AICI-Archirodon JV

CourtArmed Services Board of Contract Appeals
DecidedJuly 19, 2021
DocketASBCA No. 62201
StatusPublished

This text of AICI-Archirodon JV (AICI-Archirodon JV) is published on Counsel Stack Legal Research, covering Armed Services Board of Contract Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AICI-Archirodon JV, (asbca 2021).

Opinion

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of -- ) ) AICI-Archirodon JV ) ASBCA No. 62201 ) Under Contract No. W912ER-17-C-0014 )

APPEARANCES FOR THE APPELLANT: Scott M. Heimberg, Esq. Thomas P. McLish, Esq. Amanda B. Lowe, Esq. Akin Gump Strauss Hauer & Feld LLP Washington, DC

APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq. Engineer Chief Trial Attorney Rebecca L. Bockmann, Esq. James D. Stephens, Esq. Engineer Trial Attorneys U.S. Army Engineer District, Middle East Winchester, VA

OPINION BY ADMINISTRATIVE JUDGE OSTERHOUT ON THE PARTIES’ CROSS-MOTIONS FOR SUMMARY JUDGMENT

This appeal involves a contract to replace the Mina Salman Pier in Manama, Bahrain. The contract required appellant to use United States-flagged vessels to transport materials unless it applied for and was granted an exception to use a foreign-flag vessel. The government moves for summary judgment, arguing that appellant failed to properly request an exception and failed to follow the contract by using a foreign-flagged vessel. 1 Appellant cross-moves for summary judgment, alleging that it properly filed a request for exception but the contracting officer failed to respond in a timely manner, and that no harm occurred to the government. We grant the government’s motion, in part, regarding appellant’s failure to properly request an exception and follow the requirements of the

1 The government also filed a motion in limine to exclude appellant’s expert testimony and report. The government argued that the Board should shield the record from the introduction of irrelevant, immaterial, or cumulative matters and that the expert’s opinion included legal conclusions (gov’t mot. at 1, 14). Based on this decision, the risk of appellant’s expert report being irrelevant, immaterial, or cumulative is low. Further, the Board is capable of giving the report and potential testimony the proper weight it deserves. Thus, the government’s motion in limine is denied. contract. We deny the government’s motion as to the amount. Similarly, we deny appellant’s motion, in part, regarding entitlement but grant appellant’s motion, in part, concerning the inability to determine the amount based on the record.

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS

1. On September 25, 2017, the United States Army Corps of Engineers (USACE or the government) awarded Contract No. W912ER-17-C-0014 (the contract) to AICI-Archirodon JV (AAJV or appellant) to replace the Mina Salman Pier at Naval Support Activity, Manama, Bahrain, at the firm-fixed-price of $48,148,000 (R4, tab 4 at 1-2).

2. The contract incorporated by reference Defense FAR Supplement (DFARS) 252.247-7023, TRANSPORTATION OF SUPPLIES BY SEA (APR 2014) (R4, tab 4 at 14). The clause stated, in part, “(b)(1) The Contractor shall use U.S.-flag vessels when transporting any supplies by sea under this contract.” Further, the clause allowed for exceptions to this requirement and provided a method by which the contractor could request to use a foreign-flag vessel from the contracting officer (CO):

(c) The Contractor and its subcontractors may request that the Contracting Officer authorize shipment in foreign-flag vessels, or designate available U.S.-flag vessels, if the Contractor or a subcontractor believes that—

(1) U.S.-flag vessels are not available for timely shipment;

(2) The freight charges are inordinately excessive or unreasonable; or

(3) Freight charges are higher than charges to private persons for transportation of like goods.

(d) The Contractor must submit any request for use of foreign-flag vessels in writing to the Contracting Officer at least 45 days prior to the sailing date necessary to meet its delivery schedules. The Contracting Officer will process requests submitted after such date(s) as expeditiously as possible, but the Contracting Officer’s failure to grant approvals to meet the shipper’s sailing date will not of itself constitute a compensable delay under this or any other clause of this contract. Requests shall contain at a minimum—

2 (1) Type, weight, and cube of cargo;

(2) Required shipping date;

(3) Special handling and discharge requirements;

(4) Loading and discharge points;

(5) Name of shipper and consignee;

(6) Prime contract number; and

(7) A documented description of efforts made to secure U.S.-flag vessels, including points of contact (with names and telephone numbers) with at least two U.S.-flag carriers contacted. Copies of telephone notes, telegraphic and facsimile message or letters will be sufficient for this purpose.

(g) In the event there has been unauthorized use of foreign-flag vessels in the performance of this contract, the Contracting Officer is entitled to equitably adjust the contract, based on the unauthorized use.

DFARS 252.247-7023. Before the exemption is issued, the CO “must, by regulation, seek the advice of one of the military transport commands regarding the U.S.-flag vessel availability.” The Navy’s Military Sealift Command (MSC) provides formal advice on the availability of U.S.-flag vessels for voyage and time charters. MSC will then “consult with the Maritime Administration (MARAD) to ensure that 100% U.S.-flag service is not available and that U.S. flag vessels are being used to their fullest extent.” (R4, tab 06A at 2) We find that the 45-day notice requirement is reasonable, given the coordination with multiple governmental agencies in order to provide the CO the necessary advice as to the availability of U.S. flag vessels or if the rates quoted to a contractor are excessive or otherwise unreasonable.

3. By letter dated August 30, 2018, addressed to the CO’s representative (COR), appellant formally requested to use a foreign-flag vessel to ship steel piles for the project (R4, tab 6 at 1). Appellant proposed a shipping date range from September 25, 2018 through October 15, 2018 (id. at 2). Appellant listed the required information pursuant to DFARS 252.247-7023 (id. at 1-2). For item no. 7, appellant included a list of requirements for the shipment but did not document a description of efforts made to hire a U.S-flag vessel, did not provide points of contacts and telephone numbers of at least two U.S-flag carriers contacted, and did not provide any copies of

3 notes or letters to demonstrate contact with U.S.-flag vessels (id. at 2). The attachments contained emails discussing the availability of vessels but the ones addressing U.S.-flag vessels were dated August 28, 2018, or later (id. at 6, 10-16; see also app. supp. R4, tab 8A-1). The only quoted price for a U.S.-flag vessel that appellant presented to the CO was $1,384,220 (R4, tab 2 at 4).

4. On September 9, 2018, the CO denied appellant’s request to use a foreign-flag vessel. The CO stated that appellant failed to make the request 45 days prior to the sailing date and that appellant only provided supporting documentation dated August 28, 2018, or later, which indicated to the CO that appellant did not make a reasonable effort to find a U.S.-flag vessel in a reasonable time. (R4, tab 7)

5. On September 18, 2018, appellant responded that it was not feasible to provide 45 days of notice and provided information about the foreign-flag vessel it had scheduled to use (R4, tab 8). Appellant stated that it started looking for U.S.-flag vessels in May 2018 and provided an email to demonstrate the search (id. at 21). The May 2018 email asked for quotes but the only reference to U.S.-flag vessels was a single parenthetical: “(if us flag is not available please quote for the standard)” (id.). No other conversations about U.S.-flag vessels from May 2018 were provided.

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