________________________________________ RECONSIDERATION DENIED: January 23, 1998 ________________________________________ GSBCA 14057 TRAVEL CENTRE, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. O. Kevin Vincent of Baker & Botts, Washington, DC, counsel for Appellant. Michael D. Tully, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges PARKER, HYATT, and VERGILIO. PARKER, Board Judge. The General Services Administration (GSA) moves the Board to reconsider its decision granting the appeal of Travel Centre. In that decision, the Board held that GSA breached Travel Centre's contract to provide travel services when it improperly terminated the contract for the convenience of the Government. Use of the termination for convenience clause was improper because, during the procurement process, GSA had withheld from offerors crucial information which showed that the estimates of potential business provided in the solicitation -- estimates upon which offerors were directed to base their proposals -- were vastly overstated. Due to GSA's bad faith actions, the contract was doomed to failure from the beginning. Travel Centre v. General Services Administration, GSBCA 14057 (Nov. 26, 1997). For the reasons discussed below, we deny GSA's motion to reconsider the decision. Background In April 1995, GSA solicited offers to establish and operate a travel management center for federal agencies located in the New England area. The solicitation contemplated an indefinite quantity, indefinite delivery type contract, with a minimum guaranteed revenue of $100. The solicitation informed offerors that the winning contractor would serve as the preferred source for federal agencies requiring airline tickets, lodging, rental vehicles, and other travel services for their employees. The winning contractor would receive compensation in the form of commissions from the airlines, car rental companies, etc., and would rebate a percentage of those commissions to the Government. Offerors were required to base their proposals on estimates of expected business provided in the solicitation. Travel Centre, slip op. at 1-3. During the process of soliciting and evaluating offers for the new contract, GSA received several notices from the incumbent contractor, Dube Travel, informing GSA that its largest customer group, made up of various Department of Defense (DoD)-related agencies, had awarded its own travel services contract to another contractor and would no longer be using the GSA contract. Although the DoD-related business made up more than half of the expected business for the State of Maine, GSA never informed offerors of this important information -- information which directly contradicted the estimates of expected business contained in the solicitation upon which offerors had based their proposals. GSA simply awarded a contract to Travel Centre for the states of Maine and New Hampshire. When expected business failed to materialize, Travel Centre was forced to close its business. GSA then terminated the contract for default, changing the termination to one for the convenience of the Government in April 1997. Travel Centre at 3-4. Travel Centre appealed GSA's termination for convenience, arguing that, by inducing Travel Centre to enter into a contract knowing that the estimate of the amount of business that could be expected was vastly overstated, GSA had breached the contract. Thus, Travel Centre argued, GSA's use of the termination for convenience clause was improper. The Board agreed with Travel Centre that the termination was improper, holding that GSA withheld crucial information material to an offeror's decision whether to submit a proposal at all and, if so, how to structure it. Thus, whether GSA actually knew about this important relevant information, or recklessly disregarded it (an explanation which the Board did not find credible), by withholding the information from offerors, GSA exhibited the "bad faith" necessary to sustain a finding of breach of contract. Travel Centre at 5-8. Discussion In moving the Board to reconsider its decision, GSA points to the following alleged factual and legal errors: 1. GSA allegation: There is no evidence that DoD's notice of termination to the incumbent contractor, Dube Travel, was ever sent to GSA. Response: The decision did not say that it was sent to GSA. The decision did say that GSA received numerous reports of the termination, both before and after its occurrence, directly from Dube Travel. Although these reports were received during the process of procuring the services at issue in this case, GSA never informed prospective offerors that the DoD business would no longer be available. 2. GSA allegation: Because the numbers contained in the solicitation regarding dollar volumes, numbers of customers, and numbers of tickets issued contained errors such that the information was self-contradictory, Travel Centre should have brought this patent ambiguity to the attention of the contracting officer for resolution prior to award, rather than relying on the most favorable interpretation after award. Response: The Board considered and rejected this argument, even though GSA failed to raise it during the appeal. Offerors were told to base their proposals on the following: FY94 DATA: 4156 TICKETS $1861,700 ANNUAL DOLLAR AMOUNT (Sources: GSA Forms 3531 and current agency customer list) The solicitation also presented a table listing various agencies, numbers of tickets, dollar amounts, etc. The table was presented "for informational purposes only," and