Pond Security Service Gmbh v. United States

No. 17-1736C

(Filed: May 28, 2021)

(Re-Filed: June 16, 2021) 1

NOT FOR PUBLICATION

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POND SECURITY SERVICES, GmbH, Contracts; Contract

Disputes Act, 41 U.S.C.

Plaintiff, §§ 7101-7109 (2012);

motions for partial

v. summary judgment; CDA

statute of limitations;

THE UNITED STATES, estimates in requirement

contracts.

Defendant.

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OPINION

On February 26, 2009, the United States Army (“the Army”) entered

into a requirements contract with Pond Security Service GmbH (“Pond”)

pursuant to which Pond would provide contract security guards (“CSG”) on

American army bases in Germany. The contract was eventually performed,

but Pond has filed suit pursuant to the Contract Disputes Act, 41 U.S.C. §§

7101-7109 (2012) (“CDA”), claiming that the Army breached the contract in

by ordering far less services than estimated. The complaint contains three

counts. In count I, plaintiff claims that the agency negligently prepared a

quantity estimate to offerors; in count II, plaintiff asserts that that the

government withheld superior knowledge regarding CSG requirements; and

in count III, plaintiff claims that the government’s actual number of hours

ordered constitutes a major change under the contract.

1

This opinion was originally issued under seal in order to afford the parties

an opportunity to propose redactions of protected material. On June 16,

2021, the parties notified the court that they have no proposed redactions for

the opinion. We thus reissue this opinion unredacted.

Pending are the parties’ motions for summary judgment. Pond moves

for partial summary judgment on the issue of entitlement for all three counts;

it does not address the issue of damages. Defendant cross-moves for

summary judgment on counts I and II. Additionally, the government argues

in the alternative that the court should bar Pond from recovering damages

under counts I and II insofar as they are traceable to task order No. 2. The

government also seeks partial summary judgment on “additional costs”

claimed under count III, costs incurred while performing work under task

order No. 2, and costs incurred due to the illness of Pond employees. The

motions are fully briefed. Oral argument was held on May 26, 2021.

Because material questions of fact remain, we deny both parties’ motions.

BACKGROUND 2

Pond was the incumbent contractor on the prior indefinite delivery,

requirements contract to provide security guard services on American army

bases in Germany since September 2003.

1. The Army’s Changing Requirements Prior to this 2009 Contract

During that contract, the Army was in the middle of a

“transformation” or a “restationing” in Europe. A transformation includes

any change that affects “the command both operationally and

organizationally.” Def.’s Mot. Ex. 2 at 114 (Association of the United States

Army Journal). 3 This process involved “a large increase in manning, and

then later a decrease in manning.” Id. at 168 (Geier Dep.). Pond’s proposal

for the present contract recognized that “fluctuations in the requirements [for

the 2003 contract] were immense.” Id. at 117 (Pond’s Proposal).

In 2007, as part of this transformation, USAREUR announced

reductions of Army personnel in Germany “of approximately 1,720 Soldiers,

3,300 family members, 480 U.S. civilians and 530 local national civilians.”

Id. at 106 (USAREUR News Release). These plans changed, however, when

the Army announced a temporary delay in the reduction of troop levels in

2

The facts are drawn from plaintiff’s complaint and from attachments to both

parties’ briefs. The vast majority of the recitations of the background section

are undisputed, nevertheless, there are disputed issues of fact that the court

will attempt to isolate.

3

The parties presented multiple documents within each exhibit. We have

identified the document’s name after the exhibit number to provide clarity.

2

Europe in December of 2007, “essentially undoing previous orders to reduce

Army forces in the region.” Id. at 115.

A series of events took place prior to contract award related to the use

of CSG’s. On March 14, 2008, the agency received a memorandum from the

Army Office of the Provost Marshall General (“OPMG”) with the subject

line “Department of the Army Guidance on the Use of Contract Security

Guards (CSG) in the United States Army, Europe and Seventh Army

(USAREUR) Area of Responsibility (AOR).” Pl.’s Mot. Ex. 4 at 134 (March

2008 Memo). The memorandum stated that its purpose was “to provide

guidance to USAREUR and IMCOM-Europe on the use of CSG for access

control in the USAREUR AOR.” Id. The document also stated that “CSG

costs have steadily risen and funding is insufficient given costs of the Global

War on Terrorism, Army Transformation and USAREUR Restationing.” Id.

The primary purpose of the memorandum was:

. . . . to standardize operations and to control costs for centrally

funded CSG in the USAREUR AOR as follows:

a. DA civilians, military police and CSG will not fill the same

IACP requirement.

....

c. OPMG will only fund CSG for IACP as justified by

installation pedestrian and traffic flow.

d. USAREUR and IMCOM-E will conduct traffic studies to

determine access lane manpower requirements. . . . .

e. Installation commanders who determine the need for

additional CSG personnel for IACP (those personnel not

justified by traffic flow) and other installation security missions

will submit a request for exception to policy through their chain

of command to the Provost Marshal General.

Id. at 134-35. Pond did not receive the memorandum until June 9, 2009,

more than three months after it was awarded the contract on February 26,

2009.

Then on August 13, 2008, the Security Operations Branch presented

an internal agency PowerPoint. Id. at 20-21 (Wojtyna Dep.). Mr. Edward

Wojtyna, the CO’s representative, was responsible for preparing estimates

for the 2009 contract. Mr. Wojtyna testified regarding the PowerPoint:

Q. Okay. And this appears to be showing the difference

between the USAREUR manning standards as they currently

existed, contrasted with the Department of the Army guidance

on the use of CSGs. Do you see that?

3

A. Yes, sir.

Q. And that right-hand column, the DA guidance, is that

essentially referring to the March 2008 Army policy?

A. Without matching, I’m assuming it is, correct. That's what

it would have been used.

Q. At this point in time it’s reasonable to assume that that’s

what it was referring to?

A. Correct. Yes.

Q. And does this show that a reduced number of guard

positions would be forthcoming?

A. By a strict application of the DA guidance, yes.

Q. . . . The USAREUR manning standards were two guards up

to 200 -- is that persons per hour?

A. Correct.

Q. And the new standard would be one guard per access lane

per every 300 vehicles per hour or less?

A. Correct.

Q. And that average number of vehicles as referenced here in

the DA guidance, would that be determined by the traffic

studies?

A. Yes.

Id. at 21.

Next, the Army’s August 25, 2008 Acquisition Strategy, which was

not made available to plaintiff prior to award, stated that “the various

dynamics of transformation, installation closures, funding constraints, and

unforeseen, unplanned force protection needs . . . make it virtually impossible

to predict future requirements with any degree of certainty.” Def.’s Mot. Ex.

