MOTIONS TO DISMISS DENIED: September 8, 2010 
CBCA 1821 
ROCKIES EXPRESS PIPELINE LLC, 
Appellant, 
v. 
DEPARTMENT OF THE INTERIOR, 
Respondent. 
L. Poe Leggette and Osborne J. Dykes, III of Fulbright & Jaworski L.L.P., Denver, 
CO, counsel for Appellant. 
Colleen M. Dulin, Office of the Regional Solicitor, Department of the Interior, 
Lakewood, CO, counsel for Respondent. 
Before Board Judges SOMERS , GOODMAN , and WALTERS . 
GOODMAN , Board Judge. 
On December 4, 2009, the appellant, Rockies Express Pipeline LLC (appellant), filed 
a notice of appeal from the respondent, Department of the Interior, Minerals Management 
1Service (MMS or respondent), contracting officer’s final decision dated November 30, 2009, 
1 After the appeal was filed, the respondent changed the name of the entity to Bureau 
of Ocean Energy, Management, Review and Enforcement. The respondent now refers to the 
entity as the Bureau of Ocean Energy (BOE). In this decision, we refer to MMS/BOE as “the 
respondent.” 

 
             
        
       
           
                 
             
              
      
               
            
              
            
             
         
                 
               
               
               
                
        
            
                 
                 
           
              
             
             
              
      
          
2 CBCA 1821 
that denied the appellant’s claims for breach of a precedent agreement (PA), Appeal File, 
Exhibit 4, and a firm transportation service agreement (the REX West FTSA), Appeal File, 
Exhibit 6, between the appellant and the respondent. 
The appellant filed its complaint with this Board alleging five claims.
2 
Claims 1 and 5 are for alleged breaches of the REX West FTSA. Claim 1 alleges the 
respondent has breached the REX West FTSA in refusing to pay at least $3,548,701.45, 
which is equal to the monthly reservation charges for April through June 2009 plus accrued 
interest charges. Claim 5 states that 
if . . . it should be determined that the Precedent Agreement is not a binding 
contract, then the REX West FTSA has not terminated and remains in force 
and effect for its full ten-year term, until April 19, 2017. [The respondent] has 
repudiated and breached the REX West FTSA and is liable to [the appellant] 
for the present value of all monthly reservations charges for its ten year terms, 
constituting the amount of at least $115,923,840.00, plus interest. 
Claims 2, 3, and 4 are for alleged breaches of the PA. Claim 2 alleges the respondent 
breached the PA by failing to execute the REX East FTSA and to pay monthly reservation 
charges in the amount of at least $173,230,601.10 plus accruing interest. Claim 3 alleges the 
respondent breached the PA’s implied duty of good faith and fair dealing. Claim 4 alleges 
the respondent breached the representation in clause 12 of the PA that the PA is a “legal, 
valid, binding and enforceable obligation of [the respondent].” 
On March 30, 2010, pursuant to Board Rule 8(c)(1) (48 CFR 6101.8(c)(1) (2009)), 
the respondent filed a motion to dismiss claims 2, 3, and 4 of the complaint for lack of 
subject matter jurisdiction, on the basis that the PA is not a contract under the purview of the 
Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613 (2006) (CDA). 
On May 20, 2010 the respondent filed another motion to dismiss the entire appeal on 
the ground that the parties consented to exclusive jurisdiction over their disputes in the 
2 The complaint contains a slight inconsistency. Paragraph 2 states that “[appellant] 
principally seeks judgement for two claims” and describes these two claims as breach of the 
REX West FTSA and the PA. However, the complaint then enumerates five “claims” with 
specificity which might ordinarily be denoted as “counts” in a complaint. 

 
                 
   
   
             
            
            
                 
          
       
             
                 
             
              
                 
             
             
           
           
   
              
              
               
            
       
           
                
              
            
 
