ASBCA 58175

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) Kellogg Brown & Root Services, Inc. ) ASBCA No. 58175 ) Under Contract No. DAAA09-02-D-0007 ) APPEARANCES FOR THE APPELLANT: Jason N. Workmaster, Esq. Raymond B. Biagini, Esq. Alejandro L. Sarria, Esq. Patrick J. Stanton, Esq. Covington & Burling LLP Washington, DC APPEARANCES FOR THE GOVERNMENT: E. Michael Chiaparas, Esq. DCMA Chief Trial Attorney Carol Matsunaga, Esq. Senior Trial Attorney Defense Contract Management Agency Carson, CA OPINION BY ADMINISTRATIVE JUDGE SCOTT Kellogg Brown & Root Services, Inc. (KBR) appealed under the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109, from the contracting officer's (CO's) final decision denying its claim for subcontractor costs and asserting an $11,483,487 claim against it for subcontractor costs the government paid to KBR under a task order (TO) issued under the subject indefinite-delivery, indefinite-quantity (IDIQ) contract with the U.S. Army for logistical support. Previously, the Board denied KBR's motion for summary judgment that the government's claim was time-barred by the CDA's six-year statute of limitations and we granted the government's cross-motion for summary judgment that its claim was not time-barred, after a hearing on the motions. Kellogg Brown & Root Services, Inc., ASBCA No. 58175, 15-1BCA135,988 (KBR IV). We denied KBR's motion for reconsideration as untimely. Kellogg Brown & Root Services, Inc., ASBCA No. 58175, 15-1 BCA ,r 36,075. Thereafter, the Board conducted a hearing on entitlement and quantum. For the reasons that follow, we deny the appeal.  FINDINGS OF FACT The Contract, Task Order No. 59, and Regulations 1. Effective 14 December 2001, the U.S. Army awarded the subject IDIQ contract to Brown & Root Services pursuant to the Army's Logistics Civil Augmentation Program (LOGCAP). The contract (hereafter sometimes the "LOGCAP III" contract) was a negotiated services type. It required KBR, among other things, to provide combat services support, including dining facility (DF AC) services, for overseas contingency operations. 1 TOs could be issued on a firm-fixed-price or cost-reimbursement basis. On 1 August 2003 the contract was novated to KBR, a subsidiary of Kellogg Brown & Root, Inc. 2 (R4, tab 1 at 1; compl. and answer 1 103) 2. The contract incorporated by reference the Federal Acquisition Regulation (FAR) 52.216-7, ALLOWABLE COST AND PAYMENT (MAR 2000) clause (R4, tab 1 at 36), which provides in part: (a) Invoicing. The Government shall make payments to the Contractor when requested as work progresses ... in amounts determined to be allowable by the [CO] in accordance with Subpart 31.2 of the [FAR] in effect on the date of this contract[41and the terms of this contract.. .. (b) Reimbursing costs. (1) For the purpose of reimbursing allowable costs ... the term "costs" includes only- (ii) When the Contractor is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid, for- (A) Supplies and services purchased directly for the contract and associated financing payments to subcontractors, provided payments will be made- 1 A "contingency operation" refers to a military operation as defined in FAR 2.101. 2 The record includes other iterations of the contractor's name. For ease we use "KBR." 3 Support for this and other fact findings, regarding facts the parties have not disputed, is also found in the parties' motion papers, cited in the Board's Statement of Facts in KBR IV. Citations to the motion papers are not repeated here. 4 In this decision we apply the regulations in effect upon the date of contract award. 2  ( 1) In accordance with the terms and conditions of a subcontract or invoice .... 3.