Engineering Solutions & Products, LLC
Docket: ASBCA 58633
Decision date: 2017-08-04

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of --
Engineering Solutions & Products, LLC 
Under Contract No. 000000-00-0-0000 
APPEARANCES FOR THE APPELLANT: 
) 
) 
) 
) 
) 
APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 58633 
Richard L. Moorhouse, Esq. 
David G. Barger, Esq. 
JozefS. Przygrodzki, Esq. 
Greenberg Traurig, LLP 
McLean, VA 
Ryan C. Bradel, Esq. 
Greenberg Traurig, LLP 
Washington, DC 
Raymond M. Saunders, Esq. 
Army Chief Trial Attorney 
MAJ Bruce L. Mayeaux, JA 
Trial Attorney 
OPINION BY ADMINISTRATIVE JUDGE D' ALESSANDRIS 
In 2004, appellant Engineering Solutions and Products, LLC (ESP) leased a 
warehouse from First 
Potomac Realty Trust (FPRT) to support the United States Army 
(Army) Program Executive Office (PEO) Soldier. 1 At the time, ESP held a prime 
contract to provide this warehouse space for government use issued by the Department 
of the Treasury, Bureau of the Public Debt (BPD), Franchise Services. 2 ESP 
subsequently provided the warehouse space to the Army as a subcontractor to a series 
of prime contractors. In late 2005, while ESP was a subcontractor, the Army indicated 
that it would be interested in leasing more warehouse space at Haymarket, Virginia. 
ESP subsequently negotiated with the landlord, FPR T, for FPR T to expand the 
warehouse. ESP entered into a ten-year lease with FPRT, with the base rent 
1 Project Manager, Soldier Equipment (PMSEQ) was a program office within PEO 
Soldier. PMSEQ was later renamed Project Manager Soldier Protection and 
Individual Equipment (PM SPIE). (Tr. 1/135, 186) 
2 BPD used this contract, and others like it, to obtain property or sources for the 
benefit of other government agencies (like the Army here) which would, in 
tum, compensate BPD for its costs. 

front-loaded into years one through seven, and no base rent for years eight to ten, and 
with an early termination fee. 
During the negotiations for the expansion of the warehouse, the Army reviewed 
the construction design to ensure that the new space would meet its needs, helped ESP 
and FPRT in negotiations with Prince William County, Virginia, planning and zoning 
officials, and monitored the progress of construction activity. ESP leased the expanded 
warehouse space beginning in April 2007. The Army vacated the warehouse in March 
2012, approximately five years into ESP's ten-year lease with FPRT. ESP contends 
that there was an implied-in-fact contract with the Army requiring the Army to pay the 
early termination fee, year six rent, and other costs totaling roughly $4.2 million. ESP 
submitted a 
certified claim that was denied by the Army's contracting officer. ESP 
subsequently appealed to the Board. The Army's motion for summary judgment was 
denied by the Board on 13 May 2015. Engineering Solutions & Products, LLC, 
ASBCA No. 58633, 15-1BCAi\35,989, recon. denied, 16-1BCAi\36,313. The 
Board held a four-day hearing beginning on 19 September 2016. Because we find that 
ESP has not demonstrated the existence of an implied-in-fact contract with the Army, 
we deny the appeal in its entirety. 
FINDINGS OF FACT 
1. In August 2001, the Department of the Treasury, BPD, Franchise Services 
(FedSource), awarded Open Market Blanket Purchase Agreement (BPA) No. 4000 to 
ESP (app. supp. R4, tab 79 at 1, 4; tr. 1/46). 
2. FedSource was a "franchise-fund activity" created by the Department of the 
Treasury. See 31 U.S.C. § 322 'note (Department of the Treasury Franchise Fund). 
F edSource awarded its own contracts for goods and services to be provided to other 
agencies (supp. R4, tab 52 at 171 ). 
3. In April 2004, while ESP was a prime contractor to FedSource it leased 
approximately 123,777 square feet at a warehouse located at 15395 John Marshall 
Highway, Haymarket, Virginia (the Haymarket warehouse) (app. supp. R4, tab 85 at l; 
compl. iii! 9, 12; tr. 2/59, 65). Preston Turner, a senior logistician for PEO Soldier, 
initially identified the Haymarket property to ESP as being suitable for the Army's 
purposes (tr. 2/9-10). 
4. The FedSource center in Beaufort, South Carolina (FedSource-Beaufort) 
issued at least one task order to ESP under BPA No. 4000 which involved a 
requirement to operate the Haymarket warehouse in support of the Army's PEO 
Soldier activity (tr. 1/56-57, 2/17). By Military Interdepartmental Purchase 
Request 
(MIPR) No. MIPR4LlBR01366, dated 16 August 2004, the PMSEQ activity within 
PEO Soldier transferred $2,610,908.23 from the Department of Defense to 
2 

FedSource-Beaufort, "for lease, transfer/relocation, and maintenance of Haymarket 
facility" with an expiration of 30 September 2004 (app. supp. R4, tab 80 at 6). 
5. In November 2004, the BPD advised ESP that its BPA did not comply with 
the Federal Acquisition Regulation (FAR), and that FedSource-Beaufort would not 
issue any new task orders under the BPA (supp. R4, tab 57 at 746). In a 26 March 
2005 letter to FedSource BPA holders, BPD informed ESP that the final task order 
issued by FedSource-Beaufort under 
BPA No. 4000 would expire no later than 
30 April 2005 (id. at 748). 
6. In early 2005, notwithstanding, the FAR-related problems with ESP's BPA, 
the Army apparently still needed to use the Haymarket warehouse, thus the F edSource 
center in Baltimore (FedSource-Baltimore) awarded a task order to Westaff (USA), Inc. 
(Westaff) under existing Contract No. TPD-03-C-0005. The FedSource-Baltimore task 
order required Westaff to operate the Haymarket warehouse for PEO Soldier. Westaff, 
in turn, entered into a subcontract with ESP for that purpose. (Supp. R4, tab 56 at 349, 
tab 57 at 775; comp!. iJ 15; tr. 1/58, 61-62). While it was a subcontractor to Westaff, 
ESP submited its invoices to Westaff for payment (tr. 3/135). 
7. Ms. Gerry Mosier, a procurement analyst, also referred to as a contracts 
manager, was ESP's primary contact within 
the government during the transition from 
FedSource to Westaff, but had no contracting authority in her position at PMSEQ 
(although she had been a contracting officer earlier in her career). She retired from 
federal service in March 2006. (Supp. R4, tab 60 at 895, tab 63 at 1009; tr. 3/63-64, 
159) 
8. In approximately late 2005, while ESP was under subcontract to Westaff, 
representatives of PEO Soldier, including the head of PMSEQ, COL John Norwood 
(now retired); Steven Pinter, COL Norwood's deputy; and Todd Wendt, PMSEQ's 
Director of Logistics, visited the Haymarket facility, and told ESP personnel that PEO 
Soldier could use additional space at the Haymarket warehouse to prepare soldier 
equipment sets for deployment to Iraq (tr. 1/194-95). The Army's need for additional 
space was urgent due to the Global War on Terror, and expanding combat operations 
in Iraq and Afghanistan (tr. 1/145, 147, 155, 192, 2/20-22). PEO Soldier processed 
body armor and night vision goggles that were mission-critical equipment for the 
troops (tr. 11145, 147, 155-56). COL Norwood asked ESP to engage with FPRT to see 
ifthe warehouse could be expanded (tr. 1/195). COL Norwood also tasked Mr. Pinter 
with determining PEO Soldier's requirements and making sure they were met through 
the contracting process (tr. 4/13). Mr. Pinter helped create the statement of work 
related to the expanded warehouse at Haymarket (tr. 4/7). 
9. The Army's access to the Haymarket warehouse subsequently transitioned to 
a contractual vehicle with Lear Siegler Services, Inc. (Lear Siegler or LSI). Lear 
3 

