Government Services Corp. v. United States

In the United States Court of Federal Claims
No. 15-666 C
Filed: March 30, 2017

****************************************
* Breach Of Contract;
* Breach Of Covenant Of Good Faith And
* Fair Dealing;
* Breach of Implied Contract;
* Contract Disputes Act (41 U.S.C. § 7104);
GOVERNMENT SERVICES CORP., * Counterclaims (28 U.S.C. § 2508);
* False Claims Act (31 U.S.C. § 3729);
Plaintiff, * Federal Acquisition Regulation (“FAR”)
* 48 C.F.R §§ 1.104, 2.101,
v. * 12.604(c), 14.208(a), 14.301,
* 33.211, 52.212;
THE UNITED STATES, * Rules of The United States Court Of
* Federal Claims (“RCFC”)
Defendant. * 6(b)(1) (Extending Time),
* 8 (General Rules Of Pleading),
* 12 (Defenses And Objections),
* 15(a)(2),(3) (Amended Pleadings),
* 56(a) (Summary Judgment);
* Special Plea In Fraud (28 U.S.C. § 2514);
* Uniform Electronic Transaction Act
* (“UETA”), Idaho Code Ann. § 28-
**************************************** 50-115.

Jefferson Ragnar Griffeath, Bamcis Legal PLLC, Moscow, Idaho, Counsel for Plaintiff.

Mark Edward Porada, United States Department of Justice, Civil Division, Washington, D.C.,
Counsel for the Government.

MEMORANDUM OPINION AND ORDER GRANTING-IN-PART AND DENYING-IN-
PART THE GOVERNMENT’S CROSS-MOTION FOR SUMMARY JUDGMENT

This Memorandum Opinion And Order adjudicates Cross-Motions For Summary
Judgment filed in a breach of contract case initiated by Government Services Corporation, a
corporation with its principal office and place of business in Moscow, Idaho.

To facilitate review of this Memorandum Opinion And Order, the court has provided the
following outline:
I. RELEVANT FACTUAL BACKGROUND.
II. PROCEDURAL HISTORY.
III. DISCUSSION.
A. Jurisdiction.
1. Counts Alleged By Plaintiff’s October 7, 2015 Amended Complaint.
2. Counterclaims Alleged By The Government’s December 10, 2015 Answer.
B. Standing.
C. Standard Of Review For A Motion For Summary Judgment, Pursuant To
RCFC 56.
D. The Parties’ Cross-Motions For Summary Judgment.
1. Plaintiff’s September 15, 2016 Motion For Summary Judgment.
2. The Government’s September 15, 2016 Cross-Motion For Summary Judgment
And Counterclaims.
3. Plaintiff’s October 17, 2016 Response.
4. The Government’s October 17, 2016 Response.
5. The Government’s November 3, 2016 Reply.
6. The Government’s March 20, 2017 Supplemental Brief.
E. The Court’s Resolution.
1. Claims Alleged By Plaintiff’s October 7, 2015 Amended Complaint.
Counts One And Two: Cardinal And Constructive Change.
Count Three: Implied-In-Fact Contract.
Count Four: Breach Of Duty Of Good Faith And Fair Dealing.
2. Counterclaims Alleged by The Government’s December 10, 2015 Answer.
IV. CONCLUSION.

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I. RELEVANT FACTUAL BACKGROUND.1

On Monday, November 5, 2012, at 1:34 PM Eastern Standard Time (“EST”),2 in response
to a declared State of Emergency after Super Storm Sandy, the United States Department of
Homeland Security (“DHS”), acting through United States Customs and Border Protection
(“CBP”), issued Solicitation Number 20074623 (“the Solicitation”), for an estimated 40,000
gallons of fuel to be delivered to John F. Kennedy International Airport (“JFK Airport”). Am.
Compl. Att. 1 at 1; Gov’t App’x at A8–A9. The Solicitation was posted on www.Fedbid.com, the
Internet-based reverse auction marketplace. Am. Compl. Att. 1 at 1; Gov’t App’x at A8. On that
same day, at 2:52 PM, the Solicitation was amended to state that CBP needed “a vendor to provide
a gasoline tanker at JFK [I]nternational Airport. The estimated amount of regular unleaded
gasoline required is 40,000 gallons[.] Also, this will be dispensed from the truck to the tank.
Vendors should include all taxes in the price of fuel.” Am. Compl. Att. 2 at 2; Gov’t App’x at
A17. The Solicitation, as amended, stated that the auction period would end at 4:30 PM that same
day. Am. Compl. Att. 2 at 1; Gov’t App’x at A17.

At the close of the auction period, Government Services Corporation (“GSC”) was listed
as the “lead” contractor, because it offered the lowest bid price. Gov’t App’x at A14. On that
same day, at 5:27 PM, Mr. Matt Ruck, GSC’s President, sent an e-mail to Mr. Ebrima Conteh, the
CBP Contracting Officer (“CO”) and Contracting Specialist (“CS”), identified in the Solicitation,
stating that: “I am trying to schedule the loads. Can you confirm a contract award yet. I don’t need
the paperwork yet but I do need [i]n writing from you [to] go ahead.” Gov’t App’x at A27. The
CO responded a minute later that he was attempting to “coordinate with Avis Car rental.” Gov’t
App’x at A27; 9/9/16 Conteh Decl. ¶ 9 (explaining that CPB intended to make use of Avis Rent-
a-Car’s underground storage tank).

On that same day, at 6:02 PM, the CO sent an e-mail to Mr. Ruck, stating:

What CBP needs currently is a Fuel tank with capabilities to dispense fuel into our
employee’s personal own vehicles. Also, we will require you to accept personal
credit cards from CBP employees. Although I cannot guarantee that you will sell

1
The facts discussed herein are derived from: the October 7, 2015 Amended Complaint
(“Am. Compl.”) and attachments thereto (“Am. Compl. Atts. 1–7”); the September 30, 2015
Affidavit of Matt Ruck (“9/30/15 Ruck Affidavit”); the Government’s December 10, 2015 Answer
To Amended Complaint (“Gov’t Answer”) and Exhibits (“Gov’t Answer Exs. 1–8”); the
attachments to Government Services Corporation’s September 15, 2016 Motion For Summary
Judgment (“Pl. Mot. Atts. 1–5”); the September 14, 2016 Affidavit of Mr. Ruck (“9/14/16 Ruck
Affidavit”); and an Appendix attached to the Government’s September 15, 2016 Motion For
Summary Judgment (“Gov’t App’x at A1–A127”), including the September 9, 2016 Declaration
of Ebrima Conteh (“9/9/16 Conteh Decl.”); and the February 16, 2016 Deposition of Matt Ruck
(“2/16/16 Ruck Dep.”).
2
All timestamps in this Memorandum Opinion And Order are EST, unless otherwise noted.

3
 all the fuel; I estimated that the current need for fuel is approximately 80,000
gallons. 40,000 gallons for JFK [A]irport and 40,000 for Newark [L]iberty Airport.

Gov’t App’x at A30.3

At 7:50 PM, Mr. Ruck replied to the CO: “I have required arrangements in place and am
dispatching trucks. If you want to send the orders we will be ready.” Gov’t App’x at A27.

At 8:19 PM,4 the CO sent an e-mail to Mr. Ruck “to inform you of the selection of your
company to bring fuel trucks to John F. Kennedy International Airport and Newark Liberty
[I]nternational Airport and sell fuel directly to US Customs Employees.” Am. Compl. Att. 3;
Gov’t App’x at A35.

At 10:04 PM, Mr. Ruck replied by an e-mail to the CO: “I need exact location and on site
contact information for these two locations.” Gov’t App’x at A124. After dispatching multiple
fuel trucks to both JFK Airport and to Newark Liberty International Airport (“Newark Airport”),
GSC allegedly learned for the first time that this was not a bulk delivery to underground storage
tanks, but required gas-station style services to CBP employees and acceptance of payments, via
debit cards and credit cards, from the individuals purchasing gasoline. Am. Compl. ¶¶ 11–13.

In response and to comply with CBP’s requirements, GSC sent four senior supervisory
employees to New York and New Jersey to set up impromptu “gas stations.” Am. Compl. ¶¶ 14–
16. GSC, however, dispensed only a fraction of the fuel ordered and had to sell the rest at a
discount to mitigate potential damages. Am. Compl. ¶ 17. On February 15, 2013, CBP cancelled
the Solicitation on www.Fedbid.com. Am. Compl. Att. 5.

On April 17, 2014, GSC submitted a certified claim to CBP, seeking $176,193.60 for costs
incurred to comply with changes to the Solicitation. Am. Compl. Att. 6, at 1. On July 17, 2014,
Denise Williams, a CBP CO, issued a final decision denying GSC’s claim. Am. Compl. Att. 7.

II. PROCEDURAL HISTORY.

On June 26, 2015, GSC (“Plaintiff”) filed a Complaint (“Compl.”) in the United States
Court of Federal Claims, requesting $183,788.86 in damages. ECF No. 1. Count One alleged a
breach of contract by cardinal change; Count Two alleged a constructive change to the contract;
Count Three alleged an implied-in-fact contract requiring compensation under principles of
quantum meruit; and Count Four alleged a violation of the duty of good faith and fair dealing.

