ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of -- ) 

) 

Ricoh USA, Inc. ) 

) 

Under Contract No. W9124M-12-D-0001 ) 

APPEARANCES FOR THE APPELLANT: 

APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 59408 

Thomas L. McGovern III, Esq. 

Nicole D. Picard, Esq. 

Hogan Lovells US LLP 

Washington, DC 

Raymond M. Saunders, Esq. 

Army Chief Trial Attorney 

CPT Jessica E. Hom, JA 

Trial Attorney 

OPINION BY ADMINISTRATIVE JUDGE PAUL 

This is a timely appeal of a contracting officer's (CO's) final decision denying 

appellant Ricoh USA, Inc.'s (Ricoh's) claim in a total amount of$771,131.03. The 

Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109, is applicable. A hearing was 

held at the Board's offices; only issues of entitlement are before us for decision. 

FINDINGS OF FACT 

1. On 22 November 2011, the Army's Contracting Command at Fort Stewart, 

Georgia, issued Solicitation No. W9124M-12-T-0007 (R4, tab 2 at 1). This was a 

Request for Questions (RFQ) to "provide lease and flat rate maintenance including 

supplies ... of new Multifunctional Devices (MFDs) on a firm fixed price" (id. at 63 

of 77). The MFDs were to "be configured with copying, network printing, scanning, 

and faxing with audit capabilities, tailored to the needs of each organization/customer 

entity" (id.). The customer entities involved were the 3rd Infantry Division (3rd ID) 

and Fort Stewart's Garrison. The RFQ provided for a one-year base period (1 April 

2012-31March2013), as well as four, 12-month option periods. (Id. at 64 of77) 

2. The RFQ stated an estimated requirement of 820 MFDs ''in the initial phase 

of this program." It also provided: 

During the life of this contract, the Government expects to 

add or remove an undetermined number ofMFD's as 

requirements change due to organizational realignment or 
organizations added or deleted or combined. Any copiers 

installed after the initial installation date will terminate at 

the same time and be billed at the same monthly rate as the 

original copiers. 

The RFQ stated the expectation of "an undetermined and unlimited amount of on-site 

equipment moves during this contract period and these will be done by the offeror at 

no charge to the government." (R4, tab 2 at 63of77) 

3. The RFQ also provided: 

No guarantee is given that listed quantities will be leased. 

Estimated quantities are based on current number of MFDs 

approaching contract ending dates and projected new 

business. The contractor will provide IT support during 

the initial installation of the MFDs ... and when requested 

during the entire term of the contract. 

(R4, tab 2 at 66 of 77) 

4. The RFQ stated further: 

The government reserves the right to increase or decrease 

quantity of MFDs throughout the duration of the contract 

by modification. Government shall provide vendor with 

thirty days notice when requesting additions or deletions.f IJ 

(R4, tab 2 at 73 of 77) 

5. The RFQ also provided: 

15. Discontinuance of Service: Upon receipt by the 

contractor of written notice from the contracting 

officer, MFD service may be discontinued 30 days 

thereafter. The contracting officer may discontinue 

MFD services on shorter notice than specified above 

when agreed to by the contractor. The contracting 

officer may extend the original discontinuance date 

upon written notice to the contractor, provided such 

notice is furnished at least 15 days prior to the 

1 The RFQ stated in two places that ownership of the MFDs would remain with the 

contractor (R4, tab 2 at 63, 73 of 77). 

2 
original discontinuance date. A discontinuance 

notification will contain the following information: 

(a) MFD location by activity, building and room 

number, (b) MFD model and serial number, ( c) meter 

reading, and ( d) date MFD will be available for 

removal. The government will then make the MFD 

available for pickup by the contractor's technical 

representative. It will be the responsibility of the 

contractor to coordinate removal of the MFD with the 

army's authorized personnel. Removal of MFDs will 

be at the contractor's expense. There is no early 

termination fee, penalty or cost associated with not 

exercising option years. 

(R4, tab 2 at 76-77 of 77) 

6. The RFQ contained various pertinent FAR clauses, including 

FAR 52.216-18, ORDERING (OCT 1995), which stated: 

(a) Any supplies and services to be furnished under this 

contract shall be ordered by issuance of delivery orders or 

task orders by the individuals or activities designated in the 

Schedule. Such orders may be issued from 1 April 2012 

through 3 1 March 201 7. 

