Military Aircraft Parts

ARMED SERVICES BOARD OF CONTRACT APPEALS

Application Under the Equal Access )

to Justice Act of -- )

)

Military Aircraft Parts ) ASBCA No. 59978

)

Under Contract No. SPM4A7-11-M-T291 )

APPEARANCE FOR THE APPELLANT: Mr. Robert E. Marin

President

APPEARANCES FOR THE GOVERNMENT: Daniel K. Poling, Esq.

DLA Chief Trial Attorney

Edward R. Murray, Esq.

Jason D. Morgan, Esq.

Trial Attorneys

DLA Aviation

Richmond, VA

OPINION BY ADMINISTRATIVE JUDGE CLARKE

On 28 September 2015, Military Aircraft Parts (MAP) timely applied for

expenses pursuant to the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504, after the

Board sustained MAP's appeal of the termination for default by the Defense Logistics

Agency (DLA). Military Aircraft Parts, ASBCA No. 59978, 15-1BCAif36,101. 1

MAP seeks $5,598.41 consisting of such things as travel, meals, lodging, rental car,

expert witness fee, witness fees, laboratory testing, attorney, paralegal and other

miscellaneous costs (appl. at 5). 2 We find that DLA's actions satisfy the legal

requirements for substantial justification and deny MAP's application.

The EAJA provides, an agency that conducts an adversary adjudication shall

award, to a prevailing party other than the United States, fees and other expenses

incurred by that party in connection with that proceeding, unless the adjudicative

officer of the agency finds that the position of the agency was substantially justified or

1

MAP elected to have the appeals processed pursuant to Board Rule 12.2;

consequently, the decision in the appeal was rendered by a single

Administrative Judge. Board Rule 12.2(c). Pursuant to paragraph (n) of

Addendum I to the Board's Rules, this decision is rendered by the same

Administrative Judge.

2

Even if our decision were in favor of MAP, we agree with DLA's argument that the

majority of these expenses are not recoverable (gov't resp. br. at 6-9).

that special circumstances make an award unjust. 5 U.S.C. § 504(a)(l). Whether the

position of the agency was substantially justified shall be determined on the basis of

the administrative record, as a whole. Id. For purposes of EAJA, a "party" includes

any corporation the net worth of which did not exceed $7,000,000 at the time the

adversary adjudication was initiated, and which had not more than 500 employees at

the time the adversary adjudication was initiated. 5 U.S.C. § 504(b)(l)(B)(ii). DLA

does not contest that MAP is eligible for possible recovery under the EAJA (gov't

resp. br.). We find that the documents presented in support of the EAJA application

demonstrate that MAP is a "party," satisfied the net worth and employee limitations

required for EAJA eligibility, and that, the Board having sustained the appeal, MAP

prevailed.

Substantial Justification

DLA's first line of defense is that it was substantially justified in all respects.

The burden is on the government to show that its position was substantially justified

Lucia E. Naranjo, ASBCA No. 52084, 00-2 BCA ~ 30,937 at 152,707. The Supreme

Court has ruled that ''a position can be justified even though it is not correct, and we

believe it can be substantially (i.e., for the most part) justified if a reasonable person

could think it correct, that is, if it has a reasonable basis in law and fact." Pierce v.

Underwood, 487 U.S. 552, 566 n.2 (1988). We read this to mean the Supreme Court

interprets "substantially" as meaning "for the most part" and that is how we approach

our analysis. Only one threshold determination is to be made for the entire proceeding,

including the underlying agency action. Comm 'r, INS v. Jean, 496 U.S. 154, 159

(1990); see also Hubbard v. United States, 480 F.3d 1327, 1332 (Fed. Cir. 2007).

DLA supports its contention that it was substantially justified in its handling of this

case, both before termination and through litigation, on two arguments. First that the

Board found DLA had established a prima facie case for default termination based on its

First Article (FA) test reports (gov't resp. br. at 2). Military Aircraft Parts, 15-1 BCA

~ 36,101 at 176,258. Second, that the Board "specifically found that the Government's

position with respect to the central issue in the appeal - the interpretation of the applicable

post-weld tolerances - was reasonable" (id.). Concerning the first point, the threshold for

establishing a prima facie case is very low essentially giving the benefit of the doubt to the

government's test report. Concerning the second point, MAP points out that the contract

interpretation issue was only one of four "areas of dispute" (app. reply br. ~ 3). MAP is

correct. In our decision we dealt with four areas of dispute: Drawing 16Y226

Dimensions, Post-Welding C7551 Dimensions, Welds, and Insulation Tape. Military

Aircraft Parts, 15-1BCA~36,101at176,258-60. Therefore, we look at DLA's position

on each of the four areas of dispute and determine, as the Supreme Court said, if DLA,

although wrong, was justified "for the most part." Pierce, 487 U.S. at 566 n.2. This

means that DLA does not have to be 'justified" in all four of the areas of dispute to be

substantially justified.

