THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND
IS BEING RELEASED TO THE PUBLIC IN ITS ENTIRETY ON 
SEPTEMBER 10, 2020
CROSS-MOTIONS FOR SUMMARY JUDGMENT DENIED: September 2, 2020
CBCA 6001
COLLECTO, INC. dba EOS CCA, 
Appellant,
v.
DEPARTMENT OF EDUCATION,
Respondent.
Joseph J. Petrillo of Petrillo & Powell, PLLC, Washington, DC, counsel for
Appellant.
Michael Taylor and Megan Nathan, Office of the General Counsel, Department of
Education, Washington, DC, counsel for Respondent.
Before Board Judges BEARDSLEY, HYATT, and RUSSELL.
BEARDSLEY, Board Judge.
Appellant, Collecto, Inc. dba EOS CCA (Collecto), challenges the final decision of
a Department of Education, Office of Federal Student Aid (FSA) contracting officer
demanding the return of an overpayment in the amount of $1,028,414.63, plus accrued
interest.  FSA asserts that it overpaid Collecto for student debt collection services.  Collecto
asks us to find on summary judgment that FSA’s claim is barred by an accord and


CBCA 6001 2
satisfaction between the parties, reflected in bilateral contract modification 0056.  FSA has
filed a cross-motion, seeking summary judgment for the alleged overpayment.  FSA argues
that the modification was not an accord and satisfaction, that FSA is entitled as a matter of
law to recoup payments erroneously made regardless of the bilateral modification, and that
Collecto breached either an implied-in-fact contract or the implied duty of good faith and fair
dealing.  We deny both motions for the reasons that follow.  
Statement of Undisputed Material Facts
The Contract
On April 7, 2009, under contract GS-23F-0269K, FSA issued firm-fixed-price task
orders to twenty-three private collection agencies (PCAs) to provide student loan default
collection and resolution services.  FSA issued task order ED-FSA-09-O-0007 (order) to
Collecto.  Under the order, FSA paid Collecto percentage commissions for payments by
borrowers, and a fee for administrative resolutions, for loan consolidation, and for
rehabilitations.  The order ran from July 1, 2009 to April 21, 2015.
From July 1, 2009, to September 15, 2011, FSA used a portfolio management system
referred to as the “Legacy System” to record all financial activity on defaulted student loan
accounts.  The system recorded each time Collecto collected or otherwise serviced a
defaulted student loan.  Based on the information in the Legacy System, FSA generated a
monthly voucher for fees and commissions owed to Collecto for Collecto to review. 
Collecto would review the voucher, compare the information to its records, notify FSA of
any proposed changes, and submit a final invoice to FSA for payment.  FSA then paid
Collecto the final invoiced amount.
FSA’s Change in Invoicing Practices
On September 15, 2011, FSA retired the Legacy System and transitioned to a new
portfolio management system called the “Debt Management Collection System” (DMCS). 
The DMCS, however, did not become active until October 1, 2011, initially with limited
functionality.  From September 16 to September 30, 2011, there was no portfolio
management system operating, and for approximately two years, FSA was unable to generate
vouchers from the DMCS for PCAs to review in the same manner as under the Legacy
System.  As a result, from September 2011 through August 2013 FSA instructed all PCAs,
including Collecto, to create and submit their own invoices each month without first
receiving a voucher from FSA.  FSA did not require Collecto to submit backup for the
invoices because FSA intended to reconcile the invoice payments at a later date.  Not until
September 1, 2013, was FSA able to generate vouchers from the DMCS. 

CBCA 6001 3
Collecto’s September 2011 Invoice
By email dated October 14, 2011, Collecto submitted an invoice dated October 13,
2011, in the amount of $1,028,414.08 for services provided for the month ending
September 30, 2011 (September 2011 invoice).  This invoice also included commissions in
the amount of $123,260.96 for a 2004 contract that Collecto was still performing.  Collecto
received payment for this invoice in full on or about November 14, 2011.
FSA’s Invoice Reconciliation Process
In late 2013, FSA began to reconcile differences between the amounts invoiced by
each PCA from September 2011 through August 2013 (the “reconciliation period”) with what
each PCA had actually earned.  FSA used the data in the DMCS for the reconciliation
process, but due to errors and gaps in that data, it was necessary to establish a new set of
procedures and business rules to derive the amount earned by the PCAs.  To develop these
procedures and business rules, FSA engaged in extensive negotiations with the PCAs and
then applied these procedures to the data, recalculated what each PCA had earned during the
reconciliation period, added up what each PCA had already been paid, and ascertained
whether any underpayments or overpayments had occurred.  According to FSA, “there
[were] a lot of teleconferences between the parties regarding the reconciliation process, how
to deal with it, how to address certain issues that came up, and . . . how they were going to
calculate these total fees that were either underpaid or overpaid or properly paid during that
process or during that time period.”  The reconciliation procedures were finalized on April
24, 2014.
FSA calculated that Collecto had earned a total of $52,115,863.48 for its performance
during the reconciliation period, that it had already paid Collecto $52,032,438.08 based upon
invoices that Collecto had submitted to FSA, and that FSA, therefore, owed Collecto
$82,425.40.  FSA now asserts that it did not include the $1,028,414.08 that it had previously
paid Collecto for September 2011 in the $52,032,438.08 PSA-created invoice amount. 
Although Collecto contends that it cannot confirm how FSA calculated the already paid PSA-
created invoice amount, the evidence makes clear that FSA added together the amounts in
Collecto’s invoices from October 2011 to August 2013, excluding the September 2011
invoice amount.
The parties dispute whether the September 2011 amount of $1,028,414.08 invoiced
for by Collecto and paid by FSA should have been included in the reconciliation period
PCA-created invoice value of $52,032,438.08.  FSA initially identified the relevant period
for invoices as starting on October 2011.  The DMCS posted payments received September
16–30, 2011.  Michael Bryant, who oversaw the reconciliation process for FSA, referred to
the reconciliation period as starting in October 2011.  FSA has not identified any specific

