Board of Contract Appeals General Services Administration Washington, D.C. 20405 THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN REDACTED FORM ON NOVEMBER 16, 1998 ______________________________________________ DENIED: October 30, 1998 ______________________________________________ GSBCA 13298, 13507, 13508, 13509, 13510, 13511 ACE-FEDERAL REPORTERS, INC., ANN RILEY & ASSOCIATES, LTD., ARTI RECORDING, INC., CALIFORNIA SHORTHAND REPORTING, EXECUTIVE COURT REPORTERS, and MILLER REPORTING CO., INC., Appellants, v. GENERAL SERVICES ADMINISTRATION, Respondent. Ronald K. Henry and Mark A. Riordan of Kaye, Scholer, Fierman, Hays & Handler, Washington, DC, counsel for Appellants. John E. Cornell, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges PARKER, HYATT, and WILLIAMS. WILLIAMS, Board Judge. In these appeals, six court reporting companies seek $4,972,363.85 in lost profits and $2,486,181.90 in consequential damages due to alleged breaches of their mandatory General Services Administration (GSA) multiple award schedule contracts for court reporting services by numerous user agencies. The facts are largely undisputed, and the parties have submitted their cases on the record.[foot #] 1 As a threshold matter, respondent argues that a majority of appellants' claims are barred under the statute of limitations in the Federal Acquisition Streamlining Act of 1994 (FASA). We disagree. FASA provides that its statute-of-limitations provision takes effect on the date specified in its final implementing regulations. The regulations promulgated pursuant to that statute unambiguously state that the six-year limitation period shall not apply to contracts awarded prior to October 1, 1995, and renders the statute inapplicable to the instant contracts, which were all awarded in 1988. Respondent has raised several defenses to liability. First, respondent contends that appellants are not entitled to lost profits because, absent bad faith, the termination for convenience clause in the contracts precludes damages for lost profits. Essentially, GSA is arguing that because the user agencies' off-schedule purchases were not made in bad faith, the Board should impose a "constructive termination for convenience" and deny breach damages.[foot #] 2 Second, GSA contends that, based upon the equities, appellants are not entitled to recover because they received orders under the contracts exceeding the estimated quantities stated in the request for proposals (RFP). Third, GSA argues that court reporting for grand jury proceedings is outside the scope of appellants' contracts. Fourth, respondent contends that each off-schedule purchase made at a lower price than schedule pricing was an exception to mandatory use pursuant to the Federal Property Management Regulation (FPMR), 41 CFR 101-26.401-4(f)(1). Fifth, respondent contends that appellants' contracts were illusory because there were numerous exceptions to GSA's promise that the court reporting requirements would be satisfied through these contracts and the exceptions taken together vitiated the value of that promise, respondent's sole consideration. Appellants vigorously dispute the validity of all of these defenses, but we do not address their applicability because we conclude that appellants have not demonstrated that they are entitled to recover lost profits or consequential damages, under the terms of their contracts. Appellants' claim for recovery of lost profits based upon a diversion theory and their reliance on S&W Tires is misplaced. S&W Tires and other diversion cases are ----------- FOOTNOTE BEGINS --------- [foot #] 1 The parties filed 131 paragraphs of stipulations. [foot #] 2 In so arguing, respondent urges the Board to distinguish S&W Tire Services, Inc., GSBCA 6376, 82-2 BCA _________________________ 16,048, and follow John Reiner & Co. v. United States, 325 F.2d ___________________________________ 438 (Ct. Cl. 1963), cert. denied, 377 U.S. 931 (1964), and Kalvar ____________ ______ Corp. v. United States, 543 F.2d 1298, 1304 (Ct. Cl. 1976), cert. ______________________ _____ denied, 434 U.S. 830 (1977). ______ ----------- FOOTNOTE ENDS ----------- distinguishable in a critical respect -- those contracts were requirements contracts and one contractor was guaranteed all of the users' requirements. Each appellant's multiple award schedule contract at issue here is not a pure requirements contract in that no individual contractor was given the exclusive right to provide all the mandatory user agencies' court reporting services for the contract term. Rather, the solicitation which gave rise to these contracts and formed the basis of the parties' bargain expressly advised offerors that there could be an unspecified number of "multiple" awards for any geographic area for which a vendor chose to submit an offer. Further, the contract did not guarantee to any awardee that any quantities would be ordered. Nor did the contract guarantee to any individual awardee a percentage of the totality of the Government's required court reporting business. Agencies were free to order services based upon considerations other than price. As such, contractors bore the risk they might only receive an unspecified amount of work, possibly none, dependent upon which of the multiple award schedule contractors user agencies elected to hire. User agencies were not free to order services off-schedule, but the fact that they did so does not give rise to a remedy of either lost profits or consequential damages under the instant contracts. Appellants' effort to operate as a consortium of disappointed vendors claiming breach damages based upon a diversion of the potential universe of work divided proportionally among them must fail. The contracts were not collective endeavors -- each contractor separately and individually offered to provide services at different, independent prices. The structure of the individual contracts cannot be altered post hoc to bestow collective rights and remedies neither originally contemplated nor bargained for. Findings of Fact The Request for Proposals On or about October 30, 1987, GSA issued RFP number FCGA-SS-SS205-N soliciting proposals for court reporting and transcription services contracts. The Statement of Work in the RFP specified: The Contractor shall furnish the necessary personnel, materials, and services and otherwise do all things necessary for and incidental to the verbatim reporting and transcription of conferences, courthouse and/or legal hearings, depositions, advisory board and committee meetings, arbitration hearings, personnel grievances and appeal hearings, and other administrative hearings for various Government agencies . . . . Appeal File, Exhibit 1 at 24. The RFP as amended sought proposals for transcribing/recording: by electronic device, stenomask, stenotype, and floppy disk. Appeal File, Exhibit 1 at 24. Offerors were required to be able to provide at least two of the above methods of transcribing/recording. Id. The RFP contemplated multiple awards of what it termed "requirements contracts" under the federal supply schedule (FSS) for professional verbatim reporting and transcript services. Appeal File, Exhibit 1 at 46, 97. Paragraph M.2 of the solicitation provided: M.2 MULTIPLE AWARDS (M-FSS-305-B) (APR 1984) The Government may make multiple awards for services listed herein to those responsible offerors whose offers, conforming to the request for proposals, will be most advantages [sic] to the Government, taking into consideration the technical proposal and price for the services offered. Offerors are advised that agencies which contemplate placing orders for services contained in the contracts resulting from this request for proposal[s] will be instructed, except where precluded by administrative expense or urgency considerations, to consider equally those contract sources and other sources to assure that purchases of such services are made to the best advantage of the Government, taking into consideration the technical requirements, price, availability, delivery time and any other pertinent factors. Appeal File, Exhibit 1 at 97. Amendment Two to the solicitation clarified Paragraph M.2, Multiple Awards, by adding the following: Where the Government makes multiple awards, ordering agencies will select a contractor in accordance with the provisions of this clause taking into consideration all factors mandated by the clause: technical requirements, price, availability, delivery time and any other pertinent factors such as capacity. Selections need not be based solely on price. Respondent's Record Submission, Appendix, Exhibit 2, (Declaration of Doris L. Marsh (Marsh Declaration) (July 