ARMED SERVICES BOARD OF CONTRACT APPEALS 
 
Appeal of -- ) 
 ) 
MicroTechnologies, LLC ) ASBCA No. 62394 
 ) 
Under Contract No. W52P1J-16-D-0029 ) 
 
APPEARANCE FOR THE APPELLANT: Barbara Behn Ayala, Esq. 
   Counsel 
 
APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq. 
  Engineer Chief Trial Attorney 
Nathaniel S. Canfield, Esq. 
 E. Christopher Lambert, Esq. 
   Engineer Trial Attorneys 
   U.S. Army Engineer District, Portland 
 
OPINION BY ADMINISTRATIVE JUDGE STINSON 
 
 Appellant MicroTechnologies, LLC (MicroTech), appeals a contracting officer’s 
denial of its September 11, 2019, claim, in the amount of $46,743.19 (R4, tabs 1-2).  
Appellant elected to proceed under the Board’s Small Claims (Expedited) procedures, 
Board Rule 12.2, and the parties agreed to submit this appeal for a decision on the record 
without a hearing pursuant to Board Rule 11.  The Contract Disputes Act, 41 U.S.C. 
§ 7106(b)(4)-(5), as implemented by Board Rule 12.2, provides that this decision shall 
have no precedential value, and, in the absence of fraud, shall be final and conclusive and 
may not be appealed or set aside.  For the reasons stated below, MicroTech’s appeal is 
denied. 
 
FINDINGS OF FACT 
 
 1.  On February 22, 2016, the Army Contracting Command, Rock Island, Illinois, 
awarded MicroTech Contract No. W52P1J-16-D-0029 (the Contract), 1 of 17 multiple 
award, Indefinite Delivery Indefinite Quantity contracts for Information Technology 
Enterprise Solutions - 3 Hardware (ITES-3H) (R4, tab 3 at 000010).  The government 
accepted and incorporated appellant’s offer dated December 14, 2015, submitted in 
response to Request for Proposal No. W52P1J-11-R-0171, “to the extent it does not 
conflict with this RFP, SOW, terms and conditions” (id.).  The Contract provided that an 
ordering guide for customers placing orders against the contract would be published to 
the Army Computer Hardware, Enterprise Software and Solutions (CHESS) IT e-Mart 
website (id.).  
 

2 
 
 2.  The Contract incorporated by reference FAR 52.212-4, CONTRACT TERMS 
AND CONDITIONS – COMMERCIAL ITEMS (MAY 2015) (R4, tab 3 at 000047).  
Subparagraph (u) of that clause states: 
 
Unauthorized Obligations. (1) Except as stated in paragraph 
(u)(2) of this clause, when any supply or service acquired 
under this contract is subject to any End User License 
Agreement (EULA), Terms of Service (TOS), or similar legal 
instrument or agreement, that includes any clause requiring 
the Government to indemnify the Contractor or any person or 
entity for damages, costs, fees, or any other loss or liability 
that would create an Anti-Deficiency Act violation (31 U.S.C. 
1341), the following shall govern: 
 
(i) Any such clause is unenforceable against the Government. 
 
(ii) Neither the Government nor any Government authorized 
end user shall be deemed to have agreed to such clause by 
virtue of it appearing in the EULA, TOS, or similar legal 
instrument or agreement. If the EULA, TOS, or similar legal 
instrument or agreement is invoked through an “I agree” click 
box or other comparable mechanism (e.g., “click-wrap” or 
“browse-wrap” agreements), execution does not bind the 
Government or any Government authorized end user to such 
clause. 
 
(iii) Any such clause is deemed to be stricken from the 
EULA, TOS, or similar legal instrument or agreement. 
 
(2) Paragraph (u)(1) of this clause does not apply to 
indemnification by the Government that is expressly 
authorized by statute and specifically authorized under 
applicable agency regulations and procedures. 
 
