Petition for Writ of Certiorari — ASG Solutions Corp., dba American Systems Group, Petitioner v. United States

APPENDIX TABLE OF CONTENTS

Appendix A: United States Court of Appeals

for the Federal Circuit, Opinion, December 15,

2025. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1a

Appendix B: United States Court of Federal

Claims, Memorandum Opinion, March 29,

2024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9a

Appendix C: United States Court of Appeals

for the Federal Circuit, Order Denying Rehearing,

March 3, 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63a

Appendix D: Department of the Navy, Notice

of Termination to Prime Contractor, October 30,

2024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65a

Appendix E: Department of the Navy, Request

to Terminate for Default . . . . . . . . . . . . . . . . . . . 79a

Appendix F: Statutory and Regulatory

Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113a

APPENDIX A

NOTE: This disposition is nonprecedential.

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

ASG SOLUTIONS CORP., DBA AMERICAN

SYSTEMS GROUP,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

2024-1755

Appeal from the United States Court of Federal

Claims in No. 1:23-cv-01029-RAH,

Judge Richard A. Hertling.

Decided: December 15, 2025

DAVID DEMIAN, Finch, Thornton & Baird, LLP,

San Diego, CA, argued for plaintiff-appellant.

SHERYL L. FLOYD, Commercial Litigation

Branch, Civil Division, United States Department of

Justice, Washington, DC, argued for defendantappellee. Also represented by MARTIN F. HOCKEY,

JR., PATRICIA M. MCCARTHY, BRETT SHUMATE.

1a

Before CHEN, BRYSON, and CUNNINGHAM, Circuit

Judges.

PER CURIAM.

This case arises from a contract between a private

contractor and the United States Department of the

Navy (“Navy”). The contractor complains that the

Navy improperly terminated the contract for default

and raises a number of claims of improper conduct by

the Navy that led to that termination.

The contractor sought review of the termination

in the Court of Federal Claims (“the Claims Court”),

which granted summary judgment for the government

in a thorough opinion that addressed each of the

claims raised by the contractor. See ASG Sols. Corp. v.

United States, 170 Fed. Cl. 485 (2024). We agree with

the Claims Court’s analysis and accordingly affirm.

I

The contract in this case was an Indefinite

Delivery Indefinite Quantity task order contract under

which the contractor, ASG Solutions Corporation,

doing business as American Systems Group (“ASG”)

agreed to provide engineering and programmanagement services to support design and

construction operations at Naval Air Station

Jacksonville. Id. at 489; J.A. 2957–3022. The

government interpreted the task order as requiring the

contractor to assemble a multi-disciplinary team of at

least 20 professionals who would provide technical

support services on demand relating to design and

2a

construction work at the Naval Air Station.

Despite the terms of the agreement, ASG never

succeeded in assembling a team of 20 or more

professionals who met the qualifications set forth in

the contract. For that reason, the Navy terminated the

contract for default halfway through the one-year

contract period, over ASG’s strong objection. J.A.

4556–61.

In its challenge to the termination, ASG raises a

number of issues, the principal ones of which are (1)

that the Navy misconstrued the contract by

interpreting it to require ASG to assemble and

maintain a group of at least 20 professionals even at

times when the Navy had no tasks for the group to

perform; (2) that the contract was invalid because it

was an unlawful personal services contract, prohibited

by section 37.104 of the Federal Acquisition Regulation

(“FAR”); and (3) that the default termination was

unjustified and was merely a pretext by which the

Navy sought to rid itself of ASG as a contractor.

II

A

The government argues that the plain terms of

the contract required ASG to provide the Navy with a

team of 20 facilities technical experts to advise and

assist on projects at the Naval Air Station as they

arose, and that ASG never approached having that

number of technical experts available to perform

services for the Navy. ASG, on the other hand, argues

3a

that the contract did not require it to have a certain

number of professionals on staff, but only required it

to assemble a qualified team to perform each task after

the Navy assigned it a specific project under the

contract.

The Claims Court found the government’s

interpretation of the contract to be more reasonable, as

do we. See ASG, 170 Fed. Cl. at 498–502. Although the

contract gave ASG the right to determine “the precise

labor and staffing mix” among professionals selected to

provide the contractual services, the contract required

ASG to provide at least 20 professionals (or the

equivalent) throughout the contract period, not simply

to make professionals available when and as needed

for the tasks assigned from time to time under the

contract. J.A. 2966. Section A.2 of the solicitation

states that “[t]he staff of twenty (20) professionals is

base/minimum level of service,” J.A. 2959; and section

H.8 states that “any time there is a vacancy within the

Contractor’s team (i.e. all twenty (20) positions are not

filled), the Government will be entitled to immediate

replacement . . . or to a unit price reduction in

payment,” J.A. 2988.

Other evidence in the case is consistent with the

requirement that the contractor have an assembled

team of 20 professionals at all times. That evidence

included ASG’s bid, which referred to “[o]ur proposed

20 FTE All-Senior Team” and outlined the

backgrounds of the 20 team members. J.A. 3027; see

also J.A. 2999 (Attachment 2 to section J of the task

order outlining the proposed back grounds of 20 team

members). ASG subsequently confirmed that it

4a

understood that it would be bound by the

representations found in its bid. J.A. 3173–74. In

addition, section M of the solicitation provided that for

the evaluation of proposals, “[t]he team must be

composed of twenty (20) professionals including two

supervisors.” J.A. 3074.

We agree with the Claims Court’s conclusion that

the government’s interpretation of the contract is

clearly more reasonable than ASG’s. For that reason,

we reject ASG’s reliance on the doctrine of contra

proferentem, which calls for construing ambiguous

contract terms against the drafter—here, the

government.

B

The Claims Court rejected ASG’s argument that

the contract was an impermissible personal services

contract. ASG, 170 Fed. Cl. at 504–05. While the

contract required ASG to make a number of

professionals available to perform tasks for the Navy,

it clearly left the responsibility for hiring and

supervising those professionals with ASG.

The FAR provision governing personal services

contracts defines nonpersonal services contracts as

those in which the personnel rendering the services in

question are not subject “to the supervision and control

usually prevailing in relationships between the

Government and its employees.” 48 C.F.R. § 37.101;

see 48 C.F.R. § 37.104. The contract made clear that

the 20 professionals that ASG was committed to

making available to do government work would be

5a

employees of ASG, not of the government; the contract

specifically provided that “[t]he contractor supervises

its own team to ensure compliance with this

[Performance Work Statement].” J.A. 2968. While the

government had the right to review resumes and

specify the level of expertise required of those

employees, it was not responsible for hiring and firing

them or otherwise managing their employment on a

day-to-day basis. See J.A. 2970 (“Contractor employees

performing services under this order will be controlled,

directed and supervised at all times by management

personnel of the contractor.”); see also J.A. 2975,

2979–80, 3031–32. The Claims Court was thus clearly

correct that the contract was not a personal services

contract.

C

ASG argues that it provided the services for

which the government contracted because it stood

ready to supply professionals to do whatever tasks the

Navy asked it to perform, and that the termination for

default was therefore unjustified. The Claims Court

rejected that argument on the ground that it was

inconsistent with the obligations imposed on ASG by

the contract. ASG, 170 Fed. Cl. at 505– 08. In section

F.4 of the contract, ASG agreed that within five days

of the contract award it would provide a “[r]esume for

each position proposed” to accomplish the tasks falling

within the scope of the contract. J.A. 2974–75. ASG

failed to deliver those resumes. See ASG, 170 Fed. Cl.

at 492–93. The contract did not contemplate that ASG

would arrange to hire and provide professionals

whenever the Navy had a particular task for ASG to

6a

perform.

The summary judgment record showed that

throughout the contract period, ASG never retained as

many as 20 qualified professionals, and for most of

that period, it had far fewer.1 Moreover, on several

occasions the Navy notified ASG that it was not

complying with its responsibilities under the contract,

but ASG never brought itself into compliance with the

contract’s requirements.2

We agree with the Claims Court that the

government reasonably concluded that ASG had

defaulted on the contract, and that the termination for

default was not simply a ruse designed to enable the

Navy to escape an improvident contract. Based on that

conclusion, the Claims Court properly determined that

the government had not breached its covenant of good

faith and fair dealing through its actions and

communications with ASG. See ASG, 170 Fed. Cl. 505,

508.

1

The Claims Court held that “ASG materially failed to

perform. It did not provide the required services of assembling a

fully staffed team . . . . As of March 2023, halfway through the

contract period, ASG had retained only four employees who

reported to work at NAS Jacksonville.” ASG, 170 Fed. Cl. at 506.

2

The Claims Court noted that the Navy sent ASG a

“letter of concern” on November 1, 2022; a cure notice on

December 5, 2022; and a notice to show cause on January 20,

2023, “based on ASG’s failure to comply with its obligations to

propose team members meeting the qualifications” required by the

contract. ASG, 170 Fed. Cl. at 493.

7a

ASG has raised several other subsidiary issues in

its brief, which the Claims Court addressed in its

comprehensive opinion.3 None of those issues,

however, affect our confidence that the Claims Court’s

summary judgment order was correct.

AFFIRMED

3

ASG contends in passing that the memorandum in

which the contracting officer considered seven factors to

determine whether to terminate the contract for default (J.A.

4732–44) was inadmissible as hearsay. Appellant’s Br. 50–53. The

memorandum, however, was not considered for the truth of its

contents, but only to show that the contracting officer addressed

the factors required by 48 C.F.R. § 49.402-3(f) to be considered

before terminating a contract for default. ASG, 170 Fed. Cl. at

507–08 & n.8.

8a

APPENDIX B

IN THE UNITED STATES COURT OF

FEDERAL CLAIMS

No. 23-1029

Filed: March 29, 2024

FOR PUBLICATION

ASG SOLUTIONS CORPORATION DBA

AMERICAN SYSTEMS GROUP,

Plaintiff,

v.

UNITED STATES,

Defendant.

David S. Demian, Finch, Thornton, & Baird LLP, San

Diego, CA, for the plaintiff.

Sheryl L. Floyd, Commercial Litigation Branch, Civil

Division, U.S. Department of Justice, Washington,

D.C., for the defendant.

MEMORANDUM OPINION

HERTLING, Judge

The plaintiff, ASG Solutions Corp., dba American

Systems Group (“ASG”), was awarded an Indefinite

Delivery Indefinite Quantity (“IDIQ”) task order by the

defendant, acting through the United States

9a

Department of the Navy (“Navy”), to provide

engineering and program-management support

services to the Naval Facilities Engineering Systems

Command Southeast (“NAVFAC SE”) to support the

operations of the Design and Construction Business

Line (“DCBL”) at Naval Air Station (“NAS”)

Jacksonville in Jacksonville, Florida. Ultimately, the

Navy terminated ASG’s task order for default. ASG

filed claims with the contracting officer and, after

those claims were largely rejected, filed this action

under the Contract Disputes Act (“CDA”), 41 U.S.C. §

7101 et seq. The plaintiff alleges that the termination

for default was in error and that the Navy breached

the contract and the covenant of good faith and fair

dealing. The plaintiff has moved for judgment on the

pleadings and for summary judgment. The defendant

has cross-moved for summary judgment.

The defendant’s interpretation of the task order

as requiring the contractor to assemble a 20-person,

multidisciplinary team of professionals aligns with the

plain language of the task order, reads all its

provisions in harmony, and makes sense given the

task order’s purpose. This reading does not render the

task order a personal services contract in violation of

Federal Acquisition Regulation (“FAR”) 37.104 because

the task order made clear that, throughout

performance, the contractor retained control of its

team.

Given that the task order requires a 20-person

team, the evidence submitted by the parties

demonstrates that the plaintiff failed to perform the

contract, and termination for default was justified

10a

under FAR 52.249-8 and 49.402-3(f). The plaintiff’s

motions for judgment on the pleadings and summary

judgment are denied, and the defendant’s motion for

summary judgment is granted.

I.

FACTUAL BACKGROUND

ASG is a provider of professional-support services

for federal agencies. In 2019, the Navy awarded ASG,

along with more than 2,400 other entities, the Seaport

Next Generation Multiple Award, IDIQ Contract, No.

N0017819D7175 (“Seaport NxG Contract”). (ECF 23 at

3.) Under the Seaport NxG Contract, various Navy

commands procure a variety of professionalsupport

services, including for technical fields such as

architecture and engineering.

A.

Solicitation and Task Order

On August 25, 2022, ASG submitted a proposal in

response to a solicitation for task order No.

N6945022F3005 under the Seaport NxG Contract.1

(ECF 23 at 15; 23-2 at 67.) Under the task order, the

contractor would provide technical-support services at

1

ASG is a party to two agreements involved in this

matter. First, it is a member of the Seaport NxG contract. Second,

pursuant to that contract, it was awarded the NAVFAC SE task

order at Jacksonville NAS. The parties sometimes refer to this

latter contract as the “Jacksonville contract,” but this opinion will

refer to it as the “task order,” or the “Jacksonville task order.” The

assignments issued to ASG by the Navy pursuant to the

Jacksonville task order will be referred to as “sub-task orders” or

“assignments” rather than “tasks” or “task orders” to avoid

confusion.

11a

NAS Jacksonville for NAVFAC SE’s DCBL. The task

order was to begin in October 2023. (ECF 23-2 at 70.)

The Navy apparently opted to proceed with the

solicitation when it found itself unable to fill vacancies

in the ranks of its own DCBL workforce.

Sections A through J of the solicitation mirror the

content of the task order ultimately awarded to ASG.

Section A.2 describes the service requirements under

the task order. (ECF 17- 3 at 95.) Offerors were to

assemble a “team” to “provide expert advice and

assistance services” on various NAVFAC SE-supported

projects. (Id.) With respect to this team, Section A.2 of

the solicitation noted that:

[a]t the time of initial contract award, the

Government anticipates a staff of four (4)

Architects, four (4) Mechanical Engineers,

four (4) Electrical Engineers, two (2) Civil

Engineers, two (2) Structural Engineers, one

(1) Fire Protection Engineer, one (1) Cost

Engineer, and two (2) Supervisors.

(Id.)

Section A.2 identified this “anticipated staff” of 20

professionals as the “base/minimum” level of service

required under the task order. (Id.)

Section B provided a list of supplies and services

to be provided under the task order for which offerors

were to provide pricing. (Id. at 98.) The first line item

is the “base requirement,” which is “[t]echnical

[s]upport [s]ervices at NAS Jacksonville in accordance

12a

with [the performance work statement].” (Id.) The

“quantity” and “unit” columns provide that the Navy

will acquire these services for 12 months. (Id.) The

second line item required offerors to provide pricing for

an additional, “[o]ptional” level of service, through

which NAVFAC SE could “award additional

architectural and engineering technical expert support

services.” (Id.) This item also stated a quantity and

unit of 12 months. (Id.)

Section C of the solicitation included the

performance work statement (“PWS”). (ECF 17-3 at

103.) The PWS required the awardee to provide,

manage, and supervise a team of facilities technical

experts to “help[ ] NAVFAC SE achieve its mission and

ensure compliance with the Department of Defense

(DoD) Unified Facilities Criteria” and other applicable

standards related to the “design, construction,

sustainment, and demolition” of naval facilities. (Id.)

The PWS noted that the contractor would “choose[ ]

the precise labor and staffing mix to meet the PWS,”

as long as the team possessed the requisite expert

knowledge and experience. (Id.) The PWS was silent

about the size and composition of the team and failed

to reiterate the obligation specified in Section A.2

regarding the “base/minimum” level of service under

the task order.

Section F.4 of the solicitation outlined the

deliverables due under the task order. (Id. at 111-12.)

Among the deliverables specified in Section F.4, the

awardee would be required, within five days of

receiving the task-order award, to provide resumes to

the contracting officer for each team member proposed

13a

by offerors to perform work under the task order. (Id.

at 112.) Each resume had to be “in accordance with

[the offeror’s] proposal and the PWS.” (Id.)

Section G.5 of the solicitation outlined the task

order’s quality-assurance plan and detailed NAVFAC

SE’s review of contractor personnel. (Id. at 118.) In

relevant part, the quality-assurance plan explained

that the contracting officer’s representative would

review and approve prospective contractor personnel

to ensure that they met the required qualifications,

including certification and licensure, whenever

personnel were added to the task order.2 (Id. at 118.)

Section G.6 reiterated this requirement by confirming

that the awardee would submit to the Navy the

resumes of all proposed employees working on the task

order “in accordance with Section F.4.” (Id.) The

awardee would have to demonstrate that its personnel

held “certificates, licenses, physical requirements or

other expertise required to fulfill the requirements of

the [PWS].” (Id.) In submitting the resume of each

prospective employee, the awardee also had to “certify

that . . . the qualified individual[ ] has agreed to accept

the position upon acceptance by the [g]overnment.”

(Id.)

Section H.8 of the solicitation provided for

deductions to the firm, fixed price the Navy had to pay

2

The solicitation was amended twice. The final version

of the solicitation included an amendment intended to strengthen

the resume requirements. The summary of changes accompanying

the final solicitation explained that Section G was amended, in

part, to “clarify resume certification.” (ECF 17-3 at 95.)

