_____________________________________________________________ RESPONDENT'S MOTION FOR SUMMARY RELIEF DENIED: June 6, 1997 _____________________________________________________________ GSBCA 13277-COM TECHNICAL SYSTEMS ASSOCIATES, INC., Appellant, v. DEPARTMENT OF COMMERCE, Respondent. Joseph A. Camardo, Jr., Catherine G. Gadway, and Nancy M. Camardo, Auburn, NY, counsel for Appellant. Jerry A. Walz and Lisa J. Obayashi, Office of General Counsel, Department of Commerce, Washington, DC, counsel for Respondent. Before Board Judges BORWICK, WILLIAMS, and DeGRAFF. WILLIAMS, Board Judge. In this appeal Technical Systems Associates, Inc. (TSA) has challenged the termination for default of contract number 50RANR400020 by the Department of Commerce, Mountain Administrative Support Center. Respondent has moved for summary relief on the ground that appellant's contract was properly terminated for default based on appellant's false certification that none of its contracts had been terminated for default during the three-year period prior to the award of the contract in question. Appellant acknowledges that one of its contracts had been terminated for default during that time period, but contends that the contracting officer knew of the prior default termination when the instant contract was awarded and that respondent has waived its right to terminate, or is estopped from terminating, the contract on that basis. In addition, appellant contends that the erroneous certification was not knowingly made, and that this circumstance prevents the agency from terminating the contract for default on this ground. Because we find genuine issues of material fact, we deny respondent's motion for summary relief. Background On September 24, 1993, respondent issued solicitation number 52RANR400020 for the construction of one "fan beam antenna." Appeal File, Exhibit 1 at 1-3. In support of its successful bid on this project, appellant submitted certain representations and certifications to the Government on January 20, 1994. Appeal File, Exhibit 5. Appellant executed the Certification Regarding Debarment, Suspension, Proposed Debarment, and Other Responsibility Matters, FAR  52.209-5 as follows: (a) (1) The Offeror certifies, to the best of its knowledge and belief, that-- . . . . (ii) The Offeror has ( ) has not ( X ), within a three-year period preceding this offer, had one or more contracts terminated for default by any Federal agency. . . . . (e) The certification in paragraph (a) of this provision is a material representation of fact upon which reliance was placed when making award. If it is later determined that the Offeror knowingly rendered an erroneous certification, in addition to other remedies available to the Government, the Contracting Officer may terminate the contract resulting from this solicitation for default. Id. at 21-23, 33. This certification was signed by appellant's president. Id. at 33. Appellant's president testified in an affidavit that at the time he executed this certification he was under the mistaken belief that a prior contract between appellant and respondent, contract number 50RANB10CO97 (the prior contract), had not been terminated for default on January 20, 1992, but rather had been "settled" with respondent. Affidavit of Eugene P. Augustin (Augustin Affidavit) (Feb. 6, 1996)  10. Specifically, appellant's president testified that in January 1992, he had a conversation with the contracting officer on the prior contract discussing the possibility of a termination for default. Id.  1-2. According to appellant's president, because he had not received a show cause notice for the prior contract, he was surprised that the Government was considering a default termination and requested the contracting officer to estimate the reprocurement costs that would occur if the contract were terminated; the contracting officer estimated those costs to be between $1,500 and $1,600, and appellant's president offered to pay them in exchange for a termination for convenience. Id.  3-6. Appellant's president testified that he was out of town when the Government's letter regarding the reprocurement costs arrived at his office and his staff advised him by telephone that the Government was requesting approximately $1,500 for the reprocurement costs. Augustin Affidavit  8-10. Since appellant's president believed that he had agreed with the contracting officer to pay these costs in exchange for a termination for convenience, he told his office to pay them. Id.  10. According to his affidavit, appellant's president did not intend to mislead the Government; he thought that the prior termination for default had been settled when he paid the reprocurement bill. Id.  11. Both the defaulted contract and the instant contract were between appellant and the Department of Commerce, Mountain Administrative Support Center (MASC). Deposition of Contracting Officer Douglas B. Hargrove (Hargrove Deposition) (Nov. 30, 1995) at 4; Supplemental Appeal File, Exhibit 61 at 4. MASC is a regional administrative office of the National Oceanic and Atmospheric Administration (NOAA) which covers a multi-state area of the United States. MASC acts as a host administrative office for eight other Department of Commerce bureaus located in the Denver, Colorado, area. The MASC Procurement Office issues hundreds of purchase orders and contracts each year. Affidavit of Douglas B. Hargrove (Sept. 29, 1995)  2-3. The contract specialist who performed the responsibility determination for appellant in connection with the award of this contract testified that, at the time of award, he was not aware that appellant's prior contract had been terminated for default. Hargrove Affidavit  9. This contract specialist utilized