THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE

THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE

ORDER AND IS BEING RELEASED TO THE PUBLIC

IN ITS ENTIRETY ON MARCH 23, 2020

DENIED: March 9, 2020

CBCA 5863

FUTURE FOREST, LLC,

Appellant,

v.

DEPARTMENT OF AGRICULTURE,

Respondent.

Alan I. Saltman, Jacob W. Scott, and Alexander Gorelik of Smith, Currie & Hancock

LLP, Washington, DC, counsel for Appellant.

Lori Polin Jones, Office of the General Counsel, Department of Agriculture,

Washington, DC; and Andrew Moore, Office of the General Counsel, Department of

Agriculture, Albuquerque, NM, counsel for Respondent.

Before Board Judges VERGILIO, SHERIDAN, and ZISCHKAU.

SHERIDAN, Board Judge.

The White Mountain Stewardship contract (WMSC) was an indefinite

delivery/indefinite quantity (ID/IQ) contract under which respondent, United States

Department of Agriculture, Forest Service (Forest Service), agreed to pay appellant, Future

Forest, LLC (Future Forest), to treat and remove small diameter trees and biomass in the

Apache-Sitgreaves National Forest in Arizona. Previously, the Board ruled that the contract

minimum was 5000 acres per year for a total of 50,000 acres over the ten-year term of the

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contract. Future Forest, LLC v. Department of Agriculture, CBCA 5764, 19-1 BCA ¶ 37,238

(2019).1

In this appeal, Future Forest posits that the comments of the Forest Service employees

created a “reasonable expectation” that the agency would provide Future Forest with 150,000

acres, and that the Forest Service violated the implied duty of good faith and fair dealing

when it failed to fulfill Future Forest’s “reasonable expectation.” Future Forest further

alleges that actions of the Forest Service interfered with that duty when 150,000 acres were

not released.

The Forest Service moved for summary judgment and the Board ordered Future Forest

to address only the threshold legal issue presented by the motion—whether the duty of good

faith and fair dealing can be the basis for this claim for acreage amounts beyond the contract

minimum in an ID/IQ contract.

Future Forest does not survive summary judgment because the premise underlying its

theory of relief is unsustainable. There could be no legal “reasonable expectation” to receive

150,000 acres under this ID/IQ contract, as this ID/IQ contract did not create such an

expectation. What Future Forest and certain agency personnel may have anticipated or hoped

for at the time of contract signing or during post-award discussions represents inadmissible

parole evidence. The written language of the contract with the guaranteed minimum dictates

the parameters of reasonable expectations. Future Forest attempts to transform the ID/IQ

contract into something it is not, such as a definite quantity or requirements contract.

Legally, the theory as presented fails such that summary judgment is appropriate and the

appeal is denied.

Background

I.

Contract Terms and Performance

The Forest Service awarded the WMSC to Future Forest in August 2004. Despite the

original pre-award project, in which the Forest Service anticipated releasing approximately

150,000 acres over the ten year contract, at regular intervals of 15,000 acres a year, the

1

By modification 1, the parties authorized the Forest Service to offer task orders

that met the minimum guarantee, either in acres or green tons, whichever was reached first.

A conversion factor was included in modification 1 to derive the equivalency, and the parties

agreed that 53,550 green-tons of material was the equivalent of the 5000 acre minimum

guaranteed in the original contract.

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competed and awarded contract expressly guaranteed a minimum of 5000 acres per year for

a total of 50,000 acres over the ten-year term of the contract. Future Forest, 19-1 BCA at

181,270. The contract described the contract as an ID/IQ contract and stated the guaranteed

amounts:

B.1.0. This schedule describes the type(s) of work the

Contractor may anticipate under the White Mountain

Stewardship Project (WMSP), Indefinite Delivery/Indefinite

Quantity (ID/IQ) contract.

....

Minimum Guarantee: The Government will guarantee a

minimum, for each program year of work, of 5,000 (five

thousand) acres for a total of 50,000 acres over the 10 year

term of the contract of forest land that is in need of landscape

biomass management with approved environmental analysis.

The contract included the clause found at Federal Acquisition Regulation (FAR)

52.216-22, Indefinite Quantity (OCT 1995), which provides:

(a) This is an indefinite-quantity contract for the supplies or

services specified, and effective for the period stated, in the

Schedule. The quantities of supplies and services specified in

the Schedule are estimates only and are not purchased by this

contract.

(b) Delivery or performance shall be made only as authorized

by orders issued in accordance with the Ordering clause. The

Contractor shall furnish to the Government, when and if

ordered, the supplies or services specified in the Schedule up to

and including the quantity designated in the Schedule as the

maximum. The Government shall order at least the quantity of

supplies or services designated in the Schedule as the minimum.

48 CFR 52.216-22 (2019) (FAR 53.216-22).

Approximately one month into the contract, the parties entered into modification 1,

that authorized the Forest Service to offer task orders that met the minimum guarantee, either

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in acres or green tons, whichever was reached first. A conversion factor was included in

modification 1 to derive the equivalency, and the parties agreed that 53,550 green-tons of

material was the equivalent of the 5000 acre minimum guaranteed in the original contract.

2

Between September 2004 and May 2014, the Forest Service issued task orders

releasing 71,737.90 acres, from which Future Forest treated 2,601,846.15 green tons of

material. Future Forest operated the WMSC until the contract expired in August 2014.

II.

Future Forest’s Claims

In September 2015, Future Forest submitted a certified claim to the contracting officer

alleging that in program years eight and ten the Forest Service failed to release the amounts

of acreage required by the WMSC. Future Forest also claimed that it was entitled to

$14,743,430.72 in “lost gross profits” based on the Forest Service’s alleged failure to provide

a total of at least 150,000 acres over the ten-year period of contract performance. Future

Forest appealed the deemed denial of its claim to the Board, where it was docketed as CBCA

5764.

In June 2017, Future Forest submitted its second claim, the one that underlies this

appeal. In this second claim, Future Forest sought $14,743,430.72 in “lost gross profits”

based on the Forest Service’s alleged breach of the duty of good faith and fair dealing in not

releasing 150,000 acres during the ten years of contract performance. After the Forest

Service denied the claim, Future Forest timely filed this appeal.

In its complaint, Future Forest alleges that:

[T]he Contracting Officer, the Forest Supervisor and her contracting staff

made statements at meetings with all [the] offerors and elsewhere that,

notwithstanding the Amendments [setting forth the guaranteed minimum of

5000 acres for a total of 50,000 acres over the term of the contract], the Forest

Service would, nevertheless, still treat 150,000 acres over the term of the

contract.

As a result of these representations, Future Forest states that the Forest Service created a

“reasonable expectation” that it would release 150,000 acres. Future Forest further alleges

that the Forest Service failed to fulfill this reasonable expectation as the result of animus of

2

In referring to 5000 acres, we note that the Forest Service could also release

an equivalent amount in green tons.

CBCA 5863

5

a Forest Service official toward Future Forest and the decision to direct funding to another

Forest Service contract instead of the WMSC. The failure of the Forest Service to fulfill

these reasonable expectations, Future Forest asserts, constitutes a breach of the duty of good

faith and fair dealing. Finally, Future Forest describes the damages it seeks in this appeal

as an alternative, not in addition to, the damages it seeks in CBCA 5764.3

Discussion

I.

The Parameters of the Duty of Good Faith and Fair Dealing

Implied in every contract is a duty of good faith and fair dealing in its performance

and enforcement. Lakeshore Engineering Services, Inc. v. United States, 748 F.3d 1341,

1349 (Fed. Cir. 2014); Metcalf Construction Co. v. United States, 742 F.3d 984, 990 (Fed.

Cir. 2014). It is well settled that the covenant of good faith and fair dealing “imposes

obligations on both contracting parties that include the duty not to interfere with the other

party’s performance and not to act so as to destroy the reasonable expectations of the other

party regarding the fruits of the contract.” Centex Corp. v. United States, 395 F.3d 1283,

1304 (Fed. Cir. 2005). “What is promised or disclaimed in a contract helps define what

constitutes ‘lack of diligence and interference with or failure to cooperate in the other party’s

performance.’” Metcalf, 742 F.3d at 991 (quoting Malone v. United States, 849 F.2d 1441,

1445 (Fed. Cir. 1988)). “[T]he nature of that bargain is central to keeping the duty focused

on ‘honoring the reasonable expectations created by the autonomous expressions of the

contracting parties.’” Id. (quoting Tymshare, Inc. v. Covell, 727 F.2d 1145, 1152 (D.C. Cir.