14a

the awardee in the event the awardee did not maintain

a team of 20 employees. Specifically, Section H.8

provided that if, “at any time there [was] a vacancy

within the [c]ontractor’s team (i.e. all twenty (20)

positions are not filled),” the contractor had to provide

a replacement within five days. (Id. at 124.) If the

contractor failed to provide a replacement to restore

the team to a complement of 20 members within five

days, NAVFAC SE would subject the contractor to a

“unit price reduction in payment in accordance with

FAR 52.246-4 until the qualified technical expert(s)

[was] in place.”3 (Id.)

Section J of the solicitation included various

attachments that offerors had to submit with their

proposals. (Id. at 128.) Attachment 4 provided a

worksheet for offerors to demonstrate the

qualifications of the team they would provide under

the task order. (Id.)

In Section M of the solicitation, NAVFAC SE

outlined three factors it would use to evaluate

proposals. (Id. at 134.) The second factor, Staffing

Approach, required offerors to propose a team of 20

professionals to accomplish the work required under

the task order. (Id. at 136.) The solicitation noted:

The non-price proposal presented by the

3

FAR 52.246-4 governs fixed-price service contracts.

Section (e) provides that if the services provided do not conform

with the contract’s requirements, the government may “reduce the

contract price to reflect the reduced value of the services to be

performed.” FAR 52.246- 4(e)(2).

15a

offeror to whom the award is made will be

incorporated into the task order at time of

award. Post-award, the offeror will be held

to any proposed licenses certifications,

qualifications, expertise, etc. of the technical

support personnel that exceed the minimum

requirements of the solicitation and/or PWS.

(Id.)

Section M also specified that each team member

“must possess an education level suitable to meet the

requirements of the PWS.” Section M noted that

offerors proposing teams with education, training, or

seniority beyond the minimum requirements “may be

rated higher.” (Id.)

During the Navy’s development of the solicitation,

a NAVFAC SE contracting official had analyzed

whether the task order would constitute a personal

services contract, because the task order required

offerors to propose teams of qualified personnel to

assist the Navy in performing its functions. (ECF 23-2

at 76.) FAR 37.104 forbids agencies from awarding

personal services contracts unless they are authorized

by law to do so. The Navy contracting official

determined and certified that the task order would not

result in an impermissible personal services contract

because the awardee, rather than the Navy, would

control and manage its own employees working on the

task order. (Id.)

To reflect this determination, Section C.8 of the

solicitation incorporated a “Non- Personal Service

16a

Statement.” In this provision, the Navy certified that

all contractor personnel would be “controlled, directed

and supervised at all times by management personnel

of the contractor. . . . The [g]overnment will control

access to the facility and will perform the inspection

and acceptance of the completed work.” (ECF 17-3 at

107.) Thus, under the task order, the Navy would

assign projects to the contractor; the contractor was

then responsible for tasking out the assignment to its

personnel, who would be supervised exclusively by the

contractor in the performance of their tasks.

As part of its proposal, ASG submitted in

Attachment 4 of Section J a proposed 20-member team

consisting entirely of senior-level, accredited

professionals with advanced degrees. Although the list

included the specific qualifications of the individuals,

it did not include the name of any of the individuals

proposed. (Id. at 71.) ASG accompanied its proposed

team with the proposed cost associated with employing

each team member. (ECF 23-2 at 64.) When NAVFAC

SE incorporated Attachment 4 into the final contract

as the solicitation provided, this list of costs also

became ASG’s monthly rate: $281,870.00. (ECF 17 at

30; ECF 17-3 at 57.)

On September 15, 2022, the contracting officer

contacted ASG about its proposal, requesting that ASG

“confirm that [it] underst[ood] the technical experts

submitted after award must meet the additional

requirements proposed” in ASG’s Attachment 4. (ECF

17-3 at 539.) ASG responded simply, “[y]es.” (Id.)

On September 28, 2022, ASG was awarded the

17a

task order, which incorporated the provisions of the

solicitation outlined above, except for Section M, which

described the awardevaluation criteria. Attachment 4

of Section J of the solicitation was incorporated into

the task order as Attachment 2 to Section J.

The task order does not contain an order of

precedence clause to resolve disputes in the event of

conflicting provisions. The Seaport NxG contract does,

however, incorporate by reference FAR 52.215-8,

which provides the order of precedence in the Uniform

Contract Format. FAR 52.215-8 provides that

inconsistencies between provisions shall be resolved by

giving precedence to: (a) the schedule; (b)

representations and other instructions; (c) contract

clauses; (d) other documents, exhibits, and

attachments; and (e) the specifications, in that order.

B.

ASG’s Performance of the Task Order

Problems arose almost immediately. After being

awarded the task order, ASG struggled to assemble its

team of professionals. On October 3, 2022, the date by

which, under Section F.4 of the task order, ASG had to

submit resumes for its 20 team members, ASG

submitted only two resumes. (ECF 23 at 19.) ASG’s

owner and president emailed the contracting officer’s

representative that day noting that “so far I have been

able to obtain 2 of the 20 have [sic] signed [letters of

intent].” (ECF 17-3 at 392.) After identifying the two

individuals, ASG’s president continued “I will continue

this process till all 20 are filled.” (ECF 23 at 393.)

Between October 6, 2022, and November 9, 2022,

18a

ASG submitted eight additional resumes. (Id. at 1923.) Of the 10 resumes submitted by November 9,

2022, four were rejected by NAVFAC SE because the

professionals lacked required licenses or possessed

inadequate experience in comparison to the seniorlevel team members proposed by ASG on Attachment

2 of the contract. (Id.) Six resumes were accepted, but

four of these six professionals declined ASG’s offer, did

not report to work, or quickly resigned. (Id.) As of

November 9, 2022, ASG only had two professionals

available to work under the task order. (Id. at 23.)

Email communications between ASG and

NAVFAC SE revealed growing disagreement between

the parties pertaining to the submitted resumes and

the qualifications necessary for ASG’s team members.

ASG asserted that because the task order was not a

personal services contract, it was free to hire personnel

that it believed could deliver services consistent with

the requirements of the PWS. (ECF 23-2 at 260.) It

asserted that NAVFAC SE’s failure to issue

assignments for ASG contractors to complete under

the task order prevented ASG from assembling an

appropriate team; ASG could not recruit employees

unless it knew what type of work they would need to

do. (Id. at 477-81.) NAVFAC SE, in turn, explained to

ASG that its employees had to meet the experience

levels described in Attachment 2 to the task order

(Attachment 4 of ASG’s proposal) and insisted that it

had the right to reject resumes of proposed ASG

employees who did not reflect the qualifications for

prospective employees initially offered by ASG in its

proposal. (Id. at 259.)

19a

On November 1, 2022, the contracting officer sent

ASG a letter of concern, notifying ASG that it was

failing to meet the minimum staffing requirement

identified in Section A.2 of the task order by failing to

provide a staff of at least 20 professionals. (Id. at 458459.) The letter expressed further concern that ASG

was not meeting the requirement of Section F.4 by

failing to deliver adequate and timely resumes. (Id.)

On November 17, 2022, counsel for ASG

responded to the letter of concern. (ECF 23-2 at 46064.) ASG asserted that it was not required to maintain

a staff of 20 professionals under the task order and

that, pursuant to Section C, the PWS, ASG retained

the authority to choose the precise labor and staffing

mix to perform under the task order. (Id.)

Between November 18 and November 20, 2022,

ASG submitted four additional resumes to NAVFAC

SE. (ECF 23 at 24-25.) NAVFAC SE rejected one

resume because the proposed employee lacked the

credentials described in Attachment 2. (Id. at 25.)

NAVFAC SE accepted the other three resumes, but

ASG successfully retained only one of these

professionals. (Id. at 24-25.)

On December 5, 2022, NAVFAC SE issued a cure

notice to ASG. NAVFAC SE asserted that ASG’s

inability to meet its obligations under Attachment 2

endangered performance of the task order and could

justify termination for default. (ECF 23-2 at 527-28.)

Specifically, NAVFAC SE noted that ASG had

submitted only nine resumes that met the level of

employee qualifications required under Attachment 2.

20a

(Id.) NAVFAC SE informed ASG that unless it cured

this failure within 10 calendar days, NAVFAC SE

could terminate the task order for default under FAR

52.249-8. (Id.)

On December 14, 2022, ASG responded to the

cure notice and asserted that it was not required to

provide 20 professionals to meet its obligations under

the task order because Attachment 2 was not a

contractual obligation. (Id. at 532-34.) ASG further

responded that because the Navy had not provided to

ASG any then-pending specific assignments to perform

under the task order, ASG was not yet obligated to

provide a team of professionals. (Id. at 531- 32.) ASG

reasoned that because it was to choose the precise

labor and staffing mix to perform assignments under

the task order, it could not put together an appropriate

team until NAVFAC SE gave it specific assignments to

fulfill. (Id. at 530.)

On January 13, 2023, ASG provided an additional

resume, which NAVFAC SE accepted. (ECF 23 at 26.)

On January 20, 2023, ASG provided two more

resumes. (Id. at 27-28.) NAVFAC SE accepted one and

rejected the other based on lack of experience. Finally,

on March 10, 2023, ASG submitted an additional

resume, and NAVFAC SE accepted it. (Id. at 28.) Of

this group of three prospective employees whose

resumes NAVFAC SE accepted, ASG retained two

professionals. (Id.)

On January 20, 2023, NAVFAC SE issued ASG a

show cause notice based on ASG’s failure to comply

with its obligations to propose team members meeting

21a

the qualifications of the team members proposed in

Attachment 2. (ECF 23-2 at 672.) The notice

referenced a meeting held at NAS Jacksonville on

January 5, 2023, at which ASG’s president allegedly

acknowledged that ASG “cannot meet Attachment 4.”

(Id.) This statement, the notice explained, constituted

an anticipatory repudiation and abandonment of

ASG’s contractual obligations. (Id.) The notice

provided ASG the opportunity to explain why its

“failure to perform arose from causes beyond [its]

control” and without fault of or negligence by ASG.

(Id.)

On February 10, 2023, ASG responded to

NAVFAC SE’s show cause notice. (Id. at 674- 86.) ASG

continued to assert that it had no obligation to provide

20 professionals under the task order. Rather, ASG

insisted that it was only obligated to provide

professionals once NAVFAC SE issued specific

assignments for work under the task order. (Id. at

675.) ASG disputed the notice’s characterization of

ASG president’s statement at the January 5, 2023

meeting as a repudiation or abandonment of the

contract. (Id. at 676.) Instead, ASG explained that its

president had attended the January 5th meeting to

ensure that the onboarding of ASG’s employees would

proceed smoothly. (Id. at 680.) Regarding the shortage

of resumes it had provided by that date, ASG asserted

that post-pandemic labor-market conditions beyond its

control prevented it from providing a team of 20

professionals. (Id. at 674.) ASG also explained that it

was unable to perform because the Navy had not yet

paid ASG’s monthly invoices, as required by the task

order. At that point, ASG had provided services for a

22a

few minor assignments under the task order. (Id. at

675-76.)

On April 4, 2023, NAVFAC SE issued a final

decision terminating the task order for default. (Id. at

1600-1605). In its decision, the contracting officer

identified that ASG was required as a minimum level

of service under the task order to provide the Navy

with a team of 20 professionals, and ASG had failed to

supply such a team. (Id. at 1600.) NAVFAC SE

justified its decision to terminate for default on ASG

having provided at the halfway point of the task order

a team of only five of the 20 required professionals. (Id.

at 1602.) NAVFAC SE asserted that ASG’s position

that unforeseen labor-market conditions prevented it

from recruiting professionals was unavailing, because

ASG either knew or should have known of postpandemic labor-market conditions prior to submitting

its proposal. (Id. at 1603.)

C.

Payment Invoices and CDA Claims

ASG submitted six monthly invoices to NAVFAC

SE during performance of the task order. (ECF 17-3 at

1492-1501.) The invoices were for “Base Requirement

for Base Period” services provided between October

2022 and April 2023. (Id.) Each invoice was for the full

monthly amount stated in the task order, $281,870.00

(aside from the last invoice which did not cover a full,

month-long period). (Id.) The amounts invoiced were

the same as the estimated, monthly cost of employing

the 20-person team ASG had provided in Attachment

4 to its proposal, included in the task order as

Attachment 2.

23a

ASG submitted three certified claims to the

contracting officer seeking payments for the full

amounts of its fixed monthly prices, in accordance with

its monthly invoices. On January 9, 2023, ASG

submitted its first certified claim, seeking the

combined amount of its October and November 2022

invoices. (Id. at 1509-12.) It submitted a second claim

on March 8, 2023, seeking the combined amount of its

December 2022, January 2023, and February 2023

invoices. (Id. at 1743.) On April 18, 2023, the

contracting officer notified ASG that he had not made

a final decision on the claim submitted in January

2023 but would do so by June 30, 2023. (Id. at 1699.)

The contracting officer noted that the task order had

been terminated for default on April 4, 2023, and

NAVFAC SE’s re-procurement with another contractor

could result in liability for ASG. (Id.) On May 4, 2023,

ASG submitted a third claim which sought the

combined total of its invoices from March 2023 to April

5, 2023. (Id. at 2239-41.)

The contracting officer issued the first decision on

any of ASG’s claims in a June 28, 2023 decision which

addressed the March and May claims. The decision on

the March claim explained that ASG had already been

paid $156,396.80 for services rendered, and the

contracting officer denied the rest of the claim. (Id. at

2238.) The decision on the May claim explained that

ASG had been paid $77,812.85 for services rendered,

and the contracting officer denied the remainder. (Id.

at 2373.) In both cases, the contracting officer justified

the partial payments on Section H.8 of the task order,

which provides for a deduction in pay “if there is a

vacancy within the [c]ontractor’s team.” (Id. at 2372;

24a

see also 2237.) The contracting officer did not

correspond further with ASG about its original

January claim until August 18, 2023, when the

contracting officer informed ASG that it could expect

a final decision by December 15, 2023. (Id. at 1700.)

This decision arrived on December 1, 2023, when the

contracting officer denied the claim in its entirety

because ASG had “failed to deliver the 20 [facilities

technical experts] required by the task order.”4 (Id. at

1741.)

II.

PROCEDURAL HISTORY

After NAVFAC SE terminated ASG’s contract for

default, ASG filed this suit in July 2023. (ECF 1.) The

complaint alleges first that NAVFAC SE improperly

terminated the task order for default. (ECF 1 at 34.)

The termination, the complaint alleges, entitles ASG

to damages or, in the alternative, a conversion to a

termination for convenience. (Id. at 35.) Second, the

complaint alleges that NAVFAC SE breached the

Jacksonville task order by failing to pay ASG under

the firm fixed-price contract. (Id.) Third, it alleges that

NAVFAC SE breached the implied covenant of good

faith and fair dealing by hindering ASG’s performance

of the task order. (Id.) In support of this third claim,

the complaint alleges that NAVFAC SE’s failure to

approve resumes in a timely manner, issue

4

The decision also addresses a July 18, 2023, claim for

“anticipatory lost profits.” (ECF 17- 3 at 1709.) No copy of this

claim appears among the records submitted by either party. In

any event, the contracting officer denied the claim. (Id.)

25a

assignments for ASG to perform, inform ASG of

upcoming assignments, provide site access to ASG

personnel, and require ASG to provide a team of 20

professionals at all times prevented ASG from

performing. (Id. at 36.)

The plaintiff moved for judgment on the pleadings

in November 2023 (ECF 15), and for summary

judgment in December 2023 (ECF 17). The defendant

responded to the motion for judgment on the pleadings

and cross-moved for summary judgment in February

2024. (ECF 23.) Both parties responded to the crossmotions. (ECF 24; ECF 25.) Oral argument was held

on March 12, 2024. At the close of oral argument, the

parties were encouraged to try to settle the case and

were allowed two weeks within which to do so; any

settlement discussions that may have taken place

apparently failed.

III. JURISDICTION

The Tucker Act, 28 U.S.C. § 1491(a), vests in the

Court of Federal Claims jurisdiction over claims for

money damages against the United States:

The United States Court of Federal Claims

shall have jurisdiction to render judgment

upon any claim against the United States

founded either upon the Constitution, or any

Act of Congress or any regulation of an

executive department, or upon any express

or implied contract with the United States,

or for liquidated or unliquidated damages in

cases not sounding in tort.

26a

28 U.S.C. § 1491(a)(1).

The Court of Federal Claims has jurisdiction over

claims for breach of contract founded upon an express

contract with the United States. Hercules Inc. v.

United States, 516 U.S. 417, 422 (1996). Here, the

plaintiff’s claim is founded on an express contract with

a federal agency.

ASG’s claims are founded on the CDA. 41 U.S.C.

§ 7104(b)(1). The court may hear a claim under the

CDA only if that claim has been “submitted to the

relevant contracting officer,” and the contracting

officer has “issued a final decision on that claim.” KCon Bldg. Systems, Inc. v. United States, 778 F.3d

1000, 1005 (Fed. Cir. 2015). A claim submitted to a

contracting officer must provide a “‘clear and

unequivocal statement that gives the contract officer

adequate notice of the basis and amount of the claim.’”

