If a Contractor Mostly Provides What the Contract Sought But Not in the Manner Specified, Has the Contractor Breached?

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What if I promised to give you two pies, but instead of two pies I give you one big pie equal in weight to two pies. Have I failed to fulfill my promise? That was the issue in this case where the contractor had to provide security guards for a certain number of hours. The government claimed the contractor was required to provide a specific number of guards for eight-hour shifts. The contractor claimed it could meet the labor hour requirement by providing fewer guards working longer shifts. The board determined that it could not decide this issue on summary judgment. There was an issue of fact as to whether fewer guards working longer shifts were as effective as more guards working shorter shifts.

Appeals of Aegis Defense Services, LLC d/b/a GardaWorld Federal Service, ASBCA Nos. 62442 et al.

Background

Aegis Defense Services had an IDIQ contract to provide security services in Iraq and Afghanistan. The Army issued several task orders to Aegis under the contract. The task orders required Aegis to provide various categories of guards, in a specific number, and at a particular location. 

A dispute arose between the parties as to whether Aegis was satisfying the contract’s minimum staffing requirements. Aegis was providing the agency with all the labor hours required for each location but not with the number of guards specified by the contract. Thus, if a task required 5 positions to be staffed 24 hours a day with 3 eight hour shifts, this resulted in 120 labor hours — 15 guards (5 positions X 3 shifts) working 8 hour shifts. Aegis was providing the 120 hours but it was using 10 guards working 12 hour shifts.

The Army believed Aegis was not providing staffing as required by the task orders, so it refused to pay the full contract amounts. Aegis appealed to the ASBCA. The Army moved for summary judgment.

Legal Analysis

The board denied the Army’s summary judgment motion due to issues of disputed fact. For the government to win on  summary judgment, it would have to prove that Aegis not only breached the contract by not providing the required staffing, but also that Aegis’s substituted performance—that is, fewer guards working longer hours—was less valuable than the work required by the contract The government claimed that Aegis’s performance was less valuable before fewer guards working 12 hour shifts would not be as effective as more guards working 8 hour shifts. The board agreed that this was a reasonable assumption. But because this was the government’s motion for summary judgment, the board had to grant all inferences in favor of Aegis. Under that standard, the board could not say definitively that working 12 hour shifts provided a different level of security than 8 hour shifts.

Aegis is represented by Paul E. Pompeo and Thomas A. Petit of Arnold & Porter Kaye Scholer LLP. The government is represented by Scott N. Flesch, Captain Michael Brown, and Major Seth Ritzman of the Army.

ASBCA - Aegis Defense Services