The Armed Services Board of Contract Appeals ruled against VESEQU LLC in its appeal concerning a contract with the Defense Logistics Agency (DLA). The board denied VESEQU’s claim for a higher settlement amount after the DLA partially terminated their contract for convenience. This decision affects VESEQU, a company that provides web-based subscriptions, and highlights the importance of proper record-keeping in government contracts.
The case, identified as ASBCA No. 64468, arose from a contract awarded to VESEQU by the DLA to provide 30 web-based subscriptions, publications, and periodicals. After a dispute over the contract's terms and the inability to reach an agreement on the settlement amount following a partial termination, VESEQU appealed the contracting officer’s final decision (COFD) that set the settlement amount at $2,550.
VESEQU, represented by its Principal Program Director Jason Shadburn, argued that it incurred more costs than what the DLA was willing to pay. The DLA, represented by Chief Trial Attorney Steven M. Sosko and Trial Attorney Rachel M. Noble, contended that VESEQU did not provide sufficient evidence to support its claim for a higher amount. The board’s decision emphasized the need for contractors to maintain organized records to substantiate their claims.
The dispute began when the DLA issued a solicitation for various subscription services on April 3, 2025. VESEQU was awarded the contract on June 17, 2025. However, issues arose regarding the specific subscriptions and the terms of service, particularly with providers like Bloomberg and S&P. After several months of negotiations, the DLA issued a stop work order on October 27, 2025, leading to the partial termination of the contract two weeks later.
Following the termination, VESEQU submitted a Request for Equitable Adjustment (REA) claiming it had incurred significant costs due to the work performed before the stop work order. However, the board found that VESEQU failed to provide adequate documentation to support its claims. The COFD awarded VESEQU $2,550 for 30 hours of work on one subscription but denied claims for other subscriptions due to insufficient evidence.
In its ruling, the board stated, “VESEQU has failed to demonstrate using its standard record keeping system an amount of loss greater than the amended settlement amount with sufficient certainty so that that determination will be more than mere speculation.” The board noted that VESEQU’s documentation was not part of a regular, organized method for tracking costs, which is essential for substantiating claims in government contracts.
The board highlighted that the burden of proof lies with the contractor to show that they are entitled to a greater settlement amount. VESEQU’s reliance on post hoc estimates and narratives, which lacked contemporaneous records, was deemed insufficient. The board emphasized that a contractor must provide clear and organized records to support their claims, especially when facing a government termination for convenience.
This ruling sets a precedent for contractors dealing with government contracts, underscoring the necessity of maintaining proper documentation and record-keeping practices. It serves as a reminder that vague estimates and narratives will not satisfy the requirements for proving claims in contract disputes.
Moving forward, VESEQU may consider appealing the board's decision. However, it will need to present compelling evidence to support its claims if it chooses to pursue further legal action. The board's decision in ASBCA No. 64468 reinforces the importance of clear and organized record-keeping in government contracts, a lesson that all contractors should heed.