Stonewin International LLC

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) Stonewin International LLC ) ASBCA No. 64384 ) Under Contract No. SPE605-21-D-1011 ) APPEARANCES FOR THE APPELLANT: Angela B. Styles, Esq. David Mahoney, Esq. Akin, Gump, Strauss, Hauer & Feld LLP Washington, DC APPEARANCES FOR THE GOVERNMENT: Steven M. Sosko, Esq. DLA Chief Trial Attorney Mohammand Javad Khan, Esq. Alex M. Mayfield, Esq. Samuel Thorpe, Esq. Trial Attorneys DLA Energy Ft. Belvoir, VA OPINION BY ADMINISTRATIVE JUDGE MELNICK Stonewin International, LLC (Stonewin) contracted with the Defense Logistics Agency (DLA or government) to provide fuel in the Philippines. Stonewin’s acquisition of fuel from its suppliers was exempt from Philippine taxes by the terms of an agreement between the United States and the Philippines. Accordingly, Stonewin’s contract price with DLA excluded those taxes. However, Stonewin was required to pay Philippine taxes to its suppliers until the Philippine government approved requests from the United States to recognize they were tax exempt. Stonewin seeks an increase in the contract price reflecting its tax payments and an equitable adjustment for associated costs. The parties submitted the appeal under Board Rule 11 for fact finding and decision upon the record. We agree with Stonewin that Federal Acquisition Regulation (FAR) 52.229-6 entitles it to a price increase reflecting the taxes it was required to pay. Stonewin is also entitled to an equitable adjustment for the costs of action it took at the government’s direction respecting those taxes. FINDINGS OF FACT 1. In 1998, the governments of the United States and the Philippines executed a visiting forces agreement (VFA) regarding the treatment of American forces visiting the Philippines. AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES REGARDING THE TREATMENT OF UNITED STATES ARMED FORCES VISITING THE PHILIPPINES (1998), state.gov/12931. Article VII, entitled Importation and Exportation says: United States Government equipment, materials, supplies, and other property imported into or acquired in the Philippines by or on behalf of the United States armed forces in connection with activities to which this agreement applies, shall be free of all Philippine duties, taxes and other similar charges. (Id. at 8) 2. On November 17, 2021, DLA awarded the requirements contract identified above to Stonewin for the delivery of various types of aircraft fuel to different locations in the Philippines (R4, tab 1, tab 4-5). 1 The period of performance was January 1, 2022 through December 31, 2026 (R4, tab 1 at 1). The contract included FAR 52.229-6, TAXES-FOREIGN FIXED-PRICE CONTRACTS (FEB 2013) (id. at 75-77). Relevant provisions of that clause include subparagraph (c)(1), which states: Unless otherwise provided in this contract, the contract price includes all applicable taxes and duties, except taxes and duties that the Government of the United States and the government of the country concerned[2] have agreed shall not be applicable to expenditures in such country by or on behalf of the United States, except as provided in subparagraph (c)(2) of this clause.[3] (Id. at 76) Subparagraph (d)(1) provides: Except as provided in subparagraph (d)(2) of this clause,[4] the contract price shall be increased by the amount of any after-imposed tax or of any tax or duty specifically 1 The contract incorporated the solicitation, award sheet, and offer (R4, tab 5 at 3). 2 “Country concerned” means any country, other than the United States and its outlying areas, in which expenditures under this contract are made. FAR 52.229-6(b). 3 Subparagraph (c)(2) is not relevant to this dispute. 4 Subparagraph (d)(2) is not relevant to this dispute. 