AISG, Inc.

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of -- )
)
AISG, Inc. ) ASBCA Nos. 58696, 59151
)
Under Contract No. W5J9JE-10-C-0039 )

APPEARANCES FOR THE APPELLANT: Karl Dix, Jr., Esq.
J. Daniel Puckett, Esq.
Steven J. Stuart, Esq.
Smith Currie & Hancock LLP
Atlanta, GA

APPEARANCES FOR THE GOVERNMENT: Thomas H. Gourlay, Jr., Esq.
Engineer Chief Trial Attorney
James A. Wallace, Esq.
Daniel B. McConnell, Esq.
Engineer Trial Attorneys
U.S. Army Engineer District, Middle East
Winchester, VA

OPINION BY ADMINISTRATIVE JUDGE DICKINSON
ON APPELLANT'S SUPPLEMENTAL MOTION FOR SUMMARY JUDGMENT

This appeal 1 arises under a contract awarded by the Corps of Engineers
(government) to AISG, Inc. (AISG or appellant), for the construction of a secure
walled police station in Sar Hawza, Paktika Province, Afghanistan. Appellant has
moved for summary judgment, arguing that there are no material facts in dispute and
that it is entitled, as a matter of law, to an equitable adjustment for additional costs in
the amount of $841,243.39 incurred as a result of the government's alleged failure to
provide an appropriate building site for construction of the police station. The
government opposes the motion. The record before us on the motion consists of the
Rule 4 file and exhibits to the parties' filings on the motion.

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This appeal is from a deemed denial (SOF if 30). Appellant's initial motion for
summary judgement was filed prior to receipt of a contracting officer's final
decision (COFD). After receipt of a COFD, appellant requested and, without
objection, was granted permission to file this supplemental motion for summary
judgement which replaces the original motion.
 STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

1. Firm-fixed-price Contract No. W5J9JE-10-C-0039 was awarded by the
government to AISG on 3 September 2010 in the amount of $2,148,243 for the
construction of a one-story police station in Sar Hawza, Paktika Province,
Afghanistan, and $52,000 for demolition of some existing structures. The period of
performance was 365 days plus 65 weather days for a total of 430 days. (R4, tab 2 at
3) AISG was required to commence work under the contract within 10 days after
issuance of the Notice to Proceed (id. at 10).

2. The contract incorporated by reference Federal Acquisition Regulation
(FAR) 52.233-1, DISPUTES (JUL 2002); FAR 52.236-2, DIFFERING SITE CONDITIONS
(APR 1984); and FAR 52.243-4, CHANGES (JUN 2007) (R4, tab 2 at 8-9).

3. The record before us on the motion does not contain the Statement of Work
(SOW) or more than a very few isolated pages of the contract specifications, either as
originally awarded or as modified. It is undisputed that the site upon which the police
station was to be constructed was to be provided by the government and that AISG was
to adapt the provided site to meet the contract requirements (R4, tabs 4, 7, 12, 14-16,
19, 34, 37, 57; SOF ~ 17).

4. It is also undisputed that, after award of the contract, it was discovered that
the adjacent coalition forces installation had encroached on the planned building site
(Location #1) (R4, tab 19, see also tab 35). By letter dated 5 November 2010 the
government issued a suspension of work notice, citing FAR 52.242-14.

You are also hereby restricted from incurring any
additional cost against this portion of the contract. It is the
intention of the U.S. Army Corps of Engineers to follow
up this letter with additional technical direction concerning
this project site. The Suspension of Work will end upon
written notice from the Contracting Officer or
Administrative Contracting Officer.

(R4, tab 11, see also tab 35) The notice was acknowledged in writing by AISG.

5. In a 5 March 2011 Site Investigation Report, Corps project engineer
Sokoloski stated that the "local Sub Governor" had requested that the site for the
police station "should be located at the hill location closer to the village" and included
the coordinates for the hill location as well as photos of the site. This location is
hereinafter referred to as Location #2. The 5 March 2011 Site Investigation Report
stated:

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 5. Benefits of moving ANP HQ to site location on top
of hill:

5.1 Site is preferred by local officials and US Army.
5.2 Site is closer to village of Sar Hawza and will
most likely improve security for citizens.
5 .3 The site has little to no obstructions for
construction activities.
5 .4 Construction activities can begin as soon as new
site assessment is completed.

