ASBCA 62445

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) Asahi General Trading & Cont. Co. W.L.L. ) ASBCA No. 62445 ) Under Contract No. 49065890 et al. ) APPEARANCE FOR THE APPELLANT: Fred T. Pribble, Esq. Valrico, FL APPEARANCES FOR THE GOVERNMENT: Daniel K. Poling, Esq. DLA Chief Trial Attorney Robin E. Walters, Esq. Michael J. Kerrigan, Esq. Trial Attorneys DLA Disposition Services Battle Creek, MI OPINION BY ADMINISTRATIVE JUDGE MELNICK DENYING THE GOVERNMENT’S MOTION TO DISQUALIFY APPELLANT’S COUNSEL Asahi General Trading & Contracting Co. W.L.L. (Asahi) seeks compensation arising from an alleged settlement requiring the extension of the terms of a scrap removal agreement in Kuwait. Before we address jurisdictional or merits issues, the government requests that we disqualify Asahi’s counsel, who is a former General Counsel of the Defense Logistics Agency (DLA). The government contends Asahi’s counsel possesses confidential information that he would necessarily use to its disadvantage or disclose. We deny the motion. STATEMENT OF FACTS FOR PURPOSES OF THE MOTION I. Asahi’s Allegations The following allegations are taken from the relevant claims and complaint. In July of 2015, the Defense Logistics Agency, Disposition Services (DLA-DS or government) awarded Asahi related contracts for the removal of different types of scrap materials in Kuwait (the Kuwait contract). Then on February 12, 2016, DLA-DS issued related contracts for scrap removal in Qatar (the Qatar contract). 1 (Compl. ¶¶ 5, 7) 1 Presumably for ease of reference, the parties referred to each set of related contracts as a single contract.  On October 8, 2017, Asahi submitted a certified claim to the contracting officer for $1,347,625 allegedly due under the Qatar contract. Among other things, Asahi claimed that, despite the government’s promise that its defense cooperation agreement with Qatar authorized Asahi to purchase and resell scrap domestically, Qatar customs officials delayed and obstructed its removal, while also barring resale of some of the scrap within the country. Asahi suggested the government was contractually responsible for the customs officials’ acts. Asahi also alleged that the government had previously encountered problems with Qatar’s customs officials and did not disclose those facts. (R4, tab 11; compl. ¶ 7) In July of 2018, the parties settled the Qatar contract claim. Asahi promised to withdraw the claim in return for an extension of the Kuwait contract’s performance period (compl. ¶¶ 9-15). The parties agreed the new Kuwait extension would provide Asahi with sufficient business to cover its Qatar contract losses (compl. ¶¶ 11, 13). Later in July, the contracting officer notified Asahi that the Kuwait contract had not been extended because the settlement was not approved by government lawyers (compl. ¶ 16). In September of 2018, the parties resumed settlement discussions. At that time, the contracting officer’s counsel refused Asahi’s request for a three year extension of the Kuwait contract, countering with an offer of six months. The government assured Asahi that more than sufficient scrap would be generated to compensate Asahi for the Qatar claim. (Compl. ¶ 22) On September 20, 2018, the parties entered another settlement agreement. Again Asahi dropped its Qatar contract claim in return for a six month extension of the Kuwait contract. (Compl. ¶ 24) The government did not provide Asahi with the volume of scrap Asahi expected during the Kuwait contract extension (compl. ¶ 27). In February of 2019, the government unilaterally extended the Kuwait contract again for four more months (compl. ¶ 28). Nevertheless, the volume of scrap remained below Asahi’s expectations (compl. ¶ 30). Asahi requested a third extension of the Kuwait contract but that was denied. The government told Asahi that a new scrap contract for Kuwait would be awarded to another contractor, Royal Bridge International (RBI), in settlement of a claim brought by that company upon a Qatar scrap contract awarded to it in 2014. (Compl. ¶ 31) On September 11, 2019, Asahi submitted another certified claim.