did not indicate the source of the information contained therein. GSA and Travel Centre stipulated that the table was not based on fiscal year 1994 historical data as was the above-quoted information upon which offerors were to base their proposals. Thus, although the table contained errors -- the individual entries did not add up to the total listed dollar amount of $1,601,891 -- the table itself did not create an ambiguity with respect to the fiscal year 1994 data upon which offerors were to base their proposals. More important, however, is the fact that the errors in the table were not caused by the same information withheld by GSA to the effect that approximately $993,000 in potential business could never materialize. Thus, the problem would not, as GSA suggests, have been "cleared up" by inquiring about mistakes in the informational table prior to award. 3. GSA allegation: The majority decision imparts special meaning to the phrase "preferred source" which, in essence, gives no meaning to other contract provisions stating that the contract is for an indefinite quantity. Response: The Board's interpretation of the contract gives meaning to all of its terms. The contract was, as GSA points out, for an indefinite quantity, with a guaranteed minimum of only $100. The solicitation also told offerors that the winning contractor would be the preferred source for federal agencies in the geographical area. There is no inconsistency between these two terms. The problem which GSA fails to acknowledge is that, prior to awarding the contract to Travel Centre, GSA was provided information that the winning contractor would not be the preferred source for the major federal agency group in the geographical area. GSA failed to inform offerors of this fact. The fact that the solicitation was for an indefinite quantity did not mean that the Government could mislead offerors as to the amount of business which was possible. As we pointed out in the decision, even in the case of an indefinite quantity contract, the contractor does not accept the risk that the Government has misled him as to the amount of business which he might reasonably expect. In normal circumstances, a contractor assumes that the Government has prepared its estimate in good faith and accepts the risk that he may not achieve the level of sales estimated. However, where the Government knows or recklessly disregards information to the effect that the contractor has no chance of achieving the estimated quantity of sales, and fails to disclose that fact prior to entering into the contract, the term "risk" is a misnomer. The impossibility of reward for which the contractor accepts the risks of an indefinite quantity contract is a certainty known only to the Government. In this situation, we cannot accept the Government's argument that the contractor assumed this risk. Travel Centre at 8. 4. GSA allegation: The facts of the case show that there was never a meeting of the minds as to the subject matter of the contract. Thus, GSA argues, the proper remedy is rescission of the contract based upon a mistake in bid, not based upon breach of contract. Response: Again, although GSA never raised this argument during the appeal, the Board considered the argument and rejected it. There was no mistake in bid here. An offeror does not make a legal mistake when he fails to incorporate in his offer a contingency based upon the fact that the Government may have misled him as to a crucial piece of information. If this were the case, the Government would be forced to pay more for all goods and services for which offers are solicited. Travel Centre based its offer on the information contained in the solicitation -- that the contract would be for an indefinite quantity and that the winning contractor would be the preferred source for federal agencies in the geographical areas. Failing to base its offer on information held, but not disclosed, by GSA was not a mistake. 5. GSA allegation: The Board's holding of bad faith in awarding the contract is "contrary to the precedent requiring not mere bad contract formation, nor recklessness, but a specific intent to harm the contractor." Response: This issue was thoroughly briefed by the parties in the underlying appeal. As discussed in detail in the Board's decision, we do not agree with GSA's narrow view of the precedent established by the numerous and, at times, conflicting cases in this area. After reading all of the relevant cases, we remain of the opinion that, when a Government procurement official has information in his possession which materially impacts a pending procurement, and fails to disclose that information to offerors, that official has not exhibited the type of good faith dealing that people who do business with the Government have a right to expect. Decision For the reason discussed above, respondent's motion for reconsideration is DENIED. _________________________ ROBERT W. PARKER Board Judge I concur: __________________________ CATHERINE B. HYATT Board Judge VERGILIO, Board Judge, dissenting. The agency seeks reconsideration based on its views of the facts and the law which differ from those of the majority. I would typically discourage and deny such a request for reconsideration, which should not be used to reargue matters already considered by the Board. However, in denying the motion, the majority here makes assertions which I view to be unsupported by its underlying opinion. Thus, while I find no basis to reconsider my dissenting opinion, I would gladly join a member of