MOTION FOR PARTIAL SUMMARY RELIEF GRANTED IN PART: March 11, 1993 GSBCA 11663 VEHICLE MAINTENANCE SERVICES, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Howard Friedman, Silver Spring, MD, and Robert A. Oliver of Vehicle Maintenance Services, Silver Spring, MD, appearing for Appellant. John E. Cornell and Margaret A. Dillenburg, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DANIELS (Chairman), HYATT, and GOODMAN. GOODMAN, Board Judge. This appeal arises from contract no. GS-04F-88-ETS-0165 awarded to appellant, Vehicle Maintenance Services (VMS or appellant), by the General Services Administration (GSA or respondent) for the performance of preventive maintenance, inspection, overhaul, and repair of government-owned vehicles at Fort Jackson, South Carolina. Appellant submitted a claim to the contracting officer pursuant to the Contract Disputes Act for $1,970,544.14 for twenty-three claim items. The contracting officer issued a final decision dated October 10, 1991, denying the claim in its entirety, and appellant filed this appeal on January 8, 1992. Respondent has filed a Motion for Partial Summary Relief pursuant to Board Rule 8(g) with regard to the following five items of appellant's claim, arguing that they are without merit and have no basis in law: (1) Lost profit in the amount of $960,106.48 allegedly the result of the Government's bad faith failure to exercise the option periods available under the contract. Complaint at 59-62. (2) The sum of $13,697.10 as additional compensation for the delivery of vehicles during 1989. Complaint at 31-33. (3) The sum of $9,722.30 as compensation for supplying equipment which appellant alleges was required by the contract for vehicle emissions testing but was not used, as the Government allegedly did not require such testing under the contract. Complaint at 33-34. (4) The sum of $13,630.43 to recover certain nonrecurring costs arising from appellant's claim to reform the contract into a multi-year, level price contract. Complaint at 49-50. (5) The sum of $114,756.64, which represents additional fixed costs allegedly incurred by appellant in performance of the contract, but which appellant claims were not recovered over the course of the contract, allegedly because of the inaccuracy of the Government's contract estimates. Complaint at 50-58. Respondent's motion is granted in part and denied in part, as set forth below. Findings of Fact 1. On November 20, 1987, appellant was awarded contract no. GS-04F-88-ETS-0165 for the performance of preventive maintenance, inspection, overhaul, and repair of government-owned vehicles at Fort Jackson, South Carolina, pursuant to solicitation AT/TC-20014. The contract was a requirements contract for indefinite quantities. The offerors, including appellant, submitted bids for twelve line items of supplies and services, and for two discounts. GSA included Estimated Annual Quantity figures for each line item. Appeal File, Exhibits 1, 5. Appellant's Claim for Bad Faith and Reformation for Multi-year Pricing 2. Appellant's principal, Mr. Robert A. Oliver, testified in his deposition that he was "led to believe" by GSA representatives that the Government would exercise all four of the option years available in the contract. Mr. Oliver testified that the contracting officer and GSA fleet manager gave him oral assurances that the options would be exercised, and that he relied on this information in formulating his bid for the contract. Mr. Oliver was not specific as to who made these statements, nor when they were made. Respondent's Motion for Partial Summary Relief, Exhibit 4 at 283-87. 3. In sworn affidavits, the GSA representatives alleged to have provided the oral assurances refute having made the alleged statements. Respondent's Motion for Partial Summary Relief, Exhibits 7, 8. 4. A former VMS employee, Timothy M. Bozard, testified in a deposition to conversations with Mr. Oliver that evidenced that Mr. Bozard was aware that his employment with VMS was dependent on the Government exercising additional option periods, and that he was aware that there was a risk that his employment with VMS might conclude if the contract term was not extended through the Government's exercise of additional options. Respondent's Motion for Partial Summary Relief, Exhibit 9. 