ASBCA 59191

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of-- ) ) Missouri Department of Social Services ) ASBCA No. 59191 ) Under Contract No. W911S7-09-D-0029 ) APPEARANCE FOR THE APPELLANT: Keith L. Baker, Esq. Baker, Cronogue, Tolle & Werfel, LLP McLean, VA APPEARANCES FOR THE GOVERNMENT: Raymond M. Saunders, Esq. Army Chief Trial Attorney MAJ Travis P. Sommer, JA CPT Harry M. Parent III, JA Trial Attorneys OPINION BY ADMINISTRATIVE JUDGE MCILMAIL INTRODUCTION On 6 July 2016, we severed this appeal, for purposes of decision, from ASBCA No. 58944, with which it was consolidated for hearing, and stayed that appeal pending a decision in this one. Only the issue of entitlement is before the Board (tr. 1/7). Appellant seeks an equitable adjustment of contract prices, or, in the alternative, a "termination settlement," following the government's partial termination for convenience of a requirements contract. 1 1 Although the conclusion of appellant's 3 June 2015 post-hearing briefing states that it is entitled to termination costs and an adjustment of contract prices, its briefing elsewhere indicates that it seeks those forms of relief only in the alternative (app. br. at 1, 15, 26). In addition, on 5 July 2016, appellant sent a letter to the Board, referring at page 3 to its "alternative claim for a termination settlement." We find that appellant seeks termination costs and an adjustment of contract prices only in the alternative, consistent with the approach in its claim to the contracting officer (R4, tab 76 at 5).  FINDINGS OF FACT 1. On 25 September 2009, the Mission and Installation Contracting Command-Fort Leonard Wood (government) awarded the contract referenced above to appellant, Missouri Department of Social Services, for the provision of food service operations at 18 dining facilities at Fort Leonard Wood, Missouri (R4, tab 1at1). 2 The contract was for a base year, with three option years, for services at 18 facilities, designated in the contract as DFACs 630, 653, 657, 735, 739, 754, 820, 821, 836, 930, 1010, 1011, 1740, 2105, 3223, 1268, 1231, and 5073 (id. at 3-11, 13, 23, 33). On 25 September 2009, the government issued Delivery Order No. 1, for services during the base year; that is, 26 September 2009 through 31 August 2010 (R4, tab 5). The government subsequently issued contract modifications that exercised the three option years; that is, through 31 August 2013 (R4, tabs 17, 26, 66). Appellant contracted with EDP Services, Inc. (EDP), pursuant to the Randolph-Sheppard Act, to submit a proposal for the contract and to perform the food services required under the contract (tr. 1/77-78). 2. In developing its proposed pricing for the contract, EDP relied on Technical Exhibits (TE-2s) supplied by the government for each dining facility (DFAC). The TE-2s specified for each DFAC information such as the operating schedule, serving hours, seating capacity, number of diners to be served per meal, and other relevant information that EDP relied on in coming up with a price (tr. 1142-43; app. supp. R4, tab 5 at 19-22 (representative example)). Based on that information, EDP built estimates of total costs per contract year to provide the required services at all 18 DF A Cs. Each of these total cost estimates contained both variable and fixed costs and profit at a rate of 3 percent. For instance, EDP estimated, for Option Year 2, total cost and profit of $30,457,068.71. 3 (App. supp. R4, tab 3 at 6). Variable costs within this amount consisted primarily of "production labor" (cooks, attendants, cashiers, etc.) that could be expected to vary in direct proportion to the volume of business in a DFAC (tr. 1/32-34; app. supp. R4, tab 3 at 5-6). Fixed costs included the salaries of the overall project manager, building managers, maintenance workers, and van operators; costs of the job site office at Fort Leonard Wood; and costs associated with the home office, which were unlikely to vary with volume of business (tr. 1134-36; app. supp. R4, tab 3 at 5-6). 3. The total number of "production hours" estimated by EDP for each year of the contract, including Option Year 2, for all 18 DFACs was 1,279,423 (tr. 1137; app. supp. R4, tab 3 at 5).