ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of -- ) 

) 

American General Trading & Contracting, ) 

WLL ) 

) 

Under Contract No. DABM06-03-C-0009 ) 

APPEARANCES FOR THE APPELLANT: 

APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 56758 

Vonda K. Vandaveer, Esq. 

V.K. Vandaveer, P.L.L.C. 

Washington, DC 

Michael F. Brown, Esq. 

Peterson, Berk & Cross 

Appleton, WI 

Raymond M. Saunders, Esq. 

Army Chief Trial Attorney 

LTC Brian J. Chapuran, JA 

Trial Attorney 

OPINION BY ADMINISTRATIVE JUDGE MELNICK UPON THE PARTIES' 

SECOND SET OF CROSS-MOTIONS FOR SUMMARY JUDGMENT 

American General Trading & Contracting, WLL (appellant or AGT) was awarded 

a contract by the United States Army to provide laundry services at five military camps 

established in Kuwait prior to the 2003 invasion of Iraq. It alleges the Army negligently 

estimated its laundry needs in the camps, which virtually emptied shortly after award due 

to the invasion. It seeks damages resulting from that alleged breach. Separately, AGT 

also claims it entered into an implied-in-fact contract to provide laundry services at two 

additional camps in Kuwait, which it contends the government also breached. 

Previously, we denied cross-motions for summary judgment respecting the first claim 

related to the five camp express contract, denied a government motion to dismiss the 

second claim, and ruled that cross-motions for summary judgment respecting the second 

claim were moot. American General Trading & Contracting, WLL, ASBCA No. 56758 

12-1 BCA iJ 34,905. 

The parties now cross-move for summary judgment again. AGT contends that the 

undisputed facts show that the government breached both contracts. The government 

contends the five camp express contract is not subject to a negligent estimate claim, and 

that no additional implied-in-fact contract was formed. We deny the government's 

motion respecting the first claim and defer ruling upon AGT's motion on that claim until 
discovery is completed. We grant the government's motion respecting the second claim 

and deny appellant's motion on the second claim. 

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS 

I. Contract No. DABM06-03-C-0009 

1. On 17 February 2003, the U.S. Army Central Command-Kuwait awarded 

Contract No. DABM06-03-C-0009 ("09 contract") to AGT to perform laundry services at 

five military camps in Kuwait. As modified, the 09 contract was for six months, with an 

option to extend for six months. (R4, tabs 3, 4) The solicitation, issued 23 January 2003, 

and awarded contract provided that it was a firm-fixed unit-priced contract with total item 

numbers adjustment. Thus, the contractor's payment depended on the actual number of 

items laundered. (R4, tab 1 at 1-2, 21, 29, tab 3 at 2, 14) The solicitation and contract 

estimated that the laundry requirements for each camp would be 1,000 soldiers, capable 

of surging up to 7,000 soldiers per camp on a monthly basis, with the number of items to 

be laundered ranging up to 17,640,000 (R4, tab 1at2, 7, 22, tab 3 at 2, 9, 15). The 

solicitation and contract also estimated the average number of soldiers in each camp 

would be 3,500, equating to 8,820,000 items (R4, tab 1 at 2, tab 3 at 2). The solicitation 

informed bidders that "[t]he contract is based on the average number of troops for each 

camp" (R4, tab 1 at 29). However, the Price Quote Guidelines in the solicitation 

provided differently that bids should be based on "7 ,000 troops x 5 Camps x 4 weeks/mo 

x 21piecesx6 mo= 17,640,000 pieces" (R4, tab 1at23). The parties agreed to a set of 

item rates under the contract (app. prop. findings i! 31; gov't prop. findings i! 38). The 

contract does not contain the FAR 52.216-21, REQUIREMENTS (OCT 1995) clause, nor 

does it contain the FAR 52.216-22, INDEFINITE QUANTITY (OCT 1995) clause. 

2. AGT performed laundry services under the contract (gov't prop. findings 

i!il 1-2; George decl. i! 191). AGT invoiced for its services under the contract and was 

paid by the government (app. prop. findings i! 32; gov't prop. findings iii! 81-84). 

