Court Opinion

ID: 2756131
Source: CourtListenerOpinion
Date Created: 2014-11-28 15:00:20.080964+00
Date Added: 2024-06-11T12:17:25.229762
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of -- )

Aegis Defence Services Ltd. 3 ASBCA No. 59082
Under Contract No. W52PlJ-l 1-D-0082 i

APPEARANCE FOR THE APPELLANT: Armani Vadiee, Esq.

Smith Pachter McWhorter PLC
Tysons Comer, VA

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

OPINION BY ADMINISTRATIVE JUDGE WILSON
ON THE GOVERNMENTS MOTION FOR SUMNIARY JUDGMENT

This appeal arises from a diSpute as to the interpretation of certain “right of ﬁrst
refusal” language under a contract between the United States Army (Army or the
government) and Aegis Defence Services Ltd., (Aegis or appellant) for various
security support services. The government moves for summary judgment on this issue
of contract interpretation. Appellant opposes the govemment’s motion. We ﬁnd the
parties’ differing interpretations of the contract language at issue present a dispute of
fact that is material to the resolution of the appeal. Accordingly, we deny the
government’s motion.

STATEMENT OF FACTS tSOF) FOR PURPOSES OF THE MOTION

1. On 1 June 201 1, the government and appellant entered into Contract
No. WSZPIJ -1 1-D-0082 (contract), a multiple-award indeﬁnite delivery/indeﬁnite
quantity contract for commercial security support services in Iraq (R4, tab 1 at l, 4).
The contract incorporated by reference appellant’s 8 April 2011 proposal (id. at 4).

2. The contract incorporated by reference the commercial items clause at
FAR 52.212-4, CONTRACT TERMS AND CONDITIONS—COMMERCIAL ITEMS
(JUNE 2010) (R4, tab 1 at 35).

3. The contract’s Performance Work Statement (PWS), dated 24 January 2011,
provided, in pertinent part:

11.0 GENERAL GOVERNMENT FURNISHED
PROPERTY, EQUIPMENT AND SERVICES

The government may provide the facilities, equipment,
materials, and/or services listed below and will be
speciﬁed in each respective Task Order. For those life
support services required, not provided by the
Government, the Government will provide coordination
instruction and direction in the individual Task Order.

11.3 RECORDS

The contractor will maintain records of all government
property IAW FAR Part 45.5 and Far Part [sic] 52.245-1.

11.4 LOSS, THEFT, DAMAGEH, DESTRUCTION

. . .The contactor shall be responsible for the operation and
maintenance of all property used by the contractor. If a
Government provided vehicle is damaged or destroyed by
an IED, RPG or small arms ﬁre, this would be considered
proper consumption. However, if damage is done to a
government provided vehicle because the contractor
neglected to properly maintain the vehicle, the Contractor
shall be responsible to repair or replace the vehicle at NO
ADDITIONAL COST to the Government.

12.1 GENERAL

Except for those items speciﬁcally stated to be government
ﬁlmi'shed in Parts 11 and 13, or otherwise speciﬁed per
individual Task Order, the contractor shall furnish
everything required to perform this PWS. The equipment
required to perform the services will remain Contractor

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. 59082, Appeal of Aegis
Defence Services Ltd., rendered in conformance with the Board’s Charter.

Dated:

 

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

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Furnished Equipment (CFE); the US Government will not
take possession as GFE upon purchase.

(R4, tab 1 at 642 66-67) (Italics added)

4. The contract did not expressly incorporate by reference FAR 52.245-1,
GOVERNMENT PROPERTY (AUG 2010). However, under “Section H — Clause
Addendum” of the “Commercial Clause Addendum,” the contract set forth in full text
local clause 52245-4506, “GOVERNMENT FURNISHED PROPERTY.” The

relevant portions of the local Government Furnished Property clause provided:
Schedule of Government Furnished Property

(a) The Government shall furnish F.O.B. contractor’s place
of performance, the Government—owned property listed in
Appendix B of the PWS as Attachment 0001 of this
document for use in the performance of this contract.

(b) The property shall be delivered in accordance with the
schedule set forth in Attachment Number 0001 of this

document.

(d) The quantity of Government Furnished Material (GFM)
and Government Furnished Equipment (GFE) which is
offered within the PWS is contingent upon award of the

total quantity solicited herein.

(R4, tab 1 at 128) “Appendix B of the PWS” is not in the record.