6. Potential cost of moving site to hill location:

6.1 Cost of bring [sic] materials up the hill, the road is
not level and erodes rapidly during heavy rain and
snow.
6.2 Possible time lost when road is not passable for
materials and supplies.

7. The proposed new site location appears to be an
acceptable location if water is readily available at the.
site. The presence of water in the nearby area seems
[to] be an indication that water could be found on the
proposed site. The project could move forward if this
site is chosen and the site assessment is completed in a
timely manner. Project Engineer recommends
relocating the site to hill location if site assessment
agrees that no adverse land ownership issues are
present and water can be expected at site location.

(R4, tab 14 at 3-4, see also tab 19)

6. The 28 May 2011 Site Assessment Report, prepared for the government by
JQ Builders, states in pertinent part:

1. INTRODUCTION

JQ [B]uilders have completed Site Assessment of
approximately 6400[]sqm parcel land for SAR HAWZA
UP DHQ facility in SAR HA WZA District, Pakti[k]a
Province Afghanistan, for the Ministry of Interior (Mol).
The site is located at the District Center; currently there is
an ANP police post at the center of the proposed site.

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The site visit was conducted at the end of April 2011 for
the Uniform Police District Headquarter (UP DHQ)

This effort was preliminary to a Master Planning effort
including assessment of the following

1. Land Ownership
2. Adjacent Land Use
3. General Availability of Utilities on Site
4. Site Condition
5. Access Roads
6. Availability of Construction Materials and Labor
7. Availability [of] Clinics, Fuel and Public
Transportation

3.2. Site Ownership

The proposed site is Government property belongs to Mol
according Government officials, Land Documents are signed by
the following Government officials.

Government officials and Coalition forces officials at the region
proved that the proposed land is Government property and Mol
should proceed for construction at the same site.

1. Verified and signed by - Mol facility Department
Director
2. Verified and signed by - CPT Dale Marrou
3. Verified and signed by - Deputy Provincial Governor
- Haji Mohamad Zadran
4. Verified and signed by - Sub-Governor - Haji Khan
5. Verified and signed by - District Police Commander
- Abdul Wahid Kandari
6. Verified and signed by - Provincial Police
Chief - Daulat Khan
7. Verified and signed by - Zone Commander - "Gul
Nabi" Ahmad Zai
8. Verified and signed by - Member of Agriculture
Department - Mir Zajan
9. Verified and signed by - Member of Amlam
Department - Mr. Agha Mohammad

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 10. Verified and signed by- Director of Agriculture:
Hamidulluah

JO team has verified the Land from every aspect and signed by
all possible government officials and local elders.

3.8 ... Over all security situation is bad at the region.

(R4, tab 15) The Site Assessment Report includes 20 pages of copies of
"GOVERNMENT LETTERS & LAND OWNER SHIP CERTIFICATES" (R4, tab 15
at 5-24), as well as various photos of the site.

7. In a report prepared by Corps project engineer Blackwell regarding a
19-20 June 2011 site visit, it was noted that in an informal meeting the "Sub-governor
... confirmed his support for the new location." He further reported that there was a
productive well to provide potable water and that the site was "preferred by both local
officials" and the government. (R4, tab 16 at 1, 4)

Other Comments: It would be smart to have Ktrbegin
the perimeter wall as soon as he can get mobilized & to
build this with 'village' labor. This is an opportunity to
show locals that project will provide jobs & Ktr will spend
money locally. Also, since winter will impact road access,
this wall/fence is a part of SOW that is simple enough to
complete with minimum of 'out-of-village'
material/expertise. It will have immediate value to the
existing ANP outpost.

(Id. at 4)

8. By letter dated 17 July 2011 the government lifted the suspension of work
and gave AISG the opportunity to submit a "proposal for impacts associated with this
252 calendar day suspension of work" (RFP No. 1) (R4, tab 18, see also tab 19).
AISG's proposal was received by the government on 9 August 2011 (R4, tab 48).

9. Bilateral contract Modification No. P00002 dated 6 October 2011 extended
the contract performance period by 252 calendar days and provided additional
compensation in the amount of $209,000 for "[a]ll added costs associated with
relocation of contractual. scope of work to property described by Plat A-1, dated
11 June 2011." The change in contract specifications was described as:

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 Specification Section NIA Drawing A-1 dated 11 June
2011 will replace original property description in contract.
The change in location does not change design 'templates'
nor specification 'templates' that are provided in this
contract's technical provisions and other contract
documents. It is the design-build contractor's
responsibility to provide all necessary documents for site
adaptation of this contractual scope of work.

(R4, tab 4) The updated specification section is not in the record before us on the
motion, but the referenced "Drawing RE Plat Plat A-1" (R4, tab 4 at 2), may be found
at several locations in the record (see, e.g., R4, tab 17 at 3). The modification made
17 July 2011 the new contractual completion date (R4, tab 4 at 2).

10. Contract Modifications Nos. P00003-00004, dated 25 October 2011 and
16 January 2012, respectively, and issued for reasons not now at issue, further
extended the contract completion date to 18 December 2012 (R4, tabs 5, 6).

11. Unilateral Contract Modification No. P00005 dated 21February2012
provided additional compensation in the amount of $7,334 "to settle a request for
equitable adjustment (REA) due to 252-day suspension of work" which was
"necessary while USACE acquired a new property for site to perform the SOW" (R4,
tab 7, see also tab 35). The modification did not further extend the contract
performance period and included the following language:

[T]he contract price is increased as stated above, which
reflects all credits due the Government and all debits due
the Contractor. It is further understood and agreed that this
adjustment constitutes compensation in full on behalf of
the Contractor and its Subcontractors and Suppliers for all
costs and markups directly or indirectly attributable for the
change ordered, for all delays related thereto, for all
extended overhead costs, and for performance of the
change within the time frame stated.

(R4, tab 7 at 2)

12. From at least 8 February 2012 through 27 April 2012 the parties engaged in
discussion via correspondence and otherwise on the subject of the contractual
submittal requirements (R4, tabs 22-29, 35).

13. In a 5 May 2012 phone conversation, AISG requested that the government
terminate the contract for convenience (R4, tab 35 at 2).

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 14. By 8 May 2012 AISG had mobilized to the jobsite and had begun work
even though the government advised that AISG had not yet complied with the
contractual pre-construction submittal requirements. The government issued a letter of
concern in which it listed eight (8) required pre-construction submittals, only one of
which had been approved and the government directed AISG to "cease any and all
on-going works on the project site until such time as you have met your contractual
obligations and have received clearance from the USACE to mobilize." (R4, tab 30,
see also tabs 31, 35) Thereafter, the parties continued to engage on the subject of
pre-construction submittals (R4, tabs 32-33 ).

15. On 19 May 2012 AISG submitted Request for Information (RFI) No. 1 to
the government requesting that the project site be moved to a different, third set of
coordinates (hereinafter Location #3) that it alleged was "supported by the local
government & Police Commander" (R4, tab 34, see also tabs 35, 51 (attach. 3)). In a
22 May 2012 Memorandum for Record, the government's project manager Jenkins
stated:

To date, the Government has issued four (4) modifications
to subject contract while the placement is still at zero
percent (0%). At no point during this project, either at the
original site [Location #1] or at the new site [Location #2],
has the contractor performed any work. These
pre-construction modifications have increased the contract
price from the original amount of$2,222,187.00 to
$3,223,231.83, which is an increase of 45%. This causes
me to question whether or not this is outside of the scope.

