agt sj brief feb 2013

7/28/2019 AGT SJ Brief Feb 2013

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BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALSAppeal of American General Trading & Contracting, WLL )SBCA No. 56758Under Contract No. DABM06-03-C-0009

APPELLANT AGT'S MOTION FOR SUMMARY JUDGMENT FORNEGLIGENT ESTIMATE, IMPLIED BREACH OF CONTRACT, AND

DAMAGESI.NTRODUCTIONAppellant American General Trading & Contracting ("ACT") moves for

summary judgment for its claims against the Government.' The first claim involves theGovernment's negligent estimates of soldier- and laundry piece- numbers for ContractDABM06-03-C-0009 ("Contract"). The second claim is implied breach of contract forthe Government's failure to reimburse costs AGT incurred to construct two new camps asrequested and approved by the Government. The facts referenced in this brief aresupported by AGT's Proposed Findings of Fact ("PFF"), depositions, declarations, andexhibits, all of which AGT moves and requests the Armed Services Board of ContractAppeals adopt.

Indisputable evidence shows: (1) the Solicitation and Contract involved laundryservices for five camps located in Kuwait, estimated an average of 3,500 soldiers per

Department of the Army is a part of the Department of Defense (DoD). DoD is an Executive Departmentof the United States, 5 U.S.C. 101; Department of the Army is an instrumentality of the United States.Department of the Army is an "Agency" just as this term is defined in 28 U.S.C. 451. The Department ofthe Army is a proper "Executive Agency" under the Contract Disputes Act, 41 U.S.C. 601(2).Department of the A rmy has the authority to Awa rd Contracts for the procurement of services. 41 U.S.C. 602(a)(2). Department of Army Contract Number DABM06-03-C-0009, the contract at issue, is an expressContract for the procurement of services, an express Contract entered into by an Executive Agency for theprocurement of services, and thus an Executive Agency Contract to which the Contract Disputes Actapplies. 41 U.S.C. 602(a)(1). Respondent Department of the Army and DoD are referred to, collectively,as the "Government."

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camp per month, and stated a "surge" of soldiers could vary the population from1,000 to7,000 soldiers per camp; (2) the surge actually had occurred before the Contract wasexecuted, with over 100,000 soldiers (and over 7,000 per camp) having arrived in Kuwaitbefore Contract execution; (3) Government contracting personnel expected all thesoldiers would leave those Kuwait camps in the event of an invasion of Iraq; (4)Government contracting personnel in Kuwait learned an Iraq invasion was imminentbefore the Co ntract was executed, based on a huge build-up of soldiers between Januaryand mid-February 2003, news and public reports from that time indicating an Iraq

invasion was imminent, and in fact they had been specifically informed before the time ofSolicitation of plans for an invasion that could occur in March 2003; (5) Governmentcontracting personnel never changed their soldier- and item- estimates before theContract's execution, notwithstanding the surge having already occurred and theirknowledge an invasion was imm inent; (6) within the first three weeks o f the Contract'sterm, the invasion occurred, and most the soldiers left; (7) in early April 2003, AGTwrote to the G overnment's contracting personnel that "there has been a major exodus ofmilitary personnel from all five [] camp sites," that "Naturally, it has affected the revenueto be generated from this contract and it is far below the anticipated expectation of thegovernment and AG T," and "there were very few people in the Camp sites since the warbegan and the amount of laundry had diminished immensely which can cause AGT ahardship once the overheads exceed the expenses and the income"; (8) even after theinvasion and concerns expressed by AGT, Government contracting personnel did notchange their estimates (in their July 2003 modification or otherwise); (9) during theContract's 6-month term, soldiers in the 5 camps averaged less than 1,000 soldiers per

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camp per month, and there was 72.4% less total laundered items than the 8,820,000 itemsthe Contract had estimated based on the 3,500 soldier per camp average; (10) due to thenegligent estimates, and AGT having relied on those estimates in its agreeing to pricingand incurring costs, during the Contract term AGT suffered a loss of $3,413,738.78; (11)had AGT known, at the time the Contract was being negotiated, that future performancecould involve monthly soldier counts averaging near 1,000 soldiers per month per campwith laundry items totaling at or near 2,436,911 for the six-month term (as actuallywound up occurring), AGT would have calculated a more equitable bid price at a general

piece rate of .939 fils per piece; (12) if this price of 0.939 fils per piece were owed toAGT, then the Government would have owed AGT a total of USD $5,782,763.60 forlaundry services at the five camps during the Contract term; and (13) AGT further lost,and is owed by virtue of the Government's breach of implied contract, USD $55,321.78due to AGT's construction and operation of two additional camps, for which testimonyand evidence shows the Government had requested and agreed.

As described below, the Government's estimates, and failures to correct thoseestimates before and after the Contract's execution, constitute negligent estimate underapplicable law. Rumsfeld v. Applied Companies, Inc., 325 F.3d 1328, 1335 (Fed.Cir.2003), citing Womack v. United States, 182 Ct.CI. 399, 389 F.2d 793, 800 (1968) ("[T]othe extent that a government estimate is inadequately or negligently prepared, itsinclusion without correction in a solicitation or contract constitutes a misrepresentationthat, whether deliberate or unintentional, amounts to a breach of contract."); see also,Rumsfeld, 325 F.3d at 1335, quoting Clearwater Forest Indus., Inc. v. United States, 227Ct.C1. 386, 650 F.2d 233, 240 (1981) ("[w]here a contractor can show by preponderant

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evidence that estimates w ere 'inadequately or negligently prepared, not in goo d faith, orgrossly or unreasonably inadequate at the time the estimate was made[,]' the governmentcould be liable for appropriate damages resulting.").

II. PROPOSED FINDINGS OF FACT

Nature of Contract; Term(1) The Solicitation (DABM06-03-R-0014) and related Contract (DABM06-03-

C-0009) at issue between the Governm ent and AGT invo lved laundryservices. (Declaration of Ajay George D ated February 19, 2013 ["Geo rgeDecl."], Exh. C [So licitation], Exh. G [Contract]).

(2) The Con tract was executed on February 17, 2003. (George Decl., Exh. G[Contract], p. 1).

(3)AGT agrees with the Government's characterization that the Contract is "afirm-fixed-price requirements contract with item ad justment." See ProposedFinding of Fact No. 2, Army summary judgment motion (March 11, 2010).

(4) The Contract had a 6-month base term of March 1, 2003 to August 31, 2003.(George D ecl., Exh. G [Contract], p. 2); (Transcript of Deposition of LafondaSmalls Dated N ovember 20 , 2012 ["Smalls Dep."], p. 10:20- p. 11:1 I, Dep.Exh. 2 [Feb. 26 Modification], p. I).

Government Personnel W ith Knowledge of Contract and/or Related Numbers(5) LTC M arshall Kevin May executed the Contract on behalf of the Governm ent.

(George D ecl., Exh. G [Contract], p. 1).

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(6) LTC May w as the Government's Director of Contracting in Kuwait.(Transcript of Deposition of Marshall Kevin May Dated January 14, 2013["May D ep."], p. 12:11-14).

(7)MA J Lafonda Jernigan (now LaFonda S malls) was the Branch Chief of theKuw ait Director of Contracting, reporting to LTC May. (Sm alls Dep., p. 7:4-8). MAJ Jernigan, as well as LTC M ay, was involved with the bid andnegotiations with A GT concerning the Contract. Id. at p. 31:14- p. 33:10.

(8) CPT John Cockerham was an assistant contracting representative, was also

involved with the negotiations and Contract, and he reported to MAJ Jernigan.(Transcript of Deposition of John Cockerham Dated January 31, 2013["Cockerham Dep."], p. 14:5-10, p. 24:14-21).