2

Concerning the Drawing 16Y226 dimensions, we agree with MAP. Initially DLA

was substantially justified when it relied on its FA test results. However, this changed after

MAP (1) offered to have DCMA observe MAP re-measure the FA dimensions and DLA

declined the offer, (2) provided DLA with independent test results from Dimensional

Inspection Laboratories (DIL) showing the dimensions were acceptable and (3) provided

DLA with independent test results from Dayton T. Brown, Inc. (DTB), showing the

dimensions were acceptable. Military Aircraft Parts, 15-1BCAii36,101 at 176,255-57.

DLA did not challenge the credentials ofDIL or DTB. We found that with this evidence

"MAP met its burden of rebutting DLA's primafacie case that the four drawing 16Y226

dimensions were out-of-tolerance." Id. at 176,259. DLA's failure to investigate this credible

evidence that there was a problem with Hill Air Force Base's FA measurements was both

unreasonable and inexplicable. We fail to see why DLA and Hill AFB would not want to

investigate what appears to be a problem with its metrology laboratory when so much is at

stake for both its contractors and the Air Force. We find that DLA was not substantially

justified in disregarding the credible evidence that Hill AFB' s measurements of Drawing

l 6Y226 dimensions were inaccurate.

Concerning the Post-Welding C7551 dimensions we agree with DLA. In

applying generally accepted rules of contract interpretation, we found that DLA's

interpretation was "within the zone of reasonableness." Military Aircraft Parts,

15-1 BCA ii 36, 101 at 176,260. MAP correctly points out that we dropped a footnote

stating, "[w]e do not find DLA's interpretation nearly as persuasive as MAP's, but that

is not the test. DLA's interpretation is plausible." Id. at 176,260 n.9. Having found

that DLA's interpretation was reasonable, albeit wrong, we conclude that DLA's

reliance on that interpretation was substantially justified.

Concerning the welds, MAP offers two reasons why the Board should find that

DLA's position was not substantially justified, "(7) the Government failed to consider

the correctable nature of the welds in the FA's and (8) the Government failed to

contact a certified weld inspector prior to disapproving MAP's welds" (appl. at 3).

The evidence concerning these welds consists of Mr. Valenzuela, a MAP inspector

with primary expertise in Coordinate Measuring Machine, who testified that he

thought the welds were acceptable, but that if they were "a 'little too thick'" they could

be repaired. Military Aircraft Parts, 15-1BCAii36,101 at 176,256. Mr. Nguyen, a

MAP certified welder, testified that one weld was "a little thick" but it could be ground

down. Id. Mr. Madison was the dimensional technician who conducted the second

FA inspection. Id. at 176,257. He testified that he was "not a 'weld expert,' but if a

weld 'didn't look right' he would note it on the inspection sheet as a 'heads up' for

someone else to inspect it." He testified that he believes that an "engineer" looked at

the welds. Id. Mr. Schabacker, lead engineer, F-16 Office, testified that his engineers

are not certified weld inspectors but that he believed they were capable of conducting

weld inspections. He also explained why he believed the welds were defective. Id.

Unlike with the l 6Y226 dimensions, MAP did not seek independent expert analysis of

3

the welds. MAP complains that DLA failed to contact a certified weld inspector.

MAP also failed to present evidence from a certified weld inspector. In our decision

we did find that the welds were correctable, however, the evidence was not so

overwhelming in favor of MAP that we can conclude that DLA's position was not

substantially justified. We will not give undue weight to MAP's complaint that DLA

did not use a certified weld inspector when MAP also failed to do so. We conclude

that DLA's position on the welds was substantially justified.

Concerning the insulation tape, nothing in the record persuades us that DLA

considered this defect to be a reason to disapprove the FA. At the hearing,

Mr. Schabacker, testified that the tape was easily correctable. Military Aircraft Parts,

15-1 BCA, 36,101 at 176,256, 176,260. We find DLA's position on the insulation

tape substantially justified.

Having found that DLA was substantially justified in three of the four areas of

dispute, we conclude that DLA was justified in its positions "for the most part" and is

therefore not liable for EAJA damages.

CONCLUSION

MAP's application for EAJA damages is denied.

Dated: 17 November 2015

CRAIG S.

Administra ve Judge

Armed Services Board

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 on an application for fees and other

expenses incurredin connection with ASBCA No. 59978, Appeal of Military Aircraft

Parts, rendered in accordance with 5 U.S.C. § 504.

Dated:

JEFFREY D. GARDIN

Recorder, Armed Services

Board of Contract Appeals

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