RESPONDENT’S MOTION TO DISMISS FOR FAILURE
TO STATE A CLAIM DENIED:  December 18, 2025
CBCA 8468
FOUR LLC,
Appellant,
v.
DEPARTMENT OF AGRICULTURE,
Respondent.
Alexander B. Hastings of Morgan, Lewis & Bockius LLP, Washington, DC; and
Clinton Small of Morgan, Lewis & Bockius LLP, Chicago, IL, counsel for Appellant.
Elin Dugan, Office of the General Counsel, Department of Agriculture, San Francisco,
CA; and Michelle Weiner, Office of the General Counsel, Department of Agriculture,
Charlotte, NC, counsel for Respondent.
Before Board Judges LESTER, KANG, and NEWSOM.
LESTER, Board Judge.
Respondent, the Department of Agriculture, has filed a motion to dismiss this appeal
for failure to state a claim, arguing that, as a matter of law, the agency’s Digital Infrastructure
Services Center (DISC) cannot be held responsible in monetary damages for the actions of
another agency, the Federal Emergency Management Agency (FEMA).  DISC awarded and
managed a task order to appellant, Four LLC (Four), upon behalf of FEMA.  Through
DISC’s task order, Four supplied licenses for a particular brand of software not to DISC, but


CBCA 8468 2
to FEMA.1  Four alleges that, through a bilateral modification to the original task order,
DISC agreed that, if DISC did not exercise both of the one-year extension options in the task
order, the Government would not use the software or replace it with a functional equivalent
for the remainder of what would have been the full term (including options) of the task order. 
DISC did not exercise the second one-year option because FEMA, through its own
procurement office, obtained replacement software through another contractor.  Four
considers FEMA’s act of obtaining replacement software a breach of the task order
provision.
Although the parties dispute whether they actually agreed to add the provision
described above to the task order and dispute the meaning of the language used in it, those
issues are not currently before us.  The only issue that DISC presents in its motion to dismiss
is whether, as a matter of law (and assuming that the provision was added to its task order),
it may be held liable in damages for FEMA’s actions, arguing that it was not serving as
FEMA’s “agent” in a manner that would impose liability under an agency theory.  Contrary
to DISC’s position, however, Four is not asserting entitlement under an agency theory.  It is
seeking damages for a breach of contract.  The law is clear that, although an agency like
DISC is not normally responsible for the actions of another agency, an agency can, through
contract, assume financial responsibility for another’s actions by warranting that a future
event, even if under the control of the other agency, will or will not happen.  In so doing, it
assumes the risk of improper action by the other agency and of liability for resultant damage. 
As a result, we must deny DISC’s motion to dismiss, without prejudice to DISC’s ability to
seek summary judgment after the record is more fully developed regarding its liability for
FEMA’s actions.  In so deciding, we are not holding that the provision was, in fact, a part of
the task order or that the provision’s language created a warranty by DISC about what actions
FEMA would take.  We hold only that, in its complaint, Four has set forth allegations of an
actionable breach of warranty by DISC.
Background
I. The Task Order
The statement of facts set forth below are based upon the allegations that Four set
forth in its complaint filed July 25, 2025, except as otherwise noted.
1 It does not appear that the existing record explains why DISC, rather than
FEMA’s own procurement office, issued a task order to obtain software for FEMA’s, rather
than its own, use.

CBCA 8468 3
On or about July 26, 2019, DISC posted a request for quotes on the National
Aeronautics and Space Administration’s Solutions for Enterprise-Wide Procurement
Government-Wide Acquisition Contract website (SEWP V)2 seeking quotes from established
authorized resellers of licenses of a specific software developed by Splunk Enterprise (the
Splunk software) to supply such licenses to FEMA, rather than DISC, for a base year with
options for two one-year extensions.  Appeal File, Exhibit 1.
