# DENIED AS TO ENTITLEMENT: March 6, 2009

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Acbca%3A1822cf2459f034bf

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

DENIED AS TO ENTITLEMENT: March 6, 2009

CBCA 449

NAVIGANT SATOTRAVEL,
Appellant,
v.
GENERAL SERVICES ADMINISTRATION,
Respondent.

James H. Roberts, III and Carrol H. Kinsey, Jr. of Van Scoyoc Kelly PLLC,
Washington, DC, counsel for Appellant.
Michael J. Noble, Office of General Counsel, General Services Administration,
Washington, DC, counsel for Respondent.
Before Board Judges BORWICK, HYATT, and KULLBERG.
KULLBERG, Board Judge.
This appeal concerns a task order issued by the Army Contracting Agency-ITEC4
(DoD) to Appellant, Navigant SatoTravel (NST),1 for travel services in Defense Travel
Region 6 (DTR6). Respondent, General Services Administration’s (GSA’s) contracting

1

NST was acquired by Carlson Travel in 2006 and is now known as Carlson
Sato Travel. Transcript at 191.

CBCA 449

2

officer, in a decision issued on March 21, 2006, determined that the order for DTR6 services
was provided under NST’s Federal Supply Schedule (FSS) contract with GSA and demanded
payment of the applicable Industrial Funding Fee (IFF) in the amount of $292,609.50. NST
appealed from that decision, and contended that no IFF was due because the services were
not provided under its FSS contract. We conclude that the travel services were provided
under NST’s FSS contract. DoD issued a task order referencing NST’s FSS contract number,
and NST accepted the order by performance.
This appeal was docketed previously at the General Services Administration Board
of Contract Appeals (GSBCA) as GSBCA 16873. On January 6, 2007, in accordance with
section 847 of the National Defense Authorization Act for Fiscal Year 2006, Pub. L. No.
109-163, 119 Stat. 3391, the Civilian Board of Contract Appeals (CBCA) was established,
and this case was then docketed by the CBCA as CBCA 449. This Board previously denied
appellant’s motion for summary relief. Navigant SatoTravel v. General Services
Administration, CBCA 449, 08-1 BCA ¶ 33,821. A hearing was held on May 28-29, 2008.
Only the issue of entitlement was tried at the hearing.2 We deny the appeal as to entitlement.
Findings of Fact
On March 24, 2004, GSA issued solicitation number FBGT-RK-040001-B
(solicitation), Travel Services Solutions (TSS). Appeal File, Exhibit 28.3 The solicitation
referenced multiple award schedule (MAS) number 599. Id. The types of services called for
under the solicitation were classified by special item numbers (SINs). Id. at 6. Those travelrelated services under the statement of work (SOW) included: travel consultant services (SIN
599-1), travel agent services/travel management center services (SIN 599-2), new
products/services (SIN 599-99), and contract support items (SIN 599-1000). Id. at 7-20.
Generally, the solicitation described TSS as follows:
The Travel Services Solution Schedule is a comprehensive
contracting vehicle that will encompass a variety of distinct
commercial travel services in support of the Government’s
travel needs. Each SIN solicited stands alone. Companies may
choose to offer one or more SINs for which they meet the
requirements of and qualifications for the service solicited.

2

Board’s Memorandum of Conference Call and Order (Mar. 8, 2007) at 3.

3

All exhibits are found in the appeal file, unless otherwise noted.

CBCA 449

3

Exhibit 28 at 8. Generally, the types of travel services to be provided under the terms of the
solicitation included arrangements for temporary change of station, permanent change of
station, and temporary duty travel, and travel-related services such as “travel management,
travel security, [and] travel technology . . . .” Id. at 9. GSA prepared the solicitation to cover
a broad variety of commercial travel services, and an agency ordering services from a
schedule contractor would specify travel requirements based on that agency’s requirements.
Transcript at 115-16. Orders for services from schedule contractors could be placed by
“Executive agencies[,] other Federal agencies, mixed-ownership Government corporations,
and the District of Columbia . . . .” Exhibit 28 at 24.
The solicitation also defined “eTravel Service” (eTS) as “a web-based, end-to-end
travel management service for use by all civilian Executive Branch departments and agencies
of the Federal Government.” Exhibit 28 at 9. The purpose of eTS was to provide “a
common, automated, and integrated approach to managing Federal Government travel
functions.” Id. Consequently, “[c]ompeting end-to-end eTS [was] not solicited under TSS.”
Id.
The clause at solicitation paragraph C.19 was General Services Administration
Regulation (GSAR) 552.238-74, Industrial Funding Fee and Sales Reporting (JUL 2003),4
which provided in pertinent part the following:
(a)
Reporting of Federal Supply Schedule Sales. The
Contractor shall report all contract sales under this contract as
follows:
(1)
The Contractor shall accurately report the dollar value, in
U.S. dollars and rounded to the nearest whole dollar, of all sales
under this contract by calendar quarter (January 1 - March 31,
April 1 - June 30, July 1 - September 30, and October 1 ­
December 31). The dollar value of a sale is the price paid by the
Schedule user for products and services on a Schedule task or
delivery order. The reported contract sales value shall include
the Industrial Funding Fee (IFF). The Contractor shall maintain
a consistent accounting method of sales reporting, based on the
Contractor’s established commercial accounting practice. The
acceptable points at which sales may be reported include–

