ARMED SERVICES BOARD OF CONTRACTAPPEALS
Appeal of

--

United Healthcare Partners, Inc.

Under ContractNo. FA4877-12-C-0002

APPEARANCE FORTHE APPELLANT: ) ) ) ) )

APPEARANCES FORTHE GOVERNMENT: ASBCA No. 58123

Mr. David D. Cooper

CEO

Col Matthew J. Mulbarger, USAF

AirForce ChiefTrial Attorney Michelle D. Coleman, Esq. Skye Mathieson, Esq.

Trial Attorneys

OPINIONBYADMINISTRATIVEJUDGE PAGE ONTHE PARTIES' CROSS-MOTIONS FOR SUMMARYJUDGMENT

United Healthcare Partners, Inc. (UHP) appeals from the contracting officer's (CO's) final decision (COFD) to terminate for cause the parties' commercial items contract for telephone-based nurse triage answering services. 1 Theparties filed cross-motions for summaryjudgment, and each relies upon multiple bases tojustify its motion. The government alleges that termination was warranted by UHP's failure to perform in accordance with the contract, whereas UHP asserts that its actions are excused by the government's multiple material breaches ofthe contract. We deny each party's motion.

STATEMENT OF FACTS (SOF) FORPURPOSES OF THE MOTIONS

1. The United States AirForce (AF or government) issued Contract No. FA4877-12-C-0002 to UHP on 1October2011 that included a base year and four optional years ofperformance (R4, tab 1). The single contract line item number (CLIN) 0001 required the contractorto "provide all facilities, equipment, tools, transportation, personnel, labor, supervision, and management to perform a 1-800 telephone-based Nurse Triage Answering Service on a 24/7 basis." This required the contractorto "provide clinical assessment and appropriate level ofcare support services for beneficiaries in the Davis-Monthan [Air Force Base, Arizona] [DMAFB] Catchment Area" from 1 October 2011

- 30 September 2012 for the base period. (Id. at 3)

1 ASBCANo. 58123 is consolidated with ASBCANo. 59214, an appeal from a COFD denial ofa claim for breach ofcontract damage, butthe latter is not a subject ofthe cross-motions.2. The solicitation advised that historical data for FY I0 indicates there were "19213" "Total Calls" during "DutyHours" and "Non-Duty" hours (R4, tab 3 at 58). The terms "call(s)" and "all calls" are used throughoutthe contract 

### (see, e.g., CLIN 0001 and Performance Work Statement (PWS)**~~** 1.1.5, 1.1.6, 1.1.7, 1.1.8, 1.1.12 (R4, tab I at 3, 27-28)), and "Total Calls" is used in the solicitation (R4, tab 3 at 58). Neither document states whetherthe historical data orestimated quantity in CLIN 0001 includes "calls"thatUHP is not allowed to charge to the government.

3. UHP's 15 September2011 "Price Proposal" (R4, tab 3) complied with the solicitation requirement that prospective contractors' submissions be stated on a "price per call" basis (gov't mot., attach. D at 62). UHP's proposal stated the price of$12.90 per call (R4, tab 3 at 58).

4. According to CLIN 0001, the contract is for the acquisition of "SERVICES/SUPPLIES" described as "Nurse Triage Answering Service[s]." The CLIN states a quantity of"19,710"; defines the unitbeingpurchased as "Calls"; states the unit price as "$12.90"; and the contract "AMOUNT" as "$254,259.00." On a separate line below the above information, and before a summary ofthe work to be performed in accordance with the PWS, is the acronym "FFP,"which indicates that this is a "firm fixed-price" contract. (R4, tab 1at 3)

5. The contract's "Performance Work Statement for Davis-Monthan Catchment Area Nurse Triage Services [DMCANTS]" for the "355th Medical Group (MDG)" (R4, tab 1 at 26)provided additional information regarding the anticipated telephone call volume:

(Id. at 30) 1.1.16. Estimated Monthly Call Volume. The 355 MDG estimates thattotal monthly calls answered by the nurse triage service will be approximately 1,800-2,000. Approximately 5% ofthese calls will require paging the on-call Life Skills provider. The number ofcalls will vary based on the number ofholidays and/or base down days for each month, and on seasonal flu/cold patterns.

6. The contract contains standard Federal Acquisition Regulation (FAR) clauses that are incorporated by reference. These include FAR 52.232-1, PAYMENTS (APR 1984); FAR 52.233-1, DISPUTES (JUL 2002)-ALTERNATE 1(DEC1991); and FAR 52.246-4, INSPECTION OF SERVICES-FIXED-PRICE (AUG 1996) (R4, tab 1at 7-8). The contract does not include, by reference or full text, eitherFAR 52.216-21, REQUIREMENTS or FAR 52.216-22, INDEFINITE QUANTITY (id. at 7-8).

27. The contract also contains two different standard clauses which authorize the governmentto terminate where the contractor fails to perform. In relevant part, FAR 52.249-8, DEFAULT (FIXED-PRICE SUPPLy AND SERVICE) (APR 1984), incorporated by reference, provides**in~~** (a)(l) and (a)(l)(i) for termination where the contractor fails to "Deliverthe supplies orto perform the services within the time specified in this contract or any extension" without a cure notice (52.249-8(a)(2)). (R4, tab 1at 8)

8. The second clause allowing the governmentto terminate the contract is FAR 52.212-4, CONTRACT TERMS AND CONDITIONS-COMMERCIAL ITEMS (JUN 2010), which is incorporated by full text (R4, tab 1at8-12). In relevant**part,~** (a) Inspection/ Acceptance, states that the contractor "shall only tender for acceptance those items that conform tothe requirements ofthis contract. The Government

reserves the right to inspect ortest any supplies or services thathave been tendered for acceptance." (Id. at 8) Paragraph (g)**Invoice,~~** (l)(iv)requires the contractor's invoice to include a "Description, quantity, unit ofmeasure, unit price and extended price ofthe items delivered." Paragraph (i), Payment, provides at**~** (1) that "Payment shall be made for items accepted by the Government." (Id. at 8-9) Paragraph (m), Termination for Cause, allows the government to "terminatethis contract, or any part hereof, for cause in the event ofany default by the Contractor, or ifthe Contractor fails to comply with any contractterms and conditions, or fails to provide the Government, upon request, with adequate assurances offuture performance." Ifthe contract is terminated for cause, "the Government shall notbe liable to the Contractor for any amount for

...services not accepted

.... Ifit is determinedthatthe Government improperly terminated this contract for default, such termination shall be deemed a termination for convenience." (Id. at 11)

9. Contract clause FAR 52.212-4(d), Disputes, provides in relevantpart that:

This contract is subject to the ContractDisputes Act of 1978, as amended (41 U.S.C. 601-613). Failure ofthe parties to this contractto reach agreement on any request for equitable adjustment, claim, appeal or action arising under orrelating to this contract shall be a dispute to be resolved in accordance with the clause at FAR 52.233-1 Disputes, which is incorporated herein by reference. The Contractor shall proceed diligently withperformance of this contract, pending final resolution ofany dispute arising underthe contract.
(R4, tab 1at 8)

10. The language ofFAR 52.212-4(d) is consistent with contract provision FAR52.233-1, DISPUTES (JUL 2002HALTERNATEI), which was incorporated by reference. The latter clause states**in~** (i) that "The Contractor shall proceed diligently

3with performance ofthis contract, pending final resolution ofany request for relief, claim, appeal, or action arising under orrelating to the contract, and comply with any decision ofthe Contracting Officer." (R4, tab I at 7)

11. Contract clauseFAR52.246-4, INSPECTION OF SERVICES-FIXED-PRICE (AUG 1996) (R4, tab I at 7), is incorporated by reference and provides in relevant part:
(e) Ifany ofthe services do not conform with contractrequirements, the Government may require the Contractorto perform the services again in conformity with contractrequirements, at no increase in contract amount. When the defects in services cannot be corrected by reperformance, the Government may (I)require the Contractorto take necessary action to ensure that future performance conforms to contract requirements and (2) reduce the contract price to reflect the reduced value of the services performed.
(f) Ifthe Contractor fails topromptlyperform the services again ortake the necessary action to ensure future performance in conformity with contractrequirements, the Government may (I)by contract or otherwise, perform the services and charge to the Contractor any cost incurredby the Governmentthat is directly relatedto the performance ofsuch services or (2) terminate the contract for default.

12. CLIN 000I required UHP to perform in accordance with the PWS for DMCANTS for the 355th MDG (R4, tab I at 3). PWS**~I.I.I,** Background, describes DMCANTS as a "key entry point into the Military Health System." The PWS provided in relevantpart:

1.0. DESCRIPTION OFSERVICES/GENERAL INFORMATION

1.1.2. Scope. The contractor shall provide a 1-800 telephone-based nurse triage service for the Davis-Monthan CatchmentArea, to perform clinical assessment and appropriate level ofcare support services for the TRICAREprogram, 24 hours perday, 7 days a week, including all holidays. All calls into the DMCANTS shall be answered by Registered Nurses [RNs], following nationally recognized and physician approved clinical

4

### protocols and guidelines for symptom-based calls. The contractor shall gather information from the nurse triage service calls and enter the information into a database to show assessments, documented resolution, and/or further action needed from a Primary Care Manager (PCM) or the Chiefofthe Medical Staff. The contractor shall e-mail or fax patient caller information to the TRICARE Operations and Patient Administration (TOPA) flight located at DMAFB. The contractor shall communicate DMCANTS activity with the TOPA Flight Commanderdaily. Items requiring necessary follow-up from the TOPA Flight Commander, PCM, or Chiefofthe Medical Staffwill be identified by the contractor.

