THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND
IS BEING RELEASED TO THE PUBLIC IN ITS ENTIRETY ON 
APRIL 20, 2017
GRANTED IN PART: April 10, 2017
CBCA 5517
DREAM MANAGEMENT, INC., 
                                                                       Appellant,
v.
DEPARTMENT OF HOMELAND SECURITY,
                                                                          Respondent.
Timothy Sullivan and Jayna Marie Rust of Thompson Coburn LLP, Washington, DC,
counsel for Appellant.
Kasey Podzius, Office of the Principal Legal Advisor, Immigration and Customs
Enforcement, Department of Homeland Security, Washington, DC, counsel for Respondent.
BEARDSLEY, Board Judge.
Appellant, Dream Management, Inc. (DMI), appealed the denial of its claim for costs
incurred in performing a language services contract for the Department of Homeland
Security, Immigration and Customs Enforcement (ICE).  Appellant asserts that the agency
breached the contract, or in the alternative, the agency terminated the contract for its
convenience.  Appellant has elected to proceed under the Board’s expedited procedure for
small claims.  Rule 52 (48 CFR 6101.52 (2015)).  Decisions issued under the small claims

CBCA 5517 2
procedure are final and conclusive and shall not be set aside except in cases of fraud
affecting the Board’s proceedings.  Rule 52(b); see 41 U.S.C. § 7106(b) (2012); Palmer v.
Barram, 184 F.3d 1373 (Fed. Cir. 1999).  This decision has no value as precedent.  
Background
Federal Supply Schedule Contract
DMI holds a Federal Supply Schedule (FSS) contract (FSS contract) with the General
Services Administration (GSA), contract number GS-10F-222BA, to provide Spanish-
language translation and interpretation services.  The GSA FSS contract terms and conditions
(GSA terms and conditions) contained Federal Acquisition Regulation (FAR) clause
52.212-4(l) (48 CFR 52.212-4(l) (2015)), “Contract Terms and Conditions - Commercial
Items (May 2014) (Alternate I - May 2014) (Deviation I - Feb 2007).”  Stipulated Facts ¶ 3. 
That clause, titled “Termination for the Ordering Activity’s Convenience,” stated:
The ordering activity reserves the right to terminate this contract, or any part
hereof, for its sole convenience.  In the event of such termination, the
Contractor shall immediately stop all work hereunder and shall immediately
cause any and all of its suppliers and subcontractors to cease work.  Subject to
the terms of this contract, the Contractor shall be paid an amount for direct
labor hours (as defined in the Schedule of the contract) determined by
multiplying the number of direct labor hours expended before the effective
date of termination by the hourly rate(s) in the contract, less any hourly rate
payments already made to the Contractor plus reasonable charges the
Contractor can demonstrate to the satisfaction of the ordering activity using its
standard record keeping system that have resulted from the termination.  The
Contractor shall not be required to comply with the cost accounting standards
or contract cost principles for this purpose.  This paragraph does not give the
ordering activity any right to audit the Contractor’s records.  The Contractor
shall not be paid for any work performed or costs incurred that reasonably
could have been avoided.  
Exhibit 1 at 15.1  The only other clause that allowed for any type of cancellation of the
contract was a “Termination for Cause” clause.  Id.  The FSS contract included a price list
for services provided, including hourly rates for Spanish-language interpretation services. 
Id. at 5.  The FSS contract included the following terms: 
1 All exhibits are found in the appeal file, unless otherwise noted.

CBCA 5517 3
Maximum order: $1,000,000.00
Minimum order: $100.00
Id. at 2.  
On April 15, 2015, ICE posted a request on GSA’s eBuy website for “Kiche2 and
other indigenous language translations.”  Stipulated Facts ¶ 4.  K’iche’ is an indigenous
Guatemalan dialect spoken by less than ten percent of Guatemalans.  On May 14, 2015, the
agency issued a request for quotations (RFQ) and statement of work (SOW)3 to eligible
vendors.  Stipulated Facts ¶ 13; Exhibit 2 at 2.  The RFQ stated that “[t]he basis for award
of any resulting Task Order will be lowest price and technical acceptability, in accordance
with FAR 8.405-3 and 8.404-(d). . . . Multiple awards may be made, if determined to be in
the best interest of the Government.”  Exhibit 2 at 3.  The RFQ required quoters to provide,
“[f]or estimation and quote submission,” pricing for a twelve-month period of performance
based on the following estimates:
4,583 Base Hours
2,000 Optional Hours
2,000 Additional Optional Hours
Maximum Hours: 8,583
Exhibit 2 at 3 (emphasis omitted).  The SOW also provided that “[t]he awardee will have 60
days from the date of the award to hire all required staff for this requirement.  The awardee
will need to be operational No Later Than (NLT) 60 days after the award has been made.” 
Exhibit 3 at 3.  ICE executed a determination and findings (D&F) justifying entering into a
task order on a time and materials basis.  Exhibit 27 at 2.  
To arrive at the estimated number of base hours for the task order, an ICE contracting
officer’s representative (COR) used the estimated amount of interpretation services used by
ICE under another contract and multiplied that number by the percentage of families
detained.  Transcript at 234-36, 283-84, 285-87.  The resulting number was an estimated
minutes total.  Id.  The COR used that estimated minutes total, but mistakenly labeled it
hours, and multiplied that number by the percentage of Guatemalan detainees to arrive at an
2 The documents contained various spellings of the K’iche’ language, but for
the purposes of this decision, we will spell it “K’iche’.”
3 The original SOW was revised by the agency and sent to bidders that same
day.  Exhibit 3.  This decision will address the revised SOW.

