Court Opinion

ID: 4300959
Source: CourtListenerOpinion
Date Created: 2018-08-03 18:00:04.807864+00
Date Added: 2024-06-11T14:41:57.713993
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                )
                                            )
Aerospace Facilities Group, Inc.            )      ASBCA No. 61026
                                            )
Under Contract No. W912NW-12-C-0035         )

APPEARANCES FOR THE APPELLANT:                     Wojciech Z. Kornacki, Esq.
                                                   Theodore P. Watson, Esq.
                                                    Watson & Associates, LLC
                                                    Aurora, CO

APPEARANCES FOR THE GOVERNMENT:                    Raymond M. Saunders, Esq.
                                                    Army Chief Trial Attorney
                                                   ChristinaLynn E. McCoy, Esq.
                                                    Trial Attorney

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

       The Board, sua sponte, questioned whether the Board has jurisdiction over this
appeal. The government subsequently moved to dismiss for lack of jurisdiction,
asserting that, because the appeal was filed more than 90 days after the contracting
officer's (CO's) contract termination for cause was emailed to and received by
appellant, it is untimely. Appellant opposes the motion. We conclude that the
government engaged in actions to vitiate the finality of the termination decision and
deny the government's motion.

       STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

        1. The Department of the Army, Corpus Christi Army Depot (CCAD) (Army
or government), awarded Contract No. W912NW-12-C-0035 (contract) to Aerospace
Facilities Group, Inc. (AFG or appellant) on September 27, 2012, for the provision and
installation of helicopter paint-booth equipment, booth monitoring systems, and a
personnel protection system to the Aircraft Corrosion Control Facility (ACCF) (R4,
tab 1).

       2. AFG's representative, Dennis R. Robinson, Director of Engineering &
Maintenance Services, exchanged emails and letters related to the contract with the
government from September 6, 2012 through July 27, 2016, consistently utilizing the
same mailing address on Paradise Road in Las Vegas, Nevada (Las Vegas address)
(R4, tabs 2-152, 157).
        3. The CO issued Modification No. P00008 (Mod. 8) dated August 4, 2016, to
terminate the contract for cause (R4, tab 158). Mod. 8 states that acceptance of
delinquent goods would be solely for mitigation of damages (R4, tab 158 at 3 of 10).
Mod. 8 further states that this was the final decision of the CO and provided the appeal
rights required by FAR 33.21 l(a)(4)(v) (id.). Appellant received Mod. 8 on August 4,
2016, via email (compl. ,i 35; R4, tab 157 at 1-2; app. resp. at 3, ,i 14).

     4. In an email dated August 4, 2016, and received by the CO on the same day,
AFG wrote the CO concerning the termination notice stating, in relevant part:

              Attached is the letter in response to the Show [C]ause
              Letter dated 19 July 2016.

              This letter was sent to you back on 27 July 2016, and I'm
              not sµre what happen[ ed] to it or why you did not receive
              it.

              Please let me know if there are any changes to cancelled
              contract.

(R4, tab 157 at 1-2)

      5. The CO mailed a copy of Mod. 8 to appellant via U.S. Postal Service
(USPS) certified mail with return receipt to the attention of Mr. Robinson at the
Las Vegas address (R4, tab 159 at 3). The return receipt was unsigned; however, the
USPS website entry for the certified mail tracking number indicates that the package
was "Delivered, Left with Individual" on August 8, 2016 (gov't mot., ex. G-6).
Appellant asserts that the mailed copy of Mod. 8 was not received by AFG (app. resp.
at3,116).

       6. By letter dated August 11, 2016, the CO invited AFG to deliver the items
under the contract and to contact the Army to discuss reasonable proposals concerning
the termination notice, as follows:

                     The Government is willing to accept delivery of
             items under the contract to mitigate AFG's liability under
             the contract and appreciates your willingness to seek a
             solution to complete this effort and effect delivery under
             contract W912NW-12-C-0035. However, until such time
             as delivery is accomplished, the Termination for Cause
             will stand. You should contact this office no later than

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                24 August 2016 to discuss questions or reasonable
                proposals concerning the Termination for Cause.

(R4, tab 160 at 2)

       7. By email dated August 24, 2016, appellant replied to the CO as follows:

                Aerospace Facilities Group, Inc. has received and reviewed
                the government response to my letter for the Notice to
                Show Cause.

                I [sic] order to rectify this problem without going through
                the legal process of appeals, the easy solution is to release
                the last two payments agreed to in the contract for the
                amount still due to the equipment supplier. Once this is
                paid the equipment can start to be delivered to Corpus
                Christi.

                At no time did Aerospace Facilities Group delay this
                contract or the delivery of this equipment. The delay and
                position we are in today falls back on the government
                holding back contractual payments as hostage for another
                contract at Corpus Christi.

                Aerospace Facilities Group will be [filing] a formal protest
                for the Notice to Show Cause and contract cancellation. I
                hope we can work work [sic] through this so that this does
                not come to further legal issues. We will notify CCAD
                contracting of our notice of appeal once it is filed.

                I will be traveling for the next few days but [I] am
                available on my cell phone and through email.

(R4, tab 162)

       8. By email dated August 25, 2016, Army division chief for the reach-back
contract support (Army division chief) wrote appellant as follows:

                My name is Ben Henson.... I am following up the
                voicemail I left on your cell phone. If you are available I
                would love to speak with you concerning contract
                W912NW-12-C-0035. I am very optimistic that we can
                work together to develop a solution that benefits all parties

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              and best supports_the war fighter. Please let me know
              when you are available. I look forward to speaking with
              you.

(App. resp., ex. A-3)

       9. By affidavit, appellant's representative, Dennis R. Robinson, described three
telephone conferences between AFG and the government held on August 25,
August 29, and August 31, 2016, stating, in relevant part:

             21. On August 25, 2016, I received a phone call from
             Mr. Ben A. Henson, Division Chief, Army Aviation
             Logistics. AFG also received an email from him
             indicating he would like to discuss contract
             W912NW-12-C-0035. The email and phone conversation
             indicated that the Army and AFG could work together to
             develop a solution that would benefit all parties' concerns
             in this matter. I believed that this conversation indicated
             that the Government was working with us to achieve a
             resolution to the issue that was not a termination.

             22. On August 29, 2016, I contacted Mr. Henson by phone
             and had a phone conference with him and other people in
             his office. We discussed the complexity of the
             equipment. ...

             23. On that call, we also discussed the issue of delivering
             the equipment to CCAD, whereas I indicated that the last
             contractual payments needed to be made so we could pay
             our suppliers so the equipment could be released and
             delivered. I indicated to Mr. Henson that AFG was able
             and willing to proceed with the contract and that cancelling
             it was just a vindictive move on the part of the CCAD
             contracting and Ms. Ramirez. Mr. Henson said they would
             discuss the matter and get back to me for further
             discussions.

             24. On August 31, 2016, AFG received a call from
             Mr. Ben Henson's office. In that call, Mr. Henson was not
             present, and it was instead handled by an Army Attorney
             and two other people in the room. During that call, AFG
             was told that the ACCF facility was not completed and the
             installation was not possible, but the Government could

                                           4
I
I
I*I
I                   take possession of the paint booth equipment. I again

I'
                    explained to the Government that once the last payments
                    were made for the equipment, it would all be shipped to
I                   CCAD.

I                   25. On that call, I again explained that their reasoning for
                    cancelling the contract was vindictive and had nothing to
                    do with the building not being completed .... The phone

II                  conference was ended at that point and I sent Mr. Henson
                    an email indicating that AFG would be keeping the lines of
                    communication open and that we were willing to come to
I                   an agreement that would benefit all parties.
I
                    26. Given that the Government subsequently contacted me
I                   and discussed options to resolve the matter, AFG
                    concluded that the Government had not yet made a
                    definitive determination on whether to terminate the
                    contract for default. AFG relied on the Government's
                    actions, which made it seem as though it was reconsidering
                    the termination.