2 at 16 (Acquisition Strategy). It recited that “a realistic ceiling amount to

capture all unknown, unforeseen requirements would put the contract ceiling

so high that it would be become unrealistic and misleading.” Id. at 16. It

also stated that, “Although USAREUR transformation could reduce contract

requirements during the total performance period, specific reductions have

not been considered in this estimated dollar value based on possible changes

to the current plan.” Id. at 15.

The Acquisition Strategy reflects that Army planners believed that

USAREUR could have an increase in CSG requirements during the 2009

contract because of “unplanned force protection needs.” Id. at 16. Thus,

because of potential increases or decreases in CSG requirements, the Army

chose to use a requirements contract for this solicitation, as it found that it

4

would be impossible to determine a specific minimum or maximum quantity

needed for the 2009 contract. Id. at 16.

At deposition, Mr. Wojtyna was asked whether the March 2008

memorandum contained directives. In response to the question, “you’d have

to implement what was being required of you, correct, from the Pentagon?”,

he stated, “Life is more complicated than OPMG issues an e-mail or issues a

policy memorandum, it’s up to the Army commanders to execute the

programs, but not execute the -- based on the requirements within their

command.” Pl.’s Opp. Ex. 2 at 16 (Wojtyna Dep.). Mr. Wojtyna was then

asked whether “the policy required you to conduct traffic studies . . .?”. In

response, he stated, “Correct.” Id. at 17 (Wojtyna Dep.). In August of 2009,

after award of the contract, the Army completed the traffic studies

contemplated in the 2008 documents.

Plaintiff asserts that the agency knew it would not meet the new

manning standard provided in the March 2008 memorandum and delayed

implementation of the traffic studies by five months. To support this

argument, Pond presents more of Mr. Wojtyna’s testimony:

Q. Do you know when these traffic studies were planned on

being conducted?

A. I wasn’t planning to do them at all, but we ultimately did

them, I think, in August of 2008, I think -- or August of 2009

we ultimately did them.

Q. Okay. When you say you were not planning on doing them

at all, what's the basis of that statement?

A. Because they were -- in my mind they were a waste of time.

. . . We knew that they were not going to – we could not meet

the traffic flow standards as established in their memo, so --

and I told them at the time and they knew that at the time. So –

but they wanted to standardize how -- the contract guard

program throughout the Army. So I -- again, I didn’t see a point

-- it was pointless to do that because I already knew we were

not going to meet their standards.

Pl.’s Mot. Ex. 4 at 10 (Wojtyna Dep.)

Between 2006 and 2009, prior to the contract award, the Army Audit

Agency (“AAA”) completed a series of audits for the purpose of reviewing

the Army’s use of CSGs in Germany. On June 6, 2007, the AAA issued a

report identifying a possible reduction of $39.7 million in CSG costs. This

was followed on April 28, 2008, by a report identifying an additional $12.4

5

million in possible reductions, and on November 14, 2008, with a report

identifying another $2.8 million in possible reductions. Def.’s Mot. Ex. 1 at

138, 140, 147. Mr. Chad Geier, Pond’s contract manager, testified in a

deposition regarding Pond’s awareness of the AAA audits:

Q. While performing . . . that 2003 Contract, Pond became

aware of U.S. Army audits that were ongoing?

A. In conjunction with the USAREUR transformation, there

were audits being conducted, yes.

...

Q. . . . Did Pond have an understanding as to whether any cuts

were implemented in response to the audits that were

conducted during the 2003 Contract?

A. Yes, there was cuts conducted after audits that were

conducted in the 2003 Contract, but what their relevance to the

2009 Contract is, I cannot make that connection.

Q. Did you -- had you ever seen any audit reports issued by the

U.S. Army Audit Agency before this litigation started?

A. I -- I may have seen abbreviated audit reports. I don’t think

I ever saw the full audit reports. I did see information come out

of these, but I don’t know if that was directly from the audit

agency or if it was from another government office that just

produced information from that. I do not know who produced

it.

Def.’s Mot. Ex. 2 at 177-78.

After the AAA audits were completed, USAREUR took action to

reduce manning at installations identified by the AAA. Mr. Wojtyna testified

that the AAA identified specific potential reductions between the issuance of

the March 2008 memorandum and award of the 2009 contract. Def.’s Mot.

Ex. 2 at 134 (Wojtyna Dep.). In an agency email reporting on the manning

standards in USAREUR, the Army stated that the review program reduced

CSG positions by 33% (from 1,288 positions to 891) from 2006 to the date

of the report, May 13, 2009. Def.’s Mot. Ex. 2 at 97. Mr. Wojtyna explained

that, by 2008, USAREUR had sufficiently “adopted . . . the manning

standards, to the level” required by the AAA audit reports. Def.’s Mot. Ex.

2 at 134. Thus, after the conclusion of these audits, both USAREUR and the

AAA believed that, going forward, USAREUR had adopted appropriate

manning standards. Id. Mr. Wojtyna also testified that he incorporated the

AAA’s reductions into the estimates for this solicitation:

6

Q. So was that yes, you did factor in these revised standards

into the solicitation estimates?

A. I factored in the results of the AAA audits that had been

conducted of the program, who used -- partially what they used

in their assessment in the audit was the 2008 manning

standards, but not a strict application of the standards.

Pl’s Mot. Ex. 4 at 21 (Wojtyna Dep.). Mr. Wojtyna gave further testimony

regarding the Army’s estimates:

Q. Okay. I mean, and so whether it was from the 2008 memo

or whether it was from transformation, in any event, there were

reductions that were anticipated presolicitation that were not

accounted for in the estimates. Is that a fair statement? . . . .

[A.] Correct. True statement. Ultimately there were reductions

to both -- because of both, not to both – because of both factors

[the March 2008 Memorandum and the transformation].

Id. at 33.

2. The Solicitation

On October 10, 2008, the Army issued the solicitation for the 2009

contract at issue here, requesting offers for the provision of CSG services at

various garrisons throughout Germany. The Army elected to pursue a

“requirements contract for the supplies or services specified” under Federal

Acquisition Regulations (“FAR”) 52.216-21, but reserved the right, in the

event of “planned or unforeseen operational requirements,” to modify “the

function, location, and operating hours of security posts and/or patrols to

meet both permanent, immediate and temporary (on short-notice) changes in

security operational requirements.” Def.’s Mot. Ex. 1 at 14 (Solicitation).

The solicitation instructed that the quantities of requirements provided

in the solicitation “are estimates only and are not purchased by this contract.”

Id. at 13. Further the solicitation states that, if the Army’s “requirements do

not result in orders in the quantities described as ‘estimated’ or ‘maximum’

in the Schedule, that fact shall not constitute the basis for an equitable price

adjustment.” Id.

