Court Opinion

ID: 4166875
Source: CourtListenerOpinion
Date Created: 2017-05-08 17:00:04.463802+00
Date Added: 2024-06-11T14:38:25.038371
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                      )
                                                  )
USAC Aerospace Group Inc. dba USAC                )   ASBCA No. 59114
 Aerospace Group: Aerostructures                  )
                                                  )
Under Contract No. SPM4A6-10-D-0188               )

APPEARANCE FOR THE APPELLANT:                         Mr. Michael Sammon
                                                       President

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

                 OPINION BY ADMINISTRATIVE JUDGE PAGE
            ON THE GOVERNMENT'S SECOND MOTION TO DISMISS
           AND THE BOARD'S ORDER FOR SUPPLEMENTAL BRIEFING

       The Defense Logistics Agency, Aviation Supply Chain (DLA or the
government) moves for the second time to dismiss ASBCA No. 59114 for lack of
jurisdiction (gov't 2nd mot.). It reasons that this appeal, which arose from Delivery
Order No. 0001 (DO 1), cannot be maintained following the Board's dismissal of
ASBCA No. 59115 as untimely. 1 The latter appeal concerned the termination for
default of Contract No. SPM4A6-10-D-0188 between DLA and USAC Aerospace
Group: Aeronautical Flight Center (USAC, appellant or the contractor). This is the
contract under which DO 1 was issued.

      In accordance with Board Rule 7 Motions, ii 7(b) Jurisdictional Motions, the
Board on 5 May 2015 ordered the parties to address the continued corporate capacity

1
    On 4 December 2014, the Board denied the government's first motion to dismiss
         (gov't pt mot.) ASBCA No. 59114 for untimeliness, and granted that motion in
         regard to the remaining appeals that were also the subject of that motion. See
         USAC Aerospace Group Inc. dba USAC Aerospace Group: Aerostructures,
         ASBCA No. 59114 et al., 15-1 BCA ii 35,834; familiarity with that decision is
         presumed.
of USAC, and its representative, to bring and prosecute this appeal under Board Rule
15 Representation. 2

                STATEMENT OF FACTS FOR PURPOSES OF THE
                GOVERNMENT'S SECOND MOTION TO DISMISS

The Contract and Termination for Default

       On 3 May 2010, DLA awarded indefinite-delivery/indefinite-quantity (IDIQ)
Contract No. SPM4A6-10-D-0188 to USAC (R4, tab 1). The name and address of the
company are listed in the contract as USAC Aerospace Group, Aeronautical Flight
Center: Hangar, Murrieta CA 92563-2573 and the contractor's CAGE (Commercial
and Government Entity) code is given as 5RUB5 (id. at 1). 3

        Although USAC represented itself as a corporation in entering into the contract
(R4, tab 1 at 1), the record does not reflect that USAC ever notified the government
that it had forfeited this status. Nor does the record indicate that USAC sought a
novation for government approval to assume the contract in a non-corporate capacity.

        The IDIQ contract, which had a base and four optional years, called for the
contractor to provide holdback latches. The contract called for the government to
order a minimum of 163 and a maximum of 1,301 latches at the price of $44.50 each.
The contractor was required to conduct a first article test (FAT) and submit a FAT
report in 90 days. (R4, tab 1)

2
  The Board's inquiry in ASBCA No. 59114 was prompted by documents provided in
       support of the government's motion to dismiss in ASBCA No. 59186 (gov't
       mot. in No. 59186) for want ofUSAC's corporate capacity. Although ASBCA
       No. 59114 arises under a separate contract, both contracts were between DLA
       and USAC and overlapped in time. The government's motion in No. 59186
       raised jurisdictional questions in No. 59114. Appellant was notified on
       23 February 2017 that unless it provided_ timely and credible rebuttal, the Board
       would consider relevant portions of the record from No. 59186 in the instant
       appeal. Appellant did not respond to this order; accordingly, we consider the
       record from ASBCA No. 59186 in evaluating our jurisdiction over ASBCA
       No. 59114.
3
  We note that USAC used different CAGE codes in the contracts underlying
      Nos. 59114 and 59186. From appellant's correspondence, we understand these
       to be two different divisions under the same corporate aegis. As appellant did
      not distinguish between these as separate entities, we treat "USAC" as a single
      business for purposes of this decision.

                                           2
        Also on 3 May 2010, DLA issued DO 1 under the contract for a total of 1,082
latches at $44.50 each (R4, tab 6). Prior to terminating the contract for default, DLA
issued several unilateral modifications pertaining to DO 1 (R4, tabs 7-10). On 10 May
2010, contract Modification No. 000101 "incorporate[ d] the First Article Test information"
(R4, tab 7). On 10 December 2010, contract Modification No. 000102 identified an
alternate material and revised the delivery schedule (R4, tab 8). Contract Modification
No. 000103 dated 20 January 2011 revised the delivery schedule and set a schedule for first
article testing, with the FAT and report due 18 April 2011 (R4, tab 9). A modification of
12 April 2013 extended the delivery dates for CLINs 0001-0003 (R4, tab 10).

