               ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                 )
                                             )
Relyant, LLC                                 )      ASBCA No. 58172
                                             )
Under Contract No. W91B4N-08-D-001 l         )

APPEARANCE FOR THE APPELLANT:                       James H. Price, Esq.
                                                     Lacy, Price & Wagner, PC
                                                     Knoxville, TN

APPEARANCES FOR THE GOVERNMENT:                     Raymond M. Saunders, Esq.
                                                     Army Chief Trial Attorney
                                                    Kyle E. Chadwick, Esq.
                                                     Trial Attorney

              OPINION BY ADMINISTRATIVE JUDGE PROUTY
      ON THE GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT AND
                     APPELLANT'S CROSS-MOTION

        The government has filed a motion for summary judgment (govt. br.) in ASBCA
No. 58172 1 arguing that this matter may be disposed of by what amounts to a
straightforward application of the terms of the contract and its associated delivery orders
that are at issue in this matter. In response, appellant filed its own cross-motion for
summary judgment (app. br.) arguing that the relevant contract terms should be
interpreted in its favor because the terms of the delivery orders that it agreed to were
impermissible. Appellant also filed an opposition to the government's motion (app.
opp'n) arguing that, at the very least, ambiguity in the contract terms precludes summary
judgment in the government's favor and that other matters also preclude summary
judgment for the government. Both parties filed reply briefs, and we requested additional
briefing to clarify the parties' views of the amendments to two of the delivery orders. For
the reasons stated herein, we conclude that the government's interpretation of the contract
terms should prevail, and enter judgment in favor of the government.




1   While ASBCA No. 58172 is consolidated with ASBCA No. 59809, the motion applies
       only to ASBCA No. 58172.
          STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS

        I. Introduction

       1. On 22 September 2008, the Army awarded Contract No. W91B4N-08-D-001 l
(contract) to Critical Mission Support Services, the predecessor-in-interest to Relyant, LLC
(hereinafter Relyant or contractor). The contract is an indefinite-delivery/indefinite-quantity
(IDIQ) contract for the manufacture, delivery, and installation of "relocatable buildings"
(RLBs) for use in Afghanistan, which were to be constructed from retrofitted shipping
containers (App. Statement of Genuine Issues of Material Fact (SGIMF) ~ 1). 2 The contract
included a Statement of Work (SOW), provided that delivery orders (DOs) would be issued
and included a schedule setting forth prices for the RLBs and associated installation services
(R4, tab 1). The contract also contemplated that multiple vendors possessing similar IDIQ
contracts would be submitting bids to the contracting officer (CO) seeking to be awarded the
various DOs (SGIMF ~ 1). In fact, two additional vendors were awarded IDIQ contracts to
provide RLBs at the same time that Relyant was awarded its contract (id.).

       2. As will be seen herein, for four DOs that were awarded to Relyant, the parties
agreed to a price for the RLBs and their installation that was smaller than the figure in the
price schedule provided in the original IDIQ contract as amended. Although the Army paid
Relyant the amount set forth in the DOs (as amended), Relyant now seeks payment at the
higher price set forth in the original IDIQ contract (as amended).

        II. The Material Terms of the IDIO Contract

        3. The contract includes a numbered schedule of supplies and services (contract
line item numbers (CLINs)) with associated "prices/costs" (R4, tab 1 at 1-2). Section HI
of the contract provides that, prior to awarding DOs, the CO will provide to all
contractors a notice of intent to make a purchase (R4, tab 1 at 36). The section also
requires that the CO "fairly consider offers" received in response to such notices and that,
in making the awards, the CO was to "consider price and any other factors listed in the
notice" (id.).

        4. The contract also included the IDIQ Ordering clause contained in the Federal
Acquisition Regulation (FAR) 52.216-18, ORDERING (OCT 1995), which is required to be
in all IDIQ contracts (R4, tab 1 at 44). Included in this provision is paragraph (b), which
provides that:



2   Where Relyant concedes, in its "Statement of Genuine Issues of Material Fact," that
       one of the proposed findings in the government's "Statement of Undisputed
       Material Facts" is accurate, we may note it herein.