the following sources to make the responsibility determination: Conducted voice interviews with, I believe, two parties. I was unable to contact a third. Also received bank information. I checked the list of debarred and suspended parties and the list of parties owing money to the government and I obtained a Dun & Bradstreet report. Hargrove Deposition, Supplemental Appeal File, Exhibit 61 at 2-3. The contract specialist further testified that in making his determination he reviewed a microfiche record of past contracts for this geographic area. Id. at 8-9. He testified that TSA would have appeared on the microfiche record, that this type of information was readily available to him, and that he believed that he checked the microfiche when doing his responsibility determination, but he did not remember for sure. Id. Upon reviewing the written responsibility determination at his deposition, the contract specialist testified that he had in fact reviewed the microfiche at the time he made the responsibility determination. Id. at 10. The microfiche indicated that appellant's contract, number 50RANB10CO97, was terminated for default effective January 17, 1992, and that all funds were deobligated for that contract. Id., Exhibit 62. In the responsibility determination memorandum, sources of information used to support the responsibility determination were listed as including "records and experience data, including verifiable knowledge of personnel within the contracting office, auditing offices, contract administration offices, and other Contracting Officers." Supplemental Appeal File, Exhibit 57 at 2. In this responsibility determination, appellant was found to be responsible with an overall satisfactory record of past performance. Id. at 1. The Memorandum of Responsibility Determination, dated January 27, 1994, provided: In accordance with FAR 9.1, I hereby determine that Technical Systems Associates, Inc., 1900 Central Florida Pkwy., Orlando, FL 32837-9290 (TSA) is a responsible Contractor. The prospective Contractor: has an overall satisfactory record of past performance. The DoC Boulder Laboratories contracted with TSA during 1991 (contract 50RANB10CO97) [the prior contract] with positive results. TSA has a recognized performance record which is acceptable as far as meeting delivery schedules and delivering conforming supplies and services. It is anticipated that this performance will continue. Id. This responsibility determination was issued by the contract specialist's branch chief, who testified that he was unaware of the prior default termination. Affidavit of Daniel M. Gomez (Gomez Affidavit) (undated)  5; Affidavit of Douglas B. Hargrove (Second Hargrove Affidavit) (undated)  3. At the time he made the responsibility determination, the contract specialist's office was twenty to thirty feet from the office of the contracting officer who had terminated appellant's prior contract for default. Appeal File, Exhibit 61 at 6, 10; Supplemental Appeal File, Exhibit 62; Affidavit of Contracting Officer Marilyn Sherer (Sherer Affidavit) (Sept. 28, 1995)  1, 5. On January 27, 1994, appellant was awarded contract number 50RANR400020 for the construction of one fan beam antenna in the amount of $57,720.30. Appeal File, Exhibit 6. On May 9, 1995, the contracting officer terminated this contract for default, due to the failure of the antenna to pass performance and acceptance tests and untimely delivery. Id., Exhibit 55. The contracting officer who terminated appellant's prior contract for default testified that she was not aware that TSA had received another contract until the spring of 1995 when the agency was considering terminating the instant contract for default. Sherer Affidavit  7-8. Appellant disputes this testimony contending that "based upon respondent's own Responsibility Determination, [the contract specialist who performed that determination] did consult with [the contracting officer who had terminated appellant's prior contract for default], a Contracting Officer within the contracting office." Appellant's Opposition to Respondent's Motion for Summary Judgment at 5. On May 12, 1995, appellant filed this appeal challenging the termination for default. Appellant's president testified that the first time he realized that the prior contract had been terminated for default was when the issue arose during this appeal. Augustin Affidavit  12. Discussion Motions for summary relief may be granted only if there are no genuine issues of material fact in dispute and the moving party is entitled to judgment as a matter of law. The moving party has the burden of proving the absence of genuine issues of material fact. Griffin Services, Inc., GSBCA 11171, 91-3 BCA  24,156, at 120,872. In addition, doubts as to whether summary judgment is appropriate are to be resolved against the moving party, and all inferences are to be drawn in favor of the nonmoving party. Reliance Insurance Co. v. United States, 931 F.2d 863, 865 (Fed. Cir. 1991); D. L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 1146 (Fed. Cir. 1983). In its motion for summary relief, respondent alleges that appellant filed a false certification regarding its prior termination for default, thus justifying the instant termination for default. Respondent's Motion for Summary Relief at 6-7. Appellant opposes the motion, citing material factual disputes as to two matters: (1) whether respondent waived its right to terminate the instant contract based on the false certification and (2) whether appellant knowingly made a false certification. Appellant contends respondent knew, through its Mountain Administrative Support Center, of appellant's prior termination for default before the contract was awarded to