5. The term of the contract was set forth in Part I, Section B of the contract1 : B-2 TERM OF CONTRACT: Contractor shall commence performance within thirty days after award and shall continue performance for 12 months thereafter. In accordance with the clause entitled "Option to Extend the Term of the Contract Services", the Government has the unilateral right to extend the term of this contract for four additional 12 month periods upon the same terms and conditions as are contained in this contract at the time said options are exercised. Offerors are cautioned that the exercise of the options is a Government prerogative, not a contractual right of the contractor. Appeal File, Exhibit 5 at 2. 6. The clause entitled "Option to Extend the Term of the Contract Services" reads as follows: I-32 OPTION TO EXTEND THE TERM OF THE CONTRACT - SERVICES (4/84) (a) The Government may extend the term of this contract by written notice to the contractor within the time specified in the Schedule; provided, that the Government shall give the Contractor a preliminary written notice of its intent to extend at least 60 days before the contract expires. The preliminary notice does not commit the Government to an extension. ____________________ 1 Appellant does not dispute that these terms were physically included in the contract. Respondent's Motion for Partial Summary Relief, Exhibit 1 at 1-2. (b) If the Government exercises this option, the extended contract shall be considered to include this option provision. (c) The total duration of this contract, including the exercise of any options under this clause, shall not exceed five (5) years. Appeal File, Exhibit 5 at 30. Additionally, there is an "OPTION FOR ADDITIONAL ITEMS/SERVICES" contained in the solicitation for vehicle detailing to which appellant, and apparently other bidders, did not respond, and which was not included in the contract. This differed from the option to extend the term of the contract in that it was an option "to purchase services not identified in the items to be evaluated, . . . and for which the Government may have a requirement during the life of the contract." Id., Exhibits 1, 3, 5 at 5-6. 7. By execution of modification PS-03 on November 21, 1988, the Government exercised the option to extend the term of the contract for an additional twelve-month period. Appeal File, Exhibit 9. 8. The Government did not exercise its unilateral option to extend the term of the contract for additional option periods beyond the initial one-year option period exercised. Appeal File, Exhibits 8, 11, 12. 9. Respondent alleges that "the discretion to determine whether or not to renew the VMS contract rested solely with GSA." Respondent's Motion for Partial Summary Relief at 9. After consulting the GSA Region 4 Fleet Management personnel, the contracting officer determined that VMS' contract performance had been "less than satisfactory." Appeal File, Exhibit 12. As a result, she further determined that it would be in the "Government's best interest" to "issue a new procurement for these services required at Fort Jackson, SC" and provided timely notice of this decision to the contractor. Id., Exhibits 11, 12. 10. Appellant alleges that the Government's decision not to exercise the remaining option years was motivated by bad faith, in that VMS' refusal to sign GSA's unilateral contract modification caused the Government not to renew options in subsequent years; that the Government has alleged erroneous and intentionally false statements of declining workload, which were cited as the reason for resolicitation;2 that the Government has ____________________ 2 VMS alleges with supporting documentation that "[t]he quantity estimates in the 1990 solicitation that followed for Fort Jackson were approximately 10% higher than the quantity estimates for the existing VMS contract. See Exhibit No. 3. If ___ the contract and solicitation quantity estimates were prepared in (continued...) alleged erroneous and intentionally false statements as to poor contract performance by VMS; that VMS' refusal to lower its price was the basis for GSA not exercising its option to renew the contract for the final three years; and that GSA diverted work which it was contractually obligated to have performed by appellant to other contractors. Appellant's Opposition to Partial Summary Relief, Oliver Affidavit. Vehicle Delivery Claim 11. Contract modification PS-01 was executed on December 15, 1987, by appellant. PS-01 modified the contract effective January 1, 1988, to the extent that the Government provided to the contractor the equipment enumerated therein in return for the consideration (specified in paragraph 4) of $4,093 per year. Respondent's Motion for Partial Summary Relief, Exhibit 3. 