(9)Colleen Rodriguez is a government employee who, between May and October2003, served as a contract specialist and contracting officer in Ku wait.(Transcript of Deposition of Colleen Rodriguez Dated November 20, 2012["Rodriguez Dep."], p. 8:5- p. 9:17).

(10) COL U lysses Brown was the Commander ARC ENT K uwait during theyear 2003. (Transcript of Deposition of Ulysses Brown D ated Novem ber 20,2012 ["U. B rown D ep."], p. 6:19- p. 7:3).

(11) COL Brown had knowledge of soldier-count information in the 5 camps.(U. Brown Dep., p. 17:2- p. 18:11).

(12) LTC M ay did not report to COL Brown, but LTC M ay hadcommunications with COL Brown about soldiers, what the Government hadto do, and staffing. (May D ep., p. 96:7- p. 97:19).

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Pre-Contract Estimates: Laundry for 3,500 Soldiers Per Camp, "Surge" Range of1,000-7,000, and 8,820,000 Total Items

(13) The Government's Solicitation (DABM06-03-R-0014) for the Contract,issued January 23, 2003, sought laundry services for soldiers located at fivecamps in Kuwait: camps New York, New Jersey, Pennsylvania, Connecticut,and Virginia. (George Decl., Exh. C [Solicitation], p. 23).

(14) The Solicitation stated estimates as follows:FFPCam p Laundry Service - Base PeriodFixed Unit Price - See Statement of W ork for laundry requirements.Laundry Estimated 100 0 capable of surging to 7000 soldiers in one Cam p on amonthly basis . Estimated Maximum : 6 M onth/Camp x 5 Camps = 30 Months Periodof Performance 1 FEB 2003 - 31 JULY 2 003. 7,000 soldiers x 5 camps x 4 weeks x21 items x 6 m onths: 17,640,000 pieces of clothing per six mon th. The averagenumber of soldiers per camp per month is 3,500 soldiers. Equals 3,500 soldiers x 5camps x 4 weeks x 21 item s x 6 mon ths = 8,820,000 pieces of clothing per six month.This contract is Firmed F ixed Unit price with total item num bers adjustment.(George Decl., Exh. C [Solicitation], p. 2).

(15) The Solicitation language above stated a requirement that the contractorhandle laundry for a number of soldiers that could surge up to 7,000 soldiersper camp per month.

(16) According to LTC May, the term "surge" could involve one or twosituations: an increase of soldiers in preparation for war, and/or an increase ofsoldiers due to conducting an exercise. (May Dep., p. 42:18- p. 47:22).

(17) The Solicitation language above used the 3,500 soldier-per-camp average

to calculate a total amount of laundry at 8,820,000 pieces of clothing for thesix-month base term.

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Estimates Determined in October 2002, Based on Anticipated Soldiers Coming fromUnited States

(18) The estimates used in the Solicitation docum entation had been determinedby the Government in approxim ately October 2002. (Cockerham D ep., p.36:14-20).

(19) When the Government first anticipated those numbers, it was anticipatingsoldiers coming to Kuw ait from the United States. (Cockerham Dep., p.33:12-p. 34:3).

Army's Release of Bid and Estimate Information; ACT's Response(20) Approximately one m onth before the January 23, 2003 Solicitation was

issued, the Government had posted documentation, a "market research bid,"on a b id board. (Cockerham D ep., p. 37:16 p. 39:21). Contractingrepresentative John Cockerham was asked whether that market researchdocumentation contained the same soldier-count estimates as referenced in theSolicitation, and he responded "Without having seen it, I can't say exactly. Buthistorically the- the premarket research solicitation is usually a mirror imageof the actual solicitation." Id. at p. 41:21 p. 42:4.

(21) In late December 2002 or early January 2003, AGT 's staff was informedby LTC Marshall May or MAJ Lafonda Jernigan that the Government neededlaundry services and was looking for contractors. AGT's staff may have firstlearned of the scope of the laundry project from the Government notice (bid)board. (George Decl., pars. 3-5).

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(22) AGT's office learned about the laundry requirement and scope, and theGovernment's desire for contractors to provide market-research information.(George Decl., par. 5).

AGT'sReliance on Arm y's Estimates In Proposing and Agreeing to Pricing(23) Prior to the time of the Solicitation, AG T learned that the scope of the

laundry project provided by the Government included estimates of soldiersand laundry items for 5 camps. AGT learned the Government was requestinga per-piece price for laundry services. AGT learned the Government

estimated (a) laundry was needed for an average of 3,500 soldiers per campper month; and (b) the number of soldiers could surge from 1,000-7,000 percamp per month. (George Decl., par. 6).

(24) After learning of the G overnment's laundry needs, AG T did marketresearch to find the largest laundry facilities in Kuw ait that would be w illingto work w ith AGT on this laundry project. AGT took advice from laundryvendors/managers on ways A GT could handle and manage such a project.(George Decl., par. 7).

(25) AG T had relied upon the Government's estimates in determining thepricing that AGT offered in its various price proposals. (George Decl., par.8).

(26) In January 2003, AGT learned, from the market-research bid-boardinformation and/or from the Government's Solicitation that the G overnmentestimated 8,820,000 average estimated pieces would be laundered over thesix-month term of the Contract. AGT used this value, as well as the 3,500

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average soldier per camp value, to determine a general piece meal rate of KD0.259 fils to propose to the Government. (George Decl., par. 9).

(27) The attached declaration of Ajay George, AGT's General Manager,describes in detail at paragraphs 8-10 how AGT determined the general piecerate of KD 0.259 fils, and how AGT relied on the Government's estimates inmaking that pricing determination.

(28) In short, AGT used the Government's estimates (including 3.500-averageand 7,000 maximum capacity) to estimate AGT's anticipated costs, overhead

and profit margin for a project of that scope. AGT's anticipated costs,overhead and profit amounts totaled KD 2,287,333.240. AGT divided thatamount by the total estimated quantity of laundry pieces (items) provided bythe Government (3,500 average soldiers/camp x 5 camps x 21 items x 4 weeksx 6 months = 8,820,000 pieces). The division of KD 2,287,333.240(estimated costs, overhead and profit margin) by 8,820,000 (Government'saverage estimated pieces) gave the general piece meal rate of KD 0.259 fils.(George Decl., pars. 8-10).

(29) During negotiations, AGT used its general piece rate of .259 fils/piece todetermine specific piece-meal rates for different categories of pieces theGovernment wanted laundered. (George Decl., par. 13).

(30) The pricing negotiations between AGT and the Government are describedin detail in the declaration of Mr. George at paragraphs 13-17, and Exhibits D-F.

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(31) Ultimately, AGT and the Government agreed to these per-piece rates:small items at .240 fils, large items at .280 fils, sleeping bags (outer shell) at.587 fils, and sleeping bags (insert) at 1.450 fils. (George Decl., par. 17, Exh.F).

(32) Later, AGT submitted monthly invoices for the six-month Contract termthat billed at the four agreed piece rates above, applying those rates to themonthly piece quantities. This form of invoicing was done at the direction ofthe Government. The invoices AGT submitted were reviewed, audited and

approved by the Government. (George Decl., pars. 20-21, 24, Exhibit H[Invoices]).

Build-Up in January-February 2003; Arrival of Anticipated and UnanticipatedSoldiers; Over 100,000 Troops Arrived Before Contract Execution

(33) During January 2003 through mid-February 2003, prior to the Contract'sexecution on February 17, 2003, a large build-up of soldiers occurred inKuwait, and approximately 100,000 soldiers had arrived in the 5-campvicinity. (U. Brown Del), p. 17:2 p. 18:11).

(34) The build-up included additional soldiers not anticipated when theGovernment first estimated the numbers used in the Solicitation, includingsoldiers from allied commands from Europe and other places around theworld that the government had not anticipated. (Cockerham Dep., p. 34:1-8).

