Continental Collection & Disposal, Inc. v. United States

39 Cont. Cas. Fed. 76,579, 29 Fed. Cl. 644, 1993 U.S. Claims LEXIS 167, 1993 WL 393001
CourtUnited States Court of Federal Claims
DecidedOctober 6, 1993
DocketNo. 91-1536C
StatusPublished
Cited by22 cases

This text of 39 Cont. Cas. Fed. 76,579 (Continental Collection & Disposal, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Continental Collection & Disposal, Inc. v. United States, 39 Cont. Cas. Fed. 76,579, 29 Fed. Cl. 644, 1993 U.S. Claims LEXIS 167, 1993 WL 393001 (uscfc 1993).

Opinion

OPINION

HORN, Judge.

BACKGROUND

This action comes before the court on defendant’s motion for summary judgment, based on plaintiff’s failure to state a claim for which relief can be granted. Plaintiff alleges that defendant breached the contract between the parties by failing to exercise options to extend the contract for additional years. Plaintiff requests damages to compensate for those years. Defendant denies plaintiff’s allegations and asserts that the government properly exercised its right, based on the contract, not to renew the contract for additional years.

After careful consideration of the filings submitted by the parties, and for the reasons discussed below, the court, hereby, GRANTS the defendant’s motion for summary judgment.

PACTS

On September 13, 1988, Continental Collection and Disposal, Inc. (CCD) was awarded Department of the Army Contract No. DABT39-88-C-3126. The contract required CCD to perform work associated with collecting and disposing of all refuse generated at Fort Sill, Oklahoma, and to operate the fort’s sanitary landfill. Pursuant to the contract, the Army agreed to pay CCD approximately $386,460.00 for one year of service.

Performance of the contract began October 1, 1988 and was to continue for one year, ending on September 30, 1989. Clause 52.217-9 of the contract, titled “Option to Extend the Term of the Contract— Services,” stated the following agreement concerning renewal of the contract for succeeding years:

(a) The Government may extend the term of this contract by written notice to Contractor no later than 5 calendar days prior to the expiration date of the contract; provided, that the Government shall give the Contractor a preliminary written notice of its intent to extend at least 60 days before the contract expires. The preliminary notice does not commit the Government to an extension.
(b) If the Government exercises this option, the extended contract shall be considered to include this option provision.
(c) The total duration of this contract, including the exercise of any options under this clause, shall not exceed Five (5) years.

(Emphasis added.)

On January 5, 1989, approximately three (3) months after contract performance began, CCD president Ken Mathews sent a letter to the Directorate of Contracting at Fort Sill describing CCD’s intention to implement a new system of refuse collection. CCD based its authority to make this equipment change on Article C.3 of the contract. The letter stated that CCD exercised its

option to reject all government-furnished property dempster dumpster (hoist and haul-type) containers____ In return, CCD will provide necessary property, equipment, or items adequate in quality and suitable for the intended purpose, to perform work and provide services in the established time frames. This activity will not in any way be a cause for interruption of said services.

CCD claimed that this system would be less costly and more efficient. The letter stated that “[n]o government funds would be required.” In March 1989, CCD began using the new “front loader” system.

[647]*647On March 10, 1989, contracting officer Leona Evans sent CCD a letter stating that “the Director of Engineering has made a visual observation of the equipment you have selected to utilize under this contract and states it is unacceptable.” The letter explained that trash blowing from the dumpsters during the emptying process required additional military personnel. The government, therefore, requested that CCD resume use of its original collection system.

After discussions between the parties, CCD was permitted to resume use of the new system. CCD was also reimbursed for losses suffered due to the delayed implementation of the new system, which was less costly for the contractor to operate than the old system: $49,750.00 was paid on April 19, 1989, and $38,992.64 was paid on August 11, 1989.

On July 8, 1989, contracting officer Leona Evans sent a letter to CCD, notifying the contractor that the government was considering renewal of CCD’s contract for another year. The letter stated in part:

Your attention is invited to Section I, 12 Option to Extend the Term of the Contract. The Government is considering renewal of subject contract for the period 1 October 1989 through 30 September 1990. A Modification will be issued under the authority of the option provision, subject to availability of FY 90 funds.
This letter constitutes your preliminary notice from the contracting officer that an option extension is being considered, however, this preliminary notice is not to be deemed to commit the Government to an extension.

(Emphasis added.) The record also includes another copy of this letter, bearing the notation “Received by Ken Mathews,” the president of CCD, and bearing the date July 25, 1989.

According to affidavits supplied by the defendant, problems arose with the contractor’s performance, including inoperable heavy equipment at the landfill and failure to meet compaction and daily soil coverage requirements set forth in the contract. In

July 1989, the Army Inspector General’s Office conducted an investigation of refuse collection and operation of the sanitary landfill at Fort Sill. The government claims it was obligated to provide personnel and equipment to perform these required services to ensure proper disposal of waste, including hospital infectious waste and industrial waste. The Oklahoma State Health Department also inspected the landfill on August 3 and September 11, 1989, at which time problems with coverage were noted. CCD was not present at these inspections.

The contracting officer met with CCD once in August 1989 and again on September 8, and September 12, 1989 to discuss problems with contract performance. At the September 12, 1989 meeting, the contracting officer informed CCD of the previous day’s inspection and notified the plaintiff that the government had decided not to exercise the option to renew the contract for a second year. CCD’s contract for the first year of service expired September 30, 1989. On October 4, 1989, a third inspection of the landfill site by the Oklahoma State Health Department found that CCD had corrected the deficiencies at the landfill (only a fence was found to be down). By letter dated October 10, 1989, CCD was sent two Contract Discrepancy Reports (CDRs). According to plaintiff, it was not given notice of contract deficiencies during the original one year contract performance period.

The government extended the contract with CCD for one month, from October 1 to October 31, 1989. According to the September 27, 1991 final decision of Contracting Officer Larry Keith Kelman, “No options were exercised under the subject contract.” A solicitation for an interim contract was then issued. CCD was awarded an interim contract beginning November 1, 1989 and ending April 1, 1990, in order to allow the defendant time to prepare a new competitive solicitation. CCD also bid on the new long-term contract, but was not successful. On March 1, 1990, the government awarded a new contract for the collection of refuse to A.J. Fowler Corpora[648]*648tion. The new contract did not include any requirements to operate the post sanitary landfill.

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Bluebook (online)
39 Cont. Cas. Fed. 76,579, 29 Fed. Cl. 644, 1993 U.S. Claims LEXIS 167, 1993 WL 393001, Counsel Stack Legal Research, https://law.counselstack.com/opinion/continental-collection-disposal-inc-v-united-states-uscfc-1993.