CBCA 3964

GRANTED: July 30, 2015 CBCA 3964 XEROX CORPORATION, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Donald J. Walsh of Offit Kurman, P.A., Owings Mills, MD, counsel for Appellant. Michael J. Noble, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges VERGILIO, POLLACK, and SULLIVAN. SULLIVAN, Board Judge. By motion filed May 13, 2015, appellant, Xerox Corporation (Xerox), seeks summary relief on its appeal of the contracting officer’s deemed denial of its claim seeking payment of early termination charges arising from the termination for convenience of its delivery order with the National Navy Medical Center (NNMC) for the lease of copiers and other office equipment. Respondent, General Services Administration (GSA), admits that Xerox is entitled to recover the early termination charges and offers no challenge to Xerox’s calculation of the charges it is owed. For the following reasons, the Board grants Xerox’s motion and appeal. CBCA 3964 2 Statement of Facts I. Schedule Contract with GSA On October 1, 2001, GSA awarded Xerox a schedule contract that allowed federal agencies to lease copiers and other equipment from Xerox. Appeal File, Exhibit 1 (contract no. GS-25F-0062L).1 The schedule contract contained the terms and conditions that were to govern the delivery orders issued by the ordering agencies, several of which are at issue in this appeal. The first concerns the length of the leases agencies would enter into with Xerox: 1. Statement of Government Intent Lease Term is defined as the duration of the lease in months (not to exceed 60 months) as shown on the Ordering Agency’s initial delivery order. It is understood by all parties to this contract that this is a leasing arrangement. In that regard, the Government anticipates fulfilling the leasing contract subject to the availability of appropriated funds and the continued needs of the Ordering Agency. The Ordering Agency, upon issuance of any delivery order pursuant to Special Item Numbers (SIN) 51 58, 51 58a or 51 58b, intends to use the equipment for the lease term specified in the initial delivery order so long as the needs of the Ordering Agency for the equipment or functionally similar equipment continues to exist and adequate funds are appropriated. Exhibit 2 at 3. The schedule contract advised ordering agencies that Xerox would receive early termination charges if the agency decided to terminate early the delivery order for reasons other than the lack of (1) “a bona fide need for the equipment or functionally similar equipment;” or (2) appropriated funds sufficient to make the lease payments. Id. at 4, 9 (¶¶ 3, 14). The ordering agency and Xerox were to agree upon the early termination charges and incorporate them into the delivery order: 13. Early Termination Charges Equipment leased under this agreement may be terminated at any time during a Government fiscal year by the Ordering Agency’s Contracting Office responsible for the delivery order in accordance with FAR [Federal Acquisition Regulation] 52.212-4, paragraph (l) Termination for the 1 All exhibits are found in the appeal file, unless otherwise noted. CBCA 3964 3 Government’s Convenience. The Termination Ceiling Charge is a limit on the amount that a contractor may claim from the Ordering Agency on the termination for convenience of a lease or failure to renew a lease prior to the end of the lease term for reasons other than those set forth in paragraph 14, Termination for Non-Appropriation. Termination ceiling charges will apply for each year of the lease term (See FAR 17.1). The Ordering Agency and contractor shall establish a Termination Ceiling amount. The Contracting Officer shall insert the Termination Ceiling Charge for amount of the first year in the order and modify it for successive years upon availability of funds. Id. at 8.