Court Opinion

ID: 9900147
Source: CourtListenerOpinion
Date Created: 2023-11-18 22:01:18.266216+00
Date Added: 2024-06-11T09:21:00.249777
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS
 Appeal of -                                    )
                                                )
 OSC Solutions, Inc.                            )   ASBCA No. 63294
                                                )
 Under Contract No. N00189-20-A-0002            )

 APPEARANCE FOR THE APPELLANT:                      Frank V. Reilly, Esq.
                                                     Oakland Park, FL

 APPEARANCES FOR THE GOVERNMENT:                    Craig D. Jensen, Esq.
                                                     Navy Chief Trial Attorney
                                                    Philip T. Rappmund, Esq.
                                                     Trial Attorney

                OPINION BY ADMINISTRATIVE JUDGE ARNETT

       This appeal arises from denial of a claim filed by OSC Solutions, Inc. (OSC or
appellant) seeking $1,152,858 for store labor services incurred in performance of a
Blanket Purchase Agreement (BPA) with the U.S. Navy (Navy or government) (see
generally R4, tab 6). OSC contends that it was not compensated for store labor service
costs because only a “small percentage” of the orders estimated in the BPA were filled
with OSC products and OSC’s service costs were included within the cost of its
products rather than priced separately (id. at 115). Thus, OSC only received payment
for service costs associated with its products that were ordered which was insufficient
to cover the service costs it incurred.

       The Navy asserts that the BPA was not a contract as it did not obligate any
funds or bind the government to order the estimated quantity of OSC products. The
Navy notes that OSC was invited through the solicitation and during discussions to
submit separate pricing for store labor services but responded that services were
provided at “no additional charge” (gov’t br. at 9-10).

       We have previously determined that we have jurisdiction over this appeal
pursuant to the Contract Disputes Act of 1978, 41 U.S.C. §§ 7101-7109 (CDA). See
OSC Sol., Inc., ASBCA No. 63294, 23-1 BCA ¶ 38,266 at 185,805. Familiarity with
the facts is presumed. The parties elected to submit this appeal on the record pursuant
to Rule 11 and requested that the Board decide entitlement only.

       Because the BPA is not a contract for purposes of the CDA, and OSC cannot
prevail under express or implied-in-fact contract theories, the appeal is denied.

                                           1
                                  FINDINGS OF FACT

The Solicitation:

       1. On or about May 2, 2019, the Navy issued a solicitation for a BPA 1 to
provide maintenance, repair, and operations (MRO) supplies and materials for sale in
“shop stores” at four Naval Facility Public Works Department (PWD) locations in the
Northeastern United States (R4, tab 7 at 565).

        2. The Performance Work Statement (PWS) required the contractor to “furnish
all labor, supplies, equipment, management, supervision, and reports necessary to
maintain an adequate supply of all parts, materials, and equipment needed to
accomplish the needs of each PWD” (id. at 565). The contractor was required to fill
“all customer requests for material” and “research and procure all items from vendors
available from the approved GSA Schedules incorporated into” the BPA (id. at 572,
582). If the Navy needed material that was not stocked in the shop stores through the
approved GSA Schedules, the PWS required the contractor to assist the Navy to find
sources of supply (id. at 580).

       3. PWS § 2, Determination of Supply Requirements, indicated that the Navy
could submit purchase requests for brand name or manufacturer-specific items. Unless
otherwise stated in the purchase request, the contractor “may propose substitutes
available on the Schedules” and the Navy could approve or reject the proposed
substitution. (Id. at 568) Further, PWS § 2.1.4 stated, “MRO supplies and other
product lines considered to be MRO items not initially identified in the Schedule
provided may be added at any time based on the requirements of the ordering
activity and must be added to the GSA Schedule” (id. at 568) (emphasis added).
Regarding Ordering, PWS § 5.1 indicated, “The contractor is expected to research
outside its own circle of suppliers to fulfill the Government’s needs in an expeditious
manner in accordance with their Contractor Teaming Arrangement” (id. at 572).

