DENIED:  June 23, 2021
CBCA 6824
VALOR HEALTHCARE, INC.,
Appellant,
v.
DEPARTMENT OF VETERANS AFFAIRS,
Respondent.
Stuart B. Nibley, Amy C. Hoang, and Sarah F. Burgart of K&L Gates LLP,
Washington, DC, counsel for Appellant.
Neil S. Deol, Office of General Counsel, Department of Veterans Affairs, Decatur,
GA, counsel for Respondent.
Before Board Judges BEARDSLEY (Chair), GOODMAN, and SULLIVAN.
SULLIVAN, Board Judge.
Valor Healthcare, Inc. (Valor), contracted with Department of Veterans Affairs (VA)
to provide primary care services to veterans at three community clinics within the region
served by the Butler Medical Center, in Butler, Pennsylvania.  When the number of patients
seeking care at two of the clinics were fewer than the number estimated by VA in the request
for proposals and resulting contract, Valor submitted a claim to the contracting officer for
the difference between the amount of profit that Valor expected and the amount that it
realized.  Valor appealed the denial of its claim to the Board, alleging, as it did in its claim,
that VA prepared negligent estimates or that VA possessed superior knowledge regarding the
basis for the estimates that it should have shared with Valor.


CBCA 6824 2
VA filed a motion for summary judgment, asserting that, because the contract is an
indefinite quantity contract, Valor’s claims fail as a matter of law.  Valor responded that the
contract should be viewed as a requirements contract and, so viewed, its claims survive VA’s
challenge.  Because the contract is an indefinite quantity contract, precedent requires us to
grant VA’s motion and deny Valor’s appeal.
Background
I. Contract Terms
In May 2015, Valor and VA executed the contract, which required the provision of
health care services at three community clinics for a base year and four option years. 
Exhibit 5 at 1, 13-15.1  In bidding the contract, Valor provided a price per member per month
(PMPM) for each of the clinics for each of the years of the contract.  This price was
multiplied by the estimated number of patients provided by VA to obtain the total estimated
cost for each year of the contract at each clinic.  VA’s estimates for two of the clinics
(Armstrong and Clarion) are the subject of the dispute in this appeal.
Because Valor’s contract covered three clinics, the contract for the base period and
any options exercised guaranteed a minimum quantity of 2000 PMPM.  Exhibit 5 at 13.  The
maximum quantity was 30,000 PMPM.  Id.  The contract also contained the Federal
Acquisition Regulation (FAR) Indefinite Quantity clause, FAR 52.216-22.  Id. at 123-24.
Valor was required to provide a “sufficient number of Primary Care providers so that
each Primary Care provider has a reasonable caseload.”  Exhibit 5 at 26.  Pursuant to the
contract, “[c]urrent caseload ratios are based on the expectation that a fulltime physician will
care for approximately 1200 patients and a midlevel provider will care for approximately 900
patients.”  Id.  Based upon these expectations, the contract required Valor to fulfill staffing
models described in the contract.  Id. at 26-27.  The contract also contained “minimum
staffing requirements” tied to the number of veterans served and the staffing models.  Id.
at 28.
Pursuant to the instructions in the request for proposals, Valor was required to provide
“a description of the methods by which it will ensure provider panel sizes remain within
established parameters” and “a detailed discussion of how the structure and/or processes of
the Contractor shall be adjusted when/if the providers’ panel sizes exceed the established
requirements.”  Exhibit 2 at 158.  Valor also was required to provide the number of exam
rooms it proposed to supply per provider and meet or exceed the requirement of 2.5 exam
1 All exhibits are found in the appeal file, unless otherwise noted. 

CBCA 6824 3
rooms per provider.  Id. at 159.  The contracting officer evaluated the price Valor proposed
for reasonableness, defined as “a cost (Price) that provides best value to the Government
when consideration is given to prices in the market, . . . technical and functional capabilities
of the offeror,” and realism, defined as “what it would cost the offeror to perform the effort
if the offeror operates with reasonable economy and efficiency.”  Id. at 163.
VA had responsibility for determining which veterans were eligible to be seen at
Valor’s clinics, patients who were on the “billable roster.”  Exhibit 5 at 103.  If a veteran
sought medical care at one of Valor’s clinics but was already “assigned to another Primary
Care provider or provider within the [Veterans Health Administration],” VA was responsible
for determining where that veteran would be enrolled.  Id.  Veterans could not be enrolled
in more than one location for primary care services.  Id. at 104. 
Attachment 7 to the contract was titled “Statistical Information and Workload
Estimates.”  Exhibit 5 at 275-77.  It stated that “[v]eterans are not ‘assigned’ to a [clinic] but
may choose either to be seen at VA or to be enrolled in a [clinic].  VA will notify Veterans
about the availability of [Valor’s clinics] and the services to [be] provided there.”  Id. at 275. 
VA provided the projected number of enrollees and clinic stops for fiscal years 2013 to 2016,
“[b]ased on previous and current projected enrollees and workload.”  VA provided the
number of anticipated new and existing users “[b]ased on historical patterns in the area” and
warned that the numbers provided were estimates only:  “The numbers of Veterans residing
in the counties identified above and estimated numbers of visits per patient year, as stated
above, are estimates and are to be used for information purposes only.  VA in no way
guarantees the accuracy of the estimates.”  Id. at 276.  Finally, VA advised that “[p]atients
have the right to receive Primary Care other than from VA or a VA [community based
outpatient clinic].”  Id.
II. Valor’s Claim
Valor used the VA patient estimate for each clinic to develop its PMPM price for each
patient for each clinic for the base year and option years.  Complaint ¶ 15.  Valor also used
VA’s patient estimates to develop its technical proposal for staffing and facilities, both of
which were determined by the number of patients pursuant to the terms of the solicitation and
resulting contract.  Complaint ¶¶ 21–25.
The number of veterans enrolled in Valor’s clinics were lower and remained lower
than VA’s estimates through the course of the contract.  Complaint ¶¶ 27–28.  Valor
submitted a claim of $1,581,573, to the contracting officer.  Id., Exhibit G.  Valor calculated

CBCA 6824 4
this amount by subtracting its actual profit from the anticipated profits based upon VA’s
patient estimates for the two clinics.  Id., Exhibit G at 23.2
Discussion
I. Parties Executed An Indefinite Quantity Contract
The first issue presented by VA’s motion is what type of contract did the parties
execute?  VA asserts it is an indefinite quantity contract.  Valor asserts that it is a
requirements contract.  Determining the type of contract is a matter of legal interpretation. 
Environmental Quality Management, Inc. v. Environmental Protection Agency, CBCA 3072,
13 BCA ¶ 35,300.
We find that the contract is an indefinite quanitity contract because it is labeled as
such, includes the Indefinite Quantity contract clause from the FAR, and contains a
guaranteed minimum, all indicia of an indefinite quantity contract.  Coyle’s Pest Control,
Inc. v. Cuomo, 154 F.3d 1302, 1303 (Fed. Cir. 1998); Mason v. United States, 615 F.2d 1343,
1347 (Ct. Cl. 1980).  The contract cannot be a requirements contract because, although Valor
had the legal obligation to satisfy all of VA’s requirements for primary care services for
veteran patients, to the extent requested, it did not have the “exclusive right” to satisfy these
requirements.  Mason, 615 F.2d at 1349; Rowe, Inc. v. General Services Administration,
GSBCA 15217, 03-1 BCA ¶ 32,162.  Instead, the contract provided that veterans could seek
primary care services from private providers and VA itself, in addition to Valor.  Thus, the
contract lacks the exclusivity required of a requirements contract.  Marut Testing &
Inspections Services, Inc. v. General Services Administration, GSBCA 15412, 02-2 BCA
¶ 31,945.
Valor asserts that, although the contract contained indicia of an indefinite quanitity
contract, the parties acted as if the contract were a requirements contract.  One, Valor was
required to provide community-based care for all of VA’s requirements, up to the contract
maximum.  As noted, while Valor was required to meet all of the primary care needs for the
patients that it saw, not all patients were required to seek primary care services at its clinics,
thereby eliminating a key element of a requirements contract.  See Marut Testing.
Two, Valor asserts, VA was not free to obtain community clinic services from other
vendors.  But, as Valor acknowledges, veterans could obtain their primary care services from
2 In its claim, Valor represented that it was not seeking anticipated profits for the
base year because staffing issues lowered its incurred costs for that year.  Complaint, Exhibit
G at 21-22.

CBCA 6824 5
VA directly so that Valor was not the only provider of primary care services.  This
availability of choice precludes finding that VA made a promise to fulfill all of its
requirements from Valor, the key to a requirements contract.  Mason, 615 F.2d at 1349.
II. Valor’s Negligent Estimates Claim Must Fail
Having determined that the contract is an indefinite quantity contract, we next turn to
VA’s contention that Valor’s negligent estimates claim must fail as a matter of law.  VA is
correct.  A claim for negligent estimates is not a basis for recovery on an indefinite quantity
contract.  RocJoi Medical Imaging, LLC v. Department of Veterans Affairs, CBCA 6885,
20-1 BCA ¶ 37,746.
In Travel Centre v. Barram, 236 F.3d 1316 (Fed. Cir. 2001), the United State Court
of Appeals for the Federal Circuit declared the measure of the Government’s obligation on
an indefinite quantity contract.  “[W]hen an [indefinite delivery/indefinite quantity] contract
between a contracting party and the government clearly indicates that the contracting party
is guaranteed no more than a non-nominal amount of sales, purchases exceeding that
minimum amount satisfy the government’s legal obligation under the contract.”  Travel
Centre, 236 F.3d at 1319.  In Travel Centre, the appeal arose as a challenge to the
Government’s termination for convenience in the face of the Government’s knowledge that
the estimates in the solicitation were too high.  Id. at 1318.  This limitation has been applied
to cases involving claims for negligent estimates:  “The government cannot be liable for
breaching an indefinite quantity contract on the basis of making negligent estimates as long
as the government orders the guaranteed minimum.”  American General Trading &
Contracting, WLL, ASBCA 56758, 12-1 BCA ¶ 34,905.
Seeking to preserve its negligent estimates claim, Valor asserts that it had a
“reasonable expectation” that VA would require services for more than the minimum number
of patients in the contract based upon the aspects of the contract that appeared to be a
requirements contract.  Valor’s “reasonable expectation” cannot overcome the plain language
of the contract indicating that it is an indefinite quantity contract.  Varilease Technology
Group, Inc. v. United States, 289 F.3d 795, 799 (Fed. Cir. 2002); see also Future Forest v.
Department of Agriculture, 2021 WL 1422742 (Fed. Cir. Apr. 15, 2021) (affirming principle
despite alleged violation of duty of good faith and fair dealing).  Instead, Valor’s reasonable
expectation is bound by these contract terms.  TranBen, Ltd. v. Department of
Transportation, CBCA 5448, 17-1 BCA ¶ 36,635.  For these reasons, we deny Valor’s
Health’s claim based upon negligent estimates. 

CBCA 6824 6
III. Valor’s Superior Knowledge Claim Also Must Fail
Having found that Valor cannot maintain a claim for negligent estimates, we turn to
Valor’s primary claim—superior knowledge.  To succeed on a superior knowledge claim,
Valor must establish, among other elements, that it undertook work on the contract “without
vital knowledge of a fact that affect[ed] performance costs or duration.”  Hercules, Inc. v.
United States, 24 F.3d 188, 196 (Fed. Cir. 1994).  Valor alleges that VA’s failure to share the
proper patient estimates affected the costs of performance of the contract, because Valor
priced its technical proposal in such a way that actual performance was more expensive (i.e.,
less profitable) than it would have been if it had priced its proposal using the correct
information.  The question presented is, despite this allegation, must Valor’s claim fail
because the minimum guarantee caps VA’s obligation on the contract?
We hold that Valor’s superior knowledge claim also fails.  Because the claim is based
upon the estimates in the solicitation and resulting contract, the limits of Travel Centre must
apply.  At issue in Travel Centre was the Government’s failure to disclose information
regarding reduced estimates for the business under the contract.  Although it was not
described as a negligent estimates or superior knowledge claim, at issue was the
Government’s withholding of information regarding performance and whether that
withholding constituted a breach of the duty of good faith and fair dealing.
Valor’s superior knowledge claim can be reduced to an argument that “we would have
bid differently if we had known that there would be fewer patients.”  But the calculation of
damages resulting from VA’s alleged failure is the difference in profit that Valor received
and what it expected based upon VA’s estimates.  In essence, Valor alleges that VA was
obligated to buy primary care services for the number of veterans set forth in the estimates,
which is not the premise of an indefinite quantity contract.  Valor was offering to provide
medical care, and VA was offering to buy those services for a guaranteed minimum number
of patients, not any more.  Valor cannot maintain a claim based upon the “expectation that
any of the government’s needs beyond the minimum contract price would necessarily be
satisfied under this contract.”  Travel Centre. 236 F.3d at 1319.  To find otherwise would
alter the nature of the bargain between the parties.
Valor cites to two cases as support for the premise that the Board has not foreclosed
the possibility that a superior knowledge claim can be asserted on an indefinite quantity
contract:  TranBen and CAE USA, Inc. v. Department of Homeland Security, CBCA 4776,
16-1 BCA ¶ 36,377.  While it is true that both of these cases involved indefinite quantity
contracts and discussed superior knowledge claims, neither case addressed the issue directly
nor provides sufficient rationale for the Board to find that Valor’s claims can survive the
precedents discussed above.

CBCA 6824 7
Decision
 
VA’s motion for summary judgment is granted.  Valor’s appeal is DENIED.
   Marian E. Sullivan          
MARIAN E. SULLIVAN
Board Judge
We concur:
    Erica S. Beardsley              Allan H. Goodman        
ERICA S. BEARDSLEY ALLAN H. GOODMAN
Board Judge Board Judge