5. On 13 September 2011, the government issued Task Order No. 0002 (task
order) to appellant with an effective date of 2 September 2011 (R4, tab 3 at 1). The
base period of performance for the task order began 3 September 2011 and ended
31 December 2011, with four one-year options beginning on 1 January 2012 and
ending on 31 December each year. The task order included the following pertinent

provisions:

7. A11 clauses, terms and conditions set forth in the Basic
SSS-I contract, W52PlJ-l 1-D-0082, apply.

9. All equipment, labor, materials and supplies for this
Task Order is contractor furnished, unless stated as
[government furnished equipment (GFE)] in the PWS.

(R4, tab 3 at 206)

6. The task order included its own PWS, dated 24 August 2011 (R4, tab 3
at 233)- The task order’s PWS included the following pertinent provisions:

11.0 General Government Furnished Property,
Equipment and Services — All terms and conditions of
this paragraph from the basic award PWS remain[] in full
force and effect for this Task Order. The Government will
provide 155 [light armored vehicles (LAVs)] for use to
perform the required services under this task order.

12.0 General Contractor Furnished Items and
Services — All terms and conditions of this paragraph from
the basic award PWS remain[] in full force and effect for
this Task Order. Beyond the 155 LAVs provided by the

Government as stated in paragraph[s] 11.0 and 11.], all
other equipment and services are Contractor ﬁirnished.

(R4, tab 1 at 235)

7. Paragraph 2.5, “General Notes and Assumptions,” of appellant’s 30 August
201 l pricing proposal, incorporated by reference into the task order, stated that “[a]11
LAVs. . .will be provided as GFE (incl. maintenance and equipment) unless such
CLINs are amended to be CFE” (R4, tab 3 at 252).

8. The government subsequently determined that not all of the LAVs that it
was providing to appellant for use on the task order were B6-armored vehicles, as was

required (R4, tabs 6, 7).

9. Appellant submitted a proposal on 1 1 November 2011 (R4, tab 9 at 326,
329, tab 13 at 391). Appellant revised its 1 1 November proposal on 5 December 201 l

for 40 B6—armored LAVs (R4, tab 9 at 326, 328-29). The 5 December proposal
contained the following provisions under Section 2, “PRICE”:

Price assumes vehicles are delivered to Iraq, registered to
Aegis and ready for use.

For the avoidance of doubt[,] any costs associated with
transferring ownership to the Government will be for the
Government’s account.

(R4, tab 9 at 329-30)

10. Section 3, “TERMS,” of appellant’s 5 December proposal provided:

0 The Government will provide all vehicle maintenance,
repairs, replacements and fuel.

it Although the vehicles would be the property of the
Government (as CAP [contractor acquired propertyD
Aegis would hold the vehicles to the Govemment’s
order, but in Aegis[’] name for the duration of the
contract to ensure the vehicles can be registered and
licensed in Iraq.

a Government will be responsible for licensing renewal
fees and fees or taxes imposed on vehicles by the
Government of Iraq (as an ODC under the Contract).

0 At the end of the Contract[,] Aegis will be given the
right of ﬁrst refusal to purchase the vehicles in the
event the Government has no further use for them. ..

I The terms of the Contract apply to the vehicles as if
they were GFE.

(R4, tab 9 at 330) (Emphasis added)

1 1. Appellant submitted a second revised proposal, dated 11 December 201 l,
for 54 B6—armored LAVs (R4, tab 1 l at 35 9-60). Besides the change to the number of
vehicles proposed, the terms and conditions were otherwise substantially unmodiﬁed
from the 5 December proposal (id. at 360-61).

12. By email dated 19 December 2011, the government provided appellant
with a draft of the revised task order PWS for appellant’s review (R4, tab 12 at 370).
Appellant responded by email on 20 December 2011 with comments on the revised
task order PWS, including the following:

2. [P]ara 11.0.

(i) Ownership: we think it is best if Aegis purchases the
vehicle[s] in its own name, with an express undertaking in
the PWS to transfer [them] to the USG at the end of [the]
contract[; they] can still be dealt with as USG property[,]
but they would be owned in Aegis“ name[. T]his means
Aegis would be able to register the vehicles and not wait
until 601 has a system in place to allow USG registration.
We would also like to reﬂect the purchase by Aegis option
in the event the USG does not want the vehicles as detailed
in our proposal for vehicle purchase.

