The contract allowed for an adjustment for the price of steel. The contractor argued it was entitled to an adjustment. The board, however, found the contractor was really seeking an adjustment for the cost of gray iron, not steel.
Appeals of Delfasco LLC, ASBCA Nos. 63280, 63402
- EPA Clause – The contract was for the provision of practice munitions. The contract had an economic price adjustment clause applicable to the price of steel. But the clause only applied to steel, nothing else.
- The Claim – The contractor submitted a claim under the EPA clause seeking an adjustment for the price of steel used for bomb casings. The agency denied the claim. The contractor appealed.
- Steel v. Gray Iron – The government argued the EPA clause did not apply because the bomb casings were made of iron, not steel. The contractor contended the gray iron used on the casings was steel. The board noted the dictionary definition of steel is iron that contains carbon up to 1.7 percent as an essential alloy. Gray iron is pig or cast-iron containing graphite carbon. The board found these dictionary definitions clearly distinguished steel from gray iron.
- Extrinsic Evidence – The contractor wanted to provide extrinsic evidence of trade practice and how it relied on a competing interpretation of gray iron. The board found there was no evidence the contractor had relied on this alleged trade usage when entering the contrac.t Absent reliance, the board saw no reason to consider extrinsic evidence of trade usage.
The contractor is represented by David S. Cohen of Cordatis LLP. The government is represented by Scott N. Flesch, Major Ronald C. Walton, Major Jason C. Coffey, and Michael McDermott of the Army.
--Case summary by Craig LaChance, Senior Editor