(b) All delivery orders or task orders are subject to the 

terms and conditions of this contract. In the event of 

conflict between a delivery order or task order and this 

contract, the contract shall control. 

( c) If mailed, a delivery order or task order is considered 

"issued" when the Government deposits the order in the 

mail. Orders may be issued orally, by facsimile, or by 

electronic commerce methods only if authorized in the 

Schedule. 

(R4, tab 2 at 57 of 77) Also included in the RFQ was FAR 52.216-21, REQUIREMENTS 

(OCT 1995), which provided: 

(a) This is a requirements contract for the supplies or 

services specified, and effective for the period stated, in the 

Schedule. The quantities of supplies or services specified 

in the Schedule are estimates only and are not purchased 

3 
by this contract. Except as this contract may otherwise 

provide, if the Government's requirements do not result in 

orders in the quantities described as "estimated" or 

"maximum" in the Schedule, that fact shall not constitute 

the basis for an equitable price adjustment. 

(b) Delivery or performance shall be made only as 

authorized by orders issued in accordance with the 

Ordering clause. Subject to any limitations in the Order 

Limitations clause or elsewhere in this contract, the 

Contractor shall furnish to the Government all supplies or 

services specified in the Schedule and called for by orders 

issued in accordance with the Ordering clause. The 

Government may issue orders requiring delivery to 

multiple destinations or performance at multiple locations. 

( c) Except as this contract otherwise provides, the 

Government shall order from the Contractor all the 

supplies or servi~es specified in the Schedule that are 

required to be purchased by the Government activity or 

activities specified in the Schedule. 

( d) The Government is not required to purchase from the 

Contractor requirements in excess of any limit on total 

orders under this contract. 

( e) If the Government urgently requires delivery of any 

quantity of an item before the earliest date that delivery 

may be specified under this contract, and ifthe Contractor 

will not accept an order providing for the accelerated 

delivery, the Government may acquire the urgently 

required goods or services from another source. 

(f) Any order issued during the effective period of this 

contract and not completed within that period shall be 

completed by the Contractor within the time specified in 

the order. The contract shall govern the Contractor's and 

Government's rights and obligation with respect to that 

order to the same extent as if the order were completed 

during the contract's effective period; provided, that the 

4 
Contractor shall not be required to make any deliveries 

under this contract after 31 March 2017. 

(R4, tab 2 at 58 of 77) 

7. The RFQ also contained FAR 52.217-6, OPTION FOR INCREASED QUANTITY 

(MAR 1989), which stated: 

The Government may increase the quantity of supplies 

called for in the Schedule at the unit price specified. The 

Contracting Officer may exercise the option by written 

notice to the Contractor within 3 days. Delivery of the 

added items shall continue at the same rate as the like 

items called for under the contract, unless the parties 

otherwise agree. 

(R4, tab 2 at 59of77) The RFQ included FAR 52.217-9, OPTION TO EXTEND THE 

TERM OF THE CONTRACT (MAR 2000), which provided: 

(Id. at 59-60) 

(a) The Government may extend the term of this contract 

by written notice to the Contractor within 60 days; 

provided that the Government gives the Contractor a 

preliminary written notice of its intent to extend at least 

30 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 

5 years 6 mos. 

8. Finally, the RFQ stated that quotes were due by 30 December 2011 at 

4:00 p.m. local time (R4, tab 2 at 1 of 77). 

9. On 12 December 2011, the government issued Amendment No. 0001 to the 

RFQ (R4, tab 3 at 1 ). Most importantly, the amendment clarified the estimated 

number of copies for each leased MFD per month (id. at 2-5). It also added the full 

texts of FAR 52.000-4014, WAGE DETERMINATION (4 DEC 02); and FAR 52.222-41, 

SERVICE CONTRACT ACT OF 1965 (Nov 2007) (id. at 5-6). 

