If Your Claim Involves an Order Under a GSA Schedule Contract, Do You Submit the Claim to GSA or the Ordering Activity?

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If you have a claim arising from an order issued under a GSA schedule, where are you supposed to submit a claim? Do you file with GSA or the ordering activity? In this case the contractor submitted a claim to the ordering activity. The claim was denied, and when the contractor appealed to the ASBCA, the ordering activity argued the board lacked jurisdiction because the contractor should have submitted the claim to GSA. The board wasn’t convinced. A FSS contractor only needs to submit a claim to GSA if the claim involves a dispute under the schedule contract. Here, the dispute arose out of the order. The contractor properly submitted a claim to the ordering activity.

Appeal of DLT Solutions, LLC, ASBCA No. 63069

Background

DLT Solutions had a Federal Supply Schedule contract with GSA to provide various software services. The Marine Corps ordered software licenses from DLT under the schedule contract. The order had a bona fide needs provisions, which required the Marines to exercise options as long as it had a need for the licenses. The order also stated that at the end of the order period, the Marines would certify in writing that they had deleted all copies of the software.

DLT performed the base year of the contract, but the Marines did not exercise any options. DLT submitted a claim to the Marines, arguing the agency breached the contract by not exercising the option even though it had a bona fide need. The Marines denied the claim.

DLT appealed to the ASBCA asserting five counts: (1) breach of the bona fide needs provisions, (2) breach of the certification provisions, (3) fraudulent inducement, (4) superior knowledge, and (5) estoppel

Legal Analysis

Jurisdiction

The Marines moved to dismiss  the entire appeal for lack of jurisdiction. The Marines argued that the claim involved an order made under a schedule contract, so DLT should have submitted its claim to GSA. Because DLT submitted its claim to the Marines, the board lacked jurisdiction.

The board rejected the Marines’ argument. A schedule contractor only needs to submit a claim to GSA if the claim involves a dispute concerning the schedule contract. Here, the dispute centered on the terms of the order, not the scheduling contract. The Marines attempted to argue that the dispute could involve provisions of the schedule contract, but the board found the agency had not raised any genuine issue involving the schedule contract.

Superior Knowledge/Fraudulent Inducement Theories

The Marines argued the board should dismiss DLT’s superior knowledge and fraud because those theories had not been submitted as part of the underlying claim, so the board lacked jurisdiction over them. The board found this argument persuasive. The superior knowledge and fraud claims alleged that the Marines had failed to disclose or misrepresented its intent to exercise options. The operative facts submitted in the claim did not mention a failure to disclose or a misrepresentation. Thus, these were new claims over which the board lacked jurisdiction.

Estoppel

The board also found that it lacked jurisdiction over DLT’s estoppel claim. DLT argued that the Marines should be estopped from using other products when it still had a bona fide need for DLT’s software licenses. This claim, however, sought an injunction or specific performance, which the board cannot grant.

Breach of Contract 

The board determined that DLT’s two breach claims were still viable. Those claims were allowed to proceed.

DLT is represented by Thomas O. Mason, Joseph R. Berger, Mona Adabi, and Brian Lamb of Thompson Hine LLP. The government is represented by h Craig D. Jensen and Antonio Robinson of the Navy.

ASBCA - DLT Solutions