4

48 CFR 552.238-74 (2003).

CBCA 449

4
(i)

Receipt of order;

(ii)

Shipment or delivery, as applicable;

(iii)

Issuance of an invoice; or

(iv)

Payment.

(2)
Contract sales shall be reported to FSS within 30 calendar
days following the completion of each reporting quarter. The
Contractor shall continue to furnish quarterly reports, including
“zero” sales, through physical completion of the last outstanding
task order or delivery order of the contract.
(3)
Reportable sales under the contract are those resulting
from sales of contract items to authorized users unless the
purchase was conducted pursuant to a separate contracting
authority such as a Governmentwide Acquisition Contract
(GWAC); a separately awarded FAR [Federal Acquisition
Regulation] Part 12, FAR Part 13, FAR Part 14, or FAR Part 15
procurement; or a non-FAR contract. Sales made to state and
local governments under Cooperative Purchase authority shall
be counted as reportable sales for IFF purposes.
....
(b)
The Contractor shall remit the IFF at the rate set by
GSA’s FSS.
(1)
The Contractor shall remit the IFF to FSS in U.S. dollars
within 30 calendar days after the end of the reporting quarter;
final payment shall be remitted within 30 days after physical
completion of the last outstanding task order or delivery order
of the contract.
(2)
The IFF represents a percentage of the total quarterly
sales reported. This percentage is set at the discretion of GSA’s
FSS. GSA’s FSS has the unilateral right to change the
percentage at any time, but not more than once a year. FSS will
provide reasonable notice prior to the effective date of the

CBCA 449

5
change. The IFF reimburses FSS for the costs of operating the
Federal Supply Schedules Program and recoups its operating
costs from ordering activities. Offerors must include the IFF in
their prices. The fee is included in the award price(s) and
reflected in the total amount charged to ordering activities.
....
(d)
Failure to remit the full amount of the IFF within 30
calendar days after the end of the applicable reporting period
constitutes a contract debt to the United States Government
under the terms of FAR Subpart 32.6. The Government may
exercise all rights under the Debt Collection Improvement Act
of 1996, including withholding or setting off payments and
interest on the debt (see FAR clause 52.232-17. Interest).
Should the Contractor fail to submit the required sales reports,
falsify them, or fail to timely pay the IFF, this is sufficient cause
for the Government to terminate the contract for cause.

Exhibit 28 at 35-37.
On May 5, 2004, GSA awarded to NST contract GS-33F-0020-P (FSS contract) under
the solicitation. Exhibit 29. Under the FSS contract, NST would provide services under
SINs 599-2, 599-99, and 599-1000. Id. at 2. NST’s rates for services under SIN 599-2
included an IFF rate of $1.50 per transaction. Id. Under SIN-2, NST had separate rates for
domestic and international air and rail travel, transaction A; lodging and car rental,
transaction B; and online bookings, transaction C. Id.; Transcript at 117-20. Travel
arrangements under transaction C were referred to as “touchless” in that the transaction was
automated and involved a reduced level of effort. Transcript at 117-18.
On September 2, 2004, DoD issued request for quotations (RFQ) W91QUZ-04-T­
0016 for the “acquisition of official travel management and related additional services . . .
of authorized [DoD] travelers whose duty station is within Defense Travel Region 6
(DTR6).” Exhibit 1 at 44, ¶ C.1.1. The RFQ stated that “travel management services shall
be provided using both traditional methods and automated methods using the Defense Travel
System (DTS) web portal.” Id. The contracting officer, Ms. Peggy Butler, intended to issue
an order against an existing GSA schedule contract. Transcript at 17. The first page of the
RFQ was a standard form (SF) 18. Exhibit 1 at 1. Ms. Butler inserted DTS-GSA-002 in
block 3, Requisition/Purchase Request No., on the SF 18, and she deemed it a matter of