        4. The PWS identified a Shop Stores Inventory List and an Authorized Use
List as attachments 2 (id. at 565, 582). During quarterly reviews, the Navy could
modify the list as well as “present the contractor with a list” of shop store stock list
items that were purchased through other sources. In that event, the contractor would
be responsible to provide “documentation supporting why those items could not be
purchased through the shop store.” (Id. at 581)

1
  A blanket purchase agreement (BPA) is a “simplified method of filling anticipated repetitive
       needs for supplies or services by establishing ‘charge accounts’ with qualified sources
       of supply” (FAR 13.303-1).
2
  The attachments do not appear to be included in the record.
                                              2
         5. The solicitation stated,

                This BPA does not obligate any funds. Funds will be
                obligated by placement of calls under Federal Acquisition
                Regulation Subpart 8.4, entitled “Federal Supply
                Schedules”, or the use of a Government wide purchase
                card issued under the Federal Acquisition Regulation
                13.303 entitled “Blanket Purchase Agreements”, and
                agency regulations. 3

(Id. at 5). Further, it noted, “Orders will be placed against this BPA via Electronic
Data Interchange (EDI), FAX, paper, or oral communications” (id. at 541). The
solicitation stated, “Non-Schedule items will not be procured using the resulting
Agreement” (id. at 551).

       6. The solicitation provided the following instruction regarding discount rates
in price proposals submitted by offerors:

                The offeror shall propose a fixed discount rate to be
                applied to the service and material requirements which will
                be established as a term in the resulting BPA. The offeror
                shall offer a fixed discount for each of the following:

                o Services;
                o Schedule 51V Materials; and
                o Each Schedule other than 51V used to complete the
                  Test Market Basket.

                Note: All requirements to include services and materials
                must be on a FSS Schedule; no “open market” materials
                are permitted.

(Id. at 550) (emphasis omitted) 4

3
    “The Federal Supply Schedule program is directed and managed by GSA and provides
       Federal agencies . . . with a simplified process for obtaining commercial supplies and
       commercial services at prices associated with volume buying” FAR 8.402(a).
4
  Schedule 51V Materials refers to GSA Schedule 51V Hardware Superstore. “Open market”
       refers to items that are not on Federal Supply Schedules. FAR 8.402(f).
                                              3
       7. The solicitation provided the following instruction regarding services
pricing:

               Separate price information shall be submitted for each of
               the four (4) PWDs for a total of twelve (12) months of
               service support as required by the PWS. The price for the
               services shown in this spreadsheet shall include all fully-
               burdened labor required to provide services and shall be
               less than or equal to the offeror’s GSA Schedule 51 V
               rates. The offeror shall apply the Services Discount
               proposed in Tab 1 of Attachment 3 to the total proposed
               services price, which will result in the Total Discounted
               Service Price . . . .

(Id. at 550)

OSC’s Proposal and Revisions:

        8. In response to the solicitation, OSC submitted a price proposal which stated,
“10% Store service is included within the price of the products therefore there are no
additional charge (sic) for services” (R4, tab 8 at 598). OSC’s proposal also included
a table to reflect the monthly and total service price for each of the four shop store
locations. It stated a cost of $0 as the monthly and total service price for each location
and included the following note under the table: “Store service is included within the
price of the products therefore there are no additional charge (sic) for services.” (Id.
at 599)

       9. On August 2, 2019, the Navy indicated that it would conduct exchanges and
request final proposal revisions. It identified weaknesses in OSC’s proposal, including
noting that OSC’s price proposal “must contain separately priced services.” It
requested that OSC address this concern. (R4, tab 9 at 605-06)

      10. In response, OSC provided a seven-page letter dated August 2, 2019 and a
subsequent email on August 8, 2019. Both communications from OSC stated:

               OSC is offering the required services to the Navy for no
               additional charge as they are incidental to the purchasing
               of the products from our GSA schedule contract. There is
               therefore no additional charge for OSC to offer the Navy
               the required services under the contract. Required services
               are included for no additional charge.

(R4, tabs 10 at 613, 11 at 615-16)

                                            4
The Agreement:

       11. On January 2, 2020, the Navy and OSC entered into BPA
No. N0018920A0002. The BPA included a base ordering period through January 1,
2021, and four subsequent option years. (R4, tab 2 at 4, 39)

       12. Paragraph (1) of the BPA stated, “The following contract services/products
can be ordered under this BPA. All orders placed against this BPA are subject to the
terms and conditions of the contract, except as noted below . . .” (Id. at 5) It noted,
“Open market items may not be ordered under this BPA” (id.). 5

      13. Paragraph (3) of the BPA stated, “The Government estimates, but does not
guarantee, that the volume of purchases through this agreement will be
$70,070,404.09” (id.).