(Id. 

### at 26) (Emphasis added)

13. PWS 

### ii 1.1.5, Data Collection,provides that "[t]he contractor shall use a computer software program that will collect datathat can collate calls by type ofcall received and information delivered. Every call shall be logged into the database and containthe following minimum information" that includes the date, time ofcall, patient
name, sponsor's name, last 4 numbers ofthe sponsor's social security number, age, date ofbirth, address, telephone number, primary care physician/surgeon, current medications, allergies, pertinent surgical history, primary symptom/duration, nursing assessment, protocol used, disposition, reason for disposition, patient/callerunderstanding, patient/caller intended action, and nursing notes. (R4, tab 1at 27) (Emphasis added)

14. Additional PWS requirements included the following:

1.1.6. Telephone Response Time. The contractor shall

answerpatient calls in real time, preferably in less than 5 minutes.

1.1.7. Call Summaries. The contractor shall provide comprehensive documentation ofall calls, to include patient demographics, caller concern, primary symptom, protocol used, and disposition for each call. A summary of calls from the previous call period and each individual patient's triage documentation will be provided to the TOPA Flight Commander for distribution to the PCM team at the beginning ofeach duty day orto the Chiefofthe Medical Staffas requested. The contractor shall provide monthly comprehensive documentation ofall calls taken to include patient demographics, caller concern, primary symptom, protocol used, and disposition for each call to

5the Government Contracting Officer Representative (COR). This communication will be in a written format to facilitate follow-up with the referral management nurses and Military Treatment Facility (MTF) PCM teams as appropriate. The preferable method is via password protected e-mail to ensure Health Insurance Portability and Accountability Act (HIPAA)protocols are maintained.

1.1.8. Call Statistics Reporting. The contractor shall submit a monthly status report to the TOPA Flight Commander no later than the 1 oth working day ofeach month. The monthly report shall include comprehensive analyses ofall activity.

1.1.9.1. Quality Control Plan. The contractor shall establish, implement, and maintain a Quality Control Plan to ensure all services are provided as specified in this contract

.... The contractor shall submitthe Quality Control Plan to the Contracting Officerupon contract award for review

....
1.1.10. General Enrollment Screening Protocols. The contractor shall answer all patient calls with "355th Medical Group." The contractor shall first ask ifthe patient is an enrolled beneficiary ofthe 355 MDG at DMAFB. Ifthe answer is "no'', the contractor shall inform the patientthatthe service is only for enrolled beneficiaries, and advise thepatientto call theirPCM or TRICARE office in their assigned region

....

1.1.14. Other Support. The contractor shall provide sufficient technical information and a validphone number,

so the 355 MDG appointment and information line will have a working link to the nurse triage service.

(R4, tab 1at 27-29) (Emphasis added)

15. The governmenthad responsibility for making follow-up calls to patients using information providedby the contractorthat was obtained from incoming calls from enrolled beneficiaries (see, e.g., R4, tab 1at 26-27, 30, PWS 

### irir 1.1.2, 1.1.7, 1.2.6).



### 6

### 16. PWS**~** 

### 2.0, Services Summary, set forth performance objectives, contract references, and performance thresholds for each objective. UHP was required to meet

a "Performance Threshold" of"l00%" for PWS**~~** 

### 1.1.2, 1.1.3, 1.1.5.1, 1.1.6, 1.1.7, 1.1.8, 1.2.1.2, 1.2.4, 1.2.6. (R4, tab 1at 31-32)

17. UHP was required to obtain "Protected Health Information" (PHI), which is defined as "informationthat was received from or created on behalfof'the enrolled beneficiaries ofgovernment's 355th MDG (R4, tab 1at 44). The contractor was required to provide this PHI to the government in various periodic reports (see, e.g., id. 

### at 26-31, especially PWS**~~** 

### 1.1, 1.1.5, 1.1.7, 1.1.8). Because PHI is protected by HIPAA and other legal requirements, the contract required the parties to enter into a "Business Associate Agreement" that governed the contractor's handling ofsensitive PHI and its provision ofthat information to the government (id. 

### at 32, 44-48). This agreement**at~** 

### 11.b. states that UHP must make the PHI "availableto 355 MDG or a requesting individual" and**at~~** 

### IV.b. and V.d. to disclose PHI to the government for data aggregation purposes (id. 

### at 45-47). UHP furnished the government with an "executed" Business Associate Agreement on 1October 2011. The agreementplaced

no limit upon the PHI which UHP was to furnish to the government. (R4, tab 6)

18. In several places the contract informed UHP that it was required to furnish

nurse triage services onlyto enrolled beneficiaries ofthe 355th MDG in the DMAFB Catchment Area and to redirect other callers (see, e.g., R4, tab 1at 3, 26, 28, 30, CLIN 0001, PWS**~~** 

### 1.1.1, 1.1.10). PWS**~** 

### 1.2.6, Hours ofOperation, told UHP to provide services "24 hours per day, 7 days a week and on all holidays" and statedthat "No gaps in contractor coverage ofthe nurse triage services are permissible." This provision also stated that "Non-triagedcalls requesting 355 Medical Group orbeneficiary information will notbe charged to the MTF." (Id. 

### at 30) Read together, these contractprovisions inform UHP that it should expect to answer, but not triage, incoming calls from non-beneficiaries for which it would not be compensated (id. 

### at 3, 26, 28, 30).

19. UHP does not dispute that it maintained two telephone lines from commercial providerVonage in performing the contract (gov't mot., attachs. A and B). In accordance with PWS**~** 

### 1.1.14, Other Support (R4, tab 1at29), UHP received calls made directly to these lines and those transferred from the government's medical clinic main appointment line (gov't mot., attach. F, Deel. ofTSGTDiana S. Habel, Group Practice Manager for the instant contract from 1October 2011-6 February 2012 (Habel decl.) at 1). According to Vonage records, "David Cooper" obtained service for a local telephone number atoll-free number from 30 September 2011 until 29 February 2012 (gov't mot., attach. A at 2, attach. B). Although there were voluminous incoming calls to the local number (id., 

### attach. A,passim), only three calls are shown during this period to the toll-free number;

none ofthe latter are from the government's medical clinic main appointment line (id., 

### attach.Bat4). Calls transferred from the government's medical clinic main appointment line showthe incoming number as "restricted" (id., 

### attach. A,passim).

720. The governmentprogrammed UHP's local telephone number into an automatic call distributor system known as the "T-Metrics ACD system." The system allowed the governmentto trackthe number ofincoming calls to this telephone number and to check the number ofcalls transferred from the government's clinic line to UHP's local telephone line. (Habel decl. at 1-2; 

### see also R4, tabs 23, 34, 40 (printouts ofthe T-Metrics system showing transfers from the clinic to UHP's local telephone line)).

21. The contractorwas required to submit monthly reports pertaining to its contract performance to the government. UHP's monthly report for "10/0112011-10/31/2011" (R4, tab 15) provided the following categories and corresponding "Monthly Totals"; "Number of 355th Med Group Beneficiaries" (413); "Total Monthly Immediate UC [Urgent Care]/ER [Emergency Room]/SelfTx Guidance" (413); "Total PRP Members" (O); Total PRP Dependents (O); "Total non-PRP" (413); "TTL QM f/u/**Gen Q&A/**PTEd Volume" (1,752); and "Total Patient Call Volume" (2,165) (id. at 102). According to the government, the term "non-PRP" denotes 355th MDG beneficiaries (gov't mot. at 13). UHP's October 2011 monthly report contains a summary ofthe "Daily Detailed Report" for each day ofthat month using the categories listed above and "Daily Totals" for each (R4, tab 15 at 103-11). The record does not disclose the nature ofcalls labeled by UHP as "TTL QM f/u/**Gen Q&A/**PTEdVolume."

22. The government's first Corrective Action Report (CAR), No. 01-2011 2 advised UHP ofunacceptable performance and gave a suspense date of21November2011 to correct the deficiencies (R4, tab 14). CARNo. 01-2011 cited shortcomings with PWS**~~** 1.1.5, Data Collection and 1.1.7, Call Summaries (id. at 98). UHP was told that "Triagereports are only being sent on patients who were referred to Urgent Care or Emergency [and] these only accounts [sic] for 20% oftotal calls received." The government statedthat "Patient information is incorrect on 50% ofthe Triage reports received; [sic] to the pointthatpatients can'tbe identified." The government assessed the impacts ofthis deficientperformance as a "HighPatient Safety Risk" due to a "gap of continuity ofcare" and a "HIP AA Violation" because "incorrectpatient information will lead to wrong information in patientrecord or inappropriate release." UHP was warned that "incorrectpatient demographics will cause billing mistakes and patients receiving a bill when a referral should have been submitted." The contractorwas told of"Patient dissatisfaction" because "TriageNurses are notthorough and difficult to understand with extreme delay in follow-up/returned calls." (Id. at 99)

23. UHP on 22 November 2011 wrote the CO that it "intends to challenge [CAR No. 01-2011] and the premise(s) under which [it] was filed." The contractor characterized deficiencies cited in the CARas "false and/or misleading." UHP contended that it understood that the parties had "collectively reached an agreement" that certain patient data called for by PWS**~** 1.1.5 "violates law, regulations orpublic safety." (R4, tab 20

2 The date ofissue ofCAR01-2011 is not in the record. 8at 121) The record does not contain, nor does UHP allege, that it further challenged or responded to CARNo. 01-2011. The declarations ofGary Douglas Kimmel, Chiefof Base Acquisition Flight for Contracting, and David R. Harrison, CO, deny that the parties reached such an agreement.

