ASBCA 62732

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) Zahra Rose Construction ) ASBCA No. 62732 ) Under Contract No. W91B4N-20-P-0015 ) APPEARANCE FOR THE APPELLANT: Ms. Zahra Noori CEO APPEARANCES FOR THE GOVERNMENT: Scott N. Flesch, Esq. Army Chief Trial Attorney LTC Abraham Young, JA Trial Attorney OPINION BY ADMINISTRATIVE JUDGE SMITH In this appeal, we resolve appellant Zahra Rose Construction’s (Zahra) challenge to respondent Army’s (the government) final decision regarding the termination for convenience after approximately two weeks of Zahra’s two-month $30,000 contract to lease fuel trucks in Afghanistan. The contracting officer’s final decision provided a $15,000 termination settlement under Federal Acquisition Regulation (FAR) 52.212-4(l) while Zahra claims that it is entitled to $30,400 because Zahra paid the owner of the trucks in advance for the full contract term in order to obtain the trucks. In response, the government disavows its $15,000 settlement decision and argues that Zahra is entitled to no settlement because the trucks did not meet the contract’s technical requirements. Alternatively, the government argues that if Zahra is entitled to any termination settlement, it should be no more than $6,300 based upon a 12-day pro-rata calculation. For the reasons discussed below, we find that Zahra is entitled to a termination settlement of $28,800, which Zahra has sufficiently demonstrated it reasonably incurred prior to termination. We sustain the appeal in the amount of $28,800, but deny the appeal for the remainder of Zahra’s claim. FINDINGS OF FACT After a brief negotiation by email between September 2 and September 4, 2020 (app. supp. R4, tab 1 at 35, 40; tab 10; tab 16; tabs 27-29), Zahra’s sole-source Contract No. W91B4N-20-P-0015 (the contract) was executed on September 4 by Zahra and on September 7 by the government (app. supp. R4, tab 2 at 52; R4, tab 2 at 1). 1 The contract was 16-pages, commensurate with the cost and scope of a $30,000 lease of two fuel trucks (R4, tab 2 at 1, 3). The contract quantity was “2” and the units were “months.” (Id. at 3) The period of performance was also described as “04-SEP- 2020 TO 31-OCT-2020” (id.) and “03 September 2020 to 31 October 2020” (R4, tab 2 at 14). The pre-award price discussions were based on cost per truck per month (app. supp. R4, tabs 10, 27, 29). In general, the contract required delivery of two 10,000-liter fuel trucks to Camp Antonik, Helmand Province, Afghanistan for use by the government (R4, tab 2 at 14-15; tab 19 at 9). Zahra was responsible for maintenance or repair of the trucks as needed, and retrieval of the trucks at the conclusion of the contract (id. at 3, 15-16). The contract contained a list of approximately 24 technical requirements for the trucks, some related to fuel delivery functions (fuel pump capacity, specific nozzles, etc.), while others were safety items (seat belts, rear view mirror, etc.) (id. at 15). The contract was a commercial items procurement, and incorporated the 2018 version of FAR 52.212-4 “Contract Terms and Conditions--Commercial Items” (id. at 4; see also id. at 1). FAR 52.212-4(a), INSPECTION/ACCEPTANCE, provided: “The Contractor shall only tender for acceptance those items that conform to the requirements of this contract. The Government reserves the right to inspect or test any supplies or services that have been tendered for acceptance. The Government may require repair or replacement of nonconforming supplies or reperformance of nonconforming services at no increase in contract price. . . . The Government must exercise its post-acceptance rights . . . within a reasonable time after the defect was discovered or should have been discovered . . . .” FAR 52.212-4(a) (emphasis added). The contract’s termination provision was FAR 52.212-4(l) and provided: “The Government reserves the right to terminate this contract, or any part hereof, for its sole convenience . . .