14, 1997)), Exhibit 12 at 2. The solicitation did not advise offerors of any minimum or maximum number of contract awards which would result from the instant solicitation. Paragraph B.1 of the solicitation requested offerors to allow for a minimum of ninety days for acceptance of their offers. Appeal File, Exhibit 1 at 5. The RFP and the resultant contracts included the Federal Acquisition Regulation (FAR) clause entitled "Requirements (52.216-21) (Apr. 1984)," which provided, in pertinent part: c) Except as this contract otherwise provides, the Government shall order from the Contractor all the supplies or services specified in the Schedule that are required to be purchased by the Government activity or activities specified in the Schedule. Appeal File, Exhibit 1 at 46 (emphasis added). Amendment One to the RFP stated: The solicitation provides for the normal supply requirements of the Federal Government and will be used as a mandatory source for the articles or services listed herein by all departments and independent establishments, including wholly-owned Government corporations, in the executive branch (excluding the U.S. Postal Service, Department of Defense, National Labor Relations Board, and the Equal Employment Opportunity Commission) for deliver[y] within the 48 Contiguous States and Washington, D.C. . . . . TEMPORARY EXCEPTION TO MANDATORY USE PROVISION: Any agency designated above as a mandatory user shall be exempt from the mandatory use provision if prior to issuance of the GSA contract, the agency may have entered into a prior contract on its own with an ordering period conflicting with the GSA contract ordering period. Upon expiration of the agency's previous commitment, the GSA mandatory use provisions shall prevail without exception. Appeal File, Exhibit 1, Amendment One at 3. The RFP and the contracts contained standard FAR clauses applicable to service contracts, including "Warranty of Services (52.246-20) (Apr. 1984)" and "Termination for Convenience of the Government (Services) (52.249-4)(Apr. 1984)." Appeal File, Exhibit 1 at 49. The Termination for Convenience clause provided: The Contracting Officer, by written notice, may terminate this contract, in whole or in part, when it is in the Government's interest. If this contract is terminated, the Government shall be liable only for payment under the payment provisions of this contract for services rendered before the effective date of termination. Id. The RFP's Schedule of Items included line items for each of the forty-eight contiguous states, Alaska, Hawaii, and Puerto Rico, followed by sub-items covering Standard Metropolitan Statistical Areas (SMSAs) or Standard Consolidated Statistical Areas (SCSAs). Each offeror was requested to mark the geographical areas covered by its proposal. Offerors could propose to provide services for an entire state or to provide services within a designated sub-item. Appeal File, Exhibit 1 at 5. Prior to the contracts at issue in these appeals, GSA's regional office in Ft. Worth, Texas, had awarded a single award schedule contract for court reporting services with one contractor serving as the exclusive source for all of designated users' requirements in the geographic locale awarded. Marsh Declaration 1, 6. The predecessor contract was mandatory for fourteen agencies. Id. The RFP at issue was mandatory for over fifty agencies. Id. 1. The Department of Justice was not a mandatory user of the predecessor contract but was a mandatory user of the contracts that are the subject of these appeals. Appeal File, Exhibit 18 at 2. The agencies which were not covered by the earlier contracts were not asked by GSA to estimate their requirements prior to award of appellants' contracts. Stipulation (July 11, 1997) 39 (citing Appeal File, Exhibit 18 at 5, General Services Administration Report to the General Accounting Office (GSA Report) at 10 (Feb. 19, 1993)). According to the contracting officer, "the estimated requirements do not vary significantly in most locations from the historical data generated by the prior, single award schedule contract." Marsh Declaration 5. In the original solicitation, paragraph B.2, Estimated Requirements, provided total estimated requirements of $3.5 million for the forty-eight contiguous states, Alaska, Hawaii, and Puerto Rico. Amendment B to the solicitation clarified paragraph B.2 as follows: 2. ESTIMATED REQUIREMENTS (B-FSS-FCGA-998) (APR 1984) This Request for Proposal includes estimated requirements of $3.5 million for the 48 contiguous states, Alaska, Hawaii, and Puerto Rico to cover Government agencies included in Section I, Clause I- FSS-102. No guarantee is given that any quantities will be ordered. Estimated requirements shown on the amended schedule of items are derived from requirements of agencies that were mandatory users under the previous GSA contract and do not encompass requirements of additional mandatory users of resultant contracts from this RFP. Resultant contracts from this RFP will be mandatory for the majority of Federal agencies. The prices paid under previous contracts can be obtained by contacting the General Services Administration, Special Programs Division (FCGA), Washington, DC 20406. B.3 SCHEDULE OF ITEMS Estimated dollar requirements as clarified above have been added for each Special Item Number. Delete pages 6 through 22 from the solicitation and replace with pages 1 through 18 of Attachment One. Appeal File Exhibit 1 at 2 (emphasis added). The solicitation as amended contained eighteen pages listing each geographic location nationwide for which an offeror could propose services and the estimated dollar amount of the requirements for each, including the following locations pertinent to this case: Special Item Estimated SCSA # Number State/City Reqmnts 733-4 California $140,000 4480 733-4a Los Angeles/Lg. Bch. 60,100 0360 733-4b Anaheim/Santa Ana 5,000 6780 733-4c Riverside/S.. 2,500 7360 733-4d San Francisco/Oklnd. 34,800 7400 733-4e San Jose 2,500 0680 733-4f Bakersfield 0 2840 733-4g Fresno 3,200 6920 733-4h Sacramento 4,500 7320 733-4i San Diego 10,600 7120 733-4j Monteray (sic) 10,000 7480 733-4k Santa Barbara 5,800 . . . . Special Item Estimated SCSA # Number State/City Reqmnts 8840 733-8 District of Columbia $100,000 Maryland, Northern Virginia . . . . Special Item Estimated SCSA # Number State/City Reqmnts 733-12 Illinois $33,500 1600 733-12a Chicago 32,000 7880 733-12b Springfield 0 6120 733-12c Peoria 1,500 . . . . Special Item Estimated SCSA # Number State/City Reqmnts 733-29 New Jersey $5,000 5640 733-29a Newark 5,000 3480 733-29b Trenton 0 . . . . Special Item Estimated SCSA # Number State/City Reqmnts 733-31 New York $39,500 1280 733-31a Buffalo 3,000 5600 733-31b New York City/N.J. 27,500 0160 733-31c Albany 3,500 5380 733-33d Hempstead 2,500 8160 733-33e Syracuse 3,000 Appeal File, Exhibit 1 at 2, 3, 5, 10, 11. Offerors were required to propose per-page pricing for each method of transcribing/reporting offered for each geographical area to be covered. Appeal File, Exhibit 1 at 1-22. Offerors were to price three separate delivery times for each method of service offered: (1) daily, which required transcript delivery on the next day by not later than 12:00 noon; (2) regular, which required delivery before 5:00 p.m. (or prior to the close of business day for the agency) of the twentieth day following the hearing; and (3) expedited, which required delivery not later than 5:00 p.m. (or prior to the close of business day for the agency) of the sixth day following the end of the hearing. Id. The RFP also required offerors to state their proposed prices for additional copies and ancillary items such as computer disks. Id. Finally, offerors were obligated to provide transcripts to third parties on whatever basis they are ordered at the same price as the Government for additional copies. Id., Amendment One at 2. Section F.6 of the RFP provided that the contractor would be paid a minimum of $100 per day for work ordered under its contract under certain listed conditions. Appeal File, Exhibit 1 at 40. Section F.7 of the RFP further provided that the contractor would be paid overtime in accordance with an established formula. Id. at 41. Amendment One, Paragraph I.10, to the solicitation advised offerors as follows: Articles or services will be ordered from time to time in such quantities as may be needed to fill agency requirements determined in accordance with currently applicable supply procedures. Since it is impossible to pre-determine the precise quantities that will be required during the contract term, each contractor is obligated within the scope of this contract to deliver all articles