__________________________________________________ APPELLANT'S MOTIONS FOR SUMMARY RELIEF DENIED; RESPONDENT'S CROSS-MOTIONS FOR SUMMARY RELIEF GRANTED IN PART: January 19, 1995 __________________________________________________ GSBCA 12773, 12774 CARAM, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Jack Azoff, President of CARAM, Burbank, CA, appearing for Appellant. Wendy Nevett Bazil, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges NEILL, HYATT, and VERGILIO. NEILL, Board Judge. These disputes concern claims by appellant, CARAM, for an equitable adjustment of prices on two of its contracts with the General Services Administration (GSA). The two contracts are for the preventative maintenance, overhaul, inspection, and repair of the Government-owned vehicles at various military installations. Appellant contends that, for both contracts, it was required to provide services at inequitable rates. The Government has denied the claims for equitable adjustment of contract prices on the ground that appellant is entitled to no more than the rates agreed upon for the contracts in question. Appellant has submitted a motion for summary relief in both cases making identical arguments in each. The Government's oppositions and cross-motions for summary relief are likewise similar in both cases. Accordingly, with this single opinion, we are deciding the motions submitted in both appeals. In its motions for summary relief, appellant has asked that we recognize that it is entitled to relief and not bound by the original terms of either contract because neither contract was validly renewed at the time the first options to renew were exercised. Respondent has brought a cross-motion for summary relief asking us to hold that appellant has waived any right it may have had to relief based on an alleged invalid option exercise because appellant continued to perform the contracts without objection. For the reasons set out in this opinion, we deny appellant's motions for summary relief but grant, in part, GSA's cross- motions for summary relief. Findings of Fact From a review of the record thus far constituted, the following facts do not appear to be in dispute. 1. On October 12, 1989, GSA awarded Contract No. GS-04F-89- ETS-0451 to appellant for the preventative maintenance, overhaul, inspection, and repair of the Government-owned vehicles at Fort Steward and Hunter Army Airfields in Georgia (the Fort Steward/Hunter contract). Appeal File, GSBCA 12773, Exhibit 1.[foot #] 1 2. Contract Modification PS-01 provided that the contract period for this first contract was to be December 1, 1989, through November 30, 1990, and that options would also begin on December 1 and end on November 30. Appeal File, GSBCA 12773, Exhibit 2.[foot #] 2 3. On December 12, 1989, GSA awarded Contract No. GS-04F-89-ETS-0466 to appellant for the preventative maintenance, overhaul, inspection, and repair of the Government-owned vehicles at Fort Benning, in Georgia (the Fort Benning contract). Appeal File, GSBCA 12774, Exhibit 1. ----------- FOOTNOTE BEGINS --------- [foot #] 1 The appeal file does not presently contain a contract award document. Exhibit 1 contains only a signed copy of appellant's offer and internal GSA documentation indicating that the contracting officer was given clearance to award on October 12, 1989. Based on representations made by appellant in its complaint, however, as well as statements made in respondent's statement of uncontested facts, we find that the parties have, in effect, stipulated that award did occur on October 12, 1989. [foot #] 2 Respondent has provided for the record a contract modification which allegedly changed this contract period, this time to January 2, 1990, through January 1, 1991. Respondent's Cross-Motion for Summary Relief and Opposition to Appellant's Motion, Exhibit 1. ----------- FOOTNOTE ENDS ----------- 4. Both contracts contained options to extend beyond the initial base year provided that: (1) the Government gives the contractor a preliminary written notice of intent to extend at least sixty days before the contract expires; and (2) the term of the contract is extended by written notice to the contractor "within 30 days prior to expiration." The option provisions also stated that the preliminary notice does not commit the Government to an extension and the total duration of the contract shall not exceed five years. Appeal File, GSBCA 12773, Exhibit 1 at 40; Appeal File, GSBCA 12774, Exhibit 1 at 42. 