         14. Paragraph (4) of the BPA stated,

                This BPA does not obligate any funds. Funds will be
                obligated by placement of calls under Federal Acquisition
                Regulation Subpart 8.4 entitled “Federal Supply
                Schedules”, or the use of a Government wide purchase
                card issued under the Federal Acquisition Regulation
                13.303 entitled “Blanket Purchase Agreements”, and
                agency regulations.
(Id.)

         15. Paragraph (11) of the BPA stated,

                “Best Value: The Fleet Logistics Center Norfolk,
                Contracting Office, and OSC Solutions, enter into this
                blanket purchase agreement with the intent of ensuring the
                best value is achieved for the Navy when acquiring
                required materials and services as detailed in the PWS.”

(Id. at 6)

       16. Both the solicitation and the BPA referenced Federal Acquisition
Regulation (FAR) 8.405-3, Blanket Purchase Agreements, and FAR 13.03, Blanket
Purchase Agreements, and both consistently characterized the arrangement between
the parties as a “BPA” (R4, tabs 7 at 541, 2 at 5).

5
    Open market items are items not on the Federal Supply Schedules or GSA schedules (FAR
         8.402(f)).
                                              5
      17. FAR 16.506(d)(1) instructs the government to insert FAR clause 52.216-
21, Requirements, in solicitations and contracts where a requirements contract is
contemplated. Neither the solicitation nor the BPA referred to the arrangement
between the parties as a “requirements contract” or referenced FAR Part 16.503 or
FAR clause 52.216-21. (see generally R4, tabs 2 and 7)

       18. We find the agreement between the parties to be a BPA, not a requirements
contract.

OSC’s Requests for Compensation for Store Labor Services:

       19. After award of the BPA, OSC staffed the shop stores and filled an
unidentified number of orders placed by the Navy under the BPA for products on
OSC’s GSA Schedule. The dollar value of orders placed on OSC’s BPA was less than
the government estimate (answer ¶ 23).

      20. On December 31, 2020, the government exercised Option Period I, which
extended the BPA to January 1, 2022 (R4, tab 5 at 112-13).

       21. In July 2021, OSC submitted an invoice requesting payment of
$1,013,729.28 for “unabsorbed store services direct costs.” OSC stated that it had
discounted its store service costs based on the estimated volume of sales indicated in
the BPA, which had not been realized. (R4, tab 12 at 619) In October 2021, OSC
requested a “resolution” of the unpaid invoice indicating that it desired to cancel its
obligation under the BPA effective October 29, 2021, if the government would not pay
the invoice (R4, tab 13 at 627). 6

       22. On November 19, 2021, the Navy indicated its intent not to exercise the
next option period (R4, tab 12 at 622-23). As a result, the BPA expired on
December 31, 2021. On November 29, 2021, the contracting officer stated that there
was “no basis for the payment of OSC’s labor service invoices” and indicated that the
Navy did not intend to pay the invoices or modify the BPA “to permit such charges”
(R4, tab 13 at 621).

        23. On February 17, 2022, OSC filed a certified claim seeking $1,152,858 for
store labor services incurred in the performance of the BPA (see generally R4, tab 6).
Rather than price the service costs separately, OSC included its store service costs
within the cost of its products. OSC asserted that its service costs were not
compensated because the Navy ordered “a small percentage” of the product amount
estimated in the BPA, and OSC only received payment for services associated with its

6
    OSC incorrectly asserts that the Navy “backed out of” the BPA by declaring it
         “unenforceable” to avoid paying OSC (app. reply at 23).
                                                6
products that were ordered. Had the BPA estimate been realized, OSC concluded that
it would have been paid in full. (Id. at 115-18)

        24. On April 18, 2022, the Navy denied OSC’s certified claim (see generally
R4, tab 1). The contracting officer concluded that the BPA did not guarantee a
particular volume of sales, that the BPA did not impose a contractual obligation upon
the Navy, and that OSC made a business decision not to propose separate pricing for
store labor prices since that was specifically identified in the Solicitation and discussed
in the exchanges prior to award. The contracting officer noted that OSC elected to
include its store service costs within the price of the products stating that “there are no
additional charge for services.” (Id. at 1-2)

       25. On June 2, 2022, OSC filed an appeal with the Board seeking $1,153,858 7
for labor service costs it allegedly incurred to staff the four Naval PWD locations
under the BPA. The appeal was docketed as ASBCA No. 63294.