24. The government on 23 November 2011 issued a "Show Cause" notice to UHP, and advised the contractorthat "the Government considers your failure to maintain the standards outlined in the [PWS] in the aforementioned contract unacceptable." The notice warned that "unless this condition is addressed within 14 calendar days afterreceipt ofthis notice," the government "may terminate for default" under "contract clause 52.249-8 'Default (Fixed-Price Supply and Service)."' Specific concerns were stated as UHP's failures to respond to the CAR of 14 November 2011; meet performance standards under PWS, 1.1.5; and "provide Data Collection IAW contract terms and conditions" which "placedpatients in an unsafe situation." (R4, tab 21)

25. On 25 November 2011, the governmentpaid UHP's invoice for $27,928.50 for services rendered during October2011 (R4, tab 11).

26. The government continued to contest UHP'sreported call volumes for want ofdocumentation and UHP continued to deny thatthe contract required this level ofdetailed information to support its invoices. UHP's revised Monthly Report for 1-30 November 2011 (R4, tab 22) stated that the contractorhandled 451 calls from 355th Medical Group beneficiaries plus 1,423 calls from callers identified only as "TTL QM f/u/**Gen Q&A/**PTEdVolume" for a "Total Patient Call Volume" of 1,874 (id. at 137). The revised report carries the "NOTE" that "Invoicing information is derived from automatedtelecommunication systems daily count and is NOT linked to Patient Database[s] ormedically categorized Patient Volume Statistic[s]" (id.).

27. The government issued a second CARto UHP on 2 December2011 (R4, tab 24). Similarto the first CAR (R4, tab 14), CARNo. 02-2011 referenced PWS

,, 1.1.5 and 1.1.7; specified the contractor's alleged "UNACCEPTABLE PERFORMANCE" and resulting adverse impacts; and again questioned whether UHP

was billing for calls that were not compensable under the contract (R4, tab 24 at 212-13). UHP was provided a summary oferrors in its reported data (id. at 215-220), and given a suspense date of8 December 2011 to respond (id. at 212). The government issued a third CAR, No. 03-2011, on 7 December 2011 and required UHP to respond to the cited deficiencies by 14 December2011 (R4, tab 27). The government issued a fourth CAR, No. 04-2011, on 12 December2011 and gave UHP until 19 December 2011 to respond (R4, tab 28).

28. UHP was issued a fifth CAR, No. 05-2011, on 14 December 2011. The government cited PWS
,, 1.1.2 and 1.1.6 as contract requirements that were not being met; specified the contractor's performance shortcomings and adverse impacts to

9

### patients; and summarizedproblems with appellant's data. Additional issues raised in this CARwere that "Patient calls are being answered by a machine system vs. an RN

as stated in [PWS

# in 1.1.2" and thus "are not received in real time [as required by PWS 

## il1 1.1.6." The government contended that patients were experiencing unacceptably lengthy delays and failures to have calls returned, and gave UHP until 20 December 2011 to respond. (R4, tab 31)

29. On 22 December2011, the government issued a sixth CAR, No. 06-2011, and gave UHP until 29 December 2011 to respond to the deficiencies cited therein. The government cited PWS 

### iii! 1.1.2, 1.1.6 and 1.1.7 as ofconcern and reiterated UHP's performance shortcomings and associated negative patient impacts. Additionally, the government noted that UHP was providing only the last four digits ofa patient's social security number, which made it difficult to identify the person. (R4, tab 31)

30. The record does not show, nor does appellant assert, that UHP responded to the government's CARs afterthe first one (R4,passim; 

### app. mot. and opp'n,passim).



### 31. Between 16 November and 23 December 2011, the government repeatedly soughtUHP's assistance in identifying certain patients afterthe government was unable to do so due to incorrect or insufficient data in the contractor's reports. UHP variously attributed the errors to the patient, the government, orto mistakes in its reports. (R4, tabs 16-19, 25-26, 30, 32)

32. UHP's monthly report for 1-31December2011 reported a "Total Patient Call Volume" of 1,928 calls (R4, tab 33). This included 571 calls received from "355th Med Group Beneficiaries" and 1,357 calls labeled "TTL QM f/u/**Gen Q&A/PT Ed Volume" (id. 

### at 247).

33. In a 17 January 2012 email, the governmenttold UHP that it was "holding up acceptance of[the contractor's] invoice's [sic] for Nov and Dec pendingverification of call volume." The government asked the contractor for the "rational[e] for the disparity between the government's reported call volume and your company's reported call volume" so the "invoices [could be] processed for payment as soon as possible." (R4, tab 35) On 26 January 2012, the government rejected UHP's December2011 invoice, citing discrepancies between call volumes asserted and those documented (R4, tab 37).

34. The contractor's 31 January 2012 response criticizedthe government's

reasons for rejecting UHP's invoices (R4, tab 38). UHP stated that "the submission of the Monthly Clinical Statistics Report is NOT stipulated to, as a contingency to invoice approval in the [PWS] or in the Contract language, nor is it (typically) atrue and accurate representation for accounting and invoicing purposes" (id. 

### at 291). UHP advised:

At thisjuncture, and given the apparently deliberate and creative efforts to suspend compensation to our Firm,

10(Id. 

### at 292) utilizing procedures outside the prescribed parameters and guidelines under FAR and DCMA for Suspension and Notification ofpayment for Professional Contracted Services, ourFirm is unable to continue to provide services to [DMAFB] should the suspension ofpayment not be rectified by Close ofBusiness February 3, 2012. Should this notbe possible, ourFirm will have no other recourse but to suspend or cancel services as ofthat time, as a result ofactions and inaction taken by yourAdministration, placing our Firm in an untenable fiscal position.

35. The government on 1February2012 notified UHP that its "response did not provide any facts or figures which would allowus to remedy the discrepancy in call volume generated by your company and governmentrecords." Among other things, the government requested that appellant provide the data required by the PWS. UHP was told that its "monthly status report does not capture the minimum information required by the contract." This leftthe governmentunable "toverify the call numbers you are submitting as accurate since the reports do notprovide comprehensive documentation." The CO cautioned UHP that its threat to cancel or suspend services unless itwas paid by 3 February 2012 could make the contractor liable for costs including reprocurement. (R4, tab 41)

36. On 2 February 2012, the government issued CARNo. 01-2012, based on the contractor's failure to comply with PWS**~~** 

### 1.1.5, 1.1.6, 1.1.7, 1.1.8, 1.[1].9, and 1.2.5 and required UHP to respond by 9 February 2012 (R4, tab 42). On 2 February 2012, appellant replied that "The Contract does not stipulate to ANY specific requirement for accounting verification orjustificationpurposes with exception to" using the government's automated Wide Area Workflow invoicing system "as an accounting representation for billing and compensation." UHP reasserted that due to the government's continued "suspension ofcompensation to ourFirm for Triage Services rendered, now (3) three month[s] to date, we have no option butto suspend all services to Davis-Monthan AirForce Base immediately and until it can be determined, ifa resolution can be reached." (R4, tab 43) (Emphasis added)

37. UHP's monthly report for 1-31 January 2012 (R4, tab 39) stated that it had responded to atotal of 1,7 5 3 calls, which included 610 calls from "355th Med Group Beneficiaries" and 1,143 calls from "TTL QM f/u/**Gen Q&A/**PT Ed Volume" (id. 

### at 293). On 7 February 2012, the government rejected UHP's invoice dated 6February 2012 for work claimed for January 2012 because it was unable to verify the call volume asserted by the contractor (R4, tab 47).

