                ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                     )
                                                 )
DynCorp International LLC                        )       ASBCA No. 61274
                                                 )
Under Contract No. FA8617-12-C-6208              )

APPEARANCES FOR THE APPELLANT:                       Gregory S. Jacobs, Esq.
                                                     Erin L. Felix, Esq.
                                                      Polsinelli PC
                                                      Washington, DC

APPEARANCES FOR THE GOVERNMENT:                      Jeffrey P. Hildebrant, Esq.
                                                      Air Force Deputy Chief Trial Attorney
                                                     Jason R. Smith, Esq.
                                                     Lt Col Byron G. Shibata, USAF
                                                      Trial Attorneys

                   OPINION BY ADMINISTRATIVE JUDGE SWEET

       This appeal requires us to decide who should bear the cost of a latent error in an
enormous third-party data-set provided by the government to prospective offerors to allow
them to develop their pricing-which the government aptly characterizes as "a needle in a
hay field" (tr. 1/23). The Board conducted a two-day hearing on entitlement. For the
reasons stated below, we hold that the government should bear that cost because there was a
mutual mistake that th~ data-set was accurate.

                                   FINDINGS OF FACT

      I. Background

       1. The T-6 Texan II is a training aircraft used at multiple military bases (R4, tab 203
at 1). The T-6 aircraft comes in ~o model configurations-the T-6A, and the T-6B
(tr. 1/40-41, 1/107).

       2. During the relevanttime, Naval Air Station Pensacola (Pensacola) only fielded
T-6A aircraft. Conversely; nearby Naval Air Station Whiting Field (Whiting Field) only·
fielded T-6B aircraft. (Tr. 1/43)
          11 Solicitation, Offer, and Award

        3. The government issued Request for Proposals FA8617-11-R-6208 for Contractor
Operated and Maintained Base Supply (COMBS) Services for T-6 aircraft at various bases,
including Pensacola and Whiting Field (COMBS II RFP) (R4, tab 202). The COMBS II
RFP was to ensure that parts were available on-site when needed to maintain the T-6
aircraft (tr. 1/40). The solicitation provided estimates of flight hours, which showed a
projected increase in flight hours at Whiting Field (R4, tab 176 at 35).

        4. The COMBS II RFP contained seven Contract Line Item (CLIN) series. Relevant
to this appeal is the 3:XXX CLIN series, which involved firm fixed pricing based upon a
fixed Cost Per Flight Hour (CPFH) rate at each base (R4, tab 202 at 55-81). Pursuant to that
pricing structure, the amount paid would be determined by multiplying the agreed-upon
fixed CPFH rate for the base by the variable number of hours flown at that base (tr. 1/41-42).

        5. As the government conceded, potential offerors needed historic parts usage data 1
froqi the COMBS I incumbent contract for the T-6 aircraft to calculate their CPFHs
(tr. 1/234, 2/8-9, 2/25-26; R4, tab 204 at 46). Therefore, the government provided potential
offerors-via a Bidder's Library-Contract Data Requirement List (CDRL) A002 Reports
(Usage Reports), which the incumbent subcontractor L3 Vertex (L3) had created to capture
historic usage date (tr. 2/25-27; supp. R4, tab 7). In total, the provided Usage Reports
contained hundreds of thousands of rows of data (R4, tabs 19-28, 30-32, 35, 41-44). The
Usage Reports did not contain a disclaimer as to their.accuracy (R4, tabs 19-28, 30-32, 35,
41-44). Nor is there an indication in the COMBS II RFP that potential offerors assumed the
risk of any errors in the usage data (id.; R4, tab 202).