2  excluded from the contract price by a provision of this contract that the Contractor is required to pay or bear, including any interest or penalty, if the Contractor states in writing that the contract price does not include any contingency for such tax and if liability for such tax, interest, or penalty was not incurred through the Contractor’s fault, negligence, or failure to follow instructions of the Contracting Officer or to comply with the provisions of paragraph (i) of this clause. (Id.) Paragraph (i) dictates that: The Contractor shall take all reasonable action to obtain exemption from or refund of any taxes or duties, including interest or penalty, from which the United States Government, the Contractor, any subcontractor, or the transactions or property covered by this contract are exempt under the laws of the country concerned or its political subdivisions or which the governments of the United States and of the country concerned have agreed shall not be applicable to expenditures in such country by or on behalf of the United States. (Id. at 76-77) Paragraph (j) requires that: The Contractor shall promptly notify the Contracting Officer of all matters relating to taxes or duties that reasonably may be expected to result in either an increase or decrease in the contract price and shall take appropriate action as the Contracting Officer directs. The contract price shall be equitably adjusted to cover the costs of action taken by the Contractor at the direction of the Contracting Officer, including any interest, penalty, and reasonable attorneys’ fees. (Id. at 77) 3. Elsewhere, the contract stated that offerors were responsible for confirming the applicability of taxes and tax rates with state or local authorities, advising Stonewin 3 to include applicable taxes and fees in the price but prohibiting any taxes from which the U.S. Government is exempt (R4, tab 1 at 3, 143). Stonewin represented that Philippine value-added tax (VAT) and excise taxes were excluded from the contract price and accordingly no foreign taxes and duties were included (R4, tab 4 at 99, 133; app. br., ex. 1 (Schaltuper decl.) ¶ 4). 5 4. Stonewin retained three local suppliers. They were Petron Corporation (Petron), Phoenix Petroleum Philippines, Inc. (Phoenix), and Northern Star Energy Corporation (Northern Star). (Schaltuper decl. ¶ 5) Prior to award, on July 5, 2021, Phoenix submitted a proposal to Stonewin for A-1 Jet fuel that included excise taxes and VAT (R4, tab 49 at 67, 69). On July 13, Phoenix explained in a letter to Stonewin regarding the supply of bio diesel fuel that its price quote included VAT and excise tax because obtaining excise tax refunds from the Philippine authorities is time consuming and risky (app. supp. R4, tab 6 embedded ltr). 6 On September 15, 2021, Petron submitted a fuel proposal to Stonewin that included VAT, stating that the tax may be adjusted depending on the policy of the Philippine government (R4, tab 14 at 15-16). There is no evidence Stonewin consented to pay VAT or excise taxes to its suppliers prior to commencement of its performance of the contract. After award, on February 1, 2022, Petron submitted another proposal that included VAT (app. supp. R4, tab 7). It appears that on August 31, 2022, Stonewin and Petron executed an agreement with terms including VAT and excise taxes (R4, tab 49 at 52-65). A February 1, 2022, post-award fuel proposal from Northern Star included VAT (id. at 71-80). 5. At the outset of performance in January 2022, all three suppliers charged VAT and/or excise tax on their sales to Stonewin (Schaltuper decl. ¶ 5). On January 4, Stonewin notified DLA that the suppliers had said they could not obtain tax refunds from the Philippine government (R4, tab 7). DLA responded by quoting the VFA’s tax exemption provision and sought details about the taxes that the Philippines was demanding (id.). On January 5, Stonewin reiterated to DLA Phoenix’s demand for tax payments because the Philippines refused to provide refunds (R4, tab 8). On January 12, DLA directed Stonewin to the VFA, stating that its supplies should be free of all Philippine duties, taxes, and similar charges. It noted that Stonewin should take reasonable actions to obtain exemptions. And it stressed that under FAR 52.212-4(d), Stonewin must proceed diligently with performance. DLA attached a written determination that the fuel fell under Article VII of the VFA, which it instructed Stonewin to provide to the Philippine government. (R4, tab 9 at 1) Stonewin responded the same day, stating it fully understood its responsibilities and would continue to deliver fuel (R4, tab 42 at 33; Schaltuper decl. ¶ 10). 5 Mr. Schaltuper is the president of Stonewin (Schaltuper decl. ¶ 1). 6 It repeated that statement in a letter dated December 28, 2021 (R4, tab 10 at 6). 