ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of -- ) 

) 

Smart Way Transportation Services ) 

) 

Under Contract No. HTC711-14-D-R033 ) 

APPEARANCE FOR THE APPELLANT: 

APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 60315 

Mr. Sayed Sameem Jalal 

President 

Jeffrey P. Hildebrant, Esq. 

Air Force Deputy Chief Trial Attorney 

Lt Col Mark E. Allen, USAF 

Jason R. Smith, Esq. 

Trial Attorneys 

OPINION BY ADMINISTRATIVE JUDGE D' ALESSANDRIS 

ON THE GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT 

The United States Transportation Command (government) awarded Smart Way 

Transportation Services (SWT) a commercial trucking services contract in Afghanistan. 

SWT argues that the government breached the contract by failing to provide a fair 

opportunity to compete, improperly terminating the contract, and by breaching the 

implied duty of good faith and fair dealing. Pending before the Board is the 

government's motion for summary judgment, asserting that there are no disputed 

material facts and that SWT fails to establish any contractual violation. We grant the 

government's motion and deny the appeal. 

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 

1. On 9 January 2014, the United States Transportation Command awarded 

Contract No. HTC711-14-D-R033 to SWT for commercial trucking services in 

Afghanistan (R4, tab 14). SWT's contract was one of 23 awarded under the National 

Afghan Trucking Program (NAT II) (R4, tab 34 at 1 ). The NAT II was a 

firm-fixed-price, multiple-award, indefinite-delivery, indefinite-quantity (ID IQ) 

contract (R4, tab 14 ). The contract had an original base period of 24 January 2014 

to 15 December 2014 with two one-year options and one six-month option (id. at 5-7). 

2. The contract contained Federal Acquisition Regulation (FAR) clause 52.216-22, 

INDEFINITE QUANTITY (OCT 1995), which provided, in relevant part: 

(a) This is an indefinite-quantity contract for the supplies or 

services specified, and effective for the period stated, in the 
Schedule. The quantities of supplies and services specified in 

the Schedule are estimates only and are not purchased by this 

contract. 

(b) Delivery or performance shall be made only as authorized 

by orders issued in accordance with the Ordering clause. The 

Contractor shall furnish to the Government, when and if 

ordered, the supplies or services specified in the Schedule up 

to and including the quantity designated in the Schedule as 

the "maximum." The Government shall order at least the 

quantity of supplies or services designated in the Schedule as 

the "minimum." 

(R4, tab 14 at 12) 

3. The contract also contained FAR clause 52.217-9, OPTION TO EXTEND THE 

TERM OF THE CONTRACT (MAR 2000), which provided, in relevant part, that the 

government "may extend the term of this contract by written notice to the Contractor" 

(R4, tab 14 at 12). 

4. The contract's Performance Work Statement stated that the government 

"will normally provide the contractor's [Program Manager] at least 96 hours notice of a 

mission requirement; however, the contractor shall be able to respond within 48 hours 

for urgent requirements" (R4, tab 14 at 80). The Performance Work Statement also 

required the contractor to attend a post-award conference; have contractor employees 

enrolled in the Synchronized Pre-Deployment and Operational Tracker (SPOT) and 

have a SPOT-generated Letter of Authorization (LOA) for its employees prior to 

employment; to work on holidays; and to maintain Defense Base Act (DBA) insurance 

(R4, tab 14 at 64-65, 67). 

5. By task order dated 17 January 2014, the contracting officer paid the 

contractually guaranteed minimum of 129,500 afghani (AFN) to SWT (R4, tab 16). 

The government had previously provided S WT the opportunity to invoice for the 

guaranteed minimum order (R4, tab 39 at 3). The contracting officer also issued contract 

Modification No. POOOOl to the contract, dated 17 January 2014, which notified SWT 

that the NAT II award decision was being protested to the Government Accountability 

Office (GAO) and that "[t]he contractor is hereby notified to suspend performance until 

further notice. Only the Contracting Officer is authorized to allow performance to 

resume under this contract." (R4, tab 15 at 1) 

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6. By memorandum dated 30 April 2014, the contracting officer notified SWT 

that it had been reaffirmed as an awardee under the NAT II contract and that the 

government expected "to complete a modification of your contract removing the 

Stop Work Order following the debriefing period" (R4, tab 21 at 3 ). 

7. By memorandum dated 14 May 2014, the contracting officer notified all 

NAT II contractors that three unsuccessful offerors of the NAT II contract had filed 

protests with the GAO and that performance would continue "to be suspended pending 

disposition of the protests" (R4, tab 22 at 1). 

8. SWT asserts that the government became aware that requirements for 

trucking services in Afghanistan were being sharply reduced and were projected to 

continue to decline in the NAT II option years around 22 August 2014 ( app. resp. at 3 ). 

On 8 September 2014, a kick-off meeting took place for the NAT II contract (comp I. at 2). 

9. By memorandum dated 11 September 2014, the contracting officer notified 

SWT that the stop work order was being lifted on the NAT II contract and directed SWT 

"to start preparing for performance in accordance with the terms and conditions of 

HTC711-14-D-R033." The contracting officer also noted that the official notice to 

proceed would be issued around 16 October 2014 along with a formal modification. 

(R4, tab 23) 

10. By letter dated 25 September 2014, the government informed SWT that the 

contract base period would only have a period of performance of two months ( 16 October 

2014 through 15 December 2014) and that only around seven NAT II contractors would 

have their contracts' option years exercised. The contracting officer offered SWT the 

opportunity to execute an immediate no-cost termination of its contract. (R4, tab 24) 

11. By email dated 26 September 2014, the contracting officer notified NAT II 

contractors that the modification to lift the stop work order had not been issued and that 

the stop work order was still in effect (R4, tab 25). 

12. By memorandum dated 7 October 2014, the contracting officer notified 

SWT that the government would not exercise the first option period on the contract 

(R4, tab 27). By a ten-page memorandum signed 22 November 2014, the contracting 

officer outlined determinations and findings in support of the NAT II contractors who 

had their option years exercised (R4, tab 34 ). The determination noted that the military 

was downsizing, reducing the need for commercial trucking services, that there was a 

similar decline in contracting personnel to administer the contracts, and that the contracts 

required high fixed costs for a 24-hour operations center and DBA insurance (id.). The 

determination concluded that awarding all options would "expose the contractors to 

unnecessary start-up costs with no real expectation of recovering their initial outlay" 

(id. at 3). The determination further reasoned that these financial risks could affect the 

viability of the contractors and become a force protection issue (id.). 

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13. The contracting officer issued no competitive task orders under the NAT II 

contracts during the base period (R4, tab 43 at 1 ). 

14. By email dated 8 July 2015, S WT submitted a certified claim demanding 

payment for expenses allegedly incurred during the performance of the contract in the 

amount of $5,547,248.98 (R4, tab 44). 

15. By memorandum dated 25 August 2015, the contracting officer issued a final 

decision denying SWT's certified claim (R4, tab 47). SWT timely appealed to this Board 

on 7 November 2015. 

DECISION 

SWT argues that the government "performed a breach of contract for failure to 

provide fair opportunity to compete and be considered for orders, improper termination, 

failure to perform in good faith, bad faith issuance of the minimum order guarantee and 

improper use of the Option to Extend Services" (compl. at 3). The government argues 

that there are no disputed material facts and that it is entitled to judgment as a matter of 

law because it paid the guaranteed minimum required by the contract and its actions were 

consistent with the terms of the contract. 

We will grant summary judgment only if there is no genuine issue as to any 

material fact, and the moving party is entitled to judgment as a matter of law. 

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A material fact is one that may 

affect the outcome of the decision. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 

248-49 ( 1986). The moving party bears the burden of establishing the absence of any 

genuine issue of material fact, and all significant doubt over factual issues must be 

resolved in favor of the party opposing summary judgment. Mingus Constructors, Inc. 

v. United States, 812 F.2d 1387, 1390-91 (Fed. Cir. 1987). Once the moving party has 

met its burden of establishing the absence of disputed material facts, then the non-moving 

party must set forth specific facts, not conclusory statements or bare assertions, to 

defeat the motion. Pure Gold, Inc. v. Syntex (U.S.A.), Inc., 739 F.2d 624, 626-27 

(Fed. Cir. 1984). The government has met its burden of establishing the absence of 

disputed material facts. 

