Court Opinion

ID: 2734529
Source: CourtListenerOpinion
Date Created: 2014-09-19 01:27:50.404272+00
Date Added: 2024-06-11T09:46:20.294721
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of--                                   )
                                              )
Bruce E. Zoeller                              )      ASBCA No. 56578
                                              )
Under Contract No. DACA41-1-99-532            )

APPEARANCE FOR THE APPELLANT:                        Mr. Bruce E. Zoeller
                                                      Hiawatha, KS

APPEARANCES FOR THE GOVERNMENT:                      Thomas H. Gourlay, Jr., Esq.
                                                      Engineer Chief Trial Attorney
                                                     Alice J. Edwards, Esq.
                                                      Engineer Trial Attorney
                                                      U.S. Army Engineer District, Kansas City

                   OPINION BY ADMINISTRATIVE JUDGE DELMAN

       In Bruce E. Zoeller, ASBCA No. 56578, 13 BCA ~ 35,353, recon. denied, 14-1
BCA ~ 35,480 (Zoeller), we granted, in part, the government's motion for summary
judgment and denied appellant's cross-motion for summary judgment. Based upon that
decision, the only issue left for disposition is the compensation the government owes
appellant for the value of the Illinois bundle flower (IBF) seed crop in the FW parcel for
calendar year 2003. Familiarity with our decision is presumed.

      The Board stated in the decision that it would grant the parties an opportunity to
make evidentiary submissions directed to the two disputed data points in the quantum
formula adopted by the parties. The parties have now made their submissions. We address
quantum below.

The Disputed Price of IBF Seed Per Pound

        Appellant's claim asserts an average price per pound of IBF seed for 2003 of$6.24
(R4, tab 9 at 100). The government asserts an average price per pound of $5 .16 (R4, tab 1
at 4). Both parties rely upon data included in a letter to appellant from the U.S.
Department of Agriculture, Natural Resources Conservation Service, dated 5 May 2003
(R4, tab 7 at 52). It appears that this letter identifies IBF statewide average prices for
fiscal years 2000-2003 that the government paid to Kansas landowners who complied with
certain conservation practices under a federal conservation program.

      The government relies upon the stated IBF price in this letter for fiscal year 2003 in
the amount of $5 .16 per pound of live seed. However, we believe that this figure is not a
fair and reasonable data point for calendar year 2003. First, the letter provides "fiscal
year" data, not "calendar" year data with which we are concerned. Indeed, the letter is
dated 5 May 2003, and perforce, can only reflect values through that date. Further, the
letter states that "[t]he fiscal year average costs above are derived from actual costs from
the preceding year" (id.) that is, the $5 .16 figure relied upon by the government is based
upon price data from fiscal year 2002, not calendar year 2003.

       Appellant's claimed price of $6.24 relies upon an average ofIBF prices from fiscal
years 2000 through 2003. This claimed price is consistent with a sale of "Illinois
bundleflower 'VNS Diversatech"' made by appellant to Dr. Patrick Mcinteer, Animal
Health Center, on or about 1April2003, Invoice ID #239, at the price of $6.48 per pound
(R4, tab 7 at 49).

      We believe appellant's IBF average price per pound figure of $6 .24 is fair and
reasonable for calendar year 2003. We shall use this figure for purposes of calculating
quantum.

The Disputed Cost of IBF Seed Per Pound

       Appellant's claim asserts a cost of $0.50 per pound based upon a stipulation in
ASBCA No. 54160, in which appeal the valuation of a nearby IBF seed crop was in issue
during a similar time period (R4, tab 9 at 100). The government relies upon the figures
appellant provided the contracting officer (CO) to support its claim in a letter dated
31 March 2008 (R4, tab 7). We agree with the government that it is fair and reasonable to
use appellant's own data, but we believe that the government has misinterpreted the data.
According to the CO's decision, appellant's anticipated gross cost per acre for 2003 was
$161.70, predicated upon a 110% escalation of all of appellant's 2002 costs (R4, tab 1 at
6A). The Board's decision on the summary judgment motions suggested that the
government's understanding was erroneous, Zoeller, 13 BCA if 35,353 at 173,519 n.4, and
the government's supplemental briefing now agrees (gov't supp. at 2). While the
government now asserts a gross cost per acre of $155.40, or $.66 per pound (id.), it does
not explain how it obtained this number.

       We arrive at a different figure. Using the same data provided by appellant to
support its claim (R4, tab 7), we calculate a gross cost per acre of $154.40 which rounds to
a cost of $.65 per acre for 2003. 1 We shall use this figure for purposes of calculating
quantum.

1
    We obtain the figure of $.65 per pound by escalating appellant's asserted 2002
        administration costs of $74.00/acre by 110%, per appellant's figures, which comes
        to a cost of$81.40/acre. We then add to this figure appellant's asserted harvesting
        costs of$73.00/acre for a total of $154.40/acre. We then divide $154.40 by 237

                                              2
Risk Factor

       Appellant's claim asserts "a multi-risk (i.e. environmental, market, etc.) factor of
.375" (R4, tab 9 at 100) to reflect various uncertainties with respect to the potential 2003
crop. The government has accepted this risk factor. At the hearing in ASBCA Nos.
54160, 54205, appellant testified: "The lessee acknowledges that it is reasonable to
include a risk factor in any equation involving the native seed business" (tr. 1/201).

       However, appellant now contends that we should not apply any risk factor to price
appellant's compensation for the value of the IBF seed crop in parcel FW for 2003
(app. supp. at 1). We perceive no reasonable basis to eliminate a risk factor. Absent the
showing of any other risk factor, we believe the risk factor of .375 is reasonable, and we
shall use it for purposes of calculating quantum.

Quantum Calculation

       Based upon the formula below adopted by the parties and the other data points
heretofore agreed upon, we calculate appellant's compensation for the IBF seed crop for
2003 in the FW parcel as follows:

      (1)   IBF Seed Price per Pound ($6.24) less Cost per Pound ($0.65) = $5.59
      (2)   Multiplied by Average Seed Yield per Acre (632 Seed Pounds)
      (3)   Multiplied by Risk Factor (.375)
      (4)   Multiplied by Number of Acres (20)

                 Total Value of Compensation $26,496.60

                                      CONCLUSION

       Appellant is entitled to compensation in the amount of $26,496.60, plus CDA
interest from the date the CO received appellant's claim dated 29 February 2008, which,
lacking any evidence of date of receipt, we find was received on 4 March 2008, less any
amounts previously paid to appellant pursuant to the CO's decision dated 26 June 2008
(R4, tab 1).

      (the product of the average seed yield per acre, 632, times the risk factor, .375) to
      obtain a cost figure rounded to $.65 per pound.

                                              3
       The appeal is sustained consistent with this opinion.

       Dated: 11 June 2014

                                                 Admmistrative Judge
                                                 Armed Services Board
                                                 of Contract Appeals

I concur                                         I concur

:!7~RJt
Administrative Judge
                                                 RICHARD SHACKLEFORD
                                                 Administrative Judge
Acting Chairman                                  Vice Chairman
Armed Services Board                             Armed Services Board
of Contract Appeals                              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. 56578, Appeal of Bruce E. Zoeller,
rendered in conformance with the Board's Charter.

      Dated:

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

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