Court Opinion

ID: 2734419
Source: CourtListenerOpinion
Date Created: 2014-09-19 01:16:21.412467+00
Date Added: 2024-06-11T12:43:28.500925
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                )
                                            )
Mansoor International Development           )      ASBCA No. 58423
 Services                                   )
                                            )
Under Contract No. W91B4N-11-D-7011         )

APPEARANCES FOR THE APPELLANT:                     Terry L. Elling, Esq.
                                                   Thomas M. Brownell, Esq.
                                                    Holland & Knight LLP
                                                    McLean, VA

APPEARANCES FOR THE GOVERNMENT:                    Raymond M. Saunders, Esq.
                                                    Army Chief Trial Attorney
                                                   Erica S. Beardsley, Esq.
                                                   MAJ Raymond Adams, JA
                                                    Trial Attorneys

          OPINION BY ADMINISTRATIVE JUDGE MELNICK
ON THE GOVERNMENT'S MOTION TO DISMISS FOR LACK OF JURISDICTION

        Appellant, Mansoor International Development Services (MIDS), had a contract
for trucking services in Afghanistan. In March 2012, the government issued a letter
indicating the termination of the contract for cause, without providing the complete
notification of rights required by FAR 33.21 l(a)(4)(v). In September 2012, the
government issued modifications to the contract, terminating the contract for cause and
including an explanation of appeal rights. MIDS filed a notice of appeal within 90 days
of the modifications, but more than 90 days after the March letter. The government
moves to dismiss the appeal as time barred. We deny the motion.

        STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

       1. On 16 August 2011, the Bagram Regional Contracting Center awarded
Contract No. W91B4N-11-D-7011 to MIDS, effective 12 August 2011 (R4, tab 2). The
contract was for trucking services in Afghanistan (R4, tab 2 at 159; compl. ~ 3). It
incorporated FAR 52.212-4, CONTRACT TERMS AND CONDITIONS - COMMERCIAL ITEMS
(JUN 2010) (R4, tab 2 at 168).

    2. On 31March2012, the contracting officer issued NAT 0234, a "NOTICE OF
TERMINATION FOR CAUSE OF CONTRACT W91B4N-11-D-7011; AND TASK
ORDER W91B4N-11-D-7011-0002; AND TASK ORDER W91B4N-11-D-7011-0002-0003"
(R4, tab 245; compl. ilil 4, 21). The document states that:

             1. The purpose of this letter is to notify your company that [the
                identified contract and task orders] will be terminated in their
                entirety in accordance with contract clause 52.212-4(m).
                The termination is effective immediately upon completion of
                the final outstanding mission, currently being pe[r]formed
                under the contract.

(R4, tab 245 at 2774) The document provides grounds for the termination, followed by
the following statements:

             3. No further missions will be issued to your company under
                the referenced task orders or contract. Your company is
                responsible for completing all transportation missions that
                are currently in progress. Those missions shall be
                completed within the terms and conditions of the contract.
                Upon completion of the final outstanding mission, your                 I
                company's right to proceed under this contract is
                terminated.                                                            I
             4. A final invoice shall be provided to the government within
                thirty days after completion of the final mission. The final
                invoice shall include all outstanding missions which have
                not been previously invoiced and shall be suitable for final
                payment.

             6. This termination constitutes the Contracting Officer's
                final decision. Your company has the right to appeal such
                decision under the Disputes clause.

             8. This notice constitutes a decision that your company is in
                default as specified. Your company has the right to appeal
                under the disputes clause.

(R4, tab 245 at 2776-77) MIDS acknowledged receiving the letter on 31 March 2012
(R4, tab 246).