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But, Mr. Ruck advised the court that he was not aware of the additional requirements
listed in the November 5, 2012 6:02 PM e-mail, until after GSC began providing gasoline to CBP.
9/14/16 Ruck Affidavit ¶¶ 2–5.
4
Because GSC is located in Idaho, it operates under Pacific Standard Time (“PST”).
Therefore, Mr. Ruck received the CO’s November 5, 2012 8:19 PM EST e-mail at 5:19 PM PST.
Compare Gov’t App’x at A35 (Government Record of the CO’s e-mails evidencing a sent time of
November 5, 2012 at 8:19 PM EST) with Am. Compl. Att. 3 (GSC record of the CO’s e-mails
evidencing a sent time of November 5, 2012 at 5:19 PM PST).
4
Compl. ¶¶ 1–65. In support, Plaintiff filed seven Attachments (“Compl. Atts. 1–7”). Attachment
4 was the Monday, November 5, 2012 6:02 PM e-mail from the CO to Mr. Ruck, regarding CBP’s
requirement that gasoline be dispensed directly to employees’ personal vehicles, but was marked
“Monday, November 06, 2012 6:02 AM.”5 Compl. Att. 4.

On August 27, 2015, the Government filed an Answer. ECF No. 6.

On October 2, 2015, Plaintiff filed a Motion To Amend Pleadings, because the date on
Attachment 4 was incorrect, allegedly due to a “computer server program error;” the correct date
was Monday, November 5, 2012 at either “23:02:20 UTC [Coordinated Universal Time]” or
“15:02:20 Pacific Time.”6 ECF No. 7-1 at 1. Plaintiff also filed a September 30, 2015 Affidavit
from Mr. Ruck (“9/30/15 Ruck Affidavit”), who attested that the incorrectly dated e-mail was the
result of a computer error and that the e-mail was received by Plaintiff’s server either at 23:02:20
UTC or 3:02 PM PST. 9/30/15 Ruck Affidavit ¶¶ 2–7.

On October 5, 2015, the court granted Plaintiff’s October 2, 2015 Motion, pursuant to Rule
of the United States Court of Federal Claims (“RCFC”) 15(a)(2). ECF No. 8. On October 7, 2015,
Plaintiff filed an Amended Complaint. 7 ECF No. 9. On October 19, 2015, the parties submitted
a Joint Preliminary Status Report. ECF No. 10. On October 26, 2015, the court issued a
Scheduling Order. ECF No. 12.

On December 10, 2015, the Government filed an Answer to the October 7, 2015 Amended
Complaint. ECF No. 15. The December 10, 2015 Answer alleged that the November 6, 2012 e-
mail referenced in the original Complaint, in fact, “was sent on Monday, November 5, 2012 at
6:02 [PM]. . . . [B]efore GSC responded that it had commenced scheduling its gasoline shipments
and before CBP informed GSC [via e-mail] that it had been awarded the contract.” Gov’t Answer
¶ 116 (emphasis original). Therefore, the Government asserted that Plaintiff’s claim was
fraudulent and raised three additional counterclaims. Gov’t Answer ¶ 116. The first counterclaim
alleged that, under the Special Plea in Fraud, 28 U.S.C. § 2514, Plaintiff’s entire claim should be
forfeited. Gov’t Answer ¶¶ 127–29. The second counterclaim alleged that, under the False Claims
Act, 31 U.S.C. § 3729, Plaintiff knowingly submitted a false or fraudulent claim for payment by
the United States and used a false record to support its claim, and was liable for up to $11,000.
Gov’t Answer ¶¶ 131–35. The third counterclaim alleged that, under the Contract Disputes Act,
41 U.S.C. § 7103, Plaintiff was liable for at least $183,788.86 in damages, plus the costs of
reviewing Plaintiff’s fraudulent claim. Gov’t Answer ¶¶ 137–39.

On January 4, 2016, Plaintiff filed a Motion To Strike And Motion To Dismiss The
Government’s Answer To Amended Complaint. ECF No. 16. On January 7, 2016, the court
issued an Order denying the Motion To Strike. ECF No. 17. On January 8, 2016, the court issued

5
November 6, 2012, however, was a Tuesday, and not a Monday.
6
Both of these time stamps are the equivalent of 6:02 PM EST.

7
Although Plaintiff removed the incorrectly dated e-mail as an attachment, the Amended
Complaint otherwise alleged the same four counts as the June 6, 2015 Complaint.
5
another Order, clarifying that “[a]lthough Plaintiff’s Motion To Strike is denied, the court will
issue a separate ruling on Plaintiff’s Motion To Dismiss in due course.” ECF No. 18. On January
11, 2016, the Government filed a Motion To Compel and a Motion For Extension Of Time Until
April 20, 2016 To Complete Discovery. ECF No. 19. On January 13, 2016, Plaintiff filed a
Response and a Motion To Strike Discovery. ECF Nos. 20, 21. On January 14, 2016, the court
convened a status conference. On January 19, 2016, the court issued an Order ruling that the
Government’s January 11, 2016 Motion To Compel was moot and denying the Government’s
January 11, 2016 Motion For Extension Of Time. In addition, the court also denied Plaintiff’s
January 13, 2016 Motion To Strike. ECF No. 22. On January 22, 2016, the Government filed an
Opposition To Plaintiff’s Motion To Dismiss Defendant’s Counterclaims. ECF No. 23. On
February 8, 2016, Plaintiff filed a Reply. ECF No. 24.

On March 11, 2016, the court issued a Memorandum Opinion And Order Concerning
Plaintiff’s January 4, 2016 Motion To Dismiss The Government’s Counterclaims. See
Government Services Corp. v. United States, 125 Fed. Cl. 586 (2016). Therein, the court
determined that the December 10, 2015 Answer “was not untimely nor prejudicial,” and the
Government timely filed an Amended Answer, pursuant to RCFC 15(a)(3). Id. at 591; see also
RCFC 15(a)(3) (“Unless the court orders otherwise, any required response to an amended pleading
must be made within the time remaining to respond to the original pleading or within 14 days after
service of the amended pleading, whichever is later.” (emphasis added)).

On April 27, 2016, the court issued a scheduling order governing expert discovery and
post-discovery proceedings. ECF No. 29.

On May 25, 2016, Plaintiff’s counsel filed a Motion For Withdrawal. ECF No. 30. On
May 31, 2016, the Government filed a Response. ECF No. 31. On June 9, 2016, the court issued
an Order, requiring Plaintiff to substitute counsel within twenty-one days. ECF No. 32. On June
27, 2016, Plaintiff filed a Motion To Extend Deadline To Substitute Counsel, that the court granted
the following day. ECF Nos. 33, 34.

On July 11, 2016, Plaintiff filed a Notice Of Substitution Of Counsel. ECF No. 36. On
July 20, 2016, the court issued a Scheduling Order requiring the parties to file any dispositive
motions by September 15, 2016. ECF No. 39.

On September 15, 2016, Plaintiff filed a Motion For Summary Judgment (“Pl. Mot.”) with
five Attachments, including (1) the November 5, 2012 Solicitation; (2) the November 5, 2012 2:52
PM amendment to the Solicitation; (3) the November 5, 2012 8:19 PM notice of award e-mail
from the CO to Mr. Ruck; (4) the CO’s Certificate of Appointment; and (5) the September 14,
2016 Affidavit of Mr. Ruck. ECF No. 40. On that same day, the Government filed a Cross-Motion
For Summary Judgment (“Gov’t Mot.”), and attached an Appendix. ECF No. 41.

On October 17, 2016, Plaintiff filed a Response to the Government’s September 15, 2016
Cross-Motion For Summary Judgment (“Pl. Resp.”), attaching the March 18, 2016 report of
William F. Odom for the United States Department of Justice (“3/18/16 Odom Rep.”) and the June
2, 2016 report of Jon A. Berryhill for Plaintiff (“6/2/16 Berryhill Rep.”). ECF No. 44. On that
same day, the Government also filed a Response to Plaintiff’s September 15, 2016 Motion For

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Summary Judgment (“Gov’t Resp.”). ECF No. 45. On November 3, 2016, the Government filed
a Reply to Plaintiff’s October 17, 2016 Response (“Gov’t Reply”). ECF No. 46.

On February 23, 2017, the court sent an e-mail to the parties, explaining that: the court
drafted an opinion on the parties’ outstanding Cross-Motions For Summary Judgment; but Plaintiff
had not filed an answer to the Government’s December 10, 2015 counterclaims, nor had Plaintiff
requested leave of the court to file an answer out of time, pursuant to RCFC 6(b)(1)(B). The court
instructed Plaintiff that, if it intended to file a motion to file an answer out of time, it was due by
February 27, 2017. The court also explained that, under RCFC 8(b)(6), “[a]n allegation—other
than one related to the amount of damages—is admitted if a responsive pleading is required and
the allegation is not denied.”

On February 26, 2017 Plaintiff filed a Motion To File Answer To Defendant’s
Counterclaims Out Of Time (“2/26/17 Pl. Mot.”). ECF No. 47. On March 2, 2017, the
Government filed an Opposition (“Gov’t Opp.”). ECF No. 48.

