Board of Contract Appeals General Services Administration Washington, D.C. 20405 ______________________________________________ DENIED: August 19, 1999 _____________________________________________ GSBCA 12773, 12774, 13627 CONTRACT AUTOMOTIVE REPAIR AND MANAGEMENT, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Stephen J. Reiss, Calabasas, CA, counsel for Appellant. Michael J. Noble, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DANIELS (Chairman), NEILL, and HYATT. NEILL, Board Judge. These appeals concern claims by appellant, Contract Automotive Repair and Management (CARAM), for an equitable adjustment of prices on two contracts it had with the General Services Administration (GSA). The two contracts were for the preventive maintenance, overhaul, inspection, and repair of Government-owned vehicles at three military installations. Each contract called for services for a one-year base period and contained annual renewal options for an additional four years. CARAM contends that, for both contracts, it was required to provide services at inequitable rates. The Government has denied the claims for equitable adjustment of contract prices on the ground that appellant is entitled to payment at no more than the rates agreed upon for the contracts in question. This litigation has been long and protracted. It now involves three separate appeals which we consolidate here for purposes of ruling on the fundamental issue of whether CARAM is entitled to the relief it seeks. GSBCA 12773 concerns CARAM'S contract for fleet maintenance at Fort Stewart and Hunter Army Airfields in Georgia (the Fort Stewart/Hunter contract). In this case, CARAM contends that it is not limited to contract prices for services rendered during the option years because the contract in fact lapsed with the untimely and, therefore, invalid exercise of the first renewal option. In GSBCA 12774, CARAM makes a similar argument with regard to its contract for fleet maintenance at Fort Benning, Georgia (the Fort Benning contract). In GSBCA 13627, CARAM raises additional claims. The first is that GSA negligently prepared the estimates of requirements for both contracts and failed to provide estimates for the option years. The second claim is that GSA used third-party vendors to accomplish maintenance and repairs that were exclusively reserved by contract to CARAM. A third claim is that GSA, in addition to attempting to exercise the renewal options in an untimely fashion, also improperly attempted at the same time to change contract terms. For the reasons set out below, we find that none of CARAM s claims has merit. Findings of Fact The Fort Stewart/Hunter Solicitation 1. On May 26, 1989, GSA issued Solicitation Number AT/TC- 20068. The solicitation sought offers for a requirements contract covering the preventive maintenance, inspection, overhaul, and repair of Government-owned vehicles at two military installations in the State of Georgia, namely, Fort Stewart and Hunter Army Airfield. Appeal File, GSBCA 12773, Exhibit 1 at 1- 2. 2. The base period for the proposed contract was to commence on October 1, 1989, and continue for twelve months. Additionally, the solicitation provided that GSA was to have "the unilateral right to extend the term of the contract for four additional twelve-month periods upon the same terms and conditions as are contained in this contract at the time said options are exercised." Appeal File, GSBCA 12773, Exhibit 1 at 2. 3. The Fort Stewart/Hunter solicitation was issued as a result of a memorandum of understanding (MOU) entered into by the United States Army (the Army) and GSA regarding the consolidation of the Fort Stewart/Hunter motor fleet with GSA's Interagency Fleet Management System (IFMS). Under the terms of the MOU, GSA agreed to accept ownership of the fleet and then to assign the vehicles back to the installations for the Army's use. GSA would provide the basic maintenance and repair services for the vehicles on a reimbursable basis. Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 8. 4. Under this same MOU, GSA agreed to bring the Fort Stewart/Hunter vehicle fleet up to GSA's IFMS replacement standards. Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 8. At the time of the Fort Stewart/Hunter consolidation, the fleet there was, according to one GSA witness, "in terrible condition." This witness estimated that ninety to ninety-five percent of the vehicles were already eligible for replacement under the IFMS replacement standards. Transcript at 401. Under the MOU, GSA agreed to bring the vehicles in the fleet up to IFMS replacement standards within five years at the following rate: thirty percent of the fleet in each of the first three years and five percent in each of the last two years (the 30/30/30 policy). Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 8. 5. From materials in the record, it appears that, at the time of the Fort Stewart/Hunter solicitation, the IFMS vehicle replacement standards were not published. Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 5. The record does, however, contain vehicle replacement standards for Government-owned vehicles, which were in effect at the time of the solicitation and published in the Federal Property Management Regulation (FPMR) at 41 CFR 101-38.4 (1989). Respondent's Trial Exhibit 1. These FPMR standards, when compared to the IFMS replacement standards, are similar to but somewhat less demanding than the IFMS standards in effect at the time. Compare Respondent's Trial Exhibit 1 with Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 5. 6. The Fort Stewart/Hunter solicitation stated that the approximate size of the fleet to be maintained was 590 vehicles, of which 51 were passenger sedans and station wagons, 432 were light trucks, and 107 were heavy trucks, ambulances, trailers and tractors. The requirements for services and supplies on an annualized basis were listed as follows: ITEM NUMBER SERVICES/SUPPLIES ESTIMATED ANNUAL QUANTITY 1 Precision labor 2552 hours Examples: automatic transmission overhaul, engine overhaul, valve r e f a c i n g , a n d a x l e overhaul. 2 General labor 5104 hours Examples: automatic transmission linkage adjustment, fuel/ignition system adjustments, axle shaft replacement, brake overhaul, door opening area body adjustments, front end alignment, and air- conditioning air flow adjustments. 3 Maintenance labor 2552 hours Examples: oil/filter change, belt check, body or chassis lubrication. 4(a) Tire mounting (tires to be furnished by GSA) Vehicles up to 12,500 GVW [gross vehicular weight] 50 wheels 4(b) Tire mounting (tires to be furnished by GSA) Vehicles over 12,500 GVW 50 wheels 5 Wheel balancing 150 wheels 6 Service calls 100 jobs . 7 Battery charges 38 jobs 8 Lube and fluid check 583 jobs 9 Supplies a) Motor Oil 2915 quarts b) Transmission Fluid 100 quarts c) Antifreeze 225 gallons d) Oil Filter 583 each 10 Parts discount from Chilton's Labor and Parts Manual $95,000 11 Parts discount from manufacturer's suggested retail $45,000 See Appeal File, GSBCA 12773, Exhibit 1 at 4. 7. The solicitation cautioned bidders that there was no guarantee that the estimated, anticipated quantities of work would be needed during the term of the contract. Appeal File, GSBCA 12773, Exhibit 1 at 5, 28. 8. The Fort Stewart/Hunter estimates were developed approximately one to two months prior to the issuance of the solicitation. Transcript at 586. The individual who prepared these estimates was the acting chief of operations at the Maintenance Control Center for Region IV of the IFMS. Id. at 356, 583. At the time he developed the estimates, he already had over twenty years of extensive hands-on experience in vehicle maintenance with the military and had been working for GSA's Fleet Management System for approximately six months. Id. at 454-55, 567, 581-82. 9. At that time, Region IV s fleet included approximately 16,000 vehicles located in eight southeastern states. Roughly twenty percent of the vehicles were covered by vehicle consolidation agreements such as had been entered into for the Fort Stewart/Hunter fleet and were, therefore, subject to the 30/30/30 policy for vehicle replacement. Transcript at 323, 369- 71. The remaining vehicles in the fleet were subject to the normal IFMS replacement standards (see Finding 5). Id. at 584- 85. 10. The estimates for the service requirements listed for items four through eight of the Fort Stewart/Hunter solicitation (Finding 6, items four through eight) were based on estimated requirements in a similar contract covering a fleet of comparable size at another military installation in the area. Transcript at 477-80. 11. To establish the solicitation's labor hour requirements for vehicle maintenance (Finding 6, items one through three), the estimator used a new and different approach. Instead of referring to a comparable contract covering a similar-sized fleet, he turned to the database for the 16,000 vehicles in Region IV's fleet. He requested a printout of costs for all maintenance and repairs done on vehicles for the previous twelve months. The data was given on a vehicle-by-vehicle basis but grouped according to vehicle class (approximately fifteen or sixteen categories). The printout showed the amounts spent on various repairs and parts for individual vehicles in each class. This printout was, in the words of the estimator, "huge." Nevertheless, working steadily over a period of approximately one and a half to two weeks, the estimator totaled the amounts spent on labor for each vehicle, eliminating, as he did so, payments for those types of repairs which he knew would not be covered by the solicitation. He then calculated a total of these individual costs for each vehicle class. Transcript at 464-83, 493-97, 508- 19, 586-93. 12. Since the labor requirements for items one through three were to be expressed in terms of hours, the estimator, at this point, undertook to convert the total labor costs for repair and maintenance for each vehicle class into labor hours. He did this by calculating what he considered to be an average labor rate. He calculated this rate using nothing more than the highest and lowest labor rate available in the Region IV fleet database; he added the two rates and divided the sum by two. He then converted the total labor costs for each vehicle class into a total of labor hours for each class by dividing these dollar totals by his average labor rate. The resulting totals of hours expended for each vehicle class were then divided by the number of vehicles in each respective class. The result was thought to represent the average amount of labor expended for an individual vehicle in each vehicle class. To estimate the labor requirements for the Fort Stewart/Hunter solicitation, the estimator then simply divided the vehicles of the Fort Stewart/Hunter fleet into their respective vehicle classes and multiplied the number of vehicles in each class by the average amount of labor figured as applicable to an individual vehicle in that class. The sum of these calculations was said to represent the estimated annual labor for the first three items in the solicitation. Transcript at 502-08, 526-30, 593-96. 13. The estimator then divided this estimated total of labor hours into the three categories of services listed for the first three items on the requirements schedule, namely, "Precision," "General," and "Maintenance" labor. Twenty-five percent of the hours was allocated to item one, "Precision"; fifty percent of the hours was allocated to item two, "General"; and the remaining twenty-five percent was allocated to item three, "Maintenance." The estimator testified that this allocation of labor hours among the first three items reflected a traditional pattern used by GSA in similar contracts. He also observed that, based upon his own experience of many years in the automotive maintenance field, he considered this method of breaking the work out to be a good one. Transcript at 530-34, 596. 14. The estimator testified regarding the specific task assigned to him. He explained that it was his understanding that he was to provide an estimate of the labor requirement for a one- year period for the Fort Stewart/Hunter fleet and then for the Fort Benning fleet and that these figures would serve not only for the base years but possibly for the option years as well. Transcript at 546, 607. 15. At the time the estimator formulated the requirements for the Fort Stewart/Hunter solicitation, and even more so when, a short time later, he formulated the requirements for the Fort Benning solicitation, he was aware of a growing concern on the part of the fleet management over the accuracy of estimated contract requirements. He sensed that there was a need to improve on the methodology used. It was on his own initiative, therefore, and without any specific direction, coaching or guidance from others, that he decided to utilize the data contained in the IFMS database for vehicle maintenance and repairs as the basis for his estimates. Transcript at 465, 488- 92, 568. 