ASBCA 58633

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) Engineering Solutions & Products, LLC ) ASBCA No. 58633 ) Under Contract No. 000000-00-0-0000 ) APPEARANCES FOR THE APPELLANT: Richard L. Moorhouse, Esq. David G. Barger, Esq. JozefS. Przygrodzki, Esq. Greenberg Traurig, LLP McLean, VA Ryan C. Bradel, Esq. Greenberg Traurig, LLP Washington, DC APPEARANCES FOR THE GOVERNMENT: Raymond M. Saunders, Esq. Army Chief Trial Attorney MAJ Bruce L. Mayeaux, JA Trial Attorney OPINION BY ADMINISTRATIVE JUDGE D' ALESSANDRIS In 2004, appellant Engineering Solutions and Products, LLC (ESP) leased a warehouse from First Potomac Realty Trust (FPRT) to support the United States Army (Army) Program Executive Office (PEO) Soldier. 1 At the time, ESP held a prime contract to provide this warehouse space for government use issued by the Department of the Treasury, Bureau of the Public Debt (BPD), Franchise Services. 2 ESP subsequently provided the warehouse space to the Army as a subcontractor to a series of prime contractors. In late 2005, while ESP was a subcontractor, the Army indicated that it would be interested in leasing more warehouse space at Haymarket, Virginia. ESP subsequently negotiated with the landlord, FPRT, for FPRT to expand the warehouse. ESP entered into a ten-year lease with FPRT, with the base rent 1 Project Manager, Soldier Equipment (PMSEQ) was a program office within PEO Soldier. PMSEQ was later renamed Project Manager Soldier Protection and Individual Equipment (PM SPIE). (Tr. 1/135, 186) 2 BPD used this contract, and others like it, to obtain property or sources for the benefit of other government agencies (like the Army here) which would, in tum, compensate BPD for its costs. front-loaded into years one through seven, and no base rent for years eight to ten, and with an early termination fee. During the negotiations for the expansion of the warehouse, the Army reviewed the construction design to ensure that the new space would meet its needs, helped ESP and FPRT in negotiations with Prince William County, Virginia, planning and zoning officials, and monitored the progress of construction activity. ESP leased the expanded warehouse space beginning in April 2007. The Army vacated the warehouse in March 2012, approximately five years into ESP's ten-year lease with FPRT. ESP contends that there was an implied-in-fact contract with the Army requiring the Army to pay the early termination fee, year six rent, and other costs totaling roughly $4.2 million. ESP submitted a certified claim that was denied by the Army's contracting officer. ESP subsequently appealed to the Board. The Army's motion for summary judgment was denied by the Board on 13 May 2015. Engineering Solutions & Products, LLC, ASBCA No. 58633, 15-1BCAi\35,989, recon. denied, 16-1BCAi\36,313. The Board held a four-day hearing beginning on 19 September 2016. Because we find that ESP has not demonstrated the existence of an implied-in-fact contract with the Army, we deny the appeal in its entirety. FINDINGS OF FACT 1. In August 2001, the Department of the Treasury, BPD, Franchise Services (FedSource), awarded Open Market Blanket Purchase Agreement (BPA) No. 4000 to ESP (app. supp. R4, tab 79 at 1, 4; tr. 1/46). 2. FedSource was a "franchise-fund activity" created by the Department of the Treasury. See 31 U.S.C. § 322 'note (Department of the Treasury Franchise Fund). FedSource awarded its own contracts for goods and services to be provided to other agencies (supp. R4, tab 52 at 171 ). 3. In April 2004, while ESP was a prime contractor to FedSource it leased approximately 123,777 square feet at a warehouse located at 15395 John Marshall Highway, Haymarket, Virginia (the Haymarket warehouse) (app. supp. R4, tab 85 at l; compl. iii! 9, 12; tr. 2/59, 65). Preston Turner, a senior logistician for PEO Soldier, initially identified the Haymarket property to ESP as being suitable for the Army's purposes (tr. 2/9-10). 4. The FedSource center in Beaufort, South Carolina (FedSource-Beaufort) issued at least one task order to ESP under BPA No.