The Solicitation contained a pricing template for each Garrison based

upon an estimated number of hours that would be required. Initially, the

solicitation estimated that 6,371,678 hours would be needed annually.

Between the time when the solicitation was issued on October 10, 2008, and

7

the time when the contract was awarded to Pond on February 26, 2009, the

Army issued six amendments to the solicitation that had the effect of

adjusting CSG estimates. Pl.’s Mot. Ex. 4 at 492. The final contract

estimated that 5,530,083 hours would be required annually. Def.’s Mot. Ex.

2 at 142 (Wojtyna Dep.). Mr. Wojtyna testified at deposition that these

“estimates were based on where the guards were currently at, which included

any changes that were going to be – that had been listed under the tiger team

audits and the existing closures, any of the existing information we had on

closures.” Id. at 138.

The solicitation stated that such estimates were “based on historical

information and on the best information available to the Government at the

time of solicitation issue.” Pl’s Mot. Ex. 1 at 234. It also stated that each

quantity provided by the government “is an estimate of the number of hours

that may be ordered for a given location; however, actual quantities ordered

may be greater or lesser than the estimated quantities.” Id. Further, the

solicitation warned:

The quantities of supplies or services specified in the Schedule

are estimates only and are not purchased by this contract.

Except as this contract may otherwise provide, if the

Government’s requirements do not result in orders in the

quantities described as “estimated” or “maximum” in the

Schedule, that fact shall not constitute the basis for an equitable

price adjustment.

Def.’s Mot. Ex. 1 at 10 (Solicitation).

Section 1.1.2 of the solicitation, entitled Performance Work Statement

(“PWS”), allowed the contractor to recover “additional costs” resulting from

changes in “guard functions, locations, and operating hours.” Id. at 17. As

for any minor changes “in guard force functions, locations, and operating

hours,” however, the solicitation provided that these changes “will be at no

extra costs to the U.S. Government provided such changes do not impose

additional costs on the contractor.” Id. at 14. It further provided that

“examples of minor changes are, temporary location changes within a small

geographic area and temporary shift changes of less than 4 hours.” Id.

The solicitation further explained that any “[m]ajor changes in guard

force functions, locations, and operating hours will be at no extra cost to the

U.S. Government provided such changes do not impose additional costs on

the Contractor,” and that “[e]xamples of major changes are the elimination

within one Site (the area of responsibility of one Site Manager) of the annual

8

hourly equivalent of two or more 24 hours per day, 7 days per week guard

positions (total: 17,520 hours annually).” Id. at 4. 4

3. Pond’s Proposal

Pond submitted a proposal to the Army on November 24, 2008. It

contained a “basis of estimate” that set forth pricing. The basis for estimate

contained a “fully burdened labor rate” for each contract line item number

(“CLIN”) identified in the solicitation.

4. Contract Performance

Pond was awarded the Contract on February 26, 2009. The Contract

provided for one base year and three one-year options, each of which was

exercised by the Army. Performance commenced on May 30, 2009, and

extended until May 28, 2014.

To place orders under the 2009 contract, the Army periodically sent

task orders to the awardee that set forth what CSG services the Army would

require. See Id. at 12-13 (“Any supplies and services to be furnished under

this contract shall be ordered by issuance of delivery orders or task orders by

the Wiesbaden Contracting Center.”). Additionally, the solicitation notes

that “delivery orders or task orders are subject to the terms and conditions of

this contract.” Id. at 13.

The Army’s task orders were modified bilaterally in 2009 and in 2010,

to decrease the previously ordered amounts. The parties completed another

bilateral modification of a task order on March 22, 2013, in modification

(“Mod.”) 04 of Task Order No. 2 to “deobligate the remaining unused hours

and funds” covering work performed between May 30, 2012 and May 29,

2013. Def.’s Mot. Ex. 1 at 23 (Mod. 04). Mod. 04 contains the following

contractor’s release: “[Pond] having received all payments due under

contract W912CM-09-D-0015-0002, hereby releases and discharges the

Government from all liabilities and claims, including interest and related

costs, which it now has or hereafter may have, arising under this task order.”

Id. at 23. At the time Pond received Mod. 04, it had already submitted a

4

Unlike “minor changes,” “[t]he Contractor shall normally receive formal

notification from the COR 90 days prior to the effective date of major

changes except in those cases where the Contractor informs the Government

that the reductions can be implemented at an earlier date as a result of the

Contractor’s ability to avoid costs by the attrition of personnel.” Def.’s Mot.

Ex. 1 at 4 (Solicitation).

9

request for equitable adjustment (“REA”) and was discussing the REA with

the government. Pl.’s Opp. Ex. 1 at 3 (Geier Decl.).

Pond attached a declaration to its motion from Mr. Geier, which states

that while the contract was being performed, from May 30, 2009 to May 28,

2014, the Army decreased its ordered hours “by nearly 30%.” Pl.’s Mot. Ex.

1 at 4 (Geier Decl.). The point of his comparison, however, is not a decrease

from awarded hours in prior task orders, but from the original solicitation

estimate. 5 Instead of the approximately 21 million hours estimated in

Amendment No. 5 of the of the Solicitation, the Government only ordered

approximately 15 million hours.” Pl.’s Mot. Ex. 1 at 4 (Geier Decl.). It

appears that the government does not dispute this assertion.

Mr. Geier’s declaration also includes a statement regarding the effect

of the Army’s estimates upon plaintiff’s costs:

In order to quantify the various direct costs related to contract

performance, Pond calculated a mark-up rate, referred to as the

“load factor” in the Complaint. . . . The calculation of the “load

factor” (“LF”) resulted from two variables, specifically

variable x, which is the summation of all direct costs contained

in the [basis of estimate] direct cost pools for a contract year

and variable y, which is the total number of CSG hours,

meaning LF = x + y. As this formula indicates, a decrease in

the number of CSG hours ordered (variable y) with constant

direct costs (variable x), results in a higher load factor (LF).

Pl’s Mot. Ex. 1 at 3. On this point, Mr. Geier also stated, “Pond relied on

the hours and positions provided by the Army as the basis for determining

the loaded hourly rates it presented in its price proposal.” Id.

On February 12, 2012, Pond submitted a REA to the Army in the

amount of €6,558,416.15 euros. The basis for this REA was that the Army

undertook “post award efforts to save money on the security guard contracts

and to use the funds allocated for security guard costs for other purposes.”

Pl.’s Mot. Ex. 4 at 1064 (REA). On December 17, 2013, the contracting

officer (“CO”), Mr. Roberto J. Gotay, denied the REA.

5. Plaintiff’s CDA Claim

5

Plaintiff’s counsel represented during oral argument that the government

issued two task orders during the life of this contract.