Siegler held a "Rapid Response" (also referred to as R2) indefinite-delivery, 
indefinite-quantity (IDIQ) contract, which was a contract with a broad scope that 
supported the Army's command, control, communications, intelligence, and 
surveillance mission (tr. 3/80-82, 84). 
10. Lear Siegler had a pre-existing subcontract with ESP, Subcontract 
No. 1.06.20.059, with an effective date of 31 January 2003 (supp. R4, tab 66). 
Effective 6 January 2006 Lear Siegler placed an order with ESP under Subcontract 
No. 1.06.20.059 to support PMSEQ (supp. R4, tab 67 at 57-58; tr. 3/160). In February 
2006, the Army 
issued a task order to Lear Siegler to provide the expanded warehouse 
space (R4, tab 3). 
11. ESP helped prepare Lear Siegler's Task Execution Plan (TEP) 3 (tr. 2/76; 
supp. R4, tab 56 at 542), that was submitted as a proposed TEP 
to the Army 
Communications-Electronics Command (CECOM) Acquisition Center, at 
Fort Monmouth, New Jersey, in anticipation of receiving a task order under 
Lear Siegler's existing R2 IDIQ contract to provide support to PEO Soldier, including 
services at the Haymarket warehouse (R4, tabs 2-3). 
12. In paragraph 1.4 of this TEP, TEP CR-1287, REV.-Original, dated 
23 December 2005, Lear Siegler sought to pass to the government liability for any 
contingent fee for the early termination of ESP's "long term lease agreements," and 
recognize the fee as a contract cost. Paragraph 1.4 stated: 
Team LSI's pricing includes a twelve (12) month base 
period and a twelve (12) month option period. Due to the 
period of performance constraints and the long [term] lease 
agreements 
ESP entered into on warehouse/office facilities 
and materiel handling equipment in 
support of mission 
requirements, it should be noted that an early termination 
fee may be applicable should the Government award this 
task order to someone other then [sic] LSI/ESP. In 
addition, the early termination fee is also applicable should 
· PMSEQ award this task order to Team LSI and terminate 
the effort during the period of performance. 
(Supp. R4, tab 62 at 991) ESP wrote the language in paragraph 1.4 (tr. 3/110-13) 
13. On 25 January 2006, a CECOM contract specialist wrote to Lear Siegler: 
"As per the ... Contracting Officer, [Debra Abbruzzese], ... [p]lease remove the language 
from your TEP pertaining to an early termination cost under paragraph 1.4. The 
3 The Task Execution Plan functions like a bid for a task order. 
4 

Government will not pay an early termination cost." (Supp. R4, tab 62 at 984) 
Ms. Abbruzzese directed that the language be removed from the TEP because, "[i]t 
was a contingent liability that the Government was not willing to accept" (tr. 3/95). 
14. Lear Siegler complied. The changed TEP, denoted as "Rev. -A," was 
incorporated in Task Order No. 118 and did not include the language about 
government liability for the contingent fee for early termination of the lease (R4, tab 2 
at 2, tab 3 at 21; supp. R4, tab 65 at 1025). Ms. Holderness, a contracts manager at 
ESP, described her top management, specifically Mr. Livero and Mr. Hoffman, as 
being of the opinion that "we could address the termination costs at a later date, and if 
the government didn't want to accept it at a later time, that we could put in a claim" 
(tr. 3/143-44). 
15. CECOM awarded Task Order No. 118 to Lear Siegler on 1February2006, 
on a time and material basis (R4, tab 3 at 2). On 27 February 2006, the Army issued a 
no-cost, unilateral modification to change the effective date of the award from 
1 February to 6 January 2006 (R4, tab 5). Lear Siegler's initial performance period 
under Task Order No. 118, as modified, ran until 31 January 2007, with a one-year 
option (R4, tab 3 at 2, tab 5). 
16. Lear Siegler's base contract was funded in two-year increments, while the 
task order was funded annually (R4, tab 1 at 2-6, tab 3 at 2). 
17. The TEP CR-1287, REV.-A as incorporated into Task Order No. 118 stated 
that "ESP is currently negotiating with lending sources relative to expansion of the 
Haymarket facility to 240,000 square feet." The 
Army accepted Lear Siegler's request 
to subcontract 
with ESP for the Haymarket 
warehouse and approved, as pass-through 
direct costs, ESP' s monthly rent of $198, 721.43 for the base year, with an increase to 
$271,142.12 forthe option year, reflecting the timetable of the proposed warehouse 
expansion. (R4, tab 3 at 2, 17, 3 8) 
18. The Task Order No. 118 Performance Work Statement (PWS) required in 
part that: 
3 .3 .1 The contractor shall identify storage space at 
Haymarket, Virginia to support staging facility supply, 
maintenance, packaging, storage, handling and 
transportation requirements in response to military demand 
for PM Soldier Equipment. The facility shall also have the 
capability to support inventory management actions, 
5 

property accountability functions and warranty 
maintenance actions. 
(R4, tab 3 at 12) 
19. The TEP CR-1287, REV.-A addressed this requirement as follows: 
The Haymarket facility is commercial space leased by ESP 
in support of PEO Soldier and PMSEQ requirements. The 
facility is designed to support staging facility operations 
and office space requirements. The facility consists of 
123,000 square feet in its current configuration. The 
facility is approved for expansion to 240,000 square feet, 
which ESP is currently negotiating with the building 
owner .... ESP understands there will be no construction 
under this task order. 
(R4, tab 3 at 29) 
20. Task Order No. 118 required Lear Siegler to provide the expanded 
warehouse space at Haymarket to support PMSEQ (R4, tab 3 at 9, 11-12, 26-27, 29). 
Lear Siegler, in tum, placed orders with ESP to provide 
the use of the Haymarket 
warehouse to perform Task Order No. 118 (supp. R4, tab 67). Lear Siegler included in 
the order it placed with ESP the same PWS that was in its own task order with the 
government (tr. 31148-51). 
21. On 9 February 2006, representatives of the Army (including 
Mr. Preston Turner, Ms. Gerry Mosier, and Ms. Deborah Shreve from PEO Soldier), 
ESP (including Mr. Thomas Reed and Ms. Jan Holderness), and Lear Siegler held a 
"Task Order 118 (TO) Kickoff Meeting" at ESP's offices in Eatontown, New Jersey 
(supp. R4, tab 60 at 974). Mr. Turner was the senior logistician for PMSEQ 
(tr. 1/135-36). Mr. Reed, ESP's project leader, was the primary interface with PMSEQ 
personnel about operating the Haymarket warehouse (tr. 2/6, 9). He mainly dealt with 
Mr. Turner (tr. 11143, 2/9-10, 20, 26). A briefing slide presented at the kickoff 
meeting, and emailed to the Army the following day, stated that one "Team ESP 
Focus" in the base year would be "[c]ompletion of the 112,000 sq ft expansion to 
existing Haymarket Warehouse" (supp. R4, tab 60 at 974, 978). The purpose of 
having this language in the briefing slide was to announce that the warehouse 
expansion was a task to be completed under Task Order No. 118 (tr. 2/91). 
22. Mr. Turner, who worked for Mr. Wendt, the PMESQ director of logistics, 
was assigned by his organization to monitor the buildout. He tracked the monthly rent 
for the warehouse (tr. 1/169-70, 174-75, 191) reviewed the planning drawings when 
6 

