ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Wednesday, March 30, 2011

Court of Federal Claims Finds Illusory Promise Claim Illusory

Usfs_shield Crewzers Fire Crew Transport, Inc. v. U.S. arose out of a solicitation issued by the U.S. Forest Service in connection with contemplated Blanket Purchase Agreements (BPAs) for the purchase of buses that would be used by the Service to transport crews in emergencies.  The vendors would have to convert school buses to suit the Service's purposes.  Once the BPAs were issued, the Service reserved the right to order buses based on "cascading set-aside procedure" that gave preference to certain categories of bidders.  The Service wanted to make certain that it would be able to identify vendors who could provide the needed buses in a hurry, so it granted BPAs to multiple bidders.  The Solicitation included he following provision:

Since the needs of the Government and availability of contractor’s resources during an emergency cannot be determined in advance, it is mutually agreed that, upon request of the Government, the contractor shall furnish the resources listed herein to the extent the contractor is willing and able at the time of the order. Due to the sporadic occurrence of Incident activity, the placement of any orders IS NOT GUARANTEED.

The Court of Federal Claims interpreted this and other language to mean that neither party was actually promising much.  The Service made no promise to order buses to vendors awarded a BPA, and the the vendors only had a duty to maintain their readiness to provide such buses or to notify the Service of changes in their readiness to do so.  

Crewzers was never a happy camper.  It filed two pre-bid protests that the Government Accountability Office (GAO) rejected.  At that point the contracting officer notified all potential bidders that, due to delays in the bidding process (caused at least in part by Crewzers), bidders could not change key terms of their bids.  At that point, Crewzers challenged the solicitation as "illusory and unenforceable."  Crewzers filed its amended complaint in December 2010.  Briefing on cross-motions for judgment on the administrative record was completed in February and oral argument was held on March 11.

On March 18th -- how's that for efficiency?! -- the CoFC ruled for the Service.  In so doing, the court noted that the a BPA is not a contract.  Rather, "[i]t is instead a collection of provisions that may mature into a contract between the government and a supplier if and when a purchase order – in this case, a “resource order” -- is entered into by each."  Crewzers' arguments focused on the tension in the language of the Solicitation quoted above.  While contractors "shall furnish" resources; they only need do so if "willing and able."  Crewzers characterized this tension as giving rise to an illusory promise.  And so it would be, the CoFC acknowledged, if the BPAs were contracts, but they are not.

The CoFC then proceeded to reject Crewzers' alternative construction of the BPA as an option contract.  Actually, it refused to consider the argument, because it was raised as a new argument in Crewzers' reply brief.  However, the opinion then spends several pages carefully explaining why, even if the argument had been properly raised, it would have been rejected, which pretty much amounts to a rejection of the claim compounded by a criticism of Crewzers' litigation strategy.  

The CoFC rejected Crewzers' attacks on the integrity of the contacting officer's determinations as "fly-specking the solicitation" and also rejected a statutory claim.


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