________________________ DENIED: October 9, 1997 ________________________ GSBCA 13515-TD UNITED MANAGEMENT INC., Appellant, v. DEPARTMENT OF THE TREASURY, Respondent. Martha F. Dekle of Brunswick, GA, counsel for Appellant. David H. Brunjes, Office of Legal Counsel, Federal Law Enforcement Training Center, Department of the Treasury, Glynco, GA, counsel for Respondent. Before Board Judges PARKER, WILLIAMS, and DeGRAFF. DeGRAFF, Board Judge. The Department of the Treasury (Treasury) and United Management Inc. (United) entered into a contract for grounds maintenance services. When Treasury did not pay United the amount that United believed the contract obligated Treasury to pay during the first option year of the contract, United submitted a claim for $61,292.48 to the contracting officer. The contracting officer denied the claim and United filed this appeal. The Board held a hearing on May 6, 1997, and the parties submitted briefs in support of their positions. After considering both parties positions, the Board denies the appeal. Findings of Fact Treasury invited contractors to submit bids to perform grounds maintenance work at a Treasury training center located in Glynco, Georgia. Exhibit 3. United submitted the successful bid and on March 11, 1994, the parties entered into contract TFTC 94-1. Exhibit 8. The contract stated that it contained "a combination of fixed price services, priced indefinite delivery orders and negotiated fixed price task orders." Exhibit 8 at 4. The total dollar amount of the fixed price services contract line items contained in the contract was $250,860 for the first option year, and Treasury paid United $249,888.30 for these line items. Exhibit 41 at 1-7. The contract obligated Treasury to pay for work only after United submitted an itemized invoice. Exhibit 8 at 73. There is no evidence to establish either that United submitted an invoice for the remaining $971.70 for these line items, or that United performed any work for which it did not submit an invoice. Section B of the contract listed five priced indefinite delivery order contract line items, and stated that any of the five items "may be ordered" during the first option year of the contract. Exhibit 8 at 20. The line items are these: TOTAL ITEM DESCRIPTION QTY U/M U/P AMOUNT EST 002BB Perimeter Fence 6,000 FT $.50 $3,000 Both Sides, C.5.8 Minimum order shall be a 1,000 linear feet EST 002BC Perimeter Fence 6,000 FT $.25 $1,500 One Side, C.5.8 Minimum order shall be a 1,000 linear feet EST 002BD Removing Trees 60 EA $150 $9,000 Cat I C.5.12 EST 002BE Removing Trees 100 EA $200 $20,000 Cat II C.5.12 EST 002BG Vegetation Control at Driving Range (5) acres per lot 20 Lot $1035 $20,700 Exhibits 8 at 20; 9 at 2; 10 at 6. The total dollar amount of all of the estimated quantities of these five priced indefinite delivery order contract line items is $54,200. The references in items 002BD and 002BE are to paragraph C.5.12 of the contract. This paragraph explained the difference between Category I and Category II trees, and stated that Treasury estimated that United would have to remove thirty Category I trees and fifty Category II trees each year. Exhibit 8 at 51. Paragraph C.5.12 of the invitation for bids contained these same numbers. Exhibit 4 at 21. The correct estimates were the thirty and fifty trees stated in paragraph C.5.12, and not the estimates of sixty and 100 trees set out in section B. The discrepancy between the numbers contained in section B and those contained in paragraph C.5.12 occurred as the result of a change in personnel assigned to the contract. Transcript at 114-15. During the first option year, Treasury paid United a total of $40,345 for the five priced indefinite delivery order contract line items. Treasury paid $1,330 for 2,660 feet of perimeter fence clearing ordered under line item 002BB, $415 for 1,660 feet of perimeter fence clearing ordered under line item 002BC, $2,700 for line item 002BD, $15,200 for line item 002BE, and $20,700 for line item 002BG. Exhibit 41 at 7-8. The contract contained one contract line item (002BF) for negotiated fixed price task orders, and the dollar amount of this line item was stated as not to exceed $80,000. Exhibits 3 at 7; 4 at 9; 8 at 9, 55. The contract gave examples of the work that United "may have to perform" pursuant to the task orders, such as removing debris to trash dumps and moving dirt, and explained that the price of each task order would be negotiated by Treasury and United. The contract did not give any estimate of the quantities of work that Treasury would order under line item 002BF. Exhibit 8 at 55. Before bids were due, Treasury amended the solicitation to explain to potential bidders that, if it determined during negotiations for a task order that the contractor's price was not reasonable, Treasury reserved the right to "issue task orders on a competitive basis, or how ever [sic] [we] deem reasonable." Exhibit 5 at 3. During the first option year, Treasury paid United $37,342.12 for negotiated fixed price task orders performed pursuant to line item 002BF. Exhibit 41 at 8. Treasury and United had different views of the amount of work that Treasury would order from United during the first option year of the contract. United's president testified that, when United prepared its bid, it believed that it would perform every item listed