       NOTE: This disposition is nonprecedential.


  United States Court of Appeals
      for the Federal Circuit
                ______________________

              TKC AEROSPACE, INC.,
                    Appellant,

                           v.

 JANET A. NAPOLITANO, Secretary of Homeland
                  Security,
                   Appellee.
            ______________________

                      2012-1423
                ______________________

   Appeal from the Civilian Board of Contract Appeals in
  No. 2119, Administrative Judge R. Anthony McCann.
                ______________________

               Decided: October 4, 2013
               ______________________

    DOUGLAS C. PROXMIRE, Patton Boggs, LLP, of Wash-
ington, DC, argued for appellant. With him on the brief
was ELIZABETH M. GILL.

     JEFFREY A. REGNER, Trial Attorney, Commercial
Litigation Branch, Civil Division, United States Depart-
ment of Justice, of Washington, DC, argued for appellee.
With him on the brief were STUART F. DELERY, Acting
Assistant Attorney General, JEANNE E. DAVIDSON, Direc-
tor, and HAROLD D. LESTER, JR., Assistant Director.
2                                TKC AEROSPACE, INC.   v. DHS
                  ______________________

    Before O'MALLEY, BRYSON, and REYNA, Circuit Judges.
    Opinion for the court filed by Circuit Judge BRYSON.
Dissenting opinion filed by Circuit Judge REYNA.
BRYSON, Circuit Judge.
                             I
    In 2005, the United States Coast Guard issued a solic-
itation seeking to lease an aircraft for use by the Coast
Guard Commandant and the Secretary of Homeland
Security. The lease term was one year, with five one-year
option periods thereafter. TKC Aerospace, Inc. (“TKCA”),
proposed a Bombardier Challenger 604 aircraft for the job
and won the award.
                             A
    Three provisions of the contract are at issue in this
case. The first deals with the responsibility for maintain-
ing the aircraft. The solicitation called for the submission
of two proposed maintenance plans: a “full contract
maintenance plan” and an “alternative support plan” that
would provide for the use of personnel at the Coast Guard
Air Station in Washington, D.C., to perform “contractor-
specified tasks for which the contractor has provided
training, manuals and special tools as applicable to per-
form.” The solicitation noted that “Coast Guard Air
Station Washington aviation maintenance personnel
routinely perform various maintenance tasks including
corrosion control.” The solicitation added that “scheduled
depot maintenance” would be required in addition to day-
to-day maintenance of the aircraft.
      TKCA’s proposal explained that “all major and
most minor scheduled [maintenance] will be conducted at
a Bombardier factory,” and it set out two options for day-
to-day maintenance. Under the first option, the “Full
TKC AEROSPACE, INC.   v. DHS                              3
Contract Maintenance Plan,” day-to-day maintenance
would be performed by three TKCA maintenance person-
nel assigned to the Coast Guard Air Station in Washing-
ton, while the Coast Guard would still perform non-
maintenance functions such as fueling and servicing the
aircraft. Under the second option, the “USCG Mainte-
nance Capability” plan, the Coast Guard would perform
the day-to-day maintenance functions, and TKCA would
supply one on-site person at the Coast Guard Air Station
in Washington “to monitor the USCG maintenance of the
aircraft, coordinate parts deliveries, scheduled mainte-
nance planning and coordination, etc.” The price for the
full maintenance plan was $69,501.14 per month; the
price of the plan with “Air Station Washington provided
maintenance” was $55,126.14 per month.
    The government opted for the “USCG Maintenance
Capability” option, under which it would provide so-called
unit-level maintenance and Bombardier, through a sub-
contract with TKCA, would provide depot-level mainte-
nance. Steve Badolato was the TKCA employee charged
with monitoring the Coast Guard’s maintenance on site.
     The second provision at issue relates to the aircraft’s
availability. It assigns TKC responsibility for meeting
“performance metrics,” including an “Operational Availa-
bility (Ao)” of 95%. The contract explains that the Ao
metric is “designed to maximize availability to Coast
Guard Air Station Washington, while meeting the manu-
facturer’s FAA-approved maintenance requirements of
the aircraft.” Section 5.17.5 of the contract is entitled
“Computing Availability.” It states:
   Semi Annual Ao = Uptime/(Uptime +Downtime)
   ...
   Uptime represents the amount of time the system
   has been fully operational based on 8760 hours
   per year (365 days * 24 hours/day).
4                                 TKC AEROSPACE, INC.   v. DHS
    Downtime represents the sum of [Not Mission Ca-
    pable Time] and [Partially Mission Capable Time]
    in hours or fraction thereof. The Coast Guard and
    the Contractor have mutually agreed that down-
    time will be measured from the time the Contrac-
    tor is notified by the Coast Guard Air Station
    Washington Maintenance personnel . . . .
Specified price reductions are laid out in section 5.17.6.1
of the contract, in the event that “the required availability
rate is not met over the measured semi-annual period.”

