CBCA 7019

DISMISSED FOR FAILURE TO STATE A CLAIM: September 3, 2021 CBCA 7019 MLB TRANSPORTATION, INC., Appellant, v. DEPARTMENT OF VETERANS AFFAIRS, Respondent. James L. Hughes and Les A. Schneider of Wimberly, Lawson, Steckel, Schneider & Stine, P.C., Atlanta, GA, counsel for Appellant. Laetitia C. Coleman, Office of General Counsel, Department of Veterans Affairs, Lakewood, CO; and Neil S. Deol, Office of General Counsel, Department of Veterans Affairs, Decatur, GA, counsel for Respondent. Before Board Judges GOODMAN, ZISCHKAU, and SULLIVAN. SULLIVAN, Board Judge. For five months in 2020, MLB Transportation, Inc. (MLB) held a contract to transport patients in wheelchairs by van from the Department of Veterans Affairs (VA) hospital in Atlanta, Georgia, to their homes. Because its payments on the contract declined due to decreased need for transportation services during the COVID-19 pandemic, MLB filed a claim with the VA contracting officer, seeking payment of insurance costs and vehicle financing costs that it expected to recoup during the last two months of its contract. MLB appealed the denial of its claim to the Board. CBCA 7019 2 VA filed a motion to dismiss for failure to state a claim, asserting that MLB has not and cannot identify a clause of its contract that gives MLB the right to seek payment for these costs. In reviewing the contract, we found that, although the parties describe the contract as an indefinite quantity contract, it contained no guaranteed minimum and was, therefore, illusory. Because MLB did not allege in its claim or its notice of appeal that it has not been paid for the services it rendered, we dismiss the appeal for failure to state a claim.1 Background The initial period of MLB’s contract was January 1 through February 29, 2020. Exhibit 5 at 7.2 The contract period was extended three times and ended on May 14, 2020. Exhibits 12, 21, 30. The contract contained five line items—two were prices for short- or long-distance trips ($80 and $96), two were mileage rates for short- and long-distance trips ($4.25/mile and $5/mile), and the fifth was the price for waiting, charged in increments of fifteen minutes. For each of these line items, the contract listed a quantity and a total cost, which was the product of the quantity and the unit price. For example, for one-way trips of less than 100 miles, the quantity was 2054 and the unit price was $80 for a total line item value of $164,320. Exhibit 5 at 5. By modification dated March 16, 2020, the quantity of short- distance trips was increased from 2054 to 6585. Exhibit 19. It appears that the parties treated the contract as an indefinite quantity contract based upon the invoices submitted, which sought payment for quantities smaller than these line items. See, e.g., Exhibit 33. The contract does not contain any language indicating that the contract is an indefinite quantity or requirements contract. Neither an indefinite quantity clause nor a requirements clause is include or incorporated into the contract. Although the contract states that “[t]he government reserves the right to increase or decrease the actual requirements as required – see guaranteed minimum,” Exhibit 5 at 7, the contract does not state a guaranteed minimum.3 The contract also does not state that VA will only purchase wheelchair van transportation services from MLB. 1 Pursuant to Board Rule 6(a), on January 21, 2021, MLB notified the Board of its choice to designate its notice of appeal as its complaint. 48 CFR 6101.6(a) (2020). 2 All exhibits are in the appeal file, unless otherwise indicated. 3 MLB held another contract with VA in 2019 to provide the same type of services. That contract included the Indefinite Quantity clause at 48 CFR 52.216-22 and a statement regarding the guaranteed minimum. Exhibit 1 at 5, 19. CBCA 7019 3 The contract included the Commercial Items clause, Federal Acquisition Regulation (FAR) 52.212-4, Contract Terms and Conditions—Commercial Items (Oct. 2018). 48 CFR 52.212-4 (2019). That clause provides that “[c]hanges in the terms and conditions of this contract may be made only by written agreement of the parties.” Exhibit 5 at 19. The clause further provides that the possible causes of excusable delay under the contract include a pandemic. Id. at 20.