CBCA 5517 4
estimated total.  Id.  The COR, therefore, arrived at an estimated 4583 base hours, or 274,980
minutes needed.  Id.  Had the COR been consistent and used minutes throughout his
calculations, the agency estimate would have been 99 base hours, or 5940 minutes.  Id.; see
also Appellant’s Post-Hearing Brief at 5.  ICE records show that the agency used
approximately 156.98 hours of language interpretation services for the entire twelve-month
period of performance.  Transcript at 307-13.
The SOW required the provision of certain minimum services, which were:
An 800 telephonic number and/or tele-video services with preference for 24-
hour, 7 days per week basis, billed in 15-minute increments rounded to the
nearest quarter hour with 1 hour minimum requirement.  At a minimum, the
Government requires translation services that can be conducted within 24
hours of being scheduled.
Exhibit 3 at 2.  The SOW also stated that, “[t]he average length of a call for telephonic
interpretation is 30 minutes. [Enforcement Removal Operations (ERO)] estimates calls will
consume 75% of the 4,583 hours for the base year.”  Id. 
Various vendors submitted questions to the agency, which responded in an email
message to all vendors.  One question asked:
So are you saying that I can bid on ONLY the telephonic (OPI) portion of the
SOW?  Am I correct that the volume for OPI is approximately 30K minutes
per month?  Of this, how much is for K’iche and Mam?  That seems like a
very high volume for such obscure languages.
Exhibit 4 at 1.  The agency answered by stating:
We estimate that about two-thirds to three-quarters of the time is for oral
translations while the rest will be to create documents and record DVDs with
voiceovers describing activities and regulations at each center.  And we will
record those DVDs each time we expand or change a configuration of our
detention facilities or a policy.
Id.  Another question asked:
What is the actual number of minutes projected monthly for the telephonic
portion of this project?  (Based on the calculation of 75% of 4583 hours,
interpreting volume appears to be approximately 30,000 minutes per month). 

CBCA 5517 5
Does this include on-site and if so, can you please provide the telephonic
volume only with a breakdown by language?
Id. (emphasis omitted).  The agency’s response was as follows: “The average length of a call
for telephonic interpretation is 30 minutes.  ERO estimates calls will consume 75% of the
4,583 hours for the base year.  Estimates are for 3,437 hours for the Base Year.”  Id.  DMI
stated that the high agency estimate was a “critical factor” in the company’s decision to bid
on the task order.  Transcript at 54.  The company stated that the agency’s actual requirement
of ninety-nine hours would have been too low for DMI to provide services priced within its
GSA schedule rate.  Exhibit 4 at 1 (“As stated within the RFQ, all pricing has to be in
accordance with GSA rates.”).  DMI understood, however, that the estimated hours were not
a guaranteed minimum, but instead thought that the hours were a target.  Transcript at 56,
137, 210; Exhibit 30 at 2.
DMI also understood that the agency may not order the estimated number of base
hours.  Transcript at 128.  DMI’s president and chief executive officer testified that in his
experience, Government orders came “pretty close to the base numbers that they provide,”
but may not reach those estimated number of hours.  Id. at 129.  DMI also understood that
“the number of hours probably were for different languages” and thus the required services
for the K’iche’ language may not reach the 4583 hours estimated.  Id. at 127.  
DMI emailed ICE its quote on June 2, 2015.  The quote provided a total price based
on the estimated number of base and option hours.  Specifically, the quote provided, “Base
hours, 4583 at $1.38 per minute = $379,472.40.”  Exhibit 8 at 8.  The quote also stated that
“[w]e expect to cover broad business hours.  We are not able to offer 24 hour coverage at this
time.”  Id.  
Task Order Award
On June 4, 2015, ICE awarded DMI order no. HSCEDM-15-F-00031 (the task order). 
Stipulated Facts ¶ 34; Exhibit 8 at 1.  The task order stated: “This is an incrementally funded,
Time & Materials, Task Order against the contractor’s GSA schedule contract identified
above.  All services shall be provided and invoiced for in accordance with the Contractor’s
GSA terms and conditions and rates proposed in the Contractor’s quote, attached to this Task
Order.”  Exhibit 8 at 2.  Attached to the task order was the SOW and DMI’s quoted price of
$1.38 per minute for 4583 hours, which equals $379,472.40.  Id.  The GSA terms and
conditions were specifically referenced.  Id.  The task order also incorporated by reference
the clause at FAR 52.232-7, “Payments under Time-and-Materials and Labor-Hour contracts
(AUG 2012),” id. at 3, which provides in relevant part:

CBCA 5517 6
The Government will pay the Contractor as follows upon the submission of
vouchers approved by the Contracting Officer or the authorized representative:
(a) Hourly rate. (1) Hourly rate means the rate(s) prescribed in the contract for
payment for labor that meets the labor category qualifications of a labor
category specified in the contract that are—
(i) Performed by the Contractor;
(ii) Performed by the subcontractors; or
(iii) Transferred between divisions, subsidiaries, or affiliates of the Contractor
under a common control.
. . . .
(4) The hourly rates shall include wages, indirect costs, general and
administrative expense, and profit. Fractional parts of an hour shall be payable
on a prorated basis.
48 CFR 52.232-7.
The task order provided for a ceiling price of $379,472.40, which was directly taken
from DMI’s quotation.  Exhibit 8 at 8.  There was no minimum price listed on the task order. 
See id.  The task order’s stated period of performance was from June 4, 2015, to June 3,
2016.  Id.  DMI had sixty days from June 4, 2015, to become operational, which required the
interpretation line to function on August 3, 2015.  See Exhibit 3 at 3.  ICE made two
additional task order awards with similar hourly estimates to two other contractors. 
Stipulated Facts ¶¶ 40, 41; Transcript at 288-89.  There is no evidence that DMI knew of the
other two awards.
Prior to award of the task order, a DMI language specialist had identified through
research the subcontractor DMI intended to use for the work.  Transcript at 189, 195-96. 
Following award of the task order, DMI negotiated with this subcontractor for twenty-four
hours a day, seven days a week interpretation services.  On July 14, 2015, prior to finalizing
the subcontract agreement, DMI sent a clarification email to ICE asking: 
I have just left a phone message to the effect that we believe we have very
close to 24/7 telephonic coverage ready, yet in order to pay for 24/7, the influx
of calls has to pay for it by approaching the base of 4583 hours.  Any technical
or administrative considerations which must be handled prior to
commencement of service we wish to handle quickly.  Please comment on how
the agency assesses demand relative to the base hours and we will assemble a

