E & E Enterprises Global, Inc. v. United States
120 Fed. Cl. 165
Fed. Cl.2015Background
- E&E Enterprises Global (an SBA 8(a) contractor) was awarded an IDIQ firm‑fixed price contract to install broadband/VSAT at DeCA commissaries; the contract included task orders, a termination‑for‑convenience clause, and an SBA notice provision.
- The agency issued 14 task orders and paid well above the $5,000 minimum; the contract was terminated for convenience about eight months into performance.
- E&E submitted a certified CDA claim (Nov. 2012) containing two labeled alternatives: Alternative I (termination‑for‑convenience settlement costs ~ $1.53M) and Alternative II (wrongful/bad‑faith termination damages ~ $2.27M). The CO awarded only ~$97,900 on Alternative I and denied Alternative II; final decision dated May 16, 2013.
- E&E sued in the Court of Federal Claims (May 15, 2014) asserting four breach theories (each seeking $3,296,543.18): (Count I) breach of implied covenant of good faith and fair dealing; (Count II) wrongful termination/breach; (Count III) implied‑in‑fact contract/quantum meruit; (Count IV) express breach (failure to give SBA advance notice).
- The government moved to dismiss under RCFC 12(b)(1) and 12(b)(6). The court resolved jurisdictional issues (same‑claim rule under the CDA) and plausibility of the remaining counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Counts were "same claim" presented to contracting officer | E&E: Counts I, II, IV arise from same operative facts as administrative claim; CO had adequate notice | Gov: Counts I, III, IV were not the same claims presented; therefore no CDA jurisdiction | Court: Has jurisdiction over Counts I, II, IV; Count III dismissed for lack of jurisdiction (not presented to CO). |
| Nature/identity of certified claim and appealability of Alternative I | E&E: The administrative submission should be read as a unified claim; complaint seeks termination‑related relief | Gov: Alternative I and II are separate claims; CO decision on Alternative I is final and E&E did not appeal it | Court: Alternative I and II are divisible; no appeal of CO decision on Alternative I appears in complaint; thus no jurisdiction to relitigate that CO award here. |
| Sufficiency/plausibility of Counts I & II (breach of implied covenant; wrongful termination) under RCFC 12(b)(6) | E&E: Complaint alleges bad‑faith conduct and damages; damages need not be more granular at pleading stage | Gov: Damages are vague or speculative (percentage‑of‑contract formula); failure to plead constructive‑change elements; IDIQ discretion precludes implied‑covenant claim | Court: Counts I and II survive 12(b)(6); damages pleading and alleged theories are plausible at this stage; constructive‑change and discretion arguments insufficient to dismiss now. |
| Sufficiency/plausibility of Count IV (SBA advance notice) | E&E: Delay in notifying SBA is part of pattern of bad faith and supports relief | Gov: Six‑hour delay caused no plausible $3.3M injury; FAR notice benefits SBA, not contractor | Court: Count IV dismissed with prejudice for failure to state a plausible claim (no causal link or contractor entitlement). |
Key Cases Cited
- Veridyne Corp. v. United States, 758 F.3d 1371 (Fed. Cir. 2014) (describing SBA 8(a) subcontracting role)
- Travel Centre v. Barram, 236 F.3d 1316 (Fed. Cir. 2001) (IDIQ contracts obligate purchase only of minimum quantity)
- Mason v. United States, 615 F.2d 1343 (Ct. Cl. 1980) (discussing IDIQ obligations)
- Scott Timber Co. v. United States, 333 F.3d 1358 (Fed. Cir. 2003) (CDA "same claim" rule allows some variance if claims arise from same operative facts and seek same relief)
- Reliance Ins. Co. v. United States, 931 F.2d 863 (Fed. Cir. 1991) (administrative claim must clearly notify CO of breach/good‑faith theory; dissimilar post‑CO theories not allowed)
- Case, Inc. v. United States, 88 F.3d 1004 (Fed. Cir. 1996) (divisible parts of a certified claim seeking different sums are separate claims)
- Bell/Heery v. United States, 739 F.3d 1324 (Fed. Cir. 2014) (implied duty of good faith and fair dealing applies to government contracts)
- Centex Corp. v. United States, 395 F.3d 1283 (Fed. Cir. 2005) (duty of good faith and fair dealing implied in every contract)
- Precision Pine & Timber, Inc. v. United States, 596 F.3d 817 (Fed. Cir. 2010) (implied covenant prevents government reappropriation of contract benefits)