48 C.F.R. § 52.212-4(u). 
 
 3.  On June 29, 2017, MicroTech entered into a Master Purchase Agreement 
(MPA) with De Lage Landen Financial Services, Inc. (DLL), for the financing of loans 
by DLL for appellant to purchase equipment it leased to the government.  DLL agreed to 
pay appellant the purchase price for leased equipment in return for title to the equipment 
and an assignment of appellant’s lease payments received from the government on 
equipment orders.  (App. supp. R4, tab 5 at 00012-14)  In the event of a termination for 
convenience or non-renewal of a government contract that is the subject of the MPA, 

3 
 
appellant was required cooperate with DLL in preparing a claim to be submitted to the 
government in MicroTech’s name for any unpaid lease payments, and seek appeal of any 
unfavorable final decision (app. supp. R4, tab 5 at 00016-18).  Pursuant to Section 4.01 of 
the MPA, DLL assumed “all risks related to nonpayment of the Lease due to termination 
of the Prime Contract by User due to Non-renewal, Non-appropriation or Termination for 
Convenience” (app. supp. R4, tab 5 at 00017). 
 
 4.  On March 8, 2018, the government issued a CHESS IT e-mart Request For 
Quote, Reference Number 232755, seeking to lease multi-functional devices/network 
printers, as well as annual maintenance and repair services (R4, tab 8). 
 
 5.  On March 16, 2018, MicroTech submitted a quote in response to the 
government’s request, identified as Proposal No. 0315ACEPortland.  MicroTech’s 
proposal included six supplemental terms and conditions.  (R4, tab 8 at 000106, tab 9 
at 000107, 000110) 
 
 6.  Supplemental Term and Condition No. 1 stated the “Government agrees not to 
replace the Product with functionally similar Product or to revert to the use of any other 
Product to perform the functions performed by the Product for a period of one (1) year 
after any termination for convenience or non-renewal” (R4, tab 9 at 000110). 
 
 7.  Supplemental Term and Condition No. 5 stated: 
 
Within fourteen (14) days after the date of expiration, 
nonrenewal or termination of the contract, the Government 
shall, at contractors expense, have the Products packed for 
shipment in accordance with manufacturer’s specifications 
and return the Products to specified location in the continental 
United States, in the same condition as when delivered, 
ordinary wear and tear accepted, and certify in writing that all 
software has been deleted from all devices and is no longer in 
use by Government.  Any expense necessary to return the 
Products to good and working order shall be at Government’s 
expense. 
 
(R4, tab 9 at 000110) 
 
 8.  Supplemental Term and Condition No. 6 stated: 
 
Termination for Convenience – Contracts entered into 
hereunder may not be terminated except by the ordering 
office’s contracting officer exercising the provisions of and 
providing notice in accordance with FAR 52.212.4, Contract 

4 
 
Terms and Conditions-Commercial Item, paragraph (l) 
Termination for the Convenience of the Government.  In the 
event of a Termination for Convenience, or a [sic] an event of 
non-renewal by the Government, the Government will 
promptly pay Contractor, or its assignee, the Termination 
Charges. 
 
(R4, tab 9 at 000110) 
 
 9.  On May 1, 2018, the United States Army Corps of Engineers (USACE), 
Portland District, solicited from MicroTech a firm fixed price Order 
No. W9127N18F0084 (the Order) under the Contract for “Printers/Copiers/Scanners 
Maintenance.”  The Order specified that the “Contractor maintains ownership of 
equipment; installs equipment; performs preventative and corrective maintenance; and 
provides standard printer consumbables [sic] (except paper).”  (R4, tab 10 at 000164, 
000167, 000206) 
 
 10.  The Order solicited a base lease term of 5 months from, May 1, 2018, to 
September 30, 2018, with four 12-month options and one 7-month option, for a total of 
60 months.  MicroTech accepted USACE’s offer on June 18, 2018.  (R4, tab 10 at 164, 
166)  Bilateral Modification No. P00001, signed by the government on June 18, 2018, 
changed the base lease term to begin July 1, 2018, and run through September 30, 2018 
(R4, tab 11 at 000219-20).   
 
 11.  MicroTech executed a Bill of Sale dated August 14, 2018, selling to DLL its 
right, title, and interest in eight Ricoh printers that were the subject of the Order for a 
purchase price of $52,956.32 (app. supp. R4, tab 6). 
 
 12.  On August 27, 2018, the government acknowledged receipt of the Federal 
Notice of Assignment and the Instrument of Assignment, indicating that monies due 
pursuant to the Order were assigned by MicroTech to DLL (R4, tab 20 at 000285). 
 