16. The estimator elected to rely on repair data regarding the entire 16,000 vehicle fleet database rather than limit his analysis to data on maintenance of vehicles involved in recent fleet consolidations similar to that which had been agreed on for the Fort Stewart/Hunter fleet. He believed that a more restrictive analysis would skew his estimates, making them too high, as these estimates might relate to the out-years. He explained that experience had taught him that, when such fleets are integrated into the fleet management system, traditionally there is a "ballooning" of maintenance requirements for the first few years owing to the fact that often much maintenance of the vehicles, which are to be integrated into the region s fleet, is deferred or neglected during the period immediately preceding consolidation. Transcript at 520-22, 565-66, 605-07. 17. The estimator did not believe it necessary to adjust his estimates to reflect the 30/30/30 replacement policy planned for the Fort Stewart/Hunter fleet since at least twenty percent of the vehicles in the fleet database were involved in consolidations with a similar rate of replacement and the remaining vehicles were subject to GSA's standard replacement policy. Transcript at 537-40, 561-64, 583-86. He likewise did not consider it necessary to make any adjustment to reflect warranty work for which there is no charge to the Government since his database already reflected warranty work by the absence of charges for work done on the many new vehicles still under warranty. Id. at 544. The Fort Benning Solicitation 18. On October 5, 1989, GSA issued Solicitation Number AT/TC-20082. Pursuant to this solicitation, GSA sought to enter into a requirements contract for the preventive maintenance, inspection, overhaul, and repair of Government-owned vehicles at Fort Benning, Georgia (the Fort Benning solicitation). Appeal File, GSBCA 12774, Exhibit 1 at 1-2. 19. The base period for the proposed contract was to commence on January 1, 1990, and continue for twelve months. Additionally, GSA was afforded "the unilateral right to extend the term of the contract for four additional twelve-month periods upon the same terms and conditions as are contained in the contract at the time said options are exercised." Appeal File, GSBCA 12774, Exhibit 1 at 2. 20. The Fort Benning solicitation was issued as a result of an MOU entered into by the Army and GSA regarding the consolidation of another motor fleet with GSA's IFMS. Under the terms of this MOU, GSA agreed to accept ownership of the Fort Benning vehicle fleet and then to assign the vehicles back to the installation for the Army's use. GSA would, however, provide the basic maintenance and repair services for the vehicles on a reimbursable basis. Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 9. 21. Although the Fort Benning MOU did not specify the rate at which GSA would bring this fleet up to IFMS replacement standards, the standard practice of GSA with respect to consolidated fleets such as this was to follow its 30/30/30 replacement policy. Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 6. 22. Subsequent to the Fort Benning MOU, GSA awarded a vehicle maintenance contract to Transcontinental Enterprise, Inc. (TEI). TEI's contract ran from January 1 to December 31, 1989, and was in operation at the time of the Fort Benning solicitation. Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 16. During the one year period of TEI's contract, GSA replaced thirty percent of the vehicles in the Fort Benning fleet. The condition of the remaining seventy percent of the vehicles was, like that of the Fort Stewart/Hunter fleet, said to be "terrible." All of these vehicles were already eligible for replacement. Transcript at 401, 913-14. 23. The Fort Benning solicitation stated that the approximate size of the fleet to be maintained was 1363 vehicles, of which 145 were passenger sedans and station wagons, 706 were light trucks, and 512 were buses, tractors, trailers, ambulances, and trucks over 12,500 GVW. The requirements for services and supplies on an annualized basis were listed as follows: ITEM NUMBER SERVICES/SUPPLIES ESTIMATED ANNUAL QUANTITY 1 Precision labor 4317 hours Examples: automatic transmission overhaul, engine overhaul, valve r e f a c i n g , a n d a x l e overhaul. 2 General labor 8634 hours Examples: automatic transmission linkage adjustment, fuel/ignition system adjustments, axle shaft replacement, brake overhaul, door opening area body adjustments, front end alignment, and air- conditioning air flow adjustments. 3 Maintenance labor 4317 hours Examples: oil/filter change, belt check, body or chassis lubrication. 4(a) Tire mounting (tires to be furnished by GSA) Vehicles up to 12,500 GVW 2 5 6 6 wheels 4(b) Tire mounting (tires to be furnished by GSA) Vehicles over 12,500 GVW 830 wheels 5 Wheel balancing 2655 wheels 6 Service calls 78 jobs . 7 Battery charges 198 jobs 8 Lube and fluid check 536 jobs 9 Supplies a) Motor Oil 2680 quarts b) Transmission Fluid 100 quarts c) Antifreeze 225 gallons d) Oil Filter 536 each 10 Parts discount from Motor Parts and Time Guide $125,000 11 Parts discount from manufacturer's suggested retail $55,000 See Appeal File, GSBCA 12774, Exhibit 1 at 5. 24. The solicitation cautioned bidders that there was no guarantee that the estimates of the anticipated quantity of work would be needed during the term of the contract. Appeal File, GSBCA 12774, Exhibit 1 at 6, 30. 25. The Fort Benning estimates were developed approximately two or three months prior to the issuance of the solicitation in October 1989. Transcript at 587. The information in the database used by the estimator, therefore, was slightly different from that used to develop the estimates for Fort Stewart/Hunter Id. at 588-89. The individual who prepared these estimates was the same one who had prepared the estimates on the Fort Stewart/Hunter solicitation earlier in the same year. Id. at 582-83. In developing the estimates for Fort Benning, however, the estimator relied even more on the 16,000 vehicle fleet database than he had in preparing the estimates for the Fort Stewart/Hunter solicitation. In working on the latter, he had relied on the database to estimate the requirements for items one through three (precision labor, general labor, and maintenance labor). Findings 10-11. Pleased with his results, when he set about to prepare the estimates for Fort Benning, he used information from the 16,000 vehicle fleet database to derive requirements for items four through eleven as well. Transcript at 490-92. His methodology, however, remained the same. Id. at 471, 491-92, 524-25, 557, 586. 26. At the time the estimator was working on the requirements for Fort Benning, he was not aware of any complaints from TEI regarding its contract for automotive maintenance there. Nevertheless, he deliberately avoided limiting his analysis of repair data covering the last twelve months to repairs done by TEI on the Fort Benning fleet. Because that fleet was still in an early stage of consolidation, he believed that the maintenance under that contract would still be abnormally high (see Finding 16). Transcript at 566-67. Contract Provisions 27. On or about October 12, 1989, GSA awarded the Fort Stewart/Hunter contract, Contract Number GS-04F-89-ETS-0451, to CARAM, an experienced Government contractor. The contract was for the preventive maintenance, overhaul, inspection, and repair of Government-owned vehicles. Appeal File, GSBCA 12773, Exhibit 1[foot #] 1 (GSA Form 1535). Pursuant to Contract Modification PS-02, the contract period was adjusted to begin on January 2, 1990, and to run through January 1, 1991. Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 10; Transcript at 858. 28. On December 12, 1989, GSA awarded the Fort Benning contract, Contract Number GS-04F-89-ETS-0466, to CARAM for the preventive maintenance, overhaul, inspection, and repair of Government-owned vehicles. Appeal File, GSBCA 12774, Exhibit 1. 29. A scope of contract provision in each contract stated that CARAM was to provide the "normal service requirements" of GSA at the respective military installations in question, that the contract was to be used by GSA as the primary source for the services listed therein, and that the contract was, therefore, mandatory in the designated geographical area, i.e., either Fort Benning or Fort Stewart/Hunter. Appeal File, GSBCA 12773, Exhibit 1 at 28; id., GSBCA 12774, Exhibit 1 at 29. 30. Another provision found in both contracts stated that all inoperable vehicles located within the service area (defined as including the entire military installation(s) in question) were to be picked up by the contractor without charge to the Government.[foot #] 2 Both contracts also contained a provision that the contractor may be required to transport vehicles requiring warranty repairs to authorized manufacturers' shops. Appeal File, GSBCA 12773, Exhibit 1 at 10, 43; id., GSBCA 12774, Exhibit 1 at 10, 45. 31. Both contracts also permitted the Government to extend the contract unilaterally beyond the initial base year. The specific contract provision in each contract read as follows: OPTION TO EXTEND THE TERM OF THE CONTRACT - SERVICES ----------- FOOTNOTE BEGINS --------- [foot #] 1 The appeal file for GSBCA 12773 does not contain a contract award document. Exhibit 1 contains only a signed copy of appellant's offer and internal GSA documentation indicating that the contracting officer was given clearance to award on October 12, 1989. Nevertheless, based on representations made by the parties in various submissions for the record over the course of this litigation, we find that the parties are in agreement that award did occur on or about October 12, 1989. [foot #] 2 Respondent advises that CARAM's obligation to provide towing services on base without compensation was later the subject of a contract amendment. Respondent's Prehearing Brief at 25. ----------- FOOTNOTE ENDS ----------- (a) The Government may extend the term of this contract by written notice to the Contractor within 30 days prior to expiration; 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. (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, GSBCA 12773, Exhibit 1 at 40; id., GSBCA 12774, Exhibit 1 at 42. 32. Both contracts also provided that, each time an option was to be exercised extending the contract, prices would be adjusted, if necessary, in accordance with the contract provision entitled "Fair Labor Standards Act and Service Contract Act - Price Adjustment (option contracts)." Appeal File, GSBCA 12773, Exhibit 1 at 41-42; id., GSBCA 12774, Exhibit 1 at 43-44. Exercise of the Renewal Options 33. GSA attempted to exercise the renewal options for all four of the option periods provided for in the Fort Stewart/Hunter contract. Each year CARAM was given written preliminary notice of the Government's intent to exercise the option. The notices were provided by means of a form letter sent out at least sixty days prior to the expiration of the contract. The notices, however, advised CARAM that the "official documentation confirming this option" would be provided by various future dates. In two cases this was said to be "no later than November 1," in another "no later than September 1," and in another "no later than October 1." In no case, however, was the expected date for the exercise of the renewal option one which, in fact, fell within the final thirty days of the contract. Appeal File, GSBCA 12773, Exhibits 3, 7, 12, 14. 34. Notwithstanding the statements made in the preliminary notices to CARAM, regarding when the written notice of option exercise could be expected, written notice was actually given each time within the thirty days prior to expiration. Notice of the first option exercise was dated December 28, 1990; notice of the second option exercise was dated December 20, 1991; notice of the third option exercise was dated December 11, 1992; and notice of the fourth option exercise was dated December 14, 1993. Appeal File, GSBCA 12773, Exhibits 5, 8, 13, 21. 35. Similarly, GSA attempted to exercise the renewal options for all four of the option periods provided for in the Fort Benning contract. Each year CARAM was given written preliminary notice of the Government's intent to exercise the option. The notices were provided by means of a form letter sent out at least sixty days prior to the expiration of the contract. The notices, however, like those regarding the renewal of the Fort Stewart/Hunter contract, advised CARAM that the "official documentation confirming this option" would be provided by various dates. In three cases this was said to be "no later than November 1," and in another "no later than September 1." In no case, however, was the expected date for the exercise of the renewal option one which, in fact, fell within the final thirty days of the contract. Appeal File, GSBCA 12774, Exhibits 4, 6, 16, 20. 