(35) COL Brown testified that by mid-February 2003, approximately 100,000soldiers were present in Kuwait. (U. Brown Dep. p. 17:2 p. 18:11).

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(36) The attached Stars and Stripes2 news article dated February 14, 2003,similarly indicates that "For the past two months" prior to the article, "theU.S. military has flowed thousands of servicemembers into Kuwait, bolsteringa force that could invade Iraq," and "More than 100,000" servicemembers haddeployed to Kuwait or were expected to arrive shortly. (Declaration of VondaVandaveer dated February 21, 2013 "Vandaveer Decl.", par. 7, Exh. 6 [Starsand Stripes article dated February 14, 2003]).

(37) COL Brown was asked what percentage of the 100,000 troops in Kuwait

were located in the 5 camps at issue for the Contract, and he testified:Each Cam p was designed to accomm odate a Brigade Com bat Team and there werecases where the num bers exceeded and exp anded. So, the theoretic answer is all ofthem were in that five Camp v icinity. However, we took dirt pieces of land and madethem enlargemen t points for units based on overflowing in the Cam ps.(U. Brown Dep., p. 18:2-13).

Five Camps at "Surge" Rate Before Contract Was Executed(38) COL Brown testified that, as of January 2003, the 5 camps had 8,000 to

10,000 soldiers each. (U. Brown Dep., p. 19:10- p. 20:2).(39) As of mid-February 2003, just before the Contract was executed, the 5

camps' populations were "at surge rate." (Cockerham Dep., p. 57:20- p. 58:9).(40) Prior to the Contract's February 17, 2003 execution, a "surge" as

referenced in the Solicitationthat is, a build-up of soldiers resulting in 7,000soldiers per camp had already occurred. (U. Brown Dep. p. 17:2 p. 18:13,p. 19:10- p. 20:2; Cockerharn Dep., p. 57:20- p. 58:9; Vandaveer Decl., Exh.6).

.2 Stars and Stripes is a Department of Defense-authorized daily newspaper distributed overseas for the U.S.military community. Source: Revised DoD Directive 5122.11.

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(41) There was a Modification of the Contract executed on F ebruary 26, 2003.(Smalls Dep., p. 10:20- p. 11:11, Dep. Exh. 2 [Feb. 26 Modification]). TheModification, drafted by the Governm ent, did not change the estimates ofsoldiers or laundry items.

(42) Prior to that February 26, 2003 Modification, a "surge" as referenced inthe Solicitation that is, a build-up of soldiers resulting in 7,000 soldiers percamp had already occurred. (U. Brown Dep. p. 17:2 p. 18:13, p. 19:10- p.20:2; Cockerham D ep., p. 57:20- p. 58:9; Vandaveer Decl., Exh. 6).

Army's Expectation that All Soldiers Would Leave in E vent of Invasion(43) Prior to the Contract's execution, Army contracting personnel expected

that if an invasion occurred, all the soldiers in the camps would leave.(Cockerham D ep., p. 63:5-11).

(44) COL Brown testified he assumed that after an invasion the camps w ouldbe used again by returning troops, but was nev er told of any specific plan thatwould occur. (U. Brown Dep., p. 21:16- p. 22:15).

Evidence the Governm ent Contractors Were Specifically Informed, Prior to theContract's Execution, a March Invasion Was Planned(45) Military w itness Angelo W illiam Johnson, who provided a sworn

statement (attached), attests that the Government issued a deploymentoperations order on December 24, 2002 that required forces to prepare fordeployment, and that set initial dates that were later adjusted. Specifically, heattested as follows:The purpose of this statement is to provide my understanding of the timing withregards to the start date of Operation Iraqi Freedom (01F). All the informationcontained in this statement can now be obtained through the freedom of information

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act and does not violate my non disclosure agreement signed, and effective, as of m yofficial retirement from the United States Army, dated 31 JAN 2012.From 1 SE P 2002 through 1M AY 2003, I was the Joint Operations Officer, forCombined Joint Special Operations Task Force West (CJSOTF-W). Combined JointSpecial Operations Task Force-West (CJSOTF-W), a uniquely designed andconfigured headquarters responsible for conducting the entire range of specialoperations throughout Iraq ISO Operation Iraqi Freedom. Respon sible for advisingand assisting the CJSO TF-W , CDR on all matters pertaining to on-going combatoperations. Directs and supervises o perational coordination and battle-tracking of tw oSpecial Forces Battalions and their subordinate elements operating both within twoseparate Corps' battlespace, and forward of the FSCL. E nsures complete integrationof battalion battle plans into the overall CJSOT F-W operational plan to ensuremaxim um effect. I was responsible for the planning, coordination, and execution ofintegrations of fires, intelligence, and austere logistical planning for SpecialForces elements engaged in ground combat operations.Our road to war specified two specific timelines both of which were based upon tw osituations. First, the situation on the ground and second by directions by the NationalComm and Authority (NCA).In both cases we were requ ired to: be prepared to have forces ready to conductoperations on order in accordance with the deployment operations order cut on 24DEC 2002.Dates were changed/ adjusted several times, but and solidified on or about 48 hoursprior to the President of the United States final warning to 17 M arch 2003.(Sworn Statement of Angelo William Johnson Dated January 14, 2013, p. 1).

(46) Former Army contracting officer John Cockerham testified that before themarket research and Solicitation were issued, he and other contractingpersonnel were informed an invasion would occur, and were informed of apotential invasion time of March 2003. Mr. Cockerham testified:Q. Okay. No w, you personally as of, let's say January 2003, were you aware of anymedia reports as far as a po tential war w ith Iraq?A. I don't recall per se any m edia reports but the briefings that we were receiving atthat time that that there was definitely a wa r with Iraq. As a matter of fact, that's thereason the -- this contract, along with thousands of other ones, that we w ere putting inplace so rapidly was because w e had been ba sically told by all certainty that therewas going to be an intervention in Iraq sometim e possibly around March.Q. And and so if I understand what you just said, be- -- before the time -- or beforethis bid was put on the bid board -- I'm sorry. Before information about m arket

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research was even put on the board, you you personally had heard informationsuggesting there might be a w ar in March?A. Correct. And 1 was --

Q. Had M r. May and M s. Jernigan also heard that news to your knowledge?A. Yes.Q. And w hat was the source of that information?A. This was com ing from -- well, 1 can't go into any of the National Securitybriefings. But what I can tell you is -- put it this way. From some of the meetings thatwere being attended, that was the discussion.(Cockerham Dep., p. 59:12- p. 60:15).

(47) CPT Cockerham indicated that Coalition Forces Land ComponentCommand (CFLCC) was a source of war-planning information, that thatinformation was "constantly being updated," and that CPT Cockerham andothers with TS clearance had access to CFLCC's war-planning information.(Cockerham Dep., pp. 59-62).

(48) LTC May, when deposed, claimed he "can't recall" when he first learned

it was possible a large deployment into Iraq could occur in the spring. (MayDep., p. 56:1-9).

(49) When LTC May was asked specifically whether he had communicatedwith CFLCC prior to March 2003 about a potential invasion, he testified asfollows:Q. Did you ever -- at any point before M arch 20th of 2003 --A. Um-hum.Q. Which again I'm asserting was the m ajor invasion date. At any time prior to thatinvasion date, did you ever comm unicate with CFLCC about a potential invasion ofIraq?A. I can't recall, sir. Because my staff --sir, how -- how the staff sections work, the C-RAC K [sic] has a staff, I have a staff. My staff are allowed to talk to their staff, as

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well as I can talk to the staff. But I do n't recall talking to a p articular individual abou twhat you just asked.(May Dep., p. 89:10-22).