1984)). “The implied covenant of good faith and fair dealing is limited by the original

bargain: it prevents a party’s acts or omissions that, though not proscribed by the contract

expressly, are inconsistent with the contract’s purpose and deprive the other party of the

contemplated value.” Metcalf, 742 F.3d at 991. However, the implied duty “cannot expand

a party’s contractual duties beyond those in the express contract or create duties inconsistent

with the contract’s provisions.” Precision Pine & Timber, Inc. v. United States, 596 F.3d

817, 831 (Fed. Cir. 2010); see also Bell/Heery v. United States, 739 F.3d 1324, 1335 (Fed.

Cir. 2014).

II.

Ordering Obligations in ID/IQ Contracts

ID/IQ contracts provide that over the stated period of time the Government will order

an amount of goods or services within the minimum and maximum order amount stipulated

3

Future Forest makes clear that it does not base its claim on allegations of bad

faith on actions of Forest Service officials.

CBCA 5863

6

in the contract. FAR 16.504. This allows the Government considerable flexibility in meeting

its needs, without some of the obligations of a requirements contract and can provide more

latitude than a definite quantities contract. Travel Centre v. Barram, 236 F.3d 1316, 1318

(Fed. Cir. 2001) (citing Stratos Mobile Networks U.S.A. v. United States, 213 F.3d 1375,

1380 (Fed. Cir. 2000)); FAR 16.501-2. However, unlike a requirements contract where the

contractor is entitled to an exclusive relationship to provide the Government with particular

goods/services, the contractor in an ID/IQ contract is only guaranteed to receive the

minimum quantity set forth in the contract. Travel Centre, 236 F.3d at 1319; FAR 16.503.504. This minimum order quantity is the principal consideration provided by the

Government in an ID/IQ contract. TranBen, Ltd. v. Department of Transportation, CBCA

5448, 17-1 BCA ¶ 36,635, at 178,430 (citing Maxima Corp. v. United States, 847 F.2d 1549,

1557 (Fed. Cir. 1988)).

The importance of the minimum guarantee terminology in this and other ID/IQ

contracts is an essential element of the contract. Under the clear terms of the WMSC, the

Forest Service was required to release 5000 acres each year. Future Forest, LLC, 19-1 BCA

at 181,269. We do not look to extrinsic evidence, such as particular individuals’

expectations, to interpret the WMSC provisions because they are clear on their face. Id.

(citing McAbee Construction, Inc. v. United States, 97 F.3d 1431, 1435 (Fed. Cir. 1996).

Simply put, intentions, plans, or anticipations on the part of agency officials, even a

contracting officer, to order more than the stated minimums set forth in an ID/IQ contract do

not equate to contractual commitments. See Travel Centre, 236 F.3d at 1319.

Despite these well-settled principles, Future Forest asserts that there were two

“phases” in this contract, a “minimum guarantee ordering phase” in which the Forest Service

was required to order at least the minimum set forth in the WMSC, and a “discretionary

ordering phase” in which the Forest Service was required to place discretionary orders based

on purported expectations. We find no support for the idea of a discretionary ordering phase

in ID/IQ contracts, the WMSC, regulations, or case law, other than to note that an agency

could, but was not required to, place orders after the minimum had been reached.

The Government’s obligation under the WMSC was to release a minimum of 5000

acres a year. Future Forest’s arguments improperly rely on parole evidence. Expressed or

unexpressed expectations of contractor or agency officials regarding the ultimate volume to

be purchased do not alter the written minimum guarantees. Future Forest or agency officials

could have anticipated releasing a greater volume of work, but legally there can be no

“reasonable expectation” that such hopes will be satisfied.

CBCA 5863

III.

7

Interplay Between Contract Minimums and Duty of Good Faith and Fair Dealing

The Federal Circuit addressed the duty of good faith and fair dealing in Travel Centre,

which involved an ID/IQ contract to purchase travel management services for federal

agencies.4 Specifically discussing the ordering obligations in ID/IQ contracts, the Federal

Circuit noted:

[W]hile an IDIQ contract provides that the government will

purchase an indefinite quantity of supplies or services from a

contractor during a fixed period of time, it requires the

government to order only a stated minimum quantity of supplies

or services. That is, under an IDIQ contract, the government is

required to purchase the minimum quantity stated in the

contract, but when the government makes that purchase its legal

obligation under the contract is satisfied. Moreover, once the

government has purchased the minimum quantity stated in an

IDIQ contract from the contractor, it is free to purchase

additional supplies or services from any other source it chooses.