36. Notwithstanding the statements made in the preliminary notices to CARAM, regarding when the written notice of option exercise could be expected, written notice was actually given each time within the thirty days prior to expiration. Notice of the first option exercise was dated December 31, 1990; notice of the second option exercise was dated December 20, 1991; notice of the third option exercise was dated December 7, 1992; and notice of the fourth option exercise was dated December 14, 1993. Appeal File, GSBCA 12773, Exhibits 4, 9, 17, 25. 37. The original contracting officer, who sent out the first three preliminary notices on the renewal of both the Fort Stewart/Hunter contract and the Fort Benning contract, and the successor contracting officer, who sent out the fourth preliminary notices for both contracts, testified concerning the various dates given in these notices of when official documentation confirming exercise of the option would be issued. They explained that the dates were simply incorrect and had been inserted into form letters by an administrative clerk who was unaware of the contract requirement that the option be exercised within the thirty days prior to expiration. Transcript at 31, 32-43, 138, 142, 223-32. 38. Both contracting officers also testified that their understanding of the contract's requirement that notice be given to the Contractor within thirty days prior to contract expiration meant that the option had to be exercised within that period rather than prior to the start of that period. The successor contracting officer, however, did testify on direct examination that, in her opinion, the Government possessed the legal right to exercise its renewal option even before the start of the thirty- day period prior to expiration. She retracted this statement on cross examination. Transcript at 36-42, 222-28, 276-78. Exercise of the Third and Fourth Renewal Options 39. The method used by GSA to notify CARAM that the Fort Stewart/Hunter and Fort Benning contracts were extended for the first and second option periods was to issue a unilateral contract modification signed by the contracting officer. Appeal File, GSBCA 12773, Exhibits 5, 8; id., GSBCA 12774, Exhibits 4, 9. 40. In notifying CARAM of the extension of the contracts for the third and fourth option periods, however, the contracting officers issued bilateral modifications indicating that the contractor s signature was required as well. The modifications extending the contracts for the third option periods were issued with the contracting officer s signature already on them. The box in Block E of the modifications, which indicated that the contractor was required to sign, was checked on both modifications. Appeal File, GSBCA 12773, Exhibit 13; id., GSBCA 12774, Exhibit 17. The modifications extending the contracts for the fourth option periods were issued with a cover letter signed by the successor contracting officer but with modifications not yet signed by her. Like the modifications for the third option periods, the box in Block E, indicating that the contractor was required to sign, was checked on both modifications. Id., GSBCA 12773, Exhibit 21; id., GSBCA 12774, Exhibit 25. 41. The introductory language of the modifications extending the contracts for the third option periods is not exactly the same as that used in the modifications extending the contracts for the fourth option periods. The modifications dealing with the third periods open with a statement that the purpose of the modification is to exercise the renewal option in accordance with the clause "Option to Renew Contract" and to extend the contract for an additional year. Price changes reflecting a revised wage determination follow. The modifications then state: "The contract is also modified as follows." These changes involve the substitution of one specified provision with another and the addition of specific language to a provision already included in the contract. Appeal File, GSBCA 12773, Exhibit 13; id., GSBCA 12774, Exhibit 17. The modifications dealing with the fourth periods do not have an introductory statement that their purpose is to exercise the option to renew in accordance with the Option to Renew clause of the contract. Instead, they simply state that the above numbered contracts are "modified as reflected below." The first item on the modification extending the Fort Stewart/Hunter contract reads: "1. Extend the term of the contract from 01/02/94 thru 01/01/95." The corresponding item on the modification extending the Fort Benning contract reads: "1. Exercise option number 4 from January 1, 1994 thru December 31, 1994." The next item in both contract modifications identifies a wage determination. This is followed by price changes reflecting the determination. Finally, each modification provides for the substitution of one version of a price adjustment provision with another. Id., GSBCA 12773, Exhibit 21; id., GSBCA 12774, Exhibit 25. 42. CARAM did not sign the modifications intended to extend the contracts for the third option periods, and nothing in the record indicates that the contracting officer pressed CARAM for a signature. The contracting officer has no recollection of any objection from CARAM's president to her use of a bilateral modification, as opposed to a unilateral modification, to exercise the options. Transcript at 153, 168-70. Indeed, in letters sent by CARAM to the successor contracting officer regarding signature of the modifications extending each contract for the fourth option period, CARAM s president advised that he considered that the option exercises for the third option periods were done through unilateral contract modifications. Appeal File, GSBCA 12773, Exhibit 24; id., GSBCA 12774, Exhibit 28. 43. Initially, the contracting officer did press CARAM for a signature of the modifications intended to extend the contracts for the fourth option periods. By letter dated January 5, 1994, the contracting officer requested CARAM s president to sign the modifications dealing with the extensions of the Fort Stewart/Hunter contract and the Fort Benning contract. She wrote: Technically, you do not have a contract with General Services Administration without these signed documents. In order for the maintenance services to continue, we need the copies immediately. Please fax signed copies and follow-up with hard copy in the mail. Appeal File, GSBCA 12773, Exhibit 23; id., GSBCA 12774, Exhibit 27. 44. CARAM s president promptly replied to the contracting officer in a letter dated January 6, 1994, that he would not sign the modifications. He wrote: "CARAM has claims that will be jeopodized [sic] by our signing modifications PO-05 and PO-07." He noted that the Government had previously exercised the options by unilateral modification and that he could not understand why it was now necessary to have a bilateral modification. Appeal File, GSBCA 12773, Exhibit 24; id., GSBCA 12774, Exhibit 28. The contracting officer does not recall discussing the concern voiced by CARAM's president in his letter of January 6 with him or any other representative of CARAM. She understood the letter as a request to continue contract performance and to treat the modifications as unilateral. Transcript at 291-93. Contract performance did in fact continue. By letter dated February 23, 1994, the contracting officer replied to CARAM's letter of January 6 and stated that both contracts would continue in accordance with the modifications. Appeal File, GSBCA 12773, Exhibit 26; id., GSBCA 12774, Exhibit 30. The contracting officer agreed on cross-examination that, in writing this letter to CARAM, it was her intent to confirm that what she was trying to do was "a unilateral modification." Transcript at 297-98. 45. The contracting officers responsible for sending out the modifications covering the third and fourth option periods testified that they sought the contractor's signature because the purpose of each modification was two-fold. They contended that each modification not only advised the contractor that the renewal option was exercised, but also that the contract, as renewed, would be amended to include one substitute clause and revised wording for another clause. Transcript at 76-91, 266-71, 279-85. CARAM'S Original Claims 46. By letter dated July 18, 1991, CARAM's president wrote to the contracting officer complaining that his company was experiencing financial loss on the contract at Fort Benning because the amount of maintenance and repair work was not providing sufficient opportunity to achieve a profitable position. He identified GSA's fleet modernization program as the primary reason for the reduced workload. The manufacturers' warranties on new vehicles were said to eliminate or greatly reduce the need for contractor support. CARAM, therefore, requested that the contracting officer renegotiate contract prices for the Fort Benning contract based on this change in the age and configuration of the fleet. The letter made no reference whatsoever to any alleged untimely exercise of the first renewal option as an additional justification for renegotiating the contract prices. Appeal File, GSBCA 12774, Exhibit 7. The contracting officer responded to this request by letter dated July 24, 1991. In that letter she reminded CARAM that the mechanism in the contract for price adjustment was that regarding adjustments reflecting changes in labor rates set out in wage determinations issued by the Department of Labor. Id., Exhibit 8. 47. In mid-January of the following year, 1992, after GSA had extended both the Fort Stewart/Hunter contract and the Fort Benning contract for the second option periods, CARAM's president again took up the theme of revised contract prices. In letters dated January 16, 1992, he proposed new labor rates for contract items one through three for both contracts. Appeal File, GSBCA 12773, Exhibit 9; id., GSBCA 12774, Exhibit 10. The GSA administrative contracting officer (ACO) replied to CARAM, by letter dated February 25, 1992, that relief for alleged losses could not be provided simply by increasing contract rates. The ACO suggested that CARAM prepare and submit for consideration a certified request for equitable adjustment. Alternatively, she suggested that CARAM consider an appeal to the Department of Labor if the contractor believed the rates set out in the applicable wage determinations were incorrect. Id., GSBCA 12773, Exhibit 10; id., GSBCA 12774, Exhibit 11. 48. CARAM contends that during the course of 1992, it prepared and submitted for review by the contracting officer specific claims for both contracts. The claims were based upon increased labor rates which CARAM applied to services already rendered during the first option period and which CARAM advised would be applicable to subsequent option periods as well. Appeal File, GSBCA 12773, Exhibit 11; id., GSBCA 12774, Exhibit 13. The first of these submissions is dated May 1, 1992, and dealt with the Fort Stewart/Hunter contract. Id., GSBCA 12773, Exhibit 11. GSA states that it has no record of receiving this claim in 1992. A copy of the submission was apparently provided when CARAM updated this claim the following year. Id., GSBCA 12773, Exhibit 19. The second submission, dated August 11, 1992, dealt with the Fort Benning contract. In this second claim letter, CARAM, for the first time, mentioned that there was a timeliness issue regarding contract modification PO-03, the modification extending the Fort Benning contract for the second option period. Id., GSBCA 12774, Exhibit 15. No mention of a similar problem appeared in the May 1 letter regarding the Fort Stewart/Hunter contract. Id., GSBCA 12773, Exhibit 11. 49. In November 1993, after GSA had given the contractor preliminary notice of the Government's intention to extend the contracts for the fourth option periods, CARAM updated both its claims by quantifying the amounts said to be due for services actually rendered during the second option periods and by providing estimates of what would be due for the third and fourth option periods. The claims remained based on the increased rates at which CARAM insisted it should be paid. The Fort Stewart/Hunter claim was updated to $134,385. In this letter, CARAM for the first time noted that contract modification PO-04, the modification which extending the Fort Stewart/Hunter contract for the second option period, was not timely according to the contract option provision. Appeal File, GSBCA 12773, Exhibit 18. CARAM's letter updating the Fort Benning claim increased that claim to $414,822. Id., GSBCA 12774, Exhibit 22. 