Although Documents Were In Agency’s Contract File, They Were Not Incorporated Into Contract; CSI Aviation, Inc. v. Department of Homeland Security, CBCA 6292 et al.

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Government’s motion for summary judgment on narrow issue concerning whether a document was incorporated into the contract is granted. The contractor alleged that a terms and conditions document that had sent to the agency had been incorporated into its FSS contract. The board, however, found that while there were multiple copies of terms and conditions documents in the agency’s contract file, it did not appear that any of them had been incorporated. The schedule contract included a list of six document that “were hereby incorporated.” The terms and conditions were not on that list. What’s more, no other document in the file clearly incorporated the terms and conditions. The contractor argued the government had waived any argument contesting the incorporation, but the board reasoned that doctrine of waiver does not apply to an incorporation question.

CSI Aviation had a Federal Supply Schedule contract with the General Services Administration for air charter brokerage services. U.S. Customs and Immigration Enforcement issued task order to CSI under the FSS contract. Apparently after the task orders were issued, a dispute arose as to whether CSI’s FSS contract included a terms and conditions addendum. CSI asserted that certain terms and conditions had been incorporated into the FSS contract; the government disagreed. CSI appealed the issue to the CBCA. All the parties moved for summary judgment.

The board noted that the FSS contract itself consisted of a standard form 1449 with some attachments­—e.g., the solicitation, offer, a final proposal, commercial price. There was no terms and conditions document attached to the contract.

Nevertheless, the GSA contract file contained multiple versions of documents purporting to be CSI terms and conditions. The file contained a terms and conditions dated November 2008 and another copy of the terms and conditions dated February 2014. Further complicating matters, a 2009 price list in the file referred to a February 2009 terms and conditions. The record showed that between 2009 and 2015, CSI had submitted eight updates to its commercial price list, which were later added as modifications to the FSS contract. Each of these price lists stated that they were governed by the CSI’s terms and conditions, but none of these price lists actually incorporated the terms and conditions into the FSS contract.

Relying on Federal Circuit precedent, the board reasoned that to incorporate material into a contract by reference, the host document must identify with detailed particularity what specific material it incorporates and where that material can be found. The incorporating document must use language that is express and clear so as to leave no ambiguity about the whether the document is being incorporated.

The board found that CSI could not satisfy this standard with respect to the terms and conditions. First, the board reasoned, the schedule contract included a list of six document that “were hereby incorporated.” The terms and conditions were not on that list. The fact that there even was an express list of incorporated documents indicated that the parties were familiar with the language of incorporation. If they had intended to incorporate CSI’s terms and conditions, they knew how to do it.

Second, despite CSI’s contentions, neither its offer not its commercial price list referred to the terms and conditions using express, clear language of incorporation. The table of contents of its offer referred to the terms and conditions with a parenthetical describing it as a “Standard Commercial Warrant.” The board noted that such a warranty, if applicable, would be binding on CSI but not GSA.

Third, the board opined, CSI’s own arguments made it clear that the terms and conditions “were a moving target or, to be more charitable, a living document.” After reviewing the file, the board could still not locate the most current version of the terms of the conditions at any juncture from March 2009 to 2019: “Could the most current version change from day to day? Week to week? Was there one custodian at CSI, or more than one. We do not know?”

CSI attempted to argue that GSA had effectively waived any argument it had for excluding the terms and conditions, because the agency never asked CSI about the terms and conditions documents in the contract file. The board found that a waiver argument is inapplicable to an incorporation issue. The board does not look to who is responsible for reasonable doubt relating to incorporation but whether reasonable doubt exists. Thus, it is incumbent on the party which to incorporate a document that there is no doubt.

CSI is represented by Jason N. Workmaster, Caroline J. Watson, Alejandro L. Sarria, Marcus A.R. Childress, and Elizabeth J. Cappiello of Miller & Chevalier Chartered. The government is represented by Cassandra A. Maximous, Andrew M. Wagner, George Mathew and Robert Metzger of the Department of Homeland Security as well as Sarah E. Park of the General Services Administration.

CBCA CSI Aviation