    TKCA’s proposal represented that the Challenger
604’s low maintenance requirements would “greatly
reduce[]” the difficulty of meeting the 95% availability
requirement. It ran through estimated calculations of
scheduled and unscheduled maintenance to project a “Not
Mission Capable” rate of 3.735%. That left 1.265% for
partially mission capable failures, which, TKC said,
“should be sufficient allowance.” Thus, TKC’s projections
anticipated that all maintenance would count against the
95% Ao requirement and, in its view, “demonstrate[d] the
ability of the TKC . . . Team to meet the minimum Avail-
ability Rate of 95%.” The contract also specified that “any
downtime which is caused by the Coast Guard will not be
included in computing Availability.”

    The final disputed provision is the standard risk-of-
loss provision taken from the Department of Homeland
Security’s supplement to the Federal Acquisition Regula-
tion, 48 C.F.R. § 3052.228-91. It provides:

    (a) The Government assumes all risk of loss of or
    damage (except normal wear and tear) to the
    leased aircraft during the terms of this lease while
    the aircraft is in the possession of the Govern-
    ment.
TKC AEROSPACE, INC.   v. DHS                              5
   (b) In the event of damage to the aircraft, the
   Government, at its option, shall make the neces-
   sary repairs with its own facilities or by contract,
   or pay the Contractor the reasonable cost of repair
   of the aircraft.
                               B

     While conducting the scheduled depot maintenance in
December 2009, Bombardier discovered extensive corro-
sion damage beneath the carpet and around the seats
inside the aircraft. During the 2008 depot maintenance,
Bombardier had discovered and repaired a small amount
of corrosion damage in the seat tracks. The damage
discovered in 2009 was more extensive. Mr. Badolato’s
initial reaction was that Bombardier should have discov-
ered the corrosion during the 2008 depot inspection, “as
[the corrosion] didn’t manifest itself over a one year
period.” Mr. Badolato stated that in his view Bombardier
“should cover the 250 man hours of access required as
well as compensation for the progression of corrosion over
the year period.” TKCA had Bombardier make the neces-
sary repairs and did not indicate at that time that it
intended to charge the Coast Guard for the repairs. The
plane was returned for service on January 20, 2010.
    In April 2010, TKCA received a letter from the Coast
Guard stating that the aircraft was unavailable from
December 19, 2009, through January 18, 2010, and that
the 5% unavailability allowance in the contract was
exceeded. The Coast Guard advised that it would with-
hold $631,414 in payments to TKCA, an amount that was
later reduced to $493,988.60.
    TKCA responded that the withholding violated the
terms of the contract. It contended that the corrosion
damage was the Coast Guard’s fault because it fell within
the Coast Guard’s day-to-day maintenance obligations.
TKCA therefore argued that it was entitled to credit for
the $493,988.60 that was assessed for downtime and
6                                TKC AEROSPACE, INC.   v. DHS
should be paid an additional $135,547.58 for the cost to
repair the corrosion damage. The Coast Guard refused
the request.
   In June 2010, TKCA submitted a certified claim in the
amount of $629,536.18. When the contracting officer
denied the claim, TKCA appealed to the Civilian Board of
Contract Appeals.
     After an evidentiary hearing, the Board denied
TKCA’s appeal. The Board noted that at the time the
aircraft was returned to service, “there was no indication
from TKCA that the corrosion repair was anything other
than depot level maintenance, which was the responsibil-
ity of TKCA.” With respect to responsibility for the corro-
sion, the Board found that the evidence was “inconclusive”
and that “the cause of the corrosion is undetermined.”
However, the Board found that the Coast Guard had not
“failed to follow the maintenance procedures required by
the contract, [and] that [no] lack of maintenance on the
part of USCG contributed to the corrosion problem.” In
the absence of a known cause of the corrosion, the Board
concluded that the responsibility for repairing the damage
fell on TKCA “[a]s part of Bombardier’s depot mainte-
nance program.” The Board found that “TKC was respon-
sible for all maintenance of the aircraft” under the
contract, even if Coast Guard personnel were performing
some of it. In support of that conclusion, the Board noted
that TKCA had assumed responsibility for the 2009
corrosion repair until after the Coast Guard assessed it
for the aircraft’s downtime during the repair period.
    The Board interpreted the risk-of-loss clause in the
contract to apply only to “accidental damage to the air-
craft while in the possession of the USCG [and to] ha[ve]
nothing to do with corrosion or contract maintenance.”
The Board found that TKCA had failed to demonstrate
that the damage was not caused by normal wear and tear;
to the contrary, the Board noted, the wet carpet condi-
TKC AEROSPACE, INC.   v. DHS                                7
tions that TKCA contended were responsible for the
corrosion constituted the type of wear and tear that
rendered the risk-of-loss clause inapplicable.
    Finally, the Board rejected TKCA’s interpretation of
the “operational availability” provision as requiring the
Coast Guard to give notice to TKCA before assessing
downtime. The notice provision, the Board held, “refers
only to situations where the aircraft is ‘down’ while it is at
the Coast Guard Air Station Washington, or possibly, in
locations where the contractor would not know that the
aircraft is down and the Coast Guard Air Station Wash-
ington would.” The provision did not apply when mainte-
nance was being performed and TKCA knew the plane
was down. The Board found that TKCA’s actions in
December 2009 demonstrated that TKCA knew the plane
was unavailable, that “downtime was an issue,” and that
“no notice communication from the Coast Guard Air
Station Washington was necessary” to start the downtime
clock running.
    TKCA appealed from the Board’s decision denying the
claim in its entirety.
                               II