50. Before GSA attempted to extend the contracts into the fourth option periods, the contracting officer, by letter dated December 7, 1993, denied CARAM's claims for increased payment based on the contractor's proposed revised rates. Appeal File, GSBCA 12773, Exhibit 20; id., GSBCA 12774, Exhibit 24. CARAM filed notice of appeal by letter dated February 18, 1994. Id., GSBCA 12773, Exhibit 25; id., GSBCA 12774, Exhibit 29. Prior to filing its notice of appeal, CARAM received notice of the Government's attempt to exercise the renewal options for the fourth and final option periods. By letters dated January 3, 1994, the contractor acknowledged receipt of the contract modifications purporting to extend each of the two contracts but once more requested that it be paid in accordance with the revised rates it had proposed. Each letter closes with the assurance, however, that "CARAM will continue to perform the services . . . at the rates listed in [the contract] pending resolution of our claim." Id., GSBCA 12773, Exhibit 22; id., GSBCA 12774, Exhibit 26. CARAM's Allegation of Negligence, Conditional Exercise of Renewal Options, and Breach 51. In its original complaints for GSBCA 12773 (the Fort Stewart/Hunter contract) and GSBCA 12774 (the Fort Benning contract), CARAM contended that it was no longer restricted to payment in accordance with contract rates since both the Fort Stewart/Hunter contract and the Fort Benning contract had lapsed owing to the Government's failure to exercise the first renewal options in a timely fashion. Based upon that theory, CARAM brought motions for summary relief for both claims. The Government replied by bringing a cross-motion for summary relief based upon the contention that CARAM had waived its right to challenge the exercise of the options since it had continued to perform both contracts for the four option periods without protest. The Board denied CARAM's motions on the ground that there were material facts in controversy. However, it granted the Government's cross-motion with regard to the first option year of each of CARAM's two contracts. CARAM v. General Services Administration, GSBCA 12773, et al., 95-1 BCA 27,488. 52. Following the Board's decision on the motions for summary relief, CARAM, by motion filed on May 17, 1996, sought leave of the Board to amend its complaints in both appeals. Specifically, CARAM wished to add an allegation to each complaint that the Government had negligently prepared the requirements for both solicitations, failed to provide estimates for the option years, and issued a bilateral modification for the purpose of exercising the third renewal options and changing the terms of the contract. The Board denied CARAM's request to amend on the ground that the new allegations went beyond the scope of the claims which were the subject of GSBCA 12773 and GSBCA 12774 and should, therefore, be submitted first to the contracting officer for decision. CARAM's actual letters to the contracting officer on these matters were somewhat more precise than its motion to amend. The letters identified four basic areas of concern with regard to each of the two contracts, namely, (i) the negligent preparation of estimates, (ii) the use of third party vendors to supply requirements covered by CARAM's requirements contract with GSA, (iii) the failure to account for GSA's vehicle replacement program in the calculation of contract estimates, and (iv) the ineffective exercise of renewal options due to change in the contract terms. In a single decision, the contracting officer denied these claims for both the Fort Stewart/Hunter contract and for the Fort Benning contract. CARAM promptly appealed the decision. Appeal File, GSBCA 13627, Exhibits 1-3. Because of its close relation to CARAM's two pending appeals, this newest appeal, docketed as GSBCA 13627, was consolidated with them. 53. On December 3, 1996, CARAM filed motions for summary relief claiming that both the Fort Stewart/Hunter and the Fort Benning contracts had lapsed when GSA attempted to extend them through the alleged conditional exercise of the renewal options for the third or the fourth option periods. These motions, like those filed earlier by CARAM, were denied by the Board on the ground that material facts were in issue. CARAM v. General Services Administration, GSBCA 12773, et al., 97-2 BCA 29,245. The Cause of CARAM's Alleged Losses 54. Applying the estimated quantities in the Fort Stewart/Hunter solicitation to CARAM's contract prices, as adjusted from time to time under the contract's Fair Labor Standards Act clause, respondent has calculated, for the record, the revenue which CARAM should have earned theoretically during the base and option periods of the contract --assuming all estimated quantities were in fact ordered. These figures are as follows: Base Year. . . . . . . . . . . $334,257.05 First Option Period. . . . $358,817.44 Second Option Period. . $358,817.44 Third Option Period . . . $362,927.68 Fourth Option Period . . $369,361.92 A similar calculation for the Fort Benning contract yielded the following figures: Base Year. . . . . . . . . . . $468,336.75 First Option Period. . . . $468,336.75 Second Option Period. . $474,779.98 Third Option Period . . . $482,129.00 Fourth Option Period . . $490,671.37 Respondent's Supplemental Appeal File, GSBCA 13627, Exhibits 27- 28; Transcript at 771-74. 55. Unfortunately, the Government's data regarding payments to CARAM during the periods of the Fort Stewart/Hunter and the Fort Benning contracts is not broken out according to contract. Rather the payment records show the following total payments made to CARAM for the following calendar years: Calendar year 1990 . . . $900,553.32 Calendar year 1991 . . . $913,912.07 Calendar year 1992 . . . $833,586.49 Calendar year 1993 . . . $837,257.39 Calendar year 1994 . . . $849,655.39 Respondent's Supplemental Appeal File, GSBCA 13627, Exhibits 11- 15; Transcript at 774-81. A GSA witness has confirmed that during the periods in question, CARAM had no other contracts with GSA in Region IV. Transcript at 776-77. 56. This actual payment data for both contracts compares to the total expected revenue for both contracts as follows: Actual Revenue Expected Revenue Calendar year 1990 . . . $900,553.32 . . . $802,593.80 Calendar year 1991 . . . $913,912.07 . . . $827,154.19 Calendar year 1992 . . . $833,586.49 . . . $833,597.42 Calendar year 1993 . . . $837,257.39 . . . $845,056.68 Calendar year 1994 . . . $849,655.39 . . . $860,033.29 Totals: $4,334,964.96 $4,168,435.38 Respondent's Supplemental Appeal File, GSBCA 13627, Exhibits 11- 15, 27-28; Transcript at 771-81. CARAM's total actual revenue on both contracts, therefore, exceeded its expected revenue by a total of $166,529.58. 57. GSA's estimator, who himself was aware of maintenance practices as acting chief of operations at Region IV Maintenance Control Center, explained how automotive maintenance contractors such as CARAM, on occasion, pass up the opportunity to charge customers for their own labor, particularly in the area of precision maintenance, and, instead, subcontract the work to others. When this occurs, the contractor pays the subcontractor for both labor and materials, and the overall cost of the work is billed to the customer simply as the cost of a replaced part. Transcript at 541-44, 602-03. 58. One witness called by GSA had personal knowledge of maintenance operations throughout the entire five years of CARAM's performance of the Fort Stewart/Hunter contract. He was employed by the Army's contractor at Fort Stewart/Hunter prior to the fleet consolidation and was hired by CARAM when it began performing the contract in 1990. Prior to working at Fort Stewart/Hunter, this witness worked for over twenty years with the Army doing hands-on maintenance and engineering. He worked for CARAM doing assorted jobs at Fort Stewart/Hunter for approximately two years. During that time he had occasion to work in or visit the vehicle maintenance area daily. In early 1992, he resigned his position with CARAM, and in April 1992, he accepted a position as a GSA inspector for the Fort Stewart/Hunter fleet. Transcript at 874-88. 59. This GSA inspector testified that, at the time CARAM was awarded the Fort Stewart/Hunter contract, it was common knowledge and a source of concern among the members of the maintenance workforce that, after awarding a contract to CARAM, GSA would begin replacing the local fleet and this would result in a reduction in the amount of maintenance work to be done. He also testified that, throughout the periods of its contract, CARAM lacked the equipment and qualified personnel to do precision maintenance and that, during the last two years of its contract, CARAM did not even have a person qualified to do diesel maintenance. As a result, CARAM was required to subcontract a considerable amount of maintenance work. This witness further testified that, in the final years of the contract, CARAM frequently did not even accept the work given to it by GSA, but rather "kicked it back" on the ground that the work simply could not be done at that time. In the opinion of this witness, from the time he became a fleet inspector in 1992, CARAM's performance of the Fort Stewart/Hunter contract was not satisfactory. Transcript at 881-905. 60. GSA also called an individual who served as manager of GSA's fleet at Fort Benning from July 1989 to March 1994. This witness had over thirty years of experience in the field of vehicle maintenance. He testified that, at the time CARAM was awarded the Fort Benning contract, the 30/30/30 policy on vehicle replacement was already into its second year. New vehicles were in evidence and the poor condition of the other vehicles was apparent. As fleet manager, this witness had occasion to be in CARAM's shops daily. He stated that CARAM denied itself "a lot of labor." He explained that CARAM had neither the ability nor the equipment on site to do precision maintenance. As a result, all of this work was subcontracted out to commercial vendors. In addition, he explained that several times throughout the year, CARAM would develop a shop backlog and return work to GSA for GSA itself to send out to commercial vendors. Apart from CARAM's inability to do precision maintenance and the periodic shop backlogs, this witness considered the performance of CARAM at Fort Benning to be "adequate." Transcript at 910-26. 61. Both the GSA fleet inspector from Fort Stewart/Hunter and the fleet manager from Fort Benning testified that, more often than not, there was no documentation regarding work which was turned back to GSA by CARAM. The fleet manager at Fort Benning testified that there simply was no documentation. Rather, when there was a backlog of unscheduled maintenance, CARAM would bring him a coffee can in which the keys to the vehicles to be serviced were kept and tell him that it could not get to these vehicles. Transcript at 921-22. GSA's fleet inspector at Fort Stewart/Hunter testified that work which was rejected was generally simply rejected "verbally." He explained that, toward the end of the contract, sometimes GSA would insist on CARAM signing a document, particularly for larger jobs, stating that CARAM was returning the work to GSA because CARAM could not do it. Id. at 902-04. Finally, a GSA witness, who personally examined Region IV s records on payments to vendors for repairs made on vehicles in the Fort Stewart/Hunter and Fort Benning fleets during the periods of CARAM s contracts, testified regarding such documentation. He explained that he had found releases signed by a representative of CARAM when vehicles were turned down by the contractor, but that he was not prepared to say that in every instance where CARAM turned down a vehicle there was a formal letter from CARAM saying it did not want to do the work. Id. at 661-64. Work Given to Commercial Vendors 62. During the course of pretrial discovery, CARAM served an interrogatory asking if GSA used vendors other than CARAM to service or repair vehicles covered by the Fort Stewart/Hunter or the Fort Benning contracts. In reply to the interrogatory, GSA responded that it used several non-contract vendors to effect maintenance and repair of vehicles located at these installations. GSA further stated that records still available for the period of time the contracts were in place indicate that, for the vehicles assigned to the Fort Stewart/Hunter fleet, GSA spent a total of $32,617 for labor and $75,544 for parts with vendors other than CARAM. The Government contended, however, that all but $2648 in labor and $950 in parts were expended in areas where CARAM had no contractual right. For the vehicles assigned to the Fort Benning fleet, GSA stated that it spent a total of $63,292 for labor and $145,521 for parts with vendors other than CARAM. Of these amounts, however, the Government claimed that all but $4056 in labor and $2607 in parts were expended in areas where CARAM had no contractual right. Appellant's Trial Exhibit 2 at 6 (unnumbered); Appellant's Trial Exhibit 1 at 6 (unnumbered). 