CBCA 5089

CBCA 5089 GRANTED IN PART; CBCA 5619 GRANTED: July 30, 2021 CBCA 5089, 5619 MICHAEL JOHNSON LOGGING, Appellant, v. DEPARTMENT OF AGRICULTURE, Respondent. Joseph Scuderi, Jeremey Dobbins, and Andrew Friese of Scuderi Law Offices, P.S., Olympia, WA, counsel for Appellant. Kate Z. Schneider, Office of the General Counsel, Department of Agriculture, Portland, OR, counsel for Respondent. Before Board Judges SHERIDAN, ZISCHKAU, and O’ROURKE. O’ROURKE, Board Judge. Appellant, Michael Johnson Logging (Johnson or purchaser), claimed damages for breach of contract by respondent, the Department of Agriculture (USDA or agency), related to Johnson’s performance of a timber sale contract. In CBCA 5089, Johnson claimed damages in the amount of $1,112,417, which was later amended in its post-hearing brief to $700,000, arising from USDA’s administration of the contract. In CBCA 5619, Johnson appealed USDA’s decision to withhold a cash performance bond of $6000 and the cash balance remaining on the contract of $15,551.86, a total of $21,551.86, representing the cost to complete post-termination contract work. Based on the contract’s clear terms, as well as the substantial evidentiary record, we find that Johnson failed to establish USDA breached the implied duty of good faith and fair CBCA 5089, 5619 2 dealing in its administration of the contract, precluding any recovery for lost productivity, performance suspensions, use of inadequate skid trails, and equipment damage. We conclude, however, that USDA did breach certain express terms of the contract and, therefore, grant in part Johnson’s claim in CBCA 5089 and award damages in the amount of $89,425. We grant Johnson’s appeal in CBCA 5619. Findings of Fact Solicitation, Bid, and Contract Award On September 1, 2007, USDA sent a letter and timber sale prospectus to potential bidders, notifying them of the upcoming Big Shrew South timber sale in Olympia, Washington. Attached to the prospectus were a map of the sale area and a sample contract that contained the relevant terms and conditions of the sale and encouraged bidders to “inspect the sale area and sample contract before submitting a bid.” The sale was limited to small businesses, and bidders could expect to harvest about 25,397 tons of timber. The minimum acceptable bid for the advertised timber was $56,635.31, and the minimum acceptable bid rate for the biddable species was $2.23 per ton. The contract identified December 23, 2010, as the termination date. On September 18, 2007, Johnson submitted a certified bid in response to the solicitation. Section 22 of the bid form, entitled “Terms of Bidder’s Offer,” stated: Bidder certifies and represents that the Bidder has read and understands each and every provision of this bid form (together with any attachments thereto) and the sample sale contract. The Bidder agrees that it assumes the responsibility to clarify any questions before signing this form. The Bidder agrees that the written provisions of this bid form (together with any attachments) and the sample contract constitute the entire agreement of the parties until a written contract is executed and neither the bid form (and any attachments) nor the sample contract, can be orally modified. The Bidder expressly adopts the terms of this bid form and the sample contract as material parts of the Bidder’s offer for the advertised timber or forest product.[1] On September 25, 2007, USDA awarded Johnson the contract for a bid price of $58,413.10. USDA received no other bids. 1 The requirements for Big Shrew South were based on a habitat study conducted by the agency. Although bidders were not informed about the study, the contract requirements were developed with the study in mind. CBCA 5089, 5619 3 Relevant Contract Terms The contract contained both standard provisions for scaled timber sales and special provisions related to the Big Shrew South timber sale.