination for default of a purchase order contract.
Appellant has elected Board Rule 12.3, Accelerated Procedure, and each party has
decided to proceed under Board Rule 11, Record Submission. Each party filed an
initial brief and a reply brief. In addition to the briefs, the record includes the
government's Rule 4 file, as supplemented, tabs 1-45, appellant's supplement to that
file, exs. Al-A4, which it filed as an attachment to its "Reply to Respondent's
Answer" on September 16, 2019. Only the termination for default is at issue here.

                                 FINDINGS OF FACT

       1. On January 4, 2019, the U.S. Army Corps of Engineers, New England District
(government or Corps) issued Request for Quotations (RFQ) No. W912WJ19Q0033 to
perform the work set forth in an attached schedule. Item No. 0001 of that Schedule
described the work as follows:

               NHL Replace Sanitary Sewer Pipe
               FFP
               Contractor shall furnish all labor, materials, equipment,
               and transportation to remove and replace approximately
               320 feet of existing vitrified clay (VC) sanitary sewer
               piping from the Comfort Station to the existing distribution
              box at North Hartland Lake, Hartland, VT in accordance
              with the Statement of Work.

(R4, tab 2 at 1-2)

       2. The Schedule further stated that "site visits are highly recommended prior to
providing a quote." (Id. at 2) Paragraph 7 of the Quotation Instructions stated:

              Contractors are not required to submit an Accident
              Prevention Plan (APP) with their quote. The successful
              offeror will be required to submit this document at the
              direction of the Technical Point of Contact. The APP must
              be accepted by the Government designated Authority prior
              to the commencement of work.

(Id. at 3)

       3. Also included with the RFQ was a Statement of Work (SOW), Section A of
which gave a more detailed description of the work to be performed (R4, tab 2 at 4).
Section D, paragraph 1, Accident Prevention Plan, of the SOW provided in part as
follows:

              The Contractor shall prepare an Accident Prevention Plan
              (APP) specific to the activities being performed. It shall
              include an Activity Hazard Analysis (AHA) as described
              in Paragraph "2. AHA" below. All work shall be
              conducted in accordance with the APP, the U.S. Army
              Corps of Engineers Safety and Health requirements
              Manual (EM 385-1-1, 2014 edition), and all applicable
              Federal, State, and local safety and health requirements. A
              copy of EM 385-1-1 can be accessed electronically using
              the following link:

              http://www.publications. usace.army .mil/Portals/7 6/Publica
              tions/EngineerManuals/EM_ 3 85-1-1.pdf

             The APP shall detail how safety and health will be
             managed during the project. The APP shall address the
             requirements of applicable Federal, State and local safety
             and health laws, rules, and regulations. The Contractor
             shall comply with Federal Acquisition Regulation Clause
             No. 52.236-13 for Accident Prevention, which is added by
             reference. Special attention shall focus on the

                                           2
              requirements of EM 3 85-1-1, specifically Section Ol .A.11
              through 01.A.18, Figure 1-2 AHA, and Appendix A
              (Minimum Basic Outline for Accident Prevention Plan).
              The APP shall be developed by a qualified person. The
              Contractor shall be responsible for documenting the
              qualified person's credentials. Work shall not proceed
              until the APP has been reviewed by the Government
              Designated Authority (GDA) and deemed acceptable for
              use on the project.

(R4, tab 2 at 12)

       4. Section D, paragraph 4 of the SOW, Site Safety and Health Officer (SSHO)
required the contractor to designate one person as SSHO, whose qualifications were to
include:

              A. A minimum of five years of experience in
              implementing safety and health programs at similar
              projects;
              B. Documented experience in personal protective
              equipment;
              C. Working knowledge of construction safety procedures
              as well as Federal and state occupational safety and health
              regulations.
              D. Completion of the 30-hour OSHA Construction Safety
              class or as an equivalent, 30 hours of formal construction
              safety and health training covering the subjects of the 30-
              hour course.

(R4, tab 2 at 13)

        5. Section E of the SOW, General and Administrative Submittals Required,
called for the successful contractor to submit for approval an initial Project Schedule
within five days after receipt of notice to proceed (NTP), the Accident Prevention Plan
to include an AHA for each major phase of work, documentation of SSHO
qualifications, and make several other submittals (R4, tab 2 at 13-14 ).

       6. Performance of the contract was to be completed within 120 days after
issuance of the NTP (R4, tab 2 at 35).

      7. Molly Jessie Company (appellant or MJC) submitted a quotation on
January 18, 2019, to perform the work set forth in the RFQ including the SOW. The
amount of the quote was $34,000 firm-fixed price. (R4, tab 3 at 1-2) The government

                                           3
(by Jennifer Samela) advised MJC that it was the apparent low bidder on January 22,
2019 and asked if it was going to perform the work itself or use a subcontractor (R4,
tab 4 at 2). Mr. Ryan, MJC's facility Manager, responded that it would do the work
itself. In reply, on January 24, 2019, Ms. Samela asked "[a]re you familiar with the
US Army Corps of Engineers safety submittals?" Mr. Ryan replied on the same date:

               I will review the Safety related submittals in general to
               report back to you if I have concerns or not and any
               unfamiliarity that I may encounter after I breeze through
               the folder again for assurance/insurance purposes to
               respond back to your request.

(Id. at 1-2)

        8. On January 28, 2019, Mr. Ryan further replied:

               I have reviewed our plans again, and you refer to the
               requirements ofEM-385-1-1 in general on page 12 of
               section 1 accident prevention plan. This U.S. Army Corps
               of Engineers Safety and Health Manual is what we
               currently use and provide toe [sic] other agencies in the
               government contracting requirements and submissions
               currently and I see no deviation as referred to your
               statement of work body of language provided.

(Id. at 1)

        9. On February 19, 2019, Ms. Samela transmitted the Purchase Order to
Mr. Ryan, stating that if he agreed "to the terms and conditions, he should execute one
copy." She further stated that since the "award is below the level for bonding, this e-
mail shall serve as your Notice to Proceed." The terms and conditions included the
same SOW as had accompanied the RFQ, including the sections discussed above (R4,
tab 6 at 1-2). In addition the purchase order incorporated by reference FAR 52.249-10,
DEFAULT (FIXED-PRICE CONSTRUCTION) APR 1984 (R4, tab 5 at 43).
Mr. Ryan signed the order on February 26, 2019 (R4, tab 5 at 1). Ms. Samela
confirmed to Mr. Ryan on February 27, 2019 that the "period of performance [was]
until 19 June 2019" (R4, tab 8 at 1), which was 120 days after receipt of the NTP.

       10. On May 2, 2019, the Contracting Officers Representative (COR),
Mr. Wayne Chmielewski, sent a letter of concern to MJC regarding a lack of progress
in submitting an acceptable site-specific Accident Prevention Plan (APP) and an Initial
Project Schedule. Apparently an APP was submitted on March 4, 2019 but it did not
include the qualifications of an SSHO who met contract requirements. Further, the

                                            4
SSHO was required to have completed the 30-hour OSHA Construction Safety Class
and no evidence of that was included. Appellant was also advised that certificates
were required for two employees to be first-aid and CPR qualified in accordance with
EM-385-1-1. (R4, tab 27)

       11. In a lengthy response on May 3, 2019, Mr. Ryan did not dispute that the
information sought in the COR' s letter of concern was required by the contract nor did
he dispute that it had not been provided. His concern was the time and cost of the
paperwork required that he thought was excessive for a contract of that size as
suggested by the final sentence in his response:

              At this time here I have asked the office to not put further
              cost and expense, effort or anything related to the project
              as you have exhausted the funding that was initially
              planned for the entire project and we haven't even started
              yet, due to your demands that go unsupported for this type
              of project and size.

