ARMED SERVICES BOARD OF CONTRACT APPEALS

OPINION BY ADMINISTRATIVE JUDGE SMITH

ON RESPONDENT’S MOTION TO DISMISS

Appellant, Hallym Furniture Industrial Co., Ltd

. (Hallym ) , appeals a contracting officer’s final decision (COFD) that denied Hallym’s certified claim seeking reinstatement of its Blanket Purchase Agreement (BPA) with Respondent

, Department of the Army 411 t h Contracting Support Brigade , Korea (the government)

. Alternatively, Hallym’s claim sought an equitable adjustment for three different types

o f costs arising from the cancellation of the BPA in the total amount of 169,500,000

Korean w on (approximately $1 51,287.95 ). 1 The government has moved to dismiss the appeal, a rguing that the BPA is not a valid contract as required by the Contract Disputes Act (CDA), therefore the Board lacks subject matter jurisdiction over Hallym’s appeal

. Hallym argues that the BPA is a contract because Hallym could not
refuse a call order once it was issued. On balance, w e find that this BPA is similar in

nature to other BPAs that the Court of Appeals for the Federal Circuit has held to be

non

- contractual

, thus we dismiss the appeal for lack of jurisdiction.

STATEMENT OF FACTS FOR PURPOSES OF THE MOTION

On April 6, 2020, t he parties e xecuted BPA No. W91QVN

- 20

- A

- 0012 for repair of Government

- owned wooden furniture

. ( R4

, t ab 1 ) The BPA indicates that
the BPA “is not a contract ” ( i d. at 5 2 ), but the BPA contains contrary descriptive verbiage as well. 3 The BPA provide d that individual repairs or groups of repairs

1 The symbol for Korean w on is “ ₩ ” so Hallym’s total claim amount is shown as

“₩ 169 .5 M

. ”

2 Paragraph 2 of the Performance Work Statement reads: “ TERM OF BPA : This BPA
is not a contract. If the contractor fails to perform in a manner satisfactory or no longer required by the g overnment, this BPA may be cancelled with 30 days written notice to the contractor by the Contracting Officer (KO). ” ( R4

, t ab 1

at 5 )

3 For example, and most notably, “Type of Contract. The g overnment contemplates
award of a Fixed Unit Price, Multiple BP A’s contract resulting from this
solicitation

. ” ( R4

, t ab 1 at 21 ) (emphasis omitted ) . Also, “[t] he Contractor Appeal of

- ) ) Hallym Furniture Industrial Co., Ltd

. ) ASBCA No. 62782 )
Under Contract No. W91QVN

- 20

- A

- 0012 )2 would be separately issued as “purchases” or “calls” or “call orders.” 4 ( Id. at 8 ) The BPA provided that call orders would be issued on a rotating basis between Hallym and
other awardee contractor ( s )

. ( Id. at 8 ) The BPA did not commit the g overnment to issue any call orders . Instead

, paragraph 13 of the Performance Work Statement provides that the government’s obligation arises only from call orders actually made
under the BPA : “ EXTENT OF OBLIGATION : The Government is obligated un der this BPA only to the extent of authorized purchases [ i.e. call orders] actually made
under the BPA. ” ( I

d

. at 8 ) T he BPA indicates that “[t] he Government may require continued performance of any services within the limits and at the rates specified in
the contract ” ( id

. at 21 ).

After award of the BPA, t he Government issued ten call orders that were performed by Hallym

. ( R4

, t ab 10 at 5, 7; g ov ’ t r eply at 4 ( “appellant . . . performed all of the ordered repair work.” ) ) Dis agreements arose , however, with regard to the prices used by Hallym in its invoice s , which were higher than in Hallym’s BPA price proposal. ( R4

, t abs 13, 17

- 18 , 23

- 27 ) To correct what it perceived to be defects in Hallym’s invoices, t he government itself generated the final invoice for Hallym’s work (R4

, t ab 21 ; app. supp. R4

, t ab 4 ), but there is no evidence that the final invoice has been paid. ( ( g ov ’ t. r eply b r. at 5 ) ( Appellant has not signed or acknowledged the final
invoice ) )

.