CBCA 6001 4
fees or commissions billed by Collecto in its invoice for September 2011 that were included
in the reconciliation process.  On August 14, 2012, FSA sent an email to the PCAs, stating: 
You should have received by now, your September 2011 invoice.  This is the
last invoice using information out of the legacy system and includes payments
posted through September 15, prior to conversion.  The totals from this invoice
will be included in the invoice reconciliation which we will be doing at some
point.  We would like for you to review the information in this invoice and
notify us if you find any problems.  The detailed payment files should be
available through TSO.
Do not submit this invoice for payment.  You were previously paid for
September 2011 based on the invoices which you submitted last year.
The invoice referenced in this email, however, is not in the record.  In October 2013, FSA
sent Collecto an email listing amounts that FSA understood Collecto was paid for each
month of the reconciliation period.  The table in that email listed payments by month and
began with October 2011 and ended with August 2013.  The email stated, “Please review
your numbers and if you find that you received a different amount, please report that
variance to David, Lawannah and Mike.” 
The Contract Modification
On April 24, 2014, FSA and Collecto executed bilateral modification 0056 (mod 56),
the stated purpose of which was “to incorporate Invoice Reconciliation Procedures . . . [that]
are hereby effective for performance occurring from September 16, 2011 through August 31,
2013.”  The other twenty-two PCAs executed substantially similar contract modifications at
about the same time.  Mod 56 provided that, “[i]n the event the Invoice Reconciliation
Procedures conflict with a term of the contract, the Invoice Reconciliation Procedures shall
take precedence during the aforementioned period of performance.  See following pages for
Invoice Reconciliation Procedures.” 
The first two pages of Collecto’s twenty-one-page modification contained a Standard
Form 30 (SF 30), which included the parties’ signatures and identified the stated purpose of
mod 56.  Box 12 of SF 30, entitled “Accounting and Appropriation Data,” stated:  “See
Schedule”; “Modification Amount:  $0.00”; “Modification Obligated Amount:  $0.00.” 
The next twelve pages, under the heading “Invoice Reconciliation Procedures,”
contained specific written procedures and business rules regarding how to calculate
Collecto’s commissions for each of the following types of activities:  regular payments,
rehabilitations, consolidations, administrative resolutions, reversals, and refunds. 

CBCA 6001 5
At the end of section 1.2 under the regular payments section, the following language
was included:  “The table in Appendix 1 shows the applicable rates for each contract code
over time.”  Appendix 1, titled “Historical Commission Rates,” began with a half-page chart
listing Collecto’s historical commission rates for collections that Collecto had performed
under 2004 and 2009 FSA contracts.  After that chart of historical commission rates, the
parties added another chart to Appendix 1, one without any kind of introductory title or
description.  In that second Appendix 1 chart, there were twenty-four line items for “Regular
Collections,” forty for “Rehabilitations,” two for “Administrative Resolutions,” eight for
“Consolidations,” one for “Litigation Referrals,” and one for “Performance Incentive.”  The
second Appendix 1 chart indicated a “FSA Total Invoice Value” of $52,114,863.48, a “PCA-
Created Invoices” number of ($52,032,438.08), and a “Difference” of $82,425.40. 
Collecto subsequently invoiced FSA for and was paid the difference of $82,425.40. 
Mod 56 did not contain any language indicating that FSA or Collecto reserved the right to
make a claim for any discrepancies or other issues arising as a result of the modification. 
 FSA also gave credit in Appendix 1 for an “Aug-11 Titanium Invoice” in the amount
of $888.61 and for a “Sep-11 Legacy Invoice” in the amount of $221,927.01.  Nowhere in
mod 56 is there any explanation of why an invoice from August 2011, which predates the
reconciliation period, is included in Appendix 1.  As for the “Sep-11 Legacy Invoice,” FSA
included the following language as a “Special Scenario” in the “Regular Payments” part of
the “Invoice Reconciliation Procedures”:
Payments received in September, 2011 after Legacy shutdown (9/15/2011). 
Payments received during this period would normally have an effective date
(“date entered”) [for commission calculation purposes] in September, 2011. 
DMCS assigned them an effective date in October, 2011.  For compensation
purposes, FSA will use the system-assigned effective date and actual posting
date.
This language appears to address how FSA, for purposes of reconciliation, would handle
student debt payments with an effective date after September 15, 2011, but says nothing
about payments with an effective date from September 1 to 15.  Nothing in mod 56 explains
why FSA gives credit for a September 2011 invoice based on the Legacy System that
shutdown on September 15, 2011.1
1 FSA indicated in meeting minutes from a September 5, 2013, PCA invoicing
reconciliation meeting that “[t]he September [2011] legacy activity is going to be part of this
reconciliation.”  Mod 56 contains no language reflecting that.

