CBCA 7184

DISMISSED FOR FAILURE TO STATE A CLAIM: December 20, 2021 CBCA 7184 OWL, 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. David G. Fagan, Office of General Counsel, Department of Veterans Affairs, Portland, OR, counsel for Respondent. Before Board Judges BEARDSLEY (Chair), GOODMAN, and DRUMMOND. BEARDSLEY, Board Judge. The Department of Veterans Affairs (VA) moves to dismiss for failure to state a claim the appeal of OWL, Inc. (OWL) on the grounds that (1) there can be no recovery of alleged costs attributable to an unforeseen pandemic and (2) the VA is not obligated under a requirements contract to purchase a certain number of services. We dismiss the appeal for failure to state a claim. Background On July 12, 2017, OWL entered into a requirements contract with the VA to “provide ambulatory, wheelchair and stretcher transportation services to VA beneficiaries of the CBCA 7184 2 Phoenix VA Health Care System and Clinics.” Appeal File, Exhibit 2 at 60.1 The period of performance was a base year with five one-year option periods. Id. The contract indicated that “[t]his is a requirements contract for the period of July 2017 through April 2022.” Id. at 1. The contract included the Federal Acquisition Regulation (FAR) clause 52.216-21 Requirements (OCT 1995), stating in part: This is a requirements contract for the supplies or services specified, and effective for the period stated, in the Schedule. The quantities of supplies or services specified in the Schedule are estimates only and are not purchased by this contract. Except as this contract may otherwise provide, if the Government’s requirements do not result in orders in the quantities described as “estimated” or “maximum” in the Schedule, that fact shall not constitute the basis for an equitable price adjustment. Id. at 83 (emphasis added). The contract also included FAR clauses 52.216-18 Ordering (OCT 1995) and 52.216-19 Order Limitations (OCT 1995). Id. OWL alleges that as a result of the COVID-19 pandemic,2 “the VA effectively issued a partial stop work order/government delay of work/change of work scope by limiting the number of patients per trip, reducing trip requests, and giving patients instructions to conduct telehealth appointments.” Notice of Appeal at 2.3 OWL claims that “the COVID-19 pandemic, the Executive Order and the VA’s actions substantially reduced ridership and substantially changed how OWL delivered transportation services.” Id. at 3. Because of the reduction in revenue and trips, OWL submitted to the contracting office a request for equitable adjustment (REA) that sought reimbursement for the calendar year 2020 of $380,060.37. The requested amount was based on a loss of revenue of $850,218 minus savings due to a reduced labor force and fuel costs of $470,157.63. Id. On August 12, 2021, OWL timely appealed to the Board the decision of the contracting officer denying OWL’s REA. 1 All exhibits are in the appeal file, unless otherwise indicated. 2 On March 13, 2020, President Trump declared a national emergency with respect to the COVID-19 pandemic (Proclamation No. 9994, 85 Fed. Reg. 15,337 (Mar. 13, 2020), Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak). On March 18, 2020, President Trump issued an Executive Order (Executive Order No. 13,909, 85 Fed. Reg. 16,227 (Mar. 18, 2020), Prioritizing and Allocating Health and Medical Resources to Respond to the Spread of COVID-19) which required prioritizing and allocating health and medical resources to respond to the COVID-19 pandemic. 3 Appellant designated its notice of appeal as its complaint. CBCA 7184 3 Discussion The Board looks to Rule 12(b)(6) of the Federal Rules of Civil Procedure for guidance in deciding a motion to dismiss for failure to state a claim. Rule 8(e). Thus, in considering this motion, “we must assume all well-pled factual allegations are true and indulge in all reasonable inferences in favor of the nonmovant.” Anaheim Gardens v. United States, 444 F.3d 1309, 1314-15 (Fed. Cir. 2006)).