Rashed Elham Trading Company
ASBCA No. 58383, 58619, 58620
| A.S.B.C.A. | Oct 12, 2017Background
- In Aug 2011 the DoD awarded Rashed Elham Trading Company (RETC) an indefinite-delivery/indefinite-quantity NAT contract to transport bulk fuel, dry cargo, and heavy cargo in Afghanistan; the contract incorporated FAR 52.212-4 and detailed PWS requirements (asset minimums, mission/TMR documentation, satellite "snapshot" tracking, invoicing procedures).
- Contract required RETC to maintain minimum assets, submit signed TMRs and supporting snapshots, and submit monthly invoices; Paragraph K and a non‑incorporated 16 Oct 2011 MFR established a government role in preparing draft invoices for contractor review.
- From Sep 2011–Apr 2012 the government issued multiple letters of concern and three suspensions for deficiencies: insufficient super lowboys, pilferage/theft of government container(s), suspected forged/altered TMRs, an MRAP accident, fuel pilferage on fuel missions, and failures to meet acceptable quality levels and reporting requirements.
- RETC sent a 4 Apr 2012 letter stating it was "cancelling" the contract (30‑day notice) and thereafter reported zero available assets; it did not submit the requested corrective action plan and did not respond to a 24 Apr 2012 cure notice.
- The contracting officer terminated the contract for cause on 15 Sep 2012 citing anticipatory repudiation, failure to comply with contract terms, pilferage and suspected falsified paperwork, failure to maintain assets, failure to cure, and prior suspensions; RETC appealed the termination and separately claimed breach by the government for alleged invoice delays and improper administration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether termination for cause was justified (anticipatory repudiation / failure to perform) | RETC says its 4 Apr 2012 letter was a request for convenience termination and it continued to finish existing missions; it argues government invoice delays caused its financial inability to perform | Government says RETC unequivocally repudiated the contract by cancelling and by reporting zero assets, and thus abandoned future performance | Held: Termination sustained — RETC’s cancellation letter and reporting zero assets constituted anticipatory repudiation and refusal to perform |
| Whether RETC failed to comply with material contract terms (assets, documentation, AQLs) | RETC contends some issues were corrected or caused by subcontractors or government actions (holding-yard delays, invoice delays) | Government points to repeated noncompliance: missing/forged TMRs, pilferage, MRAP damage, failure to meet AQLs, failure to submit corrective action plan | Held: Government established prima facie noncompliance; RETC failed to show excusable reasons for deficiencies |
| Whether government breached duty of good faith by changing invoicing practice or delaying payments (excusing RETC’s nonperformance) | RETC claims the 16 Oct MFR shifted invoice preparation to government and invoice delays prevented payment to subs and prevented detection of pilferage | Government argues contract did not give RETC exclusive right to prepare invoices; delays were largely caused by RETC’s late, incomplete, or suspicious submissions and necessary investigations | Held: Government did not breach duty of good faith; RETC failed to prove payment delays were the controlling cause of nonperformance |
| Whether government reasonably terminated rather than convert to convenience termination or otherwise mitigate | RETC sought convenience termination or relief; did not submit CAP or respond to cure notice | Government followed cure/cap procedures, gave suspensions and opportunities to cure, and terminated after failure to respond | Held: Termination for cause reasonable and supported by record; appeals denied |
Key Cases Cited
- Danzig v. AEC Corp., 224 F.3d 1333 (Fed. Cir. 2000) (inadequate response to cure notice does not satisfy obligation to provide assurances of timely completion)
- Metcalf Constr. Co. v. United States, 742 F.3d 984 (Fed. Cir. 2014) (implied duty of good faith and fair dealing limited by contract terms)
- First Nationwide Bank v. United States, 431 F.3d 1342 (Fed. Cir. 2005) (duty of good faith examined against the original bargain)
- TGC Contracting Corp. v. United States, 736 F.2d 1512 (Fed. Cir. 1984) (contractor’s financial incapacity is not ordinarily an excuse for nonperformance)
- Laguna Constr. Co. v. Carter, 828 F.3d 1364 (Fed. Cir. 2016) (court may avoid resolving fraud allegations when unnecessary to disposition)