                                         DECISION

I. The Parties’ Contentions

       OSC asserts that the BPA was a contract because it was an “order” which
obligated OSC to provide staffing and, therefore, obligated funds to pay for staffing
(app. br. at 11). OSC contends that it processed 100% of the estimated orders 8 which
included “prohibited orders” for other vendors’ products but was only paid store labor
service costs for the portion of the orders (approximately 17%) that were for OSC
products (id.). OSC concludes that “only products on OSC’s authorized GSA pricelist
could be ordered” and characterizes government purchases through other vendors as
“prohibited open market purchases” (id. at 1, 5). In effect, OSC posits the BPA as a
requirements contract 9 conferring exclusive rights upon OSC to fulfill all orders under
the BPA with OSC’s products thereby earning store labor service costs for every order
placed (id. at 11). Alternatively, OSC asserts that the Navy should be required to pay
for OSC’s services under an implied in fact or constructive change theory since the
Navy “cannot get free services by ordering prohibited goods outside the terms and
conditions of the Order” (id. at 12).

7
  The amount sought in OSC’s complaint for $1,153,858 differs by $1,000 from the amount
        stated in OSC’s claim in the amount of $1,152,858. In its reply brief, OSC clarified
        that the claim amount of $1,152,858 is the correct amount sought.
8
  The inference that OSC processed orders for other vendors’ products differs from its claim
        that the “estimated volume of orders did not materialize” (R4, tab 6 at 115). There is
        no evidence in the record that OSC filled orders for other vendors’ products.
9
  While it does not use this term, OSC treats the BPA as if it were a requirements contract
        under FAR 16.503.
                                               7
        The Navy asserts that the BPA was not a contract as it did not obligate any
funds and did not bind the government to order the estimated quantity. The Navy
notes that OSC was invited both through the solicitation and during discussions to
submit labor pricing, and OSC responded that its service costs were included in the
price of the products and therefore “no additional charge” (gov’t br. at 9-10). The
Navy contends that OSC made a “deliberate business decision in pricing its proposal”
and is not entitled to relief under any legal theory (id. at 14). Finally, the Navy asserts
that it did not enter into a requirements contract with OSC (gov’t reply at 4-5).

II. Standard of Review under Board Rule 11

        Under Board Rule 11, the parties may waive a hearing and instead have the
Board issue a decision based on the record. “Unlike a motion for summary judgment,
which must be adjudicated on the basis of a set of undisputed facts, pursuant to Board
Rule 11, the Board ‘may make findings of fact on disputed facts.’” U.S. Coating
Specialties & Supplies, LLC, ASBCA No. 58245, 20-1 BCA ¶ 37,702 at 183,031
(citing Grumman Aerospace Corp., ASBCA No. 35185, 92-3 BCA ¶ 25,059
at 124,886 n.13).

III. OSC cannot prevail under an express contract theory.

       A. The dispute arises under the BPA, not the Schedule Contract.

       First, we must address where the dispute arises. The Court of Appeals for the
Federal Circuit established a “bright-line rule” in its decision in Sharp Electronics v.
McHugh that “all disputes requiring interpretation of the schedule contract go to the
schedule [contracting officer], even if those disputes also require interpretation of the
order, or involve issues of performance under the order.” 707 F.3d 1367, 1373 (Fed.
Cir. 2013). However, the Court explained the application of this rule does not prevent
the contracting officer from construing the language of the order or to apply relevant
provisions of the schedule contract as long as there is no dispute in their meaning. The
Federal Circuit held:

              FAR 8.406-6 does not authorize an ordering CO to decide
              a dispute requiring interpretation of schedule contract
              provisions, in whole or in part, regardless of whether the
              parties frame the dispute as pertaining to performance.
              However, the ordering CO is certainly authorized to
              construe the language of the order (or its modifications).
              Because an order's details—not merely price, quantity, and
              specifications, but also permissible variation in quality or
              quantity, hours and location of delivery, discounts from
              schedule pricing, etc.—are arranged between the schedule

                                             8
                contractor and the ordering CO, the ordering CO is able to
                construe these commonly disputed terms as long as the
                dispute does not involve interpretation of the schedule
                contract.