    1. Corrosion Control.
    TKCA first argues that the Coast Guard was respon-
sible for the corrosion that was discovered during the
2009 depot maintenance and therefore was liable for the
cost to repair that damage.
     The contract provided that TKCA (or its agent, Bom-
bardier) would be responsible for maintenance of the
aircraft in two respects—through “depot maintenance,”
i.e., regular maintenance conducted at a Bombardier
facility; and through day-to-day maintenance at the Coast
Guard Air Station in Washington, the aircraft’s home
base. TKCA assigned an on-site project manager to the
Washington base who was responsible for “[c]oordinating
8                                  TKC AEROSPACE, INC.   v. DHS
. . . all the required maintenance, special equipment, and
personnel requirements for [the aircraft’s] operating
locations” and “[d]irecting the maintenance of aircraft in
coordination with the appropriate Service Center(s)
scheduling managers.” The contract stated that TKCA
would train and instruct Coast Guard employees to per-
form “routine and special aircraft inspections and related
aviation and administrative duties.” Those duties includ-
ed “corrosion control, preflight, thru flight, postflight, and
other routine inspections.” Significantly, TKCA agreed
that its on-site TKCA project manager would “monitor the
[Coast Guard] maintenance of the aircraft” and be re-
sponsible for “scheduled maintenance planning and
coordination,” while “[a]ll major and most minor sched-
uled maintenance would still be performed by the contrac-
tor Bombardier factory” or other TKCA-designated
facilities by TKCA-designated agents.
    As part of regular maintenance program, Bombardier
performed “structural maintenance” of the aircraft, which
included removing the carpets, seats, and other interior
finishes in the aircraft to look for corrosion damage and
repair it if found. It was during such a period of depot
maintenance, in December 2009, that Bombardier discov-
ered the corrosion and undertook the repair that became
the subject of this lawsuit.
    The Board found that there was no known cause for
the corrosion and that under those circumstances, the
contract placed the responsibility for repairing the corro-
sion on TKCA, which had the contractual obligation to
look for corrosion during depot maintenance and to repair
it when found. The Board concluded that the contract did
not relieve TKCA of its responsibility to ensure that the
aircraft was being properly maintained; it was just that
Coast Guard personnel were performing some of the
maintenance. The Board explained: “There is no merit to
the argument that TKCA was not responsible to ensure
that the aircraft was being properly maintained because
TKC AEROSPACE, INC.   v. DHS                             9
the [Coast Guard] had agreed that its personnel would
actually perform ‘routine’ maintenance.” TKC Aerospace,
Inc. v. Dep’t of Homeland Sec., CBCA No. 2119, 12-1 BCA
¶ 34,937, at 171,770. Nor was there any evidence, accord-
ing to the Board, that the Coast Guard failed to perform
any of the routine maintenance tasks properly: “To con-
clude that, after years of maintaining the contract proper-
ly as directed by TKCA, the [Coast Guard] suddenly
stopped doing so and caused the corrosion problem is
unsupported by the evidence.” Id.
    The Board’s finding that TKCA was responsible for
directing routine maintenance at the Washington base
and conducting major maintenance and repair at the
Bombardier facility was soundly based on the terms of the
contract, TKCA’s maintenance plan, and the testimony of
witnesses at the hearing before the Board. The Board
found that the evidence did not establish that the Coast
Guard failed to follow the maintenance procedures re-
quired by the contract or that any lack of maintenance on
the part of the Coast Guard contributed to the corrosion
problem. Moreover, the Board found that TKCA’s project
manager, when apprised of the discovery of the corrosion
damage, admitted that Bombardier had failed to discover
the corrosion damage during the 2008 depot maintenance
of the aircraft. Based on those findings, which are sup-
ported by substantial evidence, the Board reasonably
concluded that the Coast Guard was not ultimately re-
sponsible for failing to discover the corrosion that was
found when the carpet and the seats were removed, and
that the responsibility for discovering and repairing that
condition rested with TKCA. The Board’s decision on the
issue of the responsibility for corrosion control must
therefore be upheld.
   2. Notification of Aircraft Unavailability.
   TKCA argues that the contract required the Coast
Guard to notify TKCA that the aircraft was unavailable
10                                 TKC AEROSPACE, INC.   v. DHS
even when the plane was being serviced in the Bom-
bardier depot designated by TKCA. The Board disagreed
with that interpretation of the contract, and so do we.
    The contract provides that the “downtime” for which
TKCA is responsible “will be measured from the time the
Contractor is notified by the Coast Guard Air Station
Washington Maintenance personnel until” the aircraft is
returned to ready-to-fly status. The Board sensibly
interpreted that provision to require the Coast Guard to
notify TKCA when the aircraft was unavailable in Wash-
ington or in some other location where TKCA would not
necessarily be aware of its unavailability. It would make
no sense to require the Coast Guard to notify TKCA that
the aircraft was unavailable when the aircraft was in the
possession of TKCA undergoing repairs or maintenance at
a TKCA-designated facility. In any event, the Board
pointed to substantial evidence that the Coast Guard did
provide notification of the aircraft’s unavailability: accord-
ing to TKCA’s own claim letter, the two parties “agreed
that corrosion repairs should be started immediately
while the aircraft was at the Bombardier maintenance
facility to minimize downtime and cost for the repairs.”
Nothing in the contract requires that the notification be
in writing or that it specifically advert to the operational
availability requirement of the contract.
    TKCA characterizes the “notification” provision as if it
required not just notice of the unavailability of the air-
craft, but notice that the Coast Guard intended to treat
the period of unavailability as chargeable to TKCA. The
contract language, however, does not support that inter-
pretation. The evident purpose of the notification provi-
sion was to apprise TKCA that the aircraft was out of
service so that TKCA could take steps to minimize the
aircraft’s downtime and avoid incurring a penalty under
the contract. That purpose would not be served by requir-
ing notification during a period when TKCA was fully
TKC AEROSPACE, INC.   v. DHS                              11
aware that the aircraft was out of service because it was
undergoing maintenance at a TKCA-designated depot.
    The contract provides that the calculation of down-
time excludes periods in which the downtime is caused by
the Coast Guard (other than normal wear and tear), that
the calculation of availability “is dependent on a wide
range of variables,” and that availability “is to be comput-
ed and verified semi-annually.” Those provisions indicate
that availability is to be determined retrospectively and
that it will frequently not be possible to determine in
advance whether a particular period of downtime due to
maintenance and repair will be chargeable against the
downtime allowed by the contract. For that reason, the
Coast Guard would frequently not know at the beginning
of a period of maintenance and repair whether the una-
vailability of the aircraft during that period would be
chargeable to TKCA. To require the Coast Guard to
notify TKCA, at the outset of any such downtime period,
that the unavailability of the aircraft would be charged
against TKCA would be a pointless formality that would
not advance any purpose served by the notification re-
quirement. It would, in effect, require the Coast Guard to
“notify” TKCA of the aircraft’s unavailability at the outset
of any period of maintenance simply to guard against the
possibility that the period of maintenance would last
longer than the permissible period under the contract and
thus ultimately result in downtime chargeable to TKCA.
    It is telling that in the course of the parties’ exchang-
es prior to the institution of this action before the Board,
and in the submissions to the contracting officer, TKCA
never relied on the absence of notification as a basis for
avoiding liability for the aircraft’s downtime. The notifi-
cation requirement, moreover, was barely mentioned in
the hearing before the Board; it emerged as an issue in
the case only in TKCA’s post-hearing brief. Instead, the
parties focused on whether the downtime was the fault of
the Coast Guard, which under the plain terms of the
12                               TKC AEROSPACE, INC.   v. DHS
contract would excuse TKCA from liability for the down-
time. It is thus evident from the conduct of the parties
that they regarded the downtime for depot maintenance
as chargeable in the calculation of aircraft’s operational
availability and that they did not regard advance notifica-
tion as a precondition for the Coast Guard to claim
chargeable downtime for depot repairs that were not the
Coast Guard’s responsibility. 1 Because the Board’s deci-
sion on this point is supported by substantial evidence, we
sustain it.
     3. Risk-of-Loss Clause.
    TKCA argues that the risk-of-loss clause in the con-
tract applies to the corrosion damage to the aircraft and
that the Coast Guard was therefore liable for the damage
that TKCA repaired. The Board, however, found that the
risk-of-loss clause pertains to accidental damage to the
aircraft while in the government’s possession, and that it
does not pertain to repairs performed as a part of the
contract-designated maintenance, such as abatement of
corrosion caused by ordinary wear and tear.
    We agree with the Board that the risk-of-loss clause
does not excuse TKCA from its contractual obligation to
repair the corrosion damage to the leased aircraft. As the
Board pointed out, TKCA failed to show that the corrosion


