Parwan Group Company

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of -- )

)

Parwan Group Company ) ASBCA No. 60657

)

Under Contract No. SP0600-13-D-9504 )

APPEARANCES FOR THE APPELLANT: Eric S. Montalvo, Esq.

Lauren R. Brier, Esq.

The Federal Practice Group Worldwide

Service

Washington, DC

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

DLA Chief Trial Attorney

Matthew Vasquez, Esq.

Trial Attorney

DLA Energy

Fort Belvoir, VA

OPINION BY ADMINISTRATIVE JUDGE D'ALESSANDRIS

ON THE GOVERNMENT'S MOTION FOR PARTIAL DISMISSAL

FOR LACK OF JURISDICTION AND MOTION TO DISMISS

FOR FAILURE TO STATE A CLAIM

Appellant Parwan Group Company (Parwan) appeals from a contracting

officer's final decision denying its claim for unanticipated security costs arising out of

a fuel delivery contract in Afghanistan. The Defense Logistics Agency-Energy (DLA)

moves for partial dismissal for lack of jurisdiction, alleging that portions of Parwan's

complaint raise claims that were not presented to the contracting officer for final

decision prior to the filing of Parwan's appeal. DLA also moves to dismiss the entire

appeal for failure to state a claim upon which relief can be granted. Parwan opposes

the motion.

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

On 23 April 2012, DLA issued Solicitation No. SP0600-12-R-0208

(solicitation) seeking proposals for the transportation of government-owned fuel

products in Afghanistan (R4, tab 1 at 47). 1 Amendment No. 0005 to the solicitation

1

Citations to the Rule 4 file are to the consecutively-numbered pages unless otherwise

indicated.

contained answers to questions from offerors about a number of issues, including three

related to convoy security (R4, tab 2 at 93-94). 2 In response to those security

questions, DLA informed offerors that "vendors considering the use of armed private

security will not be considered for award" (id. at 94). Offerors were also informed that

there would be "no US Government provided escorts" for the contractor-provided

services (id.).

Parwan interpreted those responses to mean that the use of security for any

particular convoy would be left to the contractor's discretion, and that "if [the

contractor] did not provide security [it] bore the risk of non-performance for each

unsuccessful shipment" (compl. ,r 8). Accordingly, when Parwan submitted its

proposal on 27 June 2012, it did not include costs for convoy security (id. ,r,r 8, 58).

On 28 November 2012, DLA awarded Contract No. SP0600-13-D-9504

(contract) to Parwan (R4, tab 6 at 1). This fixed-price commercial item contract

consisted of a two-year base period from the date of award through 31 December

2014, and a one-year option period from 1 January 2015 through 31 December 2015,

for a total estimated contract value of $12,902,090 (R4, tab 6 at 126-27; gov't mot.

at 1-2). The contract included Federal Acquisition Regulation (FAR) clause 52.243-1,

CHANGES-FIXED-PRICE (AUG 1987), ALTERNATE IV (APR 1984), which states in

relevant part:

(a) The Contracting Officer may at any time, by

written order, and without notice to the sureties, if any,

make changes within the general scope of this contract in

any one or more of the following:

(1) Specifications.

(2) Work or services.

(3) Place of origin.

(4) Place of delivery.

(5) Tonnage to be shipped.

(6) Amount of Government-furnished property.

(b) If any such change causes an increase or

decrease in the cost of, or the time required for,

performance of any part of the work under this contract,

whether or not changed by the order, the Contracting

Officer shall make an equitable adjustment in the contract

2

When receiving a motion to dismiss for lack of jurisdiction, the facts supporting

jurisdiction are subject to fact-finding based on the Board's review of the

records. See, e.g., CCJE & Co., ASBCA Nos. 58355, 59008, 14-1 BCA

,r 35,700 at 174,816.

2

price, the delivery schedule, or both, and shall modify the

contract.

