ASBCA 60979

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) Globe Trailer Manufacturing, Inc. ) ASBCA No. 60979 ) Under Contract No. W56HZV-11-D-0204' ) APPEARANCES FOR THE APPELLANT: G. Lindsay Simmons, Esq. Eric Whytsell, Esq. Jackson Kelly PLLC Washington, DC APPEARANCES FOR THE GOVERNMENT: Arthur M. Taylor, Esq. DCMA Chief Trial Attorney Michael T. Patterson, Esq. Trial Attorney Defense Contract Management Agency Chantilly, VA , OPINION ON CROSS-MOTIONS FOR SUMMARY JUDGMENT BY ADMINISTRATIVE JUDGE D'ALESSANDRIS . Pending before the Board are cross-motions for summary judgment regarding the proper interpretation of the termination settlement provision for commercial item contracts, Federal Acquisition Regulation (FAR) 52.212-4(1), when the contract additionally contains a provision for first article testing, FAR 52.209-4. The Department of the Army (government or Army) awarded a requirements contract for low-bed semitrailers to appellant; Globe Trailer Manufacturing, Inc. (Globe). The commercial items .contract required Globe to submit eight trailers as part of the first article test procedures. These test trailers were separate contract line-items (CLINs) in the first delivery order. Pursuant to the first article test requirements, any work beyond the first article test units was performed at Globe's risk. Globe submitted the first article test units; however, the Army terminated the contract for convenience of the government before the first article test units were approved. After Globe submitted a termination settlement proposal, the termination contracting officer issued a final decision limiting Globe's recovery to the first article test contract line items. In the pending cross-motions, the government contends that the first article test provision caps Globe's recovery for work related to the first articles at the amount of the first article test line items. Conversely, Globe contends that its recovery is not limited to the first article contract line items, but that it can recover all reasonable charges relating to production of the first articles. For the reasons stated below, we grant both motions in part, holding that Globe is entitled to recoyer for work performed pursuant to non-first article test contract line items that were required to be delivered prior to first article approval, but that Globe's recovery for work necessary for first article approval is limited to the amount of the CLINs for the first article test line items. STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS On September 21, 2011, the Army awarded Contract W56HZV-11-D-0204 and delivery order 0001 to Globe. The contract was a five-year requirements contract for M870A4 low bed semitrailers and related deliverables. (R4, tab 1 at G-1-10) The M870A4 is a trailer intended for military use on diverse surfaces and in all climates (id. at G-46) Relevant to this appeal, the delivery order included separate CLINs including CLINOOO lAA for one shakedown test trailer, CLIN0002AA for one First Production Verification Inspection (FPVI) test trailer, CLIN0003AA for five Production Verification Test (PVT) trailers, CLIN0004AA for one Logistics Demonstration (Log Demo) test trailer, 1 CLIN0006AA for contract data requirements lists (CDRLs), and CLIN1001AA for 641 first year production trailers for a total amount of$39,613,22I.27 (R4, tab 1 at G-1-10, tab 9 at G-176, 181). CLINs 0002AA and 0003AA contain similar provisions providing that "[a]ll costs associated with the trailer ... are to be included in the unit price" (R4, tab 1 at G-5, 6). Two additional delivery orders followed (R4, tabs 15, 19). Relevant to this appeal, the contract contained FAR 52.209-4 FIRST ARTICLE APPROVAL-GOVERNMENT TESTING (SEP 1989)-Altemate Sep/1989 I (Jan 1997) AND ALTERNATE II (SEP 1989) providing that "(h) ...