 13.  On August 30, 2018, the government issued unilateral Modification 
No. P00002 incorporating into the Order the Federal Notice of Assignment.  The 
Modification also stated, “Proposal number 0315ACEPortland, including all sections, is 
hereby incorporated into this Delivery Order by reference as if fully set forth herein.”  
(R4, tab 12 at 000228) 
 
 14.  On September 27, 2018, the government issued unilateral Modification 
No. P00003, exercising the first option, from October 1, 2018, through June 30, 2019, for 
a period of nine months (R4, tab 13).  Bilateral Modification No. P00004, signed by the 
government on October 25, 2018, changed the base lease term to begin July 13, 2018, to 
match the acceptance date of the leased equipment (R4, tab 14).  

5 
 
 
 15.  By email dated March 20, 2019, the contracting officer notified MicroTech that 
USACE, Portland District, was in the process of transitioning all of its printer requirements, 
including those fulfilled under the Order, to the Defense Logistics Agency (DLA).  
Mr. Hayes stated that the “Portland District as a whole, along with other project offices, are 
in the works of transferring to a DLA enterprise solution for printers.”  (R4, tab 17) 
 
 16.  On May 17, 2019, the government signed unilateral Modification No. P00005, 
with an effective date of July 1, 2019, exercising a three-month period of performance, from 
July 1, 2019, through September 30, 2019.  The modification was issued under the authority 
of FAR 52.217-9, OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 
2000), which was incorporated in the Order in full text.  (R4, tab 10 at 000171, tab 15) 
 
 17.  On July 23, 2019, the contracting officer notified MicroTech via email that 
the government would not exercise its option under the Order for the period that was to 
begin October 1, 2019 (R4, tab 18). 
 
 18.  On or about August 2, 2019, the contracting officer confirmed with appellant 
during a telephone conference that the government planned to substitute the printers 
leased from MicroTech with functionally similar equipment (compl. ¶ 12; answer ¶ 12). 
 
 19.  During the 15-month period of performance, the government made total 
payments of $23,928.00 (R4, tab 16). 
 
 20.  On September 11, 2019, MicroTech submitted to the contracting officer via 
email its claim in the amount of $46,743.19 (R4, tab 1). 
 
 21.  On November 25, 2019, the contracting officer issued a final decision denying 
MicroTech’s claim (R4, tab 2).  The contracting officer stated, in part: 
 
MicroTech’s quotation was not incorporated into the order. 
Because task order no. W9127N18F0084 was solicited as an 
RFQ, MicroTech’s quotation did not constitute a proposal 
that the Government accepted. Rather, the order itself 
constituted the Government’s offer, which MicroTech 
accepted, per FAR 13.004. The order neither attached 
MicroTech’s quotation nor used express and clear language  
  

6 
 
incorporating MicroTech’s quotation by reference, and 
therefore did not incorporate the quotation. 
 
(R4, tab 2 at 000004)  Appellant filed a timely notice of appeal, which was docketed as 
ASBCA No. 62394. 
 
DECISION 
 
 The issue in this appeal is the effect, if any, of incorporating by reference into the 
Order, through unilateral modification, additional terms authored by the contractor, 
which taken together appear to create a right of MicroTech (or DLL as its assignee) to 
receive undefined “termination charges” in the event the government invokes its 
contractual right not to exercise an option for leased equipment and then within one year 
thereafter replaces the previously leased equipment with functionally similar equipment. 
 
 Appellant argues that the government materially breached Supplemental Term and 
Condition No. 1, which appellant refers to as the “Non Substitution Clause,” and 
allegedly prohibits the government for one year “from replacing the leased equipment 
with functionally similar equipment” (app. br. at 1).  According to appellant, the 
government’s alleged breach “resulted in the inability of Appellant (and its financing 
source) to recover the purchase price paid by Appellant (and financed by its financing 
source) for the leased equipment through the 60-montlhly [sic] lease payments provided 
for in the Delivery Order” (app. br. at 2). 
 
