ASBCA 59978

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) DayDanyon Corporation ) ASBCA No. 57681 ) Under Contract No. SPM8ED-09-D-OOO 1 ) APPEARANCE FOR THE APPELLANT: Mr. Joseph S. Jankowski President APPEARANCES FOR THE GOVERNMENT: Daniel K. Poling, Esq. DLA Chief Trial Attorney Joseph R. Weidenburner, Esq. Assistant Counsel Kristin K. Bray, Esq. Assistant Trial Attorney DLA Troop Support Philadelphia, PA OPINION BY ADMINISTRATIVE JUDGE JAMES This dispute arises from DayDanyon Corporation's (DayDanyon's) timely appeal from the DLA Troop Support contracting officer's (CO's) 20 April 2011 terminations for default of the captioned contract and its Delivery Order Nos. 0002 and 0003. The Board has jurisdiction of the appeal under the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109. After a two-day hearing at the Board's offices, the parties filed briefs. The Board is to decide only the validity of the default termination. FINDINGS OF FACT 1. On 23 April 2009, the Defense Supply Center Philadelphia (whose name was changed to DLA Troop Support (DLATS 1)) awarded indefinite-quantity type Contract No. SPM8ED-09-D-0001 (the contract) to DayDanyon for collapsible joint modular intermodal containers (JMICs). The contract was to be administered by the Defense Contract Management Agency (DCMA), Atlanta. (R4, tab 4 at 1) 2. The contract specified contract line item numbers (CLINs) for the JMICs: CLIN 0001, National Stock Number (NSN) 8145-01-564-5802, "COLOR GREEN"; CLIN 0002, NSN 8145-01-564-5795, "COLOR TAN"; CLIN 0003, NSN 8145-01-551-5311, "NOT PAINTED"; and CLIN 9906, first article testing. CLINs 0001-0003 each estimated 500 JMICs. (R4, tab 4 at 1-3, 12) 1 For simplicity, hereafter we refer to the government purchasing activity as DLATS.  3. The contract provided for issuance of delivery or task orders and incorporated, inter alia, the FAR 52.209-4, FIRST ARTICLE APPROVAL- GOVERNMENT TESTING (SEP 1989); FAR 52.249-2, TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (FIXED-PRICE) (MA y 2004); and FAR 52.249-8, DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984) clauses (R4, tab 4 at 16, 21). 4. After a 4 June 2009 DLATS stop work order due to a bid protest, DayDanyon resumed contract performance on 2 July 2009 pursuant to bilateral contract Modification No. POOOOl (R4, tab 11 at 1-2). 5. On 16 December 2009 DayDanyon submitted two first article JMICs for government testing (R4, tab 34 at 1). The government's 13 January 2010 test report found 27 major and 15 minor defects in the JMICs (R4, tab 38 at 1-8). 6. On 3 March 2010 DayDanyon again submitted two first article JMICs. The government's 30 March 2010 test report found 2 major and 5 minor defects in those JMICs. (R4, tab 43 at 1-9) 7. DLATS' 6 April 2010 letter to DayDanyon conditionally accepted the first article JMICs, provided that DayDanyon submit a corrective action plan addressing such deficiencies. On or about 7 April 2010 DayDanyon submitted such a plan, which DLATS approved on or about 9 April 2010. (R4, tabs 46, 47, 49) DLATS authorized DayDanyon to begin production of JMICs on 29 April 2010 (R4, tab 51). 8. On 3 May 2010 DLATS issued: (a) Delivery Order No. 0002 (DO 2) for 100 units of"NSN ... 8145015645795" (tan) and Delivery Order No. 0003 (DO 3) for 400 units of"NSN ... 8145015515311," (unpainted) both of which mistakenly cited CLIN 0001, whose NSN 8145-01-564-5802 was for "COLOR GREEN" (finding 2), and required delivery by 29 March 2010, and (b) unilateral Modification Nos. 000201 and 000301 to DOs 2 and 3, respectively, correcting their delivery date to 31 August 2010, but not correcting their CLIN 0001 cites (R4, tabs 53-56). 9. DayDanyon's 2 July 2010 email to DLA stated that DayDanyon expected contract modifications to add ECP No. 109028, to update 2 data lists and 12 drawings, and to correct "the incorrect Item/CLIN" stated in Modification Nos. 000201 and 000301 (R4, tab 63 at 3). 10. On 20 July 2010 unilateral Modification No. P00003 incorporated ECP No. 109028 and updated the data lists and drawings as DayDanyon expected (R4, tab 66). 11. On 5 August 2010 DO 2 unilateral Modification No.