       6. The First Quarter (Ql) 2010 Usage Report contained 18,930 rows of data,
including the following entries for the following parts (Disputed Parts): 2

          Part#       Base         Material Description         Aircraft    Issue
                                                                             Date
    100-602571-000    428    Multifunctional Display Unit       N166014    01/08/10
    4420.,000         428    Audio Management Unit ·            Ni'66010   01/27/10
    4420-000          428    Audio Management Unit              N166012    02/02/10
    100-602579-000    428    Video and Transfer Recorder        N166014    02/04/10
                             Unit
    100-602571-000 428       Multifunctional Display Unit       Nl66013 02/08/10
    066-01143-2101 428       Transponder, Mode-S (MST-          Nl66013 02/09/10
                             67A)

1 Parts  usage-or consumption-describes how frequently a part fails (tr. 2/26).
2
    We refer to other usage reports besides the Ql 2010 Usage Report as "Other Usage
        Reports."
                                              2
 100-602573-000        428   Integrated Avionics Computer     N166017 02/18/10
                   -         (CMA-5000)
 100-602571-000        428   Multifunctional Display Unit      N166013      02/23/10
 100-602571-000        428   Multifunctional Display Unit      N166011      02/24/10
 100-602571-000        428   Multifunctional Display Unit    . N16601J      02/24/10
 100-602571-000        428   Multifunctional Display Unit      N166015      02/26/10
 5520-004              428   Audio Selector_Panel, AFT         Nl66010      03/02/10
                             Cockpit
 100-602573-000        428   Integrated Avionics Computer     N166014 03/05/10
                             (CMA-5000)
 100-602573-000        428   Integrated Avionics Computer     N166017 03/05/10
                             (CMA-5000)
 100-602571-000        428   Multifunctional Display Unit     N166013 03/09/10
 100-602571-000        428   Multifunctional Display Unit     N166014 03/09/10
 100-602573-000        428   Integrated Avionics Computer     N166018 03/09/10
                             (CMA-5000)
 100-602571-000        428   Multifunctional Display Unit     N166018       03/12/10
 100-602571-000        428   Multifunctional Display Unit     N166022       03/19/10
 4420-000              428   Audio Management Unit            Nl66010       03/23/10
 100-602573-000        428   Integrated Avionics Computer     N166019       03/26/10
                             (CMA-5000)                                .•


 100-602573-000        428   Integrated Avionics Computer     N166020 03/26/10
                             (CMA-5000)
 100-602573-000        428   Integrated Avionics Computer     N166021       03/26/10
                             (CMA-5000)
 4420-000              428   Audio Management Unit            N166023       03/26/10
 100-602571-000        428   Multifunctional Display Unit     N166015       03/29/10

(R4, tab 42, rows 16,777, 16,994,.17,080, 17,193, 17,231, 17,271, 17,392, 17,445, 17,506,
17,513; 17,563, 17,652, 17,780, 17,781, 17,776, 17,779, 17,852, 17,901, 18,055. 17,898,
18,200, 18,241, 18,340, 18,242, 18,106) Under the Base column, 428 corresponded to
Pensacola, and 423 corresponded to Whiting Field (tr. 1/50, 1/53). Therefore, according to
the QI 2010 Usage Report, the Disputed Parts' base was Pensacola (id.).

       7. Karl Heidrich-a COMBS II program manager for the government-testified that
he thought that the Usage Reports were accurate (tr. 2/29). Likewise, William Harlin-the
Director of Supply Chain for the Aviation Business Unit for appellant DynCorp
International LLP (DynCorp), who developed the CPFHs-testified that he believed that
the Usage Reports were accurate. Given his responsibility for developing DynCorp's
CPFHs, Mr. Harlin had an adequate basis for testifying about DynCorp's belief regarding
the accuracy of the Usage Reports that he used to develop the CPFHs. Therefore, we find
that DynCorp also believed that the Usage Reports were accurate. (Tr. 1/162)

                                             3
        8. However, the Ql 2010 Usage Report erroneously indicated that the Disputed
Parts' base was Pensacola, when in fact the Disputed Parts' base was Whiting Field.
Bobby May, Jr.-an L3 logistics manager who was involved in creating subsequent Usage
Reports (tr. 1/234-35)-testified that the underlying usage data had been stored in an SAP
database, from which an L3 employee exported and formatted the usage data to create the
Usage Reports. Mr. May testified that, in the course of this litigation, he examined the
underlying SAP data for Ql 2010. That examination revealed that the Disputed Parts' base
listed in the Q 1 2010 Usage Report deviated from the Disputed Parts' base identified in the
SAP data. (Tr. 1/237-40) As a result, Mr. May gave the following answers to the following
questions at the hearing:

             Q.     Yea, what does [the conflict between the Ql 2010 Usage
                    Report and the SAP database] tell you about the location
                    information that was in the Bidder's Library?