CBCA 449

6

discretion to style the requisition number in that manner in order to show DoD’s intent to
issue an order against a GSA schedule contract. Exhibits 1 at 1, 63; Transcript at 18.
Paragraph L.1.2 of the RFQ stated that the “Government contemplates award of one
Firm Fixed Price task order with a base period of 5 months, plus 2 option periods of 6 months
and 1 months [sic].” Exhibit 1 at 78. Paragraph L.4 of the RFQ provided that “[a]t the time
of award of any contract resulting from this solicitation, the successful Offeror’s offer will
be incorporated by reference as part of the contract.” Id. at 80. An offer under the RFQ
meant an “‘offer’ as described in FAR 2.101.” Id. Paragraph L.5.1 of the RFQ stated that
“[o]fferors shall identify all existing GSA FSS contract(s) to be used to satisfy the
requirement of the Statement of Work (SOW).” Id.
The RFQ required submission of a technical proposal and a pricing spreadsheet with
cost assumptions. Exhibit 1 at 82-83. The various services to be provided for the base and
option periods were listed as numbered contract line items (CLINs). Id. at 2-43. The pricing
spreadsheet was an attachment to the RFQ, and it required that each “[o]fferor insert a Firm
Fixed Price for each Priced CLIN or subCLIN.” Id. at 83. The CLINs for the various
services during the base period were numbered 0001 through 0015, and there were separately
numbered CLINs for each of the two option periods.5 Id. at 2-30.
Travel agent services under CLIN 0001 were arranged by means of the DTS web
portal. Exhibit 1 at 2-3; Transcript at 28-30. DTS is an on-line system, which is used by
DoD personnel for managing commercial travel, and a contractor performing DTR6 services
would access the data within DTS to obtain air or rail tickets or make other travel-related
reservations. Transcript at 15, 25, 129-32. Transactions for travel services using DTS
included “touched” transactions that involved assistance from the Commercial Travel Office
(CTO) to make special arrangements for a traveler. Id. at 31. Travel agent services provided
under CLINs 0002 and 0003 were identified as “traditional” in that such services were
provided where DTS was not available, and arrangements were made by contacting a travel
agent. Id. at 31-33. The services provided under CLINs 0004 through 0015 included: fees
for reconciling claims (CLIN 0004), support contractor travel (CLIN 0005), leisure travel in
conjunction with official travel management services (CLIN 0006), paper ticket delivery
(CLIN 0007), reporting requirements (CLIN 0008), staffed locations (CLINs 0009-0011),
satellite ticket printer (CLIN 0012), global distribution system (GDS) terminal and software
(CLINs 0013-0014), and movement of human remains (CLIN 0015). Exhibit 1 at 6-16.

5

The CLINs for the first option period were numbered 0016 through 0030, and
the CLINs for the second option period were numbered 0031 through 0045.

CBCA 449

7

With the exception of CLIN 0015, each CLIN also referenced the purchase request number
DTS-GSA-002. Id.
When DoD issued the RFQ, NST had been providing DTR6 travel services as a
subcontractor under a contract between DoD and Northrop Grumman Mission Systems.
Exhibit 24, ¶ 4; Transcript at 267. Because DoD had been ordered to terminate its contract
for DTR6 services and competitively procure those services as a result of an action before
the United States Court of Federal Claims,6 very little time was allowed by DoD for
submission of a quote. Transcript at 269. No face-to-face meetings took place between DoD
and NST, and communication between DoD and NST was by either telephone or electronic
mail. Id. at 268.
Ms. Butler contacted five or six qualified commercial travel office companies (CTOs),
which included NST, and described the RFQ. Transcript at 19-20. It is not clear from the
record if Ms. Butler specifically advised any representative from NST that an award would
be made against a GSA schedule contract. Id. at 20. No documentation of such discussions
was included in the record. Id. at 55. The RFQ was not advertised. Id. at 19, 151. Ms.
Butler believed that it would have been a requirement to advertise an open-market
acquisition. Id. A copy of the RFQ was subsequently sent to those CTOs. Id. at 22.
On September 23, 2004, NST submitted its technical proposal and pricing
spreadsheet. Exhibit 16. Attached to NST’s proposal was a standard form (SF) 18 that
referenced the RFQ number, W91QUZ-04-T-0016, in block one. Id. At block three was the
requisition purchase number, DTS-GSA-002. Id. At block ten was the printed instruction
that stated in pertinent part: “This is a request for information, and quotations furnished are
not offers.” Id. Mr. Marc Stec, who was then NST’s vice president for contracts and
proposals,7 executed that document. Id. NST’s technical proposal and pricing spreadsheet
did not reference its FSS contract number, nor did its proposal contain information about its
rates under its FSS contract. Exhibits 16, 24, ¶ 12; Transcript at 70.
On October 29, 2004, DoD issued to NST order number W91QUZ-05-F-0005 on a
SF 1449 for DTR6 travel services. Exhibit 2 at 1. Inserted at block two of the SF 1449 was
NST’s FSS contract number, GS-33F-0020P. Id. Ms. Butler inserted the FSS contract
6

On July 26, 2004, the United States Court of Federal Claims ordered DoD to
“terminate those portions of the DTS DTR6 contract and recompete that work.” CW
Government Travel, Inc. v. United States, 61 Fed. Cl. 559, 582 (2004).
7

Mr. Stec is currently vice president for development for Carlson SATO Travel.
Transcript at 190.