An IDIQ contract does not provide any exclusivity to the

contractor. The government may, at its discretion and for its

benefit, make its purchases for similar supplies and/or services

from other sources.

Travel Centre, 236 F.3d at 1319 (citations omitted) (emphasis added). Regarding Travel

Centre’s “reasonable expectations,” the Federal Circuit concluded:

Regardless of the accuracy of the estimates delineated in the

solicitation, based on the language of the solicitation for the

IDIQ contract, Travel Centre could not have had a reasonable

expectation that any of the government’s needs beyond the

4

The General Services Administration (GSA) estimated that the contract was

worth approximately $2,500,000 per year, but the contract minimum guaranteed no more

than $100 of revenue. Prior to the start of the contract, GSA received notice that certain

government agencies, comprising half of the expected revenue, would not be using the

contract, but failed to pass that information on to prospective bidders. Although it received

more than $500,000 in gross sales, Travel Centre submitted a breach of contract claim to

GSA alleging a breach of the duty of good faith and fair dealing.

CBCA 5863

8

minimum contract price would necessarily be satisfied under

this contract.

....

In sum, when an IDIQ contract between a contracting party and

the government clearly indicates that the contracting party is

guaranteed no more than a non-nominal minimum amount of

sales, purchases exceeding that minimum amount satisfy the

government’s legal obligation under the contract.

Id. (citations omitted) (emphasis added). Neither faulty estimates nor “less than ideal

contracting tactics” are sufficient to overcome the Government’s obligation to order only the

minimum guaranteed in an ID/IQ contract. Id.

The gravamen of Future Forest’s claim is that the duty of good faith and fair dealing

required the Forest Service to order 150,000 acres to fulfill Future Forest’s reasonable

expectations regarding the quantities under the contract:

The Government is bound by its duty of good faith and fair

dealing with respect to placing additional orders and cannot

avoid violating that duty simply because it has fulfilled its

minimum ordering obligation under the contract. Meeting the

contract’s minimum ordering requirement simply does not

ensure that the Government will meet all the implied duties that

continue to apply to placing orders during the subsequent

discretionary ordering portion of the contract – a period that

could well last for many years after the minimum has been

ordered.

Future Forest acknowledges that “[a]n implied duty cannot expand any express

contract duty, including the Government’s express obligation under an ID/IQ contract to

order the minimum amount specified,” but then asserts that “[b]ecause of the creation of a

reasonable expectation with regard to the discretionary ordering portion of the contract, the

Government had an implied duty not to take any action to prevent the ordering of an

additional 100,000 acres in excess of the contract minimum.”

The duty of good faith and fair dealing applies while any contract is being performed,

even after the minimum has been ordered. See TranBen, 17-1 BCA at 178,430. Implied

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9

duties, such as a duty not to evade the spirit of the bargain and a duty not to hinder

performance, continue during contract performance. Here, however, the bargain was that the

Forest Service would order treatment of no less than 5000 acres a year. To find, based upon

the representations and actions of Forest Service personnel, that the implied duty required

the release of a greater number of acres would violate the contract’s express terms and create

obligations that are “inconsistent with the contract’s purpose.” Metcalf, 742 F.3d at 991.

Future Forest cannot have had “reasonable expectations” rooted in the duty of good

faith and fair dealing that the Forest Service would have ordered more than the contract

minimum because, in this ID/IQ contract, the Government’s obligations regarding quantity

were defined by the contract minimum. “The implied duty of good faith and fair dealing

cannot expand a party’s contractual duties beyond those in the express contract or create

duties inconsistent with the contract’s provisions.” Metcalf, 742 F.3d at 991 (citing Precision

Pine & Timber, Inc., 596 F.3d at 831). Contractors with the government “cannot rely on the

implied covenant of good faith and fair dealing to change the text of their contractual

obligations.” Century Exploration New Orleans, LLC v. United States, 745 F.3d 1168, 1179

(Fed. Cir. 2014). To find otherwise would negate the parts of the contract addressing the

minimum guarantee and the long-standing tenets associated with minimum guarantees in

ID/IQ contracts. Future Forest’s claim for damages based upon the implied duty of good

faith and fair dealing fails because Future Forest could not have reasonable expectations that

reformed the contract into something other than an ID/IQ contract with a minimum guarantee

of 5000 acres a year.

Future Forest posits that the pending motion for summary judgment should be treated

as a motion for failure to state a claim and, therefore, the Board must accept all of Future

Forest’s allegations as true. Future Forest also asserts that “[t]he implied duty also precluded

the Government from not ordering those 100,000 acres for nefarious reasons.” Accepting

these statements as true, we still cannot allow the duty of good faith and fair dealing to

expand the contract minimum on an ID/IQ contract because it would substitute an

aspirational amount for the contract minimum. This Board is mindful that “[t]he implied

duty of good faith and fair dealing does not entitle a contractor to damages for every dubious

action by the contracting agency that impairs the value of the contract.” TranBen, 17-1 BCA

at 178,431. Here the Board need not explore any purported dubious actions, because Future

Forest seeks to impose on the Government extra-contractual obligations.

Future Forest relies upon Burke Court Reporting Co., DOT BCA 3058, 97-2

BCA ¶ 29,323. In Burke, the contractor alleged a violation of the duty of good faith and fair

dealing in the placing of orders for work over the contract minimum. The Board denied the

Government’s motion for summary judgment because the contractor had “a right to rely on

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other contract provisions implying that it will be fairly considered for additional work, if

required by the government.” Burke Court Reporting, 97-2 BCA at 145,801. Future Forest

does not allege a violation of other provisions of the WMSC. Its allegations are rooted in the

quantity to be ordered under the contract. The applicable provision on that point is the

contract minimum; any statements made by agency officials as to ordering expectations were

not contractual guarantees.5

Future Forest also relies on ALK Services, Inc. v. Department of Veterans Affairs,

CBCA 1789, 10-2 BCA ¶ 34,518, in which the Board denied a motion for summary relief in

favor of further discovery. Following fuller development of the record, the Board

determined that ALK involved a requirements contract and involved allegations of bad faith.

See ALK Services, Inc. v. Department of Veterans Affairs, CBCA 1789, et al., 13 BCA

¶ 35,260. That scenario is not applicable to this ID/IQ contract, and the assertion by Future

Forest that the agency’s failure to order anticipated volumes constitute instances of lack of

good faith that are compensable.6

Contrary to presumptions of Future Forest, expectations do not change the express

nature of the minimum guarantee. TranBen, 17-1 BCA at 178,430 (“We know of no decision

finding a breach of the duty where the Government satisfied its minimum ordering obligation

under an ID/IQ contract.”); Dot Systems, Inc. v. United States, 231 Ct. Cl. 765, 769-70

(1982) (finding that it was not reasonable for the contractor to believe that it was entitled to

an estimation rather than the stated minimum). In fact, the opposite conclusion has been

reached consistently by courts and boards, which reveals the importance of the written

agreement. Travel Centre, 236 F.3d at 1319; Abatement Contracting Corp. v. United States,

58 Fed. Cl. 594, 613 (2003); VSE Corp. v. Department of Justice, CBCA 5116, 18-1 BCA

¶ 36,928, at 179,92-13; Electronic Data Systems, LLC v. General Services Administration,

CBCA 1552, 10-1 BCA ¶ 34,316 at 169,507; Crown Laundry & Dry Cleaners, Inc., ASBCA

39,982, 90-3 BCA ¶ 22,993, at 115,481. Expectations do not increase purchasing obligations

or alter the nature of a contract.

5

The decision in Burke was issued several years before the Federal Circuit’s

clarifications in Travel Centre and Metcalfe.

6

The decision on summary relief was issued before the Federal Circuit’s

decision in Metcalf.

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Decision

For the foregoing reasons, respondent’s motion for summary judgment is granted.

The appeal is DENIED.

Patricia J. Sheridan

PATRICIA J. SHERIDAN

Board Judge

We concur:

Joseph A. Vergilio

JOSEPH A. VERGILIO

Board Judge

Jonathan D. Zischkau

JONATHAN D. ZISCHKAU

Board Judge