ASBCA 59876

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) BAE Systems Southeast Shipyards Mayport LLC ) ASBCA No. 59876 ) Under Contract No. N00024-1 O-C-4406 ) APPEARANCES FOR THE APPELLANT: Robert E. Korroch, Esq. William A. Wozniak, Esq. Williams Mullen Norfolk, VA APPEARANCES FOR THE GOVERNMENT: Ronald J. Borro, Esq. Navy Chief Trial Attorney Anthony K. Hicks, Esq. Trial Attorney OPINION BY ADMINISTRATIVE JUDGE WOODROW ON APPELLANT'S MOTIONS FOR SUMMARY JUDGMENT AND FOR STAY INTRODUCTION This appeal involves a dispute over the calculation of an award and incentive fee under a cost-plus award fee contract for maintenance and repair of CG 4 7 and DDG 51 class ships at the Naval Station Mayport, in Jacksonville, Florida. On 10 April 2016, appellant, BAE Systems Southeast Shipyards Mayport LLC (BAE or appellant), filed a motion for summary judgment, contending that it is entitled to the full award and incentive fee determined during the sixth evaluation period under Contract No. N00024-1 O-C-4406. Appellant asserts that it is entitled to an award and incentive fee payment of $1,895,525.70 based on its composite rating of 84.6 percent for the sixth evaluation period. Appellant contends that the government improperly reduced that amount in Phase II of the evaluation period when the government concluded that appellant did not achieve the 40 percent rate for small business subcontractor utilization that the contract required for payment of the fee without deduction. On 22 July 2016, appellant filed a motion to stay pending its motion for summary judgment. The government opposes appellant's motion for summary judgment, arguing that there are genuine issues of material fact regarding the method of calculating the small business utilization percentage and regarding the specific costs appellant included in its calculation of the percentage. The government did not file a cross-motion for summary t I judgment, but instead set forth its own competing statement of undisputed facts within its opposition brief. The government further opposes appellant's motion for stay. We deny appellant's summary judgment motion as to the interpretation of the contract provision setting forth the small business utilization percentage and because genuine issues of material fact remain regarding the correct figures to be included in the calculation. We deny appellant's motion for a stay as moot. STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS 1. The Department of the Navy, Southeast Regional Maintenance Center, Jacksonville, Florida (government), awarded Contract No. N00024-10-C-4406 to BAE on 13 September 2010 (R4, tab 10). The contract is a cost-plus-award-fee contract for maintenance and repair of CG 4 7 and DDG 51 class ships (id. at 51 ). 2. The contract provides for the payment of an award fee and an incentive fee. The purpose of the award fee is to encourage and reward superior performance in the management and technical areas of the contract. The purpose of the incentive fee is to encourage and reward cost control and completion of work on or before negotiated milestone completion dates. (R4, tab 10 at 34, 41) The contract provides that the award and incentive fees are evaluated in two distinct phases for each fee evaluation period (id. at 34). 3. In Phase I, award and incentive fees are determined (R4, tab 10 at 34), while in Phase II, the total award and incentive fee calculated in Phase I is adjusted based on the contractor's performance in subcontracting to small businesses (id. at 44-46). The contract states that the contractor must subcontract at least 40 percent of the direct costs of the contract to small business concerns during each fee evaluation period (id. at 51, 128-29). 4.