The Taliban took over Afghanistan and seized fuel the contractor was supplying to the government. The contractor claimed the government was liable for the lost fuel. But the ASBCA said the contractor had to eat the loss. The contract specified the government was not responsible for fuel the contractor had not delivered. Additionally, the contractor’s loss was caused by the Taliban, not by the government’s conduct.
Appeal of Targe Logistic Services Company, ASBCA No. 63282
- Claim– The contract was for delivery of aviation fuel in Afghanistan. While the contractor was performing, the Afghanistan government collapsed. The Taliban took over and seized the fuel facilities in Afghanistan. The government terminated the contract for convenience. The contractor submitted a claim alleging the government breached by not paying for delivered fuel and by not providing adequate security. The government denied the claim. The contractor appealed to ASBCA.
- Delivered Fuel – The contractor contended the government breached by not paying for “delivered” fuel. But the board noted the contract defined “delivered” fuel that had been delivered to an aircraft. Here, the the Taliban had taken fuel stored in a regional terminal. The fuel had not been delivered. The government was not liable.
- Third-Party Action – Aside from the contract terms, the board also noted the government is not liable for damaged resulting from the acts of third parties. In this case, neither party disputed that the Taliban seizure was the proximate cause of the last fuel. The board reasoned the government was not responsible for the Taliban’s actions, so the government was not liable for the loss.
- Allocation of Risk of Loss – The contract specified that the risk of loss remained with the contractor until it was delivered into government aircraft. It additionally warned that the contractor may be required to perform the contract “in dangerous or austere conditions.” The contractor argued the risk of loss provision only applied in narrow circumnstances. The board, however, found the risk of loss provision clearly applied until the contractor delivered the fuel.
- Security and Access – The contractor claimed the government breached by failing to provide adequate security and access. But the board found the contract placed responsibility on the contractor until the fuel was delivered into the aircraft. Moreover, nothing in the contract required the government to guarantee access to the fuel facilities.
- Sovereign Acts Defense – ASBCA further noted that even if the government were responsible for providing security and access, it was absolved because the United States’ withdrawal of its troops from Afghanistan was a sovereign act. This effectively excused the government from performance as it made performance of the contract impossible.
- Termination for Convenience Costs – Contractor alleged it was entitled to compensation for its lost fuel reserves and equipment because the contract required it to maintain the fuel reserves the Taliban seized. The board found that this claim needed additional fact finding. Thus, termination claim survived summary judgment.
The contractor was represented by Enayat Qasimi and Shamsi Maqsoudi of Whiteford, Taylor & Preston, LLP. The government was represented by Dana J. Chase and Brandon P. Mark.
— Case summary by Joshua Lim, Assistant Editor