Id. (quoting Contract Cleaning Maint., Inc. v. United

States, 811 F.2d 586, 592 (Fed. Cir. 1987)).

ASG submitted its claims to the contracting

officer in January, March, and May 2023, and the

contracting officer has issued final decisions on those

claims. The defendant does not dispute that

jurisdiction under the CDA over ASG’s claims is

appropriate.

IV. STANDARDS OF REVIEW

The plaintiff has moved for judgment on the

pleadings pursuant to Rule 12(c) of the Rules of the

Court of Federal Claims (“RCFC”). To decide a motion

27a

for judgment on the pleadings, a court “assumes that

all of the nonmovant's allegations are true and

indulges all reasonable inferences in favor of the

nonmoving party.” Gummer v. United States, 40 Fed.

Cl. 812, 814 (1998). Judgment on the pleadings “is

appropriate where there are no material facts in

dispute and the party is entitled to judgment as a

matter of law.” Forest Laboratories, Inc. v. United

States, 476 F.3d 877, 881 (Fed. Cir. 2007).

Both parties have also cross-moved for summary

judgment. Under RCFC 56(a), a “court shall grant

summary judgment if the movant shows that there is

no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.”

“Credibility determinations, the weighing of the

evidence, and the drawing of legitimate inferences

from the facts” are inappropriate at the summaryjudgment stage. See Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 255 (1986). An issue is “genuine” only if

it “may reasonably be resolved in favor of either

party,” and a fact is “material” if it “might affect the

outcome of the suit under the governing law.” Id. at

248-50. Contract interpretation involves questions of

law and is therefore “generally amenable to summary

judgment.” Premier Office Complex of Parma, LLC v.

United States, 916 F.3d 1006, 1011 (Fed. Cir. 2019).

V.

DISCUSSION

The parties offer conflicting and inconsistent

interpretations of the task order.

The plaintiff argues that the terms of the PWS

28a

control; when other provisions of the task order conflict

with the PWS, the plaintiff argues the terms of the

PWS should prevail. Under the PWS, ASG chooses the

labor mix required to meet the assignments given by

the Navy. Thus, until the Navy gives ASG an

assignment to perform, ASG need not provide any

team members because it cannot know what the right

mix of professional skills would be to perform an

assignment until it receives one. ASG argues that a

reading of the task order requiring ASG to provide and

maintain a specific number of team members would

convert the task order into either a personal services

contract, which is prohibited by FAR 37.104, or a time

and materials contract, which must comply with FAR

16.601 to be valid. ASG therefore argues that its

reading is the only legally permissible one.

The defendant argues the opposite. The Navy

asserts that it was indeed procuring a team of 20

professionals, and the various provisions of the task

order make that clear. The Navy argues that its

reading of the task order is the only one that gives

effect to all the task order’s terms, including the

requirement that the contractor supply a team of 20

professionals or face a reduction in payment if its team

endures a vacancy among the 20 positions for more

than five days. The defendant argues that because the

contractor would maintain total control over its

employees by assigning work and supervising team

members without interference by the Navy, the

contract contains safeguards adequate to avoid a

prohibited personal services contract.

ASG also argues that even if the Navy’s

29a

interpretation of the contract is correct, the Navy

failed to terminate the contract for default in the

manner required by FAR 52.249-8 and FAR 49.4023(f).

A.

Contract Interpretation

The central issue of contract interpretation in this

case is whether the task order requires the contractor

to compose and maintain a team of 20 professionals to

assist NAVFAC SE in performing the work of the

DCBL and whether these professionals had to meet

the qualifications described in Attachment 4 of ASG’s

proposal, incorporated into the task order as

Attachment 2.

Contract interpretation must “begin with the

plain language” of the contract. Foley Co. v. United

States, 11 F.3d 1032, 1034 (Fed. Cir. 1993). In reading

that language, a court should “interpret the contract in

a manner that gives meaning to all of its provisions

and makes sense.” McAbee Const. Inc. v. United States,

97 F.3d 1431, 1435 (Fed. Cir. 1996) (citing Hughes

Communications Galaxy, Inc. v. United States, 998

F.2d 953, 958 (Fed. Cir. 1993)). Interpretations should

“effectuate [the] spirit and purpose” of the contract.

Hercules, 292 F.3d at 1381. Although a contract is

ambiguous if it is “susceptible to more than one

reasonable meaning,” Barron Bancshares, Inc. v.

United States, 366 F.3d 1360, 1375 (Fed. Cir. 2004),

the fact that each party can advance conflicting

interpretations of a contract does not on its own render

the contract ambiguous. Metric Constrs., Inc. v. Nat’l

Aeronautics & Space Admin., 169 F.3d 747, 751 (Fed.

30a

Cir. 1999).

This task order is a “standard service contract as

defined in FAR Part 37.” (ECF 17-3 at 55.) A service

contract under the FAR is “a contract that directly

engages the time and effort of a contractor whose

primary purpose is to perform an identifiable task

rather than to furnish an end item of supply.” FAR

37.101. Examples of service contracts provided in the

FAR include “advisory and assistance services.” Id.

1.

The plaintiff’s interpretation

The plaintiff argues that the task order’s PWS

“empowers ASG to determine the make-up of its team”

in response to assignments from NAVFAC SE. (ECF

17 at 25.) According to the plaintiff, the task order is

a service contract whose “‘primary purpose’” is the

performance by ASG of identifiable tasks as assigned.

(Id. at 26 (quoting FAR 37.101).) This interpretation is

reinforced, the plaintiff argues, by the provision of the

PWS specifying that the contractor “chooses the

precise labor mix” necessary to complete the

assignment. (ECF 17-3 at 62.) As an example, the

plaintiff supposes that NAVFAC SE assigns ASG a

project exclusively seeking architectural services. In

that case, it reasons, ASG would need to “bring in as

many architects as necessary to fulfill the tasks.” (ECF

17 at 26.) If the next project assigned by NAVFAC SE

requires a team of civil engineers, ASG would then

“replace the architects with as many civil engineers as

necessary.” (Id.) This reading, the plaintiff argues, is

the only one that enables ASG to complete the full

range of assignments contemplated within the PWS as

31a

incorporated into Section C. (Id. at 27.)

Under the plaintiff’s reading, the task order

requires the contractor to assemble rapidly a highly

qualified team suited to each assignment once

NAVFAC SE assigns a specific project. Sections like

A.2 specifying the makeup of the team that NAVFAC

SE “anticipate[d]” the awardee would need served to

put offerors on notice of the types of professionals the

Navy could require them to provide. (Id. at 33

(discussing Section A.2, ECF 17-3 at 55).) ASG read

this provision as a sensible warning, because under a

firm-fixed-price contract, the contractor would need to

provide the requested individuals no matter the cost.

Given the structure of a firm-fixedprice contract, the

plaintiff explains, it makes sense to establish a

“base/minimum level of service” for the contractor to

expect to have to provide. (ECF 17 at 34.) When the

language about a team of 20 professionals appeared as

an evaluation criterion in Section M of the solicitation,

ASG understood it to require offerors to demonstrate

they could provide 20 professionals with a variety of

skills; this criterion, ASG argues, did not suggest that

providing a team of 20 professionals was an obligation

under the task order and a prerequisite to completing

any assignments under the task order. (See id. at 37.)

ASG argues that a reading of the task order

requiring it to hire and maintain a team of 20 facilities

technical experts outside of any specific assignments

would render the PWS “meaningless, potentially

impossible, and illegal.” (Id.) First, it asserts that the

PWS would be meaningless because if the task order

only obligates ASG to provide a team of 20

32a

professionals, then “the scope of work so carefully

detailed in the PWS is superfluous and absurd.” (Id.)

Second, performing the assignments contemplated by

the PWS would be impossible. If ASG is always bound

to maintain the slate of professionals proposed in

Attachment 2, it “very likely will not be able to

perform” assignments requiring, for example, only

architects. (Id.) Third, requiring ASG to maintain and

complete assignments with a team of 20

predetermined professionals would strip ASG of “its

right to determine the ‘how’ of performance.” (Id. at

28.) As a result, NAVFAC SE would have control over

performance of the task order in violation of FAR

37.104(d). (Id.)

Under the plaintiff’s interpretation, the PWS is

central. That section sets forth ASG’s “performance

obligations under the [task order].” (ECF 24 at 11.)

Each section of the task order that references the

contractor’s performance, the plaintiff notes, points the

reader to the PWS. (Id.) ASG interprets the

deliverables section, F.4, to list “8 types of deliverables

of work-product anticipated to be performed based on

PWS tasks.” (ECF 17 at 28-29.) It argues that the

representative team ASG proposed in Attachment 4 of

the solicitation, while incorporated into the contract,

is not an “irrevocable promise to deliver these

personnel in a manner unmoored from the rest of the

contract.” (ECF 24 at 18.)

2.

The defendant’s interpretation

In the defendant’s interpretation, the task order’s

central purpose is to provide NAVFAC SE with a team

33a

of 20 facilities technical experts to advise on projects at

NAS Jacksonville as they arise. Its reading starts from

the text of Section A, in which the task order notes

that a team of 20 professionals is the “base/minimum

level of service.” (ECF 23-2 at 3.) This requirement has

been clear, the defendant argues, since the solicitation,

which noted in its evaluation criteria—Section

M—that offerors “shall submit” a team that reflected

the requirements specified in Section A.2, i.e., a team

of 20 professionals. (Id. at 118.)

In addition to these express requirements of the

solicitation and task order, the solicitation made clear

that the team proposed by each offeror on Attachment

4 of its proposal would be “incorporated into the task

order at the time of award.” (ECF 23-3 at 118.) ASG

confirmed its understanding of this fact when, in reply

to the contracting officer’s pre-award email, its

president acknowledged that ASG was aware that, if

awarded the task order, it would be obligated to

provide a team whose qualifications matched those it

had listed in Attachment 4 of its proposal. (ECF 23-3

at 217.)

Because the purpose of the task order is to

provide a team of 20 professionals to advise NAVFAC

SE at NAS Jacksonville, the defendant argues that the

task order permits NAVFAC SE to review the resumes

of prospective team members. (ECF 23 at 47.) The first

deliverable due according to the schedule provided in

Section F.4 required ASG to submit resumes of the 20

prospective team members within five days of task

order award. (Id.) The defendant argues that neither

this requirement, nor NAVFAC SE’s ability to accept

34a

the resumes in accordance with Section G.6, violates

FAR 37.104’s prohibition on personal service contracts.

(Id. at 49, 14.) During drafting, a contracting officer

implemented safeguards to avoid a personal services

contract and formally certified this fact before

publication of the task order. (Id. at 49.) The task

order is not a personal services contract, the defendant

argues, and NAVFAC SE did not create one by “trying

to enforce the contract terms” and reviewing ASG’s

deliverables. (Id.)

3.

The defendant’s interpretation is

the only reasonable one

The fact that the task order is a firm-fixed-price

contract is not itself dispositive. A firm-fixed-price

contract “is not subject to any adjustment on the basis

of the contractor’s cost experience in performing the

contract.” FAR 16.202-1. Such a contract does not,

however, necessarily entitle the contractor to the full

amount of compensation when it does not perform the

contract in full. See Pacific Coast Community Services

v. United States, 858 Fed. Appx. 346, 349 (Fed. Cir.

2021) (“[A] firm-fixed-price contract requires the

contractor to charge the government a fixed price for

services but does not provide that the government

must pay that price when the contractor does not

deliver the services.”). Section H.8 provides for a price

reduction if the contractor’s team membership falls

below 20 people. (ECF 17-3 at 84.) Here, the monthly

rate NAVFAC SE was to pay ASG was the total cost of

employing each of the 20 professionals, $218,870.00.

(ECF 17-3 at 89 (showing the monthly cost of each

employee); ECF 17 at 30 (stating the monthly cost,

35a

which reflects the sum of each employee’s monthly

rate).) Following the structure of a firm-fixed-price

contract, ASG requested this monthly amount in each

of its certified claims to the contracting officer. (ECF

17-3 at 1509-12, 1743, 2239-41.)

ASG argues, however, that the provisions of the

task order specifying a team of 20 reflect the Navy’s

best estimate of how many employees, and their

respective qualifications, would be required to fulfill

the requirements of the task order. ASG relies on the

word “anticipates” in Section A. (ECF 23-2 at 3

(emphasis added) (“at the time of initial contract

award, the [g]overnment anticipates” a staff of 20

experts).) ASG explains that the provisions reflecting

a team of 20 were designed to allow offerors, and the

eventual awardee, to price their offers appropriately,

because under a firm-fixed-price contract, the awardee

would bear the financial risk if it ultimately required

more resources to fulfill the assignments NAVFAC SE

gave it. The parties have provided conflicting readings

of the task order, but no party has suggested that

provisions of the task order itself are internally

inconsistent such that the Seaport NxG contract’s

order of precedence clause would apply to resolve the

conflict. Overall, the defendant’s interpretation best

harmonizes all the task order’s provisions and is most

consistent with its purpose. The first section of the

task order makes a team of 20 technical experts a

requirement from the outset. Section A.2 opens with

the proviso, relied on by ASG, that “at the time of

initial contract award, the [g]overnment anticipate[d]”

that a staff of 20 experts across specified disciplines

would be required, and that the team would be

36a

“subject to change.” (Id.) In the next sentence,

however, Section A.2 specified that “the staff of twenty

(20) professionals is the base/minimum level of

service.” (Id. (emphasis added).)

Later sections comport with or do not conflict with

Section A’s language. Section B supports the

defendant’s reading. Under Section B, the Navy

retained the option to increase the number of

employees working for the contractor on the task

order. If the contractor retained the full discretion to

determine appropriate staffing for any assignment,

there would be no need for the Navy to have retained

the option of awarding the contractor additional funds

to increase the size of the team.

The PWS, Section C, “requires the contractor to

provide, manage, and supervise a multidisciplinary

team of facilities technical experts.” (Id. at 10.) The

PWS provides that the contractor chooses “the precise

labor and staffing mix” to fulfill assignments. (Id.) The

PWS is silent on the size or composition of the “staffing

mix.” The PWS is the heart of the task order. A

contractor would expect this central part of the

contract to specify in detail what tasks will be

performed; other provisions often reflect boilerplate

language to guide the parties’ execution of those tasks.

In this case, however, it is the PWS that is almost

perfunctory, and the surrounding sections more

specific. In this regard, the task order is written

inside-out.

Although not expressed as clearly as it should

have been, the PWS implicitly requires the contractor

37a

to provide a team ready to advise on any projects

NAVFAC SE assigns to it. As part of its supervisory

role over its employees under the task order, ASG had

to provide NAVFAC SE with a weekly report setting

out, among other items, “active projects for each

[facilities technical expert]”; ASG was not required to

report each week on the progress of each assigned

project. (Id. at 12.) This requirement contemplates a

standing team ready to take on projects as they are

assigned so that the Navy can track the work of the

team members, rather than track the staffing of

discrete assignments.

In Section F.4, the calendar of deliverables

assumes a team of 20 professionals.5 The calendar

5

Section F.4 contains the following deliverables:

1.

Design Drawings & Specifications. Date of Submission:

At project milestones (ex: 35%, 65%, 100%).

2.

Requests for Proposals (RFP). Date of Submission: 100%

Pre-Final.

3.

Design Review Comments. Date of Submission: At

project milestones (ex: 35%, 65%, 100%).

4.

Quantity Takeoffs for Cost Estimates. Date of

Submission: At project milestones (ex: 35%, 65%, 100%).

5.

Construction Cost Estimates. Date of Submission: At

project milestones (ex: 35%, 65%, 100%).

6.

Project Status Report for Assigned Projects. Date of

Submission: Weekly.

38a

required that, “[w]ithin five days of award of task

order,” the awardee was required to submit a “resume

for each position proposed in accordance with the

[c]ontractor’s proposal and the PWS.” (Id. at 19.) The

parties dispute what “task order” means in this

context. The plaintiff contends that the term refers to

individual project assignments issued under the

Jacksonville task order. (ECF 17 at 35.) Only after

NAVFAC SE issues an assignment (which the plaintiff

refers to as a “task”), would ASG be obligated to

submit resumes for that assignment within five days.

(Id.) The defendant interprets “task order” to refer to

the Jacksonville task order. (ECF 23 at 47.) This

interpretation requires that the 20 resumes of the

members of ASG’s prospective team would have been

due by October 3, 2022, five days after award of the

Jacksonville task order. (See ECF 23-2 at 19.)

The defendant’s interpretation of the table of

deliverables is the better reading of the task order. The

term “task order” is singular and does not contemplate

multiple submissions. On the other hand, other

deliverables listed on the table contemplate multiple

submissions, with various due dates “at project

milestones” or “weekly.” (Id.) These plural “project

milestones” contrast with the singular reference to

7.

Work Schedule. Date of Submission: Monthly (due by

the 5th working day of the month).

8.

Resume for each position proposed in accordance with

the Contractor’s proposal and the PWS. Date of

Submission: Within five days of award of task order.

(ECF 23-2 at 19.)