appellant, and that by awarding the instant contract with knowledge of the prior default termination respondent waived its right to use the prior termination as a reason to terminate the contract for default. Appellant's Opposition to Respondent's Motion for Summary Relief at 9-11. Alternatively, appellant argues that respondent is estopped from using the prior termination as a reason for terminating the contract for default. Id. at 20-23. If respondent's agents knew of the prior termination for default before the contract award, the award of the contract would have been made with knowledge of the false certification. Thus, respondent may have waived, or may be estopped from relying on, the false certification as a means of terminating the contract. American Contractors v. General Services Administration, GSBCA 10363, 92-2 BCA  24,899, at 124,176. As this Board recognized in American Contractors: If the contracting officer knew of the forgery charge before contract award, the award would have been with knowledge of the false certification. It is possible, therefore, that the contracting officer may have waived or may be estopped from relying upon the certification provision as grounds for terminating the contract. Office of Personnel Management v. Charles Richmond, 110 S. Ct. 2465, 2472 (1990) (Supreme Court refused to adopt an across-the-board rule that estoppel never applies against the Government); United States v. Georgia-Pacific Co., 421 F.2d 92, 100-01 (9th Cir. 1970) (equitable estoppel may lie against the Government when the agent's conduct giving rise to the defense is within the scope of her authority). accord, National Medical Staffing, Inc., DOTBCA 2568, 94-1 BCA  26,542, at 132,103. Appellant has squarely raised the issue of whether the contract specialist who performed the responsibility determination had knowledge of appellant's prior termination for default at the time of award. Appellant points to the fact that the responsibility determination itself expressly mentions the prior terminated contract by number to argue that the Government knew that contract had been terminated for default, but chose to find appellant responsible nonetheless. Appellant argues, "Instead of declaring Appellant nonresponsible the Government chose to ignore the Modification [effecting the termination for default] so that it could take advantage of Appellant's cost-effective proposal for the contract." Appellant's Supplement to its Opposition to Respondent's Motion for Summary Relief at 2-3. Further, that contract specialist in his deposition admitted that, in conjunction with performing appellant's responsibility determination, he reviewed a microfiche record which expressly referenced appellant's prior termination for default. In addition, appellant contends that the contract specialist who drafted the responsibility determination learned of the prior termination through discussions with the contracting officer who terminated the prior contract, whose office was twenty to thirty feet away. Appellant notes that the responsibility determination expressly cites "other Contracting Officers" as sources of information for the responsibility determination. Although the contract specialist denies that he had knowledge of the termination for default at that time, appellant has proffered sufficient evidence to render this uncertain, since all inferences must be drawn in favor of appellant, the nonmoving party. Resolution of the factual issue of respondent's knowledge of the prior termination is necessary to determine whether estoppel or waiver is applicable. American Contractors, 92-2 BCA at 124,176. The issue of whether appellant knowingly executed the erroneous certification also precludes the entry of summary relief. Appellant has proffered evidence through the testimony of its president that he, the signatory of the certification, was unaware that the prior default termination was in effect at the time he executed the certification; appellant's president testified in an affidavit that he believed at the time he executed the certification that the default termination had been settled by virtue of his company's payment of the reprocurement costs. Given appellant's president's testimony, there is a genuine issue of material fact concerning whether appellant knowingly falsely certified. As the Armed Services Board of Contract Appeals recognized in Spread Information Sciences, Inc., ASBCA 48438, 96-1 BCA  27,996, at 139,834: [T]he erroneous certification must have been 'knowingly rendered' in order to justify a default termination. While the National Interior Contractors decision made no express finding that the erroneous certification had been knowingly made, it cannot be regarded as authority that the element of knowledge is unnecessary. In the instant case the certification clause, FAR 52.209-5(e), specifies that a contracting officer may terminate a contract for default if an offeror knowingly rendered an erroneous certification. 41 CFR 52.209-5(e) (1989); Appeal File, Exhibit 1 at 23. Decision There are material issues of fact regarding respondent's knowledge of the prior termination for default at the time of award. It is also disputed whether appellant knowingly rendered an erroneous certification. All inferences must be drawn in appellant's favor. Therefore, summary relief is inappropriate. Accordingly, respondent's motion for summary relief is DENIED. The Board will convene a telephonic conference on June 13, 1997, at 10:00 a.m. to discuss further scheduling in this appeal. ______________________________ MARY ELLEN COSTER WILLIAMS Board Judge We concur: ____________________________ ____________________________ ANTHONY S. BORWICK MARTHA H. DeGRAFF Board Judge Board Judge