5 
10. On 16 December 2011, Ricoh submitted various clarification requests to 

the government. Initially, it requested that the government remove the following 

language from item 15 of the statement of work (SOW): "Removal of MFDs will be 

at the contractor's expense. There is no early termination fee, penalty or cost 

associated with not exercising option years." (Supp. R4, tab 3 at 41) Ricoh stated that 

this language was in conflict with the termination for convenience language contained 

in subsection (1) of FAR 52.212-4, CONTRACT TERMS AND CONDITION-COMMERCIAL 

ITEMS. It specifically cited this sentence: 

Subject to the terms of this contract, the Contractor shall 

be paid a percentage of the contract price reflecting the 

percentage of the work performed prior to the notice of 

termination, plus reasonable charges the Contractor 

can demonstrate to the satisfaction of the Government 

using its standard record keeping system, have resulted 

from the termination. 

(Supp. R4, tab 3 at 41) As part of this clarification request, Ricoh also argued that the 

absence of early termination fees was in conflict with common commercial practices, 

as well as Pub. L. No. 103-355. It stated that "[i]t is customary in the commercial 

copier industry to enter into a lease with a decreasing payment schedule." Ricoh 

concluded that the lack of an early termination fee was inconsistent with common 

practices. It requested that the language be deleted from the RFQ. (Id. at 42) 

11. Ricoh also sought clarification of the following, pertinent items: 

What type of contract is Ft Stewart implementing? 

Lease contract under FAR is multiyear, if this is 

Ft. Stewart's intension [sic], please confirm[.] 

Is this a GSA award? 

Is Ft. Stewar[t] looking for a firmed fixed price 

request? 

(Supp. R4, tab 3 at 43) 

12. Mr. Jeffrey Talley, Ricoh's sales representative for Fort Stewart, forwarded 

a copy of the questions to Mr. Anthony Justi, the Garrison's contracting officer's 

representative (COR). In his cover letter, Mr. Talley stated: 

Here are the questions sent to contracts. I would suggest 

that when Contracts contacts you, please emphasize on the 

6 
question regarding cancellation that Ft Stewart is not 

looking to cancel the entire contract but only units that 

may no longer be needed or have funded out[.] On the 

existing contracts Ft. Stewart has actually added units. 

(Supp. R4, tab 1 at 49) 

13. On 20 December 2011, Ms. Marvene Falgout, a government contract 

specialist, forwarded an email to Ricoh, in which she wrote: "Will review your 

questions.... You can bid your schedule with our solicitation or you can bid open 

market. Thanks." (App. supp. R4, tab 50 at 149-50)2 

14. On 21December2011, the Army issued Amendment No. 0002 to the RFQ. 

The amendment extended the closing date from 30 December 2011 to 9 January 2012. 

(R4, tab 4 at 1) It also revised the RFQ's SOW to increase the estimated number of 

copies for certain MFDs. The amendment reiterated that the RFQ contemplated a 

requirements-type contract; it also stated, once again, that "[t]here is no early termination 

fee, penalty or cost associated with not exercising option years." (Id. at 2, 16) 

15. On 6 January 2012, Ricoh forwarded its quote to the Army in which it set 

forth unit prices for the various contract line item numbers (CLINs) (R4, tab 5). On 

9 January 2012, the Army issued Amendment No. 0003 to the RFQ. It stated: 

THE ABOVE REFERENCED SOLICITATION IS 

HEREBY AMENDED TO ADD QUESTIONS AND 

ANSWERS FROM CONTRACTORS, CHANGE THE 

STATEMENT OF WORK AND ADD CLINS. SEE 

SUMMARY OF CHANGES. 

(R4, tab 6 at 1 ). The amendment also extended the required response date to 

13 January 2012 (id. at 2). As a result, Ricoh retracted its quote (supp. R4, tab 7 at 1). 

16. Regarding Ricoh's questions and assertions about the lack of an early 

termination fee associated with not exercising option years, the Army, through 

Amendment No. 0003, answered as follows: 

ANSWER: there is no early termination fee, penalty or 

cost associated with not exercising option years IS NOT 

in conflict with the FAR clauses. This is in clause 

2 Through at least two pieces of correspondence, Ricoh acknowledged that the RFQ 

precluded an early termination fee (app. supp. R4, tab 49 at 134; supp. R4, tab 5 

at 140-41). 

7 
52.217-9, OPTION TO EXTEND THE SERVICE. We 

are not talking about termination of contract, we are 

talking about not excertion [sic] the OPTION YEARS. 

Option years are just that - Options. The government 

request you price the option years, however, we might 

not exercise the option due to money, deployment, etc. 