                                             2
               All delivery orders or task orders are subject to the terms and
               conditions of this contract. In the event of a conflict between
               a delivery order or task order and this contract, the contract
               shall control.

(Id.)

        III. Orders on and Changes to the Contract

        5. Contemporaneously with its award of the contract to Rely ant on 22 September
2008, the government issued DO No. I (DOI) on the contract directing Relyant to
produce, deliver, and install nine two-story RLBs for a total price based upon CLIN
prices in the original contract schedule, $5,38 I ,750.15 (nine times $55 I,I24 for the
manufacture of each plus nine times $46,848.24 for their installation) (R4, tab 4). 3

       6. The parties executed Modification No. POOOOI to the contract (POOOOI) on 22 and
23 December 2008, which changed the SOW and increased the CLIN pricing schedule for
the original contract (R4, tab 15 at I-I2). Neither the amended SOW nor the amended
pricing schedule purported to retroactively apply to the RLBs ordered in DOI (id.).

        7. The Army issued both D02 and D03 on 24 December 2008 to Relyant (R4,
tabs 17, 18). D02 was for the manufacture and installation of one two-story RLB at
Bagram Airfield (R4, tab I 7 at 1-2). The price for D02 corresponded to the now-amended
CLIN price schedule in the original contract (agreed to in POOOO I), minus a five percent
"discount" offered by Relyant (id. at 2). Thus, the order's price under the amended price
schedule, of $997,036 ($858,965 for the manufacture of the RLB plus $138,07I for its
installation), was marked down to $947,184.20 in this DO that was executed by both
parties (id.). The executed order referenced no contingency for the discount (R4, tab I 7).

        8. D03 was for manufacturing and installing two more two-story RLBs at Bagram
Airfield (R4, tab I8 at I-2). As in D02, the price corresponded to that in the amended price
schedule, minus the five percent "discount" offered by Relyant (id. at 2). Thus, the original
price for the manufacture and installation of the two RLBs under the amended price schedule
of $1,994,072 (two times $858,965 for their manufacture plus two times $138,07I for their
installation), was marked down to $1,894,368.40 in this DO that was executed by both
parties (id.). The executed order referenced no contingency for this discount (R4, tab I 8).

       9. Three days later, on 27 December 2008, the Army issued D04, which, like
D03, was for the manufacture and installation of two more two-story RLBs at Bagram
Air Field (R4, tab I9 at I-2). The pricing ofD04 was identical to that ofD03: the
amended contract's price schedule, subjected to a five percent "discount," leading to a

3
    DO I miscalculated this price by 1¢.

                                              3
price of $I,894,368.40 in this DO that was executed by both parties (id.). The executed
order referenced no contingency for this discount (R4, tab I9).

        IO. Subsequent to the issuance of DOI, the parties recognized that DOI had failed
to make any allowance for the costs of delivering the RLBs from Bagram Airfield to other
Forward Operating Bases (FOBs) in Afghanistan (the contract had a CLIN for delivery that
had been left off of the DO) (R4, tab 9 at 1-4). Apparently, because of funding constraints,
the number of RLBs provided by DO 1 needed to be reduced in order to accommodate the
added delivery costs (R4, tab 6 at 1 (Relyant noting that, absent increased funding, the
number ofRLBs would need to be reduced)). The parties also decided to "incorporate
mechanical and window changes into CLIN 0002 unit pricing" (R4, tab 24 at 2). Thus, on
2 and 3 April 2009, the parties executed Modification No. 1 to DOI that: (1) reduced the
number ofRLBs provided and installed by Relyant from nine to six; (2) increased the unit
price for the manufacture of the RLBs to $6I5,55 l.06 and left the unit price for installation
of the RLBs at $46,848.24; 4 and (3) added an unpriced CLIN (not to exceed $1,396,704)
for transportation of the RLBs to the FOBs (id. at 1-3). After this modification, the total
price ofDOl changed to $5,371,099.80 (id. at 3), compared to the DO's prior price of
$5,381,750.15 (R4, tab 4 at 2).