There is currently no schedule for this project. We have
not received any more pre-construction submittals, and
nothing on the Government's side has stopped the
contractor from fulfilling this obligation. The Resident
Office, the Area Office, the Project Manager, the Customer
(NTM-A), and COL Martin have all agreed that this
project needs to be terminated. As I stated before, the
current contract with modifications is already 45% above
the original contract amount and we have had no progress.
Based on the above stated facts, we need to seriously
consider terminating this contract. If we continue to try to
force this contract to work, we can easily spend much more
money in the process. My recommendation would be to
terminate the project, as the Government requirements

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 have changed significantly and the Contractor has not
performed.

(R4, tab 35 at 2)

16. AISG claims government project engineer Riles approved Location #3
sometime prior to 18 April 2012 (R4, tab 54 at 2). This is a proposed finding of fact
that is central and material to the matter now before us and the record shows that the
proposed fact is in dispute (R4, tab 55; app. mot, ex. A at 6-11; gov't opp'n, Riles
decl.; SOF iii! 6, 7, 16)

17. By letter dated 4 June 2012 AISG provided information that it considered
to complete all required pre-construction submittals (R4, tab 36, see also tabs 39-41).
AISG's position is that, because this was a site-adapt project, submittals could not be
prepared until the location of the site was finalized (app. mot., ex. A).

18. On 25 July 2012 the Afghanistan Ministry of Interior "Authorize[d]" the
government to have AISG construct the Sar Hawza project at Location #3 (R4, tab 51,
attach. 3 at 31 ).

19. On 6 August 2012 the government issued a Cure Notice to AISG:

This Cure Notice constitutes final notice to your
company on your continued failure to meet contract
requirements. Specifically you have failed to provide
acceptable contract required preconstruction submittals, to
include the Accident Prevention Plan, a Work Plan, a QC
Plan, and a Construction Schedule. This project was
awarded on 3 September 2010. The project was suspended
on 5 November 2010, and the suspension was lifted on
17 July 2011. Subsequently, there was a modification
signed on 20 October 2011 to move the location of the
project. To date, your company has failed to submit the
submittals required by your contract. You have far
exceeded any reasonable time frame to begin providing the
required submittals.

Your company is now 684 days into the contract
and you have yet to make any significant progress during
the past 12 months toward completion. The contract
required completion date is 19 August 2012£21. Since there

2 The correct completion date is 18 December 2012 (SOF if 10).

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 are now less than 32 days remaining in your contract, it no
longer appears possible to complete this contract within the
allotted period of performance.

AISG has not had authorization to mobilize to the
site, nor has AISG completed any acceptable work to date.
Serial Letter C-0005 was issued on 8 February 2012 ... to
address the lack of progress on AISG's part. Serial Letter
C-0009 ... was issued on 8 May 2012 to address the fact
that AISG had begun mobilizing to the project site without
.the required pre-construction submittals in place. Also on
8 May 2012, Serial Letter C-0010 ... was issued to notify
you that AISG would be receiving an interim
unsatisfactory rating which is accessible in CCASS .... In
spite of repeated Government requests, you have failed to
provide all required submittals. The latest correspondence
on this issue was an email sent by Mr. Jonathan Jenkins on
7 July 2012 ... and answered a question on how to properly
submit submittals. As of today's date, those submittals in
question have still not been properly submitted. It has
been obvious from the start of this project that your
company lacks the knowledge and experience required to
understand the basic contract requirements needed to
complete this project.

(R4, tab 42)

20. In AISG's 16 August 2012 response to the Cure Notice, it stated that all
pre-construction submittals had been provided with the exception of the Construction
Schedule which it stated was provided with the letter. With respect to AISG's RFI
requesting a change to Location #3, AISG stated:

The current RFI to reconsider the Site Location is awaiting
a letter from the Afghanistan Ministry of Interior.
However, ifthe USACE does not want to reconsider, then
AISG is prepared to move immediately onto site "A" and
site-adapt the ANP headquarters. AISG was endeavoring
to placate and satisfy the Afghan Village Elders, Local
Police and Provisional Government to avoid local Afghan
protests which have occurred in such sites as Khair Kot in
Sharana, Paktika .... Obviously, the local customers could
severely disrupt the construction if they do not support the
Corps and the Project. The final attachment is a letter from

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 the Afghanistan Ministry of Interior which states they want
us to build on the site identified by the Local Village
Elders in Sar Hawza, the Local Police and the Provisional
Government. This RF! was submitted on 15 July 2012.
We are still waiting for a response.