1138. The DMAFB contracting office notified Ms. Habel on 2 February 2012 that UHP had discontinued service, and she received complaints thatthe government's clinic appointment line clerks were unable to transfer callers seeking nurse triage services to UHP's number. Ms. Habel at 3:56 p.m. that day called the clinic's appointment line from herwork number; after her call was transferred to UHP'striage line, the phone rang twice then beeped continuously until she hung up. She tried to

access appellant's nurse triage services line from her cell phone at 5:46 p.m. but was again unsuccessful. Upon verifying that UHP's phone line was not operable, Ms. Habel put in place a contingency plan for government nurses to furnish patient services until a reprocurement contractor could take UHP's place. (Habel decl. at 3-4)

39. The CO prepared an undated "DETERMINATIONAND FINDINGS" recounting factors considered in "determin[ing] whetherto terminate [UHP's] contract for cause in accordance with FAR49-402-3(f)." The CO concluded that "it is in the best interest ofthe Governmentto terminate this contract for cause (default)." The CO stated that UHP "has not [met] performance standards identified within [PWS

# irm 1.1.2, 1.1.5, 1.1.6, 1.1.7, 1.1.8, and 1.1.9" and detailed appellant's performance deficiencies. The government also noted that, other than "their single email of22 Nov 2011,"the contractorhas failed to respond to the CARs. The CO said that nurse triage services

were "mission essential" and "a24/7 requirement [that] does not lend itselfto any break in service." (R4, tab 36) The CO's 3 February 2012 memorandum for record focused upon UHP'srepeated assertions that it would ceaseperformance unless paid. He stated that "Facedwiththe disruption ofservices, the [355th MDG] put a contingency plan in place to have [government staff] man the Nurse Triage line" after UHP's telephone lines became inoperative. (R4, tab 45)

40. The COFD of6 February 2012, entitled "NOTICE OF TERMINATION FOR CAUSE" (R4, tab 46), notified UHP that the subject contract was terminated in accordance with "contractclause 52.249-8 [Default (Fixed-Price Supply and Service]." The CO cited UHP's "failureto maintain the standards" set forth in PWS 

### iii! "1.1.2, 1.1.5, 1.1.6[,] 1.1.7, 1.1.8, and 1.1.9." (Id. at 361)

DECISION

I. 

### Standardsfor SummaryJudgment
Summaryjudgmentis an efficient measure for resolving suits in which there are
no disputed material facts and the movant is entitled tojudgment as a matter oflaw. 

### Mingus Constructors, Inc. v. UnitedStates, 812 F.2d 1387, 1390 (Fed. Cir. 1987); FED. R. CIV. P. 56. "Amovant for successful summaryjudgmentmust show, based solely upon the record now before us and withoutbenefit ofa hearing that there is sufficient and uncontroverted evidence to meet its evidentiary obligation as defined by law and precedent." 

### Osborne Construction Co., ASBCANo. 55030, 09-1 BCA 

### if 34,083 at 168,512. "Summaryjudgmentis appropriate when, drawing all reasonable

12inferences in favor ofthe nonmovant, there is 'no genuine dispute as to any material fact and the movant is entitled tojudgment as a matter oflaw.'" Spectrum Pharmaceuticals, Inc. v. SandozInc., 802 F.3d 1326, 1333 (Fed. Cir. 2015) (citing FED. R. CIV. P. 56(a)); seeAnderson v. LibertyLobby, Inc., 477 U.S. 242, 255 (1986). While "we determine whether disputed facts are present, the Boardwill not at this juncture serve as arbiters to resolve controversies norweigh evidence ormake determinations ofcredibility." Osborne, 09-1 BCA, 34,083 at 168,513 (citingLiberty Lobby, 477 U.S. at 248).
Although bothparties move for summaryjudgmentand assertthere are no disputed material facts regarding theirrespective legal positions, they interpretthe contract and events differently. "Merelybecause a party has moved for summary judgment and avers there are no genuine issues offact precluding its recovery does not

mean that it 'concede[s] that no issues remain in the event [that its] adversary's theory is adopted.'" We evaluate each cross-motion "separately on its merits, and all reasonable inferences are drawn in favor ofthe defendingparty; the Board is not bound to'grantjudgment as a matter oflaw for one side orthe other.'" Osborne, 09-1 BCA, 34,083 at 168,513 (quotingMingus, 812 F.2d at 1391).

"Substantive law dictates the parties' relative burdens, and defines those 'material' facts that may affectthe outcome ofa particularcause ofaction." Osborne, 09-1 BCA,34,083 at 168,512 (citingLibertyLobby, 477 U.S. at 249-50). As this appeal is grounded in an allegedly wrongful contracttermination, substantive law governing terminations controls. A termination for default is a drastic sanctionthat should be imposed "only for good grounds and on solid evidence." JD. Hedin Construction Co. v. UnitedStates, 408 F.2d424, 431 (Ct. Cl. 1969). The government bears the burden ofprovingthat the terminationwasjustified, "regardless ofwhose 'claim' is being asserted." Lisbon Contractors, Inc. v. UnitedStates, 828 F.2d 759, 765 (Fed. Cir. 1987). Ifthe government establishes a prima facie case ofthe contractor's default, then the contractormust showthat the default was excusable withinthe meaning ofthe Default clause orwas caused bythe government's material breach. Military AircraftParts, ASBCANo. 59978, 15-1BCA,36,101at176,258.

II. Controlling Contract Termination Provision

As a preliminary matter, we note that this firm-fixed-price, commercial items contract contains two clauses that permitthe governmentto terminate for default or cause (SOF,7). These are FAR52.249-8, DEFAULT (FIXED-PRICE SUPPLY AND SERVICE (APR 1984); and FAR52.212-4, CONTRACT TERMS AND CONDITIONS-COMMERCIAL ITEMS (JUN 2010)3 (SOF
,,7-8). FAR 52.249-8(a)(l)(i) states that the government may "terminatethis contract in whole orinpart ifthe Contractor" fails to "performthe

3 The Board's decision in SWR, Inc., ASBCANo. 56708, 15-1 BCA,35,832, provides a thorough historic perspective offederal procurement ofCommercial Items. 13services within the time specified in this contract," and**at~** (a)(2) thatthe government should provide the contractorwith a 10-day opportunity to cure. FAR 52.212-4(m) authorizes the government to terminate the contract "forcause in the event ofany default by the Contractor, or ifthe Contractor fails to comply with any contract terms and conditions, or fails to provide the Government, upon request, with adequate assurances of future performance." The latter clause does notrequire that the government give the contractor advance notice or opportunity to cure. See, e.g., Gargoyles, Inc., ASBCA No. 57515, 13 BCA**~** 35,330.
According to the government's 6 February 2012 COFD, the contract was terminated in accordance with FAR 52.249-8 due to UHP's failure to maintain the standards required by the PWS,**specifically~~** 1.1.2, 1.1.5, 1.1.6, 1.1.7, 1.1.8, and 1.1.9. (SOF**~** 40). However, the subject line ofthe COFD states that it is a "NOTICE OF TERMINATION FORCAUSE," language that is consistentwith FAR 52.212-4(m) and not FAR 52.249-8, which focuses upon the term "default."

The Boardhas addressed the confusion that may result from the government's insertion ofboth FAR 52.249-8 and FAR52.212-4 in a commercial items contract. Itis appropriate to determine which provision controls, as commercial items contracts are unique in government contracting. The "principlesthat apply under the FAR clauses that govern termination for default apply with equal force underthe termination for

causeprovision ofthe commercial items clause." Free & Ben, Inc., ASBCA No. 56129,**11-1BCA~34,719** at 170,952 (citing GeneralInjectables & Vaccines, Inc., ASBCA No. 54930, 06-2 BCA**~** 33,401at165,593, aff'd, 519 F.3d 1360 (Fed. Cir. 2006), reh 'g denied, 527 F.3d 1375 (Fed. Cir. 2008)). According to FAR 12.403,**Termination,~** (a):

[T]he paragraphs in 52.212-4 entitled "Termination for the Government's Convenience" and "Termination for Cause" contain concepts which differ from those contained in the termination clauses prescribed in Part 49. Consequently, the requirements ofPart49 do not apply when terminating contracts for commercial items and contracting officers shall follow the procedures in this section. Contracting officers may continue to use Part 49 as guidance to the extent that Part49 does not conflictwith this section and the language ofthe termination paragraphs in 52.212-4.

Thus, "basedupon the provisions ofparagraph (m) ofFAR 52.212-4, the government has the right to terminate for cause in the event of'any default' by appellant, or upon appellant's failure 'to comply with any contract terms and conditions,' or upon appellant's failure to 'provide

...adequate assurances offuture performance."' Gargoyles, 13 BCA**~** 35,330 at 173,412. We find that FAR 52.212-4**~** (m) is the controlling termination clause in the instant contract.

14III. 

### The Parties'Motionsfor SummaryJudgment

Theparties' divergentperspectives are reflected in the bases asserted tojustify the motions (gov'tmot. and app. mot.) and are repeated in the oppositions (gov't opp'n and app. opp'n) and the government's reply to appellant's opposition (gov'treply). For purposes of judicial economy, we consider all relevant submissions in analyzing the parties' positions on specific issues.

A. 