CBCA 5517 7
compendium of all end-user information to be used for interpretation—the
number to call, the billing code to enter, etc.
Exhibit 9 at 1-2.  ICE responded that same day by stating: “As far as the contractual aspect
goes, there is no guarantee in the number of hours we may order.  The specified hours simply
state the maximum hours we may require under each [contract line item number (CLIN)].” 
Id.  After a series of email messages between a DMI language specialist and the
subcontractor, only one of which was sent by DMI’s chief executive officer, DMI executed
a subcontractor agreement on July 17, 2015, for K’iche’ interpreters.  Stipulated Facts ¶ 49;
Exhibits 29, 30, 31, 32.  The agreement required “[a] minimum of 21,500 minutes per
month” and stated that “[i]n the event DHS does not meet the minimum required 21,500
minutes in a month, [the subcontractor] will bill Dream Management for 22,500 minutes.”4 
Stipulated Facts ¶ 49; Exhibit 32 at 6.  The agreement did provide that the 22,500 minute
minimum would only cover three months and that DMI could “reset the agreement” after
DMI assessed the agency’s actual demands.  Transcript at 74.  The agreement further stated
that DMI would be charged $1.25 per minute.  Exhibit 32 at 6.  
Performance of Task Order
On July 24, 2015, DMI informed the agency by email that “staff has been hired and
is being trained for service.  If we can beat 3 August and start sooner I’ll tell you
immediately.”  Stipulated Facts ¶ 51.  The agency COR’s response stated, “Ok, Good news. 
I will be on leave from July 31 until August 5.”  Id.  On August 5, 2015, DMI again
contacted ICE to inform the agency that “although [DMI] projected a 3 August start-up we
encountered slow onboarding, training and vetting of staff.”  Exhibit 33 at 2.  The email
message further stated that DMI would be ready for service on August 9, 2015, and would
send access information to the language line by the evening of August 7, 2015.  Id.  The COR
responded, “No problem.  Thanks for the update.”  Id. at 1.  
On August 10, 2015, DMI emailed ICE with the call-in information and explained that
the line was “live.”  Exhibit 10 at 2.  The ICE COR responded that same day, stating that he
would need to send instructions and sign-in sheets to the field offices, which “may take until
early next week to make its way through the approval process.”  Exhibit 10 at 1.  However,
unbeknownst to DMI, the call-in information was required to go through “at least four or five
4 It is not clear whether the minimum number of minutes in the subcontract is
21,500 or 22,500.  The subcontract states two different numbers and the representations of
the parties provide no clarification.  Stipulated Facts ¶ 49; Exhibit 32 at 6; Transcript at 71-
72.  This decision will use 22,500 minutes.

CBCA 5517 8
steps” before being distributed to the ICE field offices and could take around thirteen days. 
Transcript at 239-40, 242. 
On August 18, 2015, an email message was sent to ICE field offices with call-in
information for the other two awardees, but not for DMI.  Stipulated Facts ¶ 54; Transcript
at 238-39.  The other two awardees had gone live before August 3, 2015.  Transcript at 238. 
DMI’s delay in going live caused the approval process to be delayed and behind the other
two awardees.  Id. at 237-38.  ICE anticipated that a “third vendor will come on-line in
September with capability to provide 24-hour service with immediate response.”  Stipulated
Facts ¶ 54.  ICE, however, never sent call-in information for DMI to its field offices, and it
never informed DMI of the fact that while it was live and on standby, no ICE user had the
number or could call in.  Transcript at 269.  
DMI informed ICE on August 21, 2015, that it had not seen any usage on the account. 
Exhibit 11 at 2.  The email message further stated, “If we need to modify our resource
deployment over time we rely on your input.  Please share your observations on how service
usage is projected.”  Id.  The ICE COR responded on August 24, 2015, informing DMI that
“on Friday, a judge ordered our three family centers closed by October 23.  We are currently
awaiting to hear how the agency will proceed.  I will keep you in the loop once I know
more.”  Exhibit 11 at 1.  The email message did not explain that ICE had not yet distributed
DMI’s call-in information to its field offices, which would have accounted for the lack of
usage of the line.  Id.  
ICE emailed DMI with an update on September 1, 2015.  In the email message, the
ICE COR explained that the court ruling limited the amount of time families may remain in
ICE custody but that the agency still had a need for DMI’s services.  Exhibit 12 at 1.  DMI
responded to ask whether the services should be “paused” until the agency was ready, to
which the ICE COR replied, “I’d say idle them for at least 2 weeks . . . more likely 3-4, but
I won’t know until mid-Sept.”  Exhibit 13 at 1.  At noon on September 3, 2015, DMI
informed its subcontractor that it should “expect to be idle,” so the subcontractor “put a hold”
on the account for one week, during which time the agency would not be able to reach an
interpreter if it called the line.  Exhibit 35 at 3; Transcript at 88, 144-45, 220-21.  Neither the
GSA terms and conditions nor the task order contained a suspension clause.  See Exhibits
1, 8.
Contract Modification
On September 9, 2015, DMI attempted to clarify with ICE “when lines should be live”
again after the pause.  Exhibit 14 at 1.  The agency COR responded, “I’ll need to confer later

CBCA 5517 9
this week with my chief who is still out from the long weekend.”  Id.  A few days later, on
September 14, 2015, DMI emailed the ICE contracting officer stating:
Since we received communication from Mr. Caruso on the court ruling . . . we
have analyzed the situation about the K’iche line and determined that this
situation as it is, is not sustainable for us.  The K’iche interpreter line had not
been used at all in the past month we had it live, and we have incurred in [sic]
significant costs to set it up and maintain it based on the contract estimated
amounts.
In order to maintain this line we have to have interpreters standing by around
the clock to satisfy the requirements in the contract.  The dialect is very
difficult to source, [e]specially when it is a 24/7 operation.  We cannot longer
[sic] keep interpreters just waiting.
We are asking you to entertain the possibility of cancelling the contract if you
think we won’t have the stated activity outlined in the contract, because we
both cannot continue to incur in [sic] costs that are unnecessary.  This is an
attempt to mitigate costs.
Exhibit 15.  The email message further stated that “[s]o far the costs of setting the line up and
keeping the interpreters on stand by has made us to incur in more than $25,000.”  Id.  The
ICE contracting officer in turn, emailed the COR for advice, stating that “Dream
Management has reached out to us requesting that we terminate their contract.  I assume they
don’t want to default and then we terminate it.”  Appellant’s Hearing Exhibit 1.  The email
message included a few options that ICE could take in regards to the DMI contract, “let them
off the hook and amicably terminate the remainder of their contract, require them to perform
and see if they decide to just default, restructure the contract and give them a guaranteed
minimum monthly amount regardless of our actual usage.  Please let me know what you
think.”  Id.  The ICE COR’s response stated, “Please terminate the remainder of their
contract per their request.”  Id.  
On September 16, 2015, DMI received an email message stating, “Per your request,
please review, sign and return the attached modification for the above mentioned Task
Order.”  The modification stated that its purpose was “to change the period of performance
to end on 9/16/2015” and that “[a]ll other terms and conditions remain the same.”  Exhibit
16 at 2.  DMI signed the modification that day; the ICE contracting officer signed it the
following morning.  Id.  

CBCA 5517 10
Payment Negotiations
On October 26, 2015, DMI emailed an invoice to ICE for $39,630.84.  Exhibits 17,
18.  The invoice requested payment for 22,500 minutes per month prorated, which DMI
described as the “minimum amount.”  Id.  ICE rejected the invoice on November 2, 2015,
because according to ICE, the contract “had no guaranteed minimum” and DMI had not
performed any services.  Exhibit 19.  
DMI subsequently sent a letter on January 13, 2016, to the ICE contracting officer
requesting relief.  Exhibit 20.  The total amount requested was $60,296.87, which included
$48,645 for the “minimum hours under the Contract” and $11,651.87 for costs in pursuing
resolution of the issue.  Exhibit 20 at 10.  After receiving no response from the contracting
officer, DMI sent a letter on March 21, 2016, converting the January 13th request to a claim. 
Exhibit 21.  
On June 8, 2016, ICE stated, “Although I agree . . . that your purchase order contained
no guarantee as to the number of hours we would order[,] I do agree that you would have
incurred start-up costs to prepare for performance under the purchase order.”  Exhibit 49. 
ICE then asked for an explanation “of the actual costs [DMI] incurred to set up the line, hire
the K’iche interpreters, and have them on stand-by.”  Id.  DMI responded on July 1, 2016,
outlining its costs incurred.  
DMI’s explanation included two invoices from its subcontractor and a table with a
breakdown and explanation of costs.  The invoices received from the subcontractor totaled
$35,897.50.  Exhibit 22 at 6.  These invoices are further supported by four checks DMI sent
to its subcontractor.  Exhibits 45, 46, 48, 50.  The checks are dated, in order, February 15,
2016, for a sum of $10,000; March 22, 2016, for a sum of $12,948.75; June 6, 2016, for a
sum of $6000; and June 9, 2016, for a sum of $6948.75.  Id.  The table of costs claimed
included: 
costs incurred in setting up the line $4,816
costs incurred in hiring the interpreters and having them on
standby 
$35,897.50
[general & administrative (G&A)] costs $2,442.81
profit $2,157.82
the costs incurred in seeking a resolution to the issue $17,316.91
[Total] $62,001.04

CBCA 5517 11
   
Exhibit 22 at 3 (emphasis added).  DMI presented a further breakdown of its costs incurred
in setting up the line:
Administrative
Costs
Researching for sources to
staff the line
$1,456 56 hours (language
specialist) X
$26/hour
Recruitment
Staffing
Interviewing interpreter
candidates to staff the line
$520 20 hours (language
specialist) X
$26/hour
Interviewing partners
companies to staff the line
for DMI
$338 13 hours (language
specialist) X
$26/hour
Discussions with
[subcontractor] to act as a
sub for DMI
$2,450 7 hours (president) X
$350/hour
Line Set Up
Testing the line to route
the calls the proper way
$52 2 hours (language
specialist) X
$26/hour
Total Costs $4,816
Id.  DMI provided no documentation or other evidence to support the hourly rates charged
for each employee, or to prove that the above costs were, in fact, incurred.  Transcript at 172-
73.  Instead, DMI admitted that it had just estimated the time and costs incurred in order to
provide costs to the agency.  Transcript at 171-75.

CBCA 5517 12
Settlement Discussions and Appeal
ICE responded on August 5, 2016, offering “to offset a portion of the costs [DMI]
incurred preparing for service” in the amount of $31,189.51.  Exhibit 51.  DMI made a
counteroffer to the agency on August 17, 2016.  The counteroffer stated that DMI would be
willing “to accept $54,000 to resolve this matter.”  Stipulated Facts ¶ 78.  The agency
responded with its final decision on October 5, 2016.  The decision stated that the claim was
“denied with the exception of $100.”  Exhibit 23.  In addition, the decision stated that “the
minimum for this task order is $100 and the maximum ceiling is $379,472.40, which reflects
4,583 hours of translation services.”  Exhibit 23.  The minimum amount was taken from the
FSS contract.  Id.  The maximum ceiling was taken from the task order and had been derived
from DMI’s quote for 4583 hours.
DMI timely appealed to the Board on October 17, 2016. 
Discussion
Jurisdiction
The Board has jurisdiction to decide this matter pursuant to the Contract Disputes Act
(CDA), 41 U.S.C. §§ 7101-7109 (2012).  Resolving the disputes in this appeal does not
require the interpretation of a disputed contract provision in the FSS contract.  The ordering
activity (ICE) contracting officer, therefore, had authority to decide the disputed issues in this
case, thereby giving us jurisdiction to entertain this appeal.  See 48 CFR 8.406-5(a); Sharp
Electronics Co. v. McHugh, 707 F.3d 1367, 1374 (Fed. Cir. 2013).  
The Task Order is a Time and Materials Contract
A threshold issue in this case is the question as to the type of contract used by the
parties.  The parties agree that the contract was a task order for commercial services placed
against DMI’s FSS contract.  DMI maintains that the task order was an indefinite-delivery,
indefinite-quantity (IDIQ) contract, while ICE contends that it was a time and materials
contract.  The answer can be found in the plain language of the task order. 
The determination of contract type is governed by an objective reading of the
language of the written agreement, “not by one party’s characterization of the instrument.” 
Champion Business Services v. General Services Administration, CBCA 1735, et al., 10-2
BCA ¶ 34,539, at 170,345, modified on reconsideration, 10-2 BCA ¶ 34,598 (citing
Varilease Technology Group, Inc. v. United States, 289 F.3d 795, 799 (Fed. Cir. 2002)); see
LAI Services, Inc. v. Gates, 573 F.3d 1306, 1314 (Fed. Cir. 2009) (citing M.A. Mortenson Co.
v. Brownlee, 363 F.3d 1203, 1206 (Fed. Cir. 2004)).  The contract must be read as a whole

CBCA 5517 13
and reasonable meaning must be given to all parts so as not to interpret any provision as
meaningless or so as to create a conflict with other provisions of the contract.  Hercules Inc.
v. United States, 292 F.3d 1378, 1380-81 (Fed. Cir. 2002); Jane Mobley Associates, Inc. v.
General Services Administration, CBCA 2878, 16-1 BCA ¶ 36,285, at 176,954.  Extrinsic
evidence can serve to confirm that the Board’s interpretation of the plain meaning of the
contract was in fact the parties’ understanding.  TEG-Paradigm Environmental, Inc. v.
United States, 465 F.3d 1329, 1338 (Fed. Cir. 2006). 
DMI argues that because the task order is for an indefinite number of hours, it must
be an IDIQ contract.  In support, DMI cites to Mason v. United States, 222 Ct. Cl. 436
(1980), and FAR part 16 to assert that an indefinite-delivery contract must be one of three
types: “Definite-quantity contracts, requirements contracts, [or] indefinite quantity contracts.” 
48 CFR 16.501-2(a); see Mason, 222 Ct. Cl. at 444.  Of the three choices, DMI asserts that
the task order is best characterized as an indefinite quantity contract because it is one in
which the Government must order a minimum, but can order up to a maximum, of supplies
or services.  To interpret the task order as an IDIQ contract, however, would ignore the parts
of the task order that indicate that it is a time and materials contract, thereby rendering parts
of the contract meaningless. 
Here, the plain language of the task order indicated that it is a time and materials task
order placed against an FSS contract.  The task order specifically stated that “[t]his is an
incrementally funded, Time & Materials, Task Order against the contractor’s GSA schedule
contract identified above.”  The RFQ also indicated that a time and materials contract would
be awarded.  The task order incorporated the Time and Materials Payments clause and met
the requirements of FAR 8.404. 
FAR 8.404 and FAR part 38 govern task orders placed against FSS contracts.  48 CFR
8.404, 38.301; see Kingdomware Technologies, Inc. v. United States, 136 S. Ct. 1969, 1974
(2016).  The only types of order preferences for services listed in FAR 8.404 are firm fixed-
price, time and materials, and labor-hour contracts.  48 CFR 8.404(h)(1).  FAR part 16, while
it discusses time and materials contracts, is not relevant to FSS contracts.  Specifically, FAR
8.404 requires a determination and findings, a ceiling price, and an inability by the agency
to accurately estimate its needs.  The agency wrote a determination and findings,
incorporated a ceiling price, and indicated that estimating its needs was problematic.  We
find that the parties entered into a time and materials contract.5
5 A question as to whether a time and materials task order was an appropriate
contract vehicle for interpretation services remains.  

CBCA 5517 14
There was No Breach Under Either the FSS Contract or the Task Order
DMI asserts that, regardless of whether the task order is a time and materials or IDIQ
contract, ICE breached the contract by preparing a materially misleading estimate and
requiring DMI to rely on the estimate in submitting its bid.  The agency counters that, by
definition, a time and materials contract cannot contain a negligent estimate.  
The type of contract is relevant to the determination of whether there was a negligent
estimate.  A time and materials contract is used when “it is not possible at the time of placing
the order to estimate accurately the extent or duration of the work or to anticipate costs with
any reasonable degree of confidence.”  48 CFR 8.404(h)(3)(i); see also Coastal Government
Services, Inc., ASBCA 49625, 97-1 BCA ¶ 28,888, at 144,049.  To use a time and materials
contract, the Government is not required to provide a minimum amount of services requested;
it need only provide a ceiling price.  48 CFR 8.404(h)(3)(ii). 
The Board has held that in estimating service hours, the Government does not
guarantee that those hours will be ordered, and the “Government [is] not required under the
contract to order the number of hours listed.”  Brink’s/Hermes Joint Venture v. Department
of State, CBCA 1188, 09-2 BCA ¶ 34,209, at 169,115 (finding no negligent estimate when
total services used was only three percent of hours estimated in contract under time and
materials portion).  DMI argues that the Government can be held liable for a negligent
estimate, and relies on Womack v. United States, 389 F.2d 793 (Ct. Cl. 1968), for support. 
Womack, however, only considered the question of negligent estimate in a requirements
contract.  See also Medart, Inc., GSBCA 8939, 91-2 BCA ¶ 23,741, aff’d, 967 F.2d 579
(1992) (applying Womack to a requirements contract).  The concept of a negligent estimate
in a time and materials contract is antithetical to the contract vehicle.  A time and materials
contract is used, as in this case, where the amount of services needed is unknown and
difficult to predict.  
Nonetheless, retracing the mathematical calculations for the agency’s estimated base
hours in the request for quotes shows that the agency made a significant error.  The estimated
number of base hours that ICE should have included was approximately ninety-nine, not
4583.  Although the agency erroneously estimated the number of base hours expected, the
agency was not required to provide a minimum and cannot be held liable for a negligent
estimate.  Thus, there was no breach of contract.  
DMI argues that the Board should now read the stated number of base hours (4583)
as a required minimum.  However, DMI knew or should have known that the estimate was
the maximum (not minimum) number of hours for CLIN 0001 and was not guaranteed.  Not
only was this a time and materials task order, which does not require a minimum, but also

CBCA 5517 15
the ceiling amount identified in the task order for CLIN 0001 was $379,472.40 (equaling
4583 x 60 x $1.38), which was DMI’s quoted price.  The agency even reduced the base hour
estimate by 25% and indicated that the hours would be for all languages, not just K’iche’. 
There is no evidence that the agency intended the base hours to constitute a minimum, just
the opposite.  Moreover, DMI knew that there was no guaranteed minimum.  In fact, before
executing a contract with its subcontractor, DMI was told by the agency that it could not
guarantee the number of hours it may order and that it was only providing a maximum
number of hours. 
DMI argues that the high number of estimated hours enticed the company into
submitting a quotation, and speculates that it would not have submitted one had it known the
correct estimate.  Contract law precludes recovery for speculative damages, however.  Story
Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 562–63 (1931); System
Fuels, Inc. v. United States, 666 F.3d 1306, 1311 (Fed. Cir. 2012).  We cannot know and
cannot guess whether DMI would have bid on the contract if the number of estimated base
hours was less, and we, therefore, cannot base our decision on what DMI may have done.  
The Government Terminated the Task Order for Its Convenience
DMI contends in the alternative that ICE terminated the contract for its convenience
with the bilateral modification ending the period of performance.  ICE argues that DMI
signed the modification, making it a mutual agreement to end the contract that did not invoke
the Termination for Convenience clause.  
Parties may change or delete parts of the services required under a contract through
modifications to the contract.  John N. Brophy Co., GSBCA 5122, 78-2 BCA ¶ 13,506, at
66,173.  Major deletions of contract work, however, may not be accomplished through
modifications.  J.W. Bateson Co. v. United States, 308 F.2d 510, 513-14 (5th Cir. 1962);
Praecomm, Inc. v. United States, 78 Fed. Cl. 5, 11 (2007), aff’d, 296 F. App’x 929 (Fed. Cir.
2008).  Furthermore, if a contract contains a termination for convenience clause and the
contracting officer could have invoked the clause instead of terminating the contract on some
other, invalid basis, the tribunal will “constructively invoke the clause to retroactively justify
the government’s actions, avoid breach, and limit liability.”  Best Foam Fabricators, Inc. v.
United States, 38 Fed. Cl. 627, 638 (1997) (citing John Reiner & Co. v. United States, 325
F.2d 438, 444 (Ct. Cl. 1963)).  A directive to end performance of the work will be considered
a termination for the Government’s convenience.  Maxima Corp. v. United States, 847 F.2d
1549, 1553 (Fed. Cir. 1988); G.C. Casebolt Co. v. United States, 421 F.2d 710, 712 (Ct. Cl.
1970).  Such a clause substitutes termination for convenience recovery costs for any breach
of contract damages that plaintiff might otherwise have had.  See Inland Container, Inc. v.

CBCA 5517 16
United States, 512 F.2d 1073, 1081-82 (Ct. Cl. 1975); Drain-A-Way Systems, GSBCA 7022,
84-1 BCA ¶ 16,929, at 84,214-15 (1983). 
The bilateral modification to end performance of all work under DMI’s contract was,
in effect, a termination for convenience.  The task order explicitly incorporated the GSA
terms and conditions, which included a termination for convenience clause.  Because the
modification did more than change part of contract performance, and the contract included
a termination for convenience clause, the modification will be treated as a termination for
convenience by the agency.  
The agency’s use of a bilateral modification was, therefore, an invalid method with
which to end the contract.  The cases cited by the agency to support the argument that the
Board should not disturb a “voluntary, bilateral contract action in favor of a constructive
termination,” Olbeter Enterprises, Inc. v. United States Postal Service, PSBCA 6543, 16-1
BCA ¶ 36,281, at 176,943, concerned only partial changes to contract work and are
distinguishable from the current facts.  See Justman Freight Lines, Inc. v. United States
Postal Service, PSBCA 6428, 15-1 BCA ¶ 35,819, at 175,163 (2014) (refusing to disturb
mutually agreed upon change deleting only a portion of contract work); Honeycomb Co. of
America, ASBCA 44612, 02-1 BCA ¶ 31,703, at 156,588 (2001) (considering partial
reduction in work not a termination because was voluntary bilateral modification designating
the reduction as a change); Seaboard Surety Co., ASBCA 6716, 1962 BCA ¶ 3407, at 17,488
(applying changes clause when parties agreed to elimination of some contract work and
downward adjustment of contract price).  Olbeter, cited by ICE to support its argument that
a voluntary agreement should not be disturbed, does not concern a partial change, though it
too does not apply here.  Olbeter held that the agency could not invoke a retroactive
termination to limit the Government’s damages because the contract remained in force until
the Government terminated the contract under the termination clause in the contract.  16-1
BCA at 176,943.  Here, the agency never invoked the termination clause, but, nevertheless,
attempted to end the contract.  The agency could not terminate the entire contract without
using the termination clause. 
ICE argues that the Government cannot be found liable for declining to issue a
termination for convenience because it is never obligated to terminate a contract for
convenience.  Simply because the Government is not obligated to do so does not mean that
its actions cannot constitute a termination for convenience, as they did here.
The agency also argues that DMI waived its right to termination costs by signing the
bilateral modification.  The modification, however, did not contain no-cost termination or
release language.  See 48 CFR 43.204(c), 49.603-6.  The modification made no mention of

CBCA 5517 17
how DMI’s incurred costs would be treated.  The determination of damages, therefore, is
determined by the Termination for Convenience clause in the task order. 
Termination for Convenience Remedy
Compensation under the termination for convenience clause in the task order is not
limited to a percentage of work performed prior to termination plus settlement charges, but
may include other expenses based on a consideration of “reasonable charges” a contractor
incurred.  ACM Construction & Marine Group, Inc. v. Department of Transportation, CBCA
2245, et al., 14-1 BCA ¶ 35,537, at 174,155 (citing Russell Sand & Gravel Co. v.
International Boundary and Water Commission, CBCA 2235, 13 BCA ¶ 35,455, at 173,869);
Corners & Edges, Inc. v. Department of Health and Human Services, CBCA 693, et al., 08-2
BCA ¶ 33,961, at 168,022-23.  One of our predecessor boards observed that “[i]t is axiomatic
that . . . one must strike a balance between the need for technical compliance with regulatory
requirements and the need for basic fairness.”  Spectrum Leasing Corp. v. General Services
Administration, GSBCA 12189, 95-1 BCA ¶ 27,317, at 136,185-86 (1994). 
The basic principles governing a termination for convenience settlement are stated in
the FAR and provide that: 
A settlement should compensate the contractor fairly for the work done and the
preparations made for the terminated portions of the contract. . . .  Fair
compensation is a matter of judgment and cannot be measured exactly. . . . 
The use of business judgment, as distinguished from strict accounting
principles, is the heart of a settlement.
48 CFR 49.201(a).
During the task order period of performance, DMI provided no interpretation services. 
However, DMI did incur costs in preparing to perform the task order, primarily the cost of
providing a live line to K’iche’ interpreters twenty-four hours a day and seven days a week. 
This cost was incurred from August 10, 2015, the day DMI’s line went live, to
September 3, 2015, the day DMI instructed its subcontractor to pause.  
The costs to which DMI is entitled are the reasonable costs paid to its subcontractor
for the time period of August 10 to September 3, 2015.  The standards for determining the
allowability of a contractor’s costs when settling a subcontractor’s claims are the
“reasonableness and prudence of the settlement, including the competence and good faith
with which the negotiations were conducted and the adequacy of the information upon which
the settlement was based.”  General Dynamics Land Systems, Inc., ASBCA 52283, 02-1

CBCA 5517 18
BCA ¶ 31,659, at 156,411 (2001) (citing Boston Towing & Salvage Co., ASBCA 41357,
92-2 BCA ¶ 24,864, at 124,031).  
DMI’s subcontract, while reasonable, did not accurately reflect the hours of work
expected.  DMI guaranteed its subcontractor a fixed monthly payment based on the agency’s
4583 estimated hours.  Despite the fact that the agency’s estimate turned out to be wrong, at
the time it executed the subcontract, DMI knew that 4583 was the maximum (not minimum)
number of hours for interpretation services estimated by the agency.  DMI also knew that the
agency did not guarantee that it would order 4583 or any other number of hours.  In fact, the
agency specifically told DMI to expect only 75% of the maximum estimated 4583 hours if
only providing interpretation services, which DMI was.  DMI also expected the hours to be
divided among the different languages that ICE needed interpreted, yet DMI was only
interpreting K’iche’.  In addition, while the agency preferred “24/7 coverage,” such coverage
was not required, and DMI had not promised to provide “24/7 coverage” in its bid proposal. 
Nonetheless, because it was so difficult to find K’iche’ interpreters, DMI accepted the
subcontractor’s terms (guaranteed payment for 22,500 minutes per month at $1.25 per
minute) in order to provide the services required.  DMI believed that 4583 was a target and
that the agency would come close to its estimate based on DMI’s previous contract
experience.  Even so, DMI provided for a ninety-day trial period for the subcontract, after
which time it would assess the actual agency demand.  DMI, however, did not have the
opportunity to reassess its subcontract based on demand due to the agency’s termination.  
In determining DMI’s termination for convenience costs, we must take into
consideration that ICE’s estimate was erroneous, that ICE failed to pass on DMI’s number
to its field offices, and that ICE failed to tell DMI that its interpretation line had not been
made available to anyone.  The erroneous estimate led DMI to enter into a subcontract that,
in hindsight, was unnecessarily costly.  The agency’s failure to pass on DMI’s number to the
field offices not only operated to DMI’s detriment, but also was a failure by ICE to mitigate
DMI’s costs.  Effectively, the agency let DMI incur costs that it had no chance to recoup
either at the time, or during the remainder of the contract.  The agency also allowed DMI to
make decisions about DMI’s performance and termination without significant information
as to why it had received no calls on its interpretation line.  As such, DMI remained in the
preparation stage until it was terminated.  Fairness dictates that DMI recover some of those
costs.  
DMI paid its subcontractor for August 10 to September 16, 2015, in the amount of
$35,897.50.  DMI did, however, mitigate the agency’s costs by pausing its subcontract from
September 3 to 16, 2015.  During this time, the interpretation line was not active.  We do not

CBCA 5517 19
find that simply because DMI chose to pay its subcontractor for services while the line was
not active, DMI is entitled to these costs. 
DMI paid its subcontractor the prorated share of 22,500 minutes per month, which
came out to $19,960 for August and $15,937.50 for September.  However, these costs should
be reduced to reflect the fact that DMI could only have reasonably expected 75% of the 4583
hours, or 3437 hours, as the maximum number of hours for interpretation services.  That
number should have been even less because DMI was only providing interpretation of one
language.  DMI, however, could not know that 4583 or even 3437 hours was far beyond the
number of hours of services actually possible.  Thus, for the month of August, 22,500
minutes-per-month equals 725.80 minutes per day.  For the twenty-two days in August
during which the line was live, DMI would owe the subcontractor for 15,967.60 minutes. 
Based on the $1.25 rate per minute DMI was charged, we find that, for August, DMI would
be entitled to $19,959.50 of its subcontractor costs.  Taking the reasonably expected 75% of
those hours equals $14,969.63.  
For September, 22,500 minutes per month equals 750 minutes per day.  For the three
days in September during which the line was live, DMI would owe the subcontractor for
2250 minutes.  Based on the $1.25 rate, we find that, for September, DMI would be entitled
to $2812.50 of its subcontractor costs.  Again taking 75% of those hours, DMI is entitled to
$2109.38.  Taking the total for August and September, DMI is therefore entitled to a total
recovery of its preparation costs of $17,079.
DMI has also asked for G&A costs and profit.  DMI is not entitled to any of these
costs.  Under the FAR payments clause for time and materials contracts, the hourly rates must
“include wages, indirect costs, [G&A] expense, and profit.”  48 CFR 52.232-7(a)(4).  As
such, these costs are already built into the contract prices and cannot be claimed by the
contractor in addition to its recovery for hours performed.  Since DMI did not perform any
interpretation services, however, there is no recovery for G&A or profit.  Additionally,
anticipatory profits and consequential damages are not recoverable.  See International Data
Products Corp. v. United States, 492 F.3d 1317, 1323-24 (Fed. Cir. 2007); Shin Enterprises,
Inc., ASBCA 16542, 72-1 BCA ¶ 9391, at 43, 614 (determining that if the contractor has
incurred no costs, no profit recovery is allowed); see also 48 CFR 49.202(a).  DMI’s claim
for G&A expenses and profit is, therefore, denied.  
DMI also seeks compensation for costs incurred in seeking a resolution of the issues
in the amount of $17,316.91.  DMI has suggested that these costs included attorney fees,
accountant fees, and consultant fees.  While settlement expenses, including accounting, legal,
clerical, and similar costs reasonably necessary for the preparation and presentation of
settlement claims to the contracting officer are generally allowable, 48 CFR 31.205-42(g),

CBCA 5517 20
the contractor has the burden of proving these costs were incurred “with sufficient certainty
so that the determination of the amount . . . will be more than mere speculation.”  Nu-Way
Concrete Co. v. Department of Homeland Security, CBCA 1411, 11-1 BCA ¶ 34,636, at
170,698 (2010) (quoting Benmol Corp. v. Department of the Treasury, GSBCA 16374-TD,
05-1 BCA ¶ 32,897, at 162,979); see also Lisbon Contractors, Inc. v. United States, 828 F.2d
759, 767 (Fed. Cir. 1987).  DMI failed to substantiate its costs.  DMI did not provide legal
bills, consultant  or accountant invoices, or any other substantiating documentation.  In fact,
DMI’s president testified that he did not believe that accounting or consultant costs were
even incurred.  Award of these costs would be mere speculation.  For these reasons, this
portion of DMI’s claim is denied. 
DMI has failed to meet its burden of proving that it is entitled to the $4816 in costs
it claims for setting up the line.  DMI only estimated the time expended  after-the-fact and
failed to maintain a log or keep track of the time claimed.  DMI also failed to provide any
payroll records, canceled checks, or project documentation to support these costs or hourly
rates.  Moreover, the hours claimed and hourly rates are not supported by the record.  Fifty-
six hours spent on research seems unreasonably high given that DMI had a prior relationship
with the subcontractor and had already identified the subcontractor prior to its bid. 
Therefore, the costs DMI claimed for researching sources to staff the line are not allowable. 
The seven hours spent by DMI’s CEO in discussions with the subcontractor prior to
execution of the subcontract also seem to be unreasonably high and are not allowed.  The
hourly rate charged lacks support.  The other charges claimed by DMI are similarly
unsupported by the record and are therefore not allowed.6 
Decision
The appeal is GRANTED IN PART in the amount of $17,079.  The balance of
the costs claimed is denied.
_____________________________
ERICA S. BEARDSLEY
Board Judge
6 ICE argues that the $100 minimum in the FSS contract applies to the task
order.  As a result of the damages awarded for the termination for convenience, the
application of the $100 minimum to the task order need not be decided.