Avant Assessment, LLC

Armed Services Board of Contract Appeals·Decided October 3, 2018·No. ASBCA No. 61358, 61407, 61442·Published

Opinion

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of -- ) ) Avant Assessment, LLC ) ASBCA Nos. 61358, 61407, 61442 ) Under Contract Nos. W9124N-10-C-0109 ) W9124N-11-C-0015 ) W9124N-11-C-0033 )

APPEARANCES FOR THE APPELLANT: Dirk D. Haire, Esq. Sean Milani-nia, Esq. Rachel M. Severance, Esq. Kelsey O'Brien, Esq. Alexa Santora, Esq. Fox Rothschild LLP Washington, DC

APPEARANCES FOR THE GOVERNMENT: Raymond M. Saunders, Esq. Army Chief Trial Attorney CPT Harry M. Parent III, JA MAJ Douglas A. Reisinger, JA Trial Attorneys

OPINION BY ADMINISTRATIVE JUDGE MCILMAIL

FINDINGS OF FACT

These three appeals, concerning three contracts for the development and delivery of foreign-language test items (contracts 15, 33, and 109), were consolidated for hearing and decision. Appellant, Avant Assessment, LLC, seeks compensation pursuant to the contracts' termination-for-convenience clauses, subsequent to our decisions converting the default terminations of those contracts by the U.S. Army Mission Contracting Command (the government) to ones for its convenience. Avant Assessment, LLC, ASBCA No. 58903 et al., 17-1 BCA if36,837 at 179,513 (contract 15); ASBCA No. 58866, 16-1 BCA if 36,511 at 177,886 (contract 33); ASBCA No. 58867, 15-1 BCA ,r 36,067 at 176,128 (contract 109). The United States Court of Federal Claims transferred to us the termination-for-convenience matter regarding contract 109. Avant Assessment, LLC v. United States, 134 Fed. Cl. 323, 336 (2017). We dismissed as moot previous appeals in which Avant advanced breach claims that the government improperly rejected test items. See Avant Assessment, 17-1 BCA ,r 36,837 at 179,513 (contracts 15 and 33); 16-1 BCA ,r 36,505 at 177,862-63 (contract 109). l I Contract 109 was awarded in 2010; contracts 15 and 33 were awarded in 2011 (ASBCA No. 61358 (61358) R4, tab 1 at 1; ASBCA No. 61407 (61407) R4, tab 1 at l; ASBCA No. 61442 (61442) R4, tab 1 at 2). Contract 15 originally required the delivery of 4,620 test items; contract 33 originally required the delivery of 1,300 test items; contract 109, 3,300 test items. Avant Assessment, 17-1 BCA ,r 36,837 at 179,509-10 (contracts 15 and 33); 16-1 BCA ,r 36,505 at 177,862 (contract 109). Contract 15 was modified to require only 4,437 test items; contract 33 was modified to require only 1,244 test items; contract 109 was modified to require only 3,174 test items (app. hr. at 17-18; see tr. 1/11 (reciting a slightly different set of numbers)). The government has paid Avant the contract prices for those modified totals (tr. 1/11).

Contracts 33 and 109 provide that "[i]t is expected that a certain proportion of passages and/or items submitted by the Contractor will be rejected during the [government's] review process"; contract 15 provides that "[i]t is probable that not all submitted items will be accepted" (61358 R4, tab 1 at 11; 61407 R4, tab 1 at 8; 61442 R4, tab 1 at 14). Additionally, the three contracts together reference "historic" rejection rates ranging from 30% to 60% for other such contracts (61358 R4, tab 1 at 14; 61407 R4, tab 1 at 8; 61442 R4, tab 1 at 14).

In addition, contract 15 provides:

[I]n order to produce 4,620 usable items, the Contractor typically needs to overproduce by 30% or approximately 6,000 items in order to net 4,620 items. The government will only pay for 4,620 usable/approved items.

(61407 R4, tab 1 at 8) Contract 33 provides that "[t]he Contractor shall provide acceptable reading passages and items as summarized in the table below," and that "it is likely that successful completion of the contract will entail the initial development of more items than listed in the above charts, to account for loss during review" (61358 R4, tab 1 at 10-11). Contract 109 similarly provides that the government:

[W]ill work closely with the Contractor to improve items ... but work plans developed by [the government] will entail the initial development of more items than listed in the above charts, to account for loss during review.

(61442 R4, tab 1 at 14)

2 Each contract includes FAR 52.212-4, CONTRACT TERMS AND CONDITIONS- COMMERCIAL ITEMS (JUN 2010), "Termination for the government's convenience," which, in the third sentence of paragraph 1, provides:

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.

(61358 R4, tab 1 at 32; 61407 R4, tab 1 at 32; 61442 R4, tab 1 at 33) The U.S. Army Mission Contracting Command (the government) terminated the contracts for cause in 2013. 17-1 BCA ,r 36,837 at 179,510 (contracts 15 and 33); 16-1 BCA ,r 36,505 at 177,862 (contract 109). We converted the terminations of contract 109 in 2015, contract 33 in 2016, and contract 15 in 2017 to ones for the convenience of the government. 17-1 BCA ,r 36,837 at 179,513 (contract 15); 16-1 BCA ,r 36,511 at 177,886 (contract 33); 15-1 BCA ,r 36,067 at 176,128 (contract 109). Familiarity with the facts of these previous decisions is presumed.

In December 2010, after the award of contract 109 but before the award of contracts 15 and 33, the government held a meeting regarding contract 109, notes of which meeting include the following:

6. Deliverable ownership: government maintains full control a. The contractor inquired who retains ownership of rejected items b. According to the contract, the government retains ownership of all deliverables, which includes rejected items c. C.6.12.2 The Government will retain sole ownership of and exclusive rights to all deliverables and Government-Furnished Materials provided to the Contractor (for example, intellectual property).

3 Follow Up Action: Dean Hays will have Legal review [of] the contract to see if the government does in fact retain ownership of rejected items[.]

(Ex. 11 at 1, 4)

In 2016, Avant presented to the contracting officer its termination settlement proposals for the three contracts (61358 R4, tab 15 at 1; 61407 R4, tab 16 at 1; 61442 R4, tab 14 at 1). In each, Avant requested compensation "for costs incurred for completed items delivered to the Government above the contracted for amount of items," as well as an additional amount for settlement expenses (61358 R4, tab 15 at 2; 61407 R4, tab 16 at 2; 61442 R4, tab 14 at 2). For contract 109 those amounts are $5,185,849.61 and $30,966.25, respectively; for contract 33: $1,514,271.98 and $3,133.00; for contract 15: $2,310,240.87 and $3,405.00 (id.). The settlement expenses in the contract 33 and contract 15 proposals appear to be for the time of non-attorney personnel (61358 R4, tab 15 at 58; 61407 R4, tab 16 at 56). Only $10,354 of the settlement expenses in the contract 109 proposal appears to be for such time; the rest appears to be for the time of attorneys (61442 R4, tab 14 at 165-71 ). None of the termination for convenience settlement proposals alleges that the government asserted a contractual or other ownership right to rejected test items; that the government retained rejected test items inconsistent with Avant's ownership rights; or that the government denied Avant the right or ability to possess, retain, reuse, or repurpose rejected test items (see 61358 R4, tab 15 at 1-2; 61407 R4, tab 16 at 1-2; 61442 R4, tab 14 at 1-2).

The contract 15 and contract 33 proposals include Standard Form 1436, which includes certification language that is different from that specified by the Contract Disputes Act (CDA), 41 U.S.C. § 7103(b)(l), for claims exceeding $100,000 (61358 R4, tab 15 at 55; 61407 R4, tab 16 at 52).

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