they were provided to him by ESP, and provided assistance to ESP's landlord in dealing 
with Prince William County officials about the buildout (tr. 11171, 209-10, 212-13, 
2/25-26, 30, 36-37). Mr. Wendt also reviewed the drawings when they were presented 
to him by ESP, but gave no direction regarding the layout of the facility (tr. 11226, 
2/33). 
23. Mr. Hoffman, the founder of ESP and the company's president and CEO at 
the time of these events, was a former GM-15 Deputy Director of Logistics at 
CECOM, and a member of the Army Acquisition Corps. He received training related 
to his duties with the Army and was aware that only a warranted contracting officer 
could make a binding commitment on behalf of the government. (Tr. 1121, 35-37, 52, 
54,64) 
24. According to Mr. Hoffman, ESP renegotiated the warehouse lease and 
Mr. McGrory, the ESP chief financial officer, was the lead negotiator (tr. 11100). 
Mr. Hoffman 
insisted that ESP would not have entered the renegotiated lease absent 
direction to do so by the Army (tr. 1130). However, Mr. Hoffman was never a party to 
a conversation where Army personnel directed ESP to enter into the renegotiated lease 
(tr. 11103-04). Although Mr. Hoffman believed Army personnel knew the terms of the 
lease, he did not know that for a fact and he was not sure which Army personnel knew 
which terms of the renegotiated lease (tr. 1142, 101). He also did not know whether 
Army personnel were ever given a copy of the lease (tr. 1175). 
25. Although Mr. Hoffman testified that assurances were given that "ESP 
would not be responsible for any payments for which we had no use at the facility 
for," he was not the recipient of such assurances and never stated exactly who within 
ESP ever received such assurances from Army personnel (tr. 1130-31). When asked 
who within the Army conveyed such assurances to ESP personnel, he stated, "I do 
know Preston Turner was involved. I can't speak with certainty as to who his 
associates 
were." (Tr. 1/31) 
26. Mr. McGrory, testified that Mr. Hoffman was the recipient of assurances 
from Army program personnel; the only information Mr. McGrory had about any 
assurances from Army personnel, however, came from Mr. Hoffman (tr. 3/27, 38-39). 
27. Mr. Hoffman testified that the renegotiated lease term which provided that 
all the rent to be paid in the first seven years, with the last three years being rent free, 
was in the lease because "we were given the impression that [PMSEQ] would be in 
there for an extended period, seven years or longer" (tr. 1/33). 
28. Mr. Turner recalls having a conversation with Mr. Hoffman in either 2005 
or 2006. He recalls saying that the requirement "will probably be going on until 2010 
or whatever like that." (Tr. 11181) Mr. Reed, who was employed by ESP until 
7 

October 2006, and who was the primary interface with Mr. Turner, never received any 
commitment about how long PMSEQ might require the Haymarket warehouse 
(tr. 21103, 107). He did "expect" that the requirement would exist even after Task 
Order No. 118 was completed (tr. 2/121). 
29. ESP was motivated to enter into the renegotiated lease because it believed 
that this step would allow it to grow 
(tr. 2/23, 47-49). Mr. McGrory was involved in 
the financial aspects of the warehouse expansion. He testified that the guidance he 
was given by Mr. Hoffman was to ensure that whatever was done was good for the 
company and good for the workforce. (Tr. 3112-14, 37-38) The renegotiated lease 
was a financial aspect ofESP's expansion (tr~ 3113-14). Mr. Hoffman recognized that 
there was a risk that the Army would not stay for the duration of the lease because the 
ten-year term gave the Army time to provide the function internally (tr. 1/30, 98). 
30. Ms. Holderness prepared a draft letter to PEO Soldier, dated 6 January 
2006, that apparently was never sent, but which stated in pertinent part: 
Appreciating that the sole purpose in ESP's 
pursuit of the build-out initiative is in response to PEO 
Soldier direction, ESP requests PEO Soldier concurrence 
with the following prior to executing the proposed leasing 
agreement with First Potomac: 
- Acceptance of the lease terms and conditions 
relative to security and other 
deposits/rent/rent escalation/Common Area 
Maintenance charges/occupancy terms. 
Acceptance that ESP will invoice all 
remaining lease and associated payments in 
the event that PEO Soldier does not require 
the facility (or portions thereof) through the 
end of the leasing period. 
An acknowledgement that ESP's agreement 
to lease the build-out facility is contingent 
upon ESP being the sole provider of 
material handling equipment and the 
personnel resources necessary to operate 
8 

