Appeal of NES Pacific Limited Liability Company
September 2025
Appellant NES Pacific Limited Liability Co. (NESP) sought compensation for two interrelated issues: 1) switchgear1 that were ordered timely, manufactured to meet contract specifications/drawings, delayed as a result of a labor shortage due to COVID-19, shipped from the U.S., delivered to the project at Kadena Air Base, Japan approximately 16 days after the contract completion date (CCD), and refused by the Air Force; and 2) storage/demurrage charges, continuing to accrue daily, arising from the government's refusal to accept the late switchgear.
The Board determined that, on this construction contract, the government's rejection of the switchgear was improper. The rejection appears to have been based solely on a late delivery caused by labor shortages resulting from COVID19. The contract included Federal Acquisition Regulation (FAR) clause 52.249-10, Default (Fixed-Price Construction) (R4, tab 1 at 17). A manufacturing delay arising from a labor shortage during a global pandemic is the type of delay commonly addressed by the Default Clause as beyond the control and without the fault or negligence of the contractor and subcontractor.
ASBCA No. 63710
Practice area(s): Lawsuits / Disputes
Court: Armed Forces Board of Contract Appeals
David Rose
David A. Rose, Esq., is a senior member of the firm practicing throughout the United States and internationally based in Georgia. In addition to Federal Contracts and Procurement law, he assists companies and corporations with business formation issues (LLCs, Domestic Corporations, Joint Ventures, Teaming Arrangements, 8(a) and Small Disadvantaged Applications to SBA, Mentor Protégé, Affiliation and Ostensible Subcontractor Issues, etc.) and with the establishment of subsidiary entities in foreign locations from the Caribbean to the Mid and Far East. With more than 20 years of experience, the former Deputy General Counsel (Deputy Staff Judge Advocate) of the Air Force Center for Engineering and Environmental Excellence, oversaw the legal program for execution of over $4 Billion in Federal contracts each year. Dave has served at senior positions in Korea, Japan, Germany, Great Britain and the Pentagon and now brings that breadth of knowledge and experience to the commercial sector. His background is complemented by degrees in chemistry, mathematics, a jurisdoctorate, and post doctoral degrees in environmental law and procurement law from George Washington University. He was most recently selected as the 2011 SAME National Industry Small Business Advocate. He is active in the State Bar of Georgia, US Court of Federal Claims, US Tax Court, Armed Services Board of Contract Appeals, Fulton County Bar Association, the Society of American Military Engineers, the American Society of Civil Engineers, and the Judge Advocates Association. He currently holds the active rank of Lt Col in the United States Air Force Reserves and the position of Deputy Staff Judge Advocate (Cat A) to the Headquarters, United States Air Force Reserves where he is one of the primary legal advisers to the Commanding Officer of the Air Force Reserves, Lt General Scobee.