12. Contract modification PS-02 was executed on February 4, 1988, by the contracting officer and on February 5, 1988, by appellant. PS-02 modified the contract to the extent that it deleted paragraph 4 of modification PS-01 and substituted the provision that: "To compensate the Government for use of this equipment, the contractor agrees, after repairs and final inspection by GSA are completed, the contractor will deliver the vehicles to Fort Jackson Transportation Motor Pool." Respondent's Motion for Partial Summary Relief, Exhibit 5. 13. Appellant does not dispute that the terms of modification PS-02 applied to contract performance occurring in 1988. Respondent's Motion for Partial Summary Relief, Exhibit 4 at 423. Vehicle Emissions Testing Claim 14. The contract, in Section M-2, MECHANICS AND EQUIPMENT, states: Contractor must have available suitable up-to-date diagnostic and repair equipment necessary for the diagnosis, repair, and adjustment of automotive systems to meet the Federal Standards for air quality and safety. . . . Necessary equipment includes, but is not limited to, such diagnostic equipment as an oscilloscope or computer diagnostic machine, infrared ____________________ 2(...continued) good faith on a consistent basis by the Fleet Management Branch and Contracting Officer, their statements that the contract was re-solicited due to a declining workload can not be true." Appellant's Opposition to Partial Summary Relief at 13. analyzer, and cylinder balance tester as may be appropriate. Appeal File, Exhibit 5 at 44. 15. Appellant alleges that it provided all contract- required equipment, including an engine diagnostic machine with an oscilloscope and emissions analysis capabilities. Appellant's Opposition to Partial Summary Relief at 19. 16. Appellant alleges further that (a) despite the fact that the contract required VMS to have the equipment, GSA refused to pay for it even in situations where the use of the equipment would have facilitated repair of a vehicle; (b) GSA maintained that they would only pay for the use of such equipment in states that have an emissions inspection program; and (c) South Carolina had no such program and, if GSA was to use the existence of a state emissions program as the sole criterion, it should not have required the equipment. Appellant's Opposition to Partial Summary Relief at 19. 17. Respondent alleges that the equipment was used in the performance of the contract. Respondent's Motion for Partial Summary Relief at 25. Faulty Government Estimates Claim 18. The contract reads, in relevant part: B-1 B-FSS-10-A REQUIREMENTS CONTRACT FOR (4/84) FSC Class 7539 - Preventative Maintenance, Inspection, Overhaul and Repair of Government- Owned Vehicles - Ft. Jackson, South Carolina. . . . . B-3 B-FSS-998 - ESTIMATED REQUIREMENTS (4/84) The figures in the "Estimated Requirements" column show estimates of the number of vehicles or dollar volume of the work to be done. NO GUARANTEE IS GIVEN THAT ANY QUANTITIES OF THE SERVICES DESCRIBED IN THE SOLICITATION WILL BE NEEDED DURING THE TERM OF THE CONTRACT.3 ____________________ 3 This caveat appeared again in a clause directly under the form on which the offerors filled in their quantities next to GSA's Estimated Annual Quantities. *ESTIMATED ANNUAL QUANTITY: _________________________ (continued...) . . . . I-18 I-FSS-100 SCOPE OF CONTRACT: (CONT'D) Resultant contract will be used by GSA as the primary source for the services listed herein. . . . The quantities shown herein as the Government estimated requirements are based upon information made available to the General Services Administration. Such estimates are being furnished to the bidder solely for general informational purposes. No guarantee is given that any quantities of the services described will be needed during the term of the contract, but bona fide needs as may arise will be obtained subject to the provisions of the contract. If during the contract period, significant changes in the estimated requirements occur, the Government will where feasible, notify the contractor of such changes; however, such notification is furnished exclusively for the Contractor's information and has no bearing on the contractual obligations of either party. Appeal File, Exhibit 5 at 2, 24. 