(R4, tab 6 at 13) 

17. Based upon the Army's answers to its questions, particularly regarding the 

lack of an early termination fee, Ricoh's employees formulated a response to the RFQ. 

However, in addition to the price quote which it had previously submitted and 

withdrawn, Ricoh's response included two other elements which had not been solicited 

by the Army's RFQ. 3 One was a so-called "TECHNICAL PROPOSAL RESPONSE" 

which encompassed more than 70 pages (R4, tab 8, passim). Ricoh submitted a third 

part which contained additional supporting documentation (supp. R4. tab 10). In its 

technical proposal, Ricoh responded to the paragraphs of the Army's SOW. 

Specifically, Ricoh stated a period of performance of 60 months, not the base period of 

12 months and 4 option periods contained in the RFQ (R4, tab 8 at 264 ). 

18. More to the point, disregarding the plain language contained in both the 

RFQ and Amendment No. 0003, Ricoh's technical proposal included a section 

defining "EARLY TERMINATION CHARGES." It provided: 

Equipment leased under this agreement may be terminated 

at any time during a Government fiscal year by the 

Ordering Agency's Contracting Office responsible for the 

delivery order in accordance with FAR 52.212-4, 

paragraph (1) Termination for the Government's 

Convenience. If the Government exercises its rights 

pursuant to FAR 52.212-4(1), or discontinues the lease 

(exclusive of a non-appropriation), the Government agrees 

to return the leased equipment and pay Contractor the 

remaining Lease Payments due for the Lease Term from 

the due date of the termination payment ("Termination 

Charge"). If the Government discontinues, terminates, or 

fails to renew part of an order, irrespective of reason, the 

Government shall pay that portion of the Termination 

3 Ricoh's price quote is set forth at Rule 4, tab 8 at 336-38. In the cover letter which 

accompanied its price and technical quotes, Ricoh acknowledged.receipt of the 

amendments which included the Army's responses to its questions (id. at 258). 

8 
Charge equal to the percentage of terminated or not 

renewed equipment. 

• The Termination Ceiling Charge represents the value of 

the work, exclusive of on-going maintenance and/ or 

services, that the Contractor may claim performed at 

any given time during the Lease Term and represents 

the amount due for that work in the event of a 

termination for convenience of the lease or failure to 

renew a lease prior to expiration of the Lease Term for 

any reason other than lack of funding. 

• Termination ceiling charges will apply for each year of 

the lease term (See FAR 17 .1 ). The Ordering Agency 

and contractor shall establish a Termination Ceiling 

amount. 

• The Contracting Officer shall insert the Termination 

Ceiling Charge for amount of the first year in the order 

and modify it for successive years upon availability of 

funds. 

• No claim will be accepted for future costs: supplies, 

maintenance, usage charges or interest expense beyond 

the date of cancellation. 

• Iri accordance with the bona fide needs rule, all 

termination charges must reasonably represent the 

value the Ordering Agency received for the work 

performed at cancellation based upon the shorter lease 

term. 

• No termination cost will be associated with the 

expiration of the lease term. 

(R4, tab 8 at 265) The language contained in Ricoh's technical proposal 

notwithstanding, there is no record evidence demonstrating that the parties ever 

established a termination ceiling amount. 

19. On 7 February 2012, the Army notified Ricoh that it was the apparent low 

bidder (supp. R4, tab 10 at 902). On 9 February 2012, the Army forwarded a copy of 

the contract to Ricoh. It stated: "It is a delivery order requirements type contract. We 

9 
will be cutting the 1st two delivery orders as soon as budget gets us the purchase 

requests here. You will get two, one will be for Garrison and one will be for Division. 

Congrats." (Supp. R4, tab 11 at 427) 

20. The contract's "Period of Performance" was set forth as follows: 

Base Period 

Option Period 1 

Option Period 2 

Option Period 3 

Option Period 4 

1April2012- 31March2013 

1 April 2013 - 31 March 2014 

1 April 2014 - 31 March 2015 

1 April 2015 - 31 March 2016 

1 April 2016 - 31 March 2017 

There is no early termination fee, penalty or cost 

associated with not exercising option years. 

(R4, tab 1 at 56) 

21. Ms. Becky Niksch, the CO, awarded the contract on Standard Form 1449 

(REV 3/2005). With respect to the scope of the award, item 29 stated "SEE 

SCHEDULE." (R4, tab 1at1) By the phrase, "SEE SCHEDULE," the CO was 

conveying her intent only to accept Ricoh's schedule of prices. Accordingly, the 

Army did not incorporate into the contract either Ricoh's technical proposal or its 

supporting documentation. The CO explained that the Army would have altered the 

solicitation if it included in the contractual award items that were not contained in the 

RFQ, as amended, as they were nonresponsive. If the Army had included these items 

in the contract, it would have been required to resolicit the contract to be fair to the 

other offerors. (Tr. 1/159-60) Ms. Niksch's testimony is corroborated by the fact that 

the physical contract, as awarded, contained only Ricoh's pricing schedule. It did not 

include the technical proposal submitted by Ricoh (R4, tab l,passim). The contract 

did contain all of the standard FAR clauses which were a part of the RFQ (id. 

at 31-55). 

22. As awarded, the contract thus functioned as a master pricing agreement. It 

provided for the issuance of delivery orders which served as offers to be accepted by 

Ricoh through actual performance (R4, tab 1 at 45). 

23. During the contract's base period of performance, which extended from 

1June2012 to 31 May 2013, the Army issued five delivery orders. using Standard 

Form 1449 as a contractual vehicle (R4, tabs 9, 11, 14, 16, 17). Through the first 

delivery order, the Army leased 580 MFDs for the 3rd ID; and by the second delivery 

order, the Army leased 280 MFDs for Fort Stewart's Garrison (R4, tabs 9, 11). 

10 
24. As a result of congressionally-mandated budget cuts known as 

"sequestration," the overall amount of funds available to Fort Stewart during the 

contract's first option year declined substantially. Accordingly, government officials 

such as Ms. Polly Williams, the 3rd ID's resource management officer. reviewed all of 

the division's contracts to determine where and how steeply corresponding cuts were 

to be made. As a result, the number ofMFDs ordered by the division was 

substantially reduced during the contract's first option period. (Tr. 2/8-15) 

25. As a result of the reduction in funding, the Army, in early March 2013, 

investigated the usage rate for the approximately 584 MFDs leased by the division 

through the Ricoh contract. Of this total, the Army concluded that 88 of the machines 

had a usage rate of less than 8 percent. These MFDs were "locked up in a building 

that a unit moved out of several months ago (these are not units that are deployed and 

will return to these buildings)." (Supp. R4, tab 43 at 418) 

26. In April 2013, representatives of the Army and Ricoh met to determine 

whether the government might issue a delivery order for MFDs for another unit at 

Fort Stewart; the hospital. As part of the conversation, Ricoh's sales representative, 

Mr. Talley, stated that the pricing under the contract at issue in this appeal was not fair 

to Ricoh, at least partially because the CO had not inserted an early termination fee 

clause in that instrument. (Tr. 2/27-29) The discussions relating to the hospital's 

requirements did not come to fruition (tr. 2/30). 

27. On 12 April 2013, the Army forwarded the following email to Ricoh: 

The contracting office was notified today that the 3rd 

Infantry division is planning to cut 203 devi[ c ]es off of the 

first option period. 

Based on the Statement of Work, paragraph 4. Period of 

Performance, "There is no early termination fee, penalty or 

cost associated with not exercising option years." In 

Paragraph 15, "Upon receipt by the contractor of written 

notice from the contracting officer, MFD service may be 

discontinued 30 days thereafter." 

I also looked at the terms in FAR 52.218-18 and 

FAR 52.218-19 that sets specific ordering limits (no less 

than 1 and no more than 20 in a single task order). 

The contract also contains the clause 52.216-21 

Requirements. 

11 
I could not find any provisions that would allow for a 

termination fee. 