10

Pond submitted its certified claim to the CO on May 24, 2016. The

claim sought €9,990,930.93 euros plus CDA interest as a result of Army

changes to the contract, “result[ing] in 31.98% less of the guard services than

indicated in the Contract quantity estimate.” Pl.’s Mot. Ex. 4 at 1213

(Certified Claim). The certified claim argued that the reduction in guard

services was the result of a negligent estimate made by the Army.

In its certified claim, Pond attached a graph depicting the price

differential between the contract price and the re-determined price for the

reduced hours ordered during the contract period. Pl.’s Mot. Ex. 4 at 1231.

Period Estimated Hours Amount Re-determined Difference

Hours Provided/I Invoiced for price for hours (w/o Special

n voiced Hours Provided provided (w/o Event Hours)

(w/o Sp. Event Sp. Event

Hours) Hours)

05/09 - 05/10 5,533,203 4,367,793 106,971,405.45 109,777,348.93 € 2,805,943.48 €

Base year €

05/10-05/11 5,533,203 4,071,297 99,773,697.55 102,445,811.26 € 2,672,113.71 €

1st Option €

05/11-05/12 5,533,203 3,529,178 90,235,370.18 € 92,634,646.99 € 2,399,276.81

2nd Option €

05/12-05/13 5,533,203 3,077,539 80,802,791.35 82,916,388.28 € 2,113, 596.93 €

3rd Option €

Total 9.990.930,93

€

Pl.’s Mot. Ex. 4 at 1231.

Pond argued in its claim that the Army’s estimates were negligent

because it had information prior to award, not shared with Pond, that should

have alerted the Army to the likelihood of more reductions. The CO’s final

decision (“COFD”) denied Pond’s claim on November 29, 2016, finding that

Pond had received “a realistic estimated total quantity for CSG manpower

requirements in the solicitation and resulting contract based on the most

current information available” at the time and “adequate information to

understand the Government’s estimates and what would be required to

successfully perform the contract.” Pl.’s Mot. Ex. 4 at 1330-31 (COFD).

The decision further explained that the March 2008 memorandum relied

upon by Pond in its claim “contained no directive to reduce or relax

standards,” but instead “provided guidance to calculate an objective

requirement, and the means to deviate from the objective requirement.” Id.

at 1332.

The COFD invited Pond to provide clarification in the event Pond

believed the Contracting Officer misunderstood the claim. Pond responded

11

with a letter on January 13, 2017. On February 27, 2017, the CO confirmed

its November 29, 2016 COFD. Pl.’s Resp. Ex. 2 at 26 (CO Letter). The

confirmation explained that “[a]ny differences in actual ACP manning

quantities ordered were not major changes” under the contract because the

“applicability of ‘major changes’ [is] only in relation to changes in and to the

individual task orders issued under the contract, and not to differing order

quantities over the life of the contract from estimated quantities.” Id. With

respect to the March 2008 memorandum, the confirmation reiterated that it

contained no directive to reduce standards and that directives to reduce

manning levels were not issued until after the contract was awarded. The

confirmation noted that it was a final decision and explained how Pond could

appeal the decision. On November 6, 2017, Pond filed a complaint, initiating

an action in this court challenging that decision.

DISCUSSION

Plaintiff filed a motion for partial summary judgment on all three

counts of its complaint, and defendant filed motions for summary judgment

on counts I and II of plaintiff’s complaint and a partial summary judgment

motion on count III of plaintiff’s complaint.

A. The Government’s Motion for Summary Judgment Based on the

Statute of Limitations.

The government asserts that, because Pond filed its certified claim on

May 24, 2016, any claim that accrued prior to May 24, 2010, would be barred

by the 6-year CDA statute of limitations. 41 U.S.C. § 7103 (a)(4)(A). 6 The

government argues that counts I and II are barred by the statute of limitations

and also argues that because count III seeks additional costs under Section

1.1.2 of the solicitation, to the extent that Pond incurred these costs before

May 24, 2010, it is barred from recovering such costs.

Pond obtained a copy of the March 2008 memorandum on June 9,

2009. Defendant argues that counts I and II accrued on that date, because

both counts argue that had Pond been informed of the relaxed manning

standards at the time of the March 2008 memorandum and Pond would have

6

The government acknowledges that it did not plead this affirmative defense

in its answer, but adds that while “an affirmative defense may be waived if

not pled as prescribed,” “the waiver is not effective absent unfair surprise or

prejudice.” First Annapolis Bancorp, Inc. v. United States, 75 Fed. Cl. 280,

288 (2007).

12

been able to apply a “higher ‘load factor’ to the wage costs, which would

have resulted in higher CLIN prices [of] 9,990,930.93 euros.” Compl. ¶ 47.

Thus, according to defendant, when Pond learned of the memorandum, it

knew of the events that “fix the alleged liability of . . . the Government . . .

and permit assertion of the claim,” and it had knowledge that “some injury

[has] occurred.” Sikorsky Aircraft Corp., 773 F.3d 1315, 1320 (Fed. Cir.

2014).

In its opposition, Pond argues that the government failed to assert this

affirmative defense in its answer, and thus, the government’s defense is

untimely. It is unnecessary, however, for the court to decide whether

defendant has waived its statute of limitations defense, as we do not find that

plaintiff’s counts I and II accrued on June 9, 2009, when Pond received the

March 2008 memorandum.

Pond argues that its claims did not accrue on June 9, 2009, because

the memorandum did not make clear that it would impact the current

contract. 7 We agree. The language in the memorandum does not include

any clear statement that the volumes under the 2009 contract would be

impacted. It would have been impossible for Pond to know whether it was

injured at that time. See FAR § 33.201 (defining “accrual of a claim” as “the

date when all events, that fix the alleged liability of either the Government

or the contractor and permit assertion of the claim, were known or should

have been known. For liability to be fixed, some injury must have

occurred.”) 8 The memorandum does not present anything from which the

plaintiff could have calculated an injury, and thus, the memorandum could

not have fixed the government’s alleged liability.

It is unnecessary for the court to find the precise date of when the

statute of limitations could have been triggered, as the government only

7

Defendant argues in the alternative that, if Pond had no idea what the

implications of the memorandum would be, the memorandum could not have

provided Pond with any meaningful information about the Army’s

requirements, and thus, the government could not have withheld superior

knowledge. We deal with that assertion below.

8

The government argues that Pond’s claim accrued when “some injury . . .

occurred,” not when Pond could determine the amount of its claim. Under

48 C.F.R. 33.201, the date of a claim’s accrual is determined by the events

fixing the “alleged liability” of the government. However, we disagree that

Pond was aware of any injury at the time that it received the memorandum.

13

offers one date as the triggering event. Because we find that plaintiff’s claims

did not accrue on June 9, 2009, we deny the government’s motion for

summary judgment on counts I and II and its motion for partial summary

judgment on count III based upon the statute of limitations.

