ASBCA 58742

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) DCX-CHOL Enterprises, Inc. ) ASBCA No. 58742 ) Under Contract No. N00104-05-C-FA80 ) APPEARANCE FOR THE APPELLANT: James S. DelSordo, Esq. Argus Legal, LLC Manassas, VA APPEARANCES FOR THE GOVERNMENT: Ronald J. Borro, Esq. Navy Chief Trial Attorney Abram D. Burnett, III, Esq. Assistant Counsel NAVSUP Weapon Systems Support Mechanicsburg, PA OPINION BY ADMINISTRATIVE JUDGE HARTMAN ON APPELLANT'S MOTION FOR SUMMARY JUDGMENT Appellant seeks conversion of the termination of its contract for default to a termination for the convenience of the government. Appellant asserts that it is entitled to summary judgment because the Department of the Navy (Navy) waived the delivery schedule for its contract when it failed to deliver and continued to perform the contract in reliance on that waiver with the Navy's knowledge, thereby precluding termination of its contract for default absent establishment of a new delivery schedule. The Navy asserts that appellant has not established either of the elements necessary for a waiver and that there are questions of material fact precluding grant of appellant's motion for summary judgment. STATEMENT OF FACTS FOR PURPOSES OF THE MOTION In September of 2005, the Navy awarded Contract No. N00104-05-C-FA80, for submarine "stuffing tubes" (also referred to as "hull penetrators") to appellant, DCX-CHOL Enterprises, Inc. (DCX) (R4, tab 4). Stuffing tubes are classified as "Level I/SUB SAFE" materials because the use of incorrect or defective material could create a high probability of failure resulting in serious personnel injury, loss of life, loss of vital shipboard systems, or loss of the ship itself (see R4, tab 2 at 57). By bilateral contract Modification No. P00020 dated 18 October 2012, the parties agreed to extend the remaining contract delivery date to 15 February 2013 (R4, tab 56).  By email dated 24 January 2013, Lea Demirovic, a Navy contract specialist located in Mechanicsburg, Pennsylvania, asked DCX for its delivery schedule for the remainder of the units under the contract (R4, tab 60 at 2). Four days later, by email dated 28 January 2013, Tom Shafer of DCX responded that "I am working on this and will get back to you later today" (id.). On 12 February 2013, Ms. Demirovic responded to Mr. Shafer that "I haven't received anything from you yet" and "[p]lease let me know what's the status" (id.). Two days later, on Thursday, 14 February 2013, one day before the specified delivery date, Mr. Shafer replied to Ms. Demirovic as follows: I apologize for not getting back to you but I was trying to get delivery answers. We are still missing components from our supplier for the Plasma Coating process. I have been told these parts should be at our facility next week. If the parts do come in and are acceptable, I am looking at an additional 4 weeks for in-house processing. I would estimate the delivery the week of March 25, 2013. I will keep you informed of our progress next week. (Id. at 1) On Tuesday, 19 February 2013, the day after the President's Day holiday, Ms. Demirovic advised Mr. Shafer by email that "[y]our contract is currently delinquent" and "[i]n order to consider your extended delivery date of 03/25/13, we would need consideration." After Ms. Demirovic did not receive a response to her 19 February 2013 email within 2 days, she sent a 21 February 2013 email to both Mr. Shafer and Cory Gamberg of DCX stating again "subject contract is currently delinquent," "[y]our attention to this matter is greatly appreciated," and "[p]lease respond at your earliest convenience." (Id., tab 63 at 2) Ms. Demirovic received no response from DCX to her 21 February 2013 email during the following 12 days. The Navy's contracting officer (CO), Richard Fry, then sent DCX a "show cause" letter dated 5 March 2013 stating: Since you have failed to perform Contract No.