### The Government's Motionfor SummaryJudgment

The government advances three principal arguments in support ofits motion, two ofwhich are cited in the government's 6 February 2011 Notice ofTermination for Cause, whichrelied upon FAR 52.249-8, DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984) as authority for the CO's action. First, UHP anticipatorily repudiated the
contractthrough unequivocal statements on 31 January and 2 February 2012 that it would

ceaseperformance immediately and indefinitely unless promptlypaid. Second, UHP then allegedly materiallybreachedthe contract when, ratherthan correctingperformance deficits noted in the CARs orcontinuing services while disputingthe issues in accordance with the contract's Disputes clause, the contractorabandonedperformance on 2 February 2012 by rendering inoperable the telephone lines used for nursetriage services. (Gov'tmot. at 23-24)

The governmenturges a third basis to substantiatethe termination, which was not explicitly stated in the termination notice. It argues thatUHP's discontinuing services violated PWS**~~** 1.1.2 and 1.2.6, whichrequired that the contractorprovide nurse triage services "24 hours per day, 7 days a week, including all holidays." (Gov'tmot. at 35) The government asserts that UHP also "failedto meetthe 100%performancethreshold for [PWS**~]** 

### 1.1.7'' to "provide call summaries for 

### all calls" (id. at 36). It says that while "UHP only provided daily reports for calls referred to Urgent Care orEmergency,"the contractor "also had an obligation underthe contractto provide documentation for 

### all calls meaning all 355th MG beneficiary calls requiring clinical assessment." The government asserts that UHP's failure "to meet even one ofthe 100%performancethresholds" stated in PWS**~** 2.0 "is a material breach ofthe PWS and thusjustifiedtermination" even though this deficiency was not "explicitly cite[d]" in the COFD. (Id. at 37)

1. 

### AllegedAnticipatoryRepudiation of the Contract by UHP

FAR 52.212-4(m) allows the governmentto terminate the contract for cause where, among otherthings, the "Contractor fails to comply with any contract terms and conditions, or fails to providethe Government, upon written request, with adequate

assurances offuture performance." The governmentbears the initial burden ofproving that its termination ofa commercial items contract for cause isjustifiedunder the standard set forth in this clause. 

### DaceEnterprises, LLC, ASBCA No. 57984, 13 BCA**~** 35,451

15at 173,846 (citing Genome-Communications, ASBCA Nos. 57267, 57285, 11-1 BCA**~** 34,699 at 170,889). Deciding whether a contractor anticipatorily repudiated the contract is "alegal determination susceptible to summaryjudgmentifthere are undisputed facts supporting a positive, definite, unconditional and unequivocal intention to repudiate." Vinyl Technology, Inc., ASBCA No. 47967,**97-1BCA~28,974** at 144,298 (citing Scott Aviation, ASBCA No. 40776, 91-3 BCA**~** 24,123 at 120,726). Used "[i]n this context, 'unconditional' means without imposing a condition the opposing party has no duty to perform." Vinyl Technology,**97-1BCA~28,974** at 144,298 (citingAmexicana Corp., ASBCA No. 14417, 71-1 BCA**~** 8886 at 41,301, aff'don recon., 71-2 BCA**~** 8990).

We find that undisputed material facts establish that UHP anticipatorily repudiated the contract by unequivocally communicating on 31January and 2 February 2012 that it intendedto stop workunless the governmentpaid its invoices by 3 February 2012. The government had refused to pay the invoices because it believed that UHP had not complied with the contract and had failed to document "all calls" for which it invoiced the government. (SOF**~~** 22-24, 26-29, 31, 33-36) The government was within its rights to refuse to pay the contractorwhere it regarded the work as unacceptably performed. A contractor is generally required to continue performance as directed by the government, pendingresolution ofthe parties' dispute. "Ifthe contractorbelievesthe [government's] interpretation erroneous, the determination may be appealed through the claims procedure." EssexElectro Engineers, Inc., ASBCANo. 49915, 02-1 BCA**~** 31,714 at 156,699. In short, "Government contractors mustperform and then argue aboutthe amount ofthe equitable adjustment at some latertime." Benju Corp., ASBCA No. 43648 etal., 97-2 BCA**~** 29,274 at 145,655 (quoting S. Rep. No. 95-1118, 95th Cong., 2d Sess. 32, reprinted in 1978 U.S.C.C.A.N. 5235, 5266).

When the government responded to UHP on 1February2012 and reminded appellant ofits contractual obligations, UHP gave no assurances that it would continue while disputing the government's refusal to pay invoices. Instead, the contractor said that, due to the government's continued "suspension ofcompensation to ourFirm for Triage Services rendered, now (3) three month[s] to date, we have no option butto suspend all services to [DMAFB] immediately and until it can be determined, ifa resolution can be reached." (SOF**~~** 35, 36). UHP's declaration ofintent to cease performancejustifiedthe CO's decision to terminate the contract for cause on the basis ofanticipatory repudiation. "[I]n order for a defaulttermination to be sustained, the CO need only be found to have been 'justifiably insecure about the contract'stimely completion."' Free & Ben, 11-1 BCA**~** 34,719 at 170,954 (citingFFR-Bauelemente 

### + Bausanierung GmbH, ASBCA No. 52152 etal., 07-2 BCA**~** 33,627 at 166,557). The anticipatory repudiation ofa contract is not limitedto "cases ofexpress and unequivocal repudiation ofa contract." Rather, a contractor's anticipatory repudiation may be found where "reasonable grounds" supportthe beliefthat the otherparty "will breachthe contract," and a "demand [for] adequate assurance ofdue performance" is not met. Danzigv. AEC Corp., 224 F.3d 1333, 1337-38 (Fed. Cir. 2000), cert. denied, 532 U.S. 995 (2001) (citing RESTATEMENT (SECOND) OF CONTRACTS § 251 (1981)).

16We are not persuaded by UHP's intimation (as we understand it) that it demonstrated forbearance in the face ofthe government's refusal to pay its invoices, or that it only said that it would "suspend" performance until the payment issue was resolved, presumably in its favor (see, e.g., app. opp'n at 12; app. mot. at 44-45). UHP's use ofthe word "suspend" does not weaken the government's position that appellant anticipatorily repudiated the contract, which requires the contractorto provide health-related nurse triage services on a "24/7"basis, without lapse. We find that the government has established a prima facie basis for terminating the contract for

cause following UHP's anticipatory repudiation, and in§ III.B address whether UHP has shown this action was excused by the government's material breach.

2. UHP 's AllegedMaterial Breach of Contract byAbandonmentof Performance

The government next moves for summaryjudgmenton the basis that UHP materially breachedthe contract by abandoning performance (gov't mot. at 31-35). The government has met its burden ofproofby demonstrating undisputed material facts that appellantprematurely and without government assent ceased to provide agreed-upon

nurse triage services. Appellant's withdrawal oftelephone access violated multiple contractprovisions. These included CLIN 0001, which required UHP to perform a "Nurse Triage Answering Service on a 2417basis" during the base period of 1October 2011-30 September 2012. The PWS contains several provisions which consistently reinforced CLIN 0001; see, e.g., PWS

## iii! 1.1.2, 1.1.6, 1.14, 1.2.6, and PWS 

### if 2.0, which set a 100% performancethreshold with respect to PWS

## iii! 1.1.2 and 1.2.6 and other requirements. Taken together, these emphasize UHP's duty to provideprompt and uninterrupted nurse triage services by means ofa valid telephone number on a "2417" basis during theperiod specified in the contract. (SOF

## iii! 1, 4, 14, 16, 28)

The government has met its initial burden ofproofby showingthat appellant refused to continue performance, and has established a prima facie basis for terminating for cause. See, e.g., GeneralInjectables & Vaccines, Inc. v. Gates, 519 F.3d 1360, 1363 (Fed. Cir. 2008) andPrecision Standard, Inc., ASBCANo. 59116, 15-1 BCA

### if 36,040 at 176,028. We find that uncontroverted facts establish that UHP repudiatedthe contract by abruptly ending performance on 2 February 2012 when the government did not acquiesce to appellant's demands that its invoices be paid by 3 February 2012 (SOF 

## iii! 34, 38). This is sufficient to meetthe government's dual burdens of justifying termination ofthe contract for cause, and showing undisputed material facts supporting summaryjudgment. We consider in§ III.B whetherUHP's repudiation may be excused.

UHP challenges the government's termination ofthe contract as procedurally flawed. Itcontends thatthe government "failedto execute 'Cure' procedural requirements" (app. mot. at 14), and denies that the government's "show cause" notice and CARs were an adequate substitute for a 10-day cure notice (id. at 57). Itis

17unnecessary that we determine whetherthe "show cause" notice and CARs were an adequate substitute for a cure notice, as none is required for a commercial items contract. We have determined in§ II that the correct authority for the termination is FAR 52.212-4(m), and this provision does not necessitate a cure notice.4

Pursuantto FAR 12.403(a), the requirements ofFARpart 49 do not apply when terminating contracts for commercial items. However, COs may use FARpart49 as guidance to the extent that its provisions do not conflict with FAR 12.403 and the provisions ofFAR 52.212-4. We have held that the principles governing termination for default also apply toterminations for cause.


### Gargoyles, 13 BCA

### ii 35,330 at 173,412 (citing 

### Genome-Communications, 11-1 BCA 

### ii 34,699 at 170,889) (footnote omitted). In accordance with FAR 52.212-4(m), "the government has the right to terminate for cause in the event of'any default' by appellant, orupon appellant's failure 'to comply with any contractterms and conditions,' orupon appellant's failure to 'provide

...adequate assurances offuture performance.'" 

### Gargoyles, 13 BCA

### ii 35,330 at 173,412.

3. 

