Court Opinion

ID: 4166881
Source: CourtListenerOpinion
Date Created: 2017-05-08 17:00:06.755691+00
Date Added: 2024-06-11T14:24:08.026349
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                      )
                                                  )
First Division Design, LLC                        )      ASBCA No. 60951
                                                  )
Under Contract No. FA5270-13-P-0177               )

APPEARANCE FOR THE APPELLANT:                            Mr. Craig F. Pierce
                                                          :rvfanagerflvieillber

APPEARANCES FOR THE GOVERN:rv1ENT:                       Jeffrey P. Hildebrant, Esq.
                                                          Air Force Deputy Chief Trial Attorney
                                                         Phillip E. Reiillan, Esq.
                                                         Lt Col Nathanial H. Sears, USAF
                                                          Trial Attorneys

                OPINION BY AD:rv1INISTRATIVE JUDGE :rv1CIL:rv1AIL

                                      INTRODUCTION

        Appellant seeks recovery for the termination of its contract for convenience, and
for the governillent' s alleged breach of the duty of good faith and fair dealing. The
appeal is governed by the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109.*

                           SU:rv1:rv1ARY FINDINGS OF FACTS

       On 27 Septeillber 2013, the governillent awarded the contract referenced above
to appellant, First Division Design, LLC (FDD), to supply 200 dining tables and
1,000 chairs to Kadena Air Base, Japan, for $187,360 (R4, tab 1 at 1, 3-4). Each table
was to coille with two 16-inch leaves (id. at 3). The contract incorporated by reference
Federal Acquisition Regulation (FAR) 52.212-4, CONTRACT TERMS AND CONDITIONS
-COMMERCIAL ITEMS (JUL 2013) (id. at 5).

        In :rvfay 2014, FDD delivered the tables, leaves, and chairs (answer at 2, iJ 6). The
governillent subsequently determined that soille of the leaves were a color different than
the tables theillselves (answer, attach., decl. of Robert J. Heinzl, Jr., iii! 5, 7). As a result,
the governillent withheld what it says is $20,000 froill its payillent to appellant (gov't

*First Division Design, LLC, elected to have the appeals processed pursuant to Board
        Rule 12.2; consequently, this decision shall have no value as precedent and in the
        absence of fraud, shall be final and conclusive and Illay not be appealed or set
        aside. Board Rule 12.2(d).
mot. at 1). On 5 June 2015, the government terminated the contract for convenience
(R4, tab 4 at 2-3).

        On 3 June 2016, FDD submitted to the contracting officer a termination
settlement proposal in the amount of $31,683.90 (R4, tab 15 at 1-3). On 16 June 2016,
FDD submitted a revised proposal (R4, tab 18). Neither version of the proposal
alleged any government impropriety (R4, tabs 15, 18). On 10 August 2016, FDD
requested that the contracting officer issue a final decision; the parties were, on that
date, at an impasse (R4, tab 24 at 1), ripening the settlement proposal into a claim. See
DODS, Inc., ASBCA No. 59510, 15-1BCA,-r35,918 at 175,580; Ensign-Bickford
Aerospace & Def Co., ASBCA No. 58671, 14-1 BCA ,-r 35,599 at 174,408. On
19 December 2016, the contracting officer issued a final decision stating "as [FDD
has] been already paid $166,523.20, [it is] entitled to no further payment" (R4, tab 29
at 1, 10). FDD timely filed its appeal on 21December2016, seeking $44,133.90.

       In its briefing before the Board, FDD seeks $61,609.01, plus interest from
1June2014 (app. br. at 13). In support of its request for recovery, FDD points to a
contracting officer's final decision regarding a claim under a contract other than the
one referenced above (supp. R4, tab 21 ), a spreadsheet allegedly depicting time that
appellant spent "regarding this [termination of convenience]" (supp. R4, tab 18), and a
table of "Unbilled Costs by Job" (listing charges such as "Verizon," "Comcast," and
"Waste Management") allegedly associated with the contract referenced above (supp.
R4, tab 15; app. br. at 12-13).

                                       DECISION

       FAR 52.212-4(1) provides, in pertinent part:

              Subject to the terms of this contract, the Contractor shall be
              paid a percentage of the contract price reflecting the
              percentage of the work performed prior to the notice of
              termination, plus reasonable charges the Contractor can
              demonstrate to the satisfaction of the Government using its
              standard record keeping system, have resulted from the
              termination.

FDD seeks $20,836.80, plus interest, under "Prong 1" of the sentence above-that is,
the prong that provides for "[t]he percentage of the contract price reflecting the
percentage of work performed" prior to the notice of termination. FDD says that it is
entitled to what it says is the unpaid portion of the contract price: $20,836.80 (app. br.
at 11). The government does not address this issue. We find FDD's claim to the
$20,836.80 uncontested, and award that amount, plus interest.

                                            2
       Under "Prong 2," FDD seeks $35,671.68 (app. br. at 12-13), consisting of the
following:

 Email charges                                $11,212.50

 Study of Board decisions                     $5,550.00

 Document production related to               $6,600.00
 alternative dispute resolution

 Study ofFAR/DFAR                             $2,550.00

 Document production related to               $1,875.00
 settlement proposals

 Office expenses                              $7,884.18

 Total                                        $35,671.68

(App. br. at 12-13)

        FDD must demonstrate its entitlement to recovery under FAR 52.212-4(1) using its
standard record keeping system and with contemporaneous documentation. See SWR,
Inc., ASBCA No. 56708, 15-1BCAii35,832 at 175,229-30 (applying FAR 52.212-4(1)).
In support of its claimed charges, FDD points to three documents, only one of which-the
table of unbilled job costs-consists of such evidence. Therefore, only those unbilled job
costs are potentially recoverable. However, we find that those unbilled job costs consist
of home office overhead. Prong 2 of FAR 52.212-4(1) allows the recovery of overhead
that relates not to work completed, but to work terminated and not performed. Id.
at 175,231. We have found that FDD is entitled to the withheld contract price under
Prong 1; therefore, FDD performed all the contract work, and is not entitled to
compensation for any home office overhead under Prong 2.

       FDD also contends that the government breached the duty of good faith and fair
dealing by improperly (and even fraudulently) administering the contract and processing
FDD's settlement proposal (app. br. at 5-13; reply at 2-7). FDD's claim to the
contracting officer does not include any such allegations; consequently, we do not
possess jurisdiction to entertain them. See CDM Constructors, Inc., ASBCA No. 59524,
15-1 BCA ii 36,097 at 176,239.

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                                    CONCLUSION

      For these reasons, the appeal is sustained to the extent that FDD is awarded
$20,836.80, with interest under 41 U.S.C. § 7109, from 10 August 2016, the date that
FDD requested that the contracting officer issue a final decision.

       Dated: 25 April 2017

                                                   ~~
                                                   Administrative Judge
                                                   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. 60951, Appeal of First
Division Design, LLC, rendered in conformance with the Board's Charter.

       Dated:

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

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