Agency Cannot Withhold Payment for Allegedly Faulty Product When Contractor Did Not Fail to Meet Contract Requirements; ASBCA No. 57929, Appeal of Ensign-Bickford Aerospace & Defense Company

Appeal of the agency’s denial of a request for equitable adjustment for costs related to the rejection of four lots of deliverables is sustained, where the results of the first article test did not add product specifications above those detailed in the contract; where the government could not demonstrate that issues with the deliverables were unacceptable either by contract provision or by industry standard; and where the government did not demonstrate that its safety concerns were reasonable, and where, even if reasonable, safety concerns cannot lead to the rejection of products at the expense of the contract without a failure to meet a contract requirement.