(50) During discovery for this litigation, the Government has been repeatedlyasked to produce, and has failed to produce, discoverable information anddocuments relating to CFLCC and war-planning. (Vandaveer Decl., par. 12).

(51) Evidence from January 2003 indicates LTC May was at that time aware ofplans for an imminent deployment of soldiers from Kuwait north into Iraq.

(52) In January 2003, at a meeting prior to execution of the Contract, LTC Mayasked AGT's President Sheila Gittens whether AGT could accompanysoldiers north, from Kuwait into Iraq, to provide laundry services for soldiersdeployed into Iraq. (Declaration of Sheila Gittens Dated ["Gittens Dec!."],par. 2)

(53) As a result of this conversation, in an email Ms. Gittens had written LTCMay dated January 16, 2003, she stated "We have designed our trailers to bemobile in order to follow the troops north to ensure that clean uniforms willnot be a problem to the Government." (Gittens Decl., par. 3, Exhibit K).

(54) When deposed, LTC May did not refute the evidence above that inJanuary 2003 he had discussed with Ms. Gittens the prospect of soldierstraveling north into Iraq. LTC May testified he does not recall having anydiscussion with Ms. Gittens relating to the Contract:Q. If I understand you r testimon y before, you don 't recall talking to Sheila or LionelGittens about anything?A. I don't recall talking to them about this contract. I have met -- like I say, sir, I mayhave met them in passing at the mall or somewhere and said hi, bye, whatever.Because part of my p ersonality is I like to get to know you. So...

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(May Dep., p. 81:7-14).(55) AGT did not end up agreeing with the Government to travel north or

provide laundry services for soldiers in Iraq. (Gittens Decl., par. 4).(56) During the communications above or otherwise, the Government had not

informed AGT that a deployment of soldiers from the Kuwait camps into Iraqcould result in fewer laundry items than the Government's estimates, or thatthe estimated numbers of soldiers or laundry items may otherwise beinaccurate. (Gittens Decl., par. 5).

Evidence and Circumstances From Which the Government Contractors ShouldHave Been Aware a Large Deployment of Nearly All Soldiers Was Imminent,Regardless of the Specific Notice As Attested by CPT Cockerham

(57) Even were the Government to step forward with new assertions ordocuments not previously produced and to claim Kuwait contractingpersonnel did not know or have reason to know, prior to the Contract'sexecution, that a spring invasion of Iraq was likely there were extensivecircumstances and evidence that were publicly known and showed invasionwas imminent.

(58) As detailed above, there was a huge build-up and surge of soldiers thatoccurred between January and February 2003 and that resulted in over100,000 soldiers in Kuwait as of mid-February 2003.

(59) On January 28, 2003, then-President George W. Bush gave his State of theUnion message, during which he said that the British government "has learnedthat Saddam Hussein recently sought significant quantities of uranium fromAfrica." (Vandaveer Decl., par. 8, Exh. 7).

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(60) On January 30, 2003, the Department of State issued a Travel Warningthat stated "Private American citizens currently in Kuwait should evaluaterigorously their own security situation and are strongly urged to considerdeparting." (Vandaveer Decl., par. 9, Exh. 8).

(61) News reports in February 2003 indicated developments showing war wasimminent. For example, a February 3, 2003 USA Today article titled"American schools in Kuwait shut down" reported that "The two mainAmerican schools in this oil-rich emirate have decided to close for about six

weeks amid growing tensions in the Gulf, school officials said Monday in thefirst substantive sign of war fears among the American community inKuwait." (Vandaveer Decl., par. 10, Exh. 9).

(62) On February 5, 2003, Secretary of State Colin Powell, in his statement tothe UN Security Council, indicated war against Iraq was necessary, and saidIraq had mobile production facilities "used to make biological agents."(Vandaveer Decl., par. 11, Exh. 10).

(63) The Stars and Stripes article dated February 14, 2003 (referenced above)indicated that "For the past two months" prior to the article, "the U.S. militaryhas flowed thousands of servicemembers into Kuwait, bolstering a force thatcould invade Iraq," and "More than 100,000" servicemembers had deployedto Kuwait or were expected to arrive shortly. (Vandaveer Decl., par.7, Exh. 6[Stars and Stripes article]).

(64) LTC May testified as follows about his observations of the visibility of thelarge increase of soldiers in Kuwait:Q. We re there more than 100,000 soldiers in Kuwa it as of February 1st, 2003?

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A. I don't recall, sir. I don't recall that number. It could have been m ore; it could havebeen less. I just don't recall.Q. W hat's your understanding of the the highest number of soldiers ever located inKuwait?A. Sir, I wouldn't be concerned with the highest number. I would only look at thatrequirement docum ent. You kind of -- see, sir, we're trained to stay in our lanes.W hen we have an Arm y mission, our -- my mission was contracting. So the newsmay report there's 200,000 soldiers in Kuw ait. That wouldn't concern me unless theyneeded contracting support.Yeah, I know if I look out the window or go somew here, I would understand,wow , there's more soldiers on the road, there's more soldiers here at the base Camp,there's more soldiers in the Air Force, at somewhere else.But that wouldn't be my concern, sir_ That's -- so I can't recall if you say, y ouknow, 200, 100,000.

(Dep. May, p. 111:15 - p. 112:14).March Invasion Occurs (Within First Three Weeks of Contract Term); HugeReduction in Soldiers to Less Than 1,000 Per Camp for Contract Term

(65) On March 20, 2003, within the first three weeks of the Contract's baseterm, the invasion occurred, and soldiers from the Kuwait camps were

deployed into Iraq. (George Decl., par. 25).

(66) After the invasion, there were fewer than 1,000 soldiers at each camp. (U.Brown Dep., p. 20:10- p. 21:4).

(67) Two of the five camps closed during the Contract term. (U. Brown Dep.,p. 23:3 p. 24:6).

April 2003 Complaint by AGT to the Government About Exodus of Soldiers,Immense Diminishment of Laundry, Revenue Below Expectation

(68) On April 6, 2003, AGT faxed a letter to MAJ Jernigan, which stated that:a. "there has been a major exodus of military personnel from all five

camp sites;"

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b. "Naturally, it has affected the revenue to be generated from thiscontract and it is far below the anticipated expectation of thegovernment and AGT," and

c. "there were very few people in the Camp sites since the war began andthe amount of laundry had diminished immensely which can causeAGT a hardship once the overheads exceed the expenses and theincome."

(Smalls Dep., p. 23:10- p. 30:13, Dep. Exh. 3).

Prior to Execution of the Contract, and Up Through the End of the Contract's BaseTerm, The Government Did Not Revise Its Estimates(69) Despite the build-up and surge of soldiers between January and mid-

February 2003, the Government did not revise the soldier- and item- estimatesat any time before the Contract's February 17, 2003 execution. (George Decl.,Exh. C [Solicitation], Exh. G [Contract]).

(70) Despite the build-up and surge of soldiers between January and mid-February 2003, the Government did not revise the soldier- and item- estimatesat any time before the Contract's February 26, 2003 modification. (SmallsDep., pp. 10-11, Dep. Exh. 2 [Feb. 26 Modification]); (George Decl., Exh. C[Solicitation], Exh. G [Contract]).

(71) Despite the Iraq invasion on March 20, 2003and despite the fact that

the Government considered modification of the Contract on various groundsand issued a Contract modification effective July 20, 2003 the Governmentdid not revise the soldier- and item- estimates at any time prior to the end of

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the Contract's base term on August 31, 2003. (Rodriguez Dep., p. 12:11- p.14:9; Dep. Exh. 2 [July 2003 M odification)).

(72) When Government contracting personnel were asked whether they evenconsidered revising the soldier- and item- estimates provided to AGT at timespreceding the end of the base term, they provided no indication or detail thatthey had. (May Dep., p. 113:17- p. 114:2); (Smalls Dep., p. 36:12- p. 40:21; p.45:13- p. 46:2); (Cockerham Dep., p. 59:3-11); (Rodriguez Dep., p. 44:18- p.45:2).

Actual Laundered Items for Contract Term 72.4% L ess Than Estimated; Costs andFinancial Loss Incurred(73) By the end of the Contract's 6-month base term, the G overnment had only

delivered 2,436,911 pieces of laundry, which was 72.4% less than the8,820,000 number of pieces the Government had estimated for that Contractterm. (George Decl., pars. 21, 27).

(74) The invoices' number of items laundered totaled 2,436,911, itemized asfollows:

Invoice # Quantity Invoiced3079 281,5643091 388,4493133 510,5063156 489,7523193 415,6673218 350,973TOTAL 2,436,911(George Decl., par. 21).

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(75) The invoices' amounts above averaged 406,152 items per month. (GeorgeDecl., par. 21).

(76) Because far fewer pieces were delivered than the 8,820,000 number ofpieces the Government had estimated for that Contract term, ACT's fixedcosts were spread out over a fewer number of units. As such, the per-unit pricecharged for laundering the item did not cover the actual cost of laundering it.(George Decl., par. 27).

(77) In constructing the laundry facilities and performing services through the

completion of the 6-month base term ending August 31, 2003, AGT hadincurred costs totaling KD 1,597,984.132 (US $5,484,281.54). The attacheddeclaration of Ajay George provides detail and documentation supportingthese costs. (George Decl. at pars. 28-30, Exhibit 1).

(78) The Government paid AGT a total of KD 603,305.000 (US$2,070,542.76) for the 6-month base term. (George Decl. at par. 31).

(79) Thus, for the base term AGT suffered a loss of US $3,413,738.78 (US$5,484,281.54 costs incurred US $2,070,542.76 Army payment received =$3,413,738.78). (George Decl. at par. 32).

Had AGT Known Prior to Executing the Contract That Laundered Items WouldLikely Total Near 2,436,911 (As Later Occurred), AGT Would Have Sought aGeneral Piece Rate of .939 Fils Per Piece

(80) Had AGT known, at the time the Contract was being negotiated, thatfuture performance could involve monthly soldier counts averaging near 1,000soldiers per month per camp with laundry items totaling at or near 2,436,911for the six-month term (as actually wound up occurring), AGT would have

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calculated a different bid price to compensate AGT for its expenses of settingup and running the camps, plus reasonable profit. Specifically, AGT wouldhave sought a general piece rate of .939 fils per piece. (George Decl., par.34).

(81) Just as the original bid price piece meal rate was calculated at .259 fils bytaking the total anticipated revenue of KD 2,287,333.240 divided by8,820,000 pieces (as referenced above), similarly had AGT known anestimated count of laundry would have been at 2,436,911 pieces, then AGT

would have provided a price by dividing KD 2,287,333.240 by 2,436,911pieces and offering the Government the resulting price of .939 fils per piece.(George Decl., par. 34).

(82) Prior to execution of the Contract, AGT was unable to calculate or offerthis fair price of .939 fils because AGT had relied on the Government's pre-contractual estimates of soldiers and laundry pieces. (George Decl., par. 35).

(83) If this price of .939 fils per piece were owed to AGT, then theGovernment would owe AGT a total of USD $5,782,763.60 for laundryservices at the five camps during the Contract term. Specifically, theGovernment would have owed AGT: 2,436,911 total pieces laundered duringbase term x 0.939 fils/piece rate = KD 2,288,259.429 owed - KD 603,305.000paid by the Government for the 6-month base term = KD 1,684,954.429 owedx KD to 3.432 KO to USD conversion rate applicable during the year 2003 =USD $5,782,763.60 owed. (George Decl., par. 36).

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Government Request and Approval that AGT Construct Two Other Camps(84) In late June of 2003, contracting officer Colleen Rodriguez called AGT's

President Sheila Gittens, and asked AGT to set up new laundry facilities attwo camps, the 35th Brigade (BDE) and Camp Victory, to meet the laundryneeds for soldiers in Kuwait. Ms. Rodriguez told Ms. Gittens the request wasurgent and asked AGT to provide a pricing scheme to meet the costs of the setup. (Gittens Decl. at par. 7).

(85) Ms. Gittens responded to Ms. Rodriguez via email on June 22, 2003, with

the tents and other infrastructure required to operate the additional facilitiesand a price breakdown to cover the estimated cost. (Gittens Decl. at par. 8,Exhibit L).

(86) Thereafter, Ms. Rodriguez verbally told AGT to proceed, so AGT startedcoordinating the mobilization and the site identification for Camp Victory.(Gittens Decl. at par. 9).

(87) On June 25, 2003, AGT continued to pursue a request for a written noticefrom Ms. Rodriguez to proceed, given AGT had issued purchase orders fortents, generators, AC units and staffing. (Gittens Decl. at pars. 10-11, ExhibitM).

(88) Ms. Rodriguez emailed that same day in response, telling AGT to keepproceeding with its efforts, and indicated she was in the process of preparing achange order, but she was running late catching up with MAJ Jernigan'sduties. Ms. Rodriguez's email further indicated that a modification would becompleted and sent to AGT within a week's time. Ms. Rodriguez, however,

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ultimately did not in fact complete the modification during the initial contractperiod of performance at issue. (Gittens Decl. at par. 11, Exhibit M).

(89) AGT considered Ms. Rodriguez's emailed notice to proceed to be awritten approval from the contracting office, so AGT pursued the procurementand moved forward with the mobilization for Camp Victory. (Gittens Decl. atpar. 12).

(90) On June 26, 2003 Ms. Rodriguez emailed AGT, requesting confirmationof a start date for laundry service at the 35th BGD. AGT responded June 28,

2003 with a start date of July 12, 2003, pending receipt of the notice toproceed and noted the new rates for the service would be those as previouslysubmitted. AGT did not receive a response to this email. (Gittens Decl. at par.13, Exhibit N).

(91) When continuing with AGT's activities onsite to set up the laundry facilityat Camp Victory, AGT noticed that the Government had not cleared the site asof June 30, due to unavailability of their equipment, so AGT emailed Ms.Rodriguez to inform her. In that same June 30 email, AGT again requested anotice to proceed with the 35th BGD, which referenced the prices that wassent to Ms. Rodriguez on June 22. (Gittens Decl. at pars. 14-15, Exhibit 0).

(92) In response to this email that same day, Ms. Rodriguez emailed AGT awritten notice to proceed. (Gittens Decl. at par. 15, Exhibit 0).

(93) Based on AGT's reliance on the Government's notice to proceed, AGTbuilt the two additional facilities, one at Camp Victory and the other 35thBRG. Camp Victory became operable on July 8, 2003 and the 35th BRG on

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July 12, 2003. Ms. Gittens sent emails to Colleen Rodriguez on July 8, 2003confirming the launch of Camp Victory laundry services, and on July 13, 2003confirming the start-up of services at 35th BRG. (Gittens Decl. at par. 16,Exhibit P).

(94) Ms. Rodriguez verified the authenticity of emails she had exchanged withMs. Gittens, and admitted that the Government had in fact approved the setupof Camp Victory and the 35t h BRG. (Rodriguez Dep., p. 34:4- p. 37:22).

(95) AGT's expenses incurred in setting up and operation the two additional

camps totaled KD 39,476.400. (George Decl., par. 38, Exh. J [documentationsupporting costs)).

(96) Because the Government did not provide to AGT a modification duringthe period of performance as Ms. Rodriguez had indicated would be done,AGT did not invoice items from the two camps at piece rates indicated inAGT's emails with Ms. Rodriguez. Rather, absent approval for thoseparticular rates, AGT invoiced for laundry items at the two additional campsat the same piece-meal rates for which the other 5 camps were being invoiced.(George Decl., par. 39).