CBCA 6001 6
In the entirety of the twelve-page “Invoice Reconciliation Procedures” portion of
mod 56, the only reference to Appendix 1 is the one identified above.  This reference does
not indicate that Appendix 1 would also contain a listing of current accountings of monies
paid (or not paid) or that should be paid under the existing contract.  The parts of the
“Procedures” addressing invoice reconciliation for rehabilitations, consolidations,
administrative resolutions, reversals, or refunds do not refer to Appendix 1. 
The new rules for rehabilitations referenced “Appendix 2:  Rehabilitation Scenarios,”
which identified twenty different rehabilitation scenarios and defined a rehabilitation fee, or
rate, that would be applied to each scenario.  At the bottom of each of the nineteen pages
constituting mod 56 (except for the SF 30), including every page of Appendix 1 and
Appendix 2, is a footer with the words “Invoice Reconciliation Procedures.” 
FSA’s Demand for Repayment 
In 2015, another PCA informed the agency that its PCA-created invoice for September
2011 had been omitted from the reconciliation calculation.  The agency, thereafter, believed
that it had made the same reconciliation calculation error for every PCA.  FSA hired an
independent audit firm, which determined that the agency had overpaid Collecto by
$1,028,414.632 for the reconciliation period.  On March 6, 2017, FSA informed Collecto that
it was overpaid by $1,028,414.63.  The FSA contracting officer issued a final decision on
December 22, 2017, asserting that Collecto owed FSA the amount of the overpayment.3 
Collecto subsequently filed this timely appeal.  A short time after Collecto filed its notice of
appeal, Transworld Systems, Inc., another of the PCAs from which the FSA contracting
officer had demanded repayment for reasons similar to the demand to Collecto, filed its own
notice of appeal, which the Board docketed as CBCA 6049.4 
Collecto asks us to find as a matter of law that FSA’s overpayment claim in the
amount of $1,028,414.63 is barred by an accord and satisfaction in mod 56.  In other words,
Collecto argues that the payment of $82,425.40 was a final determination of the payments
2 The audit report identified a $.55 difference in the total commissions earned
by Collecto during the reconciliation period.  Thus, FSA claims repayment of $.55 more than
the total of the September 2011 invoice amount — $1,028,414.63 vs. $1,028,414.08.
3 In error, the contracting officer’s final decision indicates that FSA demanded
payment from Collecto in the amount $1,355,737.84.
4 The parties represent that a third PCA has challenged another contracting
officer’s repayment demand in a case currently pending before the Court of Federal Claims.

CBCA 6001 7
earned and owed for the reconciliation period and, therefore, there was no overpayment. 
Collecto asserts that this final determination cannot be reopened or changed.  FSA asks us
to find summary judgment for the alleged overpayment, arguing that the modification was
not an accord and satisfaction, that FSA is entitled as a matter of law to recoup payments
erroneously made regardless of mod 56, and that Collecto breached either an implied-in-fact
contract or the implied duty of good faith and fair dealing by refusing to acknowledge the
mistake and repay the overpayment.
Discussion
Summary judgment is appropriate when “there is no genuine issue as to any material
fact (a fact that may affect the outcome of the litigation) and the moving party is entitled to
judgment as a matter of law.”  Marine Metal, Inc. v. Department of Transportation, CBCA
537, 07-1 BCA ¶ 33,554 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986)). 
“Each party’s motion must be evaluated on its own merits and all reasonable inferences must
be resolved against the party whose motion is under consideration.”  Government Marketing
Group v. Department of Justice, CBCA 964, 08-2 BCA ¶ 33,955 (citing Anderson, 477 U.S.
at 248, and California v. United States, 271 F.3d 1377, 1380 (Fed. Cir. 2001)). 
FSA’s Overpayment Argument
The parties dispute whether there was an overpayment.  FSA asserts that, by mistake,
FSA failed to include Collecto’s September 2011 invoice amount in its calculation of how
much Collecto had already been paid for the reconciliation period.  Collecto asserts that FSA
must prove that the payments and the compensable events for which Collecto invoiced in
September 2011 were included in the reconciliation process.  Collecto also asserts that the
reconciliation process was rife with errors, and if the process can be reopened for one error,
it should be reopened for all. 
FSA has established that Collecto’s invoice in the amount of $1,028,414.08 for
commissions and fees in September 2011 is not included in the FSA already paid figure of
$52,032,438.08.  The amount that FSA is seeking to recover clearly mirrors the September
2011 invoice payment amount plus the $.55 variance.  Adding up Collecto-created invoices
from October 2011 to August 2013 equals the PCA-created invoice amount in mod 56.  This
finding, however, does not mean that FSA has proven that Collecto was overpaid and the
amount of the alleged overpayment.
The basis for part of FSA’s calculations is inconsistent with the actual language of
mod 56.  The Collecto invoice for September 2011 encompasses commissions and fees from
September 1 through 30, 2011, but the invoice reconciliation procedures in mod 56 were
supposed to encompass a period that did not begin until September 16, 2011.  Although FSA

CBCA 6001 8
argues that everyone understood that commissions for the entirety of September 2011 were
part of the reconciliation process, FSA has not explained how it can require Collecto to
adhere to that verbal agreement, which conflicts with the plain language of mod 56, while
simultaneously arguing that it is not bound by agreements about other amounts included in
but not supported by mod 56’s language.  FSA cannot pick and choose which side
agreements, outside the actual language of mod 56, it will enforce.  Transworld Systems Inc.
v. Department of Education, CBCA 6049, slip op. at 14 (Aug. 13, 2020) (A party “cannot
disaffirm part of the contract that is particularly disadvantageous to himself while affirming
a more advantageous part, and an attempt to do so is ineffective as a disaffirmance.” (citing
Restatement (Second) of Contracts § 383 cmt. a (1981))).  
We also question FSA’s inclusion, in its accounting of Collecto’s prior task order
payments, of commissions identified on Collecto’s September 2011 invoice as having been
earned under a 2004 contract, rather than under this task order.  On its face, it does not seem
appropriate to include in Collecto’s already paid amount commissions paid on other
contracts.
Collecto has identified problems in FSA’s ability during the six-month negotiation
period to identify and calculate the PCAs’ earned commissions.  The record also remains
unclear as to the reasons and effect of the inclusion of the “August-11 Titanium Invoice” and
the “Sep-11 Legacy Invoice” in FSA’s calculation of what Collecto earned for the
reconciliation period. Because the FSA contracting officer’s final decision at issue here
demands repayment of what the contracting officer views as FSA’s overpayment to Collecto,
it will be FSA’s burden, assuming that mod 56 did not constitute an accord and satisfaction,
to show that Collecto received an overpayment that FSA is entitled to recoup.  Transworld,
slip op. at 15 (“The assertion of a right to recoup funds paid in error is a government claim
upon which the Government bears the burden of proof.” (citing JBG/Federal Center, L.L.C.
v. General Services Administration, CBCA 5506, et al., 18-1 BCA ¶ 37,120)).  To prove an
overpayment, FSA will have to establish that the “should have been paid” amount exceeds
the “already paid” amount, without reference to any prior verbal agreements that did not
result in an accord and satisfaction.
In summary, FSA has established that it failed to include the September 2011
commission invoice in its calculation of Collecto’s PCA-created invoice amount when
negotiating the invoice reconciliation procedures leading to mod 56.  However,
inconsistencies between the written invoice reconciliation procedures themselves and the
manner in which FSA applied them, as well as the issue of whether FSA miscalculated
Collecto’s commissions, preclude FSA from proving overpayment or its amount on summary
judgment.
Collecto’s Accord and Satisfaction Argument

CBCA 6001 9
Collecto asserts that, even if FSA overpaid Collecto, mod 56 constituted an accord
and satisfaction barring FSA’s overpayment claim.  Both parties seek summary judgment
based on Collecto’s accord and satisfaction argument.  “A valid accord and satisfaction
requires four elements:  (1) proper subject matter; (2) competent parties; (3) consideration;
and (4) a meeting of the minds of the parties.”  Transworld, slip op. at 16 (citing A-Son’s
Construction, Inc. v. Department of Housing & Urban Development, CBCA 3491, et al.,
15-1 BCA ¶ 36,184 (quoting O’Connor v. United States, 308 F.3d 1233, 1240 (Fed. Cir.
2002))).5 
A. Substituted Contract versus Executory Accord
In arguing that mod 56 did not create any accord and satisfaction, FSA asserts that it
is still entitled to rely on and enforce the written portion of the invoice reconciliation
procedures contained in mod 56 and that it is entitled to recalculate the amounts owed by
reference to those written procedures.  Collecto argues that either the reconciliation process
cannot be reopened, or if it can be reopened to fix one error, the entire reconciliation process
should be reopened.
[A]n accord and satisfaction may occur in two ways:  (1) the agreement itself
may be considered a new or “substituted contract” comprising both the accord
and the satisfaction, extinguishing the subject claims and permitting suit only
to be brought on the “substituted contract” or (2) the parties may enter into an
“executory accord” that discharges the claims only if the agreement is later
performed and, if not performed, the original claims may be reopened.
Transworld, slip op. at 17 (quoting Edward H. Foran, ASBCA 51596, et al., 01-1 BCA
¶ 31,323).  FSA defines mod 56 as a “substituted contract,” and Collecto defines mod 56 as
an executory accord.  “The determination of whether the modification is in the nature of a
substituted contract or an accord and satisfaction, operating as an immediate discharge, or
is an executory accord, where substituted performance was meant as a future discharge, is
a question of the intention of the parties and of reasonable interpretation of the expressions
of the parties.”  Transworld, slip op. at 18 (“Whether a contract is an accord or a substituted
contract is a question of interpretation.” (quoting TMW, Joint Venture, Inc., ASBCA 23115,
5 FSA argues that there was no bona fide dispute before the parties executed mod
56, a fifth element of a valid accord and satisfaction.  The bona fide dispute requirement “is
designed to insure that the necessary consideration is present to create the contract” or
contract modification.  Transworld, slip op. at 16 (quoting Lowrance v. Hacker, 866 F.2d
950, 953 (7th Cir. 1989)).  Thus, we must decide whether adequate consideration supported
the modification.  Id.