3. On 20 March 2003, the president ordered the invasion of Iraq (1st amended 

compl. and answer, part Ii! 33). 

II. Camps Victory and 35th Brigade 

4. In late June, 2003, Ms. Colleen Rodriguez, a contracting officer with the 

Kuwait Directorate of contracting, contacted Ms. Sheila Gittens, AG T's president. 

Ms. Rodriguez asked AGT to establish laundry facilities at two additional camps named 

Victory and 35th Brigade. Ms. Rodriguez requested Ms. Gittens to provide a pricing 

scheme that would meet the costs of the operation. (Gittens decl. i! 7) Ms. Gittens' 

1 Mr. George declares that he is AGT's Middle East manager (George decl. i! 1). 

2 
22 June email response addressed Camp Victory. She provided a list of equipment to 

perform the services, and quoted item rates that were higher than those agreed upon for 

the 09 contract. (Id. ~ 8, ex. L; George decl. ~ 41; Cockerham tr. 55-562

). Ms. Rodriguez 

verbally instructed Ms. Gittens to proceed (Gittens decl. ~ 9). 

5. On 25 June 2003, Ms. Gittens emailed Ms. Rodriguez that AGT had "set up" 

purchase orders for equipment and coordinated with a Lt. Tucker to designate a site for 

the laundry at Camp Victory. She therefore requested a written notice to proceed. 

Ms. Rodriguez's response instructed AGT to "keep proceeding with [its] efforts." She 

explained that she was in the process of "preparing a change order" and hoped to have 

one for AGT later in the week. However, no modification was sent. (Gittens decl. ~ 11, 

ex. M) AGT then proceeded with the procurements and mobilization for Camp Victory 

(id. ~ 12). 

6. On 26 June 2003, Ms. Rodriguez emailed Ms. Gittens, inquiring about when 

AGT could have "a full service laundry" at 35th Brigade. Ms. Gittens responded that a 

laundry could be available at that location by 12 July, depending on when she received a 

notice to proceed. She continued that Ms. Rodriguez should "note that both Victory and 

35th [Brigade] will be at the new rates previously given." (Gittens decl. ~ 13, ex. N) On 

30 June 2003, Ms. Gittens emailed Ms. Rodriguez that she was still waiting for a notice 

to proceed to establish the facility at 35th Brigade, and requested confirmation of the 

prices she had previously provided. Ms. Rodriguez's response provided the notice to 

proceed, but requested documentation regarding AGT's price increases. (Id. ~ 14, ex. 0) 

7. Based on the notices to proceed it received, and with the government's 

approval, AGT built and operated laundry facilities at both camps (Gittens decl. if 16, 

ex. P; Rodriguez tr. 34-37). AGT claims to have incurred KD 39,476.400 establishing 

and operating the facilities (George decl. ~ 38). However, it did not invoice the 

government for those services at the rates it had quoted. Instead, because the government 

did not issue a contract modification approving those rates, AGT charged the same rates 

that were in effect for the 09 contract. Between commencement of services at the 

additional camps in July, and 31 August, AGT laundered 151,107 items. The numbers 

are consistent with soldier counts in the hundreds in each camp. AGT's total revenues 

for those services were KD 23,357.000. (Id.~~ 39-40) 

III. AGT's Claim 

8. On 12 October 2003, AGT submitted a certified claim for KD 1,271,991. AGT 

claimed the government had negligently estimated its requirements for the 09 contract, 

and failed to pay amounts owed for services at the two additional camps. (R4, tab 8) On 

2 CPT Cockerham was assigned to the contracting command (Cockerham tr. 24). 

3 
11 August 2004, AGT submitted a "corrected" certified claim for KD 1,358,241.400 that 

"replaced" the original (R4, tab 15). 

9. On 2 December 2008, the contracting officer issued a final decision denying 

AGT's claim (R4, tab 16). 

10. By letter dated 26 February 2009, AGT appealed the denial of its claim to this 

Board (R4, tab 17). 