the staging facility operation during the 
leasing period. 
(Supp. R4, tab 60 at 892-93) Ms. Holderness agreed that at the time she prepared the 
draft letter, the final terms of the renegotiated lease were not known (tr. 3/137). 
31. On 20 January 2006, via email, ESP's upper management, including 
Mr. Hoffman and Mr. McGrory, discussed difficulties faced with its landlord, FPRT. 
FPRT had notified ESP that it might suspend the architectural design of the warehouse 
buildout. As a result, ESP personnel discussed what their alternatives might be. 
(Supp. R4, tab 56 at 421) As Mr. Hoffman testified: "That is what I wanted to open 
the door on to talk to Preston about. Like hey, if we can't get to the finish line with 
First Potomac to satisfy everybody's requirements, then we have got to look in a 
different direction." (Tr. 1/83) 
32. On 11 April 2006, ESP entered into a new lease for the Haymarket 
warehouse with FPRT (supp. R4, tab 57 at 828-29; compl., 12). Ms. Holderness, the 
ESP contracts manager, signed for ESP (tr. 3/104-05). The lease on the warehouse 
that had been 
signed in June 2004, was terminated upon the execution of the 
renegotiated lease. As Mr. Hoffman explained, the old lease and the renegotiated lease 
"became one lease." (Supp. R4, tab 57 at 836,, 2.06; tr. 1/103) 
33. The lease that ESP signed in April 2006 provided for the expansion of the 
Haymarket warehouse by the landlord and a substantial increase in rent upon the 
completion of the expansion, as anticipated in Lear Siegler's Task Order No. 118 
(supp. R4, tab 57 at 829-30). 
34. Mr. Reed disclosed to Mr. Turner the monthly lease amounts for the 
renegotiated lease (tr. 1/163, 174-75). Mr. Turner provided his "concurrence" with the 
lease costs and 
provided the information to the contract manager, Ms. Shreve, for her 
review (tr. 1/165). However, Mr. Turner clarified that his concern was with the 
buildout and monthly rent, and that he did not recall a discussion of the lease terms 
and did not relay his discussion with Mr. Reed to the contracting officer (tr. 11174-75, 
180). Mr. Turner lacked contracting authority (tr. 1/169, 176-77). Mr. Reed's primary 
points of contact in PM SEQ for invoices and estimates were Ms. Shreve and 
Ms. Mosier (tr. 2/118). Ms. Shreve was a program analyst who worked with 
Ms. Mosier until her retirement. Ms. Shreve had no contracting officer authority. 
Ms. Mosier, like Ms. Shreve, was a program analyst but was referred to by the title of 
contract manager. Like Ms. Shreve, Ms. Mosier had no contracting authority. 
(Tr. 3/62-63, 68; supp. R4, tab 63) In fact, no one assigned to PMSEQ had any 
contracting authority (tr. 1/176, 3/63-64, 4/10-11). Ms. Shreve reviewed ESP's 
invoices, but at some point Mr. Turner became involved in that task with her (tr. 3/77). 
9 

35. Mr. Reed testified that he had provided a draft copy of the renegotiated 
lease to Mr. Turner (tr. 2/41, 45). 
36. Mr. Reed had no recall that the lease terms provided that all the rent would 
be paid in the first seven years, and that the last three years of the lease were rent free 
(tr. 2/96-97). Mr. Reed believes he mentioned the $600,000 early termination amount 
to Mr. Turner in emails (tr. 2/100-01). Mr. Reed was not deeply involved in 
negotiating the termination provisions of the renegotiated lease; that was instead the 
purview of Mr. Hoffman and Gary Livero (tr. 2/98-99). 
37. Although Mr. Reed testified that he told Ms. Shreve the same details about 
the renegotiated lease that he had told to Mr. Turner (tr. 21111-12), Ms. Shreve never 
attended any meetings regarding the leasing arrangements and was never privy to any 
of the details of the lease (supp. R4, tab 63; tr. 3/68-69). 
38. Ms. Shreve testified to a conversation with either Mr. Decesare or 
Mr. Livero, of ESP. The individual expressed concern about entering into a ten-year 
lease for the expanded warehouse in light of the fact that the government's task order 
at the time had a twelve month performance period, and the government funding was 
for that same period of time. Ms. Shreve testified that she responded by saying, "it 
was our intentions to continue to use it, but that we couldn't guarantee anything 
because we only got funding on a year-to-year basis, and only if we had a requirement, 
so, you know, I can't guarantee anything after 12 months." She advised the individual 
that ESP needed to make a business decision about whether or not it would lease the 
facility for that period. (Supp. R4, tab 63; tr. 3/69-70, 75) 
39. Mr. Pinter testified regarding a conversation with ESP about the structure's 
expansion. Mr. Pinter testified that ESP explained that "they had to sign a ten year 
lease for the facility and they wanted the Government to sign a ten year contract." 
Mr. Pinter explained that the government could only sign a base year with options. 
(Supp. R4, tab 61; tr. 4/8-9, 10) 
40. Testimony by ESP's witnesses was uncontroverted, that in April 2006 when 
the renegotiated lease was executed, it was not possible to know when any of the lease 
years would begin or end because those dates could only be determined once 
construction was completed (tr. 2/103-04, 3/42, 155-56). 
41. At the time of the renegotiated lease, ESP was working under a subcontract 
with Lear Siegler that needed to be "recompeted" in about two years. There was no 
guarantee that ESP would be successful in that re-competition. (Tr. 3/45) 
42. Mr. Turner testified that he did not see a copy of the renegotiated lease 
until between 2010 to 2012 (tr. 11173-74, 175) and did not recall discussing the early 
10 

termination provisions of the renegotiated lease with Mr. Reed, nor did he recall being 
informed about the $600,000 early termination fee amount (tr. 11175). ·Mr. Wendt, 
Mr. Turner's supervisor, never saw the lease until litigation commenced in 2012 
(tr. 11224). He first learned that ESP had signed a long-term lease in 2007, after the 
buildout construction was completed (tr. 11223-24). 
43. No evidence was presented that PMSEQ personnel, or any other Army 
personnel, ever gave ESP direction to enter into the renegotiated lease (tr. 11177, 
197-99, 2/50, 4111, 29, 43-44). At most, there was evidence that PMSEQ personnel 
were interested in the timing of the buildout and when the expanded space would be 
available for use (tr. 1/201, 2/50). 
44. In December 2006, the Army issued a no-cost, unilateral modification 
extending the term of Task Order No. 118 from 31 January to 31 March 2007 (R4, 
tab 11). 
45. In March 2007, the Army exercised an option to extend Lear 
Siegler's 
performance of Task Order No. 118 through 4 March 2008 (R4, tab 14 ). 
46. On 25 April 2007, ESP and FPRT signed a First Amendment to Deed of 
Lease for the Haymarket warehouse. The First Amendment to Deed of Lease stated 
that it related to "a Deed of Lease dated April 11, 2006." (App. supp. R4, tab 85 
at 1-2) 
4 7. The April 2007 First Amendment to Deed of Lease stated that the landlord 
had expanded the Haymarket warehouse from approximately 123,777 square feet to 
approximately 236,082 square feet, and that ESP would occupy the expanded space for 
ten years, from 1 April 2007 through 3 
1 March 2017. The amended lease agreement 
specified monthly base rent for the first seven years (through 31 March 2014 ), but no 
base rent for years eight through ten, although ESP agreed to pay, as "additional rent," 
its share of operating expenses and real estate taxes, and to pay for all utilities, in all 
years. (App. supp. R4, tab 85 at 1-4) 
48. On 4 March 2008, the Army issued a no-cost, unilateral modification 
extending Lear 
Siegler' s performance period under Task Order No. 118 from 4 March 
through 31 March 2008, to avoid a lapse in service pending the award of a follow-on 
task order (R4, tab 18). 
49. On 1 April 2008, the CECOM Acquisition Center awarded Lear Siegler 
time-and-materials Task Order No. 200 under 
Contract No. DAAB07-03-D-B010. 
The task order requirements included operating the Haymarket warehouse for 
PMSEQ. Lear Siegler's initial performance period under Task Order No. 200 ran 
11 