     1  Although no penalties had been assessed for pre-
vious periods of depot maintenance, the evidence indicat-
ed that the maintenance on those occasions had been
accomplished within the scheduled period (or shortly
thereafter), unlike the lengthy repair period at issue in
this case. Similarly, no downtime was charged for repairs
that the parties agreed were the result of damage caused
by the Coast Guard, but that was because the contract
expressly excluded such periods from the downtime
calculation.
TKC AEROSPACE, INC.   v. DHS                            13
was not the product of normal wear and tear, which is
specifically excluded from the risk-of-loss clause. Even
the TKCA project manager originally concluded that the
corrosion damage was the result of ordinary wear and
tear, and that was TKCA’s position in initial correspond-
ence with the contracting officer. Because the Board’s
decision that the corrosion repair performed in this case
did not fall within the scope of the risk-of-loss clause is
supported by substantial evidence, we uphold the Board’s
decision on that issue.
                           *****
     TKCA makes a final, procedural argument, contend-
ing that the Board should have admitted evidence regard-
ing similar corrosion problems encountered in another
aircraft maintained by Coast Guard personnel at the
Coast Guard Air Station in Washington. We have consid-
ered that issue and conclude that the Board did not abuse
its discretion in excluding that evidence on relevance
grounds. Accordingly, we affirm the decision of the Civil-
ian Board of Contract Appeals sustaining the denial of
TKCA’s claim.
                         AFFIRMED
        NOTE: This disposition is nonprecedential.


  United States Court of Appeals
      for the Federal Circuit
                 ______________________

               TKC AEROSPACE, INC.,
                     Appellant,

                             v.

 JANET A. NAPOLITANO, Secretary of Homeland
                  Security,
                   Appellee.
            ______________________

                       2012-1423
                 ______________________

    Appeal from the Civilian Board of Contract Appeals in
No. 2119, Administrative Judge R. Anthony McCann.
                 ______________________

REYNA, Circuit Judge, dissenting.
     The majority affirms a determination of the Civilian
Board of Contract Appeals (“Board”) that Appellant TKC
Aerospace, Inc. (“TKCA”) bore the responsibility for
corrosion repair and aircraft downtime for a corporate jet
that the U.S. Coast Guard leased from TKCA. Specifical-
ly, the majority holds that substantial evidence supports
the Board’s determination that TKCA was liable for
corrosion remediation maintenance expenses because the
Coast Guard was not obligated under the contract to
detect and prevent corrosion damage and, in any event,
the damage fell outside the contract’s “risk of loss” provi-
2                                TKC AEROSPACE, INC.   v. DHS
sion as normal wear and tear. The majority also found
substantial evidence supporting the Board’s conclusion
that notwithstanding the Coast Guard’s failure to notify
TKCA that downtime was accruing, TKCA had adequate
notice to be held liable for the downtime. I disagree with
the majority in all three respects. Because contract
interpretation is an issue of law that this court reviews de
novo, 41 U.S.C. § 7107(b)(1); Travel Centre v. Barram, 236
F.3d 1316, 1318 (Fed. Cir. 2001), I conclude that the
Board legally erred in interpreting the contract provisions
concerning corrosion abatement expenses and sufficiency
of notice. Accordingly, I respectfully dissent.
                     I. BACKGROUND
    Under the contract, the Coast Guard could have re-
quired TKCA to perform all maintenance on the aircraft.
Instead, the Coast Guard opted to save $14,375 per month
and assumed responsibility for its personnel to perform
the daily maintenance (known as line or unit-level
maintenance). 1 TKCA remained obligated to perform
depot-level maintenance at scheduled intervals. 2