DECISION 

Summary judgment should be granted if it has been shown that there are no 

genuine issues of material fact and the moving party is entitled to judgment as a matter of 

law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Summary judgment shall be 

entered against a party that "fails to make a showing sufficient to establish the existence 

of an element essential to that party's case, and on which that party will bear the burden 

of proof at trial" because "failure of proof concerning an essential element of the 

nonmoving party's case necessarily renders all other facts immaterial." Id. at 322-23. 

I. The 09 Contract 

AGT claims the government breached the 09 contract by negligently estimating its 

laundry requirements. It contends that, prior to award of the contract, the government 

knew that the soldiers in the camps would be ordered to invade Iraq, significantly 

reducing the number of personnel in the camps below the estimated average of 3,500 

over the contract's 6-month term. It argues the government's negligent estimate 

constitutes a breach of contract, entitling it to a recovery. Both parties have moved for 

summary judgment on this claim. AGT's motion contends that the undisputed facts 

dictate it should recover. The government's cross-motion maintains the 09 contract is not 

subject to a negligent estimate claim as a matter oflaw. Because the government's 

cross-motion presents the threshold issue whether the contract is subject to the claim, we 

address it first. 

A. The Government's Motion 

As we previously held in this appeal, when estimates are placed in certain types of 

contract solicitations, contractors are entitled to rely upon them. A negligent estimate as 

to a material matter is a breach of contract. American General Trading & Contracting, 

12-1BCAii34,905 at 171,635. However, not all types of contracts are subject to such 

claims. As we observed, indefinite quantity contracts are not. Id. at 171,635-36. 

Neither party claims the 09 contract is an indefinite quantity contract, and we agree. It 

does not contain the Indefinite Quantity clause, nor does it commit the government to 

4 
purchase a minimum quantity of services, which is the key characteristic of such a 

contract. Id. 

One type of contract that is subject to negligent estimate claims is a requirements 

type contract. 12-1BCAii34,905 at 171,635. Such contracts do not guarantee any 

minimum purchase, but they commit the government to fill all of some particularly 

defined requirements for services with the contractor during a specified period. Id. We 

agree with the government that the 09 contract is not a requirements type contract. The 

contract does not contain the Requirements clause, nor does it otherwise promise AGT 

that it would be an exclusive source of laundry services. See Modern Sys. Tech. Corp. v. 

United States, 979 F.2d 200, 205-06 (Fed. Cir. 1992). 

The government implies that because it was not obligated to purchase either its 

requirements or a stated minimum of services from AGT under the 09 contract, the 

government was not committed to purchase any particular quantity of services. It 

contends such an illusory arrangement is not subject to a negligent estimate claim, which 

it implies only applies to requirements type contracts. 

Given that the 09 contract contains neither a minimum quantity clause nor a 

requirements clause, it was not enforceable at its inception since the government was not 

obligated to take any ascertainable quantity of laundry services. Willard, Sutherland & 

Co. v. United States, 262 U.S. 489, 493-94 (1923). However, the contract "became valid 

and binding to the extent that it was performed." Id. at 494; see also Coyle 's Pest 

Control, Inc. v. Cuomo, 154 F.3d 1302, 1306 (Fed. Cir. 1998). It is undisputed that AGT 

performed services under the contract, and received payment from the government (SOF 

ii 2). Thus, the 09 contract is now "definite and binding" as a result of the "conduct and 

performance of the parties." Willard, Sutherland & Co, 262 U.S. at 494. As a binding 

contract, it is subject to a claim for breach. The only question is whether it is somehow 

exempt from the kind of breach claim arising from a negligent estimate. 

As we have already noted, requirements type contracts are not the only kind of 

contracts subject to negligent estimate claims. American General Trading & 

Contracting, 12-1BCAii34,905 at 171,635. In Womackv. United States, 389 F.2d 793 

(Ct. Cl. 1968), the government negligently underestimated the size of a job annotating 

title plats for which it sought fixed-price bids for the whole project. Recognizing that the 

estimate was intended to guide bidders, the court held the contractor was entitled to 

recover. In Timber Investors, Inc. v. United States, 587 F.2d 472 (Ct. Cl. 1978), a timber 

sale contract required the contractor to construct roads on forest land for a fixed credit on 

the timber purchase price. The credit was based on a government estimate of the work 

and related costs that the contractor claimed were unreasonably inaccurate. The court 

recognized that an inaccurate estimate could support a recovery by the contractor if it 

proved its claim, which it did not. In Rumsfeld v. Applied Companies, Inc., 325 F .3d 

1328, 1340-41 (Fed. Cir. 2003), the court acknowledged that a negligent estimate claim 

5 
had previously been sustained in a case that did not involve a requirements contract. 