63. The GSA official responsible for preparing these answers to CARAM's interrogatories testified at length at the hearing regarding the information provided in response to CARAM's interrogatory and how it was developed. He explained that the information on payment to vendors other than CARAM for repairs, maintenance, and parts for vehicles belonging either to the Fort Stewart/Hunter or Fort Benning fleets was provided by the GSA project managers on site at the installations. It consisted of a computer printout of expenditures made on individual vehicles in the two fleets and invoices backing up the multiple entries. See Respondent's Supplemental Appeal File, GSBCA 13627, Exhibits 19-23. Annotations made by the site managers on the computer printout assisted this witness in making his own analysis and in calculating the totals provided in response to CARAM's interrogatories. Transcript at 682, 687-91, 698, 710-11, 736-37. 64. This same witness also testified at length concerning the criteria he applied to determine whether work given to vendors other than CARAM during the periods of CARAM's contracts was outside the scope of these contracts. He relied primarily upon the provision in each contract that CARAM was to provide the "normal service requirements" of GSA within the designated service area, i.e., on the military installation(s) (Finding 29). Based on this and other related contract provisions, he considered repair work and towing for vehicles, when off base for travel or some other legitimate purpose, and warranty repair by certified dealers, to be outside the scope of CARAM's contracts. Because the contracts provided that tires would be purchased by GSA, he likewise concluded that such purchases from commercial vendors were not within the scope of the contracts. He also excluded vehicle modification and body work done on vehicles since these requirements did not, in his opinion, qualify as "normal service requirements." In addition, this witness did not consider that work declined by CARAM and given instead to another vendor and paid for directly by GSA should still be considered within the scope of CARAM's contracts. Transcript at 704-30, 761-65. 65. In addition to explaining how he calculated the total paid to commercial vendors for parts and labor said to be outside the scope of CARAM's contracts, this same witness also explained the nature of the apparent exceptions mentioned in GSA's answer to CARAM's interrogatory. He stated that the amounts not found to be outside the scope of CARAM's contracts were not necessarily within the scope. Rather, these were expenditures for which there was no corporate memory or documentation which would support a conclusion that the work in question was definitely outside the scope of CARAM's contracts. Transcript at 674-75. He explained that, in doing his analysis of materials, he was looking for "what work was done, where it was done, and why it was done there." Id. at 683. If the documentation did not contain information which permitted him to deduce that there was a good reason for the vehicle to be off base for repair, such as warranty work or considerable distance from the installations, he included the repair in the pool of work which arguably should have gone to CARAM. He stated: In any case that I couldn't tell, we gave the benefit of the doubt that there were no extenuating circumstances and agreed that was work that probably CARAM should have received. Id. at 754. 66. During the testimony of this same witness, counsel for appellant discussed with him seven specific instances of repairs to fleet vehicles which allegedly CARAM by right should have been permitted to repair. The first two involved vehicles belonging to the Fort Stewart/Hunter fleet. The first involved repair of a vehicle's heating, ventilation, and air-conditioning system and was done by a dealer near Fort Stewart/Hunter. The GSA analyst readily acknowledged that he had included this repair in the pool of work to which CARAM might have a contractual right. Transcript at 677-80. Nevertheless, the documentation containing annotations by the site managers and upon which the analyst relied to make his own analysis states that this particular repair was made as a result of a "breakdown off post." Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 20 at 8. The second item involved the installation of a speed sensor. This too was done by a local dealer and was said by the analyst to be in the pool of repairs possibly belonging to CARAM by right. Transcript at 681-83. Here too, however, the annotation provided by the site manager provides a reasonable explanation for why the work was done off base. It provides the following comment after the listed repair: "No test equipment available by CARAM." Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 20 at 12. 67. The remaining five instances of repair by vendors other than CARAM, discussed by CARAM counsel and the GSA analyst, concerned vehicles belonging to the Fort Benning fleet. The first involved the installation of a relay assembly and horn; the second, a shifting lever; the third, a clutch assembly; the fourth, a clutch master cylinder; and the fifth, a steering gear. These five repairs, like the first two, were made by dealers located in close proximity to the installation. Transcript at 685-88, 691-94. The GSA analyst listed each repair as one involving warranty work. Respondent's Supplemental Appeal File, GSBCA 13627, Exhibit 21 at 27, 51. Annotations by the site manager regarding these five instances of repair say nothing regarding one repair, state that no invoices are available for three others, and state that in one case the warranty was not honored because of "abuse." Id., Exhibit 22 at 27, 51. Discussion Were the Estimates of GSA's Requirements Negligently Prepared? CARAM contends that it lost money on its two contracts because the estimates for labor items on line items one (precision labor), two (general labor), and three (maintenance labor) were overstated and that this was attributable to negligence on the part of GSA. CARAM has neither persuaded us that the estimates were incorrect nor that they were negligently prepared. We turn first to the question of whether the estimates were in fact correct. CARAM claims to have billed annually and on the average for no more than forty-five percent of the estimated labor requirement for the Fort Stewart/Hunter contract, and for no more than forty-three percent of the estimated labor requirement for the Fort Benning contract. CARAM s Posthearing Brief at 28; CARAM's Reply to Respondent s Prehearing Brief at 8- 9. The method used by appellant to calculate its forty-five and forty-three percent figures is a rough calculation at best. This estimate is based upon annual estimates which have been derived from relatively small samples of actual billings for services. Appellant has estimated the total annual billing for labor for each year of contract performance by summarizing actual ledger entries for a limited number of months. For 1990, on the Fort Benning contract, the data from only one month of invoices was used. For each year on the Fort Stewart/Hunter contract and for each of the remaining four years of the Fort Benning contract, the data from two months was used. An estimated annualized figure was then developed by multiplying the one-month figure by twelve or the two-month figures by six. A simple annual average was then calculated based upon these estimates of annual billings over the five year periods of contract performance. See Appellant's Supplemental Appeal File, GSBCA 12773, 12774, 13627, Exhibits 31-41; Transcript at 805. Counsel for the parties have stipulated that the summary sheets used by appellant and provided for the record accurately reflect the raw data for each of the one or two months in question. Nevertheless, the stipulation says nothing regarding the reliability of the estimated annualized figures, based as they are on these limited samples; nor does it address the reliability of the alleged averages. We are prepared to recognize that CARAM's total billings for labor, over the entire period of contract performance, may have been for less than the labor estimates shown in the solicitations. We are not persuaded, however, that this occurred to the degree claimed or that it was because the labor estimates provided in the solicitations were grossly overstated. GSA's estimator, who himself was aware of maintenance practices as acting chief of operations at the maintenance control center, explained how automotive maintenance contractors such as CARAM, on occasion, pass up the opportunity to charge customers for their own labor, particularly in the area of precision maintenance, and, instead, subcontract the work to others. He further explained that, when this occurs, the contractor pays the subcontractor for both labor and materials, but the overall cost of the work is billed to the customer simply as the cost of a replaced part. Finding 57. The fleet manager at Fort Benning and a GSA inspector from Fort Stewart/Hunter, both of whom had detailed personal knowledge of CARAM's operations at these installations, confirmed that CARAM did subcontract maintenance to other vendors. They also testified that other maintenance work was turned back for GSA itself to arrange for performance by other vendors. Findings 59-61. Accordingly, it does not surprise us that CARAM's billings for labor may ultimately have been for less than the labor estimates provided in the solicitation. Appellant urges us to ignore the testimony of the Fort Benning fleet manager and the inspector from Fort Stewart/Hunter as "unsubstantiated and self-serving." CARAM's Reply to Respondent's Posthearing Brief at 9. We choose not to do so. We found their testimony credible and particularly useful, based as it is on personal observations made over an extended period of time. Furthermore, the testimony of these witnesses regarding the incidence of subcontracting appears to be corroborated, at least in part, by the Government's own payment data. We have found that the total revenue actually paid to CARAM on both contracts, over the five-year period, exceeded the total expected revenue. Finding 56. If CARAM's alleged losses were simply the result of grossly inflated estimates, one would not expect this to have occurred. On the other hand, if, as GSA's witnesses allege, CARAM made use of subcontractors to perform vehicle maintenance, this would have had no significant impact on the amount ultimately paid to CARAM by the Government for the labor and materials involved. Nevertheless, it would decrease the amount CARAM could claim for itself for the labor involved. In such situations, CARAM's billings for its own labor would inevitably begin to fall short of the labor estimates in the solicitation without any corresponding decrease in revenues paid to CARAM by GSA.[foot #] 3 In the event that we are wrong in rejecting CARAM's argument that the estimated contract requirements were overstated, CARAM's claim still fails because we also remain unconvinced that these estimates were negligently prepared. Both parties in this litigation recognize that the law on this issue is set out in a decision of the Court of Appeals for the Federal Circuit, Medart, Inc. v. Austin, 967 F.2d 579 (Fed. Cir. 1992). The Medart Court quotes with approval the instructions in the Federal Acquisition Regulation (FAR) regarding the preparation of estimates in a solicitation contemplating a requirements contract. The FAR provision quoted in the decision, which is the same as that in effect at the time the CARAM solicitations were issued in 1989, reads in part: For the information of offerors and contractors, the contracting officer shall state a realistic estimated total quantity in the solicitation and resulting contract. This estimate is not a representation to an offeror or contractor that the estimated quantity will be required or ordered, or that conditions affecting requirements will be stable or normal. The contracting officer may 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. 