This is a Contract Disputes Act
1
case. Appellant, Caldwell & Santmyer, Inc. (“Caldwell”), appeals from the decision of the United States Department of Agriculture Board of Contract Appeals (“Board”) in
Caldwell & Santmyer, Inc.,
AGBCA No. 93-191-1, 94-2 BCA (CCH) ¶ 26,854,
BACKGROUND
A.
The pertinent facts are not in dispute. 2 On April 27, 1992, APHIS solicited bids for the construction of its Plant Germplasm Quarantine Laboratory in Beltsville, Maryland. Caldwell was one of thе bidders. Both the specifications and an equipment schedule in the contract listed two categories of equipment as “vendor furnished/vendor installed.” APHIS received no questions from prospective bidders concerning the term “vendor furnished/vendor installed.”
R.J. Crowley, Inc. (“Crowley”) submitted the lowest bid, which was 41 percent lower than the APHIS estimate. After APHIS asked Crowley to submit the cost summary sheets it had used in preparing its bid, Crowley informed APHIS of two mathematical errors in the bid. APHIS also discovered thаt Crowley had omitted the costs for “vendor furnished/vendor installed” equipment. Crowley was permitted to withdraw its bid on August 8, 1992, making Caldwell the lowest bidder.
Because of the problems APHIS had experienced with Crowley’s bid, the contact person at APHIS for the contract asked Caldwell to submit the cost summary sheets it had used in determining its bid price. Caldwell complied with the request on August 11, 1992. The cost summary sheets showed that Caldwell had not included any costs for the “vendor furnished/vendor installed” equipment. When the contracting officer returned from vacation and was told by his contact person that Caldwell’s bid did not include any costs for the “vendor furnished/vendor installed” items, he was angry that Caldwell had been asked for its cost summary sheets. In his opinion, APHIS had no reаson to believe that Caldwell’s bid contained an error that would require bid verification. His opinion was based on the analysis of the arehitectural/engineering firm that had prepared the specifications for the project and оn the amounts of the next three lowest bids. Accordingly, he instructed that Caldwell be sent the routine preaward letter. The letter was sent on August 17. On September 7, APHIS awarded Caldwell the contract.
*1580 Caldwell interpreted the specification’s “vendоr furnished/vendor installed” language to mean government furnished, as opposed to contractor furnished, whereas APHIS wanted the “vendor furnished/vendor installed” equipment to be contractor furnished with a vendor representative present and involved in the installation.
On October 5,1992, after reviewing the bid proposal for the first time, the contracting officer personally concluded that Caldwell had not included in its bid any costs for “vendor furnished/vendor installed” equipment. The next day, he wrotе Caldwell a letter in which he stated that, as the general contractor, it was responsible for supplying equipment designated “vendor furnished/vendor installed.” He asked Caldwell to submit a corrected bid in accordance with mistake after аward procedures, and directed that no work proceed under the contract. Caldwell responded that it had not erred in its bid submission. As noted above, Caldwell interpreted the “vendor furnished/vendor installed” language as requiring that APHIS furnish the equipmеnt involved. After reviewing the specifications and drawings, the contracting officer concluded that the term “vendor furnished/vendor installed” was not precisely defined and that Caldwell had not made an error in its bid.
APHIS estimated the cost of supplying and installing the omitted equipment to be between $200,000 and $300,000, and decided not to proceed under a contract that would require such a material alteration. As a result, on November 23, 1992, it terminated Caldwell’s contract for convenience. The termination letter stated that the contract had been erroneously awarded, that the solicitation contained defective specifications susceptible to more than one reasonable interpretation, that other bidders on the project also may have omitted the costs of “vendor furnished/vendor installed” equipment, that the ambiguity of the specifications impeded full and open competition, and that corrective action would рrejudice the other bidders.
On January 5, 1993, Caldwell submitted two settlement proposals to the contracting officer. The first was a termination for convenience settlement proposal in the amount of $24,669.13. Caldwell wrote that the propоsal was comprised of overhead costs “plus standard markups and settlement expenses.” APHIS accepted this proposal and paid Caldwell pursuant to it.
Caldwell’s second settlement proposal was for breach of сontract, based upon alleged wrongful termination of the contract; it was in the amount of $148,132.66. Caldwell explained that it was seeking to recover lost profits and overhead of $146,666 and a bonding premium of $1,466.66.
3
Citing
Torncello v. United States,
B.