from 1 April 2008 through 31 March 2009, with a one-year option. (R4, tab 19 at 1-2, 
tab 20 at 17) 
50. In paragraph 1.4 of its initial TEP proposal for Task Order No. 200, 
Lear Siegler again sought to pass through a 
contingent fee for the early termination of 
ESP's long-term lease as a contract cost. That contingent fee was rejected by the R2 
contracting officer for Task Order No. 200, Ms. Fernandes. (Supp. R4, tab 68 at 8, 
tab 69; tr. 31127-28) In response, Lear Siegler submitted a revised TEP in which the 
contingent fee language in paragraph 1.4 was removed and the following statement 
was inserted: "ESP CONCURS WTTH THIS CHANGE" (supp. R4, tab 70 at 1224; 
tr. 3/127). The revised TEP with the contingent termination fee language deleted was 
included in Task Order No. 200 (R4, tab 19 at 2,, 4; supp. R4, tab 70; tr. 3/123). 
51. On 1 April 2009, the Army exercised the option to extend Lear Siegler's 
performance period under Task Order No. 200 through 31 March 2010 (R4, tab 22). 
52. The Army subsequently obtained access to the Haymarket warehouse 
through a different contractual vehicle. On 5 March 2010, the U.S. Army Research, 
Development and Engineering 
Command (RDECOM) Acquisition Center, Operations 
Branch, at Aberdeen Proving Ground, Maryland, entered into bilateral Modification 
No. 1206 to Task Order No. 0012 under Engility Corp.'s existing Contract 
No. W91CRB-06-D-0037. The requirements of this task order modification included 
operating the Haymarket warehouse for PMSEQ on a time-and-materials basis. The 
performance period was from 26 February 2010 through 8 July 2011. (R4, tab 26 at 1, 
5) 
53. Engility entered into two subcontracts with ESP relating to the Haymarket 
warehouse with effective dates of 26 February 2010 (Subcontract No. 2010-1484) and 
8 June 2011 (Subcontract No. 11-129) (supp. R4, tabs 75, 76). Both subcontracts 
stated that Engility would issue purchase orders for specific requirements. The record 
contains one purchase order placed under Engility Subcontract No. 2010-1484. It had 
an initial performance period of 26 February 2010 to 20 August 2010. (Supp. R4, 
tab 72 at 001-02) 
54. On 24 March 2011, the U.S. Army Contracting Command-Aberdeen 
Proving Ground (ACC-APG) in Maryland, awarded Engility cost-plus-fixed-fee 
Contract No. W91CRB-l l-C-0074 for support services to PEO Soldier, including the 
operation of the Haymarket warehouse, from 24 March 2011 through 23 January 2012 
(R4, tab 27; compl., 21). 
55. In November 2011, the Army and Engility bilaterally extended the term of 
Contract No. W91CRB-l l-C-0074 to 23 March 2012 (R4, tabs 27, 28; tr. 4119-20). 
12 

56. On 9 January 2012, the ACC-APG contracting officer informed 
Engility that the Army would not require the Haymarket warehouse after Contract 
No. W91CRB-l l-C-0074 expired on 23 March 2012 (R4, tab 31). 
57. In February 2012, ESP submitted Invoice No. 1097-11 to Engility. The 
invoice sought $638,400.00 for a termination fee under ESP's lease for the Haymarket 
warehouse. Engility asked the ACC-APG contracting officer for approval to pay the 
ESP invoice as "other direct costs" under Contract No. W91CRB-l l-C-0074. The 
Army advised Engility that it did not consider the lease-termination fee an allowable 
cost. (R4, tab 36 at 1, 3; comp I. i1 29) 
58. The Army vacated the Haymarket warehouse on 23 March 2012 (compl. 
i135). 
59. ESP later submitted an "invoice [to Engility] for the total amount of rent 
for Year 6 through March 31, 2013, plus G&A, for a total amount of $4,186,128.99." 
ESP alleges that Engility did not pay that invoice, and it is undisputed that the Army 
did not pay Engility for these costs. (Compl. i1i1 28-29; answer i1i128-29) 
60. Both Task Order Nos. 118 and 200 which were issued to Lear Siegler 
were fully performed. So was Task Order No. 0012 under Engility's existing 
Contract No. W91CRB-06-D-0037 and Contract No. W91CRB-l l-C-0074 which was 
awarded to Engility. (Tr. 4/24) All of the orders placed with ESP by Lear Siegler 
under Task Order No. 118 and Task Order No. 200 were fully performed (tr. 3/164-65). 
The two ESP subcontracts with Engility were fully performed (supp. R4, tabs 75, 76; 
tr. 3/168-69, 4/58). 
61. Mr. Hoffman testified that ESP invoked the early termination provision of 
the renegotiated lease and that he was probably the person in ESP who did so 
(tr. 1/126). 
62. On 6 December 2012, ESP submitted a certified claim to ACC-APG for 
$3,317,728.88 in "rent and other associated costs" allegedly paid by ESP to FPRT for 
the Haymarket warehouse from 26 March 2012 through 3 December 2012 (supp. R4, 
tab 56 at 327, 333). The stated basis of the claim was that an implied-in-fact contract 
arose between ESP and the Army 
and that the Army had constructively terminated that 
contract, giving rise to a right on the part of ESP to recover termination for the 
convenience of the government costs (id. at 333). 
63. In response to a telephone request by Jeffrey Schoemer, the ACC-APG 
contracting officer, that ESP identify who from the Army "directed" ESP to enter into 
the 2007 lease amendment and "direct[ly] participa[ted] in ... the [lease] negotiations .... " 
13 

Mr. Earl Thompson, ESP's Vice President of contracts, identified COL Norwood, 
Mr. Wendt, and Ms. Shreve. (R4, tab 37 at 3-7) 
64. Mr. Schoemer issued a final decision denying ESP's claim on 5 April 
2013. He concluded that ESP had no prime contract with the government to provide 
the Haymarket warehouse between April 2006 and April 2007, and that ESP had 
supplied no "evidence that any Government communication existed in any form 
directing that ESP enter into a 10-year leasing agreement for the Haymarket, VA 
facility." (R4, tab 44 at 1-2) 
65. On 24 April 2013, the Board docketed ESP's timely appeal as ASBCA 
No. 58633. 
DECISION 
ESP asserts that it was party to an implied-in-fact contract with the Army 
to 
expand the Haymarket warehouse and to lease the warehouse for at least seven years. 
ESP, as the party 
asserting the existence of an implied-in-fact contract, bears the 
burden of establishing by preponderate evidence the existence of a contract. ESP's 
theory of an implied-in-fact contract has evolved since it first submitted its certified 
claim; however, ESP has not demonstrated the existence of an implied-in-fact contract, 
under of any the various permutations of its legal theory. Instead, the record evidence 
demonstrates that the Army indicated to ESP that it desired more warehouse space at 
the Haymarket facility. ESP, seeking to please the Army, negotiated with its landlord 
to expand the warehouse. The landlord, FPRT, indicated that it would be willing to 
expand the warehouse if ESP would commit to a ten-year lease. ESP recognized that 
there was a risk that the Army would not stay in the facility for ten years. The Army 
informed ESP that it could only commit appropriated funds and could not commit to 
more than a one-year lease, but that it intended to lease the property for several years. 
ESP attempted to mitigate its risks by structuring its lease with FPRT such that 
the ten years of base rent were payable over the first seven years, and by including an 
early termination clause. ESP attempted to include in the contract between its prime 
and the Army a provision that would make the Army liable for payment of the early 
termination fee, but ESP's proposal was rejected by Army contracting officers -- not 
once, but twice. ESP presented no evidence that anyone from the Army shared in 
ESP's understanding of the terms of its asserted implied-in-fact contract. ESP's 
argument is further undercut by the fact that its CEO was a former member of the 
Army Acquisition Corps and was aware that only a contracting officer could bind the 
Army. 
In total, the evidence demonstrates that ESP made a business 
decision to enter 
into a ten-year lease with FPRT for the expansion of the Haymarket warehouse in 
14 

