ASBCA 61682

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) Aero Tech Services Associates, Inc. ) ASBCA No. 61682 ) Under Contract No. FA8106-17-D-0009 ) APPEARANCE FOR THE APPELLANT: Deborah Appel, Esq. Law Office of Deborah Appel Bronx, NY APPEARANCES FOR THE GOVERNMENT: Jeffrey P. Hildebrandt, Esq. Air Force Deputy Chief Trial Attorney Isabelle P. Cutting, Esq. Capt Jacquelyn C. Fiorello, USAF Trial Attorneys OPINION BY ADMINISTRATIVE JUDGE THRASHER Aero Tech Services Associates, Inc. (ATSA) seeks reimbursement for labor costs incurred under Contract No. FA8106-l7-D-0009 (“0009 Contract”) in logistical support of two E-9A aircraft at Tyndall Air Force Base, Florida. ATSA’s claim is that the fixed hourly labor rate to repair or replace aircraft parts, which applies to “subcontractors” under “Over & Above” (O & A) contract line item numbers (CLIN) X007AA, does not apply to “vendors”. Rather, ATSA’s position is that any labor hourly charges are part of the “material cost” for which ATSA is entitled to full reimbursement under CLIN 007AC. We deny the appeal. FINDINGS OF FACT Background 1. The 82nd Aerial Targets Squadron at Tyndall Air Force Base, Florida employs two E-9A aircraft whose primary mission is to act as a surveillance platform to ensure the Gulf of Mexico waters are clear of civilian boaters and aircraft during live missile launches and other hazardous military activities within the test range (R4, tab 6 at 53-54). These aircraft are maintained by contractor- provided logistics. Relevant to this appeal, the contractor-provided logistics support for these aircrafts, which includes over and above (O & A) tasks, engineering services including development, test and FAA certification of modifications, and installation of modifications and depot maintenance support (id. at 53). “O & A Charges are Government directed tasks within [the] scope of the contract but not specifically forecasted such as; [sic] bird strikes, lightning strikes, FOD [(foreign object damage)], dropped or damaged components,” and other government directed actions (R4, tab 6 at 14). ATSA currently provides this support under the 0009 contract. 2. This dispute arises out of a specific O & A situation when the appellant cannot repair or replace an item in-house and must remove the item and send it to an outside contractor for repair or replacement. Upon return of the item to appellant, the outside contractor will invoice appellant either charging a fixed labor rate or a total price encompassing both labor and material with no visibility or breakout of the amount or time or labor involved (tr. 22-23). Appellant refers to the outside contractor in these situations as a “vendor”, not a subcontractor, insisting that a “vendor” is distinguishable from a subcontractor and vendor charges are reimbursable as part of “material costs” under CLIN X007AC (app br. at 2). The end result being, appellant would be fully reimbursed for all labor costs. 3. In contrast, the government argues there is no separate “vendor” category under the contract because the term vendor is defined within the definition of subcontractor (gov’t br. at 8). Therefore in these situations, the contract’s hourly rate, whether disclosed or not, is capped by CLIN X007 at the hourly labor rate in the contract (id. at 6). Likewise, the government argues that material costs proposed by the contractor may not include labor costs (id. at 7). Comparison between the Previous Contract and the 0009 Contract Follow-on Solicitation 4. ATSA performed these logistics services for six years under the previous contract, Contract No. FA8106-11-C-0004 (0004 contract) (R4, tab 1). On August 4, 2016, the Air Force issued a request for proposals (RFP) for a follow-on contract under Solicitation No. FA8106-16-R-0008 (R4, tab 6 at 1). Relevant here, the government substantially changed the acquisition strategy related to the O & A pricing, converting the 0004 contract prime and subcontract O & A CLINs from cost to fixed price CLINs. Major Toyama, the lead contracting officer on the source selection, testified that the O & A 0004 contract prime and subcontractor costs for CLIN 0007 was converted into a firm fixed price CLIN in the 0009 contract based upon historical data from the previous six year contract. (Tr. 59-60) 5.