ASBCA 58491

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of-- ) ) CP of Bozeman, Inc. ) ASBCA No. 58491 ) Under Contract No. FA4626-12-H-OOO 1 ) APPEARANCE FOR THE APPELLANT: Mr. Raul Luciani Owner APPEARANCES FOR THE GOVERNMENT: Lt Col James H. Kennedy III, USAF Air Force Chief Trial Attorney Anna F. Kurtz, Esq. Capt George Mathew, Esq. Trial Attorneys OPINION BY ADMINISTRATIVE JUDGE CLARKE This appeal involves a termination for cause of a Non-Appropriated Fund Instrumentality (NAFI) concession contract to operate two food concessions on Malmstrom Air Force Base (AFB), Montana. We deny in part and sustain in part. FINDINGS OF FACT 1. On 12 July 2011the341st Force Support Squadron issued a Request for Proposals for a NAFI contract to operate food concessions at the Community Activities Center (Grizzly Bend) and the Bowling Center (Aces High) on Malmstrom AFB (supp. R4, tab 1). 2. By email dated 20 July 2011, Mr. Luciani, owner of CP of Bozeman, Inc., submitted a list of questions to Ms. Redding, contract specialist, that included: - Please provide head count and income for the past twelve months[.] - Please provide expenses for the past twelve month[s]. - Please provide estimate of assume inventory at bowling alley. Is there any inventory to assume at the Grizzly? When will the questions and answers be released?  - Please provide building seating capacity. (Supp. R4, tab 5 at 3) These questions were sent to the First Support Squadron to be answered (tr. 2/38, 71-72). The 26 July 2011 response to Mr. Luciani took the form of a "Questions and Answers" (Q&A) document that included the following: Q: What is the head count and income for the past 12 months for the Bowling Center? A: Head count: 3,429 per month; income: $246,872 (cost of goods - 40%). Q: What are expenses for the past twelve months for the Bowling Center? A: Supplies - $30,265; minor maintenance - $2,942; coupons - $8,317; personnel - $86,834. Q: What is the head count and income for the past 12 months for the CAC [Community Activities Center]? A: Head count: 750-1000 per month; income: $146,747 (cost of goods -40%). Q: What are the expenses for the past twelve months for the CAC? A: Maintenance - $3,821; Coupons - $1,194; Supplies - $12,013; Personnel Cost - $72,203. (Supp. R4, tab 5 at 1) Mr. Luciani thought the financial information provided on 26 July 2011 was "odd" in its format, but he did not ask follow-up questions about it (tr. 1/98). He testified that he interjJreted the information to show "$1,000 a month positive flow" but he didn't take into account the monthly stipends of$1,000 and $750.00 (tr. 11110-11) (see finding 3). Concerning the Q&A response (R4, tab 34 at 9), Mr. Luciani was asking for total gross sales information (tr. 11150). At the trial he testified that the answer "$246,000.00 ... cost of goods .. .40 percent" meant that the 40% came out of the $246,872 (tr. 11151). 1 3. Contract No. FA4626-12-H-0001 (0001) was awarded to CP of Bozeman on 17 October 2011 to operate two concessions (R4, tab 1 at 2). In consideration for the 1 In his 14 October 2012 claim Mr. Luciani argued that the "cost of goods -40%" was misleading and should have been listed with the other expenses (R4, tab 34 at 2). 2 contract, CP of Bozeman was to pay a monthly stipend of $1,000 for Grizzly Bend and $750 for Aces High and 7% of gross sales for each (R4, tab 1 at 1). The contract included the following relevant clauses: 2. Termination: Notwithstanding the clause titled "Termination for Convenience" of the General Provisions relative to termination of this Concessionaire contract, it is mutually agreed that this Concessionaire contract may be terminated in whole or in part by either party: a.