order to grow the company, under the assumption that Army would stay in the 
warehouse long enough to make ESP' s lease profitable. In the end, the Army stayed 
five years, rather than the seven years ESP had hoped for. The fact that ESP's gamble 
did not pay off does not create an implied-in-fact contract. 
I. Implied-In-Fact Contracts 
In order to establish the existence of an implied-in-fact contract with the United 
States, ESP must establish the same elements as for a written contract: 1) mutuality of 
intent to contract; 2) consideration; 3) unambiguous offer and acceptance; and 4) 
actual authority on the part of the government representative whose conduct is relied 
upon. See, e.g., City of El Centro v. United States, 922 F .2d 816, 820 (Fed. Cir. 1990). 
Like an express contract, an implied-in-fact contract must be based upon a meeting of 
the minds; however, the meeting of the minds is "inferred, as a fact, from conduct of 
the parties showing, in the light of the surrounding circumstances, their tacit 
understanding." Trauma Service Group v. United States, 104 F .3d 1321, 1326 (Fed. 
Cir. 1997) (quoting Hercules Inc. v. United States, 516 U.S. 417, 424 (1996)); United 
Pacific Insurance Company, ASBCA No. 53051, 03-2 BCA ii 32,267 at 159,624. 
ESP asserts that it can establish the existence of an implied-in-fact contract by 
establishing 1) government direction to perform work, 2) performance by appellant, and 
3) a contracting officer's tacit ratification by accepting the work (app. br. at 15) (citing 
Kaiser Marquardt, ASBCA No. 50177, 97-2 BCA ii 29,169 at 145,037). ESP's 
interpretation of Marquardt as providing an alternate means of establishing the existence 
of an implied-in-fact contract is not well grounded. In Marquardt, the Board denied a 
motion to dismiss, holding that appellant had made allegations that, if proven, would 
establish that it was ordered to perform work beyond the scope of the existing contract, 
and that the contracting officer ordered appellant to continue with the work. Id. The 
Board noted that an implied-in-fact contract required proof of the same elements as an 
express contract including offer, acceptance, and consideration. Id. The decision then 
noted that an implied-in-fact contract may arise from direction, performance and tacit 
ratification, citing the Board's holding in Digicon Corporation, ASBCA No. 36907, 89-3 
BCA ii 21,966 at 110,497. Id. However, Marquardt does not say that these three 
elements are sufficient only that they may be sufficient to demonstrate an implied-in-fact 
contract. Digicon also makes clear that appellant must satisfy the same contractual 
requirements as an express contract. Digicon, 89-3 BCA ii 21,966 at 110,497. In 
Digicon, the Board found that the necessary elements of offer, acceptance, consideration 
and authority were established by the government's direction to appellant to perform a 
service not covered by the contract, appellant's compliance with the direction, and tacit 
acceptance by the contracting officer. Id. Thus, we hold that ESP must establish the 
traditional elements of a valid government contract, including offer, acceptance, 
consideration and authority, but recognize that one or more of these elements may be 
proved by direction, performance, or tacit ratification. 
15 

II. ESP has Not Established Authority or Mutuality of Intent to Contract on the 
Part of the Army 
The Army asserts that ESP cannot establish any of the elements of an 
implied-in-fact contract. As the failure to establish any one of the elements of an 
implied-in-fact contract is fatal to ESP's claim, we concentrate on the authority and 
mutuality of intent to contract issues because the record is clear on these points. We 
find that ESP has not established that anyone with authority to bind the government 
was a party to the alleged implied-in-fact contract. See, e.g., City of El Centro, 922 
F.2d at 820-21; Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384 (1947). ESP 
did not present testimony establishing an understanding between ESP and any 
government official, let alone any government official with authority to bind the 
government, that the government would lease the Haymarket warehouse for seven 
years, or that the government would pay the early termination fee for the lease. 
The only actions by authorized contracting officers in the record regarding 
ESP's alleged implied-in-fact contract were Ms. Abbruzzese's request, prior to ESP 
entering into the lease with FPRT for the expanded warehouse, that Lear Siegler delete 
the proposed contract language providing 
that the Army would be liable for an early 
termination fee (findings 11-14 ), and the similar request by Ms. Fernandes in 2008 
when the Army issued a new task order to the prime contractor (finding 50). Rather 
than establishing authority, these actions demonstrate the absence of a mutual intent to 
contract. Additionally, Mr. Pinter, who was superior to Mr. Turner, informed ESP that 
the Army could only commit to a one-year base contract with options (finding 39). 
ESP's witnesses did not testify to actions by government employees possessing 
authority. Instead, ESP' s witnesses 
were only able to testify that other ESP employees 
had an understanding that the Army would commit to a seven-year lease 
(findings 25-26). While Mr. McGrory 
testified that Mr. Hoffman received 
reassurances from the Army, Mr. Hoffman himself testified that he had not received 
any such assurances (id.). Mr. Hoffman thought that assurances were provided, but 
could only identify Mr. Turner as being involved in the assurances. Mr. Turner lacked 
contracting authority. (Finding 34) Moreover, Mr. Hoffman was a former deputy 
director of logistics with the Army and understood that only a warranted contracting 
officer could bind the government (finding 23). 
No witness testified to a shared understanding with an Army official. At most, 
the ESP witnesses testified that they 
unilaterally possessed an "understanding" that the 
Army would stay in the warehouse for seven years, but they were unable to identify 
any government official with contracting authority that shared in that understanding. 
In fact, none of the Army officials that ESP employees interacted with had contracting 
authority. (Finding 34) When ESP submitted its certified claim, the contracting 
16 