Four submitted quote no. 121585001 on July 31, 2019, identifying the prices at which
it would supply FEMA with Splunk software licenses in the base year and in each of the two
option years.  Complaint, Exhibit D.  In its quote, Four asked DISC to include in any task
order that it issued the following provision prohibiting DISC from obtaining replacement
software if DISC declined to exercise either of the two option years:
Government agrees that Four LLC’s quote will be incorporated into and made
a part of any resultant order and warrants that the use of the products is
essential to its proper, efficient, and economic operation for the entire quoted
period of performance; it will use its best efforts to obtain appropriations of the
necessary funds to meet its obligations under the order for all payments
contained therein.  Should an order expire due to non-renewal or termination
for convenience, the government agrees to cease use and not replace the
products acquired under the order with functionally similar products for a [sic]
the longer of the remainder of the full order term or a period of one year
following such event.  Products are provided as a single asset and priced based
on the volume of the full three-year term.  Partial renewal or termination is not
allowed; order must be renewed in full to obtain the proposed pricing.
Complaint, Exhibit D; see Complaint ¶ 6.  Four alleges that it was necessary to have a
guarantee that DISC would order three years of access to the Splunk software to allow Four
to “offer [DISC] a discounted rate.”  Complaint ¶ 7.
The task order that DISC issued to Four for the Splunk software on August 7, 2019
(see Complaint ¶ 4), did not contain the language that Four had requested, but it listed item
numbers corresponding to the base year, the first option year, and the second option year in
2 According to the SEWP V website, “[t]he SEWP Program enables NASA and
all Federal Agencies to efficiently and effectively acquire mission critical Information
Technology, Communication and Audio Visual (ITC/AV) solutions and services via a suite
of contracts encompassing a diversity of business sizes and offerings.” 
https://www.sewp.nasa.gov/ (last visited Dec. 17, 2025).

CBCA 8468 4
a manner consistent with the structure and pricing of the quote.  Id. ¶ 8; see Complaint,
Exhibit B.  Nevertheless, according to Four, the task order was amended through
modification P00003 on July 8, 2020, to incorporate the quote as part of DISC’s exercise of
the first option.  Complaint ¶ 5.  The language of modification P00003 read as follows:
Modification #3 incorporates the following changes:
1) Exercise option year 1 in the amount of $654,057.76.
2) The attached quote and statement of work is incorporated into the
award.
All other terms and conditions remain the same[.]
Complaint, Exhibit C.  In the copy of modification P00003 that Four attached to its
complaint, and in the copy of the modification that DISC included in the Rule 4 appeal file,
the quote is not attached to or a part of the modification.  See id.; Appeal File, Exhibit 9. 
Instead, the pricing terms from the quote are typed into the modification, and a printed copy
of a statement of work is attached, but the modification itself does not reference or otherwise
reflect the language from the quote relating to DISC’s obligation not to use or replace the
Splunk software during the full term of the task order if DISC did not exercise both options.
During the performance of the first option year, DISC informed Four that DISC would
not exercise the second option year unless Four agreed to provide fewer software licenses
than required under the task order and at a reduced price.  Complaint ¶ 10.  Four refused
DISC’s request, and DISC did not exercise the second option year.  Id. ¶ 11.
The DISC contracting officer subsequently “informed Four that FEMA had found a
different vendor to provide not just a ‘functionally similar’ product, but the Splunk software
itself.”  Complaint ¶ 12.  Four viewed FEMA’s actions as a breach of its task order, which,
according to Four, “expressly prohibited [DISC] from terminating the Task Order only to
obtain identical replacement software from a different vendor before the conclusion of the
Task Order’s second option year.”  Id. ¶ 13.