### UHP'sAllegedFailure to Meet the Contract's 100%Performance Threshold forDocumentingAllBillable Calls Justifiedthe Terminationfor Cause

The government captions its third argument for summaryjudgment as "UHP's Failure to Meetthe Contract's 100%Performance Threshold for Documenting 'All' Billable Calls Justified the Termination for Cause" (gov'tmot. at 35). Itasserts that,

even though this positionwas not articulated in the COFD, it is a legitimate basis for termination 

### (id. at 38). The government argues that UHP failed to provide a daily summary and a monthly summary for "all calls" as required by PWS 

### ii 1.1.7. It criticizes UHP on two grounds: first, that appellant did notprovide documentation for "all" ofthe calls included in its invoice (gov'tmot. at 36); we evaluate this assertion in §III.B.l. The second ground goes beyond this alleged deficiency, and extends to both the number and the content ofthe reports that UHP did provide.

4 Even ifFAR 52.249-8 Default (Fixed-Price Supply and Service) were the correct clause, the result would be the same. This clause also "permits a termination for default without a cure notice

...in the event that the contractor 'fails to

...perform the services within the time specified"' in the contract. 

### Greenleaf Distribution Services, Inc., ASBCA No. 34300, 88-3 BCA

### ii 21,001at106,100-01. Similarto 

### Greenleaf, it was unnecessary for the governmentto provide UHP a cure notice

as doing so may have effectively eliminated important services for an extended period. 

### Id. 18The government says that PWS 

### ii I.I.7 should be read in conjunction with PWS 

### ii 1.1.5 Data Collection, "which required UHP to collect 22 points ofdata for all ofits calls." PWS 

### ii 1.1.7 "requiredtwo summaries, a daily summary and a monthly summary" that "had to have 'comprehensive documentation of

### all calls, to include patient demographics, caller concern, primary symptom, protocol used, and disposition for each call,' which is essentially the same data as the 22 data points required" by PWS 

### ii 1.1.5. The government says that UHP had to provide a "summary ofcalls and each individual'spatienttriage documentation" to "the TOPAFlight Commander at the beginning ofeach duty day, which meant that UHP had to provide comprehensive documentation ofall ofthe calls it serviced each day." The contractor also had to provide the CO'srepresentative with "monthly comprehensive documentation ofall calls taken to include patient demographics, caller concern, primary symptom, protocol used, and disposition for each call." (Gov't mot. at 36)
According to the government, while "UHP only provided daily reports for calls referred to Urgent Care orEmergency,"the contractor "had an obligation underthe contractto provide documentation for 

### all calls meaning all 355th MG beneficiary calls requiring clinical assessment" (gov'tmot. at 37). In the government's view, UHP was to provide services "intended to assist with triaging non-life threatening situations and directingthe appropriate level ofcare to resolve the medical issue," and had to document these calls in accordance with the contract (gov't opp'n at 36). While it does not disagree with UHP's assertion that it was not appropriate to obtainpatient data from emergency callers, the government's rationale is founded in its contract interpretation and not in the law ormedical protocols. It reasons thatpatient data is not required because callers with emergencies would "not fall underthe compensable calls underthe contract, 

### i.e., calls requiring clinical assessment." (Id.)

The government mentions another category ofcalls included in UHP's invoices, which the contractor labeled as "TTL QM f/u/**Gen Q&A/**PTEd Volume." Itasserts that, tothe extentthat UHP believed that these calls were compensable, it should have provided "documentation [that] would have assistedthe AirForce in inspectingthe calls and determining whetherthey were acceptable underthe contract.... Instead, UHP simplyprovided a daily and monthly summary ofthe number ofcalls that it said that it serviced" under various categories. (Gov't mot. at 37)

The government cites its contractual authority to inspect services as a condition to accepting the work and making paymentto the contractor. It alleges that appellant's failure to providepatient data from calls invoiced "did notpermit the Air Force to inspect or accept UHP's services." It says that the contractor's refusal to "provide the comprehensive documentation required under" PWS 

### ii I.I.7 fell short ofthe "I00% performance threshold requirement underthe contract," and was "amaterial breach of the PWS and thusjustifiedtermination." (Gov't mot. at 37) The government denies "commit[ting] a material breach" by "ask[ing] UHP to substantiate its invoices before

I9

### payment," and takes exception to UHP's belief"thatbecause it serviced calls that it should be paid for those calls without any validation" (id. at 45).

UHP's disputes the government's version offacts, and responds that it gave the government both the required reports and, as appropriate, the data called for by the contract. Appellant says that the "substantiationto the new level ofdetails" demanded by the government "is an excessive and unnecessary inspection and contrary to FFP guidelines for simplified accounting and compensation." (App. opp'n at 13) Accordingto UHP, the government's unreasonable interpretation ofthe contract renders the 100%performance threshold unattainable (id. at 6). Appellant says that it followed PWS 

### ii 1.1.7 and "provided daily Triage medical record reports

...for Patients requiring and/or requesting Triage medical evaluations" as well as "amonthly report containing the comprehensive documentation ofall calls by the 10th working day of each month" (app. mot. at 46). The contractor asserts that the government was not responsive to its repeated requests to resolve this issue (app. opp'n at 3, 13-14).

The contractor asserts that collecting and providing all ofthe patient information required by the government was "unenforceable and prohibitive," as doing

so would violate "laws and regulations" applicable to its medical professionals. Appellant alleges that documenting "the 22 items ofPatient information of'every call' and caller" in accordance with PWS 

### ii "1.1.5 constitutes a violation ofPublic and Patient Privacy and Safety under HIPAA." The requirement that UHP document '"all calls'

...also violates the authority andjurisdiction ofthe Contract Office and Officers,

as itrelated to Non-355th members and Non DMAFB personnel." (App. opp'n at 11-12) UHP contends that it was preventedby HIPAA from providing PHI to government contract administrators, who "donot fall within the parameters ofa Healthcare Provider or ancillary covered entities" (id. at 11). Appellant denies that it repudiated the contract, and characterizes the government's "refusal to address violations ofLaw createdby [the government's] interpretation ofthe contract language" and its "failure to provide instructions and direction" as "anunequivocal and definite repudiation" bythe government (id. at 11-12).
Although the government did not rely upon this argument in terminating the contract, it is permitted to raise it on motion as we "mayuphold atermination for default on any ground existing at the time ofthe termination." Kaman Precision Products, Inc., ASBCA Nos. 56305, 56313, 10-2 BCA

### ii 34,529 at 170,286. We have considered the parties' arguments regarding UHP's compliance with the 100% performance threshold set forth in PWS 

### ii 2.0, and find that both parties fall short of justifying summaryjudgment. The government's argument goes to two aspects of reports that appellant was supposed to provide: whether it provided the correct number ofreports, and whether each report containedthe requisite content. Without

more specific proof, the government failed to show that undisputed material facts support its argument thatUHP did not document "all calls" in accordance with

20PWS**~** I. I.7. The government has not met its heavy burden tojustify terminating UHP's contract for cause onthis basis without benefit ofan evidentiary hearing.
Similarly, UHP failed to adequately support its motion by fact or by law; it has neither established that it provided all reports required by contract or that any missing content was appropriately excluded. Appellant has not established that its refusal to collect or report particular data was excused by law or applicable medical protocol, and does not explain the effect ofthe Business Associate Agreement entered into by the parties that governedthe handling ofPHI and its disclosure to the government 

### (see SOF**~** I7). We cannot on motion assess whetherthe government materially breached the contract by the manner in which it interpreted the contract. Norcan we assess from the record before us whether UHP reasonably interpretedthe contract to preclude collecting and distributing certain information due to conflicts with outside medical protocols and laws, or whether compliance with these comprised a contractual ambiguity. Among otherthings, that would require that we evaluate extrinsic evidence which is not now before us and presents a mixed question offact and law unsuitable for summaryjudgment. 

### See, e.g., MIC/CCS, Joint Venture, ASCBANo. 58023, I4-l BCA**~** 35,678 at I74,636. Triable issues remain regarding whether UHP provided all required information on all calls for which it billed the government, and whether it has been compensated for callsproperly performed in accordance with the contract.



### B. UHP's Motion/or SummaryJudgment

The government established a prima facie case for terminating the contract for

cause on the bases ofUHP's anticipatory repudiation ofthe contract and abandonment ofperformance. The burden ofproduction now shifts to UHP to showthat its actions

are excusable, orwere caused by the government's material breach. 

### DCX, Inc. v. 

### Perry, 79 F.3d I32, 134 (Fed. Cir. I996), 

### cert. denied, 5I9 U.S. 992 (1996). Appellant maintains that it attempted to resolve the "Government's misinterpretation ofthe contract language, whichresulted in compromise to adherence and compliance to laws, regulations and safe Patient Practices." UHP says that the governmentrefused to gobeyond preliminary discussions, then "refusedto address any aspect ofthe existing

or additional issues ofviolation or language correction." (App. opp'n at 3)

UHP's motion alleges overtwenty instances ofthe government's material breach of contract to excuse appellant'sprematurely ending the work and its allegedperformance deficiencies 

### (see, e.g., app. mot. at I0-I I, 59). These allegations underpin two central arguments.5 The first is that the parties entered into a lump sum, firm-fixed-price contract in the amount of$254,259 withpaymentto be apportioned on a monthly basis independent

5 We have discussed appellant's otherprimary contentions that the government materially breachedthe contractby failing to issue a cure notice in § 11.A.2 and wrongly withheld payment after requiring call documentation in violation of law and medial protocol in§ 111.A.3. 2I

### ofthe number ofcalls (app. mot. at 35-36, 56; see also app. opp'n at 13-16), and that the government wrongly refused to pay for workperformed (app. mot. at 25-28). The second argument is that the government negligently estimated the number ofanticipated calls in the solicitation and contract (id. 

