Nascent Grp. J.V. v. United States, 09-092

Decision Date18 January 2012
Docket NumberNo. 09-092,09-092
PartiesTHE NASCENT GROUP, J.V., by NATIVE AMERICAN SERVICES CORPORATION, INC., Plaintiff, v. UNITED STATES, Defendant.
CourtU.S. Claims Court

TO BE PUBLISHED

Defense Appropriation Act, Pub. L. No. 107-107;

Implied Covenant of Good Faith and Fair Dealing;

Offer;

Option;

Patent Ambiguity of Contractual Terms.

Terance Patrick Perry, Missoula, Montana, Counsel for Plaintiffs.

Cameron Cohick, United States Department of Justice, Civil Division, Washington, D.C., Counsel for Defendant.

MEMORANDUM OPINION AND FINAL ORDER

BRADEN, Judge.

The parties agree that the Army Corps of Engineers ("the Army Corps") contracted with the NASCENT Group Joint Venture ("NASCENT")1 to construct a Border Patrol Station at Blaine, Washington ("the Blaine Project"). NASCENT, however, claims that it also contracted to construct a second Border Patrol Station at Lynden, Washington ("the Lynden Project") and priced the Blaine Project with this understanding. The parties also do not dispute that, when NASCENT was awarded a contract to construct the Blaine Project, the Army Corps had not obtained funding for the Lynden Project. At issue is whether NASCENT was awarded a contract to construct the Blaine Project and the Lynden Project, or only the Blaine Project, with an Army Corps option to later award the Lynden Project.

Following a three-day trial, extensive post-trial briefing, and considering comprehensive arguments of NASCENT's counsel as to all potential theories under which NASCO could beentitled to relief, for the reasons discussed herein, as a matter of fact and law, the court has determined that NASCENT did not and cannot establish any express breach of contract and/or a breach of the implied covenant of good faith and fair dealing.

To facilitate review of this Memorandum Opinion and Final Order, the court has provided the following outline:

I. RELEVANT FACTS.

A. Congress Appropriated Funds For The Army Corps Of Engineers To Construct Border Patrol Stations In Blaine, Washington And Lynden, Washington.
B. On November 13, 2003, The Army Corps Of Engineers Requested Proposals To Construct Border Patrol Stations In Blaine, Washington And Lynden, Washington.
C. On December 16, 2003, Plaintiff Submitted A Proposal.
D. On January 14, 2004, The Army Corps Issued Amendments To The November 13, 2003 Proposal.
E. On January 28, 2004, Plaintiff Submitted A Revised Proposal.
F. During February-March 2004, Plaintiff And The Army Corps Of Engineers Engaged In Pre-Contractual "Value Engineering" Discussions.
G. On March 11, 2004, The Army Corps Of Engineers' Project Manager And Technical Representative Sent An E-mail To Plaintiff.
H. On March 16, 2004, Plaintiff Sent A Facsimile To The Army Corps Of Engineers, Submitting A Price Of $6,466,717 For The Blaine Project.
I. On April 21, 2004, The Army Corps Of Engineers' CO Signed DD Form 1155, With Attachments, A Copy Of Which Was Found In Plaintiff's Files.
J. On April 22, 2004, The Army Corps Of Engineers Sent A "Notice Of Award Information" To Plaintiff By Facsimile.
L. On May 10, 2004, A Notice To Proceed Was Issued Regarding The Blaine Project.
M. The Army Corps Of Engineers' Attempts To Secure Funding For The Lynden Project.

II. PROCEDURAL HISTORY.

III. JURISDICTION.

IV. STANDING.

V. DISCUSSION.

A. Whether The Army Corps Of Engineers' March 11, 2004 E-Mail Was An Offer That Plaintiff Accepted By A March 16, 2004 Facsimile.
1. The Plaintiff's Argument.
2. The Government's Response.
3. The Court's Resolution.
a. The Army Corps Of Engineers' March 11, 2004 E-Mail Was Not An Offer.
b. Even If The Army Corps of Engineers' March 11, 2004 E-Mail Was An Offer, Plaintiff's March 16, 2004 Facsimile Was Not An Acceptance.
B. Whether The Parties Formed A Contract On April 21, 2004, In Response To Plaintiff's March 16, 2004 Facsimile Proposal Offering To Construct The Blaine Project, With An Option To Construct The Lynden Project.
1. The Plaintiff's Argument.
2. The Government's Response.
3. The Court's Resolution.
a. Plaintiff's March 16, 2004 Facsimile Offered To Construct The Blaine Project, With The Lynden Project As An Option.
b. The Army Corps Of Engineers' April 21, 2004 DD Form 1155, With Attachments, Accepted Plaintiff's March 16, 2004 Offer.

C. Assuming, Arguendo, That A Contract Was Not Formed On April 21, 2004, Whether The Army Corps Of Engineers' April 22, 2004 Facsimile Was A Contract To Construct The Blaine Project, With The Lynden Project As An Option.

1. Assuming, Arguendo, That A Contract Was Formed By The Army Corps Of Engineers' April 22, 2004 Facsimile, Did The Terms Thereof Unambiguously Award Plaintiff The Blaine Project, With The Lynden Project As An Option?

2. Assuming, Arguendo, That The Army Corps of Engineers' April 22, 2004 Facsimile Was Ambiguous, Was Any Ambiguity "Patent," Thus Requiring The Ambiguity To Be Construed In Favor Of The Army Corps Of Engineers?

D. Whether The Army Corps Of Engineers Breached The Implied Covenant of Good Faith And Fair Dealing.

1. The Plaintiff's Argument.
2. The Government's Response.
3. The Court's Resolution.

VI. CONCLUSION.

I. RELEVANT FACTS. 2
A. Congress Appropriated Funds For The Army Corps Of Engineers To Construct Border Patrol Stations In Blaine, Washington And Lynden, Washington.

In the National Defense Authorization Act For Fiscal Year 2002, Pub. L. No. 107-107, 115 Stat. 1012 (2001), Congress appropriated funds to construct Customs and Border Protection ("CBP") facilities at three locations at or near the Canadian border: Blaine, Washington; Lynden, Washington; and Oroville, Washington. JX 5.

The Army Corps received $10.1 million to construct the Blaine Project that would include both a CBP headquarters building and a smaller border patrol station, but only a budget item of $4.5 million to construct the smaller CBP station at Lynden.3 JX 5; TR at 122, 134, 260-62 (Saepoff).

In addition, the Army Corps was not authorized to transfer or reprogram funds between projects, i.e., from the Blaine Project to the Lynden Project, without approval from DHS. TR at 136-137, 262-263 (Saepoff). The Army Corps used some of the appropriated funds to purchase property, and after the Army Corps' purchase of real estate for the Lynden Project and budgeting for other Army Corps expenses, $3.3 million remained for design and construction of the Lynden Project. JX 19 at COE 00522; TR at 263-64, 266-67, 272-73 (Saepoff) (explaining the use of funds). After purchasing real estate and budgeting for internal Corps expenses, $5.6 million remained for the Blaine Project. JX 19 at COE 00522.

On August 29, 2003, NASCENT was one of three contractors awarded a Multiple Award Task Order Contract ("MATOC") by the Seattle District Office of the Army Corps of Engineers. Jt. Stip. Nos. 2, 3; JX 9.

B. On November 13, 2003, The Army Corps Of Engineers Requested Proposals To Construct Border Patrol Stations In Blaine, Washington And Lynden, Washington.

On November 13, 2003, the Contracting Officer ("CO") invited NASCENT and the two other MATOC contractors to submit proposals to construct the Blaine Project and/or the Lynden Project, pursuant to Request for Proposal ("RFP") No. W912DR-04-T-2101, "Design-Build: U.S. Customs and Border Protection Sector Headquarters Blaine and U.S. Customs and Border Protection Station Lynden." JX 13 at COE 0056. The RFP represented that $3.1 million was available for design and construction of the Lynden Project and that $5.6 million was available for design and construction of the Blaine Project. JX 13 at COE 0063. The cover letter specifically advised, however, that this "AWARD IS SUBJECT TO THE AVAILABILITY OF FUNDS." JX 13 at COE 0057. The RFP further stated: "Funds are not currently available for award of this Task Order in Seattle District. No Task Order will be awarded until appropriated funds are made available[.]" JX 13 at COE 0068. Section 00110 of the RFP, "Proposal Submission and Evaluation" added: "The Government reserves the right to award a single Firm fixed-price Task Order for both projects or award multiple Firm fixed-price Task Orders[,] one for each project." JX 13 at COE 0068.

Accordingly, the RFP required that contractors submit three proposals: 1) "Schedule A" for all required work for the Blaine Project; 2) "Schedule B" for all required work for the Lynden Project; and 3) "Schedule C" for both the Blaine Project and the Lynden Project. Jt. Stip. No. 5; JX 13 at COE 0061-63. Offerors were informed that the Blaine Project and the Lynden Project could be awarded to one contractor or different contractors. TR at 120-21 (Saepoff).

On November 21, 2003, the Army Corps conducted a pre-proposal conference at which NASCENT's Project Manager and Technical Representative, Steve Saepoff, was present. TR at 118-19 (Saepoff); TR at 448-49 (Fashimpaur). During this conference, NASCENT's Project Manager, Kurt Fashimpaur, specifically asked if funding was authorized for both Projects. PX 27 at COE 0575; TR at 122 (Saepoff). The Army Corps indicated that funding was secured and that it was "pressed [by CBP] to award the Blaine and Lynden projects" and the sites had been acquired. TR at 119-20 (Saepoff); TR at 449-50 (Fashimpaur). Therefore, the Army Corpsanticipated that an amendment would be issued reflecting that both contracts would be awarded. PX 27 at COE 0576.

On November 26, 2003, the Army Corps issued an "Amendment of Solicitation," stating that the total amount of funds for the Lynden Project was $3.3 million, but indicated the Army Corps "may choose to exceed this amount." JX 19 at COE 0522.

C. On December 16, 2003, Plaintiff Submitted A Proposal.

On December 16, 2003, NASCENT submitted a proposal in response to the November 13, 2003 RFP that included: Schedule A (the Blaine Project) - $5,204,274; Schedule B (the Lynden Project) - $3,858,419; Schedule C (the Blaine Project and the Lynden Project) -$8,597...

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