ASBCA 59091

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of-- ) ) Atlas International Trading Corporation ) ASBCA No. 59091 ) Under Contract No. FA8240-10-M-U025 ) APPEARANCES FOR THE APPELLANT: Terry L. Elling, Esq. Megan M. Mocho Jeschke, Esq. Elizabeth N. Jochum. Esq. Holland & Knight LLP McLean, VA APPEARANCES FOR THE GOVERNMENT: Lt Col James H. Kennedy III, USAF Air Force Chief Trial Attorney Erika L. Whelan Retta, Esq. Capt Amy K. Siak, USAF Capt Eric J. Singley, USAF Trial Attorneys OPINION BY ADMINISTRATIVE JUDGE MCILMAIL ON THE GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT The government moves for summary judgment, contending that appellant's bribery of the government's program manager makes the contract at issue in this appeal void ab initio. The Board grants the motion and denies the appeal. 1 STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 1. On 20 January 2010, the Department of the Air Force (government) and Atlas International Trading Corporation (appellant) entered into Contract No. FA8240-10-M-U025, for the provision of a "l 9Zh6 Zip Kit" ( compl., ex. A at 1, 3 of 12). 2. From 2008 through about August 2011, Sylvester Zugrav, appellant's owner and director, paid Jose L. Mendez, a government program manager, more than $185,000, in exchange for favorable procurement treatment (gov't mot., attach. 1 at 3-4, if 11, attach. 2 at 4-5, if 11). As part of that arrangement, in 2009, Mr. Zugrav offered to pay Mr. Mendez 1 This appeal has been consolidated with ASBCA Nos. 59090 and 59092 through 59111, which address other contracts, but only this appeal, ASBCA No. 59091, is the subject of the government's motion. Although the government styles the motion as one for partial summary judgment, the motion seeks denial of ASBCA No. 59091 in its entirety. $80,000 if appellant received a contract for a Zip Kit, and Mr. Mendez provided appellant the information (not provided to other potential vendors) that (1) the government needed a 19Zh6 Zip Kit, and (2) the government's budget for that item was $500,000 (gov't mot., attach. 1 at 5, ~ (b), at 9, ~ (f), attach. 2 at 6, ~ (b), at 10, ~ (e); app. reply at 12, ~ 1). Appellant subsequently submitted to the government an "unsolicited proposal" that a contracting officer (CO) (who was not Mr. Mendez) accepted, awarding the contract to appellant for $553,000, the amount that appellant had proposed (compl., ~ 20, ex. A; app. reply at 12, ~ 2). Subsequently, Mr. Mendez (on 24 October 2011) and Mr. Zugrav (on 26 February 2013) pleaded guilty to violating 18 U.S.C. § 371, Conspiracy to Commit Bribery, including for activities relating to the 19Zh6 Zip Kit procurement (gov't mot., attach. 1at1, 9-10, attach. 2 at 1, 10-11). Mr. Mendez also pleaded guilty to violating 18 U.S.C. § 20l(b)(2), Bribery; and 18 U.S.C. § 423, Procurement Fraud, including for activities relating to the 19Zh6 Zip Kit procurement (gov't mot., attach. 2 at 1-2, 10-11). Thus, appellant obtained the contract by bribing a government program manager; but for that bribery, appellant would not have obtained the contract. 3. On 27 June 2013, the government terminated the contract for cause (compl., ex:B). 4. Appellant received the CO's final decision on 28 September 2013 (compl., ex. B). 5. On 24 December 2013, appellant timely filed this appeal from the CO's final decision. DECISION The government requests summary judgment in its favor, and that the appeal be denied. Summary judgment shall be granted if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter oflaw. FED. R. CIV. P. 56(a); Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed. Cir. 1987). The government requests that the Board deny the appeal from the termination of the contract because, the government contends, the contract was tainted by fraud (that is, bribery of the government's program manager) from its inception, and so is void ab initio.