    1   According to Coast Guard’s Aeronautical Engi-
neering      Maintenance        Management         Manual,
COMDTINST M13020.1F, unit-level maintenance nor-
mally consists of “inspecting, servicing, lubricating, ad-
justing, and replacing components, minor assemblies, and
subassemblies. It also consists of calibrating, repairing or
replacing damaged or unserviceable parts, components,
and assemblies; modifying materiel, emergency manufac-
turing of unavailable parts; and developing/providing
internal technical assistance.” Joint App’x 449.

    2   By contrast, depot level maintenance “usually
consists of repairing, modifying, overhauling, reclaiming,
or rebuilding parts, assemblies, subassemblies, compo-
nents and end items; emergency manufacturing of una-
TKC AEROSPACE, INC.   v. DHS                               3
    In furtherance of its unit-level maintenance obliga-
tions, Coast Guard represented in clause 5.7.1.2 of the
contract that its aviation maintenance personnel are
trained to perform ground handling and servicing of Coast
Guard aircraft, including conducting routine and special
aircraft inspections and related aviation administrative
duties such as “corrosion control, preflight, thru flight,
post flight” and other routine inspections. Joint App’x 217
(emphasis added). 3 Related to its representations, the


vailable parts; and providing extensive, detailed technical
assistance to using activities.” Id. at 449–50.

   3   In pertinent part, clause 5.7.1.2 also provides:

   Coast Guard Air Station Washington aviation
   maintenance personnel are trained to perform
   ground handling and servicing of Coast Guard
   aircraft. They conduct routine and special aircraft
   inspections and related aviation administrative
   duties. . . . Aviation Maintenance Technicians
   (ATM Rate) service and maintain aircraft bleed
   air, hydraulic and fuel systems, aircraft engines,
   auxiliary power units, and power train systems.
   They also maintain, and can conduct minor re-
   pairs on aircraft fuselage, wings and fixed and
   movable flight control surfaces. Some of the duties
   performed by Air Station Washington mainte-
   nance personnel include corrosion control, pre-
   flight, thru flight, post flight, and other routine
   inspections; organizational level on-equipment
   maintenance, servicing and routine checks, in-
   cluding removal and replacement of components
   and minor repairs on installed engines and Auxil-
   iary Power Units (APUs); limited off-equipment
   maintenance capability, including, but not limited
   to: testing of selected LRUs, tire build-up, interior
4                                TKC AEROSPACE, INC.   v. DHS
Coast Guard’s Aeronautical Engineering Maintenance
Management Manual provides that the Coast Guard’s
“Commanding Officers are responsible for the adequate
maintenance and corrosion control of aircraft in their
custody and are to impose such other inspection require-
ments as necessary to meet differing environmental and
operation conditions as may exist.” Joint App’x 451. To
fulfill this obligation, the Coast Guard designated specific
personnel to serve as its “Corrosion Control Officer.”
Additionally, the Coast Guard assumed all risk of loss of
or damage (except normal wear and tear) to the leased
aircraft during the term of the lease while the aircraft
was in possession of the Coast Guard and agreed that, in
the event of damage to the aircraft, the Coast Guard
would pay TKCA’s reasonable cost of repair of the air-
craft. Joint App’x 201–02.
    Under clause 5.17 of the contract, TKCA was obligat-
ed to maintain semi-annual operational availability of the
aircraft in excess of 95% taking into account any unavail-
ability due to maintenance, whether it be unit-level
maintenance at the aircraft’s Air Station Washington
home or depot level maintenance performed at Bom-
bardier’s facilities elsewhere.    See Joint App’x 220.
Clause 5.17.5 of the contract provided that downtime
would be measured from the time TKCA was notified by
the Coast Guard Air Station Washington Maintenance
personnel until the affected aircraft system was returned
to Ready for Issue (RFI) status. Id.



    refurbishment, strut removal and replacement,
    and repair of water and latrine systems.