In granting Agriculture’s motion for summary judgment, the Board noted that, under the termination for convenience clause, a contracting officer has “broad discretion.” Caldwell, 94-2 BCA (CCH) at 133, 625. The Board observed that, in Caldwеll’s case, the clause appeared to have been used “for its intended purpose of ending an improvident procurement.” Id. Accordingly, the Board concluded, the contracting officer had not abused his discretion in terminating the contract. Id. The Board rejected Caldwell’s Tomcello argument. It found “no evidence the Government intended before award to terminate the contract for any reason.” Id.
*1581 DISCUSSION
We treat the decision of an agency board on any question of fact as final and conclusivе unless the decision is “fraudulent, or arbitrary, or capricious, or so grossly erroneous as to necessarily imply bad faith, or if such decision is not supported by substantial evidence.” 41 U.S.C. § 609(b) (1988). In reviewing the decision of an agency board on any questiоn of law, we are not bound by the conclusions of the board.
Fruin-Colnon Corp. v. United States,
A.
Caldwell contends first that the contracting officer acted in bad faith and abused his discretion in terminating the contract for convenience. The termination for convenience clause of the contract provided, in pertinent part, as follows:
(a) The Government may terminate performance of work under this contract in whole, or from time to time in part, if the Contracting Officer determines that a terminаtion is in the Government’s interest.
48 C.F.R. § 52.249-2 (1994).
We have stated that “[i]t is not the province of the courts to decide
de novo
whether termination was the best course. In the absence of bad faith or clear abuse of discretion the contracting officer’s еlection to terminate is conclusive.”
Salsbury Indus. v. United States,
The stipulated facts do not support Caldwell’s claim of either bad faith or abuse of discretion. As indicated above, according to the stipulation, Caldwell interpreted the specification’s “vendor furnished/vendor installed” language to mean government furnished, as opposed to contractor furnished, whereas APHIS wanted the “vendor furnished/vendor installed” equipment to be contractor furnished, with a vendor representative present and involved in the instаllation. Significantly, upon learning that Caldwell did not believe it had made a mistake in its bid, the contracting officer did not immediately terminate the contract outright; rather, he examined the contract to see if he could fairly take the position that Caldwell’s reading of the “vendor furnished/vendor installed” language was wrong. It is clear that the contracting officer wanted to hold Caldwell to its bid price and to require that it pay for “vendor furnished/vendor installed” equipment. Ultimately, though, he rejected that course of action and decided to terminate the contract because the modification that would have been necessary to reflect Agriculture’s original intent would have been too costly and would have been unfair to the other bidders.
In short, after concluding that a critical contract provision had been poorly drafted and that the error could not be remedied through an amendment, the contracting officer decided to terminаte the contract. The stipulated facts simply do not support Caldwell’s claim that the contracting officer acted in bad faith or abused his discretion. Because Caldwell failed to carry its burden of proof on this element of its claim, we agree with the Board that, in this case, there was “no impropriety in the Government’s exercising its contractual right to terminate.” Caldwell, 94-2 BCA (CCH) at 133,625.
B.
On appeal, Caldwell also renews its Tom-cello argument. It claims that the termination for convenience in this case was wrongful and should be treated as a brеach because — even assuming APHIS was not motivated by bad faith — it knew prior to awarding the contract that Caldwell’s bid did not include the cost of equipment designated as “vendor fumished/vendor installed.” According to Caldwell, “a termination for convenience is improper when the Government had actual knowledge, as was true in Tom-cello and as is true here, and chose to contract anyway.” (Emphasis in original).
*1582
We explained
Tomcello
in
Salsbury Industries v. United States: “[Tomcello]
stands for the unremarkable proposition that when the government contracts with a party knowing full well that it will not honor the contract, it cannot avoid а breach claim by adverting to the convenience termination clause.”
The same facts that stand in the way of Caldwell’s bad faith/abuse of discretion claim — discussed above — bar the door to its
Tomcello
argument. As the Board found, there is “no evidence the Government intended before award to terminate the contract for any reason.”
Caldwell,
CONCLUSION
For the- foregoing reasons, the decision of the Board that APHIS did not act improperly in terminating Caldwell’s contract for the convenience of the government is supported by substantial evidence and is free of legal error. Accordingly, the Board did not err in granting Agriculture’s motion for summary judgment and dismissing Caldwell’s appeal.
COSTS
Each party shall bear its own costs.
AFFIRMED.
Notes
. 41 U.S.C. §§ 601-12 (1988 & Supp. V 1993).
. The facts set forth herein are taken from the Agreed Statement of Facts and Damages that the . parties submitted to the Board and on the basis of which they cross-moved for summary judgment.
. Before the Board, the parties eventually agreed to $125,000 as the amount of any award to Caldwell for this claim.