Four alleges that, on September 7, 2021, Four’s president, Jeffrey Nolan, informed
the contracting officer during a telephonic conference that “because [DISC] was procuring
the [Splunk] Software on FEMA’s behalf, the Task Order’s terms remained binding, and
those terms prohibited [DISC] from declining to renew the Task Order solely to acquire the
same software from a different vendor.”  Complaint ¶ 14; Complaint, Exhibit A ¶ 6.  Four
further alleges that “the [DISC] Contracting Officer acknowledged and agreed with
Mr. Nolan’s explanation” but still declined to exercise the second option year.  Complaint

CBCA 8468 5
¶ 15.  The contracting officer explained that FEMA had decided to buy the (same) Splunk
software on its own (through FEMA’s own contracting process) without DISC’s
involvement.  Complaint, Exhibit A ¶ 6.
II. Four’s Certified Claim and Appeal
On February 3, 2025, Four submitted a certified claim to the DISC contracting officer,
seeking damages in the amount of $654,057.75 for DISC’s breach of “its promise not to
obtain replacement software during the Prohibition Period,” its breach of the duty of good
faith and fair dealing, and its misrepresentation that it would not obtain replacement
software.  On June 24, 2025, Four filed a notice of appeal with the Board based upon the
contracting officer’s “deemed denial” of Four’s claim, which the Clerk of the Board docketed
as CBCA 8468.
In its complaint, filed July 25, 2025, Four alleged that DISC breached the task order
“by (1) conditioning the exercise of Option Year 2 on Four’s agreement to reduce the number
of licenses; (2) declining to exercise Option Year 2 when Four refused those terms; and
(3) procuring the same Software from a different vendor during the Prohibition Period, in
direct violation of the Term.”  Complaint ¶ 20.  On August 25, 2025, DISC filed a motion
to dismiss this appeal for failure to state a claim, arguing that, as a matter of law, DISC could
not be held responsible for actions that a separate agency took and that DISC had no power
to control FEMA’s conduct.  As an addendum to its motion, DISC also filed an answer to
Four’s complaint.  DISC responded to the motion to dismiss on September 25, 2025, and
DISC filed a reply brief on October 30, 2025.
Discussion
I. Standard of Review
The Board recently described the standard that the Board must apply in reviewing a
motion to dismiss for failure to state a claim as follows:
Dismissal “for failure to state a claim upon which relief can be granted is
appropriate when the facts asserted by the [appellant] do not entitle [it] to a
legal remedy.”  Boyle v. United States, 200 F.3d 1369, 1372 (Fed. Cir. 2000). 
“The [tribunal’s] task in considering a motion to dismiss for failure to state a
claim is not to determine whether [an appellant] will ultimately prevail, but
‘whether the claimant is entitled to offer evidence to support the claims.’”
Integhearty Wheelchair Van Services, LLC v. Department of Veterans Affairs,
CBCA 7318, 22-1 BCA ¶ 38,156, at 185,311 (quoting J. Cardenas & Sons

CBCA 8468 6
Farming, Inc. v. United States, 88 Fed. Cl. 153, 160-61 (2003) (quoting
Chapman Law Firm Co. v. Greenleaf Construction Co., 490 F.3d 934, 938
(Fed. Cir. 2007))).  In considering a dismissal for failure to state a claim, “we
must assume all well-pled factual allegations are true and indulge in all
reasonable inferences in favor of the nonmovant.”  Anaheim Gardens v. United
States, 444 F.3d 1309, 1314-15 (Fed. Cir. 2006) (quoting Gould, Inc. v. United
States, 935 F.2d 1271, 1274 (Fed. Cir. 1991)).  Dismissal is appropriate only
“if it is clear that no relief could be granted under any set of facts that could be
proved consistent with the allegations.”  Id. at 1315.  “If no relief could be
granted, . . . dismissal [is] proper.”  Id.; see Blackstone Consulting, Inc. v.
General Services Administration, CBCA 718, 08-1 BCA ¶ 33,770, at 167,160.
Texas Industrial Security, Inc. v. General Services Administration, CBCA 8467, slip op. at 5
(Nov. 28, 2025). 