I. Failure to Provide a Fair Opportunity to Compete For Task Orders 

We start with SWT's first argument that the government "breach[ed] [a] contract 

for failure to provide fair opportunity to compete and be considered for orders." This 

argument fails because there were no competitive task orders issued under the NAT II 

contract during the base period (SOF ii 13). SWT was given the opportunity to invoice 

for the contract minimum order guarantee during the base period (SOF ii 5), satisfying the 

government's contractual obligation under the IDIQ contract. RJO Enterprises, Inc., 

ASBCA No. 50981, 03-1 BCA ii 32,137 at 158,908 (because it was an IDIQ contract the 

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government "was obligated to purchase no more than the contractual minimum 

quantity"). 

II. Improper Termination 

SWT next alleges that the government improperly terminated the contract. Since 

there was no actual termination of the contract, S WT appears to be alleging a de facto 

termination through the government's suspension of work and failure to exercise the 

contract's first option. This argument fails as well because the suspension of work and 

termination for convenience clauses provide no relief when no work was ordered under 

an IDIQ contract and the contractor has been paid the minimum contract value. See 

Beneco Enterprises, Inc., ASBCA No. 46405, 96-2 BCA ,-i 28,531 at 142,468 (concurring 

majority). In Beneco, the appellant, like SWT here, sought costs allegedly incurred 

during a suspension of work due to a post-award bid protest. The Board denied the 

appeal because no work was ordered under the IDIQ contract so no performance was 

suspended. The Board noted that appellant's only relief was through the Minimum 

Contract Value clause. Id. 

III. Good Faith and Fair Dealing and Bad Faith 

SWT next alleges that the government breached the implied duty of good faith 

and fair dealing. Implied in every contract is a duty of good faith and fair dealing in 

its performance and enforcement. Lakeshore Eng 'g Servs., Inc. v. United States, 

748 F.3d 1341, 1349 (Fed. Cir. 2014); Metcalf Constr. Co. v. United States, 

742 F.3d 984, 990 (Fed. Cir. 2014). It is well settled that the covenant of good faith and 

fair dealing "imposes obligations on both contracting parties that include the duty not to 

interfere with the other party's performance and not to act so as to destroy the reasonable 

expectations of the other party regarding the fruits of the contract." Centex Corp. v. 

United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005). "What is promised or disclaimed 

in a contract helps define what constitutes 'lack of diligence and interference with or 

failure to cooperate in the other party's performance."' Metcalf Constr., 742 F.3d at 991 

(quoting Malone v. United States, 849 F.2d 1441, 1445 (Fed. Cir. 1988)). "[T]he nature 

of that bargain is central to keeping the duty focused on 'honoring the reasonable 

expectations created by the autonomous expressions of the contracting parties."' Id. 

(quoting Tymshare, Inc. v. Covell, 727 F.2d 1145, 1152 (D.C. Cir. 1984)). The 

implied duty of good faith and fair dealing cannot create duties inconsistent with the 

express provisions of the contract. Bell/Heery v. United States, 739 F.3d 1324, 1335 

(Fed. Cir. 2014). 

SWT initially alleges that the government breached the implied duty of good 

faith and fair dealing by failing to exercise the contract's first option. However, the 

government has broad discretion when exercising options. In Plum Run, Inc., 

ASBCA No. 46091 et al., 97-2 BCA ,-i 29,193 at 145,230, we held that the government 

possesses discretion in exercising options and that a contractor can only prevail by 

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establishing bad faith, abuse of discretion, or arbitrary or capricious action. The 

contract's Option to Extend the Term of the Contract clause itself presupposes discretion, 

employing the word "may" (SOF ii 3). SWT's citation to Community Consulting 

International, ASBCA No. 53489, 02-2 BCA ii 31,940 ( compl. at 5), is factually 

distinguishable because that case involved allegations that the appellant was not fairly 

considered for task orders. Here, no competitive task orders were issued during the base 

period (SOF ii 13). 