3 CBCA 1821 
federal district court for the Southern District of New York by the inclusion of a clause in the 
PA entitled “Dispute Resolution.” 3 
We deny both motions. 
Background 
The respondent states that its mission is to “manage the ocean energy and mineral 
resources on the Outer Continental Shelf and Federal and American Indian mineral revenues 
to enhance public and trust benefits, promote responsible use, and realize fair value.” 
Respondent’s Motion to Dismiss Claims 2, 3, and 4, at 1. To that end, the respondent is 
responsible for ensuring that all revenues from federal and American Indian mineral leases 
are “effectively, efficiently, and accurately collected, accounted for, and disbursed to 
recipients.” Appeal File, Exhibit 43 at 5. 
The Mineral Leasing Act of 1920, as amended, and the Outer Continental Shelf Lands 
Act, 43 U.S.C. § 1353 et. seq., authorized the respondent to take a portion of the natural gas 
produced under federal leases as “royalty-in- kind” (RIK), as opposed to taking cash payment 
“in value” for these royalties. In connection with taking RIK, the respondent developed a 
RIK program to facilitate the competitive sale of this oil and gas on the open market. In 
order to facilitate these sales, the respondent had to procure transportation services to ship 
the oil or gas it received in-kind from the location where producers delivered royalty 
production to the respondent to a location where it could be sold. 
The Department of the Interior and Related Agencies Appropriations Act of 2001, 
Pub. L. No. 106-291, 114 Stat. 922 (2000), authorized the respondent to use revenue that it 
generated from the RIK program to pay for services incidental to selling oil and gas. 
Specifically, the Act stated that the respondent may under the RIK pilot program use a 
portion of the revenues from RIK sales, without regard to fiscal year limitation, to pay for 
transportation to wholesale market centers or upstream pooling points, and to process or 
otherwise dispose of royalty production taken in kind. 
The respondent’s contracting officer’s final decision stated the appellant’s appeal 
rights pursuant to the CDA. When the appeal file was submitted, the Board reviewed the PA 
and directed the parties to brief the significance of the Dispute Resolution clause. The 
respondent’s motion to dismiss the entire appeal was the respondent’s response to the 
Board’s direction. 
3 

 
              
             
          
                 
         
             
           
    
   
   
     
        
 
           
             
            
              
            
             
             
            
               
               
             
             
    
          
          
            
             
     
          
  
4 CBCA 1821 
This law was further codified in 42 U.S.C. § 15902(b)(4) by the Energy Policy Act 
of 2005, Pub. L. No. 109-58, 119 Stat. 594 (2005). The provision states: 
Retention by the Secretary. The Secretary may, notwithstanding section 3302 
of title 31, retain and use a portion of the revenues from the sale of oil and gas 
taken in-kind that otherwise would be deposited in miscellaneous receipts, 
without regard to fiscal year limitation, or may use oil or gas received as 
royalty taken in-kind (referred to in this paragraph as “royalty production”) to 
pay the cost of ­
(A)	 	 transporting the royalty production; 
(B)	 	 processing the royalty production; 
(C)	 	 disposing of the royalty production; or 
(D)	 	 any combination of transporting, processing, and disposing of the 
royalty production. 
In 2005, the respondent entered into discussions with the appellant regarding the 
reservation of space on a proposed interstate pipeline that the appellant planned to construct. 
The proposed pipeline would ultimately be 1679 miles long, stretching from west of 
Cheyenne, Wyoming, to Clarington, Ohio. If the respondent could transport to Ohio gas that 
was being produced in Wyoming, then it could sell its in-kind gas at a higher market price. 
The appellant intended to open the pipeline in three stages. The first pipeline 
segment, called the Certificate 1 segment, was to transport gas from production areas west 
of Cheyenne, Wyoming, through the existing hub in Cheyenne, and eastward to Audrain 
County, Missouri (the “Audrain hub”). This segment is known as REX West. The second 
segment of pipeline, called the Certificate 2 segment, was to originate at the Audrain hub and 
terminate in Warren County, Ohio (the “Lebanon hub”). The third pipeline segment, called 
the Certificate 3 segment, would transport gas from the Lebanon hub to Monroe County, 
Ohio (the “Clarington hub”). The Certificate 2 and Certificate 3 segments were eventually 
combined and these segments are collectively known as REX East. 
The appellant needed approval and authorization from the Federal Energy Regulatory 
Commission (FERC) to build the pipeline, and the appellant sought firm commitments from 
shippers to ship gas on the pipeline as each segment came available. Without sufficient 
commitments from shippers, the appellant could not support the viability of the project and 
could not proceed with obtaining the necessary governmental authorizations needed to 
construct the pipeline. 

 
             
       
           
  
           
       
        
           
        
         
          
        
            
    
     
        
           
          
  
          
         
          
        
  
   
  
              
       
5 CBCA 1821 
On February 6, 2006, the respondent entered into an arrangement with the appellant 
known to the parties as the “Precedent Agreement.” 4 
The PA contained the following terms relevant to resolution of the respondent’s 
motions to dismiss: 
This Precedent Agreement dated this 6th day of February, 2006 states an 
agreement between Rockies Express Pipeline LLC (“Transporter”), a 
Delaware limited liability company, and U.S. Minerals Management Service 
(“Shipper”). Each of Transporter and Shipper are sometimes referred to herein 
individually as a “Party” and collectively as the “Parties.” 
WHEREAS, Transporter is developing plans to construct and/or acquire and 
operate certain facilities referred to as the Rockies Express Pipeline Project 
(the “Project”) that will create long-haul, firm transportation takeaway capacity 
out of the natural gas supply areas located in the Rocky Mountain producing 
areas of Wyoming and Colorado. 
Appeal File, Exhibit 4 at 1. 
WHEREAS, The commitment provided by Shipper via this Precedent 
Agreement and potentially other similar agreements will be used as support for 
the construction and operation of the Project; and . . . 
Id. at 2. 
WHEREAS, this Precedent Agreement has been executed as evidence of the 
agreement between Transporter and Shipper that, upon satisfaction of the 
conditions precedent set forth below, the parties will enter into Firm 
Transportation Service Agreements (each a “FTSA”) providing for firm 
interstate natural gas transportation service to be provided by Transporter for 
Shipper on the Project. 
Id. at 3. 
4 The foregoing facts are summarized from pages 1 through 4 of the respondent’s 
motion to dismiss claims 2, 3, and 4. 

