USAC Aerospace Group Inc. dba USAC Aerospace Group: Ordnance Division
ASBCA No. 59186
| A.S.B.C.A. | Mar 16, 2017Background
- DLA awarded contract SPM4A6-11-C-0135 to "USAC Aerospace Group: Ordnance Division" on 23 May 2011 for guided missile launcher tripod mounts; contract incorporated FAR clauses including CCR/SAM registration requirements and default remedy.
- Government evidence (state records and SAM/CCR entries) suggested USAC had lost or had revoked corporate status in California (2008) and Nevada (revocation noted 30 Apr 2011), and that multiple CAGE codes and registration inconsistencies existed.
- DLA terminated the contract for default on 6 Dec 2013 for failure to deliver the first article; USAC appealed on 28 Feb 2014, NOA signed by Michael Sammon as Director of Operations.
- Government moved to dismiss for lack of jurisdiction, arguing the contract was a nullity because USAC lacked corporate capacity to contract.
- The Board, sua sponte, raised additional concerns under Board Rule 15 about whether USAC was a legally incorporated entity at award and whether Sammon had authority to represent the corporation; it ordered USAC to prove incorporation and representative authority but received inadequate responses.
- Because USAC failed to produce credible documentation of corporate existence or Sammon’s authority, the Board drew adverse inferences and dismissed the appeal without prejudice for lack of a proper corporate representative.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Corporate capacity to contract | USAC did not meaningfully contest capacity in filings; focused on merits. | DLA: USAC was defunct/ not incorporated at award, so contract is a nullity and Board lacks jurisdiction. | Board did not resolve motion on merits but found capacity doubts and requested proof; adverse inference drawn for lack of proof. |
| Duty to disclose SAM/CCR registration accuracy | (not asserted) | DLA: Contractor must keep CCR/SAM accurate; inconsistencies support lack of capacity. | SAM/CCR entries were considered probative of irregular corporate status but Board relied on failure to rebut. |
| Authority of corporate representative (Board Rule 15) | Sammon signed NOA as Director of Operations; USAC offered only uncertified assertions of authority. | DLA challenged Sammon’s authority given corporate suspension/revocation. | Board required proof of representative authority; absent proof, drew adverse inference that Sammon lacked authority. |
| Procedural consequence / remedy | USAC sought to pursue appeal (merits of termination). | DLA sought dismissal for lack of jurisdiction due to null contract and lack of capacity; cited precedent requiring dismissal where corporation suspended. | Board dismissed appeal without prejudice because it could not proceed without a properly authorized corporate representative. |
Key Cases Cited
- In re Krause, 546 F.3d 1070 (9th Cir. 2008) (discusses standing and consequences of corporate default or suspension)
- AA Primo Builders, LLC v. Washington, 126 Nev. 578 (Nev. 2010) (Nevada law on corporate standing and revival following forfeiture)