             A.     For [Ql 2010] and [Pensacola], it appears to have been
                    flip flopped.

             Q.     What do you mean when you say, "flip flopped"?

             A.     When the data is exported from SAP, it has to be
                    formatted to get into the correct format for submittal.
                    And it appears for that site location, 423, 428, that the
                    numbers were switched.



             Q.     So what does that lead you to conclude regarding the
                    transaction, say, 423 in your system and, say, 428 in the
                    Bidder's Library?

             A.     It leads me to believe that the-when the information
                    was exported out of SAP index, that in the formatting of
                    the data for that quarter was done that the individual that
                    did that inadvertently switched those two site location
                    numbers.

             Q.     That would make the locations incorrect for those
                    transactions, correct?




                                              4
                A.     For those transactions, for that one quarter, for that site.

(Tr. 1/240-42) Mr. May testified that he verified that there had been no changes within the
SAP system (tr. 1/241). In light of his role at L3, his examination of the SAP data, the fact
that his testimony was against his company's interest, and our observations of Mr. May at
the hearing, we conclude that Mr._ May was credible. Thus, we find that the QI 2010 Usage
Report erroneously indicated that the Disputed Parts' base was Pensacola (Base 428), when
in fact the Disputed Parts' base was Whiting Field (Base 423).

       9. While Mr. May admitted that he was "speculating" that the reason for the errors
was that L3 miscoded Base 423 as Base 428, he did not testify that he was speculating
regarding the existence of those errors. Mr. May presented no testimony as to whether the
Usage Reports for other quarters besides Ql 2010 (Other Usage Reports) were accurate.
(Tr. 1/234-43, 1/253)

       10. Mr. Heidrich speculated that the QI 2010 Usage Report may have been accurate
because a T-6B visiting Pensacola for a photo-op or maintenance training could have
received parts from Whiting Field (tr. 2/30-31). However, Mr. Heidrich admitted that he
does not have any evidence that that actually happened (tr. 2/31). Therefore, we find that
Mr. May's well-founded testimony regarding the errors is more credible than Mr. Heidrich's
speculation.

       11. DynCorp did not notice the errors in the QI 2010 Usage Report because of the
inassive amount of data in the .Usage Reports (tr. 1/162-63). Mr. May testified that it was
unlikely that a contractor would.have noticed the errors, given the amount of data in the
Usage Reports (tr. 1/260-61).

        12. DynCorp relied upon the Ql 2010 Usage Reports to prepare its CPFH proposals
(tr. 1/161). In particular, DynCorp used the following formula to calculate a CPFH for each
base:

           (Parts Usage From Usage Reports)x (Cost for Parts Used From Suppliers)
                         (Number of Flight Hours for Historic Quarter)

(Tr. 1/154-56) Jeffrey Roth-DynCorp's senior director of Aircraft Engineering and
Logistic Services,_ who oversaw the contract at issue here-testified that the Usage Report's
errors caused DynCorp to calculate a CPFH that was lower than it would have been absent
the errors by decreasing the Parts Usage From Usage Report at Whiting Field in the
numerator of the above equation (tr. 1/55). 3 While there were relatively few Disputed Parts,

3
    While Mr. Roth conceded that the errors also resulted in a CPFH that was too high for
        Pensacola, the effects were not off-setting because Whiting Field had significantly
        more flight hours than Pensacola (tr. 1/55-56).
                                                 5
the errors had a significant impact upon the Whiting Field historic usage data-and
therefore upon the Whiting Field CPFH-because the Disputed Parts were high-cost parts
(tr. 1/55-56).

