MOTION FOR SUMMARY JUDGMENT DENIED; 
MOTION TO DISMISS IN PART DENIED:  July 9, 2021
CBCA 6795
GRAND STRATEGY, LLC,
Appellant,
v.
DEPARTMENT OF VETERANS AFFAIRS,
Respondent.
Gaëtan Gerville-Réache and Adam D. Bruski of Warner Norcross + Judd LLP, Grand
Rapids, MI, counsel for Appellant.
Francis P. Gainer, Office of General Counsel, Department of Veterans Affairs,
Washington, DC; and Jennifer Claypool, Office of General Counsel, Department of Veterans
Affairs, Hines, IL, counsel for Respondent.
Before Board Judges BEARDSLEY (Chair), GOODMAN, and O’ROURKE.
O’ROURKE, Board Judge.
Appellant, a service-disabled, veteran-owned small business, won two national
requirements contracts with the Department of Veterans Affairs (VA) to provide towels and
washcloths to VA medical centers.  Both contracts included a period of performance of five
years, consisting of one base year and four option years.  Appellant challenges the agency’s
contention that both contracts ended at the conclusion of the base year since orders were
placed and filled under the contracts throughout the five-year term.  Appellant seeks breach
of contract damages against the VA for placing orders with other vendors in violation of the
contracts’ Requirements clause, which gave appellant the exclusive right to supply these


CBCA 6795 2
items while the contracts were in effect.  The VA filed motions for summary judgment and
partial dismissal.  We deny the motion for summary judgment based on a material dispute
of fact over when the contracts concluded.  We deny the motion to dismiss in part because
appellant made no claim for relief based on alleged violations of a VA statute.
Findings of Fact
In 2012, the VA awarded two requirements contracts to Grand Strategy, LLC (Grand
Strategy or appellant), one for towels and the other for washcloths.  Both contracts were
national awards, which meant that VA medical centers across the country were required to
order these items from Grand Strategy and that Grand Strategy was required to fill them. 
Exceptions to this mandate were quantity based.  For example, when an order was for less
than twelve items or for more than one hundred items, the VA was not required to order them
from Grand Strategy.  Emergency orders were also excepted.  Grand Strategy could decline
emergency orders, and when it did, the VA could source the items through other vendors.
Both contracts had the same period of performance, one base year plus four option
years, but only the towels contract contained the Federal Acquisition Regulation Option
clause at 48 CFR 52.217-9, “Option to Extend the Term of the Contract (March 2000),”1
which stated:
(a)  The Government may extend the term of this contract by written notice to
the Contractor within 30 days; provided that the Government gives the
Contractor a preliminary written notice of its intent to extend at least 60 days
before the contract expires.  The preliminary notice does not commit the
Government to an extension.
(b)  If the Government exercises this option, the extended contract shall be
considered to include this option clause.
(c)  The total duration of this contract, including the exercise of any options
under this clause, shall not exceed five (5) years.
The specific dates attached to the period of performance for both contracts were as
follows:
1 Respondent claims that this was an oversight and the washcloths contract
should have also contained the Option clause.

CBCA 6795 3
Year Start Date End Date
Base November 1, 2013 October 31, 2014
Option 1 November 1, 2014 October 31, 2015
Option 2 November 1, 2015 October 31, 2016
Option 3 November 1, 2016 October 31, 2017
Option 4 November 1, 2017 October 31, 2018
When the base year of each contract expired in October 2014, the VA did not execute
written modifications to exercise the first option year.  Nonetheless, the VA continued to
place orders under the contracts, and Grand Strategy continued to fill them.  In mid-2015,
Grand Strategy informed the VA that certain medical centers were placing orders with other
vendors and therefore not complying with the terms of the VA’s requirements contracts with
Grand Strategy.  Grand Strategy expressed its concerns that only a few medical centers knew
about the contracts and either did not believe they were mandatory or looked for ways around
them.  Discussions were held among various agency representatives to determine why these
national contracts were underutilized, and on August 13, 2015, the contracting officer sent
an announcement to purchasing offices at VA medical centers, alerting them to the national
contracts and instructing them to forward the information to other VA purchasing offices.
On September 9, 2015, the VA sent a letter to appellant stating: 
This letter is in reference to your national contracts numbers VA797N-13 C
0010 for Reusable Towels and VA797N-13 C 0011 for Reusable Washcloths. 
In accordance with Federal Acquisition Regulation (FAR) clause 52-217.9,
Option to Extend the Term of the Contract, this letter provides written notice
that the Department of Veterans Affairs National Acquisition Center intends
to exercise both contracts with twelve month options, 9/01/2015 08/30/16,
respectively.  However, this preliminary notice does not commit the
Government to extend the contracts.  If the Government actually exercises the
option years, the contracts will be modified within 30-days prior to the
expiration of the contracts, as provided in the referenced clause.
Forty days later, on October 19, 2015, the agency sent another letter to appellant
informing it that the VA had decided not to exercise the options on the contracts, but then,
on October 30, 2015, the contracting officer executed two modifications to do just
that—exercise option year two under both contracts.  The modifications, which were signed
by the contracting officer, indicated that the second option would end on October 31, 2016.