(R4, tab 12 at 369)

13. On 23 December 2011, the parties executed Task Order Modiﬁcation
No. 06, which “fund[ed] CLIN 0001AH, LAVS, for the purchase of 14 uparmored
suburbans.” Task Order Modiﬁcation No. 06 incorporated by reference appellant’s
19 December proposal. (R4, tab 13 at 385, 387)

14. On 9 January 2012, the parties executed Task Order Modiﬁcation No. 07,
incorporating the revised task order PWS dated 3 January 2012 (gov’t reply br., ex. 1
at 1, 3), which stated the following at paragraph 1 1.0, “General Government
Furnished Property, Equipment and Services“:

The Government will provide up to 222 gas or diesel
powered LAVs, in their current condition of varying
degrees of armor, for contractor’s use in performing the
required services under this task order. . .. All GFE and
CFE LAVs are to be tracked in the contractor property
control system.

The contractor may be required to purchase additional
Level III/B6 armored LAVs as CFE, if funding is
available. All LAVS purchased by the contractor for use
on this contract will be registered and licensed in [the]

contractor’s name to facilitate GoI licensing. [The
government] will provide reimbursement for costs
associated with licensing, registration, taxes, renewal fees
and title transfer fees imposed by the Government of Iraq.
At the end of the contractor’s performance period on this
Task Order, USG will retake title of the LAVs. If USG
does not wish to take title to the vehicles, contractor will
be given ﬁrst right of refusal on negotiating and possible
procurement of said vehicles.

(Gov’t mot., ex. 5 at l, 3; app. resp. at 2)

15. On 13 February 2012, the government executed Task Order
Modiﬁcation No. 10, funding the purchase of an additional 38 “up-armored SUVs”
(R4, tab 23 at 615, 617).

16. By email dated 14 August 2013, the government directed appellant to turn
the LAVs over to the government for possession at the end of the contract (gov’t mot.,
ex. 13 at 1).

17. On 17 September 2013, appellant submitted a claim for the interpretation
of contract terms to the contracting ofﬁcer (R4, tab 56 at 983-88). In the email
accompanying appellant’s claim, appellant noted that the government did not intend
“to retain” the vehicles, but intended instead to turn them over to the Government of
Iraq, and asserted that “it is inconsistent and incorrect (and cannot possibly offer best
value to the Government since we are prepared to pay for these vehicles) to state that
[they] cannot be transferred to Aegis.” Appellant also stated:

As you are aware[,] it is our opinion and that of our
external US Government contracting attorney[s] that the
correct legal interpretation remains the one that shows the
52 suburbans...always have belonged to Aegis and thus
are not GFE anyway. All of which I would assert supports
the argument that there is no bar to letting Aegis keep these
vehicles — which in any event are legally registered to us in
Iraq.

(R4, tab 56 at 981) In its claim, appellant requested the contracting ofﬁcer to make
several determinations, including, inter after:

2. That under the explicit terms of the contract the US.
Government does not now nor has it ever held title to
the LAVs.

4. That under the explicit terms of the contract Aegis has
a right of ﬁrst refusal...at contract completion to retain
the LAVS upon payment of the depreciated cost of the
LAVS to the US. Government, and such right of ﬁrst
refusal preempts any potential authority of the US.
Government to destroy or transfer the vehicles or any
number of them to the G01 or to any third party.

5. That the U.S. Government does not have any intended
use or further need for the LAVs within Iraq except as
potentially described in 4 above.

(Id. at 934)

18. On 25 October 2013, the contracting ofﬁcer issued a ﬁnal decision denying
appellant’s 17 September claim (R4, tab 63 at 1039, 1041-43).

19. By letter dated 20 December 2013, appellant appealed to the Board from
the contracting ofﬁcer’s final decision.

DECISION

In moving for summary judgment, the government contends that there are no
material facts in dispute; that the LAVs are contractor-acquired property because the
contract language clearly states that the government would take title to the LAVs at the
end of the contract’s period of performance; that appellant would have a right of ﬁrst
refusal to procure the LAVs only if the government elected not to take title; and that
the government did elect to take title, vitiating appellant’s right of ﬁrst refusal
regardless of whatever subsequent use the government intended for the vehicles upon
retaking title to them (gov’t mot. at 1, 6, 8-9). Appellant counters that the parties”
intentions as to the govemment’s use for the vehicles subsequent to taking title to them
under the clause — whether for the government’s own purposes or for any purpose
whatsoever, including transferring them to a third party — creates a dispute of material
fact, and that the government’s interpretation would render meaningless any language
regarding appellant’s right of ﬁrst refusal (app. reSp. at 1—2, 5).

It is well settled that summary judgment is only appropriate where the movant
establishes that there is no genuine issue as to any material fact and that it is entitled to
judgment as a matter of law. Mingus Constructors, Inc. v. United States, 812 F.2d
1387, 1390 (Fed. Cir. 1987). As a general rule, pure contract interpretation is a question

of law that may generally be resolved by summary judgment. Osborne Construction
Company, ASBCA No. 55030, 09-1 BCA 11 34,083 at 168,514 (citing PJ. Mafﬁi
Building Wrecking Corp. v. United States, 732 F.2d 913, 916 (Fed. Cir. 1984)); HTA
Aviation, LLC, ASBCA No. 57891 et a!., 14-1 BCA 11 35,556 at 174,238. But where the
parties “vigorously contest the intended meaning of material contract terms,” we have
recognized that “material disputes of fact nevertheless may arise concerning the
meaning intended by the parties.” International Source and Supply, Inc, ASBCA

Nos. 52318, 52446, 00-1 BCA ﬁl 30,875 at 152,434-35 (emphasis added). “When the
meaning of a contract and the parties’ intentions are both relevant and in dispute, there

are mixed questions of fact and law that pose triable issues precluding summary
judgment.” AshBritt, Inc, ASBCA Nos. 56145, 56250, 09—2 BCA 11 34,300 at 169,434.

The government contends that the LAVS are “contractor acquired property,” a
term that is nowhere deﬁned in the contract or the task order (SOF 11'" 3-7, 9, 10, 12, 14).
Although the terms “Government property,” “Gavernment-ﬁirnished property,” and
“Contractor—acquired property” are deﬁned at paragraph (a) of FAR 52.245-1,
GOVERNMENT PROPERTY (AUG 2010), neither the contract nor the task order expressly
incorporates the clause (SOF 11 4).1 Even if we could somehow determine from the
record before us that the LAVs were “contractor-acquired property,” it is not clear
whether the government ever actually took title to the LAVs. The government urges us
to look to FAR 45.402 for “general guidance to title with respect to contractor-vauired
property” (gov’t mot. at 7) (footnote omitted), which states in pertinent part:

(a) Title vests in the Government for all property
acquired or fabricated by the contractor in accordance with
the ﬁnancing provisions or other speciﬁc requirements for
passage of title in the contract.

FAR 45.402(a). In this case, the “speciﬁc requirements for passage of title in
the contract” to which the “general guidance” of FAR 45.402 refers is the right of ﬁrst

refusal language.

The parties vigorously contest the intended meaning of the right of ﬁrst refusal
language. Whether the parties intended for the government to afford appellant a right
of ﬁrst refusal only if the government refused to take title to the vehicles, or whether
they intended for the government to afford appellant a right of ﬁrst refusal in the event

I Whether FAR 52.245-1 should be incorporated into the contract (sec GL. Christian
andAssociaies v. United States, 312 F.2d 418 (Ct. C1. 1963), cert. denied,
375 US. 954 (1963) has not been raised nor briefed, and this is not before us.
Neither party argues that the deﬁnitions of the clause should be used in
deciding this appeal regardless of whether the clause is incorporated into the

contract and/or task order.

the government did not intend to use the vehicles for its own purposes, are mixed
questions of fact and law. In order to answer such questions, we must ascertain the
intent of the parties, and in order to do that we must consider extrinsic evidence, which
precludes summary judgment. See, e. g., Ronald Hsu Construction Co., ASBCA

Nos. 48682, 49441, 97-1 BCA ‘11 28,739 at 143,453-54 (“[W]here the contract terms
are ambiguous, requiring the weighing of external evidence, the matter is not amenable
to summary judgment”); F airchild Industries, Inc, ASBCA No. 46197, 98-2 BCA

11 29,767 at 147,508 (when the issue of intent is controverted, it cannot be the subject
of a successful dispositive motion); International Source and Supply, 00-] BCA

'|l 30,875 at 152,434 (“[W]e do not interpret contractual terms in a vacuum; rather, our
goal is to arrive at an interpretation that accurately reﬂects the intentions of the
parties”). Accordingly, summary judgment is inappropriate in this case.

CONCLUSION

Because we ﬁnd that there is a genuine dispute of material fact as to the parties’
intended meaning of the contract language at issue, the government’s motion for
summary judgment is denied.

Dated: 14 November 2014

 

OWEN C. WILSON
Administrative Judge
Armed Services Board

 

 

 

of Contract Appeals
I concur I concur
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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