39a

“task order,” suggesting that deliverables regarding

assignments under the Jacksonville task order would

occur repeatedly. In this context, the one-time,

singular reference to “task order” most logically refers

to the Jacksonville task order, and not the recurring

assignments within it. If ASG were required to submit

resumes at the outset of each assignment under the

Jacksonville task order, the deliverable table would

use language reflecting those repeated submissions,

just like the project milestones and weekly report

deliverables. Unless context requires otherwise, a term

should be read consistently throughout at least the

same provision of a contract. See Imation Corp. v.

Koninklijke Philips Elecs. N.V., 586 F.3d 980, 990

(Fed. Cir. 2009) (cleaned up) (“A proper interpretation

of a contract generally assumes consistent usage of

terms throughout the [a]greement.”).

Further, a “task order” is defined as “an order for

services placed against an established contract or with

government sources.” FAR 2.101. Interpreting “task

order” to mean the Jacksonville task order comports

with this definition in the FAR, because the

Jacksonville task order was issued pursuant to an

established government contract: the Seaport NxG

Contract. The Jacksonville task order also expressly

identifies itself as a task order in Section A.1. Section

A.1 notes that the Jacksonville task order is a “Firm

Fixed Price (FFP) task order.” (ECF 17-3 at 55.)

The singular word “award” in Section F.4 also

suggests the full slate of resumes was due on October

2, 2022, and not five days after NAVFAC SE issues

each assignment. Assignments given to ASG under the

40a

task order would not be “awarded” to it; once ASG was

awarded the Jacksonville task order, there would be

no competition for further assignments under that

task order. Therefore, it is implausible to interpret the

phrase “award of the task order” as referring to the

order of each assignment given to ASG by NAVFAC

SE under the Jacksonville task order.

Section G of the task order provides further

support for the defendant’s interpretation that the

task order requires a fulltime team of 20 professionals

as the baseline of performance under the contract.

Section G contains a section titled “Submission and

Substitutions of Key Personnel.” (ECF 23-2 at 25.) In

explaining the resume requirement, Section G.6 notes

that “all resumes for proposed individuals will be

submitted after award in accordance with Section F.4.”

(Id. 25.) Again, the term “award” in the singular is best

read refer to the award of the Jacksonville task order,

because assignments given to the contractor under

that task order would not be “awarded.” In addition,

the term appears again in the singular. Under the

contract, the Navy expected to make multiple

assignments to the contractor; use of the singular

“award” is best construed as applying to the one award

of the governing Jacksonville task order.

Upon submitting resumes for its 20 team

members, the contractor had to certify that the

proposed individuals had “agreed to accept the position

upon acceptance by the [g]overnment.” (Id.) This

language again suggests that the Navy’s goal under

the contract was to hire a vetted team of

41a

professionals.6

Finally, interpreting Section A.2’s language

according to its ordinary usage gives meaning to

Section H.8, which describes what would happen when

the contractor’s team experiences a labor shortage.

Section H.8 provides that “[i]f at any time there is a

vacancy within the [c]ontractor’s team (i.e. all twenty

(20) positions are not filled),” the contractor must fill

the vacancy within five days, or the Navy would reduce

payments to the contractor otherwise due for that

vacant position until another professional joins the

team. (Id. at 32.) This clause is meaningless if the

contract does not require ASG to provide and maintain

a team of 20 professionals.

Essentially, the plaintiff treats the PWS as the

6

In his first submission of resumes to the Navy, ASG’s

president seemed to share this interpretation. As noted in Section

I.B, above at 5-6, he wrote to the contracting officer’s

representative on October 3, 2022, that he had “been able to

obtain 2 of the 20” and would continue to submit resumes “until

all 20 [were] filled.” (ECF 23-2 at 223.) This interpretation

changed gradually, beginning with an October 6, 2022, email in

which ASG’s president pushed back against NAVFAC SE’s

request that future resumes comply with the labor mix ASG had

provided in Attachment 2 of the task order. He noted there that

it was “up to ASG to [ ] hire who it has reasons to believe in good

faith can deliver services per Section C.” (Id. at 230.) He began to

protest the Navy’s interpretation of the number of professionals

required under the task order in an October 13, 2022, email,

writing that ASG has “the prerogative to change the labor mix

and quantity as [ASG] deem[s] fit to execute the work.” (Id. at

269.)

42a

central and governing portion of the contract. Under

ASG’s reading, the other sections of the task order are

important in providing the obligations and limits of the

parties’ contractual relationship, but only the PWS

establishes the contractor’s obligations under the task

order. A PWS is the “statement of work . . . that

describes the required results in clear, specific and

objective terms with measurable outcomes.” FAR

2.101. As previously noted, it is hard to conceive or

explain why the PWS does not include any reference to

what the defendant now insists is the contract’s

central purpose, i.e., to provide the Navy with a team

of 20 professionals. Perhaps the Navy thought that by

placing the requirement for a team of 20 professionals

in Section A.2, it was highlighting the primary purpose

of the task order for offerors; if that is what the Navy

thought it was doing, its effort was ineffective.

Contractors generally look to the PWS to ascertain

exactly what goods or services they will be obligated to

provide or perform under a contract. The provisions

that surround the PWS typically support it by

providing boilerplate mechanisms to guide the parties’

execution of the contract. Here, however, it is the PWS

that describes the advisory work of the contractor’s

team in broad, generic language, while the

surrounding provisions more clearly require a team of

20. A simple reference to the hiring of 20 professionals

when the PWS already mentions the contractor’s

“team” could have avoided this entire dispute, both

preserving ASG’s standing as a reputable government

contractor and the Navy’s progress on its essential

projects.

A court must read all provisions of a contract

43a

together and give effect to each of them. The provisions

of the Jacksonville task order are best harmonized if

Section A.2 is taken at face value: while the Navy

could only anticipate its precise needs, the awardeesupplied team of 20 interdisciplinary professionals was

the “base/minimum level of service.” Section C

describes the assignments the contractor’s

“interdisciplinary team” will be given to accomplish;

Section F requires the contractor to submit resumes of

its prospective team members “within five days of

award of task order”; Section G describes the required

content of the resumes and explains that the

prospective employees must agree to work “upon

acceptance by the government”; and Section H

mandates that the contractor maintain its staff of 20

at all times or face a payment reduction. The plaintiff’s

interpretation requiring only a to-be-determined team

of an unspecified makeup corresponding to specific

assignments is inconsistent with the language of

Section A.2 and requires strained interpretations of

the other provisions of the contract.

The logistical processes involved in performance

of the task order also support the defendant’s

interpretation that a team of 20 professionals was a

central requirement of the task order. The contractor’s

authority to choose a staffing mix in the PWS does not

mean that the Navy expected the contractor to

overhaul the makeup of its team in response to each

individual assignment. Both parties address the

onboarding process all the professionals had to

undergo before they could report to work. The

defendant explained that the security and background

screenings for each proposed ASG employee could take

44a

up to two months before that employee could access

NAS Jacksonville to perform the assignment. (ECF 23

at 13.) Emails submitted by the plaintiff convey ASG’s

frustration that the onboarding process was moving

more slowly than expected. (See, e.g., ECF 17-3 at 361,

374.) The existence of these administrative hurdles

further strains ASG’s reading of what the task order

required. These mandatory processes are also

antithetical to the one-year term of the task order.

NAVFAC SE would need to have ASG assemble a team

as soon as it awarded the task order so that the team

could “provide advice and technical assistance” to the

Navy’s projects at NAS Jacksonville, as the task order

required. (ECF 23-2 at 10.) A workflow in which

NAVFAC SE assigns a project to ASG, ASG then

recruits and hires qualified personnel, the personnel

then undergo screening and onboarding for two

months, and only then can provide the services needed

by the Navy is impracticable. A reading that requires

this result, as the plaintiff’s does, is therefore

implausible and should be avoided. The defendant’s

reading of the task order is consistent with the plain

meaning of the task order language, best harmonizes

all provisions of the task order, and is the reasonable

interpretation, given the task order’s purpose. The

plaintiff’s interpretation does not produce a reading of

the task order that gives meaning to all of its parts to

effect the Navy’s purpose: to have ASG provide a team

of 20 professionals who satisfied the qualifications

described in ASG’s proposal.

B.

Personal Services Contract

Given that the defendant’s interpretation of the

45a

task order is the only reasonable one, the next step is

to analyze whether, under that interpretation, the task

order becomes a personal services contract that would

violate FAR 37.104 or an improperly executed time

and materials contract under FAR 16.601.

The plaintiff’s primary argument in advocating

for its interpretation of the task order is that under the

government’s reading the task order is an illegal

personal services contract. An interpretation that

renders a contract illegal cannot be a reasonable

interpretation. See Bay Co., FL v. United States, 112

Fed. Cl. 195, 202 (2015); Cray Research, Inc. v. United

States, 44 Fed. Cl. 327, 333 (1999) (quoting Hobbs v.

McLean, 117 U.S. 567, 576 (1886)) (“‘where a contract

is fairly open to two constructions, by one of which it

would be lawful and the other unlawful, the former

must be adopted’”). Here, the defendant’s

interpretation of the task order is the reasonable

construction, so it must be determined whether that

interpretation renders the contract illegal. The

“difference between a de facto ‘personal services

contract’ and a nonpersonal services contract often

means the difference between an unlawful and a

lawful services contract.” Off. of Fed. Contract

Compliance Progs. v. Florida Hosp. of Orlando, 2013

WL 3981196, at *17 (U.S. Dep’t of Labor Adm. Rev.

Bd. Jul. 22, 2013) (en banc).

FAR 37.104(a) defines a personal services

contract as one “characterized by the employeremployee relationship it creates between the

[g]overnment and the contractor’s personnel.” Such a

contract is illegal because it “circumvents” laws that

46a

govern the procedures for hiring federal employees. Id.

In assessing a contract, the “key question” is whether

the government will “exercise relatively continuous

supervision and control over the contractor personnel

performing the contract.” FAR 37.104(c). The FAR lists

six factors that guide an assessment of whether a

personal services contract exists:

1.

Performance on site.

2.

Principal tools and equipment furnished by

the Government.

3.

Services are applied directly to the integral

effort of agencies or an organizational

subpart in furtherance of assigned function

or mission.

4.

Comparable services, meeting comparable

needs, are performed in the same or similar

agencies using civil service personnel.

5.

The need for the type of service provided can

reasonably be expected to last beyond 1 year.

6.

The inherent nature of the service, or the

manner in which it is provided, reasonably

requires directly or indirectly, Government

direction or supervision of contractor

employees.

FAR 37.104(d).

Of these factors, the last one aligns most closely

47a

with the FAR’s “key question” underlying whether an

employer-employee relationship between a contractor’s

staff and the government has been created.

Caselaw closely adheres to the FAR’s designation

of the government’s degree of supervision over

contractor personnel as the “key question” in

determining whether a contract is impermissibly for

personal services. As the Federal Circuit has noted,

“the principal ground on which a contract will be found

to be a personal services contract . . . is the degree of

supervision to which the contracting employees were

subject under the contract.” Seh Ahn Lee v. United

States, 895 F.3d 1363, 1371 (Fed. Cir. 2018). The fact

that some of the factors listed in FAR 37.104(d) are

met under a contract does not “‘per se render[ ] the

contract a personal services contract’”; instead, such

factors “are merely ‘to be used as indicia of continuous

supervision and control of contractor personnel by the

government.’” John Douglas Burke v. Dept. Health &

Human Services, CBCA 7492, 23-1 B.C.A. ¶ 38304

(Mar. 10, 2023) (quoting W.B. Jolley, B- 234146, 89-1

CPD ¶ 339 (Comp. Gen. Mar. 31, 1989)).

Before issuing the solicitation, the Navy analyzed

whether the task order would constitute an illegal

personal services contract. The contracting officer

determined that five of the six factors listed in FAR

37.104(d) would be met under the contract. After this

finding, the Navy implemented additional safeguards

in the task order. It added language to clarify that “the

contractor [would] choose[ ] the precise labor and

staffing mix” and to require “the contractor to provide,

manage, and supervise” the team. (ECF 23-2 at 10.)

48a

With these provisions, even though ASG’s employees

were working onsite and with government-provided

tools, ASG would assign and control the daily activities

of its employees performing work under the task order.

The lack of Navy control over ASG’s employees would

prevent the creation of an employer-employee

relationship between the government and ASG

personnel. (ECF 23 at 49; see also ECF 23-2 at 10.)

The fact that several of the factors of FAR

37.104(d) would be met does not necessarily mean that

the task order violates the FAR. In Seh Ahn Lee v.

United States, the Federal Circuit explained that the

FAR 37.104(d) factors are “far from definitive.” 895

F.3d at 1371. Indeed, meeting several of FAR

37.104(d)’s analysis criteria “does not dictate that an

executed contract will be deemed void.” Id. at 1372.

Instead, the controlling question, which assumes

greater importance as more of the other factors listed

in 37.104(d) are met, is whether the language of the

task order or the manner of its administration gives

the agency control over the work of the contractor’s

employees.

The task order specifically left the control of

ASG’s employees to ASG. The Navy would assign work

to ASG. ASG would then select which members of the

20-person team were appropriate to execute the work;

ASG would control the daily activities of the team. The

Navy was allowed to inspect the completed work to

ensure it was satisfactory. Otherwise, from the

assignment of the work to its completion and review by

the Navy, ASG was in control of its team. Because

ASG, not the Navy, assigned work to its employees

49a

and managed their daily activities, the Navy’s

determination that the task order would not create a

personal services contract was correct.

Although the task order did not create a personal

services contract, the inquiry is not ended. A personal

services contract may arise either by the contract’s

terms or the “manner of its administration during

performance.” FAR 37.104(c)(1). ASG argues that

NAVFAC SE’s insistence on reviewing and retaining

approval rights over the hiring of ASG’s employees

created a personal services contract. The defendant’s

interpretation of Section G.6 as allowing NAVFAC SE

to approve resumes would lead, the plaintiff argues, to

“an absurd result of NAVFAC SE controlling the labor

mix as if this were a personal services contract.” (ECF

24 at 15.) By reviewing resumes to ensure they meet

the qualifications promised by ASG in Attachment 4 of

its proposal (and incorporated into the task order as

Attachment 2), the plaintiff argues, NAVFAC SE

“stripped [ASG] of its right to determine the ‘how’ of

performance.” (Id. at 27.) Beyond violating the FAR,

the plaintiff contends that the Navy’s actions also

violated the PWS, which grants the contractor the

right to choose the labor mix needed to complete an

assignment. (Id. at 39-40.) It does not argue why this

“labor mix” could not refer to a selection of

professionals drawn from the contractor’s existing

team of 20. Once the Navy approves the contractor’s

team, the task order gives the contractor freedom to

select which individuals to use on any given

assignment.

When examining performance, “an order for a

50a

specific article or services, with the right to reject the

finished product or result, is not the type of

supervision or control that converts . . . an

independent contractor (such as a contractor

employee) into a [g]overnment employee.” FAR

37.104(c).

While no federal court has addressed FAR

37.104(d) in a factually similar case, decisions of the

Comptroller General have found that agencies may

review contractor personnel without creating a

personal services contract. See The Endmark Corp., B278139 (Comp. Gen. Dec. 31, 1997) (quoting FAR

37.104(c)(1)) (“an agency’s evaluation of a key

employee’s performance . . . does not establish or

evidence an employer-employee relationship marked

by ‘relatively continuous supervision and control [of

the non-government employee] by a [g]overnment

officer or employee,’ as required to constitute an

improper personal services contract”). Agencies have

“discretion to determine [their] needs and the best

method to accommodate them,” and a party’s

disagreement with the agency’s determination about

its needs “does not establish that the agency’s

judgment is unreasonable.” Matter of: Ronald L. Glass,

B-417855 (Comp. Gen. Nov. 21, 2019).

The plaintiff’s argument that NAVFAC SE’s

administration of the task order created an illegal

personal services contract rests on the Navy’s

insistence on reviewing the resumes and approving the

hiring of ASG’s prospective employees. The plaintiff

neither alleges nor argues that other statements or

actions by NAVFAC SE resulted in an employer51a

employee relationship between ASG’s personnel and

the Navy. The plaintiff also does not allege that

NAVFAC SE attempted to supervise or interfere with

ASG’s employees’ performance of their jobs at all; its

argument pertains only to allegations that NAVFAC

SE attempted to supervise ASG’s recruitment of those

employees. Once on site, neither the task order nor

NAVFAC SE’s actions reflect that the agency had any

supervisory involvement with ASG’s team members.

The Navy’s insistence on reviewing and approving

resumes, on its own, is not sufficient to demonstrate

that NAVFAC SE administered the task order in a

manner that created a personal services contract. The

delivery by ASG of resumes matching the

qualifications of the contractor’s proposal was a

specific deliverable under Section F.4 of the task order.

