Government’s motion to dismiss a breach of contract claim for lack of jurisdiction is granted, where the agreement in contention was a blanket purchase agreement, which is not a contract, but merely a framework for the award of future contracts that created no obligations for either party. While the plaintiff alleged the agency ceased issuing task orders under the BPA as retaliation for the plaintiff’s refusal to work with a certain subcontractor, the court also noted the BPA did not obligate funds and did not oblige the agency to issue any task orders at all.
McLeod Group LLC alleged the Department of Homeland Security breached its contractual obligations under a blanket purchase agreement and certain task orders issued under the BPA. McLeod sought monetary damages and attorney’s fees and costs. The government moved to dismiss for lack of jurisdiction.
McLeod was awarded a blanket purchase agreement to provide DHS and its Office of the Chief Administrative Officer with consulting services and recommendations regarding the improvement of DHS’s organizational structure, mission, and organization of its lines of business. The need for the contract arose after an internal investigation suggested that the DHS CAO had created an oppressive and toxic work environment. McLeod’s principal had participated in this investigation and substantiated the allegations.
Approximately six months after award, another contractor, Java Productions Inc, approached McLeod to inquire about work as a subcontractor under the BPA. McLeod declined the offer. According to McLeod, after it declined to work with this subcontractor, DHS retaliated against McLeod and declined to award McLeod any additional task orders under the BPA.
McLeod later submitted a certified claim alleging that DHS failed to execute its contractual responsibilities under the BPA in a good faith and trusted manner, and that the agency acted in bad faith by not issuing additional within-scope task orders to McLeod. However, the DHS contracting officer found this was not a proper basis for a claim. The CO noted that the BPA guaranteed no set amount of work and that it could have been discontinued at any time. The CO found no intent to injure McLeod and denied the claim in full. This litigation followed.
The government moved to dismiss for lack of jurisdiction, as the claims rely on a blanket purchase agreement, which did not establish a contractual relationship between the parties. The government argued that the BPA is not a contract, that McLeod had not asserted non-frivolous allegations of the existence of a contract, and that McLeod failed to identify the specific terms of the BPA that were allegedly breached.
In response, McLeod argued that the question of whether the BPA is a contract is a question for the court, and therefore dismissal on jurisdictional grounds would be improper. McLeod also argued that its allegations reflected a fully formed and partially performed agreement with the government, and those it had non-frivolously asserted the existence of a contract.
However, the court agreed it lacked jurisdiction to hear the complaint, as it has been long established that BPAs are not contracts with the government, but rather frameworks for future contracts that establish no requirements for either party under orders are issued by the government and accepted by the contractor.
The court explained that the plain text of the BPA states that the agreement is not a contract with the government and that it obligated no funds to the contemplated services. The agreement did not impose significant obligations on either McLeod or DHS, but provided that all performance obligations would be specified in any future task orders. Notably, the BPA did not obligate DHS to issue any task orders at all.
While McLeod argued the BPA was a contract, the court found its arguments unpersuasive. For example, McLeod argued the BPA required it to attend a kick-off meeting and complete monthly status reports of open task orders, but the court did not consider these significant performance obligations such that they created a contract. Further, the agency’s issuance of seven task orders did not demonstrate that the underlying BPA was itself a contract.
McLeod Group LLC is represented by Richard P. Rector and Dawn E. Stern of DLA Piper US LLP; and by Joshua B. Duvall of Matross Edwards, LLC. The government is represented by Sonia W. Murphy, Trial Attorney, Patricia M. McCarthy, Assistant Director, Robert E. Kirschman, Jr., Director, Joseph H. Hunt, Assistant Attorney General, Commercial Litigation Branch, Civil Division, Department of Justice; and by Charlene T. Storino and Christine R. Couvillon, Acquisition and Procurement, Department of Homeland Security.