Court Opinion

ID: 4425198
Source: CourtListenerOpinion
Date Created: 2019-08-13 22:00:07.867848+00
Date Added: 2024-06-11T14:51:56.892274
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                   )
                                               )
Potomac Electric Corp .                        )      ASBCA No . 61371
                                               )
Under Contract No. SPRRA2-l 7-D-0028           )

APPEARANCE FOR THE APPELLANT:                         Mr. Leny Chertov
                                                       V.P. Operations

APPEARANCES FOR THE GOVERNMENT:                       Daniel K. Poling, Esq.
                                                       DLA Chief Trial Attorney
                                                      Edward R. Murray, Esq.
                                                       Trial Attorney
                                                       DLA Aviation
                                                       Richmond, VA

                   OPINION BY ADMINISTRATIVE JUDGE YOUNG

        This appeal arises from costs incurred by Potomac Electric Corporation
(Potomac or appellant) in the performance of a contract allegedly awarded to it by the
Defense Logistics Agency (DLA or government). DLA argues that no contract
existed. Appellant elected to proceed under Board Rule 12.2, 1 Expedited Procedures,
and both parties agreed to waive a hearing and submit their cases on the written record
pursuant to Board Rule 11. Both entitlement and quantum are before us. We find that
a contract existed and that it was terminated by the government. We sustain the
appeal.

                                    FINDINGS OF FACT

       1. On June 19, 2017, DLA issued Standard Form 33 , Solicitation, Offer and
Award No. SPRRA2-l 7-R-0053 (the solicitation) as a small business set-aside for a
firm-fixed-price , indefinite-delivery, indefinite-quantity (IDIQ) type contract for
direct ctirrentmotors (R4, tab 1 at 1-4). The solicitation provided for the purchase of
200 motors in the base year, and 150 motors in each of four option years (R4, tab 1
at 5-11 ). The guaranteed minimum was 150 motors (R4, tab 1 at 4 ). The solicitation
required delivery of the 200 motors in the base year 255 days after contract award
(R4, tab 1 at 14). The solicitation closed on July 7, 2017 (R4, tab 1 at 1).

1
    Pursuant to the Rules of the Board, a decision under Rule 12.2 shall have no value as
         precedent, and in the absence of fraud, shall be final and conclusive and may
         not be appealed or set aside.
       2. On July 7, 201 7, Potomac submitted a proposal. The total price proposed
for the base and four option years was $3,319,786.22 (R4, tab 2 at 1-2, 27). The
base year contemplated the delivery of 200 motors for $784,476.00, with delivery
255 days after award (R4, tab 2 at 27). On July 13, 2017, DLA contract specialist
Mr. Harrison A. Mayfield (the contract specialist) sent Potomac an email
confirming receipt of its proposal (R4, tab 3 at 1).

       3. On August 15, 2017, the contract specialist sent an email to Potomac,
stating: "Attached is a draft copy of contract SPRRA2- l 7-D-0028 and delivery
order 0001. Please review, if everything is ok, have [sic] sign both, the basic
contract and delivery order and return to me for processing" (R4, tab 3 at 1).

       4. The contract specialist's email attached an Award/Contract Standard Form
26 (SF-26), No. SPRRA2-l 7-D-0028 (the contract) 2 showing that it was awarded to
Potomac Electric Corp. (R4, tab 3 at 1-4). The contract did not bear a watermark
identifying it as a draft, or indicate it was a draft in any way. The delivery order,
DD Form 1155, Order for Supplies or Services (delivery order or DO), also attached
to the email, ordered 200 motors for $784,476.00, which mirrored Potomac's
proposal. The DO set a delivery date of January 31 , 2018 (169 days after award)
(R4, tab 3 at 4, 49-52). Th€ contract incorporated by reference the Federal
Acquisition Regulation (FAR) 52.249-2, TERMINATION FOR CONVENIENCE OF THE
GOVERNMENT (FIXED-PRICE) (APRIL 2012) (R4, tab 3 at 40).

       5. The contract and delivery order identified the name of the contracting
officer (CO) as Angela L. Clark and included her email and phone number, but
these documents were unsigned (R4, tab 3 at 4, 49). The contract specialist did
not have authority to bind the government (R4, tab 24). By signed declaration, the
CO stated that she did not direct the contract specialist to send the draft award to the
contractor (R4, tab 25).