Based upon the g overnment’s opinion regarding Hallym’s “ unsatisfactory performance ” relating to the invoice s , the c ontracting o fficer notified Hallym on September 21, 2020, that the BPA would be cancelled in 30 days because “[Hallym] failed to perform this BPA services ( sic ) in a manner satisfactory to the Government.” ( R4 , t ab 20 ) 5 A written dialogue ensu ed where Hallym attempted to persuade the contracting officer to retract the cancellation notice

. ( R4

, t ab s 2 2

- 27 ) The dialogue

shall maintain own facility (minimum of 198m2 [60 Pyeong]) to perform this

contract requirements ( sic ) for the entire contract period. ” ( Id. at 8 ) Also,

“ [t] he Government may require continued performance of any services within the limits and at the rates specified in the contract. ” ( Id. at 21 ) A word search of the BPA finds 45 uses of the word “contract,” many of which are incidental
like “Section I

-- Contract Clauses” ( id. at 14) , but approximately 10 of which

are not i.e. the clauses cited above . A document that the government intends
not to be a contract should minimize use of the word “contract

. ” Instead,

“BPA” should be used to desc ribe t he agreement

. 4 The BPA uses all three terms to refer to the repair orders issued under the BPA . For purposes of this decision, we use the term “call orders.”

5 The BPA provides that “[i] f the contractor fails to perform in a manner satisfactor y or no longer required by the Government, this BPA may be cancelled with

30 days written notice to the contractor by the Contracting Officer

. ” ( R4

, t ab 1

at 5 )3 devolved into allegations by both parties of “ lack of business integrity and ethical business practices ” (the government’s allegation against Hallym, ( R4

, t ab 24 at 2 ; see also g ov ’ t. r eply b r. at 2) ) and a “gross administrative error” and improper or illegal changes to government documents (Hallym’s allegation s against the government)

. ( Complaint at 6; se e R4

, t ab 25 )

When the g overnment refused to withdraw the cancellation notice , instead finalizing the cancellation on November 11, 2020

, (R4

, t ab 27)

, Hallym submitted a certified claim on November 25 , 2020 , seeking r einstatement of the BPA or, in the alternative, ₩169.5M for bid preparation costs, facility lease costs, and lost future profits

– but not for payment of the government

- generated invoice

. ( R4

, t ab 2 8 ) The

g overnment denied Hallym’s claim in full with a COFD issued on December 7, 2020. ( R4

, t ab 2 9 ) The COFD addressed each of Hallym’s claim allegations regarding the
BPA bid

, award

, price

, invoice process , and claimed financial injuries as well as the

g overnment’s basis for canceling the BPA

. Id. This app eal timely followed the COFD.

DECISION

I. Standard of Review

We review the government ’ s motion to dismiss for lack of jurisdiction pursuant
to the standards of F ED

. R. C IV

. P.

. 12(b)(1). L

- 3 Commc ’ ns Integrated Sys., L.P

., ASBCA Nos. 60713, 60716, 17

- 1 BCA ¶ 36,865 at 179,624 (applying Rule 1 2(b)(1) because Board may look to Federal Rules of Civil Procedure for guidance where
Board ’ s rules are silent). When a motion to dismiss pursuant to F ED

. R. C IV

. P.

12 (b)(1) denies or controverts allegations of jurisd iction, only uncontroverted factual allegations are accepted as true for purposes of the motion, and other facts underlying the jurisdictional allegations are subject to fact

- finding based on the Board ’ s review of
the record. Cedars

- Sinai Med

. Ctr

. v. Watk ins , 11 F.3d 1573, 1583

- 84 (Fed. Cir. 1993); CCIE & Co ., ASBCA Nos. 58355, 59008, 14

- 1 BCA ¶ 35,700 at 174,816.

T he government’s motion distinguish es between a facial attack on the Board’s jurisdiction and a factual attack , and the different standards tha t apply to our review of factual allegations (g ov ’ t. r eply b r. a t 2

- 3 ) . Though this digression is not incorrect , it is unnecessary because the government’s motion to dismiss essentially relies upon no
facts at all save for the BPA itself and, perhaps, the written content of Hallym’s
certified claim. Hallym , as the proponent of the Board ’ s jurisdiction, bears the burden of proving the Board ’ s subject matter jurisdiction by a preponderance of the evidence

, which includes showing the existence of a valid contract

. See 41 U.S.C. § 7105(e)(2) ; General Mills, Inc. v. United States , 957 F.3d 1275, 1284 (Fed. Cir. 2020); Reynolds v. Army & Air Force Exch

. Serv

. , 846 F.2d 746, 748 (Fed. Cir. 1988); United Healthcare
Partners, Inc ., ASBC A No. 58123, 13 BCA ¶35,277 at 173,156

. S ee also Crewzers Fire Crew Transp., Inc. v. United States , 741 F.3d 1380, 1382 (Fed. Cir. 2014).4 II. BPAs a re Generally n ot Contracts , and the BPA Here is no Exception

Fundamental contract law dictates that there can be no contract without mutual obligations between the parties. See Kam

- Almaz v. United States , 682 F.3d 1364, 1368 (Fed. Cir. 2012); Night Vision Corp. v. United States , 469 F. 3d 1369, 1375 (Fed. Cir. 2006) . Specifically, t he Court of Appeals for the Federal Circuit has held that BPAs that do not impose binding obligations up on the parties are not contracts. Crewzers

, 741 F.3d at 1384; Modern Sys. Tech. Corp. v. United States , 979 F.2d 200, 206 (Fed.
Cir. 1992) (“ absence of mutuality of obligation leads to the conclusion that the parti es lacked the requisite contrac tual intent ”) ; see also See Ridge Runner Forestry v.

V

eneman, 287 F.3d 1058 (Fed. Cir. 2002). 6 In particular, where the government is not obligated to place call orders, as here, the BPA “reflect[s ] illusory promises that do not impose obligations on either party.” Crewzers, 741 F.3d at 1382

– 83.

T he g overnment’s reliance upon Crewzers and Mode rn Sys. Tech. is apt, al beit
with a caveat

. D espite the clause stating that “ [ t ] his BPA is not a contract” here, the parties do not address the fact that the BPA also contain s numerous clauses , discussed above, that refer to the document as a “contract.” ( See

, e.g. R4

, t ab 1 at 21 ( Type of

Contract ) ) While the internal contradictions in the BPA here, and the government’s
failure to address them

, present a slightly different factual predicate tha n that found in

Crewzers and Modern Sys. Tech.

, 7 the government ’s motion go es beyond the conclusory self

- characterization in the BPA and demonstrate s that the nature of the
BPA itself is , in fact, non

- contractual. For example, as in Crewzers and Modern Sys. Tech, Hallym’s BPA did not require either party to take action until a call order was placed and accepted

, supplying the consideration and mutual obligations missing from the BPA to create a contractual relationship between the parties

. T hus, Hallym’s BPA
is “a set of ground rules as it were, and no obli gations are assumed by either party until orders are given by the Government and accepted by the contractor.” Modern Sys
Tech

. , 979 F.2d 200 at 204

. On that key question, Crewzers and Modern Sys. Tech

.

are on point and we hold that the BPA here lacks mutual obligations and therefore is not a binding contract.

6 The government also cites to McLeod Grp. v. United States

, 840 F. App’x 525 (Fed. Cir. 2020), an unpublished Federal Circuit decision

, and Zhengxing v. United

States , 204 F. App ’ x 885 (Fed. Cir. 2006), which is “not citable as precedent.” Rather than rely upon unpublished and non

- precedential decisions, we instead refer primaril y to Crewzers and Modern Sys. Tech.

, which are valid and binding precedent and, except as noted below, on point with this appeal

. 7 Our review of Crewzers , Modern Sys. Tech., McLeod and Zhengxing f ound no
indication of similar internal contradict ions i n those BPAs

.5 T he g overnment’s hypotheticals at pages 12

- 13 of its reply brief

, that the Board would not possess jurisdiction if the Government had simply stopped issuing call
orders to Hallym instea d of canceling the BPA, or if the Government had cancelled the BPA for a reason unrelated to Hallym’s contract performance

, or without stating a reason at all, is persuasive and further illustrates the non

- obligatory

, therefore non

contractual nature of the BP A. By plain reading of the provision that permits the cancelation of the BPA upon 30 days notice, t he government had the prerogative to do exactly what it did here

– cancel the BPA for any reason or none at all, and certainly when the government became di ssatisfied with Hallym’s performance related to it s invoices

.