(R4, tab 6 at 143)

The contract also included two clauses relevant to Parwan's performance under

this contract - clause 952.225-0004, COMPLIANCE WITH LA ws AND REGULATIONS

(DEC 2011); and clause 252.225-7995, CONTRACTOR PERSONNEL PERFORMING IN THE

UNITED STA TES CENTRAL COMMAND AREA OF RESPONSIBILITY {DEVIATION

2011-00004) (APR 2011) (R4, tab 6 at 133, 147). These clauses imposed upon

Parwan two key obligations. First, under both clauses, Parwan was required to comply

with all host nation laws (id.). Second, under clause 252.225-7995( c ), "[u ]nless

specified elsewhere in the contract, the Contractor is responsible for all logistical

and security support required for contractor personnel engaged in this contract" ( id.

at 147).

The contract's performance work statement (PWS) reiterated Parwan's obligation

to comply with host nation laws, stating that Parwan must "remain in full compliance

with all laws, decrees, labor standards, and regulations of the Afghanistan Government"

(R4, tab 1 at 47). The PWS also stated that the U.S. Government "will not provide

security escort for trucks transporting fuel product in Afghanistan" (id. at 48).

In February 2013, after Parwan began making deliveries, the Afghan

government issued a decree stating that all convoys delivering fuel for the U.S.

Government using "southern routes" would henceforth be required to use security

escorts (R4, tab 29 at 492, 586). The decree further stated that private companies were

no longer authorized to provide security escorts, and that Parwan would be required to

use the security services of the Afghan Public Protection Force (APPF), a state-owned

enterprise of the Afghan Ministry of the Interior (id.).

By email dated 7 March 2013, Parwan informed DLA that the new requirement

to use security escorts had caused security costs for all companies transporting fuel for

the U.S. Government to "skyrocket," and that for Parwan in particular, the increased

costs had become "almost prohibitive" (app. supp. R4, tab 38 at 4). By email dated

8 March 2013, DLA advised Parwan that it was working "to find a payment solution"

(id. at 3).

On 24-25 April 2013, representatives from DLA and Parwan met to discuss the

increased security costs and the possibility of Parwan filing a request for equitable

adjustment (REA). Pursuant to that meeting, DLA instructed Parwan to submit an

REA "for the change to the method of shipping and the attendant increase in costs

incurred by Parwan." (Compl. ,r,r 15-16) By email dated 26 May 2013, Parwan

notified DLA that it was experiencing delays in delivery that it attributed to the

3

I

security escorts (app. supp. R4, tab 39). The parties thereafter exchanged additional

emails discussing the delays, with DLA twice requesting information from Parwan

concerning its "issues" with APPF (R4, tabs 10-11; app. supp. R4, tabs 40-43). By

email dated 17 June 2013, DLA also requested that Parwan advise it of what actions

could be taken by DLA to "alleviate the delays in delivery" (app. supp. R4, tab 42). It

is unclear whether Parwan ever responded to this request.

By email dated 11 July 2013, DLA requested additional information regarding

Parwan's working relationship with APPF, including "systemic problems" regarding

scheduling and cancellations. Parwan responded that same date, stating with respect to

the systemic problems that "(w]e do not really get told why a convoy is cancelled,

usually the reason given is security, we do know at times that they do not always have

the assets available." (App. supp. R4, tab 46 at 53, 55)

In July 2013, Parwan submitted two REAs to the contracting officer, neither of

which are at issue in this appeal. In an email dated 3 September 2013, Parwan

submitted a third REA (REA 3) seeking reimbursement for increased costs associated

with the security escorts, which it described as "excessive" (R4, tab 15 at 243). By

email dated 20 September 2013, Parwan amended REA 3 to include additional costs

(R4, tab 16). In October, November and December 2013, Parwan emailed the

contracting officer requesting an update on the status of its REAs, including REA 3

(R4, tabs 17-18, 20). In those emails, Parwan mentioned that it was experiencing

financial difficulties while the REAs were pending, noting that Parwan "could be

upside-down financially on this contract," that if the REAs were not approved it would

be "running at an extensive loss" and it did not "know our current financial position as

we have so many items pending" (R4, tab 17 at 276-77, tab 20 at 340).

