Appeal of the agency’s denial of a claim for the costs of sample products and product development is denied, where the parties never entered into any express or implied-in-fact contract and where the appellant itself acknowledged the government was not obligated to purchase any of its products. While the parties spent some time discussing the sample products and possible modifications, at no point did the agency have funding for any purchases, nor did any government official with contracting authority ever become involved.
The government moved to dismiss an appeal by Man & Machine Inc., arguing that no contract existed between the parties or, alternatively, that Man & Machine failed to state a claim upon which relief could be granted.
When the Walter Reed National Military Medical Center sought vendors who could provide a common access card-enabled keyboard that could be easily sanitized and disinfected, the CIO’s office identified Man & Machine as a potential vendor. In response to the government’s request for information, the appellant provided test products and discussed potential modifications to the products. However, the office conducting market research was unable to identify funding for the purchase. MMI asked the office to return its test products, but suggested that the request was not urgent.
Ten months later, Walter Reed received an invoice for $118,773.00 for miscellaneous product development costs and an invoice for $1,744.18 for the test products. In a letter to Walter Reed, MMI stated that it understood the hospital had not committed to the purchase of any product but that it had constructively accepted the products provided and was required to pay for them. When the center tried to return the equipment, MMI refused to accept it. A claim followed, which was denied. MMI filed this appeal.
The government argued the board had no jurisdiction to consider the appeal, because Walter Reed had no implied or express contract with MMI. In response, MMI argued it made a non-frivolous assertion of an implied contract.
ASBCA concluded there was no implied contract and no evidence of one other than MMI’s assertions. The entirety of MMI’s arguments stated that it had provided pricing, terms, and conditions, and that Walter Reed had not returned its test products. The board found these facts did not relate to an implied in fact contract. In fact, MMI admitted there was no mutual intent for the parties to enter into any contract and that it was aware the government was under no obligation to make a purchase. Further, at no point did any government official with contracting authority become involved in the market research. ASBCA found no basis to conclude an implied in fact contract had been formed and dismissed the appeal for lack of jurisdiction.
Man & Machine Inc. is represented by Clifton Broumand, President. The government is represented by Laurel C. Gillespie, Chief Trial Attorney, and by Ian F. Rothfuss and James A. Douglas, Trial Attorneys, Defense Health Agency