(97) AGT's procedures for counting, tallying, and or recording the itemslaundered at these facilities was the same as that used for the five contractcamps. (George Decl., par. 40).

(98) The total quantity of laundry received in July and August 2003 from thesetwo additional camps from their respective launch dates in July throughAugust 31 was only 151,107 laundered items, with a corresponding payment

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received of only KD 23,357.000. The laundry totals are consistent with asoldier count of in the hundreds per camp rather than the thousands for theperiod of performance in question. (George Decl., par. 40).

(99) Because AGT ended up invoicing the Government at the same piece ratesused in the Contract, which was based on an average troop count of 3,500 percamp, rather than the higher rate quoted to Ms. Rodriguez, which took intoaccount the reality of the troop count being far less than an average of 3,500,AGT was paid significantly less than if AGT had been paid at the rate

identified in the emails with Ms. Rodriguez. (George Dec]., par. 41).(100) AGT's unrecovered expenses for the two camps total KD 16,119.400,

based on the following calculation: Set up and operational costs of KD39,476.400 KD 23,357 paid by the Government = KD 16,119.400 inunrecovered expenses for the two camps. (George Decl., par. 41).

(101) As a result of the Government's failure to issue a modification thatincluded the higher piece rates AGT had quoted in emails to Ms. Rodriguez,AGT suffered a financial loss in constructing and operating the two extracamps (Camp Victory and 35th BDE) and the Government obtained afinancial benefit at AGT's expense. (George Decl., par. 42).

The Only Affirmative Defense Identified in Government's Answer Was SovereignActs; the Answer Did Not Deny the Government Had Knowledge (Before ContractExecution) of a Spring Invasion

(102) During this litigation, the Government submitted an Amended Answerdated September 23, 2011.

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(103) The only affirmative defense identified in the Amended Answer is asovereign acts defense. (Amended Answer, pp. 39-40).

(104) The Amended Answer does not assert any information or defense claimingthat AGT had any breach, failure to perform, or other wrongdoing on AGT'spart that has any bearing on the claims.

(105) The Amended Answer does not assert any information or defense claimingthe Government was not aware, before the Contract's execution, that a spring2003 invasion of Kuwait soldiers into Iraq was planned.

(106) The Government's Amended Answer restated the second sentence frompar. 37 of AGT's Amended Complaint and answered as follows:Second Sentence: As the leader in the invasion of Iraq, the U.S. militaryknew or should have known the attack was imminent and that significantlyfewer than 3,500 or even 1,000 soldiers would be in the camps once the attackoccurred.Answer: Argument No response required.(Amended Answer, p. 16, par. 37).

(107) On July 17, 2012, AGT served the Government with discovery requeststhat included the following Interrogatory Number 2:2. With regard to any potential defense or assertion by the Government that theGovernment was not aware, prior to executing contract No. DA BM06 -03-C-0009,that the Government was planning a surge and deployment of soldiers that wouldresult, during the term of contract No. DABM06-03-C-0009, in significantly fewerthan 3,500 soldiers per camp per m onth being present at the Kuw ait Camps at issue(Camp Pennsylvania, Camp Virginia, Camp New York, Camp N ew Jersey, CampConn ecticut, and Camp Bu ehring/Udairi), please: (1) provide a description of eachsuch defense or potential defense; (2) identify each and every witness w ho maysupport each listed defense, and contact information (including ad dress, emailaddresses and phone numbers) for each witness; and (3) identify each and everydocument which may support each listed defense.

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The Government's response to this Interrogatory No. 2 did not identify anydefense, or facts supporting any defense. The Government's response did notidentify any specific document supporting any defense, and only made the generalstatement that "The Government identifies the documents provided in its Rule 4,along with any related supplement, and the documents provided herewith indiscovery (numbered 1 to 212)." (Vandaveer Decl., par. 13, Exh. 11[Interrogatory No. 2 Response]),III. LEGAL STANDARDS

A. LEGAL STANDARDS AS TO NEGLIGENT ESTIMATE: ESTIMATESTHAT ARE INADEQUATELY OR NEGLIGENTLY PREPARED,WHETHER DELIBERATE OR UNINTENTIONAL, AMOUNT TONEGLIGENT ESTIMATE AND BREACH OF CONTRACT.Applicable law as to negligent estimate provides the following:

"[T]o the extent that a government estimate is inadequately or negligentlyprepared, its inclusion without correction in a solicitation or contractconstitutes a misrepresentation that, whether deliberate orunintentional, amounts to a breach of contract." See Rumsfeld, 325F.3d at 1335 (Fed.Cir. 2003), citing Womack, 389 F.2d at 800 (emphasisadded).

The law further provides:"[w]here a contractor can show by preponderant evidence that estimateswere 'inadequately or negligently prepared, not in good faith, or grosslyor unreasonably inadequate at the time the estimate was made[,]' thegovernment could be liable for appropriate damages resulting." SeeRumsfeld, 325 F.3d at 1335, quoting Clearwater Forest Indus., Inc. v.United States, 227 Ct.C1. 386, 650 F.2d 233, 240 (1981). (emphasisadded).

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B. LEGAL STANDARDS AS TO DAMAGES FOR NEGLIGENT ESTIMATE:DAMAGES OWED BASED ON EQUITABLY-ADJUSTED PRICING,TAKING INTO ACCOUNT COSTS AND PROFIT.If AGT prevailed on the negligent estimate claim, damages would consist of

reliance damages involving an equitable adjustment in price. See Rumsfeld, 325 F.3d1328, 1341, citing In re HKH Capitol Hotel Corp., ASBCA No. 47,575, 98-1 B.C.A.(CCH) 29548, at 146,472, 1998 WL 34784 (Jan. 26, 1998) ("Where the Government'sestimate is negligently prepared and appellant reasonably relies upon that estimate to itsfinancial detriment, the remedy is an equitable adjustment" [citation omitted] and John

Cibinic, Jr. & Ralph C. Nash, Jr., Formation of Government Contracts 1205 [3d ed.1998] [stating that relief for faulty government overestimates "has been measured byrepricing the contract quantities based on an accurate estimate of the quantities of work.Such repricing places the contractor in the position it would have occupied but for theGovernment breach."]).

Of note, in Rumsfeld (unlike this case) the government had terminated thecontract for convenience before the appellant had delivered any products. Rumsfeld, 325F.3d at 1341. In light of that circumstance, the Court found:

It does not appear from the record before us that A pplied delivered any cylinders beforeDLA terminated the contract for the convenience of the government. If any cylinderswere delivered, Applied should have the o pportunity to establish that it is entitled to anequitable adjustment in the price of those cylinders because it relied on D LA's negligentestimates and, as a result, suffered dam ages. W e note that, in denying A pplied's breachclaim, DL A's contracting officer referenced such an approach. The contracting officernoted that "lain equitable adjustment com pensates for changes by p aying a contractor itsincreased costs resulting from the change, plus an allowance for profit on that cost." Se eUnited States v. Callahan Walker Constr. Co., 317 U.S. 56, 61, 63 S .Ct. 113, 87 L.Ed. 49(1942) ("An 'equitable adjustment' ... involved m erely the ascertainment of the cost of[additional work] ... and the addition to that cost of a reasonable and customaryallowance for profit."); Earth Burners, Inc. v. U nited States, 43 Fed.Cl. 481, 482 (1999)(noting that "[t]he proper measure of an equitable adjustment is reasonable costs,including reasonable profit for the w ork performed" (citation om itted)); In re Gen. Ry.Signal Co., ENGBC A N o. 6168, 96-1 B.C.A. (CCH) 27981, at 139,755, 1995 WL(Aug. 3, 1995) ("We conclude that the equitable adjustment for the switching machines

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should be m easured by the contractor's reasonable cost plus an allowance for a fair andcustomary profit." [citation omitted]). We think the approach of an equitable adjustmentproperly assesses Applied's damages.If, as appears to be the case, no cy linders were delivered, Applied is limited to recourseunder the Termination for Convenience of the G overnment Clause of the contract.Id . at 1341-1342.