The right of NAVFAC SE to review and accept the

resumes of proposed ASG team members before the

team member could work at NAS Jacksonville is “not

the type of supervision or control that converts” a

contractor into a government employee. FAR

37.104(c)(1). Once it is established that the task order

calls for an interdisciplinary team of 20 professionals,

it is within NAVFAC SE’s discretion to screen resumes

of prospective contractor employees. Agencies have

discretion to determine their needs and the best way

to meet them. See Ronald L. Glass, B-417855. This

limited involvement by the Navy of reviewing resumes

to ensure they met the qualifications proposed by ASG

in its response to the solicitation does not create a

personal services contract; rather the submission of

the resumes of its prospective employees was a

deliverable under the contract. The Navy’s review and

52a

approval of resumes did not involve any governmental

supervision of ASG’s employees, and none of these

actions interfered with ASG’s performance of the task

order in violation of the covenant of good faith and fair

dealing.

Following

the

defendant’s

reasonable

interpretation of the task order does not render the

task order an illegal personal services contract in

violation of FAR 37.104. The plaintiff has not shown

that the defendant’s interpretation of the task order

could render it an improperly executed time and

materials contract. The FAR mandates that time and

materials contracts be used “only when it is not

possible . . . to estimate accurately the extent or

duration of the work or to anticipate costs with any

reasonable degree of confidence.” FAR 16.601(c). In

such a case, the contracting officer must prepare and

submit for agency approval “a determination and

findings that no other contract type is suitable.” FAR

16.601(d)(1). The defendant’s interpretation of the task

order is the most reasonable, and under that reading

the task order is a one-year contract which requires

the contractor to provide a team of 20 advisory

professionals. The duration is established and

undisputed by the plaintiff. Moreover, the firmfixedprice structure of the task order means that the costs

are established beyond “a reasonable degree of

certainty.” ASG provided the cost of employing each

team member in its proposal, and those rates added

together became the contract price. Nothing in the

record indicates that these variables were ever in

doubt by ASG or NAVFAC SE, and no evidence

suggests that NAVFAC SE ever contemplated

53a

implementing a time and materials pricing structure.

C.

Termination for Default

The defendant correctly interprets the task order

to require the contractor to provide a multidisciplinary

team of 20 professionals, and such an interpretation

does not create a personal services contract in violation

of FAR 37.104. Even so, the evidence must also

demonstrate that NAVFAC SE correctly effected the

termination in accordance with the requirements of

FAR 52.249-8 and FAR 49.402-3.

1.

FAR 52.249-8

Pursuant to FAR 49.504(a)(1), the provisions of

FAR 52.249-8 were included in the contract. Under

FAR 52.249-8(a)(1), an agency may terminate a

contract for default if the contractor fails to “(i)

[d]eliver the supplies or to perform the services within

the time specified in th[e] contract or any extension;

(ii) [m]ake progress, so as to endanger performance of

th[e] contract . . . ; or (iii) [p]erform any of the other

provisions of th[e] contract.” An agency’s right to

terminate a contract for default pursuant to

subparagraphs (ii) and (iii) requires that it first

provide the contractor notice and offer the contractor

a 10-day window to cure the failure. FAR 52.2498(a)(2).

The Federal Circuit provided the standard for

evaluating an agency’s decision to terminate a contract

for default in Lisbon Contractors, Inc. v. United States.

828 F.2d 759 (Fed. Cir. 1987). A termination for

54a

default “require[s] a reasonable belief on the part of

the contracting officer that there was no reasonable

likelihood that the [contractor] could perform the

entire contract effort within the time remaining for

contract performance.” Id. at 765 (cleaned up).

The plaintiff argues that “there is no allegation

and no evidence of any failure to perform services

requested by NAVFAC SE.” (ECF 24 at 23.) It explains

that ASG performed every task NAVFAC SE assigned

it. Despite ASG’s successful performance of each

assigned task, the Navy insisted that ASG’s

performance was inadequate because ASG did not hire

or provide resumes for the number of facilities

technical experts required under the task order. (Id.)

As a result, the plaintiff argues, NAVFAC SE wrongly

claimed that it could not assign ASG all the projects it

anticipated accomplishing through the task order. (Id.)

The plaintiff’s argument turns on its reading,

already rejected, of what the task order required.

Under the plaintiff’s reading of the task order, the

Navy assigns projects to ASG, and only then does ASG

assemble the appropriate team; because ASG

performed each sub-task the Navy assigned, it did not

fail to perform any work required by the task order.

(Id. at 23-24.) The defendant argues that because the

point of the task order was to appoint a team of 20

facilities technical experts, the plaintiff’s failure to do

so clearly justifies a termination for default. (ECF 25

at 23.) The defendant has offered the better reading of

the contract. Under this reading, ASG failed to

perform.

55a

Given that the defendant’s reading of the task

order is the better one, the plaintiff’s argument (ECF

24 at 25) that it did not fail to perform as required

under the task order is rejected. See 52.249-8(a)(1)(i).

ASG had to submit 20 resumes to the Navy within five

days of the award of the task order, which was October

3, 2022. ASG did not do so by that date. Indeed, ASG

never did so.

The plaintiff’s analyses of the termination

according to FAR 52.249-8(a)(1) factors (ii) and (iii)

follow the same logic and must be rejected for the same

reason: they rest on ASG’s flawed reading of the

requirements of the task order.

ASG materially failed to perform. It did not

provide the required services of assembling a fully

staffed team. This failure in turn limited the projects

that NAVFAC SE could assign. ASG never made

sufficient progress toward assembling the team. As of

March 2023, halfway through the contract period, ASG

had retained only four employees who reported to work

at NAS Jacksonville. (ECF 25-1 at 71-72 (decl. of the

contracting officer).) Given ASG’s performance halfway

through the contract term, it was reasonable for the

contracting officer to determine that insufficient time

remained both for ASG to assemble the required team

and for that team to carry out the tasks NAVFAC SE

sought to assign to the team.7

7

The contracting officer also supported the default

termination decision by asserting that ASG had repudiated the

task order. According to the defendant, repudiation occurred

56a

While meeting any one factor of FAR 52.2498(a)(1) can justify termination for default, ASG’s

performance met all three of them.

ASG also argues that even if its performance

provided proper grounds to terminate the task order

pursuant to FAR 52.249-8, the termination is

nevertheless invalid because ASG did not receive a

notice to cure as required by FAR 52.249-8(a)(2). (ECF

24 at 26.) ASG argues that although it received a cure

notice letter and a show cause notice on December 5,

2022, and January 20, 2023, respectively, these notices

did not provide ASG with the opportunity to cure. It

could only cure, the plaintiff reasons, by performing

assignments. ASG “repeatedly requested information

on projects to perform and was denied that

information.” (Id.) This alleged denial prevented ASG

from having a meaningful opportunity to cure. (Id.)

The plaintiff’s argument, again, relies on its

during a meeting on January 5, 2023. (ECF 23-2 at 672.) During

that meeting ASG’s president allegedly stated that ASG “cannot

meet Attachment 4” (referring to Attachment 2 of the task order).

(Id.) NAVFAC SE viewed this statement as anticipatory

repudiation. (Id.) ASG has repeatedly denied that it repudiated

the task order. In an email to a NAVFAC SE representative,

ASG’s president wrote, “at no time did I repudiate [ ]or state for

the record that I ‘cannot meet Attachment 4’ but did articulate the

challenges as I have consistently done.” (ECF 23-2 at 1520.) On

the evidence provided by the parties, ASG’s alleged repudiation of

the task order is a factual dispute unfit for resolution on summary

judgment. Because the termination for default was appropriate

regardless of whether repudiation occurred, the factual dispute

over this issue does not preclude summary judgment.

57a

faulty reading of the task order, already rejected. It

received and responded to the December 5, 2022 and

January 20, 2023 notices. (ECF 23-2 at 532-34, 67486.) Rather than hire a team of 20 in response to either

notice, ASG continued to insist that it was not

required to do so. On their face, the notices provided to

ASG reflect that the Navy had advised ASG of its

failures to perform and gave ASG the opportunity to

comply with the terms of the task order. ASG never

did. The Navy effected the termination in compliance

with FAR 52.249-8.

2.

NAVFAC SE’s Consideration of the

FAR 49.402-3(f) factors

When an agency is contemplating a termination

for default, FAR 49.402-3(f) outlines seven factors that

the contracting officer “shall consider”:

(1) The terms of the contract and applicable

laws and regulations.

(2) The specific failure of the contractor and

the excuses for the failure.

(3) The availability of the supplies or

services from other sources.

(4) The urgency of the need for the supplies

or services and the period of time required to

obtain them from other sources, as compared

with the time delivery could be obtained

from the delinquent contractor.

58a

(5) The degree of essentiality of the

contractor in the Government acquisition

program and the effect of a termination for

default upon the contractor’s capability as a

supplier under other contracts.

(6) The effect of a termination for default on

the ability of the contractor to liquidate

guaranteed loans, progress payments, or

advance payments.

(7) Any other

circumstances.

pertinent

facts

and

The plaintiff argues that NAVFAC SE failed to

satisfy the requirements of FAR 49.402-3(f) when

terminating ASG for default. The plaintiff asserts that

consideration of the seven factors found in FAR

49.402-3(f) is mandatory, and that the contracting

officer failed to consider any of them. (ECF 17 at 47-48;

ECF 24 at 30-33.) As a result, the plaintiff contends,

the contracting officer failed to exercise his discretion

as required to terminate ASG for default, thereby

undercutting the validity of the termination. (ECF 24

at 30-31.) The defendant argues that the seven factors

identified in FAR 49.402-3(f) are irrelevant because

ASG failed to perform under the task order and

repudiated. (ECF 23 at 55.)

Although FAR 49.402-3(f) requires contracting

officers to consider the seven factors in deciding to

terminate a contract for default, the evaluation of

these factors is not a prerequisite to a valid

termination. DCX, Inc. v. Perry, 79 F.3d 132, 135 (Fed.

59a

Cir. 1996). The provision of the FAR setting out these

factors does not confer any enforcement rights on a

defaulting contractor. Id.; see also Minelli v. United

States, 1995 WL 424858, at *4 (Fed. Cir. July 18,

1995). Accordingly, a contracting officer’s failure to

consider one or more of the factors does not require

that a termination for default be converted into a

termination for convenience. DCX, Inc., 79 F.3d at 135.

While the factors outlined in FAR 49.402-3(f) are

not mandatory, an agency’s compliance or

noncompliance with them may aid a court in

determining whether a particular termination for

default reflects an abuse of the contracting officer’s

discretion. See Darwin Constr. Co. v. United States,

811 F.2d 593, 598-599 (Fed.Cir.1987); DCX, Inc., 79

F.3d at 135; PCL Const. Servs., Inc. v. United States,

47 Fed. Cl. 745, 781 (2000) (contracting officer’s

decision to terminate contract for default was

reasonable despite no written analysis of enumerated

consideration of FAR 49.402-3(f) factors when the

contractor had repudiated the contract); Alutiiq Mfg.

Contractors, LLC v. United States, 143 Fed. Cl. 689,

698 (2019) (termination for default was improper when

contracting officer only considered the first two FAR

49.402-3(f) factors).

The record reflects that the contracting officer

considered all seven factors. In a document titled

“Request to Terminate for Default,” signed by the

contracting officer on March 17, 2023, the contracting

60a

officer outlined and discussed each factor in detail.8

(ECF 25-1 at 62-63.) The evidence is sufficient to

demonstrate that the contracting officer considered the

factors required by the FAR, and the contracting

officer’s analysis of those factors does not reflect an

abuse of discretion. Indeed, given the correct reading

of the task order, even without the Navy’s analysis of

the FAR 49.403-3(f) factors, the termination for default

would not be an abuse of the Navy’s discretion because

ASG failed to perform the contract.

VI. CONCLUSION

The plaintiff is not entitled to judgment on the

8

At oral argument, the plaintiff objected to the admission

of this document, which was made part of the record only with the

defendant’s reply brief filed five days before the argument.

Because caselaw reflects that the plaintiff does not have an

affirmative right to receive an agency’s analysis of each factor, the

time at which the plaintiff became aware of this document does

not affect the validity of the termination analysis. See DCX, Inc.,

79 F.3d at 135. The date of the contracting officer’s signature on

the request, March 17, 2023, reflects that the contracting officer

considered the relevant factors before NAVFAC SE made the

decision to terminate for default. The document is relied on for

that point only, and not for the substance of its analysis.

Regardless, a court retains discretion to consider untimely

submissions when there is no undue prejudice to the opposing

party. See Aventis Pharma S.A. v. Hospira, Inc., 675 F.3d 1324,

1333 (Fed. Cir. 2012) (finding that the district court did not abuse

its discretion in allowing a party to make late amendments to its

pleadings in part because the non-moving party was not unduly

prejudiced by the amendment). Considering the timing and

limited use of this document in resolving its claims, ASG has not

been unduly prejudiced by its introduction.

61a

pleadings or summary judgment. Although ASG has

presented a possible reading of the task order, the

defendant’s reading is the reasonable one. The

defendant’s reading of the task order does not convert

it into an illegal contract for personal services or an

improperly executed time and materials contract. ASG

was properly notified of the deficiencies in its

performance and received an opportunity to cure. It

did not cure, and the contracting officer’s decision to

terminate the task order for default complied with the

FAR and was not an abuse of discretion.

The plaintiff’s motions for judgment on the

pleadings and summary judgment are denied. The

defendant’s motion for summary judgment is granted.

A separate order will be filed concurrently with this

opinion directing the Clerk to enter judgment.

s/ Richard A. Hertling

Richard A. Hertling

Judge

62a

APPENDIX C

ITNOTE: This order is nonprecedential.

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

ASG SOLUTIONS CORP., DBA AMERICAN

SYSTEMS GROUP,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

2024-1755

Appeal from the United States Court of Federal

Claims in No. 1:23-cv-01029-RAH, Judge Richard A.

Hertling.

ON PETITION FOR PANEL REHEARING AND

REHEARING EN BANC

Before MOORE, Chief Judge, LOURIE, BRYSON1,

DYK, PROST, REYNA, TARANTO, CHEN,

HUGHES, STOLL, CUNNINGHAM, and STARK,

1

Circuit Judge Bryson participated only in the decision

on the petition for panel rehearing.

63a

Circuit Judges.2

PER CURIAM.

ORDER

ASG Solutions Corp filed a combined petition for

panel rehearing and rehearing en banc. The petition

was first referred to the panel that heard the appeal,

and thereafter the petition was referred to the circuit

judges who are in regular active service.

Upon consideration thereof,

IT IS ORDERED THAT:

The petition for panel rehearing is denied.

The petition for rehearing en banc is denied.

March 3, 2026

Date

FOR THE COURT

Jarrett B. Perlow

Clerk of Court

2

Circuit Judge Newman did not participate.

64a

APPENDIX D

[DEPARTMENT OF THE NAVY LETTERHEAD]

4330

Ser CON24/23-046

4 April 2023

TRANSMITTED VIA EMAIL: rito@asgscorp.com

ACKNOWLEDGEMENT OF RECEIPT REQUIRED

Mr. Ritobrata Banerjee

ASG Solutions Corporation American Systems Group

3990 Old Town Ave, STE B107

San Diego, CA 92110-2967

Dear Mr. Banerjee:

SUBJECT:

NOTICE OF TERMINATION TO

PRIME CONTRACTOR FOR

CONTRACT N00178-19-D-7175, TASK

ORDER N6945022F3005, TECHNICAL

SUPPORT SERVICES FOR THE

ENGINEERING AND DESIGN

DIVISION FOR THE DESIGN AND

CONSTRUCTION BUSINESS LINE

This letter is to notify ASG Solutions Corporation

American Systems Group ("ASG") that effective

immediately, the subject task order is hereby

terminated in its entirety for default of the contractor.

As detailed in the Letter of Concern dated November

1, 2022, the Cure Notice dated December 5, 2022 and

65a

the Show Cause letter of January 20, 2023, ASG has

breached its contractual duty by failing to perform in

accordance with the terms and conditions of the

contract and has repeatedly reiterated its refusal to

comply with the contract or to provide any reasonable

assurance to the Navy that the performance will be

improved in time to meet mission requirements.

Background

The subject task order was awarded by Naval

Facilities Engineering Systems Command (NAVFAC)

Southeast to ASG on September 28, 2022, in the total

amount of $3,836,152.00 for the one-year base period.

The contract called for a self-sufficient and

self-supervised multidisciplinary support team

consisting of at least twenty (20) professionals to

provide professional support services in the form of

advisory and assistance services to NAVFAC

Southeast's Engineering and Design Division, Design

and Construction Business Line (DCBL). In

accordance with CLIN 1000, the services were

required to be performed on-site at Naval Air Station,

Jacksonville, Florida.

Task Order Section A.2 — Service Requirements

— specifies: "the staff of twenty (20) professionals is

base minimum level of service." In order to enforce this

requirement, Section H.8 - Schedule of Deductions states: "If at any time there is a vacancy within the

Contractor's team (i.e., all twenty (20) positions are not

filled) the Government will be entitled to immediate

replacement (within 5 days of loss of personnel), or to

a unit price reduction in payment, in accordance with

66a

FAR 52-246-4 until the qualified technical expert(s) is

in place. The daily unit price will [be] determined by

the Unit Price per Month proposed in the Optional

Levels of Service CLIN, as applicable." Further

underscoring the essentiality of this requirement,

Section G.6 - Submission and Substitutions of Key

Personnel - provides that: "The offeror shall certify

that as of the date of submission of the resume, the

qualified individual(s) has agreed to accept the

position upon acceptance by the Government, pending

any unforeseen circumstances."

