ASBCA 63243

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) NikSoft Systems Corp. ) ASBCA No. 63423-ADR ) Under Contract No. FA8771-17-F-0017 ) APPEARANCES FOR THE APPELLANT: Kristen L. Loesch, Esq. Josh S. Cergas, Esq. Praemia Law, PLLC Reston, VA APPEARANCE FOR THE GOVERNMENT: Caryl A. Potter III, Esq. Air Force Deputy Chief Trial Attorney SUMMARY BINDING DECISION BY ADMINISTRATIVE JUDGE SMITH The parties requested that entitlement in this appeal be decided by Alternative Dispute Resolution (ADR) using a one-judge summary proceeding with a binding decision. We approved the request along with the May 20, 2024, ADR agreement. Per that agreement this “decision [is] final, conclusive, not subject to reconsideration or appeal, and may not be set aside, except for fraud.” Similarly, this decision has no value as precedent and cannot be cited in any other proceeding. We have reviewed the entire record and the two ADR briefs from each party. We find no entitlement and deny the appeal. SUMMARY OF FACTUAL FINDINGS Appellant (NikSoft) was awarded a contract for “life cycle sustainment” (the sustainment work) of respondent United States Air Force’s (USAF’s) Cargo Movement Operations System (CMOS), which is an IT system that, as its name indicates, helps coordinate USAF’s movement of cargo. After NikSoft had earned over $8.3 million of the contract’s $9.4 million total value, USAF changed its future plans with a command directive to migrate CMOS to a cloud-based IT environment (the migration work). Once given the task to migrate CMOS, there was considerable discussion within USAF and between USAF and NikSoft regarding how the migration work would be accomplished. NikSoft asserted that the migration work was outside the scope of its sustainment contract and offered to negotiate an added-cost change order to perform the work. USAF considered whether the migration work was within the scope (and cost) of the sustainment contract but ultimately agreed that the migration work was outside NikSoft’s scope. After more consideration, USAF determined that it could not have NikSoft perform the migration work either within the bounds of the sustainment contract or as a change order. Without either of those options, USAF terminated of NikSoft’s contract for convenience and the migration work was performed by a different contractor, Ignite. NikSoft’s termination settlement was bilaterally resolved for an additional payment of $46,188.58 and is not disputed in this appeal. The termination settlement reserved NikSoft’s right to pursue this claim for lost profit of $629,576.16. NikSoft claims bad faith by USAF when it “acted to harm NikSoft through various means and ultimately forced an early end to the Contract on pretextual grounds.” NikSoft asserts that a patchwork of USAF personnel independently, or in cahoots, terminated Niksoft’s sustainment contract in order to award the migration work to Ignite. NikSoft alleges that USAF illicitly removed the migration work from the Small Business Administration’s (SBA) 8(a) program. Niksoft also argues that USAF’s “satisfactory” CPARS rating of NikSoft, which NikSoft characterizes as “negative”, was also bad faith. According to NikSoft, these bad acts were perpetrated for various reasons, some explained in conclusory fashion by NikSoft and some not explained at all. Most prominently, NikSoft argues that USAF decided (for a reason that NikSoft does not explain despite its many allegations regarding purported motivations of USAF personnel or groups) to terminate NikSoft’s contract as “punishment” and “retaliation” against NikSoft for its position that the migration work was outside the scope of the sustainment contract – a position that USAF eventually agreed with. Another alleged reason for terminating NikSoft was to steer the migration work to the contracting specialist’s (COR’s) “close friend’s company, Ignite.” To support its numerous allegations of bad faith, NikSoft relies a lot upon two affidavits from its own personnel. NikSoft also cites some internal USAF documents where USAF personnel debated and then decided on its final courses of action, including when and how to do the migration work, whether NikSoft’s contract could or should be used, the resulting termination for convenience, and the CPARS ratings. As an example, to support NikSoft’s contention about the COR’s “very close personal friend” at Ignite, NikSoft cites only to a paragraph in its own affidavit where conclusory and trivial “facts” are depicted.