B. Count I: The Government Negligently Estimated the Number of CSG

Hours in the Solicitation.

A requirements contract obligates “the government to fill all its actual

requirements for specified supplies or services during the contract period by

purchasing from the awardee, who agrees to provide them at the agreed

price.” Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed. Cir. 1992) (citing 48

CFR § 16.503(a) (1991)). This type of contract “is useful when the

government anticipates recurring needs but cannot predetermine the precise

quantities or future demands at the time of the award. The very nature and

use of a requirements contract presupposes uncertainty about actual

purchases.” Id. (Citing 48 CFR §§ 16.501(a), 16.503(b) (1991)).

FAR 16.503(a)(1) dictates how the CO must provide estimates in a

solicitation for a requirements contract:

[T]he contracting officer shall state a realistic estimated total

quantity in the solicitation and resulting contract. This estimate

is not a representation to an offeror or contractor that the

estimated quantity will be required or ordered, or that

conditions affecting requirements will be stable or normal. The

contracting officer may obtain the estimate from records of

previous requirements and consumption, or by other means,

and should base the estimate on the most current information

available.

48 C.F.R. § 16.503(a)(1). Additionally, the Federal Circuit teaches in

Rumsfeld v. Applied Cos., Inc., that the government has an “implied

obligation” when it utilizes a requirements contract “to act in good faith and

use reasonable care in computing its estimated needs.” 325 F.3d 1328, 1334-

35 (Fed. Cir. 2003).

Therefore, under a negligent estimate theory of breach, a contractor

must “show by preponderant evidence that the government’s estimates were

inadequately or negligently prepared, not in good faith, or grossly or

unreasonably inadequate at the time the estimate was made.” Agility Def. &

Gov’t Servs., Inc. v. United States, 847 F.3d 1345, 1350 (Fed. Cir. 2017)

14

(citing Medart Inc., 967 F.2d at 581). Without showing “negligence or bad

faith, the contractor bears the risk of variance between the estimated and

actual contract quantities.” Medart, Inc., 967 F.2d at 581.

Pond argues that it is entitled to summary judgment because the

Army’s estimates were negligently prepared. The government asks the court

to grant its motion for partial summary judgment on count I because plaintiff

has failed “to show by preponderant evidence that the government’s

estimates were inadequately or negligently prepared, not in good faith, or

grossly or unreasonably inadequate at the time the estimate was made.”

Agility Def. & Gov’t Servs., Inc., 847 F.3d at 1350 (citing Medart, Inc., 967

F.2d at 581). The parties rely on the same documents and deposition

testimony to reach different conclusions. For the reasons given below, we

deny both motions.

First, Pond argues that agency officials knew that the historical data

on which the estimates were based did not accurately reflect anticipated

reductions under the transformation process. Plaintiff points to the

deposition testimony of Mr. Wojtyna:

Q. [S]o whether it was from the 2008 memo or whether it was

from transformation, in any event, there were reductions that

were anticipated presolicitation that were not accounted for in

the estimates. Is that a fair statement?

[A] Correct. True statement. Ultimately there were reductions

to both -- because of both, not to both – because of both factors.

Pl’s Mot. Ex. 4 at 33. From this plaintiff concludes that the agency had notice

of future reductions which were not reflected in the solicitation.

The government responds that the question presented to Mr. Wojtyna

conflated reductions resulting from the transformation with reductions

resulting from the March 2008 memorandum. It is unclear whether Mr.

Wojtyna understood the question, as his response rephrased the question,

answering that reductions occurred because of the transformation and the

March 2008 memorandum. Thus, the court is unable to determine, based

upon his response alone, whether the Army had knowledge about future

reductions that it withheld from Pond.

Pond also argues that the agency had other contemporaneous

knowledge of anticipated changes to workload requirements. It cites the

traffic study and argues that the agency knew that the studies would result in

a reduction in guard positions during the contract period. Pond points to

testimony from Mr. Wojtyna in response to the following question, “did the

15

traffic studies reveal that there was insufficient funding to continue

maintaining the current levels of CSGs in USAREUR?” Id. at 17. His

answer:

I believe the traffic studies resulted in what we knew they were

going to result in. The traffic studies, using them would have

resulted in higher manning than OPMG thought we needed

based on the traffic studies. . . . But we knew . . . what the traffic

studies would show is that there were more guards at the gates

than OPMG thought we were -- we should be using because in

their opinion we were supposed to just use the traffic studies

for the manning standards.

Id.

Pond further asserts that, instead of complying with the mandate to

perform traffic studies to adjust guarding levels, defendant delayed the traffic

studies for five months. Plaintiff urges that the agency knew it would not

meet the new manning standard and would have to reduce its guard services

to meet the guidelines, and thus it waited until after contract award to begin

the traffic studies. Pond argues that this delay injured plaintiff because the

estimates were not based on current information available to the Army. To

support this argument, Pond presents the following from Mr. Wojtyna’s

testimony:

Q. Do you know when these traffic studies were planned on

being conducted?

A. I wasn’t planning to do them at all, but we ultimately did

them, I think, in August of 2008, I think -- or August of 2009

we ultimately did them.

Q. Okay. When you say you were not planning on doing them

at all, what's the basis of that statement?

A. Because they were -- in my mind they were a waste of time.

. . . We knew that they were not going to – we could not meet

the traffic flow standards as established in their memo, so --

and I told them at the time and they knew that at the time. So –

but they wanted to standardize how -- the contract guard

program throughout the Army. So I -- again, I didn’t see a point

-- it was pointless to do that because I already knew we were

not going to meet their standards.

Id. at 10.

16

The government disagrees with plaintiff’s asserted inferences,

arguing the fact that the Army anticipated that using the traffic studies

“would have resulted in higher manning than OPMG thought we needed,”

does not mean that the Army anticipated that it would have to reduce

manning standards because of limited funding. Id. at 17. The Army could

rely on other sources of funding, defendant asserts, as Mr. Wojtyna testified:

Q. Well, at this point in time this is August 2008. You had not

yet conducted traffic studies, correct?

A. Correct.

Q. So you didn’t know the results of those traffic studies, what

they were going to show; is that correct?

A. I was confident I knew what they were going to show.

Q. Okay. They were going to show reduced guard positions?

A. Correct. . . . by a strict application of those standards. . . .

Caveat that by meaning -- they also meant that we would

maybe have to resort to alternate funding sources for our

requirements. When you say “reductions,” it would be a --

reductions in what DA would fund, not necessarily meaning

that it would be reductions in guard requirements themselves

because there were alternate sources of funding that we could

apply.

Id. at 22.