officer asked ESP to identify the Army employees that purportedly directed ESP to 
enter into the lease and participated in the lease negotiations. ESP identified 
COL Norwood, Mr. Wendt, and Ms. Shreve. (Finding 63) None of these individuals 
possessed contracting authority (finding 34). Moreover, as detailed above, neither did 
Mr. Turner or the contracting specialists at PEO Soldier that interacted with ESP 
(finding 34). Thus, ESP cannot establish the existence of an implied-in-fact contract 
with an individual possessing contracting authority. City of El Centro, 922 F .2d 
at 820-21. 
ESP argues that even if the Army officials did not possess contracting authority, 
they possessed inherent contracting authority, or that there was a ratification of the 
implied-in-fact contract. Both of ESP's arguments fail. ESP cannot establish that any 
of the individuals that they interacted with possessed inherent contracting authority. 
Specifically, ESP asserts that Preston Turner, at the time a senior logistician with 
PEO 
Soldier, possessed inherent authority (app. br. at 22). An individual, who is not a 
contracting officer can be found to possess "inherent" contracting authority when 
contracting is an "integral" and indispensable part of their jobs. See, e.g., H. Landau 
& Co. v. United States, 886 F.2d 322, 324 (Fed. Cir. 1989); Todd Pacific Shipyards 
Corp., ASBCA No. 55126, 08-2 BCA ~ 33,891 at 167,756. However, here the record 
demonstrates that contract administration was handled by CECOM and that none of 
the PEO Soldier employees were involved in administering the contract (findings 11, 
13, 
15, 34). 
There was no evidence presented in the hearing that Mr. Turner possessed any 
inherent contracting authority. Instead, the record demonstrates that his role was to 
monitor the buildout, but there was no evidence that Mr. Turner acted as contracting 
officer. (Finding 22) The fact that Mr. Turner reviewed invoices before payment 
(finding 34) does not change this conclusion. Additionally, ESP cites to Mr. Turner's 
testimony that he "concurred" with the lease terms (app. br. at 22). Given the totality 
of the testimony in the appeal, it appears that Mr. Turner's "concurrence" signified 
that PMSEQ, as a program office, did not object to the dollar amount for the monthly 
lease payment that would be passed through the prime contractor to the Army 
(finding 34). ESP additionally cites to Mr. Turner's testimony that he went back to 
Ms. Shreve for her concurrence. However, Mr. Turner also testified that he did not 
pass any of this information on to the contracting officer. (Finding 34) Thus, in total, 
the evidence does not support a finding that Mr. Turner assented to an agreement that 
the Army would occupy the warehouse for a set period of years. Although knowledge 
is not necessary to establish a lack of authority (see Federal Crop Ins., 332 U.S. 
at 3 85), here, Mr. Hoffman, the former CEO of ESP was a former deputy director of 
logistics with the Army and was aware that only a warranted contracting officer could 
bind the government (finding 23). Thus, it would not have been reasonable for ESP to 
rely on anything that Mr. Turner may or may not have said. 
17 

ESP's second argument, with respect to contracting authority, that there was a 
ratification, fares no better. ESP actually makes two interrelated arguments regarding 
ratification: 1) that there was an institutional ratification; and 2) that the contracting 
officer's acceptance of the benefits of the expanded warehouse constituted a 
ratification. ESP's institutional ratification argument relies on the holding in 
Silverman v. United States, 230 Ct. Cl. 710 ( 1982). In that case the plaintiff court 
reporter was a subcontractor on a contract with the Federal Trade Commission (FTC) 
to transcribe hearings. Silverman had not been paid for several transcripts previously 
provided to the prime contractor and was concerned regarding the prime' s financial 
viability. Because of this, Silverman sent the transcripts for two days of hearings to 
the prime contractor c.o.d., and the prime contractor rejected the shipment. Silverman 
contacted the FTC, informing it of the status of the transcripts and requesting that the 
FTC not make any further payments to the prime contractor until Silverman was paid 
for previously delivered transcripts. The FTC official promised to pay directly to 
Silverman any amounts still due the prime contractor for the previously-furnished 
transcripts and payment for the two days of transcripts currently being withheld by 
Silverman in consideration for Silverman providing the transcripts directly to the FTC, 
rather than providing the transcripts to the prime contractor. Id. at 703-07. 
The trial judge made factual findings, adopted by the Court of Claims, that 
offer, acceptance, and consideration were evident in the FTC official's offer to pay 
directly to Silverman the funds for transcripts not previously paid to the prime 
contractor in exchange for Silverman releasing the two days of hearing transcripts 
directly to the FTC. The trial judge also found that the FTC had ratified the 
implied-in-fact agreement by accepting the transcripts. Silverman, 230 Ct. 
Cl. at 710 
("the FTC ratified such promise"). 4 To the extent that Silverman is relevant here, it 
can be distinguished by the express ratification of the agreement between Silverman 
and the FTC official. This is supported by the holding in City of El Centro where the 
Federal Circuit interpreted Silverman as being an implied-in-fact contract that was 
ratified by an express agreement with an official possessing inherent authority. City of 
El Centro, 922 F .2d at 821 ("By contrast, in the case before us there was no promise, 
certainly no express promise, by an official empowered to bind the Government"); see 
also Aero-Abre, Inc. v. United States, 39 Fed. Cl. 654, 658 (1997) (in City of El Centro 
the Federal Circuit "construed Silverman not as a case in which a government agency 
ratified an unauthorized 
agreement, but as one in which the contracting employee had 
implied actual authority to bind the government"). As noted above, unlike in 
4 However, the trial court judge explicitly found that the FTC official lacked 
contracting authority. Silverman, 230 Ct. Cl. at 707. One commentator has 
referred to the "appellate decisions dealing with the 'authority' issue in 
implied-in-fact contract cases" as "[a] [m]ess." "Implied-In-Fact Contracts: 
The 'Authority' Stumbling Block." 14 CIBINIC & NASH REPORT~ 5 (Jan. 
2000). 
18 

Silverman it is clear that there was no meeting of the minds between ESP and the 
Army as the Army twice rejected ESP's efforts to insert language into the prime 
contract with the Army to make the Army liable for a prepayment penalty 
(findings 13-14, 50). 
ESP also cites Janowsky v. United States, 133 F.3d 888 (Fed. Cir. 1998) in 
support of its institutional ratification argument ( app. hr. at 20-21 ). However, the facts 
in Janowsky differ significantly from this appeal. Janowsky was a procedural decision 
in which the plaintiff owned a vending machine business and was concerned with a 
possible decline in business value if he cooperated with the FBI on a sting operation. 
Janowsky, 133 F.3d at 890-91. Janowsky received a verbal promise of 
indemnification from an FBI agent who lacked authority, and also had his lawyer 
prepare a written agreement, with input from the FBI. Id. The FBI allowed the 
undercover operation to continue, and not until after capturing one of the targets of the 
probe did the FBI inform Janowsky that he would not receive the promised 
indemnification. Id. at 891. The Federal Circuit held that it was error for the Court of 
Federal Claims to grant summary judgment because there was a factual issue regarding 
whether the FBI had institutionally ratified the agreement. Id. Significantly, the 
Federal Circuit again interpreted Silverman, this time backing-off the interpretation of 
Silverman contained in City of El Centro and suggesting that the holding in City of El 
Centro was premised on the fact that the government did not receive a direct benefit 
from the implied-in-fact contract in that case, whereas it had received a direct benefit 
in Silverman. Id. 
Regardless of how Silverman is interpreted, ESP has not established institutional 
ratification. Rather than ratifying a purported understanding of the parties that the 
Army would compensate ESP for early 
termination costs, the Army rejected ESP 's 
attempt to include this purported agreement in the contract (findings 13-15, 32). 
Significantly, this action occurred before ESP signed the lease with its landlord FPRT. 
The Army again rejected this proposed contractual provision in 2008, after ESP entered 
into the lease agreement with FPRT. (Finding 50) The widespread institutional 
rejection of the contract terms proposed by ESP foreclose any finding of institutional 
ratification of such terms (findings 3 8-3 9). 
In a related argument, ESP alleges that the contracting officer's acceptance of the 
benefits of an implied-in-fact contract can constitute ratification. Here, ESP relies upon 
Healthcare Practice Enhancement Network, Inc., VABCA No. 5864, 01-1 
BCA ii 31,383 at 154,986, which in tum cites Sociometrics, Inc., ASBCA No. 51620, 
00-1 BCA ii 30,620. However, these cases are easily distinguishable as they involve 
novice contractors in situations where it should have been clear to the contracting officer 
that services were being provided without a contract. In Healthcare Practice 
Enhancement, a Veterans Administration (VA) official without contracting authority 
retained, by written agreement, consultants to assist in preparing a strategic plan. The 
19 

V ABCA found ratification of the express but unauthorized contract because the 
contracting officer attended meetings with the consultants and the committee, of which 
the contracting officer was a member, sought and received the benefits of the 
consultants' work. Healthcare Practice Enhancement, 01-1BCA~31,383 at 154,987. 
As the Veterans Board noted in that appeal, 
Id. 
We conclude that, in cases in which a Government 
official, though lacking actual contracting authority, enters 
into an agreement with a contractor to provide something 
of value that the Government needs and receives as a 
benefit, and either an authorized CO knew or should have 
known about it (Williams) or the non-authorized 
Government official who entered the agreement was a 
senior, or high level, official (Silverman), then the 
Government is liable to compensate the contractor. 
The facts in this appeal differ from Healthcare Practice Enhancement in that 
there is no written but invalid agreement between ESP and the Army. While ESP 
argues that the Army's contracting officer, as in Healthcare Practice Enhancement, 
was aware of the benefits of the contract, the record here does not support such an 
argument. First, the contracting officers were in CECOM and were physically isolated 
from the Haymarket warehouse, and not in regular contact with ESP, a subcontractor 
to a series of prime contractors (findings 11, 34). Additionally, here, the Army's 
contracting officer paid the prime contractor for the use of the Haymarket warehouse 
(findings 20, 49, 54). ESP fails to explain how, simply by possibly having seen a copy 
of the lease agreement (a subject of conflicting testimony (findings 24, 34-37, 42)) 
between ESP and FPRT, the contracting officer was aware of the purported 
implied-in-fact contract between ESP and the Army, when the Army was paying the 
prime contractor for the provision of the same benefit - the use of the Haymarket 
warehouse. 
Sociometrics is largely similar to Healthcare Enhancement Practice. In 
Sociometrics, the Defense Technical Information Center (DTIC) retained appellant for 
assistance with its annual fall and spring conferences. There was an express contract 
with a series of option years. After the government exercised the first three option years, 
Sociometrics erroneously believed that DTIC had awarded the fourth option year, when, 
in fact, the government had not exercised the option. The contracting officer's 
representative continued working with Sociometrics in hosting the fall conference as if 
the option had been exercised, and this knowledge was imputed to the contracting 
officer by the Board in holding that there was an implied-in-fact contract, ratified by the 
contracting officer's acceptance of the benefits. Sociometrics, 00-1 BCA ~ 30,620 
at 151, 152-53. However, again in Sociometrics the Board considered the contracting 
20 

officer's knowledge, or actually the contracting officer's representative's knowledge, of 
a service being provided to be evidence of the implied-in-fact contract. But here, the 
Army paid the prime contractor for the provision of the Haymarket warehouse and there 
was no ''knowing acceptance" of a benefit. In fact, rather than a "knowing acceptance" 
of the benefits, the contracting officer at the time that ESP entered its lease with FPRT, 
Ms. Abbruzzese, was aware of ESP's request for reimbursement of the early termination 
fee before ESP entered into the lease with FPRT, and she explicitly informed the prime 
contractor that the Army would not accept responsibility for the contingent liability 
(findings 13-15). A later contracting officer, Ms. Fernandes, rejected ESP's second 
attempt to insert liability for the early termination fee into the task order (finding 50). 
The understanding of the contracting officer for a finding of ratification is key and the 
knowledge of contract specialists or others involved with the contract is not relevant. 
Flex/ab, L.L.C. v. United States, 424 F.3d 1254, 1263 (Fed. Cir. 2005). Thus, we hold 
that ESP has not established the existence of an implied-in-fact contract with the Army. 
Moreover, as ESP has not established authority, we reject ESP's argument that the fact 
that the Army's rejection of the early termination fee does not preclude finding an 
implied-in-fact contract for the year six rent (app. reply br. at 8-9). 
III. ESP has not Established Entitlement under Quantum Meruit 
ESP asserts that it is entitled to recover under quantum meruit pursuant to the 
Board's holding in Honeywell lnt'l, Inc., ASBCA No. 57779, 15-1BCA~36,121. In 
Honeywell the Board noted that where "the government receives the goods or services 
for which it contracted, but then seeks to avoid payment by arguing that the underlying 
contract was unlawful" the contractor may recover under the theory of quantum 
meruit. Id. at 176,340 (quoting United Pac. Ins. Co. v. United States, 464 F.3d 1325, 
1334 (Fed. Cir. 2006)). ESP additionally cites to Gould, Inc. v. United States, 67 F.3d 
925, 930 (Fed. Cir. 1995) for the similar proposition that quantum meruit permits the 
contractor to be "compensated under an implied-in-fact contract when the contractor 
confers a benefit to the government in the course of performing a government contract 
that is subsequently declared invalid." As explained in more detail above, we hold that 
there was no contract between ESP and the Army, express or implied-in-fact, that 
would serve as the basis for recovery under quantum meruit. Recovery under quantum 
meruit prevents the government from unjustly benefiting from goods or services 
provided pursuant to an unenforceable contract. Here, we have held that there is no 
contract. Moreover, as noted above, the Army paid the prime contractor for provision 
of the Haymarket warehouse pursuant to the express contracts between the Army and 
prime contractors (findings 20, 49, 54). Thus, the government paid for the benefit it 
received, and there is no basis for recovery under a theory of quantum meruit. 
Finally, we note that Count I of ESP's complaint asserted that the Army 
breached its prime contract with the Treasury Department's BPD (compl. ~~ 36-43). 
21 

ESP presented no evidence in support of this argument at the hearing, or in its 
post-hearing brief. This argument is waived. 
CONCLUSION 
ESP has not established the existence of a contract with the Army for payment 
of the early termination fee, year six rent, and other costs. The appeal is denied. 
Dated: 4 August 
2017 
I concur 
(I /\ 
~__.___\ -----
~SHAcKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
" ' 
IJ~ /.j 'fl.a..& •• --
DA YID D' ALESSANDRIS 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I concur 
J. REID PROUTY 
Administrative 
Judge 
Acting Vice Chairman 
Armed Services Board 
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. 58633, Appeal of 
Engineering Solutions & Products, LLC, rendered in conformance with the Board's 
Charter. 
Dated: 
22 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals