BPAs Are Not Contracts–So “Tough Luck” For Terminated BPA Holder

A company’s blanket purchase agreement with the U.S. Forest Service was not a “contract,” meaning that the company had no ability to file a complaint with the U.S. Court of Federal Claims for an alleged improper termination of the BPA.

In dismissing the complaint on technical grounds, the Court’s message to the terminated company was, in essence, “tough luck.”

The decision of the U.S. Court of Federal Claims in Crewzers Fire Crew Transport, Inc. v. The United States, No. 11-607C (2013) involved a BPA issued by the Forest Service for the purchase of crew carrier buses.  The BPA specified that the placement of orders was “NOT GUARANTEED” but that if the Forest Service did place an order, the BPA holder was only required to provide the buses if it was willing and able to perform at the time.

In March 2011, the Forest Service awarded a BPA to Crewzers Fire Crew Transport, Inc.  The BPA had a three-year term.

In August 2011, the Forest Service notified Crewzers that its BPA was being suspended due to alleged breaches.  Crewzers responded to the Forest Service’s notice, disputing the alleged breaches.  However, in September 2011, the Forest Service terminated the BPA “for cause.”

Crewzers subsequently filed a complaint with the Court.  Crewzers’ complaint alleged that the Forest Service had acted in bad faith by terminating the BPA, interfered with Crewzers’ performance of the BPA, breached the covenant of good faith and fair dealing, and engaged in other improper actions.

The Government argued that because the BPA was not a contract, the Court lacked jurisdiction to hear Crewzers’ claim.  The Court agreed.

The Court noted that “[i]t is a settled matter of law that to invoke jurisdiction under the Tucker Act or [Contract Disputes Act], a plaintiff must allege all the requisite elements of a contract with the United States.”  The Court explained, “[t]he requisite elements include a mutual intent to contract including an offer, an acceptance, consideration, and facts sufficient to establish that the contract was entered into with an authorized agent of the United States who had actual authority to bind the United States.”

The Court pointed out that the BPA provided no guaranteed work and that Crewzers was only required to accept an order if it wished to, something the Court deemed “a classic illusory promise.”  Citing prior court decisions and FAR provisions, the Court wrote that under a BPA like this one, “a contract is not formed between a contractor and the Government until two conditions are met: an order must be placed under the BPA; and the contractor must accept that order.”  Thus, the Court concluded, “Crewzers’ BPA did not itself establish a contract with the Forest Service.”  The Court dismissed Crewzers’ complaint.

Although it is hard to find fault with the Court’s legal analysis, it seems to me that an improperly terminated BPA holder ought to be entitled to some form of legal recourse.  Although there is no way to know what would have happened had the Court heard Crewzers’ claims on their merits, the Government should not be able to hide behind legal technicalities if it treats contractors unfairly.  For now though, BPA holders are forewarned: the Crewzers Fire Transport case demonstrates the real-life implications of the oft-repeated saying, “a BPA is not a contract.”

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