### at 20-22).

In orderto recover on a breach ofcontract theory, appellant must show by a preponderance ofthe evidence that the government owed appellant a contract duty; the government breached that duty and caused damage to appellant; and the damage was reasonably foreseeable at the time ofcontract award. Edinburgh International, ASBCA No. 58864,**16-1BCA~36,227** 

### at 176,743 (citing TRSResearch, ASBCA No. 51712,**01-1BCA~31,149** 

### at 153,874; and MA. Mortenson Co., ASBCA No. 53105 etal., 04-2 BCA**~** 

### 32,713 at 161,845).

1. 

### The Government'sAllegedMaterialBreach of Failing to Pay UHP on a LumpSum Basis

UHP alleges thatthe government materially breached the contractby erroneously tying contractorpayments to call volume (app. mot. at 56-58; app. opp'n at 6-7, 13-14). The contractor maintains that "theAirForce unreasonably required UHP to invoice the government on a monthly basis based on the number ofactual calls," whereas "payments under firm-fixed-price contracts are not tied to an actual call volume [but] are based solely on the fixed amount provided for in the contract" (app. mot. at 56).

UHP contends that "the contract and the SF 1499 compensation agreement was designated and designed to be a Firm-Fixed-Price 'lump sum' agreement 'not subject to any adjustment' ofcompensation amount" (app. opp'n at 13). It 

### argues that "the contract is a firm-fixed-price contract thatprovides for apayment to UHP in the amount of$254,259.00 ayear, or $21,188.25 per month, regardless ofwhether UHP received 1,500, 2,000, or 2,500 calls in a given month" (app. mot. at 56). UHP says that the government materially changed the lump sum contractby going to "a 'per call' reimbursement contracttype" (app. opp'n at 12-13). Appellant argues that the "volume serviced under aFirm-Fixed-Price contract is notrelevant to the payment amount, therefore, substantiationto the new level ofdetails" demandedby the government "is an excessive and unnecessary inspection and contrary to FFP guidelines for simplified accounting and compensation" (id. 

### at 13). Tothe extent that volume is relevant, appellant contends that the government's use ofthe automated T-Metrics systemto track calls received by the contractorwas flawed, as this did not record calls made to UHP's direct line (id. 

### at 4). UHP cited its prior course ofdealing in successfullyproviding nurse triage services under other government contracts, asserting that its compensation "hadnever been tied to actual call volume" in "nearly 10 years ofdoing business

...under such firm-fixed-price contracts." (Id. 

### at 15)

22The government agrees with appellant that this is a fixed-price contract, but disagrees that it is in a lump sum amount (gov't opp'n at 20). Rather, it asserts that "UHP was to bepaid a fixed price of$12.90 perunit or calls that it made in accordance with the contract" (id. at 7). The government maintains that "UHP's contract is a 'priceper call' fixed-unit-price contract, not a firm-fixed-price lump sum contract" in which "paymentwas based upon the number ofcalls that UHP serviced in accordance with the contractrequirements" (gov't mot. at 40). According to the government, it is not a material breach ofcontractto withholdpayment for cause where appellant did not comply with contract requirements to documentthe calls (gov't opp'n at 44).

Bothparties' arguments rely upon language in CLIN 0001, which describes the "SERVICES/SUPPLIES"beingprocured as "Nurse Triage Answering Service[s]" 

### (see, e.g., app. mot. at 56-58; gov'topp'n at 7, 19). The quantity is given as "19,710"; the unit as "Calls"; the unit price is stated as "$12.90" and the "AMOUNT" as "$254,259.00." On a separate line below the above information and before a summary ofthe workto beperformed in accordance with the PWS, is the acronym "FFP," which indicates thatthis is a "firm fixed-price" contract. (SOF**~** 4)

The Boardresolves contract interpretation disputes by considering the document as a whole, harmonizing and giving reasonable meaning to all provisions if possible. 

### NVTTechnologies, Inc. v. 

### UnitedStates, 370 F.3d 1153, 1159 (Fed. Cir. 2004). We find no contractual support for appellant's argument thatthis was a "lump sum" contract, nor does appellant effectively counterthe fact that CLIN 0001 is stated in the unitprice of$12.90 "percall." Instead, UHPrelies on past experience under other fixed-price contracts in which it furnished the governmentwith nurse triage services, none ofwhich have been shown to be relevant or contain language similarto that used here. Appellant failed to prove that the government materially breached the contract by failing topay UHP on a lump sum basis, irrespective ofcall volume. We deny summaryjudgment on this basis.

2. 

### The Government'sAllegedMaterialBreach of the Contract by Negligently Estimating the Number of Calls

UHP alleges that the government materially breachedthe contract by negligently estimating the number ofanticipated calls that the contractor should expect

as its workload. Appellant asserts that it reliedto its detriment upon the projected call volume of 19,710 as stated in the solicitation and contract. Itmaintains that neither of these documents contains an exclusion as to the type ofcall, nor did these indicate that any ofthe calls included in the government-provided estimate would be non-compensable. (App. mot. at 20-24) UHP again references CLIN 0001, which as previously noted states a "quantity" of 19,710 and the "unit" as "calls" (SOF**~** 4). Appellant urges thatthis was a "Misrepresentation during the formation ofthe contract" (app. mot. at 31), and that under the government's erroneous interpretation of

23the contract "approximately 70-80% ofthe total calls [it actually received] would be uncompensated" (id. at 21).

The government denies negligently estimating the anticipated number ofcalls in the solicitation and contract. Itasserts that ifUHP "argue[s] that it understood the entire 19,710 call volume to represent compensated calls,"then this "assum[es] that the calls received that were notto be charged to the contract underthe PWS were 

### in addition to the disclosed call volume of 19,710, rather than included in the 19,710 call volume." The government argues that this would constitute "apatent ambiguity evident on the face of the solicitation provisions, which imposed on UHP the duty to inquire." (Gov't opp'n at 31-32) The government questions the number ofcompensable versus non-compensable calls that appellant claims it received, based upon the relatively small number ofcall summaries submittedby the contractor (id. at 33-34). Itcontends thatUHP was told_ in PWS ,-r 1.2.6 that "[n]on-triaged calls requesting 355 Medical Group orbeneficiary information will not be chargedto the [government]" (gov'topp'n at 25 (citing R4, tab 1 at 30)), nor would "patient follow-up calls" that were to be performedby the government pursuant to PWS ,-r 1.1.2 (gov't opp'n at 26).

The government's estimate ofsupplies or services to be purchased is of significance for several varieties ofgovernment contracts, "as the quantity may impact both a contractor's capacityto supply the contract items andthe price at which it agrees to supply them." 

### Rumsfeldv. 

### AppliedCompanies, Inc., 325 F.3d 1328, 1334-35 (Fed. Cir. 2003). Eventhough an estimate is not a guaranteed level ofwork, the government is required to use care in estimating contract workloads, as the contractor is entitled to rely upon this information in preparing its bid orproposal. The government will be found liable where a contractor can showby a preponderance of evidence thatthe estimate was prepared in an inadequate ornegligent manner, was not done in good faith, orwas "grossly orunreasonably inadequate at the time the estimate

was made." 

### Medart, Inc. v. 

### Austin, 967 F.2d 579, 581 (Fed. Cir. 1992). To prevail on its claim thatthe government materially breachedthe contractby negligently estimating the anticipated workload, UHP "must show '(a) misrepresentation in the Governmentproffered estimates, whether intentional ornegligent, (b) reliance thereon, and (c) resulting injury."' 

### American General Trading & 

### Contracting WLL, ASBCA No. 56758, 12-1 BCA,-r 34,905 at 171,638 (citing

### JA. Jones Mgmt. Services, Inc., ASBCA No. 46793, 99-1BCA,-r30,303 at 149,833). "The adequacy ofthe government's estimate is onlytested by the relevant information reasonably available to it." 

### American General Trading, 12-1 BCA,-r 34,905 at 171,635 (citing 

### Womack v. 

### UnitedStates, 389 F.2d 793, 801 (Ct. Cl. 1968)). Although a "negligent estimate as to

a material matter is a breach ofcontract," our next step is to ascertain the type of contract at issue, as "not all types ofcontracts are subjectto such claims." 