C. LEGAL STANDARDS AS TO BREACH OF IMPLIED-IN-FACTCONTRACT: AGREEMENT AS TO PROPERTY OR SERVICESINVOLVING MUTUAL INTENT TO CONTRACT, LACK OFAMBIGUITY IN OFFER AND ACCEPTANCE, AND CONTRACTINGAUTHORITY IN THE GOVERNMENT REPRESENTATIVE SAID TOHAVE ENTERED INTO THE AGREEMENT.In the instant case, and with respect to construction of Camp Victory and 35th

BDE, AGT's Amended Complaint alleged a FAR 50 Claim (Claim 2) to also include anagreement and breach of contract claim: the claim is identified as "Breach of Contract-Formalizing Informal Commitments (FAR 50.103-2(c))." (Amended Complaint, p. 15)(emphasis added). The Amended Complaint's asserted facts, as referenced and discussedbelow, support an alleged FAR 50 violation and an alleged breach of an implied-in-factcontract of the type that applicable law recognizes to be within ASBCA's jurisdiction.

An implied-in-fact contract is one that "must prove mutual intent to contract, lackof ambiguity in the offer and acceptance, consideration, and contracting authority in thegovernment representative who is said to have entered into the agreement." City of ElCentro v. United States, 922 F.2d 816, 820 (Fed. Cir. 1990), cert. denied, 501 U.S. 1230(1991); RGW Communications, Inc. D/B/A Watson Cable Company, ASBCA No.

54495, May 18, 2005.ASBCA is granted jurisdiction to hear claims involving implied-in-fact contracts,

including for the procurement of property and services such as those here (construction),by The Contract Disputes Act of 1978 (CDA), 41 U.S.C. 601-613, as amended. The

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CDA grants ASBCA subject matter jurisdiction applying to any express or impliedcontract for (i) the procurement of property, other than real property in being; (ii) theprocurement of services; (iii) the procurement of construction, alteration, repair ormaintenance of real property; or, (iv) the disposal of personal property. See CDA, 3(a),41 U.S.C. 602(a); Appeal of Wesleyan Company, Inc., ASBCA No. 53896, April 22,2005. Applicable law has clarified that implied-in-fact contracts for property andservices of the type with the two extra camps here (which include construction-relatedproperty and services) are subject to the CDA provision above, and subject to subject

matter jurisdiction by ASBCA. See, e.g. Appeal of ASFA Construction Industry andTrade, Inc., ASBCA No. 57269, June 23, 2011, Appeal of UniTech Services Group, Inc.,ASBCA No. 56482, Jan. 22, 2010.

IV. ARGUMENTA. THE GOVERNMENT'S ESTIMATES INCLUDING A SURGE UP TO

7,000 SOLDIERS PER CAMP (WITH NO REFERENCE TO A DROPOR DEPLOYMENT), A 3,500-SOLDIERS-PER-CAMP AVERAGE,AND 8,820,000 AVERAGE ITEM TOTAL WERE PREPAREDINADEQUATELY AND UNREASONABLY, AND WERENEGLIGENTLY ESTIMATED, BECAUSE THE ARMY HADSPECIFIC KNOWLEDGE BEFORE THE CONTRACT'SEXECUTION (AND BEFORE ITS MODIFICATIONS) THAT ALARGE SPRING INVASION WAS OCCURRING.

Per Rumsfeld, "[T]o the extent that a government estimate is inadequately ornegligently prepared, its inclusion without correction in a solicitation or contractconstitutes a misrepresentation that, whether deliberate or unintentional, amounts to abreach of contract." See Rumsfeld, 325 F.3d at 1335 (Fed.Cir. 2003), citing Womack,389 F.2d at 800 (emphasis added).

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As of mid-February 2003. prior to the Contract being executed, the reality of thesituation in Kuwait was entirely at odds with the estimates in the Solicitation andproposed Contract. The estimates contemplated an upward "surge" to 7,000 soldiers percamp, when in fact by mid-February that surge had already occurred. Just before signingthe Contract, AGT was stepping into a situation where "surge rate" populations ofsoldiers (7,000+ per camp) in the 5 Kuwait camps had already accrued, where thesoldiers were about to be deployed in a March invasion, and where the Governmentcontractors had already been specifically informed that the deployment was imminent

and likely to be in March.As attested by military witness Angelo William Johnson, the Government issued a

deployment operations order on December 24, 2002 that required forces to prepare fordeployment. (Sworn Statement of Angelo William Johnson Dated January 14, 2013, p.1).

This timing coincides with the testimony of former Army contracting officer JohnCockerham, who testified that before the market research and January 23, 2003Solicitation were issued, he and other contracting personnel were informed an invasionwould occur, and were informed of a potential invasion time of March 2003. (CockerhamDep., p. 59:12- p. 60:15). The Government lacks basis to present any material disputewith the evidence above. The lead contractor, LTC May, when deposed, claimed he"can't recall" when he first learned it was possible a large deployment into Iraq couldoccur in the spring. (May Dep., p. 56:1-9). And evidence from January 2003, as detailedabove, indicates LTC May was in fact at that time aware of plans for an imminentdeployment of soldiers from Kuwait north into Iraq.

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Even were it assumed for argument's sake that the Government contractingpersonnel had not been specifically informed (prior to Contract execution) of a planneddeployment likely to occur in Spring (i.e. during the Contract term), the mid-Februarycircumstances around them plainly showed an invasion was imminent. As detailedabove, a series of escalating and publicly-known actions and statements occurred inJanuary to mid-February--including the build-up of over 100,000 troops in Kuwait, thePresident's State of the Union speech, the Secretary of State's UN Speech, the TravelWarning to persons in Kuwait, etc.showed an invasion was imminent.

Despite Government contractors' knowledge as of mid-February that an invasionof the Kuwait soldiers into Iraq was imminent, the Government failed to inform AGT thatan invasion and large drop in laundry was likely, and the Government did not change itsestimates in the Solicitation or proposed Contract. The estimates originally had beendetermined months earlier (in October 2002), prior to the surge, and as such they werenot an adequate fit for the mid-February realities and numbers that had built up prior tothe Contract's February 17, 2003 execution. Even after the invasion and the actual dropin soldiers had occurredand after AGT expressed written concerns about the large dropin soldiers, laundry and revenue the Government still did not change the estimates,despite issuing a modification to the Contract for different purposes.

Prior to the Contract's execution, Army contracting personnel expected that if aninvasion occurred, all the soldiers in the camps would leave. (Cockerham Dep., p. 63:5-11). COL Brown testified he assumed that after an invasion the camps would be usedagain by returning troops, but was never told of any specific plan that would occur. (U.Brown Dep., p. 21:16- p. 22:15).

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In sum, the Government specifically had the information and knowledge availableto change its estimateswhich contemplated an upward surge and numbers approaching7,000 soldiers per campto numbers that were more equitable and reflected theanticipated downward drop of soldiers, and huge reduction of laundry items, that wereassociated with the imminent invasion of Iraq. The Government had not informed AGTthat a deployment of soldiers from the Kuwait camps into Iraq could result in fewerlaundry items than the Government's estimates, or that the estimated numbers of soldiersor laundry items may otherwise be inaccurate. (Gittens Decl., par. 5).

The foregoing circumstances demonstrate that the Government's estimates wereinadequately or negligently prepared, and that their inclusion without correction in theSolicitation, Contract and modifications constituted misrepresentations that, whetherdeliberate or unintentional, amounted to a breach of contract. Rumsfeld, 325 F.3d at1335. Accordingly, summary judgment should be granted, finding the Government liablefor negligent estimate as to the Contract and the 5 camps at issue.

D. DAMAGES FOR NEGLIGENT ESTIMATE ARE OWED PURSUANT TOEQUITABLY-ADJUSTED PRICING AT A RATE OF .939 FELS PERPIECE, AND TOTALING USD $5,782,763.60 IN DAMAGES.As described above, prior to Contract execution, AGT determined a proposed

general piece meal rate of259 fils, which AGT calculated by taking the total anticipatedrevenue of KD 2,287,333.240 divided by the Government's estimated amount of8,820,000 pieces. Had AGT known an estimated count of laundry at 2,436,911 pieceswas likely (as actually wound up occurring), then AGT would have provided a price bydividing KD 2,287,333.240 by 2,436,911 pieces and offering the Government theresulting price of .939 Ills per piece. (George Decl., par. 34). Prior to execution of the

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Contract, AGT was unable to calculate or offer this equitable price of .939 fils becauseAGT had relied on the G overnment's pre-contractual estimates of soldiers and laundrypieces. (George Decl., par. 35).

Because the Government's estimates were negligent, the above adjusted price of.939 fils per piece should be owed to AGT per law providing such an equitable rateadjustment is the appropriate remedy. See Rumsfeld, 325 F.3d 1328, 1341, citing In reHKH Capitol Hotel Corp., ASBCA No. 47,575, 98-1 B.C.A. (CCH) 29548, at 146,472,1998 WL 34784 (Jan. 26, 1998) ("Where the Government's estimate is negligently

prepared and appellant reasonably relies upon that estimate to its financial detriment, theremedy is an equitable adjustment" [citation omitted] and John Cibinic, Jr. & Ralph C.Nash, Jr., Formation of Government C ontracts 1205 [3d ed. 1998] [stating that relief forfaulty government overestimates "has been measured by repricing the contract quantitiesbased on an accurate estimate of the quantities of work. Such repricing places thecontractor in the position it would have occupied but for the Government breach."]).

As such, the Government owes AG T:2,436,911 total pieces laundered during base term x 0.939 fils/piece rate = KD2,288,259.429 owed - KD 603,305.000 paid by the Government for the 6-month baseterm = KD 1,684,954.429 owed x KD to 3.432 KD to USD conversion rate applicableduring the year 2003 = USD $5,782,763.60 owed.(George Decl., par. 36).Accordingly, summary judgment should be granted to the effect that the

Government owes A GT dam ages totaling U SD $ 5,782,763.60 for laundry services at thefive camps during the Contract term.

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E. A BREACH OF IMPLIED-IN-FACT CONTRACT OCCURRED, ANDLOST COSTS TOTALING USD $55,321.78ARE OWED TO AGT,BECAUSE AN AGREEMENT OCCURRED BETWEEN AGT AND THEGOVERNMENT THAT INVOLVED PERTINENT PROPERTY ORSERVICES (INCLUDING CONSTRUCTION AND OPERATION OFCAMP VICTORY AND 35T H BDE), MUTUAL INTENT TO CONTRACT,LACK OF AMBIGUITY IN OFFER AND ACCEPTANCE, AND THEGOVERNMENT REPRESENTATIVE WHO ENTERED INTO THEAGREEMENT HAD CONTRACTING AUTHORITY.AGT alleged an implied-in-fact contract that fulfilled the legal pleading standards

above. First, the agreement at issue, involving construction and operations of twolaundry camps (Camp Victory and 35t h BDE), was for construction-related property and

services subject to the CDA provision above at 3(a), 41 U.S.C. 602(a).An implied-in-fact contract is one that "must prove mutual intent to contract, lack

of ambiguity in the offer and acceptance, consideration, and contracting authority in thegovernment representative who is said to have entered into the agreement." City of ElCentro v. United States, 922 F.2d 816, 820 (Fed. Cir. 1990), cert. denied, 501 U.S. 1230(1991); RGW Communications, Inc. D/B/A Watson Cable Company, ASBCA No.54495, May 18, 2005.

Regarding the last requirement, the Government contracting representative whomade the communications and agreement with AGT was Colleen Rodriguez, agovernment employee who, between May and October 2003, served as a contractspecialist and contracting officer in Kuwait. (Rodriguez Dep, p. 8:5- p. 9:17). As such,she was a contracting officer of the Government, pursuant to authority under FAR 1.601and 1.602, and fulfilled the contracting-authority standard per City of El Centro above.

The emails and communications between AGT and Ms. Rodriguez, detailedabove, demonstrate that the Government (via its contracting officer) instructed AGT to

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construct two laundry facilities, and the contracting officer agreed that AGT would becompensated for the costs of doing so. The emails and testimony submitted indisputablysubstantiate that the parties had "mutual intent to contract, lack of ambiguity in the offerand acceptance, consideration, and contracting authority in the government representativewho is said to have entered into the agreement." City of El Centro v. United States, 922F.2d at 820.

It is true the parties did not reach agreement as to specific laundryitem-prices intheir communications, and there was ambiguity as to whether AGT was entitled to its

proposed pricing (which was higher than the Contract rate) as opposed to the Contract-rate unit pricing AGT had billed at. In light of this, AGT seeks only reimbursement oflost costs associated with these two camps.

As detailed above, AGT's lost and unrecovered expenses for the two camps totalKD 16,119.400. Accordingly, summary judgment should be granted, finding theGovernment in breach of implied-in-fact contract, and obligated to make payment toAGT for KD 16;119.400 for related damages attributable to costs and financial lossincurred. The KD to USD conversion rate applicable in 2003 was 3.432. (George Decl.,par. 29). Accordingly the Government owes AGT payment for the two camps in theamount of USD $55,321.78.

V. CONCLUSION

Based on the foregoing reasons, Appellant AGT respectfully requests that AGT'smotion for summary judgment be granted, that the Government be found liable fornegligent estimate and breach of implied-in-fact contract, and be ordered to make

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payments to AGT for damages in the amounts of TSD S5,782,763.60 and USD$55,321.78, respectively.

Respectfully submitted this 21' day of February, 2013.

Attorney for AppellantVonda K. Vandaveer, Esq.DC Bar # 483807V.K. Vandaveer,P.O. Box 27317Washington, DC 20038-7317Phone: (202) 340-1215Fax: (202) 521-0599Email: [email protected] F. BrownState Bar #: 1041753Peterson, Berk & Cross200 E. College Ave.P.O. Box 2700Appleton, WI 54912-2700Phone: (920)831-0300Fax (920)831-0165Email: [email protected]: WIENCL TO:Major K.L. Grace Moseley, Trial AttorneyDepartment of The ArmyUnited States Army Legal Services Agency9275 Gunston Road, Suite 2124Fort Beivoir, VA 22060-5546

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CERTIFICATE uF SERVICE1 hereby certify, under penalty of perjury, that on February 21, 2013 a true andcomplete copy o f all documents except the exhibits has been electronically mailed to theGovernment's attorney, at kesabii.l.moseley.milqiemail. mil . A true and com plete copy of

this motion and all exhibits will be hand delivered Friday, February 22, 2013 to M ajorKesabii Mo seley, Trial Attorney and, at the followina address:Major K.L. Grace M oseley, Trial AttorneyDepartment of The ArmyUnited States Army Legal Services Agency9275 Gunston Road, Suite 2124Fort Belvoir, VA 220 60-5546

Assya ThodeV.K. Vandaveer,P.O. Box 27317Washington, DC 20038-7317Plione:(202) 340-1215Fax:(202) 521-0599Email: [email protected]

agt sj brief feb 2013

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