        11. On 27 August 2009 and 2 September 2009, the parties executed Modification
No. 2 to D03, changing the type ofRLB from the two-story variety to the three-story type
(R4, tab 64). This modification, signed by both parties, increased the price for the delivery
order by $714,035.80, from $1,894,368.40 to $2,608,404.20 (id. at 2). The $714,035.80
price increase corresponded to the difference in price of the contract's CLINs (as amended
by POOOO 1) for the manufacture and installation of three-story RLBs compared to the
manufacture and installation of two-story RLBs (R4, tab 15 at 2, 4, tab 62 at 2). Because
this figure was added to the original D03's discounted price for a two-story RLB, D03's
price for the three-story RLB remained less than the amended contract's price for
three-story RLBs, although the net discount was proportionally less (approximately 3.7%,
compared to the original 5%).

       12. At the same time, the parties also issued a materially identical Modification
No. 2 to D04, changing the type ofRLB from a two-story model to a three-story type
(R4, tab 65). The prices in Modification No. 2 to D04 were identical to those in D03 as
amended (R4, tab 64 at 2, tab 65 at 2).

      13. Nine days later, on 11 September 2009, the parties executed a bilateral
modification to the original contract (P00007) in which they agreed to incorporate
changes into the SOW for the original contract and to amend the prices of several

4   By contrast, the CLIN prices for manufacturing and installing two-story RLBs (with
        their modified SOW) in the original contract, as modified by POOOO 1 three months
        earlier, were $858,965 and $138,071 respectively (SOF iii! 6, 8).

                                             4
CLINs (R4, tab 69). Of materiality to this motion, CLIN 0002 (for the manufacture of
two-story RLBs) saw its unit price increase by $25,840 and CLIN 0003 (for the
manufacture of three-story RLBs) had a unit price increase of $38,760 (id. at 2).

         I4. On the same day that the parties executed P00007, they executed related
bilateral modifications to DOs 2, 3, and 4 (R4, tabs 70, 7I, 72). For D02, the parties
added $25,840 to the price, consistent with the increased price of CLIN 0002 as modified
by P00007 (R4, tab 70 at 2). For D03, the parties added $77,520 to the price, consistent
with the increased price of CLIN 0003 as modified by P00007 and multiplied by two, to
account for there being two RLBs ordered by D03 (R4, tab 7I at 2). And, finally, the
modification to D04 was materially identical to the modification to D03, adding $77,520
to its price (R4, tab 72 at 2). 5 DOI remained unchanged.

         IV. Payment on the Contract

      I5. The Army paid Relyant $662,399.3 I ($6I5,551.06 for their manufacture and
$46,848.25 for their installation) for each RLB provided under DOI as modified in April 2009
(SGIMF ~ I 9). This is the amount that the parties agreed to (exclusive of delivery charges) in
Modification No. I to DOI (id.). The Army also paid Relyant the amounts set forth in D02,
D03, and D04 as amended by their I I September 2009 modifications (SGIMF ~~ 20, 21, 22).

                                          DISCUSSION

        The standards for summary judgment are well established and need little elaboration
here. Summary judgment should be granted if it has been shown that there are no genuine
issues of material fact and the moving party is entitled to judgment as a matter of law.
Celotex Corp. v. Catrett, 477 U.S. 3I7, 322 (1986). A non-movant seeking to defeat
summary judgment by suggesting conflicting facts "must set forth specific facts showing that
there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (I986)
(quoting First National Bank ofArizona v. Cities Service Co., 39I U.S. 253, 288-89 (1968)).

       Here, the primary dispositive issue is whether the price schedule set forth in the
original contract (as modified) precludes the parties from negotiating and agreeing to
different prices in the DOs. Relyant's position is that, regardless of what the parties
mutually agree to in the DOs, they may not differ from the prices set forth in the contract's
price schedule because the Ordering clause in the original contract requires that all
differences between the contract and the DOs be resolved in favor of the original contract
(app. br. at 8). The government argues that the contract permits the DO prices to be lower
than those in the original contract schedule because it explicitly allows the different IDIQ

5
    Like the earlier modifications to DOs 3 and 4, the prices-as-modified continued to be
         lower than the prices contained in the original contract (as modified) because the
        price increases were added to the original "discounted" price.

                                               5
contractors to submit bids on delivery orders with different prices (gov't br. at 8-9). We
conclude that only the government position harmonizes all of the provisions of the
contract and, not coincidentally, is consistent with the parties' pre-conflict actions, which
reflect their intent. Appellant's interpretation, on the other hand, is unreasonable. We
further conclude that the other defenses against summary judgment articulated by Relyant
do not present disputed facts that preclude judgment in favor of the government.

        I. The Proper Interpretation of the Contract Allows the Parties the Right to
           Mutually Agree to Lower Prices for the DOs than Those in the Original
           Contract's Price Schedule

         Under basic principles of the law, a contract is interpreted "in terms of the parties'
intent, as revealed by language and circumstance." United States v. Winstar Corp.,
518 U.S. 839, 911 (1996) (citations omitted). Generally, this process begins and ends
with the language of the contract. TEG-Paradigm Environmental, Inc. v. United States,
465 F.3d 1329, 1338 (Fed. Cir. 2006). And in reviewing this language, the Board should
read the contract "as a whole and [interpret it] to harmonize and give reasonable meaning
to all its parts," if possible, leaving no words "useless, inexplicable, inoperative,
insignificant, void, meaningless or superfluous." Precision Dynamics, Inc., ASBCA
No. 50519, 05-2 BCA il 33,071at163,922; see also Hercules, Inc. v. United States,
292 F.3d 1378, 1381 (Fed. Cir. 2002) ("contract must be construed to effectuate its spirit
and purpose giving reasonable meaning to all parts of the contract"); Hunkin Conkey
Constr. Co. v. United States, 461F.2d1270 (Ct. Cl. 1972) (rejecting contract
interpretation that would render a clause in the contract meaningless). Interpreting the
contract as a whole requires the Board to interpret all documents that are part of the same
transaction together. See RESTATEMENT (SECOND) OF CONTRACTS§ 202(2).

        With these foundational tenets in mind, we tum to the contract at hand. To be
sure, the price schedule in the original contract, read by itself, could lead the casual
reviewer to believe that it sets the only prices that may be paid by the government for the
CLINs covered by the contract. This is Relyant's favored interpretation. But this
interpretation would be in tension with Section H 1 of the contract, which allows the
contractors to make competitive bids for DOs and for the CO to consider the price when
deciding to which contractor it would award each DO (see SOF il 3). If the price
schedule in the contract were not subject to change by mutual agreement of the parties in
the DOs, there would be little point in the competitive bidding contemplated by clause
Hl. 6 Moreover, this interpretation would also be in direct conflict with the DOs that

6   Indeed, one of the significant benefits of a multiple award IDIQ contract, like the one here,
        is that the continuing competition for the award of DOs allows the government the
        opportunity to control the prices of individual DOs. See JOHN CIBINIC, JR. & RALPH
        c. NASH, JR., FORMATION OF GOVERNMENT CONTRACTS 1243 (3d ed. 1998), see also
        id. at 1249, 1251 (referencing competitive pricing of individual delivery orders).

                                               6
were negotiated and executed by both of the parties, which set forth lower prices than the
original contract's price schedule and (being a part of the contract), must be considered in
harmonizing the meaning of the contract. Under Relyant's interpretation, the prices that
the parties agreed to in the DOs would have been utterly meaningless. This is a
disfavored interpretation and cannot constitute an accurate reflection of the parties'
intentions: just what were the parties doing when they were executing their DOs if the
reduced pricing was unallowable? Tellingly, in none of its four filings related to this
motion, does Relyant provide any explanation of how, under its interpretation of the
contract, clause H 1 or the DOs' terms would not be superfluous, nor does it offer any
means to harmonize them with the original contract's price schedule.

        The government must, of course, provide a reasonable explanation for the
existence of the pricing schedule in the original contract and why its terms are not
superfluous if they are subject to alteration by the DOs. The government has suggested
that this pricing schedule reflects a maximum price permissible by the contract (gov't
reply at 4). Although no terms of the contract use this express language, we believe it to
be a reasonable interpretation of the contract, which has the virtue of harmonizing all of
the terms of the contract and being consistent with the intent of the parties as evidenced
by the DOs. See Blinderman Constr. Co. v. United States, 695 F.2d 552, 558 (Fed. Cir.
1982) (contemporaneous construction of an agreement prior to dispute is entitled to great
weight). It is also consistent with the public policy interest of fostering price competition
in the original award of the multiple IDIQ contracts (by requiring the parties to bid a
ceiling price) while continuing to allow for price competition in the DOs.

