Government’s Claim for Undelivered Golf Cart Batteries Slammed Faster than a Country Club Martini; Appeal of Club Car, Inc., ASBCA No. 61710

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Contractor’s appeal of government’s claim is sustained. The contract obligated the contractor to provide golf carts and one replacement battery for each cart. The government ordered carts but did not order batteries for those carts until after the contract expired. The government claimed it was still entitled to the batteries. The ASBCA disagreed, finding that the plain language of the agreement did not obligate the contractor to supply batteries after the contract ended. Having chosen to order batteries separate from the carts, the government bore the consequences of not ordering the batteries before the contract expired.

Club Car, Inc. had a contract with the Army, Morale, Welfare, and Recreation Fund to supply golf carts at various Army locations. The contract required Club Car to provide a replacement battery with each cart. Rather than simply store a surplus of batteries, the Fund ordered batteries form Club Car as the need arose. Throughout the life of the contract, Club Car supplied batteries when requested.

The contract specified that any order issued during the contract term but not completed before the end of the term had to be completed within 12 months of the contract expiration. Thus, for instance, if the Fund ordered golf carts the day before the contract ended, Club Car would be obligated to provide those carts for another year.

Club Car’s contract expired in July 2016. Once the contract expired, Club Car stopped delivering replacement batteries to the Fund. The Fund, however, demanded additional batteries. Club Car refused, asserting that it was longer obligated to deliver batteries after the 12 month grace period. The Army issued a final decision demanding the Club Car pay $310,200 for undelivered batteries. Club Car appealed the Fund’s decision to the ASBCA. Shortly after the Army filed its answer, Club Car moved for judgment on the pleadings.

The board granted Club Car’s motion. The plain language of the contract did not obligate Club Car to deliver replacement batteries that have not been ordered within the effective period of the contract. The Fund’s battery orders were issued after the expiration of the contract in July 2016. The Fund chose and ordering procedure in which it would order batteries well after initial cart delivery. Having chosen that procedure, Club Car was not responsible for the Fund’s failure to order sufficient replacement batteries in time.

Club Car is represented by Michael T. Wagner of Covington & Burling LLP. The government of represented by Raymond S. Saunders and Major Stephen M. Hernandez.

ASBCA – Club Car