in the solicitation, and that United relied upon the estimates contained in the solicitation. Transcript at 16. When United's bid was prepared, United's current president was the secretary of the company and was not involved in preparing the bid. Transcript at 6, 24. The record does not contain any documents to establish what assumptions United made when it prepared its bid. United's president also testified that Treasury twice used prison labor to perform "some work," and that Treasury did not use any more prison labor after United called this to the attention of contract administration officials. Transcript at 19-20. The record does not explain either what work was performed by prison labor, or whether the work was performed during the first option year of the contract. Treasury employees did not share United s view concerning the amount of work that Treasury would order from United. The agency's contract administrator testified about the indefinite delivery line items and the task order line item. He stated that Treasury did not want to limit itself to having only one contractor perform all of the grounds maintenance work because there were many construction projects in progress at the training center. The contract administrator said that, for example, it was better to allow the construction contractor to hire a subcontractor to cut down trees than to have Treasury's grounds maintenance contractor try to work with the construction contractor to cut down trees, because the latter alternative could lead to friction between contractors. Transcript at 59-60. The chief of the services contract branch at the training center testified concerning the indefinite delivery line items. She said that Treasury needed flexibility in contract administration and did not want to limit itself to having only one contractor perform grounds maintenance work. She explained that the training facility had a master plan in place for improvements, and Treasury wanted to permit construction contractors to clear ground and to remove trees and bushes. Treasury did not want to have a construction contractor claim, for example, that it had been delayed by the grounds maintenance contractor. Transcript at 112- 14. Treasury viewed the quantities set out in the five indefinite delivery line items as estimates, which is what they are labeled in the contract. The Treasury employee who developed the estimates contained in the contract based those figures upon historical data. He looked at orders placed against prior contracts and took into account changes that had occurred in the training facility s physical plant due to construction. Transcript at 87-88. He explained that there was "no way" that the eleven-mile long perimeter fence was cleared in its entirety each year. Transcript at 91. He noted that "[t]he best estimates are at the mercy of climatic conditions." Transcript at 95. The contract administrator explained that, in some years, trees might have to be removed because of insect damage or lightning strikes. In years when such problems do not occur, trees do not have to be removed. Transcript at 45, 60-61. He also explained that it is nice to have the perimeter fence cleared, but the need can vary according to the weather and there was one year, 1990, when the perimeter fence was not cleared at all. Transcript at 61, 65. United thought that it would be paid approximately $80,000 for the negotiated fixed price task order line item (002BF). Transcript at 18. The Treasury employee who developed the contract s estimates explained that the $80,000 task order item was meant to cover unexpected events such as a hurricane or a presidential visit. He arrived at the $80,000 figure by looking at the amounts Treasury spent on such events in prior years, and by considering whether that figure exceeded the amount of funds available for the contract. Transcript at 89, 97-98. The chief of the services contract branch explained that line item 002BF was stated as a "not to exceed" amount because, in prior years' contracts, Treasury included a definite amount for task orders and then had to find things to do with [the funds] at the end of the year. Transcript at 119. She testified that Treasury had ordered $80,000 of task orders in some past years. Transcript at 119-20. The parties could not resolve their differences by looking at the language of the contract. The invitation for bids and the contract contained a list of Federal Acquisition Regulation (FAR) clauses that were incorporated into the contract. One of the items on the list is described as "52.216-22 Indefinite Quantity (APR 84) [16.505(d)]." Exhibits 3 at 68; 8 at 81. The reference to 52.216- 22 is inconsistent with the reference to 16.505(d), because FAR 16.505(d) directed contracting officers to insert the clause found at FAR 52.216-21 Requirements, into solicitations and contracts, and not the clause found at FAR 52.216-22 Indefinite Quantity. 48 CFR 16.505, 52.216-22 (1994). When Treasury issued the solicitation, FAR 52.216-22 read: INDEFINITE QUANTITY (APR 1984) (a) This is an indefinite-quantity contract for the supplies or services specified, and effective for the period stated, in the Schedule. The quantities of supplies and services specified in the Schedule are estimates only and are not purchased by this contract. (b) Delivery or performance shall be made only as authorized by orders issued in accordance with the Ordering clause. The Contractor shall furnish to the Government, when and if ordered, the supplies or services specified in the Schedule up to and including the quantity designated in the Schedule as the maximum. The Government shall order at least the quantity of supplies or services designated in the Schedule as the minimum. 