and services ordered. Appeal File, Exhibit 1, Amendment One at 3. The RFP did not prohibit subcontracting work, and the Government recognized that appellants proposed to use subcontractors or independent contractors as well as their own full-time employees to fulfill schedule contract requirements. Appeal File, Exhibits 1, 25 at 5, 28 at 5; see Appellants' Record Supplement, Exhibit 1 (Affidavit of Robert Monick, President of Ace-Federal Reporters, Inc. (Ace-Federal) (July 9, 1997)) at 4 ("Ace-Federal would have had no difficulty performing the additional work, because the company had in place a network of subcontractors and independent contractors the company had used in the past when orders exceeded the company's in-house capabilities."); Appellants' Record Supplement, Exhibit 2, Affidavit of Ann Riley (Riley Affidavit) (July 10, 1997) 5 ("Companies in the court reporting business typically use a combination of employees, independent contractors, and subcontractors to perform any work that is ordered."); Appellants' Record Supplement, Exhibit 3, Affidavit of Sandra Tankoos (Tankoos Affidavit) (July 8, 1997) 10; Appellants' Record Supplement, Exhibit 5, Affidavit of Marijke Elder (Elder Affidavit) (July 3, 1997) 9; Appellants' Record Supplement, Exhibit 7, Affidavit of Michael J. Tallman (July 3, 1997) 7; Appellants' Record Submission, Exhibit 9, Affidavit of Stephen Miller (July 8, 1997) 5, 6; Appellants' Record Supplement, Exhibit 15, Appellant Ace-Federal's Answers to Respondent Interrogatory No. 35. (In addition to some sixty-seven subcontractors and independent contractors, Ace-Federal also "had available to it all of the court reporters listed in the Court Reporters Source Book, published annually by the National Shorthand Reporters Association (now known as the National Court Reporters Association)."). The Pre-Proposal Conference GSA conducted a pre-proposal conference on November 23, 1987. During the conference, representatives of Heritage Reporting Corporation (Heritage) asked a GSA representative, Ms. Trilma Davis, if mandatory users could "get out of using the Federal Supply Schedule." Stipulation 25. Ms. Davis responded that to be excused from the schedule an agency would first have to obtain a waiver, but that GSA had no intention of granting waivers and that she had input into GSA's decisionmaking when responding to requests for waivers. Id.; Appeal File, Exhibit 17 at 12. Proposals The parties stipulated that each of the appellants submitted a proposal in response to the RFP with the expectation that, by receiving award of a schedule contract, each would be able to develop and maintain ongoing relationships with mandatory user federal agencies for which they had not previously worked. Stipulation 43 (citing Appellants' Record Supplement, Exhibits 1, 2, 4, 6, 8, 10). Award GSA awarded a total of ten multiple award contracts covering various geographic regions as a result of the offers received in response to the RFP. Appeal File, Exhibit 3. Alaska, Hawaii, and Puerto Rico were non-mandatory requirements. Id. At the time of award, each of the appellants was an established business with a history of performing government contracts; each had one or more established offices in its respective areas of award, and each had made capital investments and developed an organization and structure that permitted it to accommodate fluctuating workloads through the use of piece-work or payment-by-the-page labor. Stipulation 46. For example, as of 1988, Ace-Federal had been in business for twenty-seven years and employed about eighty-four people. Id. The company's 1988 gross receipts approached $3,000,000, and it had invested in equipment necessary to conduct its business, including computer equipment, copiers, stenotype machines, translation systems to produce transcripts, recording equipment, and delivery vehicles, valued in excess of $600,000. Id. Further, Ace-Federal had developed a network of trained subcontractors and independent contractors to whom it could assign work on a piece-work or per- page basis. Id. By letter dated August 24, 1988, GSA advised Ace-Federal that it had been awarded contract number GS-OOF-03036 for reporting and transcription services for SMSA 840, special item number (SIN) 733-8, for the District of Columbia, Maryland, and Northern Virginia. The letter further advised Ace-Federal: "Multiple awards will be made for SIN 733-8, and your contract will be one of several for the area." Appellants' Supplemental Appeal File, Exhibit 9. Ace-Federal's contract ran from August 1, 1988, through July 31, 1989, with two one-year options. Id. GSA awarded contract number GS-OOF-03035 to Ann Riley & Associates, Ltd. (Ann Riley) for the same term, with two one-year options. The contract covered court reporting and transcription services for the same District of Columbia metropolitan area. Stipulation 48. In its notification of award to Ann Riley, GSA stated: "Multiple awards will be made for SIN 733-8 and your contract will be one of several for the area." Appeal File, Exhibit 29. By letter dated August 12, 1988, GSA advised Miller Reporting Co., Inc. (Miller) that it had received a multiple award schedule contract for SIN 733-8 and that its contract would "be one of several for the area." Appeal File, Exhibit 26. The term of Miller's contract, number GS-OOF-03034, ran from August 1, 1988, through July 31, 1989, with two one-year options and also covered court reporting and transcription services for the District of Columbia metropolitan area. Id.; Stipulation 52. In this contract, the Government expressly reserved the right to make additional awards under the RFP. Appeal File, Exhibit 26 at 5. GSA awarded contract number GS-OOF-03039 to ARTI Recording, Inc. (ARTI), for the term August 19, 1988, through July 31, 1989, with two one-year options. The contract covered court reporting and transcription services for the New York City metropolitan area, including portions of New Jersey. The New York portion of this area included Bronx, Kings, New York, Putnam, Queens, Richmond, Rockland, and Westchester Counties; the New Jersey portion included only Bergen County. Stipulation 49. By letter dated September 30, 1988, GSA advised California Shorthand Reporting (CSR) that it had been awarded contract number GS-OOF-03045 and that multiple awards had been made for some areas.[foot #] 3 The term of CSR's contract ran from September 26, 1988, through July 31, 1989, with two one-year options, and covered court reporting and transcription services for California (except Los Angeles County) and Hawaii. Stipulation 50. At the time of award, GSA's contracting officer advised CSR's president that multiple awards had been made in California and that there were two other contractors which received awards in that state. Appeal File, Exhibit 35 (Letter from Walter Young to Marijke Elder (Nov. 23, 1987)). CSR acknowledged that it was "very much aware that there [were] other schedule contractors in the State of California . . . ." Id. (Letter from Marijke Elder to Walter Young (Dec. 13, 1987)). By letter dated September 23, 1988, GSA notified Executive Court Reporters (Executive) that it had received a multiple award contract for reporting and transcription services covering special item numbers 733-4a, 8, 12a, 31b, and 49. The notification further advised Executive: "Multiple awards will be ----------- FOOTNOTE BEGINS --------- [foot #] 3 CSR's contract covered a nonmandatory area, Hawaii, and CSR was the only contractor which received an award for this state. Appeal File, Exhibit 3. ----------- FOOTNOTE ENDS ----------- made for some areas." Appeal File, Exhibit 32.[foot #] 4 Executive's contract, number GS-OOF-03043, ran for the term September 23, 1988, through July 31, 1989, with two one-year options. The contract covered court reporting and transcription services in Alaska, Los Angeles County in California, the New York/New Jersey area, the District of Columbia, and the Chicago metropolitan area. The contract defined the Chicago metropolitan area to include Cook, Dupage, Kane, Lake, McHenry, and Will Counties. Id. GSA awarded contract number GS-OOF-03033 to Heritage, a company which is not an appellant in this case, for the term of August 1, 1988, through July 31, 1989, with two one-year options. The contract covered all types of court reporting and transcription services for the forty-eight contiguous states and the District of Columbia. Appeal File, Exhibit 3.[foot #] 5 In thirty-nine of the contiguous states, Heritage was the sole contractor for mandatory users and in the remaining contiguous states and in Washington, D.C., Heritage was one of several contractors. Id.