19. The final decision of the contracting officer dated October 10, 1991, reads in part: Claim A: Government Contract Estimates. General Services Administration (GSA) offered the estimates listed in Paragraph B-5 of subject contract in good faith based on data available on the Ft. Knox, KY Fleet Consolidation. Ft. Knox had been in operation for approximately fourteen months at the time the Solicitation was released for Ft. Jackson, SC. GSA corrected oversights as they became apparent in a timely manner by the issuance of Contract Modification PS-04 dated November 21, 1988. However, VMS declined to accept the modification. In July, 1989, due to a decline in the workload for Ft. Jackson, SC, GSA made the determination to re-solicit. ____________________ 3(...continued) The figures in this column show estimates of the anticipated quantity of work. There is no guarantee that the quantities described will be needed during the term of the contract. Appeal File, Exhibit 5 at 5. . . . . Although the figures in the contract reflect a limited degree of accuracy, the overall results of the total sum of each of the fourteen bid areas does reflect a dollar value equal to the estimated annual value of the contract; therefore, it is the determination of the Contracting Officer that VMS sustained no monetary loss and is not entitled to compensation. Appeal File, Exhibit 25 at 1-2. 20. Appellant alleges that the Government failed to consider relevant information in preparing the estimates. One of the most significant deficiencies in the contract quantity estimates was "the omission of the fleet replacement schedule Fleet Management Branch committed to in its Fleet Consolidation agreement with the Army that allegedly resulted in a reduction of 27% of the workload in the first contract year and 54% in the second contract year." Appellant's Opposition to Partial Summary Relief at 27-28. 21. Appellant states that the result of the inclusion of this omitted data was that: [T]he contract fleet was transformed from one with a high potential for continuing major repairs and/or over-hauls with high skilled labor content and major parts replacement or over-haul to one characterized by routine maintenance with all but unskilled labor and minor parts requirements. The contract quantity estimates were qualitatively consistent with the contract fleet; the contract quantity estimates were not at all consistent with the actual workload potential given the omitted fleet replacement schedule and individual vehicle maximum life/mileage replacement standards. Appellant's Opposition to Partial Summary Relief at 29. Discussion We are obliged in ruling on motions for summary relief to draw all inferences in favor of the party opposing the motion; a motion for summary relief is only proper on those facts about which we "need not function as an arbiter among differing versions of every factual reality for which evidentiary support has been presented." Cable Electric Products, Inc. v. Genmark, Inc., 770 F.2d 1015, 1020 (Fed. Cir. 1985). All significant doubt over pertinent factual issues must be resolved in favor of the party opposing summary judgment. Armco v. Cyclops Corp., 791 F.2d 147, 149 (Fed. Cir. 1986). Summary relief is not favored, so we will view the facts in the light most favorable to the nonmoving party. Jordan & Nobles Construction Co., GSBCA 8349, et al., 90-1 BCA 22,471 (1989). 1. Bad Faith Claim Appellant seeks the sum of $960,106.48 in lost profits resulting from the Government's alleged bad faith and abuse of discretion in failing to exercise the options for the remaining contract years. Respondent argues that appellant's bases for the bad faith claim are that respondent allegedly (1) diverted work in violation of the contract; (2) refused to pay for work performed by appellant in accordance with the terms of the contract; and (3) abused its discretion by failing to exercise option periods available under the contract. To the extent that appellant seeks damages for respondent's alleged breach of contract for diversion of work or failure to pay in accordance with the terms of the contract, respondent argues that these damages have already been sought in other portions of the underlying claim.4 Respondent's Motion for Partial Summary Relief at 5-6. Thus, respondent contends that the only remaining basis upon which appellant may recover the $960,106.48 sought in this portion of the claim would require that appellant prove the Government's failure to exercise option periods available under the contract was somehow tantamount to breach of contract. Respondent's Motion for Partial Summary Relief at 6. Respondent correctly notes that allegations of agency breach of contract by failing to exercise a discretionary right, such as the invocation of an option, in bad faith, have been heard by boards of contract appeals. See, e.g., Gricoski Detective Agency, GSBCA 8901, 90-3 BCA 23,131; John McCabe, ASBCA 36958, 89-2 BCA 21,857; Optimal Data Corp., NASA BCA 381-2, 85-1 BCA 17,760 (1984). Respondent argues that appellant must present "well-nigh irrefragable proof" to overcome the presumption that Government officials acted in good faith in the exercise of their powers and responsibilities. Kalvar Corp. v. United