Hallym attempts to distinguish its BPA from those found not to be contracts by arguing that Hallym could not refuse call orders once they were issued by the
government , a so

- called obligation not found in Crewzers that, Hallym argues, makes
the BPA a valid contract (app. br. at 7

- 14)

. Even if true, that still does not provide
sufficient contract consideration or a mutual obligation that make s the BPA a contract where the government is under no obligation to issue any call orders

. See Modern Sys. , 979 F.2d at 204 (citing Gavin, Gov ’ t Requirements Contracts , 5 P UB

. C ONT

. L. J. 243, 246 (1972)) (“Usually the parties merely arrange to do business when the government places an order at t he unit price named in the [BPA]. In s uch an agreement, there is noth ing in writing which requires the government to take any ascertainable quantity or amount”). And we do not agree with Hallym’ s contract interpretation anyway. The BPA here provided that the government ’ s obligations were created upon issuance of call orders ( R4

, t ab 1 at 8 )

, which must apply equally to Hallym

– the parties’ mutual obligations do not arise until the government initiates a
call order that is accepted by Hallym

. Modern Sys. Tech., 979 F.2d at 204

. T he BPA
here did not contain a n express provision where Hallym would only perform call orders that it was “willing and able” to perform, as existed in Crewzers

, 741 F.3d

at 1381 . It also did not explicitly provide that “[e] ach or der that the [government] places and the contractor accepts becomes an indi vidual contract,” as in Modern Sys.
Tech

. , 979 F.2d at 204 (emphasis added)

. But these clauses are little more than helpful
statements of the obvious

– each call order cannot become a contract until there is an offer and acceptance. As a result, t he lack of a similar clause does not transform Hallym’s BPA into a contract.

III. The Board’s Jurisdiction i s Limited to Call Order Claims , but None are
Presented Here

As discu ssed above, although Hallym and the government were parties to ten call orders, each of which wa s undisputedly a contract within the purview of the6 CDA, 8 the BPA itself is not a contract and, contrary to Hallym’s argument at page 14 of its opposition, Hall ym’s claim does not allege injury or costs related to the performance of Hallym’s ten call orders. ( R4

, t ab 28 ) As the government noted in its

Answer at 57

, Hallym may have som e right to submit a call order claim if it suffered recoverable damage s during call order performance (including, it appears, to seek payment upon the final invoice)

, but such claims were not made in Hallym’s certified claim, were not addressed in the COFD, and we have no authority to adjudicate them in this appeal.

CONCLUSION

The government’s motion is GRANTED and the appeal is DISMISSED for lack of jurisdiction.

Dated: September 2 , 2021

BRIAN S. SMITH
Adm inistrative Judge
Armed Services Board of Contract Appeals

(Signatures continued)

8 The government’s motion acknowledges that the call orders issued to Hallym were

CDA contracts. ( See

, e.g. , g ov ’ t. r eply b r. at 9 ( Upon the placement of a call order under a BPA, the call would become the contract, which then adopts the

terms of the BPA; as a matter of law, for purposes of Contract Disputes Act jurisdiction; thus making ‘ any interpretation required of the terms of the BPA

. .

. an interpretation of the terms of [the call orders placed under the BPA] since
those orders were the vehicles that formed the contracts. ) ) (quoting Hewlett

Packard Co. , ASBCA Nos. 57940, 57941, 13 BCA ¶ 35,366 at 173,548 )

.7 I concur

RICHARD SHACKLEFORD Administrative Judge Acting Chairman
Armed Services Board of Contract Appeals I concur

J. REID PROUTY 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. 62782

, Appeal of Hallym Furniture Industrial Co., Ltd. , rendered in conformance with the Board’s Charter.

Dated: September 2, 2021

PAULLA K. GATES

- LEWIS Recorder, Armed Services Board of Contract Appeals