CBCA 3725

GRANTED IN PART: September 17, 2015 CBCA 3725 HEARTHSTONE, INC., Appellant, v. DEPARTMENT OF AGRICULTURE, Respondent. Jason S. Randolph, Dandridge, TN, counsel for Appellant. Jay McWhirter, Office of the General Counsel, Department of Agriculture, Atlanta, GA, counsel for Respondent. Before Board Judges SOMERS, POLLACK, and SULLIVAN. SULLIVAN, Board Judge. On February 27, 2015, the Board issued a decision denying in part the appeal filed by appellant, Hearthstone, Inc., of the contracting officer’s final decision terminating Hearthstone’s timber sale contract for default and assessing reprocurement costs. Hearthstone, Inc. v. Department of Agriculture, CBCA 3725, 15-1 BCA ¶ 35,895. In our decision, with regard to the claim for reprocurement costs asserted by the Department of Agriculture, Forest Service, we stated, “Neither party has addressed the Government’s reprocurement costs claim in the submissions to date, leaving the Board unable to adjudicate the Government’s claim on the current record.” Id. at 175,482. Following that decision, we directed the Forest Service to submit further support and briefing regarding the claim for reprocurement costs and provided Hearthstone an opportunity to respond. After considering CBCA 3725 2 the information submitted by the parties, we find that the Forest Service has not met its burden to establish its entitlement to such costs. Statement of Facts Initial Board Decision and Subsequent Proceedings On September 26, 2006, the Forest Service awarded to Hearthstone the White Bull timber sale contract in the amount of $349,427.29. Appeal File, Exhibit 14.1 Because Hearthstone failed to cut any timber and failed to make an initial progress payment, the Forest Service terminated the contract for default on January 22, 2013. Exhibit 88. In a decision issued on November 13, 2013, the contracting officer sought damages from Hearthstone pursuant to the default provision of the contract. Exhibit 89 at 344-45. Hearthstone appealed to the Board the contracting officer’s decision seeking damages arising from the termination for default. The parties submitted the appeal for a decision on the record, pursuant to Rule 19 of the Rules of the Civilian Board of Contract Appeals. 48 CFR 6101.19 (2013). After considering the parties’ submissions, the Board found the Forest Service’s decision to terminate the contract for default was proper because Hearthstone failed to meet the requirements of the contract and the contracting officer had a reasonable basis for believing that Hearthstone would be unable to complete the contract in a timely manner. Hearthstone, Inc., 15-1 BCA at 175,479-80. The Board was unable to resolve the appeal in its entirety, however, because neither party had addressed in its submissions the Forest Service’s claim for reprocurement costs. We also found that the Forest Service had failed to provide “any of the contracts, bills, or other information necessary to evaluate the demand for reprocurement costs.” Hearthstone, Inc., 15-1 BCA at 175,482. To enable the Board to decide this aspect of the appeal, the Board invoked its authority pursuant to Rule 4(e) and directed the parties to submit further evidence and briefing regarding the Forest Service’s claim. Id. In an order issued the same day as the decision, the Board explained that “neither appellant nor respondent ha[s] addressed [the contracting officer’s decision assessing reprocurement costs] in briefing. Respondent also has not provided the documentary evidence underlying the demand for damages. Therefore, the Board is unable to resolve this aspect of Hearthstone’s appeal without further submissions by the parties.” Order (Feb. 27, 1 All exhibits are found in the appeal file unless otherwise noted. The page numbers cited are the Bates numbers indicated on the exhibits. CBCA 3725 3 2015) at 1. The Board directed the Forest Service to “supplement the [appeal file] with the documents that support the contracting officer’s decision, dated November 13, 2013.” Id. at 2. The Board also requested further briefing to explain the Forest Service claim for reprocurement costs and how it comported with applicable precedent. Id. In the same order, the Board provided Hearthstone an opportunity to respond to this submission and supply any additional documents that it wanted the Board to consider in resolving the remaining issues on appeal.