(Id. at 1374)

Pursuant to the bright-line rule from Sharp Electronics, we must determine whether
this dispute requires interpretation of schedule contract provisions, in whole or in part.
Id.
        In this case, the dispute does not require interpretation of or a dispute regarding
schedule contract provisions. Instead, OSC’s claim focuses on the BPA and its
asserted rights under the BPA. The Navy focuses on how OSC bid the BPA and
asserts that the schedule contract has no relevance to this appeal (gov’t reply at 5). We
agree.

       B. This BPA is not a contract.

       While OSC attempts to bind the government to exclusively purchase OSC
products, this BPA is not a requirements contract, or even a contract at all. There are
fundamental differences between a requirements contract and a BPA. A requirements
contract is a binding contract; a BPA generally is not. A requirements contract
“creates a binding contractual obligation upon the government to order, and for the
contractor to furnish the government’s needs or requirements of a specific item or
service for a specified period of time.” Gen. Dynamics Ordnance and Tactical Sys.,
Inc., ASBCA No. 56870, 11-2 BCA ¶ 34,774 at 171,128 (citing Medart, Inc. v. Austin,
967 F.2d 579, 581 (Fed. Cir. 1992)); see also FAR 16.503. “[A]n essential element of
a requirements contract is the promise by the buyer to purchase the subject matter of
the contract exclusively from the seller.” Modern Sys. Tech Corp. v. United States,
979 F.2d 200, 205 (Fed. Cir. 1992). “[I]t is the very essence of a requirements
contract . . . that the buyer agree to turn to the supplier for all of its needs.” Id. at 206
(quoting Torncello v. United States, 681 F.2d 756 (Cl. Ct. 1982)).

        Conversely, a BPA that does not impose a binding obligation upon the parties is
not a contract. Crewzers Fire Crew Transp. Inc. v. United States, 741 F.3d 1380, 1384
(Fed. Cir. 2014); Modern Sys. Tech Corp., 979 F.2d at 202-04. The Court of Appeals
for the Federal Circuit and the Board have consistently held that a BPA was not a
contract where it lacked mutuality of consideration and found that separate contracts
“come into being each time the Government ordered services [under the BPA] and
appellant provided such services.” Hewlett-Packard Co., ASBCA Nos. 57940, 57941,
13-1 BCA ¶ 35,366 at 173,551 (quoting Julian Freeman, ASBCA No. 46675, 94-3
BCA ¶ 27,280 at 135,906); see also Dr. Chauncey L. Duren d/b/a Chesapeake
Orthopedics, ASBCA No. 35773, 90-1 BCA ¶ 22,386 at 112,487. Once an order is

                                              9
placed under a BPA, a contract is created with respect to that order, but the BPA is not
a contract where it lacks mutuality of consideration. See, Hewlett-Packard Co., 13-1
BCA ¶ 35,366 at 173,551 (discussing Zhengxing v. United States, 204 F.App’x 885,
886-87 (Fed. Cir. 2006), aff’g, 71 Fed. Cl. 732 (2006)).

       A contract with the government requires (1) mutuality of intent, (2)
consideration, (3) an unambiguous offer and acceptance, and (4) actual authority on
the part of the government’s representative to bind the government in contract.
Anderson v. United States, 344 F.3d 1343, 1353 (Fed. Cir. 2003). A failure of any of
these requirements precludes the existence of a valid contract.

        Here, the BPA is not a contract because it lacks mutuality of consideration. The
BPA expressly stated that it did not obligate any funds or guarantee a specific volume
of purchases (findings 13-14). While the BPA may have required OSC to perform
some staffing services in preparation for issuing orders under the BPA, we hold that
there is no consideration under the BPA for such work. OSC was solicited to provide
service costs for staffing the four locations; however, OSC declined to do so in its
proposal and exchanges prior to execution of the BPA (findings 8-10). Instead, OSC
consistently indicated that its service costs were incidental to the purchase of products
which would be sold under orders issued against the BPA and captured within the
purchase price of the products sold (id.). At the time the BPA was executed, neither
party intended any compensation for services until such time as an order might be
issued. Lacking mutuality of consideration, we conclude that the BPA is not a
contract. Because the BPA is not a contract, it does not serve as a basis for Board
jurisdiction or afford OSC any remedy. 10

IV. OSC cannot prevail under an implied contract theory.

      OSC asserts that an implied contract arose from the BPA whereby OSC would
perform services to stock and staff the four locations and would be paid “the fair and
reasonable value” of work performed (compl. at 2).

