Western Trading Company ( 2018 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
Western Trading Company ) ASBCA No. 61004
)
Under Contract No. W5KA4N-11-P-0126 )
APPEARANCE FOR THE APPELLANT: Mr. Amanullah Tanha
General Director
APPEARANCES FOR THE GOVERNMENT: Raymond M. Saunders, Esq.
Army Chief Trial Attorney
CPT Jeremy D. Burkhart, JA
Trial Attorney
OPINION BY ADMINISTRATIVE JUDGE OSTERHOUT ON THE
GOVERNMENT'S MOTION TO DISMISS FOR LACK OF JURISDICTION
This is an appeal of a contracting officer's denial of a claim by Western Trading
Company (Western Trading or appellant), alleging that it is owed $379,000.00 for
delivery of vehicles to Camp Arena, Herat, Afghanistan, pursuant to Contract
No. W5KA4N-11-P-0126 (the contract). The Herat Regional Contracting Office
(government or Army) filed a motion to dismiss for lack of subject matter jurisdiction,
arguing that the contract was terminated for cause on 19 March 2011 but Western
Trading failed to appeal the termination decision within 90 days as required by the
Contract Disputes Act (CDA) 41 U.S.C. §§ 7101-7109. Despite receiving
correspondence on multiple occasions from the Board, Western Trading did not respond
in any way to the government's challenge to our jurisdiction. We grant the motion.
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION
1. On 5 February 2011, the Herat Regional Contracting Office executed Contract
No. W5KA4N-11-P-0126 to Western Trading (R4, tab 1 at 1). The contract was issued
in the amount of $290,000.00 for two armored 2011 Toyota Land Cruisers in new
condition (id. at 4) and one armored 2011 Toyota Hilux Pick Up for $98,999.99 (id. at 5)
for a total of $388,999.99.
2. The government required the vehicles by 28 February 2011 (R4, tab 1 at 5-6).
3. The contract incorporated by reference Federal Acquisition Regulation (FAR)
52.212-4, CONTRACT TERMS AND CONDITIONS-COMMERCIAL ITEMS (JUN 2010) (R4,
tab 1 at 6). This clause states, in relevant part:
(d) Disputes. This contract is subject to the Contract
Disputes Act of 1978, as amended (41 U.S.C. 601-613).
Failure of the parties to this contract to reach agreement on
any request for equitable adjustment, claim, appeal or action
arising under or relating to this contract shall be a dispute to
be resolved in accordance with the clause at FAR 52.233-1,
Disputes, which is incorporated herein by reference. The
Contractor shall proceed diligently with performance of this
contract, pending final resolution of any dispute arising
under the contract.
(m) Termination for cause. The Government may
terminate this contract, or any part hereof, for cause in the
event of any default by the Contractor, or if the Contractor
fails to comply with any contract terms and conditions, or
fails to provide the Government, upon request, with
adequate assurances of future performance. In the event of
termination for cause, the Government shall not be liable to
the Contractor for any amount for supplies or services not
accepted, and the Contractor shall be liable to the
Government for any and all remedies provided by law. If it
is determined that the Government improperly terminated
this contract for default, such termination shall be deemed a
termination for convenience.
4. FAR 52.233-1, DISPUTES, states in relevant part:
(f) The Contracting Officer's decision shall be final
unless the Contractor appeals or files a suit as provided in
[the CDA].
5. The contracting officer (CO) and the Western Trading representative,
Mr. Amanullah Tanha, communicated via email (R4, tabs 2, 3, 9, 12).
6. When the CO sent the contract to Mr. Tanha, he documented via email, "As
we discussed earlier, it is important you have the vehicles delivered by the 28th of
February" (R4, tab 2 at 1).