Moreover, the government justified its decision not to exercise the first option 

year to some but not all NAT II contractors in a ten-page determinations and findings 

memorandum (SOF ii 12). The determination noted that the military was downsizing, 

reducing the need for commercial trucking services, that there was a similar decline in 

contracting personnel to administer the contracts, and that the contracts required high 

fixed costs for a 24-hour operations center and DBA insurance (id.). The determination 

concluded that awarding all options would "expose the contractors to unnecessary 

start-up costs with no real expectation of recovering their initial outlay" (id.). The 

determination further reasoned that these financial risks could affect the viability of the 

contractors and become a force protection issue (id.). Thus the failure to award option 

years to SWT was not done in bad faith nor was it an abuse of discretion or arbitrary or 

capricious. Therefore, the government provided S WT "fair opportunity" to compete and 

be considered for orders. In light of the government's discretion in determining whether 

to exercise an option and the lack of an obligation to do so, SWT could only have 

reasonably assumed that the contract would be for the base period. SWT alleges that the 

government failed to properly follow the evaluation criteria for exercising option years. 

This is not a reasonable belief. SWT does not point to any clause in the contract which a 

reasonable person could interpret to mean the government restricted its discretion to 

exercise options. Thus, SWThas not shown that there was a breach of the implied duty 

of good faith and fair dealing when the government declined to exercise the contract's 

option. 

SWT next asserts that the government required it to do specific tasks such as 

attending a post-award conference, working on a holiday, and incurring expenses for 

DBA insurance, SPOT authorization and SPOT-generated LOAs. SWT also states that 

the contracting officer encouraged SWT to "remain in a state of ready with trucks and 

personnel in anticipation of starting performance" despite knowing that mission needs 

would be significantly reduced (app. resp. at 3). However, the terms of the contract 

require the contractor to perform these tasks (SOF ii 4). SWT does not explain how the 

government's actions constitute a breach of the implied duty of good faith and fair 

dealing, given that the actions it complains of are provided for in the contract. As such, 

there was no breach of the implied duty of good faith and fair dealing. 

Since the nature of the bargain is central to honoring the reasonable expectations of 

the parties, we next turn to the bargain itself. SWT was awarded one of the contracts 

under the NAT II program. The NAT II program was a firm-fixed-price, multiple-award, 

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IDIQ (SOF ii 1). The government paid SWT the contract minimum order guarantee 

(SOF ii 5). The government had discretion under the contract as to whether to exercise the 

contract's option (SOF ii 3). Thus, the government honored the reasonable expectations of 

the parties and did not breach the implied duty of good faith and fair dealing. 

Finally, SWT also alleges that the government acted in bad faith.* It is well 

established that government officials are presumed to act in good faith. Road and 

Highway Builders, LLC v. United States, 702 F.3d 1365, 1368 (Fed. Cir. 2012). To prove 

that a government official acted in bad faith, a contractor "must show a 'specific intent to 

injure"' by clear and convincing evidence. Id. at 1369 (quoting Am-Pro Protective 

Agency, Inc. v. United States, 281F.3d1234, 1240 (Fed. Cir. 2002)). In deciding a 

motion for summary judgment, we must determine whether a reasonable fact finder could 

find by clear and convincing evidence that the government acted in bad faith. Am-Pro, 

281 F.3d at 1239-41. SWT has not alleged any facts to show that the government had a 

"specific intent" to injure SWT in any of its allegations. Moreover, even if the 

allegations were sufficient to demonstrate an intent to injure, they are just allegations and 

are not supported by citation to any evidence pursuant to Board Rule 7(c). Thus, a 

reasonable fact finder could not find by clear and convincing evidence that the 

government acted in bad faith. 

We have considered appellant's remaining arguments and find they have no merit. 

The government's motion for summary judgment is granted. Accordingly, the appeal is 

denied. 

Dated: 21November2016 

(Signatures continued) 

DAVID D' ALESSANDRIS 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

* It is unclear whether or not appellant is alleging bad faith or a breach of good faith and 

fair dealing. We will read appellant's assertion as alleging both, using the same 

arguments. 

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I concur 

~~ffet(-- Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

I concur 

~ RICHARD SHACKLEFORD 

Administrative Judge 

Vice Chairman 

Armed Services Board 

of Contract Appeals 

I certify that the foregoing is a true copy of the Opinion and Decision of the 

Armed Services Board of Contract Appeals in ASBCA No. 60315, Appeal of Smart Way 

Transportation Services, rendered in conformance with the Board's Charter. 

Dated: 

8 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals