CBCA 8468

RESPONDENT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM DENIED: December 18, 2025 CBCA 8468 FOUR LLC, Appellant, v. DEPARTMENT OF AGRICULTURE, Respondent. Alexander B. Hastings of Morgan, Lewis & Bockius LLP, Washington, DC; and Clinton Small of Morgan, Lewis & Bockius LLP, Chicago, IL, counsel for Appellant. Elin Dugan, Office of the General Counsel, Department of Agriculture, San Francisco, CA; and Michelle Weiner, Office of the General Counsel, Department of Agriculture, Charlotte, NC, counsel for Respondent. Before Board Judges LESTER, KANG, and NEWSOM. LESTER, Board Judge. Respondent, the Department of Agriculture, has filed a motion to dismiss this appeal for failure to state a claim, arguing that, as a matter of law, the agency’s Digital Infrastructure Services Center (DISC) cannot be held responsible in monetary damages for the actions of another agency, the Federal Emergency Management Agency (FEMA). DISC awarded and managed a task order to appellant, Four LLC (Four), upon behalf of FEMA. Through DISC’s task order, Four supplied licenses for a particular brand of software not to DISC, but CBCA 8468 2 to FEMA.1 Four alleges that, through a bilateral modification to the original task order, DISC agreed that, if DISC did not exercise both of the one-year extension options in the task order, the Government would not use the software or replace it with a functional equivalent for the remainder of what would have been the full term (including options) of the task order. DISC did not exercise the second one-year option because FEMA, through its own procurement office, obtained replacement software through another contractor. Four considers FEMA’s act of obtaining replacement software a breach of the task order provision. Although the parties dispute whether they actually agreed to add the provision described above to the task order and dispute the meaning of the language used in it, those issues are not currently before us. The only issue that DISC presents in its motion to dismiss is whether, as a matter of law (and assuming that the provision was added to its task order), it may be held liable in damages for FEMA’s actions, arguing that it was not serving as FEMA’s “agent” in a manner that would impose liability under an agency theory. Contrary to DISC’s position, however, Four is not asserting entitlement under an agency theory. It is seeking damages for a breach of contract. The law is clear that, although an agency like DISC is not normally responsible for the actions of another agency, an agency can, through contract, assume financial responsibility for another’s actions by warranting that a future event, even if under the control of the other agency, will or will not happen. In so doing, it assumes the risk of improper action by the other agency and of liability for resultant damage. As a result, we must deny DISC’s motion to dismiss, without prejudice to DISC’s ability to seek summary judgment after the record is more fully developed regarding its liability for FEMA’s actions. In so deciding, we are not holding that the provision was, in fact, a part of the task order or that the provision’s language created a warranty by DISC about what actions FEMA would take. We hold only that, in its complaint, Four has set forth allegations of an actionable breach of warranty by DISC. Background I. The Task Order The statement of facts set forth below are based upon the allegations that Four set forth in its complaint filed July 25, 2025, except as otherwise noted. 1 It does not appear that the existing record explains why DISC, rather than FEMA’s own procurement office, issued a task order to obtain software for FEMA’s, rather than its own, use. CBCA 8468 3 On or about July 26, 2019, DISC posted a request for quotes on the National Aeronautics and Space Administration’s Solutions for Enterprise-Wide Procurement Government-Wide Acquisition Contract website (SEWP V)2 seeking quotes from established authorized resellers of licenses of a specific software developed by Splunk Enterprise (the Splunk software) to supply such licenses to FEMA, rather than DISC, for a base year with options for two one-year extensions. Appeal File, Exhibit 1. Four submitted quote no.