Capy Machine Shop, Inc. ( 2014 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
Capy Machine Shop, Inc. ) ASBCA No. 59085)
Under Contract No. SPE4A6-13-M-S227 )
APPEARANCE FOR THE APPELLANT: Mr. Salvatore Capacchione
President
APPEARANCES FOR THE GOVERNMENT: Daniel K. Poling, Esq.
DLA Chief Trial Attorney
Edward R. Murray, Esq.
Adrienne D. Bolton, Esq.
Trial Attorneys
DLA Aviation
Richmond, VA
OPINION BY ADMINISTRATIVE JUDGE TUNKS ON THE GOVERNMENT'S
MOTION FOR SUMMARY JUDGMENT
The government moves for summary judgment, alleging that there are no
material facts in dispute and appellant's alleged default is unexcused. As a result, the
government asserts that it is entitled to summary judgment as a matter of law.
STATEMENT OF FACTS FOR PURPOSES OF THE MOTION
1. On 25 September 2013, Mr. John Vlachos, general manager of Capy,
accepted Order No. SPE4A6-13-M-S227 in the amount of $37,431.60. 1 The order
required Capy to supply 27 splice fairings and a first article to the Defense Logistics
Agency Aviation (DLA Aviation), a field activity of the Defense Logistics Agency.
(R4, tab 1 at l(A), 2of24) The delivery date for the production quantity was
18 February 2015 (R4, tab 2 at 2of2). 2
1
The order resulted from a Request for Quotations issued by the government on
16 August 2013 (R4, tabs 3, 4).
2
The order required the delivery of a First Article Unit, 30 days after the production
quantity. This obvious mistake is not alleged to be relevant to this appeal.
2. The order incorporated FAR 52.249-8, DEFAULT (FIXED-PRICE SUPPLY AND
SERVICE) (APR 1984) by reference (R4, tab 1 at 23of24). The clause provides, in
part, as follows:
(a)(l) The Government may, subject to paragraphs
(c) and (d) of this clause, by written notice of default to the
Contractor, terminate this contract in whole or in part if the
Contractor fails to--
(i) Deliver the supplies or to perform the services
within the time specified in this contract or any extension;
(c) Except for defaults of subcontractors at any tier,
tqe Contractor shall not be liable for any excess costs if the
failure to perform the contract arises from causes beyond
the control and without the fault or negligence of the
Contractor. Examples of such causes include (1) acts of
God or of the public enemy, (2) acts of the Government in
either its sovereign or contractual capacity, (3) fires,
(4) floods, ( 5) epidemics, ( 6) quarantine restrictions,
(7) strikes, (8) freight embargoes, and (9) unusually severe
weather. In each instance the failure to perform must be
beyond the control and without the fault or negligence of
the Contractor.
(d) If the failure to perform is caused by the default
of a subcontractor at any tier, and if the cause of the default
is beyond the control of both the Contractor and
subcontractor, and without the fault or negligence of either,
the Contractor shall not be liable for any excess costs for
failure to perform, unless the subcontracted supplies or
services were obtainable from other sources in sufficient
time for the Contractor to meet the required delivery
schedule.
3. On 7 November 2013, Mr. Vlachos emailed Mr. Donnie W. Graves, the
contracting officer (CO), as follows:
Please cancel the above contract at no cost to Capy
Machine.
2
Our forming vendor can't locate his tooling[.]
(R4, tab 6)
4. On 13 November 2013, CO Graves issued a show cause notice to Capy:
Because you have indicated in an e-mail dated
07 NOV 2013 citing an inability to locate tooling on
contract SPE4A7-13-M-S227 within the time required by
its terms and thereby requesting termination for
convenience, the Government is considering terminating
this contract under the provisions for default. Pending a
final decision in this matter, it will be necessary to
determine whether your failure to perform arose from
causes beyond your control and without your fault or
negligence. Accordingly, you are given the opportunity to
present, in writing, any facts bearing on the question to
me ... within 10 days after receipt of this notice ....
If you have any questions, please contact
Len DuPilka, Contract Administrator....
(R4, tab 7)
5. On 26 November 2013, Mr. Vlachos emailed Mr. Len J. DuPilka, the
contract administrator, as follows:
The cost of new tooling is $19,647.00 total which wasn't
included on the quote.
That is the reason for asking to cancel this contract.
(R4, tab 8)
6. The record contains a quotation from Banner Metalcraft, Inc., dated
18 October 2013, 3 which includes a one-time tooling charge of $19,647.00
(compl., attach.).
7. On 12 December 2013, Ms. Janice Hicks, the terminating contracting officer
(TCO), terminated the contract for default, stating as follows:
3
The contract having been awarded on 25 September 2013.
3
You are hereby notified that contract SPE4A6-13-M-S227
is terminated for default effective immediately. Your right
to proceed further with performance of this contract is
terminated. The termination is based on your failure to
perform in accordance with the terms and conditions of the
contract. The terminated supplies may be procured against
your account and you will be held liable for excess costs.
(R4, tab 10)
8. On 19 December 2013, Capy appealed the TCO's final decision to this
Board where it was docketed as ASBCA No. 59085.
DECISION
Summary judgment is properly granted only where the moving party has met its
burden of proving the absence of any genuine issue of material fact and proven that it
is entitled to judgment as a matter oflaw. Mingus Constructors, Inc. v. United States,
812 F.2d 1387, 1390 (Fed. Cir. 1987). In this appeal, the government bears the burden
of proof to justify the default termination. If the government establishes a prima facie
case that the termination was justified, the burden shifts to the contractor to
demonstrate that the default was excusable. Hanley Industries, Inc., ASBCA
No. 56584, 14-1 BCA if 35,699.
The government argues that there are no material facts in dispute and that it is
entitled to summary judgment on the ground of anticipatory repudiation. By email
dated 7 November 2013, Mr. Vlachos, Capy's general manager, requested CO Graves
to cancel the contract at no cost because its forming vendor could not find its tooling.
On 26 November 2013, Mr. Vlachos emailed Mr. DuPilka, the contract administrator,
again requesting that the government cancel the contract. Capy stated that the reason
for its request was that the cost of new tooling was $19,647 and that it could not afford
to perform the contract.
The government has not demonstrated that Capy repudiated the contract.
Anticipatory repudiation requires a "positive, definite, unconditional, and
unequivocal" manifestation on the part of the contractor that he will not perform the
contract. Cascade Pacific International v. United States, 773 F.2d 287, 293 (Fed. Cir.
1985). Capy communicated with the CO twice before the contract was terminated.
On 7 November 2013, Capy requested a no cost cancellation, stating that its "forming
vendor can't locate his tooling." On 26 November 2013, Capy advised that the "cost
of new tooling is $19,647.00 total which wasn't included on the quote. That is the
4
reason for asking to cancel this contract." These communications do not reflect a
positive, definite, unconditional and unequivocal refusal to perform.
Accordingly, the government's motion for summary judgment is denied.
Dated: 22 October 2014
(}/, r/
~
......_ ,/""'11\_....,,/__.?1(.r(c{-;, 'I
·1~
J_ -·,_~-
ELIZ~ETH A. TUNKS
Administrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
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. 59085, Appeal of Capy
Machine Shop, Inc., rendered in conformance with the Board's Charter.
Dated:
JEFFREYD. GARDIN
Recorder, Armed Services
Board of Contract Appeals
5