 Appellant correctly notes that its Proposal No. 0315ACEPortland was 
incorporated into the Order pursuant to Modification No. P00002 (app. br. at 8, 12; 
finding 13).  This is important because appellant’s proposal was not part of the original 
agreement between the parties.  See Ricoh USA, Inc., ASBCA No. 59408, 17-1 BCA 
¶ 36,584 at 178,198 (contract that resulted from the government’s request for a quote 
included contractor’s pricing schedule, but not its technical proposal).  As stated in 
FAR 13.004(a):  
 
A quotation is not an offer and, consequently, cannot be 
accepted by the Government to form a binding contract.  
Therefore, issuance by the Government of an order in 
response to a supplier’s quotation does not establish a 
contract.  The order is an offer by the Government to the 
supplier to buy certain supplies or services upon specified 
terms and conditions.  A contract is established when the 
supplier accepts the offer.[1]   
                                              
1 Consistent with FAR 13.004(a), the final decision recognized that the Order did not 
incorporate appellant’s proposal, stating “[b]ecause task order 

7 
 
 
 Appellant argues that “[t]he Contracting Officer was clearly authorized to bind the 
government to both the Non-Substitution and the Termination Charge Clauses that are 
included in Appellant’s quote and were incorporated into the DO” (app. br. at 13).  As 
support, appellant cites FAR 52.212-4, specifically, subparagraph (g)(1), which states, 
“[t]he Contracting Officer is the only person authorized to direct changes in any of the 
requirements under this contract” (app. br. at 13-14 (citing Appellant’s Proposed 
Findings of Facts ¶ 22)).2   
 
Notwithstanding FAR 52.212-4(g)(1), as cited by appellant, the supplemental 
terms and conditions contained in appellant’s proposal, and relied upon by appellant here, 
are not binding upon the government.  The contracting officer had no authority to modify 
the Order in favor of MicroTech to include the supplemental terms and conditions, 
without there being consideration to the Government.  As noted in Craft Machine Works, 
Inc., ASBCA No. 47457, 98-1 BCA ¶ 29,467, “[i]t is well settled that a contracting 
officer does not have the authority to agree ‘to increase the remuneration to be paid a 
contractor without any increase whatever in the contractor’s obligations to the 
Government.’”  98-1 BCA ¶ 29,467 at 146,264 (citing Joseph J. Jaeger, Jr., ASBCA 
No. 11413, 66-2 BCA ¶ 5757 at 26,822).  It does not matter that the contract terms 
exceeding the contracting officer’s authority were embodied in a written modification.  
Wheeler Bros., Inc., ASBCA No. 16112 et al., 73-1 BCA ¶ 9916 (“Such lack of authority 
cannot be overcome by the issuance of a contractual document which has the effect of 
increasing the amount to be paid to the contractor without any increase in the latter’s 
                                              
no. W9127N18F0084 was solicited as an RFQ, MicroTech’s quotation did not 
constitute a proposal that the Government accepted.  Rather, the order itself 
constituted the Government’s offer, which MicroTech accepted, per FAR 13.004.  
The order neither attached MicroTech’s quotation nor used express and clear 
language incorporating MicroTech’s quotation by reference, and therefore did not 
incorporate the quotation.”  (Finding 21)  The final decision, however, failed to 
discuss or recognize the import of Modification No. P00002. 
2 Appellant’s Proposed Findings of Facts ¶ 22 cites as support a version of FAR 52.212, 
which was included in the Contract “as an addendum to 52.212-4” and contains a 
section (g) entitled “Contract Authority” (app. br. at 8; R4, tab 3 at 000034-35).  
We note that, pursuant to FAR 12.302, TAILORING OF PROVISIONS AND 
CLAUSES FOR THE ACQUISITION OF COMMERCIAL ITEMS, the Contract 
also included a separate, tailored version, of FAR 52.212-4, “to reflect special 
contract terms and conditions that are unique for this contract” (R4, tab 3 
at 000059).  The Contract also incorporated by reference FAR 52.212-4, 
CONTRACT TERMS AND CONDITIONS – COMMERCIAL ITEMS (MAY 
2015) (finding 2).  Both the tailored version of FAR 52.212-4 and the May 2015 
version include a section (g) entitled “Invoice” (R4, tab 3 at 000060).  48 C.F.R. 
§ 52.212-4 (MAY 2015). 

8 
 
obligations to the Government, and such document will not be binding upon the 
Government.”).   
 