       13. In addition to the Usage Reports, the government provided potential offerors the
following information pre-award:

          •   The flight hours for each base (R4, tab 3).

          •   The flight hours for each aircraft tail number (R4, tab 36).

          •   A T-6 aircraft Beddown Schedule (Beddown Schedule) showing the current and
              projected quantities ofT-6A aircraft and T-6B aircraft at each base. (R4, tab 33)

          •   A map showing that the number of T-6B aircraft at Whiting Field would
              increase from 37 to 149 (R4, tab 205 at 3).

          •   A list of parts unique to the T-6B aircraft (Parts List) (R4, tab 64).

        14. The flight hours data showed that the T-6B aircraft flight hours increased after
their introduction in 2009 or 2010 (R4, tab 36; tr. 1/107-08). The Beddown Schedule
showed only T-6A aircraft would be stationed in Pensacola, and only T-6B aircraft would
be stationed at Whiting Field (id.). A comparison of that list to the Ql 2010 Usage Report
shows that all of the Disputed Parts were for the T-6B aircraft (compare id. to R4, tab 42,
rows 16,777, 16,994, 17,080, 17,193, 17,231, 17,271, 17,392, 17,445, 17,506, 17,513, -
17,563, 17,652, 17,780, 17,781, 17,776, 17,779, 17,852, 17,901, 18,055. 17,898, 18,200,
18,241, 18,340, 18,242, 18,106). 4

       15. Prior to the submission of proposals, the government answered several questions
from potential offerors. Specifically, the government gave the following answer to the
following question:

              - Q3 8: How granular will the usage data be? For example, will
                      it be per base? By fleet? Since all metrics are at the base
                      level, could data be given at the base level?

                A38: Data will be as detailed as possible. Currently, the
                     [goverinnent] intends to provide demand data by base for

4   In particular,'the government raises arguments about the 133-430137-5, 50-910033-3, and
          NAS75-5-012 parts (gov't post-hearing br. at 9-10, 24). However, those parts were
          in the Other Usage Reports (finding 6). As discussed below, we reject any claim
          regarding those Other Usage Reports. Therefore, we need not address those parts.
                                                  6
                     the last two years. Note that the fleet is growing and
                     therefore that will have to be accounted for in your
                     calculations.

(R4, tab 204 at 46) The government also gave the following answer to the following
question:

              Q60: Who is responsible for complexities in forecasting trends
                   (parts usage, cost)?

              A60: Government has considered risks for future rising
                     demands. Ultimately, the COMBS contractor is
                     responsible. The Government is providing what it
                     believes is adequate data in order for offerors to
                  . ·effectively forecast for requirements.

(Id. at 56)

        16. Mr. Harlin testified that the projected increase.in the number of flight hours
"really doesn't have a bearing on cost per flight hour by location" (tr. 1/277). The
government presented no testimony to contradict Mr. Harlin's testimony.

       17. On March 4, 2011, DynCorp submitted a proposal (R4, tab 192). That proposal
stated-·under)"pricing assumptions"-that "[t]he Cost per Flight Hour is based on
consumption data provided in the Bidder's Library. Pricing of CLINs 3X00-3X10 assumes
the data provided is both complete and correct." (R4, tab 190 at 18)

    18. On June 1, 2012, the government awarded Contract No. FA8617-12-C-6208
(COMBS II Contract) to DynCorp based upon the COMBS II RFP (R4, tab 75).

       III. Procedural History

       19. In 2014, DynCorp noticed that it was losing money on the COMBS II Contract,
particularly at Whiting Field. After investigation, DynCorp discovered the Ql 2010 Usage
Report errors. (Tr. 1/50-54)

       20. On December 10, 2014, DynCorp submitted an initial certified claim (R4,
tab 65a). On May 12, 2015, it submitted a final certified claim, which it revised on·
October 12, 2015 (R4, tabs 66-67).