       On 30 July 2013, the contracting officer (CO) issued a "SHOW CAUSE
NOTICE" to the contractor, advising that "the Government is considering terminating
your contract for default." DLA advised that USAC had "neither delivered the
required supplies nor [had it] requested a new delivery date." The contractor was
given "10 days after your receipt of this notice" to respond. (R4, tab 30)

       USAC replied to the Show Cause Notice on 2 August 2013. It attributed
performance deficiencies to its supplier Robinson Manufacturing for providing a
nonconforming casting. USAC asked for an additional payment of $1,500 and an
extension of 60-90 days to correct the failure. (R4, tab 31)

      The CO on 19 September 2013 notified USAC that the instant contract was
terminated for default (R4, tab 33). The CO on 20 September 2013 issued contract
Modification No. POOlOl, a separate notice of termination for default of CLINs 0001
and 0002 (DO 1). The address listed for USAC in this modification was "117 4 East
Edna Plc, Covina CA 91724-2507 USA." (R4, tab 5)

USAC's Appeal in ASBCA No. 59114 of the Government's Termination/or Default of
DOI

       On 3 January 2014, the ASBCA received USAC's appeal from the CO's
decision to terminate the contract for default. Attached to that notice was a copy of the
CO's separately issued contract modification that terminated DO 1. The Board
docketed this appeal as ASBCA No. 59114.

       USAC's correspondence of 3 March 2014 was signed by Michael Sammon as
"President/Director of Operations." This letter confirmed that he was the "Company
Official qualified" under Board Rule 26. 4 Appellant said that it would advise the
Board if it retained legal representation, but has not done so.

4
    This rule has been renumbered as Board Rule 15 Representation.

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The Government's Second Motion to Dismiss in ASBCA No. 59114 and Appellant's
Opposition to the Motion

       The government on 4 February 2015 filed its second motion to dismiss in ASBCA
No. 59114. It noted that the Board's ruling of 4 December 2014 dismissed as untimely
ASBCA No. 59115, which arose from USAC's challenge to termination of the
underlying contract. The government reasoned that "DLA terminated for default all of
the delivery orders-including Delivery Order 0001, the subject of [ASBCA No. 59114]
- when it terminated for default USAC's IDIQ contract." (Gov't 2nd mot. at 7)

       The Board on 23 February 2015 ordered appellant to submit its opposition to
the government's second motion to dismiss by 10 April 2015. The order allowed the
government the option of replying by 11 May 2015, and gave appellant the
opportunity to submit a final response by 11 June 2015.

      USAC characterized its 10 April 2015 submission as its "opposition to the
government's [second motion to] dismiss." The contractor's correspondence did not
address the consequences ofthe Board's dismissal of ASBCA No. 59115.

The Board's Order for Supplemental Briefing

       In considering the government's second motion to dismiss, the Board's review
of the overall record raised other concerns. This included unrebutted information
submitted as part of a government motion in ASBCA No. 59186. Documentation
provided by the government from the California and Nevada secretaries of state
brought into question the corporate viability ofUSAC, and to Mr. Sammon's
representative capacity, at all times relevant to making and sustaining both ASBCA
Nos. 59114 and 59186.

       As provided in Board Rule 7 Motions, ii (b) Jurisdictional Motions, the ASBCA
on 5 May 2015 issued sua sponte an Order for Supplemental Briefing on the issues of
USAC's continued corporate capacity and Mr. Sammon's compliance with Board Rule
15 Representation. The parties were ordered to address "whether ( 1) USAC possessed
sufficient corporate capacity, and (2) Michael Sammon's adequate legal authority, to
bring and prosecute this appeal." The order directed the parties' attention to its
decision in "Easterbrook/Ramco, ASBCA No. 42176 [et al.], 94-2 BCA ii 26,658 and
[to] Nevada Revised Statutes (NRS) § 78.175 DEFAULTING CORPORATIONS: DUTIES
OF SECRETARY OF STATE; REVOCATION OF CHARTER AND FORFEITURE OF RIGHT TO
TRANSACT BUSINESS; DISTRIBUTION OF ASSET[S], including NRS 78.175(2)."

       The parties were told to "exchange with one another, and submit to the Board, a
supplemental brief pertaining to the Board's jurisdiction over [ASBCA No. 59114]
that addresses the questions framed" in the order. This order cautioned USAC that its

                                          4
failure to provide responsive answers to the questions posed therein would result in the
Board's drawing an adverse inference regarding the requisite status of each and the
serious consequences thereof:

                      If it is USAC's position that both USAC and
              Michael Sammon were duly authorized to bring and
              prosecute this appeal, it is required to furnish proof for
              these contentions. Failure to do so in either instance will
              result in the Board's drawing adverse inferences and
              dismissal of this appeal for want of jurisdiction.

       USAC's letter of 11 June 2015 did not address the Board's inquiry; rather, it
further asserted the merits of its appeal.

                                      DECISION

        Despite repeated opportunities, USAC failed to provide any evidence that
Mr. Sammon was an authorized representative as required by Board Rule 15. Having
warned USAC of the consequences of failing to furnish credible evidence, the Board
draws the following adverse inference. We find that USAC purportedly entered into the
subject contract as a corporation but failed to furnish proof that Michael Sammon is a
qualified corporate representative, to bring and maintain this appeal. This conclusion is
based upon appellant's failure to rebut evidence submitted in ASBCA Nos. 59114 and
59186. USAC failed to comport, as it must, with Board Rule 15 Representation. See,
e.g., Smart Construction & Engineering Co., ASBCA No. 59354, 15-1BCA~36,018.

       It is unnecessary that we consider the government's second motion to dismiss.

                                    CONCLUSION

      Since the Board is unable to proceed without a proper representative, ASBCA
No. 59114 is dismissed without prejudice.

      Dated: 26 April 2017

                                                   Administrative Judge
                                                   Armed Services Board
                                                   of Contract Appeals

(Signatures continued)

                                            5
 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

       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. 59114, Appeal ofUSAC Aerospace
Group Inc. dba USAC Aerospace Group: Aerostructures, rendered in conformance with
the Board's Charter.

       Dated:

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

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