By email dated 2 December 2013, DLA informed Parwan "[a]s a reminder" that

APPF was the "only authorized armed security provider" under Afghan law, and "[i]f

caught using unauthorized armed security you risk negative reports and/or losing your

entire contract" (R4, tab 19). By letter dated 27 March 2014, DLA denied Parwan's

requests for reimbursement, stating that the increased security costs were not

reimbursable under the contract (R4, tab 24 at 456). By letter dated 22 April 2014, the

contracting officer reiterated to Parwan that, "per the terms of the contract, DLA

Energy does not reimburse or pay any security fees, including any fees from APPF

security" (R4, tab 25 at 459).

By letter dated 31 May 2015, Parwan filed its certified claim seeking a

contracting officer's final decision on several issues raised in its REAs (R4, tab 29).

4

With respect to the security costs, the claim sought $1,022,440, 3 and made the

following points:

a. At the time it submitted its bid proposal to DLA, Parwan

was not obligated to use any armed security for its

convoys, and therefore did not include any security costs in

its bid proposal;

b. In February 2013, the Afghan Ministry of the Interior

informed Parwan that it would be required to begin using

APPF security escorts at the end of that month;

c. The terms of the contract required Parwan to comply

with all U.S. and host nation la~s; and

d. Because Afghan law now required it to use APPF

security escorts, an obligation "reinforced and reiterated"

by DLA employees, Parwan was entitled to the increased

costs of performance.

(Id. at 492-93)

Parwan's claim included invoices reflecting the increased security costs (R4,

tab 29 at 595-617). Parwan also sought a contract modification to reflect the new

security obligation, which it argued was a reasonable request because the additional

expenditure "was not contemplated in the award costs, is required by Afghan law and

indirectly by the contract, and may result in financial ruin for the company" (id.

at 493). Specifically with respect to the increased security costs, Parwan's claim made

no mention of the impact of delivery delays. 4

By letter dated 14 April 2016, DLA issued the contracting officer's final

decision, which denied the portion of Parwan's claim seeking reimbursement for the

increased security costs (R4, tab 35). DLA denied changing the contract requirements,

citing the contract provisions that required Parwan to comply with host nation law and

that assigned responsibility for security to Parwan. DLA also pointed out that a

fixed-price contract such as Parwan's places upon the contractor "maximum risk and

full responsibility for all cost and resulting profit or loss" meaning that ''the use of

3 That amount has now increased to $1,044,660 to reflect invoices Parwan received

from APPF after submission of its claim (compl. ,r,r 32-33).

4

Parwan's claim also sought recovery for costs associated with delays in

downloading fuel; however, those costs are unrelated to the increased security

costs and are not at issue in this appeal (R4, tab 29 at 493-95).

5

APPF and any costs incurred ... are not reimbursable under this contract." (Id. at 707)

Parwan filed its notice of appeal by letter dated 1 July 2016. The appeal challenges

only that portion ofDLA's decision relating to Parwan's increased security costs.

DECISION

Parwan's complaint asserts four grounds for relief. 5 Counts I and II allege that

DLA changed the contract requirements, with Count II specifically alleging that the new

security escort requirement constituted a constructive change ( comp I. ,i,i 34-54). In

Count III, Parwan alleges that a 15% increase in its overhead costs and severe delivery

delays rendered its contract with DLA commercially impracticable (id. ,i,i 55-62). Count

IV alleges that Parwan "detrimentally relied" upon DLA's repeated assurances that the

increased costs ''would be taken care of," and that based upon those assurances, Parwan

continued performance with the understanding that it would be "made whole" through

an equitable adjustment (id. ,i,i 63-70).

DLA has moved to dismiss Counts III and IV of the complaint, arguing that the

Board lacks jurisdiction to entertain these allegations because they were never

presented to the contracting officer. DLA has alternatively moved to dismiss the entire

appeal for failure to state a claim upon which relief can be granted. We address the

jurisdictional argument first.