 
           
           
        
         
     
        
            
         
         
  
         
 
     
            
          
          
            
   
  
          
             
      
            
            
               
   
6 CBCA 1821 
WHEREAS, Shipper is an agency of the federal government subject to specific 
statutory requirements governing its Royalty in Kind Program; . . . 
Id. 
WHEREAS, Shipper and Transporter desire to provide, within reasonable 
interpretations of the statutory authorities and limitations, the MMS as 
custodian of federal natural gas resources reasonable access to transportation 
and other services necessary to implement the Congressionally authorized 
Royalty in Kind Program and said Shipper and Transporter do hereby agree to 
certain rate and termination provisions designed to permit Shipper to 
implement its statutory requirements as Shipper has reasonably determined to 
implement such requirements. 
Id. 
NOW, THEREFORE, in consideration of the mutual covenants and agreement 
contained herein, and intending to be legally bound, Transporter and Shipper 
agree as follows: . . . 
2. Services 
Transporter agrees . . . to provide Shipper, as conditioned herein, with firm 
transportation service as set forth on the attached Appendix A. 
[5] The 
construction and operation of these interstate facilities are subject to the 
jurisdiction of the FERC, and subject to FERC and other federal, state and 
local permits and approvals. 
Id. at 4. 
3. Special Provisions Related to MMS Status as a Government Agency 
5 Appendix A contained two rate options - The Maximum Recourse Reservation Rate 
and a Negotiated Reservation Rate, with election pages for Certificate segments 1, 2 and 3. 
Also included was an illustrative matrix of Fuel Loss and Unaccounted For (FL&U) 
percentages applicable to each certificate with a final determination of the actual FL&U 
percentages to be determined by FERC. In addition to signing the PA, the contracting officer 
separately signed Appendix A. 

 
          
          
         
              
           
         
           
              
            
        
           
      
            
          
            
          
            
          
         
  
             
           
           
           
            
            
          
        
           
            
           
           
      
  
7 CBCA 1821 
(a) Commencing with the date following the in-service date of facilities 
needed to deliver Shipper’s gas to the Lebanon Hub, Transporter shall 
determine the hypothetical difference between the price at which Shipper 
could have sold its gas at the Receipt Points and the price at which Shipper 
could have sold its gas at the Delivery Points less transportation costs 
assuming a one hundred percent load factor (the “REX Basis/Transport 
Difference”). The Rex Basis/Transport Difference is agreed by the Parties to 
be an approximation of whether Shipper has been able to sell its RIK gas at 
fair market value within its legislative and statutory mandate. Shipper has the 
right to audit the calculation during normal business hours. 
The REX Basis/Transport Difference shall be calculated, as of the date twelve 
months following the in-service date of facilities needed to deliver Shipper’s 
gas to the Lebanon Hub (the “First Calculation Date”) and on each twelve 
month anniversary of the First Calculation Date thereafter, in accordance with 
the methodology and example set forth on Appendix C to establish an “Annual 
Bank Balance” and accumulated over time to establish a “Cumulative Bank 
Balance”, as set forth on Appendix C. Transporter shall notify Shipper in 
writing within forty-five (45) days following the First Calculation Date and 
within forty-five (45) days following each twelve-month anniversary of the 
First Calculation Date thereafter, of the Cumulative Bank Balance as of such 
dates. Shipper shall have the right to terminate the FTSA with no liability 
resulting to Shipper in the event the Annual Bank Balance (first annual 
calculation) or the Cumulative Bank Balance is negative as of the First 
Calculation Date or on any of the twelve-month anniversaries of the First 
Calculation Date thereafter. Shipper shall have the right but not the obligation 
to terminate the FTSA in such event under this provision, which shall be 
exercisable by Shipper, in writing, within fifteen (15) business days after 
Shipper receives notification from Transporter that the Cumulative Bank 
Balance calculation yields a negative result and shall become effective on the 
first day of the month specified by Shipper. Shipper’s failure to notify 
Transporter in writing of Shipper’s exercise of a termination right under this 
provision within the time set forth above shall constitute waiver of such 
termination right for the applicable calculation period. 
Id. at 4-5. 
4. Rates 