        Relyant argues that the order of precedence portion of the Ordering clause would be
superfluous under the government's preferred interpretation of the contract (app. opp'n at
10-11 ), but that is not so. The clause is simply not applicable when there is no conflict in the
contract and DO terms, and there is no such conflict here. There are many other potential
contingencies in which the terms of a DO could conflict with the contract as we interpret it
here (e.g., ifthe DO's prices exceeded the ceiling prices in the original schedule), making the
order of precedence clause a necessary provision. Put another way, application of the order of
precedence clause is only necessary ifthere is a conflict in the contract's terms; the proper
interpretation of this contract (which permits the parties to mutually agree to lower prices in
the DOs than in the original schedule) avoids such a conflict.

       The government also argues, in the alternative, that, if its view of the contract is
incorrect, then the contract's terms would have presented a patent ambiguity, which would
have required Relyant to make an inquiry about their meaning (gov't reply br. at 5).
Because we find that our interpretation of the terms of the contract is internally-consistent
and removes any ambiguity, the doctrine of patent ambiguity does not apply.




                                              7
         II. Relyant's Additional Arguments Do Not Challenge the Viability of the DOs

       Relyant makes a number of additional undeveloped arguments that the DOs, as
amended, should be invalid. One of these arguments is made explicitly in the
"Argument" section of its opposition to the government's motion; the others are sprinkled
throughout the "Factual and Procedural Background" section of its opposition brief. All
but one of these arguments are contained in a single legally-conclusory paragraph of the
declaration of its Vice President of Business Development, Kenneth Biles. None are
persuasive.

         Relyant's only additional argument that is fully developed and included in its
"Argument" section is that the government should not be entitled to the five percent
discounts reflected in the pricing for DOs 2, 3, and 4 because the government's
modification ofRLB requirements after First Article Testing of the RLB's deprived it of
the economies of scale necessary to support the "discount" (app. opp'n at 12-14; Biles
decl. iii! 14-15). As the government rightly points out, the final DOs, as amended by their
change orders, made no reference to any discount (R4, tabs 70, 71, 72), and even the
original DOs' discounts were not contingent upon such economies of scale (SOF iii! 7-9).
Thus, whatever contingencies may have been considered when Relyant first proposed the
five percent discount to the government were overtaken by the DOs and their
amendments, which made no mention of such considerations and did not make the DOs
contingent upon any factors involving economy of scale.

        Relyant alleges in a single paragraph of the "Factual and Procedural Background"
of its opposition brief that the terms of the first modification to DO 1 should be void
because they were entered under duress 7 (app. opp'n at 4). The total factual support for
this legal conclusion in Relyant's filing consists of the following language in Mr. Biles's
declaration:

               Modification #01 to DO #0001 also included an additional
               line item making shipping costs part of the Government's
               order, which both Relyant and the Government agreed should
               have been included in the original delivery order. Because
               Relyant needed to be reimbursed by the Government for
               shipping as had originally been contemplated, Relyant agreed
               to Modification #01 to DO #0001 even though it contained
               inconsistent pricing terms and even though it contained a
               release of claims clause. Based on the circumstances and the
               Government's constantly changing demands with regard to


7   This allegation was not presented in Relyant' s complaint or claim, and Relyant does
         not extend it to the terms of DOs 2, 3, or 4.

                                              8
              RLB specifications and other issues, Relyant agreed to
              Modification #01 to DO #0001 under economic duress.

(Biles decl. ii 7) Like the single paragraph in Relyant's response brief raising this
defense, this declaration names a defense (a defense raised here for the first time in this
litigation) and makes generalized references to some of its elements, but is nowhere near
sufficient to preclude summary judgment.

        As discussed above, a non-movant seeking to defeat summary judgment by
suggesting conflicting facts "must set forth specific facts showing that there is a genuine
issue for trial." Liberty Lobby, 477 U.S. at 248 (quoting First National Bank ofArizona,
391 U.S. at 288-89). In order to prevail on an economic duress defense, a party must
allege and prove that it (1) involuntarily accepted the other party's terms; that
(2) circumstances permitted no other alternative; and (3) such circumstances were the
results of the other party's coercive acts. Rumsfeld v. Freedom NY, Inc., 329 F.3d 1320,
1329 (Fed. Cir. 2003). Mr. Biles's declaration does not set forth facts supporting a single
element of the defense, even though it would need facts supporting all three in order to be
effective: nowhere, except perhaps by implication, does he allege that Relyant's
agreement to the terms of the modification to DO 1 was involuntary; nowhere does he
present any facts explaining why the circumstances presented no alternative to agreeing
to the modification that he now alleges was improper; and nowhere does he allege any
coercive acts by the government. Thus, there are no facts supporting the defense of
economic coercion that preclude summary judgment.

       The next argument advanced by Relyant in its "Factual and Procedural
Background" section is that the amendments to DO 1 are invalid because they lowered its
price and thus lacked consideration (app. opp'n at 4; Biles decl. ii 7). This is not a serious
argument: as the government points out, the amendment to DO 1 lowered the overall
price of the DO because it reduced the number ofRLBs ordered (SOF ii 10). It also
increased the unit price of the RLBs that it was obtaining (id.). This easily passes the
(low) bar for consideration, which can be met by a bargained-for mutual exchange of
promises. See RESTATEMENT (SECOND) OF CONTRACTS§§ 71, 72 (1981).

       Relyant' s next argument in this section is that it should be excused from the terms
of DO 1 because the government allegedly did not perform its end of the deal by making
payment for shipping costs (app. opp'n at 4; Biles decl. ii 7). A claim for unpaid
transportation costs is not presently before the Board. In any event, this alleged breach of
the contract would not change the terms of the contract that are before us here: what
Relyant is due for its manufacture and installation of the subject RLBs.

       The last argument raised by Relyant in this section that we address is Relyant' s
contention that the amendments to the original contract's pricing schedule that were
effected by P00007 should have been applied to DO 1, just as these changes were applied


                                              9
(through amendment) to DOs 2, 3, and 4 (app. opp'n at 5). But since, as discussed above,
the price schedule in the original contract does not preclude the parties from agreeing to a
lower number in DOs on that contract, there is no reason that P00007 should have
necessarily applied to DO 1. Indeed, the fact that the parties amended DOs 2, 3, and 4
concurrently with their adoption of P00007 indicates that they recognized that changing
the price schedule in the original contract was not enough to change the prices in the DOs
(thus, lending even more support to the interpretation of the contract that we set forth
above), while their decision not to amend the pricing in DO 1 indicates that they had
agreed that DO 1 need not have its prices changed. There was, moreover, a sensible
reason for the parties to have left DOl 's prices unchanged, which was that its SOW
appears to have been unchanged, unlike the change to the SOW for DOs 2, 3, and 4.

       III. The Army Paid Relyant the Amount Specified by the DOs as Amended

        Relyant does not dispute the fact that the Army paid it the amount to which it was
entitled under the prices memorialized in the final amended versions of the DOs executed
by both parties. Thus, there is no breach in this case, and the government is entitled to
judgment in its favor.

                                       CONCLUSION

      For the reasons stated herein, we grant summary judgment in favor of the
government. ASBCA No. 58172 is denied.

       Dated: 12 January 2016


                                                  J. REID PROUTY
                                                  Administrative Judge
                                                  Armed Services Board
                                                  of Contract Appeals

I concur                                          I concur



~~
 ;;&                      ~
           STEMPLE~i4
                                   /

MARK N.                                           RICHARD SHACKLEFORD
Administrative Judge                              Administrative Judge
Acting Chairman                                   Vice Chairman
Armed Services Board                              Armed Services Board
of Contract Appeals                               of Contract Appeals



                                             10
      I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 58172, Appeal ofRelyant,
LLC, rendered in conformance with the Board's Charter.

      Dated:



                                               JEFFREY D. GARDIN
                                               Recorder, Armed Services
                                               Board of Contract Appeals




                                          11