While the parties agree on the relevant documents and testimony,

there remains disputed inferences from those materials. Plaintiff has put

forward some evidence, supported by Mr. Wojtyna’s statements, that the

government knew at the time of the solicitation that the traffic studies would

result in reduced CSG requirements. Whether this constitutes negligence,

however, requires the court to draw disputed inferences.

Finally, Pond asserts that Mr. Wojtyna admitted that the March 2008

memorandum’s effect would be to reduce CSG requirements for this 2009

contract, meaning that the government’s estimates were negligently

prepared. Mr. Wojtyna testified regarding the effect of the memorandum on

the Army’s requirements, “[W]e did have to reduce the number of guards,

but not to the level that that memo would take us. That was the

disagreement.” Pl.’s Opp. Ex. 2 at 7 (Wojtyna Dep.). In a follow up

question, he was asked, “Q. Okay. Just so I understand this, you agreed that

there would be reductions. The disagreement would be over the number of

those reductions; is that correct? . . . [A.] Correct.” Id. at 7.

17

Mr. Wojtyna further clarified the Army’s view of the memorandum’s

effect, “even though OPMG . . . said they would not fund beyond what . . .

was in that memo, . . . there were other funding sources that if we went

forward with our requirements, . . . we would either get funding from OPMG

or it would be funded through other channels.” Id. at 12. Pond contends that

Mr. Wojtyna’s statement, “we did have to reduce the number of guards, but

not to the level that that memo would take us,” demonstrates the Army knew

that reductions were forthcoming due to the memorandum. 9 Id. at 7.

The question of the Army’s knowledge at the time of the solicitation

regarding future reductions to CSG requirements is material to plaintiff’s

negligent estimate claim, as the reasonableness of the agency’s estimates are

determined by the information available to it at the time of solicitation.

Plaintiff presents evidence, supported by Mr. Wojtyna’s testimony and the

March 2008 memorandum, that the memorandum provided the Army with

information that should have been used in making its estimates.

The government asserts that the Army provided realistic estimates

with information that was reasonably available, as the Army had conflicting

considerations causing substantial uncertainties with CSG manning

requirements at the time of the solicitation. First, defendant offers evidence

that the Army’s cost reduction efforts were the subject of disagreement

between OPMG and USAREUR. After the AAA audits were completed, the

government asserts that the USAREUR took action to reduce manning at

installations identified by the AAA, and by 2008 the USAREUR sufficiently

“adopted . . . the manning standards, to the level” required by the AAA.

Def.’s Mot. Ex. 2 at 134 (Wojtyna Dep.). Thus, after the conclusion of these

audits, defendant contends both USAREUR and the AAA believed that

USAREUR had adopted appropriate manning standards. Id.

Second, defendant relies on the Army’s December 2007

announcement, which stated that that transformation plans would be

temporarily delayed, thereby highlighting the unpredictability of the

transformation process. Def.’s Mot. Ex. 2 at 115. Finally, the government

argues that the Army also believed that the USAREUR could have an

increase in CSG requirements because of “unplanned force protection

needs.” Acquisition Strategy, Def.’s Mot. Ex. 2 at 16.

9

Mr. Wojtyna agreed that the disagreement between OPMG and USAREUR

was “over the number of those reductions.” Pl.’s Opp. Ex. 2 at 7 (Wojtyna

Dep.).

18

It is unclear to the court from this evidence alone, however, whether

the agency knew that the Army’s CSG requirements would inevitably be

affected during this contract, and thus, prepared its estimates negligently.

Because this is a disputed question of material fact, the issue of the agency’s

knowledge must be resolved at trial. As discussed above, the extent of the

agency’s knowledge is a disputed fact. Even though the Army presents

countervailing considerations that it had at the time of the solicitation, there

is still a genuine dispute of material fact as to whether the Army prepared its

estimates with the most current information available to it, or whether it

prepared its estimates negligently. Thus, neither movant is entitled to

summary judgment as to count I. See RCFC 56(a) (summary judgment will

be granted when “there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.”).

C. Count II: The Government Withheld Superior Knowledge Regarding

Anticipated CSG Requirements.

The Federal Circuit has held that the government has a duty to disclose

its superior knowledge where:

(1) a contractor undertakes to perform without vital knowledge

of a fact that affects performance costs or duration; (2) the

government was aware the contractor had no knowledge of and

had no reason to obtain such information (3) any contract

specification supplied misled the contractor or did not put it on

notice to inquire; and (4) the government failed to provide the

relevant information.

Giesler v. United States, 232 F.3d 864, 876 (Fed. Cir. 2000) (citing Hercules,

Inc. v. United States, 24 F.3d 188, 196 (Fed. Cir. 1994)); see also Miller

Elevator Co., Inc., 30 Fed. Cl. 662, 675 (1994) (a superior knowledge claim

can only be brought with respect to vital facts that “the contractor neither

knows nor should have known of . . . by contract specification or otherwise”

and where “the Government knew or should have known of the contractor’s

ignorance of the facts.”).

The superior knowledge which plaintiff attributes to the Army is that

it knew reductions in guard services were forthcoming but did not disclose

this information to plaintiff. Pond claims that it did not know of this fact and

relied on the government’s estimates, and thus, the Army had a duty to

disclose its superior knowledge. It asks for summary judgment on this count.

19

The government seeks summary judgment with respect to count two

because plaintiff was aware that reductions were possible during the contract

and because the Army had no knowledge of vital facts at the time of the

solicitation that it withheld from Pond. For the reasons stated below, we

deny both motions.

Plaintiff asserts that the March 2008 memorandum informed the

Army of anticipated reductions for this contract because it contained a

mandatory order to reduce costs within USAREUR. Pond argues that Mr.

Wojtyna’s testimony shows the Army knew that reductions would be

forthcoming as it had an awareness of what the OPMG mandated traffic

studies would likely show even before the studies were performed:

I believe the traffic studies resulted in what we knew they were

going to result in. The traffic studies, using them would have

resulted in higher manning than OPMG thought we needed

based on the traffic studies. . . . But we knew. . . . what the

traffic studies would show is that there were more guards at the

gates than OPMG thought we were -- we should be using

because in their opinion we were supposed to just use the

traffic studies for the manning standards.

Pl.’s Mot. Ex. 4 at 17 (Wojtyna Dep.).

The government responds that the March 2008 memorandum was not

an order with clear instructions to reduce costs for this contract in Germany.

It points out that the memorandum itself merely “provides guidance to

USAREUR on the use of CSG for access control in the USAREUR AOR,”

and does not mandate any response. Pl.’s Mot. Ex. 4 at 134 (March 2008

Memo.). Further, defendant argues, the memorandum merely sets forth

conditions for funding controlled by OPMG based upon future traffic

studies—“OPMG will only fund CSG for IACP as justified by installation

pedestrian and traffic flow.” Id. at 135. Finally, the government argues that

the memorandum gave commanders “who determine the need for additional

CSG personnel for IACP” the ability to seek an exception to OPMG’s

funding policy, allowing the commander to have additional CSG personnel,

which may not be justified by traffic flow. Id. at 134-35.