7. Also on 5 February 2011, Mr. Tanha informed the government, via email, that
he would be able to deliver the vehicles before 28 February 2011 but that he would need
a letter from the U.S. Military to give to Afghan customs to clear the vehicles. A cure
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notice was issued on 3 March 2011, giving Western Trading two days to cure the
non-delivery of the vehicles under the contract. Appellant failed to respond. (R4, tab 3)
8. On 7 March 2011, the CO sent Western Trading a show cause notice
regarding why the contract should not be terminated for cause. The show cause notice
contained details of what transpired:
On 5 February 2011 you were awarded and accepted the
subject contract for the delivery of 2 each, B7 armored
Sports Utility Vehicles and 1 each, B6 armored pickup truck
with a required delivery date of not later than 28 February
2011. Following a phone call the same day, you confirmed
by email that you could provide the vehicles by the required
delivery date. On 18 February you were emailed by the
customer, MAJ Jenkins and replied with a confirmation you
can provide the vehicles by the required delivery date. On
25 February, you stated the vehicles were at customs in
Kabul and awaiting escorts, but guaranteed delivery by
28 February. On 27 February, your company stated the
vehicles cleared customs and scheduled a delivery time of
1400 local hours on 28 February. No delivery was made on
28 February 2011 and your company could not verify the
whereabouts of these vehicles. On 1 March 2011, I asked
for written assurance (i.e., commercial invoice from
supplier, VIN numbers for vehicles, bill of lading) that you
have the vehicles in possession and will still deliver the
vehicles. Your company has failed to provide any such
documentation.
The CO required an answer within 48 hours after receipt of the notice. (R4, tabs 4-5)
Appellant again failed to respond. Based on the record, we find that the vehicles were
never delivered to the government.
9. On 19 March 2011, after not receiving any answers, the CO terminated the
contract for cause via email with Modification No. POOOO 1. The termination modification
included standard final decision language and instructions for appeal, including that
Western Trading "must, within 90 days from the date you .receive this decision, mail or
otherwise furnish written notice to the agency board of contract appeals and provide a copy
to the CO from whose decision this appeal is taken." (R4, tab 6; see also R4, tabs 8-9)
10. On 31 October 2015, over four years after the termination for cause, Western
Trading filed a notice of appeal with the Board. It was docketed as ASBCA No. 60860.
On 3 November 2016, the Board requested that appellant provide a copy of the claim it
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had submitted to the CO prior to filing the appeal. Western Trading indicated it desired
to submit its claim to the CO and the government provided the CO's contact
information. On 4 November 2016, the Board issued an order stating it intended to
dismiss the appeal absent any objection from either party.
11. By letter dated 5 November 2016, over five years after the termination for
cause and as the contract was being closed-out, Western Trading submitted a certified
claim to the closeout CO for $379,000 for the purchase and transportation of armored
vehicles to Camp Arena, Herat, Afghanistan. Western Trading included the contract,
several emails, and the termination modification with its claim. (R4, tab 12 at 1, 63-65)
We find that, as Western Trading never delivered the vehicles under the contract (SOF
, 8), this claim was a de facto challenge to the 19 March 2011 termination for cause.
12. On 10 January 2017, the CO denied Western Trading's claim because
Western Trading failed to deliver the vehicles prior to the date required in the contract
and the termination for cause. The CO also noted that Western Trading failed to deliver
any written documentation requested by the CO to demonstrate the vehicles were in the
country. (R4, tab 16) We further find that the CO did not act in a manner that signaled
that the underlying termination for cause was being reconsidered.
13. On 19 January 2017, Western Trading appealed the CO's final decision. The
appeal was docketed as ASBCA No. 61004. (R4, tab 18)
14. On 20 January 2017, Western Trading submitted a second notice of appeal that
the Board later ruled was from the same CO's final decision. This appeal was docketed as
ASBCA No. 61015. (R4, tab 19) See Western Trading Co., ASBCA No. 61015, 2017 WL
1277018. On 30 January 2017, the Board, having received no objection and after learning
that Western Trading had submitted a claim to the CO dated 5 November 2016 which was
appealed and docketed as ASBCA Nos. 61004 and 61015, dismissed ASBCA No. 60860
without prejudice. The order of dismissal specifically allowed ASBCA Nos. 61004 and
61015 to continue. Western Trading Co., ASBCA No. 60860, 2017 WL 629050.
15. On 21 March 2017, the Board administratively dismissed ASBCA No. 61015
because it was a duplicate of ASBCA No. 61004. See Western Trading, 2017 WL 1277018.
16. On 20 September 2017, the government filed a motion to dismiss for lack of
jurisdiction contending appellant's claim is "[b]ased on the same set of facts,
circumstances, and actions preceding the termination for cause and is inextricably bound
up with the propriety of the CO's decision to terminate for cause." Further, as the
government contended Western Trading failed to appeal the termination for cause within
90 days of the CO's final decision on 19 March 2011, the appeal should be dismissed.
