ASBCA 60049

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) First Division Design, LLC ) ASBCA No. 60049 ) Under Contract No. FA5270-13-P-013 l ) APPEARANCE FOR THE APPELLANT: APPEARANCES FOR THE GOVERNMENT: Mr. Craig F. Pierce Manager/Member Jeffrey P. Hildebrant, Esq. I "' Air Force Deputy Chief Trial Attorney Phillip E. Reiman, Esq. Maj Matthew Ramage-White, USAF Alexis J. Bernstein, Esq. Trial Attorneys OPINION BY ADMINISTRATIVE JUDGE KINNER Appellant, First Division Design, LLC (FDD), appeals the Air Force's decision to deny most of the costs FDD claims relating to the termination for convenience of its contract for floor tiles. Appellant principally contends that the Air Force is liable for delay in terminating the contract and for costs incurred during extended negotiations prior to termination. The contract was terminated because the Air Force had incorrectly accepted FDD's offer for floor tiles manufactured in China. The Air Force could not accept products manufactured in China pursuant to applicable trade restrictions. Both parties elected Board Rule 11 disposition. The government later filed a motion for summary judgment, however, it withdrew that motion, requesting that its brief be considered as the government's Rule 11 submission. FINDINGS OF FACT I. The 18th Contracting Squadron, Commercial Acquisitions Flight, at the Kadena Air Base in Okinawa, Japan (KAB ), issued a request for quotations (RFQ) on 6 August 2013 to procure vinyl floor tiles (app. supp. R4, tab 1). The RFQ required offers to be submitted by 30 August 2013 (R4, tab 9 at 5). The RFQ stated that an award would be made to the responsible offeror whose offer conformed to the solicitation and would be most advantageous to the government (id. at 6). 2. The solicitation was issued, and the subsequent contract awarded, using standard form 1449, Order for Commercial Items (R4, tab 1 at 1). The contract incorporated by reference Federal Acquisition Regulation (FAR) 52.212-4, CONTRACT TERMS AND CONDITIONS-COMMERCIAL ITEMS (JUL 2013) (id. at 5). Relevant portions of that clause are: (b) Assignment. The Contractor or its assignee may I f assign its rights to receive payment due as a result of performance of this contract to a bank, trust company, or other financing institution, including any Federal lending agency in accordance with the Assignment of Claims Act (31 U.S.C. [§] 3727). However, when a third party makes I payment (e.g., use of the Government wide commercial purchase card), the Contractor may not assign its rights to receive payment under this contract. (1) Termination for the Government's convenience. The Government reserves the right to terminate this contract, or any part hereof, for its sole convenience. In the event of such termination, the Contractor shall immediately stop all work hereunder and shall immediately cause any and all of its suppliers and subcontractors to cease work. Subject to the terms of this contract, the Contractor shall be paid a percentage of the contract price reflecting the percentage of the work performed prior to the notice of termination, plus reasonable charges the Contractor can demonstrate to the satisfaction of the Government using its standard record keeping system, have resulted from the termination. The Contractor shall not be required to comply with the cost accounting standards or contract cost principles for this purpose. This paragraph does not give the Government any right to audit the Contractor's records.