ASBCA 61349

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) Cooper/Ports America, LLC ) ASBCA No. 61349 ) Under Contract No. HTC711-15-D-R036 ) APPEARANCES FOR THE APPELLANT: W. Barron A. Avery, Esq. Brian V. Johnson, Esq. Baker & Hostetler LLP Washington, DC APPEARANCES FOR THE GOVERNMENT: Jeffrey P. Hildebrant, Esq. Deputy Chief Trial Attorney Caryl A. Potter, Esq. Lawrence M. Anderson, Esq. Danielle A. Runyan, Esq. Trial Attorneys OPINION BY ADMINISTRATIVE JUDGE SWEET This appeal involves a contract between the government and appellant Cooper/Ports America, LLC (C/PA) to provide stevedoring services. The government originally entered into the contract with Shippers Stevedoring Co. (Shippers). However, C/PA purchased Shippers’ interests in the contract, and entered into a novation agreement with the government. C/PA seeks reformation of the contract’s prices based upon a purported misrepresentation because the contracting officers (COs) allegedly promised that they would “work with” C/PA on the contract’s prices and purportedly misstated the existing fact that they could not revise the prices due to Shippers underbidding the contract. We hold that C/PA has failed to show that it is entitled to reformation based upon a misrepresentation because (1) the COs’ statements that they would work with C/PA did not constitute a binding promise, let alone a promise to revise the contracts’ prices; (2) the COs did not misstate the existing fact that the government could not revise the prices due to Shippers underbidding the contract; and (3) we cannot reform the contract to make it illegal. Therefore, we deny this appeal. FINDINGS OF FACT 1. On January 28, 2015, the United States Transportation Command (government) awarded contract HTC711-15-D-R036 (036 Contract) to Shippers to provide stevedoring and related terminal services at ports in the Southeastern United States (R4, tabs 1, 4). The 036 Contract was a firm-fixed price contract (R4, tab 4 at 4-6). 2. Shippers was losing money on the 036 Contract (tr. 22-23). Therefore, it approached the entity that ultimately became C/PA about an acquisition (tr. 122-23). 1 C/PA was interested in purchasing Shippers’ assets, but was hesitant to acquire the 036 Contract because Shippers’ prices were too low. Nevertheless, Shippers insisted upon the 036 Contract being included in the transaction. (Tr. 21-24) 3. During a coffee break at a meeting in May 2016, Christopher Smith, who subsequently became a C/PA Board Member (tr. 119-20), discussed C/PA’s potential acquisition of the 036 Contract with CO William Fugate (May Conversation) (tr. 108, 123-24). Mr. Smith explained that C/PA could not afford to assume the 036 Contract because Shipper’s prices were too low. There is no evidence that Mr. Smith informed CO Fugate that the reason that Shipper’s prices were too low was because Shippers underbid the 036 Contract. (Tr. 108, 124) 4. Mr. Smith testified that CO Fugate responded during the May Conversation that “[w]e can’t discuss the rates with you here, the process would be first you have to novate over the contract, you file a claim, and then we’d work with you; the government is not in the business of putting other companies out of business” (tr. 124). CO Fugate testified that he did not make the comment that the government is not in the business of putting other companies out of business in the context of the 036 Contract. Rather, CO Fugate testified that he made that comment in response to a more general criticism from Mr. Smith that the government was always trying to make stevedoring contractors lose money. (Tr. 109) CO Fugate also testified that he did not recall using the phrase “work with.” However, CO Fugate testified that he told Mr. Smith: that we would make no guarantee that those rates would change. So Mr. Smith asked for what they could do. And on a firm-fixed-price contract, I said that they could submit a claim under the disputes clause and we would evaluate the 1 Cooper/T. Smith and Ports America were two stevedoring/terminal-operating companies. Cooper/T.