(Supp. R4, tab 17 at 215) On that same day, Ricoh responded: "Am checking on it as 

well. In the meantime, can you provide the Bands [sic - devices] by quantity Division 

is wanting to return." (Id. at 214) 

28. On 16 April 2013, the Army provided notification to Ricoh "of the 

government's intent to exercise the next option period for the Copier Leases." The 

Army also stated: "If the Government elects to exercise this option, it will be done by 

modification to the contract and will be issued at least thirty (30) days prior to the date 

for commencement of services for the option period." (Supp. R4, tab 18) 

29. On 26 April 2013, the Army forwarded an email to Ricoh "to comply with 

the 30 day notification requirement set forth in the base contract of any changes in 

services." It stated, in part: 

(R4, tab 19) 

The Delivery order in effect for 3 ID copiers is due to 

expire on 31 May 2013. Our office has confirmed that the 

3ID requirements for the next delivery order will be 

reduced by 213 MFDs. Garrison has not provided exact 

numbers, and does not expect any major fluctuation in 

quantities in the foreseeable future. 

30. On 22 May 2013, the Army issued Modification No. P00005 to exercise 

the first option period. It stated, in part: "This supplemental agreement is issued to 

exercise the option to extend the term of the contract for the period 1 Jun 2013 through 

31 May 2013 at prices set forth in the Bid Price Schedule for the 1st option period."4 

The modification also included a "RELEASE OF CLAIMS," which provided: 

In consideration of the modification agreed to herein as 

complete and equitable adjustment for the changes 

incorporated herein, the Contractor hereby releases the 

Government from any and all liability under this contract 

for further equitable adjustment attributable to such facts 

4 The end date of 31 May 2013 was a typographical error. It should read: "31 May 

2014." (Tr. 2/34) 

12 
or circumstances giving rise to the aforesaid changes 

without exception. 

(R4, tab 22 at 454) A representative of Ricoh signed a copy of this modification (id. 

at 455). The modification did not, in and of itself, alter the number ofMFDs ordered 

by the government. 

31. On 29 May 2013, the Army issued Delivery Order No. 0006 for the 3rd ID. 

It leased 3 72 MFDs (R4, tab 24 ); and, on the same date, it issued Delivery Order 

No. 0007 for the Garrison. It ordered 279 MFDs, which was only one less than it had 

ordered during the contract's base period. (R4, tab 25) 

32. On 17 September 2013, Ricoh forwarded a certified claim to the CO in a 

total amount of$771,131.03, plus interest. It contended that the Army, by 

discontinuing the lease of 208 MFDs during the contract's first option period, had 

partially terminated the contract for convenience. Alternatively, Ricoh argued that the 

delivery orders executed during the first option year constituted a unilateral deductive 

change order for which it should receive compensation. (R4, tab 28 at 1-3) In 

addition, Ricoh alleged that the Army had accepted its technical proposal which 

envisioned the imposition of early termination fees for the discontinued MFDs (id. 

at 4). 

33. On 23 April 2014, the Army issued Modification No. P00007, which 

exercised the second option period. The modification contained the identical 

"RELEASE OF CLAIMS" language which was included in Modification No. P00005. 

A representative of Ricoh signed the document. (Supp. R4, tab 40; finding 27) As 

was the case with Modification No. P00005, this modification did not, in and of itself, 

alter the number of MFDs ordered by the government. 

34. On 25 April 2014, the CO issued a final decision denying Ricoh' s claim in 

its entirety (R4, tab 31 ). This appeal followed. 

35. Subsequently, Ricoh responded to the Army's interrogatory no. 16 by 

stating that it had sold the discontinued MFDs for a total price of$183,325.10. At the 

hearing, Ricoh confirmed the correctness of this response. {Tr. 2/62-68) 

DECISION 

The crux of this appeal revolves around several issues of contractual 

interpretation. Indeed, the parties' disputes encompass even the existence and scope of 

the underlying contract. However, a detailed analysis of the various contractual 

provisions at issue demonstrates a clarity which is lacking in many of the parties' 

allegations. Specifically, this was a requirements contract which, by its very nature, 

13 
gave the Army a great deal of flexibility in ordering MFDs from Ricoh (finding 6). 

Further, the RFQ stated plainly that "the Government expects to add or remove an 

undetermined number ofMFD's as requirements change due to organizational 

realignment or organizations added or deleted or combined" (finding 2). The RFQ 

reiterated this point when it provided: "No guarantee is given that listed quantities will 

be leased. Estimated quantities are based on current number of MFDs approaching 

contract ending dates and projected new business." (Finding 3) Similarly, the RFQ 

stated: 

The government reserves the right to increase or decrease 

quantity ofMFDs throughout the duration of the contract 

by modification. Government shall provide vendor with 

thirty days notice when requesting additions or deletions. 

(Finding 4) Finally, the RFQ provided for "Discontinuance of Service" for individual 

MFDs. It stated, in pertinent part: "There is no early termination fee, penalty or cost 

associated with not exercising option years." Thus, the context for the "no early 

termination fee" statement was the discontinuance of quantities of MFDs during the 

exercised option years, not the actual exercise of the options themselves. (Finding 5)5 

Ricoh's sales representative, Mr. Talley, was aware of the context of this "no early 

termination fee" statement. In a cover letter accompanying Ricoh's questions, he 

stated that "regarding cancellation ... Ft. Stewart is not looking to cancel the entire 

contract but only units that may no longer be needed or have funded out." 

(Finding 12) Through clarification requests which it submitted in response to the 

RFQ, Ricoh asked the Army to remove this clause (finding 10). The Army declined 

(finding 13). 

The scope of the contract itself is disputed by the parties. First, we note that the 

solicitation, as issued, took the form of an RFQ, not an RFP (finding 1 ). This is 

significant because the Army was merely soliciting price quotes, not technical 

proposals. By submitting materials that were outside the scope of the RFQ, Ricoh was 

nonresponsive to the RFQ. Accordingly, the CO accepted only Ricoh's 

"SCHEDULE" of prices (finding 21). This fact is corroborated by the physical 

contract which the CO executed and forwarded to Ricoh. It contained only Ricoh's 

pricing schedule. It did not include Ricoh's technical proposal which contained the 

proposed, changed early termination fee language. (Findings 18, 21) Therefore, that 

language was not part of the contract. 

Ricoh makes several arguments which detract from the clarity of our findings. 

For example, it argues that the Army accepted its "offer" which contained an early 

5 All of these cited provisions were contained in the contract as awarded (R4, tab 1, 

passim). 

14 
termination charges clause (app. br. at 14-16). This is simply not the case. As we 

have concluded, the Army accepted only accepted Ricoh's schedule of prices and did 

not include its technical proposal in the contract, as awarded. 

Ricoh also argues that the Army failed to notify it that it did not intend to accept 

its technical proposal ( app. br. at 16-18). This is not correct. Through the contractual 

award, the CO referenced only Ricoh's schedule of prices. Moreover, the copy of the 

contract which she executed and forwarded to Ricoh did not contain the technical 

proposal. These facts, taken together, placed Ricoh on notice of the contract's scope. 

Despite this conclusion, Ricoh made no further inquiries and, subsequently, engaged in 

contractual performance upon receipt of various delivery orders. See, e.g., ADT 

Construction Group, Inc., ASBCA No. 55125, 06-1BCA~33,237 at 164,702-04, 

recon. denied, 07-1BCA~33,501, affirmed, 259 F. App'x 310 (Fed. Cir. 2007). 

Ricoh also contends that the termination charges clause in the solicitation was 

limited to the exercise of option years (app. br. at 30-32). In formulating this 

argument, Ricoh ignores the clause's context. As we have stated, the clause was 

developed in the context of the discontinuance of certain quantities of MFDs during 

the exercised option years, not the actual exercise of the options themselves. 

Finally, we agree with Ricoh's argument that it did not release its claim for 

early termination fees and related expenses by signing modifications to the contract 

(app. br. at 32-35). The release language contained in the modifications applied by 

their terms only to "changes incorporated herein." The only changes made by the 

modifications were the exercise of contractual options. Accordingly, the language 

does not apply to the delivery orders which were subsequently issued by the Army and 

did not contain releases. (Findings 30, 33)6 

We have carefully analyzed Ricoh's remaining arguments and reject them. 

6 Based upon our denial of Ricoh's claim, we reach no conclusion regarding its sale of 

discontinued MFDs (finding 35). 

15 
CONCLUSION 

The Board denies the appeal. 

Dated: 5 December 2016 

I concur 

---- -----) / . ,/ 

-~:~~r tlf;~~ Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

MICHAEL T. PAUL 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

I concur 

r{}k 

~~~CKLEFORD 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. 59408, Appeal of Ricoh 

USA, Inc., rendered in conformance with the Board's Charter. 

Dated: 

16 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals