               ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                   )
                                               )
Ricoh USA, Inc.                                )      ASBCA No. 59408
                                               )
Under Contract No. W9124M-12-D-0001            )

APPEARANCES FOR THE APPELLANT:                        Thomas L. McGovern III, Esq.
                                                      Nicole D. Picard, Esq.
                                                       Hogan Lovells US LLP
                                                       Washington, DC

APPEARANCES FOR THE GOVERNMENT:                       Raymond M. Saunders, Esq.
                                                       Army Chief Trial Attorney
                                                      CPT Jessica E. Hom, JA
                                                       Trial Attorney

                   OPINION BY ADMINISTRATIVE JUDGE PAUL

        This is a timely appeal of a contracting officer's (CO's) final decision denying
appellant Ricoh USA, Inc.'s (Ricoh's) claim in a total amount of$771,131.03. The
Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109, is applicable. A hearing was
held at the Board's offices; only issues of entitlement are before us for decision.

                                  FINDINGS OF FACT

        1. On 22 November 2011, the Army's Contracting Command at Fort Stewart,
Georgia, issued Solicitation No. W9124M-12-T-0007 (R4, tab 2 at 1). This was a
Request for Questions (RFQ) to "provide lease and flat rate maintenance including
supplies ... of new Multifunctional Devices (MFDs) on a firm fixed price" (id. at 63
of 77). The MFDs were to "be configured with copying, network printing, scanning,
and faxing with audit capabilities, tailored to the needs of each organization/customer
entity" (id.). The customer entities involved were the 3rd Infantry Division (3rd ID)
and Fort Stewart's Garrison. The RFQ provided for a one-year base period (1 April
2012-31March2013), as well as four, 12-month option periods. (Id. at 64 of77)

        2. The RFQ stated an estimated requirement of 820 MFDs ''in the initial phase
of this program." It also provided:

               During the life of this contract, the Government expects to
               add or remove an undetermined number ofMFD's as
               requirements change due to organizational realignment or
                organizations added or deleted or combined. Any copiers
                installed after the initial installation date will terminate at
                the same time and be billed at the same monthly rate as the
                original copiers.

The RFQ stated the expectation of "an undetermined and unlimited amount of on-site
equipment moves during this contract period and these will be done by the offeror at
no charge to the government." (R4, tab 2 at 63of77)

         3. The RFQ also provided:

               No guarantee is given that listed quantities will be leased.
               Estimated quantities are based on current number of MFDs
               approaching contract ending dates and projected new
               business. The contractor will provide IT support during
               the initial installation of the MFDs ... and when requested
               during the entire term of the contract.

(R4, tab 2 at 66 of 77)

         4. The RFQ stated further:

               The government reserves the right to increase or decrease
               quantity of MFDs throughout the duration of the contract
               by modification. Government shall provide vendor with
               thirty days notice when requesting additions or deletions.f IJ

(R4, tab 2 at 73 of 77)

         5. The RFQ also provided:

               15. Discontinuance of Service: Upon receipt by the
                   contractor of written notice from the contracting
                   officer, MFD service may be discontinued 30 days
                   thereafter. The contracting officer may discontinue
                   MFD services on shorter notice than specified above
                   when agreed to by the contractor. The contracting
                   officer may extend the original discontinuance date
                   upon written notice to the contractor, provided such
                   notice is furnished at least 15 days prior to the

1 The   RFQ stated in two places that ownership of the MFDs would remain with the
         contractor (R4, tab 2 at 63, 73 of 77).

                                              2
                   original discontinuance date. A discontinuance
                   notification will contain the following information:
                   (a) MFD location by activity, building and room
                   number, (b) MFD model and serial number, (c) meter
                   reading, and (d) date MFD will be available for
                   removal. The government will then make the MFD
                   available for pickup by the contractor's technical
                   representative. It will be the responsibility of the
                   contractor to coordinate removal of the MFD with the
                   army's authorized personnel. Removal of MFDs will
                   be at the contractor's expense. There is no early
                   termination fee, penalty or cost associated with not
                   exercising option years.

(R4, tab 2 at 76-77 of 77)

     6. The RFQ contained various pertinent FAR clauses, including
FAR 52.216-18, ORDERING (OCT 1995), which stated:

              (a) Any supplies and services to be furnished under this
              contract shall be ordered by issuance of delivery orders or
              task orders by the individuals or activities designated in the
              Schedule. Such orders may be issued from 1 April 2012
              through 3 1 March 201 7.