What mattered was not the type of contract but whether "estimates of volume are material 

to the contract." Id. at 1340; see also Ravens Grp., Inc. v. United States, 112 Fed. Cl. 39 

(2013) (acknowledging the applicability of a negligent estimate claim to the firm-fixed 

price portion of a contract to respond to monthly service calls). 

Estimates of volume are material to the 09 contract. The solicitation and contract 

represent that the number of personnel would vary from 1000-7000 per Camp. They also 

state that the average number of soldiers per camp will be 3,500. The solicitation 

expressly instructs AGT to bid based on its receipt of laundry pieces from 7000 soldiers 

in each camp, but warns that it will only be paid for the total number of items it actually 

receives. (SOF ii 1) AGT has presented evidence that it relied on the government's 

estimates to establish its item rates, indicating that the prices ultimately paid to it under 

the binding contract that was formed were driven by those representations (George decl. 

iii! 8-17). To the extent the estimates underlying the 09 contract's prices were negligently 

prepared, and that AGT reasonably relied on them, there is no reason AGT cannot pursue 

a claim based on that negligence. See Konitz Contracting, Inc., ASBCA No. 52299, 01-2 

BCA ii 31,572 at 155,902 (acknowledging that a contract lacking both a requirements and 

indefinite quantities clause, and only enforceable to the extent performed, remains subject 

to a claim for equitable price adjustment); Envtl. Quality Mgmt., Inc. v. Environmental 

Protection Agency, CBCA No. 3072, 13 BCA ii 35,300 (observing that, even if a contract 

is neither requirements nor indefinite quantity, a claim based upon a variation in 

estimated quantities is still cognizable). 

Though relied upon heavily by the government, Eastern New Mexico 

University-Roswell, ASBCA No. 57110, 12-2 BCA ii 35,090, does not dictate otherwise. 

There, the Board ruled that the contract at issue was neither an indefinite quantities 

contract, a requirements contract, nor a definite quantities contract. Therefore, the Board 

rejected the contractor's claim that the government failed to order an alleged minimum 

quantity. Eastern New Mexico University-Roswell did not hold that, to the extent 

performed, the contract was immune from a negligent estimate claim. That issue was not 

presented. 

We recognize that since the 09 contract was only binding to the extent it was 

performed, and therefore AGT could have declined to perform at the contract rates, AGT 

may have little to complain about past the point in time it became reasonably clear the 

government's estimates were negligently prepared. Whether and when that might have 

been the case requires more thorough development of the record. Right now we only 

conclude that the contract is not immune from a negligent estimate claim as a matter of 

law. 

6 
Because the government has not shown that it is entitled to summary judgment 

upon AGT's negligent estimate claim, its motion for summary judgment on that claim is 

denied. 

B. AGT's Motion 

AGT presents detailed evidence in support of its contention that the government's 

estimates were negligently prepared and that it was damaged. The government has 

responded, but AGT has also separately moved to compel responses to document 

requests it states are relevant to its motion. We granted part of AGT's motion to compel. 

Therefore, we will defer ruling upon AGT's motion for summary judgment on the 09 

contract until its discovery is complete. 

II. The Implied-In-Fact Contract Claim 

In addition to its negligent estimate claim arising from the 09 contract, AGT also 

claims that the ~overnment breached an implied-in-fact contract relating to Camps 

Victory and 3 5 Brigade. 3 It contends that the contracting officer agreed to compensate 

AGT for all its costs providing laundry services at those camps. Accordingly, it seeks the 

difference between its alleged KD 39,476.400 cost of performing and its KD 23,357.000 

invoice receipts. Both parties seek summary judgment. The government contends there 

is no evidence that the parties formed an implied-in-fact contract in which the 

government agreed to pay more than the 09 contract's rates for AGT's services at the two 

camps, or to pay all of AGT's costs providing facilities at those locations. To defeat the 

government's motion for summary judgment, AGT must proffer evidence of an 

implied-in-fact contract obligating the government to pay its excess costs. Celotex, 

477 U.S. at 322 (requiring summary judgment to be entered against a party that "fails to 

make a showing sufficient to establish the existence of an element essential to that party's 

case, and on which that party will bear the burden of proof at trial"). 

