The government’s request that the Armed Services Board of Contract Appeals reconsider the amount of damages owed to the appellant for nonrecoverable equipment costs is denied, where evidence created more than 18 months after the close of the record cannot be used as a basis for reconsideration and where the sale of the appellant’s assets to another firm did not include the equipment in dispute.
The Defense Information Systems Agency moved the Armed Services Board of Contract Appeals to reconsider its earlier decision as to quantum in 2Connect W.L.L.’s appeal of the contracting officer’s final decision denying its claim for nonrecoverable equipment costs. After the close of the record, 2Connect was sold and the government wished to offset the amount of damages awarded to 2Connect by the amount the appellant received for the related equipment. Because the government relied on evidence created after the record had closed and requested that the board allow post-judgment discovery, the board treated the motion as a request for post-judgment relief.
The case involved costs associated with an Irrevocable Right of Use, an exclusive, long-term lease of a specified portion of a telecommunications cable. In its earlier decision, ASBCA concluded that 2Connect had proved that it incurred $2,274,015 in nonrecoverable equipment costs resulting from the cancellation of its contract. The board concluded the costs were reasonably incurred and that the equipment had no foreseeable reuse.
More than one year after the record in this appeal closed, 2Connect’s telecommunications license was revoked and the company decided to sell its assets to another firm. 2Connect later submitted a novation agreement notifying the government of this action and assigning its successor the rights and interests to any contracts between 2Connect and the government.
The government argued that the novation agreement showed that 2Connect sold the IRU in dispute for a value that was not subtracted from the government’s liability. Because the board concluded the IRU had no foreseeable reuse, the government argued that any proceeds from the sale of the IRU should be used to reduce the damages. Further, the government argued that because of the sale, it may no longer have access to the IRU at no charge. The government requested post-judgment discovery and reconsideration of the board’s decision as to quantum.
In response, 2Connect argued that evidence created after a hearing has ended cannot serve as the basis for reconsideration. Further, the appellant argued that it did not sell the IRU at issue, because the business transfer agreement references two different IRUs.
The board agreed that evidence created nearly 18 months after the close of the record can not be used as the basis for a motion for reconsideration. Even if this evidence could be used, the board noted that the government must show that the evidence is likely to produce a different result. However, the board found the evidence did not support this contention.
First, the board found that 2Connect’s business documents did not indicate that the IRU at issue was part of the asset transfer. The disputed IRU telecommunications circuit was to connect Manama, Bahrain and Camp Lemonier, Djibouti, while the business documents indicated other locations.
The board also noted that if the government had a genuine interest in the IRU, the question of the government’s access to the IRU could and should have been addressed by the government as a matter of contract administration at the time appellant and its successor proffered the novation agreement for execution. The board explained that a motion for reconsideration does not function as a vehicle for redressing oversights in contract administration.
2Connect W.L.L. is represented by Shelly L. Ewald of Watt, Tieder, Hoffar & Fitzgerald, L.L.P. The government is represented by William E. Brazis, Jr., DISA General Counsel, and Travis L. Vaughan, Trial Attorney, Defense Information Systems Agency.