On March 9, 2017, the court issued a Memorandum Opinion And Order that granted
Plaintiff’s February 26, 2017 Motion to file an answer out of time. See Government Services
Corp. v. United States, ___ Fed. Cl. ___, 2017 WL 933099, at *4 (2017). In the March 9, 2017
Memorandum Opinion And Order, the court explained that denying Plaintiff’s motion would result
in an effective default judgment in favor of the Government under RCFC 8(b)(6). Id. at *3.
Because Plaintiff had denied the Government’s counterclaims, albeit not in pleading, and because
Plaintiff had otherwise “diligently pursued” this case in every other regard, the court determined
that Plaintiff could file an answer out of time. Id. at *4 (citing Information Systems & Network
Corp. v. United States, 994 F.2d 792, 797 (Fed. Cir. 1993) (holding that it was an abuse of
discretion to enter default judgment against a party that had failed to file an answer, when that
party had otherwise “diligently pursued” the case)).

On March 9, 2017, Plaintiff filed an Answer to the Government’s Counterclaims (“Pl.
Answer”). ECF No. 50.

On March 20, 2017, the Government filed a Supplemental Brief Regarding Its Motion For
Summary Judgment (“Gov’t Supp. Br.”). ECF No. 51.

III. DISCUSSION.

A. Jurisdiction.

The United States Court of Federal Claims has jurisdiction, under the Tucker Act, “to
render judgment upon any claim against the United States founded either upon the Constitution,
or any Act of Congress or any regulation of an executive department, upon any express or implied
contract with the United States, or for liquidated or unliquidated damages in cases not sounding in
tort.” 28 U.S.C. § 1491(a)(1). In addition, under 28 U.S.C. § 1491(a)(2), the United States Court
of Federal Claims “shall have jurisdiction to render judgment upon any claim by or against, or
dispute with, a contractor arising under [the Contract Disputes Act], including a dispute concerning
termination of a contract, rights in tangible or intangible property, compliance with cost accounting

7
standards, and other nonmonetary disputes on which a decision of the contracting officer has been
issued under section 6 of that Act.”

1. Counts Alleged By Plaintiff’s October 7, 2015 Amended Complaint.

In this case, Plaintiff’s October 7, 2015 Amended Complaint alleges four counts, under the
Contracts Dispute Act (“CDA”), 41 U.S.C. § 7104. Am. Compl. ¶¶ 28–72. Under the CDA, a
government contractor may file a complaint in the United States Court of Federal Claims within
twelve months of a “final” CO decision regarding a contract “claim.” See 41 U.S.C. § 7103(a)8
(requiring that each claim by a contractor against the Government relating to a contract be
submitted to the CO for a decision); 41 U.S.C. § 7104(b)(1) (“[I]n lieu of appealing the decision
of a contracting officer under section 7103 of this title to an agency board, a contractor may bring
an action directly on the claim in the United States Court of Federal Claims[.]”); see also Guardian
Angels Med. Serv. Dogs, Inc. v. United States, 809 F.3d 1244, 1247 (Fed. Cir. 2016) (“Under the
[CDA], a contractor has the option of appealing a contracting officer’s decision either to the
appropriate board of contract appeals or the United States Court of Federal Claims. Regardless of
which forum a contractor elects, however, only final contracting officer decisions may be
appealed.” (citation omitted)). In addition, the “claim” submitted to the CO must be a written
“demand for something due or believed to be due,” and provide the CO with notice of the relief
requested and the legal and factual basis for that request. See Alliant Techsystems, Inc. v. United
States, 178 F.3d 1260, 1265 (Fed. Cir. 1999). For claims of more than $100,000, the CDA requires
the contractor to certify that: (A) the claim is made in good faith; (B) the supporting data is accurate
and complete to the best of the contractor’s knowledge and belief; (C) the amount required
accurately reflects the contract adjustment for which the contractor believes the Government is
liable; and (D) the certifier is authorized to certify the claim on behalf of the contractor. See 41
U.S.C. § 7103(b)(1)(A)–(D). A CO’s decision regarding a claim may be deemed “final” only if it
is “the consummation of the agency’s decisionmaking process.” See Bennett v. Spear, 520 U.S.
154, 178 (1997) (internal quotation marks omitted).

In this case, Plaintiff submitted a certified claim to CBP on April 17, 2014, for $176,193.60
as a result of the “great many changes” made by the Government to the work required by the
Solicitation. Am. Compl. Att. 6. On July 17, 2014, a CBP CO issued a final decision denying
Plaintiff’s claim. Am. Compl. Att. 7. On June 15, 2015, i.e., less than one year later, Plaintiff
filed a Complaint in the United States Court of Federal Claims, seeking an increased amount of
$183,788.76. ECF No. 1. Because Plaintiff has met the jurisdictional requirements of the CDA,
the court has determined it has jurisdiction to adjudicate Counts One and Two of the Amended
Complaint that respectively allege a cardinal change and a constructive change of the requirements
of the Solicitation. Am. Compl. ¶¶ 28–45, 57–65.

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The October 7, 2015 Amended Complaint alleges that the court has jurisdiction, pursuant
to 41 U.S.C. §§ 601–613. Am. Compl. ¶ 4. On January 4, 2011, Congress amended certain
provisions of the CDA and recodified the Act at 41 U.S.C. §§ 7101–7109. See Public Contracts
Act of Jan. 4, 2011, Pub. L. No. 111–350, § 3, 124 Stat. 3677, 3816–26. The amendments to the
Act are not relevant in this case. See, e.g., id. at 3820 (amending 41 U.S.C. § 606 so that “United
States Court of Federals Claims” is substituted for “United States Claims Court”). The court reads
the October 7, 2015 Amended Complaint as alleging jurisdiction under 41 U.S.C. §§ 7101–7109.
8
 Count Three of the October 7, 2015 Amended Complaint alleges an implied-in-fact
contract and that Plaintiff should be compensated under quantum meruit principles. Am. Compl.
¶¶ 47–56. “A recovery in quantum meruit is based on an implied-in-law contract.” Int’l Data
Prods. v. United States, 492 F.3d 1317, 1325 (Fed. Cir. 2007). Jurisdiction under the Tucker Act,
however, “extends only to contracts either express or implied in fact, and not to claims on contracts
implied in law.” Hercules Inc. v. United States, 516 U.S. 417, 423 (1996); see also City of
Cincinnati v. United States, 153 F.3d 1375, 1377 (Fed. Cir. 1998) (“[I]mplied-in-law contracts . .
. impose duties that are deemed to arise by operation of law and are outside the jurisdiction of the
[United States] Court of Federal Claims.”). As such, the court does not have jurisdiction to
adjudicate a claim alleging recovery under quantum meruit. The United States Court of Federal
Claims, however, has jurisdiction to adjudicate an implied-in-fact contract. See City of Cincinnati,
153 F.3d at 1377 (holding that “a non-frivolous assertion” of an implied-in-fact contract is
sufficient to establish jurisdiction in the United States Court of Federal Claims under the Tucker
Act). In this case, the court has determined that it also has jurisdiction to adjudicate Count Three
of the Amended Complaint, but only to the extent that it alleges the existence of an implied-in-fact
contract.

Count Four of the October 7, 2015 Amended Complaint alleges that the CBP CO breached
the duty of good faith and fair dealing by denying Plaintiff’s certified claim on July 17, 2014. Am.
Compl. ¶ 61 (“In considering Plaintiff’s claim . . . the Contracting Officer breached her duty to
fairly and independently consider the merits of [Plaintiff’] claim . . . . Instead, upon information
and belief, she arbitrarily and capriciously rejected [Plaintiff’s] claim[.]”). The duty of good faith
and fair dealing is inherent in all contracts with the federal government. See Metcalf Const.
Co. v. United States, 742 F.3d 984, 990 (Fed. Cir. 2014) (“We have long applied [the duty of good
faith and fair dealing] to contracts with the federal government.”); see also RESTATEMENT
(SECOND) OF CONTRACTS § 205 (Am. Law Inst. 1981) (“Every contract imposes upon each party
a duty of good faith and fair dealing.”). The duty requires that parties “not to act so as to destroy
the reasonable expectations of the other party regarding the fruits of the contract.” Metcalf Const.
Co., 742 F.3d at 991. The duty of good faith and fair dealing extends not only to performance, but
also to the “assertion, settlement and litigation of contract claims and defenses.” RESTATEMENT
(SECOND) OF CONTRACTS § 205 cmt. e. The United States Court of Federal Claims may consider
the fairness of the CO’s claim decision when determining whether a government agency has
breached the duty of good faith and fair dealing. See Mansoor Int’l Dev. Serv., Inc. v. United
States, 121 Fed. Cl. 1, 6–7 (2015) (determining that the United States Court of Federal Claims has
jurisdiction to adjudicate whether a CO breached the duty of good faith and fair dealing by denying
a claim). For these reasons, the court has determined that it also has jurisdiction to adjudicate
Count Four of the Amended Complaint.

2. Counterclaims Alleged By The Government’s December 10, 2015
Answer.

The Government’s December 10, 2015 Answer alleges counterclaims arising under: the
Special Plea in Fraud, 28 U.S.C. § 2514; the False Claims Act (“FCA”), 31 U.S.C. § 3729; and the
CDA, 41 U.S.C. § 7103. Gov’t Answer ¶ 75. Under the Federal Courts Administration Act, 28
U.S.C. § 1503, the United States Court of Federal Claims has jurisdiction “to render judgment
upon any set-off or demand by the United States against any plaintiff in such court.”