5. Both contracts also provided that, each time an option is exercised extending the contract, prices will be adjusted, if necessary, in accordance with Clause 552.222-86, Fair Labor Standards Act and Service Contract Act - Price Adjustment (option contracts). Appeal File, GSBCA 12773, Exhibit 1 at 41-42; Appeal File, GSBCA 12774, Exhibit 1 at 43-44. 6. The contracting officer first purported to exercise the options to renew the two contracts by executing a unilateral contract modification for each during the last month of the base year. This was done after the preliminary notice of intent to extend was given at least sixty days prior to contract expiration. Appeal File, GSBCA 12773, Exhibits 3, 5; Appeal File, GSBCA 12774, Exhibits 2, 4. 7. In addition to exercising the renewal option after the base year, the Government also claims to have exercised one-year renewal options for three subsequent years. Appeal File, GSBCA 12773, Exhibits 7-8, 12-14, 21; Appeal File, GSBCA 12774, Exhibits 2, 4, 6, 9, 16-17, 20, 25. 8. Midway through the first option year on the Fort Benning contract, appellant wrote to the contracting officer complaining that, because of GSA's fleet modernization program, CARAM was doing much less work than originally envisioned and was experiencing financial loss. This letter to the contracting officer closes with a request to renegotiate contract prices based on the unexpected change in the age and configuration of the fleet. The letter, however, makes no reference whatsoever to the alleged untimely exercise of the first renewal option as an additional justification for renegotiating the contract prices. Appeal File, GSBCA 12774, Exhibit 7. 9. Shortly after renewal of the contracts for the second option year, CARAM proposed revised rates on both the Fort Benning and the Fort Steward/Hunter contracts. Appeal File, GSBCA 12773, Exhibit 9; Appeal File, GSBCA 12774, Exhibit 10. Later in that same year, CARAM claims to have submitted certified claims for adjustment of the prices in both contracts. Id., GSBCA 12773, Exhibit 11; GSBCA 12774, Exhibit 13. 10. Towards the close of the third option year, CARAM updated its claims for revised prices and presented estimated claims for the fourth option year as well. Appeal File, GSBCA 12773, Exhibit 18; Appeal File, GSBCA 12774, Exhibit 22. 11. In the statements of fact supporting its cross-motions for summary relief, GSA contends that "CARAM did not allege that GSA's exercise of the first option year was faulty until this very proceeding." Respondent's Statement of Uncontested Facts Filed in Support of Its Cross-Motion for Summary Relief, GSBCA 12773, at 2; Respondent's Statement of Uncontested Facts Filed in Support of Its Cross-Motion for Summary Relief, GSBCA 12774, at 2. CARAM, in response, has offered nothing which denies this fact -- at least with regard to the exercise of the first option renewals. Rather, in responding, CARAM refers the Board to two documents in the appeal file (Appeal File, GSBCA 12773, Exhibit 18; Appeal File, GSBCA 12774, Exhibit 15) which show that CARAM, in correspondence with the contracting officer after the first option year, questioned the exercise of the second renewal option for both contracts. Appellant's Statement in Opposition to Respondent's Statement of Uncontested Facts in Support of Its Cross-Motion for Summary Relief, GSBCA 12773, at 1-2; Appellant's Statement in Opposition to Respondent's Statement of Uncontested Facts in Support of Its Cross-Motion for Summary Relief, GSBCA 12774, at 1-2. 12. By letter dated December 7, 1993, appellant's claims on both contracts were denied. The contracting officer's decision offers no explanation for the denial other than the statement that the claims were reviewed and found to be unsupported. Appeal File, GSBCA 12773, Exhibit 20; Appeal File, GSBCA 12774, Exhibit 24. 13. Appellant has appealed that decision. Appeal File, GSBCA 12773, Exhibit 25; Appeal File, GSBCA 12774, Exhibit 29. Discussion In its motions for summary relief, appellant asks that we find the first renewal options were invalidly exercised and that, as a result, the two contracts with GSA expired upon the conclusion of the base period for each contract. This is not a conclusion which we can reach on the basis of the record as it currently exists. It is well settled that notice to exercise an option is effective only upon receipt. Dynamics Corp. of America v. United States, 389 F.2d 424, 431 (Ct. Cl. 1968). The statements of uncontested facts and issues provided by the parties in accordance with Board Rule 8(g) do not, however, indicate that there is agreement on the date of dispatch or receipt of the contract modification purporting to exercise the first renewal option. Indeed, the statements are clearly in conflict even as to when the base period began for the Fort Steward/Hunter contract. Obviously, if the parties are not in agreement or prepared to stipulate on material facts such as these, we cannot conclude, as a matter of law, that the renewal options for the first year were exercised invalidly.[foot #] 3 Copeland's Enterprises, Inc. v. CNV, Inc., 945 F.2d 1563, 1565-66 (Fed. Cir. 1991); Armco, Inc. v. Cyclops Corp., 791 F.2d 147, 149 (Fed. Cir. 1986). The situation with regard to respondent's cross-motions for summary relief is somewhat different. GSA contends that CARAM's continued performance of its contracts without objecting to exercise of the first renewal option constitutes a waiver of the right to equitable adjustments based on any assertion, at this late date, that the contract was not validly renewed. We find merit in respondent's argument at least for any claim associated with performance during the first option year. We are convinced that during this period, CARAM did not raise any objection to the proper exercise of the renewal options for that year. Because there is no real dispute on that issue, we are prepared to grant GSA's cross-motions for this period. E. Walters & Co. v. United States, 576 F.2d 362, 367 (Ct. Cl. 1978). We deny the cross-motions, however, for any claim associated with performance during subsequent option years. The record, as constituted thus far, contains evidence that CARAM did question the exercise of the renewal option for the second option year and that it did so before the contract's final expiration date. Whether CARAM is entitled to relief on that portion of its claim which relates to performance during these subsequent option years will turn on such issues as whether the second or subsequent option renewals were validly exercised and when objection was actually made regarding the purported option exercise. These are critical matters which obviously require further development of the record before a decision can be reached. Finally, respondent suggests in both cross-motions that the Board may lack jurisdiction over these appeals because "appellant never raised the issue of ineffective exercise of the option to the Contracting Officer and therefore, never got a final decision on the issue." Respondent's Cross-Motion for Summary Relief, GSBCA 12773, at 5; Respondent's Cross-Motion for Summary Relief, GSBCA 12774, at 5. We disagree. Documentation in the record demonstrates that the question of timely exercise of a renewal ----------- FOOTNOTE BEGINS --------- [foot #] 3 Respondent in its cross-motions for summary relief stated that it does not dispute appellant's statement that the modification exercising the option was not received "until after the contract expired." Respondent's Cross-Motion for Summary Relief, GSBCA 12773, at 1-2; Respondent's Cross-Motion for Summary Relief, GSBCA 12774, at 1-2. We do not interpret GSA's decision not to dispute this contention as an admission that the contracts expired, but rather that expiration simply makes no difference since, as GSA argues in its motion, CARAM waived any right to use the alleged invalid exercise as a basis for its claims. ----------- FOOTNOTE ENDS ----------- option was raised with the contracting officer prior to the final decision. Appeal File, GSBCA 12773, Exhibit 18; Appeal File, GSBCA 12774, Exhibit 15. The contracting officer chose to issue a decision on appellant's claims which contained virtually no discussion of the nature or basis for the claims. The lack of detail, however, cannot serve as a basis for finding that the Board is without jurisdiction to hear an appeal from that decision. Decision Appellant's motions for summary relief in these appeals are DENIED. Respondent's cross-motions for summary relief in these same appeals are GRANTED IN PART, to the extent indicated herein. ____________________ EDWIN B. NEILL Board Judge We concur: _______________________ CATHERINE B. HYATT Board Judge _______________________ JOSEPH A. VERGILIO Board Judge