Court Opinion

ID: 2752223
Source: CourtListenerOpinion
Date Created: 2014-11-17 19:00:11.1497+00
Date Added: 2024-06-11T11:26:41.863425
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of --                                     )
                                                 )
Bulova Technologies Ordnance Systems LLC )           ASBCA No. 57406
                                                 )
Under Contract No. W91CRB-09-C-OO14              )

APPEARANCES FOR THE APPELLANT:                       Eric R. Pellenbarg, Esq.
                                                      Phelps Dunbar LLP
                                                      Tampa, FL

                                                     Craig Schnee, Esq.
                                                      General Counsel

APPEARANCES FOR THE GOVERNMENT:                      Raymond M. Saunders, Esq.
                                                      Army Chief Trial Attorney
                                                     MAJ Samuel E. Gregory, JA
                                                      Trial Attorney

                OPINION BY ADMINISTRATIVE JUDGE THRASHER
               ON APPELLANT'S MOTION FOR RECONSIDERATION

       On 3 March 2014, Bulova Technologies Ordnance Systems LLC (appellant)
timely filed a motion for reconsideration on our 28 January 2014 decision in Bulova
Technolo?ies Ordnance Systems LLC, ASBCA No. 57406, 14-1BCA~35,521
(Bulova). Our decision sustained in part and denied in part appellant's appeal of the
termination of appellant's contract for default. Appellant moves for reconsideration of
our decision asserting that the Board's decision contains mistakes in its findings of
fact and errors of law which justify conversion of that portion of the decision that
denied its appeal related to acquisition of PKM medium machine guns from Bulgaria
and the PSL sniper rifles and scopes from Romania. The government opposes the
motion. Familiarity with our decision is presumed and references to findings are to
findings in our decision.

Background

       The original contract delivery dates for the weapons from Bulgaria and Romania
were triggered by receipt of End Use Certificates (EUCs) provided by the government; we
determined this requirement to mean EUCs acceptable to the exporting countries. The
government took the position that acceptable EUCs were received on 22 May 2009 but we

1
    Judge Elizabeth Grant, who authored the 28 January 2014 decision, has retired.
found that date to be a year later, 19 May 2010 (finding 22). However, this scheme was
revised by Modification No. P0002 (Mod. 2); as a result, delivery of those weapons was not
contingent on receipt of an acceptable EUC. Instead, Mod. 2 set specific delivery dates.
(Finding 23)

       On the merits, appellant argued that Mod. 2 was unenforceable because Bulova
provided no monetary consideration to the government for the delivery extensions and
appellant was only agreeing to perform a pre-existing duty (to deliver weapons) which
does not constitute consideration (app. br. at 11-12; app. reply br. at 3-4). Our
decision found that both parties provided consideration with respect to Mod. 2.
Bulova, 14-1BCA,-i35,521at174,098.

        Appellant contends now that the Board erred as a matter of law in concluding
that Mod. 2 was supported by consideration by the government and therefore
enforceable (mot. at 7). Appellant provides two arguments to support its contention.
First, appellant argues the government had waived its right to terminate appellant for
default as of the date of Mod. 2 (mot. at 9-12). Second, appellant argues the
government did not have a good faith belief that it had a right to terminate appellant as
of the date of Mod. 2 and, therefore, Mod. 2 was invalid and unenforceable for lack
of consideration (mot. at 12-15).

        The government opposes appellant's motion arguing appellant has not
identified any errors of law or of fact by the Board but is instead merely "'re-packaging
facts already decided and arguments already made" (gov't opp'n at 11). The
government notes that both the arguments that Mod. 2 was not supported by
consideration and that the government waived its right to terminate were argued in
appellant's post-hearing brief and reply brief (gov't opp'n at 4-5 (citing app. br.
at 11-12, 15 and app. reply br. at 2-4)).

      Appellant responds that the government's position, that it is merely reasserting
arguments made in its post-hearing briefs:

              [G]loss[es] over the essence ofBulova's Motion: that the
              findings of fact arrived at by the Board after post-hearing
              briefings necessarily require one of the conclusions as set
              forth in the Motion, i.e., that because the Board determined
              that the Government in fact delayed delivery of the EUCs
              for Romania and Bulgaria, the conclusions of law must be
              reevaluated according to the natural flow of events
              stemming from the Government's EUC delays.

                                            2
(App. reply br. at 1) Thus, appellant argues that we must reevaluate our
conclusions of law because of our finding that the government delayed delivery of
the EUC (finding 22), stating:

                     The Government spends much of the Opposition's
             fifteen pages attempting to argue that Bulova is merely
             reasserting its prior position that Modification No. 2
             ("Mod. 2") lacked consideration and was thus void.
             Notably, however, the Government fails to address the fact
             that Bulova's "re-arguing" of this point did not, and could
             not have come about until after the Board's decision on the
             merits. Until such time as the Board agreed with Bulova
             that the Government delayed in providing Bulova with the
             proper EUCs, Bulova's argument was just that-an
             argument of a litigant that was contested by the
             Government. Critically, however, after the Board's
             decision in this case, Bulova's argument was accepted as
             fact and thus necessitated a re-evaluation of the Board's
             conclusions in light of this fact being established.
             Nowhere in its Opposition does the Government
             acknowledge the fact that the Board found it had delayed
             in delivering the EUCs or otherwise address the critical
             determination that the Government's long-held position-
             that it had timely delivered the EUCs and as such Bulova's
             protestations to the contrary were little more than a "red
             herring"-had been shot down.

                    As more fully set forth in the Motion, Bulova
             contends that if the government believed that it provided
             valid EUCs on 22 May 2009, then Bulova had, in the
             government's mind, missed all of the PSL delivery dates
             and many of the PKM delivery dates, some by as many as
             seven (7) months at the time of the first cure notice. This
             delay in asserting its right to terminate the contract in the
             face ofBulova's continued performance constituted a
             waiver of the government's right to default Bulova. As the
             government had waived Bulova's failure to deliver, it did
             not have the right to terminate Bulova for non-performance
             (or more properly failure to deliver as was stated in the
             cure notices) as of the date of Mod. 2 and thus did not
             provide consideration for Mod. 2, rendering it invalid.

                                           3
                      Bulova' s second argument is that as the Board
              determined that the Government failed to provide proper
              EUCs for Romania and Bulgaria for nearly a year, the
              Government was incorrect in its assertion during Contract
              performance that it had a right to terminate Bulova as of
              2 June 2010. In order for the government's relinquishment
              of this non-existent right to be [a] valid consideration for
              Mod. 2, it must have believed in good faith that its right
              was valid at the time Mod. 2 was executed. Based on the
              Government's course of conduct during the performance of
              the Contract, it is clear that the government did not believe
              it had the right to terminate Bulova, thereby rendering
              Mod. 2 void as well.

(App. reply br. at 1-3)

                                       DECISION

       We do not grant a motion for reconsideration absent a compelling reason. TMS
Envirocon, Inc., ASBCA No. 57286, 13 BCA ii 3 5,204 at 172, 717. In evaluating a
motion for reconsideration, we examine whether the motion is based on newly
discovered evidence, mistakes in the findings of fact, or errors of law. American
AquaSource, Inc., ASBCA Nos. 56677, 57275, 13 BCA ii 35,365. A motion for
reconsideration does not provide the moving party the opportunity to reargue its
position. WestWind Technologies, Inc., ASBCA No. 57436, 11-2 BCA ii 34,859.

        Although appellant has not presented any newly discovered evidence, it seems
to equate our finding related to the date of receipt of acceptable EU Cs as newly
discovered evidence that would require us to reevaluate, our "conclusions of law ...
according to the natural flow of events stemming from the Government's EUC delays"
(app. reply br. at 1). We reject this conclusion for two reasons. First, our findings are
not evidence; they are decisions based upon the evidence already in the record.
Second, even assuming arguendo that we considered our finding newly discovered
evidence; it would not change our decision on the issue of whether or not Mod. 2 was
supported by consideration. Whether or not an agreement such as Mod. 2, i.e.,
settlement of a dispute, is supported by consideration is determined by the parties'
beliefs at the time of the agreement, even if later those beliefs are determined to be
unfounded. Aviation Contractor Employees, Inc. v. United States, 945 F.2d 1568,
1574 (Fed. Cir. 1991); RESTATEMENT (SECOND) OF CONTRACTS§ 74(1) cmt. b (1981)
(a bargain is judged as it appeared to the parties at the time, even if the claim is later
shown to be invalid). That is exactly how we addressed the consideration issue in our
decision where we stated:

                                            4
                    Under Mod. 2, the delivery schedule scheme was
             altered from that originally set forth, erasing the EUC issue
             and the risk that either side was not in compliance with
             contract requirements for that reason. The government
             agreed to different performance due dates (longer, in its
             view), giving up the possibility that it could terminate
             Bulova at that point for default for nonperformance;
             Bulova in tum also agreed to different performance due
             dates (shorter, in its view), giving up its position that
             Bulova was entitled to more time to perform because the
             EUCs were defective. By relinquishing these positions,
             which each side believed to be valid, the parties provided
             consideration to support the new delivery schedule.

Bulova, 14-1BCAif35,521 at 174,098.

      Furthermore, we also addressed any arguments purporting to excuse appellant's
performance due to the EUC delays, stating:

            Because bilateral Mod. 2 set up a new delivery schedule,
            the alleged EUC delay cannot now be considered as an
            excuse for performance problems relating to the PKM
            medium machine guns or the PSL sniper rifles. In
            agreeing to a new delivery schedule, a contractor erases
            the ability to raise pre-existing causes of delay. Range
            Technology Corp., ASBCA No. 51943 et al., 04-1 BCA
            if 32,456 at 160,546 ("in agreeing to these new delivery
            schedules, the parties eliminated from consideration the
            causes of delay occurring before the mutually agreed
            extensions"); Steelform, Inc., ASBCA No. 57724, 12-2
            BCA if 35,170 at 172,570 (non-delivery/default cannot be
            excused by causes of delay that existed before bilateral
            agreement to a new delivery schedule). There is no basis to
            revive the EUC issue for these weapons after issuance of
            Mod.2.

Bulova, 14-1BCAif35,521at174,097-98.

                                          5
       For reasons stated, the motion for reconsideration is denied.
       Dated: 7 November 2014

                                                  dmin strative Judge
                                                 Acting Vice Chairman
                                                 Armed Services Board
                                                 of Contract Appeals

I concur

e~~--
Administrative Judge
Acting Chairman
Armed Services Board
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. 57406, Appeal of Bulova
Technologies Ordnance Systems LLC, rendered in conformance with the Board's
Charter.

      Dated:

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

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