CBCA 6772

DENIED: March 31, 2021 CBCA 6772 MICROTECHNOLOGIES LLC dba MICROTECH, Appellant, v. DEPARTMENT OF JUSTICE, Respondent. Joseph J. Petrillo and Karen D. Powell of Smith Pachter McWhorter, PLC, Tysons Corner, VA, counsel for Appellant. Robin M. Fields and Matthew Vince, Office of General Counsel, Executive Office for United States Attorneys, Department of Justice, Washington, DC, counsel for Respondent. Before Board Judges GOODMAN, DRUMMOND, and CHADWICK. GOODMAN, Board Judge. Appellant, Microtechnologies LLC dba Microtech, has filed this appeal from the decision of a contracting office of respondent, Department of Justice (DOJ), denying its claim for termination for convenience costs. Appellant and respondent have filed motions for summary judgement. We grant respondent’s motion, deny appellant’s motion, and deny the appeal. CBCA 6772 2 Background Appellant holds a multiple-award government-wide acquisition contract (the contract) for information technology products and services. On September 25, 2017, respondent issued a fixed-price delivery order (the order) under the contract, effective September 27, 2017, for a brand name of workstation perpetual software licenses, plus travel and software maintenance. The period of performance included one base year (September 29, 2017, to September 28, 2018) and two potential option years (September 29, 2018, to September 28, 2019; and September 29, 2019, to September 28, 2020). The cost of software maintenance during each option year, if exercised, was $688,051.80. On September 29, 2017, at the beginning of the base year of performance, appellant purchased the perpetual software licenses and software maintenance for the base year and both option years and paid the invoice for this purchase on October 31, 2017. Two days after the base year period of performance ended, on Sunday, September 30, 2018, at approximately 2:30 p.m., appellant’s financial services manager emailed respondent’s Executive Office for United States Attorneys acquisitions staff, chief of operations, indicating that she had not heard from the contracting officer’s representative (COR) regarding the exercise of the first option year. Later that day, at approximately 6:30 p.m., respondent transmitted via attachment to email a proposed bilateral modification designated P00002 (modification 2), which stated in part: “To exercise option year 1 for [brand name] Workstation Perpetual Software License for the period of September 29, 2018, through September 28, 2019, in the amount of $688,051.80.” Appellant accepted, signed, and returned modification 2 the same day at approximately 9:10 p.m. On Monday, October 1, 2018, at 8:37 a.m., the assistant director of respondent’s acquisitions staff sent an email to appellant’s financial services manager informing appellant that the option year had been exercised in error. Attached to the email was modification P00003 (modification 3), which read in part as follows: “The purpose of this modification is to terminate Option Year One. The option year was exercised in error.” At 9:09 a.m., appellant received an email from respondent requesting signature on a modification terminating the option year. Appellant did not sign that modification, and on October 2, 2018, respondent sent appellant a unilateral modification dated October 1, 2018, terminating the option year, which was signed by the contracting officer. By letter dated November 29, 2018, appellant informed respondent that the manufacture of the brand name work stations does not sell software maintenance for less than a one-year term, and so respondent will be liable, as the result of the termination of the modification, for the full cost of a one-year maintenance subscription. Therefore, appellant suggested that respondent rescind the termination, and requested a response so that it could CBCA 6772 3 send a termination cost proposal if the termination was not rescinded. The letter also stated that the “short form” Termination for Convenience clause referenced in the modification was not in the order or in the contract; instead, the correct convenience termination clause was the one for commercial item contracts, Federal Acquisition Regulation (FAR) 52.212-4(l). By letter dated May 17, 2019, appellant sent respondent a claim for termination costs in the amount of $688,051.80, which represented the price of one year of software maintenance in modification 2.