Appellant acknowledges that FAR 52.217-9 grants the government discretion to 
exercise options.  Appellant argues, however, that this discretion “is constrained by the 
Non-Substitution clause” which “acts as a binding constraint on the Government in the 
event of a non-renewal and prohibits the Government from replacing the leased 
equipment with functionally similar equipment during the one-year period following any 
termination for convenience or non-renewal of the lease.”  (App. br. at 14-15)3  
 
In essence, appellant’s claim, based upon the application of Supplemental Term 
and Condition Nos. 1 and 6, renders void the government’s right not to exercise its lease 
options, because the relief demanded by MicroTech seeks payment of monies appellant 
would have received pursuant to the Order, had the government exercised all options 
specified in the Order.  Under appellant’s theory, the government would be liable for full 
payment of the unexercised option years, even though appellant would not be required to 
provide the equipment or services specified in the Order. 
 
The supplemental terms and conditions, as applied by appellant, would diminish 
the government’s bargained-for right not to exercise its option to extend the lease.  Gov’t 
Sys. Advisors, Inc. v. United States, 847 F.2d 811, 813 (Fed. Cir. 1988) (discussing the 
government’s bargained-for right not to exercise a delivery order option).  Indeed, at the 
time it accepted the Order, MicroTech “assumed any financial risks resulting from its 
financial planning based on the assumption that it would be awarded all option periods 
under the contract.”  Phoenix Data Sols. LLC Aetna Gov’t Health Plans, ASBCA 
No. 60207, 18-1 BCA ¶ 37,164 at 180,923 (quoting Vehicle Maint. Servs. v. GSA, 
GSBCA No. 11663, 94-2 BCA ¶ 26,893 at 133,880).  Inclusion of the supplemental 
terms and conditions into the Order, in essence, improperly transferred to the government 
the financial risk assumed by the contractor at the time it accepted the Order.  
 
The government argues that application of the supplemental terms and conditions 
proffered by appellant together violated the Anti-Deficiency Act, 31 U.S.C. § 1341, and 
                                              
3 MicroTech claims entitlement to full payment of what it terms the “60 month lease” 
(app. br. at 1-2, 5-6, 10-11, 21-23, 26-27).  Indeed, appellant alleges that the 
contracting officer “acknowledged that all of the equipment specified in the DO 
had been installed and accepted by the Government and that the lease 
commencement date for the 60-month lease plan shall be July 13, 2018” (app. br. 
at 6).  In actuality, the contracting officer stated “[t]his is to acknowledge that the 
Equipment and Software referenced above has been installed and accepted and 
that the lease commencement date shall be 13 July 2018” (app. supp. R4, tab 2).  
The Order here included a base year, plus options, which totaled 60 months.  The 
Order was not a 60-month lease.  (Findings 10, 14).   

9 
 
FAR 52.212-4(u).4  According to the government, the supplemental terms and conditions 
are unenforceable as they create an indeterminate liability requiring “the Government 
indemnify DLL, MicroTech’s assignee, for losses resulting from the Government’s 
decision not to exercise its option under the Order” (gov’t br. at 7).  The government 
likewise argues that the supplemental terms and conditions are unenforceable because 
they impose a penalty on the Government, also in violation of the Anti-Deficiency Act 
(gov’t br. at 10-13).   
 
In support of its argument, the government cites a decision of the Comptroller 
General, Burroughs Corp., B-186313, 76-2 CPD ¶ 472 (Comp. Gen. Dec. 9, 1976), 
modified in part, aff’d in part, Honeywell Info. Sys., B-186313, 77-1 CPD ¶ 256 (Comp. 
Gen. April 13, 1977), discussing a requirement that the government pay “separate 
charges” if it returned equipment to the contractor or terminated its use prior to the 
intended 60-month use of the system procured (gov’t br. at 8-10).  The Comptroller 
General held that the provision violated the Anti-Deficiency Act because payment would 
“subject the Government to an indeterminate liability.”  76-2 CPD ¶ 472.   
 
The government likewise cites Fed. Data Corp., B-190659, 78-2 CPD ¶ 380 
(Comp. Gen. Oct. 23, 1978), in which the Comptroller General held that “[t]he real effect 
of the ‘separate charges’ provision in the SEC contract was” to force “the contracting 
agency to purchase its requirements from the contractor for successive fiscal years or to 
pay damages for its failure to do so” (gov’t br. at 10 (quoting Fed. Data Corp.)).  The 
Comptroller General expressly rejected the argument that the government had ratified the 
“separate charges” provision, holding the government had no authority to contract for a 
provision in violation of funding statutes.  Id.  
 