CBCA 449

8

number because it was her intent to award an order under NST’s FSS contract. Transcript
at 49. Block 28 of the SF 1449 stated the following:
The Contractor is to sign this document and return to issuing
office. Contractor agrees to furnish and deliver all items set
forth or otherwise identified above and on any additional sheets
subject to the terms and conditions specified herein.
Ref: Quote as amended 20 Oct 04.
Exhibit 2 at 1. NST did not execute the SF 1449. Id. Ms. Butler executed the SF1449 on
the date of award by means of a computer-generated signature. Id.; Transcript at 49.
Although NST failed to sign the SF 1449, Ms. Butler did not deem the lack of a signature to
be unusual based upon her experience with other contractors who would commence
performance without executing a contract document. Transcript at 51.
Subsequent to DoD sending to NST the SF 1449, NST proceeded to perform DTR6
travel services under the order and invoiced DoD for those services. Exhibit 24, ¶ 16;
Transcript at 52. Mr. Stec testified that the SF 1449 was received at NST’s office, as
evidenced by the fact that it was in company records, but neither he nor any other person
employed by NST and responsible for processing such orders recalled receipt of the
document at the time NST commenced performing services under the order. Transcript at
206, 259. Mr. Stec speculated that the SF 1449 could have been sent to NST by an electronic
mail message. Id. at 258. He was unable to explain why the SF 1449 was not signed. Id.
at 206-07. Two other NST employees who might have seen the SF 1449, according to Mr.
Stec, were Ms. Gladys Masaro, proposal director, and Ms. Maureen Keating. Id. at 218.
Neither Ms. Masaro nor Ms. Keating testified at the hearing, nor was there an affidavit or
other evidence of their knowledge of the circumstances surrounding receipt of the SF 1449
submitted in this appeal.
Mr. Lee Templeman, a contracts manager for NTS, stated in his declaration that upon
“contract award, [he] review[s] the Task Order (T.O.) documents prior to signature by the
Vice President of Contracts and Proposals; once signed, [he] ‘process[es]’ the T.O. . . .
assigning a DK number, issuing a CIN (Contracting - IMS Notification document) with all
the pertinent contract and fee information . . . .” Exhibit 25, ¶ 2. The DK number was
assigned internally by NST “to track information related to specific accounts.” Id. ¶ 3. In
the case of orders placed under a GSA contract, the DK number would begin with either a
“34” or a “44.” Id. ¶ 5. Mr. Templeman further stated: “Because there was no GSA TSS or
other schedule involvement in [NST’s] award and administration of DoD’s DTR6 Contract

CBCA 449

9

. . . and, therefore, no need for IFF tracking, [he] did not assign it a GSA-type ‘34’ or ‘44’
DK code.” Id. ¶ 9. Mr. Templeman did not testify at the hearing.
A post-award meeting between NST and DoD took place on November 19, 2004.
Exhibit 20. Mr. Stec attended the meeting along with another NST employee,
Ms. Frances Jackson,8 who was the contract administrator. Transcript at 249-50.
Ms. Jackson would have had access to the DTR6 order, including the SF 1449, as evidenced
by her electronic mail message before the meeting. Exhibit 20; Transcript at 252-53. There
was no discussion of the SF 1449 and the reference to NST’s FSS contract number at the
meeting between NST and DoD. Transcript at 253-54. Ms. Jackson did not testify at the
hearing, and there is no affidavit or other evidence that would show her knowledge of the SF
1449.
During October of 2005, GSA contacted NST to arrange a “contractor assistant visit”
(CAV). Exhibit 3. The purpose of the CAV was to “ensure the company has an adequate
sales tracking system in place and that ‘government’ sales are properly reported, and the
correct Industrial Funding Fees (IFF) remitted.” Id. GSA’s review of NST’s DTR6 contract
was the result of an anonymous tip that NST had not been paying IFF. Exhibit 36, ¶ 3;
Transcript at 125. Mr. Stec testified that it was not until GSA conducted its review that he
became aware of the fact that the SF 1449 referenced NST’s FSS contract number.
Transcript at 206, 218.
In December of 2005, Ms. Lisa Maguire, a GSA contracting officer, contacted Ms.
Butler to determine whether the order for DTR6 travel services was an order under a GSA
schedule contract. Exhibit 4. Ms. Butler’s response was the following:
The DTS DTR6 requirements mirror those of the GSA contract,
with more definitive information provided as outline[d] in our
separate DTS Statement of Work and CLIN structure.
The existing DTR6 task order also reflects SATO’s schedule
number.
The RFQ requested that offerors provide firm fixed transaction
fee’s [sic]. The Government did not perform a realism analysis
prior to award to determine if a portion of the price included

8

Ms. Jackson used the nickname “Frank” in her electronic mail message.
Exhibit 20; Transcript at 250.

CBCA 449

10
a[n] IF[F]. It is the offeror’s responsibility to ensure that their
proposed price is appropriate.

Id. at 2.
Ms. Rebecca Koses, a contracting officer and division director for travel and
transportation services at GSA, prepared the schedule portion of the TSS solicitation, and she
subsequently determined that NST was responsible for paying IFF in that NST’s DTR6
contract was within the scope of its FSS contract. Transcript at 109-11, 113, 125-27. The
TSS schedule was “a broad omnibus contract vehicle for commercial services and the
schedule was meant to capture a variety of commercial services in the travel industry . . . .”
Id. at 115. NST’s FSS contract included travel agent services, SIN 599-2, and various
contract support services, SINs 599-99 and 599-1000. Exhibit 29; Transcript at 117-18.
According to Ms. Koses, CLINs 0001 through 0003, DTS, DTS “touched,” and
“traditional” travel agent services, were within the scope of NST’s FSS contract. Transcript
at 131-36. Ms. Koses testified that GSA had issued other orders to NST under its FSS
contract for travel services with other DoD agencies that involved providing services through
the use of DTS.9 Exhibits 61, 62; Transcript at 133. NST did not object to those other orders
that included DTS-related travel agent services. Transcript at 133-34. DTS is similar to eTS,
but DTS is for use by DoD agencies while eTS is for use by civilian agencies. Id. at 129-31.
In order to provide travel agent services using DST, NST would access DTS data through a
commercial global distribution system with which it had a contract. Id. at 154-55.
CLINs 0004 through 00012, which involved related travel services, were within the
scope of NST’s DTR6 contract. Transcript at 135-39. Of the remaining CLINs under NST’s
DTR6 contract, Ms. Koses conceded that only CLINs 0013-0014, GDS terminal and
software, were outside the scope of NST’s FSS contract. Id. at 139-40. Ms. Koses testified
that the RFQ would not have required a separate competition for CLINs 0013 and 0014
because their cost was less than the micro-purchase threshold of $3000. Exhibit 2 at 16-17;
Transcript at 139-41.
With regard to CLIN 0015, movement of human remains, Ms. Koses acknowledged
that such shipments are classified as freight, and the TSS schedule did not mention the
shipment of freight in conjunction with travel. Transcript at 141-42. Ms. Koses did point

9

Those orders included order number TSS 80629-3 with the Defense Contract
Management Agency and order number TSS 80936-1 with the Defense Contract Audit
Agency. Exhibits 61, 62.

CBCA 449

11

out that other GSA schedule contractors have provided for shipment of human remains as
part of their travel services contracts. Id. at 142-43. NST’s FSS contract only provided,
generally, for “miscellaneous arrangements,” which Ms. Koses considered sufficiently broad
to include such services. Id. at 145. NST had no unit price for CLIN 0015 in its DTR6
contract. Exhibit 2 at 17; Transcript at 149.
On January 9, 2006, representatives from DoD and GSA met to discuss the order for
DTR6 travel services with NST because it had been “flagged as a potential GSA Schedule
purchase and as such, subject to the performance required by the vendor’s TSS contract terms
and conditions.” Exhibit 40 at 1. According to the minutes of the meeting, DoD
representatives acknowledged that “there may have been enough ambiguity in the attending
documents . . . and that . . . if there was vendor confusion, it was not readily apparent at the
time of award.” Id. Additionally, “DoD expressed concern about the amount of monies that
may be due GSA as a result of the purchase being identified as a GSA Schedule should the
vendor submit a claim to DoD claiming it did not fully understand that the requirement was
a GSA schedule purchase.” Id. In response to DoD’s concern about potential liability for
the cost of NST’s payment of IFF, Ms. Koses advised that a GSA schedule contractor would
propose a price that already included IFF. Transcript at 159.
On March 21, 2006, GSA’s contracting officer issued a decision that demanded from
NST payment for IFF in the amount of $292,609.50 for transactions under its order with DoD
for DTR6 travel services. Exhibit 8. That amount represented IFF for 195,073 transactions
for travel service arrangements, which included DTS, DTS “touched,” and “traditional”
travel services, under SIN 599-2 at a rate of $1.50 for each transaction during the period from
November 29, 2004, to January 31, 2006. Id. NST timely appealed that decision to this
Board.
Discussion
NST argues that there was no meeting of the minds and mutual assent to DoD’s order
to provide DTR6 travel services under its FSS contract. Instead, NST contends that it
intended to enter into an open-market agreement to provide DTR6 travel services for DoD,
and NST was not obligated to pay IFF under such an agreement. Further, NST contends that
the RFQ contained work that was outside the scope of its FSS contract, and DoD was legally
precluded from awarding an order for DTR6 services under NST’s FSS contract. Finally,
NST contends that the contracting officer’s decision asserting GSA’s claim for IFF was made
without considering legal advice presented at a January 9, 2006, meeting between GSA and
DoD representatives.

CBCA 449

12

GSA contends that upon NST’s receipt of the SF 1449, which was an order for
services under its FSS contract, NST proceeded to perform travel services under the terms
of the order without objecting to its terms. NST, consequently, was obligated to pay IFF to
GSA. Additionally, the Government argues that any services under DTR6 that were outside
the scope of NST’s FSS contract were within the micro-purchase threshold, and DoD’s
award of a FSS contract was proper. GSA has the burden of proving its claim by a
preponderance of the evidence. See Xerox Corp. v. General Services Administration,
GSBCA 15190, 01-2 BCA ¶ 31,528, at 155,651.
The requirements for a binding contract with the Government, whether express or
implied-in-fact, are “mutual intent to contract including an offer, an acceptance, and
consideration.” Trauma Service Group v. United States, 104 F.3d 1321, 1325 (Fed. Cir.
1997). It is well recognized that the question of “whether a legally enforceable contract has
been formed by a meeting of the minds depends upon the totality of the factual
circumstances.” Texas Instruments Inc. v. United States, 922 F.2d 810, 815 (Fed. Cir. 1990).
In this case, DoD solicited and acquired DTR6 travel services under an RFQ. The FAR
defines offer and acceptance as they pertain to an RFQ as follows:
(a)
A quotation is not an offer and, consequently, cannot be
accepted by the Government to form a binding contract.
Therefore, issuance by the Government of an order in response
to a supplier’s quotation does not establish a contract. The order
is an offer by the Government to the supplier to buy certain
supplies or services upon specified terms and conditions. A
contract is established when the supplier accepts the offer.
(b)
When appropriate, the contracting officer may ask the
supplier to indicate acceptance of an order by notification to the
Government, preferably in writing, as defined at 2.101. In other
circumstances, the supplier may indicate acceptance by
furnishing the supplies or services ordered or by proceeding
with the work to the point where substantial performance has
occurred.
48 CFR 13.004 (2003) (FAR 13.004). A party that receives such an order and fails to
execute it, but instead, substantially performs that order from the Government, is deemed to
have accepted the terms of that order. See Syracuse International Technologies, ASBCA
55607, 08-1 BCA ¶ 33,742, at 167,043 (2007). The SF 18 that NST used to submit its quote
stated that it was not an offer. The SF 1449 that DoD sent to NST was the offer, and
acceptance of DoD’s offer could have been accomplished either by NST’s execution of the

CBCA 449

13

SF 1449 or by its substantial performance. In this case, NST did not execute the SF 1449,
but proceeded to perform the contract by providing DTR6 travel services and invoicing for
those services. NST’s performance of DTR6 travel services upon receipt of the SF 1449 was
an acceptance of an order to perform those services under its FSS contract number.
Although NST argues that neither Mr. Stec nor any other employee of NST recalled
receipt of the SF 1449, it is undisputed that the document was received by NST, and NST
cannot avoid its obligation under the terms of the SF1449 by asserting a lack of knowledge
of the terms of a document in its possession. A fundamental principle of contract law is the
following:
According to the objective theory of contract formation, what is
essential is not assent, but rather what the person to whom a
manifestation is made is justified as regarding as assent. Thus,
if an offeree, in ignorance of the terms of an offer, so acts or
expresses himself as to justify the offeror in inferring assent, and
this action or expression was of such a character that a
reasonable person in the position of the offeree should have
known it was calculated to lead the offeror to believe that his
offer had been accepted, a contract will be formed in spite of the
offeree’s ignorance of the terms of the offer.
1 Richard A. Lord, Williston on Contracts § 4:16 (4 th ed. 1990). It is well recognized “as the
Supreme Court has said long ago, ‘[i]t will not do for a man to enter into a contract and when
called upon to respond to its obligations, say that he did not read it when he signed it, or did
not know what it contained.’” Fiesta Leasing and Sales, Inc., ASBCA 29311, 86-3 BCA
¶ 19,045, at 96,188 (quoting Upton v. Tribilock, 91 U.S. 45, 50 (1875)). “Any other rule
would throw chaos into all contract arrangements because a party could avoid responsibility
thereunder at his convenience simply by saying that he had signed the contract without
reading it.” Schoeffel v. United States, 193 Ct. Cl. 923, 935 (1971).
Mr. Stec conceded during his testimony that the SF 1449 was in NST’s files.10
Although Mr. Stec asserted that he and other NST employees had no recollection of receipt
of the SF 1449, the record shows that NST had a procedure for the processing of such
documents, which presumably would have required review of a document such as the