4  6. On January 18, 2022, Stonewin contacted the Philippines Bureau of Internal Revenue (BIR) about its fuel supplies and provided DLA’s determination that they should be tax exempt under Article VII of the VFA. It inquired about the procedure for obtaining exemption and obtaining refunds. (R4, tab 10 at 8; Schaltuper decl. ¶ 11) BIR responded on January 25 that Stonewin should coordinate with the Excise LT Regulatory Division of the Department of Finance (DOF) (R4, tab 10 at 7; Schaltuper decl. ¶ 12). On January 20, Stonewin sent the same inquiry, and DLA determination, to DOF, which referred it back to BIR (R4, tab 10 at 10-12; Schaltuper decl. ¶¶ 11-12). 7. On January 31, 2022, Stonewin notified DLA that it was failing to achieve tax exemptions and was experiencing substantial losses. It had spent hours calling BIR and DOF to obtain the exemption under the VFA and had been passed back and forth. Stonewin explained that Petron, Phoenix, and Northern Star were all crucial suppliers for the contract and its only fuel sources. All three said that in the absence of confirmation from BIR they could not apply a tax exemption. (R4, tab 10 at 1-2) They refused Stonewin’s request to exclude taxes from their fuel prices (Schaltuper decl. ¶ 6). 8. The suppliers were correct to hold out for BIR confirmation, because on February 8, 2022, BIR sent a letter to Stonewin describing its position regarding VFA tax exemptions. It required the “US Government or its authorized representative . . . to obtain from [BIR] . . . a ruling confirming its exemption from excise taxes, which shall, in turn, be submitted when securing a prior written permit” from the Philippine government. (R4, tab 13 at 5-6) On February 14, Stonewin forwarded the letter to DLA requesting assistance as outlined in the letter (id. at 2). On March 1, DLA disclosed to Stonewin that the United States Air Force had experienced the same impediments obtaining authorization from the Philippines to enable its contractors to treat taxes as exempt. The Air Force was working with the United States Embassy for the Philippines to obtain resolution. Accordingly, DLA had notified the embassy about Stonewin’s issues and was providing a paper to the embassy so that it could “defend the issue better.” DLA intended “to involve the Embassy to the point that we can provide your team with a successful process to request tax exemption under VFA.” (Id. at 1) 9. On May 25, 2022, over three months after Stonewin notified DLA that BIR required U.S. Government action, the embassy sent a letter to BIR. The letter cited BIR’s instruction to the U.S. Government to seek a ruling about excise tax exemptions under the VFA. It requested the establishment of a clear exemption process for Stonewin’s fuel delivery contract, identifying only Phoenix as its supplier. (R4, tab 18 at 2, tab 30 at 15) Four months after that, BIR responded to the embassy in a letter dated September 1, 2022, and received September 11. There, BIR recognized the terms of the VFA and agreed that Stonewin’s subsequent purchases from Phoenix were 5 exempt from Philippine taxes under the VFA. It did not apply the exemption to prior fuel purchases. (R4, tab 19 at 1, 3-4) 10. The government forwarded BIR’s ruling to Stonewin on September 30, 2022 (R4, tab 19 at 1). In the interim, Stonewin incurred tax charges to Phoenix that we infer Stonewin could have avoided had the government informed it of the ruling earlier (R4, tab 42 at 62). The next day, Stonewin expressed frustration that the government had not shared with it a draft of the embassy’s limited request respecting Phoenix before sending it, given that Petron was also a supplier to Stonewin for the contract, something Stonewin had previously informed DLA (R4, tab 10 at 1, tab 19 at 1). DLA then coordinated with the embassy to draft further correspondence with BIR (R4, tab 30 at 3-9). On March 17, 2023, five and a half months after Stonewin had identified the inadequacies of BIR’s first ruling, the United States Ambassador to the Philippines sent another letter to BIR further addressing the tax exemption matter. She observed the VFA mandated a tax exemption on fuel purchased for U.S. military forces, but that Philippine law required that the exemption be sought after purchase through applications. Because the tax refund process had not been codified, vendors were unwilling to purchase fuel for fear of non-reimbursement. She noted that BIR’s prior September 1, 2022, letter had clarified that purchases by Stonewin from Phoenix were exempt but requested that BIR expand that ruling to all fuel and supply vendors for the U.S. military to provide evidence of the tax-exempt status at the time of purchase. (Id. at 19) On April 12, 2023, BIR sent a letter to Stonewin ruling that all purchases from any local supplier made or to be made by Stonewin on behalf of the U.S. Armed Forces were exempt from Philippine taxes. The ruling said nothing to clarify the refund process uncertainty acknowledged by the Ambassador. (R4, tab 30 at 23-24) 11. Given all the facts, we find that neither Stonewin, its vendors, or any other vendors Stonewin might have retained, could have treated Philippine taxes as exempt under the VFA before the U.S. Government requested and obtained recognition from BIR. There was nothing Stonewin or its suppliers could have done themselves to obtain recognition of the exemptions. We also find that because the government ordered Stonewin to continue performance after Stonewin notified it that its suppliers were charging taxes on the fuel, Stonewin could not avoid paying the taxes until the embassy obtained recognition from BIR. 12. After receiving BIR’s April 12, 2023, ruling, Stonewin tried several times to obtain information from BIR concerning refunds of taxes already paid. It received no response. It reported those facts to the government on May 2, 2023, requesting further assistance establishing a reclaim procedure. (R4, tab 29 at 1-2; Schaltuper decl. ¶ 17) On July 26, 2024, Stonewin applied to BIR through counsel for a refund of the VAT and excise taxes paid to its suppliers (R4, tab 49 at 12-18; Schaltuper decl. ¶ 19). On March 14, 2025, BIR denied Stonewin’s request on the grounds that any request 6 had to be submitted by Phoenix and Petron as the taxpayers. It did not say such requests would be granted. (R4, tab 50 at 5-6) Phoenix and Petron declined to make their own requests because they did not believe they would be granted (id. at 7-8). Petron reported that it had not recovered any excise tax refunds that it had claimed since 2016 (R4, tab 44 at 4). Northern Star also expressed doubts that refunds could be recovered (app. supp R4, tab 6 at 1). There is no evidence that anyone (including the suppliers to the Air Force contract who also encountered impediments treating taxes exempt under the VFA) has recovered refunds from BIR of taxes exacted despite the fact they were subject to the VFA’s exemption. 13. Prior to BIR’s exemption rulings, Stonewin paid VAT and excise taxes to Phoenix, Petron, and Northern Star totaling $666,818.34 (R4, tab 42 at 61-63, 376-1307; Schaltuper decl. ¶ 20). It also incurred $6,259.41 in costs complying with contracting officer directives responding to the tax issue. They included personnel time communicating with the government, BIR, and suppliers; compiling tax payment data and documents; and other follow up efforts to implement contracting officer instructions. (Schaltuper decl. ¶ 21) 7 14. On March 13, 2024, Stonewin emailed a certified claim to the contracting officer seeking $720,864.14, including $666,818.34 in taxes paid and $54,049.80 in costs complying with contracting officer directives (R4, tab 38 at 3-7). On September 30, 2025, the contracting officer denied the claim (R4, tab 56 at 3-4). Stonewin appeals. DECISION There is no dispute that the fuel provided by Stonewin’s suppliers for its performance of the contract was subject to the VFA’s tax exemption. Stonewin has also established that it paid VAT and excise taxes charged to it by its suppliers prior to BIR’s confirmation of the VAT exemption, that the suppliers would not recognize the 7 Mr. Schaltuper attached to his declaration a listing of the $6,259.41 in expenses, with each item identifying the person who performed the work, time spent and amount incurred (Schaltuper decl., attach. A) . The government objects to the attachment for lack of foundation and claims the amounts are mere allegations and not records. It also maintains the listing is unreliable. Mr. Schaltuper’s declaration testified to the incurrence and accuracy of the amounts claimed and that the attachment reflects a true and accurate summary of Stonewin’s costs (Schaltuper decl. ¶ 21). The government has offered no evidence challenging his veracity or the truth of his assertions. He has established foundation for the attachment. The objection to the attachment is overruled. Regardless, Mr. Schaltuper’s unrefuted testimony proves Stonewin incurred the costs claimed. 7 VFA exemption until BIR confirmed it, and that BIR would not confirm it until the U.S. Government requested recognition (findings 5, 7-10, 13). The issue presented is whether Stonewin is entitled to a price increase from the government for those taxes, and associated costs, under FAR 52.229-6. FAR 52.229-6(c)(1) excluded from the contract price taxes and duties that the government and the Philippines agreed through the VFA would not be applicable. Accordingly, Stonewin omitted VAT and excise taxes from its price (finding 3). Subparagraph (d)(1) required the contract price to be increased by the amount of any tax or duty excluded from the price by a provision of the contract that Stonewin was required to pay, if Stonewin had stated in writing that the contract price did not include a contingency for that tax and the liability was not incurred through Stonewin’s fault, negligence, or failure to follow contracting officer instructions, or failure to comply with paragraph (i). Paragraph (i) required Stonewin to take all reasonable action to obtain exemption or refund of any taxes or duties from which the United States Government, Stonewin, or its subcontractors were exempt under agreements such as the VFA. The clause’s price adjustment requirement applies to contractors such as Stonewin, who did not directly incur the taxes but instead paid them indirectly as costs passed through from vendors and suppliers who actually paid them. Gen. Logistics Grp., Ltd., ASBCA No. 60838, 2021 WL 12149590, at *9. Paragraph (j) requires an equitable adjustment of the contract price to cover the costs of action taken by Stonewin at the direction of the contracting officer. Stonewin’s exclusion of VAT and excise taxes from the price satisfied the requirement that it state in writing that the price contained no contingency for them (finding 3). On January 4, 2022, right after performance commenced, Stonewin notified DLA that its suppliers were charging VAT and/or excise taxes (finding 5). The suppliers would not recognize a VFA exemption without confirmation from BIR (finding 7). DLA responded by ordering Stonewin to continue performance, meaning Stonewin had to pay the taxes charged by the suppliers for fuel. DLA also instructed Stonewin to provide the Philippines its determination that the supplies should be free of duties, taxes, and similar charges under the VFA. Stonewin responded the same day that it understood the government’s instructions and would continue deliveries. (Finding 5) Stonewin provided DLA’s determination to BIR and DOF (finding 6). Eventually, BIR informed Stonewin that the U.S. Government or its representative had to request a ruling confirming exemption from taxes, something DLA independently knew because the Air Force had encountered the same impediments (finding 8). We conclude Stonewin followed DLA’s instructions under FAR 52.229-6(d)(1) and (j) and took reasonable action to obtain recognition of the exemption under paragraph (i). However, we found there was nothing Stonewin or its suppliers could have done themselves to obtain BIR recognition of it (finding 11). Acknowledging that it had to act itself, the government then took control of the matter and involved the 8 embassy. The United States Ambassador eventually obtained BIR’s recognition that the VFA tax exemption applied to all of Stonewin’s suppliers under the contract on April 12, 2023. (Findings 8-10) Though Stonewin then reasonably endeavored to obtain refunds from BIR under paragraph (i), BIR denied Stonewin’s request (finding 12). The government presents a small number of repetitive arguments opposing Stonewin’s recovery that do not comport with the facts or the contract. The government contends that it is Stonewin’s fault it had to pay the taxes because it did not confirm the applicability of taxes with local tax authorities so that its prices included all applicable taxes that are not exempt (see R4, tab 1 at 143). The government has not proven that Stonewin did not accurately ascertain the applicability of taxes. Indeed, consistent with the terms of the VFA, Stonewin’s proposal excluded VAT and excise taxes from the contract price since those were subject to an exemption (finding 3). To the extent the government suggests that prior to award Stonewin was required to contact BIR and convince it to abide by the VFA exemption, we do not agree. FAR 52.229-6(i) does require Stonewin to take all reasonable action to obtain exemption and taxes that the United States and the Philippines have agreed are not applicable. However, paragraph (i) is a contract performance provision. Stonewin was no more obligated to perform the contract prior to award than the government. After the contract was awarded and it was charged the taxes, Stonewin followed government instructions and attempted to obtain exemption recognition from BIR (findings 5-8). Anyway, we have found there was nothing Stonewin could have done itself to obtain BIR’s recognition of the exemption (finding 11). The government further argues that Stonewin is at fault for the taxes because it knew prior to award that Petron and Phoenix intended to charge VAT and excise taxes so it should have secured other suppliers. The government has not shown there were any other suppliers that would have provided fuel to Stonewin without charging taxes. In fact, a separate Air Force contractor encountered the same issues with its suppliers (finding 8). We have found that no supplier to Stonewin could have treated Philippine taxes as exempt under the VFA before the U.S. Government obtained approval from BIR (finding 11). The government argues Stonewin’s notice to it about taxes was untimely under FAR 52.229-6(j), which required Stonewin to promptly notify the contracting officer of all matters relating to taxes that reasonably may be expected to result in an increase in the contract price. Stonewin knew prior to award that Phoenix and Petron intended to charge it VAT and excise taxes (finding 4). It disclosed those charges to the government on January 4, 2021, three days after the start of performance and upon Stonewin receiving bills for them (finding 5). The government suggests paragraph (j) required Stonewin inform the government prior to award that it would be charged taxes. 9  FAR 52.229-6(d)(1) expressly conditions a price increase for any taxes excluded from the contract price upon compliance with paragraph (i), requiring Stonewin to take reasonable actions to obtain exemption or refunds of taxes subject to the VFA, which Stonewin sought from BIR. However, subparagraph 6(d)(1) does not reference paragraph (j), presenting a question as to how closely we must scrutinize the promptness of a paragraph (j) notification to grant a price increase under subparagraph (d)(1). 8 On the other hand, subparagraph (d)(1) does condition a price increase on Stonewin following contracting officer instructions. It would make little sense that it could completely neglect to tell the government it had encountered matters that might result in a price increase, so that the government could issue instructions, and then claim the increase completely after the fact. Assuming then that Stonewin’s promptness providing notification has some relevance to whether it should receive a price increase, paragraph (j) is also a contract performance provision. The earliest paragraph (j) became operative was the date of award, November 17, 2021, 48 days before Stonewin provided notice to the government (findings 2, 5). Presumably, the government is suggesting that the number of days Stonewin took to notify it matters because had it known about the taxes earlier it might have obtained BIR’s ultimate recognition of the exemptions sooner, reducing how much taxes Stonewin paid. We conclude that if we must assess Stonewin’s promptness, it should be judged in relation to all the facts, including the time spent by the government to act itself. The government took nearly three months after learning from Stonewin that it would have to directly seek BIR’s approval of the exemption before making its first request of BIR, and then it failed to disclose all of Stonewin’s suppliers, though Stonewin had notified the government about them (findings 7-10). The government then delayed over two weeks providing Stonewin with BIR’s initial ruling respecting Phoenix, forcing Stonewin to incur unnecessary tax charges (findings 9-10). Though upon learning of the BIR ruling Stonewin immediately informed the government it was inadequate, the government then took another five and half months to correct its request and seek an expanded ruling. The over nine