The contractor delivered nonconforming items. The contractor argued that the agency's delay in rejecting the items amounted to constructive acceptance. But ASBCA was not convinced by the contractor's argument. The agency order required the items to meet certain specifications. Because the items were nonconforming, an acceptance had not occurred.
Appeal of Paragon Defense Solutions, Inc., ASBCA No. 64168
- Background - The Defense Logistics Agency issued a purchase order to the contractor for specific "CAP, TUBE" fittings. The contractor delivered items that did not comply with the required specifications and later filed a claim for payment, asserting that the agency's failure to promptly reject the items implied acceptance. The agency maintained that since the items were nonconforming, the purchase order had lapsed and no contract was formed. The contractor appealed to ASBCA.
- Acceptance of Nonconforming Goods - The contractor argued that because the agency delayed in rejecting the delivered items, this constituted constructive acceptance. ASBCA ruled that the agency retained the right to inspect and reject goods, and the delay did not automatically imply acceptance. The Board highlighted the requirement for goods to meet specifications and concluded that the items delivered failed to comply. It reiterated that acceptance could only occur upon delivery of conforming items.
- Contract Expiration - The agency contended that the purchase order lapsed due to the contractor's failure to provide conforming goods by the specified deadline. ASBCA agreed, noting that acceptance was contingent on full compliance with the purchase order's terms. Since the contractor did not meet these terms, the offer had expired.
- Inspection Obligations - The contractor also challenged the agency’s inspection results. It asserted they were unreliable. However, ASBCA determined that the contractor failed to provide evidence that the delivered items conformed to the purchase specifications. The Board emphasized the contractor's obligation under the inspection clause to ensure that only conforming items were tendered, which further undermined the contractor's claims.
The contractor is represented by Mr. Weiwei Jian of Paragon Defense Solutions, Inc. The government is represented by Gary P. Bilski, John J. Pritchard, Julie K. Phillips, and Adam J. Heer of the Defense Logistics Agency.