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In addition, under 28 U.S.C. § 2508,

[u]pon the trial of any suit in the United States Court of Federal Claims in which
any setoff, counterclaim, claim for damages, or other demand is set up on the part
of the United States against any plaintiff making claim against the United States in
said court, the court shall hear and determine such claim or demand both for and
against the United States and plaintiff.

28 U.S.C. § 2508.

Under the CDA, the United States Court of Federal Claims also may review a counterclaim
alleging fraud. See 41 U.S.C § 7103(c).

For these reasons, the court has determined that it also has jurisdiction to adjudicate the
Government’s December 10, 2015 counterclaims.

B. Standing.

The United States Supreme Court has held that “the question of standing is whether the
litigant is entitled to have the court decide the merits of the dispute or of particular issues.”
Warth v. Seldin, 422 U.S. 490, 498 (1975). Standing must be determined “as of the commencement
of suit.” Rothe Dev. Corp. v. Dep’t of Def., 413 F.3d 1327, 1334 (Fed. Cir. 2005) (quoting
Lujan v. Defenders of Wildlife, 504 U.S. 555, 570 n. 5 (1992)). The party invoking federal
jurisdiction bears the burden of establishing standing. See Lujan, 504 U.S. at 560–61. Specifically,
“a plaintiff must show [that] it has suffered an ‘injury in fact’ that is . . . concrete and particularized
and . . . actual or imminent, not conjectural or hypothetical; . . . the injury is fairly traceable to the
challenged action of the defendant; and . . . it is likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envtl.
Serv., Inc., 528 U.S. 167, 180–81 (2000) (internal citations omitted).

The October 7, 2015 Amended Complaint alleges that Plaintiff suffered a monetary injury
that is concrete, particularized, and fairly traceable to CBP’s actions. In addition, any financial
injury established by Plaintiff can be redressed by a monetary judgment. Therefore, the court has
determined that Plaintiff has standing to seek an adjudication of the claims alleged in the October
7, 2015 Amended Complaint.

C. Standard Of Review For A Motion For Summary Judgment, Pursuant To
RCFC 56.

If there is no genuine issue of material fact, the moving party is entitled to summary
judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); see
also RCFC 56(c). A material fact is one that might significantly affect the outcome of the suit
under applicable law. See Anderson, 477 U.S. at 247–48 (“As to materiality, the substantive law
will identify which facts are material. Only disputes over facts that might affect the outcome of
the suit under the governing law will properly preclude the entry of summary judgment. Factual

10
disputes that are irrelevant or unnecessary will not be counted . . . . That is, while the materiality
determination rests on the substantive law, it is the substantive law’s identification of which facts
are critical and which facts are irrelevant that governs.”). The existence of “some alleged factual
dispute between the parties will not defeat an otherwise properly supported motion for summary
judgment[.]” Id. Where the nonmoving party only proffers evidence that is “merely colorable, or
is not significantly probative, summary judgment may be granted.” Id. at 249–50 (citations
omitted).

The party moving for summary judgment has the initial burden of demonstrating the
absence of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 325
(1986). If the moving party carries its burden to demonstrate an absence of any genuine issue of
material fact, then the burden of proof shifts to the nonmoving party to “set forth specific facts
showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 250. An issue is genuine
only if it might prompt a reasonable fact-finder to resolve a factual matter in favor of the
nonmoving party. Id. at 248. The court is required to resolve any doubts about factual issues in
favor of the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1987). In doing so, all presumptions and inferences drawn from the evidence must be
resolved in favor of the nonmoving party. Id. Nevertheless, the court must weigh the
persuasiveness and plausibility of such evidence and view it “through the prism of the substantive
evidentiary burden.” Anderson, 477 U.S. at 254.

D. The Parties’ Cross-Motions For Summary Judgment.

1. Plaintiff’s September 15, 2016 Motion For Summary Judgment.

Plaintiff argues that, pursuant to RCFC 56(a), it is entitled to summary judgment with
respect to Counts One, Two, and Three alleged by the October 7, 2015 Amended Complaint. See
RCFC 56(a) (“The court shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”);
see also Pl. Mot. at 1.9

Plaintiff first argues that CBP enacted a “constructive change” and a “cardinal change” to
the contract, by requiring Plaintiff to provide fuel directly to CBP employees’ vehicles, instead of
an underground storage tank, and requiring Plaintiff to deliver fuel both to Newark and JFK
Airports. Pl. Mot. 5–7. The scope of this work was “materially different” from that required by
the Solicitation, because there is “no similarity” between requiring fuel to be supplied to an
underground storage tank and requiring that fuel be supplied to vehicles via an “impromptu gas
station.” Pl. Mot. at 6–7. “The only thing that ties the two forms of work together is that they both
involved fuel.” Pl. Mot. at 7. Consequently, Plaintiff reasons that the change ordered by CBP was
a “cardinal change” and a breach of the November 5, 2012 contract. Pl. Mot. at 7.

9
Plaintiff’s September 15, 2016 Motion For Summary Judgment did not address Count
Four of the October 7, 2015 Amended Complaint, alleging that CBP breached the duty of good
faith and fair dealing.

11
 In the alternative, Plaintiff argues that an implied-in-fact contract existed or can be inferred
from the conduct of the parties, because there was a “clear meeting of minds.” Pl. Mot. at 8. In
this case, the parties’ conduct shows that Plaintiff understood that it was to provide fuel to CBP
employees, in exchange for payment by the Government. Pl Mot. at 8.

2. The Government’s September 15, 2016 Cross-Motion For Summary
Judgment And Counterclaims.

Pursuant to RCFC 56, the Government filed a cross-motion for summary judgment on all
four counts alleged by the October 7, 2015 Amended Complaint, and on all three counterclaims
set forth by the Government’s December 10, 2015 Answer. Gov’t Mot. at 1.

The Government first argues that, prior to contract award on November 5, 2012, the CO
sent an e-mail to Plaintiff containing the additional terms at 6:02 PM; Plaintiff did not object, either
prior to acceptance or during performance. Gov’t Mot. at 15. Therefore, Plaintiff’s constructive
and cardinal change claims are not viable, because Plaintiff failed “to raise the problem prior to
execution, or even prior to litigation, on which it later bas[ed] its challenge.” Whittaker Elec.
Sys. v. Dalton, 124 F.3d 1443, 1446 (Fed. Cir. 1997). In the alternative, under the Uniform
Electronic Transactions Act (“UETA”), codified at Idaho Code Annotated § 28-50-115, an
electronic record is received when it enters the recipient’s computer system. The record evidences
that the CO’s 6:02 PM November 5, 2012 e-mail was received by Plaintiff’s system at 6:02 PM
on Monday, November 5, 2012. Gov’t Mot. at 17–18.10 Therefore, the contract terms were
communicated to Plaintiff prior to Mr. Ruck’s November 5, 2012 7:50 PM e-mail, confirming that
Plaintiff was ready to perform, and prior to the CO’s November 5, 2012 8:19 PM e-mail informing
Plaintiff that it had been awarded then contract. Gov’t Mot. at 12.

To the extent that Mr. Ruck contends that he did not receive or elected not to open the
November 5, 2012 6:02 PM e-mail, Mr. Ruck is not credible because he has been subject to
multiple criminal convictions.11 Gov’t Mot. at 17. Moreover, CBP and the CO had no way of

10
The UETA is a model law that has been adopted by “almost all” of the states. See Insight
Sys. Corp. v. United States, 110 Fed. Cl. 564, 581 n.24 (2013). The State of Idaho, where GSC is
located, has adopted the UETA. See Idaho Code Ann. § 28-50-115(b) (“Unless otherwise agreed
between a sender and the recipient, an electronic record is received when . . . [i]t enters [the
recipient’s] information processing system[.]”). Although the UETA is not a federal law, the
Government argues that it should determine the rights and liabilities of the parties. Gov’t Mot. at
18 (citing Everett Plywood & Door Corp. v. United States, 190 Ct. Cl. 80, 89 (1969) (utilizing the
Uniform Commercial Code in interpreting a Government contract)).
11
In 2006, Mr. Ruck was convicted of forgery by the District Court of the Second Judicial
District of the State of Idaho, County of Latah. See State v. Ruck, Case No. CR-2005-002960
(Idaho 2d Dist. Ct. October 10, 2006). In March 2016, Mr. Ruck was convicted by jury of 28
counts of wire fraud and theft, as result of double- and triple-billing for fuel deliveries under
another contract. See United States v. Ruck, Case No. CR-14-0246-CEJL (D. Idaho March 8,
2016). In August 2016, Mr. Ruck was charged with, and pled guilty to, aiding and abetting the
making of a false statement under 18 U.S.C. §§ 1001–1002. Gov’t App’x A108–29 (8/9/16 Plea
Agreement in United States District Court for the District of Idaho). In addition, on February 20,
12
knowing whether Mr. Ruck read the e-mail. Gov’t Mot. at 19. Therefore, Plaintiff cannot rely on
the defense of lack of knowledge about the new terms to the contract. Gov’t Mot. at 19 (citing
NVT Techs., Inc. v. United States, 73 Fed. Cl. 459, 464 (2006) (determining that a party could not
“don[] blinders to the cover letter and other circumstances underlying the formation of the
contract” in order to create ambiguity with respect to contract formation)).

With respect to Count Three, Plaintiff’s implied-in-fact contract claim fails on the merits,
because if there was any ambiguity on the part of offer and acceptance, it was the fault of Plaintiff
for ignoring the CO’s November 5, 2012 6:02 PM e-mail. Gov’t Mot. at 21. In addition, a plaintiff
may not recover under an implied-in-fact contract theory where an express contract exists between
the parties governing the same subject matter. Gov’t Mot. at 21–22 (citing Algonac Mfg.
Co. v. United States, 192 Ct. Cl. 649, 673 (1970) (“[A]s a general rule there can be no implied
contract where there is an express contract between the parties covering the same subject.”)).

With respect to Count Four, the implied covenant of good faith and fair dealing does not
require the CO to agree with every position taken by the contractor when the contractor submits a
claim. Gov’t Mot. at 24 (citing Dotcom Assoc. I, LLC v. United States, 112 Fed. Cl. 594, 601
(2013) (determining that the Government did not breach the duty of good faith and fair dealing
when it disagreed with Plaintiff as to whether it breached the contract)).

In addition, the Government requests summary judgment on the counterclaims alleged by
the December 10, 2015 Answer, that arise under: the Special Plea in Fraud, 28 U.S.C. § 2514; the
FCA, 31 U.S.C. § 3729; and the CDA, 41 U.S.C. § 7103. Gov’t Mot. at 27. The “undisputed
evidence” establishes that: (1) the CO sent the November 5, 2012 6:02 PM e-mail to Plaintiff,
setting forth the terms that Plaintiff now argues constituted a constructive change to the contract;
(2) Plaintiff’s computer-system received that e-mail; (3) Mr. Ruck e-mailed the CO at 7:50 PM on
November 5, 2012 to confirm that Plaintiff had the “required arrangements in place and [was]
dispatching trucks;” and (4) contract award was made at 8:19 PM on November 5, 2012. Gov’t
Mot. at 28–29. These e-mail communications establish that Plaintiff was informed of the material
terms of the contract on November 5, 2012, prior to commencement of performance. Gov’t Mot.
at 29. On April 17, 2014, however, Plaintiff nevertheless filed a certified claim with CBP, alleging
that CBP modified the contract only after performance commenced. Gov’t Mot. at 29; see also
Am. Compl. Att. 6 (4/17/14 Certified Claim). In addition, by the June 26, 2015 Complaint,
Plaintiff “egregiously” submitted falsified evidence in the form of Attachment 4, consisting of the
Monday, November 5, 2012 6:02 PM e-mail from the CO, that was altered to appear as if it was
sent on the non-existent date of Monday, November 6, 2012, at 6:02 AM. Gov’t Mot. 30.
Accordingly, the Government is also entitled to summary judgment on all three of its fraud-related
counterclaims.

2014, Plaintiff, as a corporate entity, and Mr. Ruck, as a natural person, were debarred from
competing on future contracts by the Defense Logistics Agency. Gov’t App’x at A120–23. This
debarment was effective throughout the entire executive branch. 48 C.F.R. 9.406–1(c). Generally,
debarment does not last for more than three years, and Plaintiff’s debarment ended in February,
2017. See 48 C.F.R. § 9.406–4; see also Gov’t App’x at A120 (evidencing that Plaintiff’s
debarment terminated on 2/19/17).
13
 3. Plaintiff’s October 17, 2016 Response.

Plaintiff responds that, as a matter of law, the November 5, 2012 6:02 PM e-mail from the
CO could not have amended the November 5, 2012 Solicitation. Pl. Resp. at 2. The Solicitation
was prepared and published under Federal Acquisition Regulation (“FAR”), as an Invitation For
Bids (“IFB”). Pl. Resp. at 2. Under FAR 12.603(c)(4), “the contracting officer shall . . . [p]ublicize
amendments to solicitations in the same manner as the initial synopsis and solicitation.” 48 C.F.R.
§ 12.603(c)(4). In this case, on November 5, 2012, the Solicitation originally was publically posted
on www.FedBid.com. Pl. Resp. at 2. Consequently, any amendment to the Solicitation needed to
be posted to that website. Pl. Resp. at 3. The CO’s November 5, 2012 6:02 PM e-mail was not
posted to the website. Pl. Resp. at 3. Therefore, CBP did not comply with the requirements of
FAR 12.603(c)(4). Pl. Resp. at 3.

In addition, FAR 14.208(a) requires that all changes to an IFB be made through the formal
amendment process. See 48 C.F.R. § 14.208(a).12 In this case, CBP never issued a formal
amendment to the November 5, 2012 Solicitation. Pl. Resp. at 3. Instead, the CO’s November 5,
2012 6:02 PM e-mail only announced a change, and this did not relieve CBP of “the necessity of
issuing an amendment.” Pl. Resp. at 3.

In response to the Government’s argument that the CO’s November 5, 2012 6:02 PM
e-mail should be construed as an offer to contract, Plaintiff argues that, in an IFB acquisition, the
contractor is the offeror and the Government is the offeree. Pl. Resp. at 4 (citing 48 C.F.R. § 2.101
(defining “offeror” as “offeror or bidder”)). Under FAR 14.301(d)(2), a bid may be considered
only if its “terms and conditions . . . do not vary from the terms and conditions of the invitation for
bids.” 48 C.F.R § 14.301(c). Therefore, as a matter of law, the Solicitation was an invitation for
offers; Plaintiff’s bid was an offer on the terms of the Solicitation, that subsequently was accepted
by the Government, at which time the contract was made. Pl. Resp. at 4.

The timing of the CO’s November 5, 2012 6:02 PM e-mail is irrelevant, because bidding
closed on November 5, 2012 at 4:30 PM. Pl. Resp. at 5. Therefore, Plaintiff would have been
unable to respond to the e-mail prior to the bidding period closing. Pl. Resp. at 5. And, under
FAR 52.212-1(f)(5),13 Plaintiff could not withdraw its offer, after receiving the November 4, 2012

12
FAR 14.208(a) provides:

[i]f it becomes necessary to make changes [to the IFB], such changes shall be
accomplished by amendment of the [IFB] using Standard Form 30, Amendment of
Solicitation/Modification of Contract. The fact that a change was mentioned at a
pre-bid conference does not relieve the necessity for issuing an amendment.

48 C.F.R. § 14.208(a).
13
FAR 52.212-1(f)(5) provides

Offers may be withdrawn by written notice received at any time before the exact
time set for receipt of offers. Oral offers in response to oral solicitations may be
withdrawn orally. If the solicitation authorizes facsimile offers, offers may be
14
6:02 PM e-mail, because “[o]ffers may be withdrawn by written notice received at any time before
the exact time set for receipt of offers.” 48 C.F.R. § 52.212-1(f)(5) (emphasis added).

Plaintiff also disputes whether the Attachment 4 was altered. Pl. Resp. at 6. In support,
Plaintiff attached expert reports of the Government’s computer forensics expert, Mr. Odom, and
Plaintiff’s computer forensics expert, Mr. Berryhill, that disagree as to whether Attachment 4 was
altered. Pl. Resp. at 6; see also 3/18/16 Odom Rep. at 5 (concluding that Attachment 4 was
altered); 6/2/16 Berryhill Rep. at 3 (concluding that Mr. Odom’s conclusion lacked factual
support). As such, whether Plaintiff engaged in fraudulent conduct is a material and genuinely
disputed fact, precluding the Government from prevailing on summary judgment on the
Government’s counterclaims. Pl. Resp. at 6.

4. The Government’s October 17, 2016 Response.

The Government responds that Plaintiff’s argument is “based on the simple – but faulty –
premise that the terms of the parties’ contract are defined solely by reference to the [S]olicitation
posted on www.FedBid.com, without taking into consideration the other written communications
between the parties[.]” Gov’t Resp. at 1. Notably, Plaintiff fails to mention that Mr. Ruck and the
CO exchanged multiple communications that formed the contract. Gov’t Resp. at 1–4.

The most that Plaintiff can argue is that Mr. Ruck did not see the CO’s November 5, 2012
6:02 PM e-mail on the same day that it was sent. Gov’t Resp. at 4. But, since CBP had no way of
knowing that Mr. Ruck did not read the e-mail, the agency should not be held liable based on
Plaintiff’s oversight or lapse. Gov’t Resp. at 6. The record shows that the CO was informed by
Plaintiff that it was ready and willing to perform. Gov’t Resp. at 6; see also Gov’t App’x at A27
(11/5/12 7:50 PM e-mail from Mr. Ruck that Plaintiff “had required arrangements in place” and
“[i]f you want to send the orders we will be ready”). Therefore, as a matter of law, Plaintiff cannot
seek damages that arose because of Plaintiff’s silence. See Whittaker Elec. Sys., 124 F.3d at 1446
(holding that a contractor is precluded “from challenging the validity of a contract . . . where it
fails to raise the problem prior to execution, or even prior to litigation, on which it later bases its
challenge”). Moreover, Idaho adopted the UETA, so that an e-mail is considered to be “received”
when it enters into the recipient’s “information processing system . . . even if no individual is
aware of its receipt.” Idaho Code Ann. § 28-50-115(b), (e).

In any event, regardless of whether Mr. Ruck read the November 5, 2012 6:02 PM e-mail
or not, it is “undeniable” that he read the CO’s November 5, 2012 8:19 PM e-mail, because he
responded to it at 10:04 PM on that same day. Gov’t Resp. at 8. The November 5, 2012 8:19 PM
e-mail specified that Plaintiff would be required to provide gas-station style service at two different

withdrawn via facsimile received at any time before the exact time set for receipt
of offers, subject to the conditions specified in the solicitation concerning facsimile
offers. An offer may be withdrawn in person by an offeror or its authorized
representative if, before the exact time set for receipt of offers, the identity of the
person requesting withdrawal is established and the person signs a receipt for the
offer.

48 C.F.R. § 52.212-1(f)(5).
15
locations (JFK Airport and Newark Airport), verified by Mr. Ruck’s response requesting the “exact
location and on site contact information for these two locations.” Gov’t Resp. at 8 (citing Gov’t
App’x at A124).

5. The Government’s November 3, 2016 Reply.

The Government emphasizes that “both sides agree” that CBP did not award any contract
through www.FedBid.com, and eventually canceled the Solicitation. Gov’t Reply at 2–3; see also
Pl. Am. Compl. ¶ 10 (stating that GSC was awarded the contract “via email”); Pl. Am. Compl. ¶
18 (stating that CBP cancelled the Solicitation). If CBP made award through www.FedBid.Com,
Plaintiff would have been charged a fee by FedBid, but, Plaintiff was never charged such a fee.
Gov’t Reply at 3.

In addition, the November 5, 2012 agreement was a “no-cost contract,” wherein a vendor
performs a service that an agency would otherwise perform, but is paid by third parties instead of
by the agency. Gov’t Reply at 8. Therefore, Plaintiff’s argument that the FAR prevented the
Government from requiring performance other than required by the Solicitation is incorrect,
because the FAR does not apply to Government contracts that do not involve an expenditure of
appropriated funds, including no-cost contracts, such as the one at issue in this case. Gov’t Reply
at 9 (citing 48 C.F.R. § 1.104 (“The FAR applies to all acquisitions as defined in part 2 of the FAR,
except where expressly excluded.”)); see also 48 C.F.R. § 2.101 (“Acquisition means the acquiring
by contract with appropriated funds of supplies or services (including construction) by and for the
use of the Federal Government[.]”); Fid & Cas. Co. of New York, B-281281, 99-1 CPD ¶ 16
(Comp. Gen. Jan 21, 1999) (“[T]he FAR, by its terms, applies only to government acquisitions of
supplies or services with appropriated funds.”). Consequently, the FAR does not apply to the
November 5, 2012 contract between the parties. Gov’t Reply at 9.

6. The Government’s March 20, 2017 Supplemental Brief.

The Government adds that Plaintiff “did not offer any evidence . . . to contest the
Government’s allegation that GSC knowingly and intentionally manipulated the [November 5,
2012] 6:02 PM e[-]mail. “ Gov’t Supp. Br. at 4. Plaintiff did, however, attach the forensic expert
reports of Mr. Odom and Mr. Berryhill to its October 17, 2016 Response. Gov’t Supp. Br. at 4.
In addition, there is Mr. Ruck’s September 30, 2015 Affidavit, wherein Mr. Ruck asserts that the
incorrect date on Attachment 4 was caused by an unknown computer error. Gov’t Supp. Br. at 4;
see also 9/30/15 Ruck Affidavit ¶ 5. Therefore, “the Government recognizes that the court may
conclude that there now are material issues of fact in dispute regarding whether [Plaintiff]
knowingly and intentionally submitted a false claim or false evidence in support of its claim.”
Gov’t Supp. Br. at 5.

E. The Court’s Resolution.

1. Claims Alleged By Plaintiff’s October 7, 2015 Amended Complaint.

Counts One And Two: Cardinal And Constructive Change.

Counts One and Two of the October 7, 2015 Amended Complaint allege a cardinal and
constructive change of the November 5, 2012 contract between Plaintiff and CBP. A “constructive

16
change” exists when a “contractor performs work beyond the contract requirements without a
formal order, either by an informal order or due to the fault of the Government.” Int’l Data Prods.
Corp., 492 F.3d at 1325. When a constructive change to a contract results in work that is
“materially different” than that ordered by the contract, it is considered a “cardinal change.” See
Bell/Heery v. United States, 739 F.3d 1324, 1335 (Fed. Cir. 2014) (“A cardinal change is similar
[to a constructive change], but has two distinguishing features: (1) a cardinal change requires work
materially different from that specified by the contract; and (2) a cardinal change amounts to an
actual breach of contract.”).

Plaintiff is correct that, under the FAR, a government contractor’s submission of a bid in
an “Invitation-For-Bids” type proceeding (including a reverse-auction hosted on
www.FedBid.com), constitutes an “offer” incorporating the terms of the Solicitation. See 48
C.F.R. § 14.301(d)(2) (“[A] bid may be considered only if award on the bid would result in a
binding contract with terms and conditions that do not vary from the terms and conditions of the
invitation for bids.”). In such a situation, the contractor is the offeror and the Government is the
offeree. See 48 C.F.R. § 2.101 (defining “Offeror” as “offeror or bidder” (emphasis added)).

In this case, however, the Government did not accept the terms originally offered by
Plaintiff via www.FedBid.com. Instead, the CO’s November 5, 2012 6:02 PM e-mail explicitly
rejected the terms offered by Plaintiff:

What CBP needs currently is a Fuel tank with capabilities to dispense fuel into our
employee’s personal own vehicles. Also, we will require you to accept personal
credit cards from CBP employees. Although I cannot guarantee that you will sell
all the fuel; I estimated that the current need for fuel is approximately 80,000
gallons. 40,000 gallons for JFK [A]irport and 40,000 for Newark [L]iberty Airport.

Gov’t App’x at A30 (emphasis added).

The terms suggested by the CO’s November 5, 2012 6:02 PM e-mail are materially
different from the terms proposed by the Solicitation. As such, the CO’s November 5, 2012 6:02
PM e-mail was a counteroffer, with new contract terms. See First Commerce Corp. v. United
States, 335 F.3d 1373, 1381 (Fed. Cir. 2003) (holding that a letter from a federal agency proposing
materially different contract terms constituted a counteroffer); see also RESTATEMENT (SECOND)
OF CONTRACTS § 39 (“A counter-offer is an offer made by an offeree to his offeror relating to the
same matter as the original offer and proposing a substituted bargain differing from that proposed
by the original offer.”).

The parties do not dispute that the November 5, 2012 6:02 PM e-mail was received by
Plaintiff’s e-mail server within moments of being sent by the CO. 9/30/15 Ruck Affidavit ¶ 4
(stating that Plaintiff’s server received the email on November 5, 2012 at “23:02:20 UTC or
3:02:20 PM Pacific time,” i.e., the equivalent of 6:02 PM EST); Gov’t App’x at A51 (Record of
Plaintiff’s e-mail server indicating receipt of November 5, 2012 6:02 PM e-mail); A76 (2/16/16
Ruck Dep.) (testifying that “[The e-mail] was received from our ISP [on November 5, 2012] at
3:02 p.m. Pacific Time [i.e., 6:02 PM EST]”). But, on November 5, 2012 at 7:50 PM, Mr. Ruck
sent a reply e-mail that accepted these new terms: “Sir, I have required arrangements in place and

17
am dispatching trucks. If you want to send the orders we will be ready.” Gov’t App’x at A27.
And, at 8:19 PM, the CO sent an additional e-mail confirming “[t]his is to inform you of the
selection of your company to bring fuel trucks to John F. Kennedy International Airport and
Newark Liberty International Airport and sell fuel directly to US Customs Employees,” i.e.,
repeating the same terms of the November 5, 2012 6:02 PM e-mail. Gov’t App’x at A35. This
was followed, at 10:04 PM, by Mr. Ruck’s final e-mail, confirming the new terms: “I need exact
location and on site contact information for these two locations.” Gov’t App’x at A124 (emphasis
added). At this juncture, Plaintiff accepted the terms of CBP’s counteroffer. See RESTATEMENT
(SECOND) OF CONTRACTS § 50(1) (“Acceptance of an offer is a manifestation of assent to the terms
thereof made by the offeree in a manner invited or required by the offer.”). Then, Plaintiff
commenced performance in accordance of the new terms. Am. Compl. ¶ 15.

By accepting the Government’s counteroffer, Plaintiff agreed to an express contract, the
terms of which consisted of the text of the e-mails between the parties. An express contract with
the Government “may arise as a result of the confluence of multiple documents.” See D&N
Bank v. United States, 331 F.3d 1374, 1378 (Fed. Cir. 2003). Common law governs the contractual
relationship between a private party and the United States. See United States v. Winstar Corp.,
518 U.S. 839, 871 (1996) (holding that “ordinary principles of contract construction and
breach . . . [that apply] to any contract action between private parties” govern a contract with the
Government). Whether a contract exists is a “mixed question of law and fact,” but the
interpretation of a contract is a “question of law.” 1st Home Liquidating Trust. v. United States,
581 F.3d 1350, 1355 (Fed. Cir. 2009). In Anderson v. United States, 344 F.3d 1343 (Fed. Cir.
2003), the United States Court of Appeals for the Federal Circuit held that an express contract
requires the following elements:

(1) mutuality of intent to contract;

(2) lack of ambiguity in offer and acceptance;

(3) consideration; and

(4) a government representative with actual authority to bind United States in contract.