48 CFR 16.503(a)(1) (1988) (FAR 16.503(a)(1)). Under Medart, the Government is expected to act in good faith and use reasonable care in computing its estimated needs. Nevertheless, as the FAR provision notes and the Medart Court itself points out, the risks associated with variance between actual purchases and estimated quantities are expressly allocated to the contractor. Medart, 967 F.2d at 581; see also Technical Assistance International, Inc. v. United States, 150 F.3d 1369, 1372 (Fed. Cir. 1998). Provisions in both solicitations confirm this fact and expressly put the contractor on notice of the risks. Findings 7, 24. The GSA estimator who prepared the labor estimates for the Fort Stewart/Hunter and Fort Benning contracts clearly complied with the Medart standard. Based upon his testimony, we find that he made a good faith estimate of the Government s labor requirements for both solicitations and that these estimates were ----------- FOOTNOTE BEGINS --------- [foot #] 3 While this is true with regard to work given by CARAM to its subcontractors, the same cannot of course be said of work simply returned by CARAM to GSA. The latter was given by GSA to other vendors who were then paid directly by GSA. Transcript at 884. ----------- FOOTNOTE ENDS ----------- based upon a conscientious review of Region IV s requirements, using the most current information available. The estimator did not restrict his analysis to previous requirements of the installations in question. This, however, was not required. As the FAR provision, which was sanctioned by the Medart Court, noted: "The contracting officer may obtain the estimate from records of previous requirements and consumption, or by other means . . . ." The database the estimator turned to included the maintenance requirements for all 16,000 vehicles in Region IV s fleet over the previous twelve-month period. It was not limited to the requirements of fleets covered by vehicle consolidation agreements such those which had been entered into for Fort Stewart/Hunter or Fort Benning. Findings 9, 11. The estimator understood that his task was to formulate estimates which would serve as an indicator of requirements not only for the base years, but also for any extensions of the contracts to subsequent years in the event the Government chose to exercise its renewal options. Finding 14. In preparing the labor estimates for the Fort Stewart/Hunter and Fort Benning solicitations, therefore, he deliberately avoided using the previous year s requirements limited to those installations or to other installations involved in recent fleet consolidations. He knew from experience that requirements for the first years of those contracts tended to "balloon" and could not, therefore, be relied upon as accurately reflecting requirements for later years under the same contracts. He, therefore sought to use a database containing current data which would provide a more balanced and stable picture. Findings 8, 16, 25-26. This decision was part of a conscious effort on his part to improve on the accuracy of the Government s estimates which he knew had been the object of some criticism. Finding 15. In short, the methodology used by the GSA estimator appears to us to be logical and basically sound. CARAM, through the testimony of an expert mathematician, attempts to demonstrate that it was mathematically impossible for the labor estimates in both solicitations to have been formulated using the same method which the estimator claims to have used in each case. We find the expert's report unconvincing. His model is based upon certain factual assumptions which are in conflict with the record as developed at the hearing. First, this expert testified that his model and its mathematical equations depend on the estimator's database being the same when the estimates were prepared for each installation. He further testified that if the database changed, it would be necessary to change the model as well. Transcript at 196-97. The testimony of the estimator, however, was that his calculations of the estimates for Fort Stewart/Hunter and Fort Benning were done at different times and that the database used was, therefore, not exactly the same. Findings 8, 25. CARAM's expert also testified that his analysis was based on the assumption that the estimator's work was based on three classes of vehicles. He agreed that if there were in fact more classes of vehicles this would increase the number of unknown variables and require further study and an update of his model. Transcript at 200-03. The testimony of the estimator, however, was that the vehicle information in the fleet database which he used grouped the vehicles according to approximately fifteen or sixteen different classes or categories. Finding 11. CARAM is particularly critical of the average labor rate used by the estimator to convert dollars spent on labor to labor hours. See Finding 12. The criticism in this case is understandable. The factor used is certainly not an average (simple or weighted) of all labor rates paid in Region IV. It is nothing more than a mid-point between two extremes. Nevertheless, appellant, which clearly has the burden here, has not convinced us that the figure used was, in fact, wrong or necessarily outside the standard deviation for what would have been an appropriate average labor rate. Arguments that it was obviously wrong because of the alleged resultant inflated labor estimates fail in the absence of convincing proof that the estimates were, in fact, inflated. Similarly, appellant s attempt to demonstrate the impracticality of the estimator s method for converting labor costs to hours, by using a similar mid-point figure between high and low labor rates found in the record, is altogether too speculative to be convincing. See CARAM's Posthearing Brief at 23-24. CARAM complains that the Government s estimates would have been more accurate and more in keeping with the requirements of Medart had the estimator relied upon the previous twelve-month requirements for the installations in question or for the fleets at other installations which were likewise subject to the 30/30/30 replacement policy. CARAM's Posthearing Brief at 21. As already noted, the estimator explained why he elected not to do this. Finding 16. We find his explanation persuasive. There is likewise argument between the parties over whether adjustments should have been made in the stated requirements to reflect the 30/30/30 replacement policy in effect at Fort Stewart/Hunter and Fort Benning or to reflect warranty work done on new vehicles in the fleet for which the Government did not pay any labor charges. CARAM s Posthearing Brief at 27; CARAM's Reply to Respondent s Posthearing Brief at 12-13. GSA s estimator presented what we consider a reasonable explanation of why such adjustments were not necessary in view of the broad database he used for his calculations. Findings 17. There may be some merit in CARAM's various criticisms of the Government estimator's methodology. Indeed, although we do not so conclude here, it may even be true that the estimates might have been more accurate if they had been developed as CARAM alleges they should have been. Nevertheless, to prove negligence in the preparation of estimates, CARAM must demonstrate that the approach actually selected by the estimator was an unreasonable one. Medart, 967 F.2d at 581-82. CARAM has failed to do this. It characterizes the efforts of the Government's estimator as "just guess work." CARAM's Posthearing Brief at 24. We disagree. We remain convinced that, in this case, the Government acted in good faith, used due care in computing its estimated needs, and utilized a reasonable method to do so. What of CARAM's complaint that the Government acted negligently in providing vendors with only one year's requirements? The FAR guidance quoted by the Court in Medart makes no mention of any requirement to provide vendors with estimates relating to option years as well as to the base year. It does, however, impose on the contracting officer the responsibility of providing a realistic, estimated total quantity. If the requirements stated in the solicitations for Fort Stewart/Hunter and Fort Benning did not reflect the planned increasing degree of vehicle renewal and, consequently, a corresponding decrease in required maintenance and repair during the option periods, then arguably CARAM was misled by the estimates stated. The testimony of the estimator convinces us that this did not occur. He explained in some detail his concern with the fact that the first year requirements for installations such as Fort Stewart/Hunter and Fort Benning, where local fleets are integrated into the regional fleet for the first time, tend to "balloon." He also explained that he was aware that the estimates given in the solicitations would serve not only for the base year but possibly for the option years as well if the options were exercised. Findings 14, 16. By using the 16,000- vehicle database, he believed it possible to reflect the impact of the fleet's on-going vehicle replacement program without any special adjustment of the estimates as ultimately calculated for the facilities in question. Finding 17. Twenty percent of the vehicles in this database were, in fact subject to the 30/30/30 replacement policy in effect at Fort Stewart/Hunter and Fort Benning. The remaining eighty percent were already subject to the normal IFMS replacement standards. Finding 9. The approach used by the estimator appears to us to have been reasonable under the circumstances. Indeed, it appears to us that, if anything, it posed a risk that requirements would be understated rather than overstated. Given the high rate of replacement in Region IV s fleet as a whole, there are undoubtedly at any given time a vast number of vehicles still subject to warranty. This, of course, reduces the number of instances in which the Government is required to pay for maintenance. Using factors derived from this database to estimate maintenance requirements for fleets such as those at Fort Stewart/Hunter and Benning which, at least for the first year or two, remained in woeful need of replacements, could readily lead to an understatement of maintenance requirements. A look at the total payments actually made to CARAM, as compared with the total expected revenue for the first two years of the contracts, suggests that this may well have occurred. Actual revenue paid to CARAM for the first two years of contract performance was substantially in excess of the total expected revenues for both contracts. See Finding 56. The estimator has testified that he expected this, to some degree, as a result of deferred maintenance. Finding 16. We believe it highly likely, however, that, given the estimator s methodology, this phenomenon is also attributable to the fact that the estimated requirements for the first and second year were understated. This, however, lends no support to CARAM's fundamental contention that requirements were overstated. CARAM complains that it should have been advised that the fleets at Fort Stewart/Hunter and at Fort Benning were subject to the 30/30/30 replacement policy. This, however, was unnecessary if, as the Government convincingly argues, the methodology of the estimator already took into consideration the inevitable reduction in maintenance and repair requirements resulting from replacement standards in effect for the entire fleet. Furthermore, the condition of the fleets at both installations was no secret. Findings 4, 22. We find it difficult to believe that CARAM did not anticipate that a good portion of the fleet would quickly be replaced over the life of the contracts as extended through the exercise of options. While the standard rate of renewal of the IFMS fleet was not the subject of a published regulation at the time, a similar policy and rate of replacement of Government owned vehicles had been published in the FPMR. Finding 5. It is, therefore, puzzling that CARAM, as an experienced Government contractor whose work included contracts for automotive maintenance (Finding 27), did not itself question the use of only one set of annual requirements in each of the two solicitations. Nevertheless, had CARAM voiced some concern in this regard, we are now convinced that a reasonable explanation could have been provided. Were the Exercises of the Options for the Second, Third, and Fourth Option Periods Untimely? From the time it filed its first two appeals (GSBCA 12773 and 12774), CARAM has maintained that it was not bound to contract prices for any option period because both the Fort Stewart/Hunter and the Fort Benning contracts lapsed at the time the Government attempted to exercise the first renewal option for each contract.[foot #] 4 Specifically, CARAM contends that the options were not exercised in a timely manner. The language which CARAM relies upon is found in the option clause which appears in both contracts. The pertinent language reads: ----------- FOOTNOTE BEGINS --------- [foot #] 4 Because the Board has already granted GSA's cross-motion for partial summary relief on CARAM s claims for the first option year (Finding 51), only the timeliness of the second, third, and fourth option exercises remain in issue at this time. ----------- FOOTNOTE ENDS ----------- (a) The Government may extend the term of this contract by written notice to the Contractor within 30 days prior to expiration; 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. Finding 31. CARAM argues that, when the contract calls for written notice to be given "within 30 days prior to expiration" it means that the written notice must be provided even before the final thirty days begin to run. CARAM contends that the preliminary written notice, which must be given at least sixty days before the contract expires, opens a window of opportunity for the Government. If the Government chooses to exercise the renewal notice, it must do so within thirty days following the preliminary notice and before the last thirty days of contract performance begin to run. CARAM's Posthearing Brief at 16-20. This, according to CARAM, is the interpretation of the contract provision which the Government consistently followed in issuing preliminary notices of intent to exercise the renewal options. Furthermore, according to CARAM, this interpretation complies with FAR 17.204, which states that the period set in a contract for the exercise of an option should provide the contractor with adequate lead time to ensure continuous production. CARAM contends that to read the clause as precluding actual exercise of the option before the start of the final thirty days of the contract makes no sense and thwarts the purpose of the applicable FAR provision. We find CARAM's interpretation of the option provision unacceptable primarily because it is in patent conflict with the plain meaning of the words "within 30 days prior to expiration." A contract is read in accordance with its express terms and the plain meaning thereof. C. Sanchez and Son, Inc. v. United States, 6 F.3d 1539, 1543 (Fed. Cir. 1993); Hills Materials Co. v. Rice, 982 F.2d 514, 516 (Fed. Cir. 1992); Hol-Gar Mfg. Corp. v. United States, 351 F.2d 972, 976 (Ct. Cl. 1965). CARAM's interpretation of the provision would change the meaning of the term "within" to "at least" -- which is decidedly not an ordinary and commonly accepted meaning of the term. CARAM's interpretation of the term "within" is particularly curious in view of the use of the term "at least" in the very same contract clause, where mention is made of the sixty-day preliminary notice. There the intent is obviously to state that this preliminary notice is to be given before the final sixty-day period begins to run. The term "at least" is employed to express this intent. Presumably the same term would have been used in referring to the final thirty-day period if the intent there was to indicate that the option should be exercised before the final thirty-day period began to run. We realize, of course, that in giving preliminary notice of intent to extend the contract, the Government consistently advised CARAM that the option would actually be exercised at a date prior to the start of the final thirty-day period of the contracts. Findings 33, 35. However, this hardly convinces us that CARAM's interpretation is to be preferred. The contracting officers attributed this inaccuracy in the notices to administrative error and testified instead that they read the term "within" as meaning precisely that. Finding 37, 38. We find their explanation credible, especially since the renewal options were, as a matter of fact, consistently exercised within the final thirty-day period for both contracts. Finding 34. Indeed there is no evidence that, at the time the options were first exercised, CARAM interpreted the option provision differently. The allegation that the options were untimely exercised was not raised until well into the second option year for the Fort Benning contract and not until the close of the third option year for the Fort Stewart/Hunter contract. Findings 48-49. Neither do we find CARAM's reliance on FAR 17.204 sufficient to justify departure from the plain meaning of the term "within." Under that provision, the period set in a contract for the exercise of an option should provide the contractor adequate lead time to ensure continuous production. The scheme set out in the option provision in CARAM s two contracts does require the Government to provide the contractor with advance notice of its intent to extend the contract. The clause expressly provides that a renewal option cannot be exercised within the final thirty days of contract performance if not proceeded by a written preliminary notice given at least sixty days before contract expiration. Finding 31. Admittedly, this preliminary notice does not legally bind the Government. Nevertheless, assuming that the preliminary notice is given in good faith, this condition attendant to the actual exercise of a renewal option satisfies the basic thrust, if not the letter, of the FAR requirement. Accordingly, we are not prepared to distort the plain meaning of the option provision, as CARAM urges us to do, simply to accommodate a more restrictive reading of this FAR provision. Were the Exercises of the Options for the Third and Fourth Option Periods Invalid? As noted earlier, in CARAM s later appeal, GSBCA 13627, CARAM claims that it is entitled to relief under its contracts with GSA because, even if the contracts were renewed in a timely manner, they lapsed with the attempt to exercise either the third or the fourth renewal options. CARAM contends that these option exercises were conditional and, therefore, not legally binding. It is, of course, well settled that to exercise an option properly, the Government's acceptance of the offer has to be unconditional and in exact accord with the terms of the contract being renewed. Lockheed Martin IR Imaging, Inc. v. West, 108 F.3d 319, 323 (Fed. Cir. 1997); New England Tank Industries of New Hampshire, Inc. v. United States, 861 F.2d 685, 687 (Fed. Cir. 1988); Civic Plaza National Bank v. First National Bank in Dallas, 401 F.2d 193, 197 (8th Cir. 1968); United States v. T. W. Corder, Inc., 208 F.2d 411, 413 (9th Cir. 1953). The parties accept this principle but disagree on whether the action taken by the Government in attempting to extend the Fort Stewart/Hunter and Fort Benning contracts into the third and fourth option periods constituted a conditional exercise of the renewal options. In each instance, the contracting officer made use of a bilateral contract modification to advise CARAM that the options were exercised and, at the same time, to make rate changes based upon revised wage determinations and to make certain clause changes. The contractor was asked to sign these modifications. Findings 40-41. The contracting officers testified that they sought the contractor's signature on these modifications because the purpose of these modifications was two-fold, namely, to exercise the options and then to amend the contracts as extended. The contracting officers are of the opinion that this was clear from the modifications themselves. Finding 45. We disagree. The modifications make no distinction between those items listed which require the contractor's concurrence and those which do not. Finding 41. Rather, they simply indicate that the contractor is required to sign the modification. Finding 40. Furthermore, no evidence has been presented to suggest that, at the time the modifications were issued, CARAM was otherwise put on notice of this two-fold purpose of the modifications. By bundling the option exercise with proposed contract amendments in one and the same contract modification and requiring the contractor to confirm his agreement with all that was listed in the modification by signing the same, the Government did, in effect, subject the option exercise to conditions and thus render it legally ineffective.[foot #] 5 The matter does not stop here, however. If CARAM is to claim successfully that it is entitled to higher rates of payment because its contracts, in fact, lapsed with the ineffectual exercise of the third or the fourth renewal options, it must demonstrate that it alerted the contracting officers to the possibility of such a claim prior to completion of contract performance. If, instead, CARAM simply continued to perform, saying nothing regarding the conditional nature of either the ----------- FOOTNOTE BEGINS --------- [foot #] 5 The conditional nature of the modifications purporting to exercise the fourth renewal options is particularly blatant in view of the contracting officer's letters of January 5, 1994, to CARAM in which she advised the company president that unless the modifications were signed, CARAM had no contracts. Finding 43. ----------- FOOTNOTE ENDS ----------- third or fourth option exercise until after the completion of contract performance, then it will be deemed to have waived its right to assert a claim based on these deficiencies. Whittaker Electronic Systems v. Dalton, 124 F.3d 1443, 1446 (Fed. Cir. 1997); E. Waters & Co. v. United States, 576 F.2d 362, 367-68 (Ct. Cl. 1978); Cities Service Helex, Inc. v. United States, 543 F.2d 1306, 1313-14 (Ct. Cl. 1976); Ling-Temco-Vought, Inc. v. United States, 475 F.2d 630, 637 (Ct. Cl. 1973). Given the record before us, we conclude that CARAM did not object to the contracting officer's conditional exercise of the third renewal options through the medium of bilateral contract modifications. The fact that the modifications called for a signature from the contractor was apparently ignored. Finding 42. Indeed, when CARAM's president wrote the contracting officer on January 6, 1994, regarding the use of bilateral contract modifications to extend the contracts into the fourth option periods, he was by then apparently laboring under the mistaken assumption that the options extending the contracts into the third option periods had been exercised using unilateral modifications. Finding 44. As for the exercise of the fourth renewal options, we find nothing in the record indicating that CARAM was of the opinion that the exercise was legally ineffective because it was conditional. Neither do we find anything indicating that CARAM informed the contracting officer of any concern in this regard prior to the expiration of the contracts. Ironically, it was the contracting officer who shortly after an attempt to exercise the fourth renewal options advised CARAM in a message of January 5, 1994, that CARAM was technically without a contract because it had not signed the contract modifications dealing with the renewal options. Finding 43. From CARAM's immediate reply of January 6, it is clear that CARAM did not agree with the contracting officer and wished the contracts to continue. CARAM's president countered the contracting officer's statement that the contracts had lapsed, by asking why his signature was now required when unilateral modifications had been sufficient in the past for the exercise of renewal options. We find in the record no further exchange between the parties on this matter until the contracting officer's letter of February 23 in which she acquiesced to CARAM's request that the modifications relating to the option exercises be treated as unilateral rather than bilateral modifications. Finding 44. We find no evidence in these limited exchanges of any concern--much less communication of concern to the contracting officer by CARAM--over the conditional exercise of the renewal options for either the third or the fourth option periods. We, therefore, agree with GSA that this allegation was in fact raised for the first time in the spring of 1996, after the completion of contract performance, when CARAM sought leave to amend its complaints in GSBCA 12773 and 12774. See Finding 52. CARAM would, of course, like us to perceive some overlap between its claim for relief based upon the allegation of conditional exercise of the third and fourth-year options and its claim for relief based upon its allegation that the earlier renewal options were not exercised in a timely fashion. We find no such overlapping of the claims. It was for this reason that we denied CARAM's request to amend its initial complaints to include the allegation regarding conditional exercise and insisted instead that the claim be submitted first to the contracting officer for decision. It is well established that, if a claim arises from operative facts different from those which form the basis of a claim already presented to the contracting officer, or if that claim is not contained within the scope of the claim previously presented to the contracting officer, then a separate decision is required. Santa Fe Engineers, Inc. v. United States, 818 F.2d 856 (Fed. Cir. 1987). Similarly, in deciding whether a specific claim is distinct from another already presented to a contracting officer, it is appropriate to consider the evidence which must be examined to resolve the claims. If the court will have to review the same or related evidence to make its decision, then only one claim exists. Otherwise, the claims are deemed to be distinct. Placeway Construction Corp. v. United States, 920 F.2d 903 (Fed. Cir. 1990). The record, as eventually developed, only confirms our initial conclusion that the claim based on an alleged conditional exercise of the third and fourth options involves essentially different operative facts and different evidence than that relative to the alleged untimely exercise of the earlier renewal options. For that reason, we view the two allegations as distinct from one another. Since the claim concerning the conditional exercises of the third or fourth renewal options was not brought to the attention of the contracting officer until after the completion of contract performance, we conclude that CARAM has waived its right to contest the exercises on that ground at this time. CARAM contends that its continued performance of its contracts should not be interpreted as a waiver of any objection it may have had to the conditional exercises of the third or the fourth renewal options since, pursuant to the disputes clause of the contracts, it was obliged to continue performance pending final resolution of any claim arising under the contract. CARAM's Posthearing Brief at 15; CARAM's Reply to Respondent's Posthearing Brief at 6. We disagree. Under the disputes clause, a contractor is required to continue performance and comply with any decision of the contracting officer pending final resolution of any request for relief, claim, appeal, or action arising under the contract. Nevertheless, the provision assumes that such a request or claim has actually been asserted. In the case of CARAM's claim that the third or fourth option exercises were conditional and, therefore, not legally binding, we have concluded that no such claim was asserted prior to completion of performance of the two contracts. CARAM draws our attention to its two letters of January 3, 1994, which acknowledged receipt of the modifications purporting to exercise the fourth renewal options. The letters assured the contracting officer that CARAM would continue to perform "pending resolution of our claim." We fail to see how this statement could have served to put the contracting officer on notice of any claim CARAM might have had based on the conditional exercise of the fourth renewal options. In point of fact, from the record, it is obvious that the claim to which CARAM was referring at the time was that which had been the subject of a contracting officer's decision rendered the month before on December 7, 1993, and eventually appealed by CARAM on February 18, 1994. See Finding 50. The same must be said of statements made in CARAM's letters of January 6, 1994. CARAM most assuredly complained in these letters of the use of bilateral modifications to exercise the options. The objection, however, was not because these modifications represented a conditional exercise of the renewal options, but because CARAM's president believed the company's claims would be jeopardized if the modifications extending the contracts into the fourth option periods were to be signed by him. See Finding 44. In the absence of any clarifying statement from CARAM in those letters, we conclude that the obvious reference is to the recently denied claims which were based upon the alleged untimely exercise of the first renewal options and not to any claims based on the conditional exercise of the fourth renewal options. In short, we agree with CARAM that the Government's exercises of the third and fourth renewal options for both the Fort Stewart/Hunter and Fort Benning contracts were conditional and, therefore, not legally binding. Nevertheless we are persuaded that CARAM, because it remained mute on this issue until after contract performance, waived its right to any claim for relief based upon this fact. Did the Government Breach CARAM's Contracts by Giving Work to Other Vendors? CARAM explicitly waives its claim to damages based on the alleged diversion of work under its contracts to the extent it prevails in its claims for relief based upon other allegations. CARAM's Posthearing Brief at 30-31. Since CARAM has not prevailed on these other claims, we turn now to its allegation that work which it had a right to perform under its Fort Stewart/Hunter contract and its Fort Benning contract was unlawfully diverted to other vendors. Because we are concerned in this decision with only the basic issue of entitlement, CARAM correctly observes that all it must prove at this juncture to prevail is that some work which CARAM had a contractual right to perform was given to other vendors. The amount of such work is not in issue at this time. CARAM's Posthearing Brief at 29; Transcript at 671-72. CARAM contends that it was entitled to all repairs for vehicles in the Fort Stewart/Hunter and Fort Benning fleets which were "not the subject of an emergency situation off of the geographic area of the fort, have not been refused by CARAM in writing, and are not subject to warranty of the manufacturer." CARAM's Posthearing Brief at 30. We find CARAM's insistence on the right to repair fleet vehicles even when they are not actually on base unless they are "in an emergency situation" to be unreasonably restrictive and simply not supported by the actual wording of the contracts. Obviously, a contractor s ability to recover for an agency s diversion of work which might be performed under a requirements- type contract depends on the language of the contract. Pegasus Aviation v. General Services Administration, GSBCA 10112, 93-3 BCA 25,944, at 129,040; Kozak Micro Systems, GSBCA 10519, 91-1 BCA 23,342, aff d, 989 F.2d 1201 (Fed. Cir. 1993) (table). In the case of CARAM s contracts for Fort Stewart/Hunter and Fort Benning, the applicable language is somewhat unique. The requirements covered by the contracts are not described in terms of the fleet vehicles themselves, but rather in terms of the territory in which the vehicles are normally located. Each contract expressly states that it is mandatory in the designated geographical areas of the installations themselves. Finding 29. Given the nature of GSA s inter-agency fleet operations and the agency s desire to accommodate fleet users, this type of provision makes sense to us and should be carefully read. It is unlikely that GSA would enter into a contract which would strip it of the flexibility to order vehicle repairs by other vendors when a vehicle is off base but said by the operator to be in need of repair.[foot #] 6 Had CARAM provided us with hard evidence of a pattern of abuse wherein the Government consistently arranged for vehicles to leave the base so as to qualify for off-base repair by other ----------- FOOTNOTE BEGINS --------- [foot #] 6 Testimony of the chief of fleet operations for Region IV on this issue was particularly telling. It concerned a hypothetical situation posed to him by counsel for CARAM. The witness was asked whether, in his opinion, an operator would have the right to purchase a new set of windshield wipers from a local off-base vendor if, while driving the vehicle, he or she encountered rain and the wipers already on the vehicle were smearing. The witness' reply was surprisingly forceful. He stated repeatedly that he "absolutely" believed this to be the right of the operator and that GSA would defer to his or her judgment. He went on to explain during cross-examination that it is GSA policy to reimburse operators for such expenses when incurred while in transit and that authorization is not even required below certain dollar thresholds. Transcript at 744-45, 759-60. We view the comments of this witness as evidence of a firm policy commitment on the part of the agency to be responsive to reasonable requests from operators for immediate off-base repair when, in the judgment of the operator, this is required. ----------- FOOTNOTE ENDS ----------- vendors, we would of course be more concerned with the alleged instances of off-base repairs and purchases. We find no evidence of this, however. Indeed, the chief of fleet operations also testified that it was not unusual for vehicles taken off base to the dealer for warranty work to be returned for repair when it was found that the work was not covered by warranty. Likewise, he explained that it was not unusual for a vehicle to be brought back for repair by CARAM when it developed non-life-threatening problems near the base. A very practical reason why this was done was that the repair could be done more economically by CARAM. Transcript at 740, 745, 747. In short, if a vehicle was taken off-base for a legitimate purpose, such as warranty work or official travel, we do not agree with CARAM that its requirements contract was breached if GSA failed to have the vehicle brought back to CARAM for repair in all but emergency-type situations. We likewise disagree with CARAM that it should be deemed to have waived its contractual rights to provide maintenance and make repairs only in those situations where it did so in writing. CARAM would have us accept the fact that when work was returned or released by the contractor, this was always confirmed in writing. This, however, has not been proven. Rather, those with personal knowledge of CARAM's operations at Fort Benning and Fort Stewart/Hunter could not confirm this. One witness explained that, towards the end of the contracts, GSA itself insisted on signed releases from CARAM when larger jobs were returned undone. Finding 61. This suggests to us that the written release of work was not a formality insisted upon by CARAM to protect its own interest but rather a defensive tactic employed by GSA to protect itself from any subsequent claim of diversion. CARAM is alleging that GSA breached its contracts by diverting work from its requirements contract. As a claimant for breach damages, CARAM bears the burden of proving that breach. Perry v. Department of the Army, 992 F.2d 1575, 1577 (Fed. Cir. 1993). The seven specific instances of repair which CARAM's attorney chose to discuss with the GSA analyst at hearing do nothing to help CARAM's case. Only two of the instances were even identified by the GSA analyst as possibly involving work to which CARAM had a contractual right, and annotations by the site manager in both cases suggest that the analyst's conclusions are unsupported. As to the other five instances, the analyst concluded that all involved vehicles under warranty--although in one case the warranty was not honored because the vehicle was said to have been abused. See Findings 66-67. Counsel did get an acknowledgment from the GSA analyst that invoices were lacking in several cases. This deficiency in the record, however, poses a more serious problem for CARAM than for the Government given the fact that CARAM bears the burden of proof here. Neither is it enough for CARAM to rely on the Government's answer to its interrogatory to prove that it is entitled to damages for diversion of work. From the testimony of the GSA analyst who prepared the reply to CARAM's discovery request, it is clear that the repairs and purchases identified as possibly falling within the scope of CARAM's contract were simply those for which CARAM was given the "benefit of the doubt" owing to the absence of corporate memory or documentation. Finding 65. An admission of uncertainty on the part of the Government, however, is not enough to prove CARAM's claim to entitlement. The Board has itself examined in detail the limited data in the record, namely in Respondent's Supplemental Appeal File, GSBCA 13627, Exhibits 19-23, regarding the relatively few repairs and purchases identified by the GSA analyst as possibly belonging by right to CARAM. Clearly, in the majority of cases, the repairs and purchases on which CARAM was given the benefit of the doubt by the GSA analyst, who responded to the interrogatory, involved vendors in close proximity to either Fort Stewart/Hunter or Fort Benning. Nevertheless, CARAM has not proved unlawful diversion in any of these instances. Furthermore, testimony provided at trial by other GSA witnesses concerning CARAM's occasional inability to perform convinces us that it is far more probable that these local repairs and purchases involved work returned or released to GSA informally by the contractor, rather than work diverted by GSA in violation of its contract with CARAM. We arrive at this conclusion for three basic reasons. First, the Government's overall performance of these contracts, as evidenced in the record before us, does not suggest that GSA would disregard its contractual obligations. Secondly, as already noted, we found the testimony of GSA's witnesses regarding CARAM's periodic inability or unwillingness to perform highly credible. Finally, CARAM has not furnished us with persuasive evidence that any of the specific instances identified by GSA as possibly in violation of CARAM's contractual rights were in fact breaches as alleged. CARAM's claim for diversion, therefore, fails for want of proof. Decision CARAM's appeals are DENIED. _______________________________ EDWIN B. NEILL Board Judge We concur: ________________________ _______________________________ STEPHEN M. DANIELS CATHERINE B. HYATT Board Judge Board Judge