Incorporation by reference is an intriguing doctrine. Under the doctrine, the reference to some distinct document that’s not included with a contract is, through some arcane legal alchemy, made part of the contract. It’s probably something the scriveners of antiquity conceived of when they got sick of writing contract terms. “Oh man, I just wrote all these terms out last week on embossed vellum. I don’t want to write them all again. I’ma just incorporate them by reference.” This case is a good primer on the doctrine. The contractor argued its contract had incorporated a terms and conditions document. The CBCA said no. The Federal Circuit, however, sided with the contractor, finding that the board had botched this analysis, and that the contract clearly incorporated the document in question.
CSI Aviation, Inv. v. Department of Homeland Security, General Services Administration, Fed. Cir. 2021-1630
Background
CSI submitted an offer to GSA for a Travel Services Solutions schedule contract to provide chartered flights. CSI’s offer included a document entitled CSI’s terms and conditions. That terms and conditions document stated that CSI would be entitled to recover any expenses incurred due to canceled flights. GSA awarded CSI a contract. The contract documents included CSI’s offer and the terms and conditions document.
Over the next few years, other agencies awarded CSI task orders for chartered flights under the schedule contract. When some of those flights were canceled, CSI submitted a claim to GSA seeking to recover the costs of the canceled flights. GSA denied the claim. CSI appealed to the CBCA.
The board denied the appeal, reasoning that the contract had not incorporated CSI’s terms and conditions by reference. CSI appealed to the Federal Circuit.
Holding
- Contract Incorporated CSI’s Terms and Conditions by Reference – A document is incorporated by reference if the contract cites the document in such a manner that makes it clear the document is effectively part of the contract. In this case, CSI’s offer, which was part of the contract, stated that the “terms and conditions apply to all operations and are incorporated by reference.” The board held this language was sufficiently clear to incorporate the terms and conditions by reference.
- Incorporation Doesn’t Require Magic Words – The CBCA had reasoned that the contract had used different language and incorporated some documents. The board had reasoned that if CSI had wanted to incorporate documents, it should have used the same incorporation language throughout. But the court reasoned there are no magic words for incorporation. The fact that the contract did not use uniform incorporation language was irrelevant.
- Incorporation Language Was Not Ambiguous – The board had found that the incorporation language—i.e., “apply to all operations”—was ambiguous and not the type of language that should be read as expressly incorporating a document. The court, however, reasoned that the board offered no basis for this determination. Rather, the court opined, placed in context, this language was intended to be incorporation language.
- It Was Clear Which Document CSI Intended to Incorporate – The board had found no incorporation, in part, because it was not clear which version of the terms and the conditions was referenced in the contract. The court opined that the board was “strain[ing] to find ambiguity”regarding the referenced document. The only dispute was whether the contract had incorporated the terms and conditions. It didn’t really matter which version had been incorporated.
CSI is represented by Jason Nicholas Workmaster, Elizabeth J. Cappiello, Laura G. Ferguson, and Alejandro Luis Sarria of Miller & Chevalier Chartered. The government is represented by Kyo Cho, Brian M. Boynton, Martin F. Hockey, Jr. and Partricia M. Mccarthy of the Department of Justice as well as Cassandra Maximous and Andrew Wagner of the Department of Homeland Security along with Sarah Park of the General Services Administration.