ASG explicitly acknowledged its understanding of

these contractual requirements. On August 24, 2022,

ASG submitted its proposal, which contained

Attachment 4 — Proposed Labor Mix, listing twenty

(20) highly qualified professionals from a variety of

technical disciplines. The proposed labor mix included

very specific qualifications over and above the

minimum requirements set forth in the solicitation, to

include Masters Degrees, Professional Licensing, and

extensive DoD experience.

The solicitation clearly states: "The non-price

proposal presented by the offeror to whom the award

is made will be incorporated into the task order at time

of award." This was so important that, prior to award

of the task order, on September 15, 2022, NAVFAC

Southeast issued a clarification notice to confirm

ASG's proposal. The clarification notice required ASG

to expressly acknowledge that ASG understood that

any personnel proposed after award would need to

meet the qualifications of the personnel that ASG

proposed in its Attachment 4. Specifically, the

67a

contracting officer asked: "Please confirm that you

understand the technical experts submitted after

award must meet the additional requirements

proposed that are contained within your non-price

proposal, Attachment 4. On the same date, ASG

provided written confirmation, acknowledging the

requirement, and affirming it with an unequivocal

"Yes."

Therefore, due to the highly skilled labor mix

proposed and confirmed by ASG, NAVFAC Southeast

selected ASG for award as the best value offeror.

ASG's Attachment 4 was incorporated in the task

order award in Section J as Attachment 2 — Labor

Mix.

Contract Schedule

ASG's task order was awarded on 28 September

2022, with a completion date of September 27, 2023.

Section F.4 — Deliverables - required the contractor to

submit "to the contracting officer" "within five days of

award of task order" a "resume for each position

proposed in accordance with the Contractor's proposal

and the PWS." Approximately halfway through the

one-year period of performance, ASG has provided only

five (5) of the twenty (20) professionals required by the

task order and that were expressly proposed and

confirmed by ASG in Attachment 4 of its proposal.

ASG has failed to provide the personnel to

perform the technical support services required by the

contract, which has had, and continues to have, an

adverse impact on NAVFAC Southeast's mission

68a

accomplishment. This has been explained to ASG on

several occasions, but ASG has failed and/or refused to

take sufficient corrective actions.

Contractor Performance Issues

From the beginning of the contract, ASG's

performance has never been satisfactory. The task

order required the contractor to submit resumes of

qualified candidates within five (5) days of contract

award to the Contracting Officer for review and

approval as stated in Section F.4 — Deliverables of the

Task Order.

In the first twelve (12) days of the period of

performance, ASG submitted five (5) resumes to the

Contracting Officer's Representative (COR), but of

those five resumes two failed to meet the

requirements, and a third individual has not

completed his security forms to date. On October 17,

2022, at the kickoff meeting, ASG began to assert that

it would not comply with certain requirements of the

task order. According to ASG, due to the

performance-based elements within the performance

work statement (PWS), ASG could unilaterally decide

whether or not to comply with the personnel

requirements of the task order and with the personnel

qualifications that ASG proposed in its proposal

Attachment 4 incorporated into the task order as

Attachment 2.

To date, approximately six months into the base

period of performance, ASG has provided only five (5)

of the twenty (20) professionals that are required by

69a

the task order and that were expressly proposed and

confirmed by ASG in Attachment 4 of its proposal.

Throughout the entire six months, ASG has provided

a total of eighteen (18) resumes to the contracting

officer. NAVFAC Southeast rejected six (6) of the

resumes because they did not meet the proposed

qualifications listed in ASG's Attachment 4; and

approved twelve (12) candidates, five (5) of which did

not accept employment with ASG, the other seven (7)

accepted employment with ASG. One of the approved

candidates terminated employment with ASG nine (9)

days after approval. Another approved candidate has

yet to complete the security process. An additional

candidate was recently approved in early March 2023.

In summary, approximately halfway through the

one-year period of performance, ASG has provided only

twenty-five percent (25%) of the number of qualified

professionals required by the task order and as

expressly proposed and confirmed by ASG in

Attachment 4 of its proposal. Out of these five (5)

professionals, only four (4) have performed

professional support services under the task order to

date.

ASG insists that it is bound neither by the terms

of the task order nor by the terms of its proposal

incorporated into the contract. ASG insists that it can

unilaterally interpret the task order PWS according to

its own unilateral convenience. Moreover, ASG claims

entitlement to full compensation under the task order.

ASG submits and certifies monthly invoices in the full

amount of $281,870.00 each, regardless of the

positions filled or services rendered.

70a

On 1 November 2022, NAVFAC Southeast issued

a Letter of Concern explaining that ASG was failing to

meet the task order requirements. In response to the

Letter of Concern, ASG took the position that even

though it proposed and confirmed twenty (20) qualified

personnel sought by the Government, it is not bound

to providing the number, the qualifications, or the onsite services that it proposed.

On December 5, 2022, NAVFAC SE issued a Cure

Notice, informing ASG that the Government

considered ASG' s repudiation of its proposal,

specifically its Attachment 4, a condition that was

endangering performance of the task order and that

could result in a termination for default. ASG

responded to the Cure Notice on December 14, 2022.

According to ASG, the labor mix required by the task

order and proposed by ASG is irrelevant, and only

ASG's self-serving interpretation of select portions of

the performance work statement are controlling. ASG

has continuously argued that it is not required to

provide twenty (20) professionals that meet the

qualifications of its proposal. According to ASG, it is

allowed to provide whatever staffing it deems

appropriate, working from whatever location, and with

whatever qualifications, regardless of the terms and

conditions of the task order and ASG's proposal.

Additionally, ASG accuses NAVFC Southeast of

wanting to enforce a prohibited personal services

contract, ignoring the fact that management,

supervision, and oversight of personnel remained at all

times within the control of ASG (not NAVFAC

Southeast). In fact, Section 8 of the task order, entitled

71a

Non-Personal Service Statement, provides: "Contractor

employees will perform independent of and without

the supervision of any Government official."

On January 5, 2023, at a meeting with NAVFAC

SE's Contracting Officer's Representative (COR), ASG

stated that it "cannot meet Attachment 4," citing labor

market conditions. On one hand, ASG admits that it

has defaulted under the contract, blaming labor

market conditions. On the other hand, ASG argues

that it is not bound by the contract, and that it can

unilaterally interpret and administer select portions of

the contract to its advantage and profit. NAVFAC

Southeast believes that ASG either knew or should

have known the state of the labor market prior to

making its proposal. NAVFAC Southeast believes that

ASG submitted a potentially false or fraudulent

proposal that ASG either knew or should have known

that it could not achieve. NAVFAC Southeast believes

that ASG's invoices requesting full payment for less

than full services may constitute a potential false

claim against the government.

Termination

On January 20, 2023, NAVFAC Southeast issued

a Show Cause Notice, which notified ASG that the

Government was considering termination of the

contract for default. The Show Cause Notice provided

an opportunity for ASG to submit a response detailing

any facts bearing on the reason ASG has failed to

perform in accordance with the contract with regard

to: (1) failure to comply with its proposal, specifically

Attachment 4, which expressly proposed a multi72a

disciplinary mix of twenty (20) qualified personnel

meeting specific qualifications and credentials; and (2)

ASG's anticipatory repudiation of the contract

performance by informing the COR that ASG "cannot

meet Attachment 4."

On January 22, 2023, ASG requested a time

extension to respond, and an opportunity to meet in

person with NAVFAC Southeast personnel. On

January 31, 2023, NAVFAC Southeast issued an

extension notice that also included confirmation of the

in-person meeting to be held on February 1, 2023 that

had previously been scheduled. On February 1, 2023,

NAVFAC Southeast representatives met with ASG

representatives. ASG reasserted its position that

NAVFAC Southeast should not enforce the terms of

the contract that ASG cannot meet. According to ASG,

it should be allowed to perform DCBL support tasks

with less personnel (four or five) working primarily

remotely (online rather than on-site). In sum, ASG

essentially requested a total reformation or

modification of the task order. NAVFAC Southeast

cannot grant ASG's request. For one, allowing ASG to

potentially exercise a bait and switch scheme of this

magnitude may constitute fraud. Moreover, the

mission needs of DCBL for this particular task order

called for a multidisciplinary and qualified team of at

least twenty (20) professionals providing on-site

support to DCBL operations. ASG's failure to provide

the required team, hindered DCBL's ability to assign

meaningful support tasks under the contract. ASG has

asserted that without receiving meaningful tasks it

cannot hire a qualified team. However, the task order

required providing the qualified team first to be able to

73a

receive tasks based on the composition and capabilities

of the support staff team. In a meeting on February 1,

2023, the ASG was asked if it would consider a

reduction in quantity of required personnel for a

reduction in total price. ASG did not propose any sort

of reduction in their response dated February 10, 2023

to the Show Cause notice. Rather, ASG has insisted on

full pay for its minimal or non-existent performance.

On February 10, 2023, ASG responded to the

Show Cause Notice. ASG did not fully address the

failures identified in the Show Cause Notice. ASG did

not accept any responsibility. ASG did not provide any

acceptable recovery plan. Rather, ASG reiterated its

stance that: (i) ASG is not required to have a minimum

number of 20 professionals; (ii) ASG is entitled to staff

the contract with any individuals of ASG's choosing

without regard to the qualifications; (iii) the

contractual requirement for the professionals to work

on-site at Naval Air Station Jacksonville is impossible

to meet, and ASG employees should be able to work

remotely from anywhere; and (iv) ASG is entitled to

full payment under the contract regardless of level of

performance.

Decision

After due consideration of all of the information

above, I fmd and determine that ASG is in default,

without any valid excuse. ASG is hereby notified that

the Government, by this written notice, terminates

Contract N00178-19-D-7175, Task Order

N6945022F3005 including ASG's right to proceed with

performance, in its entirety and for default in

74a

accordance with FAR 52.249-8 — Default (Fixed-Price

Supply & Service) (April 1984). This termination for

default shall be effective upon ASG's receipt of this

notice. ASG shall cease work under this task order

immediately. No further work shall be assigned to

ASG. Any current work assigned to ASG shall cease

immediately. ASG personnel shall return any

Government Furnished Equipment, to include but not

limited to, Government Furnished Laptops, Common

Access Cards, and any other computer related

equipment as scheduled with the Contracting Officers

Representative (COR) on-site in building 903 on board

Naval Air Station Jacksonville, on 5 April 2023.

The Government reserves its right to re-procure

the contract. ASG may be found liable for applicable

re-procurement costs under the Termination for

Default clause cited above. The Government reserves

the rights and remedies provided by law and under the

contract.

This notice of termination for default constitutes

the Final Decision of the Contracting Officer. ASG has

the right to appeal this final decision pursuant to the

Disputes Clause, FAR 52.233-1 (May 2014), of the

contract. This decision may be appealed to the Armed

Services Board of Contract Appeals, which is the

authorized representative of the Secretary for hearing

and determining contract disputes. If you decide to

appeal this decision, written notice thereof must be

mailed or otherwise furnished to the Armed Services

Board of Contract Appeals, Skyline Six, 5109 Leesburg

Pike, 7th Floor, Falls Church, VA 22041, within 90 days

from the date you receive this decision. A copy shall

75a

also be furnished to the Contracting Officer from

whose decision the appeal is taken at the following

address:

Naval Facilities Engineering Systems Command

Southeast

Attn: Renee Comfort, Chief of Contracting Office

Naval Air Station Jacksonville

P.O. Box 30A BLDG 903 Contracting SL

Jacksonville, FL 32212-0030

The notice should indicate that an appeal is

intended, should reference this decision, identify the

contract by number, and state the amount in dispute.

The rules of procedures of the Armed Services Board

of Contract Appeals are in the Department of Defense

Federal Acquisition Regulation Supplement, Appendix

A, Part Two. Optional Accelerated Procedures are

available in appeals involving $100,000 or less and

Small Claims (expedited) procedures are available in

appeals involving $50,000 or less or, in the case of a

small business concern (as defined in the Small

Business Act and regulations under that Act),

$150,000 or less. In lieu of appealing to the Board of

Contract Appeals, you may bring action directly in the

Court of Federal Claims* within 12 months of the date

you receive this decision (*except as provided in

Section 4 of the Contract Disputes Act (Maritime

Contracts)).

Sincerely,

COMFORT.RENE

E.M.1082580375

76a

Digitally signed by COMFORT.RENEE.

M.1082580375

Date: 2023.04.04 11:59:05 -04'00'

RENEE M. COMFORT

Chief of Contracting Office

Terminating Contracting Officer

Copy to:

Administrating Contracting Office

Contracting Officers Representative

Planning Design and Construction Division

NAVFAC SE, Office of Small Business

Small Business Association Regional Office

77a

Acknowledgment of Notice

The undersigned acknowledges receipt of a signed copy

of this notice on ________, 2023. Two signed copies of

this notice are returned.

ASG Solutions Corporation DBA American Systems

Group

By _______________________ (Name)

___________________________(Title)

(End of notice)

78a

APPENDIX E

Request to Terminate for Default

From:

To:

Via:

Cory Iselin, Supervisory Contract Specialist,

NAVFAC Southeast (SE)

Renee Comfort, Chief of Contracts, NAVFAC

SE

Rebecca Jones, FSC Division Director,

NAVFAC SE

Subj:

RECOMMENDATION TO TERMINATE

FOR DEFAULT CONTRACT NUMBER

N 69 4 50 - 1 9- D -7 1 75 T AS K O RD ER

N6945022F3005 ENTITLED DESIGN AND

CONSTRUCTION BUSINESS LINE

(DCBL) TECHNICAL SUPPORT SERVICES

Ref:

(a) FAR Part 49

(b) DFAR Part 49

(c) NPGI 49.4

Encl:

(1) N69450-19-D-7175 -N6945022F3005

ASG Systems Corporation DBA American

Systems Group (ASG) Proposal

(2) Letter of Concern dated 11/1/22

Evidence of Receipt to Letter of Concern

dated 11/1/22

ASG Response to Letter of Concern dated

12/14/22

Cure Notice dated 12/5/22

79a

Evidence of Receipt to Cure Notice dated

12/5/22

ASG response to Cure Notice dated 12/14/22

Government response to ASG response

dated 12/22/22

Show Cause dated 1/20/23

Evidence of Receipt to Show Cause dated

1/22/23

ASG response to Show Cause dated 2/10/23

(3) Government Estimate (time and money)

to complete

1. In accordance with references (a) – (c), it is

recommended that the subject contract be terminated

for default. Enclosures (l) – (2) provide the supporting

background information necessary to assist in making

this determination.

2. Background Information:

a.

Contract

number

and title:

N69450-19-D-7175-N6945022F3005 Design

and Construction Business Line (DCBL)

technical support services

b.

Date of Award: 9/28/2022

c.

Value of contract at time of award:

$3,836,152.00 (Funded At Time of Award) &

$17,381,838 (Total potential value)

d.

Original contract completion date: 9/29/2023

80a

(End of Base Period)

e.

Contractor’s name and address:

ASG Systems Corporation DBA American

Systems Group (ASG)

3990 Old Town Ave, Suite B-107

San Diego, CA, 92110

f.

Surety’s name and address: NA

g.

Modifications: No modifications

h.

Amount paid to date: $0

i.

Balance of funds remaining: $3,836,152.00

j.

Contractor’s unpaid earnings for work

through date of this document $1,409,350.

The contractor may be entitled to

approximately $207,615.81 for personnel

proposed and approved during the first five

months of the task order.

k.

Assignee (if applicable): NA

l.

Trustee in bankruptcy (if applicable): NA

m.

Inventory (List all work in place): NA

n.

Percentage of completion (Describe the areas

and extent of work performed):

Approximately 8%. Time wise, 42% (5

months divided by 12 months of the base

81a

period) has elapsed. Performance wise, 20%

(4 qualified professionals out of a minimum

of 20 required for a compliant

multidisciplinary team) has been provided.

Since 20% of 42% is 8.4%, it can be said that

completion percentage is 8% at this time.

In terms of assigned projects, NAVFAC SE

assigned to ASG the following DCBL

professional support projects:

- Whiting Field P286 65% Review –

Completed

- Kessler New Cyber Processing Facility

65% Review – Completed

- Kingsville B4766 Replace HVAC Pre-Final

Review – Completed

- Indoor SAUSR Range,

Pre-Final Review – In process

Charleston

- Mayport Triton Maintenance Trainer Final

Review – In process

o.

List any corrective action required: The

contract called for a base minimum of 20

qualified professionals, with resumes to be

provided to the Contracting Officer within 5

business days of award. To date the

contractor has provided a total of 17 resumes

to the contracting officer. NAVFAC SE

rejected six (6) resumes because the

82a

personnel did not meet the professional

qualifications proposed by ASG. NAVFAC

SE approved eleven (11) personnel that met

the qualifications proposed by ASG.