The Board's Jurisdiction over Counts III and IV

Parwan bears the burden of proving the Board's jurisdiction by a preponderance

of the evidence. Reynolds v. Army & Air Force Exchange Service, 846 F.2d 746, 748

(Fed. Cir. 1988); United Healthcare Partners, Inc., ASBCA No. 58123, 13 BCA

,i 35,277 at 173,156. Pursuant to the Contract Disputes Act (CDA), "[e]ach claim by a

contractor against the Federal Government relating to a contract shall be submitted to

the contracting officer for a decision." 41 U.S.C. § 7103(a)(l). "The scope of [an]

appeal is determined by the claim originally submitted to the contracting officer for a

final decision." MACH II, ASBCA No. 56630, 10-1 BCA i! 34,357 at 169,673.

Accordingly, we do not possess jurisdiction over new claims that were not previously

presented to the contracting officer. Id.

To determine whether a claim is new we examine whether it derives from the

same set of common or related operative facts as the claim presented to the contracting

officer and seeks the same or similar relief. Scott Timber Co. v. United States, 333 ·F .3d

1358, 1365 (Fed. Cir. 2003); The Public Warehousing Company, ASBCA No. 56022,

5

For purposes of this decision we will refer to those four grounds for relief as

Counts I through IV.

6

11-2 BCA ,r 34,788 at 171,227. If the operative facts in the pleadings are essentially the

same as those presented in the claim, they are within the scope of the appeal. MA CH II,

10-1 BCA ,r 34,357 at 169,673. Allegations presenting a new legal theory of recovery,

or the introduction of additional facts that do not alter the nature of the original claim, do

not constitute a new claim if they are based upon the same operative facts included in

the original claim. Trepte Construction Co., ASBCA No. 38555, 90-1 BCA ,i 22,595

at 113,385-86. Where proof of the new legal theory includes operative facts differing

from those in the original claim, however, "the essential nature of the claim has been

changed and we do not have jurisdiction over the new claim until it is presented to the

contracting officer for decision." Shams Engineering & Contracting Co. & Ramli Co.,

ASBCA Nos. 50618, 50619, 98-2 BCA ,i 30,019 at 148,525. The claim must provide a

"clear and unequivocal statement that gives the contracting officer adequate notice" of

its claim. K-Con Building Systems, Inc. v. United States, 778 F.3d 1000, 1005 (Fed. Cir.

2015) (quoting Contract Cleaning Maintenance, Inc. v. United States, 811 F.2d 586, 592

(Fed. Cir. 1987)).

Count III - Commercial Impracticability

Count III of Parwan's complaint asserts that the new security escort

requirement rendered the contract commercially impracticable. To establish

commercial impracticability, a contractor must show that "(l) a supervening event

made performance impracticable; (2) the non-occurrence of the event was a basic

assumption upon which the contract was based; (3) the occurrence of the event was not

the contractor's fault; and (4) the contractor did not assume the risk of occurrence."

Spindler Construction Corp., ASBCA No. 55007, 06-2 BCA ,i 33,376 at 165,462

(citing Seaboard Lumber Company v. United States, 308 F.3d 1283, 1294-95 (Fed.

Cir. 2002)). The doctrine applies where "the costs of performance amount to

commercial senselessness ... [not] just because performance cannot be achieved most

economically." Safety Training Systems, Inc., ASBCA Nos. 57095, 57166, 14-1 BCA

,i 35,509 at 174,051 (citing Natus Corp. v. United States, 371 F.2d 450,457 (Ct. Cl.

1967)). Thus "[a] showing of simple economic hardship is not sufficient." American

Combustion, Inc., ASBCA No. 43712, 94-3 BCA ,i 26,961 at 134,243 (citingJennie-0

Foods, Inc. v. United States, 580 F.2d 400,410 (Ct. Cl. 1978)).

Count III specifically alleges that "[a]t the time of Contract formation, both

parties assumed transportation security was neither needed nor required to ship

products along certain routes in Afghanistan," and for this reason, the solicitation did

not include a requirement "mandating the use of APPF escorts" (compl. ,i,i 56-57).

Count III further alleges that based upon this understanding, Parwan did not include

security costs in its bid price (id. ,r 58). Count III then asserts that the subsequent

requirement to use security escorts rendered the contract commercially senseless,

because Parwan incurred a 15% increase in overhead costs and experienced severe

delivery delays due to difficulties in coordinating shipments (comp 1. ,i,r 61-62).

7

DLA contends that Count III is based upon materially different facts than those

alleged in Parwan's claim, which DLA notes did not mention commercial

impracticability (gov't mot. at 7). Parwan disagrees, arguing that Count III merely

presents a new legal theory rather than a new claim (app. opp'n at 25-27). Parwan

describes the claim as having asserted that the new security requirement was

"unexpected" and "unforeseen," but fails to identify any specific language in the claim

that supports this assertion (id. at 26). Parwan also notes that the 15% increase in

security costs can easily be calculated from the invoices attached to the claim (id.).

With respect to the complaint's references to delivery delays, Parwan maintains that

they "derive directly from the change in contract" addressed in its claim, but it, again,

fails to identify any language in the claim that supports this assertion (id. at 27).

We agree with DLA. The operative facts of Parwan's claim are straightforward

and simple: 1) Parwan did not include any costs for security escorts at the time it

submitted its bid because the solicitation did not require it; 2) after performance began,

Afghan law changed, requiring Parwan to use security escorts if it wished to operate in

Afghanistan; 3) Parwan is contractually required to comply with host nation law; and

4) as a result, Parwan incurred additional costs exceeding the contract price (R4, tab 29

at 492-93). The claim does not address what the parties believed with respect to the

need for security escorts, nor does it mention a reason the solicitation did not require

security escorts (id.). Although Parwan submitted invoices for the security escort costs

with its claim, the claim document itself only minimally addresses the impact of those

costs, and it is silent with respect to the impact of delivery delays (id. at 492, 595-617).

While it is true that in determining the scope of the claim we may "examine the

totality of the correspondence ... [and] the continuing discussions, between the parties,"

Public Warehousing, 11-2 BCA ,r 34,788 at 171,228, the record here does not support

including commercial impracticability within the scope of Parwan's claim. With

respect to the impact of the increased security costs, although there are other

references to financial hardship contained in the record, they are vague and conclusory

at best (R4, tabs 15-18, 20; app. supp. R4, tab 38). In addition, while the record

indicates the parties discussed delivery delays on several occasions in 2013 prior to the

filing of REA 3 (R4, tabs 10-11; app. supp. R4, tabs 29-43, 46), it contains no

evidence Parwan ever communicated to DLA that it believed the impact of those

delays was so severe that it rendered the contract commercially senseless.

Parwan's claim is in essence a question of contract interpretation, i.e., the impact

of the change in Afghan law upon Parwan's contractual obligations. Count III goes far

beyond that limited analysis, altering the claim's essential nature by requiring factual

inquiry into whether DLA shared Parwan's a~sumption that security escorts would not

be required, why security escorts were not required by the solicitation and whether the

increased costs and the impact of delivery delays were so great that they rose to the

8

level of commercial impracticability. Because Parwan's claim did not provide a "clear

and unequivocal statement that [gave] the contracting officer adequate notice" it was

alleging commercial impracticability, we do not possess jurisdiction over Count III of

Parwan's complaint. K-Con Building Systems, 778 F.3d at 1005.

Count IV-Detrimental Reliance

Count IV of Parwan's complaint alleges that shortly after the Afghan

government imposed the new security requirement, DLA provided assurances that a

"payment solution" would be found (compl. ,r 14). Count IV further alleges that

Parwan, relying to its detriment upon those assurances, continued to perform and

"absorb[ed] the additional costs with an understanding that [it] would be made whole

th.rough an equitable adjustment" (compl. ,r,r 65-69).

