DLT Solutions, LLC

CourtArmed Services Board of Contract Appeals
DecidedMay 31, 2022
DocketASBCA No. 63069
StatusPublished

This text of DLT Solutions, LLC (DLT Solutions, LLC) is published on Counsel Stack Legal Research, covering Armed Services Board of Contract Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DLT Solutions, LLC, (asbca 2022).

Opinion

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) DLT Solutions, LLC ) ASBCA No. 63069 ) Under Contract No. W52P1J-18-A-0001 ) Order No. M67854-19-F-4035 )

APPEARANCES FOR THE APPELLANT: Thomas O. Mason, Esq. Joseph R. Berger, Esq. Mona Adabi, Esq. Brian Lamb, Esq. Thompson Hine LLP Washington, DC

APPEARANCES FOR THE GOVERNMENT: Craig D. Jensen, Esq. Navy Chief Trial Attorney Antonio Robinson, Esq. Trial Attorney

OPINION BY ADMINISTRATIVE JUDGE SWEET ON THE GOVERNMENT’S MOTIONS TO DISMISS

This appeal involves an order by the United States Marine Corps (Ordering Activity) under a blanket purchase agreement awarded from a General Services Administration (GSA) Federal Supply Schedule contract for a software license and associated maintenance and support. The order was for a base year and four option years. It also contained provisions that required the Ordering Activity to exercise the options so long as there was a bona fide need for the software, and certify that the Ordering Activity deleted the software once the order expired. However, the Ordering Activity declined to exercise the options, and did not certify that it deleted the software. Appellant DLT Solutions, LLC (DLT) raises breach of contract, breach of the covenant of good faith and fair dealing, superior knowledge, fraudulent inducement, and estoppel claims.

The Ordering Activity has moved to dismiss all of the claims for lack of jurisdiction, arguing that there was not an adequate claim because DLT should have presented its claim to a GSA contracting officer (CO), and not to an Ordering Activity CO (Ordering CO). In the alternative, the Ordering Activity moves to dismiss the superior knowledge, fraudulent inducement, and the estoppel claims for lack of jurisdiction because they are a new claim, allege fraud, and seek promissory estoppel respectively. Finally, the Ordering Activity moves to dismiss all of the claims for failure to state a claim.

For the reasons discussed below, we deny the motion to dismiss all of the claims because DLT properly presented its claim to the Ordering CO. However, we grant the motion to dismiss the superior knowledge claim and the fraudulent inducement claim for lack of jurisdiction because they are new claims that DLT did not present to the Ordering CO. 1 We also strike the estoppel claim because a portion of that claim seeks specific performance or injunctive relief, and the remainder of the claim does not assert an independent basis for entitlement to relief. Finally, we deny the motion to dismiss for failure to state a claim.

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS

I. The Contracts

1. From April 11, 2016 through April 10, 2021, DLT entered into Federal Supply Schedule Contract GS-35F-267DA (Schedule Contract) with the GSA for various computer software services, including services related to Quest software (gov’t br. ex. 1 at 1-2). 2 The Schedule Contract contained several provisions that the Ordering Activity argues are relevant. First, the Schedule Contract contained an Annual Funding Provision, which stated that:

When annually appropriated funds are cited on a maintenance order, the period of maintenance shall automatically expire on September 30th of the contract period, or at the end of the contract period, whichever occurs first. Renewal of a maintenance order citing the new appropriation shall be required, if maintenance is to continue during any remainder of the contract period.

(Id. at 19) Second, the Schedule Contract contained a Payments Provision, which stated that:

For firm-fixed price orders the ordering activity shall pay the Contractor, upon submission of proper invoices or vouchers,

1 While the Ordering Activity only moved to dismiss the superior knowledge claim on the grounds that it was a new claim (mot. at 14-18), we also dismiss the fraudulent inducement claim pursuant to our authority to address jurisdictional issues sua sponte, Sharp Elec. Corp. v. McHugh, 707 F.3d 1367, 1370 (Fed. Cir. 2013), because it also is a new claim for the reasons discussed above. 2 All citations to exhibit 1 to the Ordering Activity’s brief are to the PDF page number. 2 the prices stipulated in this contract for service rendered and accepted. Progress payments shall be made only when authorized by the order. For time-and-materials orders, the Payments under Time-and-Materials and Labor-Hour Contracts at FAR 52.212-4 (MAR 2009) (ALTERNATE I – OCT 2008) (DEVIATION I – FEB 2007) applies to time-and- materials orders placed under this contract. For labor-hour orders, the Payment under Time-and-Materials and Labor- Hour Contracts at FAR 52.212-4 (MAR 2009) (ALTERNATE I – OCT 2008) (DEVIATION I – FEB 2007) applies to labor-hour orders placed under this contract.

(Id. at 60) Finally, the Schedule Contract contained an Order of Precedence Provision, which stated that the Schedule Contract will take precedence over any order in the event of a conflict (id. at 43, 52, 58, 62).

2. On November 20, 2017, the United States Army Contracting Command awarded Blanket Purchase Agreement No. W52P1J-18-A-0001 (BPA) to DLT from the Schedule Contract to reduce the administrative cost of acquiring commercial software and services, including services related to Quest software (R4, tab 1 at 1-3). The BPA included the Transaction Software Agreement with Quest, which stated that “[c]ancellation of Maintenance Services for perpetual Licenses for On-Premise Software will not terminate Customer’s rights to continue to use the On-Premise Software” (R4, tab 1.1 at 19). The BPA also included a Department of Defense (DOD) Electronically Stored Information Supplement to the GSA Exclusive Use License Agreement (EULA), which contained a Re-Use Provision stating that “[n]othing in this License Grant or elsewhere in this EULA or in other documents concerning this license or the software licensed herein shall preclude Licensee from licensing other identical, similar or competitive software from other Publishers or Resellers at any time and for any reason whatsoever” (R4, tab 1.2 at 24, 28).

3. On January 29, 2019, the Ordering Activity published Solicitation No. M67854-19-Q-4035 (Solicitation) for Quest perpetual licenses and associated maintenance and support (app. supp. R4, tab 1-2 at 28-35).

4. On March 12, 2019, DLT submitted its quote (Quote) to the government. It was the only potential contractor to do so. (R4, tab 2 at 69) The Quote required that the Order contain a Bona Fide Needs Provision, stating that “[i]t is the intent of the Government by placing this Order to exercise each renewal option so long as the bona fide needs of the Government for the products or functionally similar products continues

3 to exist and the requirements of FAR 17.207 are satisfied” (id. at 74). The Quote also contained a Certification Provision, which stated that:

Within (30) days after the date of expiration or termination of any Order in which the Government has not exercised a purchase option to acquire the software license, the Government shall, at its own risk and expense, have the software removed. In connection with such removal of software, the Government shall certify in writing to the Contractor that the Government has (a) deleted or disabled all files and copies of the software from the equipment on which it was installed; [and] (b) has no ability to use the returned software.

(id.).

5. Based upon the solicitation and the Quote, the Ordering Activity awarded Order No. M67854-19-F-4035 (Order) on the BPA to DLT for Quest perpetual licenses and associated maintenance and support (R4, tab 2 at 31-39). The Order was for one base year and four option years (id. at 33-59). The Order also incorporated the Quote (id. at 66).

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DLT Solutions, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dlt-solutions-llc-asbca-2022.