         6. On August 15, 2017, Potomac emailed the contract specialist, stating:

                       "The solicitation ... requested [delivery of 200
                units] 25 5 days after the award. The document we
                received this morning, SPRRA2-l 7-D-0028/0001...states
                delivery date of 200 units as January 31 , 2018 [ 169 days
                after award]. Potomac Electric's price proposal is based

2
    Whether a contract existed is a central issue in this appeal. For ease of reference, this
        document will be referred to as "the contract" as distinguishable from
        SPRRA2-l 7-R-0053 ("the solicitation").
                                               2
              on the Solicitation's 255 days delivery request. Could
              you please clarify?"

(R4, tab 4 at 2-3)

       7. On August 16, 2017, the contract specialist responded: "You are correct,
I adjusted the delivery date. Attached is the corrected delivery schedule, if
everything is ok, have [sic] sign both the basic contract and delivery order 0001
and return to me fo r processing." (R4, tab 4 at 2) The contract specialist attached
a corrected SF-26 and DO, showing the delivery date as 255 days after award (R4,
tab 20 at 17, 72).

        8. The same day, August 16, 2017, Potomac emailed the contract specialist
posing three technical questions. Potomac stated that the solicitation did not
address certain technical details which made a difference between model numbers
of the motors Potomac needed to purchase in performance of the contract. (R4,
tab 4 at 1-2) The contract specialist did not respond to Potomac's technical
questions, but on August 17, 2017, he forwarded them to Mr. Henry W. Daniels,
III, to respond to them (id. at 1). Mr. Daniels is also a contracting officer (R4, tab 11
at 1) and appears copied in almost every correspondence with or regarding Potomac
(R4, tabs 4, 7, 11-13, 16, 20).

       9. On August 18, 201 7, the CO reviewed, made edits, and signed a final
price negotiation memorandum (FPNM), which reflected Potomac 's proposal (R4,
tab 25). The FPNM stated:

              The Government will accept Potomac Electric proposed
              price, as is.... The responsive offer received from Potomac
              Electric Corp at a total price of$3 ,319,785.00 is
              considered fair and reasonable based on adequate price
              competition .... Contract number is SPRRA2-l 7-D-0028.

(R4, tab 5 at 2, 7)

      10. The same day, August 18, 2017, Potomac signed and dated the contract
and DO, and emailed them to the contract specialist on August 19, 2017. In the
same email, Potomac also stated: "The 200 units release has extremely tight
schedule and Potomac must get started right away." Potomac also asked the
contract specialist to address the technical questions it had posed in its email of
August 16, 2017. (Finding 8; R4, tab 6 at 1, 7)

      11. In order to meet the "extremely tight schedule" Potomac set its team of
contract managers, engineers, and purchase personnel to work on the contract

                                            3
round-the-clock, reviewing the technical specifications and negotiating with
vendors to place purchase orders for the motors (R4, tab 22). Potomac stated that
" [being] a small company, we all worked on the contract" including weekends.
Potomac did not purchase materials. (R4, tab 23)

       12. On August 23, 2017, the contract specialist sent an email to the CO and
to Mr. Daniels forwarding the contract and DO signed by Potomac, as well as
Potomac 's technical questions (finding 8), stating: "Potomac has signed the basic
contract and delivery order, but still wants the questions address[ ed] below. If
you can sign these two documents and award it in P ADDs 3 I can get distribution
out hopefully today." (R4, tab 7 at 1)

       13. On August 28, 2017, the CO signed a Contract Clearance Request
(CCR) requesting review and approval of the FPNM which, as found above,
reflected Potomac 's proposal (finding 9; R4, tab 10).

         14. Also on August 28, 2017, as shown by internal correspondence (R4,
tabs 8-9), DLA realized that it needed to receive the motors in a shorter time frame
than initially anticipated. DLA determined that the requirement was urgent and
compelling and decided to change the structure of the purchase, as reflected in a
determination and findings (D&F) which also mirrors Potomac ' s proposal (R4, tab 8
at 4). 4 DLA decided it would purchase 200 motors on an urgent and compelling
basis for delivery 135 days after award, and that future quantities of motors would
be procured under an ID/IQ contract (R4, tab 9 at 1). On August 29, 2017, DLA
issued an amendment to the solicitation, to purchase 200 motors with a delivery
date of 165 days after award, and deleted the remainder of the motors from the
procurement (R4, tab 11 at 3, 5).

