Mission1st Group, Inc., ASBCA No. 62461, 62646

Background

Army awarded Mission1st Group (M1) a firm‑fixed‑price task order (Sept. 24, 2013) with a 9‑month base period and two 9‑month evaluated option periods; the task order also included an "Option to Extend Services" (up to 6 months) under FAR 52.217‑8 and option clauses under FAR 52.217‑9.
M1 proposed fixed prices for base and two option periods and a not‑to‑exceed price for up to six months of extended services; M1 later experienced staffing/cost problems at proposed rates.
The Army issued a notice of intent to exercise the first option 91 days before base‑period end (Mar. 25, 2014); M1 warned it would seek repricing or challenge any option exercise.
The government proposed a three‑month partial extension; on June 19, 2014 it notified M1 it was exercising the Option to Extend Services; Modification P00009 (dated June 23, 2014) priced a three‑month extension.
Parties subsequently executed bilateral Modifications P00010, P00011 and P00012, which adjusted the option funding and added a labor position; M1 later filed a certified claim seeking $3,694,336.73 for alleged improper option exercise.
The ASBCA decided on the parties’ written submissions and denied M1’s appeals.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the FAR 52.217‑8 option to extend services was an out‑of‑sequence "option period 3" requiring prior exercise of the two evaluated options	The placement and wording in the task order show the "Option to Extend Services" is effectively option period three, so it could only be exercised after options 1–2	The FAR 52.217‑8 option may be exercised independently; task order language and prior ASBCA precedent allow using the extend‑services option separate from evaluated option periods	The Board held the contract permitted exercise of the FAR 52.217‑8 extend‑services option independent of the evaluated option periods; Glasgow precedent bindingly supports this result
Whether the government timely exercised the extend‑services option "within 90 days before the expiration of the contract"	"Within 90 days" should be read as "at least 90 days before" (i.e., exercise must occur prior to the 90th day before expiration)	"Within" means inside that 90‑day window; June 19 exercise was inside the 90‑day period and the June 23 modification executed the exercise within the base period	The Board interpreted "within" by its ordinary meaning and held the June 19/23 exercise was timely (inside the 90‑day period)
Whether M1 waived any claim by subsequently signing bilateral modifications that funded the extension	Signing the modifications did not waive M1’s right to seek additional compensation; at most M1 waived the right to stop performance	By signing bilateral modifications that changed option funding and confirmed performance terms (including P00011), M1 accepted payment for the contested period and thus waived its claim (accord and satisfaction)	The Board held that, even assuming any initial defect, M1 waived its claim by agreeing to and signing the bilateral modifications that priced and funded the extension

Key Cases Cited

Lockheed Martin Corp. v. Walker, 149 F.3d 1377 (Fed. Cir. 1998) (Federal Circuit decision finding an out‑of‑sequence option exercise improper based on contract schedule and pricing)
Bell BCI Co. v. United States, 570 F.3d 1337 (Fed. Cir. 2009) (discussing accord and satisfaction in government contract disputes)
Cmty. Heating & Plumbing Co. v. Kelso, 987 F.2d 1575 (Fed. Cir. 1993) (authority on accord and satisfaction principles)
Sharp Elec. Corp. v. McHugh, 707 F.3d 1367 (Fed. Cir. 2013) (distinguishing GSA schedule terms from agency‑inserted contract terms)