AISG will construct wherever USACE directs, regardless
of the requests of the Sar Hawza Village Elders, Local
Police, District Government or the Afghanistan Ministry of
Interior's requests. The local interests are properly
concerned that the current location provided by the
USACE is too close to the village, and does not provide
the proper standoff thereby compromising the safety of
both the Police Headquarters and the village. If the
USACE believes that building the Police Headquarters
within 10 meters from the village is the correct decision,
then AISG will begin construction despite the local
concerns.

The Cure Notice states the completion date for the contract
is 19 August 2012 .... Therefore, we respectfully request
that you rescind the Cure Notice since it was not based on
accurate information. We remain committed to timely
completing this Project for the Corps.

(R4, tab 44)

21. On 21August2012 the government formally denied AISG's request to
change the project site to Location #3 (R4, tab 43).

22. On 29 August 2012 AISG again submitted an RFI requesting that the
project site be changed to Location #3, stating:

If AISG use[s] the coordinates given by USACE, there is a
risk of incurring unnecessary resentment from the Village
Eider's [sic], Local Police, District Governor, and the
Ministry of Interior.

(R4, tab 45)

23. On 3 October 2012 the government requested that AISG submit a proposal
to relocate the contract work to Location #3 (R4, tab 46). AISG's undated proposal
requested no increase in contract price and a new contract completion date of

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21 October 2013 (R4, tab 47). By letter dated 5 November 2012, contracting officer
LaRosa cancelled the government's request for a proposal and directed AISG to
proceed to perform the contract work at Location #2:

AISG was well aware of the "obstructions", an ANP
outpost and an encroachment into an adjacent village wall,
that were within the above noted "Plat A-1" coordinates.

[AISG's proposal to perform the work at Location #2 was
received by the government on 9 August 2011.]

In regards to the ANP Outpost, AISG states [in its
Location #2 proposal]: "The ANP outpost will be
disassembled to allow for reassembly, if desired at a future
date. The most expedient method of removal would be the
demolition ofthe outpost,· however, this would destroy the
Hesco and eliminate the possibility ofreusing the
materials. Disassembly to preserve the material will be
manpower intensive, with the individual Hesco units being
emptied by hand. "

In regards to the encroachment on the village wall, AISG
states [in its Location #2 proposal]: "The village wall to
the right in the photo will require removal. Once the
sections are removed, we recommend tying in the
remaining walls to the perimeter wall of the site as a cost
savings. To minimize the loss ofsecurity for the residents,
we will begin construction of that portion of the perimeter
wall first. "

... Construction will continue with the. [Location #2]
coordinates, the original contract documents, and all
exercised modifications to date.

(R4, tab 48 at 2, see also tab 51, attach. 1at37-39)

24. On 13 November 2012 the government issued a Show Cause Letter in
which it again stated that AISG, in its August 2011 proposal to perform the contract
work at Location #2, was aware "of the existing ANP checkpoint, and the site
encroachment into the existing village" (R4, tab 50 at 3). Further:

In your RFP No. 1 Technical & Cost Proposal you indicate
that the content of your proposal is primarily based upon

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 your 25 July 2011 site visit of the new site location. In
your RFP No. 1 proposal you explain how you are going to
address the ANP checkpoint and the site encroachment and
then 299 days later you submit RFI No. 001 presenting the
obstructions as if it was the first time you became aware of
them. This action amounts to gross failure by you to
prosecute the work with the diligence that will insure its
completion within the time specified in the contract.

(Id. at 4)

25. In itsl 8 November 2012 response to the Show Cause Letter, AISG for the
first time claimed that AISG's failure to progress with the work was due to delays
resulting from the government's alleged failure to procure "approval of the local
Village Elders, Afghan National Police ('ANP') and Afghan Ministry of the Interior"
and further stated that "Afghan authorities absolutely refuse to move" the existing
police checkpoint. (R4, tab 51 at 1-2, see also app. mot., ex. A)

26. On 13 December 2012 the government issued a suspension of all work,
including procurement, design and administrative actions associated with the project
(R4, tabs 52, 54-55). The suspension of work was lifted effective 18 December 2012
and referenced "attached documents and Photos and coordinates for the approved
finalized work site" which are not contained in the record with the letter (R4, tab 53),
but we find from the rest of the record that the subject of the referenced attachments
was the approval by the government of Location #3 as the construction site (see, e.g.,
R4, tab 54).

27. On 28 January 2013 AISG thanked the government for finalizing the
project site location and submitted a request for equitable adjustment (REA) under the
Changes clause seeking $1,019,077.39 on the sole basis of alleged site location delays
from May-December 2012 (R4, tab 54).

28. Contract Modification No. P00007 3 dated 29 January 2013 relocated the
building site to Location #3, provided no additional compensation and extended the
contract completion date by 393 calendar days to 15 January 2014. The modification
directed AISG to change the contract drawings to incorporate the new grid coordinates
and to show all changes on the contract as-built drawings. (R4, tab 9, see also tab 49)

3
The modification states that the contractor was required to sign the document,
however, the copy in the record before us shows only the contracting officer's
signature.

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 29. By letter dated 14 March 2013 the government denied AISG's REA except
for the amount of $1,490.32 and an extension of 5 days due to the December 2012
suspension of work. On 2 April 2013 AISG converted its REA to a certified claim and
requested a contracting officer's final decision. (R4, tabs 55-56)

30. On 12 June 2013, after receiving no response from the government to its
certified claim, AISG appealed to this Board from a deemed denial. This appeal was
docketed as ASBCA No. 58696. AISG's complaint seeks $841,243.39 for alleged site
location delays, citing the Changes clause, Differing Site Conditions clause and breach
of the implied duty of good faith and fair dealing. A subsequent contracting officer's
final decision denying the claim is dated 8 February 2014. The timely appeal of the
COFD was docketed as ASBCA No. 59151 and consolidated with ASBCA No. 58696.

DECISION

Appellant's claim from which this appeal arises seeks compensation for delays
allegedly resulting from failure of the government to provide an appropriate building
site (SOF ~~ 27, 29, 30) Appellant asserts several legal theories in support of its claim
(defective specification as to Location #2; lack of evidence that the government
obtained necessary approvals for Location #2; delay associated with approval,
retraction and subsequent re-approval of third building site; and, breach of the implied
duty of good faith and fair dealing) (app. mot. at 23-31, 34, 43). AISG described the
factual heart of the claim and appeal as "the Corps' failure to provide AISG with a
Project site to construct the ANP Headquarters" (app. reply at 2).

Our review of the record before us on the motion reveals that it requires further
development as it is virtually devoid of evidence of the SOW and specifications from
which we can determine certain contractual rights and obligations of the parties as they
relate to AISG's motion (SOF ~ 3). The evidence that is in the existing record before
us on the motion contains multiple material facts in dispute. Among the material facts
that are in dispute or for which there is no evidence (as opposed to bare argument)
presented by either party are ( 1) what the contract requires the government to provide
as a project site (SOF ~ 3), (2) whether Location #2 met the contract requirements as
the site for construction (SOF ~~ 16, 20, 27-28), (3) what, if any, approvals the
government was required by the contract or otherwise to obtain before construction
could begin at any site (SOF ~~ 5-7, 18), and (4) whether the government first
approved Location #3 as the building site sometime prior to May 2012 (SOF ~~ 13,
23-24).

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 On the basis of the foregoing, appellant's motion for summary judgment is
denied.

Dated: 23 September 2015

:~ I
i:\ \)
I / Jr. , ~ A n----/1
v~L/~v;,

CKINSON
Administra ive Judge
Armed Services Board
of Contract Appeals

I concur I concur

A~F~-----
MARK N. STEMPLER
M
RICHARD SHACKLEFORD
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals

I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA Nos. 58696 and 59151,
Appeals of AISG, Inc., rendered in conformance with the Board's Charter.

Dated:

JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals

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