ANHAM FZCO, LLC, ASBCA No. 59283

Background

ANHAM FZCO was awarded an indefinite-quantity prime‑vendor contract (2010) to procure, store and distribute U.S.‑sourced food to U.S. forces and other federal customers in Iraq, Kuwait and Jordan; it was required to maintain a 45‑day inventory and to forecast monthly demand.
A 2008 pre‑proposal conference and Amendment No. 0003 included government statements about drawdown/exit procedures and that the government’s only contractual obligation was the guaranteed minimum order quantity.
A Status of Forces Agreement (SOFA) effective 1 Jan 2009 set a deadline of 31 Dec 2011 for U.S. forces to leave Iraq; ANHAM alleges DLA‑Troop Support (DLA TS) nonetheless told it in 2011 that no withdrawal plan had been established and encouraged it to plan for high troop levels.
ANHAM leased the Logistica warehouse in Kuwait and renewed/extended the lease such that it asserts it incurred $10,989,020 in extra lease costs after troops withdrew in late 2011 due to pipeline inventory and storage needs.
ANHAM claims DLA TS withheld or misrepresented knowledge of an operational order (OPORD 11‑01) directing withdrawal in 2011, breached the implied covenant of good faith and fair dealing, and caused ANHAM’s excess lease/storage costs; DLA TS asserted defenses including sovereign acts, assumption of risk, mitigation failure and waiver.
The government moved for summary judgment to dismiss ANHAM’s claim; the Board denied the motion, finding disputed material facts (including whether DLA TS misled ANHAM and what DLA TS knew) and rejecting on the record the government’s legal defenses as grounds for summary judgment.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether DLA TS breached the implied covenant of good faith and fair dealing by withholding or misrepresenting troop withdrawal plans	DLA TS knew of OPORD 11‑01 and amendments directing withdrawal in 2011 and intentionally misled ANHAM, causing it to retain excess warehouse space	ANHAM assumed the risk of troop withdrawal; DLA TS lacked (or did not disclose) usable information and did not mislead	Denied summary judgment — disputed material facts exist about DLA TS’s knowledge and representations; claim sufficient to proceed to trial
Whether ANHAM suffered compensable damages for lease costs	ANHAM incurred almost $11M in lease costs because it relied on DLA TS’s projections and had excess pipeline inventory requiring storage	Government says lease costs were covered in regular contract payments or avoidable (mitigation/choice to renew)	Denied summary judgment — government produced no proof that regular payments covered excess storage and factual disputes on mitigation and causation remain
Whether the sovereign‑acts doctrine bars ANHAM’s claim	Plaintiff seeks recovery for government misrepresentation/withholding, not for the sovereign decision to withdraw troops per se	Government contends withdrawal was a sovereign act excusing liability	Denied summary judgment — sovereign acts do not automatically bar claims based on government misrepresentation or failure to provide necessary information; factual inquiry required
Whether summary judgment is appropriate	N/A (procedural)	Government argued facts undisputed and entitlement as a matter of law	Denied — material factual disputes (e.g., OPORD knowledge, government statements, reliance, damages) preclude summary judgment

Key Cases Cited

Metcalf Constr. Co. v. United States, 742 F.3d 984 (Fed. Cir.) (implied covenant of good faith and fair dealing limits government discretion)
Lakeshore Eng'g Servs., Inc. v. United States, 748 F.3d 1341 (Fed. Cir.) (duty not to interfere with the other party's performance)
Hughes Communications Galaxy, Inc. v. United States, 998 F.2d 953 (Fed. Cir.) (sovereign authority retained by government in contracts absent unmistakable surrender)
United States v. Winstar Corp., 518 U.S. 839 (U.S.) (limitations on sovereign‑acts defense and when a sovereign act may excuse government performance)
Casitas Mun. Water Dist. v. United States, 543 F.3d 1276 (Fed. Cir.) (sovereign act excuses performance only when it renders performance impossible)
Carabetta Enters., Inc. v. United States, 482 F.3d 1360 (Fed. Cir.) (sovereign‑acts defense does not necessarily mandate dismissal)