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Unclear Award Document Precluded Summary Judgment

The government was not entitled to summary judgment on an equitable adjustment claim, according to the Armed Services Board of Contract Appeals, because the record required development to determine whether the award document was a requirements contract or a basic ordering agreement. The munitions contractor asserted it was awarded a requirements contract, and the government's failure to estimate quantities beyond the first year caused it to incur reimbursable costs. In moving for summary judgment, the government argued the award document was a nonbinding BOA. Whereas a requirements contract obligates the government to order its requirements of a specific item for a specified period of time, a BOA is merely a mutual written understanding that provides for terms and conditions that will apply to future contracts between the parties.

Mixed Message

The documentary evidence was contradictory. Although the draft solicitation provided for the award of a requirements contract, the revised solicitation, while retaining typical requirements contract clauses, indicated the government intended to award a BOA. However, the revised solicitation and award document did not include all prescribed BOA clauses, and the award document inconsistently stated it was a BOA and a contract. Moreover, in response to the contractor's pre-bid request for clarification, the government referred to 10 USC 2304a and advised it did not plan to obtain competition before issuing delivery orders, which was consistent with a requirements contract but not a BOA. On the other hand, the contractor agreed without protest to perform several DOs that stated they were issued under a BOA. Given the confusing evidence, the board concluded it required further evidence of the parties' contemporaneous interpretation to classify the award document, and summary judgment was inappropriate. (General Dynamics Ordnance and Tactical Systems, Inc., ASBCA, 93,208)




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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