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

             (c) If mailed, a delivery order or task order is considered
             "issued" when the Government deposits the order in the
             mail. Orders may be issued orally, by facsimile, or by
             electronic commerce methods only if authorized in the
             Schedule.

(R4, tab 2 at 57 of 77) Also included in the RFQ was FAR 52.216-21, REQUIREMENTS
(OCT 1995), which provided:

             (a) This is a requirements contract for the supplies or
             services specified, and effective for the period stated, in the
             Schedule. The quantities of supplies or services specified
             in the Schedule are estimates only and are not purchased


                                            3
by this contract. Except as this contract may otherwise
provide, if the Government's requirements do not result in
orders in the quantities described as "estimated" or
"maximum" in the Schedule, that fact shall not constitute
the basis for an equitable price adjustment.

(b) Delivery or performance shall be made only as
authorized by orders issued in accordance with the
Ordering clause. Subject to any limitations in the Order
Limitations clause or elsewhere in this contract, the
Contractor shall furnish to the Government all supplies or
services specified in the Schedule and called for by orders
issued in accordance with the Ordering clause. The
Government may issue orders requiring delivery to
multiple destinations or performance at multiple locations.

(c) Except as this contract otherwise provides, the
Government shall order from the Contractor all the
supplies or servi~es specified in the Schedule that are
required to be purchased by the Government activity or
activities specified in the Schedule.

(d) The Government is not required to purchase from the
Contractor requirements in excess of any limit on total
orders under this contract.

(e) If the Government urgently requires delivery of any
quantity of an item before the earliest date that delivery
may be specified under this contract, and ifthe Contractor
will not accept an order providing for the accelerated
delivery, the Government may acquire the urgently
required goods or services from another source.

(f) Any order issued during the effective period of this
contract and not completed within that period shall be
completed by the Contractor within the time specified in
the order. The contract shall govern the Contractor's and
Government's rights and obligation with respect to that
order to the same extent as if the order were completed
during the contract's effective period; provided, that the




                             4
                 Contractor shall not be required to make any deliveries
                 under this contract after 31 March 2017.

(R4, tab 2 at 58 of 77)

     7. The RFQ also contained FAR 52.217-6, OPTION FOR INCREASED QUANTITY
(MAR 1989), which stated:

                 The Government may increase the quantity of supplies
                 called for in the Schedule at the unit price specified. The
                 Contracting Officer may exercise the option by written
                 notice to the Contractor within 3 days. Delivery of the
                 added items shall continue at the same rate as the like
                 items called for under the contract, unless the parties
                 otherwise agree.

(R4, tab 2 at 59of77) The RFQ included FAR 52.217-9, OPTION TO EXTEND THE
TERM OF THE CONTRACT (MAR 2000), which provided:

                 (a) The Government may extend the term of this contract
                 by written notice to the Contractor within 60 days;
                 provided that the Government gives the Contractor a
                 preliminary written notice of its intent to extend at least
                 30 days before the contract expires. The preliminary
                 notice does not commit the Government to an extension.

                 (b) If the Government exercises this option, the extended
                 contract shall be considered to include this option clause.

                 (c) The total duration of this contract, including the
                 exercise of any options under this clause, shall not exceed
                 5 years 6 mos.

(Id. at 59-60)

       8. Finally, the RFQ stated that quotes were due by 30 December 2011 at
4:00 p.m. local time (R4, tab 2 at 1 of 77).

       9. On 12 December 2011, the government issued Amendment No. 0001 to the
RFQ (R4, tab 3 at 1). Most importantly, the amendment clarified the estimated
number of copies for each leased MFD per month (id. at 2-5). It also added the full
texts of FAR 52.000-4014, WAGE DETERMINATION (4 DEC 02); and FAR 52.222-41,
SERVICE CONTRACT ACT OF 1965 (Nov 2007) (id. at 5-6).