       15. On August 29, 201 7, the contract specialist sent an email to Potomac
enclosing the amended solicitation, stating:

                       Please see attached solicitation amendment.
                Sorry to inform you. Subject solicitation had to be

3
    PADDs is believed to mean Procurement Automated and Documents System.
4
    DLA's internal correspondence centers on the premise that an urgent and compelling
       requirement does not need to be synopsized. This is noteworthy, as DLA's
       email to Potomac of September 7, 201 7, recognizes that the government failed
       to synopsize the first solicitation which is "a violation of the FAR" (R4, tab 14
       at 3). DLA's course of action changing the structure of the purchase suggests
       an attempt by the government to correct the failure to synopsize the solicitation
       by restructuring the purchase as an urgent and compelling requirement which
       does not need to be synopsized.
                                             4
              changed due to this requirement being Urgent and
              Compelling. Instead of a 5 year Indefinite Delivery
              Indefinite Quantity (IDIQ), it is now a One-Time Buy
              for a quantity of 200 each. When proposal is submitted,
              please copy everyone on email. Any questions, notify
              Contracting Officers Henry Daniels and Angela Clark.

(R4, tab 11 at 1)

       16. On the same day, August 29, 2017, Potomac responded via email:

                    Only after our phone conversation with
              Mr. Daniels this morning we realized the following:
              The DLA sent us the amendment of the solicitation
              SPRRA2-l 7-0053.

              1. The solicitation SPRRA2-l 7-0053 had closed on
              July 7, 4:30PM, 2017 ET.
              2. The government did not conduct any discussions or
              negotiations with Potomac Electric in reference to our
              proposal[.]
              3. We received the award letter from Mr. Harrison [the
              contract specialist] on August 16th, 2017. We signed the
              contract (and first year release) a few days later and
              proceeded with procurement of materials. We also wrote
              to Mr. Harrison several times on contractual matters.

                     It appears to Potomac Electric that the
              government decided to nullify our award, reopen the
              solicitation that has been closed a month ago, amended
              it and is now seeking new proposals from suppiiers.

(R4, tab 12 at 1)

      17. On September 7, 2017, the chief of DLA tactical division sent Potomac
an email, stating:

                     Please let me start by apologizing for all the
              hardship we have put you through with this
              requirement. I do want to reassure you however, that
              although we committed errors along the way, we are

                                          5
              trying to correct these errors and proceed with the
              utmost standards.

                     1. The initial solicitation SPRRA2-17-R-0053,
             Direct Current Motor, quantity of 800 (Year 1=200) was
             solicited as a 5 year IDIQ. However, the requirement
             was not synopsized, which violated FAR 5.10 I and
             5.102. We mistakenly thought we could avoid a
             synopsis because the first delivery order would be
             issued to satisfy an urgent requirement.

                    6. Since the solicitation was never awarded, a
             debriefing was not and shall not be conducted with any
             other interested bidders.

(R4, tab 14 at 2-3) (Emphasis added)

        18. On October 2, 2017, Potomac submitted a claim to the CO for $27,000 for
costs incurred in the performance of the contract between August 16, 2017, the date of
putative contract award, and August 29, 2017 , the date Potomac stopped working on the
contract (R4, tab 15 at 1). Potomac claimed it incurred expenses in reviewing the contract,
conducting production simulation and planning, contacting vendors to negotiate delivery
and to place purchase orders, placing ads to hire additional personnel to meet the large
requirement, and contacting vendors after August 29, 2017, to cancel orders (id. at 2).

       19. On October 4, 2017, the CO sent an email to Potomac stating that since
no contract had been awarded to Potomac, she " lack[ed] jurisdiction" to resolve
Potomac's request for monetary compensation and that no further action would be
taken upon Potomac 's request (R4, tab 16).

       20. On October 15, 2017, Potomac submitted an appeal with the Board from
the email denying its claim dated October 2, 2017 (finding 18). The Board docketed
the appeal as ASBCA No. 61371.

      21. Potomac's claim of October 2, 2017, in the amount of $27,000, is further
explained in Potomac's letter dated April 22, 2019, (R4, tab 22 at 2, 4), to include:
$6,256 for 214 hours of direct labor costs; $16,954 of overhead (at the rate of 271.4%);

                                          6
and $5,539 in general and administrative costs (at the rate of21.6%) (R4, tab 22 at 4). 5
These rates, as well as a profit rate of 8%, were included in Potomac's price proposal
(R4, tab 2 at 48), which the government found fair and reasonable in the FPNM
(finding 9; R4, tab 5 at 7). Potomac asserts that "[Our] cost accounting system was
audited by the DCMA [Defense Contract Management Agency] during the solicitation
process leading to the award of the [contract] and DCMA found our accounting
practices in full compliance" (Rule 4, tab 22 at 2). Potomac submitted spreadsheets in
support of its claim, and states it did not keep track of hours expended because this was a
firm-fixed-price, not a cost-type contract, and its employees were paid fixed salaries which
were reflected in the spreadsheets (R4 , tab 23 at 2). Potomac also asserts it incurred
$3,400 in attorney fees related to filing a protest (R4, tab 22 at 2, 5). The attorney fees
were not included in Potomac ' s claim submitted to the CO on October 2, 2017 (R4,
tab 15).