As we have held in this appeal, an implied-in-fact contract is based on a meeting 

of the minds not embodied in an express contract, but inferred from conduct of the parties 

showing their tacit understanding. American General Trading & Contracting, 12-1 BCA 

ii 34,905 at 171,639. To prove an implied-in-fact contract, AGT must demonstrate the 

party acting for the government had contracting authority, and then facts showing 

mutuality of intent, consideration, and lack of ambiguity in offer and acceptance. Id. 

Assuming without deciding that Ms. Rodriguez was authorized to bind the 

government to the alleged contract for the two camps, AGT has failed to present evidence 

that the government agreed to pay all of AGT's costs. AGT's evidence shows that 

3 Previously, we ruled we lacked jurisdiction over an additional claim by AGT that it is 

entitled to compensation for these services under FAR 50.103-2(c). 

7 
Ms. Rodriguez requested AGT to establish laundry facilities at the two additional camps, 

and Ms. Gittens responded by quoting new, higher item rates for Camp Victory (SOF 

if 4). Ms. Rodriguez replied that AGT should proceed (SOF if 5). She then reiterated her 

request for the 35th Brigade site. In response, Ms. Gittens provided a date that location 

could be ready, and made clear that services at both facilities would be at the new rates. 

She sought confirmation of those prices from Ms. Rodriguez. Ms. Rodriguez provided 

the notice to proceed for 3 5th Brigade, but requested documentation supporting the new 

prices. (SOF if 6) AGT constructed facilities at the two sites, provided laundry services, 

and invoiced the government. However, AGT did not invoice for the new prices. 

Because the government never approved the new rates, AGT only charged the rates 

applicable to the 09 contract. The government paid those invoices. (SOF if 7) 

This evidence demonstrates statements and conduct by the parties consistent with 

an intent by all to contract for AGT's services at the two sites; and it shows that 

consideration was provided by both parties. However, it does not show an unambiguous 

promise by the government to pay AGT's costs, whatever they were. AGT presents no 

evidence that it demanded, or the government accepted, some form of cost 

reimbursement arrangement. There is evidence AGT proposed new, higher item prices 

given its actual experience performing the 09 contract, but AGT concedes that the parties 

never agreed to those prices (app. mot. at 37). That concession is consistent with AGT's 

evidence that it performed services at the two camps while only invoicing the 

government at the lower rates it had charged under the 09 contract. AGT implies that its 

lower charges are somehow Ms. Rodriguez's fault because she never issued a 

modification (presumably to the 09 contract) approving the higher prices AGT quoted 

(app. prop. findings if 96). The suggestion does not assist AGT. If anything, it is simply 

more evidence that the government never agreed to AGT' s higher rates and that AGT 

consented anyway to the lower rates it ultimately invoiced. Given AGT's failure to 

present any evidence that the government agreed to pay costs above the invoices it has 

already paid, its motion for summary judgment upon its implied-in-fact contract claim is 

denied, and the government's motion is granted. 

8 
CONCLUSION 

The government's motion for summary judgment on the 09 contract claim is 

denied. AGT's motion for summary judgment on the implied-in-fact contract claim is 

denied. The government's motion for summary judgment on the implied-in-fact contract 

claim is granted. 

Dated: 23 April 2014 

I concur 

Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

~~-~ ~MELNICK 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

I concur 

lllfV\ 

RICHARD SHACKLEFORD 

Administrative Judge 

Vice Chairman 

Armed Services Board 

of Contract Appeals 

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

Armed Services Board of Contract Appeals in ASBCA No. 56758, Appeal of American 

General Trading & Contracting, WLL, rendered in conformance with the Board's 

Charter. 

Dated: 

9 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals