154 F.3d 1302 (Fed. Cir. 1998), 97-1234, Coyle's Pest Control, Inc. v. Cuomo

Docket Nº:97-1234.
Citation:154 F.3d 1302
Party Name:COYLE'S PEST CONTROL, INC., Appellant, v. Andrew CUOMO, Secretary of Housing and Urban Development, Appellee.
Case Date:August 24, 1998
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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Page 1302

154 F.3d 1302 (Fed. Cir. 1998)

COYLE'S PEST CONTROL, INC., Appellant,

v.

Andrew CUOMO, Secretary of Housing and Urban Development, Appellee.

No. 97-1234.

United States Court of Appeals, Federal Circuit

August 24, 1998

Page 1303

Lara Levinson, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, DC, argued for appellee. With her on the brief were Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, and Sharon Y. Eubanks, Deputy Director. Of counsel on the brief was Bruce M. Kasson, Attorney, Office of General Counsel, Division of Training and Administrative Law, Department of Housing and Urban Development, Washington, DC.

Before NEWMAN, PLAGER, and RADER, Circuit Judges.

RADER, Circuit Judge.

On summary judgment, the Department of Housing and Urban Development's Board of Contract Appeals (the Board) denied Coyle's Pest Control, Inc.'s (Coyle's) breach of contract claim for $1,525,170.74. See Coyle's Pest Control, Inc., HUD BCA No. 96-A-121-C10, 97-1 BCA p 28,717 (Jan. 6, 1997). Because the Board correctly determined that the contract was invalid and unenforceable when interpreted as either a requirements or an indefinite quantity contract, this court affirms.

I.

The Department of Housing and Urban Development (HUD), through the Small Business Administration, awarded Contract No. H06C94050400000 to Coyle for termite inspection and subterranean treatment of HUD-owned properties in thirty-four Texas counties. Section B.1 of the contract required Coyle "to furnish all labor, service, equipment, transportation, materials and supplies to provide subterranean termite control and related services on assigned properties owned by [HUD]." Clause C.2.D stated that properties would be "assigned on an as-needed basis." (emphasis added).

The contract, effective December 20, 1993, provided for a one-year term (the base year) as well as two one-year options. Section B.2 established a fixed price for inspection services and a two-tier, fixed price scheme for treatment services. This section set treatment prices at one of two levels depending on whether the range of properties assigned monthly was 0-170 or 171-240; the option years included modest increases for each of the two levels. The estimated value of the contract, including the base year and the two option years, was $1,930,000.

Section L.14 labeled the contract a "fixed unit rate-indefinite quantity contract." Nonetheless, the contract did not include two provisions typically present in indefinite quantity contracts: (1) a specified minimum number of properties to be assigned to Coyle; and (2) the indefinite quantity clause found in Federal Acquisition Regulation (FAR) 52.216-22 and then required by FAR 16.505(e). See 48 C.F.R §§ 52.216-22, 16.505(e) (1993). Also absent were two provisions generally associated with requirements contracts: (1) a clause requiring HUD to order all of its subterranean termite inspections and treatments from Coyle; and (2) the requirements clause found in FAR 52.216-21 (a mandatory feature of requirements contracts then under FAR 16.505(d)). See id §§ 52.216-21, 16.505(d).

In June 1995, during the first option year, HUD proposed Modification No. 4 to the contract. The proposed modification prevented Coyle from treating properties that HUD had already inspected and found free of termite infestation. Coyle rejected the modification. Thereafter, HUD informed Coyle that it would receive a "substantially lesser amount of properties" for termite services. At about the same time...

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