CBCA 6795 4
The appeal file also contains two undated letters to Grand Strategy on VA letterhead
from a VA contract specialist informing Grand Strategy that effective December 21, 2015,
administration of the respective national contracts would transfer from the National
Acquisition Center in Illinois to the Strategic Acquisition Center in Virginia.  This occurred
during option year two.  There is no evidence that the contracts were further modified in
order to exercise option years three or four.  Nonetheless, orders continued to be made and
filled under both contracts after option year two concluded.  In 2018, appellant twice inquired
about the contracts, and the agency responded by issuing two letters, one in May and one in
September, stating that the contracts had expired.  The second letter, dated September 5,
2018, specifically stated:
Our review of VA’s records and the documents you provided . . . indicates that
contract VA797N-13-C-0010 and [contract] VA797N-13-C-0011 (for towels
and washcloths) expired in 2016, due to the most recent option periods
exercised under those contracts expired and the follow-on option period was
not exercised.  Those contracts are no longer active and no orders can be
placed against them.  VA’s website is being corrected accordingly and Grand
Strategy has no obligation to fill any orders that it may have received in error
which cite to the expired contracts.
On October 30, 2019, appellant filed a certified claim with the contracting officer in
the amount of $653,727, for breach of contract damages.  In its claim, Grand Strategy
maintains that the VA failed to abide by the exclusivity requirements of the contracts as
evidenced by responses to numerous Freedom of Information Act (FOIA) requests and
conversations with VA personnel.  The contracting officer denied the claim on the basis that
appellant failed to show that its contracts had been extended past the base period because
there was no modification to the contracts exercising the first option, nor any evidence that
the agency intended to exercise the same.  The contracting officer further determined that
“because Grand Strategy LLC continued to accept and receive orders outside of the terms
and conditions of these contracts,” and was paid for them, “Grand Strategy LLC has
recouped any and all costs and has been made whole.”  Appellant timely appealed the
contracting officer’s final decision.
Discussion
Before us are two motions filed by the VA, one for summary judgment and the other
for partial dismissal for failure to state a claim.  The standard for summary judgment is well
established.  Summary judgment is appropriate when no material facts are in dispute and the
moving party is entitled to judgment as a matter of law.  Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986); Harris IT Services Corp. v. Department of Veterans Affairs, CBCA 5814,
20-1 BCA ¶ 37,533 (2019).  A material fact is one that will affect the outcome of the case. 

CBCA 6795 5
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Turner Construction Co. v.
Smithsonian Institution, CBCA 2862, et al., 15-1 BCA ¶ 36,139.  When deciding a motion
for summary judgment, all reasonable inferences and presumptions are resolved in favor of
the non-moving party.  Anderson, 477 U.S. at 255; CAE USA, Inc. v. Department of
Homeland Security, CBCA 4776, 16-1 BCA ¶ 36,377.
In its motion for summary judgment, the VA maintains that the requirements contracts
at issue expired on October 31, 2014, at the end of their base year, and since the VA did not
exercise any of the option years, the VA cannot be held liable for breach of contract for
ordering towels and washcloths from other vendors after that date.  The VA further argues
that since the VA paid for all orders accepted and filled by appellant after the base year,
appellant has been “made whole” and is not entitled to additional compensation.  Appellant,
on the other hand, contends that the VA exercised all four option years under both contracts. 
In support of its contention, appellant points to multiple written communications to that
effect, as well as contract modifications that exercised option year two under both contracts,
and the parties’ continued performance under the terms and conditions of the contracts for
the maximum performance period of five years.
Included in the appeal file are two signed contract modifications that were executed
by the VA to exercise option year two under both contracts.  The VA’s statement of
undisputed facts submitted in support of the motion references those modifications but
describes them as “purported modifications.”  The appeal file also contains a number of
documents from the VA that demonstrate that the contracts were active through option year
two.  Furthermore, both parties acknowledge that the VA continued to place orders under the
contracts after 2016, and that appellant continued to fill the orders.  The record also includes
deposition testimony of a contracting officer who stated, “I exercised the second option but
I cannot tell you who exercised the first option.”  In its motion, the VA asks the Board to find
that the contracts expired in 2014, at the conclusion of the base years.  Despite these
opposing assertions, the VA represents that there are no material facts in dispute.  We cannot
agree.
As we noted, motions for summary judgment are appropriate for matters where the
facts are not in dispute.  In light of the VA’s own admissions and the evidence in the appeal
file, this case cannot be resolved on summary judgment, and the VA’s additional arguments
to the contrary—good faith, the doctrine of unclean hands, and illegal contract
interpretation—are unavailing.  Whether the contracts expired after the base year, at the
conclusion of the second option year, or at some other point, is a question of fact which
requires further investigation.  For these reasons, we deny the VA’s motion for summary
judgment.

CBCA 6795 6
The VA also asks the Board to dismiss appellant’s claim that the VA violated the
Veterans Benefits, Healthcare, and Information Technology Act of 2006, 38 U.S.C. §§ 8127,
8128 (2018), when it ordered towels and washcloths from nonveteran-owned sources, at
higher prices, and which were 100% imported.  In its complaint, appellant argued that the
VA’s non-extension of the contracts was arbitrary and capricious, in part, because respondent
“did not find another veteran-owned small business to serve as a responsible single source
for towels and washcloths at best value to the Government.”
The VA’s motion acknowledges that these contracts were set aside under this statute
but nonetheless urges the Board to dismiss the allegations that it violated the same or the
objectives of the VA’s Standardization Program2 by placing orders with other nonveteran-
owned vendors.  “Even if true, [these allegations] do not state a claim under which Appellant
would be entitled to relief under the contracts at issue.”  The VA also contends that “[Grand
Strategy] did not include any such allegations in its Claim submitted to the contracting
officer for a final decision,” and therefore, the allegations should be dismissed because they
do not meet the requirements of 41 U.S.C. § 7103(a).
As a threshold matter, the VA’s dismissal motion calls into question the Board’s
jurisdiction over any claim related to the VA’s alleged violation of the Veterans Benefits,
Healthcare, and Information Technology Act of 2006, since it was not raised in the initial
claim to the contracting officer.  In examining both the complaint and the claim, however,
we note that this issue was presented not as a separate claim for relief but rather as evidence
in support of its breach claim against the VA and its allegation that any failure to exercise
an option under the circumstances should be construed as arbitrary and capricious conduct
on the part of the VA—both of which were raised in Grand Strategy’s claim to the
contracting officer.  To the extent that the VA seeks dismissal of this claim for lack of
jurisdiction, we deny the motion on those grounds.
The VA also seeks dismissal for failure to state a claim for relief, which we deny for
the same reasons.  See Force 3, LLC v. Department of Health & Human Services, CBCA
6654 (Apr. 14, 2021) (“In reviewing a motion to dismiss for failure to state a claim, ‘we
accept as true the complaint’s well-pled factual allegations,’ though not its ‘asserted legal
conclusions.’”).  Even if the VA violated the statute and other VA regulations in its
2 The appeal file includes the “Mandatory National Contract Announcement”
for these contracts.  The announcement references VA Directive 1761.1, dated July17, 2003,
“Standardization of Supplies and Equipment Procedures.”  Appellant asserts, on page 5 of
its appeal, that “[t]he purpose of the VA’s standardization program and the exclusivity of
vendors it mandates is to ensure ‘best value product pricing through volume purchasing and
facilitate the delivery of high quality healthcare.’” 

CBCA 6795 7
administration of the contracts, we find no evidence that Grand Strategy’s claim sought relief
for such violations.  We view their reference as mere context in support of the claim squarely
at issue in this appeal—a breach of contract claim for violating the Requirements clause of
both contracts.  Grand Strategy seeks damages for those violations and not for any alleged
breaches of the VA’s duty to the veteran-owned small business community.  We deny the
motion.
Decision
The motions are DENIED.
   Kathleen J. O’Rourke    
KATHLEEN J. O’ROURKE
Board Judge
We concur:
    Erica S. Beardsley              Allan H. Goodman        
ERICA S. BEARDSLEY ALLAN H. GOODMAN
Board Judge Board Judge