Plaintiff replies that Mr. Wojtyna’s testimony regarding base closures

shows that the Army anticipated reductions which it did not disclose. The

testimony that plaintiff refers to concerns the following statement in the

Acquisition Strategy: “Although USAREUR transformation could reduce

contract requirements during the total performance period, specific

20

reductions have not been considered in this estimated dollar value based on

possible changes to the current plan.” Def.’s Mot. Ex. 2 at 15. Mr. Wojtyna

was asked about this language:

Q. And so the government recognized that reduced contract

requirements were a reasonable possibility . . . or were in fact

anticipated for the upcoming contract?

[A.] “USAREUR transformation could reduce.” We knew

there were additional reductions coming because of the

USAREUR transformation process, but because it was

classified -- I guess, hence that statement could reduce contract

requirements, because everybody knew more reductions were

coming.

...

Q. And those reductions had been input in place as a result of

the prior audits; is that right? . . .

A. No, it was due to both. Partially due to the closure of

garrisons. Primarily caused by the DA-mandated standards for

manning.

Q. Okay. And so bases had closed because of force drawdown

and then in addition you had DA mandated standards that were

looking to reduce costs. Are those the two factors you’re

talking about?

A. Correct. Correct.

Pl.’s Mot. Ex. 4 at 19-20.

Finally, plaintiff presents evidence of an internal agency PowerPoint

slide that USAREUR and the Military Police prepared in August 2008 which,

it argues, shows plans for compliance with the March 2008 Memorandum’s

new manning standards. Pl.’s Mot. Ex. 4 at 148-163. Plaintiff asserts that

the slide depicts the difference between the current USAREUR manning

standards and the reduced manning standards under the memorandum,

stating that the new standards would require one guard per every 300 vehicles

entering the control point rather than the old standard of 2 guards per every

200 persons per hour. Id. at 150. Plaintiff also presents testimony from Mr.

Wojtna regarding the PowerPoint:

Q. Okay. And this appears to be showing the difference

between the USAREUR manning standards as they currently

existed, contrasted with the Department of the Army guidance

on the use of CSGs. Do you see that?

A. Yes, sir.

21

Q. And that right-hand column, the DA guidance, is that

essentially referring to the March 2008 Army policy?

A. Without matching, I’m assuming it is, correct. That’s what

it would have been used.

Q. At this point in time it’s reasonable to assume that that’s

what it was referring to?

A. Correct. Yes.

Q. And does this show that a reduced number of guard

positions would be forthcoming?

A. By a strict application of the DA guidance, yes.

Q. . . . The USAREUR manning standards were two guards up

to 200 -- is that persons per hour?

A. Correct.

Q. And the new standard would be one guard per access lane

per every 300 vehicles per hour or less?

A. Correct.

Q. And that average number of vehicles as referenced here in

the DA guidance, would that be determined by the traffic

studies?

A. Yes.

Pl.’s Mem. Ex. 4 at 21. Pond contends that this PowerPoint slide shows that

the agency knew the traffic studies would demonstrate that a significant

reduction in CSGs would be necessary.

The government has an additional argument, however, that Pond was

aware of the possibility of reductions at the time of the solicitation, as Pond

was the incumbent on the 2003 contract, and it knew that the Army’s CSG

requirements fluctuated dramatically during the 2003 contract, thus making

defendant’s level of knowledge immaterial. See Giesler, 232 F.3d at 877

(rejecting superior knowledge claim where contractor had “equal, if not

greater, access to” the information that formed the basis of the claim).

Defendant asserts that Pond’s proposal noted that “the fluctuations in

the requirements [for the 2003 contract] were immense.” Def.’s Mot. Ex. 1

at 117 (Pond’s Proposal). Additionally, the government points out that

Pond’s proposal made statements regarding the Army’s changing

requirements:

These facts, contained in all volumes of this proposal, stem

from over 25 years[’] experience serving USAREUR. In the

recent years of constantly changing USAREUR requirements

resulting from GWOT deployments and USAREUR

22

restructuring and re-stationing, Pond Security has successfully

met both planned and emergency changes, additions,

reductions, and relocations of our guarding services.

USAREUR will continue to undergo reductions and

restationing during the contract period. Pond Security has

clearly demonstrated its capability to understand and to rapidly

respond to USAREUR’s changing organization, missions, and

geography.

Def.’s Mot. Ex. 1 at 110 (Pond’s proposal).

The offered evidence leaves unresolved the Army’s level of certainty

regarding coming reductions and plaintiff’s own expectation of them. It is

improper at this juncture for the court to weigh or draw inferences from any

piece of evidence without examining witnesses about the relevant documents

and their expectations. Thus, the parties’ motions must be denied.

D. Count III: The Government’s Actual Number of Hours Ordered

Constitutes a Major Change Under the Contract.

Pond’s count III is an alternative argument that it is entitled to an

equitable price adjustment in accordance with the contract PWS, found in

Section 1.1.2 of the solicitation:

Major changes in guard force functions, locations, and

operating hours will be at no extra cost to the U.S. Government

provided such changes do not impose additional costs on the

Contractor. Examples of major changes are the elimination

within one Site (the area of responsibility of one Site Manager)

of the annual hourly equivalent of two or more 24 hours per

day, 7 day per week guard positions (total: 17, 520 hours

annually).

Def.’s Mot. Ex. 1 at 7.

Plaintiff argues that Section 1.1.2 permits Pond to recover for cost

impacts due to major changes in the quantities ordered. 10 Pond contends that,

10

Plaintiff also asserts that Mr. Wojtyna admitted on behalf of the

government that Section 1.1.2, and in particular the language about major

changes, was included in the contract because the agency expected

reductions in estimated hours and positions during the course of the

contract’s performance period, including the option years.

23

because actual hours were more than 30% below the estimated hours

provided by the solicitation, the reduction in hours constitutes a major change

under the clause. 11 Pond asserts that it incurred substantial additional costs

because of these reductions and asks the court to grant it partial summary

judgment as to entitlement.

The government does not contest that Pond is entitled to recover any

“additional costs” resulting from changes in “guard force functions,

locations, and operating hours” under the contract. Def.’s Mot. Ex. 1 at 7

(Solicitation). Defendant argues first that the major changes language refers

to reductions from prior task orders, not from the solicitation estimates. 12

Second, it argues that Pond’s motion fails to explain what specific

“additional costs” to which it is entitled or how those “additional costs”

resulted from the Army’s changes in “guard force functions, locations, and

operating hours.” Id.