However, ASG has retained only four (4)

employees on board. The remaining seven (7)

are not on board for the reasons listed below.

1.

Approved Architect – Once approved,

the candidate did not accept the job

from ASG.

2.

Approved Electrical Engineer – This

candidate was approved on 18 Oct

2022. ASG and the employee have not

completed the Security documentation

and the candidate has had two

Eletronic Questionnaires for

Investigations Processing (EQIPs)

expire.

3.

Approved Civil Engineer – NAVFAC SE

approved this candidate on 21 Nov

2022. The candidate resigned on 8 Dec

2022 prior to completing the security

review process.

4.

Approved Structural Engineer –

NAVFAC SE approved this candidate,

the candidate did not accept the job

from ASG because the candidate’s wife

did not meet the qualifications for

structural engineer and was not

approved for the task order.

83a

5.

First Approved Supervisor – NAVFAC

SE approved the first supervisor on 17

Oct 2022. A few days later, the

supervisor notified NAVFAC SE that

they (the supervisor) had terminated

their employment with ASG effective

on 26 Oct 2022. The first supervisor did

not finish the security review process.

6.

Second

Approved

Supervisor –

NAVFAC SE approved the second

proposed supervisor, but this

supervisor did not accept the job offer

made by ASG.

7.

Third Approved Supervisor – NAVFAC

SE approved the third proposed

supervisor, ASG was unable to hire or

employ the individual.

p.

List of paid materials and supplies at site:

NA

q.

List of unpaid materials and supplies at site:

NA

r.

Pending change orders, percentage of

completion of the changed work, status and

recommended disposition of pending change

orders: NA

s.

Whether termination will result in a

reduction in employment of 100 of more

contractor employees: No

84a

t.

Any other applicable data/information:

i.

u.

1.

Invoices – Five monthly invoices were

submitted in the amount of $281,870.00

each, for a total of $1,409,350.00. The

first two invoices have been rejected

because the vendor did not have

billable employees in place, and did not

provide the timesheets required to

verify the costs being billed. The three

remaining invoices are pending a

determination on how they may be

partially processed, if at all, without

timesheets because the contractor

refuses to submit timesheets.

Point of contact if additional information is

necessary: Cory Iselin, cory.s.iselin.civ@

us.navy.mil

DISCUSSION

Chronology of events:

a.

On 29 July 2022, NAVFAC SE issued

Solicitation N6945022R3005. The scope of

work consisted of providing a

multidisciplinary professional support staff

with the minimum personal allocation: four

(4) architects, four (4) mechanical engineers,

four (4) electrical engineers, two (2) civil

engineers, two (2) structural engineers, one

(1) fire protection engineer, one (1) cost

engineer, and two (2) Supervisors. This could

85a

b.

c.

change based upon the successful offeror’s

proposed technical approach. A staff of

twenty (20) professionals was the

base/minimum level of service. See

additional scope information in Encl. 1 at

page 9.

On 24 August 2022, ASG submitted a

proposal offering an impressive labor mix of

20 highly qualified professionals. Each

technical professional was listed as Senior,

having a minimm of 12 years to 35+ years of

experience, decades of DoD experience, a

degree from a specifically named

college/university (18 of the 20 listed

Masters degrees), and a relevant

professional certificate and/or license. On 15

September 2022, NAVFAC SE issued a

clarification notice to confirm ASG’s offer.

The clarification notice required ASG to

expressly acknowledge that ASG understood

that the personnel proposed after award

would need to meet the qualifications of the

personnel proposed in Attachment 4 of

ASG’s proposal. On the same date (15

September 2022), ASG confirmed in the

affirmative that ASG would be held to the

standards as proposed in ASG’s proposal

Attachment 4.

On 28 September 2022, NAVFAC SE

selected ASG for award as the best value

offeror due to the highly skilled labor mix of

20 highly qualified professionals proposed

and confirmed by ASG in Attachment 4 of its

86a

proposal. ASG’s Attachment 4 was

incorporated in the task order award as

Attachment 2. Consequently, NAVFAC SE

incorporated ASG’s proposed labor mix into

the task order award in Section J as

Attachment 2 – Labor Mix.

d.

On 18 October 2022, ASG began to assert

that it could unilaterally decide whether to

comply or not with the qualifications

proposed in Attachment 4 of its proposal.

Additionally, ASG began disputing the task

order requirements of providing a staff of

twenty (20) professionals as the

base/minimum level of service, and to do so

by providing resumes of qualified candidates

within 5 days of contract award to the

Contracting Officer for review and approval

by the Government (so the Government

could verify that proposed employees met

ASG’s proposed minimum qualifications).

e.

On 1 November 2022, NAVFAC SE issued a

Letter of Concern explaining that ASG was

failing to meet the task order requirements.

ASG did not change its stance. On 5

December 2022, NAVFAC SE issued a Cure

Notice, informing ASG that the Government

considered ASG’s repudiation of its proposal,

specifically its proposal Attachment 4 –

Labor Mix, which was incorporated into the

task order at the time of award, a condition

that was endangering performance of the

task order and that could result in a

87a

termination for default. The task order’s

period of performance had started on 30

September 22, however, as of the date of

Cure Notice, ASG had submitted only 18

resumes, out of which only twelve (12) met

the qualifications ASG proposed, and only

six (6) accepted employment with ASG, with

one (1) terminating their employment nine

(9) days after approval, and one (1)

additional employee (to the date of this

request) has yet to finish the security

process. In summary, at approximately

halfway through the one-year period of

performance, ASG has provided only five (5)

(one was just accepted in early March and

has yet to finish security process) of the

twenty professionals by the contract.

f.

On 05 January 2023 Mr. Ritobrata Banerjee

(owner of ASG) visited NAVFAC SE for a

meeting with Mr. Douglas Szilagyi,

Contracting Officer’s Representative (COR).

During that meeting, Mr. Banerjee stated

that he “cannot meet Attachment 4.”

g.

On 20 January 2023, NAVFAC SE issued a

Show Cause Notice asking ASG to Show

Cause why the task order should not be

terminated for default. The Show Cause

Notice informed ASG that it had failed to

cure t he condit ions endangering

performance. Specifically, ASG had failed to

comply with Attachment 4 of its proposal,

which expressly proposed personnel meeting

88a

specific qualifications and credentials. On 22

January 2023, Mr. Banerjee requested an

in-person meeting to discuss the Show Cause

Notice. On 1 Feb 2023, ASG representatives

Mr. Banerjee and Mr. Marcy met with

NAVFAC SE representatives Ms. Renee

Comfort (Chief of Contracts), Mr. Cory Iselin

(Contracting Officer), Ms. Rebecca Jones

(Public Works Contracts Division Director),

Mr. Doug Szilagyi (Contracting Officers

Representative), and Mr. John Bazylewicz

(Assistant Deputy Director for Small

Business). During the meeting the intent

and terms of the contract were discussed.

Mr. Banerjee continued to assert that his

belief was that the Government was wrong

and that the Government should allow him

to staff the contract with whomever he

deemed necessary. He stated that should he

be required to respond to the Show Cause

Notice that he would propose a 2% reduction

in price in order for the ability to provide

whomever he deemed qualified for the

contract, whether they met the terms of his

proposal or not. Mr. Banerjee continued to

assert that his proposal was simply just that,

a proposal and that he did not need to

adhere to or provide what he proposed. The

Government continually pointed back to the

contract language stating the base/minimum

level of service and remind Mr. Banerjee

that he responded during clarifications that

he was aware that he would be held to his

proposal. At the conclusion of the meeting,

89a

Ms. Comfort informed Mr. Banerjee that

ASG was still required to submit a formal

response to the Show Cause Notice.

h.

On 10 February 2023, ASG responded to the

Show Cause Notice. In Summary, ASG

continued to categorically deny the

Governments assertions made in the Show

Cause and all prior notices. ASG essentially

contended that it was not obligated to adhere

to the Government’s requirements or its

proposals, but only to ASG’s unilateral

interpretation of certain portions of the task

order. ASG continued to claim that the

Government is operating this contract as a

Personal Services contract and that the

Government is ignoring contract language

and the needs and mission of the

Government. ASG stated that “the

Government has shown zero regard for ‘the

impracticability and absurdity of staffing 20

elite professionals to show up in Jacksonville

and do nothing.’” ASG closed its response by

stating that “the Government has presented

ASG with two equally untenable options:

1) “conspire with the Government and its

agents to unlawfully treat this contract as a

personal services contract and perform the

extra-contractual task, which to date is

impossible based on market conditions, of

delivering 20 professionals of the

Government’s choosing with no work to be

done...” or 2) “Face the full wrath of the

90a

Government’s unlimited legal budge in bet

the company litigation at the Court of

Federal Claims, which all the costs and

waste associated with the endeavor.” ASG

requested that the Government avoid

litigation by ceasing “baseless attacks”,

paying ASG (full price), and consider

Alternative Dispute Resolution. The

government team discussed and considered

the request for ADR as suggested by ASG,

and by Mr. John Bazylewicz (NAVFAC

Assistant Deputy Director for Small

Business), however the team believed that

the entirety of this situation does not lend

itself to reaching a successful ADR

agreement, and as such the Government

determined ADR not to be the best path

forward.

Past and present performance of the

contractor, including deficiencies and

difficulties together with a statement of

any efforts made to improve

performance:

The contractor has refused to perform in

accordance with this task order since it start

date of 30 September 2022. ASG has not

been able to meet its proposal as outlined in

Attachment 4 Labor Mix. ASG has been

unable to provide twenty (20) professionals

as the base/minimum level service

requirement. ASG is very combative and

argumentative, insisting in its own

91a

interpretation of the contract and completely

disregarding the fact that it expressly

proposed a specific labor mix of 20 qualified

professionals to work at NAVFAC SE in

Jacksonville, FL. NAVFAC SE requires a

multidisciplinary team composed of specific

specialties to deliver on-site professional

support services for the Design and

Construction Business Line. ASG insists

that provided that it can perform DCBL

work remotely and with personnel of any

number and qualification of its choosing, it

would meet the performance requirements of

the contract. ASG insists on a partial and

selective contract interpretation that would

render meaningless the requirement to

provide a specific labor mix for a

multidisciplinary team providing seamless

on-site professional support services to

DCBL in Jacksonville, Florida. ASG only

wants to read the contract sections that

support its particular interpretation of the

contract, negating other sections of the

contract, and negating its proposal. ASG also

demands to be paid in full for the contract

even if its performance is partial and only

meeting specific sections or portions of the

task order rather than the task order as a

whole. ASG’s position is that it should be

paid the full amount of $281,870.00 per

month regardless of their level of effort. In

support of this argument, ASG points to the

fact that the CLIN is firm-fixed price.

However, the deductions clause of the

92a

contract clearly sets forth the mechanism by

which the firm-fixed price may be reduced if

the contractor fails to keep a minimum staff

of 20 professionals. Almost halfway through

the performance period, ASG has never

achieved this requirement.

ASG has made minimal efforts to

correct/improve their performance. They

have continued to occasionally submit new

resumes; since Show Cause was issued, they

have submitted an additional resume, for an

individual whom the government approved

and whom has yet to finish his security

processing. The Government has done it’s

best to work with ASG in reviewing resumes

on time (providing feedback in less than 48

hours in every case since the Kickoff

meeting, even though this is not a

requirement of the contract). They have

provided detailed notes on resumes when

individuals have not been approved to help

better direct ASG towards acceptable

candidates that meet the ASG proposed

specifications for their team members.

Present factual position, contentions,

representations, or promised

performance by the contractor (Review

contractor’s response to Cure

Notice/Show Cause letter and answer

each allegation).

ASG response to Letter of Concern: ASG’s

93a

response contained embellishments and

conflations of opposing issues/topics/laws/etc.

making the response difficult to understand.

Overall, ASG argues that the Government is

misinterpreting the task order whereas ASG

is allegedly interpreting it correctly.

According to ASG, even though it proposed

the 20 qualified personnel sought by the

Government, it is not bound to provide the

proposed team. The Government disagrees.

The intent of the task order was clearly to

obtain the onsite professional support of a

multidisciplinary team composed of at least

20 qualified personnel. It is evident that

ASG understood the Government

requirement exactly as required in the

Solicitation. The evidence is that ASG

proposed the 20 qualified personnel required

by the Government in the Solicitation.

Moreover, ASG confirmed in writing that it

could and would provide the required

personnel that it proposed. The statement of

work is clear that notwithstanding the

performance-based nature of the work, the

performance is to be rendered on-site by a

professional staff of at least 20 professionals

physically located at NAVFAC SE in

provided administrative office spaces. The

task order even specifies that if there is a

vacancy in the 20 professionals, ASG would

have to replace the vacancy within 5 days of

loss of personnel.

ASG asserts that Section A.2 provides no

94a

support for the Government’s position. The

Government disagrees. Section A-2 provides

the Services Requirements for the task

order, specifying the multidisciplinary team

of at least 20 professionals as the

base/minimum level of professional support

service consistent with FAR 37.101. ASG

argued that the Government was trying to

change the contract into a cost reimbursable

time and materials (T&M) personal services

contract. The Government disagrees. Section

H.8 clearly advises ASG that vacancies

below the minimum of 20 personnel would

need to be filled, or that price deductions

would be applicable. ASG asserts that

Section F.4 provides no support for the

Government’s position. ASG states that the

Government does not have a right to review

resumes to ensure potential employees meet

the requirement proposed by ASG in its

Attachment 4 (labor mix). The Government

disagrees. It is implicit in the Government’s

right and discretion to properly administer

the contract to review resumes and approve

personnel to be on board a military

installation providing professional support

services in accordance with FAR Part 37. It

is reasonable to review resumes and

personnel on board for many reasons,

including contract administration, oversight,

and avoidance of an improper or fraudulent

“bait and switch” against the Government

and as a waste of public funding. ASG’s

response to the Cure Notice set forth a

95a

narrative of their efforts to hire individuals

to perform the services (albeit not meeting

the specifications of their proposal).

However, ASG states that it is “impossible.”

Additionally, ASG’s position is that it has

performed all work that it has been given,

has delivered ahead of schedule, stating,

“The Government has not requested any

task order that ASG has not performed.”

Moreover, ASG believes that it deserves a

CPARS of Very Good/Exceptional. The

Government disagrees. While it is true that

ASG has submitted the work assigned, the

Government has been unable to assign the

complexity of the projects intended for this

contract, and only been able to assign small

review based projects that require minimal

staff due to the lack of a complete team, and

scarcity of ASG’s approved staffing.

NAVFAC has assigned ASG small

professional support projects that ASG could

handle with the staffing level on hand. As

stated previously, the task order was

envisioned to have a robust professional

support to DCBL by a fully staffed

multidisciplinary team of highly qualified

professionals. Lacking the full staff has

hindered the ability to meet the customers

mission as was intended by issuance of this

contract.

ASG response to Cure Notice:

As

before,

ASG’s

96a

response

contained

embellishments and conflations of opposing

issues/topics/laws/etc. that made the

response difficult to understand and follow.

In addition to the same arguments raised

before, ASG asserted that it cannot endanger

performance of a task order where there is

no work to perform. The Government

disagrees. ASG pretends to interpret the

task order in a self-serving manner where

only the requirements that ASG likes or can

meet are valid while all other requirements

can be ignored, disregarded, and waived at

Government’s expense.

ASG decided to interpret the task order as

only requiring performance regardless of the

composition, location, and qualification of

the team. According to ASG, provided that it

can perform with any personnel it wants and

from wherever it wants, it is complying with

the contract. In other words, ASG wants to

invalidate the contractual requirement for a

multidisciplinary team of a minimum

composition providing onsite professional

support to DCBL at NAVFAC SE in

Jacksonville, Florida. That is neither what

the Government procured nor what ASG

offered. Somehow, however, ASG wants to

unilaterally reform and change the contract

to its own selfserving interests without

consideration and at Government’s and

taxpayers’ expense. The task order sought a

multidisciplinary team for onsite

professional support. ASG understood the

97a

requirement, and expressly proposed to meet

it. After contract award, and after displacing

competitors with a potentially false proposal,

ASG pretends to change the contract to its

sole and self-serving advantage. This is

borderline fraud and false claim conduct that

cannot be reasonably accepted or condoned.

The task order calls for the vendor to provide

a staff of twenty (20) professionals who

would provide professional support on-site at

NAVFAC SE. However, since ASG failed to

provide the required staff, the task order

never took off as planned. Rather the

Government received no services for the first

three (3) months of the period of

performance until ASG provided its first

qualified, approved and cleared through

security employees on 3 January 2023. At

such time, the Government began to assign

tasks to ASG. The Government attempted to

help prevent no performance by assigning

smaller review type work that could be

completed by the disciplines of the three (3)

approved employees now on board, rather

than assigning work that required a fully

multi-disciplinary team.

Once again, ASG asserted that its proposed

labor mix spreadsheet is not a contract

obligation. The Government disagrees. The

staff was confirmed before award, and ASG’s

offer was accepted and incorporated into the

task order. ASG made reference to

Non-personal Services Contract Provisions.