(R4, tab 29 at 1-2)

       12. On May 14, 2019, the contracting officer issued a cure notice advising
appellant that its lack of response to the Corp' s request for required submittals was
endangering performance and that if it did not comply by curing the deficiencies
within ten days of receipt of the cure notice, the contract might result in a termination
for default pursuant to contract clause 52.249-10, Default (Fixed-Price Construction).
(R4, tab 30 at 2)

       13. MJC replied that same day suggesting that it met the requirements without
providing the necessary paperwork to substantiate it. It also continued to question the
motives of the Corps, stating:

              We do not comprehend all of the major requirements for
              documentation over and above other jobs of this
              magnitude. It appears to be discrimination and we
              certainly hope it isn't related to our ethnic background.

(R4, tab 31 at 3)

       14. The Corps replied on May 29, 2019 disputing each point made by appellant
and advising that unless the deficiencies were cured within five extended days, the
contract might be terminated for default (R4, tab 32 at 1-2).

                                            5
        15. A show cause notice was issued by the Corps to appellant on June 11,
2019, stating that it was considering terminating the contract for default, but before
doing so, it was giving MJC an opportunity to make a submission, in writing, with
supporting documentation, detailing why the default was "due to causes beyond its
control and without its fault or negligence, and which MJC believed excused its failure
to perform the contract." (R4, tab 33 at 1-2)

        16. Appellant replied, again not disputing the particulars of the missed proper
submissions but offering the excuse that the paperwork requirements exceeded what
should have been required for a contract of this size (R4, tab 34 ). The government
found no merit in the arguments presented in MJC's response to the show cause notice
and advised that it was proceeding to terminate the purchase order for default (R4,
tab 35 ~t 1), which it did by contracting officer's final decision on June 25, 2019,
stating that no work had been performed since award of the purchase order on
February 19, 2019 and that appellant failed to cure the deficiencies outlined in the cure
notice (R4, tab 39).

      17. The final decision was timely appealed to the Armed Services Board of
Contract Appeals and was docketed on July 26, 2019 as ASBCA No. 62140.

                                       DECISION

        The legal standards for a default termination are well established. Under the
default clause in this contract, FAR 52.249-10 DEFAULT (FIXED-PRICE
CONSTRUCTION) (APR 1984), the government may terminate the contract for
default when the contractor, without excuse, fails to diligently prosecute the work or
fails to complete the work within the time prescribed by the contract. The government
bears the burden to prove that its termination was justified. Lisbon Contractors, Inc. v.
 United States, 828 F.2d 759, 764-65 (Fed. Cir. 1987). If the government establishes a
prima facie case justifying the termination, the burden shifts to the contractor to prove
the default was excusable. Truck/a Services, Inc., ASBCA No. 57564, 17-1 BCA
,r 36,638 at 178,445 (citing ADT Constr. Grp., Inc., ASBCA No. 55358, 13 BCA
,r 35,307 at 173,312).
       The contracting officer terminated the contract for default on June 25, 2019, six
days beyond the contract completion date and no onsite work had been accomplished
and thus the government has carried its burden to establish a prima facie case
(findings 10, 12, 14-15). The burden thus shifts to MJC to demonstrate that its default
was excusable (findings 11, 13, 16). Appellant has failed to meet its burden. It
continues to assert in its brief and in its reply that the requirements insisted upon by the
government were requirements that should have applied to larger contracts, yet it
offers no evidence of that. The requirements the government insisted upon were in the
SOW issued with the Request for Quotations and were similarly in the SOW which

                                             6
became part of this purchase order contract. It cannot now complain about their
inclusion and seek to avoid the consequences of failing to follow them. The time to
complain about the paperwork requirements was prior to submission of its bid, not
now after the government has insisted upon strict compliance. Appellant has failed to
demonstrate that its default was excusable. ADT Constr. Grp., 13 BCA ,r 35,307
at 173,312 (citing Empire Energy Mgmt. Servs., Inc., ASBCA No. 46741, 03-1 BCA
,r 32,079 at 158,553). Thus, the default termination was appropriate.

                                   CONCLUSION

      The appeal is denied.

      Dated: February 12, 2020

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

 I concur

 J.~
 Administrative Judge
 Vice Chairman
 Armed Services Board
 of Contract Appeals

                                           7
       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. 62140, Appeal of Molly
Jessie Company, rendered in conformance with the Board's Charter.

       Dated:

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

                                            8