         A. OSC cannot prevail on its implied-in-fact contract argument.

       An implied-in-fact contract is founded upon a meeting of the minds and “is
inferred, as a fact, from the conduct of the parties showing, in the light of the
surrounding circumstances, their tacit understanding.” Guardian Safety & Supply LLC
dba Enviro Safety Products, ASBCA No. 61932, 19-1 BCA ¶ 37,333 at 181,560;
Kam-Almaz v. United States, 682 F.3d 1364, 1368 (Fed. Cir. 2012) (quoting Hanlin v.

10
     As indicated in the Board’s decision on the government’s motion to dismiss, we concluded
          that OSC’s assertion of an implied-in-fact contract was sufficient to establish
          jurisdiction over the dispute.
                                               10
United States, 316 F.3d 1325, 1328 (Fed. Cir. 2003)); see also Prudential Ins. Co. of
Am. v. United States, 801 F.2d 1295, 1297 (Fed. Cir. 1986) (“A contract implied in
fact is not created or evidenced by explicit agreement of the parties, but is inferred as a
matter of reason or justice from the acts or conduct of the parties.”). The requirements
for an implied-in-fact contract with the government “are the same as for an express
contract; only the nature of the evidence differs.” Hanlin, 316 F.3d at 1328; see also
Trauma Serv. Grp. v. United States, 104 F.3d 1321, 1325 (Fed. Cir. 1997). The
elements of proof to establish a valid contract with the government are: (1) mutuality
of intent to contract; (2) lack of ambiguity in offer and acceptance; (3) consideration;
and (4) actual authority on the part of the government representative to bind the
government in contract. Anderson, 344 F.3d at 1353. OSC bears the burden of
proving the existence of an implied-in-fact contract. Altanmia Com. Mktg. Co.,
ASBCA No. 55393, 09-1 BCA ¶ 34,095 at 168,584.

        For the same reasons that the BPA is not an express contract, it also is not an
implied-in-fact contract. The BPA did not obligate government funds (findings 5, 14).
This demonstrates both a lack of government intent to contract as well as a lack of
consideration. OSC proposed that it would perform services “for no additional
charge” stating that service costs were “incidental to the purchasing of the products”
(finding 10; see also findings 8-9). The repeated and express nature of OSC’s
communications regarding this element of its price proposal demonstrates OSC’s
intent to capture its service costs through orders, not the BPA. The meeting of the
minds as expressed in OSC’s proposal, exchange communications, and the BPA was
that OSC would be compensated for service costs through product orders, not through
the BPA. The BPA lacks consideration.

        The compensation now sought by OSC for store labor services arises from how
OSC bid the BPA, specifically its decision to not separately price service costs. While
OSC attempts to explain the logic and intent behind its decision to bid the BPA in the
manner that it did, it has not alleged or demonstrated grounds to recover for a mistake
in its bid. Rather, OSC made a deliberate business decision to not separately price
service costs. Further, OSC’s allegations regarding the source selection process for the
BPA and the exclusion of another offeror are irrelevant and unsupported. OSC has
presented no evidence to substantiate its assertions. Attorney argument is not
evidence. Icon Health and Fitness, Inc. v. Strava, Inc., 849 F.3d 1034, 1043 (Fed. Cir.
2017); see, e.g., Gemtron Corp. v. Saint-Gobain Corp., 572 F.3d 1371, 1380 (Fed. Cir.
2009) (“[U]nsworn attorney argument . . . is not evidence and cannot rebut . . . other
admitted evidence . . . .”).

        We will not disregard the express language of OSC’s proposal or its
communications regarding its price proposal prior to award of the BPA which clearly
listed $0.00 for services, stated that the services were incidental to the purchase of
products and were included “for no additional charge” (findings 8, 10). We find no

                                            11
basis for an implied-in-fact contract that would be contrary to the terms of both OSC’s
proposal and the BPA. OSC has not met its burden to demonstrate an implied-in-fact
contract.