      (App. resp., ex. A-1 at 3-4)

             10. By letter dated September 13, 2016, the CO issued a final decision
      demanding AFG repay $7,809,984.15 for unliquidated government installment
      payments (R4, tab 164). Among other things, the letter summarized conversations
      with appellant after the termination to discuss reasonable proposals, negotiations, and
      possible delivery of the paint-booth equipment. The CO stated, in relevant part:

                    After the Government issued the Termination for Cause,
                    AFG reached out to the Government to open settlement
                    negotiations. The Government indicated its willingness to
                    discuss negotiations with AFG and invited AFG to discuss
                    any reasonable proposals concerning the Termination.

                           The Government spoke with you, as Director
                    Engineering & Maintenance Services, Aerospace Facilities
                    Group, on two occasions. During the last call on
                    August 31, 2016, the Government confirmed to you that
                    the Aircraft Corrosion Control Facility ... at CCAD was not
                    completed and installation was not possible but that the
                    Government was able to take possession of the paint
                    booths and had adequate storage. The Government

                                                 5
              provided a POC for you to call to schedule delivery so as
              to start the delivery process and mitigate liability for the
              installment payments AFG received under the contract.
              When the Government asked you if AFG was going to
              deliver any paint booths, you responded that AFG would
              not make any deliveries.

                      As of the date of the Termination for Cause, AFG
              has received $7,809,984.15 in Government installment
              payments, which AFG failed to liquidate by delivery of
              goods as specified by the contract. In accordance with the
              Federal Acquisition Regulation (FAR) Clause, 52.232-30,
              Installment Payments for Commercial Items, paragraph g,
              "If the contract is terminated for cause, the Contractor
              shall, on demand, repay to the Government the amount of
              unliquidated installment paymentsJ"l

                     As a result, demand is hereby made upon AFG to
              repay the Government the sum of$7,809,984.15, which is
              the amount of unliquidated Government installment
              payments made to AFG ....

(Id. at 1-2) The letter advised appellant of its right to appeal, but appellant did not
appeal to the Board from the government's demand for payment.

       11. By email on November 3, 2016, appellant sent a notice of appeal to the
Government Accountability Office (GAO) with a copy to the CO (app. resp. at 6,130;
gov't mot., ex. G-10). The CO received appellant's appeal notice on that same day
(gov't mot., ex. G-11, 112). The email stated, in relevant part:

              Dear CAB,

              Aerospace Facilities Group, Inc[.] is formally filling [sic]
              an appeal on the termination of cause for contract
              W912NW-I2-C-0035.

              The Department of the Army, Corpus Christi Army Depot
              Contracting office letter for termination modification for
              the subject contract and modification are attached to this
              appeal letter.

(Gov't mot., ex. G-10)

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        12. In an email dated and received by the Board on November 8, 2016, AFG
stated it was formally filing an appeal of the August 4, 2016 Mod. 8 termination for
cause. This was 91 days after receipt of said termination CO's final decision (COFD).

                                       DECISION

       The government contends that we do not have jurisdiction over this appeal
because the appeal was not filed within 90 days of appellant's receipt of the emailed
CO's termination notice (gov't mot. at 9-11). Appellant counters that the CO sending
the termination through email violates FAR 3 3 .211 (b) (app. resp. at 14 ). Appellant
also asserts that the CO sending multiple copies of the termination caused confusion
concerning the appeal deadline and the last termination sent should begin the appeal
deadline (id. at 17-18). Appellant also argues that its written communication to the CO
requesting reconsideration of the termination tolled the appeal deadline (id. at 12-13 ).
In addition, appellant asserts that the government engaged in actions after the
termination notice was received which vitiated the finality of the termination and, thus,
the appeal is timely (id. at 7-11).

       Under the Contract Disputes Act (CDA), 41 U.S.C. § 7104(a), the 90-day
period in which to appeal a CO's decision to the Board is jurisdictional and may not be
waived. See Cosmic Construction Co. v. United States, 697 F.2d 1389, 1390-91 (Fed.
Cir. 1982); Maria Lochbrunner, ASBCA Nos. 57235, 57236, 11-2 BCA ,i 34,783.

