CBCA 7601

DENIED: October 7, 2024 CBCA 7601, 7721 COMMONWEALTH HOME HEALTH CARE, INC., Appellant, v. DEPARTMENT OF VETERANS AFFAIRS, Respondent. Sarah Reida of Legal Meets Practical, LLC, Alpharetta, GA, counsel for Appellant. Neil S. Deol, Office of General Counsel, Department of Veterans Affairs, Decatur, GA, counsel for Respondent. Before Board Judges BEARDSLEY (Chair), SULLIVAN, and CHADWICK. SULLIVAN, Board Judge. Commonwealth Home Health Care, Inc. (Commonwealth) appealed the denials of its claims on a contract with the Department of Veterans Affairs (VA) for the provision of home oxygen services. The parties have requested that the Board bifurcate the issues of liability and quantum and decide the issue of liability on the written record, pursuant to Rule 19 (48 CFR 6101.19 (2023)). Here, the Board decides the issue of liability on two questions: was VA’s monthly patient estimate negligently prepared, and were option years one and two improperly exercised when the actual patient numbers fell below VA’s estimate? For the reasons that follow, we answer no to these questions. We also find that, although VA exercised the second option year late, Commonwealth waived or forfeited its right to object by continuing performance. We deny the appeals. CBCA 7601, 7721 2 Background I. Prior and Related Contracts In July 2013, Commonwealth entered into a contract with VA to provide home oxygen equipment for veterans in the North Florida/South Georgia (NFSG) Veterans Health System. Appeal File, Exhibit 34 at 880, 893-94.1 In that contract, VA estimated that Commonwealth would serve 1850 patients monthly in the NFSG region. Id. at 893. Commonwealth performed this contract into 2019. Exhibit 28 at 50–51, 93. In January 2020, VA entered into an emergency contract with Commonwealth, which Commonwealth performed until June 2020. Exhibit 35 at 72, 98, 100, 102. We refer to these two contracts collectively as the predecessor contracts. Over the course of these predecessor contracts, the number of patients served by Commonwealth increased substantially. Exhibit 28 at 69–70. Both parties calculated the monthly average number of patients served for fiscal years 2018, 2019, and the first three quarters of fiscal year 2020, but their averages do not match: VA’s Calculation Commonwealth’s Calculation Fiscal Year 2018 2920 2872 Fiscal Year 2019 2953 2940 Fiscal Year 2020 2952 2870 Exhibit 36; Appellant’s Initial Brief in Support of Its Consolidated Appeals (Appellant’s Initial Brief) at 19-21. We find that Commonwealth’s calculations are correct. See Exhibits 1-3, 52-54. In addition to the predecessor contracts, Commonwealth also has contracts with VA to provide home oxygen services in Alabama, North Carolina, Virginia, and West Virginia. Exhibit 30 at 22; Exhibit 28 at 15. VA has contracted with Commonwealth to provide home oxygen services continuously since 1996, and Commonwealth’s Vice President of Business Development has been personally involved with the predecessor contracts, including reviewing the solicitations and putting together Commonwealth’s offers to VA. Exhibit 28 at 9, 16. 1 All exhibits are found in the appeal file, unless otherwise noted. The page numbers cited are the Bates numbers on the exhibits with prefixes removed. CBCA 7601, 7721 3 II. The Contract A. Relevant Terms VA awarded the current firm-fixed-price requirements contract to Commonwealth on October 1, 2020, with a base year (October 1, 2020, to September 30, 2021) and four one-year options. Exhibit 9 at 1, 23-41, 49. The contract contains the standard Federal Acquisition Regulation (FAR) Requirements clause, 48 CFR 52.216-21 (2020) (FAR 52.216-21). Id. at 49-51. In both the Requirements clause and the statement of need, VA advised that it would not consider as the basis for a request for an equitable adjustment the fact that its actual orders did not meet the estimated amounts. Id. at 5 and 49. VA estimated the annual cost to be $3,476,760, for the base year and each of the four option years. Id. at 23-42. VA estimated the monthly average for the number of patients to be served would be 3100. Id. at 4. VA did not disclose the data used to generate the estimate. B.