 
            
            
            
   
             
           
              
          
           
             
         
             
           
   
            
          
          
           
            
             
           
            
            
            
            
            
             
  
     
              
    
8 CBCA 1821 
Shipper acknowledges that it has made an election, as set forth on Appendix 
A; to either (i) pay the Maximum Recourse Reservation Rates for firm service 
under each FTSA or (ii) to pay Fixed Negotiated Reservation Rates for firm 
service under each FTSA. 
If Shipper shall have opted to pay a negotiated rate, as described on Appendix 
A, 
[6] such negotiated rate shall be applicable to service under each FTSA 
during the entire term of such FTSA, except as provided in Section 3 of this 
Precedent Agreement, as the same may be extended, regardless of any 
otherwise applicable maximum rate and shall be applicable at all primary and 
secondary points on the Project that are located in a zone covered by Shipper’s 
primary transportation path(s); provided that the applicability of the negotiated 
rate assumes that receipts and deliveries under the FTSAs will be made at the 
prevailing operating pressures of the Project facilities and that the negotiated 
rate does not cover any non-conforming quality or pressure requirement at any 
receipt or delivery point. 
Regardless of which form of reservation rate Shipper shall have opted to pay, 
the Commodity Rate, calculated using straight fixed variable rate design, Lost 
and Unaccounted for Gas (“L&U”), ACA and any other additional authorized 
charges or surcharges will be applied pursuant to the FERC approved Gas 
Tariff applicable to the Project (the “Tariff”). Fuel shall be provided by 
Shipper in accordance with the zoned fuel matrix set forth in the Tariff, with 
an illustrative matrix set forth on Appendix A attached to this Precedent 
Agreement. The Commodity Rate, determined on the basis of a straight fixed 
variable rate design, is estimated to be $0.004 per Dth [decatherm] for each 
zone ($0.012 per Dth across the length of the system), subject to final 
determination by the FERC. Transporter will propose as part of the Tariff, 
subject to FERC approval, that Fuel and L&U shall be assessed in-kind and 
that Fuel and L&U will be adjusted through a tracking provision. . . . 
Id. at 6. 
5. Volume, Receipt and Delivery Points 
6 The respondent elected the negotiated rate for the three certificate segments on the 
election pages of Appendix A. 

 
          
            
             
           
            
            
        
          
           
          
            
        
           
            
            
             
            
           
        
 
  
  
            
        
      
       
       
        
        
        
         
        
         
9 CBCA 1821 
The contract Maximum Daily Quantity (“MDQ”) and primary term are as 
elected by Shipper on the attached Appendix A (subject to the minimum term 
requirements set forth in Appendix A). The primary receipt point shall be the 
Cheyenne Hub (subject to being moved to points in the zone containing 
Meeker or Opal upon the combination of the Entrega Projects and the Project) 
and the primary delivery points shall be: (a) for Certificate 1 Segment: 
mutually agreeable Mid Continent/Midwest point(s); (b) for Certificate 2 
Segment: mutually agreeable point(s) in the zone containing the Lebanon Hub; 
and (c) for Certificate 3 Segment: mutually agreeable point(s) in the zone 
containing the Clarington Hub. Shipper’s election of Primary Receipt and 
Delivery Points are set forth on Appendix A. Secondary Receipt and Delivery 
Points will be made available pursuant to the Tariff. 
Transporter hereby agrees that it will construct a minimum of twenty five 
points of interconnection from among the points set forth on Appendix A or 
such other points as may be determined to have shipper demand during the 
Open Season. The selection and capacities of such points will be based on 
shipper demand as demonstrated by the results of the Open Season. Shipper 
may indicate on Appendix A up to twenty five points of interconnection 
(including Shipper’s primary receipt and delivery points) to communicate 
Shipper’s preferences. 
Id. at 7. 
6. Conditions Precedent 
Performance by Transporter of the duties and obligations assumed by it in this 
Precedent Agreement are expressly subject to the following conditions 
precedent: 
(a) All appropriate and final governmental approvals and 
other applicable authorization must be obtained and maintained 
on terms acceptable to Transporter, including approval of 
construction, rates and terms and conditions of service; and 
(b) All rights-of-way and other surface rights required to site 
and maintain the pipeline facilities along the route described 
herein must be obtained on terms and conditions acceptable to 
Transporter; provided, however, that conditions (a) and (b) shall 
be deemed satisfied for each Certificate Segment of the Project 

 
        
  
      
        
        
         
       
       
        
  
 
          
        
            
     
           
              
         
         
            
            
          
     
  
 
  
           
              
          
              
10 CBCA 1821 
upon Transport's acceptance of the FERC Authorization for such 
Certificate Segment; and 
(c) Sufficient firm capacity subscription must exist at 
acceptable rates, in Transporter's sole discretion, to proceed with 
the Project; provided, however, that this condition shall expire 
on February 28, 2006 if Transporter has not terminated this 
Precedent Agreement on or before such date; and 
(d) Shipper shall have complied with all its material 
obligations hereunder and under any FTSA then in effect. 
Id. at 8. 
8. Shipper’s Obligations 
(a) Shipper agrees that it will execute a minimum of three Firm 
Transportation Service Agreements consistent with the form of Service 
Agreement as contained in Appendix B
[7] hereto, as finally approved by FERC 
which, if Shipper shall have elected the Negotiated Reservation Rate Option, 
shall reflect the fixed nature of the reservation rate as described in Section 4, 
within five (5) business days after tender by Transporter. In light of the timing 
considerations associated with the Executive Committee of the U.S. Minerals 
Management Service, Transporter shall provide Shipper with ten (10) business 
days advance notice prior to tendering any FTSA for execution by Shipper. 
The FTSAs, at least one each for Certificate 1 Segment, Certificate 2 Segment 
and Certificate 3 Segment, will reflect the receipt points, delivery points, 
term(s), rate(s) and MDQ(s) described herein. 
Id. at 9. 
12. Representations 
Each Party represents to each other as follows: . . . 
(c) This Precedent Agreement has been duly executed and delivered by such 
Party. This Precedent Agreement constitutes the legal, valid, binding and 
7 Appendix B contained the form and terms and conditions of the FTSA. 

 
          
       
          
    
  
 
            
          
          
         
           
 
         
         
          
          
       
          
   
        
        
       
        
    
     
       
      
       
      
      
11 CBCA 1821 
enforceable obligation of such Party, except as such enforceability may be 
limited by bankruptcy, insolvency, reorganization, moratorium or other similar 
laws of general application relating to or affecting creditor’s rights generally 
and by general equitable principles. 
Id. at 13. 
16. Dispute Resolution 
To the fullest extent allowed by law, any disputes, controversies or claims that 
arise between the Parties (the “Disputing Parties”) relating to this Precedent 
Agreement (a “Dispute”) shall be resolved by means of the following 
procedure: 
(a) Notice of Dispute. Any Disputing Party shall give notice 
to the other Disputing Parties in writing that a Dispute has arisen 
(“Dispute Notice”). 
(b) If the Disputing Parties have failed to resolve the Dispute 
within fifteen (15) business days after the Dispute Notice was 
given, the Disputing Parties shall seek to resolve the Dispute by 
negotiation. If the Disputing Parties are unable to resolve the 
Dispute through negotiation within thirty (30) business days 
after the Dispute Notice was given, then the Dispute may be 
finally resolved as follows: 
i. Any disputes that arise between the Parties 
shall be brought in or removed to the United 
States District Court for the Southern District of 
New York. By execution and delivery of this 
Precedent Agreement, Shipper and Transporter 
irrevocably and unconditionally submit to the 
exclusive jurisdiction of such court and to the 
appellate courts therefrom and consent to service 
of process out of any of the aforementioned 
courts. 
ii. Transporter and Shipper agree that the 
provisions of subparagraph (a) above shall not 

 
        
  
  
             
               
                
                
            
              
          
                
              
            
              
     
           
               
             
     
            
               
     
                
            
               
          
              
   
12 CBCA 1821 
apply to any controversy wherein the FERC has 
or exercises jurisdiction. 
Id. at 14. 
On April 24, 2007, the appellant and respondent entered into the REX West FTSA, 
which was effective on that date. The parties agree that the conditions precedent to entering 
into the REX East FTSA were fulfilled. 
8 On May 16, 2008, the appellant provided to the 
respondent a draft FTSA for the REX East segment. Appeal File, Exhibit 7. The respondent 
states that “[s]ubsequent to receiving the draft REX East FTSAs, the [respondent] advised 
[the appellant] that it would not enter into the REX East FTSAs unless they contained 
applicable FAR [Federal Acquisition Regulation] clauses.” Respondent’s Motion to Dismiss 
Claims 2, 3, and 4 at 10 (citing generally Appeal File, Exhibits 9, 10, 12, and 53). 
In response to the respondent’s refusal to sign the REX East FTSA as provided, the 
appellant attempted to negotiate mutually acceptable revisions to the REX East FTSA. 
Almost six months of negotiating between the parties followed, but they were unable to agree 
to the terms of the FTSA.
9 
On December 11, 2008, the appellant notified the respondent that it was terminating 
the PA pursuant to its termination provisions. Appeal File, Exhibit 19. On December 15, 
2008, the appellant filed a notice of termination with FERC in compliance with FERC 
regulations. Appeal File, Exhibit 20. 
On June 30, 2009, the appellant submitted certified claims pursuant to the CDA. 
Appeal File, Exhibit 35. By final decision dated November 30, 2009 the contracting officer 
denied the claim. Id., Exhibit 38. 
8 The Board directed the parties to brief this factual issue. The parties concurred that 
the conditions precedent required for the REX East FTSA were fulfilled. Respondent’s 
Responses to the Board’s Questions of June 25, 2010, at 1-2; REX’s Reply to Respondent’s 
Responses to the Board’s Questions of June 25, 2010, at 1. 
9 The parties’ motions describe in detail the negotiations that took place prior to the 
appellant terminating the contract. 

 
                
                
            
             
              
              
             
       
   
             
              
              
         
      
     
           
            
            
            
            
    
           
      
             
    
       
                
                 
                 
              
          
                 
13 CBCA 1821 
Discussion 
Respondent has filed two motions to dismiss - to dismiss claims 2, 3, and 4 of the 
complaint arising from the PA and to dismiss the entire appeal. With regard to both motions, 
the appellant bears the burden of establishing subject matter jurisdiction by a preponderance 
of the evidence. Ron Anderson Construction, Inc. v. Department of Veterans Affairs , CBCA 
1884, et al., 10-2 BCA ¶ 34,485, at 170,070 (citing McNutt v. General Motors Acceptance 
Corp ., 298 U.S. 178, 189 (1936); Reynolds v. Army and Air Force Exchange Service , 846 
F.2d 746, 748 (Fed. Cir. 1988); 801 Market Street Holdings, L.P. v. General Services 
Administration , CBCA 425, 08-1 BCA ¶ 33,853). 
In assessing whether the Board has subject matter jurisdiction, the allegations of the 
complaint should be construed favorably to the pleader. Ron Anderson (citing Scheuer v. 
Rhodes , 416 U.S. 232, 236 (1974); United Pacific Insurance Co. v. United States , 464 F.3d 
1325, 1327-28 (Fed. Cir. 2006); Hamlet v. United States , 873 F.2d 1414, 1416 (Fed. Cir. 
1989); CACI, INC.-FEDERAL v. General Services Administration , GSBCA 15588, 02-1 
BCA ¶ 31,712, at 156,635 (2001)). 
When a motion to dismiss for lack of subject matter jurisdiction challenges the truth 
of alleged jurisdictional facts, the Board may consider relevant evidence beyond the 
pleadings to resolve disputed facts. Ron Anderson (citing Cedars-Sinai Medical Center v. 
Watkins , 11 F.3d 1573, 1583-84 (Fed. Cir. 1993); B&M Cillessen Construction Co. v. 
Department of Health and Human Services , CBCA 931, 08-1 BCA ¶ 33,753 (2007); 
Innovative (PBX) Telephone Services, Inc. v. Department of Veterans Affairs , CBCA 12, et 
al., 07-2 BCA ¶ 33,685). 
Respondent’s Motion to Dismiss Claims 2, 3, and 4 of the Complaint 
The Jurisdictional Issue and the Parties’ Positions 
The respondent has filed a motion to dismiss for lack of subject matter jurisdiction 
claims 2, 3, and 4 of the complaint that allege breach of the PA, asserting that the PA is not 
a contract within the purview of the CDA. 
The jurisdiction of the Board arises from the CDA. The Board has the jurisdiction to 
“decide any appeal from a decision of a contracting officer . . . relative to a contract made 
by its agency.” 41 U.S.C. § 607(d). The CDA applies to all express or implied contracts 
entered into by an executive agency for the procurement of property other than real property; 
the procurement of services; the procurement of construction, alteration, repair or 
maintenance of real property; or the disposal of personal property. Id. § 602(a). It does not 

 
               
               
             
            
      
               
              
                 
               
                 
              
   
              
                 
               
           
               
       
          
        
         
      
              
             
             
           
          
           
         
  
      