A material question of fact exists as to whether the costs Pond has

attributed to changes in “guard force functions, locations, and operating

hours” are qualifying costs under the contract, and thus, we cannot grant

plaintiff’s motion for summary judgment as to count III.

Defendant has a cross motion for partial summary judgment as to

count III. It asks the court to grant its motion pertaining to damages Pond

seeks in count III for (1) claimed “sick costs” in the amount of €4,067,269.46

euros allegedly incurred between May 30, 2009, and February 29, 2012, and

€847,955.98 euros allegedly incurred between March 1, 2012, and December

31, 2013; and (2) claimed damages arising under Task Order No. 2, which

included all work between May 30, 2012, and May 29, 2013, because it has

been released from liability. For the reasons given below, we deny

defendant’s motion.

First, the government asserts that Pond can only recover damages

under Section 1.1.2 if there are changes in “guard force functions, locations,

and operating hours” that “impose additional costs” on Pond, and not costs

11

Pond attached a declaration to its motion from Mr. Geier, which states that

while the contract was being performed, the Army decreased its ordered

hours “by nearly 30%. Instead of the approximately 21 million hours

estimated in Amendment No. 5 of the of the Solicitation, the Government

only ordered approximately 15 million hours.” Pl.’s Mot. Ex. 1 at 4.

12

This argument only became clear during oral argument; it was not clearly

briefed.

24

that were Pond’s responsibility. Def.’s Mot. Ex. 1 at 17 (Solicitation). Pond,

in effect, claims that these sick costs resulted from changes in “guard force

functions, locations, and operating hours” effected by the Army, and not

from illness. The government responds that Pond presented testimony that,

in all instances of illness, employees were required by German law to obtain

a note from a doctor and provide it to Pond, and that each employee who took

sick leave had provided such a note. Def.’s Mot. Ex. 2 at 180 (Geier Dep.).

Thus, defendant argues that Mr. Geier’s deposition suggests that the evidence

would show that the sick costs were due to employee illness and not due to

the Army’s changes in “guard force functions, locations, and operating

hours.”

Plaintiff argues that its claim for sick costs is analogous to a claim for

lost productivity in a construction or manufacturing context. See Pl.’s Opp’n

33-34 (discussing Batteast Constr, Co., ASBCA No. 35818, 92-1 BCA ¶

24,697). In Batteast, the government changed the requirements for masonry

work, and, as a result, the masons were less productive. Plaintiff asserts that

the Board awarded the contractor damages because it found that the lost

productivity was caused by the change in requirements. Id. at 123, 215.

Plaintiff avers that, here, Mr. Geier’s calculations found that the sick leave at

garrisons where CSG positions and hours were reduced or eliminated

increased significantly compared to what Pond had expected, and thus, it

argues that it can recover these costs. Plaintiff contends that CSG employees

took time off to look for other positions because of the uncertainty caused by

the Army’s reductions.

In response, the government argues that Batteast is not analogous

because the employees here were not less productive due to a change in

requirements. Rather, the employees here took time off work because they

were ill, not unproductive, the government argues. Additionally, the

government argues that the cost at issue is not one that must be borne by the

Army under the contract. 13

Again, there is a genuine dispute as to whether the CSG employees

took of time due to the government’s reductions in GSG positions. This issue

is material because it will determine whether plaintiff can recover for the

costs of the employee’s sick leave. Thus, we deny defendant’s motion for

The government argues that Pond’s proposal stated that its CSG contracts

13

would “provide for vacation time, training, and absences due to illness.”

Def.’s Mot. Ex. 1 at 78 (Pond’s Proposal).

25

partial summary judgment as to plaintiff’s claim for damages due to its

employee’s sick leave.

Next, the government argues that the court should grant it summary

judgment as to the claimed damages arising under Task Order No. 2, which

includes all work completed between May 30, 2012, and May 29, 2013,

because Pond executed a release for these damages. Defendant contends that

any of Pond’s claims arising out of Task Order No. 2 are encompassed by

the language of the release contained in Mod. 04: “[Pond] having received

all payments due under contract W912CM-09-D-0015-0002, hereby releases

and discharges the Government from all liabilities and claims, including

interest and related costs, which it now has or hereafter may have, arising

under this task order.” Def.’s Mot. Ex. 1 at 23.

Pond disputes the government’s assertion that plaintiff released the

Army from liability associated with Task Order No. 2. It argues that

plaintiff’s signature on the bilateral modification merely indicated an

administrative acknowledgment of the government’s action and not a

contract release. Pond asserts that defendant’s argument fails because the

parties did not have a meeting of the minds and the modification lacked the

required consideration, as Pond received no payment for the modification.

To support this argument, plaintiff present Mr. Geier’s declaration:

Pond did not release its claim for costs involved in the litigation

when it signed Mod 4. Pond understood that Mod 4, as an

administrative Mod for deobligation of funds. At that time,

Pond had only recently submitted its REA and was actively

discussing the REA with the Government and supplementing

the REA as requested by the Government. Mod 4 made no

reference to the REA or and changes to the Contract. Pond did

not receive any compensation or other consideration for Mod

4. Notably, the Contracting Officer did not find in his Final

Decision and in his Reconsidered Final Decision that Pond had

released its claim by executing Mod 4.

Pl.’s Opp. Ex. 1 at 3 (Geier Decl.).

Defendant disagrees with plaintiff’s assertion that the statement of

release in Modification 04 lacked a meeting of the minds because the plain

meaning of the modification is unambiguous, and Pond’s subjective

understanding of the agreement is irrelevant, it argues. “If the terms of a

contract are clear and unambiguous, they must be given their plain

26

meaning—extrinsic evidence is inadmissible to interpret them.” Barron

Bancshares, Inc., 366 F.3d at 1375.

On the issue of consideration, the government argues that the parties

created a bilateral modification pursuant to the authority set forth in the

“changes” clause of FAR 52.212-4. The government argues that

consideration does not require payment, but “‘[c]onsideration is generally a

bargained for exchange consisting of an act, forbearance, or return promise.’”

Carter v. United States, 102 Fed. Cl. 61, 66 (2011).

Because plaintiff has presented evidence showing a genuine dispute

of material fact regarding whether the release language in Modification 04

should be viewed as binding, the issue must be resolved at trial. Thus, we

deny defendant’s motion for partial summary judgment as to the claimed

damages arising under Task Order No. 2.

CONCLUSION

For the reasons given above, we deny plaintiff’s motion for partial

summary judgment and the government’s cross-motions for summary

judgment and partial summary judgment. The parties are directed to

communicate and propose a schedule for pretrial proceedings in a joint status

report on or before June 11, 2021.

s/Eric G. Bruggink

ERIC G. BRUGGINK

Senior Judge

27