II. Four’s Ability to Allege a Breach of Warranty
The sole basis of DISC’s motion to dismiss is its belief that, because it was not acting
as FEMA’s agent or as a joint actor in connection with FEMA’s purchase of the software
from a different vendor, it cannot be held liable for FEMA’s actions.  DISC represents that
“[c]ourts have repeatedly held that ‘[o]ne federal agency will not be charged with the
knowledge of, or responsibility for, another merely because they are both part of the same
government.’”  Respondent’s Motion to Dismiss at 2 (quoting Tifa Limited, Docket No. I.F.
& R.-II-547-C, 1999 WL 549374, at *19 (Office of the Env’t Prot. Agency Adm’r July 7,
1999) but citing Town of Kure Beach, North Carolina v. United States, 168 Ct. Cl. 597
(1964)).  DISC asserts that, “in claims requiring interagency knowledge or attribution of
conduct[,] . . . such imputation is only permitted where there is a special relationship, such
as a joint enterprise, a duty to share information, or express control, none of which were
alleged or exist here.”  Id. (citing J.A. Jones Construction Co. v. United States, 390 F.2d 886
(Ct. Cl. 1968) and In re “Agent Orange” Product Liability Litigation, 597 F. Supp. 740
(E.D.N.Y. 1984), aff’d, 818 F.2d 145 (2d Cir. 1987)).  It argues that, because DISC had no
involvement in or control over FEMA’s decisions or conduct and that DISC’s relationship
with FEMA “was limited to DISC acting as a procurement conduit,” Four cannot show that
DISC and FEMA “operated as joint actors with any duty to share information,” which “fails
to state a claim upon which relief can be granted.”  Id. at 2-3.  It alleges that Four’s “failure
to plead control, authority, or ratification dooms attempts to bind one party to another’s
conduct under an agency theory.”  Id. at 2 (citing Bilek v. Federal Insurance Co., 8 F.4th 581,
586-88 (7th Cir. 2021)).

CBCA 8468 7
The problem with DISC’s motion is that, contrary to DISC’s position, Four is not
asserting liability “under an agency theory.”  It is not claiming, and need not claim, that
FEMA and DISC were joint actors or that DISC is responsible for FEMA’s actions as
FEMA’s “agent.”  Four is asserting liability under a breach of contract theory, arguing that,
in the task order to which the parties voluntarily agreed, DISC expressly warranted that, if
DISC did not exercise both options in the task order and FEMA obtained substitute software
during the unexercised option period, DISC would pay damages to Four.
“[A] warranty is an assurance by one party to an agreement of the existence of a fact
upon which the other party may rely; it is intended precisely to relieve the promisee of any
duty to ascertain the facts for himself.  Thus, a warranty amounts to a promise to indemnify
the promisee for any loss if the fact warranted proves untrue.”  Dale Construction Co. v.
United States, 168 Ct. Cl. 692, 699 (1964).  “An express warranty, more specifically, arises
by ‘express contract language regarding future events . . . which entitles the contractor to rely
upon the occurrence or nonoccurrence of the event in pricing the contract.’”  Walter Dawgie
Ski Corp. v. United States, 30 Fed. Cl. 115, 126 (1993) (quoting John Cibinic, Jr. & Ralph
C. Nash, Jr., Administration of Government Contracts 179 (2d ed. 1986)).  “For a warranty
to exist there must be either an affirmation of fact or a promise which relates to performance
under the contract.”  American Ship Building Co. v. United States, 654 F.2d 75, 78 (Ct. Cl.
1981).
We need not delve here into the rules surrounding how to determine whether a
representation in a contract constitutes a warranty or whether the language at issue here
actually created a warranty—those issues are not the focus of DISC’s motion to dismiss, and
those questions are not currently before us.  The sole focus of DISC’s motion is its belief that
it can become liable for actions that another federal agency takes only if DISC had some type
of control over the other agency’s actions or if the agencies are jointly acting together in a
manner that damages a contractor.  DISC’s argument is in direct conflict with
well-established precedent.