        Appellant argues that the CO should have sent the termination only through
certified mail and that sending it through both email and certified mail violates
FAR 33.21 l(b), which "states that, '[t]he contracting officer shall furnish a copy of the
decision to the contractor by certified mail, return receipt requested, or by any other
method that provides evidence of receipt"' (app. resp. at 14) (emphasis in app. resp.).
Specifically, appellant argues:

              The "or" language expressly refers to the method of
              proving receipt of the certified mail. The FAR does not
              give the CO discretion to substitute issuing a decision by
              certified mail with issuance of the COFD through email.

(Id.)

        This Board has consistently held that the government may transmit a final
decision to the contractor through fax, hand delivery, or email with evidence of
receipt. See Tyger Construction Co., ASBCA Nos. 36100, 36101, 88-3 BCA ,i 21,149
(fax transmission of the final decision was adequate to prove receipt where the CO's
agent confirmed receipt by telephone immediately upon completion of the
transmission); Military Aircraft Parts, ASBCA No. 60308, 17-1 BCA ,i 36,680 (email

                                            7
sufficient for transmitting the COFD; however, the government failed to meet its
burden to show the contractor received the COFD); Singleton Enterprises, ASBCA
No. 58235, 14-1 BCA ,i 35,554 (the 90-day clock started to run when the contractor
received the COFD through email because the evidence showed no COFD was sent
via certified mail as contended by appellant).

        Contractors may request favored forms of communication with the government
and in those situations, it may be prudent for the government to adhere to the
contractor's request. See Mid-Eastern Industries, Inc., ASBCA No. 51287, 98-2 BCA
,i 29,907. However, in this appeal, appellant has not shown that it requested that
communications from the government be delivered only by certified mail. In addition,
the record is replete with email communications from September 6, 2012 through
July 27, 2016 between appellant and the government. (SOF ,i 2)

        The government bears the burden to establish the contractor's date of receipt of
the final decision. See Singleton, 14-1 BCA ,i 35,554 at 174,227. The government has
met its burden. It is undisputed that appellant received the CO's termination via email
on August 4, 2016 (SOF ,i,i 3, 4). Yet, appellant filed its notice of appeal with this
Board on November 8, 2016, 91 days after appellant received the emailed termination
(SOF ,i 12).

       Appellant next argues that sending multiple copies of the termination caused
confusion concerning the appeal deadline (app. resp. at 17-18). However, appellant
has stated that it did not receive the paper copy of the termination and has not
explained how the second copy of the termination, which it did not receive, caused
confusion as to the appeal deadline (SOF ,i 5).

        Next, we consider whether appellant's emails to the CO or GAO afforded
proper notice of appeal to this Board. Filing an appeal with the CO may satisfy the
Board's notice requirement. See Hellenic Express, ASBCA No. 47129, 94-3 BCA
,i 27,189 at 135,503 ("filing an appeal with the [CO] is tantamount to filing with the
Board"). Adequate notice to the CO shall be in writing, express dissatisfaction with
the CO's decision, and, manifest an intent to appeal the decision to a higher authority.
See, e.g., McNamara-Lunz Vans & Warehouses, Inc., ASBCA No. 38057, 89-2 BCA
,i 21,636 at I 08,856 (concluding that a letter stating that "we will appeal your decision
through the various avenues open to us" adequately expressed the contractor's intent to
appeal as a contractor can only "appeal" to the Board); cf Stewart-Thomas Indus.,
Inc., ASBCA No. 38773, 90-1 BCA ,i 22,481 at 112,836 (stating that the contractor's
letter indicating they would appeal to either the Board or the Claims Court was not a
notice of appeal because the CDA requires a notice of appeal to express an election of
the forum in which it will seek relief). To meet the requirement that notice has been
furnished, the Board has historically taken a liberal reading of contractor's

                                            8
communications to the CO in finding effective appeals. See Thompson Aerospace,
Inc., ASBCA Nos. 51548, 51904, 99-1BCA130,232 at 149,570.

        Appellant contends that its August 24, 2016 email to the CO meets the
established requirements of the Board for giving notice of appeal: (i) the email is
within 90 days of receipt of the August 4 termination notice; (ii) it is provided in
writing; (iii) expressed dissatisfaction with the termination; and (iv) the email appealed
to a higher authority (app. resp. at 24-25).