months consumed by the government to address exemptions from BIR reveals no urgency on its part to resolve the tax issue. It was not until April 12, 2023, that BIR fully recognized the VFA exemption for all of Stonewin’s suppliers, over a year after Stonewin notified the government of the taxes (findings 5, 10). The time expended by the government to seek those rulings contributed significantly to that duration. Considered in context, Stonewin’s 48 days to initially notify the government about the taxes, instead of 8 Gazpromneft-Aero Kyrgyzstan LLC v. United States, 132 Fed. Cl. 202, 214-23 (Fed. Cl. 2017), holds that compliance with paragraph (j)’s promptness requirement is a condition to obtain a price increase under subparagraph (d)(1). It does not really explain why that is and we are not bound by it. 10 perhaps 10, did not materially impact events, and therefore was not so excessive as to deprive it of the price increase. The government also maintains that Stonewin was not required to bear the taxes because Stonewin and its suppliers should have sought refunds from BIR. On the contrary, Stonewin engaged in reasonable efforts to obtain refunds, which BIR first ignored and then denied (finding 12). Nothing in the clause conditions the price increase upon the contractor’s suppliers seeking refunds of improperly imposed taxes. See Gen. Logistics Grp. at *9 (awarding relief for exempt customs duties paid to suppliers without conditioning recovery on a refund effort by the suppliers). The suppliers were not subcontractors bound to the terms of the prime contract. They were simply vendors from whom Stonewin made purchases. Moreover, based on their previous experience, the suppliers considered refund requests pointless (finding 12). We are unaware of any leverage Stonewin possessed to force its suppliers to incur costs in a pursuit they considered futile. Nor is there any evidence that refunds were in fact available to suppliers. That BIR identified Phoenix and Petron as the parties who could submit refund requests does not prove they could recover (id.). The United States Ambassador had herself noted uncertainty about whether Philippine law provided refunds (finding 10). Similarly, we are not persuaded by the government’s contention that Stonewin should have sued its suppliers for refunds of the taxes it paid to them prior to the BIR rulings. The government has not established that such a suit is possible under Philippine law, what its legal basis would have been, or that it had any chance of success. In a similar vein, the government stresses that Stonewin voluntarily paid the taxes charged by its suppliers. It is true that after Stonewin started performing the contract, and its suppliers charged the taxes, Stonewin agreed to pay them (findings 4-5, 13). It had no choice given that DLA ordered it to continue performance after Stonewin notified it of the charges. It had to pay the taxes to obtain the fuel from its suppliers until the government obtained BIR’s recognition of the exemptions. (Findings 5, 7) Neither Stonewin nor its suppliers were themselves able to obtain recognition from BIR of the VFA exemption (finding 11). Stonewin has established entitlement to a price increase under FAR 52.229- 6(d)(1) reflecting the taxes it paid to its suppliers pre-dating its notice of the applicable BIR rulings. The government does not challenge Stonewin’s claim these taxes total $666,818.34. Stonewin has also established that it incurred $6,259.41 in costs complying with contracting officer directives. (Finding 13) It is entitled to an equitable adjustment for that amount under FAR 52.229-6(j). 11  CONCLUSION The appeal is sustained. Stonewin is entitled to $673,077.75, plus Contract Disputes Act (CDA) interest accruing from March 13, 2024. See 41 U.S.C. § 7109(a). Dated: October 22, 2026 MARK A. MELNICK Administrative Judge Armed Services Board of Contract Appeals I concur I concur J REID PROUTY DAVID D’ALESSANDRIS Administrative Judge Administrative Judge Acting Chairman Vice Chairman Armed Services Board Armed Services Board of Contract Appeals of Contract Appeals 12  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. 64384, Appeal of Stonewin International LLC, rendered in conformance with the Board’s Charter. Dated: October 23, 2026 PAULLA K. GATES-LEWIS Recorder, Armed Services Board of Contract Appeals 13