ASBCA 62163

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) Lavender Co. ) ASBCA No. 62163 ) Under Contract No. M00146-18-D-X501 ) APPEARANCE FOR THE APPELLANT: Mr. Hong Sup Kim President APPEARANCES FOR THE GOVERNMENT: Craig D. Jensen, Esq. Navy Chief Trial Attorney Pamela Jean Castellano, Esq. Trial Attorney OPINION BY ADMINISTRATIVE JUDGE O'CONNELL Appellant, Lavender Co. (Lavender), seeks allegedly unpaid amounts on a contract for the provision of red shop rags. The parties elected to waive a hearing and to submit this appeal on the record under Board Rule 11. The Board denies the appeal. FINDINGS OF FACT 1. On November 7, 2017, the United States Marine Corps (USMC) awarded Lavender the above-referenced requirements contract (R4, tab 2 at 2). The contract provided for the issuance of delivery orders for laundry rental services of red shop rags to be used at the 2d Marine Air Wing, Marine Corps Air Station New River, Jacksonville, NC (R4, tab 2 at 5, 9). 1 2. The performance work statement (PWS) provided that the red shop rags were to be made of cotton and were to be “laundered and dried by the best commercial practices . . . free of paint, oil, grease, metal, plastics or other foreign materials” with “no objectionable odor” and “free of holes and torn, frayed or tattered edges” (R4, tab 2 at 5). It further provided that any rags containing hazardous waste or materials generated by the government were “the responsibility of the Contractor for storage, disposal[], and/or cleaning” (id. at 6). On November 3, 2017, Lavender advised the government that “[h]azardous material handling is not a problem . . .” (R4, tab 13 at 3). 1 R4 citations are to the .pdf page number in the electronic file.  3. The PWS provided that Lavender would deliver the required number of clean rags to each specified location on a weekly basis and pickup soiled rags at that time (R4, tab 2 at 6). Lavender understood that deliveries would be required at multiple locations each week because it advised a USMC contracting official on November 6, 2017 (the day before contract award), that “[w]e will make weekly pickup and delivery at each building at the base” (R4, tab 13 at 5). 4. The contract contained two contract line item numbers (CLINs). CLIN 0001 provided that Lavender would be paid $0.06 per rag up to an estimated quantity of 1,586,520 rags, which would result in payment of up to $95,191.20. CLIN 0002 provided for payment of $0.18 for each rag lost or destroyed, up to 10% of the total quantity without prior authorization of the contracting officer, for a maximum payment of $28,557.36. (R4, tab 2 at 5) 5. On November 22, 2017 (15 days after award), the contracting officer issued delivery order M00146-18-F-2800 (R4, tab 3 at 2). This order provided for the delivery of up to 7,375 rags per week to Marine Air Logistics Squadron-29 (MALS-29), with a performance period from November 27, 2017, to November 26, 2018. During this period, it provided for delivery of up to 383,500 rags and replacement of 38,350 with payment of up to $23,010 for CLIN 0001 and $6,903 for CLIN 0002 (id. at 4). The delivery order specified 10 buildings and the number of rags to be delivered weekly to each location (id. at 4-5). 6. Throughout the contract term, the various units Lavender was servicing complained about its performance. The most salient complaint given the nature of the dispute is that Lavender failed to deliver rags every week. On February 1, 2018, a customer complained that “[t]he rag situation is terrible . . . we only get a shipment once every 2-3 weeks instead of every week . . . .” (R4, tab 12 at 3) On February 6, 2018, a customer stated that after receiving a total of 1,500 rags one week, it did not hear from Lavender again for a month and only succeeded in getting more rags when a worker saw the company’s representative elsewhere on the air station (id. at 5-6). 7. Another significant problem emerged on January 23, 2018, when Lavender informed the USMC that about 15% of the rags it was receiving were soiled with grease and that it could not clean them. Lavender asked if the units could discard those rags. The USMC denied the request, observing that the contract provided that the rags were to be laundered and that the contract capped replacement at 10%. (R4, tab 13 at 16-17) 8.