Boarhog LLC v. United States, 129 Fed. Cl. 130

Navy awarded Boarhog a one-year, firm-fixed-price services contract (start 9/26/2014; price $476,216) after competitive solicitation. Two days before performance was to begin, the Navy terminated the award for convenience (9/24/2014) in response to an agency protest and re-awarded to a competitor.
Boarhog filed bid protests (Navy, GAO, and this Court). The Navy later took corrective action and re-awarded an identical contract to Boarhog on 3/10/2015; Boarhog began performance under the replacement contract on 3/26/2015.
On 4/13/2015 Boarhog submitted a CDA claim seeking $229,608 for lost performance during the six-month gap (9/26/2014–3/26/2015); the contracting officer denied the claim, finding no incurred performance costs and noting Boarhog received a replacement contract with identical terms.
Boarhog appealed the contracting officer’s final decision to the Court of Federal Claims; the Government moved to dismiss under RCFC 12(b)(6) for failure to state a claim.
The Court evaluated (1) whether the termination for convenience amounted to a contractual breach (requiring bad faith or abuse of discretion), and (2) whether Boarhog suffered recoverable damages given it performed nothing under the terminated contract and later received an identical replacement award.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Navy’s termination for convenience was a breach of contract (bad faith or abuse of discretion)	Boarhog contends the termination prevented its performance for six months and was improper; cites Court’s dismissal order in its bid protest context to suggest wrongful action	Government argues termination for convenience is unilateral and lawful absent clear evidence of bad faith or abuse of discretion; no such allegations or proof were pled	Court: Dismiss — Boarhog failed to plead facts showing bad faith or abuse of discretion; termination not shown to be a breach
Whether Boarhog suffered compensable damages from the termination	Boarhog asserts injury from prevented performance and seeks $229,608 for the six-month loss of opportunity	Government contends Boarhog incurred no performance costs (percent complete = 0) and received an identical replacement contract, precluding recovery of lost profits or consequential damages	Court: Dismiss — no recoverable injury; under contract formula recoverable amount = 0 and lost profits/consequential damages not available

Krygoski Constr. Co. v. United States, 94 F.3d 1537 (Fed. Cir. 1996) (termination for convenience gives rise to breach only for bad faith or abuse of discretion)
TigerSwan, Inc. v. United States, 110 Fed. Cl. 336 (2013) (CDA breach for improper termination requires clear and convincing evidence of misconduct)
Salsbury Indus. v. United States, 905 F.2d 1518 (Fed. Cir. 1990) (contracting officer’s decision to terminate for convenience is conclusive absent bad faith)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
Cary v. United States, 552 F.3d 1373 (Fed. Cir. 2009) (complaint must plausibly suggest entitlement to relief)