ASBCA 59526

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of-- ) ) ESCgov, Inc. ) ASBCA No. 58852 ) Under Contract No. HC1028-12-C-0047 ) APPEARANCES FOR THE APPELLANT: Thomas 0. Mason, Esq. Francis E. Purcell, Jr., Esq. Cooley LLP Washington, DC APPEARANCES FOR THE GOVERNMENT: William E. Brazis, Jr., Esq. DISA General Counsel JoAnn W. Melesky, Esq. Laura J. Barke, Esq. Trial Attorneys Defense Information Systems Agency Scott Air Force Base, IL OPINION BY ADMINISTRATIVE JUDGE YOUNGER ON RESPONDENT'S MOTION FOR PARTIAL SUMMARY JUDGMENT This appeal relates to the termination for convenience of a contract to procure software and related support services. The contractor, ESCgov, Inc. (ESC), a systems integrator, challenges the termination. The present motion for partial summary judgment relates to two counts ofESC's complaint, in which ESC seeks to recover software procurement costs and intellectual property costs, respectively. We deny the motion regarding both counts. STATEMENT OF FACTS FOR PURPOSES OF THE MOTION A. 2012 Contract 1. Effective 24 July 2012, the Defense Information Systems Agency (DISA or government) awarded Contract No. HC1028-12-C-0047 (the 2012 contract) to ESC, a systems integrator, to provide a solution to specified software needs. The 2012 contract required that the contractor's solution include a product of BMC Software, Inc. (BMC). The product was BMC BladeLogic software and licenses. The 2012 contract also required ESC to furnish the technical services necessary to install, configure, implement, administer and sustain the solution on government-furnished computing resources. (R4, tab 4 at 3) The 2012 contract was a follow-up contract to one awarded in 2008 (the 2008 contract) (R4, tab 4 at 45; see statements 11-13). 2. The 2012 contract contained various standard clauses, including both FAR 52.212-4, CONTRACT TERMS AND CONDITIONS - COMMERCIAL ITEMS (JUN 2010) and FAR 52.249-2, TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (FIXED-PRICE) (MA y 2004) (R4, tab 4 at 60). 3. By date of 29 August 2012, the government terminated the 2012 contract for convenience at no cost to either party, effective immediately (R4, tabs 9(a), (b)). 4. By date of 2 January 2013, ESC submitted a termination settlement proposal under FAR Part 49 seeking payment of $3,384,500.76 under the 2012 contract (R4, tab 17). 5. After the parties failed to reach agreement on the settlement proposal, ESC submitted a certified claim under the 2012 contract by date of 12 June 2013, seeking payment of $3,384,500.76 (R4, tab 20). 6. ESC has opposed the government's motion for partial summary judgment with the Declaration of Keith Zagurski, its executive vice president and chief financial officer. In his declaration, Mr. Zagurski addressed the BMC BladeLogic software licenses that ESC had purchased at the time of the 2008 contract. He stated that "[t]he licenses purchased by ESCgov [from BMC] were perpetual, which meant that they did not have a defined term of use. The licenses also were limited to use in support of DISA, and could not be used for other customers." (App. opp'n, ex. 1, Declaration of Keith Zagurski (Zagurski decl.) ii 8) Mr. Zagurski further stated that: ESCgov purchased the Bladelogic software licenses based upon its understanding that DISA's needs for the access and security configuration control solution requested would continue beyond the initial [2008] contract. Because the licenses were perpetual and not limited in term, ESCgov would be able to use the licenses on future DISA contracts. (Zagurski decl. ii 9) Mr. Zagurski also stated that: Although licenses with defined terms commonly are less expensive than perpetual licenses, ESCgov paid more for perpetual licenses than it likely would have for licenses with a defined term, because ESCgov planned to utilize the 2  licenses beyond the initial contract to provide access and security configuration control support to DISA. (Zagurski decl. if 10) 7.