48 CFR 52.216-22 (1994). Neither the solicitation nor the contract designated any maximum or minimum quantities of services that Treasury would order from United. Exhibits 3, 8. On October 11, 1995, United submitted a claim for $61,292.48 to the contracting officer concerning the first option year of the contract. The claim states that the contract amount of the "definite quantity line items" was $250,860, and that the contract amount of the "indefinite quantity line items" was $134,200. United asserted that Treasury was obligated to pay the entire $250,860, and that an unspecified FAR provision required Treasury to pay eighty-five percent of the $134,200 ($114,070). Exhibit 39. On December 8, 1995, the contracting officer denied United's claim. Concerning the indefinite delivery order line items, the contracting officer stated, "The estimated quantities listed in Section B are just that, estimates of the Government needs. These estimates do not obligate the Government to order any services. This is clearly stated in FAR 52.216-22, Indefinite Quantity, which was incorporated [into] the contract." The contracting officer went on to explain that indefinite quantity contracts usually have stated minimum quantities, but that Treasury was not obligated to purchase any minimum quantities from United because the contract did not include any minimum quantities. Regarding the negotiated fixed price task order line item, the contracting officer stated that Treasury was not obligated to pay United the entire amount stated in the contract. The contracting officer explained that there was no estimate of the amount of work that would be required because tasks were to be negotiated as the need for work arose, and also explained that the amount of this line item was stated as "not to exceed" $80,000. Exhibit 42. On January 11, 1996, United appealed the contracting officer's decision to the Board. During the course of this appeal, United claimed several different amounts, based upon several different theories. Compare Claim with Complaint  4, 5, 6 with Transcript at 11 with Appellant s Post-Hearing Brief at 1, 13. At the hearing, United s president testified that United is claiming $57,484.58, which is the difference between the total of all of the amounts stated in the contract for all quantities of the first option year contract line items ($385,060), and the total amount that Treasury paid to United during the first option year ($327,575.42). Transcript at 11-12. Discussion United entered into this contract apparently believing that it would be paid all of the dollar amounts for all of the quantities listed in the contract. United's reading of the contract is not supported by the language of the contract and established legal principles. The fixed price services portion of the contract obligated Treasury to pay United only after United performed work for which it invoiced. The priced indefinite delivery order portion of the contract, even if it was for Treasury s requirements, did not obligate Treasury to pay for all of the estimated quantities of priced indefinite delivery order work. Finally, the negotiated fixed price task order portion of the contract stated that Treasury could order services not to exceed a certain dollar amount, and did not create an enforceable agreement between the parties. United was paid for the work that it performed and it is not entitled to any further recovery. Fixed price services contract line items The total dollar amount of the fixed price services line items contained in the contract was $250,860, and Treasury paid United for the amount that it invoiced, $249,888.30. United makes no argument as to why it is entitled to recover the $971.70 difference between these two amounts. The contract obligated Treasury to pay only after United submitted an itemized invoice for work that it performed. There is no evidence that United performed $971.70 worth of work under these line items and either submitted an invoice or failed to submit an invoice for the work. This portion of United s claim is denied. The remaining line items United asserts that contract line items 002BB through 002BG constitute a requirements contract. Appellant s Post-Hearing Brief at 10. Treasury contends that contract line items 002BB through 002BE and line item 002BG are for indefinite quantities, and that line item 002BF does not constitute an enforceable agreement. Respondent s Post-Hearing Brief at 6, 12. According to the regulations in effect when the parties entered into this contract, requirements contracts contain estimates of the quantities of supplies or services that the Government will require, with deliveries to be scheduled as ordered by the Government. When the Government enters into a requirements contract, it promises to fill all of its needs by purchasing from only the contractor, but it does not commit to purchase any minimum quantity of supplies or services. 