the majority to ensure that the facts, as found by the Board, support the legal conclusions. However, a second vote is lacking. Various statements by the majority in denying this motion merit comment. The majority has relied upon assumptions and suppositions which are not supported by the findings of fact. Rather than resolve disputes based upon assumptions not supported by findings of fact, I believe that boards are to determine the material facts from the record submitted and reach conclusions based upon those facts. I do not here repeat what is in my dissent in the underlying case; rather, I address some of the assertions by the majority in response to particular allegations by the agency. As to the first General Services Administration (GSA) allegation, the majority asserts that GSA never informed prospective offerors that Department of Defense (DoD) business would no longer be available. While it is true that GSA never so informed prospective offerors, the findings do not demonstrate that GSA officials were aware that DoD business would not be available under the disputed contract. That is, the monthly narratives provided by Dube Travel are not as informative as the majority maintains. Dube may have no longer been doing the work because it provided DoD a lesser value than the other contractor. Nothing in the findings of fact demonstrate that DoD awarded a requirements contract for a particular duration which would affect the contract in this appeal, or that GSA procurement personnel knew that a requirements contract had been awarded. As to the majority's response to the second GSA allegation, the majority continues to take out of the context of the solicitation the phrase "Offerors shall base their offer[s] on the above illustrated [fiscal year 1994] figures." The solicitation explained the limited value of the fiscal year 1994 figures for the solicited contract with a base year of fiscal year 1996. Also, the solicited contract would not be a requirements contract, although the figures reflect usage of a requirements contract. The language of sections B and H and the figures in the table, which do not sum to the totals provided, were sufficient to alert offerors as to the limited value of the fiscal year 1994 figures. Moreover, the majority assumes (without finding) that Travel Centre based its offers solely on fiscal year 1994 figures; the majority concludes that such reliance was reasonable. Further, while referencing facts relating only to Maine, the majority concludes that the termination for convenience of the entire contract was improper and that GSA breached the contract. The findings do not suggest any impropriety with respect to the New Hampshire portion of the contract, which was awarded on a basis separate and apart from the Maine portion, and could have been separately terminated for convenience. Available relief differs under theories of breach and termination for convenience. As to the third GSA allegation, involving the phrase "preferred source," the majority gives the term such weight as to make this other than a typical indefinite delivery, indefinite quantity (IDIQ) contract. Such an interpretation imparts special meaning skewing the contract read as a whole. Further, the majority opines that GSA was provided information that the winning contractor would not be the preferred source for the major federal agency group in the geographical area. As noted above, concerning the first allegation by GSA, an existing award of a contract of an unstated type for an unstated duration does not demonstrate that Travel Centre would not be the preferred source for the services at issue. Being a preferred source is far less than a guarantee of business and suggests that agencies may opt not to utilize such services. In responding to the fourth allegation by GSA, the majority states: "Travel Centre based its offer on the information contained in the solicitation -- that the contract would be for an indefinite quantity and that the winning contractor would be the preferred source for federal agencies in the geographical areas." The findings of fact do not indicate the bases for Travel Centre's best and final offer. Any conclusions relating thereto are, therefore, arbitrary. Travel Centre bears the burden of demonstrating reasonable reliance and causation in order to prevail on entitlement. Such fundamental prerequisites to relief should not be assumed in favor of the moving party. Regarding the fifth GSA allegation, the majority makes a statement which merits particular comment. The majority states that it remains of the opinion that "when a Government procurement official has information in his possession which materially impacts a pending procurement, and fails to disclose that information to offerors, that official has not exhibited the type of good faith dealing that people who do business with the Government have a right to expect." What is propounded as a proposition of law amounts to dictum because the underlying facts have not been established. The findings do not identify any individual who may have possessed the information and been connected with this procurement. Moreover, even if an individual learned that DoD had entered into a contract for travel services, the facts and record do not demonstrate that the knowledge included the type (requirements, mandatory, IDIQ, etc.) or duration of the contract. Hence, there is no reason to impute knowledge of an adverse affect upon the procurement at issue. _________________________ JOSEPH A. VERGILIO Board Judge