       21. Based upon a deemed denial of that claim, DynCorp filed this appeal.



                                               7
                                         DECISION

       . DynCorp is entitled to reformation of the COMBS II Contract Whiting Field and
Pensacola CPFHs because it has shown, by clear and convincing evidence, that there was a
mutual mistake regarding the accuracy of the QI 2010 Usage Report DynCorp used to
create those CPFHs. A party is entitled to reformation of a contract if it can show, by clear
and convincing evidence, that: (I) the parties to the contract were mistaken in their belief
regarding a fact; (2) that mistaken belief constitu~ed a basic assumption underlying the
contract; (3) the mistake had a material effect upon the bargain; and (4) the contract did not
put the risk of the mistake upon the party seeking reformation. Atlas Corp. v. United States,
895 F.2d 745, 750 (Fed. Cir. 1990); SRM Mfg. Co., ASBCA No. 44750 et al., 96-2 BCA
,r 28,487 at 142,264. As discussed below, DynCorp has satisfied its burden of showing
each of those elements. 5

       1 The Parties Were Mistaken in Their Belief that the QI 2010 Usage Report Was
       Accurate               ·

        DynCorp has shown, by clear and convincing evidence, that the parties were
mistaken in their belief that the QI 2010 Usage Report was accurate. A mistake is a belief
that is not in accord with the facts. RESTATEMENT (SECOND) OF CONTRACTS§ 151 (1981).
Here, the parties believed that the Ql 2010 Usage Report was accurate, as demonstrated by
the facts that Mr. Heidrich and Mr. Harlin testified that they believed that the Usage Reports
were accurate, DynCorp's proposal stated that it assumed that the Usage Reports were
accurate, and DynCorp relied upon the Usage Reports to calculate its CPFHs (findings 7,
12, 17). That belief was not in accord with the facts. Mr. May persuasively testified that
the QI 2010 UsageReport inaccurately indicated that the Disputed Parts' base was
Pensacola, when the underlying SAP data showed that the base actually was Whiting Field
(finding 8). Mr. May's testimony is corroborated by the fact that the QI 2010 Usage Report
and the Parts List showed that the Disputed Parts were for T-6B aircraft at Pensacola, while
the Beddown Schedule showed that T-6B aircraft were not stationed at Pensacola
(findings 6, 13). 6

      The government first argues that Mr. Harlin's testimony is not clear and convincing
evidence that DynCorp believed that the Usage Reports were accurate because Mr. Harlin

5
  Because we find that there was a mutual mistake, we do not address DynCorp' s alternative
      defective specification claim.
6 While DynCorp asserts in its post-headng briefs proposed findings of fact that there also

      were errors in the Other Usage Reports (app. post-hearing br. at 9-10), it only argues
      in its discussion section that the QI ,2010 Usage Report was inaccurate (id. at 19-22).
      To the extent DynCorp is asserting that there were errors in the Other Usage Reports,
      it has failed t~ provide clear and convincing evidence of such errors because
      Mr. May only testified that the QI 2010 Usage Report was inaccurate (finding 9).
                                              8
    did not testify as a corporate representative (gov't post-hearing br. at 31-32). However, the
    government does not-and cannot-·cite any authority requiring corporate representative
    testimony in order to establish a company's beliefs (id.). On the contrary, given his rokin
    developing DynCorp's CPFHs, Mr. Harlin had an adequate basis for testifying about
    DynCorp's beliefs regarding the accuracy of the Usage Reports that he used to develop the
    CPFHs for DynCorp (finding 7).

             Second, the government argues that DynCorp's statement in its proposal that it
    assumed that the Usage Reports were accurate is not clear and convincing evidence that
    DynCorp believed that the Usage Reports were accurate because we purportedly found that
    that statement lacked credibility in DynCorp International, LLC, ASBCA No. 59244, 17-1
    BCA 'if 36,653 at 178,497-98 (DynCorp I) (gov't post-hearing br. at 39). We already have
    rejected that argument in denying the government's collateral estoppel summary judgment
    motion in this appeal. DynCorp International, LLC, ASBCA No. 61274, 18-1 BCA
    'if 37,011 at 180,247 (DynCorp 11). As we held in DynCorp 11, DynCorp I merely found that
    DynCorp knew that the usage data was incomplete, which is distinct from the issue in this
    appeal of whether the usage data was accurate. (Id.) DynCorp I made no finding regarding
    the accuracy of the usage data. (Id.) Therefore, the government's suggestion that
    DynCorp I precludes us from finding that DynCorp believed that the consumption data was
    accurate is meritless.