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       After the contracting officer issued the 31 March letter to MIDS, various
correspondence followed between the parties, including emails from 28 July and
1 August, where MIDS explained that it understood the contract had been terminated in
March but indicated it believed that it had 90 days from final invoice to close out the
contract and was trying to do so. On the same date, the contract specialist referred to an
"impending Final termination for the MIDS contract." (R4, tabs 284-85)

       3. On 1 September 2012, the contracting officer executed Modification
No. POOOlO of the contract. In its "SUMMARY OF CHANGES," the modification
included the following language:

              1. Your right to proceed further under this contract is hereby
              terminated pursuant to the authority of FAR 52.2124(m) [sic]
              effective 31 March 2012. As a result of this termination, the
              Government shall not be liable to [MIDS] for any amount for
              supplies or services not accepted, and the Government is not
              liable for any costs incurred by this termination. Your
              company was notified of this termination on 31 March 2012.

              3. This is the final decision of the Contracting Officer. You
              may appeal this decision to the agency board of contract
              appeals. If you decide to appeal, you must, within 90 days
              from the date you receive this decision, mail or otherwise
              furnish written notice to the agency board of contract appeals
              and provide a copy to the Contracting Officer from whose
              decision this appeal is taken.

The modification also described what should be contained in the notice of appeal,
provided notice of the Board's small claims and accelerated procedures, and of MIDS'
right to elect the alternative forum provided by the United States Court of Federal Claims
within 12 months of receipt. (R4, tab 293) Similar modifications were issued for Task
Orders 0001through0003 (R4, tabs 294-96).

       4. On 29 November 2012, the Board received a notice of appeal from MIDS. The
notice stated:

             This letter gives formal notice that MIDS pursuant to the
             Contract Disputes Act. . .is appealing the final decision to
             terminate for default of the Contracting Officer ... dated
             31 March 2012, and of the September 1, 2012 modification
             and correction of that final decision which included required

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              clauses absent in the initial letter and extended the time for
              appeal with an additional 90 days ....

The notice of appeal, and complaint filed the same day, requested conversion of the
termination for cause to a termination for convenience.

        5. On 17 September 2013, the Board issued an order to the parties seeking
commentary about whether this appeal was timely filed within 90 days of MIDS' receipt
of the 31 March letter under 41 U.S.C. § 7104(a). The government responded with a
motion to dismiss the appeal for lack of jurisdiction. MIDS opposed, contending that the
31 March letter was not a proper termination because it did not contain the explanation of
MIDS' appeal rights required by FAR 33.21 l(a)(4)(v).

       6. After considering the parties' positions, the Board issued another order on
22 May 2014, seeking briefing about whether the contracting officer's 31 March letter
constituted a notification of intention to terminate rather than an actual termination. The
Board also sought briefing about the effect of second decisions upon the time period for
appeal and whether any of the communications between the parties constituted
reconsideration of a decision by the contracting officer. That briefing is now complete.

                                         DECISION

        Under the Contract Disputes Act (CDA), 41 U.S.C §§ 7101-7109, the Board may
only exercise jurisdiction over an appeal filed "within 90 days from the date of receipt of a
contracting officer's decision." 41 U.S.C. § 7104(a); see Medina Contracting Co., ASBCA
No. 53783, 02-2 BCA ii 31,979 at 158,020. The government contends that the contracting
officer's 31 March 2012 letter was a proper contracting officer's decision terminating the
contract for cause. Accordingly, it contends MIDS' 29 November 2012 appeal from that
decision is untimely and should be dismissed. MIDS counters that the 31 March 2012
letter was merely a notice of intent to terminate and therefore not a proper termination for
cause. Additionally, it was an incomplete final decision because it did not contain the
language notifying MIDS of its appeal rights required by FAR 33.21 l(a)(4)(v) and
appellant was prejudiced thereby. MIDS argues that only the 1 September 2012 contract
modifications contain the required notices and that its 29 November 2012 notice of appeal
was filed within 90 days of receiving them.

        There is a significant question as to whether the 31 March 2012 letter was
intended to immediately terminate the contract for cause or merely notify MIDS of an
intention to do so in the future. Favoring notification of future intent is the fact that the
letter informed MIDS that it would be terminated upon completion of its final mission
and that it "is responsible for completing all transportation missions that are currently in
progress." Also, the government subsequently referred to an impending final
termination. Favoring immediate termination is the letter's statement that MIDS is in

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default, that "[t]his termination constitutes the Contracting Officer's final decision" and
that MIDS "has the right to appeal under the disputes clause." There is also MIDS'
admission that the contract was terminated in March 2012. (SOF ~ 2) However, even
assuming arguendo that the 31 March 2012 letter otherwise constituted a valid final
decision, because it lacked the required language notifying MIDS of its appeal rights, and
prejudiced MIDS ability to prosecute a timely appeal, the 90-day period for appealing to
this Board was suspended until the contracting officer cured it by issuing the 1 September
2012 decision.

       Under the CDA, a "contracting officer's decision shall .. .inform the contractor of
the contractor's rights as provided in this chapter." 41 U.S.C. § 7103(e). FAR
33.21 l(a)(4)(v) governs the notifications to be placed in contracting officer final
decisions, and requires language substantially as follows:

                     This is the final decision of the Contracting Officer.
              You may appeal this decision to the agency board of contract
              appeals. If you decide to appeal, you must, within 90 days
              from the date you receive this decision, mail or otherwise
              furnish written notice to the agency board of contract appeals
              and provide a copy to the Contracting Officer from whose
              decision this appeal is taken. The notice shall indicate that an
              appeal is intended, reference this decision, and identify the
              contract by number.

                     With regard to appeals to the agency board of contract
              appeals, you may, solely at your election, proceed under the
              board's -

                     (1) Small claim procedure for claims of $50,000 or
             less or, in the case of a small business concern (as defined in
             the Small Business Act and regulations under that Act),
             $150,000 or less; or

                      (2) Accelerated procedure for claims of $100,000 or
              less.

                    Instead of appealing to the agency board of contract
             appeals, you may bring an action directly in the United States
             Court of Federal Claims (except as provided in the Contract
             Disputes Act of 1978, 41 U.S.C. 603, regarding Maritime
             Contracts) within 12 months of the date you receive this
             decision ....

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The 31 March 2012 letter did not in any manner describe those appeal and judicial review
rights and the time limits for pursuing them.

        The United States Court of Appeals for the Federal Circuit addressed the
implications of a defective termination notice in Decker & Co. v. West, 76 F .3d 1573
(Fed. Cir. 1996). There, the contracting officer's decision terminating a contract for
default incorrectly informed the contractor that it could challenge the termination in the
United States Court of Federal Claims within 12 months when in fact, at that time, the
Court of Federal Claims had no jurisdiction over pure default terminations. This Board
ruled that because the notice was defective it did not trigger the 90-day filing
requirement, regardless of whether the contractor had relied upon it. The court of appeals
reversed. It stated that nothing in the CDA "prevents the Board ... from requiring
contractors seeking to avoid an otherwise proper time bar on the basis of a defect in the
notice of appeal rights to demonstrate detrimental reliance on that defect." Id. at 1579.
Thus, ifthe contractor's actions are unaffected by the defect, "[t]he notice ... continues to
be an effective Contracting Officer's decision under [the CDA] with respect to triggering
the limitation period." Id. at 1579-80. It is the contractor's burden to demonstrate that
the defective notice "prejudiced its ability to prosecute its timely appeal before the
limitation period will be held not to have begun." Id. at 1580. Since Decker, when
confronted with contracting officer decisions that only advise the contractor that it may
appeal under the Disputes clause, omitting additional details of its rights, the Board has
required the contractor to prove it was actually prejudiced by the omission, or that the
contractor detrimentally relied upon it, to avoid the 90-day limitation period. Am.
Renovation & Construction Co., ASBCA No. 54039, 03-2 BCA ~ 32,296 at 159,804;
Medina Contracting, 02-2 BCA ~ 31,979 at 158,020-21.

         In its filing responding to the Board's 17 September 2013 order, and the
government's motion to dismiss, MIDS essentially ignored Decker by suggesting that a
defect in the notice required by the FAR was categorically prejudicial. In a surreply,
MIDS (by prior counsel) suggested for the first time that it was not familiar with the
appeal process, but failed to present any affidavits or declarations supporting that
assertion. Mere argument by MIDS' counsel is not evidence. Stewart & Stevenson
Servs., Inc., ASBCA No. 43631, 98-1 BCA ~ 29,653 at 146,926. Only after MIDS
retained its current counsel and it filed its response to the Board's 22 May 2014 order did
it file an affidavit from its CEO, Yousuf Mansoor. Mr. Mansoor testified that MIDS
understood the 31 March 2012 letter to mean no more missions would be awarded, MIDS
was to complete existing missions, and it was to complete its billings. He explained that
at the time of the termination MIDS had no personnel experienced in administration of
government contracts and stated that "MiDS had neither specific nor general knowledge
of the time limits imposed upon it for appealing to this Board as of the time it received
the Notice of Termination, or for many months thereafter." Instead, MIDS "understood
and believed that any time limits flowed from the completion of the contract close out
process, including the completing of outstanding missions and submission of final

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invoices and claims." He closed by reiterating that "[w]e did not understand our appeal
rights and obligations and MiDs was prejudiced by the failure of the Contracting Officer
in March to explicitly recite them." (App. hr. dtd. 22 July 2014, Mansoor aff. ~~ 5, 8, 9,
15, 16)

         The government contends that Mr. Mansoor's affidavit is too late because MIDS
filed it after the parties completed briefing the government's motion to dismiss the appeal
and while responding to the Board's 22 May 2014 order about the nature of the 31 March
2012 letter. We reject that suggestion. No inflexible rules bar us from receiving
Mr. Mansoor's affidavit after a certain date. Indeed, we commenced this inquiry
ourselves with the intent to find the truth. It is clear that MIDS' new counsel thought to
obtain the affidavit from Mr. Mansoor to address MIDS' knowledge of its appeal rights.
It is relevant and we accept it.

       The government also contends that MIDS was not prejudiced by the absence of
information in the 31 March 2012 decision about the extent of its appeal rights because
the decision noted MIDS could appeal it. The government says that reference should
have prompted MIDS to seek clarification about the rest of its rights. However, Decker
does not permit the contracting officer to shift to the contractor responsibility to
determine all of its appeal rights so long as the final decision mentions that the contractor
can appeal. If that was the case, then FAR 33.21 l(a)(4)(v)'s requirement for extensive
explanation about the time and place for appeal or suit would be reduced to "you may
appeal this decision."

        Here, MIDS did not understand its appeal rights, or know of the time limits for
appealing to the Board, when it received the 31March2012 letter. Instead, it believed
that time limits flowed from the completion of the contract close out process, which it
was still attempting to pursue as late as August 2012. The government says these facts
are inadequate to conclude MIDS was prejudiced by the government's omissions in the
31 March letter because MIDS has not said it would have filed an appeal within 90 days
had it been given a full explanation of its rights. However, MIDS should have been given
that information to allow it to make a timely, informed choice about an appeal. Where it
lacked the knowledge itself, the government's failure to provide it prejudiced MIDS.
MIDS' interest in appealing is revealed by the fact that it did just that within 90 days of
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receiving the 1 September termination notice containing its full appeal rights.

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    Given this ruling, we do not address the other issues raised in our 22 May 2014 order.

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                                   CONCLUSION

      The government's motion to dismiss is denied.

      Dated: 4 September 2014

                                           ~t.£2.L/
                                            MARK A. MELNICK
                                               Administrative Judge
                                               Armed Services Board
                                               of Contract Appeals

I concur                                       I concur

~~
Administrative Judge
                                               RICHARD SHACKLEFORD
                                               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. 58423, Appeal ofMansoor
International Development Services, rendered in conformance with the Board's Charter.

      Dated:

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

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