14 CBCA 1821 
cover all government contracts. Coastal Corp. v. United States , 713 F.2d 728, 730 (Fed. Cir. 
1983). The existence of a contract to which the Government and the contractor are parties 
is an essential prerequisite to Board jurisdiction. Presidio County, Texas v. General Services 
Administration , CBCA 1209, 08-2 BCA ¶ 33,976; Inversa, S.A. v. Department of State , 
CBCA 440, 07-2 BCA ¶ 33,690. 
The respondent characterizes the PA as an agreement to agree in the future, as the PA 
contemplates entering into FTSAs after the PA was executed, and maintains that a contract 
is not formed until the FTSA is signed. The respondent also asserts that the PA cannot be 
a contract as it lacks consideration, and that the contracting officer did not have authority to 
enter into the PA. Thus, the respondent asserts that the PA is not a contract within the 
purview of the CDA, and this Board lacks jurisdiction to resolve the appellant’s claims of 
breach of the PA. 
The appellant maintains that the PA is a contract for services within the purview of 
the CDA. It asserts that the PA is an agreement between the parties in which the respondent 
agreed to supply a commitment to ship gas through a pipeline to be constructed and the 
appellant would provide transportation services for the gas through that pipeline upon 
fulfillment of specific conditions precedent in the PA under the specific terms set forth in the 
PA and its appendices.  Thus, according to the appellant, the PA is a contract, supported by 
consideration, for services and therefore within the purview of the CDA. 
This Board addressed this jurisdictional issue in Inversa, S.A. : 
It is hornbook law that the existence of a Government contract depends upon 
an unconditional offer by a purported contractor and an unconditional 
acceptance by the Government. . . . 
An offer must be a promise, and a mere expression of intention or a general 
willingness to do something on the happening of a particular event or in return 
for something to be received does not amount to an offer. . . . 
Consequently, an informal agreement, such as a letter of intent, may be 
considered an enforceable contract only if the agreement contains the essential 
terms and conditions, the agreement is made or approved by an authorized 
official, and the execution of a formal agreement is regarded by all parties as 
a technicality. 
07-2 BCA at 166,779 (citations omitted). 

 
      
            
              
              
                  
             
            
             
              
                
     
        
                  
            
            
                   
     
               
              
                
                 
             
          
             
          
                
               
            
             
             
15 CBCA 1821 
The PA is Supported by Consideration 
With regard to the respondent’s assertion that the PA lacked consideration, the PA 
contains an express commitment by the respondent to ship natural gas, and states that this 
commitment would be used by the appellant as support for the construction and operation of 
the project. Appeal File, Exhibit 4 at 2. The PA states further that it was executed as 
evidence of the agreement between the appellant and the respondent that, upon satisfaction 
of the conditions precedent the respondent would enter into FTSAs providing for firm 
interstate natural gas transportation service to be provided by the appellant to respondent. 
Id. at 3. Additionally, the respondent’s obligations included that it would execute a minimum 
of three FTSAs. Id. at 9. Thus, the PA contained mutual promises and obligations and 
therefore was supported by valid consideration. 
Execution of the PA by an Authorized Official 
The PA states that the parties intend to be legally bound. Appeal File, Exhibit 4 at 3. 
The contracting officer executed the PA and also separately executed Appendix A, which 
contained the respondent’s election of specific agreed terms in the FTSAs as explained 
below. Id. at 16-19. There is nothing in the PA that gives rise to a question as to the 
contracting officer’s authority to execute it. 
The respondent asserts that if the PA is anything other than an agreement to agree, the 
contracting officer did not have authority to enter into the PA, as the respondent interprets 
the FAR as prohibiting it from contracting for more than ten years and the aggregate term of 
the FTSAs exceeded ten years. The question of whether the FAR applies to the FTSAs is an 
issue that remains to be resolved in the merits portion of this appeal. 
The PA is a Contract within the Purview of the CDA 
The plain meaning of the PA’s language supports the appellant’s position that the PA 
is a contract for services within the purview of the CDA. 
The PA cannot be characterized as a letter of intent or a mere expression of intention 
or general willingness to do something on the happening of a particular event. The PA 
consists of detailed provisions with three appendices. Relying upon the express commitment 
of the respondent to ship its natural gas through the pipeline, the appellant committed 
substantial funds to the “support and operation” of the pipeline. The appellant would 

 
           
           
     
              
             
            
            
               
    
               
              
                
               
                
               
            
          
               
              
             
               
   
       
        
               
             
              
       
16 CBCA 1821 
thereafter provide transportation services 10 through the pipeline for the respondent to ship 
specific quantities of natural gas through identified delivery points at specific prices 
according to specific pricing calculations. 
The PA contains an express statement that the parties intended to be bound by the 
agreement, Appeal File, Exhibit 4 at 3, and that specific, enumerated obligations of both 
parties arose upon satisfaction of specific conditions precedent. Included in these obligations 
are the appellant’s obligation to transport natural gas through a minimum of twenty-five 
delivery points and the respondent’s obligation to enter into a minimum of three FTSAs. Id. 
at 7, 9. 
The respondent is required in the PA, clauses 4 and 5, to elect rates, maximum daily 
quantities (MDQ) of natural gas to be shipped, and delivery points. Appeal File, Exhibit 4 
at 6-7. Appendix A contains the respondent’s election of rates, MDQ, and delivery points 
together with another component of pricing to be applied to the elected rates - Fuel, Loss & 
Unaccounted For percentages. Id. at 16-23. Appendix A was separately signed by the same 
contracting officer who executed the PA. Appendix B contains the form of the FTSA to be 
entered into upon fulfillment of the conditions precedent. Id. at 24-27. Appendix C contains 
an additional pricing calculation (the REX Basis/Transport Difference), id. at 29-30, that was 
also described in detail in the PA, id. at 4-5. 
All of these terms are agreed in advance within the PA and its appendices to be 
applicable to the services rendered by the appellant to the respondent and the obligations of 
the respondent upon fulfillment of the conditions precedent. The parties agree that the 
conditions precedent for entering into the REX East FTSA have been fulfilled. Thus, the PA 
with its appendices is not an agreement to agree in the future. The PA is a contract entered 
into by an executive agency whereby the appellant provides services to the respondent, and 
therefore a contract within the purview of the CDA. 
10 As described by the respondent in its motion to dismiss, the services provided by 
the appellant to the respondent are transportation services for the natural gas received by 
respondent in the RIK program to support the respondent’s mission to receive natural gas as 
RIK and sell it on the open market. 

 
          
   
               
              
                
              
             
      
              
            
                
                 
                
                 
                  
                 
        
               
      
            
                 
               
         
              
               
             
             
      
              
 
         
              
   
17 CBCA 1821 
The Board has Subject Matter Jurisdiction over the Appellant’s Claims of 
Breach of the PA 
As the PA is a contract within the purview of the CDA, the appellant’s claims arising 
from its allegation that the respondent breached the PA by not fulfilling its obligation under 
the PA to enter into the REX East FTSA when the condition precedents of the PA were 
fulfilled are therefore claims pursuant to the CDA and within the jurisdiction of this Board. 
Respondent’s motion to dismiss claims 2, 3, and 4 of the complaint is denied. 
Respondent’s Motion to Dismiss the Entire Appeal 
Respondent has moved to dismiss the entire appeal, alleging that clause 16 of the PA 
entitled “Dispute Resolution” is an agreement of the parties to vest exclusive jurisdiction 
over their disputes in the United States District Court for the Southern District of New York. 
Appeal File, Exhibit 4 at 14. In support of its position, the respondent states that this clause 
reflects the intent of the parties to apply the Little Tucker Act (LTA), 28 U.S.C. § 1346(a)(2), 
to all disputes arising from the PA. The LTA is the waiver of sovereign immunity that allows 
the United States to be sued in federal district court if the amount of the claim is $10,000 or 
less. While the LTA is not mentioned in clause 16 or anywhere else in the PA, the 
respondent nevertheless concludes that the LTA is the legal basis of clause 16 and that this 
dispute must be resolved in the United States District Court of the Southern District of New 
York with appellant’s recovery limited to $10,000. 
The Respondent’s position lacks merit. The Dispute Resolution clause, by its own 
terms, applies only “[t]o the fullest extent allowed by law.” As the PA is a contract within 
the purview of the CDA, the CDA provides the exclusive remedy for the resolution of claims 
of breach of the PA, and the appellant has the choice of forum allowed by the CDA, i.e., an 
appeal to the United States Court of Federal Claims or the appropriate board of contract 
appeals. 
11 Dalton v. Sherwood Van Lines, Inc ., 50 F. 3d 1014 (Fed. Cir. 1995); Gonzalez-
McCaulley Investment Group, Inc. v. United States , slip op. (Fed. Cl. Aug 3, 2010); 
Government Technical Services LLC v. United States , 90 Fed. Cl. 522 (2009); Morgan v. 
United States , 55 Fed. Cl. 706 (2003). 
11 The Dispute Resolution clause also states: “Transporter and Shipper agree that the 
provisions of subparagraph (a) above shall not apply to any controversy wherein the FERC 
has or exercises jurisdiction.” While subparagraph (a) of the clause is the notice provision, 
neither party has alleged lack of notice or that FERC has jurisdiction over the disputes 
alleged in this appeal. 

 
            
             
               
       
 
              
         
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18 CBCA 1821 
Appellant, having filed a certified claim pursuant to the CDA and received a 
contracting officer’s final decision setting forth its appeal rights pursuant to the CDA, has 
elected to proceed at this Board. The appeal is properly before this Board. Respondent’s 
motion to dismiss the entire appeal is denied. 
Decision 
Respondent’s motions to dismiss claims 2, 3, and 4 of the complaint and to dismiss 
the entire appeal and for lack of jurisdiction are DENIED . 
ALLAN H. GOODMAN 
Board Judge 
We concur: 
JERI K. SOMERS RICHARD C. WALTERS 
Board Judge Board Judge