CBCA 6001 10
84-2 BCA ¶ 17,250, and citing Restatement (Second) of Contracts § 281 cmt. e (1981))). 
Even if mod 56 is a substituted contract and not an executory accord, the elements of accord
and satisfaction apply.  Transworld, slip op. at 18.
B. The Elements As Applied in This Case
1. Proper Subject Matter
Subject matter is proper in an accord and satisfaction analysis if it addresses “matters
that had arisen during the course of the performance of the contract.”  Transworld, slip op.
at 18 (quoting Trataros Construction, Inc. v. General Services Administration, GSBCA
15344, 03-1 BCA ¶ 32,251).  FSA asserts that the proper subject matter element of an accord
and satisfaction is not satisfied because the parties disagree as to the subject matter of mod
56.  We disagree.  The dispute between Collecto and FSA is about the scope of the subject
matter of mod 56 — not the actual subject matter of mod 56.  Cf. Transworld, slip op. at 18-
19.  Collecto and FSA disagree as to the scope of mod 56.  FSA argues that mod 56
established only written reconciliation procedures that need to be properly applied while
Collecto argues that mod 56 established a defined final payment amount that cannot be
altered.  Each party’s proposed interpretation involves the same subject matter, however. 
Questions about the proper scope of the modification relate to whether there was a “meeting
of the minds” between the parties, which we will discuss below.
2. Competent Parties
There is no dispute that Collecto and FSA were competent to enter into and execute
a contract modification.
3. Consideration and FSA’s Bona Fide Dispute Argument
 FSA argues that it received no consideration for mod 56 because Collecto was
performing the same student debt collection services both before and after the modification.
According to FSA, mod 56 “does not require Collecto or the Agency to perform any new or
different responsibilities nor is there a promise bargained for.”  We disagree.
“[T]o constitute consideration, a performance or a return promise must be bargained
for.”  Transworld, slip op. at 19 (quoting National Housing Group, Inc. v. Department of
Housing & Urban Development, CBCA 340, et al., 09-1 BCA ¶ 34,043.)  “[I]n the context
of a Government contract, [consideration] must render a benefit to the Government and not
merely a detriment to the contractor.”  Id. (quoting Turner Construction Co. v. General
Services Administration, GSBCA 15502, et al., 05-1 BCA ¶ 32,924, and citing Metzger,
Shadyac & Schwarz v. United States, 12 Cl. Ct. 602, 605 (1987)).  However, “[n]either the

CBCA 6001 11
benefit nor detriment need be actual; it is a sufficient legal detriment if the promisee agrees
to perform any act, no matter how slight, and so long as he does so at the request of the
promisor and in exchange for the promise.  The term ‘benefit’ means the receipt as the
exchange for a promise some performance or forbearance which the promisor was not
previously entitled to receive.”  Id. (quoting Turner Construction, 05-1 BCA ¶ 32,924).
Here, as a result of prolonged negotiation, the contract modification memorialized a
significant change to the original task order.  Through mod 56, Collecto agreed to relieve
FSA of its obligation to prepare invoices each month detailing student loan debt payment
activity and to take over that duty for a period of almost two years.  Mod 56 also created a
series of new rules defining how to calculate Collecto’s earned commissions.  These changes
constituted sufficient consideration to support mod 56.  Transworld, slip op. at 20 (rejecting
the Government’s argument that a contract modification failed for lack of consideration
because, even though the Government alleged that the modification required the contractor
to furnish “only that which was already required by the original contract,” the modification
actually changed some of the contractor’s performance obligations, even if minimally (citing
Edo Corp., ASBCA 2622, 56-2 BCA ¶ 1141)).
FSA seems to be arguing that only the portion of mod 56 dealing with the actual dollar
amounts to be paid Collecto, if enforceable, lacked consideration.  Transworld, slip op. at
20.  This is because FSA relies on and seeks only to enforce as binding the written invoice
reconciliation procedures that are contained in mod 56.  If mod 56 lacked consideration,
however, the entire modification would be ineffective.  Id. at 20 (citing Restatement
(Second) of Contracts § 279 cmt. b).  We do not require separate consideration for each part
of the modification unless the language of the agreement specifically calls for it or the
contract is divisible.  Id.  “Where consideration is shown for an obligation as a whole, any
particular part of the obligation cannot be extracted and said to be inoperative because
particular consideration is not assigned to it.”  Id. (quoting Denver Steel & Iron Works, ENG
BCA 2204, 1963 WL 164 (Mar. 8, 1963), and citing Brown-Forman Distillers Corp. v.
Northwest Liquor Co., 171 F.2d 255, 256 (7th Cir. 1948) (for an indivisible contract, the
consideration for the whole is the consideration for each part)).
Mod 56 is not divisible.  “[A] contract is generally construed to be divisible [only]
where the articles of the contract are entirely distinct and not in their nature connected with
one another.”  Transworld, slip op. at 20 (quoting 77A C.J.S. Sales § 15, and citing In re
Payless Cashways, 203 F.3d 1081 (8th Cir. 2000)).  The invoice reconciliation procedures
and the resulting amount to be paid to the PCAs are not so distinct and separate as to permit
us, in the absence of other evidence of a contrary intent, to find the two to be unrelated.  Id.
at 21.  To the extent that FSA argues that the consideration is inadequate, tribunals
“ordinarily ‘do not inquire into the adequacy of consideration,’ especially ‘when one or both
of the values exchanged are uncertain or difficult to measure.’”  Id. (quoting Moore v. United

CBCA 6001 12
States Department of State, 351 F. Supp. 3d 76, 89 (D.D.C. 2019) (quoting Restatment
(Second) of Contracts § 79 cmt. c. (1981))).  FSA’s argument that there was no consideration
to support mod 56 is without merit.
Addressing its bona fide dispute argument, which we view as part of FSA’s argument
about inadequate consideration, we find that there was a bona fide dispute that mod 56
resolved.  See Transworld, slip op. at 21.  FSA asserts that the parties agreed to the new
invoice reconciliation procedures, thus precluding the existence of a bona fide dispute.  “In
the context of a bilateral contract modification, a ‘bona fide dispute’ means that there are
‘accompanying expressions sufficient to make the creditor understand, or to make it
unreasonable for him not to understand, that the performance is offered to him as full
satisfaction of his claim and not otherwise.’”  Id. at 21 (quoting Chesapeake & Potomac
Telephone, 654 F.2d 711, 716 (Ct. Cl. 1981) (quoting 6 Arthur L. Corbin, Corbin on
Contracts § 1276 (1962))).  We disagree with FSA’s position that the reconciliation process
was not a change to the task order.  Id.  Both parties knew that the reason for mod 56 was
to resolve a change in FSA’s original task order obligation to prepare and issue invoices and
to agree upon a method by which the PCAs’ commissions would be reconciled.  FSA lacked
reliable data and the PCAs made extensive compromises to resolve the data deficiencies.  If
not a change, it, otherwise, would have been a breach of contract by FSA. 
4. Meeting of the Minds
The intent of the parties is the controlling factor in deciding whether there was
a meeting of the minds, and ‘[t]he contract modification provides the best
source of evidence regarding intent.’”  Trataros Construction, Inc.(quoting
McLain Plumbing & Electrical Service, Inc. v. United States, 30 Fed. Cl. 70,
81 (1993))).  In considering a meeting of the minds for purposes of an accord,
we look first to the language of the agreement.  Saturn Construction Co.,
VABCA 3229, 91-3 BCA ¶ 24,151.  When the contract language is
unambiguous, a tribunal’s inquiry ends, and the plain contract language
controls.  Textron Defense Systems v. Widnall, 143 F.3d 1465, 1469 (Fed. Cir.
1998).
Transworld, slip op. at 22.
It is unclear why FSA included dollar calculations in mod 56.  “[T]he stated purpose
of the modification, as set forth on [mod 56’s] first page, is to incorporate Invoice
Reconciliation Procedures, rather than specific dollar amounts.”  Transworld, slip op. at 22. 
Mod 56 includes several pages of written procedures that describe how FSA will calculate
the commissions owed to each PCA for the reconciliation period, and Appendix 1 contains
historical commission rates over time.  Appendix 1, however, also seems to include FSA’s

CBCA 6001 13
breakdown of the amounts owed to Collecto for the reconciliation period, the amount that
FSA believed it had previously paid Collecto, and FSA’s calculation of the difference
between the “should have been paid” and “already paid” numbers.  Mod 56 fails to explain
why those amounts are contained in Appendix 1 or in the modification at all.  Id.
At oral argument, FSA could not explain why the detailed dollar figures were included
in Appendix 1.  FSA asserted that the inclusion of the dollar figures was “simply for
purposes of convenience, as a storage mechanism, and that only the written paragraphs
detailing invoice reconciliation procedures were intended to bind all parties.”  Transworld, 
slip op. at 23.  “[W]hen interpreting a contract, however, the Board must interpret it in a
manner that ‘give[s] reasonable meaning to all of its parts.’”  Id. (quoting NVT Technologies,
Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004)).  “Such an interpretation ‘is to
be preferred over one that leaves a portion of the contract useless, inexplicable, void, or
superfluous.’”  Id. (citing Fortec Constructors v. United States, 760 F.2d 1288, 1292 (Fed.
Cir. 1985)).  In interpreting mod 56, the inclusion of detailed dollar figures cannot be
rendered meaningless or superfluous, as FSA’s interpretation of mod 56 does.
Collecto’s assertion that the $83,425.40 in Appendix 1 constituted a final settlement
of the dollar amount that FSA owed Collecto, however, is also unsupported by contract
language.  As noted above, the purpose of including dollar figures is not expressly stated
anywhere in mod 56.  The only reference to Appendix 1 in mod 56 indicates that it identifies
historical commission rates under previous contracts.  Moreover, 
the dollar figure calculated in Appendix 1 is inconsistent with the invoice
reconciliation procedures set forth in [mod 56], given that it fails to account
for [Collecto’s] receipt of the September 2011 payment.  Further, if the
inclusion of dollar calculations in Appendix 1 was intended to define
[Collecto’s] precise final payment amount for the period from September 16,
2011, to August 30, 2013, why bother to include the actual invoice
reconciliation procedures in the contract modification at all, since the parties
only needed to insert a final dollar figure?  Should we find that the actual
written procedures override the stated dollar amount or, instead, that the dollar
amount overrides the written procedures?  The absence of a reference
anywhere in [mod 56] to the fact that there would be a detailed dollar
calculation in Appendix 1 or why it is there creates an irreconcilable
ambiguity.6
6 We also note, without deciding what it means, that the first page of mod 56
includes box 12, entitled “Accounting and Appropriation Data,” that states “See Schedule”;
“Modification Amount:  $0”; and “Modification Obligated Amount:  $0.”  It is unclear how

CBCA 6001 14
Transworld, slip op. at 23.
“Where the existence of an accord and satisfaction is unclear from the language of the
contract modification itself, we must examine evidence surrounding the development of the
modification to understand the parties’ intent.”  Transworld, slip op. at 24 (citing
Merritt-Chapman & Scott Corp. v. United States, 458 F.2d 42, 44-45 (Ct. Cl. 1972)
(approving of the board’s examination “at great length [of] the negotiations preceding
acceptance of the . . . proposal, for any evidence of such exceptions or reservations”)).
The parties’ competing evidence regarding their negotiations makes it impossible to
resolve the scope of the parties’ “meeting of the minds” on summary judgment.  The FSA
business operations specialist, who negotiated mod 56 with the PCAs, indicated that the
entire purpose of the negotiations was to “come up with what we called a make whole
number” for each PCA, which was the number included in the modification.  Transworld,
slip op. at 24 (citing Deposition of Michael Bryant (Jan. 17, 2019) at 31-32).
Similarly, the FSA contracting officer who executed [mod 56] on FSA’s behalf
testified that “[i]t was my understanding that they were bilateral modifications
that memorialized the performance of the PCAs for that period of time” and
that “[t]he purpose was to pay them the correct amount . . . for their
performance.”  Deposition of John E. Ramsey, III (June 10, 2019) at 36, 38. 
He also testified as to his belief that, by executing [mod 56], [Collecto] was
certifying the dollar amounts set forth therein.  Id. at 46, 60.  In addition,
FSA’s “should have been paid” dollar calculations in Appendix 1 include
items that are not mentioned in the written procedures, but to which the parties
agreed during mod 56 negotiations . . . —commissions billed in the “Titanium”
and “Legacy” invoices covering August and . . . September 2011—providing
at least some support for interpreting the Appendix 1 dollar calculations as
more representative of the totality of the parties’ agreements than the written
procedures alone.
Id. at 24-25.  This testimony and the record provide some support for Collecto’s
interpretation that Collecto gave up the right to claim that they were owed additional monies
not included in FSA’s reconciliation, and each party agreed to accept the result of the
reconciliation, even if there were errors and imperfect data.  Collecto asserts that “there is
no evidence . . . that [the] [CO] ever communicated” to Collecto that the modification was
not a final determination of commissions and fees owed during the reconciliation period. 
this notation in box 12 should be interpreted, and the parties should address this matter in
future proceedings.

CBCA 6001 15
Nevertheless, FSA cites other portions of those witnesses’ testimony, as well
as testimony of another witness, in which the witnesses disclaim any
understanding that the dollar numbers in the PCAs’ modifications were
binding or final, although the testimony generally lacks specifics about why the
dollar figures were included into the actual bilateral modifications.  The
evidence that FSA cites is enough to create a genuine issue of material fact that
will require us to resolve the parties’ intent through a hearing or, if the parties
so elect, on a written record under Board Rule 19 (48 CFR 6101.19 (2019)). 
On summary judgment, we cannot weigh evidence or evaluate credibility, but
must, in reviewing each party’s summary judgment motion, make all
justifiable inferences and presumptions in the non-moving party’s favor. 
Navigant SatoTravel v. General Services Administration, CBCA 449, 08-1
BCA ¶ 33,821. 
Id. at 25.  Accordingly, we cannot decide the scope of the parties’ agreement or their
“meeting of the minds” on summary judgment.
Breach of The Duty of Good Faith and Fair Dealing, Mistake, and Misrepresentation 
FSA argues that, as a matter of law, it is entitled to reclaim monies that it overpaid by
mistake and that, upon notification of the overpayment, Collecto breached the duty of good
faith and fair dealing by failing to reasonably investigate the cause of the overpayment, to
verify the amount of fees paid during the reconciliation period, and to repay FSA in the
amount of the September 2011 invoice.  “It is well-settled that the Federal Government is
entitled to recover funds that ‘its agents have wrongfully, erroneously, or illegally paid.’” 
Transworld, slip op. at 26 (quoting United States. v. Wurts, 303 U.S. 414, 415 (1938)).  FSA,
however, “is not necessarily entitled to recoup any amount that it thinks it overpaid simply
because it made a mistake when negotiating: ‘The Government is bound by those agreements
of its agents that are within the scope of their actual authority, even if those agreements were
the result of a unilateral mistake of law or fact,’ and ‘the Government enjoys no special
status permitting it to disavow those agreements.’”  Id. (quoting Maykat Enterprises, N.V.,
GSBCA 7346, 84-3 BCA ¶ 17,510).  “[I]f it turns out that a bilateral contract modification
results in a bad bargain, the Government has no right simply to rescind the agreement or to
reform its terms.  Instead, the Government has to live with the mistake that it made if the
agreement in which it is contained is otherwise binding.”  Id. (citing Airmotive Engineering
Corp., ASBCA 15235, 71-2 BCA ¶ 8988, and Applied Cos. v. United States, 37 Fed. Cl. 749,
757 (1997), aff’d, 144 F.3d 1470 (Fed. Cir. 1999)).  We cannot find as a matter of law that
FSA is entitled to recover the overpayment amount; and therefore, we cannot find that
Collecto breached the covenant of good faith and fair dealing by not verifying the amount
of fees earned and then reimbursing FSA.

CBCA 6001 16
FSA asserts that Collecto breached the covenant of good faith and fair dealing in
negotiating or made an actionable misrepresentation of fact because Collecto knew or should
have known of FSA’s mistake requiring Collecto to tell FSA of its failure to include the
September 2011 invoice in its “already paid” calculation.  The record, however, is not
developed sufficiently for us to decide these issues on summary judgment.  “Whether a party
is chargeable with an overall failure to bargain in good faith ‘involves a finding of motive
or state of mind,’ which must be inferred from the evidence viewed as a whole.” 
Transworld, slip op. at 27 (quoting National Labor Relations Board v. Columbia Tribune
Publishing Co., 495 F.2d 1384, 1391 (8th Cir. 1974) (quoting National Labor Relations
Board v. Reed & Prince Manufacturing Co., 205 F.2d 131, 139-40 (1st Cir. 1953))).  We do
not know Collecto’s level of knowledge about FSA’s mistake when it executed mod 56. 
Without evidence about the details of the parties’ negotiations and mutual understandings
during those negotiations, we are not in a position to grant FSA’s request for summary
judgment on its good faith and fair dealing and misrepresentation argument.  Further, we
cannot identify whether the appropriate remedy would be to reform mod 56 to fix FSA’s
error or to render mod 56 voidable in its entirety without more information about Collecto’s
actual knowledge or “reason to know” of FSA’s error.  Id. at 29-30.  We deny FSA’s
summary judgment request on these issues.7
FSA’s Implied-in-Fact Contract Argument
FSA asks us to find on summary judgment that it had an implied-in-fact contract with
Collecto that obligated Collecto, when negotiating mod 56, to notify FSA of any errors in
FSA’s calculation of the amounts that FSA had previously paid to Collecto for the
September 2011 to August 2013 time period.  We deny FSA’s request.
“An implied-in-fact contract is founded on a meeting of the minds, which, though ‘not
embodied in an express contract, is inferred, as a fact, from conduct of the parties showing,
in the light of the surrounding circumstances, their tacit understanding.’”  Transworld, slip
op. at 31 (quoting Parsons Brinckerhoff Quade & Douglas, Inc., DOT CAB 1299, 84-2 BCA
¶ 17,309 (quoting Baltimore & Ohio Railroad Co. v. United States, 261 U.S. 592, 597
7 To the extent that FSA might have attempted to disclaim mod 56 on the basis
of a mutual mistake of fact, it did not raise such an argument in its complaint or in its motion
for summary judgment.  In its reply brief, FSA mentioned mutual mistake for the first time,
but, in response to a motion to strike the late-raised argument that Collecto filed, FSA stated
that it was not alleging a mutual mistake or relying on that defense.  In light of FSA’s
disclaimer, we do not further address this legal theory.  See Novosteel SA v. United States,
284 F.3d 1261, 1273-74 (Fed. Cir. 2002) (declining to consider legal arguments first raised
before the trial court in a reply brief). 

CBCA 6001 17
(1922))).  FSA asserts that Collecto “had actual or constructive knowledge” that FSA’s
calculation of the amounts previously paid to Collecto set forth in Appendix 1 was “not an
accurate calculation of the payments received for PCA-created invoices during the
reconciliation period.”  Because Collecto “was explicitly requested to notify the Agency of
any errors in the reconciliation calculations and [Collecto] failed to do so, [Collecto]
breached the parties’ implied-in-fact contract, which should bar enforcement of any possible
agreement on dollar amounts” in mod 56.  See id. at 32. 
There was no implied-in-fact contract here.  There was no offer or acceptance that
created a contract requiring Collecto to notify FSA of errors per its request.  Transworld, slip
op. at 32 (citing Howard v. United States, 31 Fed. Cl. 297, 312 (1994)) (“To prove the
existence of an implied-in-fact contract, plaintiffs must show the same elements required to
constitute an express contract, that is, mutuality of intent, consideration, and lack of
ambiguity in offer and acceptance.”).  “No contract with mutually binding obligations can
arise simply because FSA made a request to someone for assistance.”  Id.
FSA had an express written contract with Collecto covering Collecto’s student loan
debt collection services.  “The existence of an express contract precludes the existence of an
implied contract dealing with the same subject, unless the implied contract is entirely
unrelated to the express contract.”  Transworld, slip op. at 32 (quoting Atlas Corp. v. United
States, 895 F.2d 745, 754-55 (Fed. Cir. 1990)).  No separate implied-in-fact contract could
exist since the negotiations for mod 56 were related to the underlying express student
collections debt contract.  “In arguing for an implied-in-fact contract separate and distinct
from its express contract, FSA asserts that neither its task order nor mod 56 “cover
assurances regarding overpayments.”  Id.  Collecto performed debt collection services and
was paid for that work only because of its FSA task order.  Therefore, “FSA cannot validly
assert that its effort to reclaim an alleged overpayment under its task order is somehow
unrelated to the task order.”  Id. 
Decision
FSA’s motion for summary judgment is DENIED.  Collecto’s motion for summary
judgment is DENIED, although, in further proceedings, Collecto need not establish proper
subject matter, consideration, or competent parties in support of its accord and satisfaction
argument.
     Erica S. Beardsley         
ERICA S. BEARDSLEY
Board Judge

CBCA 6001 18
We concur:
    Catherine B. Hyatt      Beverly M. Russell         
CATHERINE B. HYATT BEVERLY M. RUSSELL
Board Judge Board Judge