                                        DECISION

I. Jurisdiction

        Our jurisdiction arises from the Contract Disputes Act, 41 U.S.C. §§ 7101-7109,
which requires a contract between appellant and the United States. If there were no
contract between the parties, the Board would have no jurisdiction to entertain this
appeal. However, an appellant need only make a "non-frivolous aUegation" of a contract
to establish the Board's jurisdiction. Leviathan Corporation, ASBCA No. 58659, 16-1
BCA ,r 36,372 at 177,294 (citing Engage Learning, Inc. v. Salazar, 660 F.3d 1346, 1353
(Fed. Cir. 2011)). "This burden does not require appellant to prove that a contract
actually exists, as that question goes to the merits of appellant's claim rather than the
Board' s jurisdiction." Anis Avasta Construction Co. , ASBCA No. 61107, 17-1 BCA
,r 36,838 at 179,517 n.2. Here, Potomac has met this low burden alleging it was awarded
Contract No. SPRRA2-17-D-0028 on August 15, 2017 (compl. ,r 2). Therefore, the
Board has jurisdiction over this appeal.

II. Was there a contractual relationship between the parties?

       Appellant argues that it was awarded a contract by DLA (app. br. at 2-3). The
government argues that no contract existed (gov' t br. at 12-16). The elements of proof
to establish a valid contract with the government are: "(l) mutuality of intent to
contract; (2) lack of ambiguity in offer and acceptance; (3) consideration; and (4) a
government representative having actual authority to bind the United States in contract."

5
    These amounts add up to $28,749, as contrasted with the amount of Potomac' s claim,
         $27,000. There is no explanation in the record for this discrepancy. As the
         claim Potomac submitted to the contracting officer was for $27,000, the Board
         determines $27,000 is the amount of Potomac ' s claim.
                                            7
Anderson v. United States, 344 F.3d 1343 , 1353 (Fed . Cir. 2003); see also City
of El Centro v. United States , 922 F.2d 816, 820 (Fed. Cir. 1990). Next, we
examine whether each element existed to form a contract in the case at hand.

         A. Mutuality of intent to contract

       Mutuality of intent is essential to the formation of a contract with the government.
ASFA Construction Industry And Trade, Inc., ASBCA No. 57269, 15-1 BCA ,r 36,034
at 176,004 (citing Walsh Constr. Co. of Ill., ASBCA No. 5295 2, 02-2 BCA ,r 32,004
at 158,279, aff d, 80 F. App 'x 679 (Fed. Cir. 2003)). To satisfy its burden to prove
mutuality of intent, appellant must show, by objective evidence, the existence of an offer
and reciprocal acceptance. Anderson, 344 F.3d at 1353 ; Yonir Technologies Inc., ASBCA
No. 56736, 10-1 BCA ,r 34,417 at 169,897 .

        Once an offer is made, for a contract to be formed, there must be an acceptance
of the offer. Anderson, 344 F.3d at 1355. "It is essential that ' acceptance of the offer
be manifested by conduct that indicates assent to the proposed bargain." ' Northrop
Grumman Sys. Corp. Space Sys. Div., ASBCA No. 54774, 10-2 BCA ,r 34,517
at 170,237 (citations omitted). Potomac offered to sell the government 200 motors in the
base year for $784,476.00, with delivery 255 days after award (finding 2). We find
this to be an unambiguous offer. The contract specialist sent Potomac a document
titled "Award/Contract" bearing a contract number, which mirrored Potomac' s offer
except for a discrepancy in the delivery deadline (finding 4), which the contract specialist
promptly corrected (finding 7), again mirroring Potomac' s offer. This conduct manifests
the government' s assent to the proposed bargain. We find that mutuality of intent to
contract is present in the appeal at hand. 6

         B. Consideration

       To constitute consideration, a performance or a return promise must be
bargained for. A performance or return promise is bargained for if it is sought by the
promisor in exchange for his promise and is given by the promisee in exchange for
that promise. RESTATEMENT (SECOND) CONTRACTS§ 71 (1981). Generally,

6
    DLA argues that there was no mutuality of intent because the government never
        signed the contract (gov't br. at 15). Whether the contract was signed,
        however, is not essential to the consummation of the contract. Anis Avasta,
        17-1 BCA ,r 36,838 at 179,516 (citing United States v. Purcell Envelope Co.,
        249 U.S. 313 , 319 (1919)). What is necessary is evidence ofan intent to be
        bound. AnisAvasta, 17-1 BCA ,r 36,838 at 179,517 (citations omitted). Here,
       there was an offer and an acceptance that denoted mutuality of intent to
        contract. Accordingly, the fact that the government did not sign the contract
        does not negate that there was a meeting of the minds.
                                              8
 consideration in government contracts is found in the exchange of promises to perform
 positive duties. The contractor's bid or proposal is a promise to furnish supplies or
 services offered in exchange for the government's promise to pay for the work. JOHN
 CIBINIC, JR. & RALPH C. NASH, JR. , FORMATION OF GOVERNMENT CONTRACTS at 189
 (2nd ed. 1986). See also Supply & Service Team GmbH, ASBCA 59630, 17-1 BCA
 ,r 36,678 at 178,602 (quoting Carter v. United States , 102 Fed. Cl. 61 , 66 (2011),
 finding that the agreement failed for lack of mutual exchange of binding promises.

         In the case at hand, Potomac promised to deliver to DLA 200 motors for
 $784,476.00 in the base year (finding 2). In return, the government both in the contract
 and the corrected SF-26, promised to pay Potomac $784,476.00 for the delivery of 200
 motors (findings 4, 7). We find that the parties intended their promises to be mutually
 binding. The exchange of promises between Potomac and DLA constitutes consideration
 in the case at hand.

        C. Lack Of Ambiguity In Offer And Acceptance

         A definite offer and an unconditional acceptance must be established to prove
  the existence of a contract. Russell Corp. v. United States, 537 F.2d 4 74, 481 (Ct. Cl.
  1976). As pointed out above, we found that Potomac's offer to sell 200 motors in the
  base year for $784,476.00, with delivery 255 days after award (finding 2), was
  mirrored by the SF-26 as corrected by the contract specialist (findings 4, 7).
  Additionally, other documents in the record mirror the terms of Potomac's offer; for
· example, the FPNM (finding 9); the D&F (finding 14) and the CCR (finding 13). We
  find that these facts support that a definite offer and an unconditional acceptance
  existed. There was no ambiguity as to the terms contemplated by the parties.

      D. Authority On The Part Of The Government Representative To Bind The
 Government

         It is well settled that anyone entering into an arrangement with the government
takes the risk of ascertaining that the official purporting to act for the government stays
within the bounds of his authority. Federal Crop Ins. Corp. v. Merrill, 332 U.S . 380, 384
( 194 7). In order to prove the elements of a contract, "there needs to be something more
than a cloud of evidence ... to prove a contract and enforceable contract rights. " D& N
Bank v. United States, 331 F.3d 1374, 1377 (Fed. Cir. 2003).

       In the appeal at hand, it is uncontroverted that the contract specialist had no
authority to bind the government (finding 5). However, the shadow of the CO looms
large over every exchange with Potomac. The CO prepared the FPNM, which mirrored
the terms of Potomac's offer and the SF-26 award document, and signed the FPNM on
the same date Potomac signed the contract (findings 9-10); on August 28, 2017, the CO
prepared and signed the CCR which incorporated the terms of the FPNM (finding 13).

                                             9
The CO was aware of the technical questions Potomac posed so it could order the
correct product, aware that Potomac had signed the contract, and aware that Potomac
was operating under a tight schedule (finding 12). The CO stated that she did not direct
the contract specialist to send the draft award to the contractor (finding 5). However,
the record is notably silent as to the communications between the CO and the contract
specialist. 7 The Board finds it difficult to believe that there were no communications
regarding Potomac between the contract specialist, the CO, and Mr. Daniels. The
absence of these communication(s) suggests that if produced, they would be
unfavorable to the government "if a party has it peculiarly within his power to produce
witnesses whose testimony would elucidate the transaction, the fact that he does not do
it creates the presumption that the testimony, if produced, would be unfavorable."
TranLogistics LLC, ASBCA Nos. 61366, 61450, 19-1 BCA il 37,330 at 181 ,552-53
(citing Graves v. United States , 150 U.S. 118, 121 (1893)).

        When considered together, these facts provide more than a "cloud of evidence"
that a government official with authority to bind the government was behind DLA's
interactions w ith Potomac, and entered into a contractual relationship with Potomac.
The Board finds that the involvement of the CO was significant enough to support the
finding that she actually directed the award to Potomac, and the contract specialist
only acted in the limited capacity of conveying information.

111. Costs

       Any government action preventing a contractor from continuing performance
should be adjusted for under the termination for convenience clause if the contracting
officer could have used the clause at the time of the action. This principle applies
where the government elected not to terminate for convenience but rather to end the
contractual relationship in some other way. JOHN CIBINIC, JR. & RALPH C. NASH, JR.,
ADMINISTRATION OF GOVERNMENT CONTRACTS at 1087 (3d ed. 1995) (citing John
Reiner & Co. v. United States, 325 F.2d 438, 444 (Ct. Cl. 1963)).

        As set forth above, we found that a contractual relationship existed between the
parties. We also found that, having awarded the contract, DLA decided that it was in
the best interest of the government to buy the motors in a different procurement
structure. (Findings 14-15, 17) However, DLA did not terminate the contract for
convenience as would have been the prescribed course of action when it "ended the

7
    In its opinion of March 11 , 2019, denying the government's motion for summary
          judgment, the Board noted the absence in the record of documents reflecting
           communications between the contracting officer and the contracting specialist
           (Bd. op. at 10). The Board later ordered that the Rule 4 file be supplemented
           with relevant documents (Bd. ord. dtd. April 16, 2019) but the record is still
           devoid of any communications between the CO and the contracting specialist.
                                              10
contractual relationship in some other way. " Instead, to paraphrase Potomac's lay
terms, the government decided to nullify the award, reopen the solicitation that had
been closed for a month, amend it, and seek new proposals. (Finding 16) DLA' s
actions had the effect of ending the contractual relationship with Potomac; it follows
that the termination for convenience provisions, which were incorporated by reference
in the contract (finding 4), apply.

        In the appeal at hand, Potomac submitted a claim to the contracting officer for
$27,000, which the contracting officer refused to decide asserting that she had "no
jurisdiction," because a contract had never been awarded to Potomac (finding 19).

        The contract incorporated by reference FAR 52 .249-2 (finding 4), which provides
that termination costs in a firm-fixed-price contract shall include initial costs and
preparatory expenses allocable to the work done, and profit in a sum determined to be
fair and reasonable; this clause also provides that that the cost principles and procedures
set forth in FAR part 3 1 shall govern. FAR 3 1.102 provides that notwithstanding the
mandatory use of cost principles, the objective in a firm-fixed-price contract is to
negotiate prices that are fair and reasonable, cost and other factors considered.

       Potomac claims that it incurred $27,000 in initial costs and preparatory expenses
to perform the contract (compl. 15). The government argues that Potomac's costs are
unreasonable and that it has not proved the costs incurred (gov't br. at 24-25). The
record shows that Potomac stated that it is a small firm and that its employees worked
round-the-clock, including weekends to meet the contract' s tight deadline (finding 11).
Potomac also stated that it did not keep track of the hours expended on the contract, as
this was a firm-fixed-price, not a cost-reimbursable contract, and its employees receive
fixed salaries which were reflected in the spreadsheets it submitted (finding 21). We
find Potomac' s assertions credible. Potomac also states that DCMA had approved the
overhead and G&A rates (finding 21), and the government does not contest that
assertion. Potomac ' s rates were included in Potomac' s proposal, which the government
found fair and reasonable (finding 9). The Board has no reason to contest this finding
by the government. The Board finds that the costs Potomac incurred in initiating
contract performance were reasonable and believable. Potomac is entitled to $27,000
incurred in performing the contract until it was terminated on August 29, 2017, plus
$2,160 in profit at the rate of 8% for a total recovery of $29,160. Potomac also asserts
$3,400 for attorney fees incurred in the context of filing a protest. These costs were not
incurred in connection with the performance of the contract, and are denied.

                                           11
                                   CONCLUSION

      The appeal is sustained. Potomac is entitled to recover $29,160.00 plus interest
pursuant to 41 U.S.C. § 7109, from October 2, 2017, to date of payment.

      Dated: July 30, 2019

                                                 LIS B. YOUNG
                                                 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. 61971, Appeal of Potomac
Electric Corporation, rendered in conformance with the Board's Charter.

       Dated:

                                                  PAULLA GATES-LEWIS
                                                  Recorder, Armed Services Board of
                                                  Contract Appeals

                                          12