10

Mr. Stec acknowledged at the hearing that his earlier declaration, Exhibit 24,
provided no details as to the receipt of the SF 1449. Transcript at 218-19.

CBCA 449

14

SF 1449. Mr. Templeman’s declaration stated that NST’s procedure was to assign the
appropriate DK code in the course of processing each order, but he stated, without further
explanation, that the order for DTR6 travel services was not processed as an order under
NST’s FSS contract. We conclude from Mr. Templeman’s declaration that the SF 1449 was
reviewed in the course of assigning the appropriate DK code. Any failure by NST’s
personnel to ascertain the contents of the SF 1449 cannot be attributed to anyone outside
NST.
Although Mr. Stec testified that other NST employees could have had occasion to see
the SF 1449, NST called Mr. Stec as its only witness to prove a lack of knowledge of receipt
of the SF 1449 by all of NST’s personnel. We find, however, that “[w]hen the persons
having the greatest familiarity with events are not called, but a litigant seeks to rely on
second-hand, hearsay evidence, a tribunal may draw an inference that the testimony of the
persons not called would not support a litigant’s position . . . .” TDC Management Corp.,
DOT BCA 1802, 91-2 BCA ¶ 23,815, at 119,259. Mr. Stec testified that Ms. Masaro and
Ms. Keating possibly had the opportunity to see the SF 1449. Additionally, Ms. Jackson
probably had access to the SF 1449 when she assumed responsibility for management of the
order. Apparently, Mr. Templeman also had that opportunity to see the SF 1449 since he was
responsible for assigning the DK code for the DTR6 order. Nothing in the record would
suggest that Mr. Stec was the only person available who could have testified as to the
circumstances surrounding receipt of the SF 1449. At most, Mr. Stec has only established
through his testimony his lack of personal knowledge about receipt of the SF 1449.
Regardless of whether the testimony of any other NST employees would have
corroborated Mr. Stec’s testimony, we find that NST received the SF 1449 in the normal
course of business. Consequently, NST’s officers and employees who were responsible for
the administration of the DTR6 travel services order had the opportunity to review the
SF 1449 and accept or reject it as an order for services under its FSS contract. NST cannot
use Mr. Stec’s asserted lack of recollection of the SF 1449 to avoid the fact that it obligated
itself to perform DTR6 travel services under its FSS contract.
NST argues that it believed that the RFQ allowed for submission of an open-market
proposal. Appellant’s Brief at 20. A contractor cannot use his proposal to alter the terms of
a contract that he failed to read. See Marine Design Technologies, Inc., ASBCA 39391,
94-1 BCA ¶ 26,355, at 131,094 (1993) (appellant believed that it had entered into a
requirements contract, but failed to read the contract before executing it to determine that it
was an indefinite quantity contract). Moreover, when “a detailed contract is executed by the
parties, it will be presumed to represent their complete undertakings and is conclusive and
in derogation of any prior understandings . . . .” Schoeffel, 193 Ct. Cl. at 934. NST has only
established that “the mistake sought to be avoided is unilateral and could have been detected