[foot #] 6 ----------- FOOTNOTE BEGINS --------- [foot #] 4 Executive's contract covered Alaska, which was a non-mandatory area, and according to the schedule, Executive was the only contractor which received an award for this state. Appeal File, Exhibit 3. [foot #] 5 Heritage filed its own appeal, and the parties settled that matter. Heritage Reporting Corp. v. General _______________________________________ Services Administration, GSBCA 10396 (Aug. 22, 1992). _______________________ [foot #] 6 Specifically, Heritage was awarded a contract for SIN 733-4 covering any area in California, including Los Angeles, ___ Long Beach, and all other California metropolitan areas. Executive also was awarded a contract for Los Angeles and Long Beach, and CSR was also awarded a contract for SINs 733-4(b) through (j), covering the Anaheim, Riverside, San Francisco, San Jose, Sacramento, San Diego, and Salinas areas. Appeal File, Exhibit 3. Similarly, Heritage was awarded a contract for any area in the states of Illinois and New York, including the areas also awarded to Executive in Illinois, and to ARTI and Executive in New York. Id. ___ In its decision partially adopting the allocation of liability among various agencies resulting from the settlement of Heritage's appeal, the General Accounting Office recognized that Heritage's award was a multiple award schedule (MAS) contract and stated: "A MAS consists of contracts with more than one supplier for services at varying prices for delivery within the same geographic area. In this case, Heritage was listed as the sole contractor for thirty-nine of the forty-eight contiguous states; in the District of Columbia and the remaining contiguous states, Heritage was one of several contractors listed." Heritage ________ Reporting Corp., B-252754, at 6 n.1 (Oct. 6, 1994). _______________ ----------- FOOTNOTE ENDS ----------- The contracting officer attested that a mandatory user under the schedule contract "is obligated to use the contractors that we have awarded." Appellants' Record Supplement, Exhibit 22, Deposition of Doris L. Marsh (Heritage Reporting Corp., GSBCA 10396) at 10 (emphasis added). GSA awarded contract number GS-OOF-03040 to a company which is not an appellant in this case, Argie Reporting Service (Argie), for the term of August 19, 1988, through July 31, 1989, with two one-year options. The contract covered court reporting and transcription services in Illinois, Nebraska, the Des Moines and Cedar Rapids metropolitan areas in Iowa, the Kansas City, Topeka, and Wichita metropolitan areas in Kansas, and the Kansas City, St. Louis, and Springfield metropolitan areas in Missouri. Stipulation 57. GSA awarded contract number GS-OOF-03044 to another entity which is not an appellant in this case, Arlington Typing and Mailing (Arlington), for the term of September 26, 1988, through July 31, 1989, with two one-year options. Stipulation 58. The contract covered court reporting and transcription services in Massachusetts. Id. GSA's Responsibility for the Schedule Contracts Under the multiple award schedule, individual agencies were to place orders directly with contractors, but GSA had supervisory responsibility with respect to the schedule contracts. Appeal File, Exhibit 22 at 2; 48 CFR 8.405 (1988). The parties stipulated that: GSA exercises supervisory authority for the schedule contracts under 40 U.S.C. 481, which provides that the Administrator of General Services shall prescribe policies and methods of procurement and supply of personal property and nonpersonal services. . . . Pursuant to 41 U.S.C. 252, the civilian portion of the executive branch is required to make purchases and contracts for property and services in accordance with the provisions of this title and implementing regulations of the Administrator. . . . The implementing regulations are the Federal Property Management Regulations (FPMR), found at 41 C.F.R. 101 et seq. 41 C.F.R. 101-26.401 states, in part, that "[a]ll executive agencies shall procure needed articles and services from Federal Supply Schedule contracts in accordance with the provisions of the appropriate Federal Supply Schedule." The burden of complying with mandatory supply schedules is on the user agencies pursuant to 41 C.F.R. 101-26.401(a) which provides that "prior to initiating procurement directly from commercial sources, agencies shall determine whether the required commodities and services or similar commodities and services serving the required functional end-use purpose are available from a Federal Supply Schedule." Under the FAR, the FPMR, and existing case law, GSA has been recognized as having overall supervisory responsibility for the GSA schedule contracts. Stipulation 36 (citing 48 CFR 38.00 et seq.; 41 CFR 101-26.491 et seq.; Digital Equipment Corporation, GSBCA 9618, 90-2 BCA 22,808; GSA Report at 2-3). Contract Terms Each contract contained all of the above-quoted solicitation terms, as well as the awardee's schedule of items, which listed each geographic area, pricing, and the type of court reporting services the contractor offered. Amendments One and Two to the RFP were incorporated into the contracts. Appellants and Heritage, Argie, and Arlington were listed in the October 31, 1988, FSS (OOSS 7301, Basic Ed., "Professional Verbatim Reporting and Transcript Services," Industrial Group 733, IG Class 7339). Appeal File, Exhibit 3. The parties stipulated that "mandatory user agencies had no authority to amend or terminate, in whole or in part, appellants' schedule contracts for the convenience of the government. Only GSA's schedule contracting officer had the authority to amend or terminate appellants' schedule contracts for the convenience of the government." Stipulation 70 (citing FAR 8.405-6(a)). Performance Upon award of their schedule contracts, appellants began contacting mandatory user agencies directly to inform the agencies that mandatory schedule contracts had been awarded and that the companies were ready to accept orders. Stipulation 65 (citing Elder Affidavit at 5, 6); Tankoos Affidavit at 5, 6. GSA was responsible for printing and distributing to user agencies a catalogue of the supplies or services available under the contract. Stipulation 63 (citing Appeal File, Exhibit 1, Amendment One; GSA Report at 10, n.7). Although the terms of the contract were to commence as early as August 1, 1988, or in two cases in September 1988, the catalogue for this multiple award schedule was not distributed to the user agencies until October 31, 1988. Marsh Declaration 7. During the terms of the schedule contracts, GSA received several notifications from Heritage that mandatory users subject to the FSS were issuing solicitations, awarding contracts, and otherwise procuring court reporting and transcription services off-schedule in violation of the contracts. Stipulation 75 (citing Appeal File, Exhibits 10, 11, 12, 14, 17). On various occasions, GSA contacted mandatory user agencies to address issues of noncompliance with schedule requirements. Stipulation 76. The contracting officer described performance under this schedule contract as follows: Most schedule contracts require very little attention on the part of GSA after award; agencies place their orders, the contractor performs and is subsequently paid by the agency. The schedule contracts for IG-733 [Industrial Group 733 Transcripts Stenographic Reporting Services] were the exception to this general rule. In addition to Ms. Benson's complaints that agencies which should have been mandatory users were going outside of the contracts to satisfy their requirements, there were complaints from schedule contractors that other schedule contractors were intruding on their territory, and there were complaints from the customer agencies that on numerous occasions court reporters would not show up when scheduled, would be late in producing a transcript, would produce low quality transcripts, and that the contract rates were significantly higher than the agency had been used to paying, and that the quality of service received under the contract did not justify the price differential. The issue of price was an ongoing dispute with our federal agency customers, and there were many more requests for waivers from mandatory use than was normal for a schedule of this nature. After much deliberation, my office concluded that we could not solve these problems by tinkering with the contract terms and conditions, and that it would be in the best interest of the government to not exercise the option period on these contracts and cancel the schedule for IG-733. Marsh Declaration 9. Each appellant received delivery orders from mandatory user