The contractor sued the government seeking damages for a termination for convenience. The government moved for summary judgment, arguing the protester was only entitled to damages it could prove using a standard record-keeping system, but that the contractor had not established it had a standard record-keeping system. The court sided with the government. The contractor’s description of its record-keeping was essentially of a vast collection of unorganized documents. The system was too haphazard to reasonably prove termination damages.
ACLR, LLC v. United States, COFC No. 15-767C
Background
The government issued ACLR, LLC a task order for audit services. ACLR sued for breach when the government refused to pay for some of ACRL’s audits. The Court of Federal Claim denied the claims for breach, finding that ACLR’s claim was not for breach, but rather for constructive termination for convenience.
In light of the court’s ruling, ACLR amended its complaint to add a claim for termination for convenience damages. The government moved for summary judgment on the termination for convenience claim.
Analysis
The government reasoned that ACLR’s claim was governed by FAR 52.212-4(l). Under the provision, upon a termination for convenience, a contractor is entitled to reasonable damages the contractor can demonstrate using its standard record keeping system. The government argued that ACLR had not demonstrated it had a “standard record-keeping system.”
The court agreed with the government. While there was no precedent on what qualifies as a standard record-keeping system, the court surmised that based on the plain language of the FAR, a standard record-keeping system has a regularly-used, carefully thought-out method that involves a set of organizing and orderly procedures. The court did not believe ACLR’s system met that standard.
ACLR had submitted a declaration describing its record-keeping as including the use of QuickBooks, Microsoft File Explorer and Microsoft Outlook, which stored vendor invoices, work product, and communications data. The court, however, found that ACLR had merely described a vast collection of documents, some of which reflected post hoc estimates rather than an organized method for tracking costs.
The court granted the government’s motion for summary judgment.
ACLR is represented by Thomas K. David and John A. Bonello. The government is represented by Joseph A. Pixley, Brian M. Boynton, Patricia M. McCarthy, Martin F. Hockey, Jr. and Augustus J. Golden of the Department of Justice as well as Lucy Mac Gabhann of the Department of Health and Human Services.
–Case summary by Craig LaChance, Senior Editor