(Gov't mot. at 12-14)
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17. On 28 September 2017, the Board allowed Western Trading 30 days from
the date of the Order to respond to the government's motion. The Board also stayed the
remaining portion of the appeal.
18. On 1 November 2017, having not received any correspondence from
Western Trading, the Board allowed Western Trading until 15 November 2017 to
respond to the government's motion and informed appellant that if it did not respond,
the Board would decide the case based on the record at hand. As of the date of this
decision, the Board still has not received any correspondence from Western Trading
regarding the government's motion.
DISCUSSION
We do not possess jurisdiction to consider this appeal because the underlying
claim is a de facto challenge to the 19 March 2011 termination for cause (SOF 1 11) and
Western Trading appealed the CO's final decision to terminate the contract for cause
more than 90 days after receipt of the final decision to terminate the contract.
The Board "has jurisdiction to decide any appeal from a final decision of a
contracting officer, pursuant to the Contract Disputes Act, 41 U.S.C. [§§] 7101-7109, or
its Charter, 48 CFR Chap. 2, App. A, Pt., 1, relative to a contract made by the Department
of Defense, the Department of the Army, the Department of the Navy, the Department of
the Air Force, the National Aeronautics and Space Administration or any other department
or agency, as permitted by law." ASBCA Rules, Preface. "Appellant, as the proponent of
the Board's jurisdiction, bears the burden of establishing jurisdiction by a preponderance
of the evidence." CCIE & Co., ASBCA Nos. 58355, 59008, 14-1BCA135,700 at
174,816 (citations omitted).
In order for the Board to possess jurisdiction, a contractor must appeal within
90 days from the date of receipt of a CO's final decision. 41 U.S.C. § 7104(a). "In the
case of a termination for cause, such as the one presented here, receipt of notification of
the CO's decision to terminate for cause begins the 90-day clock." Bushra Co., ASBCA
No. 59918, 16-1 BCA 136,355 at 177,238.
Here, it is undisputed that the government notified Western Trading of the
termination for cause via a notification letter and modification to the contract on
19 March 2011 but Western Trading failed to appeal the decision until over four years
later; well beyond the 90-day time period allowed. The termination for cause
modification clearly contained language demonstrating that this was a CO's final
decision and the contractor's appeal rights, including that any appeal must be made to
the Board within 90 days. (SOF 19) The latest date we would have possessed
jurisdiction at the Board was 17 June 2011, well before the first time appellant filed an
appeal with us on 31 October 2015 (SOF 1 10).
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While Western Trading's subsequent monetary claim to the closeout CO did not
specifically state that it was appealing or requesting reconsideration of the termination for
cause, there can be no other reasonable interpretation. However, the CO's decision to deny
the claim based on the same operative facts as the initial termination for cause did not
equate to a reconsideration of the termination decision (SOF, 12), and thus, did not act as
a stay to the running of the appeal period. The CO's decision is superfluous and has no
effect upon our jurisdiction here. Bushra, 16-1 BCA, 36,355 at 177,239. The subsequent
issuance of a CO's final decision on Western Trading's monetary claim does not diminish
the finality of the 19 March 2011 CO's final decision terminating the contract for cause.
In order for the Board to decide whether Western Trading is entitled to any recovery
under its claim, it would require us to review the propriety of the 19 March 2011 termination
for cause, which was appealed to the Board well beyond the 90-day time period. Moreover,
the record shows that Western Trading, who did not respond to the government's motion,
does not claim that the subsequent CO's final decision somehow affected the timeliness of the
appeal. Finally, because we found that the CO did not reconsider the earlier termination for
cause (SOF, 12), "it is well settled that communications after conclusion of the appeal period
'perforce could not have had any effect' on the view of the finality of the termination decision
during the appeal period." Bushra, 16-1 BCA, 36,355 at 177,239 (citing Shafi Nasimi
Constr. & Logistics Co., ASBCA No. 59916, 16-1 BCA, 36,215 at 176,698). Thus, we
conclude that Western Trading did not file a timely notice of appeal.
CONCLUSION
The appeal is dismissed.
Dated: 12 April 2018
HEIDI L ~ERHOUT
Administrative Judge
Armed Services Board
of Contract Appeals
I concur
~
RICHARD SHACKLEFORD OWEN C. WILSON
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
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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. 61004, Appeal of Western
Trading Company, rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
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