48 CFR 16.503. Indefinite quantity contracts require the Government to purchase a stated minimum quantity of supplies or services from the contractor, with deliveries to be scheduled as ordered by the Government. When the Government enters into an indefinite quantity contract, it does not promise to fill all of its needs by purchasing from the contractor, although it does commit to purchase the minimum quantity stated in the contract. 48 CFR 16.504. In a requirements contract, the consideration provided by the Government is its promise to fulfill all of its requirements by using the contractor s services. In an indefinite quantity contract, the consideration provided by the Government is its promise to pay for a stated minimum quantity. If a contract does not require the Government to purchase a fixed quantity, to meet all of its needs by using the contractor s services, or to purchase a stated minimum quantity, there is no consideration and, therefore, no enforceable agreement. Such a contract becomes valid and enforceable only to the extent that it is performed. Willard, Sutherland & Co. v. United States, 262 U.S. 489 (1923); Ralph Construction, Inc. v. United States, 4 Cl. Ct. 727 (1984); Ann Riley & Associates, Ltd., DOTBCA 2418, 93-3 BCA  25,963. Five priced indefinite delivery order contract line items Each party makes a plausible argument concerning the nature of contract line items 002BB through 002BE and 002BG. Supporting United s position that these line items are for Treasury s requirements is the fact that the contract contains estimates, and not minimum quantities that Treasury was required to purchase. Also, the contract refers to FAR 16.505(d), which applies only to requirements contracts. In addition, the contract does not state that Treasury would purchase the services covered by these five contract line items from anyone other than United. Supporting Treasury s position that these line items are for indefinite quantities is the fact that the contract incorporates FAR 52.216-22, which is the indefinite quantity clause. The contract does not say that only United would supply the grounds maintenance services mentioned in the contract. In addition, until the hearing, United referred to these line items as indefinite quantity line items. For example, in response to Treasury s motion for summary relief, United agreed with Treasury that these were indefinite quantity line items. United Management Inc. v. Department of the Treasury, GSBCA 13515-TD, 97-1 BCA  28,751 (1996). Also, Treasury officials did not intend to go to United for all grounds maintenance work. We do not have to decide whether these five contract line items constituted either a requirements contract or an indefinite quantity contract. Assuming that United is correct and that the line items constituted a requirements contract, United is not entitled to recover. An estimate contained in a requirements contract is not a representation that the agency will order the estimated quantity of services. FAR 16.503(a)(1). Therefore, if the five line items constituted a requirements contract, the fact that Treasury did not order all of the estimated quantities stated in the contract does not entitle United to recover. If the five line items constituted a requirements contract, United can recover if it establishes either that Treasury obtained services covered by these line items from someone other than United, or that it prepared its bid in reliance upon Treasury s estimates and that the estimates were inaccurate due to Treasury s negligence or lack of due care. The fact that Treasury ordered less work than it estimated does not establish that its initial estimates were prepared negligently or without exercising due care. Crown Laundry & Dry Cleaners, Inc. v. United States, 29 Fed. Cl. 506 (1993). In its post-hearing briefs, United does not argue that Treasury obtained services covered by the five priced indefinite delivery order contract line items from anyone other than United. Even so, we examined the record in order to determine whether there is any evidence that Treasury obtained such services from anyone other than United. Although Treasury wanted the flexibility to have its construction contractors perform some work that might otherwise fall under United s contract, there is no evidence that a construction contractor performed any work which should have been performed by United. United s president testified that Treasury twice used prison labor to perform some work, but there is no evidence to establish what work was performed or whether that work was performed during the first option year. No evidence establishes that Treasury obtained services covered by contract line items 002BB through 002BE and 002BG from anyone other than United. The evidence does not establish that Treasury's estimates for three of the priced indefinite delivery order contract line items (002BB, 002BC, and 002BG) were inadequately or negligently prepared. The estimate for line item 002BG is precisely the amount of work that Treasury ordered, and United has not argued that there is any basis for finding that the estimate for this line item was inaccurate. The Treasury employee who developed the estimates for line items 002BB and 002BC (perimeter fence clearing) explained that he prepared his estimates based upon Treasury s experience in prior years, which is an acceptable method of preparing an