Id. at 1353.

In this case, the e-mails between the parties evidence all four elements of an express
contract. First, there was mutuality of intent: both parties expressed an “objective manifestation”
of assent to contract with the other via their e-mails. Id. (holding that contract formation requires
an “objective manifestation of voluntary, mutual assent”). Second, there was consideration,
because the contract contained mutual promises from which each party obtained a benefit. See
RESTATEMENT (SECOND) OF CONTRACTS § 71 (explaining that “[t]o constitute consideration, a
performance or a return promise must be bargained for” and that “[t]he performance may consist
of (a) an act other than a promise, or (b) a forbearance, or (c) the creation, modification, or
destruction of a legal relation”). Plaintiff had the right of access to sell fuel to CBP employees at
CBP facilities in two different locations: Newark Airport and JFK Airport. Gov’t App’x at A35
(November 5, 2012 8:19 PM e-mail notice of award giving Plaintiff the right to bring fuel trucks

18
to JFK and Newark Airports and sell directly to CBP employees). CBP’s emergency fuel needs
were met. 9/9/16 Conteh Decl. ¶ 2. Third, there is no dispute that the CO had actual authority to
bind the Government in contract.

Finally, the November 5, 2012 6:02 PM e-mail counteroffer unambiguously communicated
the Government’s new requirements; i.e., that (1) gasoline would be delivered to both Newark and
JFK Airports; and (2) be sold directly to CBP employees. Gov’t App’x at A30. Mr. Ruck’s return
e-mails cannot be construed as anything other than an unambiguous acceptance. Gov’t App’x at
A27 (11/5/12 7:50 PM e-mail stating: “Sir, I have required arrangements in place and am
dispatching trucks. If you want to send the orders we will be ready.”); Gov’t App’x at A124
(11/5/12 10:04 PM e-mail stating: “I need exact location and on site contact information for these
two locations.” (emphasis added)).

Therefore, the counteroffer and acceptance resulted in the formation of an express
“no-cost” contract between the parties, under which the contractor performs a service that an
agency would otherwise perform, but is paid by a third party instead of the agency. See Ober
United Travel Agency, Inc. v. United States Dept. of Labor, 135 F.3d 822, 823 (D.C. Cir. 1998) (a
“no-cost contract” exists where the “government neither directly pays [a contractor] for its services
nor is obligated to buy” goods and services)).14 In Ober United Travel Agency, several federal
agencies entered into “no-cost” contracts with travel agencies, under which travel services were
sold directly to Government employees. See id. at 823. Here too, Plaintiff contracted for the right
to sell directly to CBP employees, not to sell goods directly to CBP. The parties agreed to an
express contract that required Plaintiff to deliver gasoline to both Newark and JFK Airports and
required Plaintiff to sell gasoline directly to CBP employees. Consequently, there was no
constructive or cardinal change to the work required by the contract.

To avoid the significance of the unambiguous terms of the November 5, 2012 6:02 PM and
8:19 PM e-mails, Plaintiff dismisses the e-mails as irrelevant, arguing that the CO did not follow
the proper FAR procedures regarding amendments to the Solicitation. Pl. Resp. at 3–4 (citing 48
C.F.R. § 14.208(a)).15 As previously discussed, the CO’s November 5, 2012 6:02 PM e-mail was

14
As explained by a leading text, no-cost contracts are used by federal agencies for a
variety a services, including:

real estate broker services; conference, event and trade show planning services;
travel services; home-finding and relocation services for federal employees;
photocopying, distribution and sale of agency documents; redaction and publication
of agency news report[s]; operation of [an] agency lost and stolen securities
program; Defense Base Act (DBA) workers’ compensation insurance coverage;
legal services; transient solider lodging services; and phone services to detainees.

Young Ha Cho, No-Cost Contracts: A Primer, 5 GOV’T CONT. COSTS, PRICING, & ACCOUNTING
REP. ¶ 45 (2010).
15
In acquisitions governed by sealed bidding procedures, FAR 14.208(a) provides:

19
a counteroffer for a “no-cost” contract with Plaintiff that was accepted by Mr. Ruck’s November
5, 2012 7:50 and 10:04 PM e-mails and Plaintiff’s subsequent performance, without objection.
Plaintiff has provided no citation to law requiring that, once CBP posted the Solicitation on
www.FedBid.com, the contract had to be made exclusively through that platform, and therefore
any changes had to be incorporated via amendments to the Solicitation.

Next, Plaintiff argues that the November 5, 2012 6:02 PM e-mail was sent after the closing
time for bids specified by the Solicitation and, therefore, Plaintiff never had an opportunity to
withdraw its offer prior to performance. Pl. Resp. at 5 (citing 48 C.F.R. § 52.212-1(f)(5)).16 But,
the Solicitation had no effect on contract formation because the CO’s November 5, 2012 6:02 PM
e-mail was a counteroffer. Of course, Plaintiff could have objected to the new terms or refused to
accept them or responded with a counteroffer with different terms. Plaintiff took none of these
actions, but, instead, commenced with performance on the counteroffer.

Moreover, the FAR did not apply since it only applies to contracts that involve the spending
of appropriated funds. See 48 C.F.R. § 1.104 (“The FAR applies to all acquisitions as defined in
part 2 of the FAR[.]”); see also 48 C.F.R. § 2.101 (defining “acquisition” as “acquiring by contract
with appropriated funds of supplies or services (including construction) by and for the use of the
Federal Government”). A “no-cost” contract like the contract at issue in this case, however, does
not involve the spending of appropriated funds. See Young Ha Cho, No-Cost Contracts: A Primer,
5 GOV’T CONT. COSTS, PRICING, & ACCOUNTING REP. ¶ 45 (2010) (explaining that no-cost
contracts do not use appropriated funds).

Finally, Plaintiff complains that Mr. Ruck was not aware of the additional requirements
communicated via the November 5, 2012 6:02 e-mail until after performance began. 9/14/16 Ruck
Affidavit ¶¶ 2–5.17 The CO and CBP, however, had no duty to inquire whether Mr. Ruck read the
e-mail. In any event, it is undisputed that Mr. Ruck received and read the November 5, 2012 8:19
PM e-mail, and that contained the same terms as the November 5, 2012 6:02 PM e-mail: Plaintiff

If it becomes necessary to make changes in quantity, specifications, delivery
schedules, opening dates, etc., or to correct a defective or ambiguous invitation,
such changes shall be accomplished by amendment of the invitation for bids using
Standard Form 30, Amendment of Solicitation/Modification of Contract. The fact
that a change was mentioned at a pre-bid conference does not relieve the necessity
for issuing an amendment. Amendments shall be sent, before the time for bid
opening, to everyone to whom invitations have been furnished and shall be
displayed in the bid room.

48 C.F.R. § 14.208(a).
16
“Offerors are responsible for submitting offers, and any modifications, revisions, or
withdrawals, so as to reach the Government office designated in the solicitation by the time
specified in the solicitation.” 48 C.F.R. § 52.212-1(f)(1).
17
Again, there is no dispute that Plaintiff’s e-mail server received the November 5, 2012
6:02 PM e-mail within moments of being sent.

20
was instructed to “bring fuel trucks to John F. Kennedy International Airport and Newark Liberty
International Airport and sell fuel directly to US Customs Employees.” Gov’t App’x at A35. And,
Plaintiff performed.

For these reasons, the court has determined that the Government is entitled to summary
judgment with respect to Counts One and Two of the Amended Complaint, because there is no
genuine dispute of material fact that there was a constructive or cardinal change. The allegedly
“materially different work” was, as a matter of law, a counteroffer on which Plaintiff performed.
See First Commerce Corp., 335 F.3d at 1381–82 (holding that a letter from a federal agency
proposing materially different terms was a counteroffer, and that “counteroffers may be accepted
by conduct”); see also Bell/Heery, 739 F.3d at 1335 (holding that there was no constructive or
cardinal change when the federal agency did not require the plaintiff to engage in any work beyond
what was required by the contract).

Count Three: Implied-In-Fact Contract.

Count Three alleges the existence of an implied-in-fact contract. Am. Compl. ¶¶ 46–56.
An implied-in-fact contract requires the court to find that circumstances surrounding performance
show: (1) mutuality of intent to contract; (2) consideration; (3) lack of ambiguity in offer and
acceptance; and (4) actual authority on the part of the Government representative to bind the
Government in contract. See City of El Centro v. United States, 922 F.2d 816, 820 (Fed. Cir. 1990)
(discussing the factors required to find an implied-in-fact contract with the Government). In other
words, “the requirements for an implied-in-fact contract are the same as for an express contract;
only the nature of the evidence differs.” Hanlin v. United States, 316 F.3d 1325, 1328 (Fed. Cir.
2003).

As a matter of law, an implied-in-fact contract is “inferred, as a fact, from conduct of the
parties showing, in the light of the surrounding circumstances, their tacit understanding.” Balt. &
Ohio R.R. v. United States, 261 U.S. 592, 597 (1923). In this case, Plaintiff’s conduct consisted
of supplying gasoline directly to CBP employees’ vehicles via impromptu gas stations set up at
CBP facilities, with CBP allowing Plaintiff access to CBP facilities. To the extent these
circumstances infer the existence of the contract between the parties, it was a “no-cost” contract,
under which CBP only allowed Plaintiff to use its facilities to sell CBP employees gasoline. In
short, CBP paid Plaintiff no money, nor did Plaintiff pay CBP.