States, 211 Ct. Cl. 192, 543 F.2d 1298 (1976), cert. denied, 434 U.S. 830 (1977); Knotts v. United States, 128 Ct. Cl. 489, 121 F. Supp. 630 (1954). Furthermore, respondent argues that this Board has specified that the "necessary 'irrefragable proof' has been equated with evidence that the respondent had a specific intent to injure the appellant." Trans-Atlantic Industries, Inc., GSBCA 10803, et al., 91-3 BCA 24,320, at 121,529 (citing Kalvar Corp.). Thus, to prevail on this portion of appellant's appeal, VMS must prove that the contracting officer or GSA fleet manager acted with "specific intent to injure" VMS in deciding not to renew the contract for an additional one-year option period beyond that exercised in 1989. ____________________ 4 See Complaint, Sections D.1. (Diverted Work -- ___ $58,458.70), 3.a. (Ignition System Labor -- $6,971.50), 3.b. (Non-Standard Vehicle Labor -- $249,828.75), 3.c. (Motor Repair Variances Labor -- $21,951.96), 4.b. (Motors Listed Parts -- $8,360.99), 4.c. Non-Motors Listed Parts -- $151,310.79). In Trans-Atlantic, 91-3 BCA 24,320, this Board addressed the merits of a bad faith claim. As in this case, the Trans-Atlantic contract explicitly stated that the option of extending the term of the contract to years beyond the initial year was "unilateral" to the Government, and further specified that "the exercise of the options is a Government prerogative, not a contractual right of the contractor." Id. at 121,529; Finding 5. After describing the contract clause as "extremely clear," the Board, in Trans-Atlantic, cited the Court of Appeals for the Federal Circuit and held that: Renewal of the contract was within the complete discretion of the government. An option is normally an option, and nothing in this clause limited the circumstances under which the government could decline to exercise that bargained-for right. 91-3 BCA at 121,529 (citing Government Systems Advisors, Inc. v. United States, 847 F.2d 811, 813 (Fed. Cir. 1988)). Respondent alleges that "the discretion to determine whether or not to renew the VMS contract rested solely with GSA." After consulting the GSA Region 4 Fleet Management personnel, the contracting officer determined that VMS' contract performance had been "less than satisfactory." As a result, she further determined that it would be in the "Government's best interest" to "issue a new procurement for these services required at Fort Jackson, SC" and provided timely notice of this decision to the contractor. Finding 9. Accordingly, even though the Government had exercised its option for the first twelve-month period, it did not exercise the remaining option periods. Findings 7, 8. In order to prevail against respondent's Motion for Partial Summary Relief on this issue, appellant need not present "irrefragable proof" nor specific intent to injure, but need only demonstrate the existence of a question of fact as to whether the Government acted in good faith when it decided not to exercise the option years at issue. The Government's argument contains a discussion of appellant's allegations as to alleged assurances by GSA representatives that all option years would be exercised and the Government's evidence in rebuttal to these assurances. Findings 2-4. In its response to respondent's motion, appellant does not posit these alleged assurances as instances of bad faith, but raises other bases for its bad faith claim. Appellant has raised several issues of fact as to the Government's actions in its bad faith claim, including: 1) Whether VMS' refusal to sign GSA's unilateral contract modification was the motivating factor for GSA's failure to renew options in subsequent years. 2) Whether allegations of declining workload which were cited as reason for resolicitation by the contracting officer's final decision and the Fleet Management Branch data supporting final decision were true. 3) Whether the allegations of poor contract performance contained in the record of this appeal are supported. VMS details instances of alleged deficiencies in contract performance which it claims were neither true nor have been supported by Government documentation. 4) Whether VMS' refusal to lower its price and execute modification PS-04 was the basis for GSA not exercising its option to renew the contract for the final three years. 