CBCA 449

15

by the simple, prudent act of reading the contract.” Id. at 935. DoD intended to issue an
order under a GSA schedule contract, and its offer, the SF 1449, reflected that intent. While
NST may have intended to enter into an open-market contract, that belief, which could have
been corrected by reading the SF 1449, does not alter the terms of the SF 1449.
Having found that NST entered into a contract to provide DTR6 services under its
FSS contract, our inquiry turns to whether NST is responsible for paying IFF under the terms
of its FSS contract. The agency comments that accompanied the publication of GSAR
552.238-74 stated that GSA would “consider the totality of the circumstances in determining
if a sale is subject to the IFF.” 68 Fed. Reg. 41,286 (July 11, 2003).11 We find no
circumstances to excuse NST from payment of IFF. NST’s asserted but mistaken belief that
its DTR6 order with DoD contained different terms is not such a circumstance. For purposes
of meeting its burden of proof, it is only necessary for GSA to establish that: (1) GSA
awarded to NST an FSS contract that required NST to pay IFF; (2) DoD issued to NST an
order to provide DTR6 travel services under NST’s FSS contract; (3) NST accepted that
order and provided such services to DoD that were transactions requiring the payment of IFF;
and (4) NST has failed to remit to GSA those IFF payments. GSA has met its burden of
proof.
The only work under the order for DTR6 travel services for which GSA seeks IFF are
DTS, DTS “touched,” and “traditional” travel agent services, which are under CLINs 0001,
0002, and 0003 for the base period and the corresponding CLINs for the option periods.
NST contends that DTS transactions were outside the scope of its FSS contract since its
contract provided only for eTS as a web-base system. The Board finds that DTS transactions
were within the scope of NST’s contract in that eTS is a web-based system for civilian
agencies and nothing in NST’s FSS contract precludes use of a web-based system for DoD
personnel. The solicitation for NST’s FSS contract provided, generally, that orders could be
placed by executive agencies, which would have included DoD.12 Moreover, NST accepted
at least two other orders from DoD agencies that included the use of DTS. NST is
responsible for paying IFF at the rate set forth under SIN-2 of its FSS contract, $1.50 per
transaction, for those transactions under DTR6 that include DTS, DTS “touched,” and
“traditional” travel services.

11

A June 26, 2003, letter from Ms. Patricia M. Mead, an assistant commissioner
at GSA, to the Coalition for Government Procurement, similarly stated that determining
whether a purchase was under a schedule and subject to collection of IFF payments requires
looking “at the totality of the circumstances.” Exhibit 50.
12

5 U.S.C. § 101 (2000).

CBCA 449

16

NST also contends that DoD was legally precluded from awarding the order for DTR6
services because its unit prices for CLINs 0013 and 0014, GDS terminal and software,
exceeded the micro-purchase threshold of $3000, and a separate competition for such work
would have been required. Appellant’s Brief at 29 (citing ATA Defense Industries, Inc. v.
United States, 38 Fed. Cl. 489 (1997); SMS Systems Maintenance Services, Inc., B-284550.2,
2000 CPD ¶ 127 (Aug. 4, 2000)). This Board does not have jurisdiction over protests and,
consequently, lacks authority to review procurement decisions. Innovative (PBX) Telephone
Services, Inc. v. Department of Veterans Affairs, CBCA 12, et al., 07-2 BCA ¶ 33,685, at
166,765. NST fails to explain what remedy this Board can provide in that this appeal is not
a protest and DoD is not a party before this Board. Regardless of NST’s assertions of any
legal defects in DoD’s ordering of DTR6 travel services, this Board has no authority to
disturb the rights and obligations of NST and DoD under the terms of that order.13
Finally, NST argues that the March 21, 2006, decision of the contracting officer, Ms.
Susan Lum, did not consider the concerns expressed by a DoD attorney in a memorandum
of a January 9, 2006, meeting between GSA and DoD representatives. NST contends that
the memorandum mentioned comments by a DoD attorney about possible ambiguities in the
RFQ. NST contends Ms. Lum, however, did not see that memorandum, and she wrote her
decision unaware of those concerns. We find no merit in NST’s assertion that Ms. Lum’s
decision lacked her personal and independent judgment. Such a finding requires a showing
that the “purported decision is imposed by higher authority or . . . the contracting officer
completely abandon[ed] his [or her] decisional responsibility to another.” Air-O-Plastik
Corp., GSBCA 4802, et al., 81-2 BCA ¶ 15,338, at 75,963-64. Although Ms. Lum may not
have seen that memorandum, which NST deems to be critical, that fact does not justify a
finding that she did not consider all relevant matters in this appeal. It is well settled that
determining whether a contract is ambiguous begins with the plain language of the contract.
See Gardiner, Kamya & Associates, P.C. v. Jackson, 467 F.3d 1348, 1353 (Fed. Cir. 2006).
The DoD attorney’s concern contained in the memorandum has been noted by this Board, but
we do not find this case to be one of ambiguity, but rather, a failure by appellant to properly
determine the contents of the SF 1449.

13

GSA contends that even if CLINs 0013, 0014, and 0015 (a no-cost item) were
outside the scope of NST’s FSS contract, the micro-purchase threshold was not exceeded.
Government’s Reply Brief at 3. We do not find it necessary to determine whether or not
those CLINs exceeded the micro-purchase threshold since we do not have jurisdiction over
protests, and we have no authority to grant relief.

CBCA 449

17
Decision

The appeal is DENIED AS TO ENTITLEMENT. The presiding judge will schedule
further proceedings with regard to quantum.

______________________
H. CHUCK KULLBERG
Board Judge

We concur:

_______________________
ANTHONY S. BORWICK
Board Judge

_______________________
CATHERINE B. HYATT
Board Judge

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Acbca%3A1822cf2459f034bf. Public record. Not legal advice.