We find the Comptroller General decisions, although not binding precedent, to be 
persuasive, and the supplemental terms and conditions appellant seeks to invoke here 
similar to the “separate charge” provisions, thereby imposing upon the government a 
penalty for not exercising the remaining option periods.  See JJA Consultants v. Dep’t of 
the Treasury, CBCA No. 432, 07-2 BCA ¶ 33,632 at 166,577 (issue is whether “charge 
represents the reasonable value of the work performed, or whether the charge amounts to 
a penalty for the agency’s failure to continue to use the contractor’s services.”).   
 
Appellant attempts to distinguish the Comptroller General decisions, stating that 
“[t]he Non-Substitution Clause at issue here contains no separate charge at all” (app. 
reply br. at 7), and that “[i]n contrast to the penalties addressed in the cases relied upon 
by the Government, it is undisputed that the ‘Termination Charges’ sought by MicroTech 
pursuant to the Termination Charge Clause in the Delivery Order refers to the termination 
                                              
4 Appellant’s reply brief discusses FAR 52.212-4(l), but does not discuss the import of 
FAR 52.212-4(u) in the context of the Anti-Deficiency Act (app. reply br. at 3-4, 
9-12). 

10 
 
charges provided for in FAR Clause 52.212-4(1) which include ‘reasonable charges’ that 
have resulted from the non-renewal” (app. reply br. at 9-10).5   
 
Appellant’s argument that it is “undisputed” the term “termination charges” 
equates to “reasonable charges” set forth in FAR 52.212-4(l) is misplaced.  What is 
undisputed is that appellant’s proposal contained no definition of “termination charges.” 
Appellant offers only conjecture to link the two terms.  It is appellant, not the 
government, that bears responsibility for failing to define the term in its proposal.  See, 
e.g., Selby Constr. Co., ASBCA No. 25533, 81-2 BCA ¶ 15,446 (“[u]nder the familiar 
contra proferentem rule the drafter of the contract must therefore suffer the consequences 
of its ambiguous terms.”).   
 
Even assuming that “termination charges” equates to “reasonable charges,” 
appellant still would not be entitled to recover the damages it seeks.  As noted by the 
government, “lost revenues and anticipatory profits are not among the ‘reasonable 
charges’ that are compensable pursuant to a termination for convenience” in a 
commercial items contract (gov’t br. at 14-15 (citing Nexagen Networks, Inc., ASBCA 
No. 60641, 19-1 BCA ¶ 37,258 at 181,328-29 (anticipated but unearned profits not 
compensable), and Robertson & Penn, Inc., d/b/a Cusseta Laundry, Inc., ASBCA 
No. 55625, 08-2 BCA ¶ 33,951 at 167,983 (lost revenue not compensable))).   
 
Appellant claims that it “is not seeking lost revenues or anticipatory profits” and 
that the “reasonable charges” sought by MicroTech “represent the unavoidable and 
unrecovered costs incurred by MicroTech to purchase the Ricoh printers required by the 
Delivery Order for delivery to and acceptance by the Government” (app. reply br. at 11).  
Those remaining payments, however, were not incurred because of any non-renewal, or 
as stated in FAR 52.212-4(l), have not “resulted from the termination.”  
                                              
5 Appellant attempts to escape the import of the Anti-Deficiency Act, arguing that “as 
with breach of contract damages, the Permanent Indefinite Judgment Fund, 
41 U.S.C. § 7108(a) and (b); 31 U.S.C. § 1304(a)(3)(C), is available to pay any 
final judgment of this Board awarding Appellant termination charges within the 
meaning of FAR Clause 52.212-4(1)” (app. reply br. at 10).  Appellant’s argument 
misses the mark.  Congress established the judgment fund to provide a way in 
which to reimburse lawful judgments.  S. Carolina Public Serv. Auth., ASBCA 
No. 53701, 04-2 BCA ¶ 32,651 at 161,605 (“[t]o the extent that the government is 
liable for CDA claims, the judgment fund is generally available”).  Here, the 
alleged contractual obligation arose from an agreement that violated the 
Anti-Deficiency Act.  The judgment fund does not provide an independent 
statutory basis upon which to make lawful an unlawful contract provision.  Indeed, 
41 U.S.C. § 7108(c) requires that judgment fund payments be reimbursed “by the 
agency whose appropriations were used for the contract out of available amounts 
or by obtaining additional appropriations for purposes of reimbursement.” 

11 
 
 
Of course, regardless of whether “termination charges” equates to “reasonable 
charges,” or whether appellant’s damages meet the requirements of FAR 52.212-4(l), it is 
of no consequence here because Supplemental Term and Condition No. 6, which contains 
the term “termination charges,” is not properly part of the agreement between the parties, 
and appellant is not entitled to seek damages for the government’s alleged “non-renewal” 
of the lease.  Moreover, the Order here was not terminated for the convenience of the 
government, which is the type of termination to which FAR 52.212-4(l) applies. 
 
 Appellant also argues that “[e]very court and board that has addressed 
non-substitution provisions similar to the one at issue in this case has held that the 
Government’s renewal option and its right to non-renew a lease contract can be legally 
restricted by contractual covenant from the Government that it will not replace the leased 
equipment with functionally similar equipment during the specified period of 
non-substitution” (app. br. at 15 (citing Gov’t Sys. Advisors, 847 F.2d at 811; Gov’t Sys. 
Advisors, Inc. v. United States, 21 Cl. Ct. 400 (1990), vacated on reh’g, 25 Cl. Ct. 554 
(1990); Mun. Leasing Corp. v. United States, 1 Cl Ct. 771 (1983), and 7 Cl. Ct. 43 (1984) 
(cross-motions on summary judgment))). 
 
A common thread running through the cases cited by appellant are that they 
involved lease to ownership contracts, whereby, at the end of the lease term, the 
government took ownership of the leased property.  For example, in Municipal Leasing, 
the United States Claims Court noted that “[b]y paying the prorated monthly rates over 
the life of the contract . . . the Air Force would gain the ownership of the equipment.”  
1 Cl. Ct. at 772.  Likewise, in Government Systems Advisors, the Claims Court noted that 
the delivery orders “were conditional sales contracts” whereby the government would 
“take title to the word processors after completion of a condition precedent, i.e., a series 
of specified monthly payments, or buy-out.”  21 Cl. Ct. at 408.   
 
Appellant also cites a General Services Board of Contract Appeals decision, 
Planning Research Corp. v. Dept. of Commerce, GSBCA Nos. 11286-COM, 
11576-COM, 96-1 BCA ¶ 27,954, in which the GSBCA noted that a lease to ownership 
provision may contain “‘restrictions on the circumstances under which that party may 
decline to exercise its option to renew’” (app. br. at 18-19) (quoting Planning Research 
Corp., 96-1 BCA ¶ 27,954 at 139,636).  However, the GSBCA held that the contract at 
issue there contained no such restrictions.  Id. at 139,637.  The Order at issue here was 
not a lease to ownership.  Indeed, the Order specified that the “Contractor maintains 
ownership of equipment” (finding 9).  The Claims Court and GSBCA decisions are 
neither controlling, nor binding upon us.  The Federal Circuit decision cited by appellant, 
Government Systems Advisors, which is binding precedent upon this Board, is not 
controlling as it simply distinguished the Claims Court’s decision in Municipal Leasing, 
noting that the delivery order under review by the court of appeals contained no 
restrictions like those at issue in the Claims Court decision.  847 F.2d at 813.  Indeed, as 

12 
 
noted above, the Federal Circuit’s decision recognized that the government (as the 
USACE here), had a bargained-for right not to exercise any delivery order options.  Id.  
This bargained-for right not to exercise options is important in the context of this appeal, 
and it is that right which is impacted by the manner in which MicroTech seeks to invoke 
Supplemental Term and Condition Nos. 1 and 6.   
 
Because the supplemental terms and conditions are not binding upon the parties, 
appellant’s argument that its claim meets the elements of a breach of contract claim 
likewise is rejected.  Appellant is not entitled to termination for convenience-type 
damages for “non-renewal.”  We have considered MicroTech’s remaining arguments and 
find them unpersuasive. 
 
CONCLUSION 
 
 For the reasons stated above, the appeal is denied. 
 
 Dated:  June 9, 2020
 
 
 
 
 
 
DAVID B. STINSON 
Administrative Judge 
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. 62394, Appeal of 
MicroTechnologies, LLC, rendered in conformance with the Board’s Charter. 
 
 Dated:  June 9, 2020 
 
 
 
 
 
 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals