Court Opinion

ID: 4164849
Source: CourtListenerOpinion
Date Created: 2017-05-01 14:00:05.916805+00
Date Added: 2024-06-11T14:25:45.859947
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of --                                 )
                                              )
Campus Management Corporation                 )      ASBCA Nos. 59924, 59925
                                              )
Under Contract No. SP4705-12-C-0012           )

APPEARANCE FOR THE APPELLANT:                        G. Matthew Koehl, Esq.
                                                      Pepper Hamilton, LLP
                                                      Washington, DC

APPEARANCES FOR THE GOVERNMENT:                      Ronald J. Borro, Esq.
                                                      Navy Chief Trial Attorney
                                                     Robert J. McMullen, Esq.
                                                      Trial Attorney
                                                      NA VSUP Fleet Logistics Center, Norfolk
                                                      Philadelphia, PA

                 OPINION BY ADMINISTRATIVE JUDGE PROUTY

        In this appeal, we consider what compensation appellant, Campus Management
Corporation (CMC), is entitled to for the government's termination of its contract for
convenience. We also consider the ancillary question of to what interest CMC is
entitled for the government's apparently tardy payment of several invoices for services
rendered on the contract that were submitted prior to its termination.

       The parties waived a hearing and submitted the case upon the record pursuant
to Board Rule 11. Initially, the parties only argued the issue of entitlement; however, a
review of the briefing persuaded us to raise with the parties the alternative of deciding
quantum at the same time as entitlement. Both parties agreed to have us decide the
issue of quantum contemporaneously with our entitlement decision, and submitted
additional briefs as directed.

        As will be seen, CMC has the better argument with respect to the interest
controversy, and is entitled to the pro rata share of contract performance costs for
which it was ultimately paid, but its allegations regarding its other termination costs
are largely (though not completely) unsupported.
                                   FINDINGS OF FACT

      I.     The Contract and Its Performance

        The above-captioned contract (the contract) was executed by the parties on
30 September 2012 (R4, tab 1 at 1). The contract was intended to obtain Student
Information System (SIS) software and associated licenses and maintenance for
initial use by students at the National Defense University during the 2013-2014
school year (R4, tab 1 at 4-5). To effect this, the contract had two line items
for its first year: contract line item number (CLIN) 0001, for provision of the
software, its licenses, and maintenance; and CLIN 0002 for associated training and
implementation (R4, tab 1 at 3). The net amount for these line items was $993,389.28
(R4, tab I at 1, 3). The contract also included two options for additional years of
support for the SIS (CLINs 1001 and 2001), priced at $298,982.76 for the first year
and $307,952.28 for the second year (R4, tab 1 at 4).

        On 27 September 2013, the government contracting officer (CO) executed
Modification No. P00004 (Mod 4) to exercise the first additional one-year option,
CLIN 1001, to obtain services for the 2013-2014 school year (30 September 2013 -
29 September 2014) 1 (R4, tab 10 at 1). Exercising option year one added $298,982.76
to the contract price (id. at 2), consistent with the price for CLIN I 00 I in the original
contract (see R4, tab 1 at 4). Two months later, on 25 November 2013, the parties
executed Modification No. P00005 (Mod 5), affirming that CMC was responsible for
delivering certain software to allow the use of third party "Blackboard" software under
the SIS (R4, tab 12 at 1). The price of this modification was $37,000 (id. at 2).

      II.    Termination of the Contract

       The government issued contract Modification No. P00006, terminating the
contract for the convenience of the government, on 2 May 2014 (R4, tab 15), slightly
more than seven months into the performance of the contract's first option year.
This modification referenced Federal Acquisition Regulation (FAR) 52.212-4(1)
(FEB 2012), Termination for the Government's Convenience, which is a part of the
contract (see R4, tab 1 at 25), and directed CMC to "immediately stop all work
hereunder and .. .immediately cause any and all of its suppliers and subcontractors to
cease work" (R4, tab 15). It further provided that CMC "shall not be paid for any
work performed or costs incurred which reasonably could have been avoided (id.)."

1
    The record does not explain how the 2013-2014 school year, which the contract
         characterized as the "base year" (R4, tab I at I 0-11) became the first option
         year, but we need not resolve that incongruity to address the disputes before us.

                                              2
        On 30 September 2014, CMC submitted a letter to the CO "formally requesting
a settlement proposal" for the contract termination (R4, tab 16 at 1) which we interpret
to be an actual termination settlement proposal from CMC. The letter noted an
outstanding balance of $211,406.61 in "unpaid invoices for contract [Mods 4 and 5]
for services rendered by [CMC] prior to notice of termination of contract" (id.). It also
provided a "breakdown of additional costs" that CMC "incurred to satisfy the
requirements for" the contract (id.). These additional costs summed to $648,061.27,
though CMC stated that it only sought $124,576.15 of that number because that was
the amount remaining on the contract for option year one (id. at 1-2).

       The government apparently did not respond to this letter, and, on 20 January
2015, CMC submitted a one-page certified claim (with 172 pages of attachments) for
$124,576.15 in termination costs (R4, tab 17). By a separate letter on the same date,
CMC submitted a certified claim seeking payment of the $211,406.61 in unpaid
invoices including an interest penalty in accordance with the Prompt Payment Act
(PPA) (31 U.S.C. § 3903) (R4, tab 18). The CO has not issued a final decision with
respect to CMC's claim for termination costs, which the government effectively .
concedes has been "deemed denied" (gov't br. at 2). The CO has issued no final
decision on the unpaid invoices, though the government did pay all of them on
7 March 2016, except for the $37,000 that was attributed to the Blackboard integration
work under Mod 5 (R4, tab 22; see also app. br. quantum at 2-3) 2 .

      Ill   CMC's Appeals To The Board

         On 8 April 2015, CMC filed two separate notices of appeal to the Board, both
based upon the CO' s deemed denial of its claims. The first notice of appeal, docketed
as ASBCA No. 59924, was in the amount of $211,406.16 for the unpaid invoices. The
second notice of appeal, docketed as ASBCA No. 59925, was in the amount of
$124,57 6.14 for the contract termination costs. In the consolidated complaint that it
subsequently filed with the Board on 27 October 2015, CMC reduced the amount
that it sought under the heading of unpaid invoices by $3 7,000 because it determined
that it had not yet completed the Blackboard integration work required by Mod 5
(compl. ii 14 n.l). Instead, it added $7,087.50 to its pre-existing termination
cost claim, which it claimed represented the work performed on Mod 5 prior to
termination of the contract (id.). Thus, the termination cost of the appeals increased to
$131,663.64 ($124,576.14 + $7,087.50), while the amount sought by the appeals for
the unpaid invoices decreased to $174,406.61 because of the reduction by $37,000.

       Subsequent to the filing of this appeal, on 7 March 2016, the government paid
the $174,406.61 in outstanding invoices, along with what CMC characterized as a
"limited amount" of PPA interest (app. br. quantum at 2). The government agrees

2   "App. br. quantum" and its government equivalent, "gov't br. quantum," refer to the
        supplemental briefings submitted by the parties on the issue of quantum.

                                            3
with CMC that, after setting aside the amount already paid to CMC, the amount of
PPA interest due to CMC for the period prior to their submission of the unpaid
invoices to the CO as a claim is $2,228 (app. br. quantum at 2; gov't br. quantum at 7-
8), and the government no longer opposes giving this amount to CMC although it has
not yet been paid (gov't br. quantum at 7-8). 3

      IV      Evidence Presented Regarding CMC 's Damages

       CMC's briefing on quantum significantly revised its approach to damages
compared to the approach in its claim, primarily via adoption of the reasoning
contained in the declaration of Kyle Huston, its Director of Finance, which was
attached to its brief (see app. br. quantum, ex. 1 (Huston decl.)). 4 Mr. Huston
presented evidence on multiple components of alleged damages, and we discuss them
in order.

           A. The Blackboard Integration Work

        Mr. Huston's declaration states that CMC employee and Project Manager,
Jeremy Clement, spent 31.5 hours performing integration work as required by
Mod 5 (Huston decl. at 1-2). Mr. Huston attached a two-page summary of the hours
Mr. Clement worked on this project and characterized it as the "true and correct copies
of Mr. Clement's time entries for this work" (id. at 2). This may not be completely
accurate: the attached document is very plainly a summary of such entries; it is not
entirely clear that it constitutes a copy of the actual recorded "time entries" for the work
(see Huston decl., attach. A). Mr. Huston also states that Mr. Clement's fully burdened
"commercial hourly rate" is $225, but provides no evidence of this beyond his statement
in the declaration (Huston decl. at 2). Notably, Mr. Huston's declaration does not state
what the actual cost (burdened or unburdened) of Mr. Clement's time is to CMC (id.).
At the rate included in the declaration, the 31.5 hours that Mr. Clement worked on
the Blackboard integration project would sum to $7,087 (id.). Notably, almost all of
the hours that Mr. Clement worked on the Blackboard integration project were in the
late spring and early summer of 2013 (see Huston decl., attach. A), while, as noted
above, Mod 5 was dated 25 November 2013. Only 1.5 of the 31.5 hours worked by
Mr. Clement on Blackboard integration post-dated the execution of Mod 5 (id.).

3   Because the government conceded, by the time of its filing on quantum, that CMC is
        entitled to PPA interest on these payments, it must also concede that CMC is
        entitled to CDA interest on a valid claim relating to the late payment of these
        mvmces.
4   Technically, this attachment should have been submitted as a supplement to the
        Rule 4 file, rather than simply attached to CMC's brief. Nevertheless, because
        the government has not posed any objection to its attachment to the brief and
        addresses its merits in its opposition to CMC's brief on quantum, we will
        consider it.

                                            4
       The government included an attachment to its brief on quantum which
addressed the hourly rates for software engineers (see gov't br. quantum, attach. 1).
This document, a downloaded version of a portion of the General Services
Administration's (GSA's) website, indicated that, for a currently-existing large scale
indefinite-delivery/indefinite-quantity (ID/IQ) contract that was available
government-wide, the average, fully burdened, hourly rate for a software engineer with
5 to 15 years of experience and a master's degree was $130 per hour (id.) and argued
that amount to be a more fitting cost for such services (see gov't br. quantum at 10).
CMC did not address this allegation in its reply brief.

      B. Early Termination Fees

         Mr. Huston wrote in his declaration that, after CMC was notified of the
termination of its contract, it immediately cancelled a contract for data transmission
services which supported the contract and that, as a result, it incurred early termination
fees from its telecommunications services provider, CenturyLink Technology Solutions
(CenturyLink) (Huston decl. at 2). He attached two one-page invoices from
CenturyLink to his declaration to demonstrate these fees (see Huston decl., attach. B).
The first invoice in Attachment B to Mr. Huston's declaration is dated 16 September
2014, states that it is for the service period "8/22/2014," and includes an "Early
Termination Fee" of$9,152.40 (id.). The second invoice is dated 21April2014, states
that it is for the service period of "3/17/2014," and includes an "Early Termination Fee"
of $377.66 (id.). Mr. Huston does not explain how this second Early Termination Fee
could have been incurred and billed approximately two weeks prior to the 2 May 2014
notice of termination.

       C. Contract Performance Costs

       Mr. Huston's declaration listed a number of expenses that he asserted were
incurred "performing and preparing to perform the Option Period One requirements"
(Huston decl. at 2-3). They were as follows:

              1. Software licenses

       Mr. Huston stated in his declaration that CMC purchased $75,127 in software
licenses to operate the data center utilized to perform the contract (Huston decl. at 3).
According to Mr. Huston, these licenses were non-transferrable and incompatible with
other CMC uses (id.). The invoice for the licenses, attachment C to the declaration,
was dated 6 February 2014 and confirms the amount in Mr. Huston's declaration.

                                            5
              2. Computer Hardware Equipment

       Mr. Huston also stated in his declaration that, "[j]ust before and during Option
Year One," CMC purchased $172, 133 worth of computer hardware and storage
equipment necessary to operate the computer data center used to provide contract
services (Huston decl. at 3). He further noted that this computer equipment was not
otherwise usable by CMC (id.). Attachment D to Mr. Huston's declaration includes
the 10 invoices for computer equipment that sum up to $172, 132.96. The first two
invoices, dated 1August2013 and 7 August 2013 are for $82,149 and $46,980.85,
respectively (Huston decl., attach. D). The remainder of the invoices were dated after
the date of the exercise of the option (id.).

              3. Employee Training Fees and Associated Travel

       Mr. Huston provided invoices for $7,463 in fees and travel expenses for
training its employees to meet the security standards and certification requirements
under the contract during option year one (Huston decl. at 4, attach. E). The receipts
all appear to reflect costs that were incurred during the performance period of the
option year (see Huston decl., attach. E).

              4. Data Center Build-Out

       According to Mr. Huston, CMC used a third-party vendor and its employees
to build a data center in Dallas, Texas, to meet the standards of the contract
(Huston decl. at 4). The cost for these vendors and the travel of CMC's employees
was $25,573, which was supported by receipts attached to Mr. Huston's declaration
(see Huston decl. 4, attach. F).

              5. Data Center Shutdown

       Last, Mr. Huston asserted that CMC incurred $3,398 in employee travel and
third-party shipping costs when it decommissioned the data center (Huston decl. at 4).
He attached receipts to the declaration demonstrating these costs to be $3,398
(Huston decl. at 4, attach. G).

       D. The Amount of Incurred Costs Recovered by Pre-Termination Billing

       Mr. Huston's declaration stated that, at the time of contract termination,
approximately 42% of the Option Year period remained (Huston decl. at 5). According
to Mr. Huston, this meant that CMC was able to recover a significant portion of its
incurred costs through the $174,405 in billing that it was ultimately paid (id.).
Nevertheless, Mr. Huston explained that, in his "professional judgment...a minimum of
30% of [the expenses earlier annotated] were not recovered through CMC's receipt of
the Option Period One payments, ... or subject to avoidance by CMC" (id.).

                                           6
       According to Mr. Huston, the 30% figure was based upon the fact that CMC's
expenses for the option year were "front-loaded;" that CMC was able to avoid some
performance costs; and that some of the software and hardware obtained for option
year one performance "had at best a limited residual value to CMC" (Huston decl. at 5).
Neither Mr. Huston nor any other source of evidence before us detailed a quantifiable
basis for the 30% figure from records kept by CMC, nor did CMC provide any
information from its records detailing how the $174,405 in payments that it did receive
had been allocated towards capital expenses, employee pay, or other costs incurred in
contractual performance. Although stating that the IT hardware obtained for contract
performance had only a "limited residual value," neither Mr. Huston nor any other
CMC documents quantified whatever value that might have been.

      E. Profit

       Mr. Huston's declaration also noted that CMC's target profit percentage for
contracts of the type presented here was 10% (Huston decl. at 6).

      F. Summary of Costs Sought and Our View of the Credibility
         of the Huston Declaration

        Setting aside the PPA and Contract Disputes Act (CDA) (41 U.S.C. § 7109)
interest for late payment of its invoices, CMC sought the following costs based upon
Mr. Huston's declaration:

           Blackboard Integration                               $7,087
           Early Termination Charges from CenturyLink           $9,530
           Software Licenses (30%)                             $22,538
           IT Hardware and Storage (30%)                       $51,640
           Employee Certification Costs (30%)                   $2,259
           Data Center Build-Out (30%)                          $7,672
           Data Center Shutdown (30%)                             $849

(See app. br. quantum at 9)

      These numbers sum to $94,488 for work on option year one, plus $7,087 for the
Blackboard Integration work.

       For reasons to become plain in the discussion below, it is worthwhile to look at
the non-discounted costs for performing option year one, as set forth in Mr. Huston's
declaration. They would be:

           Software Licenses                                    $75,127
           IT Hardware and Storage                             $172,133
           Employee Certification Costs                          $7,643

                                           7
           Data Center Build-Out                                $25,573
           Data Center Shutdown                                  $3,398

(See app. br. quantum at 9)

       These add up to $283,874 and include none of the labor costs or the monthly
data connection fees from CenturyLink, which would have both been substantial.
The reader is reminded that the entirety of the price for option year one was
$298,982. 76 5 - little more than a $15,000 difference with which to pay the
non-"front-end" costs. From this simple exercise, we conclude that CMC would have
almost certainly lost money in the event that it completely performed option year one,
but the government did not exercise its second option year. 6 This material fact goes
unaddressed in Mr. Huston's declaration.

        This shortcoming and others give us reason to look at Mr. Huston's declaration
with a skeptical eye. The declaration, as noted above, asserts that CMC incurred early
termination fees from CenturyLink, which we find plausible, but the first receipt
provided by the declaration pre-dates the termination by several weeks - a fact pointed
out in the government's brief (see gov't br. quantum at 13), but not addressed in
CMC's reply. Similarly, the unanswered questions regarding Mr. Clement's hourly
costs to CMC give us further reason to be reluctant to take unsupported assertions in
the declaration at face value. Taking these matters into account and looking at the
dearth of explanation contained in the declaration regarding the calculation of the
30% figure for costs not yet recovered, we expressly find that Mr. Huston's
determination of the 30% figure in his declaration is imprecise, unsupported by
CMC's records, and speculative. Plainly, this finding will have ramifications to
CMC's appeal as we discuss immediately below.

5 To be sure, the contract price was raised by an additional $37,000 to account for the
       Blackboard integration services, but that task order was separate and apart from
       the option year one requirements as it was not billed with the option year one
       invoices (see R4, tab 1O; Huston decl. (treating option year one costs differently
       than Blackboard integration costs); R4, tab 18 at 25 (separate invoice for
       $37,000, dated 31January2014, for Blackboard integration)).
6 The government obliquely suggests as much in its opposition brief (gov't br. quantum

       at 12), but CMC did not respond to it in its reply brief.

                                            8
                                       DECISION

        We analyze first, the termination costs to which CMC is entitled and then tum
to the relatively simpler question of to what amount of interest CMC is entitled for the
government's late payment of its invoices.

   I.     CMC is Required to Prove Its Termination Costs Through Its Records

        CMC bears the burden of proving its recovery in this appeal of the CO's
refusal to pay its claimed termination amount. SWR, Inc., ASBCA No. 56708,
 15- BCA ii 35,832 at 175,225 (citing Lisbon Contractors, Inc. v. United States,
828 F.2d 759, 767 (Fed. Cir. 1987). A contractor's entitlement to compensation in a
termination for convenience is determined by those applicable clauses of the FAR that
are incorporated into the contract at issue. Rex Systems, Inc., ASBCA No. 59624,
 16-1 BCA ii 36,350 at 177,216. The termination clause contained in the contract at
issue here is that for the acquisition of commercial items, FAR 52.212-4(1). Under
the terms of this clause, the contractor is entitled to "be paid a percentage of the
contract price reflecting the percentage of the work performed prior to the notice of
termination, plus reasonable charges [that] ... have resulted from the termination."
In our previous decisions reviewing this clause, we analyzed it as providing for
reimbursement under two prongs: the first prong being for the percentage of work
performed prior to the.notice of termination; the second prong being for costs
(including settlement costs) resulting from the termination. See SWR, 15-1 BCA
ii 35,832 at 175,223-24.

        Proof of termination costs must be demonstrated by the contractor "using
its standard record keeping system." FAR 52.212-4(1); SWR, 15-1BCAii35,832
at 175,229. We take this requirement to mean that a contractor must provide
documentation of its costs and that testimony under oath by a company officer without
any such documentation does not suffice to prove such costs. SWR, 15-1BCAii35,832
at 175,230 (citing Industrial Refrigeration Service Corp., VABCA No. 2532, 91-3 BCA
ii 24,093 at 120,594). Moreover, a contractor seeking termination costs is only entitled
to compensation for its actual burdened labor costs, not an amount that it might charge
an outside entity for that labor. See Sentry Insurance, a Mutual Company, VABCA
No. 2617, 91-3 BCA ii 24,094 at 120,616.

   II.    CMC Satisfactorily Proved Few of Its Claimed Termination Costs

    CMC has already been compensated by the government a pro rata share of its
performance by virtue of its having been paid for its regular invoices submitted prior
to its termination. This is the first prong of the costs permitted under FAR 52.212.4(1),
as we interpreted it in SWR, leaving us to analyze the second prong of recoverable

                                            9
costs: the reasonable charges that have been proved to have been incurred as a result
of the termination. We address them below.

         A. Blackboard Integration Costs

        We agree with CMC that it is entitled to the non-recovered costs that it incurred
in performing Mod 5, the Blackboard integration work. The problem is that CMC's
evidence of the work performed (exclusively by its employee, Mr. Clement) and its
costs is incomplete.

        As we discussed above, we entertain some doubt whether the documents
attached to the Huston declaration constitute records kept by CMC in accordance
with its standard business record keeping system. Nevertheless, the government
does not contend that they are not such records, and Mr. Huston alleges that they are.
Thus, CMC's evidence manages to qualify as standard business records and we will
consider the evidence to prove CM C's proper recovery. In the absence of contrary
evidence, we also find that Mr. Clement worked the hours that CMC claims.

       The government argues that we should not pay CMC for the hours that
Mr. Clement worked on the Blackboard integration project prior to the formal
issuance of Mod 5, suggesting that the cost of the work had already been recouped
by payments on the contract (gov't br. quantum at 10). CMC responds, correctly, that
the government provided no evidence to counter Mr. Huston's declaration that
Mr. Clement's work was performed on Mod 5, and that it was reasonable for it to
have performed work on the subject matter of Mod 5 in anticipation of its approval
(app. reply quantum at 4-5). 7 Accordingly, we find that CMC is entitled to
compensation for all 3 1.5 hours that it claims.

        CMC does not fare as well in its contention that it should be compensated at the
rate of $225 per hour for Mr. Clement's work. This is so for two reasons: first, CMC
has not proved or even alleged that this "commercial rate" for Mr. Clement's work is
the same thing as the cost that it incurred for his work. This is problematic because the
second prong of the contract's termination clause (through which CMC is seeking this
compensation) only obligates the government to compensate CMC for its costs, not the
price it would charge a customer for the services. See SWR, 15-1 BCA ii 35,832 at
175,224 (interpreting FAR 52.212-4(1)); see also Sentry Insurance, 91-3 BCA ii 24,094
at 120,616. CMC's second problem lies in a deficiency in the proof of the costs

7   Of course, prior to the issuance of Mod 5, this work was performed by CMC at the
         risk that it would not be entitled to receive compensation for it if the
         modification never issued. Subsequent to the execution of Mod 5, however,
         that changed and CMC became entitled to payment for work performed
         pursuant to that modification.

                                           10
of Mr. Clement's work. The cost of the work (which would include the hourly
fully-burdened labor cost, not just the number of hours) must be proved using its
standard record keeping system and, as previously discussed above, the sworn
testimony of a company official (such as Mr. Huston) without supporting
documentation does not suffice as proof. See SWR, 15-1 BCA ii 35,832 at 175,230.
The government offered that, under GSA schedules, a reasonable, fully-burdened rate
for the work performed by Mr. Clement was $130 per hour, although it did not
concede that CMC should be paid that (or any) amount (gov't br. quantum at 10).
CMC did not address the government's response on this matter in its reply brief.
In our view, the $130 per hour posited by the government as a reasonable cost of
Mr. Clement's work is, in fact, a reasonable rate and using it would be fair to CMC.
Thus, we hold that CMC is entitled to $4,095 ($130 per hour multiplied by 31.5 hours)
for the Blackboard integration work of Mod 5.

       B. Charges Resulting/ram the Termination

         The early termination costs sought by CMC were limited to the CenturyLink
early termination fees. The government has given us no reason to doubt the testimony
of Mr. Huston that CMC incurred such fees from its early termination of its data
transmission contracts with the company. However, there is no explanation for how
the earlier of the two invoices presented by CMC, in the amount of $377.66, dated on
21 April 2014 for the "3/ 17/2014" service period, could have possibly been caused by
the termination of the contract, which it predates. Though this concern was raised by
the government's brief (see gov't br. quantum at 13), CMC made no effort to address
it in its reply filing. We thus conclude that this invoice does not reflect a compensable
termination cost.

       With respect to the invoice in the amount of $9, 152.40, dated 16 September
2014 for the service period "8/22/2014," we determine that it is most likely for
compensable termination costs and award it. To be sure, CMC did not make this
decision as easy as it should have been (indeed, it is a close evidentiary call), but
Mr. Huston's testimony persuades us that this reflected a real incurred cost, and it is
not unreasonable for an early termination fee to have been imposed and paid a few
months after the actual termination notice.

       This is the last termination cost that we will allow in this appeal.

       C. Performance Costs

       All of the other compensation sought by CMC through Mr. Huston's
declaration was for "front-end loaded" costs that CMC asserts were necessary for
performance of the contract's option year. Mr. Huston posits that, across the board,
CMC had recovered all but 30% of these costs. As we found, above, the 30% figure

                                            11
was imprecise, unsupported, and speculative. As such, and particularly given its lack
of demonstrable foundation in CMC's business records, we find that, notwithstanding
Mr. Huston's testimony, CMC has not met its burden of proving its damages related
to performance costs and we consequently make no award to CMC of such costs. 8
See SWR, 15-1 BCA i135,832 at 175,230 (citing Industrial Refrigeration Service,
91-3 BCA i124,093 at 120,594).

    III.   CMC is Entitled to the Disputed CDA Interest on the Late-Paid Invoices

        CMC approaches the interest it is due on its late-paid invoices by considering
them to be subject to PPA interest up until the time that it submitted its claim, and then,
consistent with the applicable regulatory framework, see 5 C.F.R § 13156.10(a)(5)(i),
CDA interest from the time of claim submission until its payment (app. br. quantum
at 2-3). 9 The government concedes its obligation to make the PPA interest payment,
but contends that, since the payment of invoices was never truly in dispute, it should be
free of the obligation to pay CDA interest to CMC after the submission of the claim
(gov't br. quantum at 7-9). The government is wrong.

       The government's position is grounded upon the notion that a dispute is a
necessary element of a claim under the CDA and that, without a valid claim, there is
no CDA interest (gov't br. at 20-21; gov't br. quantum at 8-9). Never mind that the
government never sought dismissal of the appeal relating to unpaid invoices
(ASBCA No. 59924) for lack of jurisdiction under the CDA. Also, never mind that
the government remains perfectly content to consider the filing of the allegedly invalid
claim as the date that PPA interest should stop accruing. In any event, it is clear that
appellant did present a valid CDA claim.

       In its brief on entitlement, the government cited Parsons Global Services, Inc.,
ASBCA No. 56731, 11-1 BCA ,-i 34,632, for the proposition that a dispute over costs is
a prerequisite for a valid CDA claim (gov't br. at 20). The government even quoted the
penultimate paragraph in that opinion to support the notion that a valid CDA claim
required a dispute (see id. (citing Parsons Global Services, 11-1 BCA i134,632 at
170,656)). In the circumstances of that appeal, dispute over entitlement was, indeed,
the key to its resolution. But Parsons Global Services also noted that an invoice could

8 To be clear, we entertain serious concerns, as explained in our findings above, that
       CMC would have lost money had it performed the entirety of the First Option
       Year and been paid the full amount set forth in the contract for such work.
       Nevertheless, we have no way of calculating how much it would have lost and
       need not engage in such speculation here to conclude that CMC has not proved
       its entitlement to the amount of money that it seeks in this portion of its appeal.
9 CMC does not seek payment of CDA interest on the PP A interest; just upon the

       principal.

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become the subject of a claim "if disputed or the government unreasonably delays
payment of the invoice." 11-1 BCA ~ 34,632 at 170,654 (citing Reflectone Inc. v.
Dalton, 60 F .3d 1572, 1579-80 (Fed. Cir. 1995) (emphasis added; additional citations
omitted)). CMC has fairly contended that the government unreasonably delayed the
payment of its invoices here. It thus possesses a valid claim to which CDA interest
applies from the time of the claim until payment, and we hold that it is entitled to such
interest.

                                    CONCLUSION

        With respect to ASBCA No. 59925, CMC is entitled to the payment of $4,095
for its work on Mod 5 and $9, 152.40 in early termination costs. These are subject to
CDA interest from the date that CMC's claim was received by the CO, 20 January
2015. The remainder of its appeal relating to the termination for convenience is
denied for lack of sufficient proof.

        With respect to ASBCA No. 59924, CMC is entitled to $2,228 in PP A interest
upon its late-paid invoices for the time prior to the CO's receipt of its claim (as the
government concedes), and CDA interest upon the $17 4,406.61 in late-paid invoices
from the date of the CO's receipt of its claim, 20 January 2015, until their payment on
7 March 2016. Thus, this appeal is sustained, in part, and this matter is returned to the
parties for the calculation of interest in accordance with this decision.

       Dated: 20 April 2017

                                                   J.RrlbPRoUTY
                                                   Administrative Judge
                                                   Armed Services Board
                                                   of Contract Appeals

 I concur                                          I concur
                                                        ' 1!\ /\
                                                   ~
 MARK N. STEMPLER                                  RICHARD SHACKLEFORD
 Administrative Judge                              Administrative Judge
 Acting Chairman                                   Vice Chairman
 Armed Services Board                              Armed Services Board
 of Contract Appeals                               of Contract Appeals

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     I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA Nos. 59924, 59925, Appeals of
Campus Management Corporation, rendered in conformance with the Board's Charter.

      Dated:

                                               JEFFREYD. GARDIN
                                               Recorder, Armed Services
                                               Board of Contract Appeals

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