              Third, the government argues that Mr. May's testimony that the QI 2010 Usage
    · Report was inaccurate is not reliable because Mr. May did not create the QI 2010 Usage
      Report (gov't post-hearing br. at 29-30). We disagree. The reason Mr. May's testimony is
      reliable is not because he based it upon his experience creating the QI 2010 Usage Report.
      Rather, his testimony is reliable because Mr. May-the L3 logistics manager currently
      responsible for creating Usage Reports from the SAP database-based it upon his
      comparison of the underlying SAP data with the QI 2010 Usage Report. That comparison
      showed that the QI 2010 Usage Report deviated from the underlying SAP data. (Finding 8)

J          Fourth, the government argues that f\Ar. May's testimony is not reliable because he
    based his testimony upon the same SAP database used to generate the erroneous QI 20 I 0
    Usage Report (gov't post-hearing br. at 30). That argument improperly conflates the SAP
    database housing the underlying data, and the Usage Reports generated based upon that data
    (finding 8). There is no evidence of an error in the underlying SAP data (finding 8).
    Rather, the error was in the Ql 2010 Usage Report that L3 generated based upon that data
    because the QI 2010 Usage Report deviated from the underlying SAP data (finding 8).

           Fifth, the government argues that Mr. May's testimony that the QI 2010 Usage
             ~

    Report was inaccurate is not reliable because he admitted that he was only speculating
    regarding the reason for the QI 2010 Usage Report errors (gov't post-hearing br. at 29-30).
    That argument improperly conflates the existence of errors_ (i.e., thatthe Ql 2010 Usage
    Report indicated that the Disputed Parts' base was Base 428, instead of Base 423) with the

                                                  9
reason for those errors (i.e., because L3 miscoded Base 423 as Base 428). While Mr. May
testified that he was speculating regarding the reason for the QI 2010 Usage Report errors,
he did not testify that he was speculating regarding the existence of those errors (finding 9).
Regardless of the reason for the errors, Mr. May's well-founded testimony that there were
errors in the QI 20 IO Usage Report establishes that the parties' mistakenly believed that the
QI 2010 Usage Report was accurate.

        Sixth, the government argues that the fact that the Ql 2010 Usage Report and the
Parts List showed that the Disputed Parts were for T-6B aircraft based at Pensacola, while
the Beddown Schedule showed that T-6B aircraft were not stationed at Pensacola, does not
corroborate Mr. May's testimony because the QI 2010 Usage Report does not define the
term "base" (gov't post-hearing br. at 26). That argument is also meritless. Language must
be given the meaning that would be derived from the language by a reasonably intelligent
person acquainted with the contemporaneous circumstances. Hol-Gar Mfg. Corp. v. United
States, 351 F.2d 972, 975 (Ct. Cl. 1965). Here, a reasonably intelligent person would derive
from the contemporaneous circumstance of the government posting the Usage Report an~
the Beddown Schedule together in the Bidder's Library that the term "base" in the Usage
Reports had the same meaning as the beddown location in the Beddown Schedule
(findings 5, 13). 7 However, the Beddown Schedule indicated that T-6B aircraft were not
located at Pensacola, while the Ql 2010 Usage Report and the Parts List showed that T-6B
parts were used on aircraft located at Pensacola (findings 5, 13). It is that inconsistency that
corroborates Mr. May's testimony that the QI 2010 Usage Report was inaccurate.

       In sum, none of the government's arguments have merit, and DynCorp has shown by
clear and convincing evidence that the parties mistakenly believed that the QI 20 IO Usage
Report was accurate.



