When the U.S. withdrew from Afghanistan and the Taliban seized control, a contractor lost equipment and materials stored at a government facility. The contractor argued that the agency should compensate for these losses because it controlled the worksite and authorized the storage of items there. However, the CBCA ruled that absent an express contractual provision, the government had no duty to safeguard contractor property or indemnify against losses caused by third parties. The purchase order explicitly placed the risk of loss on the contractor and required it to maintain insurance. While the contractor couldn't recover for lost equipment, it did win partial compensation for unused materials under termination-for-convenience principles.
Top Level Construction Company v. Department of State, CBCA 8301
- Background - In May 2021, the State Department awarded the contractor two purchase orders for gate installation and concrete work at Camp Alvarado in Kabul, Afghanistan. When the Taliban entered Kabul on August 15, 2021, the U.S. evacuated the embassy on short notice. The contractor could not access the site. Upon return, all stored equipment and materials had disappeared. The contractor submitted claims seeking payment for incomplete work, lost equipment and materials totaling approximately $178,000, and bank guarantee costs. The contracting officer partially denied the claims. The contractor appealed to the CBCA.
- No Contractual Duty to Safeguard - The contractor argued the agency breached its duty to safeguard equipment and materials stored at Camp Alvarado. The Board rejected this claim. One purchase order licitly required the contractor to obtain insurance covering "damage to, or theft of, materials and equipment" and to "hold harmless and indemnify the Government" from losses during performance. The contract placed risk of loss squarely on the contractor. The other order contained no provisions addressing equipment or materials, but silence doesn't create government obligations. The Board found persuasive the ASBCA's reasoning in similar Afghanistan cases: absent specific contract language, the government has no duty to protect contractor property from third-party losses.
- Permission Doesn't Equal Responsibility - The contractor contended that by authorizing specific storage locations at Camp Alvarado, the agency assumed responsibility for protecting those items. The Board disagreed. The agency acknowledged that it allowed storage and specified locations. But the contractor provided no evidence that the agency required on-site storage or prohibited daily removal of equipment. The contractor chose to leave items for efficiency. More critically, the contractor showed no written agreement or express oral promise that the agency would safeguard the property or indemnify losses. Authorization to store at designated locations didn't modify existing contract terms or create new obligations.
- Termination Settlement Costs Allowed for Materials Only - The contractor argued it was entitled to termination-for-convenience costs. The agency effectively terminated both purchase orders on August 15, 2021, when it halted all work at the embassy. The Board treated the contractor's invoices as termination settlement proposals. However, the contractor couldn't recover equipment costs. Neither purchase order listed equipment as a deliverable or direct cost. The contractor admitted to using most of the equipment across multiple contracts and failed to prove that the items were purchased specifically for these orders. But the Board allowed recovery for documented material costs—items like rebar, plastic sheeting, wooden plates, and water pipe clearly purchased for the concrete work, yielding $15,896 in allowable costs.
- Bank Guarantee Letters Not Proven Submitted - The contractor claimed $17,986 for bank guarantee letters allegedly submitted to the agency but never returned. Without the originals, the contractor couldn't recover the guarantee amounts from its bank. The purchase order didn't require submitting original letters; only maintaining guarantees equal to 20% of the contract value was required. The agency denied receipt of the originals and found no documentation confirming receipt. The Board found the contractor failed to prove it actually submitted the original letters.
The contractor is represented by Khaybar Ziarmal, President of Top Level Construction Company, Kabul, Afghanistan, appearing pro se. The government is represented by Alexandra N. Wilson of the Office of the Legal Adviser, Buildings and Acquisitions, Department of State, Washington, DC.