5) Whether GSA diverted work which it was contractually obligated to have performed by appellant to other contractors. Finding 10. In sum, respondent argues that the Government's refusal to exercise its unilateral option to extend the contract period for the remaining option years may not be questioned, absent "irrefragable proof" that the Government had a specific intent to injure appellant. Even under the strict burden of proof posited by respondent, issues of material fact remain to be resolved on this issue. All significant doubt over pertinent factual issues must be resolved in favor of the party opposing summary judgment, and we are required to view the facts in the light most favorable to the nonmoving party. Accordingly, respondent's Motion for Partial Summary Relief as to appellant's bad faith claim is denied. 2. Claim for Compensation for Delivery of Vehicles Appellant seeks the sum of $13,697.10 as additional compensation for the delivery of vehicles during 1989. Complaint at 31-33. Respondent argues that compensation to VMS for the delivery of vehicles was addressed in the contract as modified by modification PS-02, and there is no basis for appellant's claim for additional payment for delivery of vehicles. Appellant argues that modification PS-02 only applied for the year of the contract during which it was executed and that it does not apply to the following contract year when that option was exercised by GSA. Appellant asserts that "[t]his is really a straightforward issue relating to whether the modification was intended for the first year only or to all subsequent years." Appellant's Opposition to Partial Summary Relief at 17. As executed in February 1988, contract modification PS-02 modified the contract to the extent that it deleted paragraph 4 of modification PS-01 and substituted the following provision: "[t]o compensate the Government for use of this equipment, the contractor agrees, after repairs and final inspection by GSA are completed, the contractor will deliver the vehicles to Fort Jackson Transportation Motor Pool." Finding 12. The contract clearly stated that "the Government has the unilateral right to extend the term of this contract for four additional 12 month periods upon the same terms and conditions as are contained in this contract at the time said options are exercised." Finding 5. Modification PS-02 was executed by GSA and VMS in February 1988 and appellant does not dispute that these terms applied to contract performance occurring in 1988. Finding 13. On that date, the contract was effectively modified to incorporate the terms of modification PS-02. Therefore, the terms of the contract as modified by modification PS-02 were in effect the entire period of contract performance, including the option period from January 1 - December 31, 1989. The Government did what it had a right to do - extend the contract upon the same terms and conditions contained in the contract. There are no issues of material fact in dispute on this portion of appellant's claim. As a matter of law, appellant's claim for compensation for vehicle delivery is denied and respondent's Motion for Partial Summary Relief is granted as to this portion of appellant's claim. 3. Vehicle Emissions Testing Claim Appellant seeks damages for being required to provide emissions testing equipment that allegedly the Government knew would not be used. Appellant calculates its claim on this issue based upon its assessment of the reasonable use had the equipment been utilized. Section M-2 of the contract, MECHANICS AND EQUIPMENT, requires that "[c]ontractor must have available suitable up-to-date diagnostic and repair equipment necessary for the diagnosis, repair, and adjustment of automotive systems to meet the Federal Standards for air quality and safety. . . . Necessary equipment includes, but is not limited to such diagnostic equipment as an oscilloscope or computer diagnostic machine, infrared analyzer, and cylinder balance tester as may by appropriate." Finding 14. Appellant alleges that VMS provided all contract-required equipment, including an engine diagnostic machine with an oscilloscope and emissions analysis capabilities. However, despite the fact that the contract required VMS to have the equipment, appellant alleges GSA refused to pay for the use of the equipment even in situations where its use would have facilitated repair of a vehicle. Appellant alleges that GSA maintained that they would only pay for the use of such equipment in states that have an emissions inspection program. Appellant further alleges that South Carolina had no such program and, if GSA was to use the existence of a state emissions program as the sole criterion, it should not have required the equipment. Finding 16. Respondent alleges that the equipment was used in the performance of the contract. Finding 17. The intent of the contract requirement which requires the use of the engine diagnostic machine is unclear. On the one hand, appellant alleges it is only used for work which the Government knew would not be performed. The Government argues that appellant should have known South Carolina did not require emissions testing, but did not "protest" the terms of the contract; therefore, appellant provided the machine at its own risk. Additionally, respondent alleges that the machine was used, but does not state specifically for what purpose the machine was used. Issues of material fact exist as to the intent of the contract requirement and the actual usage, if any, of the equipment. Accordingly, respondent's Motion for Partial Summary Relief is denied as to this portion of appellant's claim. 4. Multi-year Pricing Claim Appellant requests a reformation of the contract from a one- year contract with the possibility of four one-year options into a multi-year, level price contract. VMS seeks the sum of $13,630.43 to recover certain of his nonrecurring costs which appellant claims went unrecovered over the course of the contract. Complaint at 49-50. Respondent's motion seeks denial of this portion of appellant's claim on the basis that the contract clearly is a one year contract with the possibility of four one-year options, and is not a multi-year, level price contract. Respondent's Motion for Partial Summary Relief at 27-29. We agree with respondent. The contract term was clearly twelve months with the possibility of four one-year options. The contract specifically stated that "the Government has the unilateral right to extend the term of this contract for four additional 12-month periods upon the same terms and conditions as are contained in this contract at the time said options are exercised." In addition, the contract also stated that "[o]fferors are cautioned that the exercise of the options is a Government prerogative, not a contractual right of the contractor." Appellant does not dispute that these terms were evident upon execution of the contract. Finding 5. Appellant argues that the contract is actually a multi-year contract because respondent allegedly violated the Federal Acquisition Regulation (FAR) by requiring "level pricing." Appellant's position is that FAR 17.203 requires that option quantities be offered "without limitation as to price," and that this prohibition of level pricing "is relaxed only in specific 'unusual circumstances'" not present in the instant contract. Appellant's Opposition to Partial Summary Relief at 21. Respondent disputes that level pricing was required, and its position is that the requirements contract as awarded was the proper contracting vehicle. Appellant's argument fails in this instance, as it misconstrues FAR 17.203(f). FAR 17.201 defines an option as a "unilateral right in a contract by which, for a specified time, the Government may elect to purchase additional supplies or services called for by the contract, or may elect to extend the term of the contract." 48 CFR 17.201 (1987) (FAR 17.201). Pursuant to the terms of the instant contract, the Government had an option to extend the term of the contract, which it exercised for one additional twelve-month period. Finding 7. During the contract term, it purchased supplies and services as required under the requirements contract. There was no option to purchase additional supplies or services during the contract term.5 Thus, the contract does not contain option quantities, only an option to extend the term. FAR 17.203(f), upon which appellant relies, must be read in the context of the entire regulation. FAR 17.203(c) states: (c) Solicitations normally should allow option quantities to be offered without limitation as to price, and there shall be no limitation as to price if the option quantity is to considered in the evaluation of the award [emphasis added]. FAR 17.203(f) states, in pertinent part: (f) Solicitations may, in unusual circumstances, require that options be offered at prices no higher than those for the initial requirement; e.g. when . . . (2) future competition for the option is impracticable [emphasis added]. Thus, the reference in paragraph (f) to unusual circumstances is to those which vary from the normal circumstance discussed in paragraph (c) of the same regulation, with regard to option quantities, and has no bearing in the instant contract. ____________________ 5 There was an "Option for Additional Items/Services" contained in the solicitation for vehicle detailing, which was not bid by appellant, nor apparently any other bidder, and did not become part of the contract. Finding 6. There are no issues of material fact in dispute on this portion of appellant's claim. Respondent's Motion for Partial Summary Relief is granted as to this issue, and as a matter of law, appellant's claim for reformation based on multi-year pricing is denied. 5. Faulty Estimates Claim Appellant seeks $114,756.64 for additional fixed costs incurred by appellant in performance of the contract, allegedly because of the inaccuracy of the Government's contract estimates. Complaint at 50-58. Respondent argues that appellant's allegations as to the inaccuracy of the contract estimates, even if true, are insufficient to support the claim, since the Government relied on the "most current information about previous requirements available." Medart, Inc. v. Austin, 967 F.2d 579 (Fed. Cir. 1992), affirming this Board's decision in Medart, Inc., GSBCA 11987, 91-2 BCA 23,741. In Medart, the Board considered claims for losses incurred in the performance of a requirements contract, based on the "variance between actual orders and the Government's estimated requirements." See Medart, Inc., 91-2 BCA 23,741. The Board has ruled that the risks of such variances rest with the contractor. In affirming the Board's decision in Medart, the Court stated: "[t]he very nature and use of a requirements contract presupposes uncertainty about actual purchases." 967 F.2d at 581 (citing Shader Contractors, Inc. v. United States, 276 F.2d 1, 149 Ct. Cl. 535 (1960)). Therefore, the contract estimates need not be a perfect prediction of the quantities ordered under the contract. The contracting officer may simply obtain the estimate from "records of previous requirements and consumption, or by other means, and should base the estimate on the most current information available." Id. at 582. However, the Court further noted that since contractors "rely on the proffered estimates in formulating their bids, so the government must act in good faith and use reasonable care in computing its estimated needs." Id. at 581. Sufficient issues of material fact exist to deny respondent's Motion for Partial Summary Relief on this portion of appellant's claim. The Government's own final decision mentions the "limited degree of accuracy" and "oversights" in the preparation of the Government estimates. Finding 19. In its response to respondent's motion, appellant alleges Government failure to consider relevant information in preparing the estimates. Appellant states that "[t]he most significant deficiency in the contract quantity estimates is the omission of the fleet replacement schedule Fleet Management Branch committed to in its Fleet Consolidation agreement with the Army that allegedly resulted in a reduction of 27% of the workload in the first contract year and 54% in the second contract year." Finding 20. As the result of the inclusion of this omitted data, appellant states that: [T]he contract fleet was transformed from one with a high potential for continuing major repairs and/or over-hauls with high skilled labor content and major parts replacement or over-haul to one characterized by routine maintenance with all but unskilled labor and minor parts requirements. The contract quantity estimates were qualitatively consistent with the contract fleet; the contract quantity estimates were not at all consistent with the actual workload potential given the omitted fleet replacement schedule and individual vehicle maximum life/mileage replacement standards. Finding 21. Accordingly, appellant argues that "Fleet Management Branch knew or should have known the effect withholding the fleet replacement schedule and individual vehicle maximum life/mileage replacement standards would have on the contract workload and they knew the replacement schedule and standards before the solicitation was prepared." Appellant's Opposition to Partial Summary Relief at 29-30. In view of the Government's own characterization as to the limited degree of accuracy of its estimates and oversights, and appellant's documentation as to the effect of this omitted information, issues of material fact exist as to the Government's exercise of due care in preparing the estimates. Accordingly, respondent's Motion for Partial Summary Relief on this portion of appellant's appeal is denied. Decision Respondent's Motion for Partial Summary Relief is GRANTED IN PART and appellant's appeal is denied as to the claims of delivery of vehicles and multi-year pricing. Respondent's Motion for Partial Summary Relief is DENIED as to appellant's claims concerning bad faith, vehicle emissions testing, and faulty estimates. ________________________ ALLAN H. GOODMAN Board Judge We concur: _____________________ ________________________ STEPHEN M. DANIELS CATHERINE B. HYATT Board Judge Board Judge