agencies under its schedule contract. Stipulation 66. CSR received a total of ******* in revenue under its contract; Executive, ********; ARTI, *******; Ace-Federal, *******; Ann Riley, ********; and Miller, ********. Heritage received **********. Stipulation, Exhibit 2. By letters dated April 21, 1989, GSA notified each appellant of GSA's intent to exercise the option of extending each contract for twelve months, for the period August 1, 1989, through July 31, 1990, but later reversed its position and notified each appellant that it would not exercise the option and that "[a]gencies will be advised that they may procure this service on an open market basis after July 31, 1989." Appeal File, Exhibits 13, 15, 27, 30, 33, 36. Twelve agencies formally requested waivers from mandatory use of the schedule contract. Appellants' Record Supplement, Exhibit 20, Respondent's Answers to Appellant's Interrogatories in Heritage Reporting Corp. v. General Services Administration, GSBCA10396 at 5. GSA granted waivers to the Federal Communications Commission, the Federal Energy Regulatory Commission for the Office of Administrative Law Judges only, and the Department of Labor, Branch of Hearings and Review. Id. at 6. Appellants' contracts remained operative through the scheduled expiration on July 31, 1989, and appellants performed work under their contracts. Stipulation 69. Mandatory Users Who Procured Off-Schedule Services The parties stipulated that during the contracts' periods some seventy-one federal agencies or components contracted off- schedule for court reporting and transcription services totaling 3,732,605 original pages. Stipulation 97-98. On August 28, 1992, the Board granted a joint motion of the parties in the Heritage appeal to enter a stipulated judgment in the amount of $7,254,525.60, based upon their settlement,[foot #] 7 which was subsequently allocated ----------- FOOTNOTE BEGINS --------- [foot #] 7 The Board did not adjudicate the merits of the Heritage appeal, and did not itself make any findings of fact or conclusions of law. Rather, as is the common practice when the parties settle their claims independent of Board process, the Board awarded the parties' stipulated settlement amount to facilitate payment from the Government's permanent indefinite judgment fund. As such, the settlement in Heritage has no collateral estoppel effect on these claims. E.g., United States ____ ______________ v. International Building Co., 345 U.S. 502 (1953) ("Unless we ______________________________ can say that [consent judgments] were an adjudication of the merits, the doctrine of estoppel by judgment would serve an unjust cause: it would become a device by which a decision not shown to be on the merits would forever foreclose inquiry into the merits."); Red Lake Band v. United States, 607 F.2d 930, 934 _______________________________ (Ct. Cl. 1979) ("As a general rule . . . an issue is not 'actually litigated' for purposes of collateral estoppel unless the parties to the stipulation manifest an intent to be bound in a subsequent litigation . . . . Moreover, the intention to be so bound should not be readily inferred."); see generally, Charles ______________ Wright, Arthur Miller, and Edward Cooper, Federal Practice and _____________________ Procedure 4443 (1981 & Supp. 1998). In the Heritage _________ settlement, the Government did not indicate an intent to admit liability under any other schedule contracts. Appellant's Record Supplement, Exhibit 26. Importantly, the merits of the Heritage case were not "actually litigated," and the issue on which our decision rests -- the nature of the contracts -- was never (continued...) ----------- FOOTNOTE ENDS ----------- among enumerated mandatory user agencies without Board involvement.[foot #] 8 Facts Pertinent to Appellants' Claimed Lost Profits The parties stipulated that calculation of the profit rate which would have been earned by appellants for the original pages which were ordered off-schedule is determined by examining appellants' marginal cost of undertaking additional work beyond the work which was actually received by appellants. Stipulation 117. Payment to labor in the court reporting and transcription industry is predominantly based upon piece rate or per-page compensation. Id. If the pages ordered off-schedule by mandatory users had been ordered under the schedule contracts, appellants would have met the increased demand by providing additional piece-work to employees and by retaining additional independent contractors and subcontractors. Id. The ability to handle sharp fluctuations in demand through the use of employees, independent contractors, and subcontractors operating on a piece- rate or per-page basis is a characteristic of the court reporting industry. Id. 118. The total number of pages ordered off-schedule by user agencies is 3,741,487. Stipulation 111. The parties stipulated that based upon appellants' share of the market, appellants' share of the original pages ordered off-schedule was 1,381,731. Id. According to the parties' stipulation, appellants' share of original pages ordered off-schedule by mandatory schedule users (1,381,731 pages) times appellants' ----------- FOOTNOTE BEGINS --------- [foot #] 7 (...continued) raised. Moreover, Heritage stood in a different posture than any of the appellants here, since it was the sole and exclusive schedule contractor in many locations. [foot #] 8 In a proceeding before the General Accounting Office (GAO), the Department of Justice, the Securities and Exchange Commission (SEC), and the Federal Maritime Commission (FMC) challenged the amount of damages allocated to each of their agencies in connection with the settlement of Heritage's appeal. Stipulation 100. GAO denied the Department of Justice's contention, but agreed that the SEC was not required to reimburse the judgment fund for the amount attributable to its off-schedule purchases. GAO found that FMC qualified for a partial exception from the FSS' mandatory use provisions and ordered that its contribution to the $7,254,525.60 judgment be reduced by the proportionate value of 253 pages. Id. (citing Heritage Reporting ___ __________________ Corp., B-252754 (Oct. 6, 1994)). Appellants in this case have _____ not sought compensation for the 253 FMC pages. When the adjustment in the FMC's original page count recommended by the GAO is made, the number of original pages acquired off-schedule by these agencies becomes 3,732,352. ----------- FOOTNOTE ENDS ----------- average original page price ($4.393) yields $6,069,944.28 as the amount of lost revenue from the sale of original pages. Stipulation 116.[foot #] 9 Appellants' average cost per original page for performing additional assignments is $2.55. Stipulation 119. The parties stipulated that the average marginal profit rate that would have been achieved by appellants if additional work had been ordered under the schedule rather than off-schedule by mandatory users is 41.91%. Id. 120. According to the parties' stipulation, appellants' lost revenue for original pages ordered off-schedule ($6,069,944.28) times appellants' profit rate for additional work ordered under the contract yields $2,543,913.65 as appellants' lost profits for original pages ordered off-schedule by mandatory users. Id. 121. According to the stipulation, the off-schedule order of original transcript pages by mandatory users deprived appellants of the opportunity to sell copies of those originals. Stipulation 122. The parties agree that applying appellants' market share to the off-schedule original pages which were eligible for copy sales results in 947,503 original transcript pages eligible for copy sales which were lost to appellants. Id. 124. The parties further stipulated that the average number of lost copy sales per eligible original page is 2.33, and that the number of off-schedule original transcript pages eligible for copy sales (947,503) times the average number of lost copy sales per original transcript page (2.33) yields 2,207,682 as the number of copy page sales lost to appellants. Id. 125, 126. The parties agree that appellants' weighted average price per copy page was $1.10, and that the number of copy page sales lost to appellants (2,207,682) times appellants' weighted average price per copy page (41.10) yields $2,428,450.20 as the amount of lost copy sale revenue to appellants. Stipulations 127, 128. The parties stipulated that "[t]he cost of producing copy pages for sales is nominal. Accordingly, the profit rate for copy sales is set at 100 percent . . . ." Stipulation 129. Appellants claimed direct lost profits totaling $4,972,363.85, consisting of $2,543,913.65 in lost profits from sales of original transcript pages and $2,428,450.20 from sales of copy pages. Id. 130. ----------- FOOTNOTE BEGINS --------- [foot #] 9 The Federal Supply Schedule for court reporting and transcription services required each offeror to bid basic per-page prices for each category of services. The contracts also provided that the amount paid for individual orders would be increased for additional charges for such items as exhibits or inserts, minimum appearance fees, delivery, overtime, computer disks, and other special services. Stipulation 113. ----------- FOOTNOTE ENDS ----------- Discussion I. Does FASA's Statute of Limitations Bar Any of Appellants' Claims? The Federal Acquisition Streamlining Act of 1994 (FASA) amended the Contract Disputes Act of 1978 (CDA) by imposing a limitation on the submission of contractor and Government claims -- "within 6 years after the accrual of the claim." 