estimate. FAR 16.503(a)(1). The fact that the amount of fence clearing ordered by Treasury fell short of the estimates contained in the contract does not establish that the preparation of the estimates was faulty. Treasury s needs for fence clearing are not precisely predictable. Although Treasury likes to have the perimeter fence cleared, in one year the perimeter fence was not cleared at all, and the entire eleven-mile fence was not cleared every year. United did not establish that Treasury prepared its estimates for these three line items in a negligent matter or without exercising due care. United cannot recover based upon the estimates for the two tree removal line items (002BD and 002BE) contained in paragraph C.5.12, because United did not establish that the estimates contained in that paragraph were negligently or inadequately prepared. Like the estimates for the perimeter fence clearing, the estimates for tree removal contained in paragraph C.5.12 were based upon historical data, and Treasury's needs for tree removal vary according to the vagaries of nature. In a year with numerous lightning strikes and insect damage, more trees will have to be removed than in other years with different weather patterns. Even though Treasury s actual needs varied from the estimates contained in paragraph C.5.12, there is no evidence to establish that Treasury prepared its estimates in a negligent matter or without exercising due care. Treasury acknowledges that the estimates contained in section B of the solicitation and the contract for the two tree removal line items (002BD and 002BE) are inaccurate. If United did not rely upon the estimates contained in section B when it prepared its bid, however, then it was not harmed by the inaccurate estimates and it is not entitled to recover. The record does not show that United relied upon the estimates for the tree removal line items contained in section B when it prepared its bid. United's president was not involved with the preparation of United's bid and no bid documents were introduced to show how United constructed its bid. In addition, even if United relied upon the section B estimates, United did not establish that it was reasonable to rely upon the higher estimates contained in section B and to disregard the plainly different, lower estimates set out in paragraph C.5.12. See Robert L. Guyler Co. v. United States, 593 F.2d 406 (Ct. Cl.), cert. denied, 444 U.S. 843 (1979) (contractor not entitled to recover when the solicitation contained patently ambiguous terms). Negotiated fixed price task orders contract line item United argues that contract line item 002BF constituted a requirements contract, and that Treasury prepared its estimate of $80,000 for this line item in bad faith, because Treasury knew that it had never spent this amount for task orders. Appellant s Post- Hearing Brief at 1-2, 7. If the Government prepares a requirements contract s estimate in bad faith, the Government is liable to the contractor for the resulting damage. Crown Laundry & Dry Cleaners, Inc., 29 Fed. Cl. 506. The facts do not support United s argument. The solicitation and the contract did not refer to the $80,000 figure as an estimate of the work that would be ordered. The solicitation and the contract stated that work could be ordered not to exceed this dollar amount, and did not contain any estimate of the quantity of services that might be ordered. Treasury arrived at this figure by looking at its experience in prior years, and there is no evidence that Treasury s actions in arriving at the $80,000 figure were inappropriate or improper. Also, the evidence establishes that although the amount Treasury spent for task orders varied from one year to another, Treasury had spent $80,000 in prior years for task orders. The evidence falls far short of the proof that would be required to establish bad faith by Treasury officials. Contract line item 002BF did not constitute a requirements contract because nothing obligated Treasury to satisfy all of its needs by using United s services. As Treasury informed vendors before they submitted their bids, if Treasury asked the contractor for a proposal to perform negotiated task order work and if Treasury decided that the contractor s proposed price was not reasonable, Treasury could either have other vendors compete for task order work or use some other means to perform the work. If the Government does not promise to obtain all of its requirements from the contractor, there is no requirements contract. Neither did the line item create an indefinite quantity contract because it did not obligate Treasury to pay United for any minimum amount of work. Treasury said that it could issue task orders in an amount not to exceed $80,000. The $80,000 figure was not a minimum dollar amount that Treasury promised to pay. This portion of the contract, line item 002BF, was enforceable only to the extent that United performed negotiated task order work pursuant to the line item. United is not entitled to recover anything more than Treasury has already paid to United for the work performed under this line item. Decision The appeal is DENIED. _______________________________ MARTHA H. DeGRAFF Board Judge We concur: ______________________________ ________________________________ ROBERT W. PARKER MARY ELLEN COSTER WILLIAMS Board Judge Board Judge