### American General Trading & 

### Contracting, ASBCANo. 56758, 14-1BCA,-r35,587 at 174,378.

Federal procurementregulations direct the CO to include provisions in the solicitation and contractthat identify the contracttype and specify the nature ofthe

24

### parties' relative obligations. The FARhas specific clauses that must be included in a contract, depending upon the government'spurchasing obligations. According to FAR 16.501-2(a), "There are three types ofindefinite-delivery contracts: Definite-quantity contracts, requirements contracts, and indefinite-quantity contracts." A definite-quantity contract sets forth with precision the amount ofgoods or services the government will obtain within a fixed period. See 

### FAR 16.502, Definite-quantity contracts. The instant contract does not stipulate a definite number ofcalls UHP is to handle, and thus is an indefinite-quantity contract. A negligently-prepared estimate does not give rise to a contractor's cause ofaction in a definite-quantity contract, as the government is obliged to procure a set amount ofservices or supplies. FAR 16.506(e) requires the governmentto insert FAR 5 2.216-22, Indefinite Quantity into those contracts defined in FAR 16.504 as for an unquantified amount, but does not obligate the government to obtain all ofits requirements from that vendor. According to FAR 16.504(a)(l), such a "contract must require the Government to order and the contractor to furnish at least a stated minimum quantity ofsupplies or services," which according to ii (a)(2) "mustbe more than a nominal quantity." The government will not be held liable for a negligent estimate in an indefinite-quantity contract, which guarantees only that the government will order at least a specified minimum quantity; any further ordering is at the discretion ofthe government. This minimum is an essential element, as otherwise the contract would lack sufficient detail to be enforceable and fail for want ofconsideration. EasternNew Mexico UniversityRoswell, 

### ASBCA No. 57110, 12-2 BCAii 35,090 at 172,337 (citingMason v. United States, 

### 615 F.2d 1343, 1346 n.5 (Ct. Cl. 1980); and Maintenance Engineers, Inc. v. UnitedStates, 

### 749 F.2d 724, 726 (Fed. Cir. 1984)).

FAR 16.506, Solicitation provisions and contract clauses, atii (d)(l)requires the government to include FAR 52.216-21, Requirements, in those contracts which oblige the government to exclusively obtain the unquantified amount of"all" ofits particularneeds from the contractorwithin a fixed period. The government may be liable for a negligent estimate in a requirements-type contract, as bidders are entitled to rely upon a reasonable projection ofanticipated work. See, e.g., American General Trading, 

### 12-1BCAii34,905 at 171,635-36.

There are othertypes ofgovernment contracts, not applicable here, that are also susceptible to breach claims when the government negligently estimates the anticipated quantity. There is no breach for a negligent estimate where the government includes a "clear and unequivocal" statement or other strong language that sufficiently tells prospective bidders to perform their own investigation, and warns that the government's estimate is not to be relied upon. See, e.g., Summit Contractors v. UnitedStates, 

### 21 Cl. Ct. 767, 776 (1990). Even then, such disclaimers may be overridden and the government found liable ifthe "estimate is grossly erroneous or negligentlyprepared." Id. 

### (citing TimberInvestors, Inc. v. UnitedStates, 

### 587 F.2d 472 (Ct. Ct. 1978)). In any event, the contractwith UHP does not contain a disclaimer regarding the estimate.

25Contract interpretation begins with examination ofthe plain language ofthe written agreement. LAIServices, Inc. v. Gates, 573 F.3d 1306, 1314 (Fed. Cir. 2009). Contract terms are interpreted and read as a whole, giving reasonable meaning to all of its parts; where possible, we do so in a mannerthat does not leave "aportion ofthe contract useless, inexplicable, void or superfluous." NVTTechnologies, 370 F.3d at 1159. "Pure contract interpretation is a question oflaw which may be resolved by summaryjudgment. Determination ofthe type ofcontractthe parties entered into is generally a matter oflaw." EasternNew Mexico Univ., 12-2 BCA

### ii 35,090 at 172,336 (citingP.J. Maffei Bldg. Wrecking Corp. v. UnitedStates, 732 F.2d 913, 916 (Fed. Cir. 1984); Textron Defense Sys. v. Widnall, 143 F.3d 1465, 1468 (Fed. Cir. 1998); and Maintenance Engineers, Inc. v. UnitedStates, 749 F.2d 724, 73 n.3 (Fed. Cir. 1984)). NeitherUHP nor the government have sufficiently addressed this point in making and opposing these motions. The contract does not contain either FAR 52.216-21 Requirements or FAR 52.216-22 Indefinite Quantity as called for by FAR 16.506. While this suggests that the contractwas neither, further briefing is needed on this highly relevantpoint.

However, for purposes ofdeciding UHP's motion, we adopt the approach taken in American General Trading, 12-1 BCA

### ii 34,905 at 171,636, and continue our analysis of UHP's motion. "Without deciding upon the nature ofthe contract, for purposes ofruling upon the parties' cross-motions we give the benefit ofthe doubt to" the contractor "that the contract is one that is subjectto a breach claim based upon negligent estimates." Id. We assume arguendo that a negligent estimate could be a material breach ofits contract, and examine UHP's contentions in support ofits motion. UHP cites TzellAirtrak Travel Group Corp., ASBCANo. 57313, 11-2 BCA

### ii 34,845, in arguing that a material misrepresentation ofcompensable calls would excuse its repudiation ofthe contract (app. mot. at 21-22). The Boardheld there that: "A contract is voidable ifa party's manifestation ofassent was induced by either a fraudulent ora material misrepresentation by the otherparty upon which the recipient wasjustifiedin relying." Tzell, 11-2 BCA 

### ii 34,845 at 171,409-10 (citing RESTATEMENT (SECOND) OF CONTRACTS § 164 (1981); BarronBancshares, Inc. v. UnitedStates, 366 F.3d 1360, 1381 (Fed. Cir. 2004); T. Brown Constructors, Inc. v. Pena, 132 F.3d 724, 729 (Fed. Cir. 1997); see also Morris

v. UnitedStates, 33 Fed. Cl. 733, 745 (1995)).
Analyzing UHP's contentions that the governmentnegligently estimated the anticipated workload discloses that the contract lacks terms required by the FARto define contracttype. Should the contract lack sufficientterms to be enforceable, then it is voidable. Tzell, 11-2 BCA

### ii 35,845. There is also the question ofwhatthe government intended to include in its estimate, and further amplification is needed as to contractual terms and UHP's reliance on the approximated workload. "Although contract interpretation is generally considered a legal question susceptible to summary judgment, there are situations in which it requires the resolution offactual issues." Kaman Precision, 10-2 BCA

### ii 34,529 at 170,286. That is the case here; further

26

### investigation is required, as the record is not sufficiently developed to warrant summaryjudgment on this point.

CONCLUSION

Neitherparty has established undisputed material facts to fully support its motion for summaryjudgment, despite each having put forth multiple theories. The government made aprima facie case that UHP threatened to end and then untimely ceased performance. However, we are required to construe disputed material facts in favor of the non-movant, and UHP demonstrated that there are triable issues regarding the repudiation and abandonmentthatprecludejudgment for the government. UHP further raised factual and legal issues that require further development ofthe record with respect to whetherthe government is liable for negligently estimating the workload. Also, the contract's seeming lack ofsalientterms raises the question ofwhetherthe parties had an unenforceable contract that would allow UHP to withdraw from the agreement without giving rise to liability for repudiation. Further, triable issues also remain regarding whether UHP has been fully compensated for workproperlyperformed under the contract.

We have considered but find it unnecessary to more fully address the remaining arguments advanced by the parties, none ofwhich merit summaryjudgment for its proponent. Many ofthose advanced by appellant center upon the government's alleged breach ofthe duty to cooperate, arising primarily from the parties' disagreements overthe issues addressed in this decision, and it is unnecessary to analyze these in further detail. Norhas UHP met its burden ofestablishing by undisputed material facts that the government acted in bad faith. "In alleging bad faith by the government, appellant must carry ahigh burden to overcome the government'spresumption ofhaving acted in good faith. To carry this 'highburden,' requires a showingby clear and convincing evidence that

a contracting officer acted with the specific intentto injure appellant." SAiConstruction, Inc., ASBCA No. 57693,**14-1BCA~35,762** 

### at 174,987 (citingRoadandHighway Builders, LLCv. UnitedStates, 702 F.3d 1365, 1368 (Fed. Cir. 2012); andAm-Pro ProtectiveAgency, Inc. v. UnitedStates, 281F.3d1234, 1239-40 (Fed. Cir. 2002)).
Despite its prima facie showing, the government has not established by "good grounds and on solid evidence" that itjustifiablyterminated the contract for cause because questions remain on whetherthis was an enforceable contract. See, e.g., Lisbon Contractors, 828 F.2d at 765; JD. Hedin, 408 F.2d at 431; see also Tzell, 11-2 BCA**~** 

### 34,845 at 171,409-10. UHP has not established, as it must to obtainjudgment, by undisputed material facts that the government materially breachedthe contract. See, e.g., Mingus, 812 F.2d at 1390.

27

### CONCLUSION

Theparties' cross-motions for summaryjudgment are denied.

Dated: 17 May 2016

I concur

Administrative Judge Acting Chairman Armed Services Board ofContractAppeals Administrative Judge Armed Services Board ofContractAppeals

I concur

RICHARD SHACKLEFORD Administrative Judge Vice Chairman Armed Services Board ofContract Appeals

I certify that the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContractAppeals in ASBCA No. 58123, Appeal ofUnited Healthcare Partners, Inc., rendered in conformance with the Board's Charter.

Dated:

28 JEFFREY D. GARDIN Recorder, Armed Services Board ofContract Appeals