41 U.S.C. 605(a) (1994); Pub. L. No. 103-355, 2351(a), 108 Stat. 3243, 3322 (1994). FASA was enacted on October 13, 1994. Respondent contends that the six-year limitation on claims took effect on that date. Ace's claim was submitted on February 13, 1995, and Ann Riley's, ARTI's, CSR's, Executive's, and Miller's on September 28, 1995. Because appellants' claims were all submitted after FASA's enactment, and because the contracts ran from August 1, 1988 (or in the case of Executive and CSR, September 23 and 26, 1988, respectively) through July 31, 1989, respondent argues that the first half of Ace Federal's claim should be excluded, and the claims of the remaining appellants should be excluded in their entirety. Respondent's Reply Brief at 4. We disagree. Section 10001 of FASA sets forth the effective dates and applicability of its various statutory amendments. Section 10001(c) provides that certain enumerated amendments apply as of October 13, 1994. Section 2351, establishing the six-year time limitation for the submittal of claims, is not one of the enumerated amendments. Section 10001(b) provides that other amendments enacted by FASA apply as of the date specified in final implementing regulations. Specifically, Section 10001(b) states: (1) An amendment made by this Act shall apply, in the manner prescribed in the final regulations promulgated pursuant to section 10002 to implement such amendment, with respect to any solicitation that is issued, any unsolicited proposal that is received, and any contract entered into pursuant to such a solicitation or proposal on or after the date described in paragraph (3). (2) An amendment made by this Act shall also apply, to the extent and in the manner prescribed in the final regulations promulgated pursuant to section 10002 to implement such amendment, with respect to any matter related to-- (A) a contract that is in effect on the date described in paragraph (3); (B) an offer under consideration on the date described in paragraph (3); or (C) any other proceeding or action that is ongoing on the date described in paragraph (3). (3) The date referred to in paragraphs (1) and (2) is the date specified in such final regulations. The date so specified shall be October 1, 1995, or any earlier date that is not within 30 days after the date on which such final regulations are published. Section 10002 of FASA, entitled "Implementing Regulations," includes these paragraphs: (a) Proposed Revisions - Proposed revisions to the Federal Acquisition Regulation and such other proposed regulations (or revisions to existing regulations) as may be necessary to implement this Act shall be published in the Federal Register. . . . . (f) Savings Provision - Nothing in this Act shall be construed to affect the validity of any actions taken . . . before the date specified in the regulations pursuant to section 10001(b)(3) except to the extent and in the manner prescribed in such regulations. The implementing regulation referenced in the statute, FAR 33.206(a), provides: Initiation of a claim. (a) Contractor claims shall be submitted, in writing, to the contracting officer for a decision within 6 years after accrual of a claim, unless the contracting parties agree to a shorter time period. This 6-year time period does not apply to contracts awarded prior to October 1, 1995. . . . 48 CFR 33.206(a) (1997) (emphasis added). Respondent contends that this regulation is both superfluous and contrary to the express provisions of FASA. Respondent's Record Submission at 25. The regulation is hardly superfluous when the statute expressly provides that certain of its amendments shall apply in the manner prescribed in the implementing regulations. Respondent also contends that the Board should "disregard" the amendments to FAR 33.206(a) on the ground that those amendments are contrary to the terms of FASA. Respondent's Record Submission at 28. Respondent submits that FASA only authorized regulations necessary to implement the Act and that FAR 33.206(a) was not "necessary" because of the statement in FASA Section 2351(a) permitting contractually agreed-upon earlier statutes of limitations to stand in spite of the Act. Again, regulations were expressly contemplated by the statute to establish the effective dates of certain of its provisions. Other than its interpretation of "necessary," respondent cites no provision of the regulation which is contrary to FASA. In fact, the regulation writers took their cue from the statute and established a bright line rule that the six-year period shall not apply to contracts awarded prior to October 1, 1995. Thus, the regulation is consistent with the limited discretion granted to the regulation writers by the statute on its face. This regulation is also consistent with precedent addressing the effective date for the FASA amendments. See, e.g., OAO Corp. v. Johnson, 49 F.3d. 721, 725 (Fed. Cir. 1995) (FASA amendments not effective until "the date provided in the final regulations implementing those amendments, or on October 1, 1995, whichever is earlier"); Ungermann-Bass Networks, Inc. v. Department of the Navy, GSBCA 13005-C(12977-P), 95-1 BCA 27,344 at 136,269 (1994) (FASA takes effect on the earlier of October 1, 1995, or such date as may be prescribed in regulation); Motorola, Inc., ASBCA 48841, 96-2 BCA 28,465, at 142,172 (FASA authorizes a regulation excluding contracts awarded prior to October 1, 1995). II. Did the Agencies' Failure to Order Court Reporting Services from Appellants Breach The Multiple Award Schedule Contracts and Entitle Appellants to Recover Lost Profits? It is undisputed that mandatory user agencies ordered court reporting and transcription services from parties other than schedule contract awardees. Appellants claim this was a breach of their schedule contracts and collectively claim entitlement to lost profits in the amount of $4,972,363.85. In determining whether there was a compensable breach, we must first examine the terms of the contracts. In their stipulations, the parties characterize their multiple award schedule contracts as requirements contracts, but a reading of each of the contracts as a whole does not support this characterization. See Stipulations 19, 47-52. The determination of the type of contract the parties have entered into is generally a matter of law. E.g., Maintenance Engineers, Inc. v. United States, 749 F.2d 724, 726 n.3. (Fed. Cir. 1984) (citing 41 U.S.C. 609(b) (1982)); Torncello v. United States, 681 F.2d 756, 760 (Ct. Cl. 1982); see also Crown Laundry & Drycleaners, Inc. v. United States, 29 Cl. Ct. 506 (1993). The stipulations of the parties characterizing appellants' contracts as requirements contracts are therefore not binding on a reviewing tribunal. E.g., Al-Kurdi v. United States, 16 Cl. Ct. 660 (1989); Bromley Contracting Co. v. United States, 14 Cl. Ct. 69, 74 (1987), aff'd, 861 F.2d 729 (Fed. Cir. 1988). Nor is the tribunal bound by the name or label given to a contract in the contract itself. Crown Laundry, 29 Cl. Ct. at 515 (citing A-Transport Northwest Co. v. United States, 27 Cl. Ct. 206, 214 (1992) aff'd, 36 F.3d 1576 (Fed. Cir. 1993)); Ralph Construction, Inc. v. United States, 4 Cl. Ct. 727, 731 (1984); Mason v. United States, 615 F.2d 1343, 1346 (Ct. Cl. 1980).[foot #] 10 Further, although the contracts contain the standard Requirements clause, which purports to bind the Government to order "all" its requirements from each awardee, that clause is trumped by other contract provisions. The Requirements clause itself is qualified -- it expressly states "Except as this contract otherwise provides, the Government shall order from the Contractor all the supplies or services specified in the Schedule . . . ." The contract "otherwise provides" that this contract neither binds the Government to purchase all of its requirements from any one vendor, nor obligates the Government to purchase any minimum amount from any one vendor. The schedule itself, as well as the cover letters transmitting the contracts, advised vendors that multiple awards were made for all of the mandatory geographic locales at issue.