ASBCA 58245

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) U.S. Coating Specialties & Supplies, LLC ) ASBCA No. 58245 ) Under Contract No. W912EE-10-C-0019 ) APPEARANCE FOR THE APPELLANT: Louis H. Watson Jr., Esq. Watson & Norris, PLLC Jackson, MS APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq. Engineer Chief Trial Attorney Steven H. Finch, Esq. John M. Breland, Esq. Engineer Trial Attorneys U.S. Army Engineer District, Vicksburg OPINION BY ADMINISTRATIVE JUDGE WOODROW This appeal arises from the termination for default of a contract to construct a building to house a large unclassified supercomputer at the Army’s Engineering Research and Design Center (ERDC). On April 9, 2015, the Board issued a decision denying the government’s amended motion to dismiss or, in the alternative, for summary judgment. U.S. Coating Specialties & Supplies, LLC, ASBCA No. 58245, 15-1 BCA ¶ 35,957 (U.S. Coating I). On January 21, 2016, the government filed a renewed motion for summary judgment, contending that the parol evidence rule barred evidence of an alleged prior oral agreement between appellant and the Assistant U.S. Attorney (AUSA) during appellant’s Chapter 11 bankruptcy proceedings, and alternatively, that the AUSA lacked actual authority to enter into the alleged agreement. On April 6, 2017, the Board issued a decision denying the government’s motion. U.S. Coating Specialties & Supplies, LLC, ASBCA No. 58245, 17-1 BCA ¶ 36,710 (U.S. Coating II). In U.S. Coating II, we held that the record was insufficient to determine whether the April 25, 2012 bankruptcy agreement was a fully integrated agreement and that genuine issues of material fact existed regarding whether there was a separate oral agreement with the government to terminate the contract for convenience. 17-1 BCA ¶ 36,710 at 178,760. We further held the AUSA possessed the necessary authority to bind the government when the parties entered into the April 25, 2012 bankruptcy settlement agreement. Id. at 178,761.  Subsequently, the parties agreed to the submission of the appeal on the record without a hearing pursuant to Board Rule 11. Based on the briefs and evidence submitted, we conclude that appellant has not met its burden of demonstrating that the parties entered into a separate oral agreement to terminate the contract for convenience. We further conclude that the contracting officer (CO) reasonably exercised her discretion when she terminated the contract for default. Accordingly, we deny the appeal. FINDINGS OF FACT I. The Contract 1. On June 21, 2010, the U.S. Army Corps of Engineers (Corps) awarded Contract No. W912EE-10-C-0019 (contract) to appellant, U.S. Coating Specialties & Supplies, LLC (U.S. Coating) in the amount of $11,383,000 for the construction of a U.S. Army Engineer Research and Development Center Information Technology Laboratory office building and computer facility in Vicksburg, Mississippi (ERDC Project) (R4, tab 3 at 5-6 1). 2. The contract included the standard Federal Acquisition Regulation (FAR) default clause, 52.249-10, DEFAULT (FIXED-PRICE CONSTRUCTION) (APR 1984), which provided, in pertinent part: (a) If the Contractor refuses or fails to prosecute the work or any separable part, with the diligence that will insure its completion within the time specified in this contract including any extension, or fails to complete the work within this time, the Government may, by written notice to the Contractor, terminate the right to proceed with the work (or the separable part of the work) that has been delayed. . . . .... (c) If, after termination of the Contractor’s right to proceed, it is determined that the Contractor was not in default, or that the delay was excusable, the rights and obligations of the parties will be the same as if the termination had been issued for the convenience of the Government. (Id. at 132-34) 3. U.S. Coating’s principal subcontractor was Mid-State Construction Company, Inc. (Mid-State) (gov’t br., ex.