Appeal alleging an implied-in-fact contract with the government is denied. The claimant, which had been the subcontractor on a task order, claimed that it had formed an implied-in-fact contract with the government under which it was entitled to payment for the storage of government property. The board found that there was no implied contract because there was no unambiguous offer and acceptance. The claimant argued that the agency’s failure to provide disposal instructions for the property amounted to an acceptance. But the board found that the government’s inaction cannot constitute acceptance of an offer.
The Navy awarded a task order to The Analysis Group (TAG) for engineering and technical support of the Floating Network Littoral Sensor Grid—a series of floating sensorized buoys that create a wireless network for ship to ship connectivity. Intellicheck, Inc. worked as a subcontractor on that task order. The task order provided that when the work was completed, the Navy would provide for disposition of the buoys.
TAG completed the task order. The Navy did not immediately provide for disposition of the buoys. Intellicheck stored the buoys. After two years, the Navy provided Intellicheck with disposition instructions. Intellicheck then filed a claim with the Navy for the storage costs. The Navy denied the claim, reasoning that Intellicheck was a subcontractor under the task order and thus did not have standing to bring a claim.
Intellicheck appealed to the ASBCA. Although Intellicheck was a subcontractor on the task order and thus not in privity with the Navy, the company claimed that it had formed an implied-in-fact contract with the Navy for the cost to store the buoys.
The board reasoned that an implied contract is a contract that is inferred, as a fact, from the conduct of the parties. To establish an implied-in-fact contract, a claimant must prove (1) mutuality of intent, (2) consideration, (3) unambiguous offer and acceptance, and (4) actual authority on the part of the government’s representative to bind the government.
Here, the board found that Intellicheck could not satisfy the offer and acceptance prongs. Intellicheck contended that the Navy had offered, through TAG, that it would provide disposal instructions for the buoys. Intellicheck claimed it had accepted this offer expecting to receive disposal instructions. But the board reasoned that this was a term of the express contract term between the Navy and TAG, not a separate offer to Intellicheck. The Navy could not enter an implied contract with Intellicheck by entering an express contract with TAG.
Intellicheck also contended that by not providing timely disposal instruction, the Navy effectively accepted Intellicheck’s offer to store the buoys. The board rejected this reasoning that it was not objective evidence of an offer and acceptance. There was no communication between the parties that could serve as the basis of an implied-in-fact contract. The Navy’s inaction was simply not an unambiguous acceptance of the alleged offer.
Intellicheck is represented by William A. Shook of the Law Offices of William A. Shook PLLC. The government is represented by Craig D. Jensen and Toya M. McLendon of the Navy.