In its opposition brief, Parwan elaborates on Count IV and argues that based

upon this detrimental reliance, DLA is estopped from denying liability for the security

costs (app. opp'n at 27-28). Characterizing Count IV as a new legal theory rather than

a new claim, Parwan avers that it "emerges directly" from two facts referenced in the

claim-I) that in February 2013 Parwan was required to use security escorts in order to

fulfill its contractual obligations; and 2) that this "change to its contract requirements

was 'reinforced and reiterated_ by DLA employees'" (id. at 27).

We do not agree that the difference here is merely the legal theory in the claim.

The two statements referenced by Parwan cannot be reasonably interpreted as

informing DLA that Parwan was asserting an estoppel claim. Equitable estoppel

requires: 1) some form of misleading conduct, which may consist of silence or

inaction as well as affirmative action, leading another to reasonably infer that rights

will not be asserted against it; 2) reliance upon the misleading conduct; and 3) material

prejudice due to the reliance. Mabus v. General Dynamics C4 Systems, Inc., 633 F.3d

1356, 1359 (Fed. Cir. 2011). There is nothing in Parwan's claim asserting that DLA

assured Parwan it would be paid, either falsely or otherwise, or that Parwan was

relying upon any such assurances in continuing to incur the additional costs. Count IV

introduces a new set of facts that are wholly unrelated to the claim and that materially

alter the claim's essential nature. We therefore find that Count IV is also a new claim

over which we do not possess jurisdiction.

Breach of Implied Duty to Cooperate

In its opposition brief, Parwan for the first time alleges that DLA breached its

implied duty to cooperate, and that this breach constituted a constructive change to the

contract (app. opp'n at 15) (citing R. W Jones Construction, Inc., IBCA No. 3656-96,

99-1 BCA ,r 30,268 at 149,681). DLA characterizes this allegation as an implicit

request by Parwan to amend its complaint, which it argues should be denied because it

9

I

l represents a new claim not previously presented to the contracting officer (gov't reply

at 15). Although the Board may permit a party to amend its pleadings upon conditions

fair to both parties, see Board Rule 6( d), the Board will deny a request to amend a

complaint if the amendment is essentially a new claim based upon operative facts

not already presented to the contracting officer. GSC Construction, Inc., ASBCA

No. 59046, 15-1 BCA ,r 35,882 at 175,429.

The implied duty to cooperate arises out of the implied duty of good faith and

fair dealing that every contract contains. Metcalf Construction Company v. United

States, 742 F.3d 984, 991 (Fed. Cir. 2014). The duty requires the government to do

"what is reasonably necessary to enable the contractor to perform." SEE Engineering,

Inc., ASBCA No. 39728, 94-2 BCA ,r 26,810 at 133,352. Parwan's opposition brief

alleges that DLA breached this duty when it took over a year to deny Parwan's

requests that it be reimbursed for the increased security costs (app. opp'n at 15-17).

Parwan identifies no provision in the claim itself supporting its contention that

DLA breached this duty. Instead, Parwan points to the allegations in the complaint

that even though it began requesting reimbursement for the security costs as early as

March 2013, DLA did not deny that request until 27 March 2014 (app. opp'n at 16-17

(citing compl. ,r,r 12-24, 65-68)).

It is not the complaint, however, but the claim that forms the basis for our

jurisdiction. Madison Lawrence, Inc., ASBCA No. 56551, 09-2 BCA ,r 34,235

at 169,207; MACH II, IO-I BCA ,r 34,357 at 169,673. As DLA notes, Parwan's claim

makes no reference to its earlier requests for reimbursement or any unreasonableness

on DLA's part in resolving those requests (gov't reply at 15; R4, tab 29 at 492-93).

We therefore hold that Parwan's contention that the government breached its duty to

cooperate represents a new claim not previously presented to the contracting officer

over which we do not possess jurisdiction. 6

Failure to State a Claim upon which Relief can be Granted

We next tum to DLA's contention that Parwan's complaint fails to state a claim

upon which relief can be granted (gov't mot. at 9-19). The Board will grant a motion

to dismiss for failure to state a claim when the complaint fails to allege facts

"'plausibly suggesting (not merely consistent with)' a showing of entitlement to

relief." Cary v. United States, 552 F.3d 1373, 1376 (Fed. Cir. 2009) (quoting Bell

Atlantic Corp. v. Twombly, 550 U.S. 544, 557 (2007)); American General Trading &

Contracting, WLL, ASBCA No. 56758, 12-1 BCA ,r 34,905 at 171,640. The

6

DLA also urges the Board to reject Parwan's breach allegation because it would be

futile on the merits (gov't reply at 14). Based upon our holding here, we need

not consider that argument.

10

allegation "must be enough to raise a right to relief above the speculative level." Cary,

552 F.3d at 1376. In addition, the "complaint must contain sufficient factual matter,

accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). We "must

accept well-pleaded factual allegations as true and must draw all reasonable inferences

in favor of the claimant." Kellogg Brown & Root Services, Inc. v. United States, 728

F.3d 1348, 1365 (Fed. Cir. 2013). We are not required, however, to accept as true

legal conclusions inaccurately portrayed as factual allegations. Exe/is, Inc., ASBCA

No. 60131, 17-1 BCA ,r 36,679 at 178,606 (citing Acceptance Ins. Companies, Inc. v.

United States, 583 F.3d 849, 853 (Fed. Cir. 2009)).

In addition to reviewing the allegations contained in the complaint, the Board

rriay consider "matters incorporated by reference or integral to the claim, items subject

to judicial notice, [and] matters of public record." A&D Auto Sales, Inc. v. United

States, 748 F.3d 1142, 1147 (Fed. Cir. 2014) (quoting SB Charles Alan Wright &

Arthur R. Miller, Federal Practice and Procedure§ 1357 (3d ed. 2004)). Here, the

focus of the complaint is the purported change in the contract's performance

requirements from what was originally contemplated by the parties. Thus we may

properly consider the contract's terms in determining whether Parwan's complaint

states a claim upon which relief can be granted. See CCIE & Co., 14-1 BCA ,r 35,700

at 174,816.

Counts III and IV having already been dismissed for lack of jurisdiction, we are

left only to evaluate the sufficiency of Counts I and II. Although far from a model of

clarity, Count I appears to assert entitlement under the Changes clause itself (compl.

,r,r 34-48). 7 However, nowhere in the complaint does Parwan allege the existence of a

written change order, which the Changes clause requires. See FAR 52.243-l(a). Thus,

to the extent that Count I seeks recovery strictly under the Changes clause, it fails to

allege facts showing Parwan is entitled to relief.

In Count II, Parwan seeks relief under a theory of constructive change. "A

constructive change occurs when a contractor performs work beyond the contract

requirements, without a formal order under the Changes clause, due either to an

express or implied informal order from an authorized government official or to

government fault." Circle, LLC, ASBCA No. 58575, 15-1 BCA ,r 36,025 at 175,974

(citing Bell/Heery v. United States, 739 F.3d 1324, 1335 (Fed. Cir. 2014)). Thus in the

absence of government action or fault, the constructive change doctrine cannot form

7 Parwan's opposition brief further confuses the issue by recharacterizing Count I as a

constructive change claim and Count II as a claim for breach of the implied

duty to cooperate (app. opp'n at 8, 10-18). Notwithstanding the confusion, we

will proceed by examining the counts as they appear in the complaint.

11

1

1

the basis for recovery. -Jnt'l Data Prods. Corp. v. United States, 492 F.3d 1317, 1325

(Fed. Cir. 2007).

Count II incorporates and expands upon an allegation appearing in Count I that

in late February 2013, DLA began "ordering" Parwan to use security escorts (compl.

,i 40), alleging that that this "demand" constituted a constructive change to the contract

(comp 1. ,i,i 49, 51, 54 ). We are not required, however, to give deference to Parwan' s

legal conclusion regarding the effect ofDLA's "demand." Exe/is, 17-1 BCA ,i 36,679

at 178,606. The terms of the parties' contract explicitly allocated to Parwan

responsibility for all security support required for contractor personnel, and further

required Parwan to comply with all host nation laws (R4, tab 1 at 47-48, tab 6 at 123,

147). Moreover, as the complaint itself concedes, it was the Afghan government, not

DLA, that mandated the use of security escorts (compl. ,i 12). 8 We therefore find that

DLA's "orders" were not intended to effect a change to the contract but rather to

enforce the contract's terms. Thus a critical element of the constructive change

doctrine-that the purported change was ordered by the government-is missing from

Count II.

Additionally, in the alternative, we hold that Counts III and IV also fail to state

a claim for relief. With respect to Count III, we note that commercial impracticability

only applies where the contractor did not assume the risk that the supervening event

might occur. Spindler Construction, 06-2 BCA ,i 33,376 at 165,462. In the case of a

fixed-price contract, however, that element cannot be established because it is the

contractor, not the government, who bears the risk of unexpected costs. Safety

Training Systems, 14-1 BCA ,i 35,509 at 174,052. Parwan's complaint alleges no fact

that would entitle it to shift that risk back to DLA.

With respect to Count IV, we note that while equitable estoppel "may be raised

either as an affirmative defense or as grounds to prevent the defendant from raising a

particular defense," it is not an independent cause of action that Parwan can assert.

Carlson v. Arnot-Ogden Memorial Hospital, 918 F.2d 411,416 (3d Cir. 1990); RGW

Communications Inc. d/b/a Watson Cable Co., ASBCA Nos. 54495, 54557, 05-2 BCA

,i 32,972 (Board is without jurisdiction to entertain contracts implicit in law). 9

8

Paragraph 12 of the complaint is ambiguous as to whether it alleges that the

requirement to use APPF security was imposed by the Afghan Ministry of

interior or the U.S. Government. Parwan's brief makes clear that it is alleging

that the Afghan Ministry imposes the requirement (app. opp'n at 5).

9

DLA argues that the same would be true with respect to promissory estoppel (gov't

reply at 13-14). While we do not believe that Parwan was asserting a claim

based upon promissory estoppel, even if it were, Count IV would still fail.

Although promissory estoppel can be used to create an affirmative cause of

action, against parties other than the government, Jablon v. United States, 657

12

Accordingly, even ifwe found that Parwan had met the CDA'sjurisdiction

requirements for Counts III and IV, we would nevertheless dismiss them for failure to

state a claim upon which relief can be granted.

CONCLUSION

The government's motion is granted. Counts III and IV of the complaint are

dismissed for lack of jurisdiction. The remaining counts at issue in this appeal, Counts

I and II, are dismissed for failure to state a claim upon which relief can be granted.

Dated: June 25, 2018

DAVID D' ALESSANDRIS

Administrative Judge

Armed Services Board

of Contract Appeals

I concur I concur

~,,____-

RICHARD SPIACKLEFORD J. REID PROUTY

Administrative Judge Administrative Judge

Acting Chairman Vice Chairman

Armed Services Board Armed Services Board

of Contract Appeals of Contract Appeals

F .2d 1064, 1068 (9th Cir. 1981 ), "[ a]n obligation based upon promissory

estoppel is a type of contract implied-in-law ... and cannot be asserted against the

government." RGW Communications, 05-2 BCA ,i 32,972 at 163,338 n.13

( citations omitted).

13

I certify that the foregoing is a true copy of the Opinion and Decision of the

Armed Services Board of Contract Appeals in ASBCA No. 60657, Appeal of Parwan

Group Company, rendered in conformance with the Board's Charter.

Dated:

JEFFREY D. GARDIN

Recorder, Armed Services

Board of Contract Appeals

14