CBCA 4012

CBCA 4012, 4013 DISMISSED AS MOOT; CBCA 5083 DENIED: May 17, 2016 CBCA 4012, 4013, 5083 UNIVERSAL HOME HEALTH AND INDUSTRIAL SUPPLIES, INC., Appellant, v. DEPARTMENT OF VETERANS AFFAIRS, Respondent. Anthony R. Smith, President of Universal Home Health and Industrial Supplies, Inc., Tampa, FL, appearing for Appellant. David G. Fagan, Office of Regional Counsel, Department of Veterans Affairs, Portland, OR, counsel for Respondent. Before Board Judges GOODMAN, WALTERS, and SULLIVAN. SULLIVAN, Board Judge. Appellant, Universal Home Health and Industrial Supplies, Inc. (Universal), appeals the decisions of the respondent, Department of Veterans Affairs (VA), to terminate two of its task orders (docketed as CBCA 4012 and 4013). Universal alleges that the initial decisions to terminate for default were undertaken in bad faith and, as a consequence, VA owes Universal damages, despite the fact that the terminations have been converted to terminations for convenience (docketed as CBCA 5083). The parties have submitted the appeals for a decision on the record, pursuant to Rule 19 of the Rules of the Civilian Board of Contract Appeals. 48 CFR 6101.19 (2015). For the reasons that CBCA 4012, 4013, 5083 2 follow, the Board dismisses Universal’s original appeals of the terminations for default (CBCA 4012 and 4013) and denies CBCA 5083. Statement of Facts I. The Contract and Task Orders A. Underlying Federal Supply Schedule contract The task orders at issue in these appeals were awarded based upon a Federal Supply Schedule (FSS) contract that Universal held to supply medical equipment and supplies (FSS contract number V797P-4612a). Exhibit 11 at 203.1 The original contract period was February 20, 2004, through February 19, 2009, id. at 204, but through a series of modifications, the contract period was extended to February 14, 2014. Id. at 641; Exhibit 4 at 55. This contract incorporated 48 CFR 52.212-4 (Federal Acquisition Regulation (FAR) 52.212-4), Contract Terms and Conditions–Commercial Items (Feb. 2003), which contains provisions for the termination of the contract for the Government’s convenience and termination for cause. Exhibit 11 at 190. The contract also provided that any supplies to be furnished by Universal under the contract would be ordered by delivery or task order. Id. at 391 (FAR 52.216-18, Ordering). “Such orders may be issued during the contract term.” Id. The contract contained several FSS provisions, including the requirement to provide proof of uninterrupted supply: When requested by the Contracting Officer, if other than the manufacturer, the offeror must submit prior to award of a contract, either (1) a letter of commitment from the manufacturer which will assure the offeror of a source of supply sufficient to satisfy the Government’s requirements for the contract period, or (2) evidence that the offeror will have an uninterrupted 1 Unless otherwise indicated, the exhibits are from the appeal file submitted by the VA in appeal CBCA 4012. The Portland task order termination is the subject of CBCA 4012. The Board ordered the agency to provide a copy of Universal’s FSS contract, which it did on January 28, 2016. The Board cites throughout this decision to the contract submitted as Exhibit 11 of the appeal file in CBCA 4012. CBCA 4012, 4013, 5083 3 source of supply from which to satisfy the Government’s requirements for the contract award. Exhibit 11 at 422 (I-FSS-644, Dealers and Suppliers (Oct. 1988)). The FSS contract contains such a statement from MedNet Health, dated August 1, 2008: This letter is to certify that Universal Home Health and Industrial Supplies, Inc. is an authorized distributor for MedNet Health. MedNet Health is committed to selling products to Universal Home Health and Industrial Supplies, Inc. to service the contract award from the award date through the end of the contract period. Id. at 1544. B. Portland and Boise VA task orders 1. Task orders awarded On June 2, 2012, VA awarded to Universal a task order for the delivery of cardiac event monitoring services for patients at a VA hospital located in Portland, Oregon. Exhibit 9 at 157.