98a

It is difficult to understand the actual

argument being made, but to the extent that

it implies that the task order is an

impermissible personal services contract, the

Government disagrees. The task order

requires a multidisciplinary team to provide

professional support services on-site under

the supervision and management of ASG

(not the Government).

ASG asserted that the Government has a

duty to exercise discretion in connection with

a termination for default. The Government

agrees and has given ASG plenty of

opportunities to honor its proposal and

position its company to perform. However,

ASG insists on its legal arguments to negate

portions of the task order and accuse the

Government of breach.

ASG states that the Cure Notice which may

lead to a termination is not justifiable. This

is incorrect, ASG has been unresponsive to

the Government’s requests to provide the

services required in the task order. As such,

one remedy available to the Government is

to issue a Cure Notice to the contractor so it

may cure the deficient performance.

ASG asserted that its performance was

satisfactory and that it would continue with

its action plan based on its own

interpretation of the requirements. The

Government disagrees. ASG has continually,

99a

since the first meeting after award of this

task order (Kickoff 17 October 2022),

disagreed with the Government on the

requirements of the task order and has been

combative in asserting that the Government

is wrong and does not understand the

contract. As such, ASG refused to

acknowledge the requirement to provide the

twenty (20) professionals for the base period.

ASG response to Show Cause Notice:

As before, ASG’s response contained

embellishments and conflations of opposing

issues/topics/laws/etc. that made the

response difficult to understand. ASG’s

response contained condescending language,

and accused the Government of bullying

ASG. ASG reiterated that its interpretation

of the task order is correct.

ASG stated that, “.... market conditions

outside the control of ASG have made it

impossible as of the date of this letter for

ASG to recruit 20 full time professionals of

the Government’s choosing to show up in

Jacksonville to do nothing, which is

apparently what the Government believes

ASG is required to do per this contract.” ASG

implicitly acknowledged that it has tried to

recruit the 20 qualified personnel offered,

but has failed to do so due to market

conditions. The market conditions are

complicated, but not drastically different

100a

today than five or six months ago when ASG

submitted its proposal and confirmed its

offer of 20 qualified personnel. Whether ASG

was negligent, fraudulent, or both in

preparation of its proposal is yet to be

discovered. Regardless, it seems that ASG

acknowledges the duty to provide 20

qualified professionals to perform the

required services on site at Jacksonville,

Florida. That is, ASG finally acknowledged

that the task order calls for 20 professionals

to work at NAVFAC SE (Jacksonville), but

ASG cannot satisfy the requirement due to

market conditions.

ASG accuses the Government of trying to

run this contract as a Personal Services

Contract under FAR 37.104. The

Government disagrees. As stated above, the

professionals would be on-site providing

professional support, but would be managed

and supervised at all times by ASG (not by

the Government). That is precisely why the

multidisciplinary team must include

qualified supervisors employed by ASG.

Requiring ASG to submit potential employee

resumes for review (as required by the task

order), so the Government can verify they

meet ASG’s proposed qualifications does not

make this a Personal Services contract. That

is simply reasonable and proper government

contract administration and oversight, it is

not management or supervision of employee

performance. Finally, requiring ASG to

101a

submit timesheets for employees (required

per the task order), so the Government can

verify ASG is submitting accurate invoices to

the Government for payment does not make

this a Personal Services contract. This is a

reasonable contract administration and

oversight process to ensure adequate

disposition of Government funds.

ASG argued that if the Government holds

ASG to the task order terms, the

Government is trying to treat the contract

like a Personal Services contract. The

Government disagrees. Again, while the

Government is providing overall contract

administration and oversight, the actual

supervision and management of contractor

employees would be performed by ASG (not

the Government). Holding a contractor to

contract terms and conditions does not make

a contract a Personal Services contract. At

one point in their response, ASG stated that

the task order does not require a staff 20

professionals at NAVFAC SE that ASG

proposed, but if it did it would be impractical

and absurd. ASG stated that 20

professionals at NAVFAC SE would be doing

nothing, just sitting there. Also, AGS stated

that 20 professionals who meet ASG’s

proposed qualifications cannot be

“manufactured,” because “...who will be

actually willing to work at NAVFAC SE

Facility in this post-pandemic world...” The

Government disagrees. This is precisely

102a

what AG proposed. The fact that ASG has

failed to perform to its proposal does not

make the task order requirements

unenforceable or reflect negatively on

NAVFAC in any way. On the other hand,

allowing ASG to negligently or fraudulently

run a bait and switch would reflect

negatively on NAVFAC SE and the

Government.

ASG also argued that Section C, the

Performance Work Statement, takes

precedence over its proposed labor mix. The

Government disagrees. The proposed labor

mix incorporated into the task order takes

precedence over Section C. FAR 52.215-8

Order of Precedence-Uniform Contract

Format clearly states that attachments have

precedence over the specifications. ASG goes

on to continually state or admit that it

cannot meet its proposed labor mix

requirements due to market conditions, but

at the same time maintains that it does not

need to meet its proposed labor mix

requirements. Unfortunately, these excuses

and contradictory statements do not shield

ASG from liability and responsibility to

comply with the terms and conditions of the

task order. All terms and conditions were

part of the Solicitation under which ASG

prepared its competitive proposal. ASG had

the opportunity to ask any questions

pertaining to these terms and conditions

during the pre-proposal phase of this

103a

procurement. ASG did not submit any

questions, Instead, ASG proposed and

confirmed what now appears to be a

negligent, and potentially false or fraudulent

proposal.

a.

Position of the Surety concerning the

proposed default action and whether it

has expressed an interest in completing

the contracting by a contractor of its

choosing or by Takeover Agreement: NA

b.

Additional contract time extensions

claimed or likely to be claimed: NA

c.

Pending claims

(date of claim,

description, amount (money and time),

date of certification, status,

recommended disposition):

ASG

submitted a claim on 9 January 2023 for two

invoices that were rejected because the

vendor did not provide timecards of

employees so the Government could verify

the hours being billed. The vendor was asked

to provide time sheets so the Government

could verify the invoice amounts, the vendor

refused to so, but instead filled a claim:

(1)

Invoiced Amount - $281,870.00 - Invoice

Number - N6945022F30051022 - Period

of Performance – 09/30/2022 –

10/29/2022 - Month of October 2022 –

Invoice; and

104a

(2)

Invoiced Amount - $281,870.00 - Invoice

Number - N6945022F30051122 - Period

of Performance – 10/30/2022 –

11/29/2022 - Month of November 2022 –

Invoice.

The claim has been sent to the claims

department for processing. During the first

two months of performance, for which these

claims are for, the vendor had very few, if

any, employees hired to work on task order

N6945022F3005, so most, if not all, of the

money being billed is erroneous. It could be

considered fraudulent billing to the US

Government

d.

Labor violations: NA

e.

Special military or other urgency

concerning the project: NA

f.

Government estimate (time and money)

to complete the work: NA

g.

Funds available (in addition to funds

remaining under the contract) to

complete the work: NA

h.

Project reprocurement date (explain

what needs to be done prior to

reprocurement and the estimated date

for award of the completion contract

and for completion of the defaulted

work). Determination as to whether or not

105a

to re-procure these services remains to be

made, however, Re-procurement of these

services is not advised utilizing the FY22

funds on contract. As there is only an

additional maximum of 6-months remaining

to utilize these funds, there is not a

reasonable expectation that DCBL would

receive beneficial services in a timely

manner prior to the end of the Fiscal Year.

2.

FACTORS CONSIDERED IN DETERMINING

WHETHER CONTRACT SHOULD BE

TERMINATED FOR DEFAULT (reference FAR

49.402-3(f)):

a.

Terms of contract, applicable laws and

regulations: FAR Clause 52.249-8 Default

(Fixed-Price Supply and Service).

b.

Specific failure of contractor and the

excuses for failure:

ASG has failed to provide the self-sufficient

and self-supervised multidisciplinary

professional support team required by the

task order. The task order solicitation

required a team of at least 20 professionals

to provide professional support on site to

NAVFAC SE DCBL in Jacksonville, Florida.

ASG did not question the solicitation

requirements. Instead, offered 20 highly

qualified professionals to lure the

Government to award the task order to ASG.

Immediately after task order award, ASG

106a

began to fail on its promise, and began to

attack the Government for trying to enforce

the bargain of the parties under the terms

and conditions of the task order. ASG has

failed to provide the required self-sufficient

and self-supervised multidisciplinary team

for professional support performance on-site

at Jacksonville, Florida. Instead of accepting

failure and trying to negotiate an equitable

price reduction, ASG claims entitlement to

full compensation, arguing that it is not

require to provide the required and proposed

personnel and that the Government wants to

convert the contract into a prohibited

personal service contract. ASG argues that it

is not required to provide 20 professionals to

work at NAVFAC SE. ASG argues that it

can provide whatever staffing it deems

appropriate, from whatever location, and

with whatever qualifications regardless of

the terms and conditions of the task order

and ASG’s proposal.

c.

The availability of the supplies or

services from other sources: The services

are available from other sources. There was

a total of 6 proposals (inclusive of ASG)

received in response to the solicitation issued

that led to the award of N6945022F3005.

d.

Urgency

of

the

need

for the

supplies/services and the period of time

required to obtain them from other

sources, as compared with the time

107a

delivery could be obtained from the

delinquent contractor: To be determined

based on the mission needs of DCBL.

e.

The degree of essentiality of the

contractor in the Government

acquisition program and the effect of a

termination for default upon the

contractor’s capability as a supplier

under other contracts: ASG is one of

many staffing companies in the United

States, and not essential to the Government

acquisition program. The termination for

default should not affect ASG’s ability to

provide staffing under pre-existing contracts,

but may affect ASG’s ability to obtain similar

contracts in the near future. The termination

for default may help other agencies avoid

similar negligent or fraudulent “bait and

switch” schemes under professional support

contracts.

f.

The effect of a termination for default

on the ability of the contractor to

liquidate guaranteed loans, progress

payments, or advance payments:

Unknown

g.

Any other pertinent facts and circumstances

(i.e. any Government vulnerability, etc. –

explain):

The Government has been too lenient with

ASG, prolonging a default that was evident

108a

within the first five days of the contract into

five months of difficult contract

administration efforts. It is likely that ASG

will appeal the termination for default to

convert it into a termination for convenience.

ASG will argue that the task order is 100%

performance based and that the Government

should have allowed to perform with

whatever staffing, from whatever location,

a n d w i t h w h a t e v e r p r o f e s s i on a l

qualifications. As with all litigation, there

will be hefty expenses and time consuming

duties plus risk of an adverse judicial

decision.

3.

RECOMMENDATIONS:

a.

Based on the foregoing, termination for

default is in the Government’s best interest

for the following reasons:

1.

The contractor is unwilling and/or

unable to provide the self-sufficient and

self-supervised multidisciplinary

professional support team required in

the task order. The requirements were

for professional support services

provided by a minimum of twenty (20)

qualified professionals as clearly

understood and expressly proposed by

ASG. However, ASG now argues that

due to market conditions it cannot

fulfill its proposal. Instead of

negotiating an equitable reduction of

109a

the contract price for reduced

performance, ASG insists that it can

reform the contract based on its own

self-serving contract interpretation and

a myriad of accusations against the

Government, demanding full payment

regardless of its lack of performance.

The Government cannot pay full price

for services that have not been

performed.

2.

To continue this contract would harm

and impede the mission of the United

States Navy. The contractor has

expressly stated that it is impossible for

it to obtain the multidisciplinary on-site

team (as was proposed) to provide the

required professional support to the

mission of NAVFAC SE’s DCBL. If the

Government were to fully assign DCBL

professional support projects to ASG in

accordance with the contractual level of

service of a multi-disciplinary team of

at least twenty (20) professional, ASG,

having only five (5) qualified

professionals on its staff, would

certainly fail and negatively impact the

mission.

3.

The contractor appears to be involved in

a classic bait and switch operation with

regard to this task order. The vendor

proposed highly qualified individuals in

order to win the award. Upon winning

110a

the award, the vendor changed its

posture arguing that it does not have to

comply with portions of the task order

or portions of its proposal.

b.

Recommended re-procurement method: To

be determined upon discussions with DCBL

and assessment of command needs for

professional support services.

Prepared by:

ISELIN.CORY.

S.1100847996

Digitally signed by ISELIN.CORY.S.11

1100847996

Cory Iselin

CONTRACTING OFFICER/CONTRACT SPECIALIST

3/17/23

DATE

I have reviewed the above for form and legality:

GONZALEZ.JAVI

ER.E.1258530140

Digitally signed by GONZALEZ.JAVIER.E.

1258530140

Date 2023.03.21 09:27:15 -04'00'

3/21/23

DATE

Termination

Contracting

111a

Officer

or

Level

III

Contracting Officer approval:

/s/

Renee Comfort

Terminating Contracting Officer

4/4/2023

DATE

112a

APPENDIX F

STATUTORY AND REGULATORY

PROVISIONS

49.402-3 Procedure for Default

[48 C.F.R. § 49.402-3]

...

(d) Subdivisions (a)(1)(ii) and (a)(1)(iii) of the Default

clause cover situations when the contractor fails to

perform some of the other provisions of the contract

(such as not furnishing a required performance bond)

or so fails to make progress as to endanger

performance of the contract. If the termination is

predicated upon this type of failure, the contracting

officer shall give the contractor written notice

specifying the failure and providing a period of 10 days

(or longer period as necessary) in which to cure the

failure. When appropriate, this notice may be made a

part of the notice described in subparagraph (e)(1)

below. Upon expiration of the 10 days (or longer

period), the contracting officer may issue a notice of

termination for default unless it is determined that the

failure to perform has been cured. A format for a cure

notice is in 49.607.

(e) (1) If termination for default appears appropriate,

the contracting officer should, if practicable,

notify the contractor in writing of the possibility

of the termination. This notice shall call the

contractor’s attention to the contractual liabilities

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if the contract is terminated for default, and

request the contractor to show cause why the

contract should not be terminated for default. The

notice may further state that failure of the

contractor to present an explanation may be

taken as an admission that no valid explanation

exists. When appropriate, the notice may invite

the contractor to discuss the matter at a

conference. A format for a show cause notice is in

49.607.

(2) When a termination for default appears

imminent, the contracting officer shall provide a

written notification to the surety. If the contractor

is subsequently terminated for default, a copy of

the notice of default shall be sent to the surety.

(3) If requested by the surety, and agreed to by

the contractor and any assignees, arrangements

may be made to have future checks mailed to the

contractor in care of the surety. In this case, the

contractor must forward a written request to the

designated disbursing officer specifically directing

a change in address for mailing checks.

(4) If the contractor is a small business firm, the

contracting officer shall immediately provide a

copy of any cure notice or show cause notice to the

contracting office’s small business specialist and

the Small Business Administration Area Office

nearest the contractor. The contracting officer

should, whenever practicable, consult with the

small business specialist before proceeding with

a default termination (see also 49.402-4).

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(f) The contracting officer shall consider the following

factors in determining whether to terminate a contract

for default:

(1) The terms of the contract and applicable laws

and regulations.

(2) The specific failure of the contractor and the

excuses for the failure.

(3) The availability of the supplies or services

from other sources.

(4) The urgency of the need for the supplies or

services and the period of time required to obtain

them from other sources, as compared with the

time delivery could be obtained from the

delinquent contractor.

(5) The degree of essentiality of the contractor in

the Government acquisition program and the

effect of a termination for default upon the

contractor’s capability as a supplier under other

contracts.

(6) The effect of a termination for default on the

ability of the contractor to liquidate guaranteed

loans, progress payments, or advance payments.

(7) Any other pertinent facts and circumstances.

...

(j) If the contracting officer determines before issuing

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the termination notice that the failure to perform is

excusable, the contract shall not be terminated for

default. If termination is in the Government’s interest,

the contracting officer may terminate the contract for

the convenience of the Government.

52.249-8 Default (Fixed-Price

Service)

[48 C.F.R. § 52.249-8]

Supply

and

As prescribed in 49.504(a)(1), insert the following

clause:

Default (Fixed-Price Supply and Service) (Apr 1984)

(a) (1) The Government may, subject to paragraphs (c)

and (d) of this clause, by written notice of default to the

Contractor, terminate this contract in whole or in part

if the Contractor fails to(i) Deliver the supplies or to perform the services

within the time specified in this contract or any

extension;

(ii) Make progress, so as to endanger performance

of this contract (but see paragraph (a)(2) of this

clause); or

(iii) Perform any of the other provisions of this

contract (but see paragraph (a)(2) of this clause).

...

(f) The Government shall pay contract price for

116a

completed supplies delivered and accepted. The

Contractor and Contracting Officer shall agree on the

amount of payment for manufacturing materials

delivered and accepted and for the protection and

preservation of the property. Failure to agree will be a

dispute under the Disputes clause. The Government

may withhold from these amounts any sum the

Contracting Officer determines to be necessary to

protect the Government against loss because of

outstanding liens or claims of former lien holders.

(g) If, after termination, it is determined that the

Contractor was not in default, or that the default was

excusable, the rights and obligations of the parties

shall be the same as if the termination had been issued

for the convenience of the Government.

...

117a