ASBCA 61397

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of-- ) ) L&M Technologies, Inc. ) ASBCA No. 61397 ) Under Contract No. NNJ08JA01C ) APPEARANCE FOR THE APPELLANT: Ms. Antonette Montoya Chief Executive Officer APPEARANCES FOR THE GOVERNMENT: Scott W. Barber, Esq. NASA Chief Trial Attorney Wendy L. Bateman, Esq. Trial Attorney NASA Johnson Space Center Houston, TX Brian M. Stanford, Esq. Lisette S. Washington, Esq. Trial Attorneys NASA Headquarters Washington, DC OPINION BY ADMINISTRATIVE JUDGE CLARKE This appeal arises out of a contract for logistics operations services for the NASA Johnson Space Center (JSC), Houston, Texas. The parties dispute the proper interpretation of a clause dealing with unallowable costs. L&M Technologies, Inc. (L&M), claims $683,739.31 to account for Defense Contract Management Agency's (DCMA' s) 2009 final indirect rates. The parties decided to submit this case on the record pursuant to Board Rule 11. We decide entitlement only. We have jurisdiction pursuant to the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109. We sustain the appeal. FINDINGS OF FACT 1. On December 21, 2007, NASA awarded L&M Contract No. NNJ08JA01C for logistics operations services for JSC in Houston, Texas, including those facilities at JSC, Ellington Field, and the Sonny Carter Training Facility (R4, tab Oat 1, 5). The contract included a 54-day, phase-in period and up to 10 contract years (CYs) 1 of performance with a combination of cost-plus-fixed-fee, cost-plus-award-fee, and award 1 To avoid confusion, "CY" stands for "contract year" that runs from March to February, not calendar year. term options (id. at 6). The period of performance for each CY was from March to February 2 with CY 1 being from March 1, 2008 to February 28, 2009 (id. at 6-8). The contract year at issue in this appeal, CY 2, accordingly, is March 1, 2009 through February 28, 2010. Indirect Rates and Invoices 2. By letter dated April 28, 2008, the Defense Contract Audit Agency (DCAA) approved provisional billing rates for L&M' s fiscal year ending December 31, 2008 3 as: Description Indirect Rates Total FringeC4l 39.24% Overhead 9.56% G&A 5.29% (R4, tab 6) 3. On May 4, 2009, L&M submitted its 2009 estimated provisional rates to DCAA for approval (R4, tab 10 at 2; app. supp. R4, tab 19 at 2). L&M's 2009 estimated provisional rates were: Total Fringe at 41.95%, Overhead at 13.24%, and G&A at 5.32% (app. supp. R4, tab 15 at 1). 4. By letter dated May 13, 2009, to contracting officer (CO) Rubio, L&M documented a telephone conversation between CO Rubio and Mr. Silva, L&M controller, held on the same day, concerning L&M's indirect rate adjustments for the periods "CY-2008 (03/01/08-12/31/08) and CY-2009 (Ol/01/09-04/24/09)" 5 (app. supp. R4, tab 15). Mr. Silva wrote, "After addressing your concerns, I was delighted to hear that you have given us approval to process the rate adjustment invoices" (id. at 1). L&M billed 2008 provisional rates for both periods: 39.24% Total Fringe, 9.56% Overhead, and 5.29% G&A. The adjustment invoice for the first period was for the increase in 2008 actual rates. 6 The adjustment invoice for the second period was for the increase in 2009 estimated provisional rates of 41.95% Total Fringe, 13.24% Overhead, and 5.32% G&A. (Id.) Mr. Silva also wrote, "Effective April 25, 2009, the CY-2009 estimated provisional rates (Fringe 41.95%, 0/H 13.24%, and G&A 5.32%) are incorporated into the invoice and also into the 533M reporting and will remain in effect until December 31, 2009" (id.