In any event, Plaintiff may not recover under an implied-in-fact contract when there is an
express contract between the parties governing the same subject matter. See Trauma Service
Group v. United States, 104 F.3d 1321, 1326 (Fed. Cir. 1997) (“[A]n implied-in-fact contract
cannot exist if an express contract already covers the same subject matter.”). In this case, any
implied-in-fact contract that could be inferred from the circumstances surrounding Plaintiff’s
performance evidences the same elements as the express contract created by the e-mail exchange
conducted between the CO and Mr. Ruck; i.e., a “no-cost” contract.

For these reasons, the Government is entitled to summary judgment with respect to Count
Three of the Amended Complaint.

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 Count Four: Breach Of Duty Of Good Faith And Fair Dealing.

Count Four alleges that the CBP CO breached the duty of good faith and fair dealing by
denying Plaintiff’s certified claim on July 17, 2014 without “fairly and independently
consider[ing] the merits of [Plaintiff’s] claim, including, but not limited to the adequacy of its
supporting data,” as required by the FAR. Am. Compl. ¶ 61 (citing 48 C.F.R. § 33.211(d) (“The
contracting officer shall issue a decision with a reasonable time, taking into account: (1) [t]he size
and complexity of the claim; (2) [t]he adequacy of the contractor’s supporting data; and (3) [a]ny
other relevant factors.”)).

The FAR, however, does not apply to the terms of the “no-cost” contract, because a “no-
cost” contract does not involve the spending of appropriated funds. See 48 C.F.R. § 1.104 (“The
FAR applies to all acquisitions as defined in part 2 of the FAR[.]”); see also 48 C.F.R. § 2.101
(defining “acquisition” as “acquiring by contract with appropriated funds of supplies or services
(including construction) by and for the use of the Federal Government”).

Nevertheless, the duty of good faith and fair dealing requires both contracting parties “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.” See Metcalf Const. Co., 742
F.3d 991 (quoting Centex Corp. v. United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005)) (emphasis
original); see also Precision Pine & Timber, Inc., v. United States, 596 F.3d 817, 820 n.1 (Fed.
Cir. 2010) (“Both the duty not to hinder and the duty to cooperate are aspects of the implied duty
of good faith and fair dealing.”).

In this case, Plaintiff’s certified claim did not represent a “reasonable” expectation as to
the fruits of the contract, because Plaintiff was not paid anything by CBP. Gov’t App’x at A30
(11/5/12 6:02 PM e-mail providing terms of “no-cost” contract between the parties). In addition,
it was not “reasonable” for Plaintiff to claim $4,800 as a FedBid fee, when FedBid had never
assessed any fee from Plaintiff. Am. Compl. Att. 6 (4/17/14 Certified Claim requesting “the fee
rightly due FedBid Inc., which has been estimated at $4,800”); see also Gov’t App’x at A81
(2/16/16 Ruck Dep.) (MR. RUCK: “Through the cancellation of the solicitation, FedBid did not
assess a fee to GovServ.”).

For these reasons, the court has determined that the Government is entitled to summary
judgment with respect to Count Four of the Amended Complaint.

2. Counterclaims Alleged by The Government’s December 10, 2015
Answer.

The December 10, 2015 Answer also alleges three counterclaims: (1) Plaintiff’s entire
amended complaint should be dismissed under the Special Plea in Fraud, 28 U.S.C. § 2514; (2)
Plaintiff should pay a penalty of $11,000 for each false claim submitted to CBP under the FCA,
31 U.S.C. § 3729(a)(1); and (3) under the CDA, 41 U.S.C. § 7103(c)(2), the Government is owed
damages equivalent to the unsupported portions of Plaintiff’s claim, i.e., $183,788.86. Gov’t
Answer ¶¶ 126–139.

22
 These counterclaims are all based on the same alleged facts. Gov’t Answer ¶¶ 75–125.
First, by virtue of the November 5, 2012 6:02 PM e-mail from the CO, Plaintiff was informed of
the terms of the November 5, 2012 contract,18 prior to the November 5, 2012 8:19 PM notice of
award e-mail, and prior to Plaintiff beginning performance. Gov’t Answer ¶ 92. Second, Plaintiff
nevertheless sent a certified claim to CBP, claiming $176,193.60 in losses stemming from “a great
many changes in the requirement.” Gov’t Answer ¶¶ 97–98. Third, and most importantly, on June
26, 2015, Plaintiff filed a Complaint in the United States Court of Federal Claims alleging that
Plaintiff was not informed of the gas-station style service requirement by the CO until “after”
Plaintiff dispatched fuel trucks to JFK and Newark Airports. Gov’t Answer ¶¶ 103–107; see also
Compl. ¶ 12 (“Once the fuel trucks were already sent, some on site and some en route, [the CO]
informed [Plaintiff] that they would now need to dispense fuel directly from the fuel tankers into
Government employee owned vehicles.”). In support of that allegation, Plaintiff attached, as
Attachment 4, an e-mail with a sent date of “Monday, November 6, 2012 at 6:02 AM.”
Gov’t Answer ¶ 112 (emphasis added); see also Compl. Att. 4.

November 6, 2012 was a Tuesday, not a Monday, so the e-mail attached to the June 26,
2015 Complaint as Attachment 4 was incorrectly dated. This error is apparent from Attachment
4, that shows that the e-mail was incorrectly dated as “Monday, November 6, 2012 6:02 AM, in
contrast to several other e-mails marked with the correct date of Monday, November 5, 2012.
Gov’t Answer ¶ 115 (emphasis added). Consequently, the December 10, 2015 Answer alleges
that Attachment 4 was “altered . . . to make it appear that it was sent a day later than it was.” Gov’t
Answer ¶ 113. In addition, the Government asserts that Plaintiff: (a) supported an allegation with
false evidence, and (b) “continues to falsely assert” that it was unaware of the material terms of
the contract prior to beginning performance. Gov’t Answer ¶ 125.

Plaintiff responds that there is a factual dispute as to whether the e-mail at issue was altered.
Pl. Resp. at 6. In support, Plaintiff has filed reports prepared by computer forensic experts for both
parties. 3/18/16 Odom Rep; 6/2/16 Berryhill Rep. The Government’s expert, Mr. Odom, reports
that “it is my opinion the email provided as Attachment 4 by Mr. Ruck and [Plaintiff] is not the
original email located on [Plaintiff’s] systems . . . and, as such, was manually altered to reflect a
different sent date other than its original sent date.” 3/18/16 Odom Rep. at 5. Plaintiff’s expert,
Mr. Berryhill, states that Mr. Odom’s report is unreliable because Mr. Odom did not conduct a
proper forensic examination of Plaintiff’s e-mail server. 6/2/16 Berryhill Rep. at 3. In addition,
Mr. Berryhill opines that several of Mr. Odom’s opinions lack factual support, because he did not
have electronic copies of the evidence. 6/2/16 Berryhill Rep. at 3. In addition, Plaintiff filed the
September 30, 2016 Ruck Affidavit, wherein Mr. Ruck attested that Attachment 4 was altered as
a result of a computer error. 9/3/16 Ruck Affidavit ¶ 5.

Summary judgment is appropriate only when there is no genuine dispute as to any material
fact. See Anderson, 477 U.S. at 255; see also RCFC 56(a). “As to materiality, the substantive law

18
This includes the requirement that CBP needed gas-station style service, for which its
employees would pay via individual debit and credit cards, and the requirement that Plaintiff
furnish gas-station style service at both the Newark and JFK Airports. See, e.g., Gov’t App’x at
A30 (e-mail from the CO to Mr. Ruck evidencing a sent time of Monday, November 5, 2012 at
6:02 PM and containing both requirements).
23
will identify which facts are material.” Anderson, 477 U.S. at 248. Whether a dispute is “genuine”
turns upon whether a reasonable fact-finder could find for the non-movant. Id.

By the March 20, 2017 Supplemental Brief, the Government states that “the
record . . . arguably contains bare, minimal evidence of a factual dispute regarding whether
[Plaintiff] knowingly and intentionally manipulated the email to support its claim,” and “the
Government recognizes that the [c]ourt may conclude that there now are material issues of fact in
dispute.” Gov’t Supp. Br. at 4–5. The court agrees. For these reasons, the court has determined
that the Government is not entitled to summary judgment with respect to the counterclaims alleged
by the December 10, 2015 Answer.

IV. CONCLUSION.

For the aforementioned reasons, Plaintiff’s September 15, 2016 Motion For Summary
Judgment is denied. The court, however, grants-in-part, and denies-in-part, the Government’s
September 15, 2016 Cross-Motion For Summary Judgment. Summary judgment is granted in
favor of the Government with respect to all four counts of Plaintiff’s October 7, 2015 Amended
Complaint. Summary judgment is denied with respect to the three counterclaims alleged by the
Government’s December 10, 2015 Answer.

The Government will advise the court whether it will request a trial on the three
counterclaims asserted in the December 10, 2015 Answer by May 1, 2017.

IT IS SO ORDERED.

s/ Susan G. Braden
SUSAN G. BRADEN
Chief Judge

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