                                               5
        10. On 16 December 2011, Ricoh submitted various clarification requests to
the government. Initially, it requested that the government remove the following
language from item 15 of the statement of work (SOW): "Removal of MFDs will be
at the contractor's expense. There is no early termination fee, penalty or cost
associated with not exercising option years." (Supp. R4, tab 3 at 41) Ricoh stated that
this language was in conflict with the termination for convenience language contained
in subsection (1) of FAR 52.212-4, CONTRACT TERMS AND CONDITION-COMMERCIAL
ITEMS. It specifically cited this sentence:

              Subject to the terms of this contract, the Contractor shall
              be paid a percentage of the contract price reflecting the
              percentage of the work performed prior to the notice of
              termination, plus reasonable charges the Contractor
              can demonstrate to the satisfaction of the Government
              using its standard record keeping system, have resulted
              from the termination.

(Supp. R4, tab 3 at 41) As part of this clarification request, Ricoh also argued that the
absence of early termination fees was in conflict with common commercial practices,
as well as Pub. L. No. 103-355. It stated that "[i]t is customary in the commercial
copier industry to enter into a lease with a decreasing payment schedule." Ricoh
concluded that the lack of an early termination fee was inconsistent with common
practices. It requested that the language be deleted from the RFQ. (Id. at 42)

       11. Ricoh also sought clarification of the following, pertinent items:

              What type of contract is Ft Stewart implementing?
              Lease contract under FAR is multiyear, if this is
              Ft. Stewart's intension [sic], please confirm[.]

              Is this a GSA award?

              Is Ft. Stewar[t] looking for a firmed fixed price
              request?

(Supp. R4, tab 3 at 43)

       12. Mr. Jeffrey Talley, Ricoh's sales representative for Fort Stewart, forwarded
a copy of the questions to Mr. Anthony Justi, the Garrison's contracting officer's
representative (COR). In his cover letter, Mr. Talley stated:

             Here are the questions sent to contracts. I would suggest
             that when Contracts contacts you, please emphasize on the


                                            6
                  question regarding cancellation that Ft Stewart is not
                  looking to cancel the entire contract but only units that
                  may no longer be needed or have funded out[.] On the
                  existing contracts Ft. Stewart has actually added units.

    (Supp. R4, tab 1 at 49)

       13. On 20 December 2011, Ms. Marvene Falgout, a government contract
specialist, forwarded an email to Ricoh, in which she wrote: "Will review your
questions.... You can bid your schedule with our solicitation or you can bid open
market. Thanks." (App. supp. R4, tab 50 at 149-50) 2

        14. On 21December2011, the Army issued Amendment No. 0002 to the RFQ.
The amendment extended the closing date from 30 December 2011 to 9 January 2012.
(R4, tab 4 at 1) It also revised the RFQ's SOW to increase the estimated number of
copies for certain MFDs. The amendment reiterated that the RFQ contemplated a
requirements-type contract; it also stated, once again, that "[t]here is no early termination
fee, penalty or cost associated with not exercising option years." (Id. at 2, 16)

       15. On 6 January 2012, Ricoh forwarded its quote to the Army in which it set
forth unit prices for the various contract line item numbers (CLINs) (R4, tab 5). On
9 January 2012, the Army issued Amendment No. 0003 to the RFQ. It stated:

                 THE ABOVE REFERENCED SOLICITATION IS
                 HEREBY AMENDED TO ADD QUESTIONS AND
                 ANSWERS FROM CONTRACTORS, CHANGE THE
                 STATEMENT OF WORK AND ADD CLINS. SEE
                 SUMMARY OF CHANGES.

(R4, tab 6 at 1). The amendment also extended the required response date to
13 January 2012 (id. at 2). As a result, Ricoh retracted its quote (supp. R4, tab 7 at 1).

       16. Regarding Ricoh's questions and assertions about the lack of an early
termination fee associated with not exercising option years, the Army, through
Amendment No. 0003, answered as follows:

                 ANSWER: there is no early termination fee, penalty or
                 cost associated with not exercising option years IS NOT
                 in conflict with the FAR clauses. This is in clause

2   Through at least two pieces of correspondence, Ricoh acknowledged that the RFQ
        precluded an early termination fee (app. supp. R4, tab 49 at 134; supp. R4, tab 5
        at 140-41).

                                               7
                52.217-9, OPTION TO EXTEND THE SERVICE. We
                are not talking about termination of contract, we are
                talking about not excertion [sic] the OPTION YEARS.
                Option years are just that - Options. The government
                request you price the option years, however, we might
                not exercise the option due to money, deployment, etc.