During performance of the contract, the Coast Guard
performed all of the tasks mentioned above except testing
the LRUs, performing tire build-up, and removing and
replacing the struts. Joint App’x 93.
TKC AEROSPACE, INC.   v. DHS                               5
    During the first five years of the contract, few, if any,
problems or disputes developed. In March 2008, during
routine depot maintenance, an inspection uncovered
corrosion damage on the seat track directly behind the
galley bulkhead wall, the remediation of which required
approximately $2,500 in repairs and did not result in
appreciable downtime. As a result, TKCA assumed the
cost of the repair. During the following year’s scheduled
depot maintenance in December 2009, however, pervasive
corrosion damage was discovered under the carpets in the
forward, starboard part of the aircraft, near the galley
bulkhead. The repairs required the aircraft to be taken
out of service for an additional 33 days beyond the sched-
uled maintenance, and it was not returned to the Coast
Guard until January 20, 2010. Due to the aircraft’s
unavailability during this time, the contract’s mission
readiness requirement of 95% was not met.
                        II. DISCUSSION
    Although there is evidence that the Coast Guard
could have caused the corrosion when liquids would spill
onto the galley floor from the sink and other sources or
when water would reach the carpet through the open
forward door, see Joint App’x 73, there is no reason upset
the Board’s conclusion that the cause of the corrosion is
undetermined. Joint App’x 7. Instead, this case requires
review of the contract provisions concerning which party
was obligated to perform preventative corrosion mainte-
nance under the contract and, in the event of widespread
damage, which party bore the risk of loss resulting from
such damage. Furthermore, it presents the issue of
whether the contract required the Coast Guard to provide
TKCA notice before downtime could begin accruing con-
sistent with the parties’ mutual agreement. I address
these issues in turn.
6                                TKC AEROSPACE, INC.   v. DHS
                   A. Corrosion Control
    As an initial matter, the majority concludes that
TKCA had undertaken the obligation under the contract
to detect and prevent corrosion. In doing so, it relies
heavily on the fact that depot level maintenance was the
responsibility of TKCA. Even though the Coast Guard
was obligated to perform “routine” daily maintenance, the
majority nonetheless affirms the Board’s conclusion that
it was TKCA’s “responsibility to ensure that the aircraft
was being properly maintained at all times.” Joint App’x
9 (emphasis added). I find legal error in the Board’s
conclusion.
     Under the terms of the contract, the Coast Guard
could have opted to require TKCA to perform all mainte-
nance, but instead, the Coast Guard elected to undertake
the responsibility for performing daily maintenance. This
included, but was not limited to, inspecting components
and repairing or replacing damaged parts. The Coast
Guard represented in provision 5.7.1.2 that its personnel
were capable of performing a lengthy list of activities,
most notably, corrosion control. As it turned out, Coast
Guard personnel performed all of those activities, save a
select few not relevant to this case. See supra note 3. As
a matter of contract interpretation, there is legal error in
the Board’s conclusions that TKCA was obligated to
ensure that the aircraft was properly maintained at all
times and that the Coast Guard only performed routine
maintenance under TKCA’s supervision, direction, and
control. Accordingly, I cannot agree with the majority’s
affirmance of the Board’s conclusion that TKCA had
undertaken the obligation under the contract to detect
and prevent corrosion.
                      B. Risk of Loss
    The majority affirms the Board’s conclusion that the
risk of loss provision only applied to “accidental” damage
and, therefore, not did not apply in this case because the
TKC AEROSPACE, INC.   v. DHS                             7
corrosion damage was “simple wear and tear.”         Joint
App’x 10. I disagree.
    Federal Acquisitions Regulation provision 3052.228-
91, which was incorporated into the contract, provides
that
   [the Coast Guard] assumes all risk of loss of or
   damage (except normal wear and tear) to the
   leased aircraft during the term of this lease while
   the aircraft is in possession of the [Coast Guard].
   In the event of damage to the aircraft, the [Coast
   Guard], at its option, shall make the necessary
   repairs with its own facilities or by contract, or
   pay [TKCA] reasonable cost of repair of the air-
   craft.
Joint App’x 201–02. Nothing about the provision limits it
to “accidental” damage. The Board erred when it import-
ed this concept into the risk of loss provision. Here, the
Coast Guard bore the risk of loss and damage to the
aircraft it leased from TKCA regardless of the nature of
the loss or damage as long as it was more than normal
wear and tear. The majority finds substantial evidence
supporting the conclusion that the corrosion damage was
normal wear and tear. I disagree. It is unreasonable to
conclude that a repair that requires the entire interior of
an aircraft to be removed and an extensive amount of
man-hours and onsite component fabrication is a repair of
normal wear and tear. The Board’s conclusion that the
damage to the aircraft was normal wear and tear is
unreasonable and not supported by the record, which
instead demonstrates damage to the aircraft requiring
significant repairs resulting in significant downtime. The
majority incorrectly holds that substantial evidence
supports the Board’s conclusion.          See 41 U.S.C. §
7107(b)(2)(C). Because the damage was not normal wear
and tear, it follows that the damage to the aircraft was
the type of damage covered by the risk of loss provision.
8                                TKC AEROSPACE, INC.   v. DHS
                        C. Notice
    Finally, the majority affirms the Board’s interpreta-
tion that the contract did not require the Coast Guard to
provide TKCA with notice that downtime was accruing
while the aircraft was undergoing depot maintenance and
corrosion remediation at TKCA’s facility. The majority
does so notwithstanding the Board’s erroneous view that
downtime assessments involve an after-the-fact analysis
and are “retroactive” in nature. Joint App’x 10. The
majority also affirms the Board’s interpretation that the
contract only requires actual notice when the aircraft is
“down” at the Coast Guard’s Air Station Washington
home or at some other location presumably because
TKCA would potentially not be aware of the aircraft’s
unavailability. Id. This interpretation of the contract’s
notice requirement is erroneous because it overlooks that
the notice provision is intended to start the clock to meas-
ure accrued time, not simply acknowledge that the air-
craft is down.
     I find that the notice requirement is used to measure
accrual of time that the aircraft is unavailable and not to
simply alert TKCA that the aircraft is down, a factor
TKCA would presumably know given its responsibility for
depot level maintenance. In pertinent part, provision
5.17.5 provides that “[t]he Coast Guard and [TKCA] have
mutually agreed that downtime will be measured from
the time [TKCA] is notified by the Coast Guard Air Sta-
tion Washington Maintenance personnel until . . . [t]he
affected aircraft system is returned to Ready for Issue
(RFI) status.” Joint App’x 221. The Board and the major-
ity overlook the parties’ mutual agreement that downtime
would only begin accruing once the Coast Guard provided
notice to TKCA of the accruing downtime. There is noth-
ing in the notice provision that makes it inapplicable
should TKCA be aware on its own that the aircraft is
“down” or otherwise undergoing service or repair. As it is,
TKCA authorized overtime and nightshift/weekend sup-
TKC AEROSPACE, INC.   v. DHS                               9
port to accelerate the corrosion remediation. Had the
Coast Guard notified TKCA that it potentially faced
liability for the downtime, TKCA may have been com-
pelled to authorize additional overtime, especially since
the repairs occurred during the holiday season, in order to
limit potential liability.
    The Coast Guard argues that, even if notice was re-
quired, TKCA had actual notice that the aircraft was
“down.” The Coast Guard relies on a passage cited by the
Board, which indicated that the parties “agreed that
corrosion repairs should be started immediately while the
aircraft was at the Bombardier maintenance facility to
minimize downtime and cost for repairs.” Joint App’x 10.
At best, this reliance amounts to post-hoc rationalization.
This passage is taken from TKCA’s claim letter, which
was sent after the Coast Guard had already withheld
invoice payments due to unscheduled downtime. The
passage exemplifies the “after-the-fact analysis” of down-
time erroneously endorsed by the Board. If the Coast
Guard had adequately notified TKCA that it could be
facing downtime, TKCA could have taken steps to limit its
liability from the beginning. Because the Board erred in
finding the Coast Guard’s constructive notice to TKCA
adequate, I conclude that the Board improperly assessed
a penalty against TKCA for unnoticed downtime.
                       IV. CONCLUSION
    As set forth above, I conclude that the risk of loss pro-
vision obligated the Coast Guard to cover the corrosion
repair cost and that the Coast Guard failed to provide
adequate notice that downtime had begun accruing while
the repairs were underway. From the majority’s contrary
conclusions, I respectfully dissent.