7
    Because we find that the term "base" was not ambiguous, we need not-and do not-
        address the government's patent ambiguity argument (gov't post-hearing br. at 26).
        To the extent that the government is arguing that the inconsistency between the QI
        2010 Usage Report and the Beddown Schedule was patent, that argument would be
        meritless. A patent ambiguity is one that is so glaring that it is unreasonable for a
        contractor not to discover and inquire about it. A contractor need not inquire about
        more subtle ambiguities. Triax Pacific, Inc. v. West, 130 F.3d 1469, 1474-75
        (Fed. Cir. 1997). Here, given the massive amounts of data in the Usage Reports, we
        conclude that it was reasonable for Dy~Corp to overlook the inconsistency between a
        few rows of data in one Usage Report and the Beddown Schedule (findings 5-6, 11).
        Because that was a subtle inconsistency, it was latent and did not trigger a duty to
        inquire. In any event, a contractor's negligence in failing to ascertain the correctness
        of information does not defeat a mutual mistake claim. Southwest Welding & Mfg.
        Co. v. United States, 373 F.2d 982, 991 (Ct. Cl. 1967).
                                                10
       II. The Mistaken Belief that the QI 2010 Usage Report Was Accurate Constituted a
       Basic Assumption Underlying the COMBS II Contract

         DynCorp has shown, by clear and convincing evidence, that the mistaken belief that
the Q 1 2010 Usage Report was accurate constituted a basic assumption underlying the
COMBS II Contract. A belief constitutes a basic assumption underlying a contract if it is a
significant part of the bargaining process. Comshare, Inc., ASBCA No. 49284, 98-1 BCA
tjf 29,588 at 146,674. Here, the parties' belief that the Ql 2010 Usage Report was accurate
was a significant part of the bargaining process because of the significant role the usage
data in the Ql 2010 Usage Report played in calculating the CPFH pricing. The usage data
was one of the three factors that DynCorp used to calculate its CPFH (finding 12). As a
result, DynCorp expressly stated in its proposal that its pricing for the 3XXX CLINs "is
based on [usage] data provided in the Bidder's Library/' and that DynCorp "assumes the
data provided is ... correct" (finding·l 7). Likewise, the government conceded that potential
offerors needed usage data to calculate CPFHs (finding 5). Because of the significant role
the usage data played in the CPFH calculations, the mistaken belief that that data was
accurate constituted a basic assumption underlying the COMBS II Contract.

        The government argues that the projected increase in flight hours at Whiting Field
also should have played a significant role in calculating the Whiting Field CPFH (gov't
post-hearing br. at 33, 37-38). However, Mr. Harlin testified that an increase in the number
of flight hours does.not "have a bearing on the CPFH by location" (finding 16). That
testimony is persuasive because the CPFH is a fixed rate per flight hour, which is
multiplied by the variable number of flight hours (finding 4). Thus, the number of flight
hours component of the pricing formula-and not the CPFH component-accounts for the
projected increase in flight hours. Moreover, the government presented no testimony to
contradict Mr. Harlin's testimony (finding 16). Instead, the government points to its
responses to. questions, in which it indicated that potential offerors were responsible for the
complexities of forecasting parts usage costs, and that potential offerors' calculations had to
account for fleet growth (gov't post-hearing br. at 36-37 (quoting finding 15)). However,
those general responses do not assert that an increase in the number of flight hours impacts
the CPFH, let alone contain an explanation of how increased flight hours purportedly
impact the CPFH{finding 15). Thus, those responses do not persuasively contradict
Mr. Harlin's testimony that the projected increase in flight hours did not impact the CPFH.

        In any event, even if the projected increase in flight hours should have played a
significant role in the Whiting Field CPFH calculation that would not negate the fact that
the usage data also played a significant role in the CPFH calculation. That is because
multiple factors played a significant role in the CPFH calculation (finding 12). Since the
usage data in the QI 2010 Usage Report was one of those factors that played a significant
role in the CPFH calculation, the mistaken belief that the Ql 2010 Usage Report was
accurate constituted a basic assumption underlying the COMBS II Contract.