The Government’s ability to create a warranty that would require it to pay damages
for conduct for which it would not otherwise be liable or for conduct or behavior over which
it has no control is well-settled.  For example, there is a long line of cases in which courts
have held that, despite the fact that the Government is immune from liability for actions that
it undertakes in its sovereign capacity, an agency can agree, through contract, to compensate
a contractor if a sovereign act is undertaken.  “It has long been established that while the
United States cannot be held liable directly or indirectly for public acts which it performs as
a sovereign, the Government can agree in a contract that if it does exercise a sovereign
power, it will pay the other contracting party the amount by which its costs are increased by
the Government’s sovereign act, and that this agreement can be implied as well as

CBCA 8468 8
expressed.”  D&L Construction Co. v. United States, 402 F.2d 990, 999 (Ct. Cl. 1968); see
Gerhardt F. Mayne Co. v. United States, 76 F. Supp. 811, 815 (Ct. Cl. 1948) (“[The
Government] cannot enter into a binding agreement that it will not exercise a sovereign
power, but it can say, if it does, it will pay you the amount by which your costs are increased
thereby.”); Sunswick Corp. of Delaware v. United States, 75 F. Supp. 221, 228 (Ct. Cl. 1948)
(“We know of no reason why the Government may not by the terms of its contract bind itself
for the consequences of some act on its behalf which, but for the contract, would be
nonactionable as an act of the sovereign.”).  The Court of Appeals for the Federal Circuit in
Hughes Communications Galaxy, Inc. v. United States, 998 F.2d 953 (Fed. Cir. 1993),
discussed how an agency can create an obligation to pay damages for taking actions that, but
for the existence of a contract provision requiring compensation, the Government could not
be held financially liable:
[T]he present case simply involves the question of how liability for certain
contingencies was allocated by the contract.  In its contractual capacity, the
government executes countless agreements with private entities to receive and
provide services, goods and supplies.  These contracts routinely include
provisions shifting financial responsibility to the government for events which
might occur in the future.  That some of these events may be triggered by
sovereign government action does not render the relevant contractual
provisions any less binding than those which contemplate third party acts,
inclement weather and other force majeure.
Id. at 958-59.
The Government can make that same type of warranty, obligating itself to pay
compensation for its breach, for actions or inaction by a third party over which the
Government has no control.  “It is also settled that although the Government is not liable for
damages resulting from the action of third parties, it may be held liable if it extended to the
contractor a warranty which was breached.”  D&L Construction, 402 F.2d at 999 (citing Dale
Construction, 168 Ct. Cl. at 699).  The Court of Claims in Dale Construction explained how
a government agency, through contract, could warrant that a third party (there, a
municipality) would turn off water at a construction site by a particular time, even though the
agency had no control over the municipality’s behavior, and pay damages to the contractor
if the third party did not do so:
It is in this context that the record clearly establishes that the post engineer
[who timely requested that the municipality turn off the water valve] was not
at fault in this incident; hence the Government may be held liable in damages
only if the circumstances show that it extended a warranty to the contractor

CBCA 8468 9
which was breached.  In essence a warranty is an assurance by one party to
an agreement of the existence of a fact upon which the other party may rely;
it is intended precisely to relieve the promisee of any duty to ascertain the facts
for himself.  Thus, a warranty amounts to a promise to indemnify the promisee
for any loss if the fact warranted proves untrue.  The facts here appear to fall
squarely within this concept.  In assuming responsibility to have the water
supply turned off and assuring the contractor that this had been done, the post
engineer, in effect, gave plaintiff an unqualified assurance upon which the
latter was entitled to and did actually rely; further, that assurance plainly was
intended by the parties to relieve the contractor of any obligation to ascertain
the facts for itself.  Plaintiff is, therefore, reasonably entitled to recover
$822.54—the amount of loss it suffered when the assurance on which it relied
turned out to be incorrect.
Id. at 699 (emphasis added).
The United States Supreme Court in United States v. Winstar Corp., 518 U.S. 839
(1996), applied this same rationale to contractual warranties addressing acts of Congress in
finding that, if a government agency has bound itself in contracts with savings and loan
associations to pay damages if Congress changed regulatory rules in a manner that caused
the savings and loan associations to incur financial losses, those contractual agreements
would be enforceable and would place on the Government the financial burden of
compensating the associations if Congress took action inconsistent with the warranty:
The mere fact that the Government’s contracting agencies (like the Bank
Board and FSLIC) could not themselves preclude Congress from changing the
regulatory rules does not, of course, stand in the way of concluding that those
agencies assumed the risk of such change, for determining the consequences
of legal change was the point of the agreements.  It is, after all, not uncommon
for a contracting party to assume the risk of an event he cannot control, even
when that party is an agent of the Government.
Id. at 908 (emphasis added).
These same warranty concepts apply to an agency’s agreement to assume financial
responsibility through a promise that another federal agency will not take some action and
to compensate the contractor if the other agency violates the warranty in a manner that causes
the contractor to suffer damage.  As the Supreme Court in Winstar specifically noted, “[a]
common example of such an agreement is mandated by Federal Acquisition Regulation
52.222-43, which requires Government entities entering into certain fixed price service

CBCA 8468 10
contracts to include a price adjustment clause shifting to the Government [and to the agency
issuing the contract] responsibility for cost increases resulting from [the contractor’s]
compliance with Department of Labor wage and fringe benefit determinations.”  Winstar,
518 U.S. at 909 n.58 (citing 48 CFR 52.222-43 (1995)).  Similarly, the Federal Circuit in
Hills Materials Co. v. Rice, 982 F.2d 514 (Fed. Cir. 1992), held that, pursuant to standard
FAR clauses in the contract at issue there, the Department of the Air Force had contractually
agreed to accept financial responsibility if another federal agency, the Occupational Safety
and Health Administration (OSHA), changed certain OSHA regulations in a manner that
negatively impacted the contractor.  See id. at 516-17 & n.2 (finding that the sovereign acts
doctrine “does not prevent the government as contractor from affirmatively assuming
responsibility for specific sovereign acts” that another federal agency might undertake).  
Accordingly, we reject DISC’s argument that a federal agency can never be financially
responsible in damages for the actions of another federal agency over which it has no control
unless one is acting as the other’s “agent.”  An agency can, through contract, create the very
type of warranty that Four alleges was created here.  In rejecting DISC’s argument, we do
not make any judgment on whether the language upon which Four relies does, in fact, create
a warranty.  Further proceedings will be needed to determine whether the disputed clause is
even a part of the task order at all, a question that is not clear from the existing record and
is disputed.  If the disputed clause is part of the task order, there may be ambiguities in the
language, and the Board will need to determine whether ambiguities exist; whether, if so,
they are patent or latent; and whether, under the doctrine of contra proferentum, the
ambiguity would be held against Four as the drafter of the provision.  See Fort Vancouver
Plywood Co. v. United States, 860 F.2d 409, 413-14 (Fed. Cir. 1988) (discussing how to
analyze contract language for ambiguities).  Nevertheless, because it is clear that Four’s
theory of liability is breach of warranty, based upon an alleged contractual agreement
creating the warranty, rather than an agency theory, we must deny DISC’s motion to dismiss.
Decision
For the foregoing reasons, DISC’s motion to dismiss for failure to state a claim is
DENIED.
    Harold D. Lester, Jr.      
HAROLD D. LESTER, JR.
Board Judge

CBCA 8468 11
We concur:
    Jonathan L. Kang              Elizabeth W. Newsom     
JONATHAN L. KANG ELIZABETH W. NEWSOM
Board Judge Board Judge