        Appellant's August 24, 2016 email satisfies three of the four requirements to
provide notice of appeal: it was timely, it is in writing, and it expresses a
dissatisfaction with the August 4 termination notice. However, the email does not
satisfy the final requirement of manifesting an intent to appeal the decision to a higher
authority. The email states that appellant would like to rectify the termination
"without going through the legal process of appeals." Appellant's email requested
reconsideration of termination by the government through releasing the last two
payments which the contractor would then deliver to Corpus Christi. Appellant's
email indicates in the future tense that they will be filing a "formal protest" and
appellant will notify the government once an "appeal notice" is filed. (SOF 17)
Appellant unequivocally stated that it wishes to avoid litigation and would notify the
government once the appeal is filed. There is nothing in appellant's email that
manifests an intent to appeal the termination as of the date of the email. We conclude
that appellant's August 24, 2016 email to the CO does not satisfy the requirements of a
notice of appeal to the Board.

        Next, we consider AFG's November 3, 2016 appeal notice to the GAO. The
Board does not possess jurisdiction over appeals filed at other tribunals. See Carter
Safety Consultants, Inc., ASBCA No. 60779, 17-1 BCA 136,669 at 178,552 (no
jurisdiction over appeals filed with the GAO); Waterstone Environmental Hydrology
and Engineering, Inc., ASBCA No. 57557, 12-1BCA135,028 at 172,142-43 (late
appeal to ASBCA dismissed after wrongful appeal to the Civilian Board of Contract
Appeals). In any event it was 91 days after receipt of the notice of termination and
thus untimely.

        Next, we consider AFG's November 3, 2016 appeal notice sent to the CO.
Although it is possible that an appeal filed with the CO could be sufficient for
jurisdiction, we need not decide that issue because the email was untimely at 91 days
after AFG received the notice of termination. (SOF 113, 4, 11) See A.IA. Costruzioni
Sp.A., ASBCA No. 43584, 92-3 BCA 125,204 at 125,582.

        Next, we consider whether AFG's request for reconsideration of the termination
vitiated the deadline for a timely appeal to this Board. Appellant argues that its
August 24, 2016 letter requests reconsideration; thus, the request vitiated the August 4

                                            9
termination notice (app. resp. at 12). We conclude that appellant's request to the CO
to reconsider her final decision is not in itself sufficient to vitiate the termination
decision. See Propulsion Controls Engineering, ASBCA No. 53307, 01-2 BCA
,r 31,494 at 155,508 (holding that "it is unreasonable to conclude that a [CO] is
reconsidering a final decision simply as a result of a request to do so").

        Finally, we consider whether actions by the government vitiated the finality of
the final decision.

              While receipt by the [CO] of a request for reconsideration
              of a decision in itself does not serve to vacate a decision or
              the period in which to appeal, reconsideration of a decision
              by the [CO] or creation of a reasonable appearance that the
              decision is being reconsidered both serve to vacate the
              earlier decision along with the accompanying appeal
              period ....

Royal Int'! Builders Co., ASBCA No. 42637, 92-1 BCA ,r 24,684 at 123,135.

        The test for vitiation of the finality of a CO's determination "is whether the
contractor presented evidence showing it reasonably or objectively could have
concluded the CO's decision was being reconsidered." Sach Sinha and Associates,
Inc., ASBCA No. 46916, 95-1 BCA ,r 27,499 at 137,042 (a lack of finality is found
where the CO met with the contractor after the issuance of the termination notice;
discussed the default termination at the meeting; and requested the contractor to
submit settlement alternatives in writing that were proposed at the meeting). The
focus is on whether any government action could have reasonably led a contractor to
believe that the subject matter was not yet final, thereby making an appeal to the Board
unnecessary. However, a demand letter sent by a CO does not vitiate finality of an
earlier final decision. See Communicology, Inc., ASBCA No. 47934, 95-2 BCA
,r 27,640 at 137,787-88.
       Appellant argues that the finality of the termination notice was vitiated because
the Army held telephonic conferences with AFG, invited AFG to discuss reasonable
proposals to resolve the situation, discussed future delivery of the paint-booth
equipment, and led AFG to believe that the termination could be reversed (app. resp.
at 8-10). The government counters that written communications with appellant were
to mitigate AFG's liability and not to reconsider the termination notice and that the
government also made clear that the termination notice was the final decision of the
CO (gov't reply br. at 6).

      The fact that the record does not reveal that the CO ever used the word
"reconsider" does not mean that the government's actions did not lead AFG to believe

                                           10
the government was reconsidering the decision. See CP of Bozeman, Inc., dba
Maintenance Patrol, ASBCA No. 58533, 13 BCA ,i 35,452 at 173,855. Subsequent
written and oral communications with the government created a cloud of uncertainty
as to the status of the August 4 termination. The CO' s email dated August 11, 2016,
stated that "[t]he Government is willing to accept delivery of items under the
contract.. .. You should contact this office ... to discuss questions or reasonable
proposals concerning the Termination for Cause." (SOF, 6)

        It was the government who reached out to AFG in an email dated August 25,
2016, stating, "I am very optimistic that we can work together to develop a solution that
benefits all parties'' (SOF ,I 8). Responding to the government's invitation, appellant
held three telephonic conferences with the government discussing possible delivery of
the terminated paint-booth equipment (SOF , 9). The government repeatedly attempted
to discuss "reasonable proposals" concerning delivery with appellant (SOF ii, 6, 8-10).
Appellant's affidavit reciting the three teleconferences held on August 25, August 29,
and August 31, 2016, is consistent with the telephonic characterizations recited in the
CO's demand letter dated September 13, 2016. The CO's September 13, 2016 demand
letter acknowledges that the government was willing to enter negotiations. The CO's
demand letter states that the government invited AFG to contact the Army to schedule
delivery and discuss the same. (SOF ,i 10)

       The evidence shows that the merits of the termination were discussed during the
August 25, August 29, and August 31, 2016 teleconferences; in addition, the
teleconferences were held to discuss reasonable delivery proposals. At issue for
delivery was whether the government would release the final payments to AFG.
(SOF ,i 9) "[I]f a contracting officer wishes to avoid a determination that a decision
has been reconsidered he or she 'should refrain from any discussions, negotiations,
review of documents or other actions which could be considered to be a de facto
reconsideration."' Guardian Angels Med. Serv. Dogs, Inc. v. United States, 809 F.3d
1244, 1251 (Fed. Cir. 2016). There is substantial evidence that the government's
actions were either in fact a reconsideration or at least reasonably lead AFG to believe
the Army was reconsidering the decision based on their emails and telephonic
conversations. See Johnson Controls, Inc., ASBCA No. 28340, 83-2 BCA ,i 16,915
at 84,170.

       The Army's willingness to engage AFG, discuss the facts surrounding the
termination on three separate occasions and discuss whether AFG would deliver the
paint-booth equipment served to keep the matter open and destroyed the finality of the
termination notice. See Guardian Angels, 809 F.3d at 1249-50.

      The government's inclusion of the term "mitigation" in the August 11 and
September 13, 2016 emails do not advance the government's position. The
government has not shown that it provided clear cautionary notice to AFG prior to

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    each of the three teleconferences that the August 4 termination remained in effect and
    the discussions were for mitigation purposes only. See Ra-Nav Laboratories, Inc.,
    ASBCA No. 49211, 96-2 BCA, 28,514 at 142,397. The record reflects, and we find,
    that government actions and statements caused AFG to reasonably believe that the CO
    was reconsidering her decision.

          We find appellant's notice of appeal dated November 8, 2016, and received by
    the Board on November 8, 2016, was timely.

                                          CONCLUSION

          The government's motion to dismiss for lack of jurisdiction is denied.

          Dated: July 19, 2018

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

    I concur

    OWEN C. WILSON                                  '-sTEJ5HANIE CATES-1HARMAN
    Administrative Judge                              Administrative Judge
    Vice Chairman                                     Armed Services Board
    Armed Services Board                              of Contract Appeals
    of Contract Appeals

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I
      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. 61026, Appeal of
Aerospace Facilities Group, Inc., rendered in conformance with the Board's Charter.

      Dated:

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

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