                                              11
       111 The Mistaken Belief that the QI 2010 Usage Report Was Accurate Had a
       Material Effect upon the Bargain

        DynCorp has shown, by clear and convincing evidence, that the mistaken belief that
the QI 2010 Usage Report was accurate had a material effect upon the bargain. A mutual
mistake has a material effect if the resulting imbalance in the agreed exchange is so severe
that the contractor cannot fairly be required to carry it out. MPT Enter., ASBCA
Nos. 25339, 25834, 83-2 BCA ,r 16,761 at 83,336-37. That is, the mutual mistake must
adversely affect the contractor's reasonable expectations. (Id.)

        Here, the mistaken belief that the QI 2010 Usage Report was accurate adversely
affected DynCorp's reasonable expectation regarding pricing. While the number of errors
was small relative to the overall size of the data-set, those errors had a significant impact
upon the Whiting Field historic usage data because the errors concerned high-cost parts
(finding 12). Moreover, the resulting errors in the historic usage data had a significant
impact upon the Whiting Field CPFH because historic usage data was a substantial factpr in
calculating CPFH (finding 12). Because the mistaken belief adversely affected DynCorp's
reasonable expectations, the resulting price imbalance was so severe that DynCorp cannot
fairly be required to perform at that price. Thus, the mistaken belief that the Q 1 2010 Usage
Report was accurate had a material effect upon the bargain.

       IV. DynCorp Did not Assume the Risk that the QI 2010 Usage Report Was Accurate

        DynCorp has shown, by clear and convincing evidence, that it did not assume the
risk that the QI 2010 Usage Report was accurate. While the fact that a contract is a
fixed-price contract may suggest that the contractor assumed the risk of an error in that
pricing, that fact does not necessarily prove that conclusion. Nat'l Presto Indus., Inc. v.
United States, 338 F.2d 99, 109 (Ct. Cl. 1964). Rather, "[w]e are ... admonished, in the
region of mutual mistake, to seekjust solutions." (Id. at 111 (citation omitted))

        Here, while the COMBS II Contract was a fixed-price contract, the government
provided DynCorp with the erroneous QI 2010 Usage Report to allow DynCorp to develop
its pricing, and that report contained no disclaimer as to its accuracy (finding 5). Indeed,
there was no indication in the contract documents that DynCorp assumed the risk of any
errors in the Usage Reports (finding 5). Faced with the situation where neither party
knew-or should have known-of a latent error in data provided by the government, and
the contract did riot explicitly assign the risk of error to either party, the just solution is to
allocate that risk to the relatively more culpable party best placed to mitigate the risk. Here,
that would be the government because it provided the Usage Reports to DynCorp




                                                12
    (finding 5). Therefore, we find that DynCorp did not assume the risk that the Ql 2010
    Usage Report was accurate. 8

                                            CONCLUSION

           On entitlement, the appeal is sustained. Accordingly, the appeal is returned to the
    parties for a determination of quantum consistent with this decision.

             Dated: August 1, 2019



                                                         J~R.SWEET
                                                         Administrative Judge
                                                        ·Armed Services Board
                                                         of Contract Appeals




c::::---':~~
        RICHARD SHACKLEFORD
                                                        !co~-.=-----

                                                        OWEN C. WILSON
        Administrative Judge                            Administrative Judge
        Acting Chairman                                 Vice Chairman
        Armed Services Board                            Armed Services Board
        of Contract Appeals                             of Contract Appeals




    8
        The government points to other data in the Bidder's Library, which was accurate (gov't
             post-hearing hr. at 40-41 ). However, whether other data was accurate has no bearing
             upon the issue of whether the QI 2010 Usage Report was accurate, let alone whether
             DynCorp assumed the risk of any inaccuracy.
                                                   13
       I certify that the foregoing is a true copy of the Opinion and Decision of the Armed
Services Board of Contract Appeals in ASBCA No. 61274, Appeal of DynCorp
International LLC, rendered in conformance with the Board's Charter.

      Dated:



                                                  PAULLA K. GATES-LEWIS
                                                  Recorder, Armed Services
                                                  Board of C~ntract Appeals




                                             14
