Failure to Request Specific Relief Not Fatal to Appeal of Termination for Default; ASBCA No. 61565, Appeal of Arab Shah Construction Company

The government’s motion to dismiss an appeal of a termination for default is denied, where the appellant’s complaint, read in conjunction with the termination notice, pled sufficient facts to set forth a recognizable claim. The board also rejected the government’s argument that the claim failed to seek specific relief, finding that the very fact the contractor appealed the termination decision led to the logical inference that it wished the termination to be converted to one for the government’s convenience.

Arab Shah Construction Company appealed from the U.S. Army Corps of Engineers’ decision to terminate its contract for cause. The government moved to dismiss for failure to state a claim upon which relief could be granted, arguing that appellant’s complaint did not explicitly dispute the termination or make a specific request for relief.

The agency awarded Arab Shah a contract for diesel generator repair services at power plants located throughout Afghanistan. Approximately one year into performance, the agency issued a cure notice, which described problems with Arab Shah’s performance on three generators. In response, Arab Shah submitted a 48-page document that consisted primarily of photographs of various items appearing to be parts that were to be installed during contract performance. The response briefly described actions the appellant had already taken or intended to take, and asserted that with respect to one of the generators, the contractor responsible for maintenance was not changing the generator’s oil in a timely fashion or using good quality oil, which impacted its performance.

The CO terminated the contract, finding that Arab Shah had failed to adequately respond to the cure notice or provide a feasible recovery plan and schedule. The termination notice described the problems with the generators in detail and stated that replacement parts used in repairs were not authentic original equipment manufacturer parts, as required. The CO also stated there was evidence the contractor was re-using parts instead of replacing them with new parts.

In its appeal, Arab Shah repeated its contention that the maintenance contractor’s failure to properly maintain one of the generators was responsible for the performance deficiencies, and included a copy of the parts list provided in its response to the cure notice. Arab Shah also complained that another contractor was impairing its ability to start work by claiming that one of the generators was covered by its contract, not Arab Shah’s. The appellant claimed it had raised this issue with the agency but was ignored.

The government moved to dismiss for failure to state a claim upon which relief can be granted, arguing that appellant has neither set forth a recognizable claim nor claimed entitlement to any relief.

However, the board disagreed. Although the Corps alleged Arab Shah’s complaint failed to explain its allegations or request any actual relief, the board noted that the termination notice also factored into the complaint. When read in conjunction with the termination notice, the board held that Arab Shah’s complaint alleged sufficient facts to plausibly suggest a showing of entitlement to relief.

Specifically, the termination notice described in detail the problems encountered with the generators, and Arab Shah’s complaint incorporated emails in which it specifically communicated to the Corps that the maintenance contractor was interfering with its access to the site and was not properly changing the generator’s oil and filter. Arab Shah’s allegations regarding the problems it encountered with the maintenance contractor, and the impact of those problems on its performance, go to the question of whether its alleged performance deficiencies can be excused.

With respect to the Corps’ claim that the complaint failed to request any form of relief, the board noted the agency did not cite any precedent requiring an appellant’s complaint to recite a specific request for relief. The board’s rules only require notice pleading. By virtue of its appeal, the board found it clear that Arab Shah did not agree with and was challenging the termination decision. Although the appellant did not explicitly request the termination for cause be converted to a one for convenience, the board concluded that form of relief is a logical inference from Arab Shah’s decision to file this appeal.

Arab Shah Construction Company is represented by Mohammad Idrees, Director. The government is represented by Michael P. Goodman, Engineer Chief Trial Attorney, and by Michael E. Taccino and Aimee L. Rider, Engineer Trial Attorneys, U.S. Army Engineer District, Middle East.