Kostas Greek Food - Zorbas

CourtArmed Services Board of Contract Appeals
DecidedOctober 13, 2021
DocketASBCA No. 62213
StatusPublished

This text of Kostas Greek Food - Zorbas (Kostas Greek Food - Zorbas) 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
Kostas Greek Food - Zorbas, (asbca 2021).

Opinion

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of -- ) ) Kostas Greek Food - Zorbas ) ASBCA No. 62213 ) Under Contract No. KO190001 )

APPEARANCE FOR THE APPELLANT: Mr. Georgios Kostas Owner

APPEARANCES FOR THE GOVERNMENT: Scott N. Flesch, Esq. Army Chief Trial Attorney CPT Philip L. Aubart, JA Trial Attorney

OPINION BY ADMINISTRATIVE JUDGE CATES-HARMAN

This appeal arises from a termination for default of an Army and Air Force Exchange Service (AAFES) contract awarded to Kostas Greek Food – Zorbas (appellant; contractor; Kostas) to provide a mobile kebab food concession at U.S. Army Garrison Humphreys in South Korea (Humphreys, Korea). The contract was terminated for default for appellant’s failure to meet several contractual deadlines. The parties elected to submit the appeal on the record pursuant to Board Rule 11. The government submitted a Rule 11 brief. The appellant chose not to submit a brief. Because we find Kostas’s unexcused failure to obtain the required permits and licenses within the period set forth in the contract, as amended, provided an adequate basis for the default termination, we deny the appeal.

FINDINGS OF FACT ∗

1. Contract No. KO190001 (contract) was awarded on March 5, 2019, to appellant by the AAFES, Korea Contract Office, to provide a mobile kebab food concession at Humphreys, Korea, for a period of two years commencing March 15, 2019 (R4, tab 1 at 1, 5).

∗ Our presentation of the background facts focuses on the facts surrounding the termination. Due to appellant’s decision to forgo filing a Rule 11 brief, Kostas has not disputed the government’s recitation of facts, and we use them selectively and add additional facts we deem material based on the record. 2. The contract required Kostas to have obtained “all necessary permits and licenses” and to comply with applicable laws; the relevant section reading in full text:

PERMITS, LICENSES AND APPLICABLE LAWS

Contractor warrants that all necessary permits and licenses have been obtained and that the merchandise, services, supplies, and/or equipment provided under this contract are in compliance with applicable laws. Contractor agrees to comply with all federal and state security and breach laws, privacy laws and regulations that cover the collection and use of personal information or data.

(R4, tab 1 at 12)

3. The contract’s General Provisions included Business Permits for Host Countries, requiring the offeror to obtain all necessary permits and licenses to operate in South Korea before contract performance. The clause reads in full:

Offeror certifies by submission of proposal and/or acceptance of a contract that he will obtain all necessary permits and licenses relative to operating in the country in which contract will be performed prior to contract performance. The burden of determining applicability of host country business requirements is strictly concessionaire's responsibility and will not give rise to any claim against the Exchange or a basis for adjusting terms and conditions of the contract.

(R4, tab 1 at 21)

4. The contract required Kostas to supply equipment as follows:

EQUIPMENT, FURNITURE, AND MOVABLE TRADE FIXTURES (NOV 15).

...

b. Concessionaire Furnished: Concessionaire will provide and install all the equipment, furniture and movable trade fixtures required by this contract. All concessionaire

2 furnished property is subject to approval of the contracting officer.

(R4, tab 1 at 26)

5. Exhibit G of the contract required Kostas to supply a “Self-Contained Mobile Food Unit” (foodservice truck) that meets commercial food industry standards (R4, tab 1 at 46).

6. The contract included a Contractor Liability Services clause, which stated, in part:

Contractor will not be liable for incidental or consequential damages if the failure to perform arises out of causes beyond the control and without the fault or negligence of the contractor. Such causes may include, but are not restricted to, acts of God or of the public enemy, acts of the government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather; but in every case the failure to perform must be beyond the control and without the fault or negligence of the contractor. In such case contractor must provide prompt written notice to the contracting officer; the contracting officer, at his option may accept late, partial or substituted performance, or may terminate the contract in whole or in part effective immediately upon receipt of written notice by contractor.

(R4, tab 1 at 15-16)

7. The contract contained a “Termination” clause, stating, in part:

TERMINATION

Relative to termination of this contract, it is mutually agreed:

a. This contract may be terminated in whole or in part by either party immediately upon written notice to the other party in the event of breach of this contract by the other party.

3 b. . . . . All other concession contracts may be terminated in whole or in part by either party upon a minimum of thirty (30) days’ [sic] notice, in writing to the other party. . . .

(R4, tab 1 at 12). Additionally, the contract also contained the following:

NONWAIVER OF DEFAULTS

Any failure by the Exchange at any time to enforce or require strict performance of any terms or conditions shall not constitute waiver thereof, and shall not affect or impair such terms or conditions in any way or [sic] the Exchange’s right at any time to avail itself of such remedies as it may have for any breach or breaches of such terms or conditions.

(R4, tab 1 at 14)

8. Attached to the contract is a Verification of Proposal signed by Mr. Kostas that stated:

I acknowledge that I have been requested to demonstrate my ability to perform any resulting contract at the price and fees in my proposal, and I certify that I have reexamined the basis for my proposal, including the price and fees. Based on my reexamination, I certify and confirm that I can and will perform any contra[c]t awarded on my proposal.

(R4, tab 1 at 44)

9. Between March 6 and March 8, 2019, numerous emails were exchanged between the parties. The contracting officer provided the contract award document to Kostas, and the parties discussed the contract. (R4, tab 2)

10. On March 7, 2019, eight days before the contract start date, Mr. Kostas emailed the contracting officer that his flight was landing in South Korea on March 11. Still, he needed assistance on where Camp Humphreys base was in relation to the airport and where the nearest city was located (R4, tab 2 at 6-7).

4 11. The contracting officer responded the same day and expressed concern about Mr. Kostas’s arrival date and whether Mr. Kostas would be able to commence on time with the required documents, foodservice truck, and supplies:

This is concerning to me since the service should start on 15 Mar 2019. Will you be able to commence on time? Will you have the required documents, food truck and supplies to start? Please coordinate with the service business manager.

(R4, tab 2 at 6)

12. Mr. Kostas responded the same day, stating that he still needed to obtain the foodservice truck, permits, and licenses:

[A]s you know i am coming from Europe. If i ship my mobile canteen to Korea at least needs 3-4 months to arrive.

As i want to open the soonest possible, i have no other solution than to buy a new one from the local market and the equipment will be sent by plain.

I am coming to arrange my paper work for the business license and to buy the mobile canteen.

(R4, tab 2 at 5) (punctuation and syntax in original)

13. On April 16, 2019, in response to Mr.

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