[foot #] 11 Clause M.2, Multiple Awards, made clear that ordering agencies could select any contractor listed on the schedule and that agencies were to consider schedule contractors equally in determining which source was most advantageous to the Government. Clause B.2, Estimated Requirements, expressly provided that "no guarantee is given that any quantities will be ordered." It is well established that a requirements contract is formed when the seller has the exclusive right and legal obligation to fill all of the buyer's needs for the goods or services described in the contract. Coyle's Pest Control, Inc. v. Cuomo, 154 F.3d 1302, 1305 (Fed. Cir. 1998); Ralph Construction, 4 Cl. Ct. at 731; Mason, 615 F.2d at 1346; Media Press, Inc. v. United States, 215 Ct. Cl. 985, 986 (1977); Hemet Valley Flying Service v. United States, 7 Cl. Ct. 512, 515 (1985). In Media Press, the Court of Claims concluded that an analogous multiple-award printing contract let by the Government ----------- FOOTNOTE BEGINS --------- [foot #] 10 As the Court of Appeals for the Federal Circuit has reasoned: "Case law warns that reliance on labels and contract provisions is most risky. In any event the determination of the type of contract the parties entered into is a matter of law and is not controlled by any label or contract provision." Maintenance Engineers, Inc., 749 F.2d at 726 n.5. ___________________________ [foot #] 11 In the mandatory geographic areas at issue here, there were at least two vendors -- one or more appellants, and Heritage, which held a nationwide contract covering all forty- eight contiguous states and all areas within those states. See ___ Appeal File, Exhibits 3, 31. ----------- FOOTNOTE ENDS ----------- Printing Office (GPO) was not a requirements contract. Under the terms of that contract, GPO was obligated to first ask the low- priced contractor to determine whether or not it could accept an order; that contractor could only decline if it was unable to meet a shipping schedule. If this occurred, the Government would contact the next low bidder and so on until the job was accepted. The contract provided three exceptions to this method of placing work. Plaintiff claimed that the Government had wrongly invoked one of these exceptions such that all orders were not offered to plaintiff initially. Plaintiff sought lost profits, claiming that the GPO contract was a requirements contract and that each failure on the part of GPO to offer it a printing job constituted a breach. The court held that the contract was not a requirements contract, reasoning: A requirements contract has been defined as a contract in which the purchaser agrees to buy all of its needs of a specified material from a particular supplier, and the supplier agrees, in turn, to fill all of the purchaser's needs during the period of the contract. Inland Container, Inc. v. United States, 206 Ct. Cl. 478, 482-83, 512 F.2d 1073 (1975); Ready Mix Concrete Co. Ltd. v. United States, 141 Ct. Cl. 168, 169, 158 F.Supp. 571 (1958); Gemsco, Inc. v. United States, 115 Ct. Cl. 209 (1950); Johnstown Coal and Coke Co. v. United States, 66 Ct. Cl. 616 (1929). Neither party to the instant contract is so tightly and exclusively bound to the other so as to give rise to a requirements type arrangement. The Government retained the right to purchase some of its needs from other printers. Similarly, plaintiff was empowered to refuse orders if it was unable to meet a delivery schedule. We conclude, therefore, that such consideration is insufficient to support plaintiff's construction of the contract as a requirements contract. See, Goldwasser v. United States, 163 Ct. Cl. 450, 454-55, 325 F.2d 722, 724 (1963). Media Press, 215 Ct. Cl. at 986. Similarly, in the instant case, Government agencies retained the right to purchase their needs from any of the schedule contractors, and were not bound to use any particular awardee.[foot #] 12 No individual appellant was guaranteed any business, and user agencies were free to utilize any schedule contractor without regard to price. There could have been any number of vendors, and there were two or more vendors in all areas at issue -- none of which was guaranteed the exclusive right to provide all the court reporting services for a ----------- FOOTNOTE BEGINS --------- [foot #] 12 Although appellants were not free to turn away work, they were free to subcontract it out to other reporters who were not themselves listed on the schedule. ----------- FOOTNOTE ENDS ----------- given geographic area.[foot #] 13 As such, appellants' schedule contracts are not requirements contracts. We recognize that in an earlier decision, Locke v. United States, 283 F.2d 521 (Ct. Cl. 1965), the Court of Claims suggested in dicta that a multiple award federal supply contract for typewriter repair and reconditioning was a requirements contract and ruled that a contractor whose schedule had been improperly terminated for default could be entitled to breach damages. Given the clarification in subsequent precedent, Media Press, we conclude that Locke neither warrants characterizing the instant schedule contract as a requirements contract nor justifies an award of lost profits here. Further, Locke is distinguishable from the instant appeals. In Locke, plaintiff was removed from the schedule altogether due to an improper termination of its contract and had no possibility whatsoever of performing work, thus prompting the Court of Claims to conclude that the termination deprived it of a lost opportunity which had "value." In the instant case, all appellants continued to obtain work throughout the course of the contract, but mandatory users, for unknown reasons, failed to o r d e r s o m e s e r v i c e s f r o m s c h e d u l e contractors.[foot #] 14 No appellant demonstrated that it would have received business from a particular agency which utilized an off-schedule vendor. Unlike the court in Locke, we cannot conclude that any particular vendor received less "value" than what it bargained for by virtue of the mandatory user agencies' ordering off-schedule services -- since ----------- FOOTNOTE BEGINS --------- [foot #] 13 Regulations in effect at the time describing the multiple award schedule confirm that more than one contractor was contemplated: (a) Multiple-Award Federal Supply Schedules cover contracts made with more than one supplier for __________________________ comparable items at either the same or different prices for delivery to the same geographical area. 41 CFR 101-26.408-1 (1981); accord, 48 CFR 8.403-2 (1988) ______ ("Multiple award schedules cover contracts made with more than one supplier for comparable supplies and services. Contracts are awarded to suppliers of the same generic types of items at varying prices for delivery within the same geographic area. . . ."). [foot #] 14 Appellants have not alleged or demonstrated that either GSA, which administered the schedule, or the user agencies that ordered off-schedule acted in bad faith. Appellants elected to present their cases on the record without a hearing, and that record does not reveal why in every instance mandatory user agencies elected to procure court reporting services off- schedule. ----------- FOOTNOTE ENDS ----------- all appellants received more work than estimated, and no vendor had been guaranteed any business. Moreover, the Media Press court's definition of a requirements contract has been consistently applied in subsequent cases. As the Federal Circuit recently recognized in Coyle's Pest Control, Inc., 154 F.3d at 1305, "an essential element of a requirements contract is the promise by the buyer to purchase the subject matter of the contract exclusively from the seller," quoting Modern Systems Technology v. United States, 979 F.2d 200, 205 (Fed. Cir. 1992). Similarly, the court in Torncello v. United States, 681 F.2d 756, 768-69 (Ct. Cl. 1982), reasoned: [I]t is the very essence of a requirements contract . . . that the buyer agree to turn to the supplier for all of its needs. If there is not a commitment for all needs, then the relation is not different from an indefinite quantities contract with no required minimum, the very type of relation that the Supreme Court held in Willard, Sutherland & Co. [v. United States, 262 U.S. 489 (1923)], could not be a contract. Importantly, the Federal Circuit in Coyle's Pest Control clarified that "a requirements contract necessarily obligates the Government to purchase exclusively f rom a single source." 154 F.3d at 1305; accord, Franklin Co., ASBCA 10285, 65-2 BCA 5215, aff'd, Franklin Co. v. United States, 381 F.2d 416 (Ct. Cl. 1967) (Armed Services Board of Contract Appeals disagreed with parties' characterization of contract as requirements contract when there were concurrent contracts with overlapping work). Thus, although each appellant's contract masqueraded as a requirements contract and contained a misleading label, when read as a whole each contract is more akin to an indefinite delivery indefinite quantity (IDIQ) contract enforceable only to the extent performed. Federal Electric Corp. v. United States, 486 F.2d 1337 (Ct. Cl. 1973); Tennessee Soap Co. v. United States, 126 F. Supp. 439 (Ct. Cl. 1954). The United States Court of Federal Claims recently analyzed the differences between a requirements contract and an indefinite quantity contract in Rice Lake Contracting v. United States, 33 Fed. Cl. 144 (1995). There, the court, consistent with precedent, defined an indefinite quantity contract as follows: a contract under which the buyer agrees to purchase and the seller agrees to supply whatever quantity of goods the buyer chooses to purchase from the seller. It differs from a requirements contract in that under a requirements contract the buyer agrees to purchase all his requirements from the seller. Under an indefinite quantit[y] contract, even if the buyer has requirements, he is not obligated to purchase from the seller. 33 Fed. Cl. at 152 (citing Mason v. United States, 615 F.2d at 1346 n.5). The court noted that in order for an indefinite quantity contract to be enforceable there must be a minimum quantity which the buyer was obligated to purchase; without an obligatory minimum quantity, the buyer would be allowed to order nothing, rendering its obligations illusory and, therefore, unenforceable. Id. at 152-53; accord, Coyle's Pest Control, 154 F.3d at 1306. Under the multiple award contracts at issue, there was no minimum quantity that agencies were required to order from any specific contractor, and there was no guarantee that any quantities would be ordered. We conclude that the contracts at issue are analytically most akin to indefinite quantity contracts with no stated mandatory minimum, enforceable to the extent they were performed, and there is no basis in the contracts to award damages for the off-schedule orders. Cf. William W. Goodrich, Jr. and Coralyn G. Mann, Avoiding Disaster in Federal Supply Service Contracts, 15 Pub. Cont. L.J. 1, 12 (1984) ("Awardees of multiple award schedule contracts would appear to have no legal assurance of sales or profit."). Appellants' collective efforts to obtain an award of damages representing all off-schedule purchases and divide it among themselves based upon assumptions and market share must fail. These contracts do not contemplate such a collective remedy. No amount of post-contract collaboration can alter the fact that each appellant filed a separate claim and had its own contract based upon its individual offer, with different pricing and, in some cases, different services to be performed in different locales. At best, each appellant has shown that there should have been a larger universe of potential work for the schedule contractors. However, this does not mean that every schedule contractor's share of that work should necessarily have been larger. Nor does this diminished universe of potential work trigger Government liability to each schedule contractor. Any expectation that an individual appellant would have received any portion of the additional amount of work claimed is speculative and not supported by the terms of its multiple award contract -- which expressly warned that there was no guarantee that any quantities would be ordered. As such, in addition to failing to prove a compensable breach, no appellant has demonstrated that its claimed damages were foreseeable at the time of contract formation. Cienega Gardens v. United States, 38 Fed. Cl. 64, 73 (1997) ("To the extent that plaintiffs' damages were foreseeable at the time of contract formation, not at the time of the breach, they are recoverable. Lucas v. United States, 25 Cl. Ct. 298, 310 (1992) (citing Globe Refining Co. v. Landa Cotton Oil Co., 190 U.S. 540, 545-47, 23 S.Ct. 754, 756-57, 47 L.Ed. 1171 (1903)."). Respondent argued that the Board take a different tack in denying liability here -- suggesting that we impose a constructive termination for convenience, deny breach damages, and hold that appellants are entitled only to damages permitted under the Termination for Convenience clause -- in this case nothing. Respondent's argument assumes that breach damages would otherwise be warranted. Given our conclusion that appellants have not demonstrated entitlement to breach damages under the terms of their contracts and appellants' stipulation that they have no termination for convenience costs, we need not address this argument or any of respondent's other arguments here. Instead, we hold that the contracts were not requirements contracts and, under the bargain the parties struck, the individual schedule contractors cannot recover lost profits for off-schedule purchases. III. Are Appellants Entitled to Consequential Damages? Appellants seek consequential damages in the amount of $2,486,181.90. Given our conclusion that appellants have not demonstrated a compensable breach, they cannot recover consequential damages. Further, appellants' claim for consequential damages is based solely upon their loss of incumbency. Appellants' Opening Brief at 53. Appellants rely on their stipulation that they submitted proposals with the expectation that by receiving award of a schedule contract they would each be able to develop and maintain ongoing relationships with user agencies for which they had not previously worked. Appellants contend that it was reasonable to expect that the mandatory user agencies would do business with the awardees for at least a year. Id. at 53-54. Appellants point out that incumbency had a particular value here because history revealed that expiration of mandatory contracts were followed by periods of informal contracting. Appellants derive their consequential damages of $2,486,181.90 by "taking the starting incumbent positions that appellant would have had but for the breach (i.e., $4,972,363.85) and reducing the value of that incumbent position to zero after only one year. Appellants cite this Board's decision in Stroh Corp. v. General Services Administration, GSBCA 11029, 96-1 BCA 28,265, in support of their claim for consequential damages. This case in no way supports the proposition that appellants are entitled to consequential damages. To the contrary, the Board in Stroh stated: Furthermore, Stroh is not entitled to an award of under absorbed home office overhead under its modified Eichleay formula because, in reality, this claim seeks recovery of consequential damages. See Prudential Insurance Co. of America v. United States, 801 F.2d 1295 (Fed. Cir. 1986), cert. denied, 479 U.S. 1086 (1987). To be recoverable, consequential damages must be foreseeable at the time of contract award. Landmovers, Inc., ENGBCA 5656, 92-1 BCA 24,473. Foreseeable means within the contemplation of the parties at the time of award. For damages to be recoverable there must be no intervening incident; the Government's actions must produce the effect inevitably and naturally. Ramsey v. United States, 121 Ct. Cl. 426, 433 (1951); accord Hart, Clark, and Hirt, IBCA 1508-8-81, 84-1 BCA 17,134, at 85,352-53. 96-1 BCA at 109,791. Appellants have cited no legal support for their consequential damages claim, and the facts of record do not demonstrate entitlement to such damages. As our appellate authority has recognized, "Remote and consequential damages are not recoverable in a common law suit for breach of contract . . . especially . . . in suits against the United States for the recovery of common law damages, such as the instant case." San Carlos Irrigation & Draining District v. United States, 111 F.3d 1557, 1563 (Fed. Cir. 1997) (quoting Wells Fargo Bank, N.A. v. United States, 88 F.3d 1012, 1020 (Fed. Cir.), cert. denied, 117 S. Ct. 1245 (1996), and Northern Helex Co. v. United States, 254 F.2d 707, 713, 720 (Ct. Cl. 1975)). Decision The appeals are DENIED. ________________________________ MARY ELLEN COSTER WILLIAMS Board Judge We concur: ________________________________ ________________________________ ROBERT W. PARKER CATHERINE B. HYATT Board Judge Board Judge