       B. OSC cannot prevail on a quantum meruit argument.

       A common theme among OSC’s arguments is the unfairness of the
government’s refusal to pay the claimed service costs which appears to be a quantum
meruit argument. Recovery in quantum meruit, or quasi-contract, is generally
considered to involve a contract implied-in-law rather than a contract implied-in-fact.
R.G.W. Commc’n Inc., ASBCA Nos. 54495, 54557, 05-1 BCA ¶ 32,972 at 163,333;
Perri v. United States, 340 F.3d 1337, 1343 (Fed. Cir. 2003); see also Trauma Service
Grp. v. United States, 104 F.3d at 1327 (receipt of services benefiting the government
does not create an implied-in-fact contract to pay for them but involves a contract
implied-in-law scenario). Generally, the Board lacks jurisdiction to grant relief arising
from an implied-in-law contract. R.G.W. Communications Inc., 05-1 BCA ¶ 32,972
at 163,333; United Pacific Ins. Co., ASBCA No. 53051, 03-2 BCA ¶ 32,267
at 159,623, aff’d, United Pacific Ins. Co. v. Roche, 380 F.3d 1352 (Fed. Cir. 2004). To
the extent that OSC seeks equitable relief under an implied-in-law contract or quantum
meruit theory of recovery, OSC’s claim is denied because the Board lacks jurisdiction
to grant such relief.

V. OSC has failed to demonstrate a constructive change.

        OSC argues that government orders for other vendors’ products constituted
changes for which OSC should be compensated (app. br. at 12). “A constructive
change occurs where a contractor performs work beyond the contract requirements
without a formal order, either by an informal order or due to the fault of the
Government.” Int’l Data Prods. Corps. v. United States, 492 F.3d 1317, 1325 (Fed.
Cir. 2007) (citing Miller Elevator Co. v. United States, 30 Fed. Cl. 662, 678 (1994)).
“If a contractor performs work that cannot be characterized as additional work under
the contract, it does not constitute a change.” South Bay Boiler Repair, Inc., ASBCA
No. 59281, 17-1 BCA ¶ 36,634 at 178,426 (citing Int’l Data, 492 F.3d at 1325); see
also Bell/Heery v. United States, 739 F.3d 1324, 1335 (Fed. Cir. 2014) (“To
demonstrate a constructive change, a plaintiff must show (1) that it performed work
beyond the contract requirements, and (2) that the additional work was ordered,
expressly or impliedly, by the government.”).

      To recover based on a “change” theory, a contractor must show that the extra
work allegedly performed was not “volunteered,” but a result of direction from a
Government official. See, e.g., Len Co. & Assoc. v. United States, 181 Ct. Cl. 29, 38
(1967); Inman & Assoc. Inc., ASBCA No. 37869 et al. 91-3 BCA ¶ 24,048 at 120,370.

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         Here, OSC’s “change” argument is underdeveloped and unsupported. While
 OSC alleges that it incurred service costs operating the shop stores, there is no
 apparent change or extra work required from OSC. OSC committed to staff the shop
 stores in exchange for service costs earned through the sale of its products. OSC
 offers no evidence, only counsel argument, of any extra work performed. “Attorney
 argument is not evidence.” Icon Health and Fitness, Inc., 849 F.3d at 1043.

         As previously discussed, the BPA did not create a requirements contract
 whereby OSC would be the exclusive provider to the Navy for the MRO products at
 issue (finding 18). Additionally, the solicitation notified OSC that it might be required
 to assist the government in finding sources of supply for items not on OSC’s GSA
 Schedule and that MRO products not “initially identified in the Schedule provided
 may be added at any time based on the requirements of the ordering activity and must
 be added to the GSA Schedule” (findings 2-3). The PWS also indicated that the
 government could submit purchase requests for brand-name or manufacturer-specific
 items and OSC’s proposed substitution of OSC Schedule products may be denied
 (finding 3). Thus, we find that OSC was on notice, before it submitted its proposal,
 that it might be required to add products to its GSA Schedule (findings 2-3). We find
 no evidence of extra work. OSC has failed to demonstrate a constructive change.

                                        CONCLUSION

           For the reasons stated herein, the appeal is denied.

           Dated: July 20, 2023

                                                     LAURA J. ARNETT
                                                     Administrative Judge
                                                     Armed Services Board
                                                     of Contract Appeals

I concur                                              I concur

RICHARD SHACKLEFORD                                   OWEN C. WILSON
Administrative Judge                                  Administrative Judge
Acting Chairman                                       Vice Chairman
Armed Services Board                                  Armed Services Board
of Contract Appeals                                   of Contract Appeals

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       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. 63294, Appeal of OSC
Solutions, Inc., rendered in conformance with the Board’s Charter.

       Dated: July 24, 2023

                                                 PAULLA K. GATES-LEWIS
                                                 Recorder, Armed Services
                                                 Board of Contract Appeals

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