(R4, tab 6 at 13)

       17. Based upon the Army's answers to its questions, particularly regarding the
lack of an early termination fee, Ricoh's employees formulated a response to the RFQ.
However, in addition to the price quote which it had previously submitted and
withdrawn, Ricoh's response included two other elements which had not been solicited
by the Army's RFQ. 3 One was a so-called "TECHNICAL PROPOSAL RESPONSE"
which encompassed more than 70 pages (R4, tab 8, passim). Ricoh submitted a third
part which contained additional supporting documentation (supp. R4. tab 10). In its
technical proposal, Ricoh responded to the paragraphs of the Army's SOW.
Specifically, Ricoh stated a period of performance of 60 months, not the base period of
12 months and 4 option periods contained in the RFQ (R4, tab 8 at 264 ).

       18. More to the point, disregarding the plain language contained in both the
RFQ and Amendment No. 0003, Ricoh's technical proposal included a section
defining "EARLY TERMINATION CHARGES." It provided:

                Equipment leased under this agreement may be terminated
                at any time during a Government fiscal year by the
                Ordering Agency's Contracting Office responsible for the
                delivery order in accordance with FAR 52.212-4,
                paragraph (1) Termination for the Government's
                Convenience. If the Government exercises its rights
                pursuant to FAR 52.212-4(1), or discontinues the lease
                (exclusive of a non-appropriation), the Government agrees
                to return the leased equipment and pay Contractor the
                remaining Lease Payments due for the Lease Term from
                the due date of the termination payment ("Termination
                Charge"). If the Government discontinues, terminates, or
                fails to renew part of an order, irrespective of reason, the
                Government shall pay that portion of the Termination


3   Ricoh's price quote is set forth at Rule 4, tab 8 at 336-38. In the cover letter which
        accompanied its price and technical quotes, Ricoh acknowledged.receipt of the
        amendments which included the Army's responses to its questions (id. at 258).

                                              8
              Charge equal to the percentage of terminated or not
              renewed equipment.

              •   The Termination Ceiling Charge represents the value of
                  the work, exclusive of on-going maintenance and/or
                  services, that the Contractor may claim performed at
                  any given time during the Lease Term and represents
                  the amount due for that work in the event of a
                  termination for convenience of the lease or failure to
                  renew a lease prior to expiration of the Lease Term for
                  any reason other than lack of funding.

              •   Termination ceiling charges will apply for each year of
                  the lease term (See FAR 17 .1 ). The Ordering Agency
                  and contractor shall establish a Termination Ceiling
                  amount.

              •   The Contracting Officer shall insert the Termination
                  Ceiling Charge for amount of the first year in the order
                  and modify it for successive years upon availability of
                  funds.

              •   No claim will be accepted for future costs: supplies,
                  maintenance, usage charges or interest expense beyond
                  the date of cancellation.

              • Iri accordance with the bona fide needs rule, all
                  termination charges must reasonably represent the
                  value the Ordering Agency received for the work
                  performed at cancellation based upon the shorter lease
                  term.

              •   No termination cost will be associated with the
                  expiration of the lease term.

(R4, tab 8 at 265) The language contained in Ricoh's technical proposal
notwithstanding, there is no record evidence demonstrating that the parties ever
established a termination ceiling amount.

       19. On 7 February 2012, the Army notified Ricoh that it was the apparent low
bidder (supp. R4, tab 10 at 902). On 9 February 2012, the Army forwarded a copy of
the contract to Ricoh. It stated: "It is a delivery order requirements type contract. We



                                            9
will be cutting the 1st two delivery orders as soon as budget gets us the purchase
requests here. You will get two, one will be for Garrison and one will be for Division.
Congrats." (Supp. R4, tab 11 at 427)

       20. The contract's "Period of Performance" was set forth as follows:

              Base Period                 1April2012- 31March2013
              Option Period 1             1 April 2013 - 31 March 2014
              Option Period 2             1 April 2014 - 31 March 2015
              Option Period 3             1 April 2015 - 31 March 2016
              Option Period 4             1 April 2016 - 31 March 2017

              There is no early termination fee, penalty or cost
              associated with not exercising option years.

(R4, tab 1 at 56)

        21. Ms. Becky Niksch, the CO, awarded the contract on Standard Form 1449
(REV 3/2005). With respect to the scope of the award, item 29 stated "SEE
SCHEDULE." (R4, tab 1at1) By the phrase, "SEE SCHEDULE," the CO was
conveying her intent only to accept Ricoh's schedule of prices. Accordingly, the
Army did not incorporate into the contract either Ricoh's technical proposal or its
supporting documentation. The CO explained that the Army would have altered the
solicitation if it included in the contractual award items that were not contained in the
RFQ, as amended, as they were nonresponsive. If the Army had included these items
in the contract, it would have been required to resolicit the contract to be fair to the
other offerors. (Tr. 1/159-60) Ms. Niksch's testimony is corroborated by the fact that
the physical contract, as awarded, contained only Ricoh's pricing schedule. It did not
include the technical proposal submitted by Ricoh (R4, tab l,passim). The contract
did contain all of the standard FAR clauses which were a part of the RFQ (id.
at 31-55).

       22. As awarded, the contract thus functioned as a master pricing agreement. It
provided for the issuance of delivery orders which served as offers to be accepted by
Ricoh through actual performance (R4, tab 1 at 45).

        23. During the contract's base period of performance, which extended from
1June2012 to 31 May 2013, the Army issued five delivery orders. using Standard
Form 1449 as a contractual vehicle (R4, tabs 9, 11, 14, 16, 17). Through the first
delivery order, the Army leased 580 MFDs for the 3rd ID; and by the second delivery
order, the Army leased 280 MFDs for Fort Stewart's Garrison (R4, tabs 9, 11).




                                            10
       24. As a result of congressionally-mandated budget cuts known as
"sequestration," the overall amount of funds available to Fort Stewart during the
contract's first option year declined substantially. Accordingly, government officials
such as Ms. Polly Williams, the 3rd ID's resource management officer. reviewed all of
the division's contracts to determine where and how steeply corresponding cuts were
to be made. As a result, the number ofMFDs ordered by the division was
substantially reduced during the contract's first option period. (Tr. 2/8-15)

        25. As a result of the reduction in funding, the Army, in early March 2013,
investigated the usage rate for the approximately 584 MFDs leased by the division
through the Ricoh contract. Of this total, the Army concluded that 88 of the machines
had a usage rate of less than 8 percent. These MFDs were "locked up in a building
that a unit moved out of several months ago (these are not units that are deployed and
will return to these buildings)." (Supp. R4, tab 43 at 418)

       26. In April 2013, representatives of the Army and Ricoh met to determine
whether the government might issue a delivery order for MFDs for another unit at
Fort Stewart; the hospital. As part of the conversation, Ricoh's sales representative,
Mr. Talley, stated that the pricing under the contract at issue in this appeal was not fair
to Ricoh, at least partially because the CO had not inserted an early termination fee
clause in that instrument. (Tr. 2/27-29) The discussions relating to the hospital's
requirements did not come to fruition (tr. 2/30).

       27. On 12 April 2013, the Army forwarded the following email to Ricoh:

              The contracting office was notified today that the 3rd
              Infantry division is planning to cut 203 devi[ c]es off of the
              first option period.

              Based on the Statement of Work, paragraph 4. Period of
              Performance, "There is no early termination fee, penalty or
              cost associated with not exercising option years." In
              Paragraph 15, "Upon receipt by the contractor of written
              notice from the contracting officer, MFD service may be
              discontinued 30 days thereafter."

              I also looked at the terms in FAR 52.218-18 and
              FAR 52.218-19 that sets specific ordering limits (no less
              than 1 and no more than 20 in a single task order).

              The contract also contains the clause 52.216-21
              Requirements.



                                             11
               I could not find any provisions that would allow for a
               termination fee.

(Supp. R4, tab 17 at 215) On that same day, Ricoh responded: "Am checking on it as
well. In the meantime, can you provide the Bands [sic - devices] by quantity Division
is wanting to return." (Id. at 214)

       28. On 16 April 2013, the Army provided notification to Ricoh "of the
government's intent to exercise the next option period for the Copier Leases." The
Army also stated: "If the Government elects to exercise this option, it will be done by
modification to the contract and will be issued at least thirty (30) days prior to the date
for commencement of services for the option period." (Supp. R4, tab 18)

       29. On 26 April 2013, the Army forwarded an email to Ricoh "to comply with
the 30 day notification requirement set forth in the base contract of any changes in
services." It stated, in part:

               The Delivery order in effect for 3 ID copiers is due to
               expire on 31 May 2013. Our office has confirmed that the
               3ID requirements for the next delivery order will be
               reduced by 213 MFDs. Garrison has not provided exact
               numbers, and does not expect any major fluctuation in
               quantities in the foreseeable future.

(R4, tab 19)

        30. On 22 May 2013, the Army issued Modification No. P00005 to exercise
the first option period. It stated, in part: "This supplemental agreement is issued to
exercise the option to extend the term of the contract for the period 1 Jun 2013 through
31 May 2013 at prices set forth in the Bid Price Schedule for the 1st option period."4
The modification also included a "RELEASE OF CLAIMS," which provided:

               In consideration of the modification agreed to herein as
               complete and equitable adjustment for the changes
               incorporated herein, the Contractor hereby releases the
               Government from any and all liability under this contract
               for further equitable adjustment attributable to such facts




4   The end date of 31 May 2013 was a typographical error. It should read: "31 May
         2014." (Tr. 2/34)

                                             12
             or circumstances giving rise to the aforesaid changes
             without exception.

(R4, tab 22 at 454) A representative of Ricoh signed a copy of this modification (id.
at 455). The modification did not, in and of itself, alter the number ofMFDs ordered
by the government.

        31. On 29 May 2013, the Army issued Delivery Order No. 0006 for the 3rd ID.
It leased 3 72 MFDs (R4, tab 24 ); and, on the same date, it issued Delivery Order
No. 0007 for the Garrison. It ordered 279 MFDs, which was only one less than it had
ordered during the contract's base period. (R4, tab 25)

        32. On 17 September 2013, Ricoh forwarded a certified claim to the CO in a
total amount of$771,131.03, plus interest. It contended that the Army, by
discontinuing the lease of 208 MFDs during the contract's first option period, had
partially terminated the contract for convenience. Alternatively, Ricoh argued that the
delivery orders executed during the first option year constituted a unilateral deductive
change order for which it should receive compensation. (R4, tab 28 at 1-3) In
addition, Ricoh alleged that the Army had accepted its technical proposal which
envisioned the imposition of early termination fees for the discontinued MFDs (id.
at 4).

        33. On 23 April 2014, the Army issued Modification No. P00007, which
exercised the second option period. The modification contained the identical
"RELEASE OF CLAIMS" language which was included in Modification No. P00005.
A representative of Ricoh signed the document. (Supp. R4, tab 40; finding 27) As
was the case with Modification No. P00005, this modification did not, in and of itself,
alter the number of MFDs ordered by the government.

        34. On 25 April 2014, the CO issued a final decision denying Ricoh' s claim in
its entirety (R4, tab 31 ). This appeal followed.

        35. Subsequently, Ricoh responded to the Army's interrogatory no. 16 by
stating that it had sold the discontinued MFDs for a total price of$183,325.10. At the
hearing, Ricoh confirmed the correctness of this response. {Tr. 2/62-68)

                                      DECISION

       The crux of this appeal revolves around several issues of contractual
interpretation. Indeed, the parties' disputes encompass even the existence and scope of
the underlying contract. However, a detailed analysis of the various contractual
provisions at issue demonstrates a clarity which is lacking in many of the parties'
allegations. Specifically, this was a requirements contract which, by its very nature,


                                           13
    gave the Army a great deal of flexibility in ordering MFDs from Ricoh (finding 6).
    Further, the RFQ stated plainly that "the Government expects to add or remove an
    undetermined number ofMFD's as requirements change due to organizational
    realignment or organizations added or deleted or combined" (finding 2). The RFQ
    reiterated this point when it provided: "No guarantee is given that listed quantities will
    be leased. Estimated quantities are based on current number of MFDs approaching
    contract ending dates and projected new business." (Finding 3) Similarly, the RFQ
    stated:

                  The government reserves the right to increase or decrease
                  quantity ofMFDs throughout the duration of the contract
                  by modification. Government shall provide vendor with
                  thirty days notice when requesting additions or deletions.

(Finding 4) Finally, the RFQ provided for "Discontinuance of Service" for individual
MFDs. It stated, in pertinent part: "There is no early termination fee, penalty or cost
associated with not exercising option years." Thus, the context for the "no early
termination fee" statement was the discontinuance of quantities of MFDs during the
exercised option years, not the actual exercise of the options themselves. (Finding 5)5
Ricoh's sales representative, Mr. Talley, was aware of the context of this "no early
termination fee" statement. In a cover letter accompanying Ricoh's questions, he
stated that "regarding cancellation ... Ft. Stewart is not looking to cancel the entire
contract but only units that may no longer be needed or have funded out."
(Finding 12) Through clarification requests which it submitted in response to the
RFQ, Ricoh asked the Army to remove this clause (finding 10). The Army declined
(finding 13).

        The scope of the contract itself is disputed by the parties. First, we note that the
solicitation, as issued, took the form of an RFQ, not an RFP (finding 1). This is
significant because the Army was merely soliciting price quotes, not technical
proposals. By submitting materials that were outside the scope of the RFQ, Ricoh was
nonresponsive to the RFQ. Accordingly, the CO accepted only Ricoh's
"SCHEDULE" of prices (finding 21). This fact is corroborated by the physical
contract which the CO executed and forwarded to Ricoh. It contained only Ricoh's
pricing schedule. It did not include Ricoh's technical proposal which contained the
proposed, changed early termination fee language. (Findings 18, 21) Therefore, that
language was not part of the contract.

      Ricoh makes several arguments which detract from the clarity of our findings.
For example, it argues that the Army accepted its "offer" which contained an early

5
    All of these cited provisions were contained in the contract as awarded (R4, tab 1,
         passim).

                                               14
termination charges clause (app. br. at 14-16). This is simply not the case. As we
have concluded, the Army accepted only accepted Ricoh's schedule of prices and did
not include its technical proposal in the contract, as awarded.

        Ricoh also argues that the Army failed to notify it that it did not intend to accept
its technical proposal ( app. br. at 16-18). This is not correct. Through the contractual
award, the CO referenced only Ricoh's schedule of prices. Moreover, the copy of the
contract which she executed and forwarded to Ricoh did not contain the technical
proposal. These facts, taken together, placed Ricoh on notice of the contract's scope.
Despite this conclusion, Ricoh made no further inquiries and, subsequently, engaged in
contractual performance upon receipt of various delivery orders. See, e.g., ADT
Construction Group, Inc., ASBCA No. 55125, 06-1BCA~33,237 at 164,702-04,
recon. denied, 07-1BCA~33,501, affirmed, 259 F. App'x 310 (Fed. Cir. 2007).

       Ricoh also contends that the termination charges clause in the solicitation was
limited to the exercise of option years (app. br. at 30-32). In formulating this
argument, Ricoh ignores the clause's context. As we have stated, the clause was
developed in the context of the discontinuance of certain quantities of MFDs during
the exercised option years, not the actual exercise of the options themselves.

        Finally, we agree with Ricoh's argument that it did not release its claim for
early termination fees and related expenses by signing modifications to the contract
(app. br. at 32-35). The release language contained in the modifications applied by
their terms only to "changes incorporated herein." The only changes made by the
modifications were the exercise of contractual options. Accordingly, the language
does not apply to the delivery orders which were subsequently issued by the Army and
did not contain releases. (Findings 30, 33) 6

         We have carefully analyzed Ricoh's remaining arguments and reject them.




6   Based upon our denial of Ricoh's claim, we reach no conclusion regarding its sale of
         discontinued MFDs (finding 35).

                                             15
                                     CONCLUSION

      The Board denies the appeal.

      Dated: 5 December 2016



                                                 MICHAEL T. PAUL
                                                 Administrative Judge
                                                 Armed Services Board
                                                 of Contract Appeals

 I concur                                        I concur
       ---- -----)
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                     /           .   ,/




-~:~~r tlf;~~
 Administrative Judge
                                                 ~~~CKLEFORD
                                                 Administrative Judge
 Acting Chairman                                 Vice Chairman
 Armed Services Board                            Armed Services Board
 of Contract Appeals                             of Contract Appeals



      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. 59408, Appeal of Ricoh
USA, Inc., rendered in conformance with the Board's Charter.

      Dated:



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




                                          16
